9a. BNG Annual Report BNG 2024.pdf

Annual Report 2024

1

This document is the PDF/printed version of the 2024 Annual Report of BNG and has been prepared for ease of use. The 2024 Annual Report was made publicly available pursuant

to section 5:25c of the Dutch Financial Supervision Act (Wet op het financieel toezicht), and was filed with Netherlands Authority for the Financial Markets in European single electronic reporting format (the ESEF package). The ESEF package is available on the company’s

website at https://www.bngbank.nl/jaarverslag and includes a human-readable XHTML

version of the 2024 Annual Report. In any case of discrepancies between this PDF version and the ESEF package, the latter prevails.

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Contents

1.

2.

Foreword

5

4.

CO2e emissions

41

Key figures 2024

7

5.

Internal business operations

BNG in 2024

8

Bank of added value

10 12 14 17 18

47 48 52 55 73

Governance

74 75

1.1 1.2 1.3 1.4

Building social and green added value together Local authorities Housing associations Healthcare Education Public infrastructure and energy

21 23 26 28 30 31

Financial results and outlook

34

3.2 3.3

35 37 40

2.1 2.2 2.3 2.4 2.5

3.

Driven by social impact The world around us Strategy: Our Road to Impact Stakeholder engagement and value creation

3.1

Strong position in money and capital markets maintained Financial results Financial outlook

6.

5.1 5.2 5.3 5.4

6.1 6.2

Employees Compliance Risk Management IT and cybersecurity

Corporate structure Composition of the management body and organisation

78

7.

Corporate governance statement

81

8.

Report of the Supervisory Board

83 84 87 90 92 94 96 97

Supplementary Information

98 99

9.

8.1 8.2 8.3 8.4 8.5 8.6 8.7

9.1

Foreword Composition of the Supervisory Board and committees Activities of the Supervisory Board Audit Committee Risk Committee HR Committee Remuneration Committee

Reporting principles

3

9.2 9.3

Supplementary information on material topics Glossary

10. Financial statements

10.1 Consolidated financial statements 10.2 Company financial statements 10.3 Other information

106 110 115 116 194 218

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Foreword The connecting power of cooperation

Solid results

Thanks to the commitment of our employees and our cooperation with clients, partners and

Our solid financial performance underscores not only our stability, but also our added

the Netherlands in 2024. As a financial partner, we stand alongside our clients – not only

remained high, particularly among housing associations and municipalities. This resulted in

investors, we again contributed to the economic, social and sustainable development of

with funding, but also with knowledge, engagement and the conviction that we can really make an impact together. We are working on a more social and green Netherlands and want to be a driving force behind positive change.

Integrated approach The major issues of our time call for innovative solutions. For example, the energy transition

value for clients and society. Despite challenging market conditions, the demand for credit EUR 11.7 billion in new long-term loans.

A large part of our funding came from ESG bonds, which yielded a higher return this year compared to last year. This confirms our leading role in ESG funding. We use this income

to finance affordable, more energy-efficient social housing and the sustainable and social activities of municipalities.

must not only be sustainable, but also affordable. At the same time, the housing shortage

Enriching our strategy

due to an ageing population and staff shortages.

The outlines of our strategic course remain in full force and effect. We are THE bank of

These challenges call for a common approach, especially now that government budgets

distinguish ourselves as a bank committed to social impact. In 2025, we will strengthen our

demands innovative and accessible solutions and the healthcare system faces challenges

are under pressure. Public and private parties must strengthen each other. BNG plays a connecting role in this. As the bank of the public sector, we support municipalities,

housing associations and healthcare institutions and bridge the gap between central and local authorities.

In 2024, we gave concrete meaning to this with targeted funding for such projects as rented social housing, the renovation of a specialist motion hospital and school buildings, the

redevelopment of a residential area and circular innovations. You can read more about these in the case studies in this Annual Report.

the public sector because we offer competitive lending rates, invest in sustainability and

ambition and enrich our strategy with a clear focus on core themes. For example, we aim

to accelerate the transition to affordable, sustainable energy through heating networks and further improve the social infrastructure within municipalities.

In order to serve our clients optimally, we want to become faster, more efficient and more agile. We will start working in chains, improve and digitise processes in a short-cycle way,

introduce multidisciplinary teams with expanded mandates and place a greater focus on ongoing dialogue and utilising the talent of employees. In addition, we will continue to

invest in a robust IT infrastructure and seek external advice on the most effective way to

modernise our IT landscape, monitor our outsourced IT more closely and accelerate our change processes.

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Tangible impact In order to make our impact more visible and measurable, we will focus more on

transparency about sustainability in 2025. Together with our clients, we will strive for tangible ESG results. We will support them in monitoring and improving ESG, giving account of our efforts in our reporting. We are also exploring how to reward sustainable improvements.

We will invite partners and other stakeholders to strengthen our cooperation and explore new opportunities.

Looking ahead to the future Our strong capital and liquidity position provides a solid foundation, gives us the space

to look ahead, and strengthens our confidence in our commitment to increasing social impact. Our large market share and a loan portfolio that is at an all-time high prove

that our approach is working. The year 2025 will be one of transition, in which we will lay

the foundations for acceleration, improvement and added value in 2026 and beyond. We will continue to invest in sustainability and social progress, strengthen our position as the leading funder of social progress and together build a better future for everyone. On behalf of the Executive Committee, Philippine Risch

Executive Committee in 2024: Cindy van Atteveldt, Olivier Labe, Philippine Risch, Peter Nijsse en Jaco van Goudswaard

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Key figures 2024 Volume of lending

€ 11.7 billion

Balance sheet total

€ 127.9 billion

Net profit

Interest result

€ 536

€ 294

million

million

Proposed dividend

Common Equity Tier 1-ratio

€ 140 million

85.4

billion

93

81.6

Of which granted to or guaranteed by public authorities

89.2

2022 80.6

Decentralized authorities Housing associations

2023

Total long-term loan portfolio

40%

43%

35%

12%

13%

13%

2024

2023

2022

2024

2023

2022

Loan portfolio and main SDGs per core sector 2024

€ 93.0

12%

40%

(€ 2.51 per share)

Total long-term loan portfolio

Leverage ratio

Healthcare Education

88

Public infrastructure and energy

€ 29.4 billion

€ 50.9 billion € 6.3 billion € 1 billion

€ 5 billion 7

BNG in 2024

Klimaatplan Going Green Voortgangsrapportage 2023

January

February

March

April

May

June

1

BNG signs SER Charter

Start of renovation of BNG

Introduction of brand

Progress Report on Climate

BNG starts with the

strategy ‘BNG – Bank

Plan: commitment to CO2e

podcast ‘Meerwaarde

With sustainability and

of added value’ at BNG

reduction pays off: BNG sees

Daan Heerma van

connection as guiding

Boost.

Voss winner of the BNG

emissions of clients fall.

aan tafel. Presenter

principles, we strive for an

Diversity & Inclusion.

Literature Prize.

building at Koninginnegracht.

inspiring office that fits our identity.

Financing Elisabeth-

TweeSteden Hospital by the

Introduction of new BNG

logo at Vereniging van

Nederlandse Gemeenten

Maarten Bouwhuis talks

(VNG) conference.

with customers and

Participants in the conference

stakeholders about the

sub-excursion were briefed

Korthout are appointed as

social and green future

on local and sustainable

members of the Supervisory

of the Netherlands.

energy funding.

Marja Elsinga and Constant

Board. Nijmegen winner of the

European Investment Bank

Heating networks are a

and BNG to achieve the

good alternative to natural

concentration of acute and

gas. This was the central

clinical care at the location

message of the BNG Webinar

ETZ Elisabeth of the hospital

Government Heating

in Tilburg.

Networks.

BNG Heritage Prize.

Meerwaarde aan tafel

Farewell to CEO Gita Salden. 8

July

August

Peter Nijsse appointed

With funding from BNG, HVC

Chief Commercial

can start the construction

Officer

of one of the largest solar parks in the Netherlands.

September

Start of construction of Kindcentrum Olst: the

fifth project of Stichting Maatschappelijk

Vastgoed, which was financed by BNG.

Housing association

October

Philippine Risch starts as Chief Executive Officer .

November

December

Together with the

BNG exists 110 years.

‘Coalition of the Willing’, BNG is launching the Sustainability Guideline to support local authorities in preparing their sustainability reports.

De Alliantie and BNG are strengthening their

BNG Culture Fund

cooperation.

celebrates 60-year

The extension of the loan

anniversary.

provision is used for the construction of medium-sized rental

BNG third safest bank in the world.

homes.

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1. Bank of added value

101

From a polluting economy to a climate-positive society, from a shortage of housing to liveable residential environments and from vulnerable neighbourhoods to future-proof neighbourhoods – these social transitions demand cooperation and concrete, meaningful steps. We are working towards a sustainable future together with housing associations, municipalities, healthcare institutions and other public organisations. In doing so, we ensure that financial resources contribute to the environment, wellbeing and social progress. We see financing as a powerful tool for positive change. In this way, BNG is positioning itself as a partner in impact: bank of added value.

Green

Wellbeing

Social progress

We see financing as a powerful tool for positive change. In this way, BNG is positioning itself as a partner in impact: bank of added value

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1.1 Driven by social impact Our purpose is clear: driven by social impact. With over 110 years of experience as a bank for the public domain, BNG continues to be a reliable partner that focuses on social and environmental progress. As one of the three safest banks in the world and with triple-A status, we provide financing that is not only affordable and accessible, but also contributes to sustainability and social impact. Whether for affordable housing, better care facilities or investments in climate-resilient residential environments, we facilitate solutions that create lasting social value. In this way, together with our clients, we are contributing to a resilient and future-proof society.

Working together to create impact Working together leads to real change. This conviction is embedded in our three core values, which we introduced in 2024:

Connection

Expertise

Optimism

•

We realise our ambitions through

•

We have an open-minded attitude and actively seek contact with each other.

•

We look outward and respond to relevant trends and developments.

•

We continue to develop our knowledge and expertise to find smart solutions for the financing issues and other issues in the public domain.

•

We challenge ourselves every day to

•

We think in terms of possibilities.

cooperation; we believe in the power of the collective.

make the Netherlands more beautiful and sustainable.

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Modernization of school educational facilities in Amersfoort Since 2019, the school boards of primary and secondary education institutions in Amersfoort have had control of their own school buildings. This leads to better coordination between school boards and the municipality, cost advantages in new construction, and more efficient use of temporary accommodation. In two cooperatives, the members are working together to replace around 100 outdated school buildings in a 40-year time period. To support their ambitions, we provided a credit facility of EUR 70 million in 2020, increased to EUR 175 million in 2024. In this way, the cooperatives can continue to invest in nearly zero-energy buildings (NZEB). With the contributions of the school boards, school buildings will reach the level of zero-energy buildings (ZEB) and gas-free buildings. The expanded credit facility will enable them to pay for the investment plans for the coming years and to continue to meet the requirements. The goal is to create functional, efficient, fresh, multifunctional buildings that foster a healthy learning environment. This partnership shows how economies of scale and our funding support the improvement of school buildings and contribute to making the city more sustainable.

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1.2 The world around us The world is changing rapidly and the Netherlands is facing major social challenges. Political, economic, ecological, social and technological developments affect us directly as a bank. This dynamic offers opportunities, but also brings complex challenges with it. We monitor trends closely, analyse their impact and adapt to them to strengthen our role in the public domain and maintain our leading position.

New Dutch cabinet and government budget

The plans of the new Schoof cabinet focus on areas such as social security, migration and

nitrogen. Priority is also being given to affordable housing, the acceleration of construction

projects, care, support for municipalities and the energy transition. Based on the estimated figures for 2024, the Netherlands remained within the European 3% budget deficit limit, with

an estimated deficit of 2.9% of GDP. However, political divisions hampered the development of coherent policies in, for example, the area of climate goals. We are following the cabinet

Politics Geopolitical tensions

Wars, geopolitical tensions and economic uncertainty continued to affect markets in 2024. This led to rising oil and energy prices, which slowed economic growth and drove inflation up. Elections in the United States, France and Germany also caused volatility in financial

markets. Uncertainty about future policies affected interest rates, while political instability

increased interest rate differentials between government bonds and corporate bonds. As

a result, credit costs for governments and companies increased, as did financing costs for promotional banks, such as BNG.

plans closely in order to anticipate the consequences for our clients in good time.

Stricter regulation within the banking sector

The banking sector experienced considerable pressure from stricter regulations in 2024.

National regulators and European authorities actively worked to tighten rules with a focus on climate risk, client protection and financial stability. The tightening of the Basel III

standards, anti-money laundering rules and transparency requirements for sustainability

placed extra emphasis on compliance, risk management and social impact reporting. This stricter regulation fostered stability in the financial system and improved transparency,

while at the same time demanding significant investments in systems and processes to meet requirements and societal expectations.

National cyber security

The wars and tensions in 2024 also had an impact on digital security. Attacks on critical

infrastructure by both governments and cybercriminals increased, bringing risks for national security and the financial sector. Banks were faced with high costs to strengthen their digital security. Public and private parties increasingly sought cooperation to guarantee digital

security. Ensuring a secure digital infrastructure continues to be crucial in this challenging time. We paid extra attention to this in 2024 by further strengthening our IT infrastructure, with a focus on resilience, security and reliability.

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Economic, ecological and social

Digitisation and technological developments

Strict monetary policy

Digital growth: new opportunities and risks

rates in the second half of the year. The termination of the Pandemic Emergency Purchase

providing more efficient processes, lower costs and new opportunities for collaboration

After a period of high interest rates to combat inflation, the ECB gradually started lowering Programme and the phase-out of the Asset Purchase Programme had an effect on long

interest rates and credit costs, which increased the financing costs for governments and businesses. Our bonds remained attractive to investors overall, also thanks to our solid creditworthiness and conservative risk profile.

Tight labour market

The labour market in the Netherlands is under pressure due to a structural shortage

Digitisation continued in the financial sector in 2024, with additional digital services

with technology companies. At the same time, it is increasingly clear that developments in artificial intelligence, cloud computing and the Internet of Things pose new risks, such as a dependence on large tech companies and vulnerability in the event of disruptions. In

addition, the possibility of processing data more quickly and accurately offers opportunities for process optimisation and innovations in service provision and better management

information. Digitisation is high on the agenda at BNG, with stability as a priority to improve both processes and services.

of labour. With an unemployment rate of about 4 per cent and a growing number of

vacancies, companies – including banks – stepped up their fight for talent, especially

digital and technology experts. Organisations also had to invest in attracting and retaining staff, especially in specialist areas, such as data analysis, cybersecurity and digital

transformation. On the positive side, the increase in employment rates among older people has contributed to economic growth. At BNG, thanks in part to our clear purpose, we were happy to be able to attract and retain talent in 2024.

Environmental and social issues

Society increasingly expects more from financial institutions in the area of sustainability and social impact. The climate crisis, stricter EU legislation and pressure on the public

domain call for investments in green energy, the circular economy and innovative solutions to deal with housing shortages and ageing populations. Limited government budgets

are increasing the role of financial institutions. We are anticipating these issues with our impact-driven strategy.

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SWOT analysis Our position as market leader is no reason to sit still. In order to maintain this position,

we respond actively to new developments. Where necessary, we renew and improve our

Strengths

Weaknesses

•

• •

organisation and work processes.

We look at our business model continuously and make sure our resources and capabilities are in line with what is needed. This is how we are able to manage risks and seize new

opportunities. The overview provided below summarises our key insights and shows how we are maintaining our strong position in a changing environment.

• • • • •

Our Triple A rating, status as a promotional lender and position as one of the three safest banks in the world ensure low funding costs and wide access to the capital market Largest financier in the public domain Structural financing possibilities Engaged employees

•

Higher operational costs Room for improvement in

processes and IT Digital services require further development

Stable shareholder base Focused on environmental and social impact

Opportunities

Threats

•

•

• •

High demand for funding for sustainability and social transitions Our knowledge and expertise accelerate transitions at clients Developing new financing solutions (e.g. a guarantee scheme for heat transition)

• • •

Alternative financing options through platforms, direct financing and intercompany loans

More complex laws and regulations are not always in line with our business model Tight labour market Political fragmentation complicates long-term client choices

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1.3 Strategy: Our Road to Impact For our 2024-2026 strategy, we have combined internal analyses, such as the materiality analysis, with external insights, including a SWOT, trend and competition analysis. Discussions with stakeholders, clients and investors, as well as the outcomes of dialogue sessions in 2023, have made it clear which topics are crucial for this strategy. We have combined these insights with our vision for the future, which is aimed at increasing social impact. The result is a current strategy that responds to both current and future opportunities and challenges.

Our strategy For the period 2024-2026, we want to remain the most important financier in the public

domain and contribute to a more social and sustainable Netherlands. Our strategy

translates this ambition into concrete actions and goals. We focus on increasing our

financial and social impact through clear choices and measurable targets for internal control. This lets us monitor our success and progress in both the short and long term.

Strategic objectives The strategic objectives are explained in more detail beside.

Objective 1:

Loans and advances at competitive lending rates BNG offers clients loans and advances at the most competitive lending rates, enabled by competitive organisational and financing costs. This is supported by active management of organisational costs and an efficient funding strategy. Payment transactions are also offered as a service.

Objective 2:

Digital services with personal contact BNG offers a combination of digital services and personal contact where necessary. The focus is on digitalising processes and client contacts to improve the accessibility of client processes and tailor them to client needs.

Objective 3

Demonstrable sustainable Together with its clients, BNG makes a positive impact on making the bank more social and sustainable through our loans and advances and our knowledge.

Doelstelling 4

End-to-end improvement of the lending process BNG is continuously working on making business processes more efficient. This is important for client satisfaction, the impact BNG wants to make and employee satisfaction.

Objective 5

Quality and accessibility of data BNG needs high-quality and easily accessible data for data-driven work. High-quality data make it possible to respond to changes and are essential for achieving strategic goals and improving processes.

Objective 6

Modern and secure IT BNG needs modern and secure IT infrastructure to achieve strategic goals, with the protection of clients, stakeholders, investors and employees as an important precondition.

Objective 7

We are a bank with a heart, focused on personal growth and cooperation BNG has a diverse and inclusive work environment where everyone feels at home and can be themselves. We can call on all the talent and make the best use of the different perspectives and insights. Our employees are engaged, are in control, take charge of their own development and are focused on cooperation.

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1.4 Stakeholder engagement and value creation Stakeholder engagement We continue to engage actively in dialogue with stakeholders. These discussions are often part of our daily work and take place at various levels within the organisation.

The table below provides an overview of our interactions and engagement with various stakeholder groups. Stakeholder

Involvement

Clients

We have regular conversations with our clients, where, in addition to financial matters, social impact and sustainability are playing an increasingly prominent role.

Shareholders

General Meeting of Shareholders, Extraordinary General Meeting of Shareholders and discussions with ministries, provinces and municipalities.

Supervisory Board

The Supervisory Board oversees the activities and policies of the Executive Committee, as well as the way it implements our strategy. An overview of the activities and topics discussed by the Supervisory Board can be found in Chapter 8 of this Annual Report.

Employees

We hold a weekly 'Week-Up meeting' where the ExCo or other invitees present relevant matters to all staff. We involve the staff in our Strategy by, among other things, the BNG Boost meeting, which was attended by all employees in 2024. Furthermore, we conduct a pulse survey among the staff twice a year and employees are involved in the bank's direction via the Works Council (OR).

Investors

BNG attracts a large part of its funding through public issues (bond issuance) on international capital markets. We have regular discussions with (potential) investors.

Supervisory authorities

We consult regularly with the supervisory authorities, including the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) on both financial and non-financial issues.

Rating agencies

Meetings with a range of rating agencies are held at least once per year.

Stakeholder

Involvement

Guarantee funds

Regular consultations take place with the Social Housing Guarantee Fund (WSW) and the Healthcare Sector Guarantee Fund (WfZ)

Sector organisations and trade associations

We participate in working groups of the Association of Netherlands Municipalities (VNG) and regularly hold discussions with the association of Dutch housing corporations Aedes and we are involved in the Interprovincial Consultation (IPO).

Value creation We want to continue to be the main financier of the Dutch public sector and contribute to a more social and green Netherlands. We work on the basis of a central outlook: Bank of

added value. Social impact and the value that we create together are central to everything we do.

In the model below we apply the Six-Capital model of the International Integrated Reporting Council (IIRC). This model provides insight into the value that we add for our stakeholders and society.

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How we create value

Input

Strategic focus

Human capital Expert employees with expertise in public funding and sustainability, focused on social impact Financial capital Affordable financing for public activities, thanks to strong creditworthiness and suitable financial products

Social capital Strong relationships with public partners and clients, such as housing associations and healthcare institutions, focused on collaboration and shared goals

Produced capital Buildings, office infrastructure, equipment and systems play a critical role in our business operations

Financing at competitive lending rates

Core activity Providing financing and financial services to public and semi-public institutions, focusing on social and green added value

Technological capital Our focus is on digital infrastructure, cybersecurity and client-specific digital solutions

Natural capital We focus on financing which contributes to the achievement of the net-zero CO2 target for 2050 and to protect and restore natural resources

Output

Strategic focus Attractive loans and advances, digital services, sustainability, high-quality data, modern and secure IT and bank with a heart

Purpose Driven by social impact

Outcome We offer clients loans and advances at the most competitive lending rates

Strategic client interviews

We offer a (digital) customer journey and personal contact where necessary.

Activities aimed at social and green added value

We are demonstrably sustainable.

Digitalised processes

Optimised data collection processes and improved datasets

Reinforced IT systems for improved resilience, reliability and safety

Improvements in staff strategy and investments in the personal growth of employees

Impact

We have efficient processes and focus on continuously improving these processes.

Our data are of high quality and easily accessible.

We have modern and secure IT.

We are a bank with a heart, focused on personal growth and cooperation.

191

Material themes Since 2021, we have been reporting in accordance with the guidelines of the Global Reporting Initiative (GRI) in our Annual Report and have also done so for 2024. In this context, it is

essential to map out the material themes for the organisation properly. We evaluate these themes annually and report on our progress based on identified KPIs. We focus actively on the following themes: Material theme

Link to a Strategic Objective

KPI

Objective

Score for 2024

Outcome and effectiveness of management actions

Market leader in the public sector

Loans and advances at competitive rates

Scoring percentage of new long term lending >60%

> 60%

Green

The commercial reporting has improved, which results in better management. The scoring percentage has been achieved

We are demonstrably sustainable

Demonstrable sustainable

•

ESG rating is among the top 39%

Our ESG rating is among the top 39%

Green

The KPI of the ESG rating was achieved in 2024

•

% reduction of CO2e emissions of BNGs loan portfolio (scope 1 and 2 absolute emissions)

The reduction of the CO2e emissions of BNGs loan portfolio (scope 1 and 2 absolute emissions) is greater than 0%

Green

The reduction of CO2e emissions (scope 1 and 2 absolute emissions) from the credit portfolio is 3% for the sectors we have been measuring since 2018.

Improvement of at least 5% reduction in the processing time

Red

The implementation of the Risk Based Review does not show the 5% improvement in the processing time and lead time

Efficient organisation

End-to-end improvement of the lending process

Percentage reduction in the processing time of revisions in the credit chain

Data security and high-quality data

Quality and accessibility of data

•

% Critical Data Elements (CDE) under governance

100%

Orange

The CDEs have been identified. Focusing on this KPI has provided the foundation of critical data, based on which data quality can be tested in a standardised manner

•

% delivery reliability of It changes finished (features done) compared to IT changes committed

80%

Red

Progress was made in 2024 in the tighter prioritisation and better monitoring of objectives. Nevertheless, the current scores still do not demonstrate sufficient focus on the established priorities

•

% male/female ratio

At least 40% male or female

Red

•

% of employees < 45 years of age

% of employees under 45 years of age > 50%

Orange

We observe that the figures (KPIs) in terms of the composition of the workforce (gender/age/limited capacity to work) are difficult to influence positively in the short term. This requires a long-term commitment

Modern and secure IT

We are a bank with a heart

We are a bank with a heart, focussed on personal growth and cooperation

Section 9.2 of this Annual Report explains the methodology, including the policy and actions related to material issues, and the differences from last year’s materiality analysis.

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2. Building social and green added value together

7 21

Our clients make the difference in society and we help them to do so. We support activities that contribute to social and green added value with funding that is affordable and accessible. Think of affordable housing, improved care facilities or investments in climate-resistant living environments. We not only offer financing, but also offer our targeted expertise and customised solutions to make their ambitions a reality. Our long-term vision, therefore, does not focus on profit maximization, but on impact with and for our clients.

Sustainable client relationships Client contact is central to our work. We are both partners and gatekeepers and carefully monitor the integrity of our client relationships. This takes time and effort and also

offers valuable opportunities. A good example of this is our cooperation with housing

associations, which represent a large proportion of our turnover. Together, we have made arrangements to improve the reporting structure. This provides a better overview and a stronger service provision.

Sustainability and social impact Environmental factors, social aspects and good governance (ESG: Environmental, Social,

Governance) are playing an increasingly important role in financing decisions. That is why

we invest continuously in the knowledge and expertise of our employees in these areas. This lets us support our clients in achieving their sustainability goals. Where necessary, we help them to understand their progress and encourage them to take further steps towards a sustainable future.

Our extensive knowledge of the sectors in which we have been active for decades forms a solid basis for the development of products and services that contribute to social impact.

This is apparent from targeted initiatives, such as the financing of heat networks, supporting Owners’ Associations (OAs) through a special fund for sustainability and offering solutions to keep sporting associations financially healthy. These initiatives have a tangible impact and support our clients in their sustainability efforts.

Impact of the CSRD The introduction of the CSRD may result in additional administrative burdens for our clients.

Although most of our clients do not yet fall directly under the CSRD obligation, they do have to provide data for stakeholders for whom this is the case, as applicable for BNG. We work with our clients as much as possible on standardised reports to alleviate this pressure.

22

2.1 Local authorities In 2024, we further strengthened our position as the market leader in the public domain. We act as an active partner that contributes to achieving social goals. By cooperating with local authorities, we help them not only to guarantee financial stability, but also to realise their ambition for a sustainable and future-proof society.

Local authorities Long-term loan portfolio

29.4

29.4

2.4 2024 (in EUR billions)

2023

2022

2.3

we not only support municipalities with financing solutions, but also think actively about

sustainable and strategic solutions that fit their long-term goals. This takes place, among

other things, through strategic client discussions, in which topics such as sustainability, the

3.5

energy transition and social issues are discussed. These conversations are essential for

understanding our clients’ specific needs and providing them with appropriate solutions to Extent new long-term loans

2.3 2024

facilities and renewable energy.

postponed due to the constant need for other investments in public facilities. That is why

3.5 2.4

support them in important investments, such as good social services, housing, educational

uncertainties. Renovations and sustainable projects are essential, but are sometimes

billion

30.9

they can perform their social tasks effectively. With our tailor-made financing solutions, we

Local authorities faced significant challenges in 2024, such as rising costs and financial

€ 2.4

billion

and other local authorities. They rely on us for payment transactions and lending, so that

Financial challenges and sustainable choices

Extent new long-term loans

€ 29.4

We play a crucial role as a funding partner and home banker for municipalities, provinces

suit their ambitions.

Of which granted to or

2023

2022

guaranteed by local authorities

(in EUR billions)

With its financing, BNG helps local authorities to work on

SDGs 3 (Good health and well-being), 4 (Quality education), 7 (Affordable and clean energy), 11 (Sustainable cities and communities) and 13 (Climate action).

A concrete example of our active involvement is the topic of social return, in which social

added value is created by stimulating employment and development. In payment traffic agreements, we set social return as a condition. This provides opportunities for people with a distance to the labor market, support charitable causes, and offers volunteer lessons in education. In this way, we are able to contribute to inclusive and socially responsible services.

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Knowledge sharing and client meetings We organise various meetings and webinars every year to share knowledge and

experience. In this way, we support clients in current challenges and developments. In

2024, we organised a new cycle of client meetings on current financial issues which were

specifically aimed at the practical support of financial teams within municipalities. We also contributed to discussions about the energy transition during the VNG Annual Congress.

Sustainable heating was an important theme for our public sector clients this year. During our Heat Networks webinar, for example, the following question was central: How can we

finance heating networks? In addition, together with the ACM, we organised a meeting with

heat experts from a range of organisations. This group helped considerations about how we can make the transition to sustainable heating affordable and attractive.

Sustainability Reporting Guideline We encourage clients to embed sustainability in their policy, budget and accountability

and test financing proposals for their environmental and social impact. Together with the Coalition of the Willing, consisting of, among others, local authorities and their umbrella organisations, the BNG, VNG, accountants, the CBS and the VU, we have developed the Sustainability Reporting Guideline, which helps local authorities to make sustainability

performance transparent and in line with the CSRD directive. Although municipalities and provinces do not have a legal obligation to draw up sustainability reports, they play an

important role in the chain of organisations subject to the CSRD, such as banks and other

related parties. The guideline supports them in drawing up standardised sustainability data. This lets them take a major step towards transparency and integral sustainability in the budget cycle.

24

Affordable social rental housing in Voorne aan Zee In Brielle and the surrounding area, about 750 rent-controlled homes have been given new owners, ensuring that tenants remain assured of affordable housing in their trusted environment. Approximately 300 of these homes were purchased by the municipality of Voorne aan Zee, for which we provided the funding. This allowed Voorne aan Zee’s municipal housing company to take control of the homes, thereby contributing to the preservation of rented social housing in the region. The homes were previously owned by Hef Wonen, which is now focusing on the Rotterdam urban region. The new owners will make sustainability and quality improvements. This will not only make the homes future-proof, but also ensure lower energy costs and a higher quality of living for the tenants. This acquisition lays the foundation for a sustainable and stable housing stock in Voorne aan Zee, which will keep the region attractive for both current and future residents. The cooperation between the housing associations Maasdelta and Resort Wonen and the municipal housing company is set to contribute to a solid housing market and a careful, responsible development of the region.

25

2.2 Housing associations With more than 2.4 million affordable rental properties, the social rental sector plays a crucial role in the Netherlands. As the largest financier of housing associations, we make an important contribution to affordable and sustainable housing.

Financing and investment capacity We support housing associations with funding for the construction of new social rental homes and the preservation of existing homes. Our loan portfolio continued to grow strongly in 2024. In total, we provided EUR 7.7 billion in new long-term loans.

Housing associations Long-term loan portfolio

We provided financing for EUR 308 million in the mid-lease segment. We did this across

€ 50.9 46.9

of middle-income groups. Additionally, it improves the flow from housing and contribute to mixed communities. We see great social value in this segment and advocate long-

term Social Housing Guarantee Fund (WSW) assurance to improve the financial viability

€ 7.7

billion

50.9

both urban and regional areas. The mid-lease segment meets the high housing demand

Extent new long-term loans

of projects.

billion

7.7

44.8

6.9

7.4

7.2

Housing associations operate within tight financial frameworks. They keep rent increases limited to keep housing affordable. This is an important social objective, but it does 6.6

limit their scope for investment. As a result, the implementation of new construction

6.8 Extent new long-term loans Of which granted to or

2024 (in EUR billions)

2023

2022

2024

2023

2022

guaranteed by local authorities

and sustainability is under pressure. Housing associations are, therefore, asking for tax

adjustments, such as a reduction in corporate income tax. We also consider this necessary to safeguard their long-term investment capacity.

(in EUR billions)

With its financing, BNG helps housing associations to work on SDGs 7 (Affordable and clean energy), 11 (Sustainable cities and communities) and 13 (Climate action).

26

Progress of National Performance Agreements With an annual target of 30,000 homes, the National Performance Agreements make

housing associations jointly responsible for the 900,000 new homes that need to be built before 2030. However, only 18,000 homes were completed in 2023.

Despite the delay, the new government has decided to continue with the agreements, so that the ambitions for housing construction and sustainability are retained.

In addition to the social housing targets, there are agreements on the realisation of

per cent). Making existing homes more sustainable and demolishing new buildings leads to improvements in energy labels (source: Aedes benchmark 2024).

Most housing associations follow a climate roadmap and expect to meet the goal of

phasing out poorly-insulated homes by 2028. We discuss sustainability structurally with our clients, which is an essential part of our strategy to contribute to the Climate Goals 2050. Sustainability is now a logical part of the sector strategy. We are supporting this

sustainability through our role as financier and by including ESG criteria in discussions.

50,000 medium-sized rented homes. However, housing associations are lagging behind these targets, partly due to slow approval procedures, limited construction sites, rising

construction costs and grid congestion. These structural obstacles are putting pressure on the 2030 targets.

The recalibration of the National Performance Agreements was presented during the

Woontop 2024 conference. It agreed to remove restrictive rules and procedures and to

set uniform requirements for new construction in line with EU rules to accelerate residential construction. BNG is working together with VNG and Aedes to explore the role it can play in fulfilling the agreed commitments.

Sustainability Sustainability plays a central role in the social rental sector, mainly due to the impact of

climate change and increased energy costs. Housing associations have committed to a

range of objectives, including making 450,000 homes natural gas-free by 2030 and phasing out homes with an E, F or G energy rating by 2028. This means that there should be no more homes with weak energy performance in the sector. In addition, housing associations are aiming to ensure that no homes are in a poor state of repair as of 2026.

The pressure on housing associations to take measures to reduce energy costs for tenants is growing. There were 180,700 homes with a poor energy rating in 2023. The number of

homes with E, F and G energy labels fell by 37,800 homes to a total of 142,900 (down 20.9

27

2.3 Healthcare We support healthcare institutions with financing for investments, such as in healthcare real estate. We work closely with clients from a range of sectors: hospitals, mental health care, care for the elderly, youth care and care for the disabled. Thanks to our strong market position and a stable risk profile, we are a trusted partner for the sector.

Investment challenges In 2024, the healthcare sector was under pressure to obtain financing for necessary

investments. Due to higher costs and limited resources, the volume of investment has decreased. Healthcare institutions need to make sharper choices, while requirements

on sustainability and new construction make financing more complex. We support the

sector by offering financing and strategic consultancy. In total, we provided 339 million

Healthcare Long-term loan portfolio

Extent new long-term loans

€ 6.3 6.3

(in EUR billions)

Healthcare institutions are increasingly investing in technology. Automation and

2022

robotisation help reduce the workload, while maintaining the quality of care. 995

6.7 339

2023

Technology and sustainability

million

204 2024

healthcare sectors.

€ 339

billion

6.6

euros in financing. In doing so, we contributed to important financing within the various

286

Sustainability in healthcare real estate is also increasingly becoming a priority. For

669

Extent new long-term loans Of which granted to or

285 2024

2023

2022

guaranteed by local authorities

(in EUR millions)

With its financing, BNG helps healthcare institutions to work on SDGs 3 (Good health and well-being),

7 (Affordable and clean energy) and 13 (Climate action).

new-builds, the focus is on logistical improvements, which means that care is

organised more effectively with fewer staff. This also contributes to more sustainable resource management.

Green Deal: Working together on sustainable care The Green Deal ‘Working together for sustainable care’, which we signed at the end of 2023, sets the sustainability of the healthcare sector in motion. Together with our clients, we work on investments that contribute to the goals of the Green Deal. Projects aimed at energy saving and CO2 reduction are playing an important role in this.

28

Integral Care Agreement: strengthening collaboration The Integral Care Agreement (IZA) emphasises the importance of collaboration between healthcare institutions, municipalities and health insurers to make care future-proof.

Regional cooperation is essential to address challenges, such as staff shortages and complex care needs.

29

2.4 Education In the education sector, we provide funding for primary and secondary education, including directly through municipalities, and provide direct support to secondary and higher vocational education institutions, as well as universities. In 2024, we strengthened our role as a reliable partner in educational housing. Thanks to our sector-oriented knowledge and expertise, we can finance solutions to the complex issues in this sector. We combine affordable financing with support for sustainability ambitions and innovations.

Sustainability accelerates innovation in education After a period of delay due to rising prices and the aftermath of the coronavirus, attention

again turned to improved education housing in 2024. This development was partly fuelled 1

by the emphasis on sustainability and tackling overdue maintenance. The sector is

increasingly focusing on gas-free, energy-neutral buildings and a healthy indoor climate. In addition, the possibilities for circular construction are also being examined. Economies of scale and efficiency are important and are supported by concrete financing and

cooperation. BNG supported this change through the extensive financing arrangements

for the Housing Cooperatives Samenfoort PO and Samenfoort VO in Amersfoort, which are

Education Long-term loan portfolio

Extent new long-term loans

€ 1,002 1,057

We want to contribute to affordable solutions and accelerate the approach to educational housing challenges with our knowledge and expertise. Engaging in dialogue is essential in this regard. In the second quarter of 2024, we organised the Educational Afternoon in

49

Amersfoort, where we discussed practical forms of financing together with municipalities

37 13

(in EUR millions)

Knowledge sharing and cooperation

million

1,002

2024

integrated child centre in Olst-Wijhe through Stichting Maatschappelijk Vastgoed.

€ 49

million

1,035

making several new construction projects possible. Another example is the financing of an

2023

2022

2024

Extent new long-term loans

13 3 2023

3 2022

Of which granted to or guaranteed by local authorities

(in EUR millions)

With its financing, BNG helps educational institutions to work on SDGs 4 (Quality education), 7 (Affordable and clean energy) and 13 (Climate action).

1 ibo-onderwijshuisvesting-funderend-onderwijs-een-vak-apart-een-toekomstbestendig-onderwijshuisvestingsstelsel.pdf

and educational institutions. The focus was on tackling overdue maintenance, sustainability and creating a healthy indoor climate. In the third quarter, we attended the IVVD

Onderwijsvastgoeddag together with HEVO, a specialist in sustainable housing. We

discussed the sustainability, renovation and scaling up of educational housing with the participants. During both events, we highlighted the importance of the financier’s early involvement in decision-making for a more efficient approach and better results.

30

2.5 Public infrastructure and energy In the Public infrastructure and energy sector, we work together with our clients on sustainable solutions. We provide funding that helps them tackle societal challenges and make an impact.

facilities remain future-proof. This requires long-term investments, which are often passed

Long-term loan portfolio

We offer financing at attractive conditions. We provide both secured and unsecured loans.

Extent new long-term loans

In addition, we develop and finance (guarantee) funds. With our focus on vital public

infrastructure – such as water, electricity and heat networks, renewable energy production,

€ 1,248

waste management and spatial planning – we are supporting important social goals. At

the same time, we are building up the strength of our stakeholders, such as municipalities, housing associations and healthcare and educational institutions.

million

4,771 4,010

2023

2022

A stronger role as a partner in the sector

1,317

1,248 365

327 (in EUR millions)

(utility) companies, municipalities and the national government, we are ensuring that public on to society via cost-based lending rates.

million

2024

of sufficient space for living and working require considerable investments. Together with

Public infrastructure and energy

€ 5,022 5,022

The energy and heat transition, the transition to a circular economy and the development

2024

892

Of which granted to or

198 2023

Extent new long-term loans

2022

guaranteed by local authorities

In 2024, we further strengthened our position as a financier of the Public infrastructure and energy sector. This year was marked by both large and smaller financing rounds, with a

total outstanding portfolio of EUR 5.0 billion, an increase of EUR 251 million compared to 2023.

(in EUR millions)

With its financing, BNG helps the public infrastructure and energy sector to work on SDGS 7 (Affordable and clean energy), 11 (Sustainable cities and communities) and 13 (Climate action).

Networks In networks, the focus is on making energy management, drinking water management

and heat management systems more sustainable. We play an active role here through financing and cooperation with public and private partners.

In 2024, several municipalities decided to set up a municipal energy and/or heat business. Many other municipalities are working on plans for 2025 or 2026. A good example is the

municipality of Westland, where, together with our partners, we have taken an important step in making the heat supply more sustainable. With our co-financing, Aardwarmte Polanen and Warmte Netwerk Westland have succeeded in creating a geothermal

31

installation in Monster. This project is part of the largest geothermal heat project in the

this. This initiative not only focuses on energy savings, but also offers housing associations

This is a crucial step towards a more sustainable energy system.

plays a key role in making sustainability accessible to a wider range of stakeholders and

Netherlands and provides sustainable heat to more than twenty greenhouse horticulturists.

The heat transition requires municipal control. An in-house public energy and/or heat

company is essential in this regard. In 2025, the Collective Heat Systems Act will strengthen

the opportunity to realise investments in mixed home-owners associations. This partnership contributes to making the Dutch housing stock more sustainable.

the municipal authority. There will also be policies to support public implementation. We

Environment

for heat networks. This year, we held extensive discussions with the government and

One of the major contributions in 2024 was the financing of a fourth fermentation

as a partner of municipalities and the government.

processing of household residual waste and stimulating sustainable energy production

worked together with the Association of Dutch Municipalities (VNG) on a guarantee fund municipalities about the implementation of these plans. In 2025, we will continue our role

Energy The energy sector continued to grow in 2024, despite significant challenges, such as grid

installation at Omrin. This installation is aimed at improving the separation results in the from residual waste. This not only reduces CO2 emissions, but also contributes to a

cleaner and more sustainable world with less waste and more reuse. The new fermenter

strengthens Omrin's ability to make the most of waste flows, which is essential for achieving environmental goals and supporting the energy transition.

congestion and energy market price fluctuations. A lot of renewable energy generation

We have also provided funding for the sustainability and modernisation of waste and

roof and land-based solar farms. This has led to greater differences between the supply

storage facility, the replacement of underground and above-ground containers, further

capacity has been added in the Netherlands in recent years, such as wind farms and

and demand of electricity, resulting in more frequent periods of negative electricity prices. This dynamic has a direct impact on existing business cases and is also expected to

influence future projects. As a result, well-matched financing solutions are becoming increasingly important.

One of the most important projects in 2024 was the financing of Zonnepark

cleaning services. We supported Cure and AVRI, both joint schemes, with loans for a new electrification of their vehicle fleet, and the establishment of a new environmental street.

We also financed Joint Regulation Blink, a joint venture between several municipalities, in

the unbundling of the private partner Prezero, which was part of the Joint Regulation as a

waste processing company. Our funding was used to take over the fleet and underground containers and set up our own ICT environment.

Noordermeerdijk, a land-based solar park with a capacity of 98 MWp in the

Noordoostpolder. HVC, an energy and waste company with municipalities and water

boards as shareholders, developed this park. Local farmers own 50% of the solar park. It

plays a crucial role in increasing the production of renewable energy. The financing was

finalised in 2024, paving the way for the realisation of the project in 2025. This emphasises the power of public-private collaboration in the energy transition.

In addition to large-scale projects, we also invested in sustainability on a smaller scale in

2024. In collaboration with SVn and Invest-NL, a fund of EUR 75 million was set up to support

the renovation and sustainability of home-owners associations. We finance EUR 60 million of 32

Mobility

Spatial planning

Last year, we supported various mobility financing rounds that contribute to making public

With the ambition to build more than 900,000 homes by 2030, area development is more

transport and major seaports along the coast in the Netherlands more sustainable.

One striking initiative is to make the fleet of the Dutch Pilotage Service more sustainable. Thanks to our funding, two new SWATH ships are being built. These ships are about 20

topical and more important than ever. This ambition calls for significant investments in both new locations for residential construction and the redevelopment of existing (commercial) locations.

per cent more efficient than their predecessors, leading to a significant reduction in the

As a public sector financier, we play a trusted role in this and provide the financial basis to

propulsion system, which contributes to a more sustainable and efficient shipping design.

infrastructure, public space and facilities are needed before homes or business locations

ecological footprint. They use an innovative hybrid propulsion system and an electric

This allows the Dutch Pilotage Service to continue to carry out safe and efficient operations, while at the same time investing in a cleaner future.

The Municipal Transport Company (GVB) in Amsterdam has also taken important steps

realise large-scale projects. The challenge with spatial planning is that large investments in reach their final destination. We work closely with public partners, such as provinces,

municipalities and Regional Development Companies (ROMs). Additionaly, we leverage our expertise in Public-Private Partnerships (PPPs) when it adds value.

towards making public transport more sustainable. Together with NWB, we have extended

We financed a wide range of developments in spatial planning in 2024. These ranged

capital will be used to achieve the ambitious investment agenda of the GVB for the coming

redevelopment of industrial sites. These projects not only contribute to a liveable residential

and expanded the CFP revolving credit facility to a total of EUR 427 million. This additional

years. The GVB plays a crucial role in public transport in and around Amsterdam. Every day, the company transports more than 800,000 passengers using subways, trams, buses and ferries. This funding will help the GVB to modernise its infrastructure and vehicles, ensuring more efficient transport and contributing to a more sustainable urban transport system.

from expansion sites for residential construction in fast-growing municipalities to the

environment, but also strengthen the economic capacity of regional governments. By making infrastructure and facilities future-proof, we are supporting the Netherlands' broader ambitions in terms of sustainability and resilience.

33

3. Financial results and outlook

9 34

3.1 Strong position in money and capital markets maintained Developments in 2024 In 2024, we raised EUR 18.6 billion in long-term funding with an average maturity of 5.7 years. The total amount of long-term funding raised is about EUR 3 billion more than in 2023. This was directly contributed by several large syndicated bond issues, so-called benchmarks. We have been active this year by making four new benchmark issues in EUR and three in

USD. This is in line with our ambition to maintain an outstanding curve of benchmark bond

Total outstanding ESG Bonds

Long term funding raised

€ 26.7

€ 18.6

26.7

billion

issues for both currencies. In addition, we issued two large new bonds in GBP. We were

billion

18.6 21.9

also active in AUD and CHF and returned to the Chinese yuan and Hong Kong dollar bond

7.5

15.7

markets after a few years of absence. Our funding strategy is designed to reach a wide

variety of investors both in terms of geography and type of investor. The primary investor interest of 2024 shows that we are more than achieving this diversity.

2024

2023

2024

2022

15.2 6.3

2023

16.3

5.9

2022

(in EUR billions)

(in EUR billions)

Funding by currency

Funding by geographic region

Capital market funding Of which ESG Bonds

Importance of issuing ESG bonds In the capital markets, investors are seeing significant interest in ESG bonds. Since 2014, we have been active in this market in issuing bonds with a sustainability or social label. Since then, we have already issued more than EUR 32 billion of these ESG bonds in the capital markets. The current ESG bonds are issued in line with the bank’s Sustainable Finance

Framework. This framework can be consulted on our website:. We use the funds raised to

USD 40%

2% CHF 7% GBP 2% AUD

finance municipalities and housing associations. To this end, local authority budgets and

Middle East and Africa North 6% and South America 13 %

expenditure by housing associations are directly linked both to the green and social bond categories of the International Capital Markets Association (ICMA) and also to the United Nations Sustainable Development Goals (SDGs).

CNY 1%

48% EU

Asia 23%

Europe 58 %

Our ambition is to take a significant part of the funding from the issuance of ESG bonds. In recent years, the issuance of ESG bonds has, therefore, increased. While ESG bonds made

up 14 per cent of our total bonds issued in 2020, this percentage increased to more than 40

per cent in the past year. In total, we issued a record EUR 7.5 billion of ESG bonds in 2024. This was done both by new issues and by increasing some existing bond loans.