Investor Presentation October 2018
SEK s mission and vision SEK s mission is to ensure access to sustainable financial solutions for the Swedish export industry on commercial terms. SEK s vision is to strengthen the competitiveness of Swedish exporters and help create employment and sustainable growth in Sweden. 100% owned by the Swedish government 2
Kingdom of Sweden Population 10 million Surface 450 000 km 2 Capital Language Political system European status Currency Stockholm Swedish, English widely spoken Parliamentary democracy Inside EU, outside Euro Swedish Krona 3
Economy of Sweden Public debt to GDP Rating AAA/Aaa/Aaa GDP growth Q2 2018 (QoQ/YoY) 0.8% / 2.5% GDP growth 2017 2.4% GDP 2017 USD 538bn* GDP per capita 2017 USD 53 450* 5 year CDS spreads Unemployment Sep 2018 6.5%** CPI / CPIF*** Sep 2018 (YoY) 2.3% / 2.5% Repo Rate Oct 2018-0.50% *USD/SEK average 2017, 8.55 ** seasonally adjusted, % of labour force *** CPIF = CPI with fixed mortgage rates Source: SCB, IMF, Macrobond, Bloomberg 4
Swedish Exports large part of GDP and well diversified Exports and imports Share of GDP % Key export goods 55 50 45 40 35 30 25 Materials 18% Machinery 16% Auto 15% Consumer goods 14% IT & telecom 11% Pulp & paper 10% Energy 7% Health care 6% Construction 3% Export Import Source: SCB As of December 31, 2017 5
Well-known Swedish exporters 6
SEK has a complementary role in the market Our offering provides a complement to bank and capital market finance for exporters that want a range of different financing sources. SEK creates client value on market terms through its strong international network, extensive experience and expertise in export finance. Bank and capital market Customer SEK 7
Our offering Export Finance Project Finance Trade Finance Customer Finance Small Ticket Finance On-lending Corporate Lending and Capital Market Products Our offer is available in all major and selected emerging market currencies 8
The Swedish Export Credit System Exporter Bank EKN SEK negotiates with buyer arranges guarantees finances 9
Ratings "...there is an extremely high likelihood of timely support to SEK from the Swedish government..." "SEK's capital ratios reflect its high-quality loan book and associated guarantees, highly rated exposures in its liquidity portfolio, and superior capital base." AA+ (stable) "SEK is an important pillar of Swedish exporters' success and it has strong relationships with Sweden's largest and most creditworthy corporations." October 2, 2017 "SEK's senior debt instruments continue to benefit from high government support given its strong linkages with the sovereign due to both its government ownership, as well as the special mandate the bank has to promote Swedish exports and manage the CIRR system." Aa1 (stable) "Adequate Capital and Stronger-Than-Peers Leverage "This [leverage ratio] places SEK in a stronger position compared to Nordic public sector peers..." January 16, 2018 10
SEK s sustainability framework Owner instruction Sustainability reporting Sustainability targets and strategies OECD Common Approaches OECD Convention on Combating Bribery Equator Principles IFC Performance Standards UN Global Compact UN Guidelines on Business and Human Rights 11
Funding and liquidity: No refinancing risk USD bn 45 40 35 30 25 20 Loan facility with the Swedish National Debt Office Borrowing total, including shareholder's funds Lending with first possible pre-payment, including the CIRR-system 15 10 5 0 As of September 30, 2018 12
Total USD 34.0 bn Derivatives and other assets Derivatives and other liabilities Liquidity Placements Agreed but indisbursed credits Assets Credit Portfolio Senior securities issued Subordinated capital Equity Liabilities & equity As of September 30, 2018 13
Credit portfolio Demand for financing from the Swedish export industry increased dramatically during the financial crisis The Swedish government heavily increased SEK s lending capacity during the financial crisis SEK secured access to financing for the Swedish exporters USD bn 20 New credits accepted 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 As of September 30, 2018 14
Counterparty exposures & risk mitigation Export credit agency guarantees Bank guarantees Credit derivatives Collateral agreements Insurance company guarantees 80% 70% 60% 50% 40% 30% 20% 10% Gross exposure Net exposure 0% Corporates Financial institutions including covered bonds Sovereigns (incl. local governments) As of September 30, 2018 15
Liquidity portfolio Investment profile Average duration of new investments: 5 months Maximum maturity: Generally 18 months, with some exceptions Minimum rating: Generally A-, with some exceptions 100% 90% 80% 70% 60% 50% 30 Sep 2018 31 Dec 2017 40% 30% 20% 10% 0% M 1 year 1 year < M 3 years M > 3 years As of September 30, 2018 16
Funding: flexible and diversified Multiple funding programmes in all major currencies Funding in local currencies Responsive to investor needs An experienced benchmark issuer New funding by region, as of September 30, 2018 (2017, whole year) Japan 15.5% (44.4%) North America 28.7% (20.6%) Europe excl. Nordic countries 31.1% (16.1%) Non-Japan Asia 10.8% (12.4%) Nordic countries 3.7% (2.8%) Middle East/Africa 3.4% (2.5%) Latin America 6.9% (0.9%) Oceania 0.0% (0.2%) Risk Management policy No currency risk Very limited interest rate risk All structured notes are hedged New funding by structure, as of September 30, 2018 (2017, whole year) Plain Vanilla 79.0% (59.4%) Equity linked 18.9% (31.5%) FX linked 0.6% (8.7%) Commodity linked 1.4% (0.4%) PRDC 0.0% (0.1%) As of September 30, 2018 17
Diversified funding, by region USD bn 16,00 14,00 12,00 10,00 8,00 6,00 4,00 2,00 0,00 2012 2013 2014 2015 2016 2017 2018 Q3 North America Non-Japan Asia Europe Nordic Countries Middle East/Africa Latin America Oceania Japan As of September 30, 2018 18
Diversified funding, by structure USD bn 16 14 12 10 8 6 4 2 0 2012 2013 2014 2015 2016 2017 2018 Q3 Commodity linked Equity linked FX linked Plain Vanilla IR linked PRDC As of September 30, 2018 19
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Capitalization and Profitability Return on equity (IFRS) 12% Common Equity Tier 1 capital ratio of 20.1% (actual) as of September 30, 2018 Leverage ratio of 5.6% (actual) as of September 30, 2018 10% 8% 6% Dividend policy: 30% of profit after tax to our owner Return on equity: 3.4% (target: 6%) 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Q1-Q3 2018 As of September 30, 2018 21
About SEK Owner: Swedish government, 100% Mission: Primary task: To ensure access to sustainable financial solutions for the Swedish export industry on commercial terms Financing of export credits Credit rating: S&P: AA+ /Stable/A-1+ Moody s: Aa1/Stable/P-1 Established: 1962 Financial information at September 30, 2018 Total assets USD 34.0 bn Lending USD 23.7 bn Common Equity Tier 1 capital ratio 20.1% After-tax return on equity 3.4% As of September 30, 2018 22