Stadshypotek's interim report January-September 2011

FINANCIAL PERFORMANCE

January to September 2011 compared with January to September 2010
For the period January to September 2011, operating profit increased by SEK 452
million to SEK 4,353 million (3,901). Net interest income amounted to SEK 4,530
million (4,015), with the branch in Norway accounting for SEK 305 million (326),
the branch in Denmark, established on 1 May 2010, accounting for SEK 64 million
(4) and the branch in Finland, established on 1 May 2011, accounting for SEK 33
million (-). Thus, excluding the branches, net interest income rose by SEK 443
million compared with the corresponding period of the previous year, which was
mainly due to an increase in lending volume, but also to higher margins.
However, net interest income was affected negatively by SEK 72 million compared
with the corresponding period of the previous year, since from 1 January 2011,
the fee to the Swedish Stabilisation Fund is no longer halved. Net gains/losses
on financial items at fair value amounted to SEK -4 million (37).

Expenses rose by SEK 16 million to SEK 184 million (168), primarily due to
increased costs for purchased services from the parent company. Recoveries
exceeded new loan losses and totalled SEK 21 million (30). Before deduction of
the provision for probable loan losses, the volume of impaired loans was SEK 93
million (101). Of this amount, non-performing loans account for SEK 55 million
(41), while SEK 38 million (60) relates to loans on which the borrowers pay
interest and amortisation, but which are nevertheless considered impaired. There
were also non-performing loans of SEK 850 million (552) that are not regarded as
being impaired loans. After deductions for specific provisions totalling SEK -38
million (-44) and collective provisions of SEK -6 million (-7) for probable loan
losses, impaired loans totalled SEK 49 million (50).

Q3 2011 compared with Q2 2011
Stadshypotek's operating profit for the third quarter of 2011 increased by SEK
141 million to SEK 1,540 million (1,399). Net interest income increased by SEK
126 million to SEK 1,609 million (1,438), of which SEK 107 million (93) was
attributable to the branch in Norway, SEK 25 million (20) to the branch in
Denmark and SEK 32 (1) million to the branch in Finland. Excluding these
branches, net interest income thus rose by SEK 76 million, which is due to an
increase in lending volumes and higher margins. Net gains/losses on financial
items at fair value amounted to SEK -5 million (-30). Expenses fell by SEK 3
million to SEK 60 million (63).

GROWTH IN LENDING
During the period January-September, loans to the public increased by SEK 79
billion (49) to SEK 838 billion. On 1 August, Stadshypotek's branch in Finland
acquired a loan portfolio of around EUR 3 billion from the parent company's
branch in Finland, which corresponds to approximately SEK 27 billion of the
increase in lending during the period. Stadshypotek's share of the private
market in Sweden was approximately 25 per cent (25) and its share of the
corporate market in Sweden was approximately 33 per cent (30).

CAPITAL ADEQUACY
The capital ratio according to Basel II was 55.2 per cent (44.3) while the Tier
1 ratio calculated according to Basel II was 37.7 per cent (33.0). Further
information on capital adequacy is provided in the 'Capital base and capital
requirement' section on page 13.

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

Stadshypotek
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|Moody's          |Aaa          |-        |P-1       |
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|Standard & Poor's|             |AA-      |A-1+      |
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|Fitch            |             |AA-      |F1+       |
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Stockholm 26 October 2011

Rainer Lawniczak
Chief executive

[HUG#1557956]