Norway’s KLP has reported a return of -2.1 per cent in the first half of 2022.

Publishing its interim results, KLP attributed the poor performance to higher interest rates and a sluggish equity market. However, it said the upturn in activity in hotels and shopping centres has contributed to a strong return on KLP’s properties.

In addition, during the second quarter, KLP said it achieved an investment result (the return in excess of that guaranteed by the company to its customers) of NOK -20.3bn.

“Rising inflation and higher interest rates are affecting the global economy. This has resulted in substantial movements in financial markets. We have solid financial buffers which safeguard customers’ savings during periods of negative market movements,” KLP group CEO, Sverre Thornes, said.

KLP’s total assets have increased by NOK 20.9bn in the year to date, including NOK 17.1bn in the second quarter, and amount to NOK 727.6bn. The premium reserve increased by NOK 21.9bn to NOK 508.1bn over the same period.

“Fast rising interest rates have had an immediate impact on the valuation of our bond portfolio this period. This also means that forthcoming yields in bonds will add value to future results and our long-term financial strength,” Thornes said.

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