Investor Presentation Result presentation January September 2010
Highlights Income Seasonally slow quarter supported by diversified earnings Further improved asset quality Baltics back in black Profit SEB Baltic Underlying operating profit Underlying operating profit up 35 per cent SEK 3.6bn 2
Profit and loss trend Profit and loss development -08-10 (SEK bn) 8.9 6.2 5.5-10 -10-10 Operating income Operating expenses Net credit losses -0.2 Operating profit (SEK bn) 3.6 2.8-08 Q4-08 Q1-09 Q2-09 -09 Q4-09 Q1-10 Q2-10 -10 Note: Shaded areas refer to gain on buy-back of subordinated debt, acquisition goodwill write-offs and restructuring costs, respectively 3
Income statement 2010 Profit and loss (SEK m) -10 Q2-10 % Total operating income 8,882 9,224-4 Total operating expenses -5,476-5,907-7 Profit bef credit losses & restr. 3,406 3,317 3 Restructuring costs -755 Profit before credit losses 2,651 3,317-20 Net credit losses etc 196-642 Operating profit 2,847 2,675 6 Operating income by type, vs. Q2 (SEK bn) 3.8 4.2 3.7 3.4 47% 9% 9% 8% 10% 1.0 0.7 0.8 0.8 38% Q2-10 -10 Q2-10 -10 Q2-10 -10 Q2-10 -10 Net interest Net fee and Net financial Net life insurance income commissions income income 4
Net interest and Net fee and commission income SEB Group, SEK m 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Net interest income Net fee and commissions 0 Q1-06 Q2-06 - 06 Q4-06 Q1-07 Q2-07 - 07 Q4-07 Q1-08 Q2-08 - 08 Q4-08 Q1-09 Q2-09 - 09 Q4-09 Q1-10 Q2-10 - 10 5
Net interest income development NII 2008 2010 (SEK bn) 6 5 4 3 2 1 0 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-10 -10 NII by income type 2008 2010 (SEK bn) 2.8 0.5 0.9 * Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Lending Deposits Funding & other * of which SEK 0.1bn hedging German divestment 6
Net interest income analysis SEB Group, SEK m Jan-Sep 2010 vs. Jan-Sep 2009 2010 vs. Q2 2010 2010 vs. 2009 Jan-Sep 2009 14,714 Q2 2010 3,762 2009 4,197 Lending margin 409 Lending margin 71 Lending margin 62 Lending volume -539 Lending volume -41 Lending volume -112 Deposit margin -1,351 Deposit margin 46 Deposit margin -234 Deposit volume -139 Deposit volume 8 Deposit volume -9 Funding & other -1,610 Funding & other 334 Funding & other 276 Jan-Sep 2010 11,484 2010 4,180 2010 4,180 7
Commission income development Fees & commissions 2008 2010 (SEK bn) 5 4 3 2 1 0 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-10 -10 Fees & commissions by income type 2008 2010 (SEK bn, gross) 1.7 2.2 0.5 0.2 Q1-08 Q1-09 Q1-10 Q1-08 New issues & advisory Q1-09 Q1-10 Q1-08 Secondary markets & advisory Q1-09 Q1-10 Custody & mutual funds Q1-08 Q1-09 Q1-10 Payments, cards, lending, deposits & guarantees 8
Cost development Operating expenses 1 (SEK bn) +1% 16,834 17,014 Number of FTEs 2 IT & Admin 17,655 17,331 16,986 17,059 17,133 Staff cost Jan-Sep 2009 Jan-Sep 2010-09 Q4 Q1-10 Q2 1) Excluding goodwill write-offs and restructuring costs 2) Continuing business 9
Divisional performance Operating profit -10 vs. Q2-10 (SEK m) 2,491 GTS 2,002 Corp TCM Cards Retail 571 688 424 519 320 563-197 514 Merchant Banking Retail Banking Wealth Management Life Baltic Q2-10 -10 RoBE YTD 22% 18% 20% 33% Neg. 10
Nordic corporate activity picking up Nordic Syndicated Corporate Loans Bookrunner (YTD) SEB Nordea 14.2% 22.2% Adviser and sole financing arranger on NOK 1bn merger Sole lender on ~SEK 1.6bn acq. facilities HL Display and Stofa Credit Agricole 12.9% DnB NOR Danske Markets Source: Dealogic 9.5% 11.9% Bookrunner and adviser on USD 2.1bn acq. of Intergraph Lead arranger and adviser on SEK 4.4bn acq. of Aleris 11
SEB well positioned in the Nordics Best bank in the Nordic & Baltic region for real estate products Best Danish equity research firm Refinancing of Nordic corporate loans 2010-2013 (SEK bn) 350 340 245 165 No.1 in securities lending Business bank of the year 2010 2011 2012 2013 Sweden Norway Denmark Finland Source: Dealogic Swedish corporate lending growth vs. economic sentiment 20 10 0-10 2003 2004 2005 2006 2007 2008 2009 2010 Corporate lending growth, y-o-y % - lagged by 12 months (LHS) Economic sentiment (RHS) 115 105 95 85 75 12
Trading & Capital Markets Diversified earnings, client driven activities FX Equities Capital Markets SD and Other TCM 8% 11% 7% 5% 6% 22% 15% 11% 8% 8% 3% 6% 12% 44% 44% 46% 59% 50% 45% 46% 26% 28% 33% 38% 41% 36% 44% 21% 19% 63% 3% 8% 30% 34% 6% 7% 6% 21% 34% 24% 22% 28% 22% 30% 30% 46% 34% 38% 41% 36% 4% 29% 29% 38% 4% 32% 28% 36% Q1-07 Q2 Q4 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Low risk trading orientation Daily trading income 2007 2010. 37 negative out of 963 trading days. Average loss SEK 15m Dec- 06 Mar- 07 Jun- 07 Sep- 07 Dec- 07 Mar- 08 Jun- 08 Sep- 08 Dec- 08 Mar- 09 Jun- 09 Sep- 09 Dec- 09 Mar- 10 Jun- 10 Sep- 10 * Excluding Investment Portfolio 13
Focus on savings New savings account 1.96% from 23 November Leading in unit-linked Market shares (%) Lithuania Latvia Estonia Denmark Sweden 17 12 15 25 24 0% 50% 100% SEB rank #1 #2 #3 #3 #2 Rising net sales in WM Total net sales per quarter (SEK bn) 13.5 8.7 1.1-09 Q2-10 -10 SEB market share Competitors Institutional Clients Private Banking Notes: Unit-linked market shares as of Q2 2010; Sweden based on premium income unit-linked 12 months to June 2010; Denmark unit-linked insurance in competitive markets; Latvia latest information from Q1 2010 14
Development of credit portfolio SEK bn Asset Quality 800 700 600 500 400 300 200 100 Credit exposure - on & off balance 0 Dec '06 Sep '07 Jun '08 Mar '09 Dec '09 Sep '10 Sector Sep/Jun Corporates -1.3% fx-adjusted 4.0% Households Prop Mgmt Banks Public Admin -1.0% -1.5% 3.0% -6.1% 485 SEB Group - Corporates 571 782 656 646 655 647 Dec '06 Dec '07 Dec '08 Dec '09 Mar '10 Jun '10 Sep '10 "Nordic" - Larger Germany - Larger Baltic "Nordic" - Retail Other Total Dec '09 Jun '10 Sep '10 Corporates 656 655 647 Property Management 247 248 244 Households 509 514 509 Public Administration 95 86 81 Total non-banks 1 507 1 503 1 481 Banks 310 212 218 Total 1 816 1 715 1 699 15
Swedish asset quality Private SEB mortgage lending (SEK bn) 218 229 247 260 266 Corporate SEB corporate lending (SEK bn) 265 256 221 222 218 Q4-08 Q2-09 Q4-09 Q2-10 -10 Stricter mortgage policy 7% interest rate stress test 85% first lien cap Stricter amortisation policy Q4-08 Q2-09 Q4-09 Q2-10 -10 Turnaround in corporate sentiment Robust domestic market Strong export trend Credit commitments +10% /Q2 Loan-to-value Share of portfolio >85% 2% Impaired loans, basis points 51-85% 22% 0-50% 76% 60 40 20 0 45 33 26 30 28 Q4-08 Q2-09 Q4-09 Q2-10 -10 Swedish credit loss level at 3 bps 16
10 9 8 7 6 5 4 3 2 1 0 17 Q2 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 '10 Development of NPLs SEK bn Non-performing loans SEK bn Individually assessed Portfolio assessed 0.4% of lending 1.2% of lending SEB total non-performing loans/lending 1.8% 7.5% of lending 18.9% of lending 15.6% of lending Nordic Germany Estonia Latvia Lithuania Total SEB NPL coverage ratio 68% Baltic NPL coverage ratio 65%
Net credit loss development continues to improve Credit losses Baltic region (SEK bn) 2.6 2.6 2.6 Credit losses* outside Baltic region (SEK bn) 154 bps YTD 7 bps YTD 1.7 1.4 0.2 0.3 0.4 0.9 0.5 0.1 0.1 0.3 0.8 0.6 0.8 0.6 0.5 0.4 0.2 0.1 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-0.3 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 * Continuing operations 18
Development of net credit losses, % Nordic countries Baltic countries 5,43 0,04 0,04 0,05 0,18 0,17 0,05 0,27 0,13 0,43 1,28 1,54 2005 2006 2007 2008 2009 Jan-Sep '10 Germany incl. discontinued operations 2005 2006 2007 2008 2009 Jan-Sep '10 SEB Group 0,92 0,19 0,14 0,1 0,09 0,22 0,10 0,11 0,08 0,11 0,30 0,21 2005 2006 2007 2008 2009 Jan-Sep '10 2005 2006 2007 2008 2009 Jan-Sep '10 19
Conservative provisioning policy Baltics - Non-performing loan and reserve development SEK bn Portfolio assessed Individually assessed 20 Specific reserves Collective reserves 18 16 14 12 10 8 6 4 2 0 NPL coverage ratios % 09 Q4 09 Q1 10 Q2 10 10 Group 72% 65% 70% 71% 68% Baltics 68% 61% 67% 68% 65% 20
Baltic asset quality Net credit losses, SEK m Q1 2008 2010 2 000 Non-performing and Reserves, SEK bn 20 June 2009 December 2009 Sep 2010 1 500 1 000 16 12 65% NPL coverage ratio 500 8 0-500 -10 Estonia Latvia Lithuania -109-154 4 0 NPL Reserves Write-offs Solid grip on problem portfolio end of extraordinary provisioning cycle Full establishment of Real Estate Holding companies Low inventory of repossessed leasing equipment Restructuring of troubled mortgages working well 21
Consistently improving asset quality Flow of new problem loans Watch list loans Past dues Non-performing loans Write-offs Positive development Watch list loans decreasing Past dues are decreasing Non-performing loans decreasing Only 10 per cent of all reserves for Baltic NPLs realised 22
Baltic credit loss dynamics Net credit loss dynamics, SEK bn Build-up of provisions Realizing losses 2008 2009 2010 2011? 2,6 2,5 2.6 1,7 1,4 0,9 0,2 0,3 0,4 0,4 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-0,3 23
Reasons for the rapidly falling net credit losses Austerity measures Turnaround of macro-economic situation Determination, flexibility and fighting spirit Consumers holding up better than expected Export / transit business recovering fast on back important trading partners recovery Consumer confidence recovering in residential property First Euro accession in the Baltic area a morale booster SEB s proactive work-out and provisioning 24
A strong balance sheet structure Sep 2010 Total assets SEK 2,254bn Balance sheet structure Short-term and liquid assets Cash & Lending Financial Institutions Net other trading Net bond portfolio Deposits Financial Institutions Funding <1 year Short-term funding Household lending Funding, remaining maturity >1 year Banking book Other lending Deposits from the public Stable funding Equity Assets Equity & Liabilities 25
Deposits from the general public excluding repos Corporate deposits > +80% in six years MSEK 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Public sector Private sector excl German Retail Total deposits Corporate sector Total deposits excl German Retail Private sector 0 Q1 2005 2005 Q1 2006 2006 Q1 2007 2007 Q1 2008 2008 Q1 2009 2009 Q1 2010 2010 26
Net liquidity position SEB s matched funding horizon Months 25 20 15 Loans to deposit ratio 200% 200% 180% 180% 160% 160% 140% 140% 120% 120% 100% 100% 146% 2001 2003 2005 2007 2009 2001 2003 2005 2007 2009 2010 2010 10 Loans to deposit ratio excl repos, %* 5 0 Q1-08 -08 Q1-09 -09 Q1-10 -10 200% 180% 160% 138% 140% 120% 100% 2001 2003 2005 2007 2009 *excl re-classified bonds and repos 2010 Note this is a cash flow based model where assets and liabilities are mapped to contractual maturities. SEB will manage more than 18 months without any new funding if the loans and liabilities mature without prolongation. Not ongoing business if funding is disturbed or lending increases. 27
Funding raised with original maturity > 1 year SEK bn Instrument 2008 2009 Q1 2010 Q2 2010 2010 Yankee CD 5.9 3.05 0.0 1.2 1.4 Senior unsecured SEB AG 2 5.2 0.2 0.0 0.0 Senior unsecured SEB AB 37.4 60.4 3.7 0.0 6.9 Structured bonds 13.4 8.3 1.1 1.8 0.3 Covered bonds SEB AG 29.7 24.4 2.1 0.7 1.3 Covered bonds SEB AB 72.9 25.7 0.0 22.9 16.6 Hybrid tier 1 4.7 3.3 0.0 0.0 0.0 Total 166.0 130.4 7.0 26.6 26.4 SEK 60bn 28
Long-term funding Maturity profile as per September 30, 2010 SEK bn 0 <1Y 1-2Y 2-3Y 3-4Y 4-5Y 5-7Y 7-10Y >10Y -20-40 -60-80 -100-120 -140 Subordinated Debt Covered Bonds non SEK, Swe Covered Bonds SEK, Swe Senior Unsecured Mortgage Pfandbriefe, Ger Public Pfandbriefe, Ger 29
Capital ratios and Basel III Capital adequacy without transitional floor Total capital ratio, % Tier I capital ratio, % Core Tier I 14.7 14.3 13.9 14.2 11.7 12.1 Basel III Changes during summer reduces impact Estimated effect 100-150bps deduction from Core Tier 1 Liquidity and funding effects not strategic limitations SEK bn Dec 2009 Sep-10 Capital base 107.3 101.5 RWA 730 711 30
Dividend development SEK m 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Total dividend Net profit 0 2004 2005 2006 2007 2008 2009 DPS*, SEK 2.30 2.50 3.10 3.40 0 1.00 Pay-out ratio 40% 38% 32% 33% 0% 172% Dividend policy: 40% of Net profit (EPS) over the business cycle *No. shares adjusted for rights issue 31
Strategic alignment of SEB s German business Retail banking business discontinued 173 branches 1 million customers ~2,000 employees Strategic rationale Completes strategic alignment Santander ideal partner Financial ratios will improve C/I: +4 units Core Tier 1: +50 bps ROE: +60bps Subject to regulatory approvals, expected closing around year-end 2010 32
SEB Germany after divestment Financials are expected to improve significantly in the medium term Pro-forma effects on continuing business Cost/income ratio Actual Pro-forma Return on business equity 0.6 0.9 Focus going forward Merchant Banking Asset Mgmt Targeting selected Mittelstand clients Build on strong real estate trackrecord and Merchant Banking to increase customer acquisition Actual Pro-forma 0% 10% Support functions Increased productivity, e.g. IT integration with SEB Group Pro-forma operating profit (SEK bn) 1.0 1.3 1.1 0.7 2007 2008 2009 Jan-Sep 2010 33
Accounting consequences Q2 10 10 Q4 10 Q1 11 Q2 11 11 Event 12 July Closing of transaction Separation completed Accounting, Group Pro forma Discontinued operations Restructuring costs Gain/loss of transaction Separation phase Sale of services Accounting one-off effects, MEUR -210-110 A Discontinued business - Transaction related -130 Discontinued business - Premium to equity +135 B Continued business - Restructuring -80 C Discontinued business - Hedge break-up -245 Key elements Financials 2010 will be negatively effected due to one-time effects in and Q4. The effects in will be booked as Other Expenses (EUR 80m) gross of tax and under Discontinued Operations (EUR 130m) net of tax. Discontinued operations will also include the result for German Retail net of tax. Estimated separation and closing of transaction by Q4 2010 34
Resilience and flexibility Continued Nordic expansion Positioned for increased market activity Tier 1 ratio Tier 1 14.2% Matched >18m Leverage 5.6% Total 73% Tier 1 Tier 1 Tier 1 funding ratio* reserve ratio * FDIC 35
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