STOCKHOLM, Sweden, Oct. 28, 2002 (PRIMEZONE) -- Svensk Exportkredit AB (SEK) (NYSE:SEP_p):
Business Activities
Despite shrinking credit markets, SEK has managed to keep up the level of new business. SEK's efforts towards regional and local authorities and within SEK Securities have resulted in increased business. SEK reached a total volume of customer-related financial transactions amounting to Skr 11.4 billion (14.3), of which new long-term credits granted totaled Skr 8.7 billion (12.3).
The newly established SEK Securities has arranged a customer's first transaction under an EMTN program and assisted a Swedish issuer in arranging an international road show.
The total volume of customer-related capital markets transactions other than lending was Skr 2.7 billion (2.0).
The aggregate amount of credits outstanding and credits committed though not yet disbursed decreased to Skr 78.9 billion (ye: 86.8). The decrease mainly reflects currency exchange effects due to the weakening of the U.S. dollar during the nine-month period. Simultaneously, the aggregate amount of outstanding offers for new credits increased to Skr 60.9 billion at periodend (ye: 53.9).
New long-term borrowings during the period amounted to Skr 34.9 billion (21.8). Europe and Asia have been the most important markets.
A three-year USD 500 million benchmark issue, targeted mainly towards Asian institutional investors, has been executed. The issue has been increased twice, to reach USD 750 million.
SEK continues to have a high level of liquid assets and a low financing risk. At period-end, the aggregate volume of funds borrowed and shareholders' funds exceeded the aggregate volume of credits outstanding and credits committed though not yet disbursed at all maturities.
Operating Results
Profit before taxes for the nine-month period amounted to Skr 506.1 million (565.5). The decrease in operating profit was related mainly to lower volumes in the liquidity portfolio. The annualized return on equity was 19.6% (23.0%) p.a. pre taxes, and 14.1% (16.5%) p.a. after taxes, respectively.
Net interest earnings were Skr 610.2 million (666.1). The contribution to net interest earnings from debt-financed assets was Skr 360.6 million (409.5). The underlying average volume of such debt-financed assets was Skr 112.5 billion (128.3), with an average margin of 43 basis points p.a. (43). The average volume of the liquidity portfolio, whose average margin is lower than that of the credit portfolio, decreased significantly. The contribution to net interest earnings from the investment portfolio, which represents the investment of SEK's equity, was Skr 249.6 million (256.6). The decrease reflects that reinvestments of parts of SEK's investment portfolio have been at lower interest rates than the interest rates of the replaced, matured assets.
Commissions earned were Skr 14.0 million (3.3). This improvement resulted from increased activities related to capital market products.
Administrative expenses amounted to Skr 124.6 million (121.8).
Total Assets, Liquidity and Capital Adequacy
At period-end, SEK's total assets amounted to Skr 134.3 billion (ye: 149.5). The decrease in the volume of total assets was due to a decrease in the portfolio of liquid assets, as well as currency exchange effects.
Highly rated OECD states represented 26% (ye: 38%) of SEK's total counterparty exposure. The decrease was due mainly to lower volume in the liquidity portfolio (see above). The exposure to the Swedish State, within the category of highly rated OECD states, represented 18% (ye: 21%).
No credit losses have been made.
SEK's adjusted total capital adequacy ratio at period-end was 18.8% (ye: 20.4%), of which 13.4% (ye: 13.8%) represented adjusted Tier-1. The adjusted ratios are calculated with inclusion in the Tier-1 capital base of SEK's guarantee fund capital of Skr 600 million in addition to the regulatory capital base. The regulatory total capital adequacy ratio at period-end was 17.0% (ye: 18.5%), of which 11.6% (ye: 11.9%) represented Tier-1. The decreases in the total capital adequacy ratios were due mainly to currency exchange effects on subordinated debt and greater exposures to financial institutions in the liquidity portfolio.
The full report including tables can be downloaded from the following link: http://reports.huginonline.com/879030/109465.pdf