Stadshypotek s interim report January - March 2007

* Lending increased by SEK 8bn (8) to SEK 489bn
  * Operating profit was SEK 1,097m (1,264)
  * Recoveries exceeded new loan losses during the period


Earnings performance
Stadshypotek's operating profit for the period was SEK 1,097m. The
profit for the corresponding period in 2006 was SEK 1,264m. The
change in profit is mainly due to decreased net interest income.
During the first quarter, there has been great price pressure in the
market, which has led to continued pressure on margins with a
negative impact on net interest income. Stadshypotek's lending volume
on the private market has continued its very positive development
during the period. However, compared to the same period last year, it
has not been possible to fully compensate the falling lending
margins. Net interest income was also negatively impacted during the
first quarter by effects relating to decisions concerning repurchase
of bonds relating to the transition to IFRS. These effects will
gradually decline until 2008. Compared to the fourth quarter of 2006,
net interest income was SEK 36m higher during the first quarter of
2007.

Low loan losses
Recoveries exceeded new loan losses; the net amount recovered was SEK
29m (54), which corresponds to a loan loss ratio of -0.02% (-0.05) of
lending. As at 31 March 2007, Stadshypotek's bad debts before
deduction of the provision for probable loan losses were SEK 328m
(528). SEK 35m (52) of the bad debts were non-performing loans and
SEK 293m (476) were loans on which the borrowers pay interest and
amortisation, but which are considered doubtful in view of the
uncertainty as to the borrowers' repayment capacity and the value of
the collateral. In addition, there were non-performing loans of SEK
221m (222) that are not assessed as being bad debts. After deduction
of the provision for probable loan losses, the volume of bad debts
was SEK 236m (400).

Growth in lending
Loans to the public were SEK 489bn - an increase of SEK 8bn for the
period. The first quarter has continued to see a very favourable
increase in Stadshypotek's share of net growth in the private market.
Stadshypotek's overall share of mortgage institutions' lending on the
private market was 26.5%. Stadshypotek has retained its position as a
leading player on the Swedish corporate market, with a market share
of 34.5%.

Capital adequacy
On 1 February 2007, new capital adequacy regulations were implemented
- the Basel II rules. The new rules entail major changes in how the
capital requirement is to be calculated and how a satisfactory
capital base is to be ensured. The new rules will be gradually
implemented since the transitional rules allow for an adaptation over
three years. As at 31 March 2007, the capital ratio was 10.3% (8.6).
As at 31 March 2007, the Tier 1 capital ratio was 7.3% (7.3). Further
information about capital  adequacy is available in the section
Capital base and capital requirement.

Rating
Stadshypotek's rating was unchanged.

Stadshypotek
                          Long-term                Short-term
Moody's                   Aa1                      P-1
Standard & Poor's         AA-                      A-1+
Fitch                     AA-                      F1+


Covered bonds
Moody's                        Aaa


Accounting policies
The accounts comply with the IASB accounting standards adopted by the
EU. The regulations of the Annual Accounts Act for Credit
Institutions and Securities Companies (ÅRKL) and the directives
issued by the Swedish Financial Supervisory Authority are also
applied. The interim report is also adapted to these. The same
accounting policies and calculation methods have been applied in the
interim report as in the latest annual report.


Stockholm, 23 April 2007


Frank Vang-Jensen
Chief executive


This interim report has not been examined by the company's auditors

The report can be downloaded from the following link: