Stadshypotek's interim report January - March 2009

Financial performance

Q1 2009 compared with Q1 2008
Stadshypotek's operating profits went up by SEK 654m to SEK 1,421m
(767). As of August 2008, Stadshypotek's
branch in Norway is included and this made a contribution of SEK 103m
in the first quarter. Excluding the branch in
Norway, operating profits increased by SEK 551m, mainly because net
interest income increased by SEK 510m. Both higher volumes and
margins and also the company's healthy position in the funding market
contributed to the higher net interest income. Net gains/losses on
financial operations grew by SEK 44m to SEK -18m (-62).

Expenses were SEK 53m (45). Net loan losses were SEK 5m (11), which
corresponds to a loan loss ratio of 0.00% (-0.01) of lending. After
deduction of the provision for probable loan losses, the volume of
bad debts was SEK 194m (266). SEK 64m (58) of the bad debts were
non-performing loans, while SEK 130m (208) were loans on which the
borrowers pay interest and amortisation, but which are considered
doubtful. In addition, there were non-performing loans of SEK 773m
(416) that are not assessed as being bad debts. After deductions for
specific provisions totalling SEK -69m (-75) and provisions by group
of SEK -14m (-) for probable loan losses, bad debts totalled SEK 111m
(191).

Q1 2009 compared with Q4 2008
Stadshypotek's operating profits for the first quarter of 2009 went
up by SEK 424m to SEK 1,421m (997). SEK 43m of the increase was
attributable to the Norwegian branch and excluding this, operating
profits went up by SEK 381m.

Net interest income was SEK 1,493m (1,164), of which SEK 112m (69)
was attributable to the branch in Norway. The underlying increase of
SEK 286m is partly due to higher volumes and margins but also to the
fact that the company's healthy position in the funding market
resulted in low funding costs. The average margin in the private
market was 0.66% during the quarter.

Net gains/losses on financial operations grew by SEK 75m to SEK -18m
(-93). Net gains/losses on financial operations are mainly unrealised
changes in market value on assets and liabilities subject to hedge
accounting and derivatives, which were negatively affected during the
fourth quarter of 2008 due to substantially lower market interest
rates.

GROWTH IN LENDING
Stadshypotek's lending volume continued to increase during the
period. Loans to the public increased during the first quarter by SEK
13bn to SEK 629bn (615). Compared with the same period in the
previous year, lending volumes increased by SEK 95bn, of which SEK
47bn was attributable to the branch in Norway. Stadshypotek's share
of the private market in Sweden was maintained at around 25%.
Stadshypotek retained its strong position as a leading player on the
Swedish corporate market, with a market share of some 30%.

CAPITAL RATIO
The capital ratio calculated according to Basel II was 37.7% (40.6)
and the Tier 1 capital ratio calculated according to Basel II was
26.2% (28.8). Further information concerning capital adequacy is
provided in the 'Capital base and Capital requirement' section.

Rating
Stadshypotek's rating remained unchanged, with a "stable outlook".

Stadshypotek

                  Long-term Short-term
Moody's           Aa1       P-1
Standard & Poor's AA-       A-1+
Fitch             AA-       F1+

Covered bonds
Moody's                     Aaa



Accounting policies
The accounts comply with the IASB accounting standards adopted by the
EU. The regulations of the Annual Accounts Act for Credit
Institutions and Securities Companies and the directives issued by
the Swedish Financial Supervisory Authority are also applied.The accounting policies are unchanged compared to the latest annual
report.


Stockholm, 28 April 2009

Lars Kahnlund
Chief executive


The full report including tables can be downloaded from the following
link: