Alternative performance measures 

An alternative performance measure (APM) is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. In disclosing our performance, FMO uses specific APMs that are not defined by IFRS and are different to what is included in the financial statements. APMs should not be considered as alternatives to the equivalent IFRS measures but rather supplementary to the most directly comparable IFRS measures. Alternative performance measures do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. FMO distinguishes between Sustainability-related APMs and Financial Accounting APMs.

Sustainability-related APMs 

Committed portfolio

Committed portfolio is an impact measure that is used for steering purposes. It measures FMO’s contribution and expected impact towards SDG 8 Decent Work and Economic Growth, a key strategic objective of FMO, and reflects the risk exposure taken by different risk parties. We distinguish between three business lines: FMO, funds made available by public entities ('public funds') and funds made available by other third parties ('direct mobilized funds').

The measure committed portfolio is not reconcilable with information included in the financial statements as it consists of a unique set of business rules. These business rules combine a mix of financial and non-financial information and data. The non-financial information is not required by IFRS and, as such, is not reflected in the financial statements.

The following table includes a breakdown of committed portfolio per business line and financial product.

Committed portfolio is the sum of outstanding amounts and remaining commitment amounts of the active debt, guarantee and equity investment transactions. Debt includes commercial loans, mezzanine loans and debt funds. Equity includes direct and fund investments, as well as investments made in associates. Guarantees include guarantees issued.

The outstanding amount for debt is equal to the principal outstanding amount reduced to the amount of the used Unfunded Risk Participation (guarantees received), if any; for the equity investments this is equal to the sum of fair value of the underlying assets. For guarantees, this is equal to the effective guarantees issued. The remaining commitment consists of the committed not disbursed amounts for all financial products mentioned, or in other words the principal amount available for disbursement to the customer by the funding party. 

A non-material portion (less than 0.2 percent) of our total committed portfolio is double counted as a result of FMO’s equity investment in the SDG loan fund, which was launched in 2023 and participates solely in FMO loans. FMO’s equity stake in this structure is accounted for on FMO’s own books. Along with the equity provided by other investors, this is then used by the fund to participate in FMO loans that – once commitments are made – are accounted for as direct mobilized portfolio. Direct mobilized portfolio consists of funds provided by third parties that are not on FMO’s own books. In 2024, the fund participated in several FMO loans. As such, a small portion of FMO’s equity investment counts towards both FMO committed portfolio as well as direct mobilized committed portfolio. The impact on the 2024 results is not material and, therefore, is not corrected.

New investments

New investments is a strategic business measure used for steering purposes to ensure funds maximize impact on SDGs 8, 10 and 13. New investment refers to the volume of new commitments made to customers at the end of the reporting year (based on signed contracts), reported per party bearing the risk (i.e. FMO, public entities, otherthird-parties considered direct mobilization). Volume is reported for all debt, equity and guarantee products and includes new facility agreements, limit increases, renewals of contracts and interest capitalization. It excludes transfers from one party to another or conversions from e.g. equity to debt. Grants provided through, for instance, the Capacity Development program and sub-delegated funds under management of third parties are excluded from the results. 

The measure new investments is not reconcilable with information included in the financial statements as it consists of a unique set of business rules. These business rules combine a mix of financial and non- financial information and data. The non-financial information is not required by IFRS and, as such, is not reflected in the financial statements. 

The following table includes a breakdown of new investments per business line and financial product. For a description of each financial product, refer to the section on committed portfolio.

A non-material portion (less than 0.4 percent) of our total new investments is double counted as a result of FMO’s equity investment in the SDG loan fund. In 2024, the fund participated in several FMO loans that counted towards total new investments. As such, a small portion of FMO’s equity investment counts towards both FMO new investments as well as direct mobilized new investments. The impact on the 2024 results is not material and, therefore, is not corrected.

Financial Accounting APMs

Regular income

FMO’s regular income relates to income following from financing activities and administrative services. Regular income excludes income related to value adjustments of financial instruments. Regular income includes net interest income, net fee and commission income, dividend income and remuneration from services rendered. These elements are visible on the FMO's consolidated statement of profit or loss.

Loan impairments and revaluations 

Loan Impairments and revaluations relate to gains/losses following from value adjustments of FMO’s loan portfolio. Impairments can be reconciled to the consolidated profit or loss account. Revaluations include fair value gains/losses (presented under line item ‘results from financial transactions') arising from the loan portfolio measured at fair value through profit or loss (FVPL) and gains/losses due to derecognition.

Revaluation of equity investments

Revaluation on equity investments relate to the gains/losses following from valuation adjustments of FMO’s equity portfolio. These elements are visible on FMO’s consolidated statement of profit or loss.

Results on derivatives

Results on derivatives relate to gains/losses following from valuation adjustments of FMO’s treasury portfolio and foreign exchange gains/losses. These are included under the line item ‘results from financial transactions’ in the consolidated statement of profit or loss.

Return on average shareholders' equity 

A measure that indicates how the profitability is in relation to the average shareholders' equity. This metric is expressed in the form of a percentage that is equal to net profit/(loss) divided by the average shareholders' equity for the prior and current reporting year.

Return on assets 

A measure that indicates profitability in relation to total assets. The metric is expressed in the form of a percentage that is equal to net profit/(loss) divided by the total assets for a specific reporting year.

Non-performing exposure ratio

A measure expressed as the percentage of non-performing exposures. The ratio is calculated as gross exposure of the non-performing exposures (on balance) divided by the gross exposure of the total loan portfolio. For further details on this measure, refer to the sub-section on “Non-performing exposures” included within the credit risk disclosures.

CET-1 ratio 

CET-1 ratio compares a bank’s capital against its risk-weighted assets to determine its ability to withstand financial distress. For calculation of the CET-1 ratio refer to the Capital Adequacy section in the 'Risk management' chapter.