Swedbank Investor presentation

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1

April 2018

Swedbank Investor presentation

© Swedbank

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Disclaimer

2

Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, express or implied, by the forward looking statements. Factors that might cause forward looking statements to differ materially from actual results include, among other things, regulatory and economic factors. Swedbank AB assumes no responsibility to update any of the forward looking statements contained herein.

No representation or warranty, express or implied, is made or given by or on behalf of Swedbank AB or its directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of Swedbank AB or any of its directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.

This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Swedbank AB, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

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Table of contents

Executive summary 4

1. Swedbank overview 5

2. Quarterly financial update 15

3. Capital considerations 23

4. Liquidity and funding 29

5. Cover pool data 38

6. Swedish and Baltic economy 45

7. Swedish housing and mortgage market 54

8. Appendix 69

3

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Executive summary

■ Sweden’s largest retail bank with a leading position in our three Baltic home markets

■ ROE target of at least 15%

■ Strong asset quality!

■ Solid liquidity and funding position – survival horizon more than 12 months

■ One of the best capitalised banks in Europe* with significant buffers to both MDA and Loss

absorption trigger levels

■ Dividend policy of 75% - for six consecutive years

Mar 2018 4

■ ROE: 15.4% (14.4%)

■ Cost/income ratio: 0.39 (0.42)

■ CET1 capital ratio: 24.8% (24.6%) – with requirements of 22.0% (fully loaded CRD IV)

■ Leverage ratio: 4.7% (5.2%)

■ Credit impairment ratio: 0.03% (0.08%)

■ Total credit impairment provision ratio: 0.35% ( ** )

■ Share of Stage 3 loans, gross: 0.70% ( ** )

■ Liquidity and funding: LCR: 140% (EU 2015/61), NSFR: 110%

■ Credit ratings: AA-(S)/AA-(S)/Aa2(S) from S&P/Fitch/Moody’s

Swedbank Q1 2018 (Q4 2017) – High customer activity!

Strong financial position Top 10 shareholders

Sweden

Estonia

Latvia

Lithuania

Our four

home

markets

*According to EBA stress test 2016

1. Sparbanksgruppen, 10.4%

2. Folksam, 7.0%

3. AMF, 5.5%

4. Alecta, 4.7%

5. Swedbank Robur, 3.9%

6. Sparbanksstiftelser, 3.4%

7. BlackRock, 2.5%

8. Vanguard, 2.5%

9. Norges Bank, 2.1%

10. SEB Fonder, 1.8%

Swedish owners, 61.2%

Int’l owners, 39.8%

** Due to IFRS9 introduktion

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1. Swedbank overview

5

This is

Swedbank

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Swedbank Low-risk, cost efficient and well capitalised

Mar 2018 6

Large and diversified customer base Leading retail bank in our 4 home markets

7m PRIVATE CUSTOMERS

Solid capitalisation 280bps buffer to regulatory requirement

24.8%

Focus on Mid-corp and SME segments 18% corporate lending market share in Sweden

600k CORPORATE CLIENTS

Stable profitability Return on equity target of at least 15%

15.4%

Low risk Credit impairment ratio

0.03%

Market-leading cost efficiency Cost income ratio

39%

This is

Swedbank

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VISUAL

MESSAGE

TITLE

(IF ANY)

BREATHING SPACE

FOOTER

AVAILABLE SPACE

77%

23%

83%

17%

79%

21%

81%

19%

64%

36%

79%

21%

SWEDEN

54% 46%

63%

37% 45%

55% 57% 43% 41%

59% 58%

42%

ESTONIA

69%

31%

83%

17%

68%

32%

85%

15%

50% 50% 58%

42%

LATVIA

66%

34%

82%

18%

60%

40%

77%

23%

51% 49% 63%

37%

LITHUANIA

Loans (private)* Loans (corporate)* Deposits (private) Deposits (corporate) Payments** Funds

* Excluding the Swedish National Debt Office and repurchase agreements ** BankGiro for Sweden, domestic payment transactions (Estonia, Latvia, Lithuania) = Swedbank

Market leading position in our home markets

7

This is

Swedbank

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Strong financial position

8

Low risk Stable earnings Market-leading cost

efficiency

Credit impairment (bps) Return on equity (%) Cost / income ratio (%)

Liquidity and capital ratios (%) Profit before impairments (SEK bn) Total expenses (SEK bn)

This is

Swedbank

0

5

10

15

20

25

30

0

50

100

150

200

2012 2013 2014 2015 2016 2017

NSFR LCR CET1 ratio, CRDIV (RHS)

0

2

4

6

8

10

Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

Disposal one-off

-10

0

10

20

30

40

Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

0

2

4

6

8

10

12

14

16

18

2012 2013 2014 2015 2016 2017

12

14

16

18

20

2012 2013 2014 2015 2016 2017 2018Cap

Acquisition one-off

30

35

40

45

50

55

60

2012 2013 2014 2015 2016 2017

Source: Swedbank Fact book Q1 2018

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Lending and deposits

63%

Other13%

Asset Management

11%

Payment, Cards9%

Treasury, Trading and

Capital

Markets4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017

NII NCI NGL Other

Stable and profitable business mix - retail bank profile

Source: Swedbank Fact book 4Q 2017 9

• 86% of total loans in Sweden

• 51% Swedish mortgages

• Baltic banking very profitable

• 10% of Group lending

• 20% of Group operating

profit, FY2017

• Sweden’s largest fund

manager (SEK1.2trn AuM)

• 5th largest card acquirer &

10th largest card issuer in

Europe

Net Interest Income Net Commission Income Total income

This is

Swedbank

2017

Total

income

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Swedbank strategy

Offering based on

customer need and

expectations

An available

full-service bank

High cost

efficiency

Low risk

Sustainability

and customer

value through a

responsible

core business

Strategy

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Savings

Key priorities

11

Customer Interaction

Seamless omni-channel

customer journey

One financial access point for

customers

Proactive, tailor-made product

offers and advice

Regain market share through

high-quality digital savings offer

Increase focus on

pension savings

Customer-centric

Financial Planning Platform

Lending & Payment

Fully-digital

mortgage process

Enhance corporate relationships

with our improved cash

management solution

Most convenient payments

solutions for consumers

Strategy

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Customers w ithout Internet

bank agreement29%

Connected customers (less

than monthly usage)24%

Digitally active customers

47%

Digitalisation – cost and income opportunities 90% of our customers are happy or very happy with our digital services

Note: Data relates to Swedish Banking 12

• Further potential in manual to digital sales

transformation

• Customers increasingly connected via our

digital channels

• Higher transaction volumes

• More cross-selling opportunities

Increase revenue via digital banking Improve cost and sales efficiency

0%

20%

40%

60%

80%

100%

Payments Savings &pensions

Lending Insurance

Digital sales Manual sales

Strategy

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Recent strategic achievements

13

Launched in Sweden Already operating in the Baltics

Fully digital consumer lending

SmartID launched in the Baltics

Enables faster transaction process for customers

Digital customer identification

and authorisation

PayEx acquisition

Integration and new launches begun

Enhanced merchant omni-

channel payment solutions

Retail channels

Positive AuM inflows

Strategy

Meniga investment

Data aggregation platform

Fintech partnership

Improving sustainability offerings

Nordic Swan Ecolabel - five labelled funds

Improving sustainability

offerings

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Swedbank creates value

14

Dividend per share 75% payout ratio for 6th year in a row

SEK 13.00

Return on Equity >15% target

15.4%

Common Equity Tier 1 ratio One of the highest among European banks

24.8%

Mar 2018

Strategy

0

2

4

6

8

10

12

14

0

5

10

15

20

25

30

2013 2014 2015 2016 2017 Q1 2018

SEK%

Return on equity (LHS) CET1 capital ratio (LHS)

Dividend per share (RHS)

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2. Quarterly financial update

1

5

Quarterly

financial

update

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Swedish Banking

Good loan volume growth

SEKm Q1 18 Q4 17 ▲QoQ

Net interest income 3 877 3 861 16

Net commission income 1 884 1 960 -76

Other income 483 625 -142

Total income 6 244 6 446 -202

Total expenses 2 272 2 311 -39

Profit before impairments 3 972 4 135 -163

Credit impairments 253 264 -11

Mar 2018 16

• Net interest income

– Continued mortgage loan volume growth and

slightly higher margins

– Corporate loan volume growth

– Higher resolution fund fee

• Net commission income

– Lower stock market related income

– Strong mutual fund inflows

• Other income

– Good activity in life insurance business

– EnterCard and life insurance one-offs in Q4

• Solid asset quality

Ratios Q1 18 Q4 17

ROE, % 19.7 21.3

C/I ratio 0.36 0.36

Volumes, SEKbn Q1 18 Q4 17 ▲QoQ

Loans 1 164 1 150 14

Deposits 523 525 -2

Quarterly

financial

update

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Baltic Banking

Diversified loan volume growth


Net interest income 1 103 1 116 -13

Net commission income 593 711 -118


Total income 1 905 2 053 -148

Total expenses 661 737 -76

Profit before impairments 1 244 1 316 -72

Credit impairments -26 -12 -14

Mar 2018 17

• Net interest income

– Lending growth to both households and

corporates

– Mixed margins


– Cards and asset management income

seasonally lower

• Positive FX effects

• Stable asset quality

Ratios Q1 18 Q4 17

ROE, % 19.2 20.8

C/I ratio 0.35 0.36


Loans 159 149 10

Deposits 195 185 10

Quarterly

financial

update

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Large Corporates & Institutions

Stable result


Net interest income 930 934 -4

Net commission income 621 656 -35

Net gains and losses 564 333 231


Total income 2 137 1 965 172

Total expenses 959 862 97

Profit before impairments 1 178 1 103 75

Credit impairments -100 59 -159

Mar 2018 18

• Stable net interest income


– Lower asset management, brokerage and

custody incomes

• Net gains and losses

– Positive FX effects

– CVA adjustment effects

– Increased customer interest rate hedging

activity

• Loan loss reversals

Ratios Q1 18 Q4 17

ROE, % 16.9 14.3

C/I ratio 0.45 0.44


Loans 205 203 2

Deposits 150 128 22

Quarterly

financial

update

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Group results

High customer activity


Net interest income 6 294 6 326 -32

Net commission income 3 081 3 335 -254

Net gains and losses 559 356 203


Total income 10 740 10 976 -236

Total expenses 4 169 4 563 -394

Profit before impairments 6 571 6 413 158

Credit impairments 127 311 -184

Other impairments 0 86 -86

Tax 1 410 1 277 133

Net profit 5 033 4 737 296

Mar 2018 19

Ratios Q1 18 Q4 17

ROE, % 15.4 14.4

C/I ratio 0.39 0.42

CET1 capital ratio, % 24.8 24.6

• Loan volume growth strengthened net

interest income, mitigating higher resolution

fund fee and fewer days

• Seasonally lower asset management income

and cards income

• FX effects and high customer activity

impacted net gains and losses positively

• Total expenses according to plan

• Solid asset quality

Quarterly

financial

update

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Capital

Strong capitalisation – no excess capital

Mar 2018 20

• CET1 capital increased by SEK 1.4bn

– Positive effect from net profit of SEK 1.7bn

excl. dividend

– Negative effect from IAS19 of SEK 0.1bn

– IFRS 9 implementation reduced CET1 capital

by SEK 0.4bn

• REA increased by SEK 2.4bn

• Buffer of around 280bps - above minimum

requirements

24.6% 23.9% 24.6% 24.8%

22.0%

Q2 2017 Q3 2017 Q4 2017 Q1 2018 CET1 capitalratio

requirement

CET1 capital ratio, %

Quarterly

financial

update

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Capital

Increased Risk Exposure Amount (REA)

Mar 2018 21

• REA increased by SEK 2.4bn

– Increased credit exposures offset by

model adjustment in Baltic Banking

– Higher market exposures

– IFRS 9 implementation reduced REA

by SEK 0.7bn

-1.3

4.50.9

1.3

-3.0408.4

410.8

Q4 2017 Credit risk Market risk CVA risk Operationalrisk

Other Q1 2018

Increase Decrease

REA, SEKbn

Quarterly

financial

update

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Group

Solid asset quality

Credit impairments, SEKm Q1 18 Q4 17 ▲QoQ

Swedish Banking 253 264 -11

Baltic Banking -26 -12 -14

Large Corporates & Institutions -100 59 -159

Swedbank Group 127 311 -184

Mar 2018 22

Ratios Q1 18 Q4 17

Credit impairment ratio, % 0.03 0.08

Share of Stage 3 loans, gross % 0.71 *

Total credit impairment provision

ratio, % 0.35 *

• Resilient asset quality in all business

segments

• IFRS 9 effects

* n.a.

Quarterly

financial

update

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3. Capital considerations

2

3

Capital

– fully

loaded

CRD IV

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4.5% 4.5%

3.5%3.0%

3.0%1.4%

1.4%

2.5%

11.4%

2.5%

14.9%

1.8%

2.3%6.9%

8.6%2.0%

13.5%

2.0%

16.3%

Swedbank CET1 Requirements Swedbank CET1 Capital Ratio Swedbank Total CapitalRequirements

Swedbank Total Capital ratio

Systemic Riskcharge in Pillar 2

25% REA MortgageFloor

Individual Pillar 2charge

Capital ConservationBuffer

Countercyclicalbuffer (2.0%)

Systemic Risk Buffer

Min. Additional T1and T2 capital

Minimum CET1Requirement

Composition of Swedbank’s CET1 and total capital ratio requirements

Mar 2018 24

22.0%

31.2%

24.8%

27.8%

280bp

Pill

ar

1

Pill

ar

2

Capital

– fully

loaded

CRD IV

Automatic MDA

Restrictions

Available Distributable Items

** The calculation of the ADI is based on the Annual

report, why this exercise as per Q1 2018 should be

seen as an example based on changes during the

year.

Swedbank AB (parent comp) FY 2017

Share premium reserve 13 206

Retained earnings 43 099

Available distributable items** 56 305

Change due to IFRS9 -1 406

Dividend* -14 515

Comprehensive income, Q1 2018 6 412

other 105

ADI Q1 2018 46 901

* paid out in March 2018

** Based on fully audited numbers

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4.5% 4.5%

3.5%3.0%

3.0%1.6%

1.6%

2.5%

11.6%

2.5%

15.1%

1.2%

1.6%

2.0% 5.0%

2.0% 5.5%

New Proposal CET1requirements

New Proposal Swedbank CET1Capital Ratio

New Proposal Total CapitalRequirements

New Proposal Swedbank TotalCapital ratio

Systemic Riskcharge in Pillar 2

Individual Pillar 2charge

Capital ConservationBuffer

Countercyclicalbuffer (2.0%)

Systemic Risk Buffer

Min. Additional T1and T2 capital

Minimum CET1Requirement

Proposal from the Swedish FSA to move Pillar 2 risk-weight floor for mortgage loans to Pillar 1

Mar 2018 25

14.8%

16.6%

18.6%

180bp

Pilla

r 1

Pilla

r 2

Capital

– fully

loaded

CRD IV

Automatic MDA

Restrictions

20.6%

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Regulatory uncertainty remains

• Basel proposal – largely as expected

– Awaiting final details from EU and then Swedish regulator on new standardised approach

– Likely long phasing in period – potentially until 2027

– Comfortable buffers to current capital requirements

– Feel great comfort in our capital generation capacity

– No need to review current dividend policy on the back of the proposal

• Swedish FSA proposal to move the 25% mortgage loan risk-weight floor from Pillar2

to Pillar1

• IFRS 9

– Limited impact on CET1 capital ratio of – 6bps as per 1 Jan, 2018

Mar 2018 26

Capital

– fully

loaded

CRD IV

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55

128

88

117

57

71

Loss absorptionamount

Swedbank totalcapital

Recapitalisationamount

Seniorunsecured debt

>1Y**

Loss absorptionamount***

Recapitalisationamount***

MREL needs in line with expectations – no imminent issuance plan

Mar 2018 27

Swedbank MREL requirements, SEKbn

*Nominal amount, ** Based on FY 2016 numbers

Capital

– fully

loaded

CRD IV

Based on proposal from

Swedish FSA

• Requirements for 2018 set and published by the

Swedish National Debt office (NDO) on 20

December 2017

– 7.3% based on Total liabilities + Own funds

– 34.8% based on Risk Exposure Amount (REA)

• Transition period until 1 Jan, 2022

– Already in compliance with current senior unsecured

debt outstanding

– Issuance need to the equivalent of around SEK 88bn

in subordinated MREL eligible securities to meet

requirement by 1 Jan 2022

• Sweden to adopt EU insolvency law

– Expected by year end 2018 *** Based on proposal from Swedish FSA to move the

25% risk-weight floor from Pillar2 to Pillar1

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Household loans(90% mortgages)

Shipping and offshore, TransportationManufacturing

Other corporate lending

Other property management

Residential properties

Agriculture and forestry

Hotels and restaurants, Retail

70%

15%

8%

7%

Tenant ow ner associations

Asset portfolios – low risk

Mar 2018 28

Group loan book* Q1 2018, total SEK 1 529bn

* Loans to the public excl. loans to credit institutions and SNDO

Loan distribution

Asset

quality

70%

30%Private

Corporate

55%45%

Private

Corporate

Sweden

Baltic banking

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4. Liquidity and funding

2

9

Liquidity

and

funding

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Core balance sheet structure

Mar 2018 30

Lithuania Latvia

Other corporate

lending, Sweden &

other Nordic countries

Other private, Sweden

Swedish

mortgage loans

Senior

unsecured debt

Covered

bonds

Deposits

CET1

Assets Liabilities SEKbn SEKbn

Estonia

Liquidity

and

funding

Simplified balance sheet Suppl. capital

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

Q1 2018

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

Q1 2018

© Swedbank

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0

2 000

4 000

6 000

8 000

10 000

12 000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1980 1990 2000 2005 2010 2015 2017

Deposits, cash and retail bonds (LHS) Equities (LHS)

Pension savings and mutual funds (LHS) Other financial assets (LHS)

Total financial assets (RHS)

<5Y 3-7Y >7Y

31

Covered bond strategy

Swedish households’ financial assets Covered bond strategy

Sweden

SEK 300-375bn

Other

SEK 20-50bn

EUR/USD

SEK 100-150bn

Maturity, years

SEKbn

Mar 2018

Liquidity

and

funding

© Swedbank

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0

20

40

60

2018 2019 2020 2021 2022 2023 2024-

Senior unsecured debt

Senior unsecured debt strategy

Mar 2018 32

Senior unsecured debt maturity profile SEKbn*

*Nominal amount

Liquidity

and

funding

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0

100

200

300

400

500

600

700

800

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 3650

10

20

30

40

50

60

70

80

90

100 Covered bonds Senior unsecured debt

Planned, covered bonds Planned, senior unsecured debt

Conservative funding position

Mar 2018 33

• LCR 140% (EU 2015/61)

• NSFR 110% (Basel committee)

• Issued around SEK 40bn of term funding in Q1 2018

• Plan to issue around SEK 145bn in 2018

Term funding issuance – completed and planned

Days forward

SEKbn SEKbn Prefunded for more than 12 months

Survival horizon

Liquidity

and

funding

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0

50

100

150

200

2018 2019 2020 2021 2022 2023 2024-

Other

GBP

USD

EUR

SEK

0

50

100

150

200

2018 2019 2020 2021 2022 2023 2024-

Senior unsecured debt Covered bonds

Long-term funding maturity profile

Mar 2018 34

Long-term funding maturity profile, by funding source

SEKbn

Long-term funding maturity profile, by currency

Liquidity

and

funding

SEKbn

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Private placements – active in both covered bonds and senior unsecured debt

• All major currencies

• Bullet format, FRN or Fixed

• EUR 10m equivalent minimum size

• Sweet spots:

– Senior: 2.5-5Y

– Covered: 3-8Y

– Longer tenors also possible

• Open to larger placements with smaller investor

groups

• Open to tap existing bonds

• Listing is optional

• FRN’s (SEK and EUR) – issued with a

“strike adjustment spread”*

• Program formats available:

– Senior unsecured debt: MTN, NSV and potentially

USD 144a format

– Covered bonds: MTN, RCB and Norwegian CB

program

35

*Spread added to the coupon to avoid negative coupon fixings. Bond issued above par to compensate for this. The above par value reflects the NPV of the adjusted

spread

Liquidity

and

funding

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Liquidity reserve

Mar 2018 36

According to the template defined by the Swedish Bankers' Association

Liquidity

and

funding

SEKm

Cash and holdings in central banks1

404 160

Deposits in other banks available overnight 505

Securities issued or guaranteed by sovereigns, central banks or multilateral development banks 77 076

Securities issued or guaranteed by municipalities or public sector entities 5 252

Covered bonds 44 595

- Issued by other institutions 41 514

- Own issued 3 081

Securities issued by non-financial corporates 180

Securities issued by financial corporates (excl. covered bonds) 600

Other

Total2

532 368

1) Including loans to the Sw edish Ntional Debt Office

2) 95% of the securities in the liquidity reserve per Q1 2018 are rated AAA. The rating requirement is AA-.

Assets included in the liquidity reserve should comply w ith the follow ing:

- assets shall be under the control of the Treasury function in the bank

- assets can not be encumbered

- market values are used for the assets

- only unencumbered securities receiving 0-20% risk w eight under the standardised approach to credit risk of the Basel II framew ork can be included

- securities received in reverse repo transactions shall be included in the liquidity reserve and securities used as collateral for repo transactions shall be excluded

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Rating

• On 20 April 2018, Moody’s upgraded the rating of Swedbank AB (Swedbank) to Aa2 from Aa3. The upgrade reflects Moody's

expectations of the bank's issuance of additional loss-absorbing debt in response to bank-specific MREL (Minimum Requirements

for own funds and Eligible Liabilities) requirements set by the Swedish resolution authority. At the same time Moody’s placed the

high trigger AT1 ratings of Swedbank AB on review for downgrade as there will be negative pressure on these if the Swedish FSA

adopts the current proposal to move the risk-weight floor for mortgages from pillar II to pillar I.

• November 24, 2017, S&P affirmed the rating of Swedbank at AA-/A-1+, with a stable outlook. The rating reflect Swedbank’s

strong business position, given the market-leading retail position, strong revenue performance, and efficiency, as well as prudent

management and strategy. S&P also assess the capital and earnings as strong, reflecting the strong earnings capacity. The stable

outlook on Swedbank resilient earnings and capital as Sweden's economy benefits from improvements in Europe's economic

environment and the domestic housing market adjusts to higher volumes and stricter amortization requirements.

• May 26, 2016, Fitch upgraded the rating to AA- from A+, with a stable outlook. The main drivers behind the upgrade

are: Execution of the low risk strategy including conservative risk-returns and underwriting standards, strong retail

franchise and continued strong capitalisation.

Apr 2018 37

Liquidity

and

funding

Short Long SACP1 Short Long BCA1 Short Long VR1

Swedbank A-1+ AA- a+ P-1 Aa2 a3 F1+ AA- AA-

Swedbank Mortgage A-1+ AA- - P-1 Aa2 - - - -

Covered bonds - AAA2 - - Aaa - - - -

1 Standalone Rating

S&P (Stable) Moody's (Stable) Fitch (Stable)

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5. Cover pool data

3

8

Swedbank is a labeled issuer of

the ECBC Covered Bond Label

Foundation

(www.coveredbondlabel.com )

http://www.coveredbondlabel.com/

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Cover pool data1

Mar 2018 39

Repayment structure 7

– Amortising 68%

– Interest only 32%

Average loan size SEK 577 975

Number of loans outstanding 1 606 567

Number of borrowers 1 119 065

Number of properties 752 474

Dynamic pool Yes



Foundation


Rating, S&P / Moody’s AAA / Aaa

Total pool size SEK 928.6bn

Geographic distribution Sweden 100%

Current OC-level 79.6%

Weighted average seasoning 2 66 months

Average LTV 3, 4

– WA LTV on property level (Max LTV) 49%

Non-performing loans 5 None

Fixed /Floating interest loans 6

– Fixed 29.3%

– Floating 70.7%

1 As per 31 Mar, 2018

2 Public sector loans not included

3 Index valuation as per Dec, 2017 4 Maximum LTV: Residential 75%, Commercial 60%, Forest and Agriculture 70% 5 Past due loans > 60 days are not eligible for the cover pool 6 Floating interest loans < 365 days 7 Property level of cover pool


© Swedbank

Public

Information class

Cover pool data

Mar 2018

40



Foundation


Geographical distribution, Sweden, per cent 31 Mar

(based on loan volume) 2018

North 6.5

Norrbotten county (BD) 1.4

Västerbotten county (AC) 2.4

Västernorrland county (Y) 1.5

Jämtland county (Z) 1.2

Middle (including Stockholm) 44.0

Dalarna county (W) 2.0

Gävleborg county (X) 2.1

Värmland county (S) 2.0

Örebro county (T) 2.5

Västmanland county (U) 2.4

Uppsala county ( C) 4.1

Södermanland county (D) 2.1

Stockholm county (including Stockholm) (AB) 26.8

South (including Göteborg and Malmö) 49.5

Västra götaland county (Including Göteborg) (O) 17.9

Östergötland county (E) 4.2

Jönköping county (F) 3.5

Halland county (N) 4.1

Kronoberg county (G) 2.1

Kalmar county (H) 2.9

Skåne county (including Malmö) (M) 12.8

Blekinge county (K) 1.4

Gotland county (I) 0.6

100.0

Type of loans 31 Mar

(based on loan volume) 2018

Residentials 92.0%

of w hich Single-family housing 57.0%

of w hich Tenant ow ner rights 20.9%

of w hich Tenant ow ner association 9.4%

of w hich Multi-family housing 4.7%

Public 0.7%

Commercial 0.8%

Forest & Agricultural 6.5%

100.0%

Population, Dec 2017

(thousands)

Sw eden 10 120

Stockholm, county 2 308

Västra Götaland, county (incl. Gothenburg) 1 691

Skåne, county (incl. Malmoe) 1 345


© Swedbank

Public

Information class

Cover pool loan-to-value distribution

• Weighted average LTV on property level 49%

Mar 2018 41



Foundation


LTV distribution per property1 LTV distribution by volume1, 2

1 Public loans of 0.7% of the cover pool are excluded as they are either guaranteed by a Swedish municipality or the government and have therefore no

LTV assigned to them. 2 LTV distribution as defined by the Association of Swedish Covered Bond Issuers (www.ascb.se)

0%

5%

10%

15%

20%

25%

30%

00-10 10-20 20-30 30-40 40-50 50-60 60-70 70-75

0%

5%

10%

15%

20%

25%

30%

00-10 10-20 20-30 30-40 40-50 50-60 60-70 70-75


© Swedbank

Public

Information class

0%

20%

40%

60%

80%

100%

120%

0%

20%

40%

60%

80%

100%

120%

Single-familyhomes

Tenant ownerrights

(apartments)

Tenant ownerassociations

Multi-familyhousing

Commercial Forestry &Agricultural

Total all types

Percentage of the pool Average LTV per loan type

Cover pool loan type and loan-to-value distribution

Mar 2018 42



Foundation


1excluding public sector loans of 0.7%

WA LTV per property type1

1


© Swedbank

Public

Information class

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0% -5% -10% -15% -20% -25% -30% -35% -40% -45% -50%

OC, Q118

Min req. 2%

Strong resilience to house price changes

Mar 2018 43



Foundation


• Current OC-level of 79.6%

• 2% legal minimum requirement

• Can withstand a severe house price drop

and still be able to issue AAA-rated

covered bonds

Over-

colla

tera

lisation

House price drop

House price sensitivity of the cover pool


© Swedbank

Public

Information class

Overview of the Swedish covered bond legislation

44

The Covered Bond Act entered into force on July 1, 2004 and is over-sighted by the Swedish FSA. Its main characteristics are:

Dual recourse to the issuer and cover pool

Dynamic, regulated pool of assets, frequently monitored by the Swedish FSA via appointment of an

independent inspector

Regulated valuation of cover pool assets which remain on the balance sheet

The cover pool may consist of certain mortgage credits, public credits and supplemental assets. There is no requirement to segregate mortgage and public credits.

Maximum LTVs: Residential 75%, Agricultural 70%, Commercial 60%

Maximum 10% commercial loans and 20% supplemental assets in cover pool

Regular monitoring of the property values, revaluation of property prices in case of significant drop (generally interpreted as 15% drop)

The S.O. Act amended, effective as of 21 June 2016, requires that the nominal value of the cover pool shall, at all times, be at least two per cent. higher than the aggregate nominal value of the liabilities relating to the covered bonds..

Regional constraint on collateral assets (Mortgage - EEA, Public - OECD)

The cover pool value shall always exceed the aggregate value of claims (including derivatives)

A sound balance in terms of FX, interest rates and maturities must be achieved. It is deemed to exist when the present value of the cover pool at all times exceed the present value of liabilities (including derivatives), even on a stressed basis. Present value cover must hold even after 1% upward and downward shift in the yield curve and a 10% change in the currency

Non-performing assets in the cover pool which are more than 60 days overdue must be disregarded for the purposes of the matching tests

Holders of covered bonds and relevant derivative counterparties benefit from a priority claim over the cover pool should the institution be declared bankrupt and rank pari passu ahead of unsecured creditors and all other creditors of the institution in respect of assets in the cover pool

The registered assets in the cover pool, the covered bonds and any relevant derivative contracts are required to be maintained as a unit and kept segregated from other assets and liabilities of the bankruptcy estate of the institution. The administrators-in-bankruptcy are then required to procure the continued timely service of payments due under the covered bonds and any relevant derivative contracts

Loan-to-value ratios and other limitations

Matching requirements

Benefit of a priority right over the cover pool

Administration in event of bankruptcy

The Covered Bond Act

Source: www.ascb.se

http://www.ascb.se/

© Swedbank

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6. Swedish and Baltic economies

4

5

Swedish

and Baltic

macro

© Swedbank

Public

Information class

Sweden - Strong growth gradually slowing

46

• Kingdom of Sweden rated

Aaa/AAA/AAA

Domestic demand drives growth Sentiments remain elevated

Swedish

and Baltic

macro

Sources: Statistics Sweden & Swedbank Research 1 Annual percentage growth in percent unless indicated otherwise. 2 Seasonally adjusted and smoothed

Key economic indicators1, 2016-2019

Feb 2018

Most recent 2016 2017E 2018F 2019F

Real GDP (calendar adjusted) 3.3 (Q4) 3.0 3.2 2.6 2.1

CPI growth, average 1.9 (Mar) 1.0 1.9 2.1 2.5

CPIF growth, average 2.0 (Mar) 1.4 2.0 1.8 1.9

Unemployment rate (15-74), % of labor force 6.3 (Feb)2 6.9 6.6 6.5 6.4

Savings ratio (households),% … 16.5 16.3 16.3 16.6

Real disposable income (households) … 2.5 2.6 2.2 2.1

© Swedbank

Public

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The Swedish economy

47

Exports have recovered

Housing investments to be replaced by other investments Households remain cautious

Feb 2018

Swedish

and Baltic

macro

Percentage points

of GDP

Overall investments are trending higher

© Swedbank

Public

Information class

The Swedish economy, cont.

48

Strong labour market developments Solid public finances

Dampening inflation Weak krona

Feb 2018

Swedish

and Baltic

macro

35

37

39

41

43

45

47

49

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

Budget balance forecast Public debt (Maastrict), rhs forecast

% of GDP

Sources: Swedbank Research & Macrobond.

© Swedbank

Public

Information class

The Swedish credit market

Feb 2018 49

Lending to households slows Interest rates remain low; while margins are stable

A gradual tightening of monetary policy Quantitative easing formally ended in 2017

Swedish

and Baltic

macro

-0.60

-0.40

-0.20

0.00

0.20

0.40

2015 2016 2017 2018 2019

Market pricing Swedbank forecast

Outcome Riksbank forecast December 2018

Sources: Swedbank Research & Macrobond

© Swedbank

Public

Information class

Baltics – continued growth albeit at slower rates

50

Ratings

• Republic of Estonia: A1/AA-/A+

• Republic of Latvia: A3/ A-/A-

• Republic of Lithuania: A3/ A-/A-

Real economic growth peaked in 2017 Unemployment is declining

Key economic indicators1, 2016-2019

1 % growth rate unless indicated otherwise, Y/Y growth for the most recent data

Most recent 2016 2017E 2018F 2019F

Real GDP Estonia 5.0 (Q4) 2.1 4.9 3.9 3.0

Latvia 4.2 (Q4) 2.2 4.5 3.0 3.2

Lithuania 3.9 (Q4) 2.3 3.8 3.2 2.5

CPI growth, average Estonia 2.8 (Mar) 0.1 3.4 3.0 2.5

Latvia 2.2 (Mar) 0.1 2.9 3.3 2.5

Lithuania 2.7 (Mar) 0.9 3.7 3.0 2.5

Unemployment rate (15-74), Estonia 5.3 (Q4) 6.8 5.8 6.2 6.3

% of labor force Latvia 8.1 (Q4) 9.6 8.7 8.1 7.5

Lithuania 6.7 (Q4) 7.9 7.1 6.9 6.9

Swedish

and Baltic

macro

© Swedbank

Public

Information class

Estonia: Growth to slow after peak Economic growth expanded in the fastest pace in five years in 2017

51

Domestic demand and export the main drivers Export and manufacturing output accelerate

Swedish

and Baltic

macro

© Swedbank

Public

Information class

Latvia: Solid growth to continue Supported by strong confidence, pro-cyclical fiscal policy, rapid wage growth, global tailwinds

52

Sharp cyclical pick up in growth to moderate in 2019 Sentiments are strengthening

Swedish

and Baltic

macro

© Swedbank

Public

Information class

Lithuania: GDP growth will revert to potential Weaker household consumption and export growth, but investments to pick up

53

Growth has peaked and start to ease Capacity constrains will limit export growth

Swedish

and Baltic

macro

© Swedbank

Public

Information class

7. Swedish housing and mortgage market

5

4

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

The decline in prices is not unexpected • Strong price increases in recent years due to high demand and limited supply

• Supply has increased on the back of a surge in housing investments

• Stricter borrowing criteria both by lenders and authorities

55

Home prices and macroprudential measures

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

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Price developments have varied across the country and type of housing

• Price increases, and recent falls, have been most pronounced in the Stockholm area

• Prices of apartments most volatile; single-family houses are holding up better

• The decline in housing prices slowed in the first quarter of 2018

56

Swedish

housing

and

mortgage

market

1) Source: Valueguard (HOX index)

2) Source: Mäklarstatistik, monthly average transaction prices (central city area)

Trends and average house prices, March 20181) Price developments flats and single family houses1)

Tenant owner rights

1 month 3 months 12 months SEK/sqm2)

Sweden total 0.0% +1.7% -8.6% 35 169

Greater Stockholm -0.1% +1.7% -10.3% 52 769 (85 109)

Greater Gothenburg -0.4% +0.4% -6.8% 41 289 (56 777)

Greater Malmoe +0.3% +1.4% -5.6% 27 148 (29 540)

Single-family homes

1 month 3 months 12 months SEK2)

Sweden total 0.0% +3.8% -1.8% 3 119 000

Greater Stockholm +0.4% +1.9% -6.7% 5 534 000

Greater Gothenburg -0.6% +1.5% -2.4% 4 441 000

Greater Malmoe +0.5% +5.8% +0.7% 3 955 000

© Swedbank

Public

Information class

New amortization requirement caused market distortions

• Transactions rose in January and February; slowed in March

• Housing prices bounced back in January; fell again in February and March

• Continued market adjustments expected following the new amortization requirement

57

The decline in prices slowed down in Q1

© Swedbank

Public

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Household borrowing dampens while financing costs remain low • Mortgage volume growth benefitting from new housing supply, housing turnover and higher

mortgage amounts by existing borrowers

• Housing financing costs at historically low level

• Reasonable to expect some slowdown from last year’s 7.4% market growth; February

growth was 7.2%

58

Low mortgage costs Mortgage loan growth and housing prices

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Structural foundation for the housing and mortgage market

59

• Full recourse (very limited debt forgiveness possibilities)

• No securitisation (on balance sheet), no sub-prime market, no 3rd party origination

• Restricted buy-to-let market – limited speculation

• 64% home ownership

• Rental market is regulated

• Transparent credit information (credit information agency, www.uc.se)

– Publicly available information regarding income, debt, payment track record etc.

• Consumer credit legislation requires affordability calculations including stress test of higher interest rate and

conservative cost of living

• Strong social security and generous unemployment benefit system

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Household fundamentals support the housing market • Population growth and urbanisation trends continue

• Solid labour market developments

• Solid balance sheets among households

60

Solid labour market Strong household balance sheets Construction lags population growth

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Overall indebtedness among Swedish households remains low

• Of appr. 4 million households less than 50% carry a mortgage

• Median debt-to-income ratio of mortgage holders less than 300%

• Less than 15% of mortgage holders have a debt to income ratio of more than

600%

61

Debt ratios of Swedish households Distribution of debt ratios in 2016

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015 2016

Total debt as % of gross income

>600

400-600

200-400

0-200

Nomortgages

Source: Riksbank

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

0-100 100-200 200-300 300-400 400-500 500-600 600-700 >700Total debt as % of post tax income Source: Riksbank

No. of households w/ mortgages

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

The Swedish economy underpins the housing market • Fiscal policy will be supportive and public debt is at a historic low level

• Monetary policy to remain expansionary

• Economic growth expected to continue at solid rates despite weakening housing

investments

62

Expansionary fiscal policy Gradually tightened monetary policy Slowdown in growth from high rates

35

37

39

41

43

45

47

49

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

Budget balance forecast

Public debt (Maastrict), rhs forecast

% of GDP

Sources: Swedbank Research & Macrobond.

%points

Swedish

housing

and

mortgage

market

-0.60

-0.40

-0.20

0.00

0.20

0.40

2015 2016 2017 2018 2019Market pricingSwedbank forecastOutcome

Sources: Swedbank Research & Macrobond

© Swedbank

Public

Information class

Swedbank’s exposure to the Swedish residential property market

• Swedbank has a low risk residential property portfolio

• Origination discipline and profitability have been prioritised over volume

• Engagement in low risk projects with well-known residential property

developers will continue

63

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Swedbank has a low-risk residential property portfolio

• Swedbank has pursued a low risk

strategy by tightening origination

standards, and prioritising price and

risk over volume growth

• Bulk of assets in low risk segments

• Average LTVs in lower ranges

• Residential property developer

exposures of SEK 17bn

Mar 2018 64

Real estate lending, net loans in Sweden, SEKbn

• Private mortgages: SEK 770bn, average

LTV 55%

• Tenant owner associations (“TOA”): SEK

109bn

SEK 99bn existing TOA, average LTV 39%

SEK 10bn TOA under construction

• Property management: SEK 193bn, average

LTV 58%

SEK 67bn in residential property management

(rental apartment properties)

SEK 125bn in other property management

• Construction SEK 16bn

SEK 7bn residential property development

SEK 9bn infrastructure, groundwork, craftsmen

16

125

67

109

770

0

200

400

600

800

1 000

1 200

Total real estateportfolio

Of which:Residential

propertydevelopment

17

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

0

1

2

3

4

5

6

7

8

9

2015 2016 2017

Loan growth in %

Loan growth Swedbank Loan growth market

Private mortgages – a low risk portfolio

• Low average LTVs (55% in back book, March 2018)

• Low historic losses (0.02% on average during the last 25 years)

• About 73% of total loans to single family homes

• Swedbank has grown, but at a slower rate than the market

1) As of 31 March 2018 65

Growth YoY but lower than the market High diversification

28%

12%

7% 27%

26%

Loans net1) by geography

Stockholm region Gothenburg regionMalmö region >50 000 inhabitants<50 000 inhabitants

SEK

770bn

Only 1% above 75% LTV

0

2

4

6

8

10

12

14

16

18

20

1%

4%

7%

10%

13%

16%

19%

22%

25%

28%

31%

34%

37%

40%

43%

46%

49%

52%

55%

58%

61%

64%

67%

70%

73%

76%

79%

82%

85%

88%

91%

94%

97%

100%

SEKbn

Loans1) to Private Mortgage by (sliced ) LTV-bucket

86% with

LTV <50%

99% with

LTV <75%

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Tenant Owner Associations – low leverage

• Total loan portfolio SEK 109bn, of which SEK 10bn is construction loan for new

development: – 50-80% of the tenant owner rights needs to be pre-sold before start, and 100% before final financing

– When the construction is finalised about 60% of construction loans will be repaid through equity from the TOA

members

• Low historic losses (average 0.17% over the last 25 years). Losses of which to an absolute

majority occurred during the 1990’s

1) As of 31 March 2018 66

Growth, but lower than the market Portfolio reflects market

36%

11% 10%

30%

13%


Stockholm region Gothenburg regionMalmö region >50 000 inhabitants<50 000 inhabitants

SEK

109bn

Average LTV of only 39%

0

1

2

3

4

1%

5%

9%

13%

17%

21%

25%

29%

33%

37%

41%

45%

49%

53%

57%

61%

65%

69%

73%

77%

81%

85%

89%

93%

97%

>100%

SEKbn

Loans1) to Tenant Owner Associations by LTV-bucket

95% with

LTV <50%

99.7% with

LTV <75%

Swedish

housing

and

mortgage

market

0

2

4

6

8

10

12

2015 2016 2017

Loan growth in %

Loan growth Swedbank Loan growth market

© Swedbank

Public

Information class

52% 38%

10%

Finalisation year2)

2018 2019 2020-

Residential property developers - low exposure

• Total loan portfolio of SEK 17bn, mainly to the larger listed construction firms,

with which Swedbank has long-term relations

– SEK 10bn of the loans are related to tenant-owner rights projects

• 90% of these projects will be finalised in 2018 and 2019

– SEK 7bn of the loans are related to other construction activities

• On average 87% of the apartments are pre-sold

1) As of 31 March 2018,

2) Share of committed exposure 67

57%

10%

4%

24%

5%

By location1)

Stockholm region Gothenburg region

Malmö region >50 000 inhabitants

<50 000 inhabitants

SEK

10bn

Tenant-owner rights related construction loans1) – the risk is highly mitigated

0

10

20

30

40

50

60

70

80

90

100

2018 2019 2020-

Average % pre-sold by finalisation year

Swedish

housing

and

mortgage

market

© Swedbank

Public

Information class

Residential property management – stable cash-flow generation

• Total loans of SEK 67bn towards residential property management companies

– Financing of rental apartment properties

• Well-known companies with solid finances and high collateralization

• Strong and stable cash-flow generation, no speculation and low vintage risk

1) As of 31 March 2018 68

Slower growth in 2017 Regional cities dominate

19%

8%

7%

41%

25%


Stockholm region Gothenburg region

Malmö region >50 000 inhabitants

<50 000 inhabitants

SEK

67bn

Average LTV of 54%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1%

4%

7%

10%

13%

16%

19%

22%

25%

28%

31%

34%

37%

40%

43%

46%

49%

52%

55%

58%

61%

64%

67%

70%

73%

76%

79%

82%

85%

88%

91%

94%

97%

100%

SEKbn

Loans1) to Residential property management by LTV-bucket

87% with

LTV <50%

99.8% with

LTV <75%

Swedish

housing

and

mortgage

market

-2

-1

0

1

2

3

4

5

6

7

8

2015 2016 2017

Loan growth, in %

Loan growth Swedbank

© Swedbank

Public

Information class Source: Swedbank Factbook Q1 2018

* Number of customers that have made a payment, transfer, application, investments or lending activity in the last month 70

Latvia

Population 2.0m

Private customers 0.9m

Corporate customers 83 000

Branches 34

Cards 1.0m

Number of card purchases 37.9m

Digitally active customers* 0.5m

Lithuania

Population 2.9m



Branches 61

Cards 1.7m



Estonia

Population 1.3m



Branches 34

Cards 1.1m



Sweden

Population 10.1m



Organisations 68 000

Branches 205

Cards 4.2m

Number of card purchases 296m


* Share of loan book

Swedbank – largest retail bank in our four home markets

~86%*

~10%*

This is

Swedbank

© Swedbank

Public

Information class

0

10

20

30

0

50

100

150

200

2013 2014 2015 2016 2017 Q1 2018

NSFR LCR* CET1 ratio, CRDIV (RHS)

-10

0

10

20

30

40

Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

Swedbank – low-risk bank with strong capital base • Low risk – a Board of Directors’ strategic priority – ensures access to funding

markets and low funding cost

• Retail profile and four home markets a key feature

– Around 86% of total loans originated in Sweden - Swedish mortgages account for

50% of total loans

– 90% of total loans are collateralised (77.6% real estate and 12.3% other collateral)

• Strong capital position – Board of Directors’ decision to maintain a buffer above

prevailing SFSA capital requirements to have operational flexibility – current buffer

around 280bp

• Conservative funding and liquidity position – survival horizon longer than 12 months

assuming closed funding markets, NSFR 110% and LCR 140%*

• Baltic operations self-funded – loan-to-deposit ratio < 100%

Mar 2018 71

Credit impairment ratio, bps

This is

Swedbank

Liquidity & capital, %

* From Q1 2018 – the Liquidity Coverage Ratio (LCR) is calculated in accordance with the Commission Delegated

Regulation (EU 2015/61) of 10 October 2014 (also, see Fact book, page 57)

© Swedbank

Public

Information class

Swedbank – strong and stable earnings capacity

Mar 2018 72

Profit before impairments, SEKbn

This is

Swedbank

0

2

4

6

8

10

Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

One-offs from disposals

• Four home markets – Sweden, Estonia, Latvia and Lithuania

– Strong and stable economies

– Market-leading position in all home markets

– Largest customer base in all home markets

• Retail profile ensures stable earnings with low volatility

• High cost efficiency – a strategic priority – ensures good profitability

• Stable earnings support a low risk profile and a strong capital position

© Swedbank

Public

Information class

30

35

40

45

50

55

60

2012 2013 2014 2015 2016 2017

12

14

16

18

20

2012 2013 2014 2015 2016 2017 Target18

Acquisition of Sparbanken…

Swedbank – market leader in cost efficiency

• Best-in-class cost efficiency – an executive management strategic priority

• Executive management strongly focused on cost and change management

− Integrated in corporate culture

− Focus on straight-through-processing

− Evolving household banking model – digitisation trend

• Retail profile a key feature

− Four home markets – Sweden, Estonia, Latvia and Lithuania – reduce

complexity − Largest private and SME customer base

− High degree of digitisation in home markets

Mar 2018 73

Total expenses, SEKm

C/I ratio, %

This is

Swedbank

© Swedbank

Public

Information class

Focus on sustainable business

74

Swedbank ran the books of 7 green bond deals, a total volume of USD 528m in the first

quarter of 2018. Through the dedicated work of Swedbank’s Large Corporates &

Institutions, we have taken a substantial lead in the market both with regards to the

number of deals and volumes issued.

On March 22 Swedbank successfully issued its second green bond, a SEK 2 billion,

senior unsecured 5 year bond, which will contribute to a more sustainable society as

well as contribute to tackle climate change.

2011 2012 2013 2014 2015 2016 2017

Sustainability Indicators: towards the 2030 Agenda

Eligible green assets Sustainable Development Goal

Renewable energy SDG7 and SDG13

Energy efficiency SDG7, SDG11 and SDG13

Sustainable management of living natural resources SDG15

Pollution prevention and control SDG6 and SDG11

Clean transportation SDG9 and SDG11, SDG13

Swedbank Robur wins “Sustainable actor of the year” award

Swedbank Robur won Söderberg & Partners’ “Sustainable actor

of the year” award.

It was noted that Swedbank Robur promted companies to

become better at sustainability, by making its voice heard at both

general meetings and in nomination committees.

Dow Jones

Sustainability

Index

Green bonds – Swedbank taking the lead

Swedbank is included in The Sustainability Yearbook 2018

The

Sustainability

Yearbook

Sustainable

actor of the

year

Stronger Environmental Management System (EMS)

Swedbank has developed a new methodology, Sustainability Indicators, to review the

progress towards the UN 2030 Agenda for Sustainable Development. The aim is to support

the business looking at ESG (environmental, social, governance) criteria and help to

identify weaknesses and strengths in Sweden and the Baltic countries.

Improved sustainability scores

Swedbank’s upgraded Environmental Management System

was certified with the new and more rigorous standard

ISO14001:2015.

The Sustainability Yearbook lists the world’s most sustainable

companies in each industry as determined by their score in

RobecoSAM’s annual Corporate Sustainability Assessment.

ISO

Estonia Latvia Lithuania Sweden

Sustainable medium-term grow th (SDGs #4, 8, 9) 71 61 64 90

Social inclusion (SDGs # 1, 3, 5, 10) 56 55 55 89

Environmental protection (SDGs # 6, 7, 11, 12, 13) 58 72 70 82

Governance and institutions (SDGs # 16, 17) 70 51 62 97

Dow nw ard/stable trend during last 5 years (4 years for governance) – ↓

* Benchmark is 90 or 10th percentile of the EU 28 in 2015. In total 40 indicators covering 14 from 17 SDGs, aggregated to four pillars.

Traffic lights - Sw eden: >90% for green, 70-90% for yellow 0-70% for red; Baltics: >80% for green, 60-80% for yellow , 0-60% for red.

Progress towards UN SDGs, % of benchmark*

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Our objective

• Daily banking is fully digital – 100% self service

• Meet our customers with relevant offerings, in our own or external channels

• Data and knowledge automation – to foresee needs, provide proactive offering and advice.

This will generate loyalty as well as increased sales

• Have an attractive financial platform for customers and 3rd party suppliers, providing value-

added and competitive edge

• Branches attract new customers - build the brand and increasingly focus on corporate

customers

75

Strategy

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0 200 400 600 800 1000 1200 1400

Other* 4.1%

Lithuania 3.2%

Latvia 2.2%

Estonia 4.8%

Sweden 85.7%

Swedish Mortgage loans (private+corp)

Other corporate (incl. LC&I, Sweden)

* Mostly Norway and Finland

Sweden – the dominating home market

• Total lending to the public amounts to SEK 1 574bn (as per Q1 2018), out of

which around 86% is originated in Sweden

• Estonia makes up 48% of total lending in the Baltics

Mar 2018 76

Lending distributed by countries

SEK 1 350bn

This is

Swedbank

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11.4%

10.6%

Swedbank CET1 Requirements

Pillar 2 CETrequirement

Pillar 1CET1

requirement

No automatic sanctions for breaching the Pillar 2 capital requirements ● “It is particularly important that FI has the possibility of giving due

consideration to the specific situation…in which a firm in financial stress

finds itself… For example, certain risks included in the assessment

of the Pillar 2 basic requirement might have materialized, which

might mean there are no longer grounds for requiring the firm to

hold capital for them”.

● “It ought to be positive for financial stability that a firm has the

possibility… to restore its capital without the firm necessarily becoming

subject to priory specified and automatic legal restrictions. In other

words, firms are hence given the possibility of re-establishing their

capital in a strained situation without automatic restrictions on

distributions or, depending on the size of the capital shortage, a

formal resolution phase being activated."

● “Hence…a firm may freely choose…the most suitable way of restoring

the capital in that specific situation. For example, the firm is not

obliged to halt or limit dividends or interest payments on Tier 1

capital contributions, if the firm can identify other and more

appropriate ways of restoring the capital sufficiently quickly.”

Mar 2018 77

Automatic MDA

Restrictions

22.0%

Capital

– fully

loaded

CRD IV

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16%

17%

61%

6%

0-3M

3-12M

>1-5Y

>5Y

0

100

200

300

400

500

600

Covered bonds Senior unsecured Structured retailbonds

Short-termprogrammes

Q1 2018 Q4 2017

Wholesale funding profile

• Q1 2018 – 33% or SEK 293bn of wholesale funding < 12 months, SEK

404bn placed with central banks

• Average maturity for covered bonds, 39 months

• Average maturity for senior unsecured bonds, 32 months

Mar 2018 78

Maturity profile of outstanding wholesale funding Outstanding wholesale funding, SEK 902bn

Liquidity

and

funding

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Funding sources

Mar 2018 79

Swedbank AB Swedbank Mortgage AB*

* 100% guaranteed by parent company

- Irrevocable

- Unconditional

- Timely

** Combined limit for unsecured- and covered bonds

*** Limited by cover pool size

100% owned

Program Limit

Long Term

Global MTN USD 40bn

Domestic MTN SEK 60bn

USD Senior (144a / Reg.S) USD 15bn

AUD Senior** AUD 10bn

NSV (stand alone doc.)

Short Term

Domestic CP SEK 80bn

European CP/CD EUR 6bn

US CP USD 20bn

Yankee CD USD 20bn

Finnish CD EUR 4bn

Program Limit

Long Term

Domestic Benchmark CB Unlimited***

EMTN CB EUR 25bn

USD Covered bonds (144a / Reg.S) USD 15bn

Domestic MTN CB SEK 150bn

Norwegian Benchmark CB Unlimited***

AUD Covered bonds** AUD 10bn

Registered CB (stand alone doc.)

Short Term

Domestic CP SEK 50bn

Liquidity

and

funding

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Asset encumbrance

• Asset encumbrance ratio

of around 26% based on

median values

Mar 2018 80

Liquidity

and

funding Type of assets (Balance Sheet items)

SEKm

Carry Amount Fair Value Carry Amount Fair Value

Assets of the reporting institution 568 405 1 662 532

Loans on demand 370 422

Equity instruments 16 090 16 090

Debt securities 19 160 19 328 128 398 128 883

Loans and advances other than loans on demand 549 245 1 050 002

of w hich mortgage loans 536 187 636 026

Other assets 97 620

Encumbered assets

Unencumbered assets,

additional assets

available for secured

funding

Type of assets (Off-balance sheet items) Encumbered

received collateral

Unencumbered

received collateral

available for secured

funding

SEKm Fair value Fair value

Collateral received by the reporting institution 9 608 33 039

Loans on demand

Equity instruments 2 805

Debt securities 9 608 17 704

Loans and advances other than loans on demand 10 969

Other collateral received 1 561

Purpose for encumbrance (On- and off-balance sheet items) Encumbered Assets

SEKm 31 Mar 31 Dec 30 Sep 30 Jun

2018 2017 2017 2017

Carrying amount of selected financial liabilities 555 056 552 794 557 481 557 693

of w hich Derivatives 12 415 13 170 15 389 16 561

of w hich Deposits 22 556 24 215 24 215 23 255

of w hich Debt securities issued 520 085 515 409 517 877 517 877

Other sources of encumbrance 22 957 22 844 22 844 21 351

Total 578 013 575 638 580 325 579 044

All amounts are according to Sw edbank consolidated situation and represented as median values.

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Benchmark transactions, 2016 – YTD 2018

Mar 2018 81

Liquidity

and

funding

ISIN Product Tenor Currency Amount,mn Type Spread Value date Maturity date

XS1361548693 CB 5Y EUR 1 250 Fixed MS+14 February 10, 2016 February 10, 2021

XS1377855363 SU 144a 5Y USD 1 250 Fixed T+135 March 10, 2016 March 10, 2021

XS1377258436 SU 3Y EUR 500 FRN 3m€+45 March 11, 2016 March 11, 2019

XS1530835336 CB 5Y GBP 250 Fixed G+65 December 7, 2016 December 7, 2021

XS1535953134 AT1 Perpetual USD 500 NC5 6.00% December 16, 2016 Perpetual

XS1550140674 CB 5Y6M EUR 1 000 Fixed MS -3 January 16, 2017 July 18, 2022

AU3CB0242543 SU 5Y AUD 100 Fixed MS+118 February 17, 2017 February 17, 2022

AU3FN0034229 SU 5Y AUD 350 FRN 3mBBSW+118 February 17, 2017 February 17, 2022

XS1573958409 SU 5Y6M EUR 750 Fixed MS+18 March 6, 2017 September 6, 2022

XS1577762583 SU 144a 5Y USD 500 FRN 3m$L+70 March 14, 2017 March 14, 2022

XS1577360784 SU 144a 5Y USD 1 000 Fixed T+80 March 14, 2017 March 14, 2022

XS1606633912 CB 7Y EUR 1 000 Fixed MS-6 May 8, 2017 May 8, 2024

XS1617859464 T2 10.5NC5.5 EUR 650 Fixed MS+82 May 15, 2017 November 22, 2027

XS1689549217 SU 4Y3M GBP 500 Fixed G+76 September 29, 2017 December 29, 2021

XS1530835336 CB 4Y2M GBP 250 Fixed G+57 October 2, 2017 December 7, 2021

XS1711933033 SU Green 5Y EUR 500 Fixed MS+7 November 7, 2017 November 7, 2022

XS1778322351 CB 5.5Y EUR 1000 Fixed MS-10 February 23, 2018 August 23, 2023

XS1800142330 SU Green 5Y SEK 500 FRN 3mStib+47 March 29, 2018 March 29, 2023

XS1800143650 SU Green 5Y SEK 1500 FRN MS+47 March 29, 2018 March 29, 2023

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Swedbank – contacts and financial calendar

82

Tomas Hedberg, Head of Group Treasury

[email protected] +46 706 43 97 11

Gregori Karamouzis, Head of Investor Relations


DEBT INVESTORS

Peter Stenborn, Debt Investor Relations


Magnus Alvesson, Debt Investor Relations


Ulf Jakobsson, Head of Funding


Joakim Henriks, Money Markets and Short-Term Funding


EQUITY INVESTORS

Mattias Mauritzon, Investor Relations +46 8 585 907 56

[email protected]

Annie Ho, Investor Relations +46 8 585 922 69

[email protected]

Q2 Interim report 18 Jul 2018

Q3 Interim report 23 Oct 2018

[email protected]

www.swedbank.com/investor-relations/debt-investor

Swedbank AB (publ) Landsvägen 40,

SE-105 34 Stockholm, Sweden Sundbyberg

Contact Investor Relations:

For further information, please contact: Financial calendar

Postal address: Visitors:

mailto:[email protected]











http://www.swedbank.com/investor-relations/debt-investor





Swedbank Investor presentation

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