2620291 BNG - Annual Report 2025

70

Our Risk Taxonomy Non-financial risk

Financial risk Credit risk

Market risk

Liquidity risk

Operational risk

Compliance risk

Counterparty risk

Interest rate risk

Funding capacity risk

Financial economic crime risk

Concentration risk

Spread risk

Funding spread risk

Process risk

Settlement risk

Foreign exchange risk

Short-term liquidity risk

Volatility risk

Conduct risk

Model risk

Fraud risk

People risk

Regulatory compliance risk

Data management risk* Technology risk* Third party risk Legal risk Business continuity risk (incl. external events) Statutory reporting & tax risk Information security risk (incl. cyber)* Physical security risk

ESG risk Strategic risk Strategic positioning risk

Strategic execution risk

Reputational risk

Strategic consequence risk

Traditional risks impacted by ESG, based on the ESG materiality assessment * Data management risk + Technology risk + Information security risk (incl. Cyber) = ICT risk (art. 4 (52c) CRR)

71

Explanation of the main risks

Developments 2025

If these risks materialise, they may have a material impact on BNG’s reputation, the

developments on BNG appears limited for the time being, but is being closely monitored

This section examines the main risk categories that BNG has included in its risk taxonomy. achievement of its strategic objectives or on the bank’s financial results. A brief description is included for all major risks of the definition, the risk appetite, the way in which BNG deals with this risk and the most important developments.

Geopolitical developments in 2025 are an important focus for BNG. The impact of these

and analysed. Where necessary, BNG has conducted ad hoc risk assessments to determine whether additional measures were needed to deal with these developments and limit the risk to the bank.

Strategic risk

Environmental, Social and Governance (ESG) risk

strategy and strategic objectives. This concerns risks resulting from internal and external

risk categories. These factors relate to the negative effects of the environment and climate

Strategic risks are defined as risks that affect or are created by the bank’s business

causes that could prevent us from successfully achieving our strategic objectives. The

Executive Committee and the Supervisory Board have formulated a number of strategic preconditions within which we must operate in order to be of added value to our clients, shareholders and other stakeholders.

Organisational structure

BNG considers Environmental, Social, and Governance (ESG) risk to be a factor for traditional (E), society (S), and governance (G) on the bank's financial performance, continuity, and

reputation. We focus in particular on climate and environmental risks. We consider social and governance factors to be less material for the bank. This is because BNG’s exposure is mainly located within the Netherlands and the Netherlands has good institutions and governance practices.

Strategic risks are inherent in the bank’s strategic plans and may also be influenced by

Identification, assessment and management of ESG Risks

deal with strategic risks is detailed in the organisational strategy and annual plansof the

significant ESG risks to which BNG is or may be exposed. In the materiality assessment, we

external factors. The strategic risks are usually closely related to other risk types. How we individual departments.

These risks matter are also addressed in the stress test programme and are covered in the

Capital Management Plan (as part of the mandatory internal capital adequacy assessment

BNG uses the ESG Risk Identification & Materiality Assessment (ESG RI&MA) to identify the

assess how ESG risks affect traditional risks, such as credit risk, market risk or operational risk. By identifying the material ESG risks, we ensure the integration of ESG risk into our existing risk management.

process (ICAAP)).

Internal ESG rating

The identification of strategic risks is part of the strategic decision-making process and

assessment of ESG-related credit risks at the individual client level.

of strategic risk assessment methodologies. Appropriate measures are taken to mitigate

strategic risks where possible. Monitoring and reporting on strategic risks is an integral part of the periodic risk management cycle.

The ESG factors that are assessed as material in the sector analyses form the basis for the

We use an ESG rating to measure ESG risk at the client level. This includes the ESG risk drivers established by the RMAs.

72

The ESG rating, together with the regular credit rating, forms part of the individual credit

policy. This includes both our long-term environmental and social contribution and the

ICAAP process and into climate-related stress tests and scenario analyses.

implement the strategic sustainability objectives, the SBC is supported by two other bodies.

assessment process and, thus, contributes to the risk appetite. It also provides input into the

ESG assessment and management

The risk assessment based on the ESG rating forms the basis for the client view of ESG

risks. Critical ESG outcomes are discussed with the client in order to make them open to

identification of material ESG risks that may negatively impact our performance. To help it The Sustainability Task Force (STF) consists of representatives from the most relevant

departments within the bank. The ESG Regulatory Change Framework (RCF) Task Force identifies upcoming ESG legislation and its impact on the bank.

discussion. The focus here is on the efforts of the client to get within the path to acceptance.

Developments 2025

be linked to the reduction of energy consumption or CO2 emissions. In an extreme case,

regulations such as the CRR3/CRD6 Directive. Our focus is on improving our data quality

This can lead to the creation of performance targets. These targets may, for example,

when the ESG risks are assessed as being too high, this may lead to rejection of the credit

application or a transfer to high risk for credit reviews. This approach ensures that climate

and environmental risks are taken into account fully in our credit policy, which contributes to a responsible and future-proof loan portfolio.

KPIs and Reporting

To measure the performance of our clients on sustainability, our focus is on emissions and

energy consumption KPIs (Key Performance Indicator), where we focus on the (committed) CO2 reduction targets.

We are continuing to refine our ESG risk management framework, while anticipating new further, expanding our scenario analyses and strengthening our commitment with clients to jointly mitigate ESG risks. In addition, the bank is working on expanding and deepening its

understanding of the physical risks and their further integration into the risk management

framework. Through this holistic approach to ESG risk management, we aim to enhance our resilience, protect our stakeholders and contribute to a sustainable future.

The focus of ESG risk on climate and environmental risks will be developed further by the CRR3/CRD6 and EBA Directives for the social and governance components.

We mainly use independent emissions data sources for this purpose. In this way, it is

possible to compare clients according to factors relevant to the sector, including emissions

related to the building. Divergent values are identified within the ESG risk reports, after which they are discussed with the client based on the regular periodic credit assessment process.

Organisational structure

ESG risk management is an integral part of the RMF, and the tasks and responsibilities are assigned in accordance with risk governance and the 3 LoR policy. The impact of ESG factors on the bank in terms of lending to customers, assets within the portfolios,

and positions with financial counterparties is identified and managed. Decision-making

regarding ESG risks takes place at board level and in the existing committees, including the CC, CPC, ALCO, and NFRC. The SBC determines and oversees our integrated sustainability

73

Reputation risk

Reputation risk is the risk that BNG's market position could deteriorate due to a negative reputation among stakeholders:

•

Materiality Assessment (ESG RIMA).

Internally caused reputational risk: the risk that BNG's reputation could be negatively

Creation and mitigation of credit risk

Externally caused reputational risk: the risk that BNG's reputation could be negatively

hedging currency and interest rate risks through derivative transactions with financial

affected by the impact of other (poorly managed) risks.

•

The material ESG credit factors are determined per sector in the Risk ESG Identification and

affected by altered external expectations that are not well managed in the strategic process (strategic positioning risk).

Credit risk arises from a range of activities, including lending to the public sector,

counterparties, money market liquidity management operations and investments in interest-bearing securities of issuers.

Organisational structure

The credit risks arising from lending are usually mitigated by government guarantees via

reported in the integrated risk report and discussed with the Executive Committee and the

Dutch State via backstop arrangements. Focusing our lending on the Dutch public sector,

As part of the risk management cycle, reputational risk is periodically analysed and Supervisory Board.

Credit risk

Credit risk is the risk that a borrower or a financial counterparty will fail to meet its

contractual obligations or will not do so on time. This risk is divided into three subcategories: •

Counterparty risk: The risk that a borrower or counterparty fails to meet payment obligations arising from a financial transaction at the time they are due.

•

Concentration risk: The risk of credit losses from exposure to a group of borrowers or counterparties with comparable characteristics.

•

Settlement risk: The risk of loss if a party to the settlement of a contract (or group of contracts) does not meet the agreed conditions.

ESG risks as a part of credit risk

ESG risks are an integral part of credit risk. The way in which a counterparty deals with

environmental, social and governance aspects within its business operations has a direct

influence on its creditworthiness. A higher ESG risk score may result in a lower credit rating,

as these factors materially affect a company’s financial stability and future prospects. ESG

the WSW (Social Housing) and Wfz (Care) guarantee funds, which are guaranteed by the which is inherent in the business model, entails concentration risk.

Settlement risk arises in the settlement of foreign currency issue transactions with financial counterparties. Due to the size of these transactions, the settlement risk may potentially be

high. To mitigate these risks, arrangements are made with counterparties on the maximum size of individual settlements, in accordance with the applicable internal limits. Large

settlements are processed in sub-steps, with the next part being provided only after the

previous part has been settled. Settlement dates for new transactions with counterparties are also spread over time to avoid unnecessary concentrations in one day.

Monitoring and assessment

The credit risk of a borrower or counterparty is determined periodically based on a

credit assessment. Internal credit assessments are carried out annually for all borrowers to evaluate their creditworthiness and take appropriate measures where necessary. In

addition to the periodic credit assessment process, ongoing monitoring of the financial

performance of borrowers takes place, including by monitoring early warning indicators and unlikeliness to pay indicators.

criteria are, therefore, an essential part of the credit analyses and rating methodologies.

When managing ESG risks as part of credit risk, the focus is on transition and physical risks.

74

For financial counterparties and investments, external credit assessments and investor

Risk appetite

approved within the Eurosystem are used for this purpose.

•

report data are also included in the assessment. Four external rating credit rating agencies

We are applying a prudent approach to managing market risks:

The bank models the equity in such a way that the required return of the shareholders is

Developments in 2025

achieved1[1], which is an ongoing investment in 10-year paper of the Dutch State;

Our loan portfolio remained stable in 2025, partly thanks to a tightened customer strategy

•

continued to focus on integrating climate and ESG risks into our credit assessments and

•

and a further decline in the “Financial Restructuring and Recovery portfolio”. We have reports, in line with increasing social and regulatory requirements.

Market risk

Market risk is the risk of loss of profit and capital as a result of fluctuations in market prices. There are various forms of market risk: interest rate risk, currency risk, fluctuations in credit and liquidity spreads and volatility risk. •

Interest rate risk: the risk of loss of profit or capital due to unfavourable movements in interest rates.

•

Currency risk: the risk of loss of profit or capital due to unfavourable fluctuations in exchange rates.

• •

Credit and liquidity spreads risk: the risk of loss of profit and capital due unfavourable

The bank hedges interest rate risk positions in the banking book with interest rate swaps.

We fully hedge against risks arising from value adjustments of financial instruments that may result from the change in an index, such as inflation, with index-related derivatives.

The bank hedges currency risk with cross-currency swaps and foreign exchange swaps.

Developments 2025

During the reporting year, the bank's market risk profile was characterised by increased volatility in credit and liquidity spreads. This led to manageable, unrealised losses in the capital position and the associated risk measurements.

Interest rate risk remained within the established limits, with the short-term interest rate position (0–1 year) being actively managed. In combination with further improvements

in governance and model development, market risk remained controlled and within the established risk appetite.

spread fluctuations.

Liquidity risk

implied volatility of market interest rates or exchange rates. This risk applies only to

time unable meet its payment obligations without incurring unacceptable costs or losses.

Volatility risk: the risk of loss of profit or capital due to unfavourable movements in the interest rate instruments that operate under a principle similar to that of options (for example, caps and floors).

The most recent Risk Identification & Materiality Assessment concluded that there are

no material ESG factors relating to market risk and its sub-risks. For credit and liquidity

spread risk, we nevertheless capitalise on ESG factors, because capital is based on historical movements of these spreads, where ESG factors are included.

Liquidity risk is he risk of loss of profit or capital due to the possibility that the bank is at any Liquidity risk can be broken down further into various subcategories (short and long term):

•

Short-term risk: the risk that the bank will not be able to raise sufficient funds to meet its payment obligations.

•

Funding capacity risk: the risk that, as a consequence of its funding capacity, the bank will not be able to raise sufficient funds to meet its funding requirement over the long term, which would jeopardise the continuity of its business operations.

1 The component of the required return that is related to the Euribor.

75

•

Refinancing risk: The risk that, as a consequence of our own creditworthiness or changing

quality liquid interest-bearing securities (which are explicitly held for liquidity purposes and

unfavourable financing spreads that will jeopardise future profits.

deposit with the ECB . The management of the size and composition of the liquidity portfolio

market conditions, the bank will have to raise financing or refinancing on the basis of

Within the liquidity risk, the bank focuses on the transition and physical risks within the

sub-risks of liquidity risk as far as ESG factors are concerned. The bank has established that the ESG risk is not material for the short-term liquidity risk.

Risk appetite

In order to meet our payment obligations at all times, including in stressful situations, we

pursue a prudent liquidity policy and the bank accepts liquidity risks at short notice only if there are sufficient liquidity buffers in return. The bank has a substantial liquidity buffer for

known as the liquidity portfolio) and the ECB eligible interest-bearing securities and loans is one of the liquidity measures taken to meet the external requirement for anLCR of at

least 100%. The bank also holds a large amount of collateral in the ECB deposit, allowing it

to obtain short-term financing immediately. Since we, as a bank, can deposit ECB eligible interest-bearing securities and loans as collateral with the ECB, this collateral can be

extended further in cases of prolonged stress. The size of the buffers is tested in the liquidity stress tests, which are monitored monthly. Furthermore, the financing plan and the related

planned liquidity gap are tested in unfavourable normative stress scenarios for the LCR and NSFR ratios.

this purpose.

Most of the funding is obtained from international capital markets. We distinguish between

The public sector largely consists substantially of institutions with a long investment horizon.

allow access to funding at competitive levels at any time. We are committed to proactive

This means that loans often have very long maturities. up to several decades in some

cases. As there are no acceptable funding rates available for these long maturities, the

bank attracts funding for somewhat shorter maturities and we accept a funding mismatch.

short-term and long-term financing. We maintain a number of issuance programmes that relationship management with investors who support these efforts. The main currencies for the bank are the euro and the US dollar.

This mismatch is monitored daily and is subject to strict liquidity and capital limits.

We are aware of a number of funding sources. We use the following resources for short-

Limits or warnings apply for a range of liquidity risk measures, such as the liquidity gap

•

term financing (money markets):

analysis, liquidity stress scenarios, the Liquidity Coverage Ratio (LCR), the NSFR (Net Stable

Commercial paper: The bank has a European commercial paper programme (ECP) of EUR 20 billion and a US commercial paper programme (USCP) of USD 20 billion. Under

Funding Ratio) and Contingency Funding Plan (CFP) triggers.

normal market conditions, a significant margin is maintained between the maximum size allowed by the programme and the actual use by the bank.

Unsettled repo transactions with interbank parties under a Global Master Repurchase

Liquidity risk instruments

•

with the continuous maintenance of attractive, varied and sufficiently large issuance

•

even in difficult times.

We have the following programmes available for long-term financing (capital markets):

As a bank, we want to maintain continuous access to money and capital markets, together programmes for investors, because we want to meet the credit demand of our clients –

Agreement (GMRA), where the bank's liquidity portfolio is used as collateral.

•

In addition, liquidity buffers are required, so that we have access to liquidity in stressful

times. The liquidity buffer is mainly formed from a cash position at the ECB, level 1 high-

Deposits from institutional money market parties.

a debt issuance programme (DIP) of EUR 110 billion. This is our most important source of funding. ESG bonds are also issued under this programme.

76

•

AUD 15 billion Kangroo-Kauri programme specifically for the Australian and New Zealand

Operational risk

Namen-Schuld-Verschreibungen (registered debt securities, NSV), bond issues under

of internal processes, people and systems, or from external events. Operational risk includes

markets. ESG bonds are also issued under this programme.

•

German law.

•

private loan agreements under various legislations.

We may also use the following alternative sources of funding: • • •

Operational risk is defined as the risk of loss of income or capital resulting from deficiencies various level 2 risks, including risks relating to processes, technology, information security, data management, third parties, legal affairs and business continuity. Within operational risk, we focus on transition and physical risks in terms of ESG factors.

European Central Bank financial instruments.

Risk appetite

Development Bank.

committed to a high standard of quality and reliability in its business operations, measures

‘Global’ loans from the European Investment Bank and the Council of the European guaranteed investment contracts (GICs).

We do not enter into transactions with private individuals.

Operational risks are inherently linked to the business operations of BNG. Although BNG is

to mitigate operational risks are taken based on a balance between costs and economic

income. In view of the great importance of BNG’s reputation, the bank applies and monitors qualitative limits to strengthen its risk management framework.

We have a funding plan, in which the desired funding mix is described in detail. Part of

Given its role as a system bank, BNG is not prepared to accept high or critical operational

market. These large-scale issues by an issuer with a creditworthiness linked to the Dutch

materialise once every three years or even more frequently.

the funding plan is the annual issue in benchmark size to maintain a“BNG curve” in the

State ensure that we have a secure profile among investors, allowing us to maintain access

and security risks, nor medium-sized operational and security risks that are expected to

to investors, even in times of market stress. The actual realisation of this desired funding mix

With regard to ESG‑risk, BNG takes into account increased process risks, data management

a funding plan drawn up by Treasury and reviewed on a quarterly basis.

and external requirements (e.g. as a result of missing ESG‑data). The risk of external

or the reason for deviating from this is monitored and evaluated by the ALCO, by means of

Developments 2025

risks, model risks and legal risks that may arise from non-timely compliance with internal ESG‑related events that may have an impact on BNG is also estimated.

During the reporting year, the bank's liquidity risk remained under control, with good access

Non-Financial Risk Management instruments

financial markets and geopolitical uncertainties, no limits or targets were exceeded and

•

to money and capital markets throughout the year. Although there was volatility in the

there were no structural tensions in the liquidity position. The development of the liquidity

gap remained within the established framework, partly due to active management of the

maturities of new turnover and the timely attraction of long-term funding. The refinancing risk also remained within the established risk appetite. Through continuous monitoring,

robust stress tests and the use of contingency indicators, the liquidity risk remained within the established risk appetite.

We use a range of tools to manage operational risks, including:

Key Risk Indicators: The bank’s risk appetite for operational risk results in a risk tolerance that is primarily focused on reputation and internal business operations. The bank’s

exposure to operational risk is measured using Key Risk Indicators (KRIs) with set limits. The KRIs relate to all categories of operational risk. The measured KRIs are compared

with the risk appetite and reported to the NFRC on a quarterly basis in the operational risk report.

77

•

Risk Control Self-Assessments (RCSAs): The RCSAs are performed on the business

processes, with the second line playing a facilitating, but also challenging, role. The

inherent and residual risks identified and the corresponding management measures are

Process risk: Efficient and effective business operations are necessary to achieve the

effectiveness of the most important control measures.

is a top priority. BNG launched several initiatives in 2025 that make a concrete contribution

Incident management: We record all operational incidents that occur and investigate the root causes of incidents with a medium or high or critical impact. The process

owners must carry out this investigation and initiate remedial actions. In order to prevent similar incidents in the event of future incidents, the process owner examines together

with the 2nd line whether adjustments are necessary in the process, the systems and/or

objectives of BNG. Continuous improvement and optimisation of internal work processes to this and, at the same time, aim to reduce operational costs. Through a chain-wide

approach, processes are simplified, more robust and, where possible, automated. The

quarterly management review based on measurable results gives focus to this and thus facilitates effective cooperation throughout the entire organisation.

the working method. Incidents are reported to the NFRC, the Executive Committee and

Data management risk: Effective data management is an essential part of BNG’s strategic

Scenario analysis: A scenario analysis of operational risks is performed annually.

and regulations. In addition, good data management supports timely and reliable reporting

the Supervisory Board’s Risk Committee.

•

the IT landscape.

assessed at least annually, based on probability and impact scales. The RCSA results

provide the input for our monitoring programmes, including the periodic testing of the

•

are monitored carefully and, where appropriate, integrated to enhance the robustness of

These scenarios also provide input to substantiate the economic capital allocation for operational risk.

Developments in 2025

In 2025, it was established that three focus areas have not yet reached the desired level

of maturity. In order to achieve this, improvement programmes have been launched with intensive management focus and periodic reporting. These focus areas are as follows:

objectives. It forms the basis for innovation, further digitisation and compliance with laws

on both existing and emerging risks, including on ESG aspects. BNG is working continuously on strengthening its data management capabilities, so that BNG demonstrably meets the requirements of RDARR and BCBS 239. The focus is on the accuracy and completeness

of data, a broader application of data-driven work within the organisation and a further improvement of the availability and management of data by means of appropriate systems and processes.

ICT risk2: A secure and stable IT landscape is essential for the continuity of our services and

the trust of our clients. BNG applies an integrated approach to managing ICT risks that is

aimed at ensuring the confidentiality, integrity and availability of information. This approach includes clear responsibilities within the organisation and guidelines for suppliers and other parties with whom data is exchanged. In 2025, further steps were taken to modernise our

IT environment and the IT risk framework, taking into account the requirements of the DORA Regulation and other relevant regulations. BNG continues to invest in secure and future-

proof digital infrastructure. New technological developments, including artificial intelligence,

2 ICT Risk has an impact on the following BNG risk taxonomies: 1) Technology Risk, 2) Information Security Risk (incl. Cyber Risk), 3) Third Party Risk, 4) Business Continuity Risk.

78

5.4 Digitalisation, IT and cybersecurity BNG is fully committed to modernising its IT infrastructure and increasing digital resilience. Through smart cloud migration, tighter security against increasingly complex cyber threats and strengthening cooperation in the chain, we are building a flexible and robust IT organisation. At the same time, innovative applications, such as targeted AI solutions, must ensure that we can work more quickly and cleverly. This means that we will remain agile, safe and ready for the challenges of tomorrow.

Cloud migration and infrastructure modernisation

This year, we were able to take advantage of the digital workplace and the integration

platform that were implemented successfully, with which we can link applications flexibly. In addition, we have brought payment transactions back to our own organisation and

started renewing the payment transaction system. Steps have also been taken towards

crisis and communication management and practising a number of scenarios together with IT partners.

In the event of an increased threat or special circumstances, cooperation with external parties will be intensified further. An example of this is the coordination in the run-up to the NATO summit in 2025, in which, among other things, we worked together with the municipality of The Hague.

In addition to technical improvements, such as the faster identification of deviant

behaviour, investments have also been made in organisation-wide awareness. Through

joint exercises and a clear division of roles, the bank can respond quickly and effectively to cyber incidents.

further cloud adoption, in which we have prepared components from our IT landscape

Compliance and cooperation in the chain

greater scalability, better performance and a future-proof infrastructure in line with our

Resilience Act (DORA) and the NIS2 Directive, we have tightened our processes further

for migration or have already successfully transferred them. This modernisation ensures strategic ambitions.

Resilience to complex threats

In order to comply with increasingly stringent regulations, such as the Digital Operational and made them more professional. In July 2025, we launched the Fortica transformation programme, a bank-wide initiative aimed at strengthening our IT risk management sustainably and making our (chain) organisation future-proof.

The cyber threat landscape is becoming increasingly complex. Technological

With project Fortica, we are working on a distinctly higher level of operational resilience.

the threat. This requires a coherent approach to prevention, monitoring and response.

infrastructure. Thanks to this integrated approach, we will meet the highest internal and

developments, such as the malicious use of AI, and geopolitical tensions, are increasing

Within BNG, the Security department is working on strengthening digital resilience, both

within its own organisation and across the entire chain. The focus is on testing measures,

We are improving governance, streamline processes and modernise our technological external standards, while at the same time aligning well with the needs of our public customers who rely on our continuity and reliability.

79

Innovation and AI

We are focussing on small, concrete AI applications that can be deployed quickly within

the organisation and offer immediate value, such as automatic analysis or support for daily tasks. A working group is investigating the AI initiatives which have the most potential and are both easy and secure to apply. This allows us to innovate step by step without risks to

privacy or intellectual property. Collaboration and knowledge sharing are important, such as during the Servicenow Agentic AI Hackathon Event, where we are converting ideas into smart IT solutions with colleagues and partners.

Artificial intelligence offers great opportunities to make our processes more efficient, faster

and more error-proof. Applications such as automated data processing, predictive models and smart employee support can lead to improved service and lower operational costs. As an organisation that values quality and reliability, we recognise the potential of AI to strengthen lending processes, risk assessments and customer contact.

At the same time, the use of AI brings new challenges and risks, especially for a bank

operating under strict European supervision. Systemic banks are subject to high standards

of reliability, transparency, explainability and operational risk management. This means that the introduction of AI must be carried out carefully, step by step and with robust controls. It

requires a conservative approach, in which innovation is given room to flourish, but never at the expense of stability, compliance and the security of our services.

80

Investing in affordable midmarket rental homes in Limburg Housing association Wonen Limburg does more than offer social housing. With its subsidiary Wonen Limburg Accent, it is fully committed to offer affordable mid-market rental homes. These are intended for middleincome people who earn too much for social housing, but for whom the non-subsidised housing sector is often unaffordable. Accent offers them an attractive, affordable alternative - and the proceeds flow back into social housing and vibrant neighbourhoods. In 2025, Accent focused heavily on the construction of more than 300 mid-market rental homes spread across Limburg hotspots like Maastricht, Heerlen, Brunssum and Baarlo. Some of these homes were completed in 2025, with the rest to follow shortly. For example, Wonen Limburg actively contributes to the provincial ambition to significantly expand the housing supply in both social rental homes and mid-market rental homes, exactly as laid down in the Limburg housing agenda and regional Housing Deal. The smart financing mix plays a major role in this. Loans secured by the Social Housing Guarantee Fund (WSW) were combined with commercial financing. In cooperation with BNG and other parties, funding was attracted that specifically supported the development of the middle segment. This increased the investment capacity without taxing the WSW ceiling.

Thanks to this approach, Wonen Limburg can build faster and more effectively and thus structurally reduce the housing needs in Limburg.

Our funding will create affordable, mid-market rental homes to reduce the housing shortage.

4

6..

Governance

6 82

6.1 Corporate structure We are a public statutory two-tier company under Dutch law and provide all our services under the name BNG Bank N.V. Our shareholders are exclusively governments. Half of the bank’s share capital is held by municipal authorities, provincial authorities and one water board. The other half is held by the Dutch government. We receive no financial assistance or other benefits from the government. As a systemically important bank at a national level, we are supervised directly by the European Central Bank (ECB). We are the fourth-largest bank in the Netherlands in terms of balance sheet total. We carry out our activities from our office in The Hague. Our size, structure, ownership and chain did not change significantly in 2025.

History

We provide financing to the public sector on competitive terms and for all maturities. We are continuing to support our clients in difficult times, as well. Until now, we have always succeeded in doing so. More than 90 per cent of our loans go to or are guaranteed by

government agencies. These loans, referred to as solvency loans, have a risk weighting of 0 per cent. We also take care of payment transactions for our clients. Thanks to

the shareholding by Dutch governments and our focus on solvency loans, clients and partners see us as a safe bank. We have the highest external credit ratings (Moody's:

Aaa; Fitch Ratings: AAA; S&P Global: AAA). This provides us with a strong funding position on international money and capital markets. This position allows us to attract short and

long-term funding at low prices in different currencies. As a result, we offer our clients loans at low lending rates.

In 1914, the Association of Dutch Municipalities (VNG) established the Municipal Credietbank.

This bank gave municipalities the financial clout they needed to tackle social problems at a

time of high levels of poverty and pressing social-societal issues. The Municipal Credietbank grew into BNG. This original mission – contributing to societal solutions – is still at the heart of our activities.

83

Business model

Governance structure

Our two-tier governance structure is comprised of a Supervisory Board (SB) and an

Executive Committee (ExCo). The Executive Committee has, at the moment, five directors, three of whom form the statutory board. On 7 May 2026, the ExCo will be expanded to

Raising funding through

include a sixth director, namely a CIO. The Supervisory Board appoints and dismisses

international money and

the members of the Management Board. The Executive Committee constitutes the

capital markets

management body with an executive function as defined in the Capital Requirements

Directive (2013/36/EU). It is responsible for the day-to-day management, the general course of affairs and the continuity of BNG. The Executive Committee has set up committees to provide consultancy or carry out specific tasks. These committees are:

• • • • • • •

Asset & Liability Committee Credit Policy Committee

Credit Committee

Treasury Credit Committee

Non-Financial Risk Committee Integral Portfolio Committee

Sustainable Banking Committee

Providing financing to the Dutch

•

terms and conditions

The regulations of the Management Board/Executive Committee and their committees can

public domain at competitive

Client Acceptance & Review Policy Committee (“Policy CARC”)

be found on our website.

• • •

•

4th largest bank of the Netherlands Founded in 1914

Significant bank under ECB

supervision and national systemic bank

503 employees

84

The Supervisory Board is the supervisory body as indicated in the Capital Requirements

into their expectations and the value we can create for them. Stakeholders’ responses

general course of affairs within the organisation. The members of the Supervisory Board

organise annual meetings on current topics. We also make substantive contributions to

Directive. The Supervisory Board supervises the policy of the Executive Committee and the are appointed and dismissed by the General Meeting. The Supervisory Board has four committees that prepare the decision-making process:

• • • •

Audit Committee Risk Committee

HR Committee

Remuneration Committee

The regulations of the Supervisory Board and its committees have also been published on our website.

ESG policy governance

The CEO is accountable for the strategy, including the ESG strategy. Management takes care of the implementation of this. The Strategy & Sustainability department and the

Executive Committee Sustainable Banking Committee (SBC) prepare proposals for changes

are used to improve our products, services and processes. For municipal clients, we

meetings concerning real estate in the healthcare, education, municipal and housing association sectors. We are a member of the Dutch Banking Association (NVB), the

European Association of Public Banks (EAPB), the European Banking Federation (EBF), the International Securities Dealer Association (ISDA) and the International Capital Market Association (ICMA).

Subsidiaries and associates

BNG Gebiedsontwikkeling B.V. is the only BNG subsidiary specialising in risk-based

participation in land development, process design and process guidance for municipalities and other public or semi-public organisations. In March 2018, the SB of BNG Area

Development and the then Executive Board of BNG decided no longer to engage in

new activities and projects within BNG Area Development. The projects within the existing portfolio will, therefore, be completed in the coming years.

in the purpose, strategy, ESG policy and ESG objectives. The Executive Committee decides on these proposals. The SBC ensures that BNG has, implements it and reports on an

integrated sustainability policy. ESG factors with an impact on an existing risk are managed by the relevant ExCo committee. The Strategy & Sustainability department reports each

quarter on the progress of the strategy, including the material topics. Measuring the impact that BNG has through its clients is part of the ESG policy. This task lies with the Strategy and

Sustainability department. We report annually in our annual report on the impact on society through our clients. More information is provided in Chapter 4 of this report.

Stakeholders

Our principal stakeholders are clients, investors, shareholders and employees. We invest in

long-term relationships by engaging with them regularly. We do this through consultations, regional meetings, sector meetings and investigations. These dialogues give us insight

85

6.2 Composition of the management body and organisation BNG is managed by an Executive Committee (ExCo) of five members and by six members as of 7 May 2026. The portfolios of the Executive Committee members have been allocated in such a way that the Three Lines of Responsibility policy can be fully implemented.

Name

Gender

Year of birth

Nationality

Date of first appointment

Philippine Risch, CEO

F

1972

NL

01-10-2024

Olivier Labe, CFO

M

1969

Fr/NL

01-05-2015

that they would leave the bank. Irene van Oostwaard (former head of Internal Audit at BNG)

F

1974

NL

04-03-2025

was appointed CRO on 4 March 2025 and Amir Arooni was appointed acting COO on 1 April

Irene van Oostwaard, CRO

2025 for a one-year period. Furthermore, Olivier Labe was reappointed for the third time to 1 May 2027.

Amir Arooni, COO

M

1963

NL

01-04-2025

Peter Nijsse, CCO

M

1969

NL

01-05-2024

In 2025, there were two changes in the composition of the Executive Committee. At the

beginning of 2025, Jaco van Goudswaard (COO) and Cindy van Atteveldt (CRO) announced

Date of reappointment

01-05-2019, 01-05-2023 and 01-05-2025

In the context of the renewed BNG organisation, Norbert Siegers started as a quarter maker on 5 January 2026 and will take on the role of COO on 7 May 2026.

86

Composition of the Executive Committee as per 20 March 2026

Philippine Risch, CEO

Olivier Labe, CFO

Irene van Oostwaard, CRO

Amir Arooni, COO a.i.

Peter Nijsse, CCO

Sets the course for strategy and

Oversees our financial health, from

Is responsible for risk management

Is responsible for operations,

Builds strong customer

sustainability at BNG and is

reporting to treasury. As chair of

and compliance at BNG. She chairs

processing, data governance and

relationships and promotes our

responsible for communication and

the Asset & Liability Committee and

various committees, including the

ICT. He has extensive experience

business strategy and lending

the development of our personnel

participant in international forums,

Non-Financial Risk Committee,

as Chief Information Officer and in

services. As chair of the Credit

policy. She chairs committees and

he connects BNG with broader

where she applies her expertise in

related positions in various sectors.

Committee and supervisory director

coordinates stakeholder relations.

financial communities and contributes

responsible financial management.

Amir believes that the key to

at BNG Gebiedsontwikkeling B.V.,

She is also an active board member

to sustainable capital management.

Her involvement in the Dutch Banking

building a successful business

he reflects our vision of partnership

of organisations such as the Dutch

Association demonstrates her

lies in encouraging talented

and customer engagement.

Banking Association and the Princess

commitment to effective supervision

people to perform at their best.

Maxima Centre Foundation.

and cooperation.

Amir is a member of the CIO Platform Netherlands.

87

Organisation chart as per 20 March 2026 Irene van Oostwaard

Amir Arooni

Philippine Risch

Olivier Labe

Peter Nijsse

Compliance 

Architecture & Data 

Human Resources 

Back Office 

Business Strategy  & Control

CRO

Jolanda van Rossum (a.i.)

COO a.i.

Vacancy

CEO

Monique Zandbergen

Financial Risk  anagement M

Cloud & Infrastructure

Internal Audit 

Non-Financial Risk Management

Integrated Risk Management

Wouter Dikkers

Matthijs van Winden

Vacancy

CFO

Marco Noordzij

CCO

Marleen Nieboer

Muriël Hesselberg

Treasury / Capital Markets

Client Services & Payments

IT Control & Support

Communications 

Finance & Control  Vacancy

Lending

Matthieu Vermeeren

IT Delivery 

Board Secretariat 

Financial Restructuring & Recovery

Relationship Banking 

Klaas Veenbaas

Shek Gainda

Vacancy

Security 

Sanne Bergenhenegouwen

Frederike Versloot

Aart Rietveld

Strategy & Sustainability  Vacancy

Koen Westdijk

Arjen Smit

Leonie van Heusden

Rob Schreppers

Legal & Fiscal Affairs Monica Spiegel

88

7..

Corporate governance statement

7 89

The internal risk management and control systems are an important point of attention

financial statements. The consolidated financial statements have been prepared on the

activities within our bank. It clarifies the principles behind the internal control and risk

could hinder continuity for a period of twelve months following the preparation of the report.

within BNG. The Risk Governance Framework forms the basis for all risk management

management system. The Risk Appetite Statement describes the risks we wish to accept

basis of the going-concern principle. No material risks or uncertainties were identified that

in order to achieve our objectives. The various risks attendant on the bank’s activities are

In the opinion of the Management Board under the Articles of Association, the financial

responsible for the primary and key supporting processes annually issue an ‘In Control

profit or loss for the year of BNG and its consolidated subsidiaries. The annual report

discussed each year in BNG’s Annual Report. The process owners or department heads

Statement’ to the Executive Committee, in which they highlight the risks in relation to the risk appetite, the management of risks and any deficiencies in this respect. All process

owners or department heads provide ‘in control’ information in their quarterly reports. In

the annual plans, they also explain how they aim to fulfil their responsibility of meeting the

bank’s risk appetite. At various times during the year, the second line reports to the Executive Committee on compliance with the Risk Appetite. This overall framework is closely linked to the bank’s Capital Management Policy, which is periodically reviewed and discussed with the supervisory authority.

Audits by the Internal Audit Department (IAD) focus on independently determining the

structure and function of the internal risk management and control systems. The external auditor audits the financial statements and evaluates internal control in respect of the

financial reporting insofar as relevant to an efficient and effective audit of the financial

statements provide a true and fair view of the assets, liabilities, financial position and

provides a true and fair view of the bank’s position, and the current balance sheet reflects performance during the reporting year and the expected developments of BNG and its

consolidated subsidiaries. Figures belonging to these subsidiaries have been included in

the consolidated financial statements. The Annual Report also describes the material risks facing BNG.

The Hague, 20 March 2026 Management Board under the Articles of Association Philippine Risch (CEO) Olivier Labe (CFO)

Irene van Oostwaard (CRO)

statements. The findings of the IAD and the external auditor are reported to the Executive Committee and to the Supervisory Board. The head of the IAD and the external auditor

attend the meetings of both the Audit Committee and the Supervisory Board where the financial statements are discussed.

The annual report provides sufficient insight into deficiencies in the operating effectiveness of BNG’s internal risk management and control systems. The aforementioned systems provide a reasonable degree of certainty that the financial reporting contains no

inaccuracies of material importance. These systems alone are of course incapable of

providing absolute assurance as to the achievement of the company’s objectives and the prevention of all misstatements, instances of fraud and non-compliance with laws

and regulations. A detailed explanation is provided in the ‘Risk’ section of the notes to the

90

8..

Report of the Supervisory Board

8 91

8.1 Foreword Over the past year, the world changed rapidly due to the new leadership in the United

Future-proof organisation

field for international lending. However, this was not a major obstacle for BNG. Thanks

thorough introduction to the organisation, she presented a sharpened strategy in April. The

States and geopolitical tensions. Fluctuations in the financial markets affected the playing to our strong position, we remained resilient and were able to fulfil our role very well

in these challenging times. In doing so, we underlined our stability and reliability in a dynamic market.

With the arrival of CEO Philippine Risch, a restructuring of BNG was initiated in 2025. After a

central theme is the transition from a traditional, column structure to a chain-oriented form of cooperation. This new facility increases the effectiveness, efficiency and governability of BNG.

Our loan portfolio has developed strongly over the past year. Despite the pressure on

This trend is accompanied by necessary cost reductions and a gradual reduction in staff

organisation, we have managed to achieve our investment objectives. Thanks to our sound

the competencies required for the new way of work.

our net interest income and rising costs, which are partly due to investments in IT and liquidity and a strong capital position, we were able to attract financing and make it available on favourable terms this year, as well.

Investing in social challenges

The Netherlands has many opportunities to invest in social areas, such as housing, energy, infrastructure, high-tech innovation and defence. The public domain works closely with public and private financiers to enable and accelerate these investments.

numbers until 2029. At the same time, there is still room for attracting new talent in line with

Changes have also taken place within the Executive Committee. During the year, Cindy van Atteveldt (Chief Risk Officer) and Jacco van Goudswaard (Chief Operating Officer) left the organisation to take on a new challenge elsewhere. The Supervisory Board is grateful for

their commitment and contribution. Irene van Oostwaard will succeed Cindy van Atteveldt as Chief Risk Officer and Amir Arooni will provisionally take on the role of Chief Operating Officer. We are excited about the experience and energy that they bring.

A clear investment structure is essential. The recent announcement of the merger of Invest

Strengthening our IT

level of cooperation within the Dutch financing landscape. This new institution will focus on

outsourced to one external party until the end of 2024. A strategic change has been chosen

NL and Invest International into a single national investment institution highlights the strong investments with higher risk, while BNG will continue to focus on low risk financing, preferably with a guarantee profile. In this context, we welcome the decision in Brussels to make

it possible to secure the financing of medium-sized rental homes. This strengthens our

position and actually helps us to advance the investment task for housing construction.

One of the priorities is to strengthen and restructure the IT organisation. IT was largely

to reduce this dependence and spread IT services more and partly bring them back in

house. With this approach, we also aim to improve the effectiveness and efficiency of our IT and optimise risk management.

92

An important milestone is the removal of the processing of payment traffic to our own

Building success together

The transition to the new system, scheduled for 2026, is proceeding according to schedule.

Executive Committee, all BNG employees, suppliers and partners. Their commitment makes

organisation. At the same time, we have started to renew the outdated payment system.

Social and green added value

We express our great appreciation for the hard work, commitment and passion of the

the difference and forms the basis of our success. With confidence and a strong sense of connection, we look forward to the challenges and opportunities that the future brings.

ESG is a central starting point in our organisation and our client relationships, in which

On behalf of the Supervisory Board,

measures to reduce its own ecological footprint and that of its clients. A good example

Huub Arendse, Chair

scale and sustainable renovation. The work has been delayed due to market conditions,

The Hague, 20 March 2026

environmental awareness and action are an essential theme. BNG is actively taking

is our office building on the Koninginnegracht in The Hague, which is undergoing a largebut we are looking forward to a modern and inspiring working environment with an A+++ energy label.

In discussions with the Executive Committee, the Supervisory Board has devoted

considerable attention over the past year to stimulating clients on ESG themes. The aim

is to create more social and green added value. Forms of financing, such as sustainability bonds and a pilot with green loans, emphasise this ambition. In 2025, we also entered into a dialogue with a housing association and the Social Housing Guarantee Fund to deepen cooperation.

93

A new home for care in the green areas of Vierhouten In Vierhouten - with its wooded areas - Stichting Philadelphia Zorg is working on a new residential and care environment at location Halfweg. Outdated buildings make way for modern apartments; some are already inhabited. After completion in 2026, 128 residents will find a new home and experience the tranquillity of the surrounding area. The care village is composed of three living circles, tailored to different care needs. In addition to housing, there are day centres, green initiatives and a health centre, so that residents can live in one place, join activities and fill their day with care and support that suits them. This creates a safe environment offering structure, control over their own activities and connection. This development is in line with the sustainability ambitions of Philadelphia Zorg. It has around 600 locations and is committed to reducing climate impact, circular construction and creating healthy, social environments. The investment in Vierhouten is around 40 million euros. BNG finances 30 million euros, partly secured through the Healthcare Sector Guarantee Fund. This financing enables sustainable choices in design and construction. The new construction shows how Philadelphia Zorg is building with confidence and pride in future-proof care, combining quality of life, sustainability and financial stability.

With our funding, Stichting Philadelphia Zorg is building a sustainable care village where residents find green areas, care and connection.

1

8.2 Composition of the Supervisory Board and committees The Supervisory Board is composed of seven members and has extensive knowledge and

The Supervisory Board has four committees, namely the Audit Committee, the Risk

most recent main position held by each member of the Supervisory Board. The relevant

decisions for the Supervisory Board and report verbally and in writing to the Supervisory

experience of the markets relevant to BNG. The following pages list the main position or

other positions of the supervisory directors are also included in this annual report. A register with all of the ancillary positions reported has been published on the website. All of the

Supervisory Board members are independent within the meaning of the best-practice

Committee, the HR Committee and the Remuneration Committee. The committees prepare Board. In addition, the relevant committees advise the Supervisory Board whether approval of the Supervisory Board is required.

provisions of the Dutch Corporate Governance Code.

BNG has an onboarding programme for new members of the Supervisory Board. This

The Supervisory Board monitors the policy of the Executive Committee, the way in which

change. The purpose of the onboarding is to ensure that the new members have sufficient

the Executive Committee implements the strategy and oversees general affairs within the

company. The Supervisory Board focuses on both long term sustainable value creation for

programme will be made specific to each new member, as knowledge and experience will knowledge of BNG, its strategy and activities, so that the new members can fulfil their role.

BNG clients and for the society. The Supervisory Board also monitors the effectiveness of

In 2025, the attendance rate for the Supervisory Board meetings reached 86% (2024:

the financial and non-financial reporting. Depending on the situation, the Supervisory Board

all meetings was 91% (2024: 98%).

the internal risk management and control systems, as well as the integrity and quality of fulfils the role of supervisor, employer or adviser for the Executive Committee.

100%) and for committee meetings 96% (2024: 96%). The combined attendance rate for

95

Huub Arendse (1958), chair

Femke de Vries (1972)

Karin Bergstein (1967)

Huub Arendse is former CFO and Executive

Femke de Vries is consultant in behavior,

Karin Bergstein is former member of the

Board member for the cooperative

culture and risk management and member

Executive Board of a.s.r. Nederland N.V.,

insurance group Achmea. Furthermore,

of the Supervisory Board of ABN AMRO Bank.

member of the Supervisory Board of Van

he is chairman of the Supervisory Board

Lanschot Kempen, of Nedap N.V. and of

of the Stichting Koninklijk Nederlands

UMC Groningen.

Geleidehonden Fonds.

Composition of the Supervisory Board Name

Gender

Year of birth

Nationality

Date of first appointment

End of first term

End of second term

Huub Arendse Chair

M

1958

NL

18-04-2019

2023

2027

Femke de Vries Vice-Chair

F

1972

NL

22-04-2021

2025

Karin Bergstein

F

1967

NL

22-04-2021

2025

Marja Elsinga

F

1964

NL

25-04-2024

2028

Marlies van Elst

F

1966

NL

19-04-2018

2022

Leonard Geluk*

M

1970

NL

22-04-2021

2025

Constant Korthout

M

1962

NL

25-04-2024

2028

2026

*As of the end of the General Meeting in 2026, Leonard Geluk will step down early as a member of the Supervisory Board.

96

Marja Elsinga (1964)

Marlies van Elst (1966)

Constant Korthout (1962)

Leonard Geluk (1970)

Marja Elsinga is professor Housing Institutions

Marlies van Elst is former COO ING Bank in

Constant Korthout was CFRO at Robeco

Leonard Geluk is chair of the Board of

& Governance at TU Delft and member of

Belgium and Poland and member of the

Group and Van Lanschot Kempen. He is

Directors of VNG (Association of Netherlands

the Supervisory Board of Ymere. She was

Operations & IT Management Team of

a member of the Supervisory Board of

Municipalities) and chair of the Supervisory

vice-chair of the Board of Experts of Stichting

ING Group. She is chair of the Supervisory

APG Group, Delen Private Bank and

Board of CVO Rotterdam en omstreken.

Visitatie Woningcorporaties Nederland.

Board of Nederlands Hypotheken Fonds.

Blauwtrust Groep.

He was former alderman for Youth and Education at the municipality of Rotterdam and chair of the Executive Board of ROC Midden Nederland and De Haagse

Composition of the Supervisory Board Committees and attendance Supervisory Board member

Supervisory Board meetings

Audit Committee meetings

Risk Committee meetings

Huub Arendse

100%

67%

Karin Bergstein

100%

100%

Marlies van Elst

88%

Leonard Geluk

38%

Femke de Vries

88%

Marja Elsinga

88%

Constant Korthout

100%

100%

100%

Total

86%

92%

100%

Hogeschool.

HR Committee meetings

Remuneration Committee meetings

Total %

100%

100%

88%

100%

100%

100%

100%

100%

100% 100%

75%

100%

100%

100%

100%

100%

100% 100%

100%

75%

96%

97

8.3 Activities of the Supervisory Board The Supervisory Board met eight times in 2025. The ExCo is present at the meetings with

•

financial information, (commercial) developments in the various client segments, IT, Risk,

•

the exception of the "private session" that precedes the meetings. The regular topics are

Compliance, operational progress, the budget, progress on implementation of the funding plan, corporate governance and HR-related topics. Finally, this year the renovation of

and BNG GO.

• •

the office at the Koninginnegracht and the reorganisation – including the expansion of

• •

financial results for 2025. PwC audited the report and the financial statements. We convene

•

Executive Committee and the Supervisory Board for execution and supervision respectively

•

the General Meeting (AGM) to approve the annual figures and to grant discharge to the in 2025.

• • • • • •

•

•

•

‘Route to More Added Value’ strategy

Fill the CIO vacancy and vacancy for the Head of IAS

Status of non-strategic exposures and the solar energy portfolio

Developments regarding a new payment system and the selection of a new supplier

Developments arising from ECB supervision and the On-site investigations of the Update on the Debt Issuance Programme (DIP) 2025