20 09 Highlights of annual report
Highlights of Stadshypotek s annual report January December Summary Operating profit was SEK 1,341 million in the fourth quarter compared with SEK 1,400 million in the third quarter. Operating profit for was SEK 5,761 million (3,682). Recoveries exceeded loan losses for the year. Lending increased by SEK 70 billion (91) to SEK 685 billion. The increase in included SEK 44 billion from the establishment of the branch in Norway.
Highlights of Stadshypotek s annual report PERFORMANCE Full year compared with full year Stadshypotek s operating profit increased by SEK 2,079 million to SEK 5,761 million (3,682). As of August, Stadshypotek s branch in Norway is included in the figures and this contributed SEK 346 million to operating profit. Excluding the branch in Norway, operating profit rose by SEK 1,733 million. Net interest income increased by SEK 2,167 million, of which SEK 368 million was attributable to the branch in Norway. The increase in net interest income was due to higher volumes and higher margins as a result of the company s good position in the funding market. Net gains/losses on financial operations were SEK -101 million (-71). Expenses amounted to SEK 212 million (191), of which SEK 38 million (16) was attributable to the branch in Norway. Recoveries exceeded new loan losses and the net amount recovered was SEK 31 million (75), which corresponds to a loan loss ratio of -0.00 percent (-0.01) of lending. After deduction of the provision for probable loan losses, the volume of impaired was SEK 116 million (193). SEK 61 million (56) of the impaired were non-performing, while SEK 55 million (137) were on which the borrowers pay interest and amortisation, but which are considered doubtful. In addition, there were non-performing of SEK 591 million (605) that are not assessed as being impaired. After deductions for specific provisions totalling SEK -55 million (-73) and provisions by group of SEK -11 million (-12) for probable loan losses, net impaired totalled SEK 50 million (108). Q4 compared with Q3 Stadshypotek s operating profit for the fourth quarter of decreased by SEK 59 million to SEK 1,341 million (1,400). Net interest income was SEK 1,414 million (1,568), of which SEK 130 million (132) was attributable to the branch in Norway. The average margin in the private market during the quarter was 0.65 percent (0.63). Net gains/losses on financial operations increased by SEK 108 million to SEK -12 million (-120). GROWTH IN LENDING During the year, to the public increased by SEK 70 billion or 11 percent to SEK 685 billion (615). Stadshypotek's share of the private market in Sweden was approximately 25 percent and its share of the corporate market in Sweden was approximatel y 30 percent. CAPITAL ADEQUACY The capital ratio according to Basel II was 39.9 percent (37.1) while the Tier 1 capital ratio calculated according to Basel II was 28.4 percent (25.9). Further information concerning capital adequacy is provided in the Capital base and Capital requirement section. Rating Stadshypotek s rating remained unchanged, with a stable outlook. Stadshypotek Covered bonds Long-term Short-term Moody s Aaa - P-1 Standard & Poor s AA- A-1+ Fitch AA- F1+ 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 and the directives issued by the Swedish Financial Supervisory Authority are also applied. As of the financial year, new regulations in IAS 1 have affected the presentation of the Group s financial reports so that changes in equity not deriving from transactions with the owners are presented in a separate statement of Other comprehensive income. In addition to total comprehensive income for the period, changes in equity thus only include changes in equity deriving from transactions with the owner. As from, IFRS 8 Operating Segments is applied whereby identification and measurement of reportable segments is carried out on the basis of the same principles as used for internal reporting to central and managing functions. The application of IFRS 8 has not led to any changes in the division of segments for the Stadshypotek Group. In all other respects, the highlights of the annual report have been prepared in accordance with the same accounting policies and calculation methods that were applied in the annual report for. Stockholm, 18 February 2010 Lars Kahnlund Chief executive Highlights of annual report JANUARY DECEMBER 1
Stadshypotek Group Income statement Q 4 Q 3 Jan Dec Interest income 4,800 5,076-5 21,944 29,006-24 Interest expense -3,386-3,508-3 -15,877-25,106-37 Net interest income Note 1 1,414 1,568-10 6,067 3,900 56 Net gains/losses on financial operations Note 2-12 -120-90 -101-71 42 Fee and commission income 2 3-33 10 12-17 Fee and commission expense -8-9 -11-34 -43-21 Net fee and commission income -6-6 0-24 -31-23 Total income 1,396 1,442-3 5,942 3,798 56 Staff costs -11-10 10-41 -40 3 Other administrative expenses Note 3-45 -37 22-166 -149 11 Depreciation and amortisation -2-1 - -5-2 - Total expense -58-48 21-212 -191 11 Profit before loan losses 1,338 1,394-4 5,730 3,607 59 Net loan losses Note 4 3 6-50 31 75-59 Operating profit 1,341 1,400-4 5,761 3,682 56 Tax -355-368 -4-1,521-1,027 48 Profit for the period 986 1,032-4 4,240 2,655 60 Net earnings per share, SEK 6,089 6,369 26,176 16,388 Consolidated statement of comprehensive income Q 4 Q 3 Jan Dec Profit for the period 986 1,032-4 4,240 2,655 60 Translation differences for the period 10 1-14 -4 - Total comprehensive income for the period 996 1,033-4 4,254 2,651 60 Quarterly earnings performance Q 4 Q 3 Q 2 Q 1 Q 4 Interest income 4,800 5,076 5,486 6,582 8,392 Interest expense -3,386-3,508-3,894-5,089-7,228 Net interest income 1,414 1,568 1,592 1,493 1,164 Net gains/losses on financial operations -12-120 49-18 -93 Net fee and commission income -6-6 -6-6 -8 Total income 1,396 1,442 1,635 1,469 1,063 Staff costs -11-10 -10-10 -8 Other administrative expenses -45-37 -42-42 -44 Depreciation and amortisation -2-1 -1-1 -1 Total expense -58-48 -53-53 -53 Profit before loan losses 1,338 1,394 1,582 1,416 1,010 Loan losses 3 6 17 5-13 Operating profit 1,341 1,400 1,599 1,421 997 2 Highlights of annual report JANUARY DECEMBER
Balance sheet Group Assets Loans to credit institutions 10,578 26,887 Loans to the public Note 5 684,920 615,263 Value change of interest hedged item in portfolio hedge 2,979 144 Derivative instruments Note 6 17,416 13,374 Other assets 6,897 3,830 Total assets 722,790 659,498 Liabilities and equity Due to credit institutions 212,983 182,602 Issued securities 458,535 430,404 Derivative instruments Note 6 3,433 3,231 Other liabilities and provisions 17,347 14,443 Subordinated 8,800 8,800 Total liabilities 701,098 639,480 Shareholder s equity 21,692 20,018 Total liabilities and equity 722,790 659,498 in equity Share capital Translation reserve Retained profits Total Opening equity 4,050-4 15,972 20,018 Total comprehensive income for the period 14 4,240 4,254 Group contribution provided -2,580-2,580 Equity December 4,050 10 17,632 21,692 Opening equity 4,050-15,823 19,873 Total comprehensive income for the period -4 2,655 2,651 Group contribution provided -2,506-2,506 Equity December 4,050-4 15,972 20,018 Cash flow statement Cash flow from operating activities 2,491 52,404 Cash flow from investing activities 0-47,981 Cash flow from financing activities -3,480-3,425 Cash flow for the period -989 998 Liquid funds at beginning of period 1,439 434 Cash flow for the period -989 998 Exchange rate difference on liquid funds 40 7 Liquid funds at end of period 490 1,439 Highlights of annual report JANUARY DECEMBER 3
Key figures Net interest margin, 0.88 0.66 C/I ratio before loan losses, 3.6 5.1 C/I ratio after loan losses, 3.0 3.1 Return on equity, 18.3 12.2 Capital ratio according to Basel II, 39.9 37.1 Tier 1 ratio according to Basel II, 28.4 25.9 Turnover of own debt instruments Stadshypotek issues and repurchases debt instruments which it has issued on its account. This is for the purposes of financing its operations. Turnover during the period was as follows: Issued (sold) SEK 381bn Repurchased SEK 107bn Matured SEK 253bn Segment information January December Private Corporate Total Private Corporate Total Net interest income 4,238 1,829 6,067 2,744 1,156 3,900 Net gains/losses on financial operations -70-31 -101-50 -21-71 Net fee and commission income -16-8 -24-22 -9-31 Total income 4,152 1,790 5,942 2,672 1,126 3,798 Administrative expenses -150-62 -212-136 -55-191 Profit before loan losses 4,002 1,728 5,730 2,536 1,071 3,607 Loan losses 13 18 31 64 11 75 Operating profit 4,015 1,746 5,761 2,600 1,082 3,682 Loans to the public 474,146 210,774 684,920 435,390 179,873 615,263 Private market is defined as lending secured by mortgages in single-family or two-family houses, second homes, housing co-operative apartments or residential farms. Corporate market is lending secured by mortgages in multi-family dwellings, family farms, commercial and office buildings or state and municipal. 4 Highlights of annual report JANUARY DECEMBER
Parent company Income statement Q 4 Q 3 Jan Dec Interest income 4,800 5,076-5 21,944 29,006-24 Interest expense -3,386-3,508-3 -15,877-25,106-37 Net interest income Note 1 1,414 1,568-10 6,067 3,900 56 Net gains/losses on financial operations Note 2-12 -120-90 -101-71 42 Fee and commission income 2 3-33 10 12-17 Fee and commission expense -8-9 -11-34 -43-21 Net fee and commission income -6-6 0-24 -31-23 Total income 1,396 1,442-3 5,942 3,798 56 Staff costs -11-10 10-41 -40 3 Other administrative expenses Note 3-45 -37 22-166 -149 11 Depreciation and amortisation -2-1 - -5-2 - Total expense -58-48 21-212 -191 11 Profit before loan losses 1,338 1,394-4 5,730 3,607 59 Net loan losses Note 4 3 6-50 31 75-59 Operating profit 1,341 1,400-4 5,761 3,682 56 Appropriations 48 - - 48-48 - Profit before tax 1,389 1,400-4 5,809 3,634 56 Tax -367-368 0-1,533-1,014 51 Profit for the period 1,022 1,032-1 4,276 2,620 63 Balance sheet Assets Loans to credit institutions 10,578 26,887 Loans to the public Note 5 684,920 615,263 Value change of interest hedged item in portfolio hedge 2,979 144 Derivative instruments Note 6 17,416 13,374 Other assets 6,897 3,830 Total assets 722,790 659,498 Liabilities and equity Due to credit institutions 212,983 208,523 Issued securities 458,535 404,483 Derivative instruments Note 6 3,433 3,231 Other liabilities and provisions 17,347 14,430 Subordinated 8,800 8,800 Total liabilities 701,098 639,467 Untaxed reserves - 48 Shareholder s equity 21,692 19,983 Total liabilities and equity 722,790 659,498 Highlights of annual report JANUARY DECEMBER 5
Notes The information in these notes relates to both the Group and the parent company. Note 1 Net interest income Q 4 Q 3 Interest income Loans to the public 4,754 5,029-5 21,677 28,306-23 Loans to credit institutions 46 47-2 267 700-62 Total interest income 4,800 5,076-5 21,944 29,006-24 Interest expense Due to credit institutions -604-640 -6-3,460-6,835-49 Issued securities -3,873-3,712 4-15,388-16,753-8 Subordinated -12-21 -43-112 -419-73 Other 1,103 865 28 3,083-1,099 Total -3,386-3,508-3 -15,877-25,106-37 Net interest income 1,414 1,568-10 6,067 3,900 56 In the parent company, interest expense for liabilities to credit institutions was SEK -606 million in Q4 (-659), and SEK -3,657 million (-7,303) for the January to December period. Interest expense for issued securities in the parent company was SEK -3,879 million in Q4 (-3,694), and SEK -15,191 million (-16,285) for the January to December period. Note 2 Net gains/losses on financial operations Q 4 Q 3 Hedge accounting, fair value hedges -13-121 -89-130 -397-67 of which hedged item -26 109 - -640-5,103-87 of which hedging 13-230 - 510 4,706-89 Loan receivables, valued at cost 126 129-2 513 64 - Financial liabilities, valued at cost -73-72 1-394 67 - Derivative instrument not recognised as hedges -52-56 -7-90 195 - Total -12-120 -90-101 -71 42 Note 3 Other administrative expenses Q 4 Q 3 IT costs -25-18 39-87 -95-8 Cost of premises -1-1 0-4 -4 0 Purchased services -17-15 13-62 -34 82 Other administrative expenses -2-3 -33-13 -16-19 Total -45-37 22-166 -149 11 6 Highlights of annual report JANUARY DECEMBER
Note 4 Loan losses Q 4 Q 3 Specific provision for individually assessed loan receivables Provision for the period -11 1 - -14-19 -26 Writeback of previous provisions 1 3-67 17 14 21 Total -10 4-3 -5 - Collective provision Provision by group for individually assessed loan receivables 0 0-1 -12 - Write-offs Actual loan losses for the period -10-6 67-36 -15 - Utilised share of previous provisions 4 1-17 9 89 Writeback of actual loan losses in previous years 19 7-46 98-53 Total 13 2-27 92-71 Net loan losses 3 6-50 31 75-59 Impaired Impaired 116 193 Specific provision for individually assessed loan receivables -55-73 Provision by group for individually assessed loan receivables -11-12 Net impaired 50 108 Level of impaired, 0.01 0.02 Reserve ratio for impaired, 47.3 37.8 Loan loss ratio, 0.00-0.01 Non-performing which are not impaired 591 605 Highlights of annual report JANUARY DECEMBER 7
Note 5 Loans to the public Loans to the public, by sector ember Loans before provisions Provisions for probable loan losses Loans after provisions Loans before provisions Provisions for probable loan losses Loans after provisions Households 495,951-19 495,932 453,674-16 453,658 Public sector, municipal companies 15,801-15,801 8,974-8,974 Housing co-operative associations 92,887-15 92,872 90,386-28 90,358 Other legal entities 80,347-21 80,326 62,314-29 62,285 Total to the public, before collective provisions 684,986-55 684,931 615,348-73 615,275 Collective provision -11-11 -12-12 Total to the public 684,986-66 684,920 615,348-85 615,263 of which in the Norwegian operations Households 39,299-39,299 36,612-36,612 Public sector, municipal companies - - - - - - Housing co-operative associations 6,172-6,172 4,975-4,975 Other legal entities 3,458-3,458 2,610-2,610 Total to the public in the Norwegian operations 48,929-48,929 44,197-44,197 Loans to the public, by type of property ember Loans before provisions Provisions for probable loan losses Loans after provisions Loans before provisions Provisions for probable loan losses Loans after provisions Single-family housing 367,378-8 367,370 340,637-11 340,626 Housing co-operative apartments 101,679-3 101,676 90,695-1 90,694 Owner-occupied apartments* 5,100-5,100 4,070-4,070 Private market 474,157-11 474,146 435,402-12 435,390 Multi-family housing 176,070-32 176,038 159,474-51 159,423 Offices and commercial buildings 34,759-12 34,747 20,472-10 20,462 Corporate market 210,829-44 210,785 179,946-61 179,885 Total to the public, before collective provisions 684,986-55 684,931 615,348-73 615,275 Collective provision -11-11 -12-12 Total to the public 684,986-66 684,920 615,348-85 615,263 of which in the Norwegian operations Single-family housing 34,184-34,184 32,473-32,473 Housing co-operative apartments 15-15 68-68 Owner-occupied apartments* 5,100-5,100 4,070-4,070 Private market 39,299-39,298 36,611-36,611 Multi-family housing 8,930-8,930 6,964-6,964 Offices and commercial buildings 700-700 622-622 Corporate market 9,630-9,630 7,586-7,586 Total to the public in the Norwegian operations 48,929-48,929 44,197-44,197 * Owner-occupied apartments entail individual ownership of a specific apartment in a multi-family dwelling and a share in an association for joint management of the property. 8 Highlights of annual report JANUARY DECEMBER
Non-performing by borrower category ember Non-performing which are not impaired Non-performing which are included in impaired Non-performing which are not impaired Non-performing which are included in impaired Households 535 35 512 29 Public sector, municipal companies - - - - Housing co-operative associations 19 10 44 3 Other legal entities 37 16 49 24 Total 591 61 605 56 of which in the Norwegian operations Households 57-11 - Public sector, municipal companies - - - - Housing co-operative associations 18 - - - Other legal entities - - - - Total non-performing in the Norwegian operations 75-11 - Non-performing by type of property ember Non-performing which are not impaired Non-performing which are included in impaired Non-performing which are not impaired Non-performing which are included in impaired Single-family housing 431 15 417 22 Housing co-operative apartments 88 3 98 2 Owner-occupied apartments* 10 - - - Private market 529 18 515 24 Multi-family housing 44 33 81 23 Offices and commercial buildings 18 10 9 9 Corporate market 62 43 90 32 Total 591 61 605 56 of which in the Norwegian operations Single-family housing 45-11 - Housing co-operative apartments 2 - - - Owner-occupied apartments* 10 - - - Private market 57-11 - Multi-family housing 18 - - - Offices and commercial buildings - - - - Corporate market 18 - - - Total non-performing in the Norwegian operations 75-11 - *For a definition see page 8. Highlights of annual report JANUARY DECEMBER 9
Impaired by borrower category ember Impaired Provision for probable losses Net impaired Impaired Provision for probable losses Net impaired Households 40-19 21 39-16 23 Public sector, municipal companies - - - - - - Housing co-operative associations 41-15 26 89-28 61 Other legal entities 35-21 14 65-29 36 Total 116-55 61 193-73 120 Impaired by type of property ember Impaired Provision for probable losses Net impaired Impaired Provision for probable losses Net impaired Single-family housing 18-8 10 27-11 16 Housing co-operative apartments 3-3 0 3-1 2 Owner-occupied apartments* - - - - - - Private market 21-11 10 30-12 18 Multi-family housing 69-33 36 142-51 91 Offices and commercial buildings 26-11 15 21-10 11 Corporate market 95-44 51 163-61 102 Total 116-55 61 193-73 120 *For a definition see page 8. Impaired relate in their entirety to the Swedish operations. The reserved amount for probable losses in the tables showing non-performing and impaired consists of a specific provision for individually assessed receivables. Note 6 Derivative instruments Fair value Fair value Positive values Interest-rate related instruments 14,340 6,140 Currency-related instruments 3,076 7,234 Total 17,416 13,374 Negative values Interest-rate related instruments 2,089 2,460 Currency-related instruments 1,344 771 Total 3,433 3,231 Net 13,983 10,143 Stadshypotek mainly uses interest rate swaps and caps as hedge instruments for protection against changes in value due to changes in market interest rates. Hedge accounting is applied for these hedges in accordance with the company s accounting policies. Interest rate swaps and currency futures are also used as hedges for fair value changes without hedge accounting being applied. 10 Highlights of annual report JANUARY DECEMBER
Related-party transactions Group claims/group liabilities Group Parent company Balance sheet Group claims Loans to credit institutions 10,551 26,851 10,551 26,851 Derivative instruments 17,277 12,814 17,277 12,814 Other assets 1,681 47 1,681 47 Total 29,509 39,712 29,509 39,712 Group liabilities Due to credit institutions 204,036 171,853 204,036 197,774 Derivative instruments 3,317 3,036 3,317 3,036 Other liabilities 3,680 6,319 3,680 6,319 Subordinated 8,800 8,800 8,800 8,800 Total 219,833 190,008 219,833 215,929 INCOME STATEMENT Interest income 267 700 267 700 Interest expense -3,537-6,401-3,734-6,869 Fee and commission expense -19-21 -19-21 Other administrative expenses -141-122 -141-122 Total -3,430-5,844-3,627-6,312 Inter-company transactions are reported under the above headings in the balance sheet and income statement, either between the companies in the Stadshypotek Group or between these and other companies in the Handelsbanken Group. Highlights of annual report JANUARY DECEMBER 11
Disclosures Risk Stadshypotek s operations are conducted with a controlled, low level of risk. Stadshypotek s risks are credit risk, market risk, liquidity risk, operational risk and business risk. Credit risk is the risk that an individual borrower cannot fulfil his or her commitments. Market risk is the risk of price changes in the financial markets. The market risks affecting Stadshypotek are interest rate risk and currency risk. Liquidity risk is the risk that Stadshypotek will not be able to meet its payment obligations when they fall due. Operational risk is the risk of processing errors in procedures and systems, and business risk is the risk of unexpected changes in financial performance. Credit risk is considered to be the most significant risk for Stadshypotek. The Stadshypotek board establishes policy documents and instructions describing how various risks should be managed and reported. Stadshypotek s risk management aims to ensure that the strict approach to risk that the board has established is maintained. Stadshypotek s lending operations and treasury function are integrated with those of Handelsbanken, which means that Stadshypotek s lending is carried out via the Bank s branch office network. A collaboration agreement regulates the overall relationship between the parties and relates to the services which the branches are to perform on behalf of Stadshypotek. Thus, business operations at Stadshypotek are conducted according to the same fundamental principles which apply at Handelsbanken. The Bank s culture is based on the responsibility of each employee who makes business decisions. The person who best knows the customer and the market conditions is also in the best position to assess the risk. In the Bank s decentralised organisation, the positive and negative outcomes of each branch are evaluated, which provides a natural risk limitation and caution in business operations. The responsibility of those who make business decisions is supplemented by checking that excessive risks are not taken in individual transactions or local operations. In lending, this means that limits are set for large and these are assessed in a special credit organisation. Decisions on limits are made at the branch, regional or central level, depending on the size of the credit limit. For market risks and liquidity risks, the corresponding control at Stadshypotek implies that the board of the company establish limits which restrict these risks. There is also risk control independent of the treasury function at Stadshypotek s Control and Accounting Department which is responsible for regular follow-up and monitoring of the market risks, liquidity risks and counterparty risks. The risk control function carries out daily measurements and checks to ensure that risk exposure remains within the set limits. Limit utilisation is reported internally within the company, and to the parent company s central risk control function. In addition, limit utilisation is reported regularly to the chief executive and board of the company as well as to the group chief executive, CFO, and board of Handelsbanken. Stadshypotek is also covered by the central risk control at Handelsbanken, which is designed to identify the Bank s risks, gauge them, and ensure that management of these risks complies with the Bank s low risk tolerance. Moreover, Stadshypotek has a procedure for continual capital planning to ensure that Stadshypotek has a sufficient amount of capital to secure the company s survival if a serious loss were to occur, despite the measures taken to manage the risks. The method for calculating economic capital ensures that all risks are considered in a uniform manner when the need for capital is assessed. Information about credit risks regarding loan losses and nonperforming and impaired can be found in notes 4 and 5 of this highlights report. As at ember, Stadshypotek s interest rate risk in the case of a parallel increase in the yield curve of one percentage point was SEK -306 million (-183). Capital-related matters At the start of the transition to Basel II, Stadshypotek entered into a guarantee facility relating to mortgages for housing cooperative properties, to speed up the transition. In June, Stadshypotek utilised the guarantee, which had a 0.74 percentage point effect on the Tier 1 ratio as at ember. This transaction affects only capital adequacy, in accordance with the transitional rules. 12 Highlights of annual report JANUARY DECEMBER
Capital base and capital requirement Capital base Equity 21,692 20,018 Deduction for intangible assets -15 - Special deduction for IRB institutions -44-105 Tier 1 capital 21,633 19,913 Perpetual subordinated 5,300 5,300 Dated subordinated 3,500 3,500 Special deduction for IRB institutions -44-105 Tier 2 capital 8,756 8,695 Capital base 30,389 28,608 Capital adequacy analysis Capital requirement in Basel II compared with Basel I 21 23 Capital requirement in Basel II compared with transitional rules 26 25 Capital ratio according to Basel II 39.9 37.1 Capital ratio according to Basel I 8.2 8.5 Capital ratio according to transitional rules 10.3 9.4 Tier 1 ratio according to Basel II 28.4 25.9 Tier 1 ratio according to Basel I 5.8 5.9 Tier 1 ratio according to transitional rules 7.3 6.6 Capital requirement Credit risk according to standardised approach 21 53 Credit risk according to IRB approach 5,543 5,493 Operational risk 533 615 Total capital requirement according to Basel II 6,097 6,161 Adjustment according to transitional rules 17,594 18,100 Capital requirement according to Basel II, transitional rules 23,691 24,261 Capital base in relation to capital requirement Basel II 498 464 Capital base in relation to capital requirement Basel I 103 106 Capital base in relation to capital requirement according to transitional rules 128 118 The figures reported in this section refer to the minimum capital requirements under Pillar 1 of the new capital adequacy rules in Basel II. In the table, According to Basel II means that the figures are based on the minimum capital requirements after the transitional rules have ceased to apply. In December, the Swedish Financial Supervisory Authority decided that the transitional rules would apply for a further two years, that is until the end of 2011. Handelsbanken has decided to implement the advanced IRB method for corporate exposues and this also applies for Stadshypotek. Handelsbanken is planning to start using this method during 2010. Risk-weighted assets according to Basel I 371,552 339,871 Capital requirement according to Basel I (8 of risk-weighted assets) 29,724 27,190 Risk-weighted assets in accordance with transitional rules 296,142 303,259 Transitional rules result in lowest permitted capital requirement 23,691 24,261 Risk-weighted assets according to Basel II (capital requirement/8) 76,213 77,013 Credit risks ember Standardised approach Capital requirement Exposure after credit risk protection (EAD) IRB approach Average risk weight Capital requirement Institutions 6 - - - Companies - 188,726 22.5 3,398 Households 10 477,212 5.6 2,145 Others 5 - - - Total 21 665,938 10.4 5,543 Credit risks ember Standardised approach Capital requirement Exposure after credit risk protection (EAD) IRB approach Average risk weight Capital requirement Institutions 40 - - - Companies - 166,054 26.4 3,511 Households 12 433,891 5.7 1,982 Others 1 - - - Total 53 599,945 11.4 5,493 The capital requirement according to Basel II is 79 (77) lower than the requirement in accordance with Basel I. Households represent some 80 (85) of the reduction and companies approximately 20 (15). A large proportion of credits to households with property as collateral are the main reason for the lower capital requirement. Highlights of annual report JANUARY DECEMBER 13
Notes 14 Highlights of annual report JANUARY DECEMBER
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16 Highlights of annual report JANUARY DECEMBER
Registered name: Stadshypotek AB (publ). Corporate identity number: 556459-6715. Ownership: A subsidiary of Svenska Handelsbanken AB (publ), corporate identity number 502007-7862. The Bank publishes consolidated annual accounts in which Stadshypotek AB is included. Next interim report: will be published on 28 April 2010. ADDRESS Stadshypotek AB Street address: Torsgatan 12 Postal address: SE-103 70 Stockholm, Sweden Phone: +46 8-701 54 00, Fax +46 8-701 55 40 Website: www.stadshypotek.se
www.stadshypotek.se +46 8-701 54 00 SE-103 70 Stockholm, Sweden Production: Hallvarsson & Halvarsson. Printing: Larsson Offsettryck AB. Photographers: Johnér Bilbyrå.