Swedbank's presentation of the results for 2013.

1. Swedbank’s year-end 2013 results
Michael Wolf, CEO
Göran Bronner, CFO
Anders Karlsson, CRO
© Swedbank

2. Swedish Banking
Stable results
SEKm
Q4 13
Q3 13 ▲ Q/Q
Net interest income
3 448
3 473
-25
Net commissions
1 649
1 577
72
Total income
5 536
5 491
45
Total expenses
2 533
2 389
144
Profit before
impairments
3 003
3 102
-99
Credit impairments
140
106
34
ROE, %
27.6
28.1
C/I ratio
0.46
• Stable NII
0.44
– Loan growth
– Stable back-book mortgage
margins
– Lower deposit margins
• Strong commission income
• Solid asset quality
2

3. Large Corporates & Institutions
Good performance
SEKm
Q4 13 Q3 13
▲Q/Q
Net interest income
889
864
25
Net commissions
559
467
92
1 987 1 755
232
878
759
119
1 109
996
7
– Loan and deposit growth
113
5
• Improved NII
-2
Total income
Total expenses
Profit before
impairments
Credit impairments
ROE, %
20.3
0.44
• Strong commission income
18.3
C/I ratio
• Better trading income
0.43
3

4. Baltic Banking
Continued improvement
Q4 13
Q3 13
▲Q/Q
Net interest income
844
807
37
Net commissions
454
446
8
1 511
1453
58
Total expenses
661
604
57
Profit before
impairments
850
849
1
Credit impairments
-177
-147
-30
ROE, %
15.1
C/I ratio
0.44
• Improved NII
16.6
0.42
SEKm
Total income
– Continued re-pricing
– Deposit growth
• Strong commission income
• Operational efficiency
• Continued recoveries
4

5. Group results
Improving revenue and increasing cost
SEKm
Q4 13 Q3 13 ▲Q/Q
Net interest income
5 626
5 641
-15
Net commission income
2 699
2 520
179
461
170
9 652
9 225
427
Total expenses
4 484
3 995
489
Profit before
impairments
5 168
5 230
-62
Credit impairments
-32
-56
24
Other impairments
323
95
228
Tax
1 212
998
214
Profit from continuing
operations
3 665
4 193
-528
– Volume growth
– Margins
291
Total income
• Stable NII
Net gains and losses
ROE continuing
operations, %
13.6
16.2
C/I ratio
0.46
0.43
CET 1 ratio, % (Basel 3)
18.3
18.0
• Strong commission income
• Improved NGL
– Trading
– Valuation effects
• Increased cost
– Provision for staff restructuring
– Variable pay
– General cost pressure
• Continued solid asset quality
– Ektornet
5

6. Expenses
Focus on customer activities
• Flat expenses target for 2014
Ektornet
Group
functions
Efficiency
measures
Customer
IT
related development
cost
Expenses
Expenses
2012
2013
Expenses
Expenses
2013
2014
6

7. Capital
Increased RWA
• Loan growth
Swedbank’s RWA development
SEKbn
455
11.1
2.2
450
-2,9
445
440
435
Basel 2
441.6
- 1.8
Basel 2
451.9
2.5
-0,8
0.0
• Positive rating migration
• Market risk
• FX
430
425
420
7

8. Capital
Regulatory uncertainty – higher capital requirements
16.5 - ? %
• Countercyclical buffer
Other?
• RW floor on mortgages
25% Risk weight floor on
Swedish mortgages
15% Risk weight floor on
Swedish mortgages
• Pillar 2
• Hard limits vs buffers
0-2.5% Countercyclical buffer
12% Minimum CET1 (Pillar 1)
requirement (incl. SIFI-buffer and
Capital conservation buffer)
• Leverage ratio – corporate
risk weights
CET1 ratio
8

9. Asset quality
Continued strong asset quality
Credit impairments,
SEKm
▲Q/Q
Q4 13
Q3 13
140
106
34
5
7
-2
-177
-147
-30
-139
-38
-101
50
-70
120
-88
-39
-49
Group Functions &
Other
0
-22
22
Swedbank Group
-32
-56
• Continued solid asset quality
in Sweden
24
Swedish Banking
Large Corporates &
Institutions
Baltic Banking
Estonia
Latvia
Lithuania
• Net recoveries in Baltic
Banking
• Ektornet
9

10. Swedbank’s year-end 2013 results
Q&A

11. Appendix

12. Swedish housing market
Regulatory initiatives targeting the mortgage market
Swedbank’s equity doubled
Total equity, SEKbn
• LTV cap of 85%
• Amortisation
120
• Risk-weight floor of up to 25% on
mortgage loans
100
80
60
• Capital and liquidity requirements
40
20
0
2005
Q4 2013
– High minimum regulatory
requirements (including
SiFi buffer)
– Countercyclical buffer?
– Leverage ratio?
Source: Swedbank
12

13. Swedish housing market
Shortage of housing
Number of housing units
70 000
Housing completions 1975-2012
Apartment buildings
Population and housing growth 1990-2012
Single-family dwellings
1 200
Number of homes / persons, thousands
80 000
60 000
50 000
40 000
30 000
20 000
Acc increase in population
Acc increase in housing completions
1 000
800
600
400
200
10 000
0
0
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11
90
92
94
96
98
00
02
04
06
08
10
12
Source: Statistics Sweden and Swedbank
13

14. Asset quality
Conservative provision ratio
SEKm
20 000
64%
Provision ratio, %
62%
57%
54%
53%
54%
15 000
Q413
Swedish Banking
LC&I
Baltic Banking
Group
65%
73
42
51
54
2 040
1 774
10 000
1 545
5 000
10 951
1 420
9 934
1 398
7 077
1 325
1 256
4 429
4 047
*
3 570 *
2 818
Q213*
Q313*
Q413*
*
0
Q212
Q312
Q412
Individual provisions
Q113*
Portfolio provisions
Provision ratio
* Russia and Ukraine reported as discontinued operations
14

15. Credit portfolio – Large Corporates & Institutions
Shipping and offshore
Shipping and Offshore
SEKbn
30
• Lending exposure to Shipping & Offshore
sector of SEK 25.5 bn
– Portfolio duration 4-5y
– Average fleet age 7y
– Strong employment profiles
24
26
23
25
26
4
20
6
10
16
0
Q4-12
0.2
RORO
Container
Dry bulk
Gas (LNG/LPG)
Crude oil
Product
Chemical
Floating production
Accommodation
Supply
Oil service
Drilling & exploration
Cruise
Q2-13
Offshore
Shipping and offshore portfolio by subsegment, SEKbn
Q1-13
Tanker
Q3-13
Q4-13
Other
Shipping and offshore portfolio by currency, SEKbn
Q4-13
0.1
0.1
JPY
Q3-13
0.2
Q4-13
Q3-13
NOK
0.1
0.2
0.1
USD
0.2
0.1
EUR
0.4
0.1
0.8
SEK
0.1
0.0
0.2
0.4
0.6
0.8
1.0
0
5
10
15
20
25
15

16. Liquidity and funding
Lower funding needs
•
LCR 142% (Swedish FSA definition FFFS 2012:6)
•
NSFR 89%
•
Issued SEK 103bn of term-funding FY 2013 of which SEK 14bn in Q4
Term funding issuance – completed and planned
SEKbn
Covered bonds
Senior unsecured
120
100
80
60
40
20
0
Source: Swedbank, Dec 31, 2013, nominal amounts
16

17. Liquidity and funding
Long-term funding maturity profile
• Funding plan of SEK 120bn to meet next 12 months’ nominal SEK 103bn maturities
Long-term funding maturity profile, by funding source
SEKbn
200
Government
guaranteed debt
Senior unsecured
debt
Covered bonds
150
100
50
0
2014
2015
2016
2017
2018
2019-
Source: Swedbank Dec 31, 2013
17

18. Liquidity and funding
Liquidity reserve
According to the template defined by the Swedish Bankers' Association
SEKm
Cash and holdings in central banks
Deposits in other banks available overnight
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks
Securities issued or guaranteed by municipalities or public sector entities
Covered bonds
- Issued by other institutions
- Own issued
Securities issued by non-financial corporates
Securities issued by financial corporates (excl. covered bonds)
Other
Total1
Additional liquid assets, Group2, 3
1
59 382
397
68 054
54 002
54 002
2 096
183 931
52 510
90% of the securities in the liquidity reserve per Q4 2013 are rated AAA
82% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers’ Association except for
that they are held outside Group Treasury.
3 80% of the additional assets are rated AAA
2
Source: Swedbank Fact book, Dec 31, 2013
18

19. Liquidity and funding
Prefunded in excess of 12 months
SEKbn
250
200
150
100
50
0
0
20
40
60
80 100 120 140 160 180 200 220 240 260 280 300 320 340 360
Days forward
Source: Swedbank Dec 31, 2013
19

20. Liquidity and funding
Asset encumbrance
Encum bered assets - distribution by type of liability (row ) and asset (colum n)
Central banks
Debt
and
instruments
Securities
Government supranational
issued by
issued by
debt
debt
Covered
credit corporate and
SEKm
instruments
instruments
bonds institutions other issuers
Central bank funding
Intraday settlement
Repurchase agreements 1)
Derivative 2)
Covered bonds 3)
Other 4)
Total
1 912
19 272
968
ABS
Mortgage
loans
9 243
7 475
1 266
Cash
7 178
514 186
22 152
17 984
860
860
514 186
510
7 688
Financial assets pledged for insurance policy holders
39 699
32 925
80 358
14 248
9 157
ABS
Mortgage
loans
Cash
705
5 397
7 314
2
12 713
32 925
80 358
14 248
9 157
705
226 029
Total
of w hich
received
collateral
(offbalance)
177 092
226 029
226 029
39 699
11 155
26 747
9 412
514 186
1 370
562 870
118 627
Unencum bered assets - additional assets available for secured funding
Central banks
Debt
and
instruments
Securities
Government supranational
issued by
issued by
debt
debt
Covered
credit corporate and
SEKm
instruments
instruments
bonds institutions other issuers
Securities 5, 6)
Cover pool over collateralisation 7)
Cover pool eligible assets 8)
Total
Total
of w hich
received
collateral
(offbalance)
0
23 761
403 121
23 761
Total assets (Balance sheet): SEKm 1 820 807
1)
2)
3)
4)
5)
Repoed securities.
Collateral posted under CSA agreements, gross (3-year, SEKm,
High: 21 572, Low: 10 086, Average: 14 223).
Of which accrued interest of encumbered assets in the cover
pool, SEKm 2 091 as of 31 Dec 2013.
Collateral pledged in securities lending activities and with
exchanges.
Reversed repos are included.
6)
7)
8)
All type of securities, including securities non pledgeable at
central banks, of which 78% are rated AAA, 2% are rated
below A- and 7% are not rated.
Of which accrued interest of assets in the cover pool
overcollateralisation, SEKm 932 as of Dec 2013.
Securities received as collateral in for example reversed
repo transactions that: either have (encumbered) or have not
(unencumbered), been used as collateral by Swedbank.
Source: Swedbank Facts Dec 2013
20

21. Swedish housing and mortgage market
Real estate prices – Sweden 12-month development
Single-family homes1
12M Δ
Tenant-owner rights2
12M Δ
Combined3
12M Δ
Jan/13
3%
7%
5%
Feb/13
4%
7%
5%
Mar/13
3%
7%
5%
Apr/13
2%
8%
4%
May/13
4%
8%
5%
Jun/13
4%
10%
6%
Jul/13
4%
9%
6%
Aug/13
5%
11%
7%
Sep/13
5%
11%
7%
Oct/13
6%
11%
8%
Nov/13
4%
13%
7%
Dec/13
4%
13%
7%
Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE
21

22. Nr.of deals
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Nr.of deals
Jul-10
Jan-10
Jul-09
Jan-09
EUR/m2 /Nr of deals
EUR/m2
Nr.of deals
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
200
0
Jul-10
400
200
Jan-10
600
400
Jul-09
800
600
Jan-09
EUR/m2 /Nr of deals
Jul-08
1 000
800
Jan-08
1 200
1 000
Jul-07
1 400
1 200
Jan-07
1 600
1 400
Jul-06
1 800
1 600
Jan-06
1 800
Jul-05
Tallinn
Jan-05
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
EUR/m2 /Nr of deals
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Real estate prices
Baltic countries
Riga
0
EUR/m2
1 800
Vilnius
1 600
1 400
1 200
1 000
800
600
400
200
0
EUR/m2
22