CEO presentation of Q4 2008 results

Interim report Q4 200812 February 2009

Jan LidénPresident and CEO

2© Swedbank

Content

• Fourth quarter 2008– Group– Business areas

• Comments on issues in focus– Credit quality– Liquidity and funding– Capitalization– Dividend

• Summary and conclusions

Profit trend

4© Swedbank

Fourth quarter 2008 – Group

• Profit for the period increased by 34% to SEK 3 318m (2 468 Q3), excl. impairment of goodwill

• Net interest income increased by +6% to SEK 5 742m (5 424)

• Net commission income decreased by 11% due to downturn in the stock market

• Increased provisions for loan losses, SEK 1 633m (812), of which Baltic Banking amounted to SEK 977m

• Impairment of goodwill in Ukraine amounted to SEK 1 403m

• The proposed dividend amounts to SEK 2.40 per preference share and SEK 4.50 per ordinary share.

Profit for the period, SEKm

* Excl. impairment of goodwill SEK 1 403m

5© Swedbank

** Including total subscribed capital

Fourth quarter 2008 – Group, cont.

• Successful share issue of SEK 12.4bn increases the tier 1 capital ratio to 10.7%

• Stronger liquidity due to larger funding volumes (with and without state guarantee)

• Prepared for tougher times

Tier 1 capital ratio, %

6© Swedbank

Business areasSwedish Banking• Continued lending growth, corporate lending

decreased due to cooperation with Kommuninvest

• Net interest income increased by 6%

• Continued focus on cost control and credit quality

Baltic Banking• Significant macroeconomic challenges

• Continued strong profit before loan losses

• Increased provisions for loan losses

• Focus on credit quality

Swedbank Markets• Growing customer trading and good risk

management entailed continued solid earnings

• Swedbank remains a leading player in the Swedish corporate bond market

• Market share in equities trading on Nasdaq OMX Stockholm increased

International Banking• Increased operating profit

• 18 new branches in Ukraine and two more in Russia during the period – focus on attracting deposits

• Good business development in the Nordic branches

• Impairment of goodwill

Comments on issues in focus

8© Swedbank

Credit quality – impaired loans are increasing

Share of impaired loansDistribution of lending

Sw edbank Mortgage

49%

Latvia6%

Estonia7%

Sweden75%

Other7%Lithuania

5%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08

Swedbank Mortgage Swedish Banking Baltic Banking Group

%

9© Swedbank

-500

-400

-300-200

-100

0

100

200300

400

500

Q1-

06

Q2-

06

Q3-

06

Q4-

06

Q1-

07

Q2-

07

Q3-

07

Q4-

07

Q1-

08

Q2-

08

Q3-

08

Q4-

08

-1.0

-0.8

-0.6-0.4

-0.2

0.0

0.2

0.40.6

0.8

1.0

0

200

400

600

800

1,000

1,200

Q1-

06

Q2-

06

Q3-

06

Q4-

06

Q1-

07

Q2-

07

Q3-

07

Q4-

07

Q1-

08

Q2-

08

Q3-

08

Q4-

08

0.0

0.5

1.0

1.5

2.0

2.5

-500-400-300-200-100

0100200300400500

Q1-

06

Q2-

06

Q3-

06

Q4-

06

Q1-

07

Q2-

07

Q3-

07

Q4-

07

Q1-

08

Q2-

08

Q3-

08

Q4-

08

-1.0-0.8-0.6-0.4-0.20.00.20.40.60.81.0

Credit quality – write-offs still low

Swedish Banking

Baltic Banking

Swedbank MortgageSEKm

SEKm

SEKm%

%

%

Loan losses, net Write-offs Loan loss ratio, net

Loan losses, net = write-offs + provisions –recoveries

10© Swedbank

Selected exposures – limited risk

• The secured exposure to Lehman is unchanged – USD 1 350m– 69 loans with 55 properties as underlying collateral– The collateral value is well above the exposure amount– Updated analysis shows that there is no further need of provisions

• Exposure to hedge funds – SEK 1.4bn– All exposure is secured

• Exposure to Conduits and SIVs – SEK 94m• Exposure to CDOs – SEK 183m• Exposure to Private Equity – SEK 15.1bn

– Nordic acquisition finance– 99% constitutes senior debt– Largest sector is health care, 45 %– Average loan amount is about SEK 650m

11© Swedbank

Low risk in interest-bearing securities (SEK 134bn)

As of 31 December, around 19 percent of the Group’s interest-bearing securities were valued using valuation models against around 81 percent as of 30 September and around 5 percent as of 31 December 2007

Holding distributed per sector

Mortgage bonds, covered

37%

Public sector21%

Banks15%

Other corporations

11%

Other financial corporations

9%

Mortgage bonds, not

covered7%

Holding distributed per currency

SEK73%

EUR16%

USD4%

NOK5%

LVL1%

LTL1%

EEK0%

GBP0%

Geographic distribution of issuers

Sweden73%

UK7%

Norway5%

USA5%

Baltics2%

Others8%

Accounting classification

Held for trading*

93%

Held-to-maturity

investments **Reclass-if ied as of

2008-06-306%

Held-to-maturity

investments ** Intitial

classif ication1%

* Recognised at fair value with changes in value through P/L.

** Measured at amortised cost

12© Swedbank

Liquidity for more than 1 year

Stress test of liquidity as of 31 Dec 2008

0

50

100

150

200

250

1W 2W 3W 1M 2M 3M 4M 5M 6M 9M 1Y

SEK

bn

31/12/2008 05/02/2009

Main assumption: No access to capital markets; no refinancing oflending to credit institutions, issued bonds or subordinated loans.

13© Swedbank

Prepared for tougher times

• Tier 1 capital ratio, 10.7 %• Solid liquidity• Closer evaluations of exposures deemed at higher risk• Continued focus on systematic work in the Baltics:

– Reinforcement of resources– Processes– Legal structures– Scenario planning

14© Swedbank

Group resultsMikael Inglander

CFO

15© Swedbank

Income statement, Group

SEKmQ4

2008Q3

2008 %Q4

2007 %Net interest income 5 742 5 424 6 5 259 9Net commission income 2 011 2 265 – 11 2 536 – 21Net gains/losses on financial items at fair value 1 244 – 109 386Other income 1 349 658 693 95Total income 10 346 8 238 26 8 874 17Staff costs 2 340 2 223 5 2 111 11Profit-based staff costs 262 235 11 522 – 50Other expenses* 2 300 1 855 24 1 893 22Total expenses 4 902 4 313 14 4 526 8Profit before loan losses 5 444 3 925 39 4 348 25Loan losses, net 1 633 812 238 Operating profit 3 811 3 113 22 4 110 – 7Tax 500 640 – 22 950 – 47Profit for the period 3 311 2 473 34 3 160 5Attributable to shareholders of Swedbank 3 318 2 468 34 3 108 7

* Excluding impairment of goodwill SEK 1 403m, Q4 2008

16© Swedbank

Income statement, Group

SEKmJan-Dec

2008Jan-Dec

2007 %Net interest income 21 702 19 157 13Net commission income 8 830 9 880 – 11Net gains/losses on financial items at fair value 2 351 1 691 39Other income 3 580 2 196 63Total income 36 463 32 924 11Staff costs 9 142 8 134 12Profit-based staff costs 950 1 658 – 43Other expenses* 7 993 6 927 15Total expenses 18 085 16 719 8Profit before loan losses 18 378 16 205 13Loan losses , net 3 156 619 Operating profit 15 222 15 586 – 2Tax 2 880 3 450 – 17Profit for the period 12 342 12 136 2Attributable to shareholders of Swedbank 12 290 11 996 2* Excluding impairment of goodwill SEK 1 403m, 2008

17© Swedbank

Business areas

2008 vs 2007, SEKm 2008 % 2008 % 2008 % 2008 % 2008 %Net interest income 11 840 1 6 448 14 2 171 89 1 555 32 76 – 8Net commission income 4 078 – 9 1 925 4 354 16 960 – 28 1 513 – 19Other income 2 349 59 1 040 – 17 407 530 – 30 209 – 10Total income 18 267 3 9 413 7 2 932 87 3 045 – 7 1 798 – 18Staff costs 4 282 – 0 1 801 – 12 846 80 1 094 – 7 414 – 3Other expenses 4 799 2 1 796 20 769 78 760 11 427 – 8Total expenses 9 081 1 3 597 1 1 615 79 1 854 – 0 841 – 5Profit before loan losses 9 186 6 5 816 11 1 317 99 1 191 – 16 957 – 26Loan losses, net 594 1 800 478 290 0 Operating profit 8 592 0 4 016 – 16 839 70 901 – 36 957 – 26Tax 2 156 – 11 367 – 19 261 231 – 39 224 – 30Profit for the period 6 436 4 3 649 – 16 578 54 670 – 35 733 – 25Attributable to Swedbank's shareholders 6 425 4 3 649 – 16 578 54 629 – 30 733 – 25Return on allocated equity, % 21.8 24.4 6.5 17.6 33.6* Excluding impairment of goodwill SEK 1 403m, 2008Ukrainian Banking Operations was consolidated July 2007

AssetMgmt

Int'l.Banking*

Swedish Banking

BalticBanking

Swedbank Markets

18© Swedbank

Net interest income, Swedish Banking

SEKmQ4 2008

vs Q3 2008Q4 2008

vs Q4 2007Net interest income Q3 2008 2 857Net interest income Q4 2007 2 927

Changes:Higher lending volumes 15 166Higher lending margins 247 197Higher deposit volumes 36Decreased deposit volumes – 40Decreased deposit margins – 81 – 103Other changes 32 – 193Total change 173 103Net interest income Q4 2008 3 030 3 030

19© Swedbank

Baltic Banking Operations, change in net interest income

SEKmQ4 2008

vs Q3 2008Q4 2008

vs Q4 2007Net interest income Q3 2008 1 667Net interest income Q4 2007 1 588

Changes:Higher lending volumes 104Decreased lending margins -24 -124Exchange rate effect, lending 67 89Decreased deposit volumes -61 -14Higher deposit margins 206 72Exchange rate effect, deposits 41 59Other changes -221 -99Total change 8 87Net interest income Q4 2008 1 675 1 675

20© Swedbank

Net commission income, Group

SEKmQ4

2008Q3

2008 %Q4

2007 %Payments 889 899 – 1 800 11Lending 129 194 – 34 162 – 20Brokerage 141 166 – 15 290 – 51Asset management 727 864 – 16 995 – 27Insurance 59 69 – 14 80 – 26Corporate finance 58 22 209 – 72Other 8 51 – 84 0 Total net commissions 2 011 2 265 – 11 2 536 – 21

21© Swedbank

Net gains and losses on financial items at fair value

SEKm Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007Swedish Banking 828 -126 179 16 116 1 Swedbank Mortgage open interest rate exposure 763 -172 29 -22 66 -129 MasterCard 101 89Baltic Banking 12 107 205 78 163 213International Banking 229 -6 114 22 30 42 Inefficiency in hedge accounting -126 -72 61Swedbank Markets 304 -210 118 244 137 167 Valuation of credit bonds 0 -217 0 -187 0 -60Asset Management & Insurance 1 -14 25 -15 -1 1Shared Service and Group Staff -156 139 512 -270 -31 -228 Derivatives Group funding 0 0 419 -272 21 -89Eliminations 26 1 -12 0 -28 0Total net gains and losses 1 244 – 109 1 141 75 386 196

22© Swedbank

Expenses

SEKmQ4

2008Q3

2008 %Q4

2007 %Swedish Banking 2 390 2 197 9 2 279 5Baltic Banking Operations 977 926 6 1 062 – 8International Banking* 557 315 77 302 84Swedbank Markets 500 398 26 530 – 6Asset Management & Insurance 182 200 – 9 230 – 21Other 296 277 7 123 Total expenses 4 902 4 313 14 4 526 8of which staff costs in: Swedish Banking 1 120 1 046 7 1 096 2Baltic Banking 453 483 – 6 587 – 23International Banking 257 213 21 173 49Swedbank Markets 261 227 15 333 – 22Asset Management & Insurance 107 99 8 138 – 22

* Excluding impairment of goodwill SEK 1 403m, Q4 2008

23© Swedbank

Key figures, Group

Jan-Dec2008

Jan-Dec2007

Return on equity, % * 17.1 18.9Earnings per share, SEK * 21.95 21.78Equity per share, SEK 111.54 131.96C/I ratio * 0.50 0.51Loan loss ratio, % 0.28 0.07Share of impaired loans, % 0.52 0.13Provision ratio for impaired loans, % 60 120Core tier 1 capital ratio, new rules, % 9.3 7.3Tier 1 capital ratio, new rules, % 10.7 8.5Capital adequacy ratio, new rules, % 14.8 12.7* Excluding impairment of goodwill SEK 1 403m, 2008

24© Swedbank

Summary

• Strong result

• Transparent, diversified balance sheet

• Improved capitalization and liquidity

• Focus on systematic work to manage the Group through more difficult times

25© Swedbank

Appendix

26© Swedbank

Shipping exposure• Exposure to shipping companies

amounted to SEK 20.4bn as of 31 December– Duration of the portfolio is 4 years– Average age of vessels is six years– Limited exposure to dry cargo (9%) and car

transports (2.7%)– Customers generally have long freight

contracts

Tanker33%

Ro-Ro, Container

&Bulk25%

Offshore42%

27© Swedbank

Maturity profile – long-term funding

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014-

SEK

bn,

nom

. am

ount

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014-

SEK

bn, n

om. a

mou

nt

Swedbank (excl. Swedbank Mortgage) Maturity profile Swedbank Mortgage, Maturity profile

28© Swedbank

Long-term funding 2008-2009

* As of 9 Feb 2009

SEK bn Swedbank Swedbank Mortgage

Debt to mature 2008 55 155Issued 2008 110 97

-of which guaranteed 61 0Debt to mature 2009 49 104

Issued 2009* 41 5-of which guaranteed 40 0

Swedbank Group - Long-term funding

29© Swedbank

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

<30% 30-50% 50-60% 60-75% 75-85% >85%

Småhus Flerfamiljshus (inkl Brf) Bostadsrätter

Mortgage lending, SwedenSEK 595bn

LTV

Lending

Funding

Average loan-to-value 46 percent. More than 50 percent of the total loan portfolio has a loan-to-value ratio of less than 30 percent.

LTV

Share of portfolio

Forest & Agriculture

6%

Single family homes60%

Commercial real estate

0%

Condiminiums15%

Multi-family homes2%

Tenant ow ners associations

14%

Public sector3%

CP26%

Covered Bonds68%

Equity6%

Funding

30© Swedbank

Renting of single-family homes

28%

Renting, industry

36%

Renting, other estate

9%Renting, other

industry8%

Tenant ow ners associationsr

19%

Other lending to the public, Sweden(excl. Swedbank Mortgage), SEK 309bn

Real estate management

SEKbn

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

Public sector

Other corporate lending

Forestry and agriculture

Transportation

Industry

Construction

Hotel and restaurant

Retail and w holesale

Real estate management

Individuals

31© Swedbank

Baltic Banking

32© Swedbank

Asset qualityNet loan losses

-100%0%

100%200%300%400%500%

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

0153045607590105

EU

Rm

Net loan losses NLL YoY % growth

0.98%0.58%1.61%0.77%

2008

1.91%0.77%3.70%1.32%Q4 08

0.35%Baltic Banking0.17%Lithuania0.51%Latvia0.33%Estonia

2007Net loan losses

0.98%0.29%

0.52%1.02%2.16%

1.32%2008

0.35%0.34%

0.33%0.31%0.57%

0.42%2007

1.91%0.73%

0.95%1.99%5.81%

2.95%Q4 08

incl industryincl real estate

Baltic Bankingincl private home loans

Private

Corporate

Net loan losses

5.75.5

15.1148.70.5%100.72007

40.18.7

27.0320.22.6%535.92008

4.87,28.2

102.20.3%41.5

2006

Total provisions, EURmOverdues >60 days, %

Total repossessed assets, EURmRecoveries, EURm

Write offs, EURm

Overdues >60 days, EURm

Risk indicators

33© Swedbank

Asset quality by country

Latvia

8 11 16

60

0

20

40

60

Q1 08 Q2 08 Q3 08 Q4 08

EURm

Estonia

7 11 14

28

0

20

40

60

Q1 08 Q2 08 Q3 08 Q4 08

EURm

NLL ratio – change in total provisions (both for performing and non-performing loan portfolio) and net write-offs against beginning of the year portfolio

Lithuania

3 412 11

0

20

40

60

Q1 08 Q2 08 Q3 08 Q4 08

EURm

Net loan loss dynamics

• Global recession has had a large negative impact on the Baltic economies. The impact is seen as a surge in net loan loss levels in Q4 2008 in Estonia and Latvia. Lithuania expected to follow with a time lag

• Downturn has particularly sharp impact on residential market.

Net loan losses

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08

Est Lat Lit Baltic Banking

34© Swedbank

Private portfolio risk profile

0%

10%

20%

30%

40%

1 2 3 4 5 6 7 8 9 10 11 12

EU

Rm

Q4 2007 Q4 2008

SME/SSE risk profile

0%

5%

10%

15%

20%

25%

A A- B B- C C- D D- E E- F

EU

Rm

Q4 2007 Q4 2008

Large corporate risk profile

0%

5%

10%

15%

20%

25%

30%

1 1- 2 2- 3 3- 4 4- 5 5- 6 6- 7

EU

Rm

Q4 2007 Q4 2008

* Risk exposure: on-balance + off-balance portfolio

Low riskNon-

performing

Low risk Non-performing

Credit quality of the loan book

• Well diversified portfolio dominated by retail exposures• Macro developments have triggered downgrades in all

segments: – Real estate sector drives downgrades in large

corporate segment (exposure > EUR 0.8m). Due to negative sentiment new lending is down, and the effect of downgrades cannot be balanced any more

– SME/SSE has been the first segment to react to downturn. Acceptable risk profile retained (45% of portfolio with PD<1%)

– Private portfolio has low risk profile (72% with PD<1%)

Low risk Non-performing

35© Swedbank

Overdue developmentRising overdues over 90 days have the most impact on rising NLL levels

Corporate, EE

0%

1%

2%

3%

4%

5%

dec-07 mar-08 jun-08 sep-08 dec-08

31-60 days 61-90 days over 90 days

Corporate, LV

0%

1%

2%

3%

4%

5%



Corporate, LT

0%

1%

2%

3%

4%

5%



Private, EE

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%



Private, LV

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%



Private, LT

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%



* Overdues / current portfolio

36© Swedbank

Overdue loans – Swedbank Estonia and Swedbank Latvia vs market

Estonia - overdues over 60 days / current portfolio

0%

1%

2%

3%

4%

dec-

05

mar

-06

jun-

06

sep-

06

dec-

06

mar

-07

jun-

07

sep-

07

dec-

07

mar

-08

apr-

08

maj

-08

jun-

08

sep-

08

dec-

08

Rest of the market Swedbank Estonia (bank)

Estonia - overdues over 30 days / current portfolio

0%

1%

2%

3%

4%

dec-

05

mar

-06

jun-

06

sep-

06

dec-

06

mar

-07

jun-

07

sep-

07

dec-

07

mar

-08

apr-

08

maj

-08

jun-

08

sep-

08

dec-

08

Rest of the market Swedbank Estonia (bank)

Latvia - overdues over 30 days / current portfolio

0%1%2%3%4%5%6%7%8%9%

dec-

04

mar

-05

jun-

05

sep-

05

dec-

05

mar

-06

jun-

06

sep-

06

dec-

06

mar

-07

jun-

07

sep-

07

dec-

07

mar

-08

jun-

08

sep-

08

dec-

08

Rest of the market Swedbank Latvia (bank)

Latvia - overdues over 90 days / current portfolio

0%1%2%3%4%5%6%

dec-

04

mar

-05

jun-

05

sep-

05

dec-

05

mar

-06

jun-

06

sep-

06

dec-

06

mar

-07

jun-

07

sep-

07

dec-

07

mar

-08

jun-

08

sep-

08

dec-

08

Rest of the market Swedbank Latvia (bank)

Source: Bank of Estonia, FKTK of Latvia, Hansabank Group data

37© Swedbank

Baltic lending by sectors

536

1 018

1 678

1 721

3 092

3 241

0 2 000 4 000 6 000 8 000 10 000

Other*

Construction

Transport

Industry

Retail &Wholesale

Real-estatemgmt

Individuals

EU

Rm

-62

-18

-102

-127

-10

-68

-71

-150 -100 -50 0

Portfolio (EURm), December 2008 Portfolio growth (EURm), Q4 08

xx% - share of portfolio* Other portfolio includes Other business services, Energy, Agriculture, State & Municipality and Other loans

3%

5%

8%

9%

15%

16%

44%Mortgage Other

38© Swedbank

Estonian lending by sectors

174

282

454

633

1 161

3 854

1 450

0 1 000 2 000 3 000 4 000

Other

Construction

Transport

Industry

Retail &Wholesale

Real-estatemgmt

Individuals

-28

-7

-52

-77

0

-49

-25

-100 -50 0 50 100 150


48%

2%

4%

6%

8%

15%

18%


39© Swedbank

Latvian lending by sectors

252

298

622

511

1 078

2 805

915

0 1 000 2 000 3 000 4 000

Other

Construction

Transport

Industry

Retail &Wholesale

Real-estatemgmt

Individuals

-6

3

-43

-13

4

-20

-58

-100 -50 0 50 100 150

Portfolio (EURm), December 2008 Portfolio growth (EURm), Q4 0843%

4%

5%

10%

8%

17%

14%


40© Swedbank

Lithuanian lending by sectors

438

603

578

853

2 282

110

877

0 1 000 2 000 3 000 4 000

Other

Construction

Transport

Industry

Retail &Wholesale

Real-estatemgmt

Individuals

-28

-15

-7

-37

-14

0

-2

-50 0 50 100 150


40%

2%

8%

10%

10%

15%

15%


41© Swedbank

Mortgage portfolio

LT Mortgage overdues > 30 days

0%

1%

2%

3%

4%

5%

0m 3m 6m 9m 12m 15m 18m 21m 24m 27m 30m 33m 36m

Ove

rdue

s / B

alan

ce, %

2005 2006 2007 2008

EE Mortgage overdues > 30 days

0%

1%

2%

3%

4%

5%

0m 3m 6m 9m 12m 15m 18m 21m 24m 27m 30m 33m 36m

Ove

rdue

s / B

alan

ce, %

2005 2006 2007 2008

LV Mortgage overdues > 30 days

0%

1%

2%

3%

4%

5%

0m 3m 6m 9m 12m 15m 18m 21m 24m 27m 30m 33m 36m

Ove

rdue

s / B

alan

ce, %

2005 2006 2007 2008

• Due to the effects of crisis all vintages are converging to the same level of overdues. Complicated to separate the effects of origination quality from the downturn impact

* Part of loans issued backed by guarantee of the State insurance company

12%30%67%

EE

13%33%70%

LT*

12%LTV>100% (share of portfolio)38%LTV>80% (share of portfolio)71%LTV, total portfolioLV

© Swedbank

Corporate client portfolio

• From 2005 to 2008, new lending changed– New lending in 2006 and 2007 mainly went to

companies rated 4 or 5 (scale of 7)– In 2008, the downturn caused downgrades,

rating 5 real estate portfolio most affected– New lending in 2008 focused to high quality

borrowers, mainly ratings 1 to 3-. Volumes decreasing due to negative market sentiment

Large corporate risk profile

0%

5%

10%

15%

20%

25%

30%

1 1- 2 2- 3 3- 4 4- 5 5- 6 6- 7

mEUR

2007

2008

BB Rating 6 & 7 exposures

0 200 400 600 800 1 000 1 200

2008

2007

EURm


Production

Retailing

Transportation

Other

BB Total provisions, YTD

0 50 100 150 200 250 300 350 400 450

2008

2007

mEUR


Production

Retailing

Transportation

Other

43© Swedbank

Real estate portfolio• Real estate and in particular residential

development is the most sensitive sector in Baltic Banking portfolio

• Around 58% from total Real Estate portfolio are cash flow generating properties with good tenant mix. Baltic Banking has always strictly restrained from financing speculative type of properties

• Downturn has caused drop in residential market transaction volumes. As a result residential development portfolio (31% of total real estate portfolio) is demonstrating increase in overdue and default figures. Portfolio vulnerabilities are well understood and monitored, action plans set on a case by case basis

0

300

600

900

1200

1500

1800

Dec.04 Jūn.05 Dec.05 Jūn.06 Dec.06 Jūn.07 Dec.07 Jūn.08 Dec.08

No

of tr

ansa

ctio

ns

Tallinn Riga Vilnius

Apartment transaction volume development

44© Swedbank

Baltic lending by sectors – real estate

Portfolio, December 2008

Estonia

24%

6%

23%

29%

15%

3%

3%

18%

43%

5% 8%

8%

15%

Construction OtherIndividuals TransportProduction Retail & WholesaleReal-estate mgmt

Latvia15%

12%

22%

11%2%

38%

Lithuania13%

5%

31%

40%

6%5%

Office

Production&Warehouse

Residential

Retail

Land plots

Other

45© Swedbank

Collateral breakdown

100%

2%

4%

5%

18%

2%

38%

36%

2%

%

20,167

279

706

985

3,621

668

7,960

6,660

273

Dec 2007

1%370State

20,569

328

776

1,104

3,742

317

7,715

7,321

Dec 2008

100%

1%

4%

5%

18%

3%

39%

33%

%

Other collateral*

UnsecuredUnsecured corporate

Unsecured private

Corporate real-estate

Private real-estate

Guarantees

Total**

• Baltic Banking loan portfolio is adequately secured.

• Private mortgage portfolio is fully covered with family houses and apartments (as a rule owner occupied).

• Commercial real estate collaterals are revaluated at least once per year. Valuation is performed by independent experts.

• Full asset pledge, including tangible assets and current assets, is most common case for Corporate portfolio. Collateral position enhancement with owner guarantees and additional collateral is used for more risky customers and SME segments.

• The share of unsecured loans is insignificant: 5.4% (used for top ratings in corporate segment and consumer products in private).

Baltic Collateral (EURm)

*Other collateral is deposits, customer payments, vehicles, etc** Total loans including repos

CEO presentation of Q4 2008 results

Economy & Finance

Transcript of CEO presentation of Q4 2008 results