Finnvera Oyj - Company Announcement

The roller coaster effect coloured 2012

Overview of Finnvera's operations in 2012

Fluctuations in the operating environment were reflected in companies'
business, and in their financing needs, during the past year. Among SMEs,
demand for Finnvera's financing focused on working capital and delivery
security for trading more than on investments. The volume of financing granted
to SMEs was less than the year before. Demand for export financing, especially
export credits, was brisk. International financing arrangements between several
financiers became more difficult to organise. This clearly increased the number
of applications for export credit guarantees. 

“As in the previous year, the euro crisis and uncertainty in the world economy
characterised 2012. The roller coaster effect is an apt description for the
two-fold year: during the first six months, the situation looked better than
the year before in some sectors, but signs of uncertainty increased again in
the second half of the year. In most cases, the Finnish banking market still
functioned well, but owing to the regulation of banks, stricter requirements
for issuing new credits could be discerned both at home and internationally. We
are closely monitoring trends in the financing provided by banks for SMEs.
Working together with banks, our goal is to ensure that financing can be
arranged for the development and growth of companies' business”, says CEO Pauli
Heikkilä. 

In 2012, Finnvera provided EUR 853 million in financing for enterprises'
domestic operations; this was 13 per cent less than the year before. 

The volume of new venture capital investments increased slightly on the
previous year, totalling EUR 17 million (15 million). 

The uncertain economy increased offers for export credit guarantees

Offers given for export credit guarantees and special guarantees totalled EUR
5.4 billion; this was 41 per cent more than in 2011. In total, 83 per cent of
the guarantees offered concerned the traditional sectors of Finnish capital
goods exports, such as telecommunications and the energy, forest and
shipbuilding industries. Besides Finland, the most guarantees were offered for
exports to the United States and Russia. 

“Apart from seasonal variation in competitive bidding for individual capital
goods transactions, another reason underlying the increase in offers for export
credit guarantees was the uncertain situation on the international financing
market. In particular, it has become more difficult to obtain large export
credits; this increased demand for both export credit guarantees and export
credits.” 

The permanent system for funding export credits was launched

Through its subsidiary, Finnish Export Credit, Finnvera helps to arrange
financing for foreign customers who purchase Finnish capital goods. The system
for funding export credits, based on Finnvera's own acquisition of funds, was
taken into use during the year under review. Finnvera acquires the funds needed
for export credits and SME credits from the market. The funds are obtained
using an EMTN (Euro Medium Term Note) loan programme, which is guaranteed by
the State and has the highest credit ratings. The first bonds under the
programme were floated on the international capital market in October. 

Future prospects

In Finnvera's view, 2013 will continue to be challenging in many respects. If
problems persist in the euro zone, the situation will be more serious and
difficult to predict. It is therefore expected that the period of slow growth
will continue in Finland in 2013. 

Sluggish economic growth and banks' stricter lending practices owing to
regulation make it challenging for many companies to arrange financing. SMEs
still need financing for working capital, while export companies need more
sources of funds for arranging long-term export credits. The low level of
investments reduces the demand for financing; on the other hand, banks hope to
see Finnvera participating increasingly often in financing projects, to share
risks with them. 

Finnvera's financial statements and online annual report for 2012 will be
published on the company's website www.finnvera.fi on 15 March 2013. 

Additional information:
Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400
Annamarja Paloheimo, Senior Vice President, tel. +358 29 460 2539

Finnvera provides financing for the start-up, growth and internationalisation
of enterprises and for exports. We strengthen the operating potential and
competitiveness of Finnish enterprises by providing loans, domestic guarantees,
venture capital investments, export credit guarantees and export credits. The
risks involved in financing are shared between Finnvera and other providers of
funding. Finnvera is a specialised financing company owned by the State of
Finland. It has official Export Credit Agency (ECA) status.