Highlights of Stadshypotek's 2009 annual report

PERFORMANCE

Full year 2009 compared with full year 2008
Stadshypotek's operating profit increased by SEK 2,079 million to SEK 5,761
million (3,682). As of August 2008, Stadshypotek's branch in Norway is included
in the figures and this contributed SEK 346 million to operating profit.
Excluding the branch in Norway, operating profit rose by SEK 1,733 million. Net
interest income increased by SEK 2,167 million, of which SEK 368 million 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 were
SEK -101 million (-71).

Expenses amounted to SEK 212 million (191), of which SEK 38 million (16) was
attributable to the branch in Norway. Recoveries exceeded new loan losses and
the net amount recovered was SEK 31 million (75), which corresponds to a loan
loss ratio of -0.00 percent (-0.01) of lending. After deduction of the provision
for probable loan losses, the volume of impaired loans was SEK 116 million
(193). SEK 61 million (56) of the impaired loans were non-performing loans,
while SEK 55 million (137) were loans on which the borrowers pay interest and
amortisation, but which are considered doubtful. In addition, there were
non-performing loans of SEK 591 million (605) that are not assessed as being
impaired loans. After deductions for specific provisions totalling SEK -55
million (-73) and provisions by group of SEK -11 million (-12) for probable loan
losses, net impaired loans totalled SEK 50 million (108).

Q4 2009 compared with Q3 2009
Stadshypotek's operating profit for the fourth quarter of 2009 decreased by SEK
59 million to SEK 1,341 million (1,400). Net interest income was SEK 1,414
million (1,568), of which SEK 130 million (132) was attributable to the branch
in Norway. The average margin in the private market during the quarter was 0.65
percent (0.63). Net gains/losses on financial operations increased by SEK 108
million to SEK -12 million (-120).

GROWTH IN LENDING
During the year, loans to the public increased by SEK 70 billion or 11 percent
to SEK 685 billion (615). Stadshypotek's share of the private market in Sweden
was approximately 25 percent and its share of the corporate market in Sweden was
approximately 30 percent.

CAPITAL ADEQUACY
The capital ratio according to Basel II was 39.9 percent (37.1) while the Tier
1 capital ratio calculated according to Basel II was 28.4 percent (25.9).
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.

As of the 2009 financial year, new regulations in IAS 1 have affected the
presentation of the Group's financial reports so that changes in equity not
deriving from transactions with the owners are presented in a separate statement
of "Other comprehensive income". In addition to total comprehensive income for
the period, changes in equity thus only include changes in equity deriving from
transactions with the owner.

As from 2009, IFRS 8 Operating Segments is applied whereby identification and
measurement of reportable segments is carried out on the basis of the same
principles as used for internal reporting to central and managing functions. The
application of IFRS 8 has not led to any changes in the division of segments for
the Stadshypotek Group.

In all other respects, the highlights of the annual report have been prepared in
accordance with the same accounting policies and calculation methods that were
applied in the annual report for 2008.


Stockholm, 18 February 2010

Lars Kahnlund
Chief executive


The report can be downloaded from the following link:



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