Stadshypotek's interim report January - June 2000


The Stadshypotek Group's profits for January - June 2000 were SEK 2 185m (2 253).
The result for the first half of 1999 included capital gains from a property sale. Excluding this and taking into account reduced guaranteed commission income from the parent company, the operating profit for the first half of 2000 exceeded operating profit for the corresponding period of 1999. Compared with the second half of 1999, operating profit increased by 17 %.

Income
Group net interest income was SEK 2 359m ( 2 375). Compared with the first half of 1999, net interest income has been positively affected by increased private market lending and there has been a smaller negative impact from early redemptions of private market loans which were granted in 1993 and the first half of 1994. Net interest income has been negatively affected by lower return on equity due mainly to lower interest levels.
The decrease in Other income is explained by capital gains from sale of a business property in 1999, lower guarantee commission income from the parent company in 2000 and increased costs for external market makers for the company's funding.

Expenses
The Group's expenses were SEK 207m (271), a decrease by SEK 64m or 24 % compared to the same period last year. Expenses include the agents' commission which Handelsbanken Hypotek pays to Handelsbanken. Due to a decrease in the subsidiary's volumes, agent's commission fell by SEK 40m. The remaining reduction in expenses is the result of rationalisation measures which have been carried out.

Loan losses
Net loan losses were SEK -17m (-48), which corresponds to a loan loss ratio of -0.01% (-0.02) of total lending.

Problem loans after deduction of the reserve for possible loan losses decreased by SEK 890m to SEK
2 944m. The proportion of bad debts was 0.9% (1.2).

Lending
Private market lending continued to increase while lending to the corporate market fell. Since year-end, total lending has increased by SEK 1 473m.

Capital ratio
Capital ratio as at 30 June 2000 was 12.5% (14.4). The lower capital ratio is due to payment of dividends and group contribution.


The full report including tables is available to download from the enclosed link.

<br>Stockholm, 22 August 2000 <br> <br> <br> <br>Michael Zell <br>President <br> <br>This interim report has not been examined by the company's auditors <br>

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