Kommuninvest i Sverige AB today publishes its Year-end report for 2020. Despite the market turbulence and economic downturn caused by the Corona pandemic, Kommuninvest maintained both stability and growth in its operations.
The operating profit for 2020 amounted to SEK 228,0 (392,1) million. It was weighed down by unrealized changes in market value of SEK –245,3 (–193,9) million. Because Kommuninvest holds its assets and liabilities to maturity, this will generate corresponding positive effects in the coming years. The operating income was SEK 462,2 (573,4) million. Since 2018, Kommuninvest has had a strategy aimed at offering the best possible lending prices by reducing the margin between funding and lending prices. This strategy will lead to lower results.
Kommuninvest’s lending, in nominal terms, increased by 9 (15) per cent during 2020 to reach SEK 442,8 (406,5) billion at the end of the year. Lending was very high during the market turbulence in March and April, but then slowed down as substantial central government support improved the outlook for the economy of the local government sector. Fundamentally, there is still a trend of growing investment and borrowing needs among municipalities and regions.
In line with this, the market share increased slightly. 58 (56) per cent of the total borrowing of the local government sector was at the end of 2020 financed via Kommuninvest.
Green loans continued to account for an important part of lending growth. At year’s end, a total of SEK 74,7 (63,1) billion in Green loans had been approved, relating to 431 (346) projects and 167 (150) municipalities and regions. The share of Green loans in relation to total lending, on the basis of volumes disbursed, increased during the year by just under two percentage points to 11,9 (10,1) per cent.
Kommuninvest at the end of 2020 met all internal and external capital requirements. The total capital ratio was 302,5 (126,8) per cent. The leverage ratio was 1,43 (1,58) percent. At the Annual General Meeting in April, Kommuninvest Cooperative Society adopted a capitalization plan for 2021–2024. The aim is to make capitalization predictable. Both internal and statutory capital requirements shall consistently be met by a wide margin.
– I am happy to conclude that we throughout the year coped with the pandemic and its effects without any significant problems. Our business was stable. Access to the capital market was consistently good, even when market stress was at its highest in March and April. Municipalities and regions were constantly able to borrow without disturbances. At the same time, our growth journey continued. Given the investment and borrowing needs that municipalities and regions still face, cost-effective financing is an important factor to be able to deliver high-quality welfare in the future as well, says Tomas Werngren, CEO of Kommuninvest.
The comparative figures in brackets above refer to 2019 or the turn of the year 2019/2020
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