With a market share of approximately 50%, KBN is the largest lender to the Norwegian local government sector with over 95% of Norway's municipalities and counties having loans with the institution.
At the end of Q3 2009, KBN's outstanding loan portfolio was NOK 138.6 billion (approximately USD 24 billion equivalent), of which 90 per cent is represented by loans to local governments and the remaining 10 per cent represented by guaranteed loans or loans to inter-municipal companies that represent municipal direct risk. The largest share of both approved and disbursed loans are for projects in the health and social sector and primary and secondary education.
KBN also provides consultancy services to its borrowers, including regular analysis of the interest rate environment, lending rate assessment and advice on the restructuring of portfolios.
KBN's loans are evenly distributed among the Norwegian local government sector with only a limited number of municipalities not having any loans, including wealthier power-producing municipalities that do not require debt financed investments. The pricing of loans is not dependent on size, and an important objective is to offer equally good terms to all.
Lending to the Norwegian local government sector carries a very low level of risk, and neither the agency nor its predecessor Norges Kommunalbank have suffered a loan loss since operations began in 1927.