Highlights of Stadshypotek’s Annual Report January – December 2015

JANUARY – DECEMBER 2015 COMPARED WITH JANUARY – DECEMBER 2014
Stadshypotek’s operating profit increased by 23%, or SEK 1,975m, to SEK 10,716m (8,741). Net interest income grew by SEK 1,516m to SEK 11,756m (10,240). Of the net interest income, SEK 875m (1,014) was attributable to the branch in Norway, SEK 417m (398) to the branch in Finland and SEK 277m (221) to the branch in Denmark. Excluding the branches, net interest income increased by SEK 1,580m. This increase was primarily due to lower funding costs and higher lending volumes. The decrease in net interest income at the Norwegian branch was attributable to lower margins for both the private and corporate markets, although this was offset slightly by an increase in lending volumes. The increase in net interest income at the Finnish branch can mainly be explained by higher lending volumes to the corporate market, while at the Danish branch it was mainly due to an increase in lending volumes to the private market. Currency effects also caused branches’ net interest income to decrease by SEK 16m. Net gains/losses on financial transactions increased to SEK 29m (7).

Expenses decreased by SEK 456m to SEK -1,065m (-1,521), mainly due to a lower level of sales compensation paid to the parent company for the services performed by the branch operations on behalf of Stadshypotek in relation to the sale and administration of mortgage loans. This reduction was due to further improvements to IT systems and processes within Swedish regional bank operations.

Net loan losses totalled SEK 2m (22) as recovered loan losses exceeded new loan losses.

LENDING
Loans to the public increased by 6%, or SEK 64bn, and stood at SEK 1,083bn (1,019). In Sweden, loans to the public increased by 7%, or SEK 58bn, to SEK 937bn (879). Loans to the private market in Sweden increased by 8%, or SEK 47bn, to SEK 624bn (577).

The credit quality of lending operations remains very good. Impaired loans, before deduction of the provision for probable loan losses, decreased by SEK 66m and totalled SEK 109m (175). Of this amount, non-performing loan accounted for SEK 66m (128), while SEK 43m (47) related to loans on which the borrowers pay interest and amortisation, but which are nevertheless considered impaired. There were also non-performing loans of SEK 338m (607) that are not classed as being impaired loans. After deductions for specific provisions totalling SEK -32m (-43) and collective provisions of SEK -5m (-4) for probable loan losses, impaired loans totalled SEK 72m (128).

FUNDING
Issues made under Stadshypotek’s Swedish covered bond programme totalled SEK 112.8bn (111.1). During the year, a nominal volume totalling SEK 115.3bn (110.5) matured or was repurchased. In Norway, bonds to the value of NOK 1.5bn (6.7) were issued during the year. Issues of covered bonds under the EMTCN programme totalled EUR 1.25bn (2.8) and GBP 345m (0). Issues made under the US 144A programme totalled USD 1bn (0). During the year, bonds to the value of EUR 1.25bn, CHF 80m, GBP 700m, NOK 4bn and SEK 8.8bn matured.

CAPITAL ADEQUACY
The total capital ratio according to CRD IV was 67.8% (67.1) while the common equity tier 1 ratio calculated according to CRD IV was 40.2% (39.0). Further information on capital adequacy is provided in the ‘Own funds and capital requirement’ section on page 20.

RATING           

  
Stockholm, 9 February 2016
 
  
Ulrica Stolt Kirkegaard
Chief Executive
 
   
Stadshypotek discloses the information provided herein pursuant to the Securities Markets Act.
Submitted for publication on 9 February 2016, at 10.00 CET.

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