Note 16 – Derivatives
The Group continuously hedges its assets denominated in foreign currencies in order to reduce its exchange rate exposure. As per 31 December 2021, the Group had exposures in EUR, GBP, PLN and RON, which are hedged using currency forward contracts. All outstanding derivatives are measured at fair value. Gains/losses on derivative instruments are recognised in the income statement for each annual statement. The effective part of hedge accounting in the Group is recognised in other comprehensive income for each annual statement.
The Parent Company Hoist Finance AB (publ) apply hedge accounting for the fair value of shares in subsidiaries and for shares and participations in joint ventures. Gains/losses on derivative instruments for hedge accounting in the Parent Company are recognised in shares in subsidiaries and in shares and participations in joint ventures. The Parent Company ceased its hedge accounting in GBP during 2021, as critical conditions for hedging are no longer met.
Additional information on the Group’s and the Parent Company’s management of hedge accounting is presented in Accounting Policies sections 10 and 22.8 “Hedge accounting”.
Derivatives held for trading
| Group 31 dec 2021 | ||||||
| Nominal amount/maturity | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Nominal amount | Positive market values | Negative market values |
| Interest rate-related contracts | ||||||
| Swaps | 832 | 792 | 1,447 | 3,071 | 62 | 0 |
| Currency-related contracts | ||||||
| Currency forwards | 2,357 | - | - | 2,357 | 14 | -22 |
| Total | 3,189 | 792 | 1,447 | 5,428 | 76 | -22 |
| SEK m | Positive market values | Negative market values | ||||
| Currency breakdown of market values | ||||||
| SEK | 3 | -4 | ||||
| EUR | 0 | - | ||||
| GBP | 34 | -2 | ||||
| PLN | 39 | -16 | ||||
| RON | 0 | 0 | ||||
| Total | 76 | -22 | ||||
Derivatives for hedge accounting
| Group 31 dec 2021 | ||||||
| Nominal amount/maturity | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Nominal amount | Positive market values | Negative market values |
| Currency-related contracts | ||||||
| Currency forwards | 8,624 | 8,624 | - | -122 | ||
| Total | 8,624 | 8,624 | - | -122 | ||
| Group 31 dec 2021 | ||||||
| Average exchange rate | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Positive market values | Negative market values | |
| Currency breakdown of market values | ||||||
| SEK/GBP | 12.11 | - | - | - | -24 | |
| SEK/PLN | 2.17 | - | - | - | -98 | |
| Total | - | -122 | ||||
Derivatives held for trading
| Group 31 dec 2020 | ||||||
| Nominal amount/maturity | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Nominal amount | Positive market values | Negative market values |
| Interest rate-related contracts | ||||||
| Swaps | 776 | 2,057 | - | 2,833 | - | -40 |
| Currency-related contracts | ||||||
| Currency forwards | 1,648 | - | - | 1,648 | 27 | -3 |
| Total | 2,424 | 2,057 | - | 4,481 | 27 | -43 |
| SEK m | Positive market values | Negative market values | ||||
| Currency breakdown of market values | ||||||
| SEK | - | -3 | ||||
| EUR | 10 | -13 | ||||
| GBP | 12 | -17 | ||||
| PLN | 5 | -10 | ||||
| Total | 27 | -43 | ||||
Derivatives for hedge accounting
| Group 31 dec 2020 | ||||||
| Nominal amount/maturity | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Nominal amount | Positive market values | Negative market values |
| Currency-related contracts | ||||||
| Currency forwards | 9,141 | - | - | 9,141 | 214 | - |
| Total | 9,141 | - | - | 9,141 | 214 | - |
| Group 31 dec 2020 | ||||||
| Average exchange rate | ||||||
| SEK m | Up to 1 year | 1-5 years | Over 5 years | Positive market values | Negative market values | |
| Currency breakdown of market values | ||||||
| SEK/GBP | 11.38 | - | - | 135 | - | |
| SEK/PLN | 2.26 | - | - | 79 | - | |
| Total | 214 | - | ||||
Hedging instruments and effectiveness in the hedge accounting 2021
| Group | ||||||||
| Carrying amount | ||||||||
| SEK m | Nominal amount | Assets | Liabilities | Balance sheet item in which the hedging instrument is included | Change in fair value used to calculate ineffectiveness for the period | Change in value of the hedging instrument recognised in other comprehensive income | Ineffectiveness recognised in the income statement | Income statement item which include the ineffectiveness |
| Currency-related contracts | ||||||||
| GBP - Derivatives, negative values | 4,808 | - | -24 | Other liabilities | -26 | -26 | 0 | Net result from financial transactions |
| PLN - Derivatives, negative values | 3,816 | - | -98 | Other liabilities | -15 | -15 | 0 | Net result from financial transactions |
| Total | 8,624 | - | -122 | -41 | -41 | 0 | ||
Hedging instruments and effectiveness in the hedge accounting 2020
| Group | ||||||||
| Carrying amount | ||||||||
| SEK m | Nominal amount | Assets | Liabilities | Balance sheet item in which the hedging instrument is included | Change in fair value used to calculate ineffectiveness for the period | Change in value of the hedging instrument recognised in other comprehensive income | Ineffectiveness recognised in the income statement | Income statement item which include the ineffectiveness |
| Currency-related contracts | ||||||||
| GBP - Derivatives, positive values | 5,221 | 135 | - | Other assets | 66 | 66 | - | Net result from financial transactions |
| PLN - Derivatives, positive values | 3,920 | 79 | - | Other assets | -72 | -72 | - | Net result from financial transactions |
| Total | 9,141 | 214 | - | -6 | -6 | - | ||
Hedged items 2021
| GROUP | |||
| SEK m | Change in fair value used to calculate ineffectiveness for the period | Hedge reserve | Amounts remaining in the hedging relationships for which hedge accounting is no longer applied |
| Hedging of foreign exchange risk in net investments in foreign operations | |||
| EUR | - | -149 | -149 |
| GBP | -499 | -169 | - |
| PLN | -31 | -276 | - |
| Total | -530 | -594 | -149 |
Hedged items 2020
| GROUP | |||
| SEK m | Change in fair value used to calculate ineffectiveness for the period | Hedge reserve | Amounts remaining in the hedging relationships for which hedge accounting is no longer applied |
| Hedging of foreign exchange risk in net investments in foreign operations | |||
| EUR | - | -149 | -149 |
| GBP | 568 | -143 | - |
| PLN | 257 | -264 | - |
| Total | 825 | -556 | -149 |
Hedged items 2021
| PARENT COMPANY | ||||
| Carrying amount hedged item | Accumulated fair value adjustment included in the carrying amount of the hedged item | |||
| SEK m | Assets | Liabilities | Balance sheet item in which the hedged item is included | Change in value of hedged items used to determine ineffeciency for the period |
| Fair value hedges | ||||
| GBP | - | - | Shares and participations in subsidiaries and joint ventures | -21 |
| PLN | 152 | -45 | Shares and participations in subsidiaries and joint ventures | -47 |
| Total | 152 | -45 | -68 | |
Hedged items 2020
| Parent company | ||||
| Carrying amount hedged item | Accumulated fair value adjustment included in the carrying amount of the hedged item | |||
| SEK m | Assets | Liabilities | Balance sheet item in which the hedged item is included | Change in value of hedged items used to determine ineffeciency for the period |
| Fair value hedges | ||||
| GBP | 335 | -21 | Shares and participations in subsidiaries and joint ventures | 19 |
| PLN | 147 | -47 | Shares and participations in subsidiaries and joint ventures | 10 |
| Total | 482 | -68 | 29 | |