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Regulatory press release

AB Svensk Exportkredit: SEK's interim report January-June 2020: Record lending to Swedish exporters

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As a result of COVID-19, demand for financing has risen dramatically and resulted in record lending for Svensk Exportkredit (SEK). New lending for the second quarter amounted to Skr 56.5 billion, which is the second highest volume for a single quarter in the company's history.

The high volume of new lending was primarily due to the need of Swedish exporters to strengthen their liquidity.

"Many Swedish exporters are preparing for a prolonged economic downturn and have therefore strengthened their liquidity. Borrowers seek a safe port during storms and, accordingly, interest for state financing rises, which we noted during this crisis and the financial crisis," says Catrin Fransson, CEO of SEK.

"SEK's lending was extremely high even in the first quarter, but the difference is that exporters now have a longer planning horizon, as evidenced by the increased demand we have noted for credits with longer tenors. Moreover, we are now noting more glimmers of light, not least in terms of the number of end customer transactions," says Carin Fransson.

Despite stronger earnings from clients, significant provisions for expected credit losses and revaluations of financial instruments led to a lower operating profit for the second quarter, Skr 133 million (1H19: Skr 328 million) and a net profit of Skr 101 million (1H19: Skr 262 million).

"SEK hedges the economic price risk of financial instruments held to maturity, but fluctuations in market values still give rise to temporary impacts on earnings," says Catrin Fransson.

Results January-June 2020 (compared with January-June 2019)
  • New lending Skr 89.8 billion (1H19: Skr 45.4 billion)
  • Net interest income Skr 874 million (1H19: Skr 850 million)
  • Operating profit Skr 290 million (1H19: Skr 680 million)
  • Net profit Skr 224 million (1H19: Skr 536 million)
  • Return on equity was 2.3 percent (1H19: 5.8 percent)
  • The total capital ratio amounted to 20.4 percent (year-end 2019: 20.6 percent)
  • Basic and diluted earnings per share Skr 56 (1H19: Skr 134)
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