Stadshypotek's interim report January-September 2009

FINANCIAL PERFORMANCE

January - September 2009 compared with January - September 2008
Stadshypotek's operating profits went up by SEK 1,735m to SEK 4,420m
(2,685). As of August 2008, Stadshypotek's branch in Norway is
included in the figures and this made a contribution of SEK 287m.
Excluding the branch in Norway, operating profits rose by SEK 1,448m.
Net interest income increased by SEK 1,917m of which SEK 307m was
attributable to the branch in Norway. The increase in net interest
income was due to higher volumes and higher margins as a result of
the company's good position in the funding market. Net gains/losses
on financial operations decreased by SEK 111m to SEK -89m (22).

Expenses were SEK 154m (138). Recoveries and writebacks exceeded new
loan losses, and the net amount recovered was SEK 28m (88), which
corresponds to a loan loss ratio of -0.01% (-0.02) of lending. After
deduction of the provision for probable loan losses, the volume of
impaired loans fell to SEK 127m (230). SEK 50m (38) of the impaired
loans were non-performing loans, while SEK 77m (192) were loans on
which the borrowers pay interest and amortisation, but which are
nevertheless considered doubtful. In addition, there were
non-performing loans of SEK 652m (604) that are not assessed as being
impaired loans. After deductions for specific provisions totalling
SEK -49m (-66) and provisions by group of SEK -11m (-) for probable
loan losses, net impaired loans totalled SEK 67m (164).

Q3 2009 compared with Q2 2009
Stadshypotek's operating profits for the third quarter of 2009 went
down by SEK 199m to SEK 1,400m (1,599). Excluding the branch in
Norway, operating profits fell by SEK 214m.

Net interest income was SEK 1,568m (1,592), of which SEK 132m (117)
was attributable to the branch in Norway. Excluding the branch in
Norway, net interest income fell by SEK 38m. The average margin in
the private market during the quarter was 0.63% (0.64). Net
gains/losses on financial operations decreased by SEK 169m to SEK
-120m (49).

GROWTH IN LENDING

Stadshypotek's lending volume continued to increase during the
period. Loans to the public increased during the period by SEK 49bn
to SEK 664bn (615). Compared to 30 September 2008, lending volume
increased by SEK 59bn. Stadshypotek's share of the private market in
Sweden was approximately 25% and its share of the corporate market in
Sweden was approximately 30%.

CAPITAL RATIO

The capital ratio according to Basel II was 37.0% (34.5) while the
Tier 1 capital ratio according to Basel II was 25.8% (24.5). 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      Covered bonds    Long-term   Short-term

Moody's                     Aaa            -          P-1

Standard & Poor's                        AA-         A-1+

Fitch                                    AA-          F1+



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 October 2009

Lars Kahnlund
Chief executive


This interim report has not been examined by the company's auditors.


The report can be downloaded from the following link: