Record-high guarantee volume for EKN in 2020
EKN's 2020 Annual Report: A record-high guarantee volume of SEK 119.1 billion encompassed historic levels for approved regular guarantees granted as well as extensive crisis measures.
EKN’s regular guarantee operations increased from 2019 by 19 per cent to SEK 64.7 billion in 2020, the second highest figure in EKN’s history.
“The sharp increase for our regular guarantee operations was partly attributable to the continued roll-out of 5G in many countries, where Swedish companies hold strong positions. Moreover, exports of medical technology and equipment also increased due to the pandemic. Swedish companies also remain in demand in terms of solar and wind power and sustainable transport solutions,” says Anna-Karin Jatko, Director General.
EKN’s standard offering for SMEs includes a working capital credit guarantee that covers 50 per cent of the lending banks’ risk. As the effects of the pandemic began to take hold, EKN quickly increased that cover to 80 per cent to encourage continued lending to SMEs. The number of working capital credit guarantees for SMEs increased 30 per cent during the year.
“We wanted to prevent a temporary lack of financing from affecting out viable companies, something that occurred during the financial crisis. Small and medium-sized enterprises (SMEs) account for a significant share of Sweden’s exports. The continued existence of these companies and their ability to export has a decisive impact on Swedish GDP,” says Anna-Karin Jatko.
In March 2020, EKN also started to offer temporary working capital credit guarantees to large corporates covering 75 per cent of the banks’ risk. Demand has been very high, and was at its most intense when initially introduced. During the year, EKN issued offers to 78 companies amounting to a total of SEK 146.5 billion for this product. Of these, 34 guarantees have been issued for a total volume of SEK 54.4 billion.
“Such an offer can have considerable significance for a company’s financial stability and long-term viability, through providing the security that comes with knowing that it will be possible to obtain a loan if so required. The solution has been in demand for both exporters who are long-standing EKN customers and those who otherwise do not use EKN’s services,” says Anna-Karin Jatko.
Claims payments were as expected and amounted to SEK 1.6 billion (1.8). They primarily pertained to a few transactions with claims that had arisen in previous years. One new significant claim arose pertaining to a transaction to Zambia. Provisions for future claims payments for this transaction had a considerable negative impact on the year’s profit, which amounted to SEK 0.2 billion. However, EKN retains its strong financial position.
2020 in brief (compared with 2019)
- Total guarantee volume: SEK 119.1 billion
- Regular guarantee volume: SEK 64.7 billion (54.2)
- Guarantee volume for temporary working capital credit guarantees for large corporates: SEK 54.4 billion
- New transactions: 1,896 (2,135 new transactions). A difference of 278 transactions was due to changes in administration from statutory limits.
- Number of new guaranteed transactions for SMEs: 611 (725). The difference was also a result of changed administration.
- Number of customers: 494, of which 349 SMEs (445 customers, of which 322 SMEs)
- Claims payments: SEK 1.6 billion (1.8). They primarily pertained to a few transactions with claims that had arisen in previous years.
- Profit/loss: SEK 0.2 billion (1.1)