Nordic Bank Seminar

June 2010
Erkki Raasuke, CFO
Our home markets

The bank for the many people, households and businesses

Sweden Latvia
Population 9.2m Population 2.3m
Employees 8 480 Employees 1 846
Private customers 4.1m Private customers 0.9m
Corporate customers 285 000 Corporate customers 60 000
Organisations 115 000 Branches 59
Branches 381 ATMs 369
ATMs 802 Cards 0.9m
Cards 3.7m

Estonia Lithuania
Population 1.3m Population 3.4m
Employees 2 619 Employees 2 485
Private customers 1.2m Private customers 3.2m
Corporate customers 99 000 Corporate customers 90 000
Branches 68 Branches 99
ATMs 556 ATMs 444
Cards 1.2m Cards 1.7m

2
Swedbank – a strong retail franchise
• Leading provider of services in many market segments

% Market shares, private % Markets shares, corporate

60 50
Mortgage lending 45 Lending
50
Deposits 40 Deposits

40 35
30
30 25
20
20
15
10 10
5
0 0
Sweden Estonia Latvia Lithuania Sweden Estonia Latvia Lithuania

3
Total lending by country, SEK 1 168bn
• Lending of SEK 216bn to CEE countries

Sweden 82%

Estonia 6%

Latvia 4%

Lithuania 3%

Russia 1%

Ukraine 1%

Other* 4%

100% 0 200 400 600 800 1 000

SEKbn
* Mainly Norway, Denmark, Finland, Luxemburg and USA
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 Business area overview
Profit before impairments
SEKm
3 000
Q2 09 Q3 09
2 000
Q4 09 Q1 10
1 000

-1 000

-2 000

-3 000
Retail Large Corporates & Baltic Banking Russia & Ukraine Asset Management Ektornet
Institutions

Operating result
SEKm
3 000
Q2 09 Q3 09
2 000
Q4 09 Q1 10
1 000

-1 000

-2 000

-3 000
Retail Large Corporates & Baltic Banking Russia & Ukraine Asset Management Ektornet
Institutions

5
Development since March 2009
• New management team

• Changed governance

• Reduced credit risks

• Strengthened capitalisation

• Improved funding structure

• Back to profit

6
First quarter 2010 results
SEKm Q1 2010 Q4 2009 Change
Net interest income 4 023 4 702 -679
Net commission income 2 282 2 361 -79
Net gains/losses on financial items, fair value 647 223 424
Other income 715 751 19
Non recurring items -55 -55
Total income 7 667 7 982 -315
Staff costs 2 296 2 319 -23
Variable staff costs 79 23 56
Other expenses 2 016 2 370 -354
Non recurring items -412 412
Total expenses 4 391 4 300 91
Profit before impairments 3 276 3 682 -406
Impairment of intangible assets 14 0
Impairment of tangible assets 36 352 -316
Credit impairments 2 210 5 003 -2 793
Operating profit 1 016 -1 673 2 689
Tax expense 469 115 354
Result for the period 547 -1 788 2 335
Profit for the period attributable to: Shareholders of Swedbank AB 536 -1 804 2 340

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Net interest income

Continued headwinds and temporary effects

SEKm NII Q4 09 Retail LCI Baltic Russia & Group NII Q1 10
5 000 Banking Ukraine Treasury
4 702 and Other

4 500
163
147 44 4 023
73
4 000
252

3 500
Q4 2009 4 702
3 000 Funding maturity mismatch -208
Trading strategy -145
2 500
Wholesale funding cost -121
2 000 Baltic Banking, Russia & Ukraine -118
NII and equity hedges -37
1 500 Other -50
Q1 2010 4 023
1 000

500

0
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Net gains/losses on financial items, fair value

Stronger net gains

• Trading strategy pressed NII and boosted net gains and losses

• Stable currency rates in Ukraine

• Lower P&L impact from wholesale funding valuation

SEKm Q1 10 Q4 09* Q1 09
Retail 32 45 43
Large Corporates & Institutions 441 55 1 332
Baltic Banking 72 88 183
Russia & Ukraine 27 149 10
Group Treasury and Other 75 -114 143 * Excluding capital gain of SEK 39m (sale
of Aktia shares SEK 24m and of Tallinn
Swedbank Group 647 223 1 711 Stock Exchange shares SEK 15m)

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Liquidity & Capital management

Improved funding situation

• Swedbank exits guarantee Outstanding wholesale funding
SEKbn, notional value
programme as per 30 April 2010 Total long- 459
term, non-
• SEK 100bn of long-term debt
397
guaranteed

issued during Q1 Total long- 174

term,
180
• SEK 110bn in remaining term guaranteed*

funding maturities to roll or replace Central bank 108

in 2010 repos 116

• Average maturity of wholesale Total short- 87

term, non-
funding* further extended to 24 guaranteed** 97

months (14 months end of 2008)

Total short- 28
term, Q1 2010
61
guaranteed***
Q4 2009

* Issued with more than 12 months maturity, government fee of 83bp

* Consists of debt securities in issue, repo’s with ** Including interbank deposits
central banks and interbank deposits *** Issued with less than 12 months maturity, government fee of 50bp

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Capital management

Well capitalised
Core Tier 1 capital ratio*
% Core Tier 1 capital ratio* YE 09 12.01%
14
Result +0.09%
12 12.3 RWA reduction +0.16%
12.0
Other +0.05%
10

9.4
9.8 9.9 Core Tier 1 capital ratio* Q1 10 12.31%
8

0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10

*according to f ull Basel 2

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Asset quality

Asset quality continues to strengthen

• Improved macro
– Stabilised/increasing property prices in CEE

• Swedbank risk profile continued to improve

– Limited new problems
– Increasingly confident in known problems
– Anecdotal evidence positive

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Asset quality

Quarterly change of 60-day past due loans

• Stabilisation continues

EURm
400

350

300

250

200

150

100

50

-50
Q1 09

Q1 09

Q1 09

Q1 09

Q1 09
Q2 09

Q3 09

Q4 09

Q1 10

Q2 09

Q3 09

Q4 09

Q1 10

Q2 09

Q3 09

Q4 09

Q1 10

Q2 09

Q3 09

Q4 09

Q1 10

Q2 09

Q3 09

Q4 09

Q1 10
Estonia Latvia Lithuania Russia Ukraine

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Asset quality

Impaired loans – almost no new problems

• Without FX effect up SEK 1.5bn

SEKm
45 000 45 000 Impaired loans as
40 132 40 328 % of gross lending
Ukraine
40 000 40 000
35 770 4 362 196 8 432 Russia
Ukraine 57%
35 000 35 000
Lithuania
6 113
29 657 2 381 Lativa
Russia 20%
30 000 30 000
7 896 Estonia
25 000 25 000 Lithuania 17%
9 736 LCI
19 921
20 000 20 000 13 370 Retail

15 000 9 343 15 000 Latvia 25%

10 578
10 000 10 000

5 473
5 000 5 000 Estonia 7.6%
1 150 LCI 0.3%
0 0 1 625
Retail 0.2%
0.3
57
20
25
7.6
0.2
FY 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 10

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Asset quality

Development of credit impairments

• Significant improvement SEKm

8 000
• Sweden still very low levels
7 000 6 845
6 672
• Small recoveries in Russia and 6 121
6 000
Ukraine
5 003
5 000
• Baltic countries
– Few new problems 4 000
– Property prices stabilise/increase
3 000
2 210
2 000

1 000

0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
-1 000
Retail LCI Baltic Banking Russia & Ukraine Other T

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Conclusion
• Significant improvement of asset and liability risk profiles
• Economy gaining momentum
• Still areas of concern
– Exit strategy central banks
– Fiscal consolidations
• Swedbank’s resilience has vastly improved
CEE lending
SEKbn 290% of equity
300
Private Corporate
251 209%
250 191%
188
200 172
117%
150
106
100

50

0
Q4 08 Q4 09 Q1 10 without Estonia

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