Stadshypotek’s interim report January–June 2013

January – June 2013 compared with January – June 2012
Stadshypotek’s operating profit increased by SEK 209 million to SEK 4,085 million (3,876). Net interest income grew by SEK 702 million to SEK 4,639 million (3,937). The increase in lending volume and improved margins, resulting from the company’s good position in the funding mar­ket, both contributed to the growth in net interest income. SEK 460 million (280) of the net interest income was attributable to the branch in Norway, SEK 157 million (107) to the branch in Finland and SEK 75 million (51) to the branch in Denmark. The increase in net interest income at the Norwe­gian branch was mainly due to higher margins. Excluding the branches, net interest income increased by SEK 448 million. Net gains/losses on financial transactions were SEK 97 million (75).

Expenses rose by SEK 512 million to SEK 644 million (132). The increase was almost entirely due to sales compensation to the parent company. Stadshypotek’s branches outside Sweden already make pay­ments to Handelsbanken’s branches in the respective countries for ser­vices rendered by them on behalf of Stadshypotek. As of 1 January 2013, the parent company is also compensated for the services performed by the branch office operations on behalf of Stadshypotek in relation to the sale and administration of mortgage loans in Sweden.

Net loan losses amounted to SEK -4 million (0). Before deduction of the provision for probable loan losses, the volume of impaired loans was SEK 233 million (98). Of this amount, non-performing loans accounted for SEK 141 million (62), while SEK 92 million (36) 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 1,013 million (995) that are not classed as being impaired loans. After deduc­tions for specific provisions totalling SEK -43 million (-40) and collective provisions of SEK -4 million (-6) for probable loan losses, impaired loans totalled SEK 186 million (52).

Growth in Lending
Loans to the public increased by around 8 per cent, or SEK 68 billion, compared to the end of the corresponding period in the previous year, and stood at SEK 925 billion (857). On 1 September 2012, Stadshypotek’s branch in Finland acquired a mortgage loan portfolio of around EUR 0.5 billion from the parent company’s branch in Finland, which corre­sponds to approximately SEK 4 billion of the increase in lending com­pared to at the end of the corresponding period in the previous year. In Sweden, loans to the public increased by around 7 per cent, or SEK 51 billion, compared to the end of the corresponding period in the previous year, and stood at SEK 810 billion (759). Lending to the private market in Sweden increased by around 5 per cent, or SEK 24 billion, to SEK 532 billion (508).

Issues of covered bonds from Stadshypotek’s benchmark series totalled SEK 95.0 billion (90.0). Issues of covered bonds under the EMTCN pro­gramme totalled the equivalent of approximately EUR 3.6 billion (3.9), and under the American programme, an issue of USD 1.25 billion was carried out. Stadshypotek has continued to be an active player in the Norwegian market, with issues during the period totalling NOK 4 billion.

Capital Adequacy
The capital ratio according to Basel II was 59.5 per cent (60.4) while the tier 1 ratio calculated according to Basel II was 44.5 per cent (44.0). Further information on capital adequacy is provided in the ‘Capital base and capital requirement’ section on page 20.

Stadshypotek’s rating was unchanged during the period.

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

Stockholm, 17 July 2013

Per Beckman
Chief Executive

Stadshypotek discloses the information provided herein pursuant to the Securities Markets Act. Submitted for publication on 17 July 2013, at 11.00 CET.

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