CEO presentation of Q2 2008 results

Interim report Q2 2008 17 July 2008 Jan Lidén President and CEO

Continued solid results • Continued solid results in all • Credit quality remains good and in business areas line with expectations – Net profit for the period Jan-Jun • The macro environment in the increased by 8 percent to Baltic states has deteriorated SEK 6 504m (6 022) compared with expectations in • Conversion to covered bonds on Q1, affected by a weaker 21 April – decreased spreads, European economy increased liquidity and facilitated • Net gains and losses on financial funding items were positively affected by • New capital adequacy objective unrealized valuation effects – for full Basel 2 – Tier 1 capital valuation volatility expected to ratio is to be 8.5-9.0 percent decrease as from Q3 2008. (2)

H1 2008 – best half-year so far Swedish Banking Baltic Banking International Banking Swedbank Markets SEKm SEKm SEKm SEKm 1 300 450 150 2,000 400 1 250 125 350 1 200 300 1,500 1 150 100 250 1 100 200 1 050 75 1,000 150 1 000 100 50 950 50 500 900 0 25 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 07 07 07 07 08 08 Q1 Q2 Q3 Q4 Q1 Q2 07 07 07 07 08 08 06 06 06 07 07 07 07 08 08 07 07 07 07 08 08 Profit for the period Profit for the period of which First Securities Profit for the period Profit for the period (3)

Initiatives in line with our strategy Sweden Baltics Ukraine and Russia • Structural initiatives – • Productivity improvement • Build-up of critical functions operation and branches • Cross-border capabilities and growth management • Channel management • IT management and • Grow distribution network - • Corporate market and development ATMs, branches and agency metropolitan areas • Corporate sector – leverage on network • Private banking, life and pan-Baltic position • Broaden product range pension, environmentally • Broaden customer offerings • Re-branding completed friendly products and services • Re-branding starting in autumn • Capture future growth Growth and Future growth and Stable base experience profitability Share of lending: 80 % Share of lending: 16 % Share of lending: 2 % (4)

A slowing Swedish economy • The Swedish economy has performed better than the EU average. However, GDP growth, CPI and other indicators show that the Swedish economy will grow more slowly in the next few quarters • Higher inflation, rising interest rates and weaker disposable income for households are expected to lead to weakening household consumption and credit growth. Real GDP growth CPI growth 3.0% 4.0% 2.5% 3.0% 2.0% 2.0% 1.5% 1.0% 1.0% 2007 2008F 2009F 0.0% 2007 2008F 2009F Sweden Euro-zone Sweden Euro-zone (5) Source: Swedbank, Economic Secretariat

Baltic macro development weaker than expected • Economic slowdown in Estonia continues: GDP growth will slow to about 2% in 2008 and recover to 4% in 2009 if global economic developments improve and price growth slows • In Latvia growth will slow to about 1.3% in 2008 and 2009, the bottom of the cycle is expected to be in winter 2008/2009 • The slowdown in Lithuania is expected to be modest: growth of about 6.5% is expected in 2008 and about 5.5% in 2009 • Export growth remains relatively strong, while weak domestic demand dampens imports. Trade and current account deficits are falling. The CPI has started to show signs of a slowdown, but external risks are high (oil, food). Real GDP growth CPI growth 14% 16% 12% 14% 10% 12% 8% 10% 6% 8% 4% 6% 2% 4% 0% 2% 2005 2006 2007 2008F 2009F 2005 2006 2007 2008F 2009F Est Lat Lit Est Lat Lit (6) Source: Hansabank Markets

Credit quality, Group SEKm % 600 0.60 500 0.50 Loan losses, net 400 0.40 300 0.30 Loan loss ratio 200 0.20 *Loan losses, net = write-offs + 100 0.10 provisions - recoveries + change in 0 0.00 property taken over -100 -0.10 Q2-07 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q3-07 Q4-07 Q1-08 Q2-08 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-03 Q2-03 Q3-03 -200 -0.20 SEKm % 6,000 0.50 0.45 5,000 0.40 Impaired loans 4,000 0.35 0.30 3,000 0.25 Share of impaired loans 0.20 2,000 0.15 1,000 0.10 0.05 0 Q4-07 0.00 Q1-08 Q2-08 Q3-07 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-03 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 (7)

Baltic banking overdues vs market Estonia - overdue over 30 days / current Estonia - overdue over 60 days / current portfolio portfolio 3.0% 2.0% 2.5% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% 31.12.05 30.06.06 31.12.06 30.06.07 31.12.07 30.04.08 31.12.05 30.06.06 31.12.06 30.06.07 31.12.07 30.04.08 Rest of the market HB Bank Rest of the market HB Bank Latvia - overdue over 30 days / current portfolio Latvia - overdue over 90 days / current portfolio 5% 3,0% 4% 2,5% 3% 2,0% 2% 1,5% 1% 1,0% 0% 0,5% 0,0% 31.12.04 30.06.05 31.12.05 30.06.06 31.12.06 30.06.07 31.12.07 31.12.04 30.06.05 31.12.05 30.06.06 31.12.06 30.06.07 31.12.07 Rest of the market HBA Bank Rest of the market HBA Bank (8) Source: Swedbank, Bank of Estonia, and Financial and Capital Market Commission (Latvia)

Credit quality, Baltic Banking Loan loss ratio, net* Q4 07 Q1 08 Q2 08 H1 08 Estonia 0.58% 0.38% 0.55% 0.48% Latvia 0.63% 0.53% 0.73% 0.64% Lithuania 0.10% 0.25% 0.30% 0.28% Group level provision adjustment -0.18% Baltic Banking 0.28% 0.39% 0.54% 0.47% *Loan loss ratio, net = (changes in provisions + net write-offs) / credit portfolio at the beginning of the period Overdue ratio (more than 60 days)* Q4 07 Q1 08 Q2 08 Corporate 0.65% 0.79% 1.24% Private 0.75% 0.92% 1.11% Baltic Banking 0.71% 0.86% 1.20% *Overdue ratio (more than 60 days) = volume of loans more than 60 days overdue /12 month-old credit portfolio (9)

Accounting and valuation effects Q2 Q1 Q4 Accounting and valuation effects, SEKm 2008 2008 2007 Swedbank Markets 0 – 187 – 40 Group Treasury, intra-group lending 419 – 253 20 Swedbank Mortgage 29 – 22 66 Group Treasury, liquidity portfolio –4 53 –5 (10)

Swedish Banking SEKm C/I-ratio • Continued strong corporate lending growth 5,000 0.7 • Mortgage lending growth has started to decline 4,500 0.6 • Overall stable lending margins 4,000 – Back book mortgage margin stabilizing. 3,500 0.5 New lending shows increasing margin 3,000 – Corporate margins are increasing 0.4 slowly 2,500 0.3 • Deposit margins decreased as a result 2,000 of mix effects 1,500 0.2 • Continued increase in card volumes 1,000 • Capital gain of SEK 101m from sale of 0.1 500 MasterCard shares 0 0.0 • Continued strong credit quality Q1 Q2 Q3 Q4 Q1 Q2 – Stable low LTV ratio at 43% in 07 07 07 07 08 08 Swedbank Mortgage – Only 1.5% of the lending in Swedbank Mortgage has a LTV ratio over 75%. Income Costs C/I-ratio (11)

Baltic Banking Operations SEKm C/I-ratio • Strong and stable income 2,400 0.5 • Lending margins decreased as a 2,200 2,000 result of higher funding costs 0.4 1,800 • Deposit margins affected 1,600 1,400 0.3 negatively by decreasing local 1,200 interest rates and increased 1,000 0.2 competition 800 600 • Capital gain of SEK 66m from the 0.1 400 sale of PKK 200 0 0.0 • Profit based staff costs have been Q1 Q2 Q3 Q4 Q1 Q2 reduced by SEK 185m owing to 07 07 07 07 08 08 lower provision requirements. Income Costs C/I-ratio C/I-ratio excluding one-offs (12)

International Banking • Annika Wijkström new head of SEKm International Banking • Strong net interest income development 100 • Continued strong economic growth in Ukraine and Russia but with high inflation 75 • Ukrainian Banking operations – Continued high lending growth – Higher costs due to operational excellence 50 projects and profit-based staff costs • Russian Banking – Ownership transferred from Hansabank to 25 Swedbank – Raimo Valo new CEO 0 – Recovered tax on lease assets of SEK 19m Q1 Q2 Q3 Q4 Q1 Q2 • Strong lending growth in the Nordic 07 07 07 07 08 08 branches. International Banking, profit for the period of which Russian Banking of which Ukrainian Banking Operations (13)

Swedbank Markets SEKm 450 • Magnus Geeber new head of 400 Swedbank Markets 350 • Good development in fixed 300 income and FX trading despite 250 difficult conditions at times 200 • Stable market share in equity 150 trading and structured products 100 but lower market activity 50 0 • Increased activity in Project and Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Corporate Finance compared with 06 06 06 07 07 07 07 08 08 Q1 of which First Securities • Good performance in First Profit for the period attributable to shareholders of Swedbank Securities after a slow start to the year. (14)

Swedbank lending and funding Lending to the public, SEK 1,169bn Russia Ukraine 1% 1% Nordic; 3% Lithuania 5% Latvia Swedbank 5% Swedbank Group, excl. Estonia 7% Mortgage Swedbank Swedbank SEK 573bn Mortgage Mortgage 49% - Exclusively Swedish SEK 596bn mortgage lending Sweden 30% Distribution of Net Funding Need Swedbank Treasury (excluding Mortgage) Swedbank Mortgage Funding Equity 12% 5% Commercial • Large deposits Papers Swedbank Mortgage Equity • Liquidity reserves 8% 22% constitutes a larger part of Swedbank Group’s balance • Net lender in the interbank market sheet than other financial • Liquidity limits – conservative view institutions Covered Bonds (15) Deposits 73% 80%

New capital adequacy target – mid-term • New target: The capital ratios will at least meet the level that at any given time is considered appropriate to maintain sustainable financial stability and develop operations. Considering full effect of Basel 2, the Tier 1 capital ratio is to be 8.5-9.0%. • Swedbank is currently well capitalized given the current risk profile and the risk development under an adverse scenario • Swedbank is currently capitalized in line with European peers in full Basel 2 • In relative terms Swedbank has a low risk business model with a predominance of Swedish mortgage business and low counterparty risks, which indicates a lower than average Tier 1 capital ratio. Growing presence in Eastern Europe indicates higher Tier 1 capital ratio (16)

Group results Mikael Inglander CFO (17)

Prof it for the period, SEKm Earnings per share, SEK Return on equity, % Tier 1 capital rat io, % 4 000 8.0 25.0 10.0 3 500 7.0 9.0 20.0 8.0 3 000 6.0 7.0 2 500 5.0 15.0 6.0 2 000 4.0 5.0 1500 3.0 10.0 4.0 3.0 1000 2.0 5.0 2.0 500 1.0 1.0 0 0.0 0.0 0.0 Q2- Q3- Q4- Q1- Q2- Q2- Q3- Q4- Q1- Q2- Q2- Q3- Q4- Q1- Q2- Q2- Q3- Q4- Q1- Q2- 2007 2007 2007 2008 2008 2007 2007 2007 2008 2008 2007 2007 2007 2008 2008 2007 2007 2007 2008 2008 (18)

Income statement, Group Q2 Q1 Q2 SEKm 2008 2008 % 2007 % Net interest income 5,295 5,241 1 4,591 15 Net commission income 2,374 2,180 9 2,552 –7 Net gains/losses on financial items at fair value 1,141 75 579 97 Other income 623 950 – 34 504 24 Total income 9,433 8,446 12 8,226 15 Staff costs 2,268 2,311 –2 2,016 13 Profit-based staff costs 185 268 – 31 409 – 55 Other expenses 1,977 1,861 6 1,699 16 Total expenses 4,430 4,440 –0 4,124 7 Profit before loan losses 5,003 4,006 25 4,102 22 Loan losses, net 423 288 47 102 Operating profit 4,580 3,718 23 4,000 15 Tax 935 805 16 856 9 Profit for the period 3,645 2,913 25 3,144 16 Attributable to shareholders of Swedbank 3,604 2,900 24 3,112 16 (19)

4,600 4,800 5,000 5,200 5,400 5,600 Net interest income SEKm Q1-08 5,241 Swedish Banking 11 Baltic Banking Operations 44 Baltic Banking 1 Investment International 72 Banking Swedbank 187 Markets Asset management and 2 Net interest income Q2-08 (Q1-08) Insurance Shared Services and other 151 Net interest income Q2-08 5,295 (20)

Swedish Banking, change in net interest income Q2 2008 Q2 2008 SEKm vs Q1 2008 vs Q2 2007 Net interest income Q1 2008 2,982 Net interest income Q2 2007 2,905 Changes: Higher lending volumes 54 227 Unchanged lending margins 0.0 Decreased lending margins – 244 Higher deposit volumes 34 140 Decreased deposit margins – 44 Higher deposit margins 79 Other changes – 55 – 136 Total change – 11 66 Net interest income Q2 2008 2,971 2,971 (21)

Baltic Banking, change in net interest income Q2 2008 Q2 2008 SEKm vs Q1 2008 vs Q2 2007 Net interest income Q1 2008 1,575 Net interest income Q2 2007 1,377 Changes: Higher lending volumes 33 214 Decreased lending margins -92 -108 FX-effects, lending -5 11 Higher deposit volumes 14 78 Decreased deposit margins -76 -127 FX-effects, deposits -3 8 Other changes 85 78 Total change – 44 154 Net interest income Q2 2008 1,531 1,531 (22)

Net commission income, Group Q2 Q1 Q2 SEKm 2008 2008 % 2007 % Payments 839 793 6 743 13 Lending 199 136 46 178 12 Brokerage 188 213 – 12 242 – 22 Asset management 945 950 –1 1,126 – 16 Insurance 71 68 5 80 – 11 Corporate finance 177 19 172 3 Other – 45 1 11 Total net commissions 2,374 2,180 9 2,552 –7 (23)

Expenses Q2 Q1 Q2 SEKm 2008 2008 % 2007 % Swedish Banking 2,239 2,255 – 1 2,330 –4 Baltic Banking 795 899 – 12 851 –7 International Banking 349 309 13 113 of which Ukrainian Banking 197 150 31 Swedbank Markets 585 456 28 499 17 Asset Management & Insurance 206 253 – 19 239 – 14 Other 256 268 – 4 92 Total expenses 4,430 4,440 – 0 4,124 7 of which staff costs in: Swedish Banking 1,017 1,099 – 7 1,084 –6 Baltic Banking 343* 522 – 34 495 – 31 International Banking 177 157 13 64 Swedbank Markets 390 258 51 318 23 Asset Management & Insurance 98 110 – 11 102 –4 (24) * Baltic Banking profit based staff costs have been reduced by SEK 185m owing to lower provision requirements.

Business areas Swedish Baltic International Swedbank Asset Q2 08 vs Q2 07 Banking Banking Banking Markets Mgmt SEKm Q2 08 % Q2 08 % Q2 08 % Q2 08 % Q2 08 % Net interest income 2,971 2 1,531 11 441 476 61 27 13 Net commission income 1,057 -5 478 0 55 38 352 –8 432 – 15 Other income 425 12 405 18 132 138 – 29 68 33 Total income 4,453 1 2,414 10 628 966 11 527 – 10 Staff costs 1,017 – 6 343 – 31 177 390 23 98 – 4 Other expenses 1,222 – 2 452 27 172 198 8 108 – 21 Total expenses 2,239 – 4 795 – 7 349 585 17 206 – 14 Profit before loan losses 2,214 7 1,619 20 279 381 2 321 –7 Loan losses 85 245 93 0 0 Operating profit 2,129 4 1,374 8 186 381 3 321 -7 Net shareholders' profit 1,601 8 1,272 10 147 235 0 244 –6 Return on allocated equity, % 22.1 34.8 7.8 23.3 44.7 (25)

Key figures Jan-Jun Jan-Jun 2008 2007 Return on equity, % 18.7 19.5 Earnings per share, SEK 12.62 11.68 Equity per share, SEK 135.81 120.23 C/I ratio before loan losses 0.50 0.50 Loan loss ratio, net, % 0.12 0.03 Share of impaired loans, % 0.20 0.08 Tier 1 capital ratio, new rules, % 8.8 9.0 Tier 1 capital ratio, transition rules, % 6.7 6.7 Capital adequacy ratio, new rules, % 12.6 13.4 (26)

Continued solid results • Continued solid results in all • Credit quality remains good and in business areas line with expectations – Net profit for the period Jan-Jun • The macro environment in the increased by 8 percent to Baltic states has deteriorated SEK 6 504m (6 022) compared with expectations in • Conversion to covered bonds on Q1, affected by a weaker 21 April – decreased spreads, European economy increased liquidity and facilitated • Net gains and losses on financial funding items were positively affected by • New capital adequacy objective unrealized valuation effects – for full Basel 2 – Tier 1 capital valuation volatility expected to ratio is to be 8.5-9.0 percent decrease as from Q3 2008. (27)

Appendix (28)

Exposure FAQ • No direct US Sub-Prime exposure – Minimal indirect exposure through investments of EUR 23.4m in bonds issued by US mortgage institutions who, in their turn, have exposures towards US sub-prime • Total exposure to structured credits is minimal – Total commitments towards conduits or SIVs is EUR 127m • The exposure has originated when reshaping an existing loan in order to gain better collateral, lower risk and higher margin – Negligible exposure to CDOs • Swedbank holds a very small CDO trading stock for client trades in CDOs which we have issued ourselves with mainly large Caps as underlying risk • Total holdings were EUR 21m at end Q2 – Exposure to Mortgage Backed Securities is about EUR 648m • European Aaa and mainly residential (RMBS) • Held for EUR liquidity purposes and client trading • Hedge fund exposure is about EUR 150m, all collateralized • Exposure towards private equity firms and their target companies is about EUR 1 375m in total – Nordic related LBOs • In total, the above mentioned exposures represent less than 1.5% of total assets (29)

Main Baltic macro indicators Real GDP growth CPI growth 15% 20% 10% 15% 10% 5% 5% 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 05 05 05 05 06 06 06 06 07 07 07 07 08 05 05 05 05 06 06 06 06 07 07 07 07 08 08 Est Lat Lit Est Lat Lit Consumer confidence Number of real-estate transactions and average 20 3 000 sales price 2 000 10 2 400 1 600 0 # of transactions 1 800 1 200 -10 EUR/m2 1 200 800 -20 jan- maj- sep- jan- maj- sep- jan- maj- sep- jan- maj- 600 400 05 05 05 06 06 06 07 07 07 08 08 -30 0 0 Estonia Latvia Lithuania jan- maj- sep- jan- maj- sep- jan- maj- sep- jan- maj- 05 05 05 06 06 06 07 07 07 08 08 (30) Tallinn, # of transactions Riga, # of transactions Vilnius, # of transactions Tallinn, avg sales price Riga, avg sales price Vilnius, avg sales price

GDP growth components 24% Components of GDP growth - Estonia 24% Components of GDP growth - Latvia 20% 20% 16% 16% 12% 12% 8% 8% 4% 4% 0% 0% -4% 2004 2005 2006 2007 Q108 -4% 2004 2005 2006 2007 Q108 -8% -8% -12% -12% households government investments households government investments net exports errors net exports errors 24% Components of GDP growth - Lithuania 20% 16% 12% 8% 4% 0% -4% 2004 2005 2006 2007 Q108 -8% -12% households government investments net exports errors (31) * Please note that Q1 08 data for GDP growth components are initial figures that can change as new information becomes available

Baltic current account deficit Current account (% of GDP) Estonia 5% 40% 35% 0% Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 30% -5% 25% -10% 20% 15% -15% 10% -20% 5% -25% 0% Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 -5% -30% Est Lat Lit Exports YoY growth Imports YoY growth 40% Latvia Lithuania 45% 35% 40% 30% 35% 25% 30% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 (32) Exports YoY growth Imports YoY growth Exports YoY growth Imports YoY growth

Baltic consumer price index Latvia 35 Estonia 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 2005 2006 2007 2008 2005 2006 2007 2008 -5 -5 HICP, % HICP, % Energy, % Energy, % Food including alcohol and tobacco, % Food including alcohol and tobacco, % Core inflation, % Core inflation, % 35 Lithuania 30 25 20 15 10 5 0 2005 2006 2007 2008 -5 HICP, % (33) Energy, % Food including alcohol and tobacco, % Core inflation, %

Talibor, Rigibor, Vilibor, Euribor 14 12 10 8 % 6 4 2 0 jan-07 feb-07 mar-07 apr-07 maj-07 jun-07 jul-07 aug-07 okt-07 nov-07 dec-07 jan-08 feb-08 mar-08 apr-08 jun-08 3m Talibor 3m Rigibor 3m Vilibor 3m Euribor (34)

Asset quality and provisioning costs Net loan losses Net loan losses by country 250% 30 25 Q2 08 Q1 08 2007 200% 20 Estonia 0.58% 0.38% 0.39% EURm 150% 15 Latvia 0.75% 0.54% 0.56% 100% 10 Lithuania 0.31% 0.25% 0.23% 50% 5 Group 0.55% 0.39% 0.40% 0% 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Net loan losses NLL YoY % growth Net loan losses = (changes in general and special provisions + net write offs) / credit portfolio at the beginning of the year Net loan losses 2,5% Net loan losses 2,0% Q2 08 Q1 08 2007 1,5% Corporate 0.71% 0.43% 0.42% 1,0% incl real estate 0.98% 0.86% 0.57% 0,5% incl industry 0.83% 0.09% 0.31% 0,0% Private 0.32% 0.32% 0.33% -0,5% 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q1 Q2 08 08 incl home loans 0.06% 0.16% N/A -1,0% -1,5% Group 0.55% 0.39% 0.40% -2,0% (35) Estonia Latvia Lithuania Group

Asset quality – overdue more than 60 days Overdue more than 60-days/12m old Overdue over 60-days/12m old 2,0% 2,0% portfolio portfolio 1,6% 1,6% 1,2% 1,2% 0,8% 0,8% 0,4% 0,4% 0,0% 0,0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 08 08 06 06 06 06 07 07 07 07 08 08 Group Est Lat Lit Group Overdue over 60-days/12m old Overdue over 60-days/12m old 2,5% 1,2% portfolio portfolio 2,0% 0,8% 1,5% 1,0% 0,4% 0,5% 0,0% 0,0% Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Private Corporate Real estate, rent Retail and wholesale Construction Industry Logistics and comm Other business services (36)

Baltic Banking lending by sectors Portfolio (EURm), June 2008 Portfolio growth (EURm), Q2 08 Individuals 8 621 43% 249 Real-estate 3 110 15% 176* mgmt * Retail & 1 803 9% 2 Wholesale Industry 1 801 9% 21 Transport 1 050 5% -26 Construction 580 3% -13 Other 3 181 16% 93 0 2 000 4 000 6 000 8 000 10 000 -75 0 75 150 225 300 xx% - share of portfolio *Real estate management related portfolio growth includes refinancing of existing loan from Sweden to Latvian business unit (Nordic real estate group with significant Latvian investments) (37)

Estonian lending by sectors Portfolio (EURm), June 2008 Portfolio growth (EURm), Q2 08 Individuals 3 685 45% 116 Real-estate 1 158 14% 28 mgmt Retail & 694 9% -5 Wholesale Industry 513 6% 18 Transport 308 4% -40 Construction 201 2% -4 Other 1 570 19% -17 0 1 000 2 000 3 000 4 000 -50 0 50 100 150 xx% - share of portfolio (38)

Latvian lending by sectors Portfolio (EURm), June 2008 Portfolio growth (EURm), Q2 08 Individuals 2 739 43% 38 Real-estate 1 052 17% 114* mgmt * Retail & 536 8% 0 Wholesale Industry 653 10% 28 Transport 287 5% 11 Construction 262 4% 6 Other 838 13% 13 0 1 000 2 000 3 000 4 000 -50 0 50 100 150 xx% - share of portfolio *Real estate management related portfolio growth includes refinancing of existing loan from Sweden to Latvian business unit (Nordic real estate group with significant Latvian investments) (39)

Lithuanian lending by sectors Portfolio (EURm), June 2008 Portfolio growth (EURm), Q2 08 Individuals 2 197 38% 95 Real-estate 899 16% 34 mgmt Retail & 573 10% 8 Wholesale Industry 636 11% -25 Transport 455 8% 3 Construction 116 2% -16 Other * 867 15% 97 * 0 1 000 2 000 3 000 4 000 -50 0 50 100 150 xx% - share of portfolio * Other - largest increase in Energy, gas and water supply sector (40)

Mortgages • Standard mortgage product allows issue of 30 June 2008 Estonia Latvia Lithuania new loans with maximum LTV of 85% and loan-service ratio below 50%. Average portfolio LTV 59% 74% 61% • Mortgage portfolio LTV ratios have remained Average maturity 21y 23y 22y solid at 59% in Estonia, 74% in Latvia and 61% in Lithuania. • Quality of existing portfolio and each new customer/transaction are evaluated using automated scoring tools. • Decision making process, product conditions, and pricing are adjusted based on creditworthiness of the clients. • Sub-prime mortgage lending is not practiced in Baltics (41)

Group lending by sectors – real estate Estonia 6% 22% 15% Portfolio, June 2008 5% 9% 6% 9% Latvia 2% 13% 25% 15% 43% 15% 26% 10% 3% 16% 22% Construction Other Lithuania Individuals Transport 4% 4% 13% Industry Retail & Wholesale Real-estate mgmt 38% 5% Office Production&Warehouse Residential 41% Retail Land plots 34% Other (42)

Real estate portfolio 2,5% Real estate management overdues* • As indicated by internal stress-tests 2,0% and portfolio analyses, real estate and 1,5% in particular residential real estate development is the most sensitive 1,0% sector in Baltic Banking portfolio. 0,5% ‘Sensitivity’ has started to appear in 0,0% overdue and default figures of corporate Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 portfolio. -0,5% Estonia Latvia Lithuania * Overdues over 60 days / 12 months old portfolio • Around 2/3 from total Real Estate portfolio are cash flow generating properties with good tenant mix. Properties under development process (1/3 from portfolio) are currently affected the most by decreasing prices and liquidity in the market. Hansabank has always strictly restrained from financing speculative type of properties. • Additional defaults in the residential real estate development sector are expected in the second half of 2008, but no major surprises are expected due to previously implemented portfolio limitations and individual level monitoring. Restructuring capacity has been put in place. (43)

Group lending by sectors – retail & wholesale Estonia 32% 34% Portfolio, June 2008 5% 9% Latvia 43% 9% 26% 31% 35% 15% 3% 16% Construction Other Lithuania Individuals Transport 12% Industry Retail & Wholesale Real-estate mgmt 43% 19% Distributors Specialty retail Other 69% (44)

Group lending by sectors – transport Estonia 24% 23% Portfolio, June 2008 43% Latvia 5% 25% 28% 35% 9% 16% 41% 3% 9% 15% Construction Other 10% Lithuania Individuals Transport 1% Industry Retail & Wholesale 13% 4% 11% Real-estate mgmt Trucking Marine Terminals&Ports Other 85% (45)

Sectors under close watch 2,0% Transportation overdues* Transportation 1,5% Trucking companies are facing problems due to increasing fuel prices and lagging freight rates. This global problem has 1,0% started to be reflected in Baltic Banking provisions 0,5% (especially in SME segments) since the beginning of the year. 0,0% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Estonia Latvia Lithuania * Overdues over 60 days / 12 months old portfolio Retail & wholesale Trade volume growth rates slowed down and started to decrease in Estonia and Latvia in Q2 2008 (still growing in Lithuania). There is no substantial impact on portfolio quality yet, but deterioration is expected along with a decrease in consumption. Wood processing Raw material price increases coupled with downward pressure on sales prices are having a negative impact on Baltic wood processing industry. Current portfolio quality is around average with only few problem cases observed. Additional problems may occur after export duties are imposed on Russian round wood as there is dependence on imported round wood in Estonia. (46)

Collateral breakdown Baltic Collateral (EUR m) • Hansabank’s loan portfolio is adequately secured. Q2 08 % 2007 % • Private mortgage portfolio is fully covered by State 270 1% 273 1% family houses and apartments (as a rule Private real-estate 7,172 35% 6,660 33% owner occupied). Corporate real-estate 7,927 38% 7,960 39% • Full asset pledge, including tangible assets Guarantees 316 2% 668 3% and current assets, is the most common case for the Corporate portfolio. Collateral Other collateral* 3,810 18% 3,621 18% position enhancement with owner Unsecured 1,172 6% 985 5% guarantees and additional collateral is used for more risky customers and SME Unsecured corporate 852 4% 706 4% segments. Unsecured private 320 2% 279 1% Total 20,667 100% 20,167 100% • The share of unsecured loans is insignificant *Other collateral is deposits, customer payments, vehicles, etc (used for top ratings in corporate segment and consumer products in private segment). (47)

Regular process of outstanding loan review • Portfolio quality improvement measures were introduced at the end of 2006 • Real estate sector growth is under control, with regular scrutiny of existing portfolio • Strengthened risk units – Increased number of people dealing with problem loans – Strengthened workout team – Improved quality and increased frequency of portfolio quality reporting • Targets set for new origination quality • Regular loan review process includes – Overall portfolio stress test once a year – Portfolio review twice a year – Quarterly “watch list” report – IRB portfolio scoring once a month • On the individual loan basis: – Client rating review minimum once a year • Rating classes 5 and higher are subject to more frequent assessment – Quarterly financials/covenants assessment – For SME/SSE and private portfolio weekly overdue report (with client names identified) (48)

Credit quality management process 1. Proactive management of watch list clients – Private clients - communication on step-by-step actions to take before falling into overdues. Development of standard proactive solutions to ensure serviceability of the credit – Corporate clients - proactive communication, frequent client meetings and positive attitude to find solutions 2. Overdue management - concentrates on time horizon from occurrence of distress situation (either through late payment or on the basis of client information) to moving credit over to restructuring or workout phase. The primary focuses in overdue management are: – Process design for fast and prudent management of overdues, clear process ownership – Prudent tactics to handle overdue payments. Constant re-evaluation of the tactics on their effectiveness and adequacy – Clearly set timing and channels for client contacts – Build capacity to work with distressed clients including adequate training of employees – Internal target setting and incentives to reach targets – Timely reporting and follow up on activities taken 3. Distressed debt restructuring – Defined tactics of restructuring. Solutions to ensure client serviceability of the debt – Extended capacity to work with distressed clients – Effective solutions for collected collaterals handling (49)

CEO presentation of Q2 2008 results

by Swedbank on Nov 22, 2010

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CEO presentation of Q2 2008 results — Presentation Transcript