The Swedish local government debt office, Kommuninvest i Sverige AB, continued to post growing lending volumes, according to the interim report for the first six months. Kommuninvest has also strengthened the capital base. Operating profit was SEK 14.0 (68.9) million. At 30 June 2016, lending amounted to SEK 269 (254) billion.
1 January to 30 June 2016 in review
- Strong population growth, urbanisation and demographic changes is affecting investment needs and borrowing needs in the local government sector. Kommuninvest’s lending rose to SEK 268,882.8 (254,421.7) million.
- Kommuninvest is the largest lender to Swedish municipalities and county councils/regions, and the position has strengthened somewhat. Kommuninvest’s share of the local government sector’s total borrowing amounted to 47 (46) percent at the end of the period.
- Operating profit was SEK 14.0 (68.9) million. The model for building up capital means that specific capital contributions from members will increasingly replace building up capital via the income statement.
- During the reporting period, the share capital rose by SEK 1,490.7 million through new issues, compared with SEK 1,880.0 million during 2015. This reflects the owners’ ambitions to meet forthcoming regulatory requirements regarding leverage ratio from 2018.
- The balance sheet total was SEK 367,146.6 (340,626.3) million and net interest income was SEK 372.7 (370.6) million.
- Kommuninvest meets all of the requirements regarding risk-weighted capital adequacy. The core Tier 1 capital ratio was 75.9 (44.6) percent, the Tier 1 capital ratio was 75.9 (44.6) percent and the total capital ratio 89.2 (59.8) percent. Total equity increased to SEK 5,879.5 (4,344.3) million.
- The leverage ratio, calculated according to the EU Capital Requirement Regulation CRR, was 1.56 (0.87) percent. Including the subordinated loan issued to Kommuninvest Cooperative Society, the leverage ratio was 1.84 (1.16) percent.[1]
- Membership in the Kommuninvest Cooperative Society rose by two new members during the period. As of 30 June 2016, the Society had 282 (280) members, of which 273 (272) municipalities and 9 (8) county councils/regions.
Comments by Tomas Werngren, President and CEO
– Our lending growth and the capital support from owners show that they value the Kommuninvest cooperation, and want it to continue so that Swedish municipalities and county councils can have access to efficient and stable investment financing. This is of considerable importance.
The complete interim report is available for download here
This release contains such information that Kommuninvest is required to disclose pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for disclosure on 31 August 2016 at 08:00 a.m.
Comparative earnings figures relate to the same twelve-month period previous year (1 January–30 June 2015). Comparative balance sheet figures relate to 31 December 2015.
About Kommuninvest
Kommuninvest is a municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. Together, we get better loan terms than each one individually. Since its inception in 1986, the Kommuninvest collaboration has helped lower the local government sector’s borrowing costs by many billion kronor. Currently, 273 municipalities and 9 counties/regions are members of this voluntary cooperation. With total assets of around SEK 370 billion (USD ~43 billion), Kommuninvest is the largest lender to the local government sector and the sixth largest credit institution in Sweden. The head office is located in Örebro.
Contact persons for enquiries
President & CEO Tomas Werngren, tel. +46 70 645 06 69
Chief Financial Officer, CFO Johanna Larsson tel. +46 70 516 78 33
Head of Media Relations Björn Bergstrand, tel. +46 70 886 94 76 or bjorn.bergstrand@kommuninvest.se
[1] The loan terms for the subordinated loan are such that the loan is not eligible for inclusion as Tier 1 capital according to CRR. Kommuninvest intends to replace the existing subordinated loan with a new one or with another capital form that is eligible for inclusion as Tier 1 capital well in advance of year-end 2017.
