SEK’s interim report January-September 2021: Sustainable financing increasingly important
New lending for the first nine months of the year amounted to Skr 50 billion, in line with historical normal years but significantly lower than the record high volumes in 2020. Following limited demand for financing from Swedish exporters during the first half of the year, lending has increased toward the end of the third quarter.
After a year and a half of tackling the pandemic, Sweden’s economy is back at pre-crisis levels with exports acting as a catalyst. At the same time, problems remain such as shortages of input goods and disruptions in container and shipping traffic. Another challenge is the major differences in vaccination rates across the world, which has led to a negative effect on the global economy.
Lending to Swedish exporters was limited during the first half of the year, but increased toward the end of the third quarter. Despite lower new lending during the year, SEK have seen an increased demand for export credits and project financing, meaning financing for Swedish exporters’ customers abroad.
“Projects have long lead times and it is difficult to forecast with any precision when the transactions will be closed. The company works actively with a number of major projects, many with positive sustainability effects, which is why the forecast for business growth in this area remains favorable,” says Magnus Montan, CEO of the Swedish Export Credit Corporation.
During the quarter, the company has financed businesses in Finland, the Ivory Coast and Argentina with export credits corresponding to Skr 400 million.
Interest for sustainable investments and business is growing, and SEK is developing its offering in line with this to meet the needs of clients and investors. The company is now offering three loans connected to sustainability: green, social and sustainability-linked. The sustainability-linked loan is connected to the borrower’s sustainability targets, for example to reduce energy consumption.
“An important step in SEK’s endeavor to be a positive force in the transition and achieve the UN Sustainable Development Goals is being able to offer sustainable financing regardless of the type of loan that clients require. SEK has extensive experience of financing of renewable energy and sustainable infrastructure on an international scale,” says Magnus Montan.
Together with EKN, SEK has established a scientific climate council, the first of its kind in the world. The climate council is an advisory specialist body tasked with guiding the Swedish export finance system to strive toward the 1.5°C target of the Paris Agreement.
In line with SEK’s focus on sustainability, the company issued Skr 6.1 billion in green bonds during the first nine months of the year, of which Skr 2.1 billion was issued in the third quarter. Operating profit for the third quarter amounted to Skr 402 million (3Q20: Skr 512 million), of which Skr 72 million consist of non-recurring items, such as reversal of reserves for expected credit losses and net results of financial transactions. Net interest income totaled Skr 472 million (3Q20: Skr 553 million).
Results January–September 2021 (compared with January–September 2020)
• New lending Skr 50.4 billion (9M20: Skr 106.9 billion)
• Net interest income Skr 1,425 million (9M20: Skr 1,427 million)
• Operating profit Skr 1,005 million (9M20: Skr 802 million)
• Net profit Skr 798 million (9M20: Skr 627 million)
• Volume of green bonds issued Skr 6.1 billion (9M20: Skr 3.5 billion)
• After-tax return on equity was 5.2 percent (9M20: 4.3 percent)
• The total capital ratio amounted to 22.6 percent (year-end 2020: 21.8 percent)
• Basic and diluted earnings per share Skr 200 (9M20: Skr 157)
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 is a natural business partner in export financing.
