Notes to the consolidated statement of profit or loss

21. Net interest income

Interest income

	2023	2022
Interest on loans measured at AC	434,357	329,034
Interest on collateral delivered	14,606	1,282
Interest income related to banks	17,506	1,849
Interest on interest-bearing securities	7,469	3,091
Total interest income from financial instruments measured at AC	473,938	335,256
Interest on loans measured at FVPL	43,905	43,488
Interest on short-term deposits at FVTPL	31,605	8,646
Interest on derivatives related to asset portfolio	-16,857	-36,306
Total interest income from financial instruments measured at FVPL	58,653	15,828
Total interest income	532,591	351,084

Included in the interest income on loans is €30.7m (2022: €28.8m) related to Stage 3 loans (adjusted on basis of net carrying amount).

Interest expense

	2023	2022
Interest on debentures and notes in hedge accounting	-106,940	-67,235
Interest on debentures and notes not in hedge accounting	-63,329	-59,437
Interest on short-term credits	-	-140
Interest expenses related to banks (assets)	-	-2,056
Total interest expense from financial instruments measured at AC	-170,269	-128,868
Interest on derivatives related to funding portfolio	-140,756	12,707
Total interest expense from financial instruments measured at FVPL	-140,756	12,707
Interest on leases	-122	-139
Other interest expenses	-122	-139
Total interest expense	-311,147	-116,300

Interest expense related to banks is incurred on balances held at central banks. In 2022 overnight deposit rates at central banks were negative for part of the year in the Eurozone, implying interest expense on assets.

In the derivatives related to funding FMO usually receives fixed EUR/USD/other currency and pays floating rate (e.g., USD SOFR). As the USD, EUR, SEK and AUD interest rates increased in 2023 compared with 2022 (due to the interest rate increase by central banks) interest expense for these derivatives was significantly higher in 2023.

22. Dividend income

Dividend income relates to income from equity investments.

	2023	2022
Dividend income direct investments	18,587	33,666
Dividend income fund investments	15,894	7,757
Total dividend income	34,481	41,423

23. Results from equity investments

	2023	2022
Results from equity investments
Unrealized results from capital results	13,208	-32,816
Unrealized results from FX conversions - capital results	-2,005	9,269
Unrealized results from FX conversions - cost price	-59,526	73,356
Net results from fair value re-measurements	-48,323	49,809
Results from sales
Realized results	42,573	6,124
Release unrealized results	-34,064	-6,667
Net results from sales	8,509	-543
Net results from equity investments	-39,814	49,266

24. Net fee and commission income

	2023	2022
Prepayment fees	347	4,774
Fees for FVPL loans	691	170
Administration fees	1,674	1,955
Other fees (for example: arrangement, cancellation and waiver fees)	5,025	4,013
Total fee and commission income	7,737	10,912
Custodian fees and charges for the early repayment of debt securities	-969	-1,077
Guarantee fees related to unfunded risk participants	-13,112	-11,644
Other fee expenses	-121	-88
Total fee and commission expense	-14,202	-12,809
Net fee and commission income	-6,465	-1,897

25. Results from financial transactions

	2023	2022
Gains/(losses) on remeasurement on valuation of hedged items	-138,699	341,896
Gains/(losses) on remeasurement of hedging instruments	134,237	-339,323
Net result on hedge accounting	-4,462	2,573
Result on sale and valuation of treasury derivatives not under hedge accounting	-23,096	42,768
Result on sale and valuation of derivatives related to asset portfolio	2,933	-3,989
Result on sale and valuation of loans at FVPL	14,662	-32,706
Net result on financial instruments mandatory at FVPL	-5,501	6,073
Foreign exchange results loans at FVPL	-15,705	-29,522
Foreign exchange results derivatives	57,500	-165,603
Foreign exchange results on other financial assets/liabilities	-35,500	196,703
Net foreign exchange results	6,295	1,578
Other financial results	57	159
Other changes	11,240	-29,214
Other results from financial transactions	11,297	-29,055
Net result from financial transactions	7,629	-18,831

Other changes in 2023 relate to the recognition of liabilities for FMO's obligations to the public fund programs managed on behalf of the Dutch State. Other changes in 2022 relate to consolidation of FMO's Ventures Program (refer to section Group accounting and consolidation; 'Other financial liabilities' in the accounting policies chapter).

26. Remuneration for services rendered

	2023	2022
Funds and programs managed on behalf of the State:
- MASSIF	10,073	11,518
- Building Prospects	9,456	9,332
- Access to Energy Fund	3,471	3,933
Syndication fees, remuneration from directorships and others	8,335	8,154
Total remuneration for services rendered	31,335	32,937

Remuneration for managing funds and programs is assessed for market conformity and expressed in gross amounts. Related management expenses are included in operating expenses.

27. Gains and losses due to derecognition

Gains and losses due to derecognition arise from loans measured at amortized cost when sold to a third party or when terms and conditions of a loan arrangement have been modified significantly.

	2023	2022
Gains and losses due to derecognition	2,464	299
Total gains and losses due to derecognition	2,464	299

28. Other operating income

	2023	2022
Other operating income	79	-
Total other operating income	79	-

29. Staff costs

The number of FTE at December 31, 2023, amounted to 773 (2022: 661 FTEs). All FTE are employed in the Netherlands except for 1 FTE, which is employed in our Costa Rican office.

	2023	2022
Salaries	-74,487	-61,885
Social security costs	-9,433	-7,527
Pension costs	-16,377	-13,652
Temporaries	-17,805	-17,236
Travel and subsistence allowances	-5,069	-3,889
Other personnel expenses	-4,289	-4,204
Total staff costs	-127,460	-108,393

The Pension costs line item 2023 includes an amount of €15,681k related to the defined contribution plan expenses.

Other personnel expenses include reimbursements on staff costs amounting to €4,888k (2022 €4,904k) which relate to activities performed on behalf of various government agencies. These reimbursements are treated as government grants related to income and are presented as a reduction against staff costs.

30. Administrative expenses

	2023	2022
IT expenses	-11,172	-8,920
Advisory costs	-14,741	-8,060
Other operational expenses	-13,818	-15,107
Total administrative expenses	-39,731	-32,087

These expenses consist primarily of services from third parties and other operational expenses. The remuneration paid to the Supervisory Board is included in these expenses. At December 31, 2023, the Supervisory Board consisted of five members (2022: five). The members of the Supervisory Board were paid a total remuneration of €120k (2022: €115k).

With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged by Ernst & Young Accountants LLP (2022: Ernst & Young Accountants LLP) to the company and its subsidiaries. Other assurance services include assurance in respect of sustainability disclosures, regulatory reporting, specific financial reporting of government and EU funds and capital market transactions. Ernst & Young Accountants LLP has not provided any non-assurance services to FMO.

Total fees charged by auditors

	2023	2022
Statutory audit of annual accounts	-908	-930
Other assurance services	-1,099	-950
Total	-2,007	-1,880

31. Income taxes

Income tax by type

	2023	2022
Current income taxes	2,869	19,653
Deferred income taxes	2,081	-2,780
Total income tax	4,950	16,873

The reconciliation of the statutory income tax rate to the effective income tax rate is as follows:

	2023	2022
Profit/(loss) before taxation	59,972	-15,838

Income taxes at statutory rate of 25.8% (2022 25.8%)	-15,473	4,086
Increase/decrease resulting from:
Settlement with local withholding taxes	2,510	2,186
Non-taxable income (participation exemption facility)	15,034	10,785
Tax adjustments to prior periods	2,977	83
Other	-98	-267
Total income tax	4,950	16,873
Effective income tax rate	-8.3%	106.5%

Current income tax

FMO paid €15,501 (2022: €43,771) to the tax authorities. The remaining current income tax receivable amounts to €29,634 (2022: €20,942). Per year end 2023 unused tax losses amount to €0 (2022: €0) and unused tax credits amount to €0 (2022: €0)

Deferred tax

FMO’s deferred income tax assets and liabilities are summarized as follows:

	2023	2022
Deferred tax assets
Pension provision	2,154	2,573
Actuarial gains and losses on defined benefit plans	3,363	2,272
Unused tax credits	5,655	3,158
Leases	58	55
Total deferred tax assets	11,230	8,058
Deferred tax liabilities
Fair value movements equity investments	-7,943	-13,407
Total deferred tax liabilities	-7,943	-13,407
Net balance at December 31	3,287	-5,349