Stadshypotek’s Interim Report January – June 2014

JANUARY – JUNE 2014 COMPARED WITH JANUARY – JUNE 2013
Stadshypotek’s operating profit increased by 1%, or SEK 60m, to SEK 4,145m
(4,085). Net interest income rose by SEK 188m to SEK 4,827m (4,639). SEK 517m
(460) of the net interest income was attributable to the branch in Norway, SEK
186m (157) to the branch in Finland and SEK 103m (75) to the branch in Denmark.
Excluding the branches, net interest income increased by SEK 74m, mainly due to
higher lending volumes to both the private and corporate markets. The increase
in net interest income at the Norwegian branch was also mainly attributable to
higher lending volumes to both the private and corporate markets. The increase
in net interest income at the Finnish branch can mainly be explained by higher
lending volumes to the corporate market, while at the Danish branch it was
mainly due to an increase in lending volumes to the private market. Net
gains/losses on financial transactions decreased to SEK 82m (97).

Expenses rose by SEK 113m to 757m (644). This was mainly due to an increase of
SEK 89m in the compensation paid to the parent company for the services
performed by the branch operations in Sweden on behalf of Stadshypotek in
relation to the sale and administration of mortgage loans.

Net loan losses totalled SEK 4m (4). Before deduction of the provision for
probable loan losses, the volume of impaired loans was SEK 247m (233). Of this
amount, non-performing loans accounted for SEK 195m (141), while SEK 52m (92)
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 708m (1,013) that are not classed as being impaired loans. After deductions
for specific provisions totalling SEK -34m (-43) and collective provisions of
SEK -4m (-4) for probable loan losses, impaired loans totalled SEK 209m (186).

GROWTH IN LENDING
Loans to the public increased by 8%, or SEK 70bn, compared to the end of the
corresponding period in the previous year, and stood at SEK 995bn (925). In
Sweden, loans to the public increased by 6%, or SEK 53bn, to SEK 863bn (810).
Lending to the private market in Sweden increased by around 5%, or SEK 29bn, to
SEK 561bn (532), which was in line with general market trends.

FUNDING
During the first six months of the year, covered bonds to the value of SEK 73bn
were issued (95), with issues of covered bonds from Stadshypotek’s benchmark
series accounting for SEK 41.6bn (59.1). In Norway, bonds to the value of NOK
4bn (4) were issued during the period. Issues of covered bonds under the EMTCN
programme totalled the equivalent of approximately EUR 1.6bn (3.6).

CAPITAL ADEQUACY
The total capital ratio according to CRD IV was 60.9% (59.5) while the Tier 1
ratio calculated according to CRD IV was 40.2% (44.3). Further information on
capital adequacy is provided in the ‘Capital base and capital requirement’
section on page 21.

RATING
Stadshypotek’s ratings remained 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 2014


Ulrica Stolt Kirkegaard
Chief Executive


Stadshypotek discloses the information provided herein pursuant to the
Securities Markets Act. Submitted for publication on 17 July 2014, at 10.00 CET.