UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

 

For the month of April, 2023

 

Commission File Number

001-08382

 

Aktiebolaget Svensk Exportkredit (publ)

Swedish Export Credit Corporation

(Translation of Registrant’s Name into English)

 

Fleminggatan 20

SE-112 26 Stockholm

Sweden

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F ¨

 

 

 

   

 

 

Incorporation by Reference

 

This Report on Form 6-K, including the exhibits hereto, is hereby incorporated by reference, in its entirety, into the registration statement on Form F-3 (File No. 333-249829) of Aktiebolaget Svensk Exportkredit (publ) (“SEK”).

 

This Report comprises the following:

 

1. Registrant’s report for the first quarter of 2023.
   
Exhibit 99.2 Table of unaudited consolidated capitalization of the Registrant.

 

 1 

 

 

AB Svensk Exportkredit (publ)

 

Swedish Export Credit Corporation

 

Interim Report

 

January - March 2023

 

 2 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: April 24, 2023

     
  AB Svensk Exportkredit (publ)
   
  (Swedish Export Credit Corporation)
   
  By: /s/ Magnus Montan
     
    Magnus Montan, Chief Executive Officer

 

 3 

 

 

AB Svensk Exportkredit

Swedish Export Credit Corporation 

 

 

 

 

 

 

 

 

 

 

 

 

January–March 2023

 

(Compared to the period January-March 2022)

 

●Net interest income Skr 633 million (3M22: Skr 485 million)

 

●Operating profit Skr 420 million (3M22: Skr 148 million)

 

●Net profit Skr 334 million (3M22: Skr 116 million)

 

●New lending Skr 13.8 billion (3M22: Skr 24.4 billion)

 

●Basic and diluted earnings per share Skr 84 (3M22: Skr 29)

 

●After-tax return on equity 6.1 percent (3M22: 2.3 percent)

 

Equity and balances

 

(Compared to December 31, 2022)

 

●Total capital ratio 19.7 percent (year-end 2022: 20.6 percent)

 

●Total assets Skr 391.8 billion (year-end 2022: Skr 375.5 billion)

 

●Total lending portfolio Skr 282.7 billion (year-end 2022: Skr 273.4 billion)
–of which green lending 9.8 percent (year-end 2022: 9.5 percent)

 

●Loans, outstanding and undisbursed Skr 342.7 billion (year-end 2022: Skr 348.8 billion)

 

●Outstanding senior debt Skr 345.0 billion (year-end 2022: Skr 326.3 billion)
–of which green borrowings 6.0 percent (year-end 2022: 5.9 percent)

Page 2 of 28

 

 

Strong result despite weaker demand

 

SEK posted profitability of 6.1 percent for the first quarter, reflecting a year-on-year increase of 3.8 percentage points, driven by strong net interest income. Net interest income for the quarter totaled Skr 633 million, corresponding to an increase of 31 percent year-on-year. The company also posted net profit of Skr 334 million for the quarter, reflecting a year-on-year increase of 188 percent.

 

In recent years, we have increased our lending portfolio, mainly in relation to working capital and major export credits, and increased tenors in our lending portfolio, which has contributed to more stable and higher earnings. We have also increased lending to the defense industry.

 

Following very strong business flows in the past year, we have noted lower new lending during the first quarter of the year. New lending to Swedish exporters remained at high levels, whereas new lending volumes to foreign buyers of Swedish goods and services were at lower levels. However, we are noting continued strong demand for export credits and project financing. These transactions often have long lead times, which makes it difficult to predict when they will close and thus when the lending will be provided by SEK.

 

Uncertainty in the operating environment and the shift towards higher interest rates are impacting the willingness to invest. Projects have become more costly, are delayed or simply not carried out. At the same time, demand for financing of defense, climate transition and energy projects has increased. In light of that, we remain optimistic about SEK’s business outlook for the remainder of the year.

 

During the quarter we grew our green loan portfolio by Skr 1.8 billion and our portfolio of sustainability-linked loans by Skr 3.6 billion.

 

There was significant market volatility in the quarter, primarily due to increased interest rates. Our strategy to hedge a substantial share of our financial risks has worked well. Our net results of financial transactions are neutral over time, but was negative during the first quarter, amounting to Skr -50 million.

 

The funding markets have shown a lower risk appetite during the quarter, but thanks to SEK’s strong reputation, we have been able to raise borrowings of Skr 34 billion. We issued a USD 1.75 billion three-year fixed-rate bond and a Skr 1.5 billion green bond in the first quarter of 2023.

 

SEK remains well capitalized and with high liquidity to continue to meet Sweden’s export industry’s financing needs, even during these highly uncertain times with volatile financial markets and reduced market liquidity.

  

 

Magnus Montan
Chief Executive Officer
Interim report January–March 2023Page 3 of 28

 

 

 

 

 

Challenging quarter with turbulent markets

 

The first quarter of the year was dominated by global economic uncertainty and high interest rates. Russia’s war in Ukraine showed no signs of coming to an end. Nonetheless, volumes in the capital markets for corporate bonds have shown signs of recovery. Overall, these signs of recovery are largely due to higher interest rates. The higher market rates lead to reduced demand for financing as customers are reconsidering their investment decisions. Consequently, SEK experienced a decline in the volume of new lending for the quarter.

New lending for the first quarter amounted to Skr 13.8 billion, reflecting a decrease compared to the corresponding period in 2022 (3M22: Skr 24.4 billion). New lending to Swedish exporters remained high, whereas new lending volumes to foreign buyers of Swedish goods and services were at low levels. Several major projects that SEK provides financing to have been delayed as a result of the original investment calculations being reviewed.

Demand remained strong for financing of projects in the defense industry as well as projects related to the climate transition and sustainable energy supply. Economic conditions have changed, leading to delays in the execution of certain projects. SEK has a strong position in the market and experience with major international projects and sustainable finance, which is valued by SEK’s customers.

During the quarter SEK grew its green loan portfolio by Skr 1.8 billion and its portfolio of sustainability-linked loans by Skr 3.6 billion.

 

SEK’s new lending
Skr bn Jan-Mar 2023 Jan-Mar 2022 Jan-Dec 2022
Lending to Swedish exporters1 5.4 5.3 50.3
Lending to exporters’ customers2 8.3 19.1 82.9
Total 13.8 24.4 133.2
of which CIRR-loans – 10% 22%

 

1Of which Skr 0.9 billion (3M22: Skr 1.2 billion; year-end 2022: Skr 6.2 billion) had not been disbursed at period end.
2Of which Skr 0.0 billion (3M22: Skr 1.8 billion; year-end 2022: Skr 28.6 billion) had not been disbursed at period end.
Page 4 of 28

 

 

 

 

 

 

 

 

High borrowing volumes in difficult markets

 

The high level of uncertainty in international capital markets remained elevated in the first quarter of the year. Rapid hikes in interest rates were a challenge, primarily for medium-sized banks in the United States, as evident from the collapse of Silicon Valley Bank. There are clear concerns that problems in the financial sector are more far-reaching than what has been seen to date. The risk appetite among investors is low, particularly for financial instruments with longer tenors.

Volatility in the interest rate market has been historically high, further reducing risk appetite. Investors are being cautious and it is difficult to price bonds with long maturities in such volatile conditions.

SEK is highly regarded in the global capital markets and has had healthy access to short and long-term financing during the first quarter of the year despite difficult market conditions. SEK completed one major benchmark transaction in the quarter, a USD 1.75 billion three-year fixed-rate bond in February. Additionally, the company carried out a number of other public transactions, including a GBP 300 million bond in January and a Skr 1.5 billion green bond in February.

SEK therefore has high liquidity for new lending and is well prepared to meet the future financing needs of Sweden’s export industry, even during these highly uncertain times with highly volatile financial markets and reduced market liquidity.

 

SEK’s borrowing
Skr bn Jan-Mar 2023 Jan-Mar 2022 Jan-Dec 2022
New long-term borrowing 34.3 20.1 88.5
New short-term borrowing 20.5 21.2 71.3
Outstanding senior debt 345.0 295.8 326.3
Repurchase and redemption of own debt 1.4 0.1 8.9

 

Page 5 of 28

 

 

January-March 2023

 

Operating profit amounted to Skr 420 million (3M22: Skr 148 million). Net profit amounted to Skr 334 million (3M22: Skr 116 million). The higher net profit compared to the same period in the previous year was primarily the result of higher net interest income and improved net results of financial transactions.

 

Net interest income

Net interest income amounted to Skr 633 million (3M22: Skr 485 million), representing an increase of 31 percent compared to the same period in the previous year. The high new lending rate during 2022 together with rising interest rates in Swedish kronor contributed to higher interest income during the period.

The table below shows average interest-bearing assets and liabilities.

 

Skr bn, average Jan-Mar
2023		 Jan-Mar
2022		 Change
Total lending portfolio 278.1 241.8 15%
Liquidity investments 81.9 67.4 22%
Interest-bearing assets 369.7 318.5 16%
Interest-bearing liabilities 335.6 295.4 14%

 

Net results of financial transactions

Net results of financial transactions amounted to Skr -50 million (3M22: Skr -170 million). The results were mainly attributable to unrealized value changes from cross-currency basis spreads.

 

Operating expenses

Operating expenses amounted to Skr -173 million (3M22: Skr -162 million), representing an increase of 7 percent compared to the same period in the previous year. The increase in operating expenses is mainly due to increased personnel costs. No provision was made for the individual variable remuneration program (3M22: –).

 

Net credit losses

Net credit losses amounted to Skr 17 million (3M22: Skr 2 million). Net credit losses were attributable to decreased provisions for expected credit losses for exposures in stage 1, stage 2 and stage 3.

SEK’s IFRS 9 model is based on a business cycle parameter. The business cycle parameter reflects the general risk of default in each probability of default (PD) segment and should reflect the general risk of default in the economy. Due to the current macroeconomic uncertainty, SEK has made an overall adjustment according to management’s assessment, see Note 4.

Loss allowances as of March 31, 2023, amounted to Skr -210 million compared to Skr -223 million as of December 31, 2022, of which exposures in stage 3 amounted to Skr -65 million (year-end 2022: Skr -70 million).

The provision ratio amounted to 0.06 percent (year-end 2022: 0.06 percent).

Taxes

Tax costs amounted to Skr -86 million (3M22: Skr -32 million), and the effective tax rate amounted to 20.5 percent (3M22: 21.6 percent).

 

Other comprehensive income (OCI)

Other comprehensive income before tax amounted to Skr 20 million (3M22: Skr 100 million). The outcome is explained by unrealized gains incurred from derivatives in cash flow hedging due to declining long-term interest rates during the first quarter of 2023, together with a positive result related to the changes in own credit risk due to increased credit spreads.

 

Statement of Financial Position

 

Total assets and liquidity investments

Total assets increased by 4 percent compared to year-end 2022. The company’s increased customer lending in 2022, together with an increased volume of liquidity investments, drove the increase in the company’s assets.

 

Skr bn

March 31,
2023

 December 31,
2022		 Change
Total assets 391.8 375.5 4%
Liquidity investments 87.6 76.3 15%
Total lending portfolio 282.7 273.4 3%
of which green 27.7 25.9 7%
of which CIRR-loans 101.5 94.2 8%

 

Liabilities and equity

As of March 31, 2023, the aggregate volume of available funds and shareholders’ equity exceeded the aggregate volume of loans outstanding and loans committed at all maturities. SEK considers all of its outstanding commitments to be covered through maturity.

SEK has a credit facility in place with the Swedish National Debt Office of up to Skr 175 billion. The credit facility can be utilized when the Swedish export industry’s demand for financing is particularly high.

Interim report January–March 2023Page 6 of 28

 

 

Capital adequacy

As of March 31, 2023, SEK’s total own funds amounted to Skr 21.3 billion (year-end 2022: Skr 20.8 billion). The total capital ratio was 19.7 percent (year-end 2022: 20.6 percent), representing a margin of 3.2 percentage points above SEK’s estimate of Finansinspektionen’s (the “Swedish FSA”) requirement of 16.5 percent as of March 31, 2023. The corresponding Common Equity Tier 1 capital estimated requirement was 11.4 percent. Given that SEK’s own funds are comprised solely of Common Equity Tier 1 capital, this total capital ratio represents a margin of 8.3 percentage points above the requirement. Overall, SEK is strongly capitalized and has healthy liquidity.

 

Percent March 31,
2023

December 31,

2022

Common Equity Tier 1 capital ratio 19.7 20.6
Tier 1 capital ratio 19.7 20.6
Total capital ratio 19.7 20.6
Leverage ratio 8.1 8.4
Liquidity coverage ratio (LCR) 355 311
Net stable funding ratio (NSFR) 118 119

 

Rating

 

  Skr Foreign currency
Moody’s Aa1/Stable Aa1/Stable
Standard & Poor’s AA+/Stable AA+/Stable

 

Other events

At SEK’s annual general meeting on March 27, 2023, it was resolved that no dividend would be paid for 2022.

During the first quarter 2023, SEK’s new Chief Risk Officer took up his position.

As of 2023, the Head of Compliance became part of executive management.

The macro environment

 

In the fourth quarter of 2022, Sweden’s GDP decreased 0.9 percent compared to the previous quarter. Exports declined 1.0 percent. Unemployment amounted to 7.5 percent at the end of the fourth quarter of 2022, which was an increase of 0.5 percentage points from the third quarter of 2022. The rate of inflation in February 2023 was 9.4 percent, an increase from January 2023 when the rate of inflation was 9.3 percent. Much of the increase in inflation was due to sharply rising food prices. The Riksbank (Sweden’s Central Bank) raised the policy rate on one occasion in 2023 from 2.50 percent to 3.00 percent and further hikes are expected.

Continued high inflation mean that further interest rate hikes can be expected. A higher policy rate positively impacts SEK’s net interest income. The company anticipates that higher interest rates in the market will have limited impact on the company’s clients and, therefore, also a limited indirect negative impact on SEK.

SEK believes that there is a higher-than-normal level of risk in the financial markets that can affect the company. SEK believes that information security threats, particularly in relation to cyber security, have increased as a consequence of Sweden’s support to Ukraine. Russia’s war in Ukraine is fueling inflation and the overall likelihood of a recession has increased. The war has a small direct financial effect on SEK since the company has very low lending in Russia and no lending in Ukraine or Belarus. However, the high level of uncertainty in the financial markets may have a more long-term effect on SEK’s customers and, thereby, on SEK.

The western world has gradually escalated sanctions against Russia, though now at a slowing pace, and continues to support Ukraine with military and protective equipment, as well as direct economic support to Ukraine’s armed forces. The long-term humanitarian and socioeconomic effects of Russia’s war in Ukraine are expected to be extensive and the prevailing geopolitical security tension caused by the conflict could continue for a long time.

Overall, higher interest rates have put pressure on parts of the financial system, with large market movements in stock markets as well as currency and interest rate markets. Under pressure from state authorities, banks in the United States as well as in Europe have been forced to orchestrate rescue plans. Even if the measures calmed the markets, their mere necessity has contributed to growing uncertainty.

The spread of the COVID-19 pandemic currently has almost no impact on the global economy and, as a result, the likelihood of disruptions in supply chains has decreased significantly.

 

Risk Factors

 

Various risks arise as part of SEK's operations, including primarily credit risks, but also market, liquidity, refinancing, operational and sustainability risks. For a more detailed description of these risks, refer to the separate risk report Capital Adequacy and Risk Management Report (Pillar 3) 2022 and Note 30 to the annual financial statements included in SEK's 2022 Annual Report on Form 20-F, as well as the “Risk Factors” section in SEK's 2022 Annual Report on Form 20-F.

Interim report January–March 2023Page 7 of 28

 

 

Financial targets

 

Profitability target A return on equity after tax of at least 5 percent.
Dividend policy Payment of an ordinary dividend of 20-40 percent of the profit for the year.
Capital target SEK’s total capital ratio is to exceed the Swedish FSA’s requirement by 2 to 4 percentage points and SEK’s Common Equity Tier 1 capital ratio is to exceed the Swedish FSA’s requirement by at least 4 percentage points. Currently, the capital targets mean that the total capital ratio should amount to 18.5-20.5 percent and the Common Equity Tier 1 capital ratio should amount to 15.4 percent, based on SEK’s estimation of the Swedish FSA’s requirements as of March 31, 2023.

 

Key performance indicators (unaudited)

 

Skr mn (if not otherwise indicated)

Jan-Mar

2023

Oct-Dec

2022

Jan-Mar

2022

 Jan-Dec
2022
New lending 13,763 34,774 24,376 133,181
of which to Swedish exporters 5,445 11,873 5,299 50,307
of which to exporters’ customers 8,318 22,901 19,077 82,874
of which CIRR-loans as a percentage of new lending – 20% 10% 22%
Total lending portfolio 282,745 273,448 246,459 273,448
of which green 9.8% 9.5% 7.8% 9.5%
of which social 0.4% 0.4% – 0.4%
of which sustainability-linked 3.3% 2.1% 1.1% 2.1%
Loans, outstanding and undisbursed 342,654 348,817 301,808 348,817
         
Customer growth 1% 6% 1% 14%
         
New long-term borrowings 34,310 32,778 20,111 88,472
New short-term borrowings 20,452 33,663 21,204 71,338
Outstanding senior debt 344,993 326,270 295,753 326,270
of which green 6.0% 5.9% 4.4% 5.9%
         
After-tax return on equity 6.1% 9.2% 2.3% 5.5%
         
Common Equity Tier 1 capital ratio 19.7% 20.6% 21.2% 20.6%
Tier 1 capital ratio 19.7% 20.6% 21.2% 20.6%
Total capital ratio 19.7% 20.6% 21.2% 20.6%
Leverage ratio 8.1% 8.4% 9.2% 8.4%
Liquidity coverage ratio (LCR) 355% 311% 1,161% 311%
Net stable funding ratio (NSFR) 118% 119% 141% 119%
Risk exposure amount 107,941 100,926 94,307 100,926

 

See definitions on page 30.

Interim report January–March 2023Page 8 of 28

 

Condensed Consolidated Statement of Comprehensive Income (unaudited)

 

Skr mn Note

Jan-Mar

2023

 Oct-Dec
2022

Jan-Mar

2022

 Jan-Dec
2022
Interest income   4,043 3,124 685 6,729
Interest expenses   -3,410 -2,476 -200 -4,550
Net interest income 2 633 648 485 2,179
Net fee and commission expense   -7 -9 -7 -31
Net results of financial transactions 3 -50 223 -170 69
Total operating income   576 862 308 2,217
Personnel expenses   -101 -123 -92 -402
Other administrative expenses   -56 -56 -56 -216
Depreciation and impairment of non-financial assets   -16 -50 -14 -94
Total operating expenses   -173 -229 -162 -712
Operating profit before credit losses   403 633 146 1,505
Net credit losses 4 17 -12 2 -34
Operating profit   420 621 148 1,471
Tax expenses   -86 -130 -32 -305
Net profit1   334 491 116 1,166
           
Other comprehensive income related to:          
Items to be reclassified to profit or loss          
Derivatives in cash flow hedges   11 -7 – -122
Tax on items to be reclassified to profit or loss   -2 1 – 25
Net items to be reclassified to profit or loss   9 -6 – -97
Items not to be reclassified to profit or loss          
Own credit risk   9 15 70 99
Revaluation of defined benefit plans   0 -1 30 43
Tax on items not to be reclassified to profit or loss   -2 -3 -21 -30
Net items not to be reclassified to profit or loss   7 11 79 112
Total other comprehensive income   16 5 79 15
Total comprehensive income1   350 496 195 1,181
           
Skr          
Basic and diluted earnings per share2   84 123 29 292

 

1The entire profit is attributable to the shareholder of the Parent Company.
2Net profit divided by average number of shares, which amounts to 3,990,000 for each period.
Interim report January–March 2023Page 9 of 28

 

Consolidated Statement of Financial Position (unaudited)

 

Skr mn Note March 31,
2023		 December 31,
2022
Assets      
Cash and cash equivalents 5 12,298 4,060
Treasuries/government bonds 5 7,021 15,048
Other interest-bearing securities except loans 5 67,285 57,144
Loans in the form of interest-bearing securities 4, 5 54,518 54,257
Loans to credit institutions 4, 5 23,824 22,145
Loans to the public 4, 5 214,004 207,737
Derivatives 5, 6 6,229 10,304
Tangible and intangible assets   300 307
Deferred tax asset   24 25
Other assets   497 285
Prepaid expenses and accrued revenues   5,757 4,162
Total assets   391,757 375,474
       
Liabilities and equity      
Borrowing from credit institutions 5 3,942 7,153
Debt securities issued 5 341,051 319,117
Derivatives 5, 6 10,586 13,187
Other liabilities   8,466 10,242
Accrued expenses and prepaid revenues   5,764 4,172
Provisions   23 28
Total liabilities   369,832 353,899
Share capital   3,990 3,990
Reserves   -98 -114
Retained earnings   18,033 17,699
Total equity   21,925 21,575
Total liabilities and equity   391,757 375,474
Interim report January–March 2023Page 10 of 28

 

Condensed Consolidated Statement of Changes in Equity (unaudited)

 

Skr mn Equity Share capital Reserves Retained
earnings

Hedge

reserve

Own

credit risk

 Defined
benefit plans
Opening balance of equity January 1, 2022 20,808 3,990 – -102 -27 16,947
Net profit Jan-Mar 2022 116         116
Other comprehensive income Jan-Mar 2022 79     55 24  
Total comprehensive income Jan-Mar 2022 195 – – 55 24 116
Dividend -414         -414
Closing balance of equity March 31, 20221 20,589 3,990 – -47 -3 16,649
             
Opening balance of equity January 1, 2022 20,808 3,990 – -102 -27 16,947
Net profit Jan-Dec 2022 1,166         1,166
Other comprehensive income Jan-Dec 2022 15   -97 79 33  
Total comprehensive income Jan-Dec 2022 1,181 – -97 79 33 1,166
Dividend -414         -414
Closing balance of equity December 31, 20221 21,575 3,990 -97 -23 6 17,699
             
Opening balance of equity January 1, 2023 21,575 3,990 -97 -23 6 17,699
Net profit Jan-Mar 2023 334         334
Other comprehensive income Jan-Mar 2023 16   9 7 0  
Total comprehensive income Jan-Mar 2023 350 – 9 7 0 334
Dividend –         –
Closing balance of equity March 31, 20231 21,925 3 990 -88 -16 6 18,033

 

1The entire equity is attributable to the shareholder of the Parent Company.
Interim report January–March 2023Page 11 of 28

 

Condensed Statement of Cash Flows in the Consolidated Group (unaudited)

 

Skr mn Jan-Mar
2023		 Jan-Dec
2022
Operating activities    
Operating profit 420 1,471
Adjustments for non-cash items in operating profit 56 329
Income tax paid -120 -420
Changes in assets and liabilities from operating activities -9,493 -29,617
Cash flow from operating activities -9,137 -28,237
     
Investing activities    
Capital expenditures -9 -70
Cash flow from investing activities -9 -70
     
Financing activities    
Change in senior debt 16,226 10,793
Derivatives, net 1,336 9,770
Dividend paid – -414
Payment of lease liability -7 -23
Cash flow from financing activities 17,555 20,126
     
Cash flow for the period 8,409 -8,181
     
Cash and cash equivalents at beginning of the period 4,060 11,128
Cash flow for the period 8,409 -8,181
Exchange-rate differences on cash and cash equivalents -171 1,113
Cash and cash equivalents at end of the period1 12,298 4,060

 

1Cash and cash equivalents include, in this context, cash at banks that can be immediately converted into cash and short-term deposits for which the time to maturity does not exceed three months from trade date.
Interim report January–March 2023Page 12 of 28

 

Notes

 

Note 1.Accounting policies
Note 2.Net interest income
Note 3.Net results of financial transactions
Note 4.Impairments
Note 5.Financial assets and liabilities at fair value
Note 6.Derivatives
Note 7.CIRR-system
Note 8.Pledged assets and contingent liabilities
Note 9.Capital adequacy
Note 10.Exposures
Note 11.Reference interest rate reform
Note 12.Transactions with related parties
Note 13.Events after the reporting period

 

References to “SEK” or the “Parent Company” are to AB Svensk Exportkredit. References to “Consolidated Group” are to SEK and its consolidated subsidiary. All amounts are in Skr million, unless otherwise indicated. All figures relate to the Consolidated Group, unless otherwise indicated.

 

Note 1. Accounting policies

 

This condensed interim report is presented in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. The Consolidated Group’s consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), together with the interpretations from IFRS Interpretations Committee (IFRS IC). The IFRS standards applied by SEK are all endorsed by the European Union (EU). The accounting also follows the additional standards imposed by the Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) (ÅRKL) and the regulation and general guidelines issued by Finansinspektionen (the Swedish FSA), “Annual Reports in Credit Institutions and Securities Companies” (FFFS 2008:25). In addition to this, the supplementary accounting rules for groups (RFR 1) issued by the Swedish Financial Reporting Board have been applied. SEK also follows the state’s principles for external reporting in accordance with its State Ownership Policy and principles for state-owned enterprises. 

The accounting policies, methods of computation and presentation of the Consolidated Group and the Parent Company are, in all material aspects, the same as those used for the 2022 annual financial statements included in SEK’s 2022 Annual Report on Form 20-F, except for the changes described below. SEK analyzes and assesses the application and impact of changes in financial reporting standards that are applied within the Group. Changes that are not mentioned are either not applicable to SEK or have been determined to not have a material impact on SEK’s financial reporting. 

Amendments to IAS 12 Income Taxes for deferred tax, which became effective for annual reporting periods beginning on or after January 1, 2023, relate to assets and liabilities arising from a single transaction. The amendments require companies to recognize deferred tax on particular transactions that, upon initial recognition, give rise to taxable and deductible temporary differences of equal amounts, for example a lease liability and its corresponding right-of-use asset at the commencement of the lease. The change affects SEK’s accounting principles, but has no material impact on SEK’s financial statements, capital adequacy or large exposure ratios. The transition effect for opening balances as of 2023 was less than Skr 1 million. 

There are no IFRS or IFRS Interpretations Committee interpretations that are not yet applicable that are expected to have a material impact on SEK’s financial statements, capital adequacy or large exposure ratios.


Interim report January–March 2023Page 13 of 28

 

Note 2. Net interest income

 

Skr mn

Jan-Mar

2023

 Oct-Dec
2022

Jan-Mar

2022

 Jan-Dec
2022
Interest income        
Loans to credit institutions 261 232 38 506
Loans to the public 1,954 1,698 984 5,106
Loans in the form of interest-bearing securities 514 410 196 1,114
Interest-bearing securities excluding loans in the form of interest-bearing securities 597 353 12 535
Derivatives 648 365 -606 -797
Administrative remuneration CIRR-system 61 61 56 237
Other assets 8 5 5 28
Total interest income1 4,043 3,124 685 6,729
Interest expenses        
Interest expenses -3,349 -2,426 -148 -4,353
Resolution fee -24 -22 -25 -88
Risk tax -37 -28 -27 -109
Total interest expenses -3,410 -2,476 -200 -4,550
Net interest income 633 648 485 2,179
1  Interest income calculated using the effective interest method amounted to Skr 2,844 million during January-March 2023 (3M22: Skr 1,093 million).

 

Note 3. Net results of financial transactions

 

Skr mn

Jan-Mar

2023

 Oct-Dec
2022

Jan-Mar

2022

 Jan-Dec
2022
Derecognition of financial instruments not measured at fair value through profit or loss 2 6 0 9
Financial assets or liabilities at fair value through profit or loss -39 233 -151 -19
Financial instruments under fair-value hedge accounting -13 -17 -19 88
Currency exchange-rate effects on all assets and liabilities excl. currency exchange-rate effects related to revaluation at fair value 0 1 0 -9
Total net results of financial transactions -50 223 -170 69

Interim report January–March 2023Page 14 of 28

 

Note 4. Impairments

 

Skr mn

Jan-Mar

2023

 Oct-Dec
2022

Jan-Mar

2022

 Jan-Dec
2022
Expected credit losses, stage 1 4 0 -9 -38
Expected credit losses, stage 2 5 -1 6 6
Expected credit losses, stage 3 7 -12 2 -15
Established losses – – – –
Reserves applied to cover established credit losses – – – –
Recovered credit losses 1 1 3 13
Net credit losses 17 -12 2 -34

 

Skr mn March 31, 2023 December 31, 2022
Stage 1 Stage 2 Stage 3 Total Total
Loans, before expected credit losses 237,084 37,489 8,372 282,946 273,658
Off-balance sheet exposures, before expected credit losses 38,299 22,000 4,571 64,870 80,171
Total, before expected credit losses 275,383 59,489 12,943 347,816 353,829
Loss allowance, loans -119 -17 -65 -201 -210
Loss allowance, off-balance sheet exposures1 -8 -1 0 -9 -13
Total loss allowance -127 -18 -65 -210 -223
Provision ratio (in percent) 0.05 0.03 0.50 0.06 0.06
1  Recognized under provision in Consolidated Statement of Financial Position. Off-balance sheet exposures consist of guarantee commitments, committed undisbursed loans and binding offers, see Note 8.

 

The table above shows the book value of loans and nominal amounts for off-balance sheet exposures before expected credit losses for each stage as well as related loss allowance amounts, in order to place expected credit losses in relation to credit exposures. Overall, the credit portfolio has an extremely high credit quality and SEK

often uses risk mitigation measures, primarily through guarantees from the Swedish Export Credit Agency (EKN) and other government export credit agencies in the Organisation for Economic Co-operation and Development (OECD), which explains the low provision ratio.


Loss Allowance

 

  March 31, 2023 December 31, 2022
Skr mn Stage 1 Stage 2 Stage 3 Total Total
Opening balance January 1 -130 -23 -70 -223 -164
Increases due to origination and acquisition -11 -1 0 -12 -70
Net remeasurement of loss allowance 11 6 7 24 23
Transfer to stage 1 0 0 – 0 6
Transfer to stage 2 0 0 – 0 -11
Transfer to stage 3 0 0 0 0 -19
Decreases due to derecognition 4 0 0 4 24
Decrease in allowance account due to write-offs – – – – –
Exchange-rate differences1 -1 0 -2 -3 -12
Closing balance -127 -18 -65 -210 -223
1  Recognized under net results of financial transactions in Statement of Comprehensive Income.

 

Provisions for expected credit losses (ECLs) are calculated using quantitative models based on inputs, assumptions and methods that are highly reliant on assessments. In particular, the following could heavily impact the level of provisions: the establishment of a material increase in credit risk, allowing for forward-looking macroeconomic scenarios, and the measurement of both ECLs over the next 12 months and lifetime ECLs. ECLs are based on objective assessments of what SEK expects to lose on the exposures given what was known on the reporting date and taking into account possible future events. The ECL is a probability-weighted amount that is determined by evaluating the outcome of several possible scenarios and where the data taken into consideration comprises information from previous conditions, current conditions and projections of future economic conditions. SEK’s method entails three scenarios being prepared for each probability of default curve: a base scenario, a downturn scenario, and an upturn scenario, where the scenarios are expressed in a business cycle parameter. The business cycle parameter reflects the general

risk of default in each geographic segment. The parameter is standard normally distributed where zero indicates a neutral economy as the economy has been on average, historically. The business cycle parameters for the base scenario are between -0.7 and -0.1 for the various probability of default (PD) segments. The base scenarios have been weighted at 80 percent, the downturn scenarios have been weighted at 10 percent, and the upturn scenarios have been weighted at 10 percent between the different PD-segments. 

Due to the current macroeconomic uncertainty, SEK has made an overall adjustment according to management’s overall assessment. This resulted in an increase of expected credit losses, which was calculated pursuant to SEK’s IFRS 9 model as of March 31, 2023.


Interim report January–March 2023Page 15 of 28

 

Note 5. Financial assets and liabilities at fair value

 

Skr mn March 31, 2023
Book value Fair value

Surplus value (+)/

Deficit value (–)

Cash and cash equivalents 12,298 12,298 –
Treasuries/governments bonds 7,021 7,021 –
Other interest-bearing securities except loans 67,285 67,285 –
Loans in the form of interest-bearing securities 54,518 55,109 591
Loans to credit institutions 23,824 23,440 -384
Loans to the public 214,004 210,930 -3,074
Derivatives 6,229 6,229 –
Total financial assets 385,179 382,312 -2,867
Borrowing from credit institutions 3,942 3,942 –
Debt securities issued 341,051 341,053 2
Derivatives 10,586 10,586 –
Total financial liabilities 355,579 355,581 2

 

Skr mn December 31, 2022
Book value Fair value

Surplus value (+)/

Deficit value (–)

Cash and cash equivalents 4,060 4,060 –
Treasuries/governments bonds 15,048 15,048 –
Other interest-bearing securities except loans 57,144 57,144 –
Loans in the form of interest-bearing securities 54,257 54,877 620
Loans to credit institutions 22,145 21,747 -398
Loans to the public 207,737 204,543 -3,194
Derivatives 10,304 10,304 –
Total financial assets 370,695 367,723 -2,972
Borrowing from credit institutions 7,153 7,153 –
Debt securities issued 319,117 318,900 -217
Derivatives 13,187 13,187 –
Total financial liabilities 339,457 339,240 -217

 

Determination of fair value 

The determination of fair value is described in the annual financial statements included in SEK’s 2022 Annual Report on Form 20-F, see Note 1 (h) (viii) Principles for determination of fair value of financial instruments and (ix) Determination of fair value of certain types of financial instruments.

 


Interim report January–March 2023Page 16 of 28

 

Financial assets in fair value hierarchy 

 

Skr mn Financial assets at fair value
Level 1 Level 2 Level 3 Total
Treasuries/governments bonds 1,696 5,325 – 7,021
Other interest-bearing securities except loans 22,247 45,038 – 67,285
Derivatives – 6,104 125 6,229
Total, March 31, 2023 23,943 56,467 125 80,535
Total, December 31, 2022 23,708 58,685 103 82,496

 

Financial liabilities in fair value hierarchy 

 

Skr mn Financial liabilities at fair value
Level 1 Level 2 Level 3 Total
Debt securities issued – – 27,965 27,965
Derivatives – 6,809 3,777 10,586
Total, March 31, 2023 – 6,809 31,742 38,551
Total, December 31, 2022 – 10,820 31,155 41,975

 

A transfer of Skr -1,938 million for debt securities issued was made from level 2 to level 3, due to larger elements of assessment in the

valuation. (year-end 2022: There were no transfers between levels during the period).


Financial assets and liabilities at fair value in Level 3, 2023 

 

Skr mn

January 1,

2023

 Purchases

Settlements

& sales

Transfers

to Level 3

Transfers

from

Level 3

Gains (+) and

losses (–)

through profit
or loss1

Gains (+) and

losses (–) in

Other

comprehensive

income

 Exchange-rate differences

March 31,

2023

Debt securities issued -26,536 – 1,470 -1,938 – -1,062 -14 115 -27,965
Derivatives, net -4,516 – 161 – – 849 – -146 -3,652
Net assets and liabilities -31,052 – 1,631 -1,938 – -213 -14 -31 -31,617

 

Financial assets and liabilities at fair value in Level 3, 2022 

 

Skr mn

January 1,

2022

 Purchases

Settlements

& sales

Transfers

to Level 3

Transfers

from

Level 3

Gains (+) and

losses (–)

through profit
or loss1

Gains (+) and

losses (–) in

Other

comprehensive

income

 Exchange-rate differences

December 31,

2022

Debt securities issued -32,555 -4,267 10,255 – – 2,641 -52 -2,558 -26,536
Derivatives, net -2,037 0 221 – – -616 – -2,084 -4,516
Net assets and liabilities -34,592 -4,267 10,476 – – 2,025 -52 -4,642 -31,052
1  Gains and losses through profit or loss, including the impact of exchange rates, is reported as net interest income and net results of financial transactions. The unrealized fair value changes for assets and liabilities, including the impact of exchange rates, held as of March 31, 2023, amounted to a Skr 209 million loss (year-end 2022: Skr 2,024 million gain) and are reported as net results of financial transactions.

 

Uncertainty of valuation of Level 3 instruments 

As the estimation of parameters included in the models used to calculate the market value of Level 3 instruments is associated with subjectivity and uncertainty, SEK has conducted an analysis of the difference in fair value of Level 3 instruments using other established parameter values. Option models and discounted cash flows are used to value the Level 3 instruments. For the Level 3 instruments that are significantly affected by different types of correlations, which are not based on observable market data, a revaluation has been made by shifting the correlations. The correlation is expressed as a value between 1 and –1, where 0 indicates no relationship, 1 indicates a maximum positive relationship and -1 indicates a maximum negative relationship. The maximum correlation in the range of unobservable inputs can thus be from 1 to –1. In the analysis, the correlations have been adjusted by +/– 0.12, which represents the level SEK uses within its

prudent valuation framework. For Level 3 instruments that are significantly affected by non-observable market data in the form of SEK’s own creditworthiness, a revaluation has been made by shifting the credit curve. The revaluation is made by shifting the credit spreads by +/– 10 basis points, which has been assessed as a reasonable change in SEK’s credit spread. The analysis shows the impact of the non-observable market data on the market value. In addition, the market value will be affected by observable market data. The result of the analysis corresponds with SEK’s business model where issued securities are linked with a matched hedging derivative. The underlying market data is used to evaluate the issued security as well as to evaluate the fair value in the derivative. This means that a change in fair value of the issued security, excluding SEK’s own credit spread, is offset by an equally large change in fair value in the derivative.


Interim report January–March 2023Page 17 of 28

 

Sensitivity analysis – level 3 assets and liabilities 

 

Assets and liabilities March 31, 2023
Skr mn Fair Value

Unobservable

input

Range of estimates

for unobservable

input

 Valuation method

Sensitivity

max

Sensitivity

min

Equity -2,223 Correlation 0.12 – (0.12) Option Model -13 13
Interest rate 23 Correlation 0.12 – (0.12) Option Model 0 0
FX -1,337 Correlation 0.12 – (0.12) Option Model -32 32
Other -115 Correlation 0.12 – (0.12) Option Model 0 0
Sum derivatives, net -3,652       -45 45
Equity -10,260 Correlation 0.12 – (0.12) Option Model 13 -13
    Credit spreads 10BP – (10BP) Discounted cash flow 11 -11
Interest rate -10,121 Correlation 0.12 – (0.12) Option Model 0 0
    Credit spreads 10BP – (10BP) Discounted cash flow 113 -113
FX -7,419 Correlation 0.12 – (0.12) Option Model 34 -34
    Credit spreads 10BP – (10BP) Discounted cash flow 37 -37
Other -165 Correlation 0.12 – (0.12) Option Model 0 0
    Credit spreads 10BP – (10BP) Discounted cash flow 1 -1
Sum debt securities issued -27,965       209 -209
Total effect on total comprehensive income         164 -164
Derivatives, net, December 31, 2022 -4,516       -47 47
Debt securities issued, December 31, 2022 -26,536       202 -202
Total effect on total comprehensive income, December 31, 2022         155 -155

 

The sensitivity analysis shows the effect that a shift in correlations or SEK’s own credit spread has on Level 3 instruments. The table presents maximum positive and negative change in fair value when correlations or SEK’s own credit spread is shifted by +/– 0.12 and +/– 10 basis points,

respectively. When determining the total maximum/minimum effect on total comprehensive income the most adverse/favorable shift is chosen, considering the net exposure arising from the issued securities and the derivatives, for each correlation.


Fair value related to credit risk

 

 

Fair value originating from credit risk 

(- liabilities increase/ + liabilities decrease) 

The period’s change in fair value originating

from credit risk (+ income/ - loss)

Skr mn March 31,
2023		 December 31,
2022		 Jan–Mar
2023		 Jan-Mar
2022
CVA/DVA, net1 -51 -51 0 -11
OCA2 -23 -32 9 70

 

1Credit value adjustment (CVA) and Debt value adjustment (DVA) reflects how the counterparties’ credit risk as well as SEK’s own credit rating affects the fair value of derivatives.

2Own credit adjustment (OCA) reflects how the changes in SEK’s credit rating affects the fair value of financial liabilities measured at fair value through profit and loss.
Interim report January–March 2023Page 18 of 28

 

Note 6. Derivatives

 

Derivatives by category 

 

Skr mn March 31, 2023 December 31, 2022

Assets

Fair value

Liabilities

Fair value

Nominal

amounts

Assets

Fair value

Liabilities

Fair value

Nominal

amounts

Interest rate-related contracts 1,805 1,217 440,384 2,396 2,119 423,124
Currency-related contracts 4,402 7,009 192,776 7,897 8,056 189,323
Equity-related contracts 22 2,245 10,810 11 2,901 12,022
Contracts related to commodities, credit risk, etc. – 115 3,322 – 111 3,330
Total derivatives 6,229 10,586 647,292 10,304 13,187 627,799

 

In accordance with SEK’s policies with regard to counterparty, interest rate, currency exchange, and other exposures, SEK uses, and is a party to, different kinds of derivative instruments, mostly various interest rate-related and currency exchange-related contracts,

primarily to hedge risk exposure inherent in financial assets and liabilities. These contracts are carried at fair value in the statements of financial position on a contract-by-contract basis.


Note 7. CIRR-system

 

Pursuant to the company’s assignment as stated in its owner instruction issued by the Swedish government, SEK administers credit granting in the Swedish system for officially supported export credits (CIRR-system). SEK receives compensation from the Swedish government in the form of an administrative compensation, which is calculated based on the principal amount outstanding. 

The administrative compensation paid by the state to SEK is recognized in the CIRR-system as administrative remuneration to SEK. Refer to the following tables of the statement of comprehensive income and statement of financial positions for the CIRR-system, presented as reported to the owner. Interest expenses includes interest expenses for loans between SEK and the CIRR-system which reflects the borrowing cost for the CIRR-system. Interest expenses for derivatives hedging CIRR-loans are also recognized as interest

expenses, which differs from SEK’s accounting principles. Arrangement fees to SEK are recognized together with other arrangement fees as interest expenses. 

In addition to the CIRR-system, SEK administers the Swedish government’s previous concessionary credit program according to the same principles as the CIRR-system. No new lending is being offered under the concessionary credit program. As of March 31, 2023, concessionary loans outstanding amounted to Skr 358 million (year-end 2022: Skr 361 million) and operating profit for the program amounted to Skr -5 million (3M22: Skr -4 million) for the period January-March 2023. SEK’s administrative compensation for administrating the concessionary credit program amounted to Skr 226 thousand (3M22: Skr 207 thousand).


Statement of Comprehensive Income for the CIRR-system 

 

Skr mn

Jan-Mar

2023

Okt-Dec

2022

Jan-Mar

2022

Jan-Dec

2022

Interest income 551 550 557 2,231
Interest expenses -462 -462 -513 -2,012
Interest compensation – – – 2
Exchange-rate differences 0 -1 1 3
Profit before compensation to SEK 89 87 45 224
Administrative remuneration to SEK -61 -61 -56 -236
Operating profit CIRR-system 28 26 -11 -12
Reimbursement to (–) / from (+) the State -28 -26 11 12
Interim report January–March 2023Page 19 of 28

 

Statement of Financial Position for the CIRR-system 

 

Skr mn March 31,
2023		 December 31,
2022
Cash and cash equivalents 1 1
Loans 101,504 94,241
Derivatives 6,646 8,571
Other assets 244 218
Prepaid expenses and accrued revenues 2,195 1,597
Total assets 110,590 104,628
Liabilities 109,059 103,336
Derivatives 8 –
Accrued expenses and prepaid revenues 1,523 1,292
Total liabilities 110,590 104,628
Commitments    
Committed undisbursed loans 45,406 56,265
Binding offers – –

 

Note 8. Pledged assets and contingent liabilities

 

Skr mn March 31,
2023		 December 31,
2022
Collateral provided    
Cash collateral under the security agreements for derivative contracts 8,567 10,691
Contingent liabilities1    
Guarantee commitments 4,961 4,802
Commitments1    
Committed undisbursed loans 59,909 75,369
Binding offers – –
1  For expected credit losses in guarantee commitments, committed undisbursed loans and binding offers, see Note 4.
Interim report January–March 2023Page 20 of 28

 

Note 9. Capital adequacy

 

The capital adequacy analysis relates to the parent company AB Svensk Exportkredit. The information is disclosed according to FFFS 2014:12 and FFFS 2008:25. For further information on capital adequacy and risks, see Note 30 to the annual financial statements included in SEK’s 2022 Annual Report on Form 20-F and see SEK’s 2022 Capital Adequacy and Risk Management (Pillar 3) Report.

 

Capital Adequacy Analysis 

 

  March 31, 2023 December 31, 2022
Capital ratios percent1 percent1
Common Equity Tier 1 capital ratio 19.7 20.6
Tier 1 capital ratio 19.7 20.6
Total capital ratio 19.7 20.6

 

1Capital ratios exclusive of buffer requirements are the quotients of the relevant capital measure and the total risk exposure amount.
 See tables Own funds – adjusting items and Minimum capital requirements exclusive of buffer.

 

  March 31, 2023 December 31, 2022
Total risk-based capital requirement Skr mn percent1 Skr mn percent1
Capital base requirement of 8 percent2 8,635 8.0 8,074 8.0
of which Tier 1 requirement of 6 percent 6,476 6.0 6,056 6.0
of which minimum requirement of 4.5 percent 4,857 4.5 4,542 4.5
Pillar 2 capital requirements3 3,962 3.7 3,704 3.7
Common Equity Tier 1 capital available to meet buffer requirements4 8,668 8.0 9,013 8.9
Capital buffer requirements 3,605 3.3 3,330 3.3
of which Capital conservation buffer 2,698 2.5 2,523 2.5
of which Countercyclical buffer 907 0.8 807 0.8
Pillar 2 guidance5 1,619 1.5 1,514 1.5
Total risk-based capital requirement including Pillar 2 guidance 17,821 16.5 16,622 16.5

 

1Expressed as a percentage of total risk exposure amount.
2The minimum requirements according to CRR (Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms).
3Individual Pillar 2 requirement of 3.67 percent calculated on the total risk exposure amount, according to the decision from the latest Swedish FSA Supervisory Review and Evaluation Process (“SREP”) on September 29, 2021.
4Common Equity Tier 1 capital available to meet buffer requirement after 8 percent minimum capital requirement (SEK covers all minimum requirements with CET1 capital, that is 4.5 percent, 1.5 percent and 2 percent) and after the Pillar 2 requirements (3.67 percent).
5The Swedish FSA notified SEK on September 29, 2021, within the latest SREP, that in addition to the capital requirements according to Regulation (EU) no 575/2013 on prudential requirements, SEK should hold additional capital (Pillar 2 guidance) of 1.50 percent of the total risk-weighted exposure amount. The Pillar 2 guidance is not a binding requirement.

 

  March 31, 2023 December 31, 2022
Leverage ratio1 Skr mn Skr mn
On-balance sheet exposures 256,810 241,239
Off-balance sheet exposures 5,356 7,357
Total exposure measure 262,166 248,596
Leverage ratio2 8.1% 8.4%

 

1The leverage ratio reflects the full impact of IFRS 9 as no transitional rules were utilized.
2Defined by CRR as the quotient of the Tier 1 capital and an exposure measure.

 

  March 31, 2023 December 31, 2022
Total Leverage ratio requirement Skr mn percent1 Skr mn percent1
Capital base requirement of 3 percent 7,865 3.0 7,458 3.0
Pillar 2 guidance2 393 0.2 373 0.2
Total capital requirement relating to Leverage ratio including Pillar 2 guidance 8,258 3.2 7,831 3.2

 

1Expressed as a percentage of total exposure amount.
2The Swedish FSA has on September 29, 2021 notified SEK, within the latest SREP, that SEK may hold additional capital (Pillar 2 guidance) of 0.15 percent calculated on the total Leverage ratio exposure measure. The Pillar 2 guidance is not a binding requirement.

Interim report January–March 2023Page 21 of 28

 

Own funds – Adjusting items 

 

Skr mn March 31,
2023		 December 31,
2022
Share capital 3,990 3,990
Retained earnings 17,374 16,133
Accumulated other comprehensive income and other reserves 222 212
Independently reviewed profit net of any foreseeable charge or dividend 206 1,009
Common Equity Tier 1 (CET1) capital before regulatory adjustments 21,792 21,344
Additional value adjustments due to prudent valuation -459 -474
Intangible assets1 -44 -44
Fair value reserves related to gains or losses on cash flow hedges 88 97
Gains or losses on liabilities valued at fair value resulting from changes in own credit standing 5 9
Negative amounts resulting from the calculation of expected loss amounts -108 -94
Insufficient coverage for non-performing exposures -5 –
Total regulatory adjustments to Common Equity Tier 1 capital -523 -506
Total Common Equity Tier 1 capital 21,269 20,838
Total Own funds 21,269 20,838

 

Minimum capital requirements exclusive of buffer 

 

Skr mn March 31, 2023 December 31, 2022
EAD1

Risk exposure

amount

Minimum
capital

requirement

 EAD1

Risk exposure

amount

Minimum
capital

requirement

Credit risk standardized method            
Corporates 2,973 2,949 236 3,012 2,987 239
Exposures in default 100 100 8 102 102 8
Total credit risk standardized method 3,073 3,049 244 3,114 3,089 247
Credit risk IRB method            
Central Governments 235,073 10,658 853 242,609 11,018 882
Financial institutions2 49,481 10,980 878 33,299 6,356 508
Corporates3 139,363 74,548 5,964 136,849 72,779 5,822
Assets without counterparty 500 500 40 351 351 28
Total credit risk IRB method 424,417 96,686 7,735 413,108 90,504 7,240
Credit valuation adjustment risk n.a. 3,312 265 n.a. 2,565 205
Foreign exchange risk n.a. 933 74 n.a. 800 64
Commodities risk n.a. 12 1 n.a. 19 2
Operational risk n.a. 3,949 316 n.a. 3,949 316
Total 427,490 107,941 8,635 416,222 100,926 8,074

 

1Exposure at default (EAD) shows the size of the outstanding exposure at default.
2Of which counterparty risk in derivatives: EAD Skr 7,559 million (year-end 2022: Skr 6,355 million), Risk exposure amount of Skr 2,409 million (year-end 2022: Skr 2,022 million) and Capital requirement of Skr 193 million (year-end 2022: Skr 162 million).
3Of which related to specialized lending: EAD Skr 6,043 million (year-end 2022: 6,112 million), Risk exposure amount of Skr 4,313 million (year-end 2022: Skr 4,412 million) and Capital requirement of Skr 345 million (year-end 2022: Skr 353 million).

 

Credit risk 

For classification and quantification of credit risk, SEK uses the internal ratings-based (IRB) approach. Specifically, SEK applies the Foundation Approach. Under the Foundation Approach, the company determines the PD within one year for each of its counterparties, while the remaining parameters are established in accordance with CRR. Application of the IRB approach requires the Swedish FSA’s permission and is subject to ongoing supervision. Certain exposures are, by permission from the Swedish FSA, exempted from application of the IRB approach, and, instead, the standardized approach is applied. Counterparty risk exposure amounts in derivatives are calculated in accordance with the standardized approach for counterparty credit risk.

Credit valuation adjustment risk 

Credit valuation adjustment risk is calculated for all over-the-counter derivative contracts, except for credit derivatives used as credit protection and transactions with a qualifying central counterparty. SEK calculates this capital requirement according to the standardized approach.

 

Foreign exchange risk 

Foreign exchange risk is calculated according to the standardized approach, whereas the scenario approach is used for calculating the gamma and volatility risks.


Interim report January–March 2023Page 22 of 28

 

Commodities risk 

Capital requirements for commodity risk are calculated in accordance with the simplified approach under the standardized approach. The scenario approach is used for calculating the gamma and volatility risks.

 

Operational risk 

Capital requirement for operational risk is calculated according to the standardized approach. The company’s operations are divided into business areas as defined in the CRR. The capital requirement for each area is calculated by multiplying a factor depending on the business area by an income indicator. The factors applicable for SEK are 15 percent and 18 percent. The income indicators consist of the average operating income for the past three financial years for each business area.

 

Transitional rules 

The capital adequacy ratios reflect the full impact of IFRS 9 as no transitional rules for IFRS 9 were utilized.

 

Capital buffer requirements 

SEK expects to meet capital buffer requirements with Common Equity Tier 1 capital. The mandatory capital conservation buffer is 2.5 percent. The countercyclical buffer rate that is applied to exposures located in Sweden was increased from 0 percent to 1 percent as of September 29, 2022. As of March 31, 2023, the capital requirement related to relevant exposures in Sweden was 73 percent (year-end 2022: 71 percent) of the total relevant capital requirement regardless of location; this fraction is also the weight applied on the Swedish buffer rate when calculating SEK’s countercyclical capital buffer. On June 21, 2022, the Swedish FSA decided to further increase the countercyclical buffer rate to 2 percent, which will take effect on June 22, 2023. Buffer rates applicable in other countries may have effects on SEK, but as most capital requirements for SEK’s relevant credit exposures are related to Sweden, the potential effect is limited. As of March 31, 2023, the contribution to SEK’s countercyclical buffer from buffer rates in other countries was 0.1 percentage points (year-end 2022: 0.09 percentage points). SEK has not been classified as a systemically important institution by the Swedish FSA. The capital buffer requirements for systemically important institutions that came into force January 1, 2016, therefore do not apply to SEK.

 

Pillar 2 guidance 

The Swedish FSA will in connection with the Supervisory Review and Evaluation Process (”SREP”) determine appropriate levels for the institution’s own funds. The Swedish FSA will then inform the institution of the differences between the appropriate levels and requirements under the Supervisory Regulation, the Buffer Act and the Pillar 2 requirements. These notifications are called Pillar 2 guidance. The Pillar 2 guidance covers both the risk-based capital requirement and the leverage ratio requirement.

Internally assessed economic capital 

 

Skr mn March 31,
2023		 December 31,
2022
Credit risk 7,395 7,202
Operational risk 311 311
Market risk 1,222 1,466
Other risks 265 205
Capital planning buffer 2,697 2,697
Total 11,890 11,881

 

SEK regularly conducts an internal capital adequacy assessment process, during which the company determines how much capital is needed in order to cover its risks. The result of SEK’s assessment of capital adequacy is presented above. For more information regarding the internal capital adequacy assessment process and its methods, see Note 30 to the annual financial statements included in SEK’s 2022 Annual Report on Form 20-F.

 

Liquidity coverage 

 

Skr bn, 12 month average March 31,
2023		 December 31,
2022
Total liquid assets 63.3 58.4
Net liquidity outflows1 14.8 10.9
Liquidity outflows 28.5 25.0
Liquidity inflows 15.1 15.7
Liquidity Coverage Ratio 578% 784%

 

1Net liquidity outflows is calculated as the net of liquidity outflows and capped liquidity inflows. Capped liquidity inflows is calculated in accordance with article 425 of CRR (EU 575/2013) and article 33 of the Commission Delegated Regulation (EU) 2015/61.

 

Information on Liquidity Coverage Ratio (LCR) in accordance with article 447 of the CRR (EU 575/2013), calculated in accordance with the Commission Delegated Regulation (EU) 2015/61.

 

Net stable funding 

 

Skr bn March 31,
2023		 December 31,
2022
Available stable funding 247.6 235.2
Requiring stable funding 210.7 198.2
Net Stable Funding Ratio 118% 119%

 

Information on Net Stable Funding Ratio (NSFR) in accordance with article 447 of the CRR (EU 575/2013), calculated in accordance with the Commission Delegated Regulation (EU) 2015/61.


Interim report January–March 2023Page 23 of 28

 

Note 10. Exposures

 

Net exposures are reported after taking into consideration effects of guarantees and credit default swaps. Amounts are calculated in accordance with capital adequacy calculations, but before the application of credit conversion factors.

 

Total net exposures by exposure class

 

  Credits & interest-bearing
securities		 Committed undisbursed loans,
derivatives, etc.		 Total
  March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022
Skr bn Amount % Amount % Amount % Amount % Amount % Amount %
Central governments 161.8 43.4 162.3 46.2 53.1 73.2 65.0 75.0 214.9 48.2 227.3 51.9
Regional governments 19.7 5.3 22.5 6.4 0.9 1.2 0.8 0.9 20.6 4.6 23.3 5.3
Multilateral development banks 10.4 2.8 6.1 1.7 – – 0.4 0.5 10.4 2.3 6.5 1.5
Public Sector Entity 2.6 0.7 2.1 0.6 – – – – 2.6 0.6 2.1 0.5
Financial institutions 41.4 11.1 26.1 7.4 8.3 11.5 7.5 8.6 49.7 11.2 33.6 7.6
Corporates 137.1 36.7 132.4 37.7 10.2 14.1 13.0 15.0 147.3 33.1 145.4 33.2
Total 373.0 100.0 351.5 100.0 72.5 100.0 86.7 100.0 445.5 100.0 438.2 100.0

 

Net exposure by region and exposure class, as of March 31, 2023

 

Skr bn Middle East/ Africa Asia excl. Japan Japan North America Latin America Sweden West European countries excl. Sweden Central- and East European countries Total
Central governments 0.0 0.3 1.7 0.7 – 189.1 20.8 2.3 214.9
Regional governments – – – – – 17.2 3.4 – 20.6
Multilateral development banks – 0.3 – 3.3 – – 6.8 – 10.4
Public Sector Entity – – – – – – 2.6 – 2.6
Financial institutions 0.1 – 2.3 2.8 – 23.0 21.4 0.1 49.7
Corporates 0.2 0.8 1.4 4.7 3.9 101.1 34.0 1.2 147.3
Total 0.3 1.4 5.4 11.5 3.9 330.4 89.0 3.6 445.5

 

Net exposure by region and exposure class, as of December 31, 2022

 

Skr bn Middle East/ Africa Asia excl. Japan Japan North America Latin America Sweden West European countries excl. Sweden Central- and East European countries Total
Central governments 0.0 0.3 2.4 0.8 – 191.3 30.3 2.2 227.3
Regional governments – – – – – 19.2 4.1 – 23.3
Multilateral development banks – 0.3 – 1.1 – – 5.1 – 6.5
Public Sector Entity – – – – – – 2.1 – 2.1
Financial institutions 0.1 – 0.2 1.3 – 16.0 15.9 0.1 33.6
Corporates 0.2 1.0 1.3 6.5 3.8 97.0 34.4 1.2 145.4
Total 0.3 1.6 3.9 9.7 3.8 323.5 91.9 3.5 438.2
Interim report January–March 2023Page 24 of 28

 

Net exposure to European countries, excluding Sweden

 

Skr bn March 31,
2023		 December 31,
2022
France 17.2 16.2
Germany 14.1 13.1
United Kingdom 10.5 10.5
Finland 10.3 11.6
Luxembourg 10.3 10.6
Denmark 6.1 5.6
Norway 5.2 5.4
The Netherlands 4.8 4.0
Spain 4.1 2.3
Belgium 3.2 3.2
Poland 2.4 2.3
Ireland 1.4 1.5
Portugal 1.0 1.0
Switzerland 0.5 0.6
Serbia 0.5 0.5
Czech Republic 0.2 0.2
Lithuania 0.2 0.2
Italy 0.2 0.2
Estonia 0.1 0.1
Iceland 0.1 0.1
Latvia 0.1 0.1
Slovakia 0.1 0.1
Austria – 5.9
Total 92.6 95.3

Note 11. Reference interest rate reform

 

Since the 2010s, there has been an ongoing reform to replace or amend benchmark interest rates such as LIBOR and other interbank offered rates (“IBOR”). SEK’s exposure that is directly affected by the reference interest rate reform is primarily its lending contracts with floating interest rates, its lending and borrowing contracts at fixed interest rates that are hedged to floating interest rates as well as swaps to floating interest rates. The main floating interest rate exposures relate to USD LIBOR, STIBOR and EURIBOR. LIBOR is the group of benchmark interest rates that currently has a timed settlement plan. GBP LIBOR, CHF LIBOR, EUR LIBOR, JPY LIBOR and USD LIBOR 1W and USD LIBOR 2M ceased on December 31, 2021. For USD LIBOR, the rest of the maturities will expire after June 30, 2023. Outstanding exposures with a reference interest rate of USD LIBOR and a maturity after June 2023 will be converted during the period up to June 30, 2023. Change of reference interest rate during the reform will be carried out with the intention that the change shall be financially neutral for each party. SEK has lending contracts and derivative contracts maturing after June 30, 2023 in USD LIBOR with a nominal amount of USD 1,588 million and USD 19,000 million, respectively. SEK has adhered to the 2020 ISDA Fallback Protocol, which sets a market standard for handling between counterparties the conversion of derivatives to a new reference interest rate during the reference interest rate reform. For lending contracts, conversion is handled by agreement. SEK has applied the relief under IFRS 9 Reform for new reference rates.

 

Note 12. Transactions with related parties

 

Transactions with related parties are described in Note 27 to the annual financial statements in SEK’s 2022 Annual Report on Form 20-F. No material changes have taken place in relation to transactions with related parties compared to the description in SEK’s 2022 Annual Report on Form 20-F.

 

Note 13. Events after the reporting period

 

No events with significant impact on the information in this report have occurred after the end of the reporting period.

Interim report January–March 2023Page 25 of 28

 

The Board of Directors and the Chief Executive Officer confirm that this interim report provides a fair overview of the Consolidated Group’s operations and financial position and results, and describes material risks and uncertainties facing the Consolidated Group.

 

Stockholm, April 24, 2023

 

AB SVENSK EXPORTKREDIT

 

SWEDISH EXPORT CREDIT CORPORATION

 

Lennart Jacobsen Håkan Berg
Chairman of the Board Director of the Board
     
Anna Brandt Paula da Silva Reinhold Geijer
Director of the Board Director of the Board Director of the Board
       
Hanna Lagercrantz Katarina Ljungqvist Eva Nilsagård
Director of the Board Director of the Board Director of the Board
     
  Magnus Montan  
  Chief Executive Officer  

 

SEK has established the following expected dates for the publication of financial information and other related matters:

 

July 14, 2023   Interim report for the period January 1, 2023 – June 30, 2023
October 18, 2023   Interim report for the period January 1, 2023 – September 30, 2023
January 23, 2024   Interim report for the period January 1, 2023 – December 31, 2023

 

The report contains information that SEK will disclose pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on April 24, 2023, 15:00 (CEST).

Additional information about SEK, including investor presentations and SEK’s 2022 Annual Report on Form 20-F, is available at www.sek.se. Information available on or accessible through SEK’s website is not incorporated herein by reference.

 

Interim report January–March 2023Page 26 of 28

 

 

 

Alternative performance measures (see *)

Alternative performance measures (APMs) are key performance indicators that are not defined under IFRS or in the Capital Requirements Directive IV (CRD IV) or in regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (CRR). SEK has presented these, either because they are in common use within the industry or because they comply with SEK’s assignment from the Swedish government. The APMs are used internally to monitor and manage operations, and are not considered to be directly comparable with similar key performance indicators presented by other companies. For additional information regarding the APMs, refer to www.sek.se.

 

* After-tax return on equity

Net profit, expressed as a percentage per annum of the current year’s average equity (calculated using the opening and closing balances for the report period).

 

* Average interest-bearing assets

This item includes cash and cash equivalents, treasuries/government bonds, other interest-bearing securities except loans, loans in the form of interest-bearing securities, loans to credit institutions and loans to the public, and is calculated using the opening and closing balances for the reporting period.

 

* Average interest-bearing liabilities

This item includes borrowing from credit institutions, borrowing from the public and debt securities issued and is calculated using the opening and closing balances for the reporting period.

 

Basic and diluted earnings per share (Skr)

Net profit divided by the average number of shares, which amounted to 3,990,000 for each period.

 

* CIRR loans as percentage of new lending

The proportion of officially supported export credits (CIRR) of new lending.

 

CIRR-system

The CIRR-system comprises of the system of officially supported export credits (CIRR).

 

Common Equity Tier 1 capital ratio

The capital ratio is the quotient of total common equity tier 1 capital and the total risk exposure amount.

 

Green bond

A green bond is a bond where the capital is earmarked for various forms of environmental projects. 

   

Green lending and green loans

SEK’s green lending comprises green loans that promote the transition to a low-carbon economy. The classification is performed by sustainability analysts at SEK. The effects that the loan will give rise to, such as reduced emissions of greenhouse gases, are monitored and reported. Green loans are categorized under SEK’s framework for green bonds and green loans finance products or services that lead to significant and demonstrable progress toward the goal of sustainable development.

 

Leverage ratio

Tier 1 capital expressed as a percentage of the exposure measured under CRR (refer to Note 9).

 

Liquidity coverage ratio (LCR)

The liquidity coverage ratio is a liquidity metric that shows SEK’s highly liquid assets in relation to the company’s net cash outflows for the next 30 calendar days. An LCR of 100 percent means that the company’s liquidity reserve is of sufficient size to enable the company to manage stressed liquidity outflows over a period of 30 days. Unlike the Swedish FSA’s rules, the EU rules take into account the outflows that correspond to the need to pledge collateral for derivatives that would arise as a result of the effects of a negative market scenario.

 

Loans

Lending pertains to all credit facilities provided in the form of interest-bearing securities, and credit facilities granted by traditional documentation. SEK considers these amounts to be useful measurements of SEK’s lending volumes. Accordingly, comments on lending volumes in this report pertain to amounts based on this definition.

 

* Loans, outstanding and undisbursed

The total of loans in the form of interest-bearing securities, loans to credit institutions, loans to the public and loans, outstanding and undisbursed. Deduction is made for cash collateral under the security agreements for derivative contracts and deposits with time to maturity exceeding three months (see the Statement of Financial Position and Note 8).

 

Net stable funding ratio (NSFR)

This ratio measures stable funding in relation to the company’s illiquid assets over a one-year, stressed scenario in accordance with CRRII.

  

* New lending

New lending includes all new committed loans, irrespective of tenor. Not all new lending is reported in the Consolidated Statement of Financial Position and the Consolidated Statement of Cash Flows since certain portions comprise committed undisbursed loans (see Note 8). The amounts reported for committed undisbursed loans may change when presented in the Consolidated Statement of Financial Position due to changes in exchange rates, for example.

 

* New long-term borrowings

New borrowings with maturities exceeding one year, for which the amounts are based on the trade date.

 

* Outstanding senior debt

The total of borrowing from credit institutions, borrowing from the public and debt securities issued.

 

Own credit risk

Net fair value change due to credit risk on financial liabilities designated as at fair value through profit or loss.

 

Repurchase and redemption of own debt

The amounts are based on the trade date.

 

Social loans

Social loans are offered to exporters and suppliers for projects, often in developing countries, whose aim is to improve social conditions.

 

Sustainability-linked loans

Sustainability-linked loans concern working capital connected to the borrower’s sustainability targets, for example, energy-efficiency enhancements, reduced transportation or reduced number of accidents. If the borrower reaches their targets, they are rewarded with a lower interest rate.

 

Swedish exporters

SEK’s clients that directly or indirectly promote Swedish export.

 

Tier 1 capital ratio

The capital ratio is the quotient of total tier 1 capital and the total risk exposure amount.

 

Total capital ratio

The capital ratio is the quotient of total Own funds and the total risk exposure amount.

 

Unless otherwise stated, amounts in this report are in millions (mn) of Swedish kronor (Skr), abbreviated “Skr mn” and relate to the group consisting of the Parent Company and its consolidated subsidiary (together, the “Group” or the “Consolidated Group”). AB Svensk Exportkredit (SEK), is a Swedish corporation with the identity number 556084-0315, and with its registered office in Stockholm, Sweden. SEK is a public limited liability company as defined in the Swedish Companies Act. In some instances, under Swedish law, a public company is obliged to add “(publ.)” to its company name.

Interim report January–March 2023Page 27 of 28

 

 

About Swedish Export Credit Corporation (SEK)

 

SEK is owned by the Swedish state, and since 1962 has enabled growth for thousands of Swedish companies. To expand their production, make acquisitions, employ more people and enable selling goods and services to customers worldwide.

 

SEK’s mission Our mission is to ensure access to financial solutions for the Swedish export industry on commercial and sustainable terms. The mission includes making available fixed-interest export credits within the officially supported CIRR-system.
SEK’s vision Our vision is a sustainable world through increased Swedish exports.
SEK’s core values We are professionals, make the difficult easy and build sustainable relationships.
SEK’s clients We finance exporters, their subcontractors and foreign clients. The target group is companies with annual sales exceeding Skr 500 million and that are linked to Swedish interests and exports.
SEK’s partnerships Through Team Sweden, we have close partnerships with other export promotion agencies in Sweden such as Business Sweden and The Swedish Export Credit Agency (EKN). Our international network is substantial and we also work with numerous Swedish and international banks.
Interim report January–March 2023Page 28 of 28
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