SEK’s interim report January-March 2023: Strong result despite weaker demand
Following very strong business flows in 2022, SEK has noted a slightly lower new lending for the first quarter. While new lending to Swedish exporters remains high, new lending to foreign buyers of Swedish goods and services, were at lower levels.
In recent years, SEK has increased its lending portfolio, mainly regarding working capital and export credits and extended the duration of its lending portfolio, which contributed to more stable and higher earnings. New lending for the first quarter amounted to Skr 13.8 billion, a decrease compared to the corresponding quarter last year (3M22: Skr 24.4 billion).
New lending to Swedish exporters remained high, whereas new lending volumes to foreign buyers of Swedish goods and services were at low levels. However, we are noting continued strong demand for export credits and project financing. These transactions often have long lead times, which makes it difficult to predict when they will close.
“The global uncertainty in the operating environment and the shift towards higher interest rates, affects the willingness to invest. At the same time, demand for financing of defense, climate transition and energy projects has increased. In light of that, we remain optimistic about SEK’s business outlook for the remainder of the year,”
says Magnus Montan, CEO of the Swedish Export Credit Corporation.
SEK posted profitability of 6.1 percent for the first quarter, reflecting a year-on-year increase of 3.8 percentage points, driven by strong net interest income. Net interest income totaled Skr 633 million, corresponding to an increase of 31 percent year-on-year. The company also posted net profit of Skr 334 million, up 188 percent year-on-year.
The funding markets have shown a lower risk appetite during the quarter, but thanks to SEK’s strong reputation, the company has been able to raise borrowings of Skr 34 billion. Among other issues, SEK issued a USD 1.75 billion three-year fixed-rate bond and a Skr 1.5 billion green bond.
“Overall, SEK remains well capitalized and has high liquidity for meeting the financing needs of Sweden’s export industry,” says Magnus Montan.
Results January–March 2023 (compared with January–March 2022)
• New lending Skr 13.8 billion (3M22: Skr 24.4 billion)
• Net interest income Skr 633 million (3M22: Skr 485 million)
• Operating profit Skr 420 million (3M22: Skr 148 million)
• Net profit Skr 334 million (3M22: Skr 116 million)
• After-tax return on equity 6.1 percent (3M22: 2.3 percent)
• Total capital ratio 19.7 percent (year-end 2022: 20.6 percent)
• Basic and diluted earnings per share Skr 84 (3M22: Skr 29)
For more information, please contact:
Stefan Friberg, Chief Financial Officer, Tel: +46 72-717 88 05
Jenny Wickman, press contact, Tel: +46 79-585 94 09.
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 is a natural business partner in export financing.
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