Interim report 2010 Stockholm, 8 February 2011

Interim report 2010

Stockholm, 8 February 2011

-  Operating profit amounted to SEK 3 179 m (3 631)

-  Net interest income decreased by SEK 339m to SEK 4 069m

-  Covered bonds amounting to SEK 234bn have been issued during the year

 

The Swedbank Mortgage Group (in Swedish: Swedbank Hypotek) comprises the
parent company, Swedbank Mortgage AB (publ) and the wholly owned
subsidiary Swedbank Skog och Lantbruk AB (inactive company). Swedbank
Mortgage is wholly owned by Swedbank AB (publ).

Swedbank Mortgage provides long-term financing for residential housing,
commercial properties, municipal investments and agricultural and
forestry properties.

Numbers within parenthesis refer to the corresponding period from the
previous year unless noted otherwise.

Profit analysis

Operating profit amounted to SEK 3 179m (3 631). Net interest income was
reduced by SEK 339m to SEK 4 069m (4 408). The dominating reason for the
lower net interest income was a lower average margin during 2010
compared to the previous year despite an increasing trend, which was due
to a low starting level for the year. The turning point appeared in the
beginning of the past year. The increase in volumes for the year,
amounting to SEK 30bn, compensated to some extent the lower margin.  

Funding costs have been considerably affected by the extended average
maturity of the debts. The increased costs of funding have certainly
affected the net interest income negatively but it has also resulted in
a reduced need of liquidity reserves which has had a positive effect on
the net interest income. The lower levels of interest rates during most
of the year compared to previous year have led to somewhat lower return
on equity.

Of the commission costs most part is arising from the interchange
between the savings banks and partly owned banks. These costs amounted
to SEK 562m (661). The reduction is a result of changes in the agreement
on commission with the savings banks and partly owned banks.

In net gains and losses on financial items at fair value are included
changes and realizations of market value on items for which fair value
option is applied. In April 2009 a gradual transition was initiated to
increase amortized cost accounting and hedge accounting by applying fair
value hedge accounting and cash flow hedging.

Changes in value in fair value hedges on the hedged item and the hedging
instrument is reported in the income statement while the effective part
of the changes in value on a cash flow hedge is reported in equity and
is included in other comprehensive income.  In net gains and losses in
financial items at fair value are also included profit and losses on
prepayments on loans at amortized cost and repurchases of issued
securities at amortized cost.  All included the net gains and losses on
financial items at fair value amounted to SEK -206m (-131). 

For further information, please contact:

Helena Silvander, President

Telephone +46 8 585 935 06

Christina Linderoth, Head of accounting

Telephone +46 8 585 970 20

 

Swedbank Mortgage Interim report 2010

 

Swedbank Mortgage is wholly owned by Swedbank AB (publ). Swedbank
promotes a sound and sustainable financial situation for the many
people, households and companies. Our vision is to contribute to a
development "Beyond Financial Growth". As a leading bank in the home
markets Sweden, Estonia, Latvia and Lithuania, Swedbank offers a wide
range of financial services and products. Swedbank has 9.5 million
retail customers and 535,000 corporate customers with approximately 400
branches in Sweden and over 200 branches in the Baltic countries. The
group is also present in other Nordic countries, the U.S., China, Russia
and Ukraine. As of June 30 2010 the group had total assets of SEK 1,905
billion. Read more at www.swedbank.com (http://www.swedbank.com/)