Highlights of Stadshypotek’s Annual Report 2021

JANUARY–DECEMBER 2021 COMPARED WITH JANUARY–DECEMBER 2020

Stadshypotek’s operating profit increased by SEK 236m, or 2%, to SEK 13,077m (12,841). Net interest income grew by SEK 308m to SEK 14,948m (14,640), mainly due to higher lending volumes to the private and corporate markets in Sweden.

Of the net interest income, SEK 1,080m (924) was attributable to the branch in Norway, SEK 554m (476) to the branch in Finland and SEK 501m (517) to the branch in Denmark. Excluding the branches, net interest income increased by SEK 90m (489). Net gains/losses on financial transactions increased by SEK 20m to SEK 88m (68).

Expenses rose by SEK 106m to SEK -1,937m (-1,831). This increase was mainly attributable to an increase in the sales compensation paid to the parent company for the services performed by the branch office operations on behalf of Stadshypotek in relation to the sale and administration of mortgage loans, an increase driven primarily by higher business volumes.

Net credit losses totalled SEK 4m (-9). This amount includes expert-based calculations that take into account the effects of Covid-19, and entail a provision requirement of SEK -25m. The credit loss ratio remained unchanged, at 0.00% of lending (0.00).

LENDING

Compared to the close of the corresponding period during the previous year, loans to the public increased by 6%, or SEK 87bn, and stood at SEK 1,526bn (1,439). In Sweden, loans to the public increased by 5%, or SEK 62bn, to SEK 1,302bn (1,240).

FUNDING

Issues of Stadshypotek’s benchmark programme[1] loans in Swedish kronor totalled SEK 121.9bn (101.6) during the period. During the period, a nominal volume totalling SEK 95.5bn (93.9) matured or was repurchased. The carrying amount of outstanding Swedish kronor bonds was SEK 511.1bn (475.2) at the end of the period.

Issues of foreign currency bonds under the EMTCN programme totalled EUR 1.0bn (1.0). The outstanding volumes at the end of the period were nominally EUR 8.9bn (10.4) and GBP 0.7bn (0.7).

The outstanding volume in the US programme totalled USD 1.3bn (1.3) at the end of the period. Issues in NOK totalled NOK 8.0bn (6.0). The outstanding volume at the end of the period totalled NOK 29.0bn (25.5).

CAPITAL ADEQUACY

The total capital ratio according to CRD IV was 18.3% (20.7) while the common equity tier 1 ratio calculated according to CRD IV was 12.6% (13.1). Further information on capital adequacy is provided in note 19, Capital adequacy, on page 31.

RATINGS

Stadshypotek’s ratings remained unchanged during the entire period.

JULY–DECEMBER 2021 COMPARED WITH JANUARY–JUNE 2021

Stadshypotek’s operating profit increased by SEK 45m, or 1%, to SEK 6,561m (6,516). Net interest income grew by SEK 20m to SEK 7,484m (7,464), mainly due to higher lending volumes to the private and corporate markets in Sweden.

Of the net interest income, SEK 525m (555) was attributable to the branch in Norway, SEK 271m (283) to the branch in Finland and SEK 241m (260) to the branch in Denmark. Excluding the branches, net interest income increased by SEK 81m (-10). Net gains/losses on financial transactions increased by SEK 26m to SEK 57m (31).

Expenses decreased by SEK 7m to SEK -965m (-972), mainly attributable to an increase in the compensation paid to the parent company in relation to the sale and administration of mortgage loans.

Net credit losses totalled SEK -2m (6), mainly due to recoveries and a reduced provision for Stage 1 and Stage 2 during the second half of the year. The credit loss ratio corresponded to 0.00% (0.00) of lending.

LENDING

Loans to the public increased by 3%, or SEK 43bn, during the period, to SEK 1,526bn (1,483). In Sweden, loans to the public increased by 2%, or SEK 31bn, to SEK 1,302bn (1,271).

FUNDING

Issues of Stadshypotek’s benchmark programme1 loans in Swedish kronor totalled SEK 67.9bn (54.0) during the period. During the period, a nominal volume totalling SEK 44.5bn (51.0) matured or was repurchased. The carrying amount of outstanding Swedish kronor bonds was SEK 511.1bn (481.9) at the end of the period.

Issues of foreign currency bonds under the EMTCN programme totalled EUR 1.0bn (-). The outstanding volumes at the end of the period were nominally EUR 8.9bn (9.2) and GBP 0.7bn (0.7).

The outstanding volume in the US programme totalled USD 1.3bn (1.3) at the end of the period. Issues in NOK totalled NOK - bn (8.0). The outstanding volume at the end of the period totalled NOK 29.0bn (29.0).

CAPITAL ADEQUACY

The total capital ratio according to CRD IV was 18.3% (19.0) while the common equity tier 1 ratio calculated according to CRD IV was 12.6% (13.0). Further information on capital adequacy is provided in note 19, Capital adequacy, on page 31.

EFFECTS OF COVID-19

The effects that Covid-19 have had on the economy overall have continued to have a limited impact on Stadshypotek AB. The exemption from amortisation on mortgages – initiated by the Swedish Financial Supervisory Authority – expired in August 2021, and amortisation recommenced in September 2021 for the small proportion of Stadshypotek AB’s customers who made use of the exemption. Stadshypotek’s access to funding remained good in 2021.

DISCONTINUED OPERATIONS

Stadshypotek’s parent company, Handelsbanken, has made the decision to cease its operations in Denmark and Finland. A process to divest the units in Denmark and Finland has been initiated by Handelsbanken. Stadshypotek’s operations in Denmark and Finland are included in Handelsbanken’s decision and, as of 31 December 2021, constitute disposal groups and discontinued operations in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.  See note 18.

Stockholm,  9 February 2022

David Haqvinsson
Chief Executive

This information is of the type that Stadshypotek is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication through the agency of the contact person set out above, at 11,00 CET on 9 February 2022.

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