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Capital Market Days 2008 - Mikael Inglander

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Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to ...

Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.

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    Capital Market Days 2008 - Mikael Inglander Capital Market Days 2008 - Mikael Inglander Document Transcript

    • High quality funding Mr Mikael Inglander CFO Capital Markets Day Kiev, 5 March 2008 Strong profit development SEKm SEKm 17,000 17,000 15,000 15,000 13,000 13,000 11,000 11,000 9,000 9,000 7,000 7,000 5,000 5,000 3,000 3,000 1,000 1,000 -1,000 -1,000 2000 2001 2002 2003 2004 2005 2006 2007 Profit before loan losses Capital gains EnterCard and KIAB *Loan losses, net = write-offs Loan losses, net* Operating profit (excl. capital gains) + provisions – recoveries + change in property taken over © Swedbank 2 1
    • Swedbank funding structure Lending to the public – SEK 1,103bn Swedbank Group Swedbank excl. Swedbank 49% 51% Mortgage Mortgage SEK 542bn SEK 561bn Distribution of net funding need Swedbank Treasury (excl. Swedbank Mortgage) Swedbank Mortgage Funding Equity • Large deposits 8% 5% Deposits Swedbank Mortgage Equity 84% Funding constitutes a larger part of • Liquidity reserves 8% 95% Swedbank Group’s balance • Net lender in the interbank market sheet compared to other • Liquidity limits – conservative view financial institutions © Swedbank 3 Swedbank Mortgage – credit risk 31 Dec 700 Municipalities Commercial 3% (4) Agriculture 600 buildings 6% (6) 1% (1) 500 400 Multi-family housing SEKm incl. c ondominium 300 associations 16% (17) 200 100 Single-family homes Individual 61% (61) 0 condominiums 13% (11) -100 2000 2001 2002 2003 2004 2005 2006 2007 Credit losses = 90% Residential loans -net recoveries during 2007 Net 60% 3,000 50% 2,500 40% 2,000 SEKm 30% 1,500 1,000 20% 500 10% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 <30% 30-60% 60-75% 75-85% >85% Distribution of loan to value Average LTV of 44% Impaired, restructured and past due loans “80% percent of the portfolio has an LTV of 50% or lower” © Swedbank – at historically low levels 4 2
    • Converting to covered bonds, Q2 2008 • Possibility to meet a broader investor base • Larger investor base ensures even more stable liquidity • AAA rating – funding at lower cost • Increased liquidity reserve through Swedbank’s possibility to pledge subsidiary covered bonds in the Swedish Central Bank • Funding strategy to prolong maturity structure with covered bonds © Swedbank 5 Swedbank Mortgage – long-term funding Action plan: Swedbank Mortgage - maturity of long-term funding 250,000 • Conversion to covered bonds during Q2 2008 and covered bond issues, approx. EUR 6.0bn 200,000 • Continuous activities in the market for private 150,000 placements, approx. EUR 1.5bn SEKm • Continuous issues on tap in the Swedish 100,000 mortgage bond market under existing mortgage bond programme, approx. EUR 7.5bn 50,000 • The issue of a new 5-year Swedish benchmark 0 bond Swedbank Mortgage 177 <1y 1-2y 2-3y 3-4y 4-5y >5y • The maturity of SPI173 in June 2008 is smaller than the average yearly maturing domestic benchmark bond © Swedbank 6 3
    • Additional material © Swedbank 7 Swedbank Mortgage Maturity profile 2008, long-term funding Total: SEK 158,467m 70,000 60,000 50,000 40,000 SEKm 30,000 20,000 10,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec © Swedbank 8 4