When private individuals, corporates clients and tenant-owner associations turn to SBAB to borrow money, SBAB must first raise the required capital. A large part of a new loan consists of money that SBAB has borrowed from other players.
The majority of the funding is borrowed from the capital market. To achieve this, SBAB and its subsidiary SCBC issue bonds that are purchased by investors. More information about the Group’s funding programmes can be found further down on this page.
The remaining part of SBAB’s funding consists of deposits. Deposits refer to private individuals, corporate clients and tenant-owner associations saving money in SBAB’s savings accounts. SBAB has offered deposits to private individuals since 2007, and to corporate clients and tenant-owner associations since 2009.
For SBAB, it is strategically important to have a well diversified funding portfolio and a broad investor base, which requires an active presence in the capital market and a flexible range of products.
The funding portfolio is well balanced between the Swedish and international capital market, maturities and currencies. SBAB has the following short- and long-term funding programmes:
SCBC's operations began in 2006 when the company received a licence from the Swedish Financial Supervisory Authority to issue covered bonds. In the same year, SCBC also became the first Swedish issuer of covered bonds.
SCBC does not engage in any new lending operations itself; instead it acquires loans from SBAB continuously or as required. The purpose of these acquisitions is that the loans, in full or in part, will be included in the cover pool that constitutes collateral for all investors in SCBC's covered bonds.
The loans that are not funded through the issuance of covered bonds are financed by a subordinated loan from the parent company, SBAB. The subordinated loan and SBAB's claims on SCBC under the outsourcing agreement are subordinated to all unsubordinated creditors in the event of SCBC's bankruptcy or liquidation. SCBC has thus minimised the risk of conflicts of interests between secured and non-secured creditors.
SCBC's business activities are mainly focused on issuing covered bonds in the Swedish and international capital market. For this purpose, the company uses three funding programmes: