SBAB's net operating income for 2005 amounted to SEK 666 million (SEK 678 million)

1/31/2006, 4:00 PM (Source: GlobeNewswire)
SBAB's new lending to the retail market was a record-breaking 57 % higher than last year. The market share for SBAB's retail market lending has increased to 9.4 % (8.3 %). - SBAB has had a successful year with increased sales to the retail market. Our net profit is above our profitability requirement, says Eva Cederbalk, SBAB's CEO.

Net operating income for the full year 2005
SBAB's net operating income for 2005 amounted to SEK 666 million (SEK
678 million). The change in income is mainly explained by increased
expenses. Net interest income totalled SEK 1,296 million, compared
with SEK 1,214 million in 2004. This increase is explained by a very
good development of retail market lending although falling interest
rates have had a negative impact on yield. New lending to the retail
market was a record-breaking 57 % higher than last year. Expenses
totalled SEK 596 million
(SEK 505 million).
- The high level of new sales has led to an increase in staff costs
and volume-related costs. Furthermore, SBAB has pursued a number of
extensive development projects due to adaptation to various rule
changes. In addition, restructuring expenses for a reorganisation
have been charged to expenses for 2005, says Eva Cederbalk, SBAB's

Loan portfolio and securitised loans

Dec 2005 Dec 2004
SEK billion Total Of which securitised Total Of which
loans securitised loans
Retail market 100.5 7.0 76.7 15.8
Corporate 70.6 8.1 79.4 9.4
Total 171.1 15.1 156.1 25.2

New lending to the retail market amounted to SEK 37,260 million (SEK
23,750 million) during the year. When SBAB as the first mortgage loan
company in Sweden dropped the top loan in April 2005, this
contributed to a larger customer flow which further increased the
growth of new lending to retail customers. The portfolio now totals
SEK 93,528 million (SEK 60,942 million) excluding securitisations.
New lending in the corporate market was SEK 4,976 million (SEK 4,481
million). The corporate market portfolio excluding securitisations
amounted to SEK 62,492 million
(SEK 69,965 million).

Long-term funding during the year amounted to SEK 68,866 million (SEK
43,321 million) of which SEK 47,696 million (SEK 21,698 million) was
raised in the international market and SEK 21,170 million (SEK 21,623
million) in the domestic bond market. The original short-term loan
debt, defined as short-term on the issue date, totalled SEK 45,075
million (SEK 34,717 million).

Loan losses and Doubtful loan receivables
Loan losses continued to be low and amounted net to a positive SEK 36
million (SEK 7 million).
The doubtful loan receivables have decreased during the year from SEK
214 million to SEK 144 million. The provision ratio regarding
specific provisions for individually accessed loan receivables
amounted to 66%. At the end of 2005, total provisions amounted to SEK
228 million, of which collective provision for individually assessed
loan receivables amounted to SEK 113 million.

Capital adequacy
At the end of 2005, the capital adequacy ratio was 8.9% (10.0%). The
primary capital ratio was 6.9% (8.4%). SBAB's capital base amounted
to SEK 7,376 million
(SEK 6,386 million). The capital adequacy ratio was 9.4% (10.6%), the
primary capital ratio 7.3% (8.8%) and the capital base SEK 7,040
million (SEK 6,120 million) for the parent company. The change in the
capital adequacy ratio was mainly due to increased lending in the
retail market and to the repurchase of securitised loans.

Current events

* On 16 December 2005, the Riksdag, the Swedish Parliament, decided
to approve a broadening of SBAB's mission to include accepting
deposits from the public. During 2006, SBAB will prepare for also
being able to offer savings products to customers.
* The parts of SBAB's activities relating to retail market credits
have been concentrated at two customer centres in Karlstad and
Uppsala. As a result of this, the office in Linköping has been
wound up.
* A new business area, Corporate Lending, was established during
the autumn with the intention of a renewed focus on the corporate
* In November, SBAB won an award in Dagens Industri's and the
Association of Swedish Advertisers' advertising competition for
long-term trademark management, 100-wattaren. SBAB also received
an award for the campaign " Drop the top loan".

The announcement of the results for 2005 can be read in its entirety

Annual General Meeting of Shareholders
SBAB's Annual General Meeting of Shareholders will be held on
Wednesday, 19 April 2006.

Further information is available from:
Eva Cederbalk, Chief Executive Officer SBAB,
tel: +46 8 614 43 01
Mobile: +46 70 523 23 02

Lena Hedlund, Chief Communication Officer SBAB,
Tel: +46 8 614 38 49,
Mobile: +46 708-58 07 25

The full report including tables can be downloaded from the enclosed
View document
SBAB offers residential mortgages via Internet and by telephone.
SBAB's task is to increase competition in the Swedish residential
mortgage market. SBAB has a market share of 15 % of the corporate
market and 9.4 % of the retail market.
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