Swedbank’s first quarter 2013 resultsMichael Wolf CEOMichael Wolf, CEOGöran Bronner, CFOHåkan Berg, CRO

Customer requirements drive new ways of bankingRetail banking

q y g

• Focus on functionality and ease of use

30million Monthly logins Swedbank and Savings Banks

20

25

30

15

20

5

10

0Jan 2010 Jan 2011 Jan 2012 Jan 2013

Mobile bank Internet bank

2

Fast increase of digital usageSwedbank and Savings Banks

g g• Internet Bank, private and corporate (since March 1997)

– Number of users: >3.5 million

• Mobile Bank, private (since Dec 2009)– Number of users: >1.3 million

• Mobile Bank Youth (since March 2013)– Number of users: 6 700

• Mobile Bank Corporate (since March 2013)– Number of users: >8 000

• Ipad (since Oct 2012)• Ipad (since Oct 2012)– Number of users: >200 000

• Swish (since Dec 2012)( )– Number of users: ~100 000

3

Stable resultsRetail

• Stable NIISEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y

Net interest income 3 371 3 353 3 332 -21 -39

• Solid asset quality

• New organisation

Net commissions 1 538 1 554 1 589 35 51

Total income 5 346 5 255 5 377 122 31

T t l 2 429 2 474 2 406 68 23 New organisationTotal expenses 2 429 2 474 2 406 -68 -23

Profit before impairments 2 917 2 781 2 971 190 54

Credit impairments 21 91 55 -36 34

ROE, % 28.4 28.0 27.9

C/I ti 0 45 0 47 0 45C/I ratio 0.45 0.47 0.45

4

Good returnLarge Corporates & Institutions

• Stable NIISEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y

Net interest income 728 795 783 -12 55

• Low activity in Corporate Finance

Net commissions 485 536 419 -117 -66

Total income 2 071 1 857 1 814 -43 -257

Expenses excl variable 661 668 646 22 15

• Structural challenges in Equities

pe ses e c a ab estaff costs 661 668 646 -22 -15

Variable staff costs 105 75 88 13 -17

Profit before impairments 1 305 1 114 1 080 -34 -225 q

• Solid credit qualityCredit impairments 17 162 74 -88 57

ROE, % 18.9 18.3 16.7ROE, % 18.9 18.3 16.7

C/I ratio 0.37 0.40 0.40

5

Focus on costsBaltic Banking

• Stable NII in local currencySEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y

Net interest income 910 760 742 -18 -168

• Increased customer activity

• Recoveries

Net commissions 386 366 388 22 2

Total income 1 468 1 289 1 281 -8 -187

T t l 629 633 586 47 43 Recoveries

• Increased efficiency in focus

Total expenses 629 633 586 -47 -43

Profit before impairments 839 656 695 39 -144

Credit impairments -134 -329 -70 -259 -64

ROE, % 14.6 13.3 12.6

C/I ti 0 43 0 49 0 46C/I ratio 0.43 0.49 0.46

6

Robust earningsGroup results

• Stable NII– Repricing

gSEKm Q1 12 Q4 12 Q1 13 ▲Q/Q ▲Y/Y

Net interest income 4 895 5 346 5 353 7 458 Repricing– Funding costs– Lower deposit margins

Net commission income 2 398 2 502 2 388 -114 -10

Net gains and losses 979 830 557 -273 -422

Total income 9 072 9 437 9 082 -355 10

• Net gains and losses one-off gain in Q4 12

Total expenses 4 327 4 142 4 043 -99 -284

Profit before impairments 4 745 5 295 5 039 -256 294

Impairment of tangible assets 40 141 85 -56 45 g

• Lower costsCredit impairments -96 -76 60 136 -156

Tax 1 108 786 976 190 -132

Profit from continued ops. 3 693 4 427 3 918 -509 225

• Continued good asset quality

• Ukraine and Russia

Profit from discontinued ops. -279 -174 -390 -216 -111

Profit for the period 3 410 4 252 3 525 -727 115

• Ukraine and Russia discontinued operations

Return on equity, % 14.1 16.9 13.8

ROE continuing operations, % 15.3 17.5 15.3

Cost/income ratio 0.48 0.44 0.45

7

Continued strengthening capital positionCapital situation

g g p p

• 13-15% CET116.7 17.3

15 4 16.4

Common Tier 1 capital ratio

Basel 2* Basel 3

• CRD/CRR IV – less impact

• IRB Advanced

* As of 2012 incl. IAS 1915.4

• Waiting for regulatory clarity

2007 2008 2009 2010 2011 2012 Q1 13

Changes in B3 CET1 ratio Q4-Q1

15.45%0.14% 0.14%

0.24%

0.55%

-0.13

16.38%

Q4 2012 Profit Q1 IAS 19 RWA SME & Other Q1 2013

8

change Q1 CVA (Basel 3)

Basel 3 changes

Increase Decrease

Strong credit qualityg q y

• Continued high credit quality in Sweden

Credit impairments, SEKm Q1 12 Q4 12 Q1 13

Retail 21 91 55 in Sweden

• Slower net recoveries in B lti B ki

Large Corporates & Institutions 17 162 74

Baltic Banking -134 -329 -70

E t i 78 242 54 Baltic Banking

• Exiting Russia and Ukraine

Estonia -78 -242 -54

Latvia -21 86 4

Lithuania -35 -173 -20 gSwedbank Group -96 -76 60

31.735SEKbn Impaired loans

15

20

25

30

10.3

0

5

10

15

9

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13** Russia and Ukraine reported as discontinued operations.

Swedbank’s first quarter 2013 resultsQ&AQ&A

Appendix

Loans past due 60 days – performance Q/Qp y p

EURm

50Estonia Latvia Lithuania

-50

0

50

-150

-100

-250

-200

2 2 2 2 3 2 2 2 2 3 2 2 2 2 3

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

12

Provisions – well provided forp

SEKm

Provision ratios, % Q1 13

Retail 70

LC&I 7620 000

25 000

Baltic Banking 52

Group 57

2 4782 040

65.0% 63.7% 65.2%61.9% 57.0%

15 000

11 91510 951

9 934

7 077

2 0401 774

1 545

1 4205 000

10 000

4 4291 420

0

5 000

Q1 12 Q2 12 Q3 12 Q4 12 Q1 13*

* Russia and Ukraine reported as discontinued operations.

Individual provisions Portfolio provisions Provision ratio

13

Corporate portfolio drives capital efficiencyCredit portfolio - Retail

p p p yTotal portfolio SEK 222bn Segments excl. Swedbank

Mortgage and Swedbank FinanceVolume

(SEKbn)Secured

(%)

A i lt 5 9 81Agriculture 5.9 81

Manufacturing 9.7 74

Public sector and utilities 5.1 92

94104Construction 4.7 82

Retail 9.0 88

Transportation 1.9 85

24

Shipping 0.1 95

Hotels and restaurants 3.1 91

Information & communication 0.9 46

Swedbank Mortgage AB

Swedbank Finans AB

Other

Finance and insurance 2.0 66

Property management 49.4 97

Professional service 6.7 65

Other 6.0 72

Total 104.4 87

14

SEKbnShipping and Offshore

Credit portfolio – Large Corporates & Institutions

Shipping and Offshore

4

24 26 2524 23

30

SEKbng

• Exposure to Shipping & Offshore sector was SEK 23.5bn plus

-3.0%-3.0%

pp g

15

5

4

10

20unutilised commitments of SEK 7.7bn– Portfolio duration 4-5y– Average fleet age 7y

0Q1-12 Q2-12 Q3-12 Q4-12 Q1-13

Offshore Tanker Other

g g y– Strong employment profiles

JPY

Shipping and Offshore portfolio by currency

Q1-130.7

0.9

1.6

Dry bulk

Container

RORO

Shipping and Offshore Portfolio by subsegment

bn

USD

NOKQ4-12

1.9

0.2

2.3

0.7

1.4

Floating production

Chemical

Product

Crude oil

Gas (LNG/LPG)Q1-13

Q4-12

SEK

EUR

0 5

6.8

1.6

3.5

1.2

Cruise

Drilling & exploration

Oil service

Supply

Accommodation

g p

15

0 5 10 15 200.5

0 2 4 6 8

Cruise

SEKbn

AgricultureCredit portfolio

g

• Segmentation definitions– Corporate Agriculture: Businesses

that derive their main income from agricultural activities

– Private Investments: Private individuals who own agricultural properties for residential or

Private: Residential

20%

g p pinvestment purposes

Agriculture45%

• Lending to the agricultural sector SEK 63.3bn

– Corporate Agriculture: (58%)

Private: Forestry

22% – Corporate Agriculture: (58%)• Agriculture 45%• Forestry 13%

– Private Investments (42%)Forestry

13%

22%

• Residential: 20%• Forestry: 22%

16

Core balance sheet* structureLiquidity and funding

1 4001 400S

Assets LiabilitiesSEKbn SEKbn

1 2001 200

CEE lendingEstonia

Senior

CET1Suppl. cap

Government guaranteed debt

800

1 000

800

1 000

CEE lending

Other corporatelending, Sweden & other Nordics

Oth i t S d

Deposits

600600

Other private, Sweden

200

400

200

400Swedish mortgage loans

Coveredbonds

0

200

Q1 20130

200

Q1 2013

17

Source: Swedbank, 31 March, 2013* Simplified balance sheet

Senior unsecured debt strategy Liquidity and funding

gy• Limited need given Swedbank’s balance sheet structure

• Secure OC• Secure OC

• Fund liquidity reserves

40%Senior unsecured debt

Senior unsecured debt maturity profileSEKbn

House price sensitivity of the cover pool

20%

30% OC, Q113

60

tion

0%

10%

40

ver-c

olla

tera

lisat

20%

-10%

0%

0

20 Ov

-20%0% -5% -10% -15% -20% -25% -30% -35% -40% -45% -50%

02013 2014 2015 2016 2017 2018 2019-

18

Source: Swedbank, 31 March, 2013, nominal amounts House price drop

Lower funding needs Liquidity and funding

g

• LCR 139% (Swedish FSA definition FFFS 2012:6)

NSFR 93%• NSFR 93%

• Expanded investor base

Covered bonds Senior unsecured

Term funding issuance – completed and plannedSEKb

80

100

120

Covered bonds Senior unsecuredSEKbn

40

60

80

0

20

19

Source: Swedbank, 31 March, 2013, nominal amounts

Conservative funding planLiquidity and funding

g p• Issued SEK 40bn of term-funding in Q1

• Term funding plan in 2013 of SEK 120bn full year• Term funding plan in 2013 of SEK 120bn, full-year maturities of SEK 86bn

60 00070 000

Issued long-term debt Outstanding short-term debtSEKm SEKm

40 000

50 000

50 000

60 000

20 000

30 000 Q4 12

Q1 1320 000

30 000

40 000 FY 2012

Q1 13

0

10 000

Domestic CP ECP/CD USCP Yankee CD French CD0

10 000

20 000

Domestic Euro CB USD CB Other CB Senior Domestic CP ECP/CD USCP Yankee CD French CDDomestic CB

Euro CB USD CB (144A)

Other CB Senior unsecured

20

Source: Swedbank, 31 March, 2013, nominal amounts

Long-term funding maturity profile Liquidity and funding

g g y p• FY 2013 maturities amount to nominal SEK 86bn, of which

SEK 46bn for the remainder of 2013

Long-term funding maturity profile

SEKbn

150

200 Government guaranteed debtSenior unsecured debtCovered bonds

SEKbn

100

Covered bonds

0

50

2013 2014 2015 2016 2017 2018 2019-2013 2014 2015 2016 2017 2018 2019

2121

Source: Swedbank Mar 31, 2013

Limited need for USD-fundingLiquidity and funding

g• USD-funding need covered for more than 12 months• Issued USD 1bn of covered bonds (144a) and USD 1bn of senior (144a) YTD 2013

300Interest-bearing securities

SEKbn

( ) ( )

250Lending to the public

150

200 Loans to credit institutions

Cash and balances with central banks

100

central banks

Deposits and borrowings from the public

0

50 Amounts owed to credit institutions

Debt securities in issue

Assets Liabilities

22

Source: Swedbank Fact book, Mar 31, 2013

Liquidity reserveLiquidity and funding

q yAccording to the template defined by the Swedish Bankers' Association

SEKmCash and holdings in central banks 210 251Deposits in other banks available overnight 1 290Securities issued or guaranteed by sovereigns, central banks or multilateral development banks 27 751Securities issued or guaranteed by municipalities or Public sector entities 378Covered bonds 58 284Covered bonds 58 284 - Issued by other institutions 58 284 - Own issuedSecurities issued by non-financial corporatesSecurities issued by financial corporates (excl. covered bonds) 2 532y ( )Other

Total1 300 486

Additi l li id t G 2 3 56 472Additional liquid assets, Group2, 3 56 472

1 95% of the securities in the liquidity reserve per Q1 2013 are rated AAA2 84% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers’ Association except for the fact that they are held outside the Treasury department.3

23

3 82% of the additional assets are rated AAA

Source: Swedbank Fact book, 31 March, 2013

Prolonged survival horizonLiquidity and funding

g

SEKbn

250

300

SEKbn

150

200

50

100

Days forw ard

00 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360365

Days forward

24

Source: Swedbank 31 March, 2013

Conservative liquidity levels Liquidity and funding

q y

• Short-term funding mainly a tool for cash management

More than 12 months pre funded• More than 12 months pre-funded

400400SEKbn

250

300

350

400

Next 12-month term f250

300

350

400

Additional pledgeable and/or liquid assets

150

200

250 funding maturities

CP / CDs and net interbank funding, SEKm

150

200

250 Liquidity reserve, securities

Liquidity reserve, central bank deposits

1

1

0

50

100SEKm

0

50

100 central bank deposits, SEKm

25

Source: Swedbank 31 March, 2013

1 As defined by the Swedish Bankers’ Association

Asset encumbranceLiquidity and funding

Encumbered assets - distribution by type of liability (row) and asset (column)

SEKm

Government debt

instruments

Central banks and

supranational debt

instrumentsCovered

bonds

Debt instruments

issued by credit

institutions

Securities issued by

corporate and other issuers ABS

Mortgage loans Cash TotalSEKm s u e s s u e s bo ds s u o s o e ssue s S oa s Cas Total

Central bank funding 0Intraday settlement 1 028 10 772 11 800Repurchase agreements 1) 18 448 12 765 31 213Derivative 2) 74 1 949 13 125 15 148Covered bonds 3) 514 795 514 795Other 4) 0 736 284 1 020Total 19 550 0 25 486 736 0 0 514 795 13 409 573 976

Financial assets pledged for insurance policy holders 109 813

Unencumbered assets - additional assets available for secured fundingCentral banks Debt

SEKm

Government debt

instruments

Central banks and

supranational debt

instrumentsCovered

bonds

Debt instruments

issued by credit

institutions

Securities issued by

corporate and other issuers ABS

Mortgage loans Cash Total

Securities 5, 6) 30 948 11 213 73 812 12 671 8 238 984 137 866, )Cover pool over collateralisation 7) 192 782 192 782Cover pool eligible assets 8) 12 031 12 031Total 30 948 11 213 73 812 12 671 8 238 984 204 813 0 342 679

Total assets 1 917 227

1) Repoed securities on balance sheet.2) Collateral posted under CSA agreements, gross (3-year, SEKm, High: 21 572, Low : 10 945, Average: 13 975).3) Of w hich accrued interest of assets in the cover pool, SEK 2 389m as of Q1 20134) Collateral pledged in securities lending activities and w ith

6) All type of securities, including securities non pledgeable at central banks, of w hich 80% are rated AAA, 2% are rated below A-and 8% are not rated.7) Of w hich accrued interest of assets in the cover pool overcollateralisation, SEK 831m as of Q1 20138) Type of loans; Residential 84.3%, Forestry & Agriculture 15.4%,

26

Source: Swedbank Fact book Q1 2013

exchanges5) Reversed repos are included.

8) Type of loans; Residential 84.3%, Forestry & Agriculture 15.4%, Commercial 0.3%.

Swedish mortgage marketSwedish housing and mortgage market

g g• No securitisation (on balance sheet), no sub-prime market, no 3rd party origination, insignificant

buy-to-let market

• 70% home ownership1

• Rental market is regulated

• Transparent credit information (credit information agency, www.uc.se) – Publicly available information regarding income, debt, payment track record etc

• Consumer credit legislation requires affordability calculations including stress test of higher interest• Consumer credit legislation requires affordability calculations including stress test of higher interest rate

• Very limited debt forgiveness possibilities (full recourse)

• Strong social security and generous unemployment benefit system

27

1 Source: Boverket, 2011

Real estate prices – Sweden 12 months developmentSwedish housing and mortgage market

p pSingle-family homes1 Tenant-owner rights2 Combined3

12M Δ 12M Δ 12M Δ

Apr/12 -2% 2% -1%

May/12 -2% 3% -1%

Jun/12 -1% 4% 0%Jun/12 1% 4% 0%

Jul/12 0% 4% 1%

Aug/12 2% 4% 3%

Sep/12 2% 5% 3%

Oct/12 1% 6% 3%

Nov/12 3% 7% 4%

Dec/12 4% 7% 6%

Jan/13 3% 7% 5%Jan/13 3% 7% 5%

Feb/13 4% 7% 5%

Mar/13 3% 7% 5%

28

Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE

Baltic countriesReal estate prices

1 400

1 600

1 800Riga

1400

1600

1800Tallinn

600

800

1 000

1 200

1 400

600

800

1000

1200

0

200

400

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

0

200

400

an-0

5

Jul-0

5

an-0

6

Jul-0

6

an-0

7

Jul-0

7

an-0

8

Jul-0

8

an-0

9

Jul-0

9

an-1

0

Jul-1

0

an-1

1

Jul-1

1

an-1

2

Jul-1

2

an-1

3

1 600

1 800Vilnius

J J J J J J J J J

Nr.of deals EUR/m2Source: Land book database

J J J J J J J J J J J J J J J J J

Nr.of deals EUR/m2Source: Swedbank, Estonian Land Board

600

800

1 000

1 200

1 400

0

200

400

600

an-0

5

ul-0

5

an-0

6

ul-0

6

an-0

7

ul-0

7

an-0

8

ul-0

8

an-0

9

ul-0

9

an-1

0

ul-1

0

an-1

1

ul-1

1

an-1

2

ul-1

2

an-1

3

Ja J J a J Ja J J a J Ja J J a J J a J J a J Ja

Nr.of deals EUR/m2

29

Source: Swedbank, State Enterprise Centre of Registers

Mortgage loans, gross margin (3 months)

6

%

g g g g ( )

5

4

Net margin

2

3The gross margin covers:Cost of liquidity ~0.2%Administrative costs ~0.3% C dit i i t 0 03%

1

Credit impairments ~ 0.03%Tax (22 % on profit before tax)

02003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Gross margin Swedbank's funding cost Stibor 3 months Swedish Riksbank's repo rate

30