Financial performance

Financial results

For 2025, FMO recorded a net profit of €48 million, compared to €297 million in 2024. The decline in net profit is almost entirely explained by significant foreign exchange movements, in particular the weakening of the US Dollar against the Euro. Over the year, the EUR/USD exchange rate moved from 1.04 to 1.17, resulting in a €210 million unrealized FX loss on our equity investments. In 2024, the opposite occurred: the strengthening of the US Dollar contributed €116 million in FX gains, which explains the year‑on‑year volatility in the reported net profit.

Because the FX impact is non‑operational and outside management control, FMO focusses on the regular result21 as key alternative performance measure. The regular result increased to €122 million in 2025, up from €110 million in 2024, despite the stronger euro. This increase is driven by:

Higher interest and fee income, supported by strong underlying business activity
Higher dividend income
Limited cost growth, as operating expenses increased by only €2 million, demonstrating continued cost discipline

It is noteworthy that regular income21 increased even though a large part of our revenues are USD‑denominated, while the appreciation of the euro reduced EUR‑translated income. Expenses, being primarily euro‑denominated, were not affected, making the improvement in the regular result even more significant.

Loan impairment levels also contributed positively to the result. Similar to last year, FMO recorded a net release of loan loss provisions, reflecting improved credit risk performance across the portfolio. The NPE ratio21 for the lending portfolio on December 31, 2025 is 5.5 percent, down from 7.0 percent in 2024.

FMO's approach to foreign currency exposures remains unchanged. In line with FMO's mandate to support local market development, FMO extend loans and make equity investments in local and foreign currencies. FMO therefore accept FX volatility on net profit and deliberately do not hedge open FX position on equity investments, as it provides a natural partial hedge for FMO's regulatory capital ratios. While a depreciation of the euro reduces income in euro terms, it also reduces the euro value of FMO's foreign‑currency risk‑weighted assets (RWA), which has a stabilizing effect on capital ratios.

Overall, while reported net profit shows a decline due to FX effects, the regular result demonstrates strong underlying performance, supported by higher income and cost discipline.

Cash flow

The net cash flow for the year was an outflow of €241 million. Net cash flows from operating activities amounted to an outflow of €578 million. Cash outflows relate primarily to disbursements from new investments in the lending portfolio, as well as additional investments in interest-bearing securities.

Capital position

On December 31, 2025 FMO’s capital position remained above the minimum levels required by the Dutch Central Bank as well as the requirements of FMO’s own internal Risk Appetite Framework. The total capital ratio increased to 22.3 percent (2024: 21.3 percent). The CET–1 ratio21 increased to 22.2 percent (2024: 20.4 percent).

FMO’s liquidity ratios remained within the regulatory limits with a liquidity coverage ratio (LCR) of 294 percent for the current financial year. The survival period was over 7 months (2024: more than 12 months). The net stable funding ratio (NSFR) was 110 percent at the end of the financial year (2024: 109 percent).

FMO maintained its AAA ratings from both Fitch and Standard & Poor's during the financial year. FMO’s funding portfolio increased by €163 million, where redemptions were offset by new bond issuances totaling approximately €2,096 million.

Proposal for appropriation of the net result

Taking into account the conditions set out in the State-FMO Agreement of July 1, 2023, the Management Board and Supervisory Board propose allocating the net profit as follows: distribution of €2.0 million as a cash dividend (€5.01 per share) and allocating the remaining net profit of €46.5 million to the contractual reserve.

Risk and uncertainties

FMO’s primary risk exposures are investment risk (credit risk, equity risk, concentration risk and counterparty credit risk), market risk and liquidity risk. FMO monitors developments in these areas on an ongoing basis. This includes assessments of the impact of broader global macro-economic trends, such as increasing interest rates and foreign exchange rate movements, as well as more acute impacts arising from country- or region-specific political or environmental events. Risk levels are continuously measured against predefined risk tolerances and proactive measures are taken when challenging events take place.

Risks and uncertainties also arise in the financial reporting processes related to investment valuations, the estimation of expected credit losses and impairments on the lending portfolio, and the treatment of large, structured investments. These processes rely on professional judgement, therefore there is an inherent degree of uncertainty that arises in accounting for these items. FMO embeds controls in the financial reporting and valuation processes to ensure all estimates are reasonable and free from bias.

Further information

For more details and analysis on the financial performance, please refer to the 'Consolidated statement of profit or loss' sub-chapter in the 'Consolidated financial statements'. For more information on developments related to equity investments, ECL allowances and impairments, funding, and liquidity, please refer to the 'Equity risk', 'Credit risk' and 'Liquidity risk' sections in the 'Risk Management' chapter.

21 This is an alternative performance measure (APM) that is not included in the financial statements. For a definition of this APM, please refer to the chapter ‘Alternative Performance Measures’.