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Roadshow London, Morgan Stanley Banking Conference

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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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Roadshow London, Morgan Stanley Banking Conference

  1. 1. Morgan Stanley European Banks & Financials Conference Mr Jan Lidén CEO London, 3 April 2008
  2. 2. © Swedbank 2 Strong position for profitability and growth Ukraine and RussiaBalticsSweden Stable base Growth and experience Future growth and profitability Swedbank is the leading bank in Sweden. Profitability is high and stable and the bank is consolidating its market shares in important segments in both the private and corporate sectors. Swedbank has a small but growing presence in Ukraine and Russia. In the long term, a significant share of Swedbank’s growth will be generated in these markets. The Baltic economies are experiencing strong economic growth that is expected to remain for many years. As the largest bank in the region, growing with the market ensures attractive earnings growth. Share of profit 2007: 66% Share of lending 2007: 80% Share of profit 2007: 2% Share of lending 2007: 2% Share of profit 2007: 32% Share of lending 2007: 16%
  3. 3. © Swedbank 3 Growing number of home markets 2003 2008 2012 Business is conducted through decentralized decision making, but supported by common methodology and processes
  4. 4. © Swedbank 4 Strong profit development -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000 17,000 2000 2001 2002 2003 2004 2005 2006 2007 -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000 17,000 Profit before loan losses Capital gains EnterCard and KIAB Loan losses, net* Operating profit (excl. capital gains) SEKm SEKm *Loan losses, net = write-offs + provisions – recoveries + change in property taken over
  5. 5. © Swedbank 5 Strategic priorities for the coming year Efficiency Growth
  6. 6. © Swedbank 6 Strategic priorities for the coming year – Efficiency Sweden • Structural measures (operational and branch structure) • Channel management • Cash handling The Baltic region • Improve cross-border capabilities • Productivity - measurement and continuous improvement scheme • Employee retention • IT management development Ukraine • HR management • Competence build- up and growth management • Process management • IT systems Broad client base and large volumes together with efficient processes will drive operational efficiency
  7. 7. © Swedbank 7 Strategic priorities for the coming year – Growth Sweden • Private banking and wealth management • Metropolitan areas • Corporate market • New initiatives to come – life and pension, etc The Baltic region • Leverage on pan- Baltic position within corporate sector • Broaden client offerings • Investment management growth Ukraine • Capture growth • Grow distribution network – ATMs, branches and agency network • Broader product range From a strong position in several markets there is an excellent organic growth opportunity for Swedbank in many areas – with some differences in regional focus
  8. 8. © Swedbank 8 Swedbank Markets – Objectives • Swedbank Markets shall be a leading multi-domestic player in the region with the competitive advantage of serving our customers with access to/from the CEE region. • Overall priority is to further increase cross-border capital markets business in the region. In 2007 Swedbank Markets delivered a record profit Swedbank Market’s profit to Swedbank’s shareholders 0 200 400 600 800 1,000 1,200 2003 2004 2005 2006 2007 SEKm Swedbank Markets excluding First Securities First Securities
  9. 9. © Swedbank 9 Swedbank Russia – Objectives • Long-term vision of a universal bank in Russia intact – but a relatively slow pace during 2008 • Building robust administrative routines • Growing corporate business • Open a few new retail branches during 2008 – retail products development • Implementation of new IT system • Risk management improvement In 2007 Swedbank Russia faced significant challenges but still increased lending and profits
  10. 10. © Swedbank 10 Swedbank funding structure Funding 95% Equity 5% Deposits 84%Equity 8% Funding 8% Swedbank Treasury (excl. Swedbank Mortgage) • Large deposits • Liquidity reserves • Net lender in the interbank market • Liquidity limits – conservative view Swedbank Mortgage constitutes a larger part of Swedbank Group’s balance sheet compared to other financial institutions Distribution of net funding need Swedbank Mortgage Lending to the public – SEK 1,103bn 51%49% Swedbank Group excl. Swedbank Mortgage SEK 542bn Swedbank Mortgage SEK 561bn
  11. 11. © Swedbank 11 Municipalities 3% (4)Commercial buildings 1% (1) Agriculture 6% (6) Multi-family housing incl. condominium associations 16% (17) Individual condominiums 13% (11) Single-family homes 61% (61) Swedbank Mortgage – credit risk Net 0 500 1,000 1,500 2,000 2,500 3,000 2000 2001 2002 2003 2004 2005 2006 2007 SEKm = 90% Residential loans Average LTV of 44% “80% percent of the portfolio has an LTV of 50% or lower” Credit losses -net recoveries during 2007 Impaired, restructured and past due loans – at historically low levels 31 Dec -100 0 100 200 300 400 500 600 700 2000 2001 2002 2003 2004 2005 2006 2007 SEKm 0% 10% 20% 30% 40% 50% 60% <30% 30-60% 60-75% 75-85% >85% Distribution of loan to value
  12. 12. © Swedbank 12 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
  13. 13. © Swedbank 13 Summary • Swedbank offers a strong and stable banking operation with high profitability across several geographical areas • Swedbank has a solid foundation that offers very good organic growth opportunities • Focus on efficiency will secure continued profitable growth for the Group • Stable funding structure Swedbank - Positioned for profitability and growth

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