Effective financing and accessible knowledge
Major investment needs remain among Sweden’s municipalities and regions, with escalating welfare challenges demanding that resources be used more efficiently. Kommuninvest plays an important role in both of these areas. Competitive lending provides cost-effective financing and financial expertise, while web-based analysis tools provide opportunities to save time and, accordingly, to manage debt efficiently.
Focus of the operations
Cost-effective financing is achieved by securing liquidity at the lowest possible cost while making such liquidity available to customers and members with the most possible efficient internal processes.
Over the year, an extensive study was conducted aimed to increase the capacity for matching the Company’s fixedrate lending and funding, thereby reducing the use of interest rate derivatives. A new approach intended to improve margins, reduce operational risks and cut costs is to be implemented gradually over the coming years.
The challenges facing the local government sector entail a continued and growing need for knowledge in debt management. Kommuninvest can meet this need by making the Company’s knowledge in debt management available and sharing information about the sector that it possesses. Supported by digital tools, this knowledge can be distributed fairly to an increasing number of customers and members.
Kommuninvest’s initiatives to digitalise and streamline its administration of loans continued during the year. KI Offert provides the possibility to submit a bid request digitally and KI Signera makes it possible to sign loan documents electronically. The use of these digital solutions is increasing and they are being offered to additional customer categories.
During the year, Kommuninvest produced a new web-based analysis tool that offers support in planning investments and cash flow. This tool makes it possible to generate liquidity forecasts for different time horizons and for different levels within the organisation. KI Finans Likviditet och Investeringar will be launched to Kommuninvest’s members and customers in early 2020.
Kommuninvest’s focus areas are the starting point for its operational governance.
The Company’s strong growth continues and total lending passed SEK 400 billion in 2019 – an average annual increase of 13 percent over the past five years. The Company’s share of the local government sector’s external funding has increased from 45 percent to an estimated 56 percent over the same period. In recent years, the members of the Society have capitalised the Group with the target of achieving a leverage ratio of 1.5 percent in accordance with the owner directive. Consequently, the Company’s equity has risen from SEK 2.4 billion in 2015 to SEK 7.6 billion in 2019. On 31 December 2019, the leverage ratio was 1.58 percent. For more information on the Company’s leverage ratio, see page 38 in the PDF.
For multi-year data in table format, click here.