Stadshypotek's interim report January-September 2009

January - September 2009 compared with January - September 2008
Stadshypotek's operating profits went up by SEK 1,735m to SEK 4,420m (2,685). As of August 2008, Stadshypotek's branch in Norway is included in the figures and this made a contribution of SEK 287m. Excluding the branch in Norway, operating profits rose by SEK 1,448m. Net interest income increased by SEK 1,917m of which SEK 307m was attributable to the branch in Norway. The increase in net interest income was due to higher volumes and higher margins as a result of the company's good position in the funding market. Net gains/losses on financial operations decreased by SEK 111m to SEK -89m (22).
Expenses were SEK 154m (138). Recoveries and writebacks exceeded new loan losses, and the net amount recovered was SEK 28m (88), which corresponds to a loan loss ratio of -0.01% (-0.02) of lending. After deduction of the provision for probable loan losses, the volume of impaired loans fell to SEK 127m (230). SEK 50m (38) of the impaired loans were non-performing loans, while SEK 77m (192) were loans on which the borrowers pay interest and amortisation, but which are nevertheless considered doubtful. In addition, there were non-performing loans of SEK 652m (604) that are not assessed as being impaired loans. After deductions for specific provisions totalling SEK -49m (-66) and provisions by group of SEK -11m (-) for probable loan losses, net impaired loans totalled SEK 67m (164).
Q3 2009 compared with Q2 2009
Stadshypotek's operating profits for the third quarter of 2009 went down by SEK 199m to SEK 1,400m (1,599). Excluding the branch in Norway, operating profits fell by SEK 214m.
Net interest income was SEK 1,568m (1,592), of which SEK 132m (117) was attributable to the branch in Norway. Excluding the branch in Norway, net interest income fell by SEK 38m. The average margin in the private market during the quarter was 0.63% (0.64). Net gains/losses on financial operations decreased by SEK 169m to SEK -120m (49). 
Stadshypotek's lending volume continued to increase during the period. Loans to the public increased during the period by SEK 49bn to SEK 664bn (615). Compared to 30 September 2008, lending volume increased by SEK 59bn. Stadshypotek's share of the private market in Sweden was approximately 25% and its share of the corporate market in Sweden was approximately 30%.
The capital ratio according to Basel II was 37.0% (34.5) while the Tier 1 capital ratio according to Basel II was 25.8% (24.5). Further information concerning capital adequacy is provided in the 'Capital base and Capital requirement' section.
Stadshypotek's rating remained unchanged, with a "stable outlook".

Covered bonds
Standard & Poor's
The accounts comply with the IASB accounting standards adopted by the EU. The regulations of the Annual Accounts Act for Credit Institutions and Securities Companies and the directives issued by the Swedish Financial Supervisory Authority are also applied.
The accounting policies are unchanged compared to the latest annual report.
Stockholm, 28 October 2009
Lars Kahnlund
Chief executive
This interim report has not been examined by the company's auditors.
The report can be downloaded from the following link:

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