KBW 211 UK and European Financials Conference Göran Bronner, CFO
This is Swedbank Market leading retail franchise in its home markets Largest retail bank and fund manager in Sweden 6 % Market shares, May 211 Deposits Private % 6 Market shares, May 211 Mortgage lending 5 Deposits Corporate 5 Corporate lending 4 4 3 3 2 2 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) Source Lithuania: Association of Lithuanian Banks (LBA) 2
This is Swedbank Sweden the dominating home market Around 87% of total lending is originated in Sweden Estonia makes up 41% of total CEE lending SEKbn 1 9 8 7 6 5 4 3 2 1 948 979 Private Corporate 521 584 251 427 395 97 136 8 154 69 67 39 41 Q4 8 Q2 11 Q4 8 Q2 11 Q2 11 Sweden CEE excl Estonia 3
Capital management Repurchases of own shares paused Increasing financial instability 14.8% 1.% Excess capital (SEK 9.2bn) Extra buffer due to prevailing circumstances (SEK 15.3bn) 13.% Perception of buyback programme not supporting Swedbank s brand Still over-capitalised with a CT1- ratio of 14.8 per cent as of Q2 11 5.35 per cent of total shares repurchased as per 13 September Risk appetite (ICAAP buffer, SEK 15.3bn) Stress tests support low risk level 7.% ICAAP 211 Minimum requirement (SEK 35.7bn) 4
Balance sheet development Responsible banking CEE lending deleveraged by 46% since 28 Limited senior funding need, no dependence on short-term funding 1 4 Assets* 1 4 Liabilities* 1 2 1 8 6-116 -63-12 CEE lending Estonia Other corporate lending, Sweden & other Nordic Other private, Sweden 1 2 1 8 6 Central bank + Government guaranteed -218-46 +218 Senior Covered bonds 4 +82 Swedish mortgage loans 4 +11 Deposits 2 2 Suppl. cap +11 Core T1 FY 28 Q2 Q1 211 FY FY 28 Q2 Q1 211 FY 21X Source: Swedbank, Dec 31, 28 and Jun 3, 211 * Simplified balance sheet assets and liabilities 5
Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Funding Proactive funding 12 1 8 6 4 Term issuance & maturities since Q3 29 SEK 594bn term funding issued (nominal SEKbn) Q3 29 YTD (15 Sept, 211), and maturities of SEK 386bn SEK 19bn long-term funding issued YTD, FY long-term maturities 211 SEK 18bn 2-2 -4-6 -8-1 -12 6
Funding development quarter-to-date Around SEK 45bn of long-term debt issued so far in Q3 Demand for Swedbank short-term paper continues to increase USD-funding need covered for more than 12 months Long-term debt issued quarter-to-date Short-term debt outstandings quarter-to-date SEKm SEKm 2 Other 7 Q2 11 18 16 14 12 1 8 CHF USD EUR SEK 6 5 4 3 15-Sep 6 2 4 2 1 Domestic CB Euro CB USD CB (144A) Registered CB Senior unsecured Domestic CP ECP USCP Yankee CD 7
Q4 21 Q1 211 Q1 21 Q2 211 Q2 21 Q3 211 Q3 21 Q4 211 Q4 21 Q1 212 Q1 211 Q2 212 Q2 211 Q3 212 Q3 211 Q4 212 Q4 211 Q1 213 Q1 212 Q2 213 Q2 212 Q3 213 Q3 212 Q4 213 Q4 212 Q1 214 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Term funding need to subside Issuance of SEK 466bn during last 7 quarters vs maturities of SEK 33bn during next 1 quarters Government guaranteed debt maturities of SEK 46bn in Q4 11 and SEK 28bn in Q1 12 SEKbn 1 Term funding issuance Pre-funded term maturities Average term funding issuance Average term funding need* Pre-fund Average 75 5 25 * Assuming that actual maturities from Q3 212 onwards are 1-to-1 replaced 8
Liquidity Conservative liquidity levels Short-term funding mainly a tool for cash management SEKbn 3 25 2 15 1 5 Central bank deposits CP / CDs and net interbank funding 9
Liquidity Conservative liquidity levels Short-term funding mainly a tool for cash management More than 12 months pre-funded SEKbn 3 25 2 15 1 5 Other pledgeable and/or liquid assets Additional liquidity reserve assets Central bank deposits Next 12-month term funding maturities CP / CDs and net interbank funding 1
House price sensitivity of the cover pool Resilient LTV-structure with an approximate 2-to-1 relationship between house price drops and cover pool size 35% 3% 25% 2% OC 15% 1% 5% % -5% -1% OC -15% % 5% 1% 15% 2% 25% 3% 35% 4% 45% 5% House price drop 11
Solid Q2 performance Net profit of SEK 3 452m Core Tier 1 capital ratio of 14.8 per cent after buy-backs Return on equity of 14.4 per cent in Q2 Profit for the period Profit performance Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 12
(SEKm) Expenses On target with flat costs Lower number of employees Bank accounting principles in Ektornet increase expenses.57.55.58.52.52 4 423 4 238 4 59 4 384 4 345 Total expenses Cost-income ratio Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 13