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

EXHIBIT III

FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2020

INTRODUCTION TO THE FINANCIAL STATEMENTS

The Bank’s financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The accounting principles applied in NIB’s financial statements differ in certain respects from the accounting principles generally accepted in the United States (“U.S. GAAP”). Such differences may be related to variance in the standards for recognition or measurement of amounts included in the financial statements, and IFRS may lack specific requirements or guidance that is available in U.S. GAAP in certain areas. In addition, presentation and disclosure requirements may differ between IFRS and U.S. GAAP.

The financial statements of the Bank for the financial years 2018, 2019 and 2020 have been audited by Ernst &Young Oy and Ernst & Young AB as indicated in their reports included in the Bank’s previous Form 18-K filings for the financial years ended December 31, 2018, 2019 and 2020 and incorporated by reference into the Bank’s Registration Statement on Schedule B of the Securities Act (No. 333-217876) and elsewhere herein.

The auditors were appointed by the Control Committee of the Bank. See Exhibit V to this Annual Report on Form 18-K, “Description of the Registrant – Governance”.

In accordance with the Bank’s auditor rotation policy and based on a tender process, the Control Committee of NIB appointed Authorized Public Accountant Terhi Mäkinen, representing the accounting firm Ernst &Young Oy, Finland, and Authorized Public Accountant Mona Alfredsson, representing Ernst & Young AB, Sweden as NIB’s independent joint auditors for the financial year 2018.

For the financial year 2019 and 2020 NIB appointed Authorized Public Accountant Terhi Mäkinen, representing the accounting firm Ernst &Young Oy, Finland, and Authorized Public Accountant Mona Alfredsson, representing Ernst & Young AB, Sweden as its independent joint auditors.

NORDIC INVESTMENT BANK

Statement of comprehensive income 1 January – 31 December

EUR 1,000	Note	2018		2019		2020
Interest income from financial assets held at amortised cost			298.371		315.241		254.355
Interest income from financial assets held at fair value			24.711		25.768		18.160
Interest expense			-99.590		-129.280		-66.973
Net interest income	(3) (4)		223.492		211.729		205.543
Commission income and fees received	(5)		13.271		9.462		12.485
Commission expense and fees paid			-2.546		-1.859		-3.145
Net fee and commission income			10.725		7.603		9.340
Net profit/loss on financial operations	(6)		-23.776		14.272		58.810
Foreign exchange gains and losses			-160		111		183
Total operating income			210.281		233.715		273.876
Expenses
General administrative expenses
Personnel expenses	(7)		-28.971		-30.496		-31.327
Other administrative expenses	(8)		-12.321		-13.872		-13.563
Depreciation	(14)		-1.937		-6.841		-7.546
Total operating expenses			-43.228		-51.209		-52.437
Profit before loan losses			167.053		182.506		211.439
Net loan losses	(9)		5.957		-524		-56.744
Net Profit for the year			173.009		181.982		164.695
Other Comprehensive income
Items that will not be reclassified to income statement
Fair value hedges - valuation of cross currency basis spread			6.160		15.786		9.120
Changes in own credit risk on liabilities recorded at fair value			—		—		-3.376
Total other comprehensive income			6.160		15.786		5.744
Total Comprehensive income			179.169		197.768		170.439