Stadshypotek’s Interim Report January – June 2017

JANUARY – JUNE 2017 COMPARED WITH JANUARY – JUNE 2016

Stadshypotek’s operating profit increased by 5%, or SEK 267m, to SEK 5,817m (5,550). Net interest income grew by SEK 343m to SEK 6,377m (6,034), mainly due to higher lending volumes to the private market in Sweden. However, this change in net interest income was adversely affected by SEK 196m as a result of the doubling of the fee to the Resolution Fund, effective as of 2017. Of the net interest income, SEK 409m (299) was attributable to the branch in Norway, SEK 190m (191) to the branch in Finland and SEK 208m (160) to the branch in Denmark. The increase in net interest income at the Norwegian branch was mainly attributable to a lower funding cost, but also to an increase in lending volumes. Excluding the branches, net interest income increased by SEK 186m. Net gains/losses on financial transactions decreased by SEK 37m to SEK 6m (43).

Expenses rose by SEK 37m to -555m (-518). This increase can in part be attributed to an increase in staff costs, largely a consequence of higher pension costs. There was also an increase in the sales compensation paid to the parent company for the services performed by the branch office operations on behalf of Stadshypotek in relation to the administration and sale of mortgage loans. The increase can also be explained by, above all, higher costs of IT development and costs relating to the updating of funding programmes and ratings.

Recoveries exceeded new loan losses and the net amount recovered was SEK 2m (5).

LENDING

Compared with the end of the corresponding period of the previous year, loans to the public increased by 6%, or SEK 65bn, to SEK 1,183bn (1,118). In Sweden, loans to the public increased by 6%, or SEK 57bn, to SEK 1,017bn (960). Loans to the private market in Sweden increased by 6%, or SEK 41bn, to SEK 692bn (651).

The credit quality of lending operations remains very good. Impaired loans, before deduction of the provision for probable loan losses, totalled SEK 122m (96). Of this amount, non-performing loans accounted for SEK 57m (50), while SEK 65m (46) related to loans on which the borrowers pay interest and amortisation, but which are nevertheless considered impaired. There were also non-performing loans of SEK 281m (305) that are not classed as being impaired loans. After deductions for specific provisions totalling SEK -35m (-24) and collective provisions of SEK -4m (-3) for probable loan losses, impaired loans totalled SEK 83m (69).

FUNDING

Issues made under Stadshypotek’s Swedish covered bond programme totalled SEK 49.9bn (61.5) for the first six months of the year. A nominal volume totalling SEK 76.1bn matured or was repurchased. In addition, bonds to the value of EUR 0.5bn (2.25) and USD 1.25bn (-) were issued, while bonds to the value of EUR 1.5bn and NOK 4bn reached maturity.

CAPITAL ADEQUACY

The total capital ratio according to CRD IV was 55.8% (69.4), while the common equity tier 1 ratio calculated according to CRD IV was 33.2% (38.3).

RATING

Stadshypotek Covered bonds Long-term Short-term
Moody’s Aaa - P-1
Standard & Poor’s AA- A-1+
Fitch AA F1+

 
Stockholm, 18 July 2017

Ulrica Stolt Kirkegaard
Chief Executive

Stadshypotek discloses the information provided herein pursuant to the Securities Markets Act.
Submitted for publication on 18 July 2017, at 11.00 CET.

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