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SEB Enskilda Nordic Banks Seminar, May 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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SEB Enskilda Nordic Banks Seminar, May 2010

  1. 1. SEB Enskilda Nordic Banks Seminar May 2010 Erkki Raasuke, CFO
  2. 2. 427 404 393 154 100 91 521 555 559 97 88 81 948 959 952 251 188 172 0 200 400 600 800 1 000 1 200 Q4 08 Q4 09 Q1 10 Q4 08 Q4 09 Q1 10 Sweden SEKbn CEE Private Corporate Significantly improved resilience • Reduced CEE lending 2 Note: CEE lending as % of equity calculated as net lending to the public divided by balance sheet equity 290% of equity 209% 191%
  3. 3. Efficient handling of distressed assets • FR&R units (340 FTEs) operational in Sweden, Estonia, Latvia, Lithuania, Russia, and Ukraine – The whole loan portfolio has been worked through – Active business plans for distressed exposures • Ektornet established to minimize losses and protect value – Long-term investment horizon, high degree of real estate – Intake forecast: SEK 4bn at YE 2010 and SEK 5-10bn at YE 2012 – Three quarters of intake is expected in the Baltic countries 3
  4. 4. Strengthened liquidity position • Rights issue in October 09 – real turning point for access to funding markets • Swedbank exits guarantee programme as per 30 April 2010 • SEK 100bn of long-term debt issued during Q1, and SEK20bn to date in Q2 • Average maturity of wholesale funding* 24 months (14 YE 2008) • Cumulated net cash flow over 12 months amounts to SEK +158bn * Debt securities in issue, repo’s with central banks and interbank deposits 4 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
  5. 5. Well capitalised 5 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*
  6. 6. Improved perceived risk profile but still some way to go 6 Source: Reuters, 5y CDS spreads in EUR Restructuring units established Rights issue Reduced CEE exposure Improved funding structure 0 20 40 60 80 100 120 140 160 180 200 2009/09/01 2009/09/16 2009/10/01 2009/10/16 2009/10/31 2009/11/15 2009/11/30 2009/12/15 2009/12/30 2010/01/14 2010/01/29 2010/02/13 2010/02/28 2010/03/15 2010/03/30 2010/04/14 2010/04/29 2010/05/14 5y senior CDS Swedbank Nordea Svenska Handelsbanken SEB
  7. 7. NII – headwinds and temporary effects 7 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
  8. 8. 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 8 * Excluding capital gain of SEK 39m (sale of Aktia shares SEK 24m and of Tallinn Stock Exchange shares SEK 15m)
  9. 9. 9 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
  10. 10. Asset quality continues to strengthen • Improved macro – Stabilised/increasing property prices in CEE • Swedbank risk profile continue to improve – Limited flow of new distressed loans – Increasingly confident about current distressed loans 10
  11. 11. -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 • Continued stabilisation 11 Estonia Latvia Lithuania Russia Ukraine
  12. 12. Small increase of impaired loans • Increased SEK 1.5bn excluding FX effects 12 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 1 150 5 473 13 370 7 896 2 381 8 432 Q1 10
  13. 13. • Significant improvement • Sweden still at very low levels • Small recoveries in Russia and Ukraine • Baltic countries – Positive trend – Property prices stabilise/increase 13 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
  14. 14. Conclusion • Significant improvement of asset and liability risk profiles • Economy gaining momentum although uncertainty is high • Areas of concern – Exit strategy central banks – Fiscal consolidations • Swedbank’s resilience has vastly improved 14 191% 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
  15. 15. Exposure towards Greece, Ireland, Italy, Portugal and Spain SEKm Bonds 588 Loans (money market/deposits)<90 days 3 217 Loans (committed credit facilities) 93 Derivatives gross (net) (34) 972 Other 27 Total* 4 897 16 *As of 29 April 2010

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