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Danske Bank Nordic Bank Seminar, June 2010

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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 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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Danske Bank Nordic Bank Seminar, June 2010

  1. 1. Nordic Bank Seminar June 2010 Erkki Raasuke, CFO
  2. 2. The bank for the many people, households and businesses 2 Our home markets Latvia Population 2.3m Employees 1 846 Private customers 0.9m Corporate customers 60 000 Branches 59 ATMs 369 Cards 0.9m Lithuania Population 3.4m Employees 2 485 Private customers 3.2m Corporate customers 90 000 Branches 99 ATMs 444 Cards 1.7m Estonia Population 1.3m Employees 2 619 Private customers 1.2m Corporate customers 99 000 Branches 68 ATMs 556 Cards 1.2m Sweden Population 9.2m Employees 8 480 Private customers 4.1m Corporate customers 285 000 Organisations 115 000 Branches 381 ATMs 802 Cards 3.7m
  3. 3. Swedbank – a strong retail franchise • Leading provider of services in many market segments 3 0 10 20 30 40 50 60 Sweden Estonia Latvia Lithuania % Market shares, private Mortgage lending Deposits 0 5 10 15 20 25 30 35 40 45 50 Sweden Estonia Latvia Lithuania % Markets shares, corporate Lending Deposits
  4. 4. 0 200 400 600 800 1 000 SEKbn Total lending by country, SEK 1 168bn • Lending of SEK 216bn to CEE countries 4 Sweden 82% Estonia 6% Latvia 4% Lithuania 3% Russia 1% Ukraine 1% Other* 4% 100% * Mainly Norway, Denmark, Finland, Luxemburg and USA
  5. 5. 5 Business area overview -3 000 -2 000 -1 000 0 1 000 2 000 3 000 Retail Large Corporates & Institutions Baltic Banking Russia & Ukraine Asset Management Ektornet SEKm Profit before impairments Q2 09 Q3 09 Q4 09 Q1 10 -3 000 -2 000 -1 000 0 1 000 2 000 3 000 Retail Large Corporates & Institutions Baltic Banking Russia & Ukraine Asset Management Ektornet SEKm Operating result Q2 09 Q3 09 Q4 09 Q1 10
  6. 6. Development since March 2009 • New management team • Changed governance • Reduced credit risks • Strengthened capitalisation • Improved funding structure • Back to profit 6
  7. 7. 7 First quarter 2010 results SEKm Q1 2010 Q4 2009 Change Net interest income 4 023 4 702 -679 Net commission income 2 282 2 361 -79 Net gains/losses on financial items, fair value 647 223 424 Other income 715 751 19 Non recurring items -55 -55 Total income 7 667 7 982 -315 Staff costs 2 296 2 319 -23 Variable staff costs 79 23 56 Other expenses 2 016 2 370 -354 Non recurring items -412 412 Total expenses 4 391 4 300 91 Profit before impairments 3 276 3 682 -406 Impairment of intangible assets 14 0 Impairment of tangible assets 36 352 -316 Credit impairments 2 210 5 003 -2 793 Operating profit 1 016 -1 673 2 689 Tax expense 469 115 354 Result for the period 547 -1 788 2 335 Profit for the period attributable to: Shareholders of Swedbank AB 536 -1 804 2 340
  8. 8. Continued headwinds and temporary effects 8 Net interest income Q4 2009 4 702 Funding maturity mismatch -208 Trading strategy -145 Wholesale funding cost -121 Baltic Banking, Russia & Ukraine -118 NII and equity hedges -37 Other -50 Q1 2010 4 023 4 702 4 023 163 147 44 73 252 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 NII Q4 09 Retail LCI Baltic Banking Russia & Ukraine Group Treasury and Other NII Q1 10SEKm
  9. 9. SEKm Q1 10 Q4 09* Q1 09 Retail 32 45 43 Large Corporates & Institutions 441 55 1 332 Baltic Banking 72 88 183 Russia & Ukraine 27 149 10 Group Treasury and Other 75 -114 143 Swedbank Group 647 223 1 711 Stronger net gains • Trading strategy pressed NII and boosted net gains and losses • Stable currency rates in Ukraine • Lower P&L impact from wholesale funding valuation 9 Net gains/losses on financial items, fair value * Excluding capital gain of SEK 39m (sale of Aktia shares SEK 24m and of Tallinn Stock Exchange shares SEK 15m)
  10. 10. Improved funding situation • Swedbank exits guarantee programme as per 30 April 2010 • SEK 100bn of long-term debt issued during Q1 • SEK 110bn in remaining term funding maturities to roll or replace in 2010 • Average maturity of wholesale funding* further extended to 24 months (14 months end of 2008) * Consists of debt securities in issue, repo’s with central banks and interbank deposits 10 Liquidity & Capital management Outstanding wholesale funding * Issued with more than 12 months maturity, government fee of 83bp ** Including interbank deposits *** Issued with less than 12 months maturity, government fee of 50bp SEKbn, notional value 61 97 116 180 397 28 87 108 174 459 Total short- term, guaranteed*** Total short- term, non- guaranteed** Central bank repos Total long- term, guaranteed* Total long- term, non- guaranteed Q1 2010 Q4 2009
  11. 11. Well capitalised 11 Capital management Core Tier 1 capital ratio* YE 09 12.01% Result +0.09% RWA reduction +0.16% Other +0.05% Core Tier 1 capital ratio* Q1 10 12.31%9.4 9.8 9.9 12.0 12.3 0 2 4 6 8 10 12 14 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 % *according to full Basel 2 Core Tier 1 capital ratio*
  12. 12. Asset quality continues to strengthen • Improved macro – Stabilised/increasing property prices in CEE • Swedbank risk profile continued to improve – Limited new problems – Increasingly confident in known problems – Anecdotal evidence positive 12 Asset quality
  13. 13. -50 0 50 100 150 200 250 300 350 400 Q109 Q209 Q309 Q409 Q110 Q109 Q209 Q309 Q409 Q110 Q109 Q209 Q309 Q409 Q110 Q109 Q209 Q309 Q409 Q110 Q109 Q209 Q309 Q409 Q110 EURm Quarterly change of 60-day past due loans • Stabilisation continues 13 Asset quality Estonia Latvia Lithuania Russia Ukraine
  14. 14. Impaired loans – almost no new problems • Without FX effect up SEK 1.5bn 14 Asset quality Impaired loans as % of gross lending Ukraine 57% Russia 20% Lithuania 17% Latvia 25% Estonia 7.6% LCI 0.3% Retail 0.2% 9 343 9 736 6 113 4 362 196 10 578 19 921 29 657 35 770 40 132 40 328 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 FY 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 SEKm 1 625 0.2 1 150 0.3 5 473 7.6 13 370 25 7 896 2 381 20 8 432 57 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 Q1 10 Ukraine Russia Lithuania Lativa Estonia LCI Retail
  15. 15. • Significant improvement • Sweden still very low levels • Small recoveries in Russia and Ukraine • Baltic countries – Few new problems – Property prices stabilise/increase 15 Asset quality Development of credit impairments 6 845 6 672 6 121 5 003 2 210 -1 000 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 SEKm Retail LCI Baltic Banking Russia & Ukraine Other T
  16. 16. Conclusion • Significant improvement of asset and liability risk profiles • Economy gaining momentum • Still areas of concern – Exit strategy central banks – Fiscal consolidations • Swedbank’s resilience has vastly improved 16 191% 209% 290% of equity 251 188 172 106 0 50 100 150 200 250 300 Q4 08 Q4 09 Q1 10 117% SEKbn without Estonia CEE lending Private Corporate

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