Pressrelease | 2011-07-22

SBAB Bank experiences continuous stable development

SBAB Bank´s CEO Eva Cederbalk comments on the results:

"SBAB Bank´s business volumes experienced a stable development during the second quarter, while the operation continues to broaden its product offering. We further strengthened our liquidity and continued the strategy of extending our funding."

Performance in January-June 2011 compared with January-June 2010

The interest-rate margin on lending remained stable, at the same time as net interest income declined to SEK 782 million (949) during the first half of 2011. The decrease was largely due to the high net interest income in the year-earlier period resulting from interest swaps connected to repurchased issued bonds.

The operating result was a loss of SEK 130 million (profit: 350), primarily due to changes in market values of basis swaps, since these swaps are reported at fair value. SBAB Bank uses basis swaps to eliminate currency and interest-rate risk on its international funding. However, changes in the value of basis swaps have no impact on SBAB Bank's cash flow nor do they create any real risk, since the company intends to hold them to maturity. Adjusted for the effect of basis swaps, operating profit amounted to SEK 301 million (200).

Expenses rose SEK 24 million to SEK 335 million during the period, mainly as a result of ongoing activities to broaden and strengthen the product offering. Loan losses remained low, with net income of SEK 19 million (loss: 44) reported during the period, and credit quality improved.

Lending declined to SEK 244 billion (249) and the market share was 9.2% (9.6). The interest-rate margin continued to show stable development. This was despite a downturn in demand, which most likely is a result of higher interest rates and the introduction of the residential mortgage cap, at the same time as SBAB Bank experienced more intense competition.