Stadshypotek's operating profits went up by SEK 1,155m to SEK 3,020m (1,865). As of August 2008, Stadshypotek's branch in Norway is included in the figures and this made a contribution of SEK 211m in the first half of the year. Excluding the branch in Norway, operating profits rose by SEK 944m. Net interest income increased by SEK 1,349m of which SEK 229m was attributable to the branch in Norway. The increase in net interest income was due to higher volumes and to improved margins, partly because the company's good position in the funding market resulted in low funding costs. Net gains/ losses on financial operations decreased by SEK 175m to SEK 31m (206). This was mainly because unrealised changes in market value of financial assets and liabilities subject to hedge accounting and derivatives in the same period of the previous year were positively affected by rising market interest rates.

 

Expenses were SEK 106m (90). Net loan losses were SEK 22m (28), which corresponds to a loan loss ratio of -0.01% (-0.01) of lending. Before deduction of the provision for probable loan losses, the volume of bad debts was SEK 143m (247). SEK 50m (62) of the bad debts were non-performing loans, while SEK 93m (185) were loans on which the borrowers pay interest and amortisation, but which are considered doubtful. In addition, there were non-performing loans of SEK 807m (490) that are not assessed as being bad debts. After deductions for specific provisions totalling SEK -51m (-76) and provisions by group of SEK -11m (-) for probable loan losses, bad debts totalled SEK 81m (171).

Stadshypotek's operating profits for the second quarter of 2009 increased by SEK 178m to SEK 1,599m (1,421). Excluding the branch in Norway, operating profits rose by SEK 173m.

 

Net interest income was SEK 1,592m (1,493), of which SEK 117m (112) was attributable to the branch in Norway. The underlying increase of SEK 94m is partly due to higher volumes on the private and corporate markets and to increased margins in the corporate market, but also to the company's healthy position in the funding market. The average margin in the private market during the quarter was 0.64% (0.66). Net gains/losses on financial operations increased by SEK 67m to SEK 49m (-18).

 

Stadshypotek's lending volume continued to increase during the period. Loans to the public increased during the first six months by SEK 34bn to SEK 650bn (615). Compared with the same period in the previous year, lending volumes increased by SEK 104bn, of which SEK 47bn was attributable to the branch in Norway. Stadshypotek's share of the private market in Sweden was approximately 25% and for the corporate market, it was some 30%.

 

The capital ratio according to Basel II was 36.5% (39.8) while the Tier 1 capital ratio according to Basel II was 25.4% (28.2). Further information concerning capital adequacy is provided in the 'Capital base and Capital requirement' section.

 

Stadshypotek's rating remained unchanged, with a "stable outlook".

 

Stadshypotek
	Long-term	Short-term
Moody's	Aa1	P-1
Standard & Poor's	AA-	A-1+
Fitch	AA-	F1+
Covered bonds
Moody's		Aaa

 

 

The accounts comply with the IASB accounting standards adopted by the EU. The regulations of the Annual Accounts Act for Credit Institutions and Securities Companies and the directives issued by the Swedish Financial Supervisory Authority are also applied.

 

The accounting policies are unchanged compared to the latest annual report.

 

Stockholm, 21 July 2009

 

Lars Kahnlund

Chief executive