For over 50 years SEK has provided customized financial solutions to the Swedish export industry. The Swedish state, together with the major Swedish banks, founded AB Svensk Exportkredit in 1962. Since 2003, SEK has been wholly owned by the state.
The stranglehold of World War II led to an enormous shortage of goods worldwide. However, the production apparatus was rebuilt comparatively quickly, creating an influx of goods which met demand. Competition in the marketplace soon intensified leading to buyers making increasing demands on sellers. These demands resulted in lower prices, higher quality and faster deliveries.
Furthermore, buyers insisted on increasingly generous credit terms. These demands weighed heavily on the Swedish export industry as the lean war years and the immediate post-war period, provided no scope for the build-up of financial capacity. Industry simply lacked the funds for credit to be extended on such a large scale. External refinancing was needed so that Swedish export companies could survive.
Demands for banking services was enormous and the Swedish banking system soon found it hard to meet such demand. At the end of the 1950s, this prompted the commercial banks to suggest the formation of a new, jointly owned export financing institution supported by government guarantees.
So that it could guarantee the credits, the government demanded joint ownership and majority representation on the Board. The demand that the state should own 50 percent and the commercial banks the remaining 50 percent was agreed to and adopted. Following an extensive study, AB Svensk Exportkredit was formed on September 3, 1962. SEK's very first financing deal came shortly afterwards, for the cargo ship M/S Berit. The ship was built at Stockholm's Finnboda Shipyard in 1963.
Demand for credits was lean in the early years. But during the 1960s, SEK revised its articles of association and the methods for its own borrowing. The rules for lending were also simplified. This new approach was welcomed by both bankers and other customer representatives.
The oil crises of the 1970s left new credit requirements in their wake. The economies of the OECD countries, where a large number of SEK's competitors were operating, were shaken. At the same time the economic situation in the developing countries, which were becoming an increasingly important market for the capital goods industry, was seriously affected. Most of the world's lenders were forced to make a growing number of concessions to their borrowers which led to lower profitability. For this reason a number of international agreements were concluded in the credit market in the period 1976-1978. These included the adoption of common guidelines for minimum advance payments, minimum interest rates and maximum credit periods.
The state-supported credit system (the SEK system) was introduced in 1978. Under this system SEK administered the granting of credits at subsidized interest rates. SEK received compensation for the difference between borrowing costs and lending rates, as well as for exchange losses. This allowed SEK to offer its customers far more advantageous terms than any other institution in Sweden.
In 1979, special credit agreements were signed with the Soviet Union and the People's Republic of China. In order to promote Swedish exports to these countries, SEK was able, under special conditions, to grant export credit with Government support. At the beginning of the 1980s these activities were flourishing and new products were developed to meet customer demands. The balance sheet total grew quickly and the granting of credits under purely commercial terms became increasingly important.
Up until the end of the 1990s, SEK was jointly owned by the Swedish state (50%) and the commercial banks (50%). Following a short period when ABB took over as part-owner instead of the banks, the Swedish state has been sole owner of SEK since 2003.
SEK's early focus not only provided valuable insight into and experience of the international capital market. It also provided a deep understanding of the cultures and circumstances of different countries. Our expertise in international borrowing and lending is now recognized as being among the best in the world. This expertise encompasses knowledge of local markets, currencies, financial instruments and complicated financial structures.
Swedish Export Credit Corporation (publ) Klarabergsviadukten 61 - 63 P.O. Box 194 SE-101 23 Stockholm, Phone:+46 8 613 83 00 Email: firstname.lastname@example.org Org. No. 556084-0315