Landshypotek Bank six-month interim report for 2018: Strong results and high activity going forward
Operating profit for H1 2018 amounted to MSEK 197.9 (154.8), and operating profit excluding the net result of financial transactions was MSEK 178.8 (197.8). However, a change in the accounting treatment of doubtful interest payments was made in 2017, which resulted in a nonrecurring item of MSEK 27.0. Excluding this nonrecurring item, operating profit excluding the net result of financial transactions increased MSEK 7.9.
Over the first six months of the year, Landshypotek Bank has been active with market initiatives to communicate with more forestry customers. The bank has attracted considerable attention and has welcomed an increasing number of homeowner mortgage customers. In the spring, Landshypotek Bank’s successful issue of a green covered bond backed by loans for forest assets comprised another pioneering initiative.
“We choose our own path. As a small bank, we can move quickly from idea to action, and build on the commitment at our bank. During the quarter, we laid the foundation for further strengthening our customer focus and development drivers. For several years, we have focused on becoming a better bank, with the strong internal focus required for issues regarding capital and regulations. We are now working intensively and in parallel with continuing to build the bank to manage increased external customer focus,” says Per Lindblad.
Both lending and deposits continue to increase. Lending, which comprises the bank’s core operations, increased SEK 3.6 billion compared with the close of H1 2017. The bank now has SEK 70.8 billion (67.2) in loans outstanding and SEK 13.5 billion (12.4) in deposits. During H1, the bank passed the SEK 2 billion mark for home mortgage lending — and is now progressing toward SEK 3 billion.
“The interest confirms the need for a bank with a difference that challenges in the Swedish mortgage market. Our focus is long-term and we also want to build long-term relationships with our new customers. We have a long-standing history in financing and, accordingly, differentiate ourselves from other new player by providing a safe alternative. We believe in a whole that combines new technology, pooled know-how and security,” says Per Lindblad.
Costs are also rising, in a controlled format and as planned, and amounted to MSEK 218.9 (193.4) in the first half of the year. The bank has a few more employees to welcome increasing numbers of customers and to strengthen the bank generally.
Talk of the drought that has heavily impacted agriculture dominated the start of the summer. As the farmers and foresters’ own bank, we closely monitor circumstances that impact farms.
“The financial consequences are not yet possible to assess, but we are active and are maintaining close dialogues with our customers. As the farmers and foresters’ own bank, we want to be part of meeting and overcoming temporary challenges to otherwise sound long-term entrepreneurship, together with our customers,” says Per Lindblad.
More information is available in the interim report regarding the results as well as events in our operating environment in terms of the economy, the mortgage market and farming and forestry.
The information in this report is such that Landshypotek Bank AB is obligated to disclose in accordance with the Securities Market Act. This information was submitted for publication on 20 July at 8:00 a.m. (CEST).
In brief:
January – June 2018 (compared with January – June 2017)
• Operating profit amounted to MSEK 197.9 (154.8).
• The underlying operating profit, excluding the net result of financial transactions, was MSEK 178.8 (197.8).
• Net interest income amounted to MSEK 386.0 (394.0).
• Costs totalled MSEK 218.9 (193.4).
• Net credit losses resulted in a recovery of MSEK 8.7 (loss: 3.8).
• Lending amounted to SEK 70.8 billion (67.2).
• Deposits amounted to SEK 13.5 billion (12.4).
April – June 2018 (compared with January – March 2018)
• Operating profit amounted to MSEK 95.7 (102.2).
• The underlying operating profit, excluding the net result of financial transactions, was MSEK 91.4 (87.4).
• Net interest income amounted to MSEK 198.6 (187.4).
• Costs totalled MSEK 112.5 (106.4).
• Net credit losses resulted in a recovery of MSEK 4.0 (4.7).
• Lending amounted to SEK 70.8 billion (69.6).
• Deposits amounted to SEK 13.5 billion (13.0).