Year-end report 2010

The Swedish Covered Bond Corporation, SCBC


Summary                            Jan-Dec 2010 Jan-Dec 2009

Net interest income, SEK million          1,440          813

Operating profit/loss, SEK million        1,147         -295

Net profit/loss for the period,
SEK million                                 846         -217

Lending, SEK billion                      209.7        173.3

Capital adequacy ratio, %                  10.3         11.1

Tier 1 capital ratio, %                    10.3         11.1

Core Tier 1 capital ratio, %               10.3         11.1

Rating, long-term funding

Standard & Poor's                           AAA          AAA

Moody's                                     Aaa          Aaa


All profit and loss figures in parentheses pertain to the year-earlier period.

Organisation
The Swedish Covered Bond Corporation, SCBC, is a wholly owned subsidiary of The
Swedish Housing Finance Corporation, SBAB. SCBC conducts its operations in
accordance with the requirements specified in the Covered Bonds Act (2003:1223)
and the Swedish Financial Supervisory Authority's regulations FFFS 2004:11.

Operating profit
SCBC's operating profit in 2010 amounted to SEK 1,147 million (loss: 295). Net
interest income was significantly higher than in 2009 at SEK 1,440 million
(813). Net income from financial instruments measured at fair value also
improved. During the year, hedgeaccounted items and loan receivables were the
primary contributors to the favourable trend. During the year, SCBC developed
and during the second half of the year introduced a method that better reflects
the hedging relationship of the underlying hedged item. This method had a
favourable impact of SEK 115 million before tax. SCBC's total operating income
increased year-on-year to SEK 1,621 million (175). The stability fee totalled
SEK 31 million (28). Expenses for the year amounted to SEK 464 million (445).
Net loan losses amounted to SEK 10 million (loss: 25).

Lending
SCBC does Note conduct any new lending activities itself, but acquires loans
from SBAB on an ongoing basis or as required. The aim of securing these loans is
that they be included in full or in part in the cover pool that serves as
collateral for SCBC's covered bond investors. SCBC's portfolio mainly comprises
loans for residential mortgages, with the retail market as the largest segment.
The portfolio contains no loans for purely commercial properties. Information
regarding SCBC's cover pool is published monthly at the websitewww.scbc.se.

Funding
SCBC's operations are primarily focused on issuing covered bonds in the Swedish
and international capital markets. For this purpose, the company uses two
funding programmes: the Swedish mortgage bond programme for the issuance of
covered bonds and SCBC's EUR 10 billion Euro Medium Term Covered Notee
Programme. Both programmes have received the highest possible long-term ratings
of Aaa and AAA from the rating agencies Moody's and Standard & Poor's.

SCBC's funding is conducted through the issuance of covered bonds, and to a
certain extent through repo transactions. In addition, SCBC receives funding in
the form of a subordinated loan from SBAB. The value of debt securities in issue
totalled SEK 155.3 billion (140.0). Programme utilisation at 31 December 2010
was as follows: Swedish covered bonds SEK 95.4 billion (83.9) and the Euro
Medium Term Covered Notee Programme EUR 6.7 billion (5.2).
The Swedish and international markets continued to stabilise in 2010. The
average maturity of the debt portfolio has been extended through continuous
issuances and repurchases in the international and Swedish covered bond markets.
Covered bonds are still the SBAB Group's principal source of funding.

Capital adequacy
SCBC primarily reports credit risk pursuant to the internal ratingsbased
approach (IRB approach) and operational and market risk in accordance with the
standardised approach. Without taking the transitional regulations into account,
the capital quotient was 3.83 (4.14), while the capital adequacy ratio and Tier
1 capital ratio amounted to 30.6% (33.1) Taking into account the transitional
regulations, the capital quotient was 1.29 (1.39) and the capital adequacy ratio
and Tier 1 capital ratio amounted to 10.3% (11.1). The calculation of Tier 1
capital and total capital includes profit for the year and the proposed
dividend.

Accounting policies
SCBC applies statutory IFRS, which means that the year-end report has been
prepared in compliance with IFRS subject to the additions and exceptions that
ensue from the Swedish Financial Reporting Board's recommendation RFR 2
Accounting for Legal Entities, the Swedish Financial Supervisory Authority's
regulations and general guidelines on annual reports in credit institutions and
securities companies undertakings (FFFS 2008:25) and the Annual Accounts (Credit
Institutions and Securities Companies) Act.
This year-end report complies with the requirements specified in IAS 34 Interim
Financial Reporting and IAS 1 Presentation of Financial Statements. The
accounting policies and calculation methods remain unchanged compared with the
2009 Annual Report.

Dividend
Distributable equity in SCBC amounted to SEK 10,411 million. Dividends are
proposed by the Board under the provisions of the Companies Act and are resolved
on by the Annual General Meeting. All shares are held by the Parent Company, the
Swedish Housing Finance Corporation, SBAB (publ), Corporate Registration Number
556253-7513. The proposed, as yet unpaid, dividend for 2010 amounts to SEK 100
million.

Significant events after the balance-sheet date

  * No events of material importance to assessments of the company's financial
    position have occurred after the close of the reporting period.


Financial information
The next financial report scheduled for publication is the Annual Report for
2010.


Stockholm, 2 February 2010


Johanna Clason
Managing Director


[HUG#1485370]