SEB Enskilda Nordic Seminar 7 January 2010 Erkki Raasuke, CFO
Continued focus on short-term priorities Asset quality Signs of growth rate of impaired loans levelling off Ektornet to protect long-term shareholder value Earnings capacity Liquidity and funding Capital management Continued headwinds in earnings No issue under state guarantee in Q4 Outstanding domestic covered bonds increased by SEK 47bn in Q4 Rights offering completed 2
Results by business area Mixed performance Swedish Banking Continued stable performance, limited impairment losses SEKm 3 500 3 000 2 500 2 000 1 500 1 000 Profit before impairments and provisions Q1 Q2 Baltic Banking Contracting earnings, lower growth rate in impaired loans International Banking Weak asset quality, continued de-risking Swedbank Markets Strong H1 but considerably slower H2 500 0-500 -1 000 SEKm 3 000 2 000 1 000 Swedish Banking Baltic Banking International Banking Operating result Swedbank Markets Asset Management Q1 Q2 Asset Management Strong equity markets increased fee income, new sales market share trending up 0-1 000-2 000-3 000 Swedish Banking Baltic Banking International Banking Swedbank Markets Asset Management 3
NII short-term pressure Stabilisation fee in Sweden Change in NII - Baltic Banking Low interest rates Overdue loans in Baltic Banking and International Banking Open currency position in Baltic Banking Deleveraging in Baltic Banking and International Banking Re-pricing slowing down 9M 2008 Volume Euribor Open currency position Overdue loans Other price 9M 20 NII medium-term support Largest pool of demand deposits Open currency position in Baltic Banking New regulations will affect NII 4
FTE adjustments according to plan Planned FTE actual reduction H2 H1 10 Swedish Banking -35 0-450 Baltic Banking -474-690 -250 International Banking -192-660 -670 Other -13 NA NA Total -714-1 350-1 370 5
Tax charge of SEK 734m higher than normalised SEKm Q2 Q1 YTD 20 Ukrainian Banking 248 62-408 -98 Baltic Banking -159-542 -265-966 Rest of Group 645 625 660 1 930 Swedbank Group 734 145-13 866 6
Liquidity & Funding Improved access to market funding post rights issue No long-term guaranteed funding issued since mid-july Central bank repos have decreased Outstanding domestic covered bonds increased by SEK 47bn in Q4 Total long-term, non-guaranteed Total long-term, guaranteed Outstanding wholesale funding SEKbn, notional value 179 188 338 318 Central bank repo's 165 206 Total short-term, non-guaranteed 46 99 Total short-tem, guaranteed 98 118 Q2 7
Asset quality Impaired loans as expected in Impaired loans increased by SEK 6.1bn excl FX effects SEK 8.9bn Sweden: continued very low levels Estonia: clearly best quality in the Baltic countries Latvia, Lithuania and Ukraine: continued weak development Quarterly change of impaired loans (gross, SEKm) 4 826 4 028 Q1 Q2 excl FX effects 1 200 1 188 1 100 832 2 050 1 627 436 1 390 1 931 2 287 175 286-267 331 486 1 362 1 879 Share of impaired Swedish Estonia Latvia Lithuania Russia Ukraine Banking loans, gross % (lending to the public) 0.24% 6.90% 22.08% 13.% 5.65% 43.90% 68 341 33 8
Asset quality Quarterly change of 60-day overdue loans in the Baltics growth rate slowing EURm 400 350 300 250 200 150 100 50 0 08 Q4 08 Q1 Q2 08 Q4 08 Q1 Q2 08 Q4 08 Q1 Q2 Estonia Latvia Lithuania 9
Q4 update 10
Q4 update Similar trends as in but slower capital markets NII pressure continues Low trading activity Asset quality trends intact slower build up of new overdues Outstanding domestic covered bonds increased by SEK 47bn in Q4 Swedbank AB has issued a guarantee for Swedbank Mortgage S&P covered bond criteria under review Changed tax rules in Ukraine and Lithuania 11
New suggestions from the Basel Committee 12
Preliminary thoughts on new regulations Capital Core Tier 1 ratio post share issue 12.3% with full Basel 2 rules, 9.5% with transition rules No material impact expected from new rules Leverage ratio is an open issue, due to the structure of the Swedish mortgage market Liquidity (Liquidity Coverage Ratio) Liquidity position today seems at first sight to be sufficient, however it is costly Funding (Net Stable Funding Ratio) First assessment assumes considerably longer-term funding profile of wholesale funding Market structure issue with Swedish mortgage market Need more information on final definitions and hurdle rates before a qualitative assessment of impact. Impact will also depend on the relative starting point between different banks 13