Booming demand for EKN’s crisis measures
EKN issued guarantee offers totalling more than SEK 120.7 billion in the first four months of 2020. The more than six-fold increase is due to booming demand for working capital credit guarantees.
“They’ve given companies essential assistance for financing working capital during the crisis,” says Anna-Karin Jatko, Director-General of EKN.
The large increase in guarantee offers is expected to lead to a substantial increase in guarantee volume in the next four-month period.
In the first four-month period of the year, guarantee volumes for new transactions totalled SEK 28.4 billion, compared with SEK 23.2 billion during the same period last year.
Rapid crisis solutions
EKN has issued a temporary working capital credit guarantee for large companies. The guarantee covers 75 percent of banks’ risk for working capital financing to large companies. The demand has been considerable, SEK 105.5 billion.
As part of its regular offering, EKN also has a working capital credit guarantee for small and medium-sized enterprises, which covers 50 percent of banks’ risk. The risk coverage has now been raised to 80 percent. The number of applications for working capital credit guarantees from small and medium-sized enterprises has doubled.
Following a decision by the EU, EKN can temporarily guarantee payment risk for supplier credits under two years to high-income countries Normally, only private credit insurers may do so. EKN made this option available at the end of April, resulting in roughly thirty applications that together totalled SEK 192 million.
Today, EKN’s statutory limit for issuing guarantees has a ceiling of SEK 450 billion. Utilisation of the statutory limit during the period increased to SEK 322 billion, compared with SEK 272 billion at the end of 2019.
Profits for the period totalled SEK 175 million (SEK 452 million). The decrease was due to a negative financial result, SEK -167 million (214), which is primarily attributed to higher interest payments.
EKN’s finances remain strong following many years with positive results. The remaining scope for statutory limit utilisation is almost SEK 130 billion. The Government has requested that the Swedish Parliament increase capacity by raising the limit to SEK 500 billion.
“To summarise the four-month period, we rapidly developed solutions when the crisis struck. Dialogue with both exporting companies and banks is crucial in this situation. We have capacity to assist more companies,” says Anna-Karin Jatko.
|New transactions and profit/loss||January-April 2020||January-april 2019|
|New guarantee offers, SEK millions||120,648||18,513|
|New guarantee offers, number||739||771|
|New transactions, volume of guarantees, SEK millions||28,420||23,232|
|New transactions, number||672||890|
|Claims paid, SEK millions||698||618|
|Profit/loss, SEK millions||175||452|