Debt Investor Presentation - Q1-update May 2011 Jonas Erikson, Head of Group Treasury Peter Stenborn, Debt Investor Relations
Table of contents 1. This is Swedbank 3 2. The Swedish economy 7 3. Swedish housing and mortgage market 14 4. Financial performance 21 5. Liquidity and funding 32 6. Swedbank s lending process in Sweden 43 7. Swedish covered bond legislation 47 8. Swedbank s cover pool 50 9. Appendix 54 2
1. This is Swedbank 3
This is Swedbank The Bank for the many people, households and businesses Sweden Population 9.3m Employees 8 408 Private customers 4.0m Corporate customers 309 000 Organisations 111 000 Branches 334 ATMs 731 Cards 3.7m Latvia Population 2.2m Employees 1 666 Private customers 1.0m Corporate customers 66 000 Branches 59 ATMs 375 Cards 0.9m Estonia Population 1.3m Employees 2 511 Private customers 1.2m Corporate customers 108 000 Branches 64 ATMs 546 Cards 1.1m Lithuania Population 3.3m Employees 2 161 Private customers 3.2m Corporate customers 99 000 Branches 96 ATMs 448 Cards 1.7m Source: Swedbank Fact book Q1, 2011 4
This is Swedbank Market leading retail franchise in all home markets Largest retail bank and fund manager in Sweden Market shares, Deposits % February 2011 % 60 60 Deposits Private 50 Deposits Corporate 50 Market shares, Lending February 2011 Mortgage lending Corporate lending 40 40 30 30 20 20 10 10 0 Sweden Estonia Latvia Lithuania 0 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) 5
This is Swedbank Sweden the dominating home market Total lending amounts to SEK 1,373bn (as per Q1 2011), out of which 88% is originated in Sweden Estonia makes up 44% of total lending in the Baltics Total lending distributed by country (Q1 2011) Sweden 88% SEK 1 203bn Estonia 4% Latvia 3% Lithuania 2% Mortgage loans (private+corp) Other corporate Credit institutions Other Norway 1% Other* 2% 0 200 400 600 800 1000 1200 Source: Swedbank Fact book Q1 2011 * Mainly Russia, Ukraine, Denmark, Finland, USA and Luxemburg 6
2. The Swedish economy 7
The Swedish economy A balance sheet in favourable condition Sweden s financial assets continue to exceed its liabilities General government net financial liabilities % of nominal GDP 120 % 100 % 80 % 60 % 40 % 20 % 0 % -20 % -40 % Source: OECD Economic outlook 87 database 2009 2010F 2011F 8
The Swedish economy Strong fiscal position Kingdom of Sweden rated Aaa/AAA/AAA GDP growth 5.5% in 2010 Balanced budget FY 2010 Source: Swedish National Debt Office, Feb 2, 2011 and Statistics Sweden SEKbn Swedish government debt Government debt to GDP, % 1 800 80% 1 600 70% 1 400 1 200 1 000 800 600 400 200 60% 50% 40% 30% France Germany EU27 UK Sweden Denmark 0 20% 2006 2007 2008 2009 Source: Swedish National Debt Office, Dec 31, 2010 and Swedish Government budget statement, Oct 12, 2010 Source: Eurostat, euroindicators, Nov 15, 2010 9
The Swedish economy Solid macro recovery Real GDP growth rate 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% -2,0% -4,0% -6,0% -8,0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F European Union (27 countries) Sweden United States Source: Eurostat, Mar 8, 2011 10
The Swedish economy Solid macro recovery Unemployment rate 2001-2010, % Export and import trend per month, SEKm as per Q1 each year 10 120 000 9 8 100 000 Import Export 7 6 80 000 5 60 000 4 3 40 000 2 1 20 000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 2004 2005 2006 2007 2008 2009 2010 Data up until February 2011 Source: Statistics Sweden, Mar 31, 2011 Source: Statistics Sweden, March 28, 2011 11
The Swedish economy Continuing recovery of foreign trade 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0 Current account balance as % of GDP Sweden Germany Denmark Finland Canada UK France Italy US 12% 10% 8% 6% 4% 2% 0% Top 10 export countries 2010-6.0-8.0 2005 2006 2007 2008 2009 2010F 2011F Export distribution by important commodity groups 11% 11% 12% 8% 13% 45% Engineering Chemistry Other goods Forestry Minerals Energy Source: OECD Economic outlook 87, Jun 16, 2010 Source: Statistics Sweden, Feb 28, 2011 12
The Swedish economy Sweden has shown resilience through turbulent times 5 year Sovereign CDS 300 250 200 150 100 Italy France United Kingdom Germany Sweden 50 0 Source: Bloomberg, May 3, 2011 13
3. Swedish housing and mortgage market 14
Swedish housing and mortgage market Healthy household balance sheets Swedish household financial assets and liabilities SEKbn 7 000 Total household debt Total financial assets 6 000 5 000 4 000 3 000 2 000 1 000 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: Statistics Sweden Hushållens ställning och transaktioner Feb 17, 2011 as per Dec 31, 2010 15
Swedish housing and mortgage market Structural interest rate decline key to affordability Household debt and interest expenses after tax as percentage of disposable income % % 220 22 200 180 160 140 120 100 80 60 40 20 0 20 18 16 14 12 10 8 6 4 2 0 Debt ratio (left scale) Interest ratio (right scale) Source: Riksbanken, Financial Stability Report, Dec 2, 2010 16
Swedish housing and mortgage market Housing investments at a conservative level New household formations have between 1995 and 2008 exceeded the actual new dwellings produced by 80,000 units Source: Statistics Sweden, Mar 3, 2011 Housing completions, apartments in Multi-family dwellings and Single-family houses in Sweden Number of apartments 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 Apartment buildings Single-family dwellings Housing investments as a percentage of GDP 10 9 8 7 6 5 4 3 2 1 Spain Eurozone Sweden UK USA Denmark 0 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Statistics Sweden, Dec 31, 2010 Source: Reuters Ecowin, Mar 7, 2011 17
Swedish housing and mortgage market Housing prices are moving in tandem with production costs SEK Average house production cost & average house price development 1980-2008 SEK, thousands 25 000 2 000 1 800 20 000 1 600 1 400 15 000 1 200 1 000 10 000 800 600 5 000 400 200 0 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Average production cost per sqm for a single family house, SEK (LHS) Average price for a single family house, SEKth (RHS) Source: Bostads- och byggnadsstatistisk årsbok 2010, published Feb 15, 2010 by Statistics Sweden; page 128 and 156 18
Swedish housing and mortgage market Development of housing prices and mortgage debt House prices (Index 1995=100) Residential mortgage debt to GDP Ratio, % 400 120% 350 100% 300 250 200 150 100 80% 60% 40% Sweden Norway Ireland Denmark UK Germany 50 20% 0 0% 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Riksbanken, Reuters EcoWin Source: European Mortgage Federation 19
Swedish housing and mortgage market Swedish mortgage market No securitization (on balance sheet) No sub-prime market No 3 rd party origination No buy-to-let market 60% home ownership 1 Rental market is regulated First hand contracts difficult to obtain Rents need to be negotiated with the Swedish Union of Tenants Transparent credit information (credit information agency, www.uc.se) 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: Statistics Sweden, Dec 22, 2009 20
4. Financial performance 21
Financial performance Strong start to the year Net profit of SEK 3.9bn for Q1 Core Tier 1 capital ratio of 14.9 per cent Return on equity of 16.1 per cent in Q1 Net profit performance Lehman contribution Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 22
Financial performance NII supported by higher interest rates One-offs and higher stability fee shadowing underlying NII growth Improving deposit margins in Retail Government guarantee cost kept within Treasury 4 023 3 799 3 980 4 527 Retail LC&I Baltic Banking 173 117-171 Russia, Treasury, Ukraine Other 4 527 29 188-148 997 850 2 925 (SEKm) Q1 10 Q2 10 Q3 10 Q4 10 Q1 11-433 23
Financial performance NGL affected by funding effects Strong trading result in LC&I, but higher portion of income reported as NII Russia & Ukraine returning to normalised levels Basis swap gains of 2010 partly reversed, benefits euro funding cost 647 809 574 Retail LC&I Baltic Banking Russia, Ukraine Treasury, Other 255 315 105 9 55 (SEKm) -34-70 -22-39 369 40-218 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 24
Financial performance Income statement SEKm Q1 11 Q4 10 Δ Q1 10 Net interest income 4 527 4 527 0 4 023 Net commission income 2 301 2 538-237 2 282 Net gains/losses 255 315-60 647 Other 1 369 578 791 715 Total income 8 452 7 958 494 7 667 Total expenses 4 384 4 590-206 4 391 Profit before impairments 4 068 3 368 700 3 276 Total impairments - 970-77 -893 2 260 Operating profit 5 038 3 445 1 593 1 016 Tax expense 1 182 693 489 469 Profit attributable to shareholders 3 852 2 750 1 102 536 25
Financial performance Total income distribution Q1 2011 Treasury, Trading and Capital Markets 2% Asset Management 12% Payment, Cards 9% Insurance 2% Share of P&L of associates 2% Lending and deposits 60% Other 13% Nonrecurring items 0% Source: Swedbank Facts, Mar 31, 2011 26
Financial performance Key ratios Volumes, SEKbn Q1 11 Q4 10 Δ Q1 10 Lending to the public 1 141 1 146-5 1 168 Deposits from the public 502 517-15 496 Covered bonds 477 410 66 389 Key ratios Q1 11 Q4 10 Q1 10 Return on equity, % 16.1 11.7 2.4 Cost-income ratio 0.52 0.58 0.57 Core funding ratio, %* 114 121 127 Core Tier 1 capital ratio, %** 14.9 13.9 12.3 * Lending/(deposits+covered bonds+retail bonds), ** Basel 2 27
Financial performance Continued asset quality improvements Asset quality Decreasing impaired loans FR&R/Ektornet according to plan Substantial recoveries all countries Lehman income RWA decreased by SEK 22.3bn in Q1 SEK 11.0bn lower credit risk SEK 8.7bn lower market risk Strong funding position 28
Financial performance Net recoveries of SEK 972m in Q1 SEKm 2 500 2 000 1 500 2 210 Credit impairments 963 Net recoveries in all CEE countries Sweden also recoveries Collateral revaluations, repayments and rating migration 1 000 500 120 0-500 -1 000-483 -972-1 500 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Retail LC&I Baltic Banking Russia & Ukraine Other 29
Financial performance Core Tier I ratio target 14.9% Excess capital (SEK 9.9bn) Extra buffer due to prevailing circumstances (SEK 15.6bn) 13.0% Core Tier I ratio to stay above 13% until 2013 Long-term Core Tier I ratio of at least 10% 10.0% Risk appetite (ICAAP buffer, SEK 15.6bn) Share buy-back program to be executed gradually during four quarters 7.0% Regulatory requirement (SEK 36.3bn) 30
Financial performance Impaired loans decreasing Excl. FX effect down SEK 2.5bn in Q1 Underlying decreases in all business areas in Q1 SEKm 45 000 40 000 35 000 30 000 29 657 35 770 6 113 40 132 40 328 42 719 4 362 196 2 391-4 088 38 631-3 853 34 778-3 031 31 747 6 695 Impaired loans as % of gross lending Ukraine 61% 25 000 20 000 1 555 6 357 Russia 23% Lithuania 17% 15 000 29 657 10 468 Latvia 25% 10 000 5 000 0 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 4 505 586 1 581 Q1 11 Estonia 7.7% LC&I 0.21% Retail 0.18% 31
5. Liquidity and funding 32
Liquidity and funding Significantly reduced risk level Assets* Liabilities* 1 400 1 400 1 200 1 000 800 600-114 -66-8 CEE lending Estonia Other corporate lending, Sweden & other Nordic Other private, Sweden 1 200 1 000 800 600 Central bank + Government guaranteed -212-49 207 Senior Covered bonds 400 +78 Swedish mortgage loans 400 +16 Deposits 200 200 0 0 FY 2008 Q1 2011 Source: Swedbank, Dec 31, 2008 and Mar 31, 2011 * Simplified balance sheet assets and liabilities +13 FY 2008 Q1 2011 FY 201X Suppl. cap Core T1 33
Liquidity and funding Covered bond strategy Sweden Sweden: SEK SEK 300-375bn Today: SEK ~299bn EUR/USD SEK 150-200bn Today: SEK ~156bn Other* SEK 50-85bn Today: SEK ~19bn < 5Y 3-7Y > 7Y Maturity, years *e.g. Registered covered bonds Source: Swedbank, Mar 31, 2011, Nominal amounts excluding intra group items 34
Liquidity and funding Positive trend in deposits as overall savings increase Deposits from the public excluding repos SEKbn 350 Private Corporate 300 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 Savings and investments, Swedbank Group, SEKbn SEKbn 800 700 600 500 400 300 200 100 0 590 753 699 Asset mgmt 496 502 466 Deposits from the public, excl. repos 30 29 24 Retail bonds Q1 2009 Q1 2010 Q1 2011 Market leader in deposits in all of the home markets Market shares have remained stable in all markets throughout the crisis Share of private deposits as per Q1 2011, 60% Source: Swedbank Fact book, Mar 31, 2011 35
Liquidity and funding SEK 91bn term funding issued in Q1 2011 Of which SEK 85bn in covered bonds 2 EUR-denominated covered bond benchmark deals, in the size of EUR 1bn and EUR 1.5bn 2 USD-denominated covered bond benchmark deals, of USD 1bn each Average maturity of wholesale funding, including all short- and long-term funding programs, 30 months (39 months for covered bonds) 60 Issued & matured as per Q1 2011 (nominal SEKbn) 40 20 0-20 -40-60 -80 Source: Swedbank, Mar 31, 2011 interim report and Fact book Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 36
Liquidity and funding Funding plan Nominal SEK 121bn in maturities for the remainder of 2011 Covered bonds, nominal SEKbn 1 Senior unsecured, nominal SEKbn 200 200 150 Covered bonds 150 Senior unsecured Guaranteed bonds 100 100 50 50 0 2011 2012 2013 2014 2015 2016 0 2011 2012 2013 2014 2015 2016 1 Excl. intra-group items Source: Swedbank Fact book, Mar 31, 2011 37
Liquidity and funding Liquidity reserve* SEKm Cash and holdings in central banks and deposits in other banks available o/n 63 437 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks 29 214 Securities issued or guaranteed by municipalities or PSEs 0 Covered bonds 53 366 - Issued by other institutions 53 272 - Own issued 93 Securities issued by non-financial corporates 0 Securities issued by financial corporates (excl. covered bonds) 1 869 Other 0 Total 147 886 * As defined by the Swedish FSA Liquid assets outside Treasury organisation 103 737 Total 251 623 Source: Swedbank Fact book, Mar 31, 2011 38
Liquidity and funding Structure of the Swedish domestic covered bond market Benchmark system established in early 1990s 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 40-60bn Market making at pre-set bid/offer spreads Source: Swedbank 39
Liquidity and funding Natural domestic wholesale funding market Swedish households financial assets 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1980 1990 2000 2005 2010 Deposits and retail bonds Pension savings and mutual funds Equities Other financial assets Source: Statistics Sweden Hushållens ställning och transaktioner Nov 17, 2011 as per Dec 31, 2010 40
Liquidity and funding Swedbank s domestic covered bonds SEKbn 70 2009-12-31 2010-12-31 2011-03-31 60 50 40 30 20 10 0 SPI 175 SPI 181 SPI 176 SPI 177 SPI 166 SPI 182 SPI 183 SPI 184 SPI 185 SPI 180 Source: Swedbank, Mar 31, 2011 41
Liquidity and funding The Swedish covered bond market Domestic covered bonds represent approximately 1/3 of GDP and 1/2 of the total Swedish bond market Swedish Domestic Covered Bonds, in SEKbn Public debt projections 2010-2014, in SEKbn 1 600 Total SEK denominated outstandings 1,400 Government Debt 2007-2014F % of GDP 45% 1 400 1,200 40% 1 200 1 000 800 600 400 1,000 800 600 400 1168 1119 1189 1,139 1,119 1,071 970 834 35% 30% 25% 20% 15% 10% 200 200 5% 0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 0 2007 2008 2009 2010F 2011F 2012F 2013F 2014F 0% Source: www.ascb.se Source: Government budget statement, Sep 23, 2010 42
6. Swedbank s lending process in Sweden 43
Credit portfolio Credit originating process mortgage loan application Customer 1 Application 8 Price negotiation 11 Signing Branch officer 5 6 2 START of process 4 Product incl. prel. pricing Detailed evaluation of cost of living, risk analysis etc Detailed collateral preparation 9 Final risk-adjusted pricing negotiation 12 Printout, order collateral, payment, compiling credit file etc "Credit System" 3 Initial Risk analysis with recommendation 7 Collateral, property valuation, recommendation Decision making body Back office Scoring and assessment of internal and external payment records, income. social data, credit behaviour etc. 10 Credit decision 13 Printout, order collateral, payment, compiling credit file etc Credit origination process - TIME 52
Swedbank s lending process in Sweden Origination practices summary Income is always verified Direct access to tax authority filings UC AB (Upplysningscentralen) Sweden s largest credit information agency Owned by the major Swedish banks. Supports more than 10 million credit- and commercial decisions annually The credit information agency also contains track record of delinquencies and defaults Direct access to full tax authority filings Credit scoring Is used on all customers with specific score cards for private individuals, SME s large corporate etc. Affordability analysis carried out on all private individuals 5Y fixed mortgage interest rate +300 bps, in addition 100bps in amortization of mortgage is applied Minimum level of remaining cash-flow when all costs are included Valuations of single-family houses and cooperative apartments are based on market values. Value of a property is collected by an independent data provider and then affirmed by an internal or external appraiser Source: Swedbank 45
Swedbank s lending process in Sweden Insignificant historical loan losses in Swedbank Mortgage Accumulated losses since 1982 of SEK 7.3bn Main part incurred during the years of 1991 and 1992 Less than 10% in the private segment Source: Swedbank 46
7. Swedish covered bond legislation 47
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, 2004 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 The cover pool may consist of certain mortgage credits, public credits and supplemental assets Loan-to-value Ratios and Other Limitations Maximum LTVs: Residential 75%, Agricultural 70%, Commercial 60% Maximum 10% commercial loans and 20% supplemental assets in cover pool Regular monitoring of the property values (reviewed on a monthly basis by Swedbank) 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 Non-performing assets in the cover pool which are more than 60 days overdue must be disregarded for the purposes of the matching tests Benefit of a priority right over the cover pool Administration in event of bankruptcy Source: www.ascb.se Holders of covered bonds and relevant derivative counterparties benefit from a priority claim over the cover pool should the institution be declared bankrupt Holders of covered bonds and relevant derivative counterparties rank pari passu ahead of unsecured creditors and all other creditors of the Institution in respect of assets in the cover pool The assets in the cover pool, the covered bonds and any relevant derivative contracts that have been entered into the Register 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 48
Swedish covered bond legislation Administration of the cover pool in the event of bankruptcy Should an Institution be declared bankrupt, at least one administrator-in-bankruptcy would be appointed by the bankruptcy court and one administrator-in-bankruptcy would be appointed by the Swedish FSA. The administrators-in-bankruptcy would take over the administration of the bankruptcy estate, including the Cover Pool. Provided that (and as long as) the Cover Pool meets the requirements of the Covered Bond Act (including the matching requirements), the assets in the Cover Pool, the covered bonds and any relevant derivative contracts that have been entered into the Register 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. Consequently, the bankruptcy would not as such result in early repayment or suspension of payments to holders of covered bonds or to counterparties to derivative contracts, so long as the Cover Pool continues to meet the requirements of the Covered Bond Act. If, however, the Cover Pool ceases to meet the requirements of the Covered Bond Act, and the deviations are not just temporary and minor, the Cover Pool may no longer be maintained as a unit and the continuous payment under the terms and conditions of the covered bonds and derivative contracts will cease. The holders of covered bonds and counterparties to derivative contracts would in such case instead benefit from a priority claim over the proceeds of a sale of the assets in the Cover Pool in accordance with general bankruptcy rules. This could result in the holders of covered bonds receiving payment according to a schedule that is different from that contemplated by the terms and conditions of the covered bonds (with accelerations as well as delays) or that the holders of covered bonds are not paid in full. However, the holders of covered bonds and derivative counterparties would retain the benefit of the right of priority to the assets comprised in the Cover Pool. Any residual claims of the holders of covered bonds and derivative counterparties remain valid claims against the Institution, but will rank pari passu with other unsecured and unsubordinated claims. Source: www.ascb.se 49
8. Swedbank s cover pool 50
Swedbank s cover pool Cover pool data 1 Rating AAA/Aaa by S&P and Moody s Total pool size SEK 642.9bn Geographic distribution Sweden 100% Current OC-level 27% Weighted average seasoning 2 57 months Average LTV 3, 4 WA LTV on property level (Max LTV) 56% Non-performing loans 5 None Fixed /Floating interest loans 6 Fixed 36% Floating 64% Repayment structure 7 Amortising 54% Interest only 46% Average loan size SEK 418 774 Number of loans outstanding 1 535 061 Dynamic pool Yes 1 As per Mar 31, 2010 2 Public sector loans not included 3 Index valuation as per Dec 31, 2010 4 Maximum LTV: Residential 75%, Commercial 60%, Forest and Agriculture 70% 5 Past due loans > 60 days are not eligible for the cover pool 6 Floating interest loans < 365 days 7 Property level of cover pool Source: Swedbank, Mar 31, 2011 51
Swedbank s cover pool Cover pool data Type of loans Geographical distribution* Public sector 2% Commercial 0% Forest & Agriculture 7% South (incl. Malmoe) 24% North 7% Middle (incl. Stockholm) 32% Residentals 91% West (incl. Gothenburg 20% East 17% Loan size distribution by volume 35% 30% 25% 20% 15% 33% 10% 5% 0% 14% 20% 9% 3% 2% 18% SEK Thousands Source: Swedbank, Mar 31, 2011 * Excluding public sector loans 52
Swedbank s cover pool Cover pool loan-to-value distribution 30% LTV distribution by volume* 25% 20% 15% 10% 5% 0% 21% 19% 17% 14% 12% 9% 6% 1% 00-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-75% *LTV distribution as defined by the Association of Swedish Covered Bond Issuers (www.ascb.se) Source: Swedbank, Mar 31, 2011 53
9. Appendix 54
Financial performance One-off income through sale of Lehman claim One-off pre-tax income of SEK 716m in Q1 after agreement with Lehman and sale of claim (US commercial real estate assets) Remaining gross exposure was USD 1.1bn as of 31 March 2011, consisting of 35 assets No. of repossessed assets are expected to increase (2 as of today) Over-collateralisation still intact 55
Liquidity and funding SEK 356bn term funding issued in 15 months with around SEK 181bn of maturities during the same period Issued SEK 323bn in covered bonds 6 EUR-denominated covered bond benchmark deals, EUR 6.5bn 2 USD-denominated covered bond benchmark deals, USD 2bn 7 CHF-denominated covered bond benchmark deals, CHF 1.6bn Increased domestic SEK covered bond out standings, SEK 50bn 1 EUR-denominated senior unsecured benchmark deal, EUR 1bn Issued & matured as per Q1 2011 2010 2011 60 40 20 0-20 -40-60 -80 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Swedbank, Mar 31, 2011 interim report and Fact book (nominal SEKbn) 56
Liquidity and funding Remaining government guaranteed debt Exited the programme on 30 April 2010 No issuance under the programme since summer 2009 SEK 25bn of government guaranteed debt matured during Q1 2011 Maturities of SEK 53bn for the remainder of 2011 Maturity profile as per Q1 2011, SEKbn 60 40 20 USD SEK EUR CHF HKD JPY 0 2011 2012 2013 2014 57
Liquidity and funding Funding sources Swedbank AB 100% owned Swedbank Mortgage AB* Program Long Term Limit Program Long Term Limit Global MTN Domestic MTN Short Term Domestic CP European CP/CD US CP Yankee CD French CD Finnish CD USD 40bn SEK 60bn SEK 80bn EUR 6bn USD 15bn USD 10bn EUR 4bn EUR 4bn Domestic Benchmark CB EMTN CB 144a US Covered bonds Domestic MTN CB Norwegian Benchmark CB Registered CB (stand alone doc.) Short Term Domestic CP European CP Unlimited* EUR 25bn USD 15bn SEK 150bn Unlimited* SEK 50bn EUR 6bn * Limited by cover pool size Source: Swedbank *100% guaranteed from parent company - Irrevocable - Unconditional - Timely 58
Appendix Swedbank contacts and financial calendar For further information, please contact: Jonas Erikson, Head of Group Treasury jonas.erikson@swedbank.com +46 767 6550 88 Gregori Karamouzis, Head of Debt Investor Relations Financial calendar Q2 Interim report, 21 July 2011 Q3 Interim report 25 October 2011 Q4 Interim report 14 February 2012 gregori.karamouzis@swedbank.com +46 8 585 930 31 Peter Stenborn, Debt Investor Relations peter.stenborn@swedbank.com +46 8 585 909 30 Cecilia Mattsson, Debt Investor Relations cecilia.mattsson@swedbank.com +46 8 585 907 43 Ulf Jakobsson, Head of Funding ulf.jakobsson@swedbank.se +46 8 700 90 61 Martin Rydin, Head of Long-Term Funding martin.rydin@swedbank.com +46 8 700 90 62 Ingela Saarinen-Kindbom, Money Markets and Short-Term Funding Contact debt investor relations: debt.ir@swedbank.com www.swedbank.com/investor-relations Postal address: Visitors: Swedbank Group Treasury Regeringsgatan 13 SE-105 34 Stockholm, Sweden Ingela.saarinen-kindbom@swedbank.com +46 8 700 98 10 59
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. 60