Nordic Investment Bank 18-K/A Annual report (foreign governments) (amended)

Exhibit IX

Table of Contents

3	Highlights
3	Key figures and ratios
4	President & CEO’s comments
5	Operating and financial review
5	Total comprehensive income
7	Financial position
10	Financial statements
10	Statement of comprehensive income
11	Statement of financial position
13	Statement of changes in equity
14	Cash flow statement
16	Notes to the Interim Financial Statements
16	Note 1 - Segment information
18	Note 2 - Net interest income
18	Note 3 - Net profit on financial operations
19	Note 4 - Expected credit loss
19	Note 5 - Net loan losses
20	Note 6 - Classification of financial instruments
21	Note 7 - Fair value of financial assets and liabilities
21	Note 8 - Loans outstanding
21	Note 9 - Debts evidenced by certificates
22	Note 10 - Basis of preparation
22	Ratio definitions
23	Report on Review of Interim Financial Report

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Highlights

During the half year ending 30 June 2019, a total of EUR 1,339 million in new loans were agreed and EUR 1,484 million were disbursed. The disbursements in the first half year were lower than the historically high level of 2018. The net profit for the period amounted to EUR 95 million, down from EUR 110 million for the corresponding period in 2018.

In January, NIB issued its first Nordic–Baltic Blue Bond. The five-year SEK 2 billion bond was launched under the NIB Environmental Bond Framework and the proceeds will finance investments in water resource management and protection.

At its annual meeting on 24 May 2019, the Nordic Investment Bank’s Board of Governors approved amendments to NIB’s Statutes, which will be submitted to undergo the required national procedures of member countries. The intent of the amendments is to ensure continued adherence with sound banking principles and maintain the Bank’s relevance to fulfil its mandate.

Key figures and ratios

In millions of euro unless otherwise specified	Jan-Jun 2019			Jan-Jun 2018			Jan-Dec 2018
Net interest income		107			112			223
Profit before net loan losses		91			109			167
Net profit		95			110			173
Loans disbursed		1,484			2,153			4,047
Loans agreed		1,339			1,896			4,330
Mandate fulfilment *		100	%		87	%		91	%
Loans outstanding		18,715			18,267			19,065
Total assets		31,708			31,157			31,710
New debt issues		2,895			5,203			6,620
Debts evidenced by certificates		25,598			25,132			25,651
Total equity		3,641			3,518			3,578
Equity/total assets **		11.5	%		11.3	%		11.3	%
Profit/average equity **		5.2	%		6.3	%		4.9	%
Cost/income **		20.1	%		17.0	%		20.6	%
Number of employees (average during the period)		198			196			197

* See page 8 for mandate fulfilment explanation

** See page 22 for ratio definitions

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President & CEO’s comments January–June 2019

NIB provides long-term loans to its customers to ensure sustainable growth and lasting impact on the productivity and environment of the Nordic-Baltic region. Demand for long-term financing from NIB is still strong. The disbursements in the first half of the year were, as anticipated, lower than the historically high level of 2018. During the six-month period ended 30 June 2019, a total of EUR 1.3 billion in new loans were agreed and EUR 1.5 billion million were disbursed. The credit quality of the loan portfolio improved during the period resulting in a reduction in loan loss provisions.

NIB reviews all projects and scores them for productivity gains and environmental benefits in the Nordic–Baltic countries. Projects that contribute sufficiently to sustainable development qualify for financing by NIB. All projects financed this year have been assessed as having significant positive impact on the productivity and/or environment of the region.

As expected, the profit for the period amounting to EUR 95 million was lower than for the corresponding period in 2018. The main reason for the decrease was a lower unrealised result on financial operations and lower net interest income.

During the first six months of 2019, the Bank raised EUR 2.9 billion in new funding (January–June 2018: EUR 5.2 billion). The decrease in funding requirements is a result of lower loan disbursements and lower collateral requirements. In February, NIB listed its inaugural Nordic–Baltic Blue Bond for water management and protection on Nasdaq Stockholm. The listing marked the first blue bond on NASDAQ’s Nordic Sustainable Debt Market. The bond was issued under NIB’s Environmental Bond Framework and supports the Bank’s lending to selected wastewater treatment projects, prevention of water pollution and water-related climate change adaptation.

The Banking industry has undergone significant changes since the last financial crisis in terms of capital and risk management and regulatory oversight. In order to ensure continued adherence with sound banking principles the Bank is in the process to change its Statutes. At its annual meeting in May, the Nordic Investment Bank’s Board of Governors approved amendments to the Bank’s Statutes, subject to the required national procedures (including ratification if needed) to enter into force. These amendments will permit NIB to be more relevant in its operations and thereby add more value and efficiency in achieving its mission. Sound and comprehensive polices for capital and risk management allow NIB to maintain the highest possible issuer credit rating and obtain funds from the capital markets on advantageous terms, which is essential for the implementation of its mandate.

Henrik Normann, President & CEO

4 | Interim Financial Report

Operating and financial review

Total comprehensive income

January–June 2019 compared to January–June 2018

NET PROFIT

The net profit for the period January–June 2019 amounted to EUR 94.7 million, down from EUR 110.4 million in the same period last year. Total operating income decreased from EUR 131.1 million to EUR 113.3 million. Total operating expenses increased by EUR 0.5 million to EUR 22.7 million, resulting in profit before net loan losses decreasing to EUR 90.6 million (January–June 2018: EUR 108.8 million).

NET INTEREST INCOME

Net interest income for the period amounted to EUR 106.5 million (January–June 2018: EUR 111.6 million). Net interest income on lending activities increased by EUR 1.0 million, due to higher average loans outstanding. Interest income on treasury activities decreased by EUR 6.0 million due to the low yield environment.

NET COMMISSION INCOME AND FEES

Net fee and commission income for the period January–June 2019 was EUR 4.0 million, compared to EUR 5.9 million in 2018, due to the lower volume of loans agreed and disbursed in the six month period under review.

NET PROFIT EUR m	NET INTEREST INCOME EUR m	NET COMMISSION INCOME AND FEES EUR m

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NET PROFIT ON FINANCIAL OPERATIONS

The net profit on financial operations for the period January–June 2019 totalled EUR 2.8 million, which was EUR 10.8 million lower than the same period in 2018. The result includes unrealised gains of EUR 2.8 million. The unrealised results will reverse when the underlying transactions reach maturity.

TOTAL OPERATING EXPENSES

Total operating expenses were EUR 0.5 million higher than in 2018. The Bank continues to focus on costs to ensure an efficient ratio of operating cost to income.

NET LOAN LOSSES

The total provision for expected credit losses on assets held at amortised cost amounted to EUR 116.7 million at 30 June 2019, which is EUR 3.4 million less than at 31 December 2018. This provision covers both loans outstanding and treasury assets held at amortised cost. There were no new non-performing loans during the period and no realised losses. The gain recognised in the income statement for net loan losses of EUR 4.0 million relates to recoveries on non-performing loans of EUR 1.4 million and EUR 2.6 million related to the improved credit quality of performing loans.

OTHER COMPREHENSIVE INCOME

The Bank separates the foreign currency basis spread from financial instruments used in fair value hedge accounting, and this separated amount is recorded in “Other comprehensive income” (OCI) which amounted to EUR 9.2 million for the period (January–June 2018: EUR 9.3 million). The resulting total comprehensive income for the period amounted to EUR 103.9 million, compared to EUR 119.7 million in 2018.

NET PROFIT ON FINANCIAL OPERATIONS EUR m	TOTAL OPERATING EXPENSES EUR m	NET LOAN LOSSES EUR m

*  The gains recognised in “net loan losses” above are due to loan impairment reversals.

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Financial position

LOANS OUTSTANDING

Total loans outstanding amounted to EUR 18,715 million, which is EUR 448 million higher than on 30 June 2018. Demand for NIB’s long-term financing remains strong. However, the disbursements in the first half year were lower than the historically high level in 2018. The total loans disbursed during the period amounted to EUR 1,484 million, which is EUR 669 million lower than for the same period in 2018. Total repayments amounted to EUR 1,083 million compared to EUR 258 million for the corresponding period in 2018.

Total loans outstanding, excluding exchange rate and valuation effects, decreased from EUR 19,065 million at 31 December 2018 to EUR 18,671 million. The book value amounted to EUR 18,715 million due to foreign exchange and fair valuations/transfers and hedge accounting effects of EUR 1 million and EUR 42 million, respectively.

DEVELOPMENT OF LOANS OUTSTANDING DURING 2019

EUR m

* Fair valuations/transfers and hedge accounting.

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LENDING HIGHLIGHTS

in EUR millions, unless otherwise specified	Jan-Jun 2019		2018		2017		2016		2015
Loans agreed excluding green bond investments		1,339		4,269		3,665		4,221		2,830
Green bond investments		—		61		147		143		—
Total disbursements		1,484		4,047		3,147		3,373		2,716
Total loans disbursed by business area:
Energy and water		79		840		737		1,154		483
Infrastructure, transport and telecom		221		1,192		818		791		907
Industries and services		499		1,339		932		836		932
Financial institutions and SMEs		685		675		660		593		394
Number of loans agreements in period		20		58		55		58		45
Number of green bond investments in period		0		3		9		8		—
Loans outstanding		18,715		19,065		17,232		16,640		15,627
Member countries		17,716		17,960		15,867		14,831		13,347
Non-member countries		1,113		1,222		1,504		1,948		2,396
Loan impairment provision		-114		-117		-139		-139		-116

MISSION FULFILMENT

Projects financed by NIB contribute to the Bank’s mission of improving productivity and the environment in the Nordic–Baltic countries. Before approval is given in each individual case, all eligible projects are evaluated and rated against the criteria developed based on the Bank’s mission. In the six-month period that ended on 30 June 2019, loans achieving a “good” or “excellent” mandate rating accounted for 100% of the total amount of loans agreed.

MANDATE RATING FOR AGREED LOANS

(Excluding lending green bond purchases)

* 6 months ended 30 June 2019

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FUNDING

The Bank expects to fund between EUR 5.0 billion and EUR 6.0 billion during 2019. The strategy for 2019 is to complete two benchmark transactions in US dollars or euros, complemented by other public and private issues, to maintain a diversified portfolio of currencies and a global investor base. In addition, NIB’s aim is to continue issuing NIB Environmental Bonds. By the end of June, the Bank had raised EUR 2.9 billion (January–June 2018: EUR 5.2 billion) in new funding. The decrease in funding requirements is a result of lower loan disbursements and lower collateral requirements.

In January, NIB issued its first Nordic–Baltic Blue Bond. The five-year SEK 2 billion bond was launched under the NIB Environmental Bond Framework and will focus on investments within water resource management and protection.

In May, the Bank issued a USD 1 billion benchmark, the first of the year, which has a final maturity of 21 May 2024.

DEBT DEVELOPMENT DURING 2019

EUR m

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Financial statements

Statement of comprehensive income

In thousands of euro	NOTE	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Interest income from financial assets measured at amortised cost			161,883		141,892		298,371
Interest income from financial assets measured at fair value			12,999		9,459		24,711
Interest expense			-68,368		-39,748		-99,590
Net interest income	(2)		106,514		111,603		223,492
Commission income and fees received			5,184		7,530		13,271
Commission expense and fees paid			-1,208		-1,603		-2,546
Net fee and commission income			3,976		5,927		10,725
Net profit/loss on financial operations	(3)		2,805		13,580		-23,776
Foreign exchange gains and losses			33		-6		-160
Total operating income			113,329		131,104		210,281
Expenses
General administrative expenses
Personnel expenses			-16,206		-15,428		-28,971
Other administrative expenses			-5,252		-5,844		-12,321
Depreciation			-1,286		-986		-1,937
Total operating expenses			-22,743		-22,257		-43,228
Profit before loan losses			90,585		108,847		167,053
Net loan losses	(5)		4,071		1,577		5,957
Net profit for the period			94,657		110,424		173,009
Other comprehensive income
Items that will not be reclassified to income statement
Fair value hedges
Valuation of cross currency basis spread			9,201		9,287		6,160
Total other comprehensive income			9,201		9,287		6,160
Total comprehensive income			103,857		119,711		179,169

The accompanying notes are an integral part of these financial statements.

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Statement of financial position

In thousands of euro	NOTE	30 Jun 2019		30 Jun 2018		31 Dec 2018
ASSETS
Cash and cash equivalents			2,391,245		4,687,518		4,757,905
Financial placements
Placements with credit institutions			2,130,701		9,021		9,021
Debt securities			6,560,837		6,772,067		6,454,748
Other			15,123		16,218		15,761
			8,706,660		6,797,306		6,479,531
Loans outstanding	(8)		18,714,595		18,266,843		19,065,056
Intangible assets			15,113		7,389		9,205
Tangible assets, property and equipment			32,530		30,709		30,771
Other assets
Derivatives			1,348,528		1,032,470		1,068,260
Other assets			242,772		59,889		4,520
			1,591,301		1,092,359		1,072,781
Accrued interest and fees receivable			256,072		275,215		294,421
TOTAL ASSETS			31,707,515		31,157,339		31,709,670

The accompanying notes are an integral part of these financial statements.

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In thousands of euro	NOTE	30 Jun 2019		30 Jun 2018		31 Dec 2018
LIABILITIES AND EQUITY
Liabilities
Short-term amounts owed to credit institutions			691,786		502,819		575,394
Long-term amounts owed to credit institutions			8,435		9,486		9,486
			700,221		512,304		584,879
Debts evidenced by certificates	(9)		25,597,957		25,132,131		25,651,370
Other liabilities
Derivatives			1,288,951		1,682,652		1,649,158
Other liabilities			261,845		93,402		10,080
			1,550,795		1,776,054		1,659,238
Accrued interest and fees payable			217,129		218,754		236,629
Total liabilities			28,066,103		27,639,243		28,132,116
Equity			3,641,412		3,518,096		3,577,554
TOTAL LIABILITIES AND EQUITY			31,707,515		31,157,339		31,709,670

The accompanying notes are an integral part of these financial statements.

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Statement of changes in equity

In thousands of euro	PAID-IN CAPITAL		STATUTORY RESERVE		GENERAL CREDIT RISK FUND		SPECIAL CREDIT RISK FUND PIL		PROFIT AVAILABLE FOR APPROPRIATION		HEDGING RESERVE		TOTAL
EQUITY AT 1 JANUARY 2018		418,602		686,325		1,694,594		445,919		210,981		-3,035		3,453,386
Profit for the period		—		—		—		—		110,424		—		110,424
Other comprehensive income		—		—		—		—		—		9,287		9,287
Total comprehensive income		0		0		0		0		110,424		9,287		119,711
Transactions with owners in their capacity as owners
Appropriation of profit		—		—		155,981		—		-155,981		—		0
Dividends		—		—		—		—		-55,000		—		-55,000
EQUITY AT 30 JUNE 2018		418,602		686,325		1,850,575		445,919		110,424		6,252		3,518,096
Profit for the period		—		—		—		—		62,585		—		62,585
Other comprehensive income		—		—		—		—		—		-3,127		-3,127
Total comprehensive income		0		0		0		0		62,585		-3,127		59,458
Transactions with owners in their capacity as owners
Realisation of PIL losses		—		—		18,978		-18,978		—		—		0
EQUITY AT 31 DECEMBER 2018		418,602		686,325		1,869,553		426,941		173,009		3,124		3,577,554
Profit for the period										94,657				94,657
Other comprehensive income												9,201		9,201
Total comprehensive income		0		0		0		0		94,657		9,201		103,857
Transactions with owners in their capacity as owners
Appropriation of profit		—		—		133,009		—		-133,009		—		0
Dividends		—		—		—		—		-40,000		—		-40,000
EQUITY AT 30 JUNE 2019		418,602		686,325		2,002,562		426,941		94,657		12,325		3,641,412

The accompanying notes are an integral part of these financial statements.

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Cash flow statement

In thousands of euro	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Cash flows from operating activities
Net profit for the period		94,657		110,424		173,009
Adjustments:
Unrealised gains/losses of financial assets held at fair value		9,905		-26,982		-14,275
ECL non-lending activities		44		2		-20
Depreciation and write-down in value of tangible and intangible assets		1,286		986		1,937
Change in accrued interest and fees (assets)		38,375		-3,180		-22,377
Change in accrued interest and fees (liabilities)		-19,499		9,243		27,117
Net loan losses (ECL lending activities)		-4,071		-1,577		-5,957
Adjustment to hedge accounting		-8,826		11,729		37,523
Other adjustments to the period´s profit		-2,169		5,090		7,031
Adjustments, total		15,044		-4,689		30,979
Lending
Disbursements of loans		-1,483,726		-2,153,195		-4,046,710
Repayments of loans		1,881,455		1,047,765		2,113,670
Transfers of lending green bonds to debt securities		48,149		—		—
Capitalisations, redenominations, index adjustments, etc.		-10,864		-6		897
Lending, total		435,015		-1,105,436		-1,932,143
Cash flows from operating activities, total		544,715		-999,701		-1,728,154
Cash flows from investing activities
Placements and debt securities
Purchase of debt securities		-1,135,498		-1,173,598		-1,891,112
Transfers of lending green bonds to debt securities		-48,149		—		—
Sold or matured debt securities		1,209,492		1,010,760		2,048,213
Placements with credit institutions		-1,971,792		-250		-250
Other financial placements		107		—		218
Placements and debt securities, total		-1,945,840		-163,088		157,069

The accompanying notes are an integral part of these financial statements.

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In thousands of euro	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Other items
Acquisition of intangible assets		-1,440		-2,069		-3,885
Acquisition of tangible assets		-2,660		-1,409		-2,421
Change in other assets		-911		-33,331		23,680
Other items, total		-5,011		-36,809		17,373
Cash flows from investing activities, total		-1,950,851		-199,897		174,443
Cash flows from financing activities
Debts evidenced by certificates
Issues of new debt		2,666,577		5,203,371		6,619,670
Redemptions		-3,420,578		-3,852,731		-4,924,256
Debts evidenced by certificates, total		-754,001		1,350,640		1,695,415
Other items
Long-term placements from credit institutions		-1,051		-7,842		-7,842
Change in swap receivables excluding fair value changes		51,923		-29,000		-60,891
Change in swap payables excluding fair value changes		-396,767		-59,420		34,237
Change in other liabilities		5,408		82,248		-2,206
Dividend paid		-40,000		-55,000		-55,000
Other items, total		-380,486		-69,013		-91,702
Cash flows from financing activities, total		-1,134,486		1,281,627		1,603,713
CHANGE IN CASH AND CASH EQUIVALENTS, NET		-2,540,622		82,030		50,002
Opening balance for cash and cash equivalents, net		4,182,512		4,073,797		4,073,797
Exchange rate adjustments		57,569		28,874		58,714
Closing balance for cash and cash equivalents, net		1,699,458		4,184,700		4,182,512
Additional information to the statement of cash flows
Interest income received		213,231		148,181		300,706
Interest expense paid		-87,867		-30,505		-72,473

The accompanying notes are an integral part of these financial statements.

The cash flow statement has been prepared using the indirect method and cash flow items cannot be directly concluded from the statements of financial positions.

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Notes to the interim financial statements

Note 1: Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”), who is responsible for allocating resources and assessing the performance of the operating segments. The CODM at NIB is the President. Segment results that are reported to the management include items directly attributable to that segment as well as other items allocated on a reasonable basis. In its segment reporting, NIB divides its operations into two major segments: lending and treasury operations. Treasury operations consist of asset and liability management, funding operations and portfolio management. Funding operations are reported as part of asset and liability management. The operating segments are explained in more detail in the Financial Report 2018, Note 3 “Segment information”.

In thousands of euro	LENDING		ASSET AND LIABILITY MANAGEMENT		PORTFOLIO MANAGEMENT		TREASURY TOTAL		TOTAL
Net interest income		76,219		14,175		16,120		30,295		106,514
Commission income and fees received		3,826		1,358		—		1,358		5,184
Commission expense and fees paid		-37		-975		-196		-1,171		-1,208
Net profit on financial operations		817		-3,527		5,516		1,989		2,805
Foreign exchange gains and losses		—		33		—		33		33
Operating expenses		-14,750		-5,596		-2,398		-7,994		-22,743
Net loan losses		4,071		—		—		—		4,071
Profit for period ended 30 June 2019		70,147		5,468		19,042		24,510		94,657

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In thousands of euro	LENDING		ASSET AND LIABILITY MANAGEMENT		PORTFOLIO MANAGEMENT		TREASURY TOTAL		TOTAL
Net interest income		75,464		12,832		23,307		36,139		111,603
Commission income and fees received		7,199		331		0		331		7,530
Commission expense and fees paid		-40		-1,052		-511		-1,563		-1,603
Net profit on financial operations		274		14,831		-1,524		13,307		13,580
Foreign exchange gains and losses		—		-6		—		-6		-6
Operating Expenses		-14,446		-5,468		-2,343		-7,811		-22,257
Net loan losses		1,577		—		—		—		1,577
Profit for period ended 30 June 2018		70,028		21,468		18,929		40,397		110,424
In thousands of euro	LENDING		ASSET AND LIABILITY MANAGEMENT		PORTFOLIO MANAGEMENT		TREASURY TOTAL		TOTAL
Net interest income		154,032		27,277		42,182		69,459		223,492
Commission income and fees received		12,415		856		—		856		13,271
Commission expense and fees paid		-95		-1,551		-900		-2,451		-2,546
Net profit on financial operations		49		-8,619		-15,207		-23,826		-23,776
Foreign exchange gains and losses		—		-160		—		-160		-160
Operating expenses		-27,790		-10,807		-4,632		-15,438		-43,228
Net loan losses		5,957		—		—		—		5,957
Profit for year ended 31 December 2018		144,569		6,996		21,444		28,441		173,009

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Note 2: Net interest income

In thousands of euro	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Cash and cash equivalents		-1,053		-5,781		-6,686
Placements with credit institutions		-3,806		-39		-98
Debt securities		30,608		30,600		60,913
Loans outstanding		149,034		126,572		268,953
Other interest income		100		—		—
Total, interest income		174,882		151,351		323,082
Of which, interest income from financial assets measured at amortised cost		161,883		141,892		298,371
Short-term amounts owed to credit institutions		1,196		553		455
Long-term amounts owed to credit institutions		26		45		72
Short-term repurchase agreements		—		279		345
Debts evidenced by certificates		-281,719		-287,154		-578,171
Swap contracts and other interest expenses, net		212,129		246,530		477,708
Total, interest expense		-68,368		-39,748		-99,590
Of which, interest expense from financial liabilities measured at amortised cost		-175,093		-123,393		-286,705
Net Interest Income		106,514		111,603		223,492

Note 3: Net profit on financial operations

In thousands of euro	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Financial instruments held at fair value, realised gains and losses		57		3,365		7,163
Financial instruments held at fair value, unrealised gains and losses		-5,997		21,742		6,484
Financial instruments held at amortised cost, realised gains and losses		7		154		154
Adjustment to hedge accounting, unrealised gains and losses of fair value hedges		8,826		-11,729		-37,523
Repurchase of NIB bonds, other items		-87		49		-54
Net profit on financial operations		2,805		13,580		-23,776

18 | Interim Financial Report

Note 4: Expected credit loss

In thousands of euro	STAGE 1		STAGE 2		STAGE 3		TOTAL
Balance at 1 January 2018		25,224		23,291		93,194		141,709
Transfer to Stage 1		2,694		-2,694		—		0
Transfer to Stage 2		-2,967		2,967		—		0
Transfer to Stage 3		0		0		—		0
New assets originated or purchased		4,092		38		—		4,130
Amortisations and repayments		-2,146		-1,864		—		-4,009
Impact of remeasurment on existing assets		107		-4,445		2,643		-1,695
Foreign exchange adjustments and other changes		—		—		1,381		1,381
Net change income statement		1,781		-5,998		4,023		-194
Balance at 30 June 2018		27,005		17,292		97,218		141,515
Transfer to Stage 1		2,182		-2,182		—		0
Transfer to Stage 2		1,659		-1,659		—		0
Transfer to Stage 3		0		0		—		0
New assets originated or purchased		4,184		99		—		4,283
Amortisations and repayments		-4,366		-1,879		—		-6,246
Impact of remeasurment on existing assets		-4,582		2,317		-174		-2,439
Foreign exchange adjustments and other changes		—		—		2,275		2,275
Net change income statement		-925		-3,304		2,102		-2,127
Realised losses						-19,223		-19,223
Balance at 31 December 2018		26,080		13,988		80,097		120,165
Transfer to Stage 1		1,314		-1,314		—		0
Transfer to Stage 2		0		0		—		0
Transfer to Stage 3		0		0		—		0
New assets originated or purchased		3,482		67		—		3,549
Amortisations and repayments		-2,973		-1,431		—		-4,403
Impact of remeasurment on existing assets		-130		-1,653		-1,387		-3,170
Foreign exchange adjustments and other changes		—		—		603		603
Net change income statement		1,693		-4,331		-784		-3,423
Balance at 30 June 2019		27,773		9,657		79,313		116,741

ECL - STATEMENT OF FINANCIAL POSITION
In thousands of euro	30 Jun 2019		30 Jun 2018		31 Dec 2018
Financial placements		326		304		281
Loans outstanding and commitments		116,415		141,211		119,883
Total		116,741		141,515		120,165
ECL - STATEMENT OF COMPREHENSIVE INCOME
In thousands of euro	Jan-Jun 2019		Jun-Dec 2018		Jan-Jun 2018
Net result on financial operations		-44		20		-2
Net loan losses (Note 5)		4,071		4,381		1,577
Foreign exchange gains and losses		-603		-2,275		-1,381
Total recognised in income statement		3,423		2,127		194

Note 5: Net loan losses    

In thousands of euro	Jan-Jun 2019		Jan-Jun 2018		Jan-Dec 2018
Change in expected credit loss on performing loans		2,684		4,220		8,426
Change in expected credit loss on non-performing loans		1,387		-2,643		-2,469
Decrease of provisions to cover realised loan losses		0		0		19,223
Realised loan losses		0		0		-19,223
Net loan losses		4,071		1,577		5,957

The gains recognised for “Net loan Losses” arise from the improved credit quality of the loan portfolio during the periods under review. There were no realised losses for the periods Jan-Jun 2019 or Jan-Jun 2018. In the period Sep-Dec 2018, the Bank recorded realised losses of EUR 19,223 thousand comprising principal of EUR 18,978 and interest of EUR 245 thousand.

19 | Interim Financial Report

Note 6: Classification of financial instruments    

In millions of euro	AMORTISED COST (AC)		FAIR VALUE TROUGH PROFIT AND LOSS (FVTPL)		DERIVATIVES FOR HEDGING		TOTAL
Financial assets
Cash and cash equivalents		1,074		1,318		—		2,391
Financial placements with credit institutions		9		2,122		—		2,131
Debt securities		2,018		4,543		—		6,561
Other financial placements		—		15		—		15
Loans outstanding		18,682		33		—		18,715
Derivatives		—		741		607		1,349
Total 30 June 2019		21,783		8,772		607		31,161
Financial liabilities
Short-term amounts owed to credit institutions		692		—		—		692
Long-term amounts owed to credit institutions		8		—		—		8
Debt securities issued		24,743		855		—		25,598
Derivatives		—		199		1090		1,289
Total 30 June 2019		25,443		1,054		1,090		27,587

In millions of euro	AMORTISED COST (AC)		FAIR VALUE TROUGH PROFIT AND LOSS (FVTPL)		DERIVATIVES FOR HEDGING		TOTAL
Financial assets
Cash and cash equivalents		1,644		3,044		—		4,688
Financial placements with credit institutions		9		—		—		9
Debt securities		2,474		4,298		—		6,772
Other financial placements		—		16		—		16
Loans outstanding		17,966		301		—		18,267
Derivatives		—		537		495		1,032
Total 30 June 2018		22,093		8,196		495		30,784
Financial liabilities
Short-term amounts owed to credit institutions		503		—		—		503
Long-term amounts owed to credit institutions		9		—		—		9
Debt securities issued		25,132		—		—		25,132
Derivatives		—		214		1,468		1,683
Total 30 June 2018		25,644		214		1,468		27,327

20 | Interim Financial Report

Note 7: Fair value of financial assets and liabilities

	30 Jun 2019				30 Jun 2018				31 Dec 2018
In millions of euro	CARRYING AMOUNT		FAIR VALUE		CARRYING AMOUNT		FAIR VALUE		CARRYING AMOUNT		FAIR VALUE
Financial assets
Cash and cash equivalents		2,391		2,390		4,688		4,687		4,758		4,758
Financial placements with credit institutions		2,131		2,131		9		9		9		9
Debt securities		6,561		6,635		6,722		6,839		6,455		6,509
Other financial placements		15		15		16		16		16		16
Loans outstanding		18,715		18,915		18,267		18,274		19,065		19,059
Derivatives		1,349		1,349		1,032		1,032		1,068		1,068
Total		31,161		31,434		30,734		30,857		31,371		31,419
Financial liabilities
Short-term amounts owed to credit institutions		692		692		503		503		575		575
Long-term amounts owed to credit institutions		8		8		9		9		9		9
Debt securities issued		25,598		24,501		25,132		25,132		26,651		26,651
Derivatives		1,289		1,289		1,683		1,683		1,649		1,649
Total		27,587		26,490		27,327		27,327		28,885		28,885

The determination of fair value is described in the Financial Report 2018, Note 1 “Accounting policies”.

Note 8: Loans outstanding

In thousands of euro	Jan-Jun 2019		Jul-Dec 2018		Jan-Jun 2018
Opening Balance		19,065,056		18,266,843		17,231,623
Disbursements		1,483,726		1,893,515		2,153,195
Amortisations		-798,003		-746,854		-790,138
Prepayments		-1,083,452		-319,051		-257,627
Changes in expected credit losses (note 4)		3,691		4,767		1,456
Foreign exchange movements		1,081		-34,423		-57,982
Valuations and hedge accounting		90,990		1,157		-13,684
Reclassifications and other movements		-48,494		-897		—
Closing balance		18,714,595		19,065,056		18,266,843

See Note 6 and Note 7 for classification and fair value of loans outstanding.

Note 9: Debts evidenced by certificates

In thousands of euro	Jan-Jun 2019		Jul-Dec 2018		Jan-Jun 2018
Opening Balance		25,651,370		25,132,130		23,999,754
New debt issues		2,894,531		1,416,300		5,203,371
Amortisations		-3,128,094		-1,044,801		-3,677,542
Calls and buy backs		-459,326		-19,094		-166,007
Foreign exchange movements		67,115		3,731		-10,802
Valuations and hedge accounting		572,361		171,404		-208,132
Transfers and other		—		-8,300		-8,512
Closing balance		25,597,957		25,651,370		25,132,130

See Note 6 and Note 7 for classification and fair value of debts evidenced by certificates.

21 | Interim Financial Report

Note 10: Basis of preparation

The interim financial statements are presented in accordance with IAS 34 “Interim Financial Reporting”. The accounting policies and methods of computation are the same as described in Note 1 of NIB’s Financial Report 2018, with the exception of IFRS 16, as described below.

IFRS 16 Leases substantially changed the accounting treatment by recognising more leases as liabilities with corresponding right of use assets on the balance sheet. The standard replaced IAS 17 Leases and is effective as of 1 January 2019. However, the Bank does not have significant leasing commitments and therefore the new standard had an immaterial impact.

There have been no material post balance sheet events that would require disclosure or adjustment to these financial statements.

There have been no material changes in relation to transactions with related parties compared to those described in Note 24 “Related party disclosures” in the 2018 Annual Report.

RATIO DEFINITIONS

Equity/total assets  =	Total equality at reporting date Total assets at reporting date
Profit/average equity  =	Annualised profit for the period Average equity for the period
Cost/income  =	Total operating expenses for the period Total operating income for the period

HELSINKI, 28 AUGUST 2019

	Sven Hegelund (Chairman)
Julie Sonne	Madis Üürike	Pekka Morén
Esther Finnbogadóttir (Deputy Chairman)	Kaspars Ãbolinš	Jurgita Uzieliené
Silje Gamstøbakk
Henrik Normann (President & CEO)

22 | Interim Financial Report

Review Opinion

To the Board of Directors of Nordic Investment Bank

Report on Review of Interim Financial Report

INTRODUCTION

We have reviewed the interim financial report of Nordic Investment Bank consisting of balance sheet as of June 30, 2019 and the related statements of income, changes in equity and cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes.

Management is responsible for the preparation and fair presentation of this interim financial report in accordance with IAS 34. Our responsibility is to express a conclusion on this interim financial report based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity.”

A review of the interim financial report consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial report does not present fairly, in all material respects, the financial position of the entity as at June 30, 2019, and of its financial performance and its cash flows for the six-month period then ended in accordance with IAS 34.

Helsinki, 28 August 2019

Ernst & Young Oy	Ernst & Young AB
Authorized Public	Authorized Public
Accountant Firm	Accountant Firm
Terhi Mäkinen	Mona Alfredsson
Authorized Public	Authorized Public
Accountant	Accountant

23 | Interim Financial Report