Stadshypotek's interim report January-March 2011

FINANCIAL PERFORMANCE

January-March 2011 compared with January-March 2010

For the period January to March 2011, operating profit increased by SEK 41
million to SEK 1,414 million (1,373). Net interest income amounted to SEK 1,438
million (1,432), with the branch in Norway accounting for SEK 105 million (119)
and the branch in Denmark, which was established on 1 May 2010, accounting for
SEK 19 million (-). Thus, excluding these branches, net interest income was
unchanged from the corresponding period in 2010. The increase in lending volumes
had a positive impact on net interest income, offsetting the slightly higher
funding cost. Net gains/losses on financial items at fair value amounted to SEK
31 million (-13).

Expenses rose by SEK 7 million to SEK 61 million (54). Recoveries exceeded new
loan losses and the net amount recovered was SEK 10 million (12), which
corresponds to a loan loss ratio of -0.01 per cent (-0.01) of lending. Before
deduction of the provision for probable loan losses, the volume of impaired
loans was SEK 93 million (111). SEK 45 million (44) of the impaired loans were
non-performing loans, while SEK 48 million (67) were loans on which the
borrowers pay interest and amortisation, but which are considered doubtful.
There were also non-performing loans of SEK 542 million (512) that are not
classed as being impaired loans. After deduction for a specific provision
totalling SEK -36 million (-48) and a collective provision of SEK -6 million (-
7) for probable loan losses, impaired loans totalled SEK 51 million (56).

Q1 2011 compared with Q4 2010

Stadshypotek's operating profit for the first quarter of 2011 decreased by SEK
93 million to SEK 1,414 million (1,507). Net interest income decreased by SEK
48 million to SEK 1,438 million (1,486), of which SEK 105 million (113) was
attributable to the branch in Norway and SEK 19 million (20) to the branch in
Denmark. Excluding these branches, net interest income thus fell by SEK 39
million. This was partly due to the SEK 26 million increase in the fee to the
Swedish Stabilisation Fund, as the halved fee does not apply after 1 January
2011. A further reason for the decrease in net interest income was the fact that
the positive effect of the continuing increase in lending volumes during the
first quarter did not fully offset the slightly higher funding cost. In the
first quarter, the average margin on the Swedish private market was unchanged
from the preceding quarter at around 0.68 per cent. Net gains/losses on
financial items at fair value amounted to SEK 31 million (92). Expenses
decreased by SEK 13 million to SEK 61 million (74).

GROWTH IN LENDING

Loans to the public increased during the period by SEK 14 billion to SEK 773
billion (759). 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 32 per cent (30).

CAPITAL ADEQUACY

The capital ratio according to Basel II was 49.1 per cent (42.3), while the Tier
1 ratio calculated according to Basel II was 37.7 per cent (30.8). 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

                  |Covered bonds|Long-term|Short-term
------------------+-------------+---------+----------
 Moody's          |Aaa          |-        |P-1
------------------+-------------+---------+----------
 Standard & Poor's|             |AA-      |A-1+
------------------+-------------+---------+----------
 Fitch            |             |AA-      |F1+
                  |             |         |


Stockholm, 27 April 2011

Rainer Lawniczak
Chief executive


[HUG#1509470]