SBAB’s operating profit for 2008 increased to SEK 585 million

SBAB’s operating profit for 2008 amounted to SEK 585 million (SEK 258 million). The value of the credit portfolio increased to SEK 183,959 million (SEK 167,981 million). Demand for SBAB’s savings accounts remained high and, at the end of December, deposits totalled SEK 3,542 million (SEK 759 million).
“During a year characterised by extremely difficult market conditions, it is gratifying that we succeeded in increasing our volumes of lending and deposits and reported an improvement in operating profit,” says SBAB’s CEO, Eva Cederbalk.

Results
Operating profit increased to SEK 585 million (SEK 258 million). Net interest income was slightly lower than in the preceding year, at SEK 1,141 million(SEK 1,177 million). Total operating income amounted to SEK 1,127 million(SEK 755 million), with the improvement attributable mainly to a reduction in the negative impact of unrealized changes in market value compared with the preceding year. Expenses for 2008 amounted to SEK 520 million (SEK 517 million), the same level as in 2007.

Lending
Lending to consumers amounted to SEK 183,959 million, compared with SEK 167,981 million at the beginning of the year. Part of the increase was attribut-able to SBAB’s acquisition of loans from the partly owned company FriSpar Bolån AB in order to facilitate borrowing through the issuance of covered bonds in SBAB’s wholly owned subsidiary The Swedish Covered Bond Corporation(hereinafter referred to as SCBC). New lending within the consumer market amounted to SEK 19,164 million (SEK 19,676 million). The consumer market portfolio amounted to SEK 116,823 million (SEK 104,125 million). SBAB’s market share for lending to the consumer market was 7.5% (8.1%). SBAB’s partner business constitute an important distribution channel within the consumer market.
New lending in the corporate market amounted to SEK 13,261 million(SEK 10,808 million). The corporate market portfolio amounted to SEK 67,136 million (SEK 63,856 million). SBAB’s market share for lending to the corporate market was 11.4% (13.4%).

Deposits
Demand for SBAB’s savings accounts was very high and the amount deposited at the end of the year totalled SEK 3,542 million (SEK 759 million). SBAB offers two types of savings accounts with competitive interest rates. Interest is credited from the very first krona regardless of the amount deposited and withdrawals are free of charge.


Funding
Since SBAB attaches considerable importance to having a well-diversified funding portfolio, an active market presence and a flexible range of products are essen-tial. At the start of the financial crisis, SBAB decided at an early stage to main-tain very high access to liquid funds and has continuously acted in accordance with this aim. Despite the increased unrest and reduced market liquidity, SBAB had healthy access to funds during every phase of the crisis. SBAB has been able to realise its target of achieving an increased share of long-term funding. The total value of outstanding securities issued was SEK 198,643 million (SEK 191,807 million). Funding through the issuance of covered bonds is effected through SBAB’s wholly owned subsidiary SCBC. The credit rating institutes Moody’s and Standard & Poor’s have set a credit rating of Aaa/AAA for the issued covered bonds.

Liquidity portfolio
SBAB’s liquidity portfolio is a liquidity reserve whose purpose is to manage liquid-ity and funding risks. On 31 December 2008, the portfolio amounted to SEK 31.5 billion (SEK 31.0 billion) and consisted of assets classified as “Loan receivables and accounts receivable” in an amount of SEK 23.1 billion (SEK 0.0 billion) and “Securities measured at fair value through profit and loss” of SEK 8.4 billion (SEK 31.0 billion). The objective of having these securities in the liquidity portfolio is long term and they consist only of items that achieve the highest rating, Aaa from Moody’s or AAA from Standard & Poor’s.

Current events
On January 29 2009, the Government of Sweden decided to propose a bill whereby the Swedish Parliament is asked to approve that SBAB’s mission be expanded to enable SBAB, in addition to its current activities, to also engage in banking operations and any activities that are naturally connected to such operations in accordance with the Banking and Finance Business Act (SFS 2004:297) and in fund operations in accordance with the Swedish Investment Fund Act (SFS 2004:46).