In the first phase of the crisis, borrowing needs among SEK’s clients were greatest for mediumsized companies and their suppliers, who were hard hit by considerable disruptions in supply chains. Initial demand was for short term credits to strengthen clients’ liquidity before gradually changing to increased demand for somewhat longer credit terms. In the current environment, SEK is wellpositioned with the high credit quality of its credit portfolio and a work approach based on close relationsships and long-term partnerships with its clients.

To further increase new lending capacity, the annual general meeting decided that the state would refrain from receiving a dividend. As a further measure to strengthen SEK’s capacity to grant credits with longer tenors, the government has proposed to the Swedish parliament to increase SEK’s credit facility with the Swedish National Debt Office from Skr 125 billion to Skr 200 billion. The credit facility includes commercial lending to Swedish exporters in addition to officially supported export credit (”CIRR”) loans.

“The decision increased SEK’s lending capacity and thus provided better prerequisites to support exporters.”

Catrin Fransson, CEO of SEK

In terms of funding, severe disruption and volatility in the financial markets resulted in increased price levels. Despite that fewer institutions than usual having been able to issue debt, SEK launched a successful issuance of a USD 1.75 billion three-year fixed rate benchmark bond in Mars.

“This is largest ever debt issue in SEK’s history and demonstrates the high level of market confidence from our international investors.”

Catrin Fransson, CEO of SEK

In the first quarter, new lending was Skr 33.3 billion, which was substantially higher than the corresponding period last year. Year-on-year, net interest income was slightly higher and totaled Skr 405 million (3M19: Skr 395 million). Operating profit for the period was down significantly yearon- year at Skr 157 million (3M19: Skr 352 million). The year-on-year decline in operating profit was mainly due to lower net results of financial transactions, which was affected negatively by unrealized changes in market values, in addition to an increase in the provision for expected credit losses.

Results January–March 2020 (compared with January–March 2019)

• New lending Skr 33.3 billion (3M19: Skr 13.3 billion)
• Net interest income Skr 405 million (3M19: Skr 395 million)
• Operating profit Skr 157 million (3M19: Skr 352 million)
• Net profit Skr 123 million (3M19: Skr 274 million)
• Return on equity was 2.6 percent (3M19: 5.9 percent)
• The total capital ratio amounted to 19.9 percent (year-end 2019: 20.6 percent)
• Basic and diluted earnings per share Skr 31 (3M19: Skr 69)