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As filed with the Securities and Exchange Commission on February 25, 201924, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

For the transition period from                       to                        

Commission file number: 001-08382

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Indicate the number of shares outstanding of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

x Yes   o No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes   x No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes x   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o   Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   x No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

o Yes   o No

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INTRODUCTORY NOTES

In this annual report on Form 20-F (the “annual report”), unless otherwise specified, all amounts are expressed in Swedish kronor (“Skr”).

In this annual report, unless otherwise indicated, all descriptions and financial information relate to the consolidated group consisting of Aktiebolaget Svensk Exportkredit (publ), (Swedish Export Credit Corporation) (the “Parent Company”, the “Company” or “SEK”), including the Commercial Interest Reference Rate-system (the Swedish system for officially supported export credits (theor the “CIRR-system”), which is described herein, and the Parent Company’s wholly owned, inactive subsidiary SEKETT AB (the “Subsidiary”).  These are jointly referred to as the “Consolidated Group” or the “Group”. During 2018, the winding-down of the subsidiary Venantius AB, including the latter’sits wholly owned subsidiary VF Finans AB, was completed.

The Consolidated Financial Statementsconsolidated financial statements of SEK included in Item 18 (the “Consolidated Financial Statements”) comprise the financial statements for 2019 and 2018 of the Parent Company and the Subsidiary and for 2017 and earlier of the Parent Company together with Venantius AB and its wholly owned subsidiary VF Finans AB. In certain cases, comparable figures for earlier financial periods are reported in parentheses after the relevant figure for the current period. For example, “(2017:2018: Skr 10 million)” means that the relevant figure for 2017,2018, or as of December 31, 2017,2018, as the context requires, was Skr 10 million.

The Parent Company is a “public limited liability company” within the meaning of the Swedish Companies Act (2005:551). A Swedish limited liability company, even if its shares are not listed on an exchange and are not publicly traded, may choose to declare itself a “public limited liability company”. Only public limited liability companies are allowed to raise funds from the public through the issuance of debt instruments. A public limited liability company is required to add the notation “publ” to its name, unless it is evident from the company’s name that the company is a public limited liability company.

Additional information about SEK, including investor presentations and the Annual Reportannual report for the financial year of 2018,2019, is available at www.sek.se/en/investor-relations. Information available on or accessible through SEK’s website is not incorporated herein by reference.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. SEK has based these forward-looking statements on its current expectations and projections about future events. These statements include but are not limited to:

·                          statements regarding financial projections and estimates and their underlying assumptions;

·                          statements regarding plans, objectives and expectations relating to future operations and services;

·                          statements regarding the impact of regulatory initiatives on SEK’s operations;

·                          statements regarding general industry and macroeconomic growth rates and SEK’s performance relative to them; and

·                          statements regarding future performance.

Forward-looking statements are generally identified by the words “expect”, “anticipate”, “believe”, “intend”, “estimate”, “should”, and similar expressions.

Forward-looking statements are based on current plans, estimates and projections, and therefore readers should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and SEK undertakes no obligation to update any forward-looking statement in light of new information or future events, although SEK intends to continue to meet its ongoing disclosure obligations under the U.S. securities laws (such as the obligations to file annual reports on Form 20-F and reports on Form 6-K) and under other applicable laws. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and generally beyond SEK’s control. Readers are cautioned that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, forward-looking statements. These factors include, among others, the following:

·                  disruptions in the financial markets or economic recessions, including as a result of geopolitical instability, may have an adverse effect on SEK’s financial performance;

·                  disruptions in the financial markets or economic recessions may negatively affect the credit quality of borrowers and cause risk to other counterparties, which may cause SEK to incur credit losses or affect the value of its assets;

·                  reduced access to international capital markets for the financing of SEK’s operations, or less favorable financing terms, may negatively impact SEK’s profitability and its ability to fulfill its obligations;

·                  changes in laws, regulations or accounting standards may adversely affect SEK’s business;

·                  SEK may experience negative changes in the value of its assets or liabilities and may incur other losses related to volatile and illiquid market conditions;

·                  losses could result from SEK’s derivatives used for hedging, and SEK’s hedging strategies may not prevent losses;be effective;

·                  fluctuations in foreign currency exchange rates could harm SEK’s business;

·                  increasing competition may adversely affect SEK’s income and business;

·                  SEK is exposed to significant operational risk;risk, which could harm SEK’s business, financial

·                  risk relatedperformance or the ability to financial reporting and other deficiencies in internal control over financial reporting and disclosure processes could result in regulatory action, legal liability and damage to the Group’s reputation;repay its debt;

·                  developments in emerging market countries may adversely affect the Group’s business;result in credit losses for SEK on loans to customers in those countries;

·                  negative interest rates may have an impact on SEK’s profitability; and

·                  the transition from the use of the London interbank offered ratesrate (LIBOR) may adversely affect SEK’s profitability.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not required as this 20-F is filed as an Annual Report.annual report.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not required as this 20-F is filed as an Annual Report.annual report.

ITEM 3. KEY INFORMATION

AA.  Selected Financial Data

The following selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements and related notes. The Consolidated Statement of Comprehensive Income data for the years ended December 31, 2019, 2018, 2017, 2016 2015 and 20142015 and the Consolidated Statement of Financial Position data as of December 31, 2019, 2018, 2017, 2016 2015 and 20142015 have been derived from SEK’s Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board (IASB) (herein “IFRS”).

While complying with IFRS, SEK also complies with the additional requirements of the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) (ÅRKL), the Recommendation RFR1 Supplementary Accounting Principles for Groups, issued by the Swedish Financial Reporting Board (RFR), and the accounting regulations of Finansinspektionen (the Swedish FSA) (FFFS 2008:25).

The following information should be read in conjunction with the more detailed discussion contained in Item 5 “Operating and Financial Review and Prospects”.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME DATA

(A) The dividend for the year ended December 31, 20182019 is to be proposed to the Annualannual general meeting (the “Annual General Meeting,Meeting”), which will be held on March 28, 2019,26, 2020, and is subject to approval at that meeting.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION DATA

(B) Loans outstanding consist of loans due from commercial and financial institutions including loans in the form of interest-bearing securities. Certain deposits with banks and states are not a part of total loans, although they are included in the items Loans to Credit Institutions and Loans to the Public in the Consolidated Statement of Financial Position. For a reconciliation of loans outstanding, see Note 11 to the Consolidated Financial Statements.

BB. Risk Factors

The following discussion provides a description of the most significant risk factors that could affect SEK’s businesses, results of operations and financial condition and could cause SEK’s results to differ materially from those expressed in public statements or documents. Some of these risk factors, many of which are outside the Group’s control, are inherent in the financial services industry and others are more specific to SEK’s own businesses. There are also other factors beyond those discussed below or elsewhere in this annual report on Form 20-F, that could affect SEK’s businesses, results of operations and financial condition and, therefore, the risk factors below should not be considered a complete list of all potential risks that SEK may face.

Disruptions in the financial markets or economic recessions, including as a result of geopolitical instability, may have an adverse effect on SEK’s financial performance.

SEK’s business and earnings are affected by general business, economic and market conditions, especially within Sweden and Europe. Uncertainties remain concerning the outlook and the future economic environment related to recent events in those regions, such as a continuing weak economic outlook in certain European countries and the uncertainty surrounding the economic effect of the withdrawal of the United Kingdom (the “UK”) submitting formal notification under Article 50 of the Lisbon Treaty tofrom the European Council of the intention of the UK to withdraw its membership in the European Union on January 31, 2020 (commonly referred to as “Brexit”). In November 2018, negotiators from the EU andAlthough SEK does not have operations in the UK, agreeda large portion of SEK’s borrowings are arranged through banks in the UK. If SEK fails to maintain these agreements on a draft exit agreement, which was later approved atfavorable terms following Brexit or the highest political level by the Heads of State or Government of the EU countries.  Theagreements completed with such UK House of Commons voted to reject the draft , increasing the uncertainty surrounding the actual consequences of membership withdrawal. Furthermore, political uncertainty related to the trade conflict between the US and China and the impact of the US presidential administration, including on free trade agreements between the US and other countries, could have a negative impact onbanks’ EU-based affiliates cannot be utilized effectively, SEK’s business and earnings.financial performance will suffer. Uncertainties remain as to what, if any, impact a new regulatory regime in the UK and in the EU will have on these agreements.

Additionally, even in the absence of slow economic growth or recessions, other economic circumstances — including, but not limited to, volatility in energy prices, contractions in infrastructure spending, fluctuations in market interest or exchange rates, and concerns over the financial health of sovereign governments and their instrumentalities — may have negative consequences for the companies and industries that the Group provides financing to (as well as the financial condition of SEK’s financial counterparties) and could, in addition to the other factors cited above, have material adverse effects on the Group’s business prospects, financial condition or ability to fulfill its debt obligations.

Disruptions in the financial markets or economic recessions may negatively affect the credit quality of borrowers and cause risk to other counterparties, which may cause SEK to incur credit losses or affect the value of its assets.

Risks arising from the credit quality of borrowers and counterparties and the recoverability of loans and amounts due from counterparties in derivative transactions are inherent in SEK’s businesses. Consequently, SEK may incur credit losses or delinquency in debt repayments even in normal economic circumstances. Financial market disruptions or economic recessions may further affect SEK’s customers and counterparties, negatively affecting their ability to fulfill their obligations. Market and economic disruptions may affect, among other things, business and consumer spending, bankruptcy rates and asset prices, creating a greater likelihood of impact on an increased number of SEK’s customers’ or counterparties’ credit demand or that they may become delinquent in their loans or other obligations to SEK. For example, following the financial crisis, SEK was forced to write down the value of some of its assets as a result of disruptions in the financial markets. Such disruptions may affect the recoverability and value of SEK’s assets and may necessitate an increase in SEK’s provisions for delinquent and defaulted debt and other provisions, which could in turn have a material adverse effect on SEK’s business and/or its ability to repay its debts.

Reduced access to international capital markets for the financing of SEK’s operations, or less favorable financing terms, may negatively impact SEK’s profitability and its ability to fulfill its obligations.

In order to finance its operations, SEK is dependent on the international capital markets, where it competes with other issuers to obtain financing. Although SEK has been able to successfully finance its operations to date, factors outside SEK’s control may have material adverse effects on the Group’s continued ability to obtain such financing or could cause the cost of such financing to increase. For example, as a result of the financial crisis in 2008, SEK experienced higher costs of funding through the international capital markets, as did other issuers during this time. In 2008, SEK was able to offset the first five monthsincreased cost of 2018 SEK didfunding by increasing the margins on its lending, but in the future, that might not issue any Japanese structured debt duebe possible, which could result in more expensive access to the impactcapital markets, which could have a material adverse effect on SEK's results of the European Union legal framework Markets in Financial Instruments Directive (“MiFID II”).operations.

A key factor affecting the cost and availability of financing is SEK’s credit rating. Although the Group currently has favorable credit ratings from various credit rating agencies, those credit ratings depend on many factors, some of which are outside of SEK’s control. Significant factors in determining SEK’s credit ratings or that otherwise could affect its ability to raise financing include its ownership structure, asset quality, liquidity profile, short- and long-term financial prospects, risk exposures, capital ratios, and prudential measures, as well as government support and SEK’s public policy role. Notwithstanding regular confirmation from SEK’s owner (the Swedish State) of its continued support for SEK’s current public policy role, there is a risk that this view could change in the future. Deterioration in any one of these factors or in any combination of these factors may lead rating agencies to downgrade SEK’s credit ratings. If the Group were to experience a downgrade in its credit ratings, it would likely become necessary to offer increased interest margins in the capital markets in order to obtain financing, which would likely substantially lower the Group’s profit margins and earnings, harm its overall liquidity and negatively affect its business and its ability to fulfill its obligations.

Changes in laws, regulations or accounting standards may adversely affect SEK’s business.

SEK’s business is subject to regulation and regulatory oversight. In particular, SEK is subject to financial services laws, regulations, administrative actions and policies in each location in which it operates. Any significant regulatory development could affect the manner in which SEK conducts its business and SEK’s results of operations. SEK continues to monitor new local, regional and international regulations in an effort to remain compliant with the governing law.  Changes to existing laws, or the interpretation or enforcement of laws, may directly impact SEK’s business, results of operations and financial condition.

In particular, SEK is subjectresponse to the financial services laws, regulations, administrative actions and policiescrisis in each location in which it operates. Financial2008, financial regulators around the world have respondedissued and continue to issue significant regulatory and legislative changes resulting in the wake of the financial disruptions from 2008broad reform and onwards by proposing significant changes to the regulatory regime applicable toincreased regulation impacting financial service companies, such asincluding SEK. Changes to the current system of supervision and regulation, or any failure to comply with applicable rules (and particularly those in Sweden), could materially and adversely affect SEK’s business, financial condition or results of operation and/or ability to repay its debt. For example, as a result of legislative changes in 2017, the Swedish FSA required most financial institutions in Sweden, including SEK, to pay a higher resolution fee to a fund to support the recovery of credit institutions, which adversely affected SEK’s results of operations.

The European Bank Recovery and Resolution Directive (the “BRRD”) provides an EU-wide framework for the recovery and resolution of credit institutions and investment firms, their subsidiaries and certain holding companies.  In Sweden, the requirements of the BRRD generally werecompanies and was implemented into Swedish law in 2016 by the Resolution Act 2016(2015:1016) (as amended, the “Resolution Act”) as of February 1, 2016.. In accordance with the BRRD, SEK is subject to a minimum requirement for own funds and eligible liabilities (“MREL”), which is a parallel requirement to the CRR (as defined below)Capital Requirements Regulation (Regulation (EU) no. 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) no. 648/2012 or the “CRR”)  in the EU. SEKEuropean Union. For 2020, SEK’s  minimum MREL requirement is currently in7.2 percent (for 2019: 8.3 percent). After January 1, 2022, the requirements have to be met with own funds and senior non-preferred bonds. However the legislative proposal on the implementation under Swedish law of the comprehensive amendments to the rules on banks’ capital requirements (known as the “banking package”) proposes an extended time frame for compliance withuntil January 1, 2024. The proposal also contains different requirements for the minimum requirementlevel for own funds and eligible liabilities determined for it by the national resolution authority, which in Sweden is the Riksgäldskontoret (Swedish National Debt Office).debt. Accordingly, these requirements are currently uncertain. If SEK does not comply with its capital requirements, the national resolution authority in Sweden (Riksgäldskontoret or the future, the Swedish“Swedish National Debt OfficeOffice”) may require SEK to fulfill the requirements by issuing capital that is subordinated to SEK’s outstandingin the form of senior debt.non-preferred bonds. SEK may experience difficulties in issuing this subordinated debtsenior non-preferred bonds  or the interest rate on this subordinated debtthese bonds may be considerably higher than on seniorother debt securities issued, which would negatively impact SEK’s profitability. For more information, see Item 4 “Information on the Group and the Parent Company—B. Business Overview—Swedish Government Supervision—Supervisory Authorities”.

The Resolution Act confers substantial powers on the Swedish National Debt Office to enable it to take a range of actions in relation to Swedish financial institutions that are considered to be at risk of failing, including a debt write-down tool. The exercise of any resolution power, or any suggestion of the exercise of any resolution power, in relation to SEK may have a material adverse effect on thereduce or impede SEK’s ability to obtain financing, or could cause the cost of financing to increase and/or  could affectimpair SEK’s ability to fulfill its obligationsobligations.

In addition, in the wake of the financial disruptions from 2008 and onwards, the Basel Committee on Banking Supervision (the “Basel Committee”) has revised the Basel regime to provide for new, stricter regulations with regard to capital adequacy and liquidity coverage. These stricter regulations (many of which have already come into force, while others are expected to become effective in the near future) will mean that, in general, financial institutions will need to maintain relatively more own funds (capital base) in relation to their risk-weighted assets as well as better matched borrowing in relation to their obligations. Furthermore, tighter rules on which assets can be defined as liquidity reserves as well as stricter requirements on the clearing of derivatives may also affect international capital markets. In addition, MiFID II became applicable in the European Union on January 3, 2018. Among other requirements, MiFID II imposes new requirements on the issuance and distribution of bonds and, therefore, may affect international capital markets, as well.  Compliance with these new rules and regulations may increase the costs of borrowing for all financial institutions, including SEK. For example, as a consequence of efforts to adapt to the MiFID II requirements, SEK did not issue any structured debt in the Japanese market in the first five months of 2018. For more information, see Item 4 “Information on the Group and the Parent Company—B. Business Overview—Swedish Government Supervision” below.

TheIn December 2017, the Basel Committee issued in December 2017introduced final revisions to the Basel III capital framework (the “2017 Revisions”). The main objective of the 2017 Revisions is to reduce the variability of risk-weighted assets within the banking system.system (the “2017 Revisions”). The 2017 Revisions include an output floor, altered standardized approaches for credit risk and operational risk, constraints on the use of internally-modelled approaches and changes in the leverage ratio. It is expected to enter into force on January 1, 2022. From a Swedish perspective, the 2017 Revisions must first be implemented throughinto EU legislation before they couldcan impact SEK’s capital requirements. Even though SEK is expectedexpects to meet the revised requirements based on current market assumptions, the 2017 Revisions, once implemented, may materially constrain SEK’s business plans and negatively impact profitability. For more information, see Item 4 “Information on the Group and the Parent Company—B. Business Overview—Swedish Government Supervision—Capital adequacy regulations” below.

European Market Infrastructure Regulation (EMIR), a regulation regarding OTC-derivatives,over-the-counter (“OTC”) derivatives, central counterparties and trade repositories, came into effect on August 16, 2012. Since then, various parts of the regulation have become effective. During 2018, additional parts of the regulation related to central clearing of certain OTC-derivatives came into effect. SEK may be required to post additional collateral related to its derivatives and may face higher costs as a result of these regulatory requirements.

IFRS 9 replaced IAS 39 on January 1, 2018, with regard to accounting rules for financial instruments.   The transition to IFRS 9  did not have a material negative impact on SEK´s equity, but the implementation of a new model for expected credit loss may increase the volatility of SEK’s earnings over time.

SEK may experience negative changes in the value of its assets or liabilities and may incur other losses related to volatile and illiquid market conditions.

Market volatility, illiquid market conditions and disruptions in the credit markets have mademake it difficult to value certain of SEK’s assets and liabilities during certain periods. For example, SEK is exposed to changes in fair value due to changes in credit spreads on its own debt and due to changes in currency basis spread, which it has not hedged, and such changes in fair value can have a negative impact on SEK’s results as reported under IFRS, even though SEK historically has not experienced any material realized losses related to such exposures.IFRS. Subsequent valuations, in light of factors then prevailing, may result in significant changes in the value of such assets or liabilities in future periods. In addition, at the time of any sale of any such assets, the prices SEK ultimately realizes will depend on the demand and liquidity in the market at that time and may be materially lower than such assets’ current fair value. Any of these factors could require SEK to negatively change the

carrying amount of such assets or liabilities, which may have an adverse effect on the Group’s financial condition in future periods.

Losses could result from SEK’s derivatives used for hedging, and SEK’s hedging strategies may not prevent losses.be effective.

SEK uses hedging instruments in an attempt to manage interest rate, currency, credit, basis and other market-related risks.

If any of the variety of instruments and strategies the Group uses to hedge its exposure to these various types of risk is not effective, the Group may incur losses, impairingwhich may have an adverse effect on the Group’s financial condition and could impair its ability to timely repay or refinance its debts. The majority of SEK’s derivative contracts are OTC derivatives, i.e., derivative contracts that are not transacted on an exchange. These derivatives are entered into under ISDA Master Agreements. If counterparty defaults on these contracts, the underlying exposure would no longer be effectively hedged, which could result in losses.

In addition, there can be no assurance that the Group will continue to be able to hedge risks related to current or future assets or liabilities in accordance with its current policies in an efficient manner or at all. Disruptions such as market crises and economic recessions may put a strain on the availability and effectiveness of hedging instruments or strategiesstrategies. For example, the expected transition away from LIBOR and similar benchmark rates may have a different impact on the hedged item and the hedging instrument, which could cause some of SEK’s hedge to become ineffective, resulting in potential losses. An inability to hedge its risks could increase SEK’s losses due to those risks, which could  have an adverse effect on SEK’s financial condition and its ability to fulfill its obligations.

Fluctuations in foreign currency exchange rates could harm SEK’s business.

As an international lending institution, the Group is subjectfaces exposure to some exchange-rate risk.adverse movements in foreign currency exchange rates. The adequacy of the Group’s financial resources may be impacted by changes in currency exchange rates that affect the value, in Swedish currency, of the Group’s foreign-currency obligations. For example, during 2018, there wereSEK’s exposure to foreign currency exchange risk is caused primarily by fluctuations in major currencies due to political unrest, even though that did not have a significant impact on SEK’s financial condition during the year. The values of a majority of the items presented in the Consolidated Statements of Financial Position are subject to fluctuations as a result of changes in theSkr/United States dollar (“USD”) exchange rate between the Swedish krona and other currencies, such as the U.S. dollar and the Euro.Skr/Euro exchange rate. Countries could undertake actions that could significantly impact the value of their currencies such as “quantitative easing” measures and potential withdrawals from common currencies. Higher inflation in certain countries, including in Europe, may also result in devaluation of currencies. Even though the Group carefully monitors and hedges its foreign currency exposures, changes in currency exchange rates adverse to the Group could harm SEK’s business, its profitability and its ability to repay its debts. Furthermore, SEK does not hedge its exposure towards currency exchange-rate effects related to unrealized changes in the fair value of its assets and liabilities. Also, any strengthening of the Swedish krona against other currencies may reduce demand for the products sold overseas by SEK’s Swedish clients and thus reduce demand for its loans from end-purchasers of such products, or cause such clients to experience increased difficulty in repaying their loans to SEK. Such eventualities could therefore have an adverse effect on SEK’s financial condition and its ability to fulfill its obligations.

Increasing competition may adversely affect SEK’s income and business.

Competition inThe financial services industry is highly competitive. SEK’s lending business, other than the Group’s businessCIRR-system, faces competition from other Swedish and foreign financial institutions, as well as from direct and indirect financing programs of exporters, and competition is basedincreasing. SEK competes on the basis of a number of factors including service, product innovation, product features, price, commission structures, financial strength and name recognition. The Group competes with a large number of other credit institutions, including domestic and foreign banks, as well as with the direct or indirect financing programs of exporters themselves. Some of these institutionsSEK’s competitors offer a broader array of products or have more competitive pricing or greater financial resources than SEK. Increasing competition may have significant negative effects on the Group’s financial performance ifIf the Group is unable to match the products and services of its competitors or has to lower its prices or rates in order to compete for customer business, investments or financing. Such changesfinancing, it could result in lower lending volume, decreased revenue and increased costs, all of which could have a material adverse effectseffect on SEK’s business and its ability to repay its debts.

SEK is exposed to significant operational risk.risk, which could harm SEK’s business, financial performance or the ability to repay its debt.

Broadly, operationalSEK’s businesses are dependent on the ability to process complex transactions efficiently and accurately. Operational risk for a financial institution such as SEK can arise from fraud, errors by employees, failure to document transactions properly or to obtain proper internal authorizations, equipment failures, natural disasters, information security failures, data loss, cyber-attacks and breaches from known malware or malware that may be developed in the future or the failure of external systems such as, for example, those of SEK’s suppliers or counterparties. Despite having taken preventative actions  to protect the security of its information relative to its perceived risks, SEK did notmay nevertheless experience any incidents relating tomajor security failures, data losses, cyber-attacks or breaches during 2018 that hadin the future, which could have a material adverse effect on SEK’s operations. SEK’s businesses are dependent on the ability to process complex transactions efficiently and accurately.business. Failure to address operational risk and increased regulatory requirements relating to operational risk may lead to additional costs, losses or damages to SEK’s reputation which may negatively affect customers’ and investors’ confidence, and thus SEK’s business,

financial performance and/or ability to repay its debt. For example, SEK has in the recent past incurred additional costs related to the enhancement of IT-systemsIT-system due to increased regulatory burdens. If, for example, SEK failed to properly comply with its obligations under financial guarantee contracts or other credit risk reducing arrangements or if the contracts were not properly drafted, this could result in SEK not being able to effectively seek recourse to such guarantees or other arrangements in the event the relevant borrower was unable to repay its debt to SEK.

There is also a risk that SEK’s reputation willcould also be damaged if SEK fails to comply with current legislation and best practices or in any other way fails to meet its commitments including those that are not explicit. Although operational risks can be reduced by properly documented processes, adequate systems, a culture of sensitivity to risk, compliance with regulations, effective corporate governance and other factors supporting internal control, such procedures may not be effective in controlling each single operational risk SEK faces.expectations. A significant failure in managing SEK’s operational risk could materially and adversely affect the Company’s business, financial condition, results of operation and/or ability to repay its debt.

Risk related to financial reporting and other deficiencies in internal control over financial reporting and disclosure processes could result in regulatory action, legal liability and damage to the Group’s reputation.

SEK’s external reporting of financial and non-financial data is reliant on the Group’s internal control over financial reporting including the integrity of systems and people. Failure to report data accurately and in compliance with external standards could result in regulatory action, legal liability and damage to the Group’s reputation. For additional information on SEK’s internal control over financial reporting see Item 15.

Developments in emerging market countries may adversely affect the Group’s business.result in credit losses for SEK on loans to customers in those countries.

The Group operatesgrants loans to customers in a number of emerging markets. Economic and political developmentsLending in emerging markets generally involves greater economic or political risk than in more developed countries, including economic crises, potentially unstable governments, risks of nationalization of businesses or political instability, mayappropriation of assets, restrictions on foreign ownership and uncertain legal systems. Although a significant number of SEK’s loans were guaranteed by the Swedish Export Credits Guarantee Board (the “EKN”) (38% and 40% as of December 31, 2019 and 2018, respectively), SEK could experience credit losses with respect to those loans not covered by a guarantee, which could reduce the Group’s net income and have a material adverse effectseffect on the Group’s business prospects, results of operations, business prospects and financial conditions.condition.

Negative interest rates may have an impact on SEK’s profitability.

Negative interest rates may result in lower net interest income for SEK and mightmay negatively affect the value of SEK’s assets and liabilities. For example, negative interest rates maymay:

·                  render SEK’s hedges less effective if interest rate is to be paid on the hedge while there is no compensation on the hedged item. Furthermore,item;

·                  lead to increased prepayments on loans by customers and a lower spread between rates on assets and liabilities, might also have a negative impact on net interest income. Negative interest rateswhich could reduce SEK’s revenues;

·                  lead to valuation risk due to potential changes in market practice for how to incorporate negative interest rates in the valuation. Relatively low interest ratesvaluation;

·                  create a risk that the bond market may be adversely affected due to lower turnover and less liquidity, even thoughwhich could reduce SEK’s ability to access the general upturn in interest rates in recent times has slightly mitigated this risk. Finally, low interest rates translate intocapital markets; and

·                  lead to greater risk of increased debt levels, rising asset prices and heightened financial risk taking.

LIBORThe transition from the use of the London interbank offered rate (LIBOR) may adversely affect SEK’s profitabilityprofitability.

As a result of recent regulatory and other legal proceedings, actions by regulators or law enforcement agencies may result in changes to the manner in which LIBOR is determined, its discontinuance or the establishment of alternative reference rates. In particular, on July, 27, 2017, the Chief Executivehead  of the U.K. Financial Conduct Authority (FCA), which regulates LIBOR, announced thatplans to phase out the FCA will no longer persuade or compel banks to submituse of LIBOR by the end of 2021. For the Euro Interbank Offered Rate (“EURIBOR”) and the Stockholm Interbank Offered Rate (“STIBOR”), which are also significant reference rates for the calculation of LIBOR after 2021. Such an announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Notwithstanding the foregoing, it appears highly likely that LIBOR will be discontinued or modified by 2021.SEK, there has been no such end date communicated. At this time, no consensus exists as to what rate or rates may become acceptable alternatives to LIBOR and similar reference rates, and it is not possible to predict the effect that these developments, any discontinuance, modification or other reforms to LIBOR, EURIBOR, STIBOR or any other reference rate (for example, the Euro Interbank Offered Rate, also known as Euribor, and the Stockholm Interbank Offered Rate, also known as Stibor, which are also significant reference rates for SEK), the establishment of alternative reference rates, or the impact of any such events on

contractual mechanisms may have on the markets, SEK or the Company’s floating rate debt securities. Uncertainty

SEK is following the development of new market conventions for floating interest rates and has begun preparing for the transition away from LIBOR. For example, SEK has issued a floating rate note linked to the Sterling Over Night Index Average, or SONIA, which is the alternative overnight interest rate in the sterling markets to LIBOR. However, there can be no assurance that SONIA will become an acceptable alternative to LIBOR in the sterling market.

SEK’s exposure that is directly affected by the interest rate benchmark reform is mainly its lending contracts with floating interest rates, its lending and borrowing contracts with fixed interest rates that are hedged to

floating interest rates as well as currency swaps to floating interest rates. The main floating interest rate exposures relate to USD LIBOR, STIBOR and EURIBOR. As December 31, 2019, SEK has approximately Skr 26 billion of outstanding debt linked to LIBOR. While most of this debt will mature before the end of 2021, it is possible that LIBOR will be discontinued or modified before their maturity date. This debt generally includes fallback features that would allow for the use of an alternative rate if LIBOR is no longer available. In addition, SEK is working on a cross-organizational project to renegotiate legacy business in reliance on LIBOR, introducing robust fallback provision in new trades and generally following recommended guidelines from the International Swaps and Derivatives Association (ISDA), International Capital Markets Association (ICMA) and Alternative Reference Rates Committee (ARCC). However, the use of an alternative rate could result in increased costs, including increased interest expense, and increased borrowing and hedging costs for SEK in the future. Use of an alternative rate could also reduce the interest investors receive on SEK’s floating rate notes and could adversely affect the value of and market for those notes.  Furthermore, uncertainty as to the nature of suchthe potential discontinuance, modification, alternative reference rates or other reforms of LIBOR may negatively impact market liquidity, SEK’s access to funding required to operate the business and the trading market for the Company’s floating rate debt securities. Furthermore, the use of alternative reference rates or other reforms could cause the interest payable on SEK’s outstanding floating rate debt securities to be materially different, and potentially higher, than expected.

ITEM 4. INFORMATION ON THE GROUP AND THE PARENT COMPANY

AA.                History and Development

Aktiebolaget Svensk Exportkredit (publ) (Swedish Export Credit Corporation) is a “public limited liability company” under the Swedish Companies Act.Act (2005:551). It is wholly owned by the Swedish State through the Ministry of Enterprise and Innovation (“Sweden”, the “Swedish State” or the “State”).

The Parent Company was founded in 1962 in order to strengthen the competitiveness of the Swedish export industry by meeting a need for long-term financing for both exporters and their foreign customers. SEK’s objective is to engage in financing activities in accordance with the Swedish Banking and Financing Business Act (2004:297) and, in connection therewith, to promote the development of Swedish commerce and industry as well as otherwise engaging in Swedish and international financing activities on commercial terms. The duration of the Parent Company is indefinite.

SEK’s mission has evolved since it began its operations in 1962. SEK’s range of products has expanded from its roots in export loans; however it remains a niche operator in the financial markets.

The address of the Parent Company’s principal executive office is AB Svensk Exportkredit (Swedish Export Credit Corporation), Klarabergsviadukten 61-63, Stockholm, Sweden; and the Parent Company’s telephone number is +46-8-613-83 00. The Parent Company’s authorized representative in the United States is Business Sweden, whose contact information is as follows:

Business Sweden New York

The News Building,

220 E 42nd Street

Suite 409A,

New York, NY 10017

Tel. No.: (212) 507-9001

usa@business-sweden.se

BB.     Business Overview

SEK’s mission is to ensure access to financial solutions for the Swedish export industry on commercial and sustainable terms, with the aim of promoting the development and international competitiveness of Swedish industry and trade. Its mission includes, as a public policy assignment, administration of the Commercial Interest Reference Rate-system (the “CIRR-system”).CIRR-system. Pursuant to agreements established in 1978 and amended from time to time thereafter, the Group administers the CIRR-system on behalf of the Swedish State in return for compensation.

SEK extends loans on commercial terms at prevailing fixed or floating market interest rates as well as loans on State-supported terms at fixed interest rates that may be lower than prevailing fixed market rates in the CIRR-system. The compensation from the CIRR-system to SEK is recorded as a part of interest income in the Consolidated Statement of Comprehensive Income. See Note 1(f) to the Consolidated Financial Statements. Because Sweden is a member of the Organization for Economic Co-operation and Development (the “OECD”), the CIRR-system is designed to comply with the Arrangement on Guidelines for Officially Supported Export Credits of the OECD (the “Export Credit Guidelines”).

SEK’s product offerings are aimed at Swedish exporters and their customers, and currently, theits customers are mainly found among the 100 largest Swedish exporters with sales exceeding Skr 4 billion. Starting in 2015, SEK has also expanded its product offerings to reach medium-sized exporters with sales of more than Skr 500 million.

SEK works mainly in lending and as a result, SEK acts as a complement to, and works in cooperation with, Swedish and international banks as well as other financial institutions. SEK also has close partnerships with other export promotion agencies in Sweden such as Almi, Business Sweden, the Swedish Exports Credit Guarantee Board (the “EKN”)EKN and Swedfund.

SEK can provide loans in a number of different currencies and with different maturities. The majority of its lending is in Swedish kronor, US dollars or euros, but SEK also offers loans in several other currencies.

SEK’s borrowing activities in the international capital markets have given SEK expertise in financial instruments.

SEK’s niche specialization in long-term export-related financing, combined with its financial capacity and flexible organization, are key factors in the management of its operations.

20182019

·                  SEK’s new lending to Swedish exporters and their customers amounted to Skr 57.074.5 billion (2017:(2018: Skr 89.357.0 billion), of which new lending to Swedish exporters was Skr 18.024.9 billion (2017:(2018: Skr 21.618.0 billion) and new lending to exporters’ customers amounted to Skr 39.049.6 billion (2017:(2018: Skr 67.739.0 billion).

·                  SEK has focused on broadening its client base and product offerings. SEK has performed strongly in soliciting new clients and the customer base has significantly increased. SEK has gained 1730 new customers, consisting of customers in both of SEK’s customer groups: large and medium-sized companies.

·                  Toward the end of 2018, SEK decided on a new organizational structure. Effective January 1, 2019, SEK has implemented the reorganization aimed at focusing client operations and strengthening business support. The Lending business area was split into two separate functions, Large Corporates and Mid Corporates. Two new functions have been established: Business Development, Business Support and Transformation; and Strategic Partnerships and Relations. Moreover, the accounting and treasury units have been reorganized as one function under the Chief Financial Officer (the “CFO”).

·                  SEK’s new lending to green projects totaled Skr 2.03.1 billion in 2018 (2017:2019 (2018: Skr 2.42.0 billion).

·                  SEK’s net interest income amounted to Skr 1,4421,717 million (2017:(2018: Skr 1,6831,442 million). Net interest income was affected negativelypositively by a higherlower resolution fee of Skr 266million (2017:169 million (2018: Skr 193266 million) which SEK is required to pay to a fund to support the recovery of credit institutions.

·                  SEK has a credit facility with the Swedish National Debt Office of Skr 125 billion, renewed through the end of 20192020 by the Swedish Parliament, in order to further enhance the ability to promote the Swedish export industry. SEK has not yet utilized the credit facility. The credit facility is only available for CIRR loans.

·                  The Board of Directors of SEK (the “Board”) has resolved to propose at the Annual General Meeting that a total dividend of Skr 194308 million (2017:(2018: Skr 232194 million) be paid in accordance with SEK’s dividend policy of 30 percent of the profit of the year.

Competition

SEK is the only institution authorized by the Swedish State to grant export financing loans under the CIRR-system. With support from the State, SEK helps Swedish export companies compete with other export companies within OECD member countries, which have similar support from their respective domestic export credit agencies and which also provide government-supported export credits. SEK’s lending, excluding the CIRR-system, faces competition from other Swedish and foreign financial institutions, as well as from the direct and indirect financing programs of exporters themselves.

The following table summarizes SEK’s loans outstanding and debt outstanding as of December 31, 20182019 and 2017:2018:

(A) Loans outstanding consist of loans due from commercial and financial institutions including loans in the form of interest-bearing securities. For a reconciliation of loans outstanding, see Note 11 to the Consolidated Financial Statements.

(B) Debt outstanding includes subordinated debt of Skr - million and Skr 2,040- million as of December 31, 20182019 and 2017,2018, respectively.

Lending Operations — General

The following table sets forth certain data regarding the Group’s lending operations, including the CIRR-system, during the two-year period ending December 31, 2018:2019:

(A) If a loan has been accepted by the borrower it can be disbursed immediately. However, disbursement may be delayed due to a number of factors. In some cases, including as a result of changes in the commercial and financial institutions’ need for funds, an accepted loan may never be disbursed. Currency exchange-rate effects also impact the amount of loan commitments that will result in loans outstanding. Therefore, the volume of loans accepted does not equal the volume of loans disbursed as presented in the Statement of Cash Flows in the

Consolidated Financial Statements for a single fiscal year. Loans accepted but not yet disbursed are presented under the heading “Commitments” as “Committed undisbursed loans”. See Note 11 to the Consolidated Financial Statements.

Total loans outstanding, type of loans

Most of the loans granted by SEK are granted to purchasers of Swedish exports. Western European markets are the largest markets for exported Swedish goods by revenue. However, exports to other markets, including less developed markets, are also important. Accordingly, the need for export financing may be related to transactions involving buyers in many different countries, with varying levels of creditworthiness. Pursuant to its credit risk exposure policy, SEK is selective in accepting such risk exposure. This policy seeks to ensure that SEK is neither dependent on the creditworthiness of individual buyers of Swedish goods and services, nor on the countries in which they are domiciled, but rather on the creditworthiness of individual counterparties to which SEK accepts credit risk exposure. SEK relies to a large extent on guarantees in its lending. For additional information on SEK’s approach to risk, see Note 2726 and Note 3029 to the Consolidated Financial Statements.

SEK has no exposure to loans that it would characterize as high-risk lending, including loans which have been modified or would otherwise qualify as distressed debt, other than the limited amount of such assets disclosed in Note 9 to the Consolidated Financial Statements.

CIRR-system

SEK treats the CIRR-system as a separate operation for accounting purposes. Although the deficits (or surpluses) of programs under the CIRR-system are reimbursed by (or paid to) the Swedish State, any loan losses that may be incurred under such programs are not reimbursed by the Swedish State. Accordingly, SEK has to obtain appropriate credit support for those loans as well. All of the lending under the CIRR-system is reported on SEK’s Consolidated Statement of Financial Position. SEK has consequently presented the operations of the CIRR-system in the Consolidated Statement of Comprehensive Income as the amount of net commission received, accounted for as interest income rather than presenting the gross amounts collected and paid in accordance with the agreement with the Swedish State. In general, loans under the program are guaranteed by the EKN. All such loans granted by SEK must also undergo SEK’s customary approval process.

Pursuant to an owner instruction adopted by the sole shareholder, the Swedish State, at the Annual General Meeting in April 2016, the difference between interest income related to lending and liquid assets under the CIRR-system on the one hand, and interest expenses related to borrowing, all other financing costs and any net foreign exchange losses incurred by SEK under the CIRR-system, on the other hand, are reimbursed by (or paid to) the Swedish State.

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SEK reports loans in the following categories:

Loan Types and Underwriting Policies

(a) Lending to Swedish exporters

(b) Lending to exporters’ customers

·                  export credits;

·                  loans for the funding of export lease agreements;

·                  trade finance; and

·                  project finance.

Within the CIRR-system, SEK extends loans only for the medium and long-term financing of durable goods exports. CIRR-system lending includes financing in collaboration with intergovernmental organizations and foreign export credit agencies.

SEK’s credit underwriting policies and requirements are similar regardless of loan type, and pertain equally to the CIRR-system. The majority of SEK’s loans are guaranteed by export credit agencies or banks, or by credit default swaps issued by banks or other financial institutions.

SEK’s initial loan offer and subsequent commitment set forth the maximum principal amount of the loan, the currency in which the loan will be denominated, and the repayment and disbursement schedule.

For more information, see the table under the heading “Outstanding loans as per product type” under Note 11 to the Consolidated Financial Statements.

Interest Rates

Outside the CIRR-system, export financing is extended at prevailing market rates of interest. The Group normally makes loan offers at a quoted interest rate that is subject to change prior to acceptance of the loan offer (a non-binding offer). When a borrower accepts a non-binding loan offer, the interest rate is normally set at the then-prevailing market rate (which might have changed since the loan commitment was made), and a binding loan commitment arises. Binding offers can also be provided and are offers with a higher degree of commitment to the customer with regard to disbursement of the loan than non-binding offers, regardless of whether the interest rate is fixed or not.

Because Sweden is a member of the OECD, the CIRR-system is designed to comply with the Export Credit Guidelines, which establish minimum interest rates, required down payments and maximum loan periods for government-supported export loan programs.

SEK offers CIRR loans established by the OECD in accordance with the Export Credit Guidelines. The CIRR rates for new loans are subject to periodic review and adjustment by the OECD. The Export Credit Guidelines stipulate that loan offers may remain valid for a period of not more than 120 days. EU rules and Swedish regulations state that the commercial contract relating to the loan offer must be signed within that 120-day period. Thereafter, the CIRR rate can be locked in for a maximum period of six months in order for the loan agreement to be finalized. No commitment fee is charged by SEK for CIRR loans. SEK receives compensation from the Swedish government in the form of an administrative fee of 0.25 percent per annum, which is calculated based on the loan amount outstanding. The arranging or agent-bank, generally a commercial bank, receives compensation in the amount of 0.25 percent per annum, based on the loan amount outstanding, to cover its costs for arranging and managing loans.

SEK participatespreviously participated with government agencies in an export-financing program (the “Concessionary Credit Program”) financed by the Swedish State to promote exports to certain developing countries, incorporating a foreign aid element of at least 35 percent. SEK has a portfolio of concessionary credits but Sweden is no longer

providing new concessionary credits under the program.program, but SEK still has loans outstanding on its balance sheet. Terms varied according to the per capita income of the importing country.

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The aid element is reflected in the form of lower rates of interest and/or deferred repayment schedules. The Swedish government reimburses SEK through the CIRR-system for the costs incurred as a result of SEK’s participation in the Concessionary Credit Program as well as any costs for CIRR financing.

Guarantees and Credit Default Swaps

SEK relies to a large extent on guarantees in its lending. The guarantors are principally made up of government export credit agencies, such as the EKN, the Export Import Bank of the United States, (“USEXIM”), the Exports Credits Guarantee Department of the United Kingdom, (“ECGD”), Compagnie Française d’Assurance pour le Commerce Extérieur (“Coface”) of France and Euler Hermes Kreditversicherungs AG of Germany, as well as financial institutions and, to a lesser extent, non-financial corporations. Credit risk is allocated to a guarantor in accordance with SEK’s policy and therefore, when disclosing net credit risk exposures, the majority of SEK’s guaranteed credit exposure is shown as exposure to sovereign counterparties. In general, loans under the CIRR-system are guaranteed by the EKN.

Total credit exposures for SEK covered by guarantees

As of December 31, 2018,2019, government export credit agencies guaranteed 42.641.9 percent of SEK’s total credit exposures.

If a guarantee or credit default swap is entered into for risk-mitigating purposes, the instrument protects a pre-defined amount of SEK’s exposure with respect to the principal amount of the underlying loan (and in some cases interest) as long as the issuer of the guarantee or credit default swap is financially sound. The protected amount is ordinarily 75–100 percent of the principal amount. Most of the counterparties against whom SEK accepts net exposures are rated by one or more of the internationally recognized rating agencies.

For information regarding SEK’s gross and net credit exposures to counterparties, broken down by geography and type of counterparty (taking into account applicable guarantees but not collateral), see Note 2726 to the Consolidated Financial Statements.

Loan Maturities

SEK’s historical role (and one that continues today) has been in the provision of long-term financing in order to promote the Swedish export industry. Since many of the projects the export industry engages in are long-term projects, both with regard to disbursement periods and repayment periods, SEK’s loans often have longer terms than those of loan products offered by commercial banks. However, SEK also meets its customers’ needs by providing short-term financing when required. Consequently, SEK’s loan maturities range from very short-term loans (with terms of three to six months) to loans for as long as 20–30 years. Under the CIRR-system, loan maturities generally range from one year up to 20–30 years.

Currency

SEK extends loans in different currencies, depending on the needs of its borrowers. Before the Group makes any loan commitment, it ensures that the currency in which the loan is to be funded is expected to be available for the entire loan period at an interest rate (taking into account the costs of foreign exchange derivatives) that, as of the day the commitment is made, results in a margin that the Group deems sufficient. The Group borrows, on an

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aggregate basis, at maturities corresponding to or exceeding those of prospective loans. Accordingly, the Group may decide not to hedge particular loan commitments due to movements in interest rate risk until sometime after they are made. Interest rate risks associated with such unhedged commitments are monitored closely and may not exceed interest rate risk limits established by the Board. SEK’s policies are described in Note 3029 to the Consolidated Financial Statements.

The following table shows the currency breakdown of loan offers accepted for loans with maturities exceeding one year for each year in the two-year period ending December 31, 2018.2019.

Credit Support for Loans Outstanding

The Group’s policies with regard to counterparty exposures are described in detail in Note 3029 to the Consolidated Financial Statements.

The following table illustrates the counterparties for the Group’s loans and guarantees outstanding as of December 31, 20182019 and December 31, 2017.2018. Although most loans fall into more than one category for any given loan, this table only reflects the counterparty (either the borrower or the guarantor) that SEK believes to be stronger in terms of creditworthiness.

(A) EKN guarantees are in substance insurance against losses caused by the default of a foreign borrower or buyer in meeting its contractual obligations in connection with the purchase of Swedish goods or services. In the case of a foreign private borrower or buyer, coverage is for “commercial” and, in most cases, “political” risks. Coverage for “commercial” risk refers to losses caused by events such as the borrower’s or buyer’s insolvency or failure to make required payments within a certain time period (usually six months). Coverage for “political” risk refers to losses caused by events such as a moratorium, revolution or war in the importing country or the imposition of import or currency control measures in such country. Disputed claims must be resolved by a court judgment or arbitral award, unless otherwise agreed by EKN. In the table above, only the particular amount of any given total loan that is guaranteed is listed as such. The amount of any such loan that is not covered by the relevant guarantee is excluded. EKN is a State agency whose obligations are backed by the full faith and credit of Sweden.

(B) At December 31, 2018,2019, loans in this category amounting to approximately 1 percent (2017:(2018: 1 percent) of total loans were obligations of the four largest commercial bank groups in Sweden, including guarantees in the form of bank guarantees or credit derivatives. The remaining 32 percent (2017:(2018: 3 percent) of total loans

represented loans to various financial institutions and minor commercial banks in Sweden, including guarantees in the form of bank guarantees or credit derivatives.

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(C) At December 31, 2018,2019, principally obligations of other Nordic, Western European or North American bank groups, together with obligations of Western European governments, including guarantees in the form of bank guarantees or credit derivatives.

(D) At December 31, 2018,2019, approximately 12 percent (2017:(2018: 12 percent) of the total loan credit exposure represented loans to the 20 largest Swedish corporations.

See “— Lending Operations — General” for information on the geographical distribution of borrowers, see also Note 2726 to the Consolidated Financial Statements.

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934

SEK has not entered into any new business in or with Iran since 2005.

Swedish Government Supervision

Supervisory Authorities

SEK operates as a credit market institution within the meaning of the Swedish Banking and Financing Business Act (2004:297). As such, it is subject to supervision and regulation by Finansinspektionen (the Swedish FSA), which licenses and monitors the activities of credit market institutions to ensure their compliance with the Swedish Banking and Financing Business Act, including the regulations linked to it, and such institutions’ corporate charters. Beginning in 2018, thisThis supervision with respect to capital covers the Parent Company but not the Subsidiary because the Subsidiary is not classified as a credit market institution.

Among other things, the Swedish FSA requires SEK to submit reports on a daily, monthly, quarterly, semi-annual and annual basis and may conduct periodic inspections. The Swedish FSA may also (but currently does not) appoint an external auditor to participate with SEK’s independent auditors in examining the Group’s and the Parent Company’s financial statements and the management of the Group.

The Swedish National Debt Office requires information from the credit institutions, based on a resolution framework that came into force on February 1, 2016,including SEK, in accordance with the Resolution Act (2015:1016).Act. The Resolution Act originates from the BRRD, which provides an EU-wide framework for the recovery and resolution of credit institutions, among others. The BRRD requires all EEA member states to provide their relevant resolution authorities with a set of tools to intervene sufficiently early and quickly in an unsound or failing institution so as to ensure the continuity of the institution’s critical financial and economic functions, while minimizing the impact of an institution’s failure on the broader economy and financial system. The information is used to set the minimum requirement for own funds and eligible liabilities for the credit institution. The Swedish National Debt Office has concluded that nine Swedish institutions, including SEK, have business activities that are critical to the Swedish financial system and have prepared plans that outline the measures that the Swedish National Debt Office intends to take in the event of resolution. The Swedish National Debt Office has also set a minimum requirement for own funds and eligible liabilities for those institutions. Pursuant to the Swedish National Debt Office’s decision concerning the next reporting period, in 2019,2020, the minimum requirement of totalown funds and eligible liabilities and own funds for SEK is 8.37.2 percent (2018: 7.1(2019: 8.3 percent), as calculated in accordance with the resolution regime.Resolution Act. After January 1, 2022, the requirements must be met with own funds and senior non-preferred bonds. However, the regulatory proposal on the implementation under Swedish law of the comprehensive amendments to the rules on banks’ capital requirements (known as the “banking package”) proposes an extended time frame for compliance until January 1, 2024. The regulatory proposal also contains different requirements for the minimum level for own funds and eligible debt.

The Swedish National Audit Office may audit the activities that are conducted by the Swedish State in the form of limited companies if the State as owner has a controlling influence over the activities. The State has controlling influence over the activities of the Parent Company, which is a limited company. Accordingly, the Swedish National Audit Office may appoint an Authorized Public Accountant, in order to get access to the same information as the external auditors, but has not yet done so.

As a credit market institution, SEK is also subject to prudential regulations relating to, among other things, its capital adequacy, its maximal exposure to any counterparty or any group of interconnected clients and its liquidity position.

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Capital adequacy regulations

As of January 1, 2014, the revised capital adequacy rules of the Basel Committee, referred to as Basel III, came into force within the European Union. Basel III was introduced by a legislative package consisting of the Capital Requirements Regulation (CRR) (Regulation (EU) no. 575/2013 of the European Parliament and of the Council of June 26, 2013, on prudential requirements for credit institutions and investment firms and amending Regulation (EU) no. 648/2012)CRR and the Capital Requirements Directive (CRD IV) (Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013, on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing directives 2006/48/EC and 2006/49/EC).TheEC or the “CRD IV”). The CRR is directly applicable in Sweden and contains detailed requirements pertaining to capital adequacy, liquidity, large exposures, leverage ratio and supervisory reporting. The CRD IV was incorporated into Swedish legislation as of August 2, 2014 and covers areas such as principles for prudential supervision, internal assessments of risk and capital, corporate governance, capital buffers, sanctions and remuneration. In November 2016, the European Commission presented a proposal to revise the CRD IV and the CRR. The proposal includes, along with other changes, a binding leverage ratio as well as a binding net stable funding ratio. In December 2018, the European Parliament and the Council of the European Union announced they reached a provisional political agreement on the proposed revisions to the CRR and CRD IV (CRR II and CRD V, respectively), and a plenary vote to officially adopt the agreement is expected in early 2019.

The Basel Committee adopted the 2017 Revisions to the Basel III capital framework to reduce the variability of risk-weighted assets within the banking system. The 2017 Revisions include an output floor, altered standardized approaches for credit risk and operational risk, constraints on the use of internally modelled approaches and changes in leverage ratio requirements. It is planned to enter into force on January 1, 2022. From a Swedish perspective, the 2017 Revisions must first be implemented through revisions to the CRR II and CRD V, before they could impact SEK’s applicable capital requirements.remuneration

The current regulations introduced by the CRR and CRD IV replace regulations based on the previous revision of the Basel accord, Basel II, which had been the prevailing standard since 2007, as it was incorporated into EU and Swedish legislation. The CRR, as amended, and the CRD IV, as incorporated into national legislation, apply to credit institutions, including SEK, within Sweden and the European Union.

The main structure of Basel III, consists of three “Pillars”, as follows:

(i) Pillar 1 deals with minimum capital requirements for credit risks, credit valuation adjustment risks and market risks as well as for operational risks, based on explicit calculation rules. Under Pillar 1, an institution must at all times have own funds that in size and composition are sufficient to meet those minimum capital requirements. The capital requirements and the own funds are calculated in accordance with the CRR. Pillar 1 allows institutions to choose between some alternative methods based on their level of development. For credit risk, the standardized approach is the simplest approach, containing risk weights, all of which are established by national authorities. Institutions can expand upon the supervisory authorities’ risk weights by using risk assessments from recognized credit rating agencies such as Moody’s, Standard & Poor’s and Fitch. The next level of sophistication under Pillar 1 regarding credit risk is called the foundation internal rating-based (IRB)(“IRB”) approach. Under the foundation IRB approach, the risk weights, and therefore the capital requirements, are partially based on institutions’ internal risk classifications. SEK’s permission to base its capital requirement for credit risk on the IRB approach covers most of the Company’s exposures.

(ii) Pillar 2 pertains to national supervisory authorities’ evaluation of risks and describes requirements for institutions’ processes for risk and capital management. It also establishes the supervisory authorities’ functions and powers. Further, under Pillar 2 each financial institution must identify risks and assess risk management from a wider perspective, to supplement the capital requirements calculated within the scope of Pillar 1. This Internal Capital Adequacy and Liquidity Assessment Process (ICAAP) also takes qualitative risks into account. SEK annually assesses the development of its future capital and liquidity requirements and available capital primarily in connection with the update of its three-year business plan . Furthermore, each quarter, the Swedish FSA publishes the result of its assessments on the capital

adequacy reflecting additional requirements for risks not covered by the first pillar for the ten largest financial institutions in Sweden, including SEK. This publication covers additional estimates of concentration risk, sovereign risk, market risk and pension risk. Moreover, it reflects the ICAAP, where the additional risks are included and evaluated annually.

(iii) Pillar 3 concerns and places requirements on openness and transparency and how institutions, in a broad sense, should report their operations to the market and the public. The disclosure of capital and risk management must follow the requirements of the CRR and some additional regulations issued in Sweden, most notably the Swedish FSA’s regulations FFFS 2014:12 regarding prudential requirements and capital buffers. The European Banking Authority (EBA)(the “EBA”) guidelines EBA/GL/2016/11 published in 2017 do not apply fully to SEK yet, since it has not yet been clarified by the Swedish FSA if and when SEK will start to be fully covered by the guidelines. SEK reported in accordance with Pillar 3 for the first time in the Annual Reportannual report for 2007. Since 2008, SEK has also published

In November 2016, the European Commission presented a separate reportproposal to revise the CRD IV and the CRR with the purpose of making European financial institutions more stable and resilient. This reform package entered into force on June 27, 2019. Institutions must fully comply with the regulations within two years after the regulations are in accordanceforce (or June 27, 2021). The reform package includes, along with Pillar 3: “Capital Adequacyother changes, a binding leverage ratio as well as a binding net stable funding ratio.

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Moreover, the Basel Committee introduced the 2017 Revisions to the Basel III capital framework to reduce the variability of risk-weighted assets within the banking system. The 2017 Revisions include an output floor, altered standardized approaches for credit risk and Risk Management Report, Pillar 3”.operational risk, constraints on the use of internally modelled approaches and changes in leverage ratio requirements. The 2017 Revisions will enter into force on January 1, 2022. However, the output floor, which is designed to ensure that banks’ capital requirements calculated under internal models-based approaches may not fall below 72.5% of the capital requirements required under the standardized approaches, will be phased in incrementally over five years, becoming fully effective on January 1, 2027. The 2017 Revisions must first be implemented into EU legislation before they can become binding capital requirements.

Liquidity standards

As mentioned above, the CRR also introduces newincludes liquidity standards: the liquidity coverage ratio (LCR)(“LCR”) and net stable funding ratio (NSFR)(“NSFR”). The LCR requires that a bank holds enough high quality liquid assets to cover its projected net cash outflows over a 30-day stress scenario. The European Commission has adopted a delegated act on LCR. The detailed LCR rules came into force on October 1, 2015 with phase-inand require institutions, including SEK, to maintain a LCR of 60 percent in 2015, 70 percent in 2016, 80 percent in 2017 andat least 100 percent infrom 2018. In addition, the Swedish FSA requires institutions to keepmaintain a LCR of at least 100 percent separately in euro and USD. From October 1, 2019 the Swedish FSA also requires institutions to maintain a LCR of at least 75 percent in Skr and other significant currencies. The NSFR requires that a bank maintain a stable borrowing profile in relation to the composition of its assets and off-balance sheet activities under both normal and stressed conditions. SEK has consistently maintained an LCR and NSFR in excess of minimum requirements. See Note 26 to the Consolidated Financial Statements for further details on liquidity standards.

Measures of capital adequacy

The principal measure of capital adequacy, according to the current standard (Basel III as implemented by the CRR), is a capital-to-risk exposure amount ratio, which compares the own funds, as defined in the CRR, to the total of risk-weighted exposures, that is assets and off-balance sheet items measured according to the risk level.

According to the CRR, own funds consist of three components with different levels of quality from a loss absorption perspective:

·        the highest quality is the Common Equity Tier 1 capital, which includes equity capital after certain adjustments and deductions;

·        the next level is the Additional Tier 1 capital which, subject to detailed requirements, consists of certain types of highly subordinated, perpetual debt or hybrid capital (Tier 1 capital is the sum of Common Equity Tier 1 capital and Additional Tier 1 capital); and

·        Tier 2 capital constitutes the third level and consists of, subject to detailed requirements, certain types of subordinated debt that, among other things, must have an original maturity of no less than five years.

The minimum total capital ratio requirement under Pillar 1 is 8.0 percent, a requirement that has not changed with the CRR. However, the CRR introduced additional requirements on the higher quality components of capital, with a minimum requirement of 4.5 percent and 6.0 percent relating to Common Equity Tier 1 capital and Tier 1 capital, respectively.

(1) Under Pillar 1.

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In addition to these minimum ratios, SEK must meet certain capital buffers requirements. Failure to meet the additional buffers requirements triggers, among other things, restrictions on distributions. SEK is also expected

to cover the supplementary capital requirements estimated under the second pillar, which in practice constitutes as an extension of the minimum capital requirement for financial institutions in Sweden. SEK’s policy is to maintain own funds well in excess of both the regulatory minimum requirements under the first pillar and the supplementary capital requirements under the second pillar.

The main reason for the decreaseincrease in SEK’s capital ratios as of December 31, 20182019 was due to a lower average risk weight in the fact that SEK calledliquidity portfolio due to a Tier 2 eligible subordinated debt instrument earlyhigher proportion in government exposures and redeemed it on November 14, 2018an increase in accordance with its terms.own funds. The capital adequacy ratios reflect the full impact of IFRS 9 as no transitional rules for IFRS9 are utilized. See Note 2625 to the Consolidated Financial Statements for further details on the capital adequacy and capital buffers of SEK.

Large exposures

According to the CRR, a large exposure refers to an exposure to any counterparty or any group of interconnected clients, that accounts for at least 10 percent of an institution’s eligible capital, which effectively for SEK is the total of own funds.

The aggregate amount of SEK’s large exposures as of December 31, 20182019 consisted of exposures to 2321 different counterparties, or counterparty groups, the majority of which relate to combined exposures for which more than one counterparty is responsible for the same payments.

In order to monitor large exposures, SEK has defined internal limits for large exposures, which are monitored daily, along with other limits.

CC.                         Organizational Structure

In order to increase the focus on customers, SEK has made organizational changes. In October 2018, theorganizes its activities in two Lending function split into two separate functions;functions, Large Corporates and Mid Corporates. These twoCorporates, which serve all customers with all products within SEK’s product range. The Lending functions are responsible for all customer relations contacts and cooperates with a Credit function and a Treasury group. SEK also maintains a risk control unit and a compliance function as well as staff and support functions.

Risk Control, Compliance and Internal Audit

SEK maintains a risk control unit and a compliance function which operate independently of the business areas. See also Note 3029 to the Consolidated Financial Statements. In November 2011, upon the recommendation of the Audit Committee, SEK’s Board decided that the independent internal audit function would be outsourced to an external company beginning in 2012. SEK’s Board appointed KPMG to be responsible for the independent internal audit function and they commenced their assignment in January 2012. Their assignment was extended for the years 2013 -through 2018. As of 2019, this assignment has been transferred to another external party, Deloitte. In appointing an external party to perform the internal audit, SEK benefits from significant competence and experience in auditing SEK’s compliance with applicable regulations, particularly those regarding capital adequacy and the Company’s internal risk model. SEK’s Risk and Compliance Committee, of which the Chief Executive Officer (CEO)(the “CEO”) is the chairman, has overall responsibility to establish the internal rules for the internal control of the financial reporting and follow-up compliance with the internal control regulations.

DD.         Property, Plant and Equipment

SEK’s current headquarters, which occupy approximately 4,490 square meters of office space in central Stockholm, are leased. SEK also leases office space in Gothenberg, which occupies approximately 14 square meters.

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ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

AA.         Operating Results

A major part of SEK’s operating profit derives from net interest income, which is earned mainly on loans to customers, but also to a lesser extent on liquidity investments. Borrowing for these assets comes from equity and from securities issued in international capital markets. Accordingly, the key determinants of SEK’s operating profit areare: the interest rate on interest-bearing assets, the interest rate of issued securities, the outstanding volume of interest-bearing assets and the proportion of assets financed by equity.

SEK issues debt instruments with terms that may be fixed, floating or linked to various indices. SEK’s strategy is to economically hedge these terms at floating rates with the aim of matching the terms of its debt-financed assets. The quality of SEK’s operating profit, its relatively stable credit ratings and SEK’s public role have enabled SEK to achieve borrowing at levels that are competitive within the market. Another factor affecting net interest income is the size of the resolution fee, which SEK is required to pay to a fund to support the recovery of credit institutions.

In addition to net interest income, another key influence on SEK’s operating earnings has been changes in the fair value of certain assets, liabilities and derivatives. The factor that mainly impacts unrealized changes in fair value is cross-currency basis spreads. Cross-currency basis spread is the deviation in the nominal interest rate between two currencies in a currency interest rate swap caused by the difference between the base interest rate of the currencies.

Operating expenses, primarily driven by personnel expense and other administrative expenses, also have an important impact on SEK’s operating profit.

Total otherOther comprehensive income is mainlyprimarily affected by cash-flow hedges.unrealized changes in fair value attributable to credit spreads on SEK’s own debt, which relate to the credit rating attributed to SEK by its investors.

SEK’s general business model is to hold financial instruments measured at fair value to maturity. The net fair value changes that occur mainly relate to changes in credit spreads on SEK’s own debt, which due to IFRS 9, are reported in other comprehensive income from 2018 compared to net results of financial transactions prior to IFRS 9, and basis spreads, which are recognized in net results of financial transactions. The changes could be significant in a single reporting period, but will not affect earnings over time since the lifetime cumulative changes in the instrument’s market value will be zero if it is held to maturity and is a performing instrument. When financial instruments are not held to maturity, realized gains and losses can occur, for example when SEK repurchases its own debt, or if lending is repaid early and the related hedging instruments are terminated prematurely.prematurely.

For Critical Accounting Policies and Estimates and Recent Accounting Pronouncements Issued and Other Accounting Related Announcements, see Note 1 to the Consolidated Financial Statements.

For a discussion and analysis of SEK’s financial condition and operating results for the year ended December 31, 2018 and 2017, see Item 5 of SEK’s Form 20-F for the year ended December 31, 2018 filed with the SEC on February 25, 2019.

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Assets and Business Volume

(1) Since 2019, SEK has excluded cash collateral under the security agreements for derivative contracts from the definition of liquidity investments. Comparative figures for 2018 have been adjusted.

The financial item totalTotal assets increased as of the end of 2019 compared to the end of 2017,2018, mainly due to disbursements of loans and the purchase of liquidity investments due to new funding.

New lending (offers accepted)

(1) Of which Skr 0.01.8 billion (year-end 2017:2018: Skr 0.70.0 billion) had not been disbursed at period-end.

(2) Of which Skr 5.116.3 billion (year-end 2017:2018: Skr 35.15.1 billion) had not been disbursed at period-end.

ThereSEK experienced an increased demand for green financing, and in the fall of 2019, launched two new product offerings: green loans and financing for the transition to fossil free energy. Moreover, the simplified loan product “Enkla exportlånet” aimed at medium-sized companies also performed strongly and is high accessan efficient means for SEK’s clients to finance in the banking and capital markets for Swedish exporters. This impacted SEK’s newtheir export transactions. New lending was up on an annual basis, which was down comparedattributable, in part, to last year. Loans covered by the CIRR-system as a percentage of new lending were significantly down compared to last year. CIRR-system loans are often part of major transactions that occur less frequently, which means that new lending in this respect varies between years.an increased demand for working capital and export credits.

Binding offers outstanding of lending

Offers outstanding

Commitments of undisbursed loans amounted to Skr 50.852.2 billion in 20182019 (year-end 2017:2018: Skr 72.950.8 billion).

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Counterparty Risk Exposures

SEK’s exposures to central and regional governments, multilateral development banks, public sector entity and corporatesfinancial institutions have increased as exposures to financial institutionscentral governments and corporates have decreased.decreased in 2019 as compared to 2018. For more information, see the table “Total net exposures” in Note 2726 to the Consolidated Financial Statements.

Total counterparty exposure

Other exposures and risks

SEK’s hedging transactions are expected to be effective in offsetting changes in fair value attributable to hedged risks. The determination of the gross value of certain items in the statements of financial position, particularly derivatives and issued unsubordinated securities,liabilities, which effectively hedge each other, requires complex judgments regarding the most appropriate valuation technique, assumptions and estimates. If different valuation models or assumptions are used, or if assumptions change, a different result may arise. Excluding the impact on the valuation of spreads on SEK’s own debt and basis spreads (which can be significant), such changes in fair value would generally offset each other, with little impact on the value of net assets.

SEK maintains a conservative policy with regard to market risk exposures, primarily consisting of interest rate risks currency risks and operationalcurrency risks. For quantitative and qualitative information about risks and exposures, see Note 2726 Risk Information as well asand Note 3029 Risk and capital management.

Results of Operations

Net interest income

(1) Since 2019, SEK has excluded cash collateral under the security agreements for derivative contracts from the definition of liquidity investments. Comparative figures for 2018 compared to 2017have been adjusted.

Net interest income amounted to Skr 1,4421,717 million (2017:(2018: Skr 1,6831,442 million), a decreasean increase of 1419 percent compared to the previous year. A weak Swedish krona and a higher market interest rate in Swedish krona, together with increased lending volumes, have positively impacted the net interest income. Net interest income was affected negativelyalso increased by Skr 7397 million due to a higherlower resolution fee that amounted to a total of Skr 266169 million (2017:(2018: Skr 193266 million), which SEK is required to pay to a fund to support the recovery of credit institutions. In 2018,2019, the resolution fee amounted to 0.1250.090 percent of the calculation basis (2017: 0.09(2018: 0.125 percent), which essentially corresponds to SEK’s debt-financeddebt financed assets less the CIRRofficially supported export credit (CIRR) loans. In 2019,2020, the resolution fee will go back to 0.09 percent and beginning in 2020, it will be 0.05 percent. Net interest income was also affected negatively by higherThe table below shows average borrowing costs.interest-bearing assets and liabilities.

2017 compared to 201625

Net interest income amounted to Skr 1,683 million (2016: Skr 1,747 million), a decrease of 4 percent compared to the previous year. Net interest income was affected negatively by a higher resolution fee of Skr 193 million (2016: Skr 102 million), which SEK is required to pay to a fund to support the recovery of credit institutions. The higher fee was partially offset by higher market interest rates and lower borrowing costs.

Commission earned and commission incurred

2018 compared to 2017

Commission earned and commission incurred amounted to Skr -32-33 million (2017:(2018: Skr -28-32 million). Commission earned amounted to Skr 51 million (2017:(2018: Skr 35 million). Commission incurred amounted to Skr -37-34 million (2017:(2018: Skr –31 million).

2017 compared to 2016

Commission earned and commission incurred amounted to Skr -28 million (2016: Skr -29 million). Commission earned amounted to Skr 3 million (2016: Skr 3 million). Commission incurred amounted to Skr -31 million (2016: Skr –32—37 million).

Net results of financial transactions

2018 compared to 2017

Net results of financial transactions amounted to Skr 19226 million (2017:(2018: Skr -10219 million). The result was mainly due to unrealized changes in fair value of derivatives as well as realized gains related to the repurchase of SEK’s own debt and early redemptionrepayment of loans. This was offset by unrealized losses in the fair value of assets in the liquidity portfolio and on derivatives.

2017 compared to 2016Net results of financial transactions amounted to Skr -102 million (2016: Skr -110 million), mainly due to unrealized losses related to changes in the fair value of the credit spreads on SEK’s own debt, where increased credit spreads have had a negative effect on net profit. This was partially offset by unrealized gains related to the fair value of currency swaps.

Operating expenses

2018 compared to 2017

Operating expenses decreased 3increased 2 percent compared to the previous year, which is mainly due to decreasedan increase in personnel expenses and depreciation and impairmentexpenses. In 2019, a provision of non-financial assets. The impairment related to intangible assets. Beginning in 2017, SEK introduced a system for individual variable remuneration (“IVR”)  for permanent employees with customer or business responsibility, with the exception of members of the executive management team. No provisionSkr 10 million was made in 2018 for the individual variable remuneration (2017:program (2018: Skr 7- million).

2017 compared Due to 2016

Operating expenses increased somewhat comparedInternational Financial Reporting Standards (IFRS) 16 Leases, all leases are to be recognized as assets subject to depreciation, and therefore, operating lease expense has been replaced by an expense for depreciation of the previous year, mainly duelease asset. Due to increased personnel expenses, which were partially offset bythis change, Skr 32 million is now reported as a decrease indepreciation of the lease asset instead of a lease expense under other administrative expenses. In 2017, a provision of Skr 7 million was made for the IVR, compared to a reversal of Skr 4 million in 2016 for the previous employee incentive scheme (“EIS”). Beginning in 2017, SEK introduced a system in which SEK could offer permanent employees with customer or business responsibility, with the exception of members of the executive management, the possibility of IVR. The outcome at Company level is capped at a maximum of two months’ salary, calculated on the basis of all Company employees entitled to IVR.

Depreciation and impairment of non-financial assets

2018 compared to 2017

Depreciation and impairment of non-financial assets amounted to Skr -40-57 million, which was a decreasean increase of 1143 percent comparecompared to the previous year. The impairment relatedDue to intangible assets.

2017 comparedInternational Financial Reporting Standards (IFRS) 16 Leases, all leases are to 2016

Depreciationbe recognized as assets subject to depreciation, and impairmenttherefore, operating lease expense has been replaced by an expense for depreciation of non-financial assets amountedthe lease asset. Due to this change, Skr -4532 million which was in line withis now reported as a depreciation of the previous year.lease asset instead of a lease expense under other administrative expenses.

Net credit losses

2018 compared to 2017

Net credit losses amounted to Skr 7-10 million (2017:(2018: Skr 517 million). The positive result wasnet credit losses were attributable to changes inincreased individual impairments, which were offset by the macroeconomic forecasting scenario and risk factors in accordance with IFRS 9 procedures. Further impairmentreversal of stage 3 credits offset muchthe excess of these changes. See Note 9 topreviously recorded reserves for established losses above the Consolidated Financial Statements.

realized loss. Loss allowances as of December 31, 20182019 amounted to Skr -128 million compared to Skr -139 million compared to Skr -137 million as of January 1,December 31, 2018 of which exposures in stage 3 amounted to Skr -84-64 million (January 1,(year-end 2018: Skr -66-84 million). The reserve was affected negatively by unfavorable exchange rate effects.

2017 compared to 2016

Net credit losses amounted to Skr 51 million (2016: Skr -16 million). In 2017, a provision of Skr -59 million was made for anticipated credit losses relative to individually-assessed counterparties. During 2017, a previous reserved loss of Skr 47 million was realized. The collectively-assessed credits reserve decreased by Skr 80 million during the year. The decrease was due to improvements in the assessment basis in preparation for the introduction of the new process under IFRS 9, which began in 2018 (see Notes 1 and See Note 9 to the Consolidated Financial Statements). The collectively-assessed credits reserve amounted to Skr 90 million at December 31, 2017 (year-end 2016: Skr 170 million).Statements.

Taxes

2018 compared to 2017

Tax costs amounted to Skr -277 million (2018: Skr -204 million (2017: Skr -235 million), of which Skr -448-570 million (2017:(2018: Skr -262-448 million) consisted of current tax and Skr 245291 million (2017:(2018: Skr 27245 million) consisted of deferred tax (see Note 10 to the Consolidated Financial Statements). The effective tax rate amounted to 21.2 percent (2018: 24.0 percent). The decrease in the effective tax rate was 24.0 percent (2017: 23.3 percent), while thedue to a redemption in November 2018 of subordinated debt which had non-deductible interest expenses. The nominal tax rate for 2018 was 22.02019 is 21.4 percent (2017:(2018: 22.0 percent). The difference between the nominal tax rate and the effective tax rate is primarily due to the fact that the interest expense for subordinated loans from 2017 is no longer deductible due to a change in the Swedish tax rules that became effective as of January 1, 2017.

2017 compared to 201626

Tax costs amounted to Skr -235 million (2016: Skr –222 million), of which Skr -262 million (2016: Skr -382 million) consisted of current tax and Skr 27 million (2016: Skr 156 million) consisted of deferred tax (see Note 10 to the Consolidated Financial Statements). The effective tax rate was 23.3 percent (2016: 22.2 percent), while the nominal tax rate for 2017 was 22.0 percent (2016: 22.0 percent). The difference between the nominal tax rate and the effective tax rate is primarily due to the fact that the interest expense for subordinated loans beginning in 2017 is no longer deductible due to a change in the Swedish tax rules that became effective as of January 1, 2017.

Operating and net profit

2018 compared to 2017

Operating profit amounted to Skr 8521,304 million (2017:(2018: Skr 1,007852 million). Net profit amounted to Skr 6481,027 million (2017:(2018: Skr 772648 million). Operating profit decreased mainlyThe increase compared to the previous year was due to a decrease inhigher net interest income. This was offset by an increase inincome and net results of financial transactions and a decrease in operating expenses.transactions.

2017 compared to 2016

Operating profit amounted to Skr 1,007 million (2016: Skr 1,002 million). Operating profit increased due to an improvement in net credit losses, which was largely offset by a decrease in net interest income.  Net profit amounted to Skr 772 million (2016: Skr 780 million).

Other comprehensive income

2018 compared to 2017

The line item Other comprehensive income before tax amounted to Skr 30112 million (2017:(2018: Skr -128301 million), mainly due to a reversal of a previous reserve for parameter uncertaintypositive result related to credit spreads on SEK’s own debt. Items to be reclassified to operating profit related to cash flow hedges. The effect was related to reclassification from other comprehensive income to net interest income due to the fact that hedging instruments previously were included in cash flow hedges. A major part of items not to be reclassified to operating profit were due to changes in own credit risk, but also duewhich was offset by a negative result related to the revaluation of defined benefit pension plans due to a changed discount rate.

2017 compared to 2016

and dissolution of cash flow hedges. A major partproportion of the items to be reclassified to operating profit related to cash flow hedges. The effect was related to reclassification from other comprehensive income to net interest income due to the fact that hedging instruments previously were included in cash flow hedges. ItemsA major proportion of the items not to be reclassified to operating profit were related to changes in own credit risk, but also related to the revaluation of defined benefit pensions.defined-benefit pension plans due to a changed discount rate.

BB.                         Liquidity, Capital Resources and Borrowing

SEK’s policy for liquidity and borrowing risk requires that for all credit commitments outstanding as well as agreed but undisbursed credits, there must be borrowing available through maturity. For CIRR loans, which SEK manages on behalf of the Swedish State, the Company counts its credit facility of Skr 125 billion with the Swedish National Debt Office, which in December 20182019 was extended for 2019,2020, as available borrowing, despite the fact that no funds have been drawn under this facility. As a consequence, SEK continues to have a high level of liquid assets and a low borrowing risk. The aggregate volume of funds and equity exceeded the aggregate volume of loans outstanding and loans committed during each future time period. Accordingly, SEK considers all loan commitments to be funded through maturity. As of December 31, 2018,2019, SEK had 5 months of available funds to meet potential disbursements under new lending agreements, as compared to 15the same number of months as of December 31, 2017.2018. See the section titled “Liquidity risk and refinancing risk” in Note 2726 to the Consolidated Financial Statements and the liquidity risk discussion in Note 3029 to the Consolidated Financial Statements.

Borrowing

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New borrowing in 20182019 was lowerhigher than in 2017,2018, particularly with regards to structuredplain vanilla debt. As a consequence of efforts to adapt toHigher lending volume was the new MiFID II regulations, SEK did not issue any structured debt in the Japanese market in the first five months of the year.main reason for increased borrowing.

During 2018,2019, SEK issued fourthree benchmark bonds, totaling USD 4.33.5 billion. In November 2018, SEK’s USD 250 million subordinated debt due November 14, 2023 was redeemed early.

SEK’s borrowing over the course of the year took place in a total of nineten different currencies across a number of different geographic markets. Europe (other than the Nordic countries) and North America were the largest borrowing markets in 2018.2019.

SEK continues to have high liquidity for new lending and is well prepared to meet the future financing needs of the Swedish export industry.

Debt Maturities

The following table illustrates SEK’s debt maturity profile for different types of senior and subordinated debt. Repayments are assumed to occur on the maturity date and reflect nominal amounts.