Swedbank investor presentation. May 2014

Transcription

1 Swedbank investor presentation May 214

2 Table of contents 1. Quarterly update 3 2. Capital Asset quality Liquidity and funding Cover pool data Swedish housing and mortgage market Swedish economy Appendix 53 2

3 1. Quarterly update 3

4 Quarterly update - Group results Stable quarter SEKm Q1 14 Q4 13 Q1 13 Q/Q Y/Y Net interest income Net commission income Net gains and losses Total income Total expenses Profit before impairments Credit impairments Mixed margin development - Lower deposit margins - Stable mortgage margins Continued solid asset quality Risk position enables competitive funding Continued customer and cost focus Other impairments Tax Profit from continuing operations ROE continuing operations, % Cost/income ratio CET1 Capital ratio, % Source: Swedbank, Mar 31, 214 4

5 Quarterly update - Swedish Banking Stable results SEKm Q1 14 Q4 13 Q1 13 Q/Q Y/Y Net interest income Net commissions Total income Total expenses Profit before impairments Credit impairments Lower deposit margins Stibor Number of days effect Stable mortgage margins Good economic activity supports fee income Solid asset quality ROE, % C/I ratio Source: Swedbank, Mar 31, 214 5

6 Quarterly update - Large Corporates & Institutions Strong Return on Equity SEKm Q1 14 Q4 13 Q1 13 Q/Q Y/Y Net interest income Net commissions Net gains and losses Total income Total expenses Profit before impairments Credit impairments Strong client activity within Debt Capital Markets and Corporate finance Positive deposit volume trend Solid asset quality Planned cost increases ROE, % C/I ratio Source: Swedbank, Mar 31, 214 6

7 Quarterly update - Baltic Banking Solid performance SEKm Q1 14 Q4 13 Q1 13 Q/Q Y/Y Net interest income Net commissions Total income Total expenses Profit before impairments Credit impairments ROE, % C/I ratio Continued re-pricing Good underlying customer activity Latvian EUR-entry Decreased risk Negative income impact Continued net recoveries Uncertain growth prospect due to geopolitical situation in Russia and Ukraine Source: Swedbank, Mar 31, 214 7

8 Asset quality Strong asset quality Legacy impaired portfolios almost worked-out Ektornet continued asset sales Russia and Ukraine exited limited remaining exposures Credit impairments, SEKm Q1 14 Q4 13 Q1 13 Swedish Banking Large Corporates & Institutions Baltic Banking Group Functions & Other 1 Swedbank Group Impaired loans, SEKbn Source: Swedbank, Mar 31, 214 * Russia and Ukraine reported as discontinued operations. 8

9 Market position Stronger market position in southern Sweden Acquisition of 1 per cent of Sparbanken Öresund Creation of Sweden s largest savings bank Sparbanken Skåne Swedbank will own 22 per cent of Sparbanken Skåne Significant financial upside for Swedbank Cost and capital synergies Awaiting approval from the Swedish FSA Number of branches: Swedbank: 27 Sparbanken Öresund: 16 Sparbanken Skåne: 45 9

10 1

11 2. Capital 11

12 Capital Solid capitalisation CET1 capital ratio of 18.3% 19% 18% 17% 16% Changes B3 CET1 capital ratio Q4-Q1 18.3%.18%.16% -.4% -.34% 15.4% 18.3% SEKbn Swedbank s REA development % 43 14% 13% 42 12% 11% 41 1% Q4 212 Q4 213 Profit after anticipated dividend Increase IAS 19 Other CET1 REA Q1 214 Decrease 4 Q4 213 Exposure change Rating migration (PD) LGD changes Credit risk Other credit FX effects risk Increase Decrease CVA risk Market risk Operational risk Q1 214 Source: Swedbank, Mar 31,

13 Capital Regulatory uncertainty higher capital requirements ? % Other? Countercyclical buffer 12% 25% Risk weight floor on Swedish mortgages 15% Risk weight floor on Swedish mortgages -2.5% Countercyclical buffer 12% Minimum CET1 (Pillar 1) requirement (incl. SIFI-buffer and Capital conservation buffer) RW floor on mortgages Pillar 2 Hard limits vs buffers Leverage ratio corporate risk weights CET1 ratio Source: Swedbank 13

14 Capital Potential capital constraints under new regulation Capital constraint CRD IV Pillar 1 Leverage ratio Rating agencies Pillar 2 EBA stress tests Bail-in regime Capital required CET1, AT1, T2 CET1, AT1 CET1, AT1 CET1, Total capital? CET1, AT1? Bail-in liabilities? Source: Swedbank 14

15 3. Asset quality 15

16 Asset quality Asset portfolios low risk The Group The Group, total SEK 1,219bn Sweden Hotels and restaurants, Retail Shipping and offshore, Transportation Manufacturing Latvian lending Lithuanian lending Other corporate lending Estonian lending Other property management 7% 2% 3% 6% 4% 34% 66% Private Individuals Corporate Residential properties 12% Agriculture and forestry Baltic Banking Swedish household loans (9% mortgages) 65% 49% 51% Private Individuals Corporate Tenant owner associations Source: Swedbank, Mar 31,

17 Asset quality stress test The Swedish FSA and Riksbank stress tests Swedbank s strong relative risk position confirmed CET1 - The Swedish FSA stress test CET1 - The Swedish Riksbank stress test* 215 reg. min. CET1 ratio % Jun 213 Dec 214 Dec 215 Dec 216 % Q SHB Nordea SEB Swedbank SHB Nordea SEB Swedbank *Main assumption; GDP decline and interest rates increase to stress for higher credit losses Source: The SFSA s Risk Report, Nov 14, 213 Source: The Riksbank s Financial Stability Report 213:2, chart 4:9 17

18 Asset quality Resilient Swedish asset portfolio Total accumulated Swedish mortgage loan losses* since 1982 of SEK 7.4bn (size of total loan book SEK 774bn) Main part incurred during the years of 1992 and 1993 Around 2% in the private segment 3.% 2.5% 2.% 1.5% 1.%.5%.% -.5% Swedbank s Swedish private loan loss ratios Private Credit Impairment, % Of which, Swedbank mortgage Private, % Source: Swedbank Mar , *Swedbank Mortgage 18

19 Asset quality Credit impairments low risk 15 consecutive quarters with no net credit impairments.6 Credit impairment ratio, % Source: Swedbank, Mar 31,

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21 4. Liquidity and funding 21

22 Liquidity and funding Core balance sheet* structure SEKbn 1 4 Assets SEKbn 1 4 Liabilities Suppl. cap CET1 Government guaranteed debt 1 2 Lithuania Latvia Estonia 1 2 Senior 1 Other corporate lending, Sweden & other Nordic countries 1 Deposits 8 8 Other private, Sweden Swedish mortgage loans 4 Covered bonds 2 2 Q1 214 Q1 214 Source: Swedbank Mar * Simplified balance sheet 22

23 Liquidity and funding Covered bond strategy Sweden SEK 3-375bn Covered bond strategy 1% Swedish households financial assets SEKbn 8 EUR/USD SEK 15-2bn 9% 8% 7% 6% % 4 Other* SEK 5-85bn 4% 3% 2% 3 2 1% 1 <5Y 3-7Y >7Y Maturity, years % Deposits and retail bonds (LHS) Equities (LHS) Pension savings and mutual funds Other financial assets (LHS) Total financial assets (RHS) Source: Swedbank Mar 31,

24 Liquidity and funding Senior unsecured debt strategy Senior unsecured debt maturity profile House price sensitivity of the cover pool SEKbn* 6 4 Senior unsecured debt Over-collateralisation 5% 4% 3% 2% OC, Q % % Source: Swedbank Mar 31, 214, *Nominal amounts -1% % -5% -1% -15% -2% -25% -3% -35% -4% -45% -5% House price drop 24

25 Liquidity and funding Lower funding needs LCR 144% (Swedish FSA definition FFFS 212:6) NSFR 89% / 12% (Basel committee) Issued SEK 36bn of term-funding in Q1 214 FY 214 funding plan of SEK 12bn Term funding issuance completed and planned SEKbn Covered bonds Senior unsecured Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Source: Swedbank, Mar 31, 214, nominal amounts 25

26 Liquidity and funding Liquidity reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks Deposits in other banks available overnight 565 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks Securities issued or guaranteed by municipalities or public sector entities 194 Covered bonds Issued by other institutions Own issued Securities issued by non-financial corporates Securities issued by financial corporates (excl. covered bonds) Other Total Additional liquid assets, Group 2, % of the securities in the liquidity reserve per Q1 214 are rated AAA (the rating requirement is AA-) 2 87% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers Association except from that they are held outside the Treasury department. 3 86% of the additional assets are rated AAA Source: Swedbank Fact book, Mar 31,

27 Liquidity and funding Prefunded in excess of 12 months SEKbn Days forward Source: Swedbank, Mar 31, As defined by the Swedish Bankers Association 27

28 Liquidity and funding Asset encumbrance Encumbered assets - distribution by type of liability (row) and asset (column) Central banks and supranationa SEKm Government debt instruments l debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total Central bank funding Intraday settlement collateral Repurchase agreements 1) Derivatives 2) Covered bonds 3) Other 4) Total Financial assets pledged for insurance policy holders Unencumbered assets - additional assets available for secured funding Central banks and supranationa SEKm Government debt instruments l debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total Securities 5, 6) Cover pool over collateralisation 7) Cover pool eligible assets Total ) Repoed securities. 2) Collateral posted under CSA agreements, gross (3-year, SEKM, High: , Low: 6 582, Average: ). 3) Of which accrued interest of encumbered assets in the cover pool, SEK 1 958m as of 31 Mar ) Collateral pledged in securities lending activities and with exchanges. 5) Reversed repos are included. Source: Swedbank Facts Mar 31, 214 6) All type of securities, including securities non pledgeable at central banks, of which 8% are rated AAA, 2% are rated below A- and 8% are not rated. 7) Of which accrued interest of assets in the cover pool overcollateralisation, SEK 963m as of 31 Mar 214. Total assets (BS) SEK

29 Quarterly update - Credit ratings Rating strategy same level as the best rated Nordic banks On July 19, 213 S&P changed the outlook for Swedbank AB and Swedbank Mortgage AB from negative to stable. Main reasons are the ability to build capital and withhold a high profitability On June 4, 213 Moody s upgraded Swedbank AB s and Swedbank Mortgage AB s senior unsecured credit rating to A1, with stable outlook S&P Moody's Fitch Short Long Short Long BFSR* Short Long Swedbank A-1 A+ P-1 A2 A1 C- F1 A+ Swedbank Mortgage A-1 A+ P-1 A2 A1 Covered bonds AAA Aaa * Bank Financial Strength Rating Source: Swedbank Mar 31,

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31 5. Cover pool data 31

32 Swedbank s cover pool Cover pool data 1 Rating, S&P / Moody s AAA / Aaa Total pool size SEK 739.5bn Geographic distribution Sweden 1% Current OC-level 48.6% Swedbank is a labeled issuer of the ECBC Covered Bond Label Foundation ( ) Weighted average seasoning 2 66 months Average LTV 3, 4 WA LTV on property level (Max LTV) 57% Non-performing loans 5 None Source: Swedbank Facts, Mar 31, 214 Fixed /Floating interest loans 6 Fixed 38% Floating 62% Repayment structure 7 Amortising 47% Interest only 53% Average loan size SEK Number of loans outstanding Number of borrowers Number of properties Dynamic pool Yes 1 As per Mar 31, Public sector loans not included 3 Index valuation as per Mar 31, Maximum LTV: Residential 75%, Commercial 6%, Forest and Agriculture 7% 5 Past due loans > 6 days are not eligible for the cover pool 6 Floating interest loans < 365 days 7 Property level of cover pool 32

33 Swedbank s cover pool Cover pool data Type of loans Residentials 9.9% of w hich Single-family housing 58.2% of w hich Tenant ow ner rights 16.8% of w hich Tenant ow ner association 1.6% of w hich Multi-family housing 5.3% Public 1.3% Commercial.4% Forest & Agricultural 7.4% 1.% Geographical distribution, Sweden, per cent 31 Mar 214 North 6.6 Norrbotten county (BD) 1.4 Västerbotten county (AC) 2.4 Västernorrland county (Y) 1.6 Jämtland county (Z) 1.2 Middle (including Stockholm) 44.4 Dalarna county (W) 2.2 Gävleborg county (X) 2.1 Värmland county (S) 2.2 Örebro county (T) 2.6 Västmanland county (U) 2.6 Uppsala county ( C) 4. Södermanland county (D) 2.5 Stockholm county (including Stockholm) (AB) 26.2 South (including Göteborg and Malmö) 48.8 Västra götaland county (Including Göteborg) (O) 17.6 Östergötland county (E) 4.1 Jönköping county (F) 3.6 Halland county (N) 3.8 Kronoberg county (G) 2.2 Kalmar county (H) 3.2 Skåne county (including Malmö) (M) 12.1 Blekinge county (K) 1.6 Gotland county (I).6 1. Source: Swedbank, Facts, Mar 31,

34 Swedbank s cover pool Cover pool loan-to-value distribution Weighted average LTV 57% LTV distribution per property 1 LTV distribution by volume 1, 2 3% 3% 25% 25% 2% 2% 15% 15% 1% 1% 5% 5% % % Public loans of 1.3% of the cover pool are excluded as they are either guaranteed by a Swedish municipality or the government and have therefore no LTV assigned to them. 2 LTV distribution as defined by the Association of Swedish Covered Bond Issuers ( Source: Swedbank, Mar 31,

35 Swedbank s cover pool Cover pool loan type and loan-to-value distribution WA LTV per property type 1 Percentage of the pool Average LTV per loan type 12% 12% 1% 1% 8% 8% 6% 6% 4% 4% 2% 2% % Single-family homes Tenant ownertenant owner rights associations (apartments) Multi-family housing Commercial Forestry & Agricultural Total all 1 types % Source: Swedbank, Mar 31, 214 ( 1 excluding public sector loans 1.3%) 35

36 Swedish covered bond legislation Overview of the Swedish covered bond legislation The Covered Bond Act The Covered Bond Act entered into force on July 1, 24 and is over-sighted by the Swedish FSA. Its main characteristics are: Dual recourse to the issuer and cover pool Dynamic, regulated pool of assets, frequently monitored by the Swedish FSA via appointment of an independent inspector Regulated valuation of cover pool assets which remain on the balance sheet The cover pool may consist of certain mortgage credits, public credits and supplemental assets. There is no requirement to segregate mortgage and public credits. Maximum LTVs: Residential 75%, Agricultural 7%, Commercial 6% Maximum 1% commercial loans and 2% supplemental assets in cover pool Loan-to-value ratios and other limitations Regular monitoring of the property values, revaluation of property prices in case of significant drop (generally interpreted as 15% drop) No mandatory over-collateralisation (OC) Regional constraint on collateral assets (Mortgage - EEA, Public - OECD) The cover pool value shall always exceed the aggregate value of claims (including derivatives) Matching requirements A sound balance in terms of FX, interest rates and maturities must be achieved. It is deemed to exist when the present value of the cover pool at all times exceed the present value of liabilities (including derivatives), even on a stressed basis. Present value cover must hold even after 1% upward and downward shift in the yield curve and a 1% change in the currency Non-performing assets in the cover pool which are more than 6 days overdue must be disregarded for the purposes of the matching tests Benefit of a priority right over the cover pool Holders of covered bonds and relevant derivative counterparties benefit from a priority claim over the cover pool should the institution be declared bankrupt and rank pari passu ahead of unsecured creditors and all other creditors of the institution in respect of assets in the cover pool Administration in event of bankruptcy The registered assets in the cover pool, the covered bonds and any relevant derivative contracts are required to be maintained as a unit and kept segregated from other assets and liabilities of the bankruptcy estate of the institution. The administrators-in-bankruptcy are then required to procure the continued timely service of payments due under the covered bonds and any relevant derivative contracts Source: 36

37 6. Swedish housing and mortgage market 37

38 Swedish housing and mortgage market Swedish mortgage market No securitisation (on balance sheet), no sub-prime market, no 3 rd party origination, restricted buyto-let market 7% home ownership 1 Rental market is regulated Transparent credit information (credit information agency, Publicly available information regarding income, debt, payment track record etc 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 1 Source: Boverket,

39 Swedish housing and mortgage market Abated credit growth % Household borrowing growth Årlig procentuell förändring LTV cap of 85% Amortisation Risk-weight floor of up to 25% on mortgage loans Capital and liquidity requirements Source: Swedbank, Statistics Sweden, data as per Feb

40 Swedish housing and mortgage market Population growth far exceeds housing unit growth Stockholm Population Trend most pronounced in the three largest cities, (index 199=1) 9 8 Stockholm Housing stock Gothenburg Population Malmoe Population 9 8 Gothenburg Housing Stock 9 8 Malmoe Housing Stock Source: Statistics Sweden 4

41 Swedish housing and mortgage market Shortage of housing 8 Housing completions in Sweden Population- and housing growth Number of apartments Apartment buildings Single-family dwellings Number of homes / persons, thousands Acc increase in population Acc increase in housing completions Source: Sweden statistics and Swedbank 41

42 Swedish housing and mortgage market Limits economic growth Stockholm County, index 25=1 Number of employed Housing stock Source: Statistics Sweden 42

43 Swedish housing and mortgage market Affordability withstands higher indebtedness % Swedish household financial assets and liabilities to disposable income Low interest rate environment Disposable income Wealth Amortisation savings Tax Total assets excluding collective insurance Real assets (Housing) Debt Household liabilities of disposable income* 2 Sweden unadjusted 15 1 Sweden adjusted 5 Sweden Denmark Finland Norway Germany UK France Netherlands Source: Swedish Riksbank s Financial Stability report 213:2 and Eurostat *Adjusted for differences in social security (paid through tax or post tax) when looking at disposable income 43

44 Swedish housing and mortgage market Savings 15 Household saving rates % of disposable income Sweden Germany Norway United States Finland Denmark F 215F Source: OECD Economic Outlook 94, table 23, Dec

45 Swedish housing and mortgage market Upward pressure on house prices 25 Sweden, total Total Tenant owner rights (apartments) Single-family houses 25 Stockholm Tenant owner rights (apartments) Single-family houses Gothenburg Tenant owner rights (apartments) Single-family houses Malmoe Tenant owner rights (apartments) Single-family houses Source: Valueguard Index (25=1), Mar 31,

46 46

47 7. Swedish economy 47

48 Swedish economy Continued strong fiscal position Kingdom of Sweden rated Aaa/AAA/AAA GDP growth 3.1% (Q4 13 Y/Y) CPI/CPIF -.6% /.% (Mar 14 Y/Y) Unemployment 8.5% (Feb 14 Y/Y) Debt to GDP 35% (Dec 13) Source: Statistics Sweden and National Debt Office 1 General government gross public debt as a percentage of nominal GDP* UK France Euro area Germany Finland Denmark Sweden F * Maastricht definition Source: OECD Economic outlook 94 table 61, Dec

49 Swedish economy Exports key factor for growth 12 1 Current account balance as % of GDP 12 Exports and imports trend per month, SEKm* Current prices Sweden Germany Denmark Italy Finland France United States United Kingdom Canada 4 2 Import Data up to and including February 214 Export F215F Export of important goods* 1% 13% 9% 8% 8% 1% 7% 11% 6% 5% 13% 4% 3% 2% 45% Other Energy Minerals Forest Chemical Engineering 12% 1% 8% 6% 4% 2% % Top 1 export countries, FY 213, %* 1% % Source: OECD Economic outlook 94, table 51, Dec, 213 Source: *Statistics Sweden, Mar,

50 Swedish economy Swedish GDP breakdown GDP growth From corresponding quarter previous year, %, fixed prices 3 SEKm 6 The output of the Swedish economy Import GDP Gross investments Public consumption Private consumption Export Resources Expenditures Data up to and including Q4 213 Source: Statistics Sweden, Feb, 213 5

51 Swedish economy Strong budget framework Budget framework since early 199 s to stabilize and achieve long-term sustainability in the public finances Mandatory public sector excess savings target of 1% of GDP on average over a business cycle Mandatory ceiling for the state and pension system expenses (3 years ahead) Swedish historic budget balance as a percentage of GDP F 215F Source: OECD Economic outlook 94 table 27, Dec,

52 52

53 Appendix 53

54 This is Swedbank The Bank for the many people, households and businesses Sweden Population 9.5m Private customers 4.m Corporate customers 261 Organisations 67 Branches 36 ATMs * Cards 3.8m Employees Latvia Population 2.m Private customers 1.m Corporate customers 84 Branches 54 ATMs 417 Cards 1.m Employees Estonia Population 1.3m Private customers 1.m Corporate customers 125 Branches 5 ATMs 474 Cards 1.1m Employees 2 27 ~87%* ~1%* * Share of loanbook Lithuania Population 3.m Private customers 2.m Corporate customers 87 Branches 74 ATMs 482 Cards 1.8m Employees Source: Swedbank Fact book Q1, 214 * ATMs are handled in Bankomat AB ( 54

55 Financial performance Income Income distribution Q4 213 Business area distribution Geographic distribution Lending and deposits 66% Treasury, Trading and Capital Markets 4% Asset Management 11% Other 6% Payment, Cards 7% Share of P&L of associates 3% Insurance 3% Lithuania 4% Latvia 5% Estonia 6% Other 5% Sweden 8% Source: Swedbank Mar 31,

56 This is Swedbank Market leading retail franchise in all home markets Largest retail bank and fund manager in Sweden Market shares, Deposits % % Feb Market shares, Lending Feb Deposits Private Deposits Corporate 5 Mortgage lending Corporate lending ** ** * * 1 1 Sweden Estonia Latvia Lithuania Sweden Estonia Latvia Lithuania Source: Source Sweden: Statistics Sweden (SCB) Source Estonia: Estonian Central Bank **Sources Latvia: Association of Commercial Banks of Latvia (ACBL) & The Financial and Capital Market Commission (FCMC), **as per Sep 213 *Source Lithuania: Association of Lithuanian Banks (LBA), *as per Jan

57 This is Swedbank Sweden the dominating home market Total lending to the public amounts to SEK 1,219bn (as per Q1 214), out of which around 86% is originated in Sweden Estonia makes up 45% of total lending in the Baltics Lending distributed by countries (Q1 214) Sweden 86.3% SEK 1 52bn Estonia 4.4% Latvia 2.4% Swedish Mortgage loans (private+corp) Other corporate (incl. LC&I, Sweden) Lithuania 3.% Other* 3.9% Source: Swedbank Fact book Q1 214 * Denmark, Norway, Finland and NY Branch 57

58 This is Swedbank Baltic banking Baltic market fundamentals Legal and institutional framework Fiscal position Market concentration Absence of irrational players Sophisticated product penetration Swedbank retail and deposit incumbent GDP / capita less than half of Sweden s Estonia Latvia Lithuania Risk mitigators Loan-to-deposit restriction Group governance model Source: Swedbank 58

59 Quarterly update Peer comparison Swedbank top 1 or 2 in all key metrics Based on reported 213 figures Swedbank SHB SEB Nordea Danske DnB Rating, long-term (S&P/Moody's/Fitch) A+/A1/A+ AA-/Aa3/AA- A+/A1/A+ AA-/Aa3/AA- A-/Baa1/A A+/A1/A+ Rating, short-term (S&P/Moody's/Fitch) A-1/P-1/F1 A-1+/P-1/F1+ A-1/P-1/F1 A-1+/P-1/F1+ A-2/P-2/F1 A-1/P-1/F1 RoE, net profit % RoCET1, % CET1, Basel 2, % CET1, Basel 3, % CET1, Basel 3, stressed year 216, %¹ n/a n/a T1 leverage ratio, % 4.6 n/d 4,2³ C/I ratio, % Credit impairment ratio, % Share of impaired loans, gross, % LCR, % n/d NSFR, % 89 n/d n/d n/d n/d n/d S&P RAC ratio², % ¹ The Riksbank s Financial Stability Report 213:2, Chart 4:9 ² Latest update, Q2 213 ³ Basel 3 Source: Swedbank, Dec 31,

60 Quarterly update - Expenses Focus on customer activities Flat expenses target for 214 Customer related cost IT development Ektornet Group functions Efficiency measures Expenses Expenses

61 Asset quality Conservative provision ratio SEKm 2 64% 65% 62% 57% 54% 53% 54% 6% Provision ratio, % Q114 Swedish Banking 76 LC&I 196 Baltic Banking 51 Group Q212 Q312 Q412 Q113* Q213* Q313* Q413* Q114* Individual provisions Portfolio provisions Provision ratio Source: Swedbank, Mar 31, 214 * Russia and Ukraine reported as discontinued operations 61

62 Asset quality - Credit portfolio Large Corporates & Institutions Shipping and offshore Lending exposure to Shipping & Offshore sector of SEK 25.bn - Portfolio duration 3.77 years (weighted on commitments) - Average fleet age 7 years - Strong employment profiles SEKbn Shipping and Offshore Shipping and Offshore Portfolio by subsegment, SEKbn RORO Container Dry bulk Gas (LNG/LPG) Crude oil Product Chemical Floating production Accommodation Supply Oil service Drilling & exploration Cruise Source: Swedbank, Mar 31, Q1-14 Q4-13 JPY NOK USD EUR SEK Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Offshore Tanker Other Shipping and Offshore Portfolio by currency, SEKbn Q1-14 Q

63 Liquidity and funding Swedbank s domestic covered bonds Benchmark system established in early 199s Tap issuance enhances liquidity and reduces execution risk Continuous daily issuance Buy-backs against issuance of longer tenors Total issue size often peak at SEK 4-6bn Market making at pre-set bid/offer spreads SEKbn May 14 Mar 15 Sep 15 Jun 16 Mar 17 Dec 17 Sep 18 May 2 SPI 166 SPI 182 SPI 183 SPI 184 SPI 185 SPI 186 SPI 187 SPI 18 Source: Swedbank, Mar 31,

64 Liquidity and funding Fundamental change of maturity profile 27 64% of wholesale funding < 12 months, SEK 13bn in central bank deposits Q % of wholesale funding < 12 months, SEK 127bn in central bank deposits 1% 9% SEK 673bn 2% SEK 813bn 8% Average maturity profile of outstanding market funding 8% 7% 6% 5% 4% 34% 35% 53% 5 years years 3-12 months -3 months Months % 2% 1% 29% 19% 19% % Source: Swedbank, Mar 31, Q1 214 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Total capital market funding Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Covered bond funding Q

65 Liquidity and funding Long-term funding maturity profile Funding plan of SEK 12bn to meet next 12 months nominal SEK 125bn maturities Long-term funding maturity profile, by funding source SEKbn 2 15 Government guaranteed debt Senior unsecured debt Covered bonds Source: Swedbank Mar 31,

66 Liquidity and funding Limited need for USD-funding USD-funding need covered for more than 12 months Issued USD 1bn of senior (144a) YTD 214 SEKbn 3 Assets held for sale 25 Interest-bearing securities 2 Loans to the public Assets Liabilities Loans to credit institutions Cash and balances with central banks Deposits and borrowings from the public Amounts owed to credit institutions Debt securities in issue Source: Swedbank Fact book, Mar 31,

67 Liquidity and funding Funding sources Swedbank AB 1% owned Swedbank Mortgage AB* Program Long Term Global MTN Domestic MTN USD Senior (144a / Reg.S) NSV (stand alone doc.) Short Term Domestic CP European CP/CD US CP Yankee CD French CD Finnish CD Limit USD 4bn SEK 6bn USD 15bn SEK 8bn EUR 6bn USD 15bn USD 1bn EUR 4bn EUR 4bn Program Long Term Domestic Benchmark CB EMTN CB USD Covered bonds (144a / Reg.S) Domestic MTN CB Norwegian Benchmark CB Registered CB (stand alone doc.) Short Term Domestic CP * 1% guaranteed by parent company - Irrevocable - Unconditional - Timely ** Limited by cover pool size Limit Unlimited** EUR 25bn USD 15bn SEK 15bn Unlimited** SEK 5bn Source: Swedbank, Mar 31,

68 Swedish housing and mortgage market Real estate prices Sweden 12 months development Single-family homes 1 Tenant-owner rights 2 Combined 3 12M Δ 12M Δ 12M Δ Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 1% 6% Jul/13 4% 9% 6% Aug/13 5% 11% 7% Sep/13 5% 11% 7% Oct/13 6% 11% 8% Nov/13 4% 13% 7% Dec/13 4% 13% 7% Jan/14 7% 13% 9% Feb/14 7% 13% 9% Mar/14 7% 13% 9% Source: Valuegard (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE 68

69 Real estate prices Baltic countries EUR/m2 /Nr of deals Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Tallinn Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 EUR/m2 /Nr of deals Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Riga Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Nr.of deals EUR/m2 Nr.of deals EUR/m2 EUR/m2 /Nr of deals 1 8 Vilnius Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Nr.of deals EUR/m2 69

70 Appendix Swedbank contacts and financial calendar For further information, please contact: Helo Meigas, Head of Group Treasury Financial calendar Q2 Interim report 16 Jul 214 Q3 Interim report 21 Oct 214 Gregori Karamouzis, Head of Investor Relations gregori.karamouzis@swedbank.com Bogdan Woronowicz, Debt Investor Relations bogdan.woronowicz@swedbank.com Peter Stenborn, Debt Investor Relations peter.stenborn@swedbank.com Ulf Jakobsson, Head of Funding ulf.jakobsson@swedbank.se Kimmy Samuelsson, Head of Long-Term Funding kimmy.samuelsson@swedbank.se Joakim Henriks, Money Markets and Short-Term Funding Contact debt investor relations: debt.ir@swedbank.com Postal address: Visitors: Swedbank Group Treasury Regeringsgatan 13 SE Stockholm, Sweden joakim.henriks@swedbank.se

71 Disclaimer Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, express or implied, by the forward looking statements. Factors that might cause forward looking statements to differ materially from actual results include, among other things, regulatory and economic factors. Swedbank AB assumes no responsibility to update any of the forward looking statements contained herein. No representation or warranty, express or implied, is made or given by or on behalf of Swedbank AB or its directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of Swedbank AB or any of its directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Swedbank AB, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. 71