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8/8/2019 Roadshow London, Morgan Stanley Banking Conference
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© Swedbank 2
Strong position for profitability and growth
Ukraine and RussiaBalticsSweden
Stable baseGrowth andexperience
Future growth andprofitability
Swedbank is the leading bank inSweden. Profitability is high andstable and the bank isconsolidating its market shares inimportant segments in both theprivate and corporate sectors.
Swedbank has a small butgrowing presence in Ukraine andRussia. In the long term, asignificant share of Swedbank’sgrowth will be generated in thesemarkets.
The Baltic economies areexperiencing strong economicgrowth that is expected to remainfor many years. As the largestbank in the region, growing withthe market ensures attractive
earnings growth.
Share of profit2007: 66%
Share of lending2007: 80%
Share of profit2007: 2%
Share of lending2007: 2%
Share of profit2007: 32%
Share of lending2007: 16%
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© Swedbank 4
Strong profit development
-1,000
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
17,000
2000 2001 2002 2003 2004 2005 2006 2007
-1,000
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
17,000
Profit before loan losses Capital gains EnterCard and KIAB
Loan losses, net* Operating profit (excl. capital gains)
SEKm SEKm
*Loan losses, net = write-offs+ provisions – recoveries+ change in property taken over
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© Swedbank 5
Strategic priorities for the coming year
Efficiency Growth
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© Swedbank 6
Strategic priorities for the coming year – Efficiency
Sweden
• Structural measures(operational andbranch structure)
• Channel
management
• Cash handling
The Baltic region
• Improve cross-bordercapabilities
• Productivity -measurement andcontinuous
improvement scheme• Employee retention
• IT managementdevelopment
Ukraine
• HR management• Competence build-
up and growthmanagement
•
Processmanagement
• IT systems
Broad client base and large volumes together with efficient processes will drive
operational efficiency
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© Swedbank 7
Strategic priorities for the coming year – Growth
Sweden
• Private banking andwealth management
• Metropolitan areas
• Corporate market
• New initiatives tocome – life andpension, etc
The Baltic region
• Leverage on pan-Baltic position withincorporate sector
• Broaden client
offerings
• Investment
managementgrowth
Ukraine
• Capture growth• Grow distribution
network – ATMs,branches and
agency network
• Broader product
range
From a strong position in several markets there is an excellent organic growth
opportunity for Swedbank in many areas – with some differences in regional focus
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© Swedbank 8
Swedbank Markets – Objectives
• Swedbank Markets shall be aleading multi-domestic player inthe region with the competitiveadvantage of serving our
customers with access to/fromthe CEE region.
• Overall priority is to furtherincrease cross-border capitalmarkets business in the region.
In 2007 Swedbank Markets delivered a record profit
Swedbank Market’s profit to Swedbank’s shareholders
0
200
400
600
800
1,000
1,200
2003 2004 2005 2006 2007
SEKm
Swedbank Markets excluding First Securities
First Securities
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© Swedbank 9
Swedbank Russia – Objectives
• Long-term vision of a universal bank in Russia intact– but a relatively slow pace during 2008
• Building robust administrative routines
• Growing corporate business
• Open a few new retail branches during 2008
– retail products development
• Implementation of new IT system
• Risk management improvement
In 2007 Swedbank Russia faced significant challenges but
still increased lending and profits
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© Swedbank 10
Swedbank funding structure
Funding
95%
Equity5%
Deposits
84%Equity
8%
Funding8%
Swedbank Treasury (excl. Swedbank Mortgage)
• Large deposits
• Liquidity reserves
• Net lender in the interbank market
• Liquidity limits – conservative view
Swedbank Mortgage
constitutes a larger part of
Swedbank Group’s balance
sheet compared to other
financial institutions
Distribution of net funding need
Swedbank Mortgage
Lending to the public – SEK 1,103bn
51%49%Swedbank Groupexcl. SwedbankMortgage SEK 542bn
SwedbankMortgageSEK 561bn
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© Swedbank 11
Municipalities
3%(4)Commercial
buildings1%(1)
Agriculture
6%(6)
Multi-family housing
incl. condominium
associations
16%(17)
Individual
condominiums
13%(11)
Single-family homes
61%(61)
Swedbank Mortgage – credit risk
Net
0
500
1,000
1,500
2,000
2,500
3,000
2000 2001 2002 2003 2004 2005 2006 2007
S E K m
= 90% Residential loans
Average LTV of 44%“80% percent of the portfolio has an LTV of 50% or lower”
Credit losses-net recoveries during 2007
Impaired, restructured and past due loans – at historically low levels
31 Dec
-100
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007
S E K m
0%
10%
20%
30%
40%
50%
60%
<30% 30-60% 60-75% 75-85% >85%
Distribution of loan to value
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© Swedbank 12
Converting to covered bonds, Q2 2008
• Possibility to meet a broader investor base• Larger investor base ensures even more stable liquidity
• AAA rating – funding at lower cost
• Increased liquidity reserve through Swedbank’s possibilityto pledge subsidiary covered bonds in the SwedishCentral Bank
•
Funding strategy to prolong maturity structure withcovered bonds
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© Swedbank 13
Summary
• Swedbank offers a strong and stable banking operationwith high profitability across several geographical areas
• Swedbank has a solid foundation that offers very good
organic growth opportunities• Focus on efficiency will secure continued profitable growth
for the Group
• Stable funding structure
Swedbank - Positioned for profitability and growth
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