Annual accounts 2014: Continued capital build-up ahead of leverage ratio

Kommuninvest reports stable results and a strengthening of capital, according to its annual accounts for 2014. Operating profit was SEK 729 (758) million and Kommuninvest increased its reported leverage ratio to 0.76 (0.57) percent. At 31 December 2014, lending amounted to SEK 223 (209) billion.

2014 in review

  • The local government sector’s funding needs continued to increase, with strong population growth, urbanisation and demographic changes driving investment needs. Kommuninvest’s lending rose to SEK 222,803.7 (208,644.0) million.
  • Kommuninvest maintained its position as the largest lender to Swedish municipalities and county councils/regions, with a market share of 44 (44) percent of the local government sector’s total borrowing.
  • Operating profit was SEK 729.4 (757.6) million, the second highest to date and reflecting the owners’ directive regarding the long-term build-up of capital.
  • The balance sheet total was SEK 312,052.1 (277,458.7) million and net interest income was SEK 915.2 (969.5) million.
  • Kommuninvest meets all of the requirements regarding risk-weighted capital adequacy. The core Tier 1 capital ratio was 34.6 (37.0) percent, the Tier 1 capital ratio was 34.6 (37.0) percent and the total capital ratio 49.3 (59.5) percent. Total equity increased to SEK 2,375.4 (1,727.6) million.
  • The leverage ratio, calculated according to the EU Capital Requirement Regulation CRR, was 0.76 (0.57) percent. Including the subordinated loan issued to Kommuninvest Cooperative Society, the leverage ratio was 1.09 (0.91) percent.[1]
  • Two (four) new members were added in the Kommuninvest Cooperative Society. Total membership at year-end was 280 (278) members, of which 272 (270) municipalities and 8 (8) county councils/regions.

Comments by Tomas Werngren, President and CEO

– Kommuninvest’s owners have a clear plan for meeting the future leverage ratio requirement, as demonstrated by both profit for the period and the capital measures taken in 2014.

Our lending growth shows that we continue to fulfil our mission: assisting Swedish municipalities and county councils to efficiently build up welfare in Sweden.

About Kommuninvest

Kommuninvest i Sverige AB is owned by Swedish municipalities and county councils with the purpose of supporting their financial operations through secure and cost-efficient financing, financing advice, skills development and cooperation. Kommuninvest is the largest supplier of credit to Swedish local governments.

Contact persons for enquiries

President & CEO Tomas Werngren, tel. +46 70 645 06 69

Deputy CEO Maria Viimne, tel. +46 70 333 69 02

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.