From product-centric to customer-centric, Håkan Berg, Head of Baltic Banking

1. From product-centric to customer-centric
Håkan Berg, Head of Baltic Banking

2. Baltic Banking
Long-term potential as the economies matures
g p
3 Savings
• Asset management
Advisory content
• Pension
• Relatively underdeveloped due
2 Credits
to low current income and
• Mortgages
accumulated welfare/savings
• Consumer finance • A key future growth driver
1 Basic services • Strong expansion since 2000 due
• Transfers to increased supply from banks
• Internet bank and rising standard of li i
d i i t d d f living
• Cards
• Mostly automated and highly
y g y
efficient since mid 90s.
• Used very actively
2

3. Baltic Banking
Efficiency maintained
y
Loan/deposit ratio • Net loans from peak down
250% SEK 100bn
200%
150% • Cost/income ratio FY 2008
100% was 0 44
0.44
50%
0% • Cost/income ratio FY 2010
Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410
was 0 44
0.44
Cost/income ratio
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410
3

4. Baltic Banking
Solid base for long-term sustainable growth
g g
Profit before impairments • Profit before impairments
EURm
120 – FY 2010 EUR 363m
100
80
– Q4 2010 EUR 102m
60
40
20
• Net profit
0
Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410
– FY 2010 EUR 10m
– Q4 2010 EUR 108m
Net profit
EURm
EUR
150
100
50
0
-50
-100
-150
-200
-250
-300
Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410
4

5. Baltic Banking
Swedbank position
p
2010 Estonia Latvia Lithuania Total
Population, million 1.3 2.2 3.3 6.8
Private customers, million 1.2 1.0 3.2 5.4
Corporate customers, thousand 106 65 98 269
Active customers, million 0.7 0.6 0.9 2.2
Cards in the market, million 1.8 2.4 4.3 8.5
Cards, million 1.1 0.9 1.7 3.7
Internet customers, million 0.5 0.5 0.5 1.5
Branches 64 59 97 220
ATMs 554 372 452 1 378
Employees 1 728 1 407 1 870 5 416
5

6. Baltic Banking
From product-centric to customer-centric business model
p
1. Maturing economy is leading to new customer needs
2. Increased competence and front line empowerment will
support building long-term relationships with customers
pp g g p
3. Enhanced channel functionality supports more tailored
value adding services
6

7. Baltic Banking
Different country-specific opportunities
y p pp
Estonia
• Defend the strong market position and franchise
• Maintain strong profitability
• Capture potential from improved macro economic
environment
Latvia
• Manage deleveraging and move towards a more
balanced portfolio
• Capture potential of restored market competitiveness
• Increase the share of wallet in all segments
Lithuania
• Increase product penetration and decrease cash
in circulation
• Promote usage of e-channels to increase efficiency
and lower distribution costs
• Capture opportunities from low leverage
7

8. Baltic Banking
Steering for improved profitability
g p p y
Baltic Banking Targets
g g
Returns Profit before impairments
Efficiency Cost/income ratio
Balance
Loan to deposit ratio
sheet
Risk RAROC
Customer satisfaction (TRIM)
Franchise strength
Employee satisfaction (
p y (VOICE)
)
8

9. Baltic Banking
Sustainable growth – maintained efficiency
g y
• Economic recovery and maturing market give growth
opportunities
• Customer-centric business model and a good starting position
create business opportunities
t b i t iti
• Maintaining efficiency levels supported by Group integration
g y pp y p g
• New governance in place
9