Kommuninvest i Sverige AB today publishes its Interim Report for 2022. Developments in the first half of the year have been turbulent. A subsiding crisis, the corona pandemic, has through the Russian invasion of Ukraine been followed by a new crisis. There have been significant challenges linked to high inflation, rising interest rates and volatile markets. Despite this, Kommuninvest’s operations have continued to be stable and efficient.
The operating profit for the first half of the year amounted to SEK –346.5 (124.2) million. The negative outcome is mainly explained by the risk tax, wich was introduced on 1 January and for this period added a burden of SEK –128.7 (0.0) million, as well as unrealised changes in market value of SEK –395.5 (–102.9) million. The changes primarily have to do with the fact that funding in USD has in relative terms become less costly than funding in SEK. Given that Kommuninvest intends to hold its assets and liabilities to maturity, these values are not normally realized. The operating income, in line with budget, came in at SEK 50.0 (224.5) million.
Lending, in nominal terms, amounted on 2022-06-30 to SEK 473.5 (460.7) billion. This corresponded to a first half of the year growth of 3 percent. The relatively weak growth, which was nevertheless slightly higher than expected, was largely due to the fact that results in the municipal sector have been strong for a couple of years and that the Riksbank’s purchases of municipal bonds continued to compress the interest rate differentials between Kommuninvest and other municipal issuers.
Even with limited lending growth, Kommuninvest’s estimate is that the market share increased slightly. 59 (58) per cent of the municipal sector’s total borrowing was as of 2022-06-30 financed via Kommuninvest.
Long-term funding, with maturities longer than one year, in the first half of the year summed up at an amount corresponding to SEK 86.3 (69.6) billion. At a USD transaction in February, SOFR, instead of Libor, was for the first time used as reference rate. In March, the first bond was issued in EUR since Kommuninvest’s decision in 2019 to establish three strategic funding markets: SEK, USD and EUR.
Growth continued within green financing. The share of Green loans in relation to total lending, on the basis of volumes disbursed, increased to 13.3 (13.0) per cent.
Important progress was made in Social Sustainability Loans. A further seven loans were granted during the first half of the year. As of 2022-06-30, a total of 14 investment projects had been granted loans with a combined volume of over SEK 1.6 billion.
All internal and external capital requirements were met by a wide margin. The total capital ratio as of 2022-06-30 was 278.3 (397.1) per cent. The leverage ratio was 7.55 (15.36) per cent.
– This spring we have once again demonstrated our ability to maintain stability and efficiency in turbulent times. We have the construction and the safety margins required to be able to continuously offer our members the loans they need. This is municipal collaboration at its best. I am also pleased to note that we in our funding opened the door to the EUR market and that we continued to develop positive trends within both green and social financing, says Tomas Werngren, CEO of Kommuninvest.
Comparative figures for the income statement refer to the previous year (1 January – 30 June 2021). Comparative figures for the balance sheet and for risk and capital-related data refer to 31 December 2021.
The report: Kommuninvest Interim report 2022
For further information
Tomas Werngren
CEO
Tel: +46 70 645 06 69
E-mail: tomas.werngren@kommuninvest.se
Patrick Nimander
CFO
Tel: +46 72 254 94 60
E-mail: patrick.nimander@kommuninvest.se
David Ljung
Head of Communications
Tel: +46 73 068 45 45
E-mail: david.ljung@kommuninvest.se
