SEK’s interim report January-March 2021: Moderate demand for financing
While lending to Swedish exporters has been subdued, financing for their customers abroad has gone all the better during the quarter. Demand is growing for Swedish sustainable energy solutions, which positively impacts project financing and export credits.
Global trade and the Swedish export industry recovered well during the pandemic. At the same time, there is no lack of challenges. Growth is restricted by disrupted logistics chains, shortages of inputs such as semiconductors, problems with container shipping and vaccination delays.
Operating profit for the first quarter was up significantly year-on-year at Skr 291 million (3M20:Skr 157 million). New lending for the period was Skr 14.9 billion, which was lower year-on-year (3M20: Skr 33.3 billion).Conversely, net interest income was higher due to the record high volumes of lending during 2020, and totaled Skr 485 million (3M20: Skr 405 million).
“A downturn in new lending was expected. Many companies were quick to cover their financing needs in the early stages of the pandemic, and thus have strong liquidity. In parallel, many companies are being cautious about new investments, which is resulting in lower demand,” says Catrin Fransson, CEO of SEK.
While lending to Swedish exporters has been relatively low in the first quarter, financing for their customers abroad was normal. In order to strengthen the competitiveness of Swedish exporters further, SEK has developed a new offer, Small export credits. This includes transactions between Skr 20-300 million with maturities of 3-5 years. Financing is offered in USD and EUR and includes a guarantee from the Swedish Export Credit Agency (EKN) to 95 percent, which limits the exporter’s risk to only 5 percent.
“In particular, we are noting increased demand for Swedish sustainable energy solutions, leading to increased demand for project financing and export credits. In terms of export credits, we can now offer our customers small export credits. As implied by the name, these finance smaller transactions with lower amounts and slightly shorter maturities. This product has been requested by our customers,” says Catrin Fransson.
Results January–March 2021 (compared with January–March 2020)
• New lending Skr 14.9 billion (3M20: Skr 33.3 billion)
• Net interest income Skr 485 million (3M20: Skr 405 million)
• Operating profit Skr 291 million (3M20: Skr 157 million)
• Net profit Skr 231 million (3M20: Skr 123 million)
• Volume of green bonds issued Skr 2.4 billion (3M20: -)
• After-tax return on equity was 4.6 percent (3M20: 2.6 percent)
• The total capital ratio amounted to 21.8 percent (year-end 2020: 21.8 percent)
• Basic and diluted earnings per share Skr 58 (3M20: Skr 31)
Press contact
Catharina Henriksson
+46 76-677 59 09
catharina.henriksson@sek.se
About SEK
The Swedish Export Credit Corporation (SEK) is a state-owned company that finances Swedish exporters, their suppliers, and international buyers of Swedish products and services. Sustainability is central to SEK's operations, and therefore it is a natural step to finance the industry's transition to a fossil-free society; a development that also creates new export opportunities. With lending in 60 countries, SEK has substantial knowledge of international transactions and are a natural business partner in export financing.
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