FINANCE - BANKS

2020 balance sheet

Pandemic losses for state-owned lender SNCI



Emmanuel Baumann (left) and Patrick Nickels are respectively director and president of the national credit and investment company (SNCI). (Photo: Archives/Nader Ghavami)

Emmanuel Baumann (left) and Patrick Nickels are respectively director and president of the national credit and investment company (SNCI). (Photo: Archives/Nader Ghavami)

The Société nationale de crédit et d'investissement (SCNI) has posted a historic loss for the year 2020, amounting to €22.76m compared to a profit of €28.25m the year before, largely due to the impact of covid-19 on its activities.

Founded in 1978, the SNCI is a public-law banking institution designed to encourage business investments, start-ups and research initiatives. It is wholly owned by the Luxembourg state.

"The year 2020 has shown that the bank is not immune to adverse developments that can quickly and significantly affect its results, even with an apparently very strong balance sheet,” the SNCI said in its 2020 annual results, published earlier this summer. “This evolution shows the importance of having a stable financial base so that the SNCI can continue to fulfil its mission as a development bank in the general interest of the sustainable economic development of Luxembourg, even in times of crisis when companies need a reliable partner.”

The covid-19 crisis saw the SNCI relax the conditions for repayment of all its loans and credits in March 2020, with the lender suspending capital repayment for the 31 March and 30 June 2020 deadlines for all direct and indirect loans.

The board of directors also decided to set up a special anti-crisis financing budget worth up to €400, corresponding to a total financing volume in favour of companies of almost €700m, including bank financing. A €200m SME guarantee scheme followed, in collaboration with partner banks active in the financing of companies in Luxembourg.

"Knowing that the crisis is still not over, the bank is cautiously optimistic for the year 2021. Indeed, it expects a year in continuity with the years preceding the covid-19 crisis while remaining vigilant with regard to the exit from the crisis of Luxembourg companies," adds the SNCI in its report.

In terms of its general activity, in 2020 the SNCI provided global co-financing worth nearly €77.1m, compared to €24.1m in 2019. It granted 11 equipment loans for a total amount of €7.6m to Luxembourg SMEs, compared to €4.4m in 2019. Companies in the industrial sector received the largest share of these loans, with some €5.4m allocated to them, compared with €1.8m in 2019. The trade/hospitality and catering sectors received €0.7m.

The SNCI did not make any new direct investments in 2020 but it has invested via the LFF--its key instrument for the development of the Luxembourg venture capital ecosystem--in the Paladin European Cyber Fund and the Middlegame Ventures Fund, a fund specialising mainly in European fintech start-ups.

This story was first published in French on Paperjam. It has been translated and edited for Delano.