The Swedish local government debt office, Kommuninvest i Sverige AB, reports significantly increased lending volumes, according to the interim report for the first six months. Kommuninvest has also strengthened the capital base. Operating profit was SEK 68.9 (419.0) million. At 30 June 2015, lending amounted to SEK 242 (223) billion.
1 January to 30 June 2015 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 242,088.9 (222,803.7) million.
- Kommuninvest strengthened its position as the largest lender to Swedish municipalities and county councils/regions, with an estimated market share of 48 (44) percent of the local government sector’s total borrowing at the end of the period.
- Operating profit was SEK 68.9 (419.0) million. The result has been affected by the evolved model for building up capital, where specific capital contributions from members increasingly will replace building up capital via the income statement.
- During the reporting period, the share capital rose by SEK 680.0 (650.0) million through new issues. This reflects the owners’ ambitions to meet forthcoming regulatory requirements regarding leverage ratio from 2018.
- The balance sheet total was SEK 350,850.2 (312,052.1) million and net interest income was SEK 370.6 (466.7) million.
- Kommuninvest meets all of the requirements regarding risk-weighted capital adequacy. The core Tier 1 capital ratio was 42.1 (34.6) percent, the Tier 1 capital ratio was 42.1 (34.6) percent and the total capital ratio 60.2 (49.3) percent. Total equity increased to SEK 3,070.7 (2,375.4) million.
- The leverage ratio, calculated according to the EU Capital Requirement Regulation CRR, was 0.67 (0.76) percent. Including the subordinated loan issued to Kommuninvest Cooperative Society, the leverage ratio was 0.96 (1.09) percent.[1]
- Total membership in the Kommuninvest Cooperative Society was 280 (280) members at the end of the period, of which 272 (272) municipalities and 8 (8) county councils/regions.
Comments by Tomas Werngren, President and CEO
- Our lending growth shows that we continue to fulfil our mission: assisting Swedish municipalities and county councils to efficiently build up welfare in Sweden.
- Kommuninvest’s owners have a clear plan for meeting the future leverage ratio requirement, as demonstrated by both the capital measures during the period and the resolutions at the annual general meeting of Kommuninvest Cooperative Society.
Kommuninvest Interim report 2015
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 26 February 2015 at 08:00 a.m.
Comparative earnings figures relate to the same twelve month period previous year (1 January–30 June 2014). Comparative balance sheet figures relate to 31 December 2014.
About Kommuninvest
Kommuninvest i Sverige AB is owned by 280 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.
