Pandox's financial risk management ensures that risks are handled according to policy and within the risk limits as defined and decided by the board of directors.

Interest rate risk

Pandox seeks to manage the risk that changes in interest rate levels could negatively affect the Pandox's results. Pandox's objective is that interest rate exposure is managed so that increased costs as a result of reasonable changes in interest rates are compensated through higher revenues. Pandox seeks to achieve this objective through maintaining a loan portfolio with varying maturity dates and fixed interest periods.

Furthermore, Pandox has developed and implemented systems and procedures designed to support continuous monitoring and reporting of interest rate exposures. Pandox enters into interest-rate swaps to obtain fixed interest periods.


Currency risk

The Pandox's balance sheet and income statement are exposed to changes in the value of the Swedish Krona, as certain of Pandox's assets are denominated in foreign currencies. Pandox seeks to hedge a part of this exposure through entering into loans in the local currency where  Pandox’s assets are located.

Liquidity risk

Pandox seeks to manage the risk that external financing may become more difficult to access. Pandox aims to centralize, where possible, all Pandox borrowing in the parent company in order to gain flexibility and administrative benefits. The Pandox's objective is to enter into long-term framework agreements that would allow for borrowings with various maturities.