Stadshypotek's interim report January - June 2010

FINANCIAL PERFORMANCE

January - June 2010 compared with January - June 2009

Stadshypotek's operating profit was SEK 2,604 million (3,020), a decrease of SEK
416 million compared with the corresponding period of the previous year. Net
interest income was SEK 2,705 million (3,085), of which SEK 222 million (229)
was attributable to the branch in Norway. The decrease in operating profit was
thus mainly due to the net interest income being SEK 380 million lower than the
corresponding period in the previous year. The decrease is mainly attributable
to increased funding costs. During the period, Stadshypotek opted to extend the
maturity of its funding and issued a total of SEK 109 billion in covered bonds.
Net gains/losses on financial operations were SEK 3 million (31).

Expenses were SEK 111 million (106). Recoveries exceeded new loan losses and the
net amount recovered was SEK 17 million (22), which corresponds to a loan loss
ratio of 0.00 percent (-0.01). After deduction of the provision for probable
loan losses, the volume of impaired loans was SEK 109 million (143). SEK 43
million (50) of the impaired loans were non-­performing loans, while SEK 66
million (93) were loans on which the borrowers pay interest and amortisation,
but which are nevertheless considered impaired. In addition, there were
non-performing loans of SEK 613 million (807) that are not assessed as being
impaired loans. After deductions for specific provisions totalling SEK -48
million (-51) and provisions by group of SEK -7 million (-11) for probable loan
losses, impaired loans totalled SEK 54 million (81).

Q2 2010 compared with Q1 2010

Stadshypotek's operating profit for the second quarter of 2010 was SEK 1,231
million (1,373), a decrease of SEK 142 million. Net interest income was SEK
1,273 million (1,432), of which SEK 103 million (119) was attributable to the
branch in Norway. The lower net interest income was due to higher costs for
funding. The average margin in the private market in Sweden was stable during
the second quarter. Net gains/losses on financial operations were SEK 16 million
(-13).

GROWTH IN LENDING

Loans to the public increased during the first six months  of 2010 by SEK 35
billion to SEK 720 billion (685). Compared with 30 June 2009, the increase in
lending volume was SEK 70 billion. Stadshypotek's share of the private market
in Sweden was approximately 25 percent (25) and its share of the corporate
market in Sweden was some 30 percent (30).

BRANCH IN DENMARK

During the second quarter, Stadshypotek started a branch in Denmark called
Handelsbanken Kredit. The branch's loans to the public were SEK 1 billion as at
30 June.

CAPITAL ADEQUACY

The capital ratio according to Basel II was 44.4 percent (36.5) while the Tier
1 ratio calculated according to Basel II was 33.1 percent (25.4). 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+





Stockholm, 20 July 2010





Lars Kahnlund

Chief executive


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



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