roadshow london, morgan stanley banking conference

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%







© 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



© Swedbank 5

Strategic priorities for the coming year

Efficiency Growth



© 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



© 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



© 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



© 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



© 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



© 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



© 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



© 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

roadshow london, morgan stanley banking conference

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