SEK's Year-end Report 2020: Record in new lending for SEK
The ongoing COVID-19 pandemic has left its mark on operations during the year. Exporters’ need for financing rises in times of economic turbulence. In 2020, the Swedish Export Credit Corporation (SEK) lent Skr 125.5 billion and set a new lending record for the company. The high level of lending also contributed to extremely high net interest income of Skr 1,946 million.
The export industry recovered in the third and fourth quarters despite a second wave of infection. However, economic forecasts remain subject to considerable uncertainty.
During the pandemic, exporters were in substantial need for financing, which resulted in SEK setting a lending record of Skr 125.5 billion (74.5) in 2020. The high level of lending also contributed to the company posting its second highest total for net interest income at Skr 1,946 million, compared with Skr 1,717 million last year. An increase in provisions for credit losses resulted in operating profit for 2020 totaled Skr 1,238 million which was slightly lower year-on-year (2019: Skr 1,304 million). The historically strong net interest income was a result of increased business activity and lending to Swedish exporters and their international customers.
“SEK’s mission to ensure access to finance for the Swedish export industry rises to prominence in a crisis and this time is no exception. During the pandemic, we have succeeded in maintaining a high lending capacity and thereby been able to provide the best support for the export industry,” says Catrin Fransson, CEO of SEK.
There is a substantial global need for investments in sectors such as transportation and energy, sustainable urban development and fossil-frugal production. Over the year, SEK has increased its focus on financing this transition in Sweden and internationally. To gain an understanding of clients’ financing needs, SEK conducted a survey of Swedish exporters in the autumn. The survey findings showed that over the next three years, eight out of ten companies intended to invest in transition in Sweden to reduce their climate impact. Of these, 54 percent stated that they would need to finance the investments.
“The results of the survey show an enormous force for change among exporters to reduce climate emissions. SEK expects to finance many more exporters’ transitions over the coming years,” says Catrin Fransson.
In line with SEK’s focus on sustainability, the company issued five new green bonds and issued five new tranches of existing bonds for a total of Skr 5.1 billion during the year. In the fourth quarter, SEK conducted its first public Secured Overnight Financing Rate (SOFR) transaction. SOFR is the index that is widely expected to replace the USD LIBOR. SEK completed a borrowing program for USD 700 million over two and a half years, making it one of the very first in its segment to conduct such a transaction, which is good for our marketing and our reputation.
Results January–December 2020 (compared with January–December 2019)
• New lending Skr 125.5 billion (2019: Skr 74.5 billion)
• Net interest income Skr 1,946 million (2019: Skr 1,717 million)
• Operating profit Skr 1,238 million (2019: Skr 1,304 million)
• Net profit Skr 968 million (2019: Skr 1,207 million)
• After-tax return on equity was 4.9 percent (2019: 5.5 percent)
• The total capital ratio amounted to 21.8 percent (year-end 2019: 20.6 percent)
• Basic and diluted earnings per share Skr 243 (2019: Skr 257)
Press contact
Catharina Henriksson
Head of Press and Public Affairs
+46 76-677 59 09
catharina.henriksson@sek.se
About SEK
The Swedish Export Credit Corporation is a state-owned company that finances Swedish exporters, their subsidiaries, 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 65 countries, SEK has substantial knowledge of international transactions and are a natural business partner in export financing.
