FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Dated April 26, 2019
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Aktiebolaget Svensk Exportkredit
Swedish Export Credit Corporation
(Translation of Registrant’s Name into English)
Klarabergsviadukten
61-63
SE-101 23 Stockholm
Sweden
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
| Form 20-F x | Form 40-F o |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
| Yes o | No x |
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Incorporation by Reference
This Report on Form 6-K, including the exhibits hereto, is hereby incorporated by reference, in its entirety, into the registration statement on Form F-3 (File No. 333-221336) of Aktiebolaget Svensk Exportkredit (publ) (“SEK”).
This Report comprises the following:
1. Registrant’s report for the first quarter of 2019. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: April 26, 2019
| AB Svensk Exportkredit | |
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| (Swedish Export Credit Corporation) | |
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| By: | /s/ Catrin Fransson |
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| Catrin Fransson, Chief Executive Officer |
| AB Svensk Exportkredit Swedish Export Credit Corporation |
Summary
January-March 2019
(Compared to January-March 2018)
· Net interest income Skr 395 million (3M18: Skr 382 million)
· Operating profit Skr 352 million (3M18: Skr 180 million)
· Net profit Skr 274 million (3M18: Skr 136 million)
· New lending Skr 13.3 billion (3M18: Skr 13.0 billion)
· Basic and diluted earnings per share Skr 69 (3M18: Skr 34)
· After-tax return on equity 5.9 percent (3M18: 3.1 percent)
Equity and balances
(Compared to December 31, 2018)
· Total capital ratio 19.8 percent (year-end 2018: 20.1 percent)
· Total assets Skr 313.1 billion (year-end 2018: Skr 302.0 billion)
· Loans, outstanding and undisbursed Skr 264.4 billion (year-end 2018: Skr 260.0 billion)
Statement by the CEO
Continued healthy growth for Swedish exports
Global economic growth remains healthy with high resource utilization and low unemployment. According to Business Sweden’s Market Insight for March 2019, export growth is expected to slow slightly this year due to lower demand for imports from some of Sweden’s key export markets.
Euro area investment growth is slowing, which negatively affects Swedish exports of goods since these largely consist of input and investment goods.
Despite the slight downturn in macroeconomic conditions, SEK’s efforts to increase the number of clients and to broaden business with existing clients have borne fruit. In the first quarter, the number of clients grew by five percent. One method of reaching new clients is through our new simplified loan product “Enkla exportlånet,” on which more information is available on page 4.
Close collaboration and a good understanding of clients’ needs are increasingly important to be able to develop offerings that are relevant for our clients. Therefore, we are extremely pleased that some of our larger clients chose to work together with SEK to identify new solutions that facilitate the financing of their export transactions.
Uncertainty regarding the effects of Brexit have impacted the financial markets. While SEK does not have any operations of its own in the UK, we do have a number of important relationships with banks domiciled in the UK. SEK has worked intensively to ensure that the agreements and limits we have with those banks remain valid. The banks must ensure that they can continue to conduct their operations in the EU, which in practical terms means that many of them are relocating parts of their operations from the UK to the EU.
The Government Offices of Sweden are continuing to develop Sweden’s export strategy, which SEK welcomes and contributes to. In order to achieve the goal of enhanced export, it is important that the Swedish export industry sees that a considerable potential exists for trade with the countries identified in the export strategy.
We have also identified clearer links between the identified countries and Agenda 2030 and existing investment needs in sustainable business.
In the first quarter, new lending was Skr 13.3 billion, which was a slight increase year-on-year (3M18: Skr 13.0 billion). Year-on-year, net interest income was higher and totaled Skr 395 million (3M18: Skr 382 million). Net interest income was positively impacted by, among other things, the lower resolution fee that SEK pays to the Swedish National Debt Office in 2019, and lower average borrowing costs.
Operating profit for the period was up year-on-year at Skr 352 million (3M18: Skr 180 million).
“We are continuously developing our offerings to reach new clients and to broaden our business with existing clients.”
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| Catrin Fransson | |
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Operations
New clients and new client offering
The inflow of new medium-sized company clients remained healthy through the first quarter. Total new lending amounted to Skr 13.3 billion (3M18: Skr 13.0 billion).
In the first quarter, SEK launched its new simplified loan product “Enkla exportlånet,” which aims to help Swedish exporters grow globally and has generated considerable interest. Enkla exportlånet is aimed at export companies and their suppliers. Established and innovative companies with a turnover between Skr 200-1000 million can apply for loans up to Skr 65 million. Through SEK’s cooperation with the European Investment Fund, SEK can offer customers loans without posting additional collateral, at a favorable interest rate.
Access to financing remains healthy for exporters.
New lending
Skr bn |
| Jan-Mar 2019 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Lending to Swedish exporters1 |
| 4.8 |
| 4.6 |
| 18.0 |
|
Lending to exporters’ customers2 |
| 8.5 |
| 8.4 |
| 39.0 |
|
Total |
| 13.3 |
| 13.0 |
| 57.0 |
|
CIRR loan as percentage of new lending |
| 7 | % | 8 | % | 9 | % |
1 Of which Skr 0.4 billion (3M18: Skr 0.0 billion; year-end 2018: Skr 0.0 billion) had not been disbursed at period end.
2 Of which Skr 1.0 billion (3M18: Skr 1.3 billion; year-end 2018: Skr 5.1 billion) had not been disbursed at period end.
Lower borrowing cost
During the quarter, SEK achieved a borrowing cost below that contained in SEK’s financial plan. To a greater extent, the company has taken advantage of high market demand for floating interest rate notes in conjunction with reducing the tenors for borrowing. Moreover, SEK has increased diversification in terms of instruments and currencies, and increased the share of borrowing in the Japanese market. Through these measures, SEK was able to meet borrowing needs during the quarter without issuing any benchmark bonds. SEK continues to have high liquidity for new lending and is well prepared to meet the future financing needs of the Swedish export industry.
SEK’s borrowing
Skr bn |
| Jan-Mar 2019 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
New long-term borrowings |
| 11.8 |
| 14.3 |
| 60.4 |
|
Outstanding senior debt |
| 268.9 |
| 242.7 |
| 257.8 |
|
Repurchase and redemption of own debt |
| 1.2 |
| 3.7 |
| 9.9 |
|
Comments on the consolidated financial accounts
January-March 2019
Operating profit amounted to Skr 352 million (3M18: Skr 180 million). Net profit amounted to Skr 274 million (3M18: Skr 136 million).
Net interest income
Net interest income amounted to Skr 395 million (3M18: Skr 382 million), an increase of 3 percent compared to the same period in the previous year. Net interest income was affected positively by Skr 29 million due to a lower resolution fee of Skr 41 million (3M18: Skr 70 million), which SEK is required to pay to a fund to support the recovery of credit institutions. In 2019, the resolution fee amounts to 0.09 percent of the calculation basis (2018: 0.125 percent), which essentially corresponds to SEK’s debt-financed assets less the CIRR loans. In 2020, the resolution fee will be 0.05 percent.
Net interest income was affected negatively by a higher volume of liquidity coverage ratio (LCR) assets, which bear little or no interest, in the liquidity investments.
The table below shows average interest-bearing assets and liabilities.
Skr bn, average |
| Jan-Mar |
| Jan-Mar |
| Change |
|
Total loans |
| 213.2 |
| 197.6 |
| 8 | % |
Liquidity investments1 |
| 62.4 |
| 51.8 |
| 20 | % |
Interest-bearing assets |
| 291.1 |
| 259.4 |
| 12 | % |
Interest-bearing liabilities |
| 263.4 |
| 235.8 |
| 12 | % |
1 Since 2019 SEK has chosen to exclude cash collateral under the security agreements for derivative contracts from liquidity investments. Comparative figures have been adjusted.
Net results of financial transactions
Net results of financial transactions amounted to Skr 105 million (3M18: Skr -59 million). The result was mainly due to unrealized changes in fair value of assets in the liquidity portfolio and derivatives, and improvements in the method of valuation of derivatives.
Operating expenses
Skr mn |
| Jan-Mar |
| Jan-Mar |
| Change |
|
Personnel expenses |
| -84 |
| -79 |
| 6 | % |
Other administrative expenses |
| -48 |
| -56 |
| -14 | % |
Depreciation and impairment of non-financial assets |
| -14 |
| -8 |
| 75 | % |
Total operating expenses |
| -146 |
| -143 |
| 2 | % |
The operating expenses increased 2 percent compared to the same period in the previous year, due to increased personnel expenses and depreciation and impairment of non-financial assets. Due to IFRS 16, Leases all leases are to be recognized as assets subject to depreciation, and therefore, the operating lease expense has been replaced by an expense for depreciation of the lease asset.
Beginning in 2017, SEK introduced a system for individual variable remuneration for permanent employees with customer or business responsibility, with the exception of members of the executive management team. For the first quarter of 2019, a provision of Skr 3 million was made for the individual variable remuneration in the system (3M18: Skr - million).
Net credit losses
Net credit losses amounted to Skr 9 million (3M18: Skr 5 million). The positive result was mainly attributable to changed risk factors according to IFRS 9. Loss allowances as of March 31, 2019 amounted to Skr -134 million compared to Skr -139 million as of December 31, 2018 of which exposures in stage 3 amounted to Skr -89 million (year-end 2018: Skr -84 million). The reserve was affected negatively by exchange rate effects.
Other comprehensive income (OCI)
Other comprehensive income before tax amounted to Skr -7 million (3M18: Skr 54 million), mainly due to positive changes in own credit risk, which were offset by the revaluation of defined benefit plans. The hedge reserve related to cash-flow hedges has been redeemed and reclassified to profit or loss during the first quarter of 2019, which had a negative effect on OCI.
Statement of Financial Position
Total assets and liquidity investments
Total assets increased compared to the end of 2018, mainly due to exchange rate effects.
Skr bn |
| March 31, |
| December 31, |
| Change |
|
Total assets |
| 313.1 |
| 302.0 |
| 4 | % |
Liquidity investments1 |
| 62.5 |
| 62.2 |
| 0 | % |
Outstanding loans |
| 217.1 |
| 209.2 |
| 4 | % |
of which loans in the CIRR-system |
| 73.6 |
| 69.9 |
| 5 | % |
1 Since 2019 SEK has chosen to exclude cash collateral under the security agreements for derivative contracts from liquidity investments. Comparative figures have been adjusted.
Total exposures amounted to Skr 351.5 billion on March 31, 2019 (year-end 2018: Skr 337.4 billion). SEK’s exposures to all counterparties has increased since year-end 2018. See Note 10.
Liabilities and equity
As of March 31, 2019, the aggregate volume of available funds and shareholders’ equity exceeded the aggregate volume of loans outstanding and loans committed at all maturities. Accordingly, SEK considers all of its outstanding commitments to be covered through maturity.
In 2019, SEK has a credit facility in place with the Swedish National Debt Office of up to Skr 125 billion. To date, SEK has not utilized the credit facility. The credit facility can only be utilized for loans covered by the CIRR and should be a reserve when funding markets are not available to SEK.
Capital adequacy
As of March 31, 2019, the total capital ratio was 19.8 percent (year-end 2018: 20.1 percent). SEK maintains strong capitalization in relation to the capital target, with a total capital ratio that exceeds the total capital adequacy requirement of Finansinspektionen (the Swedish FSA) by 3.3 percentage points, and has healthy liquidity.
Percent |
| March 31, 2019 |
| December 31, 2018 |
|
Common Equity Tier 1 capital ratio |
| 19.8 |
| 20.1 |
|
Tier 1 capital ratio |
| 19.8 |
| 20.1 |
|
Total capital ratio |
| 19.8 |
| 20.1 |
|
Leverage ratio |
| 5.5 |
| 5.6 |
|
Liquidity coverage ratio (LCR) |
| 162 |
| 266 |
|
Net stable funding ratio (NSFR) |
| 148 |
| 144 |
|
Rating
|
| Skr |
| Foreign currency |
|
Moody’s |
| Aa1/Stable |
| Aa1/Stable |
|
Standard & Poor’s |
| AA+/Stable |
| AA+/Stable |
|
Other events
Hélène Westholm chose to leave the Board of Directors of SEK (the “Board”), as well as the Remuneration Committee and the Audit Committee, after approximately one year of service, effective January 31, 2019. Hanna Lagercrantz was elected to the Board as Director at the Annual General Meeting on March 28, 2019, at which time she also became a member of the Remuneration Committee and the Audit Committee.
As previously described, in order to increase the focus on customers, SEK has made certain organizational changes. Three new roles were created: Executive Vice President, Strategic Partnerships and Relationships; Chief Financial Officer (CFO); and Head of Business Development, Business Support and Transformation. Per Åkerlind, previously Executive Vice President and Head of Treasury and Capital Management at SEK, has been appointed as Executive Vice President, Strategic Partnerships and Relationships. Stefan Friberg, formerly Chief Risk Officer at SEK, has been appointed CFO and Susanna Rystedt, who previously held the role of Chief Administrative Officer at SEK, has been appointed as Head of Business Development, Business Support and Transformation. In conjunction with the introduction of these roles, the roles of Head of Treasury and Capital Management and Chief Administrative Officer have been removed and the accounting and treasury units have been reorganized under the same manager, the CFO. The change also means that the Head of Sustainability will report to the Executive Vice President, Strategic Partnerships and Relationships instead of the CEO. Irina Slinko has been appointed as acting Chief Risk Officer. This stage of organizational changes became effective on January 1, 2019.
Risk factors and the macro environment
Various risks arise as part of SEK’s operations. SEK’s primary exposure is to credit risk, but the company is also exposed to market, liquidity, refinancing, operational and sustainability risks. For a more detailed description of SEK’s risk factors, refer to the Risk and Capital Management section in SEK’s 2018 Annual Report. Sweden’s GDP grew at a rate of 2.4 percent in the fourth quarter of 2018 on an annualized basis. Sweden’s unemployment rate was 6.2 percent in February 2019. The consumer price index rose 1.9 percent in February 2019 on an annualized basis and the repo rate was negative at 0.25 percent. According to Statistics Sweden (SCB), in the fourth quarter of 2018, Swedish exports increased 3.1 percent compared to the prior quarter. The Swedish economy has continued to post a healthy growth rate and public finances remained strong. However, some of the economic indicators point toward a slight slowdown. Growth in world trade has slowed during the year. Global macroeconomic indicators have weakened, even though the US economy still remains relatively strong. There is a growing expectation of a slowdown in global activity, and anxiety exists regarding trade and geopolitical risks. The negotiations for the UK’s withdrawal from the EU and the trade conflict between the US and China are two events that remain highly prominent on the global agenda.
Financial targets
Profitability target | A return on equity of at least 6 percent over time. |
Dividend policy | Payment of an ordinary dividend of 30 percent of the profit for the year. |
Capital target | Under normal conditions, SEK’s total capital ratio is to exceed the Swedish FSA’s total capital adequacy requirement by 1 to 3 percentage points. Currently, the capital target means that the total capital ratio should amount to 17-19 percent. |
Key performance indicators
Skr mn (if not otherwise indicated) |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
New lending |
| 13,303 |
| 17,752 |
| 13,033 |
| 57,015 |
|
of which to Swedish exporters |
| 4,845 |
| 7,447 |
| 4,633 |
| 18,014 |
|
of which to exporters’ customers |
| 8,458 |
| 10,305 |
| 8,400 |
| 39,001 |
|
CIRR-loans as a percentage of new lending |
| 7 | % | 13 | % | 8 | % | 9 | % |
Loans, outstanding and undisbursed |
| 264,353 |
| 260,040 |
| 267,670 |
| 260,040 |
|
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|
|
|
|
|
|
|
|
|
New long-term borrowings |
| 11,831 |
| 16,076 |
| 14,294 |
| 60,411 |
|
Outstanding senior debt |
| 268,870 |
| 257,847 |
| 242,653 |
| 257,847 |
|
|
|
|
|
|
|
|
|
|
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After-tax return on equity |
| 5.9 | % | 4.3 | % | 3.1 | % | 3.6 | % |
|
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|
Common Equity Tier 1 capital ratio |
| 19.8 | % | 20.1 | % | 19.9 | % | 20.1 | % |
Tier 1 capital ratio |
| 19.8 | % | 20.1 | % | 19.9 | % | 20.1 | % |
Total capital ratio |
| 19.8 | % | 20.1 | % | 22.3 | % | 20.1 | % |
Leverage ratio |
| 5.5 | % | 5.6 | % | 5.6 | % | 5.6 | % |
Liquidity coverage ratio (LCR) |
| 162 | % | 266 | % | 241 | % | 266 | % |
Net stable funding ratio (NSFR) |
| 148 | % | 144 | % | 147 | % | 144 | % |
See definitions on page 29.
Consolidated Statement of Comprehensive Income in summary
(Unaudited except for Jan-Dec, 2018)
Skr mn |
| Note |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Interest income |
|
|
| 1,579 |
| 1,466 |
| 1,056 |
| 5,153 |
|
Interest expenses |
|
|
| -1,184 |
| -1,088 |
| -674 |
| -3,711 |
|
Net interest income |
| 2 |
| 395 |
| 378 |
| 382 |
| 1,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net fee and commission expense |
|
|
| -11 |
| -13 |
| -5 |
| -32 |
|
Net results of financial transactions |
| 3 |
| 105 |
| 56 |
| -59 |
| 19 |
|
Other operating income |
|
|
| — |
| -2 |
| — |
| -2 |
|
Total operating income |
|
|
| 489 |
| 419 |
| 318 |
| 1,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
|
| -84 |
| -88 |
| -79 |
| -311 |
|
Other administrative expenses |
|
|
| -48 |
| -60 |
| -56 |
| -231 |
|
Depreciation and impairment of non-financial assets |
|
|
| -14 |
| -15 |
| -8 |
| -40 |
|
Total operating expenses |
|
|
| -146 |
| -163 |
| -143 |
| -582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before credit losses |
|
|
| 343 |
| 256 |
| 175 |
| 845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net credit losses |
| 4 |
| 9 |
| -1 |
| 5 |
| 7 |
|
Operating profit |
|
|
| 352 |
| 255 |
| 180 |
| 852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expenses |
|
|
| -78 |
| -61 |
| -44 |
| -204 |
|
Net profit1 |
|
|
| 274 |
| 194 |
| 136 |
| 648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income related to: |
|
|
|
|
|
|
|
|
|
|
|
Items to be reclassified to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
Derivatives in cash flow hedges |
|
|
| -8 |
| -5 |
| -6 |
| -25 |
|
Tax on items to be reclassified to profit or loss |
|
|
| 2 |
| 2 |
| 1 |
| 6 |
|
Net items to be reclassified to profit or loss |
|
|
| -6 |
| -3 |
| -5 |
| -19 |
|
Items not to be reclassified to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
Own credit risk |
|
|
| 12 |
| 64 |
| 71 |
| 374 |
|
Revaluation of defined benefit plans |
|
|
| -11 |
| -18 |
| -11 |
| -48 |
|
Tax on items not to be reclassified to profit or loss |
|
|
| 2 |
| -10 |
| -13 |
| -72 |
|
Net items not to be reclassified to profit or loss |
|
|
| 3 |
| 36 |
| 47 |
| 254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income |
|
|
| -3 |
| 33 |
| 42 |
| 235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income1 |
|
|
| 271 |
| 227 |
| 178 |
| 883 |
|
1 The entire profit is attributable to the shareholder of the Parent Company.
Skr |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share2 |
|
|
| 69 |
| 49 |
| 34 |
| 162 |
|
2 Net profit divided by average number of shares, which amounts to 3,990,000 for each period.
Consolidated Statement of Financial Position
(Unaudited except for December 31, 2018)
Skr mn |
| Note |
| March 31, 2019 |
| December 31, 2018 |
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 5 |
| 1,969 |
| 2,416 |
|
Treasuries/government bonds |
| 5 |
| 8,838 |
| 11,117 |
|
Other interest-bearing securities except loans |
| 5 |
| 51,722 |
| 48,665 |
|
Loans in the form of interest-bearing securities |
| 4, 5 |
| 39,932 |
| 36,781 |
|
Loans to credit institutions |
| 4, 5 |
| 25,568 |
| 27,725 |
|
Loans to the public |
| 4, 5 |
| 166,414 |
| 161,094 |
|
Derivatives |
| 5, 6 |
| 8,276 |
| 6,529 |
|
Tangible and intangible assets |
|
|
| 156 |
| 69 |
|
Other assets |
|
|
| 7,180 |
| 4,980 |
|
Prepaid expenses and accrued revenues |
|
|
| 3,044 |
| 2,657 |
|
Total assets |
|
|
| 313,099 |
| 302,033 |
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
Borrowing from credit institutions |
| 5 |
| 3,207 |
| 2,247 |
|
Debt securities issued |
| 5 |
| 265,663 |
| 255,600 |
|
Derivatives |
| 5, 6 |
| 20,762 |
| 21,934 |
|
Other liabilities |
|
|
| 1,584 |
| 1,069 |
|
Accrued expenses and prepaid revenues |
|
|
| 3,005 |
| 2,583 |
|
Deferred tax liabilities |
|
|
| 273 |
| 276 |
|
Provisions |
|
|
| 95 |
| 85 |
|
Total liabilities |
|
|
| 294,589 |
| 283,794 |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
| 3,990 |
| 3,990 |
|
Reserves |
|
|
| -156 |
| -153 |
|
Retained earnings |
|
|
| 14,676 |
| 14,402 |
|
Total equity |
|
|
| 18,510 |
| 18,239 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
| 313,099 |
| 302,033 |
|
Consolidated Statement of Changes in Equity in Summary
(Unaudited except for Jan-Dec, 2018)
|
|
|
|
|
|
| Reserves |
|
|
| ||||||
Skr mn |
| Equity |
|
| Share |
| Hedge |
| Fair value |
| Own credit |
| Defined |
| Retained |
|
Effects of the implementation of IFRS 9 |
| 14 |
|
|
|
|
|
| -9 |
| -409 |
|
|
| 432 |
|
Adjusted opening balance of equity January 1, 2018 |
| 17,588 |
|
| 3,990 |
| 25 |
| — |
| -409 |
| -4 |
| 13,986 |
|
Net profit Jan-Mar, 2018 |
| 136 |
|
|
|
|
|
|
|
|
|
|
|
| 136 |
|
Other comprehensive income Jan-Mar, 2018 |
| 42 |
|
|
|
| -5 |
|
|
| 56 |
| -9 |
|
|
|
Total comprehensive income Jan-Mar, 2018 |
| 178 |
|
|
|
| -5 |
|
|
| 56 |
| -9 |
| 136 |
|
Closing balance of equity March 31, 20181 |
| 17,766 |
|
| 3,990 |
| 20 |
| — |
| -353 |
| -13 |
| 14,122 |
|
Effects of the implementation of IFRS 9 |
| 14 |
|
|
|
|
|
| -9 |
| -409 |
|
|
| 432 |
|
Adjusted opening balance of equity January 1, 2018 |
| 17,588 |
|
| 3,990 |
| 25 |
| — |
| -409 |
| -4 |
| 13,986 |
|
Net profit Jan-Dec, 2018 |
| 648 |
|
|
|
|
|
|
|
|
|
|
|
| 648 |
|
Other comprehensive income Jan-Dec, 2018 |
| 235 |
|
|
|
| -19 |
|
|
| 292 |
| -38 |
|
|
|
Total comprehensive income Jan-Dec, 2018 |
| 883 |
|
|
|
| -19 |
|
|
| 292 |
| -38 |
| 648 |
|
Dividend |
| -232 |
|
|
|
|
|
|
|
|
|
|
|
| -232 |
|
Closing balance of equity December 31, 20181 |
| 18,239 |
|
| 3,990 |
| 6 |
| — |
| -117 |
| -42 |
| 14,402 |
|
Net profit Jan-Mar, 2019 |
| 274 |
|
|
|
|
|
|
|
|
|
|
|
| 274 |
|
Other comprehensive income Jan-Mar, 2019 |
| -3 |
|
|
|
| -6 |
|
|
| 12 |
| -9 |
|
|
|
Total comprehensive income Jan-Mar, 2019 |
| 271 |
|
|
|
| -6 |
|
|
| 12 |
| -9 |
| 274 |
|
Closing balance of equity March 31, 20191 |
| 18,510 |
|
| 3,990 |
| — |
| — |
| -105 |
| -51 |
| 14,676 |
|
1 The entire equity is attributable to the shareholder of the Parent Company.
Statement of Cash Flows in the Consolidated Group in summary
(Unaudited except for Jan-Dec, 2018)
Skr mn |
| Jan-Mar 2019 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Operating activities |
|
|
|
|
|
|
|
Operating profit |
| 352 |
| 180 |
| 852 |
|
Adjustments for non-cash items in operating profit |
| 176 |
| 378 |
| 14 |
|
Income tax paid |
| -61 |
| -92 |
| -366 |
|
Changes in assets and liabilities from operating activities |
| -357 |
| -8,081 |
| -24,145 |
|
Cash flow from operating activities |
| 110 |
| -7,615 |
| -23,645 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Capital expenditures |
| -7 |
| -7 |
| -21 |
|
Cash flow from investing activities |
| -7 |
| -7 |
| -21 |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Change in senior debt |
| -1,448 |
| 6,861 |
| 25,102 |
|
Derivatives, net |
| 776 |
| 3,053 |
| 1,830 |
|
Change in subordinated debt |
| — |
| — |
| -2,322 |
|
Dividend paid |
| — |
| — |
| -232 |
|
Cash flow from financing activities |
| -672 |
| 9,914 |
| 24,378 |
|
|
|
|
|
|
|
|
|
Cash flow for the period |
| -569 |
| 2,292 |
| 712 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of the period |
| 2,416 |
| 1,231 |
| 1,231 |
|
Cash flow for the period |
| -569 |
| 2,292 |
| 712 |
|
Exchange-rate differences on cash and cash equivalents |
| 122 |
| 144 |
| 473 |
|
Cash and cash equivalents at end of the period1 |
| 1,969 |
| 3,667 |
| 2,416 |
|
1 Cash and cash equivalents include, in this context, cash at banks that can be immediately converted into cash and short-term deposits for which the time to maturity does not exceed three months from trade date.
Notes
Note 1. Applied accounting principles and impacts from changes in accounting principles
Note 2. Net interest income
Note 3. Net results of financial transactions
Note 4. Impairments
Note 5. Financial assets and liabilities at fair value
Note 6. Derivatives
Note 7. CIRR-system
Note 8. Pledged assets and contingent liabilities
Note 9. Capital adequacy
Note 10. Exposures
Note 11. Transactions with related parties
Note 12. Events after the reporting period
All amounts are in Skr million, unless otherwise indicated. All figures concern the Consolidated Group, unless otherwise indicated.
Note 1. Applied accounting principles and impacts from changes in accounting principles
This condensed interim report is presented in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. The Group’s consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) together with the interpretations from IFRS Interpretations Committee (IFRS IC). The IFRS standards applied by SEK are all endorsed by the European Union (EU). The accounting also follows the additional standards imposed by the Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) (ÅRKL) and the regulation and general guidelines issued by Finansinspektionen (the Swedish FSA), “Annual Reports in Credit Institutions and Securities Companies” (FFFS 2008:25). In addition to this, the supplementary accounting rules for groups (RFR 1) issued by the Swedish Financial Reporting Board have been applied. SEK also follows the state’s general guidelines regarding external reporting in accordance with its corporate governance policy and guidelines for state-owned companies.
The accounting policies, methods of computation and presentation of the Consolidated Group and the Parent Company are, in all material aspects, the same as those used for the 2018 annual financial statements except for the application of the new and amended standards from IASB that entered into force beginning January 1, 2019. This interim report does not include all the disclosures required in the annual financial statements, and should be read in conjunction with the company’s annual financial statements as of December 31, 2018.
As of January 1, 2019, SEK began applying IFRS 16 Leases to the Consolidated Group and the Parent Company. The standard replaces IAS 17 and related interpretations, with changes for lessees. The standard became applicable January 1, 2019. All leases (with the exception of short-term and low-value leases) are to be recognized as right-of-use assets subject to depreciation with corresponding liabilities in the lessee’s balance sheet, and the lease payments recognized as repayments and interest expenses. As a result, the straight-line operating lease expense is replaced by an expense for depreciation of the right-of-use lease assets and an interest expense on the lease liability.
Lessor accounting remains essentially unchanged. IFRS 16 has primarily affected SEK’s recognition of operational leases for rental premises, as the lease definition and lease criteria have not resulted in other agreements being regarded as leases as compared to IAS 17. SEK has also decided to apply the exceptions for short-term and low-value leases. The right-of-use asset is accounted for under Tangible and intangible assets and the leasing liability is accounted for under Other liabilities. The lease term is determined as the non-cancellable period of a lease, together with any extension or termination options when SEK is reasonably certain to exercise them. The future cash flows are discounted using SEK’s incremental borrowing rate.
SEK applied the simplified approach during the transition to IFRS 16, and measured the right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease. Right-of-use assets, leasing liabilities, depreciations and interest expenses are not expected to have any material impact on SEK’s financial statements or capital adequacy or large exposure ratios.
The table shows the transition effect of IFRS 16 reconciling the closing balances under IAS 17 as of December 31, 2018, with the opening balances under IFRS 16 as of January 1, 2019.
Other changes from IASB have not had any material impact on SEK’s financial reporting for 2019 and there are no other IFRS or IFRS IC interpretations that are not yet applicable that are expected to have a material impact on SEK’s financial statements, capital adequacy or large exposure ratios.
Transition effect on Consolidated Statement of Financial Position
Skr mn |
| December |
| Effect |
| January 1, |
|
Assets |
|
|
|
|
|
|
|
Tangible and intangible assets |
| 69 |
| 94 |
| 163 |
|
Total assets |
| 302,033 |
| 94 |
| 302,127 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Other liabilities |
| 1,069 |
| 95 |
| 1,164 |
|
Accrued expenses and prepaid revenues |
| 2,583 |
| -1 |
| 2,582 |
|
Total liabilities |
| 283,794 |
| 94 |
| 283,888 |
|
Note 2. Net interest income
Skr mn |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Interest income |
|
|
|
|
|
|
|
|
|
Loans to credit institutions |
| 538 |
| 472 |
| 242 |
| 1,475 |
|
Loans to the public |
| 690 |
| 670 |
| 572 |
| 2,534 |
|
Loans in the form of interest-bearing securities |
| 190 |
| 172 |
| 159 |
| 672 |
|
Interest-bearing securities excluding loans in the form of interest-bearing securities |
| 183 |
| 151 |
| 124 |
| 523 |
|
Derivatives |
| -68 |
| -44 |
| -74 |
| -210 |
|
Administrative remuneration CIRR-system |
| 46 |
| 44 |
| 32 |
| 157 |
|
Other assets |
| 0 |
| 1 |
| 1 |
| 2 |
|
Total interest income1 |
| 1,579 |
| 1,466 |
| 1,056 |
| 5,153 |
|
|
|
|
|
|
|
|
|
|
|
Interest expenses |
|
|
|
|
|
|
|
|
|
Interest expenses |
| -1,143 |
| -1,022 |
| -604 |
| -3,445 |
|
Resolution fee |
| -41 |
| -66 |
| -70 |
| -266 |
|
Total interest expenses |
| -1,184 |
| -1,088 |
| -674 |
| -3,711 |
|
Net interest income |
| 395 |
| 378 |
| 382 |
| 1,442 |
|
1 Interest income calculated using the effective interest method amounted to Skr 1,347 million during January-March 2019 (3M18: Skr 888 million).
Note 3. Net results of financial transactions
Skr mn |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Derecognition of financial instruments not measured at fair value through profit or loss |
| 0 |
| 12 |
| 0 |
| 24 |
|
Financial assets or liabilities at fair value through profit or loss |
| 55 |
| 21 |
| -39 |
| -45 |
|
Financial instruments under fair-value hedge accounting |
| 50 |
| 23 |
| -21 |
| 43 |
|
Currency exchange-rate effects on all assets and liabilities excl. currency exchange-rate effects related to revaluation at fair value |
| 0 |
| 0 |
| 1 |
| -3 |
|
Total net results of financial transactions |
| 105 |
| 56 |
| -59 |
| 19 |
|
SEK’s general business model is to hold financial instruments measured at fair value to maturity. The net market value changes are mainly attributable to changes in credit spread on own debt, which are reported in other comprehensive income, and basis spreads, which are reported 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 net to 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, as in cases where SEK
repurchases its own debt, or where lending is repaid early and the related hedging instruments are terminated prematurely. These effects are presented in the following line items of net results of financial transactions in the table above: “Derecognition of financial instruments not measured at fair value through profit or loss”, “Financial assets or liabilities at fair value through profit or loss” and “Financial instruments under fair-value hedge accounting”. “Financial assets or liabilities at fair value through profit or loss” and “Financial instruments under fair-value hedge accounting” include realized as well as unrealized changes in fair value.
Note 4. Impairments
Skr mn |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Expected credit losses, stage 1 |
| 7 |
| -6 |
| -3 |
| 6 |
|
Expected credit losses, stage 2 |
| 4 |
| -1 |
| 5 |
| 14 |
|
Expected credit losses, stage 3 |
| -2 |
| 6 |
| 3 |
| -13 |
|
Established losses |
| — |
| — |
| — |
| — |
|
Reserves applied to cover established credit losses |
| — |
| — |
| — |
| — |
|
Recovered credit losses |
| — |
| — |
| 0 |
| 0 |
|
Net credit losses |
| 9 |
| -1 |
| 5 |
| 7 |
|
The table below shows the book value of loans and nominal amounts for off-balance sheet exposures for each stage, in each case, before expected credit losses, as well as related loss allowance amounts, in order to place expected credit losses in relation to credit exposures.
|
| March 31, 2019 |
| December 31, 2018 |
| ||||||
Skr mn |
| Stage 1 |
| Stage 2 |
| Stage 3 |
| Total |
| Total |
|
Loans, before expected credit losses |
| 185,846 |
| 30,458 |
| 751 |
| 217,055 |
| 209,096 |
|
Off balance sheet exposures, before expected credit losses |
| 34,014 |
| 31,431 |
| — |
| 65,445 |
| 55,590 |
|
Total, before expected credit losses |
| 219,860 |
| 61,889 |
| 751 |
| 282,500 |
| 264,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss allowance, loans |
| -28 |
| -17 |
| -89 |
| -134 |
| -137 |
|
Loss allowance, off balance sheet exposures1 |
| 0 |
| 0 |
| 0 |
| 0 |
| -2 |
|
Total loss allowance |
| -28 |
| -17 |
| -89 |
| -134 |
| -139 |
|
Provision ratio |
| 0.01 | % | 0.03 | % | 11.85 | % | 0.05 | % | 0.05 | % |
1 Recognized under provision in Consolidated Statement of Financial Position.
Loss Allowance, January-September, 2018
|
| March 31, 2019 |
| December 31, 2018 |
| ||||||
Skr mn |
| Stage 1 |
| Stage 2 |
| Stage 3 |
| Total |
| Total |
|
Opening balance |
| -34 |
| -21 |
| -84 |
| -139 |
| -137 |
|
Increases due to origination and acquisition |
| -3 |
| -1 |
| — |
| -4 |
| -15 |
|
Net remeasurement of loss allowance |
| 9 |
| 7 |
| -4 |
| 12 |
| 7 |
|
Transfer to stage 1 |
| 0 |
| 0 |
| — |
| — |
| 0 |
|
Transfer to stage 2 |
| 0 |
| -2 |
| 2 |
| — |
| 0 |
|
Transfer to stage 3 |
| — |
| — |
| — |
| — |
| 0 |
|
Decreases due to derecognition |
| 1 |
| 0 |
| 0 |
| 1 |
| 15 |
|
Decrease in allowance account due to write-offs |
| — |
| — |
| — |
| — |
| — |
|
Exchange-rate differences1 |
| -1 |
| 0 |
| -3 |
| -4 |
| -9 |
|
Closing balance |
| -28 |
| -17 |
| -89 |
| -134 |
| -139 |
|
1 Recognized under Net results of financial transactions in Statement of Comprehensive Income.
Note 5. Financial assets and liabilities at fair value
|
| March 31, 2019 |
| ||||
Skr mn |
| Book value |
| Fair value |
| Surplus value (+)/ |
|
Cash and cash equivalents |
| 1,969 |
| 1,969 |
| — |
|
Treasuries/governments bonds |
| 8,838 |
| 8,838 |
| — |
|
Other interest-bearing securities except loans |
| 51,722 |
| 51,722 |
| — |
|
Loans in the form of interest-bearing securities |
| 39,932 |
| 41,144 |
| 1,212 |
|
Loans to credit institutions |
| 25,568 |
| 25,677 |
| 109 |
|
Loans to the public |
| 166,414 |
| 171,509 |
| 5,095 |
|
Derivatives |
| 8,276 |
| 8,276 |
| — |
|
Total financial assets |
| 302,719 |
| 309,135 |
| 6,416 |
|
|
|
|
|
|
|
|
|
Borrowing from credit institutions |
| 3,207 |
| 3,207 |
| — |
|
Debt securities issued |
| 265,663 |
| 268,037 |
| 2,374 |
|
Derivatives |
| 20,762 |
| 20,762 |
| — |
|
Total financial liabilities |
| 289,632 |
| 292,006 |
| 2,374 |
|
|
| December 31, 2018 |
| ||||
Skr mn |
| Book value |
| Fair value |
| Surplus value (+)/ |
|
Cash and cash equivalents |
| 2,416 |
| 2,416 |
| — |
|
Treasuries/governments bonds |
| 11,117 |
| 11,117 |
| — |
|
Other interest-bearing securities except loans |
| 48,665 |
| 48,665 |
| — |
|
Loans in the form of interest-bearing securities |
| 36,781 |
| 37,666 |
| 885 |
|
Loans to credit institutions |
| 27,725 |
| 27,709 |
| -16 |
|
Loans to the public |
| 161,094 |
| 164,734 |
| 3,640 |
|
Derivatives |
| 6,529 |
| 6,529 |
| — |
|
Total financial assets |
| 294,327 |
| 298,836 |
| 4,509 |
|
|
|
|
|
|
|
|
|
Borrowing from credit institutions |
| 2,247 |
| 2,247 |
| — |
|
Debt securities issued |
| 255,600 |
| 256,619 |
| 1,019 |
|
Derivatives |
| 21,934 |
| 21,934 |
| — |
|
Total financial liabilities |
| 279,781 |
| 280,800 |
| 1,019 |
|
Determination of fair value
The determination of fair value is described in SEK’s 2018 Annual Report, see Note 1(h)(viii) Principles for determination of fair value of financial instruments and (ix) Determination of fair value of certain types of financial instruments.
Financial assets in fair value hierarchy
|
| Financial assets at fair value through profit or loss |
| ||||||
Skr mn |
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
|
Treasuries/governments bonds |
| — |
| 8,838 |
| — |
| 8,838 |
|
Other interest-bearing securities except loans |
| — |
| 51,722 |
| — |
| 51,722 |
|
Derivatives |
| — |
| 5,942 |
| 2,334 |
| 8,276 |
|
Total, March 31, 2019 |
| — |
| 66,502 |
| 2,334 |
| 68,836 |
|
Total, December 31, 2018 |
| — |
| 64,378 |
| 1,933 |
| 66,311 |
|
Financial liabilities in fair value hierarchy
|
| Financial liabilities at fair value through profit or loss |
| ||||||
Skr mn |
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
|
Debt securities issued |
| — |
| 17,290 |
| 53,854 |
| 71,144 |
|
Derivatives |
| — |
| 15,340 |
| 5,422 |
| 20,762 |
|
Total, March 31, 2019 |
| — |
| 32,630 |
| 59,276 |
| 91,906 |
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2018 |
| — |
| 32,203 |
| 54,418 |
| 86,621 |
|
There were no transfers made between levels during the period January-March 2019 (year-end 2018: Skr -2,124 million).
Financial assets and liabilities at fair value in Level 3, March 31, 2019
Skr mn |
| January 1, |
| Purchases |
| Settlements |
| Transfers |
| Transfers |
| Gains (+) |
| Gains (+) |
| Exchange- |
| March 31, |
|
Debt securities issued |
| -47,898 |
| -4,032 |
| 1,449 |
| — |
| — |
| -1,909 |
| 27 |
| -1,491 |
| -53,854 |
|
Derivatives, net |
| -4,587 |
| -2 |
| -11 |
| — |
| — |
| 1,896 |
| — |
| -384 |
| -3,088 |
|
Net assets and liabilities, 2019 |
| -52,485 |
| -4,034 |
| 1,438 |
| — |
| — |
| -13 |
| 27 |
| -1,875 |
| -56,942 |
|
Financial assets and liabilities at fair value in Level 3, December 31, 2018
Skr mn |
| January 1, |
| Purchases |
| Settlements |
| Transfers |
| Transfers |
| Gains (+) |
| Gains (+) |
| Exchange-rate |
| December |
|
Debt securities issued |
| -42,995 |
| -13,199 |
| 9,490 |
| -2,486 |
| 425 |
| 4,091 |
| 250 |
| -3,474 |
| -47,898 |
|
Derivatives, net |
| -846 |
| 3 |
| -43 |
| -57 |
| -6 |
| -3,913 |
| — |
| 275 |
| -4,587 |
|
Net assets and liabilities, 2018 |
| -43,841 |
| -13,196 |
| 9,447 |
| -2,543 |
| 419 |
| 178 |
| 250 |
| -3,199 |
| -52,485 |
|
1 Gains and losses through profit or loss, including the impact of exchange-rates, is reported as net interest income and net results of financial transactions. The unrealized fair value changes for assets and liabilities, including the impact of exchange-rates, held as of March 31, 2019, amounted to a Skr 45 million loss (year-end 2018: Skr 157 million gain) and are reported as net results of financial transactions.
Uncertainty of valuation of Level 3 instruments
As the estimation of the parameters included in the models to calculate the market value of Level 3 instruments is associated with subjectivity and uncertainty, SEK has, in accordance with IFRS 13, conducted an analysis of the difference in fair value of Level 3 instruments using other established parameter values. Option models and discounted cash flows are used to value the Level 3 instruments. For Level 3 instruments with a longer duration where extrapolated discount curves are used, a sensitivity analysis has been conducted with regards to the interest. The revaluation of the portfolio is made using an interest rate shift of +/– 10 basis points. For the Level 3 instruments that are significantly affected by different types of correlations, which are not based on observable market data, a revaluation has been made by shifting the correlations. The basis for this sensitivity analysis is therefore the revaluation of the relevant part of the portfolio, where the correlations have been adjusted by +/– 10
percentage points. After the revaluation is performed, the max/min value for each transaction is identified. For Level 3 instruments that are significantly affected by non-observable market data, such as SEK’s own creditworthiness, a revaluation has been made by shifting the credit curve. The revaluation is made by shifting the credit spreads by +/- 10 basis points, which has been assessed as a reasonable change in SEK’s credit spread. The analysis shows the impact of the non-observable market data on the market value. In addition, the market value will be affected by observable market data.
The result of the analysis corresponds with SEK’s business model where issued securities are linked with a matched hedging derivative. The underlying market data is used to evaluate the issued security as well as to evaluate the fair value in the derivative. This means that a change in fair value of the issued security, excluding SEK’s own credit spread, is offset by an equally large change in fair value in the derivative.
Sensitivity analysis — level 3 assets and liabilities
|
| March 31, 2019 |
| ||||||||||
Assets and liabilities |
| Fair Value |
| Unobservable |
| Range of estimates |
| Valuation method |
| Sensitivity |
| Sensitivity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
| -1,556 |
| Correlation |
| 0.71 - 0.04 |
| Option Model |
| 4 |
| -3 |
|
Interest rate |
| 1,160 |
| Correlation |
| 0.21 - (0.11) |
| Option Model |
| -76 |
| 74 |
|
FX |
| -2,516 |
| Correlation |
| 0.77 - (0.95) |
| Option Model |
| 21 |
| -19 |
|
Other |
| -176 |
| Correlation |
| 0.52 - (0.01) |
| Option Model |
| 0 |
| 0 |
|
Sum derivatives, net |
| -3,088 |
|
|
|
|
|
|
| -51 |
| 52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
| -506 |
| Correlation |
| 0.71 - 0.04 |
| Option Model |
| -4 |
| 3 |
|
|
|
|
| Credit spreads |
| 10BP - (10BP) |
| Discounted cash flow |
| 28 |
| -28 |
|
Interest rate |
| -53,214 |
| Correlation |
| 0.21 - (0.11) |
| Option Model |
| 85 |
| -82 |
|
|
|
|
| Credit spreads |
| 10BP - (10BP) |
| Discounted cash flow |
| 103 |
| -101 |
|
FX |
| -34 |
| Correlation |
| 0.77 - (0.95) |
| Option Model |
| -22 |
| 20 |
|
|
|
|
| Credit spreads |
| 10BP - (10BP) |
| Discounted cash flow |
| 95 |
| -95 |
|
Other |
| -100 |
| Correlation |
| 0.52 - (0.01) |
| Option Model |
| 0 |
| 0 |
|
|
|
|
| Credit spreads |
| 10BP - (10BP) |
| Discounted cash flow |
| 3 |
| -3 |
|
Sum debt securities issued |
| -53,854 |
|
|
|
|
|
|
| 288 |
| -286 |
|
Total effect on total comprehensive income2 |
|
|
|
|
|
|
|
|
| 237 |
| -234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives, net, December 31, 2018 |
| -4,587 |
|
|
|
|
|
|
| -66 |
| 64 |
|
Debt securities issued, December 31, 2018 |
| -47,898 |
|
|
|
|
|
|
| 308 |
| -307 |
|
Total effect on total comprehensive income, December 31, 20182 |
|
|
|
|
|
|
|
|
| 242 |
| -243 |
|
1 Represents the range of correlations that SEK has determined market participants would use when pricing the instruments. The structures are represented both in the security and the derivative hedging the bond. The sensitivity analysis is based on a shift in the interval for correlation between 0.1 and —0.1. The correlation is expressed as a value between 1 and —1, where 0 indicates no relationship, 1 indicates maximum positive relationship and -1 indicates maximum negative relationship. The maximum correlation in the range of unobservable inputs can thus be from 1 to —1. The table presents the scenario analysis of the effect on Level 3 instruments, with maximum positive and negative changes.
2 Of the total impact on total comprehensive income, the sensitivity effect of SEK’s own credit spread was Skr 229 million (year-end 2018: Skr 242 million) under a maximum scenario and Skr -226 million (year-end 2018: Skr -240 million) under a minimum scenario.
Fair value related to credit risk
|
| Fair value originating from credit risk |
| The period’s change in fair value |
| ||||
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
| Jan—Mar 2019 |
| Jan—Mar 2018 |
|
CVA/DVA, net1 |
| -22 |
| -29 |
| 7 |
| -5 |
|
OCA2 |
| -138 |
| -150 |
| 12 |
| 71 |
|
1 Credit value adjustment (CVA) and Debt value adjustment (DVA) reflects how the counterparties’ credit risk as well as SEK’s own credit rating affects the fair value of derivatives.
2 Own credit adjustment (OCA) reflects how the changes in SEK’s credit rating affects the fair value of financial liabilities measured at fair value through profit and loss.
Note 6. Derivatives
Derivatives by categories
|
| March 31, 2019 |
| December 31, 2018 |
| ||||||||
Skr mn |
| Assets |
| Liabilities |
| Nominal |
| Assets |
| Liabilities |
| Nominal |
|
Interest rate-related contracts |
| 4,096 |
| 11,087 |
| 284,645 |
| 3,842 |
| 10,207 |
| 280,808 |
|
Currency-related contracts |
| 3,869 |
| 7,509 |
| 168,937 |
| 2,630 |
| 8,799 |
| 162,870 |
|
Equity-related contracts |
| 311 |
| 1,988 |
| 20,414 |
| 57 |
| 2,755 |
| 16,014 |
|
Contracts related to commodities, credit risk, etc. |
| — |
| 178 |
| -1,601 |
| — |
| 173 |
| -1,920 |
|
Total derivatives |
| 8,276 |
| 20,762 |
| 472,395 |
| 6,529 |
| 21,934 |
| 457,772 |
|
In accordance with SEK’s policies with regard to counterparty, interest rate, currency exchange, and other exposures, SEK uses, and is a party to, different kinds of derivative instruments, mostly various interest rate-related and currency exchange-
related contracts primarily to hedge risk exposure inherent in financial assets and liabilities. These contracts are carried at fair value in the statements of financial position on a contract-by-contract basis.
Note 7. CIRR-system
Pursuant to the company’s assignment as stated in its owner instruction issued by the Swedish government, SEK administers credit granting in the Swedish system for officially supported export credits (CIRR-system). SEK receives compensation from the Swedish government in the form of an administrative fee, which is calculated based on the principal amount outstanding.
All assets and liabilities related to the CIRR-system are included in the consolidated statement of financial position and in the Parent Company’s balance sheet since SEK bears the credit risk for the lending and acts as the counterparty for lending and borrowing. Unrealized revaluation effects on derivatives related to the CIRR-system are recognized on a net basis under Other assets.
SEK has determined that the CIRR-system should be considered an assignment whereby SEK acts as an agent on behalf of the Swedish government, rather than being the principal in individual transactions. Accordingly, interest income, interest expense and other costs pertaining to CIRR-system assets and liabilities are not recognized in SEK’s statement of comprehensive income.
The administrative compensation received by SEK from the Swedish government is recognized as part of interest income
in SEK’s statement of comprehensive income since the commission received in compensation is equivalent to interest. Any income for SEK that arises from its credit arranger role is recognized in SEK’s statement of comprehensive income under net interest income. Net credit losses are shown in the statement of comprehensive income for SEK as SEK bears the credit risk for the lending. Refer also to Note 1 (f) in SEK’s 2018 Annual Report.
The administrative fee paid by the state to SEK as compensation is recognized in the CIRR-system as administrative compensation to SEK. Arrangement fees to SEK are recognized together with other arrangement fees as interest expenses. Refer to the following tables.
In addition to the CIRR-system, SEK administers the Swedish government’s previous concessionary credit program according to the same principles as the CIRR-system. No new lending is being offered under the concessionary credit program. As of March 31, 2019, concessionary loans outstanding amounted to Skr 673 million (year-end 2018: Skr 663 million) and operating profit for the program amounted to Skr -9 million for 2018 (3M18: Skr -10 million). The administrative compensation to SEK amounted to Skr -400 thousand (3M18: Skr -500 thousand).
Statement of Comprehensive Income for the CIRR-system
Skr mn |
| Jan-Mar 2019 |
| Oct-Dec 2018 |
| Jan-Mar 2018 |
| Jan-Dec 2018 |
|
Interest income |
| 498 |
| 459 |
| 338 |
| 1,624 |
|
Interest expenses |
| -457 |
| -423 |
| -316 |
| -1,480 |
|
Net interest income |
| 41 |
| 36 |
| 22 |
| 144 |
|
|
|
|
|
|
|
|
|
|
|
Interest compensation |
| — |
| 0 |
| 0 |
| 20 |
|
Exchange-rate differences |
| 4 |
| 1 |
| 2 |
| 9 |
|
Profit before compensation to SEK |
| 45 |
| 37 |
| 24 |
| 173 |
|
Administrative remuneration to SEK |
| -46 |
| -44 |
| -32 |
| -155 |
|
Operating profit CIRR-system |
| -1 |
| -7 |
| -8 |
| 18 |
|
Reimbursement to (—) / from (+) the State |
| 1 |
| 7 |
| 8 |
| -18 |
|
Statement of Financial Position for the CIRR-system (included in SEK’s statement of financial position)
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
|
Loans |
| 73,586 |
| 69,922 |
|
Derivatives |
| — |
| 502 |
|
Other assets |
| 6,424 |
| 4,090 |
|
Prepaid expenses and accrued revenues |
| 666 |
| 561 |
|
Total assets |
| 80,676 |
| 75,075 |
|
|
|
|
|
|
|
Liabilities |
| 73,815 |
| 70,144 |
|
Derivatives |
| 6,241 |
| 4,408 |
|
Accrued expenses and prepaid revenues |
| 620 |
| 523 |
|
Total liabilities |
| 80,676 |
| 75,075 |
|
|
|
|
|
|
|
Commitments |
|
|
|
|
|
Committed undisbursed loans |
| 44,335 |
| 47,664 |
|
Binding offers |
| 14,154 |
| 616 |
|
Note 8. Pledged assets and contingent liabilities
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
|
Collateral provided |
|
|
|
|
|
Cash collateral under the security agreements for derivative contracts |
| 14,805 |
| 16,374 |
|
Contingent liabilities1 |
|
|
|
|
|
Guarantee commitments |
| 4,047 |
| 4,032 |
|
Commitments1 |
|
|
|
|
|
Committed undisbursed loans |
| 47,244 |
| 50,814 |
|
Binding offers |
| 14,154 |
| 744 |
|
1 For expected credit losses in guarantee commitments, committed undisbursed loans and binding offers see Note 4.
Note 9. Capital adequacy
The subsidiary Venantius AB has been liquidated, which means that capital requirements are calculated at the parent company level and no longer on a consolidated level. The capital adequacy analysis relates to the parent company AB Svensk Exportkredit. For further information on capital adequacy and risks, see the section entitled “Risk and capital management” in SEK’s 2018 Annual Report and see SEK’s 2018 Capital Adequacy and Risk Management (Pillar 3) Report.
Capital adequacy analysis
|
| March 31, 2019 |
| December 31, 2018 |
|
Capital ratios excl. of buffer requirements1 |
|
|
|
|
|
Common Equity Tier 1 capital ratio |
| 19.8 | % | 20.1 | % |
Tier 1 capital ratio |
| 19.8 | % | 20.1 | % |
Total capital ratio |
| 19.8 | % | 20.1 | % |
Institution-specific Common Equity Tier 1 capital requirement incl. buffers2 |
| 8.5 | % | 8.5 | % |
of which minimum Common Equity Tier 1 requirement |
| 4.5 | % | 4.5 | % |
of which Capital conservation buffer |
| 2.5 | % | 2.5 | % |
of which Countercyclical Buffer |
| 1.5 | % | 1.5 | % |
of which Systemic Risk Buffer |
| — |
| — |
|
Common Equity Tier 1 capital available to meet buffers3 |
| 11.8 | % | 12.1 | % |
1 Capital ratios excl. of buffer requirements are the quotients of the relevant capital measure and the total risk exposure amount. The minimum requirements according to 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) have fully come into force in Sweden without regard to the transitional period. The minimum requirements are 4.5 percent, 6.0 percent and 8.0 percent related to Common Equity Tier 1 capital, Tier 1 capital and total Own Funds respectively.
2 Expressed as a percentage of total risk exposure amount.
3 Common Equity Tier 1 capital ratio as reported less minimum requirement of 4.5 percent and less 3.5 percent, consisting of Common Equity Tier 1 capital used to meet the Tier 1 and Tier 2 requirements, since SEK does not have any Additional Tier 1 or Tier 2 capital.
Own funds — Adjusting items
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
|
Share capital |
| 3,990 |
| 3,990 |
|
Retained earnings |
| 12,849 |
| 11,239 |
|
Accumulated other comprehensive income and other reserves1 |
| 1,263 |
| 1,256 |
|
Independently reviewed profit net of any foreseeable charge or dividend |
| 203 |
| 1,615 |
|
Common Equity Tier 1 (CET1) capital before regulatory adjustments |
| 18,305 |
| 18,100 |
|
Additional value adjustments due to prudent valuation |
| -495 |
| -496 |
|
Intangible assets |
| -45 |
| -43 |
|
Fair value reserves related to gains or losses on cash flow hedges |
| 0 |
| -6 |
|
Gains or losses on liabilities valued at fair value resulting from changes in own credit standing |
| 99 |
| 112 |
|
Negative amounts resulting from the calculation of expected loss amounts |
| -142 |
| -136 |
|
Total regulatory adjustments to Common Equity Tier 1 capital |
| -583 |
| -569 |
|
Total Common Equity Tier 1 capital |
| 17,722 |
| 17,531 |
|
Additional Tier 1 capital |
| — |
| — |
|
Total Tier 1 capital |
| 17,722 |
| 17,531 |
|
Tier 2-eligible subordinated debt2 |
| — |
| — |
|
Credit risk adjustments3 |
| — |
| — |
|
Total Tier 2 capital |
| — |
| — |
|
Total Own funds |
| 17,722 |
| 17,531 |
|
1 The equity-portions of untaxed reserves is included in the line “Accumulated other comprehensive income and other reserves”.
2 In 2018, SEK decided to call and redeem its Tier 2 eligible subordinated debt instrument in accordance with its terms.
3 Expected loss amount calculated according to the IRB approach is a gross deduction from Own funds. The gross deduction is decreased by impairment related to exposure ratios for which expected loss is calculated. Excess amounts of such impairment will increase Own funds. This increase is limited to 0.6 percent of SEK’s risk exposure amount according to the IRB approach related to exposures to central governments, corporates and financial institutions. As of March 31, 2019, the limitation rule has not had any effect (year-end 2018: no effect).
Minimum capital requirements exclusive of buffer
|
| March 31, 2019 |
| December 31, 2018 |
| ||||||||
Skr mn |
| EAD1 |
| Risk exposure |
| Minimum |
| EAD1 |
| Risk exposure |
| Minimum |
|
Credit risk standardized method |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporates2 |
| 1,602 |
| 1,602 |
| 128 |
| 1,701 |
| 1,701 |
| 136 |
|
Total credit risk standardized method |
| 1,602 |
| 1,602 |
| 128 |
| 1,701 |
| 1,701 |
| 136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit risk IRB method |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Governments |
| 178,567 |
| 10,138 |
| 811 |
| 171,572 |
| 9,905 |
| 792 |
|
Financial institutions3 |
| 36,211 |
| 9,848 |
| 788 |
| 33,953 |
| 9,880 |
| 790 |
|
Corporates 4 |
| 116,695 |
| 61,303 |
| 4,904 |
| 113,987 |
| 59,486 |
| 4,760 |
|
Assets without counterparty 5 |
| 198 |
| 198 |
| 16 |
| 90 |
| 90 |
| 7 |
|
Total credit risk IRB method |
| 331,671 |
| 81,487 |
| 6,519 |
| 319,602 |
| 79,361 |
| 6,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit valuation adjustment risk |
| n.a. |
| 2,293 |
| 183 |
| n.a. |
| 2,037 |
| 163 |
|
Foreign exchange risk |
| n.a. |
| 883 |
| 71 |
| n.a. |
| 879 |
| 70 |
|
Commodities risk |
| n.a. |
| 10 |
| 1 |
| n.a. |
| 10 |
| 1 |
|
Operational risk |
| n.a. |
| 3,066 |
| 245 |
| n.a. |
| 3,066 |
| 245 |
|
Total |
| 333,273 |
| 89,341 |
| 7,147 |
| 321,303 |
| 87,054 |
| 6,964 |
|
1 Exposure at default (EAD) shows the size of the outstanding exposure at default.
2 For the small and medium-sized enterprises category, with an annual turnover not exceeding EUR 50 million, the standardized method for calculating the capital requirement is applied from Q1 2019.
3 Of which counterparty risk in derivatives: EAD Skr 4,997 million (year-end 2018: Skr 4,525 million), Risk exposure amount of Skr 1,868 million (year-end 2018: Skr 1,668 million) and Capital requirement of Skr 149 million (year-end 2018: Skr 133 million).
4 Of which related to specialized lending: EAD Skr 3,318 million (year-end 2018: Skr 3,400 million), Risk exposure amount of Skr 2,141 million (year-end 2018: Skr 2,157 million) and Capital requirement of Skr 171 million (year-end 2018: Skr 173 million).
5 As of January 1, 2019, SEK applies the new accounting standard IFRS 16 Leases, which means that leasing contracts are reported as an asset with rights-of-use. At the beginning of 2019, IFRS 16 resulted in increased assets of Skr 94 million.
Credit risk
For risk classification and quantification of credit risk, SEK uses the IRB approach. Specifically, SEK applies the Foundation Approach. Under the Foundation Approach, the company determines the probability of default within one year (PD) for each of its counterparties, while the remaining parameters are established in accordance with CRR. The Swedish FSA has approved SEK’s IRB approach. Certain exposures are, by permission from the Swedish FSA, exempted from application of the IRB approach, and, instead, the standardized approach is applied. Counterparty risk exposure amounts in derivatives are calculated in accordance with the mark-to-market method.
Credit valuation adjustment risk
Credit valuation adjustment risk is calculated for all over-the-counter derivative contracts, except for credit derivatives used as credit protection and transactions with a qualifying central counterparty. SEK calculates this capital requirement according to the standardized method.
Foreign exchange risk
Foreign exchange risk is calculated according to the standardized approach, whereas the scenario approach is used for calculating the gamma and volatility risks.
Commodities risk
Capital requirements for commodity risk are calculated in accordance with the simplified approach under the standardized approach. The scenario approach is used for calculating the gamma and volatility risks.
Operational risk
Capital requirement for operational risk is calculated according to the standardized approach. The company’s operations are
divided into business areas as defined in the CRR. The capital requirement for each area is calculated by multiplying a factor depending on the business area by an income indicator. The factors applicable for SEK are 15 percent and 18 percent. The income indicators consist of the average operating income for the past three financial years for each business area.
Transitional rules
The capital adequacy ratios reflect the full impact of IFRS 9 as no transitional rules for IFRS 9 were utilized.
Capital buffer requirements
SEK expects to meet capital buffer requirements with Common Equity Tier 1 capital. The mandatory capital conservation buffer is 2.5 percent. The countercyclical buffer rate that is applied to exposures located in Sweden is 2.0 percent. The Swedish FSA has decided to raise the countercyclical buffer rate from 2.0 to 2.5 percent. The amendments will enter into force on September 19, 2019. As of March 31, 2019, the capital requirement related to relevant exposures in Sweden is 67 percent (year-end 2018: 70 percent) of the total relevant capital requirement regardless of location; this fraction is also the weight applied on the Swedish buffer rate when calculating SEK’s countercyclical capital buffer. Buffer rates applicable in other countries may have effects on SEK, but as most capital requirements for SEK’s relevant credit exposures are related to Sweden, the potential effect is limited. As of March 31, 2019, the contribution to SEK’s countercyclical buffer from buffer rates in other countries was 0.1 percentage points (year-end 2018: 0.08 percentage points). SEK has not been classified as a systemically important institution by any financial regulatory authority. The capital buffer requirements for systemically important institutions that came into force January 1, 2016 therefore do not apply to SEK.
Leverage Ratio
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
|
Exposure measure for the leverage ratio |
|
|
|
|
|
On-balance sheet exposures |
| 286,085 |
| 281,529 |
|
Off-balance sheet exposures |
| 37,183 |
| 33,159 |
|
Total exposure measure |
| 323,268 |
| 314,688 |
|
Leverage ratio |
| 5.5 | % | 5.6 | % |
The leverage ratio is defined by CRR as the quotient of the Tier 1 capital and an exposure measure. Currently there is no minimum requirement for the leverage ratio. The leverage ratio reflects the full impact of IFRS 9 as no transitional rules were utilized.
Internally assessed economic capital excl. buffer
Skr mn |
| March 31, 2019 |
| December 31, 2018 |
|
Credit risk |
| 7,276 |
| 7,008 |
|
Operational risk |
| 239 |
| 239 |
|
Market risk |
| 1,150 |
| 1,094 |
|
Other risks |
| 183 |
| 163 |
|
Capital planning buffer |
| 992 |
| 1,966 |
|
Total |
| 9,840 |
| 10,470 |
|
SEK regularly conducts an internal capital adequacy assessment process, during which the company determines how much capital is needed in order to cover its risks. The result of SEK’s assessment of capital adequacy is presented above. For more information regarding the internal capital adequacy assessment process and its methods, please see the Risk and Capital management section of SEK’s 2018 Annual Report.
Note 10. Exposures
Net exposures are reported after taking into consideration effects of guarantees and credit default swaps. Amounts are calculated in accordance with capital adequacy calculations, but before the application of credit conversion factors.
Total net exposures
Skr bn |
| Credits & interest-bearing securitites |
| Undisbursed credits, |
| Total |
| ||||||||||||||||||
Classified by type of |
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2019 |
| December 31, 2018 |
| ||||||||||||
counterparty |
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
|
Central governments |
| 117.1 |
| 41.7 |
| 121.2 |
| 43.8 |
| 57.9 |
| 82.2 |
| 48.4 |
| 80.3 |
| 175.0 |
| 49.8 |
| 169.6 |
| 50.3 |
|
Regional governments |
| 14.4 |
| 5.1 |
| 13.4 |
| 4.8 |
| — |
| — |
| — |
| — |
| 14.4 |
| 4.1 |
| 13.4 |
| 4.0 |
|
Multilateral development banks |
| 2.9 |
| 1.0 |
| 0.1 |
| 0.0 |
| — |
| — |
| 0.0 |
| 0.0 |
| 2.9 |
| 0.8 |
| 0.1 |
| 0.0 |
|
Public Sector Entity |
| 0.7 |
| 0.2 |
| 0.6 |
| 0.2 |
| — |
| — |
| — |
| — |
| 0.7 |
| 0.2 |
| 0.6 |
| 0.2 |
|
Financial institutions |
| 30.2 |
| 10.8 |
| 28.7 |
| 10.4 |
| 6.4 |
| 9.1 |
| 5.5 |
| 9.1 |
| 36.6 |
| 10.4 |
| 34.2 |
| 10.1 |
|
Corporates |
| 115.8 |
| 41.2 |
| 113.1 |
| 40.8 |
| 6.1 |
| 8.7 |
| 6.4 |
| 10.6 |
| 121.9 |
| 34.7 |
| 119.5 |
| 35.4 |
|
Total |
| 281.1 |
| 100.0 |
| 277.1 |
| 100.0 |
| 70.4 |
| 100.0 |
| 60.3 |
| 100.0 |
| 351.5 |
| 100.0 |
| 337.4 |
| 100.0 |
|
Net exposure by region and exposure class, as of March 31, 2019
Skr bn |
| Middle |
| Asia excl. |
| Japan |
| North |
| Oceania |
| Latin |
| Sweden |
| West |
| Central- |
| Total |
|
Central governments |
| — |
| 0.7 |
| 2.3 |
| 5.2 |
| — |
| 1.0 |
| 150.2 |
| 12.4 |
| 3.2 |
| 175.0 |
|
Regional governments |
| — |
| — |
| — |
| — |
| — |
| — |
| 14.2 |
| 0.2 |
| — |
| 14.4 |
|
Multilateral development banks |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 2.9 |
| — |
| 2.9 |
|
Public Sector Entity |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.7 |
| — |
| 0.7 |
|
Financial institutions |
| — |
| 2.9 |
| 1.0 |
| 6.7 |
| 0.0 |
| — |
| 9.6 |
| 16.1 |
| 0.3 |
| 36.6 |
|
Corporates |
| 4.2 |
| 1.7 |
| 3.4 |
| 3.2 |
| — |
| 3.0 |
| 82.3 |
| 24.1 |
| 0.0 |
| 121.9 |
|
Total |
| 4.2 |
| 5.3 |
| 6.7 |
| 15.1 |
| 0.0 |
| 4.0 |
| 256.3 |
| 56.4 |
| 3.5 |
| 351.5 |
|
Net exposure by region and exposure class, as of December 31, 2018
Skr bn |
| Middle |
| Asia excl. |
| Japan |
| North |
| Oceania |
| Latin |
| Sweden |
| West |
| Central- |
| Total |
|
Central governments |
| — |
| 0.7 |
| 4.0 |
| 3.9 |
| — |
| 0.9 |
| 139.0 |
| 18.0 |
| 3.1 |
| 169.6 |
|
Regional governments |
| — |
| — |
| — |
| — |
| — |
| — |
| 13.2 |
| 0.2 |
| — |
| 13.4 |
|
Multilateral development banks |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.1 |
| — |
| 0.1 |
|
Public Sector Entity |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.6 |
| — |
| 0.6 |
|
Financial institutions |
| — |
| 2.4 |
| 0.9 |
| 6.9 |
| 1.1 |
| 0.3 |
| 8.7 |
| 13.6 |
| 0.3 |
| 34.2 |
|
Corporates |
| 4.6 |
| 3.1 |
| 3.1 |
| 2.9 |
| — |
| 3.0 |
| 80.5 |
| 22.2 |
| 0.1 |
| 119.5 |
|
Total |
| 4.6 |
| 6.2 |
| 8.0 |
| 13.7 |
| 1.1 |
| 4.2 |
| 241.4 |
| 54.7 |
| 3.5 |
| 337.4 |
|
Net exposure to European countries, excluding Sweden
Skr bn |
| March 31, 2019 |
| December 31, 2018 |
|
France |
| 9.0 |
| 9.0 |
|
Norway |
| 7.8 |
| 6.8 |
|
United Kingdom |
| 7.0 |
| 6.8 |
|
Denmark |
| 6.6 |
| 5.8 |
|
Finland |
| 5.7 |
| 5.5 |
|
Germany |
| 5.3 |
| 7.5 |
|
Luxembourg |
| 4.2 |
| 1.9 |
|
The Netherlands |
| 3.6 |
| 2.8 |
|
Poland |
| 3.2 |
| 3.1 |
|
Belgium |
| 2.7 |
| 1.1 |
|
Spain |
| 2.0 |
| 1.4 |
|
Switzerland |
| 1.0 |
| 0.8 |
|
Austria |
| 0.5 |
| 4.6 |
|
Portugal |
| 0.4 |
| 0.1 |
|
Ireland |
| 0.4 |
| 0.4 |
|
Latvia |
| 0.2 |
| 0.2 |
|
Iceland |
| 0.2 |
| 0.2 |
|
Italy |
| 0.1 |
| 0.2 |
|
Estonia |
| 0.0 |
| 0.0 |
|
Russia |
| 0.0 |
| 0.0 |
|
Hungary |
| — |
| 0.0 |
|
Total |
| 59.9 |
| 58.2 |
|
Note 11. Transactions with related parties
Transactions with related parties are described in Note 28 in SEK’s 2018 Annual Report. No material changes have taken place in relation to transactions with related parties compared to the descriptions in the 2018 Annual Report.
Note 12. Events after the reporting period
No events with significant impact on the information in this report have occurred after the end of the reporting period.
The Board of Directors and the Chief Executive Officer confirm that this Interim report provides a fair overview of the Parent Company’s and the Consolidated Group’s operations and their respective financial position and results, and describes material risks and uncertainties facing the Parent Company and other companies in the Consolidated Group.
Stockholm, April 26, 2019
AB SVENSK EXPORTKREDIT
SWEDISH EXPORT CREDIT CORPORATION
Lars Linder-Aronson |
| Cecilia Ardström |
| Anna Brandt |
Chairman of the Board |
| Director of the Board |
| Director of the Board |
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Reinhold Geijer |
| Hanna Lagercrantz |
| Hans Larsson |
Director of the Board |
| Director of the Board |
| Director of the Board |
Eva Nilsagård |
| Ulla Nilsson |
Director of the Board |
| Director of the Board |
Catrin Fransson
Chief Executive Officer
SEK has established the following expected dates for the publication of financial information and other related matters:
July 16, 2019 |
| Interim Report for the period January 1, 2019 – June 30, 2019 |
October 21, 2019 |
| Interim Report for the period January 1, 2019 – September 30, 2019 |
January 30, 2020 |
| Year-end Report for the period January 1, 2019 – December 31, 2019 |
The report contains information that SEK will disclose pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on April 26, 2019 14:00 (CEST).
Additional information about SEK, including investor presentations and SEK’s 2018 Annual Report, is available at www.sek.se. Information available on or accessible through SEK’s website is not incorporated herein by reference.
Definitions
Alternative performance measures (see *)
Alternative performance measures (APMs) are key performance indicators that are not defined under IFRS or in the Capital Requirements Directive IV (CRD IV) or in regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (CRR). SEK has chosen to present these, either because they are in common use within the industry or because they accord with SEK’s assignment from the Swedish government. The APMs are used internally to monitor and manage operations, and are not considered to be directly comparable with similar key performance indicators presented by other companies. For additional information regarding the APMs, refer to www.sek.se.
*After-tax return on equity
Net profit, expressed as a percentage per annum of the current year’s average equity (calculated using the opening and closing balances for the report period).
*Average interest-bearing assets
The total of cash and cash equivalents, treasuries/government bonds, other interest-bearing securities except loans, loans in the form of interest-bearing securities, loans to credit institutions and loans to the public. Calculated using the opening and closing balances for the report period.
*Average interest-bearing liabilities
The total of outstanding senior debt and subordinated liabilities. Calculated using the opening and closing balances for the report period.
Basic and diluted earnings per share (Skr)
Net profit divided by the average number of shares, which amounted to 3,990,000 for each period.
*CIRR loans as percentage of new lending
The proportion of officially supported export credits (CIRR) of new lending.
CIRR-system
The CIRR-system comprises of the system of officially supported export credits (CIRR).
Common Equity Tier 1 capital ratio
The capital ratio is the quotient of total common equity tier 1 capital and the total risk exposure amount.
Large companies
Companies with an annual turnover of more than Skr 5 billion.
Leverage ratio
Tier 1 capital expressed as a percentage of the exposure measured under CRR (refer to Note 9).
Liquidity coverage ratio (LCR)
The liquidity coverage ratio is a liquidity metric that shows SEK’s highly liquid assets in relation to the company’s net cash outflows for the next 30 calendar days. An LCR of 100 percent means that the company’s liquidity reserve is of sufficient size to enable the company to manage stressed liquidity outflows over a period of 30 days. Unlike the Swedish FSA’s rules, the EU rules take into account the outflows that correspond to the need to pledge collateral for derivatives that would arise as a result of the effects of a negative market scenario.
Loans
Lending pertains to all credit facilities provided in the form of interest-bearing securities, and credit facilities granted by traditional documentation. SEK considers these amounts to be useful measurements of SEK’s lending volumes. Accordingly, comments on lending volumes in this report pertain to amounts based on this definition.
*Loans, outstanding and undisbursed
The total of loans in the form of interest-bearing securities, loans to credit institutions, loans to the public and loans, outstanding and undisbursed. Deduction is made for cash collateral under the security agreements for derivative contracts and deposits with time to maturity exceeding three months (see the Statement of Financial Position and Note 8).
Medium-sized companies
Companies with an annual turnover between Skr 500 million and Skr 5 billion, inclusive.
Net stable funding ratio (NSFR)
This ratio measures stable funding in relation to the company’s illiquid assets over a one-year, stressed scenario in accordance with Basel III.
*New lending
New lending includes all new committed loans, irrespective of tenor. Not all new lending is reported in the Consolidated Statement of Financial Position and the Consolidated Statement of Cash Flows since certain portions comprise committed undisbursed loans (see Note 8). The amounts reported for committed undisbursed loans may change when presented in the Consolidated Statement of Financial Position due to changes in exchange rates, for example.
*New long-term borrowings
New borrowings with maturities exceeding one year, for which the amounts are based on the trade date.
*Outstanding senior debt
The total of borrowing from credit institutions, borrowing from the public and debt securities issued.
Own credit risk
Net fair value change due to credit risk on financial liabilities designated as at fair value through profit or loss.
Repurchase and redemption of own debt
The amounts are based on the trade date.
Swedish exporters
SEK’s clients that directly or indirectly promote Swedish export.
Tier 1 capital ratio
The capital ratio is the quotient of total tier 1 capital and the total risk exposure amount.
Total capital ratio
The capital ratio is the quotient of total Own funds and the total risk exposure amount.
Unless otherwise stated, amounts in this report are in millions (mn) of Swedish kronor (Skr), abbreviated “Skr mn” and relate to the group consisting of the Parent Company and its consolidated subsidiary (together, the “Group” or the “Consolidated Group”). AB Svensk Exportkredit (SEK), is a Swedish corporation with the identity number 556084-0315, and with its registered office in Stockholm, Sweden. SEK is a public limited liability company as defined in the Swedish Companies Act. In some instances, under Swedish law, a public company is obliged to add “(publ.)” to its company name.
About SEK
About SEK, AB Svensk Exportkredit
SEK was founded back in 1962 and is currently owned by the Swedish state. Around 240 employees are based at the head office in Stockholm. In addition, SEK has an office in Gothenburg that is shared with the Swedish Export Credits Guarantee Board (EKN) and Business Sweden.
SEK’s mission |
| Our mission is to ensure access to financial solutions for the Swedish export industry on commercial and sustainable terms. The mission includes making available the officially supported CIRR system, in other words, fixed-interest export credits. |
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SEK’s vision |
| Our vision is to strengthen the competitiveness of the Swedish export industry to create employment and sustainable growth in Sweden. |
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SEK’s core values |
| We are governed by our core values: Solution orientation, Collaboration and Professionalism. |
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SEK’s clients |
| Our clients can be found in the Swedish export industry. We finance companies with operations that are linked to Swedish interests and exports. Clients are found among large to medium-sized companies and their foreign buyers of Swedish products and services. |
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SEK’s partnerships |
| Through Team Sweden, we have close partnerships with other export promotion agencies in Sweden such as Business Sweden and EKN. Our international network is substantial and we also work together with numerous Swedish and international banks. |