SEK’s interim report January–September 2023: Strong net interest income and challenging environment

Continued strong net interest income from SEK’s customer transactions, healthy business volumes and historic seven-year bonds characterized the third quarter. While demand for financing from Swedish exporters is strong, turbulence in the operating environment is generating caution regarding investments in international projects. “War and continued global tension as well as inflation and increased financing costs contributed to the postponement of some investments,” says Magnus Montan, CEO of SEK.

Strong net interest income from SEK’s customer transactions and continued strong demand for corporate lending from Swedish exporters are positive trends that have continued over from the second quarter. The lending portfolio posted historically strong growth in the first three quarters of the year at 7 percent. The third quarter represented growth of 2 percent.

Demand for financing of export credits and international project financing remained cautious during the quarter.

“War and continued global tension creates uncertainty and results in postponed investments,” says Magnus Montan, CEO of SEK, who also highlights inflation and high interest rates as contributing causes to the cautious approach to investments.

In September, SEK issued a public USD-denominated seven-year bond, the longest maturity for a public USD transaction that SEK has issued since 2007, concurrent with issuing our first ever seven-year EUR bond.

“Naturally, this is very pleasing since longer borrowing maturities are important to us and part of our borrowing strategy. It is important for our ability to contribute to the climate transition by being able to finance long-term projects that are important from climate and sustainability perspectives. This requires a long-term approach and stability,” says Magnus Montan.

Net interest income for the January to September period amounted to Skr 2,124 million (9M22: Skr 1,531 million) and for the third quarter amounted to Skr 767 million (3Q22: Skr 541 million), positively impacted by strong net interest income from our customer transactions. Net profit for the January to September period amounted to Skr 1,027 million (9M22: Skr 675 million) and for the third quarter amounted to Skr 514 million (3Q22: Skr 388 million), where the loss allowance for expected credit losses positively impacted operating profit with Skr 46 million (3Q22: Skr -5 million). Profitability was 6.2 percent for the first three quarters of the year, which was up 1.9 percentage points year-on-year.

New lending for the January to September period amounted to Skr 51.1 billion (9M22: Skr 98.4 billion) and for the third quarter amounted to Skr 15.2 billion (3Q22: Skr 28.6 billion).

SEK has a strong market position and extensive experience with sustainable finance with the ambition of supporting customers through their climate transitions. At the end of the third quarter the green and sustainability-linked loans amounted to 14.3 percent of the lending portfolio.

“SEK remains well capitalized and with high liquidity to continue to meet Sweden’s export industry’s financing needs. We remain optimistic about SEK’s business trend for the final quarter of the year,” says Magnus Montan.

Results January–September 2023 (compared with January–September 2022)

• New lending Skr 51.1 billion (9M22: Skr 98.4 billion)
• Net interest income Skr 2,124 million (9M22: Skr 1,531 million)
• Operating profit Skr 1,294 million (9M22: Skr 850 million)
• Net profit Skr 1,027 million (9M22: Skr 675 million)
• Lending portfolio growth 7.0 percent (9M22: 16.2 percent)
• After-tax return on equity 6.2 percent (9M22: 4.3 percent)
• Total capital ratio 20.8 percent (year-end 2022: 20.6 percent)
• Basic and diluted earnings per share Skr 257 (9M22: Skr 169)

For more information, please contact: 

Katarina Daniels, Press and Communications Officer, Tel: +46 72 080 68 85
Stefan Friberg, Chief Financial Officer, Tel: +46 72 717 88 05