STOCKHOLM, Sweden, Aug. 30, 2002 (PRIMEZONE) -- Svensk Exportkredit AB (SEK) (Swedish Export Credit Corporation):
Business Activities
The decline and uncertainty in the economy experienced during the period has resulted in a general low demand for new credits in the market. Even so, SEK's volume of new business remained at a high level. SEK reached a total volume of customer-related financial transactions amounting to Skr 9.5 billion (11.1), of which new long-term credits granted totaled Skr 7.3 billion (10.1).
The total volume of customer-related capital markets transactions other than lending was Skr 2.2 billion (1.0). SEK has established a security company, AB SEK Securities, in order to handle SEK's capital markets products.
The aggregate amount of credits outstanding and credits committed though not yet disbursed decreased to Skr 80.0 billion (y-e: 86.8). The decrease mainly reflects currency exchange effects in the existing portfolio due to the weakening of the U.S. dollar during the six-month period.
Simultaneously, the aggregate amount of outstanding offers for new credits increased significantly, to Skr 65.8 billion at period-end (y-e: 53.9).
New long-term borrowings during the period amounted to Skr 24.0 billion (11.4). Europe and Asia have been the most important markets.
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 six-month period amounted to Skr 344.6 million (376.0). The decrease in operating profit was related mainly to lower volumes in the liquidity portfolio. The annualized return on equity was 19.6% (22.3%) pre taxes, and 14.1% (16.1%) after taxes, respectively.
Net interest earnings were Skr 408.9 million (435.2).The contribution to net interest earnings from debt-financed assets was Skr 240.8 million (262.0). The underlying average volume of such debt-financed assets was Skr 114.0 billion (130.6), with an average margin of 42 basis points p.a. (40). The increase in average margin was due mainly to higher margins in the credit portfolio and a higher average volume of the same.
Simultaneously, 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 was Skr 168.1 million (173.2). 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.
Administrative expenses amounted to Skr 80.6 million (82.4).
Total Assets, Liquidity, and Capital Adequacy
At period-end, SEK's total assets amounted to Skr 134.7 billion (y-e: 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 affecting both the liquidity portfolio and the credit portfolio.
Highly rated OECD states represented 28% (y-e: 38%) of SEK's total counterparty exposure. The decrease is mainly due to lower volume in the liquidity portfolio (see above).The exposure to the Swedish State, within the category of highly rated OECD states, represented 19% (y-e: 21%).
No credit losses have been made.
SEK's adjusted total capital adequacy ratio at period-end was 19.6% (y-e: 20.4%), of which 14.0% (y-e: 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 17.7% (y-e: 18.5%), of which 12.1% (y-e: 11.9%) represented Tier-1. The decreases in the total capital adequacy ratios were due to currency exchange effects on subordinated debt, which affects only the Tier-2 capital.
Peter Yngwe President
The full report including tables can be downloaded from the following Link: http://reports.huginonline.com/872100/107632.pdf
Auditors' Review Report
We have reviewed the interim report for the six-month period ended June 30, 2002, in accordance with Swedish generally accepted standards for such reviews. A review is significantly less in scope than an examination in accordance with generally accepted auditing standards. During our review nothing came to our attention to indicate that the interim report does not comply with the requirements of the Swedish Act on Annual Accounts for Credit Institutions and Securities Companies.
Gunnar Abrahamson Authorized Public Accountant (Appointed by the Swedish Financial Supervisory Authority) Staffan Kjellstrom Authorized Public Accountant Caj Nackstad Authorized Public Accountant