A year of records

The year began in a way that I remember well from my days as an active athlete. Right from the start we were off at full speed – a flying start. The increase in the volume of business from the end of 2008 just went on accelerating, and during the spring I could see that we were beating every record. The year ended with offers and guarantees outstanding of SEK 364 billion.

 

During a very difficult year for Swedish exporters we played our part in facilitating 1,405 export transactions in 134 countries. EKN’s guarantees for these transactions amounted to SEK 80 billion.

Over and above that, we offered guarantees for SEK 262 billion, thus increasing EKN’s guarantee portfolio at the year-end to SEK 364 billion, including the entire volume of offers.

Despite a turbulent year for world trade, EKN’s profit was SEK 856 million. This satisfactory result is largely attributable to the emerging markets, which were less affected by the financial crisis than feared – and which also constitute a major proportion of our guarantee portfolio.

EKN’s role both wider and deeper

In our mission – promoting Swedish exports – we have a facilitating role. We enable companies of all sizes to offer their customers credit. We enable banks to finance export transactions and to offer working capital to exporting companies – even in the depths of a financial crisis. The role has expanded in recent years in terms of the types of solutions, the number of transactions, in volumes and for many more markets.

We have seen unprecedented demand for our involvement in transactions, some realistic, some less so. In such a situation, it is always vital to evaluate the business in relation to the mission and to changes in the world at large.

We make sure that we have the risk capacity to match the companies’ needs for risk cover for future export transactions.

Our role is complementary to the private sector market. We seek out flexible temporary solutions when the market cannot cover the needs that arise. At the same time we provide a clear exit strategy from the temporary solutions so that the market can take over when the situation becomes more stable.

We have to comply strictly with our commitments and maintain a strong financial position. This we do by premiums that reflect the risks, by provisions, and by active loss prevention measures.

After a year like 2009, the challenge in 2010 and subsequent years is to continue to handle the heavy demand, while also managing our commitments in a sustainable and responsible way. We have to live with the uncertainty about the state of the world economy and the capacity to pay in the transactions we guarantee.

Right from the start we were off at full speed – a flying start.

Greater focus on corporate financing needs

One effect of the financial crisis is that we have been working more closely with corporate finance departments. I have been contacted by finance directors in companies which had not previously turned to EKN. I was invited to give presentations to the Swedish Association of Corporate Treasurer.

Among companies, the awareness of risk has increased, leading to an increased demand for risk cover. Many EKN employees have accompanied Swedish companies out into the world on visits to customers in order to strengthen the companies’ offers with good financing solutions.

Companies large and small

The increase in demand for EKN guarantees has come equally from small, medium and large companies. We have been able to demonstrate that export transactions have continued to take place, despite the difficult situation. Our initiative in the West of Sweden drew a full house at our inauguration in Gothenburg. I am looking forward to the evaluation of our presence there. I believe we will be able to meet even more companies in the region seeking a partnership
with EKN.

Sweden was presented as a pioneer. Rapid decisions gave increased guarantee capacity.

Higher limit

The year both began and ended with an increase in our guarantee limit. At the start of the year, our capacity was SEK 350 billion, and at the end of the year the Swedish Parliament authorised an increase to SEK 500 billion. This capacity is needed to enable Swedish companies to continue making successful export transactions and to grow on the world market.

Sweden as a role model

The considerable pressure on our business is something we share with the equivalent organisations in many other countries. In the international context in which the world’s export credit agencies collaborate, many people can testify to the decisive role that these agencies play in sustaining international trade. In this international context, many people abroad have followed developments in Sweden with particular interest.

At the autumn meeting in South Korea of the Berne Union (the export credit industry association), I was asked to describe the enormous increase in demand, and how we had handled it. At the OECD, Sweden became the focus of interest. At the autumn meeting in Paris of the OECD Export Finance group last November, Sweden was presented as a pioneer because of the rapid decisions that gave EKN increased guarantee capacity.

At the end of the year, the readers of the international magazine Global Trade Review voted EKN as the Best Export Credit Agency. A warm thank you to all our employees and to EKN’s board for a year with a flying start, hard work and a concluding award.

Karin Apelman
Director General