Segment reporting by operating segments

The Management Board sets performance targets, approves and monitors the budgets prepared by servicing units. Servicing units are not identical to the strategic sectors.

FMO's strategic sectors represent the economic sectors in which FMO operates. The three strategic sectors are Agribusiness Food & Water, Financial Institutions and Energy, which represent economic sectors. FMO's Management Board steers on the following six servicing units: Agribusiness, Food & Water, Financial Institutions and Energy, Private Equity, Partnership for impact and Other. In 2020, no transactions are identified which are reallocated to a different servicing unit.

FMO presents the results of the operating segments using a financial performance measure called underlying profit. Underlying profit excludes the EUR/USD currency effects related to the results from equity investments, since all fair value changes including currency effects are now recorded in the profit and loss account instead of shareholder's equity since the adoption of IFRS 9.

Underlying profit as presented below is an alternative performance measure. A reconciliation of the underlying net profit to the net profit as reported under the statement of profit and loss is performed in the table here below.

December 31, 2020	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Interest income	128,411	127,472	53,277	6,895	310	7,268	323,633
Interest expenses	-17,835	-21,258	-9,038	-24,035	-272	-10,207	-82,645
Net fee and commission income	1,146	2,058	117	636	-	-358	3,599
Dividend income	-	-	-	32,908	-	-	32,908
Results from equity investments	-	-	-	-92,502	-	-	-92,502
Results from financial transactions	-1,248	-3,786	-2,807	-3,371	-	404	-10,808
Remuneration for services rendered	4,849	5,616	3,928	8,648	6,731	164	29,936
Gains and losses due to derecognition	-	-	2,000	-	-	-	2,000
Other operating income	-	-	-	38	-	255	293
Total underlying income	115,323	110,102	47,477	-70,783	6,769	-2,474	206,414

Operating expenses	-33,703	-30,630	-26,050	-36,367	-10,206	-7,194	-144,150
Total operating expenses	-33,703	-30,630	-26,050	-36,367	-10,206	-7,194	-144,150

Impairments on loans and guarantees	-32,275	-35,301	-8,581	-2,111	14	-128	-78,382
Total impairments	-32,275	-35,301	-8,581	-2,111	14	-128	-78,382

Profit/(loss) before taxation	49,345	44,171	12,846	-109,261	-3,423	-9,796	-16,118
Share in results from associates	-	-	-	-66,416	-	-	-66,416
Taxation	-8,299	-7,429	-2,161	8,312	576	1,651	-7,350
Underlying net profit/(loss)	41,046	36,742	10,685	-167,365	-2,847	-8,145	-89,884

Currency effect equity investments	-	-	-	-115,383	-	-	-115,383
Net profit/(loss)	41,046	36,742	10,685	-282,748	-2,847	-8,145	-205,267

December 31, 2019	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Interest income	139,289	131,997	66,529	2,500	552	35,392	376,259
Interest expenses	-35,655	-40,961	-18,279	-39,410	-547	-26,189	-161,041
Net fee and commission income	2,339	-5,329	-1,042	768	-	-750	-4,014
Dividend income	-	-	-	29,645	-	-	29,645
Results from equity investments	-	-	-	48,402	-		48,402
Results from financial transactions	1,417	-8,793	-7,938	347	-	-5,033	-20,000
Remuneration for services rendered	6,493	5,406	2,850	8,470	6,643	199	30,061
Gains and losses due to recognition	1,569	2,383	-37	-	-	1	3,916
Other operating income	2,159	-	-	-	-	-464	1,695
Total underlying income	117,611	84,703	42,083	50,722	6,648	3,156	304,923

Operating expenses	-33,265	-27,881	-22,958	-30,434	-9,180	-6,701	-130,419
Total operating expenses	-33,265	-27,881	-22,958	-30,434	-9,180	-6,701	-130,419

Impairments on loans and guarantees	-3,298	-43,191	-42,880	-2,163	-39	-357	-91,928
Total impairments	-3,298	-43,191	-42,880	-2,163	-39	-357	-91,928

Profit/(loss) before taxation	81,048	13,631	-23,755	18,125	-2,571	-3,902	82,576
Share in results from associates	-	-	-	11,077	-	-	11,077
Taxation	-15,954	-2,683	4,676	14,660	506	768	1,973
Underlying net profit/(loss)	65,094	10,948	-19,079	43,862	-2,065	-3,134	95,626

Currency effect equity investments	-	-	-	24,786	-	-	24,786
Net profit	65,094	10,948	-19,079	68,648	-2,065	-3,134	120,412

Segment assets December 31, 2020	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Loans to the private sector	2,026,486	1,656,547	973,813	35,105	14,913	51,600	4,758,464
Equity investments and investments in associates	-	-	-	1,983,896	-	-	1,983,896
Other assets	677,988	554,220	325,802	675,484	4,989	17,264	2,255,747
Total assets	2,704,474	2,210,767	1,299,615	2,694,485	19,902	68,864	8,998,107
Contingent liabilities – Effective guarantees issued	22,953	43,056	-	-	-	-	66,009
Assets under management (loans and equity investments) managed for the risk of the state	157,327	173,442	136,136	457,885	-	-	924,790

Segment assets December 31, 2019	Financial Institutions	Energy	Agribusiness, Food & Water	Private Equity	Partnership for impact	Other	Total

Loans to the private sector	2,177,296	1,785,504	951,245	38,383	19,495	58,699	5,030,622
Equity investments and investments in associates	-	-	-	2,165,432	-	-	2,165,432
Other assets	670,472	549,824	292,924	678,639	6,003	18,077	2,215,939
Total assets	2,847,768	2,335,328	1,244,169	2,882,454	25,498	76,776	9,411,993
Contingent liabilities – Effective guarantees issued	50,545	47,825	-	-	-	-	98,370
Assets under management (loans and equity investments) managed for the risk of the state	164,548	229,816	143,551	429,057	-	5,363	972,335