Kommuninvest i Sverige AB today publishes its Interim Report for 2021. In a first half of the year which was characterized by large-scale handling of the pandemic, macroeconomic recovery and good results in the municipal sector, Kommuninvest continued to make stable progress in its operations.
Kommuninvest’s operating profit for the first half of the year was SEK 124.2 (–159,6) million. The operating income came in at SEK 224.5 (239.0) million. This generally reflects a positive trend within the framework of a well-functioning business model.
Kommuninvest’s lending, in nominal terms, on 2021-06-30 amounted to SEK 452.9 (438.1) billion. This corresponded to a growth rate, on an annual basis, of 5 (16) per cent. That lending growth turned out to be relatively low, despite high investment levels in the municipal sector, was due to the fact that extensive government subsidies during the pandemic had generated strong results and dampened borrowing needs for many municipalities and regions. The Riksbank’s purchases of municipal bonds also reduced interest rate differentials between Kommuninvest and other municipal issuers, making it more attractive for municipalities and regions to borrow via their own market programmes.
This meant that the market share, according to Kommuninvest’s estimate, remained unchanged. 57 (57) per cent of the local government sector’s total borrowing was as of 2021-06-30 financed via Kommuninvest.
The green financing continued to expand. The share of Green loans in relation to total lending, on the basis of volumes disbursed, increased to 12.4 (11.2) per cent. In May, Kommuninvest won the Environmental Objectives Award 2021, which is run by the Swedish Environmental Protection Agency, for its contribution to the environmental objective Reduced Climate Impact. This was a major recognition for the success in building up the green financing programme.
Following a successful pilot phase, Social Sustainability Loans were launched to all members in March. This innovative product was made for municipalities and regions, including their companies, that aim to strengthen and make visible their work for social sustainability. During the pilot phase, five customers/members had been granted loans for a total of approx. SEK 525 million. No additional loans were added until the end of the first half of the year.
Kommuninvest continued to meet all internal and external capital requirements. The total capital ratio as of 2021-06-30 was 303.9 (302.5) per cent. The leverage ratio, including lending, was 1.55 (1.43) percent.
In September 2020, the Swedish Government submitted a proposal for a so called risk tax to paid by banks and other credit institutions. The proposal was updated in May 2021. With the proposed design, Kommuninvest would be targeted by the tax. In an active advocacy effort, Kommuninvest has argued for an exemption.
– The municipal cooperation through Kommuninvest continued in the first half of the year to make stable progress. It is gratifying to see how this useful collaboration tool is constantly being improved. Trends were particularly positive in the area of sustainability. The Environmental Objectives Award 2021 drew important attention to the impressive sustainability work carried out by municipalities and regions. Social Sustainability Loans will hopefully be able to contribute to enhancing socially oriented sustainability initiatives. Taking further steps forward in sustainability will be a crucial part of the continued development of Kommuninvest, says Tomas Werngren, CEO of Kommuninvest.
Comparative figures for the income statement refer to the previous year (1 January – 30 June 2020). Comparative figures for the balance sheet and for risk and capital-related data refer to 31 December 2020.
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