Kommuninvest annual accounts 2015: Capital build-up ahead of leverage ratio continues

The Swedish local government debt office, Kommuninvest i Sverige AB, reports an increase in lending, stable results and a strengthening of capital, according to its annual accounts for 2015. Operating profit was SEK 656 (729) million and the reported leverage ratio was 0.87 (0.75) percent. At 31 December 2015, lending amounted to SEK 254 (223) billion.

 

2015 in review

  • The local government sector’s investment and funding needs continue to increase, due to strong population growth, urbanisation and demographic trends. Kommuninvest’s lending rose to SEK 254,421.7 (222,803.7) million.
  • Kommuninvest maintained its position as the largest lender to Swedish municipalities and county councils/regions, with an estimated market share of 47 (44) percent of the local government sector’s total borrowing.
  • Total equity increased by SEK 1,968.9 million to SEK 4,344.3 (2,375.4) million. The increase was primarily an effect of capital contributions from members of the Kommuninvest Cooperative Society being transferred to Kommuninvest i Sverige AB as new share capital. The capital build-up is caused by forthcoming leverage ratio regulations.
  • Operating profit was SEK 655.5 (729.4) million and net interest income was SEK 798.5 (915.2) million.
  • The balance sheet total was SEK 340,626.3 (312,052.1) million.
  • Kommuninvest meets all of the requirements regarding risk-weighted capital adequacy. The core Tier 1 capital ratio was 44.6 (34.6) percent, the Tier 1 capital ratio was 44.6 (34.6) percent and the total capital ratio 59.8 (49.3) percent.
  • The leverage ratio, calculated according to the EU Capital Requirement Regulation CRR, was 0.87 (0.75) percent. Including the subordinated loan issued to Kommuninvest Cooperative Society, the leverage ratio was 1.16 (1.09) percent.[1]
  • Two (four) new members were added in the Kommuninvest Cooperative Society. Total membership in the Kommuninvest Cooperative Society was 280 (280) members at year-end, of which 272 (272) municipalities and 8 (8) county councils/regions. In February 2016, Region Jämtland Härjedalen was welcomed as a new member.

 

Comments by Tomas Werngren, President and CEO

– The capital reinforcement demonstrates that the members are willing to support Kommuninvest with the capital needed for the cooperation to continue providing the Swedish local government sector with efficient and secure investment financing.

 – Being able to meet current and future investment needs in a sustainable way will be central to the future development of the local government sector.

 

[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.


 

The complete annual accounts are available for download here: Kommuninvest Annual accounts 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 2 March 2016 at 08:00 a.m.

Comparative earnings figures relate to the same twelve month period previous year (1 January–31 December 2014). Comparative balance sheet figures relate to 31 December 2014.

 

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, 272 municipalities and 9 counties/regions are members of this voluntary cooperation. With total assets of around SEK 350 billion (USD ~40 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