Stadshypotek’s interim report January–June 2013

January – June 2013 compared with January – June 2012
Stadshypotek’s operating profit increased by SEK 209 million to SEK 4,085
million (3,876). Net interest income grew by SEK 702 million to SEK 4,639
million (3,937). The increase in lending volume and improved margins, resulting
from the company’s good position in the funding mar­ket, both contributed to the
growth in net interest income. SEK 460 million (280) of the net interest income
was attributable to the branch in Norway, SEK 157 million (107) to the branch in
Finland and SEK 75 million (51) to the branch in Denmark. The increase in net
interest income at the Norwe­gian branch was mainly due to higher margins.
Excluding the branches, net interest income increased by SEK 448 million. Net
gains/losses on financial transactions were SEK 97 million (75).

Expenses rose by SEK 512 million to SEK 644 million (132). The increase was
almost entirely due to sales compensation to the parent company. Stadshypotek’s
branches outside Sweden already make pay­ments to Handelsbanken’s branches in
the respective countries for ser­vices rendered by them on behalf of
Stadshypotek. As of 1 January 2013, the parent company is also compensated for
the services performed by the branch office operations on behalf of Stadshypotek
in relation to the sale and administration of mortgage loans in Sweden.

Net loan losses amounted to SEK -4 million (0). Before deduction of the
provision for probable loan losses, the volume of impaired loans was SEK 233
million (98). Of this amount, non-performing loans accounted for SEK 141 million
(62), while SEK 92 million (36) related to loans on which the borrowers pay
interest and amortisation, but which are nevertheless considered impaired. There
were also non-performing loans of SEK 1,013 million (995) that are not classed
as being impaired loans. After deduc­tions for specific provisions totalling SEK
-43 million (-40) and collective provisions of SEK -4 million (-6) for probable
loan losses, impaired loans totalled SEK 186 million (52).

Growth in Lending
Loans to the public increased by around 8 per cent, or SEK 68 billion, compared
to the end of the corresponding period in the previous year, and stood at SEK
925 billion (857). On 1 September 2012, Stadshypotek’s branch in Finland
acquired a mortgage loan portfolio of around EUR 0.5 billion from the parent
company’s branch in Finland, which corre­sponds to approximately SEK 4 billion
of the increase in lending com­pared to at the end of the corresponding period
in the previous year. In Sweden, loans to the public increased by around 7 per
cent, or SEK 51 billion, compared to the end of the corresponding period in the
previous year, and stood at SEK 810 billion (759). Lending to the private market
in Sweden increased by around 5 per cent, or SEK 24 billion, to SEK 532 billion
(508).

Funding
Issues of covered bonds from Stadshypotek’s benchmark series totalled SEK 95.0
billion (90.0). Issues of covered bonds under the EMTCN pro­gramme totalled the
equivalent of approximately EUR 3.6 billion (3.9), and under the American
programme, an issue of USD 1.25 billion was carried out. Stadshypotek has
continued to be an active player in the Norwegian market, with issues during the
period totalling NOK 4 billion.

Capital Adequacy
The capital ratio according to Basel II was 59.5 per cent (60.4) while the tier
1 ratio calculated according to Basel II was 44.5 per cent (44.0). Further
information on capital adequacy is provided in the ‘Capital base and capital
requirement’ section on page 20.

Rating
Stadshypotek’s rating was unchanged during the period.

+-----------------+-------------+---------+----------+
|Stadshypotek     |Covered bonds|Long-term|Short-term|
+-----------------+-------------+---------+----------+
|Moody’s          |Aaa          |-        |P-1       |
+-----------------+-------------+---------+----------+
|Standard & Poor’s|             |AA-      |A-1+      |
+-----------------+-------------+---------+----------+
|Fitch            |             |AA-      |F1+       |
+-----------------+-------------+---------+----------+



Stockholm, 17 July 2013

Per Beckman
Chief Executive

Stadshypotek discloses the information provided herein pursuant to the
Securities Markets Act. Submitted for publication on 17 July 2013, at 11.00 CET.


For more information about Stadshypotek, please go to: www.stadshypotek.se