© Swedbank

Swedbank’s second quarter 2014 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO

Stable result

2

Swedish Banking - excluding Sparbanken Öresund

SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Net interest income 3 314 3 314 -71

Net commission income 1 771 1 649 121 283

Other income 604 459 146 206

Total income 5 689 5 422 267 418

Total expenses 2 491 2 443 48 144

Profit before impairments 3 198 2 979 219 275

Credit impairments 21 31 -10 -39

ROE, % 30.5 28.3

C/I ratio 0.44 0.45

• Lower deposit margins

• Mortgage margins – Improved towards end of quarter

• Volume growth both in private and SME segments

• Higher market activity supports commission income

• One-off income from Entercard

Volumes, SEKbn Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Loans 970 949 21 51

Deposits 389 379 10 10

Sparbanken Öresund impact in Q2

3

Sparbanken Öresund

SEKm Ordinary business One-offs Total

Net interest income 48 48

Net commission income 18 18

Other income 13 461 474

Total income 79 461 540

Staff costs 47 393 440

Other expenses 39 222 261

Total expenses 86 615 701

Credit impairments 4 4

Tax expense -2 -135 -137

Profit for the period -9 -19 -28

Volumes, SEKbn

Loans 16

Deposits 12

Stable result

4

Swedish Banking – including Sparbanken Öresund

SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Net interest income 3 362 3 314 48 -23

Net commission income 1 790 1 649 141 301

Other income 1 077 459 618 679

Total income 6 229 5 422 807 957

Total expenses 3 192 2 443 749 844

Profit before impairments 3 037 2 979 58 113

Credit impairments 25 31 -6 -35

ROE, % 29.7 28.3

C/I ratio 0.51 0.45

Sparbanken Öresund impact:

• Total income SEK 540m – Of which SEK 461m in one-off

bargain purchase (badwill)

• Total expenses SEK 701m – Of which SEK 615m in one-off

restructuring costs

Volumes, SEKbn Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Loans 987 949 38 68

Deposits 401 379 20 23

Good customer activity

• NII – Loan volume growth – Lower accrued fees

• Continued high customer activity – Corporate finance – DCM

• Good cost control

• Risk awareness going forward

5

Large Corporates & Institutions

SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Net interest income 846 867 -21 79

Net commission income 496 630 -134 184

Net gains and losses 575 565 10 58

Total income 1 945 2 099 -154 306

Total expenses 804 834 -30 69

Profit before impairments 1 141 1265 -124 237

Credit impairments 21 -30 51 -177

ROE, % 23.1 26.9

C/I ratio 0.41 0.40

Volumes, SEKbn Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Loans 157 152 5 6

Deposits 98 99 -1 29

Strong revenues

• No financial impact from the crisis in Ukraine

• Increased market activity

• Good cost efficiency

6

Baltic Banking

SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Net interest income 894 874 20 263

Net commission income 522 429 93 118

Total income 1 596 1 465 131 401

Total expenses 621 607 14 45

Profit before impairments 975 858 117 356

Credit impairments -16 -101 85 -4

ROE, % 15.6 15.2

C/I ratio 0.39 0.41

Volumes, SEKbn Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y

Loans 122 118 4 3

Deposits 122 117 5 12

Strong result

7

Group results – including Sparbanken Öresund

SEKm Q2 14 Q1 14 ▲Q/Q ▲Y/Y

Net interest income 5 521 5 483 38 242 Net commission income 2 813 2 693 120 593

Net gains and losses 773 345 428 265

Other income 1 348 799 549 614

Total income 10 455 9 320 1 135 1 714

Total expenses 4 919 4 226 693 976 Profit before impairments 5 536 5 094 442 738

Credit impairments 30 -100 130 -218

Other impairments 70 135 -65 -252

Tax 1 063 1 074 -11 248 Profit from continuing operations 4 369 3 980 389 955

• Growth

• Mixed margins

• Strong commission income

• One-offs

• Meeting cost target

• Integrating Sparbanken Öresund

ROE continuing operations, % 16.6 14.6

Cost/income ratio 0.47 0.45

CET1 Capital ratio, % 20.9 18.3

Reduced REA following A-IRB approval Capital

8

• REA decreased by SEK 42bn to SEK 406.7bn during the quarter

• A-IRB approval, Sparbanken Öresund acquisition and higher lending volumes

impacted the most

• No regulatory excess capital

*

* Including equity investment in Sparbanken Skåne, SEK 1.7bn

Swedbank REA development

18.3%

20.9%

10%

12%

14%

16%

18%

20%

22%

24%

Q1 2014 Q2 2014

CET1 capital ratio 448.8

16.3

12.3 0.74.7 0.1 0.2

- 72.9

- 1.6 - 1.4 - 0.3

406.7

340

360

380

400

420

440

460

Mar 2014 AdvancedIRB

SparbankenÖresund andSparbanken

Skåne

Exposurechange

Ratingmigrations

LGD FX creditrisk

Other creditrisk

CVA risk Market risk Operationalrisk

Jun 2014

SEKbn

Increase Decrease

Strong asset quality • Low risk position confirmed by

Fitch and S&P

9

Asset quality

Credit impairments, SEKm Q2 14 Q1 14

Swedish Banking 25 31

Large Corporates & Institutions 21 -30

Baltic Banking -16 -101

Group Functions & Other 0 0

Swedbank Group 30 -100

Swedbank’s second quarter 2014 results Q & A

Appendix

Long-term financial impact from Sparbanken Öresund • P&L impact 2016-2017

– Estimated net profit contribution of SEK 350-450m – Incremental RoE to reach group target 2016

• Long term – Estimated net profit contribution of at least SEK 500m – Incremental RoE >25 per cent

12

Sparbanken Öresund

Sparbanken Öresund – ownership structure

13

Sparbanken Öresund

Sparbanken Skåne + 8 Spb Öresund

branches

Sparbanken 1826

Swedbank

Sparbanken Öresund

Sparbanksstiftelsen Öresund

Sparbanksstiftelsen Gripen

Today

22% 78%

Before transaction

Sparbanksstiftelsen Färs & Frosta

Sparbanksstiftelsen 1826

100%

Färs & Frosta

Sparbanken Öresund

Swedbank

70% 30%

Sparbanksstiftelsen 1826

Sparbanksstiftelsen Färs & Frosta

Sparbanksstiftelsen Öresund

26%

22% 100% 26% 26%

Sparbanken Öresund - Facts

14

Sparbanken Öresund

Split up of Sparbanken Öresund Swedbank Skåne (1

Sparbanken Öresund

Swedbank Sparbanken Skåne

Current Proforma Increase %

Employees 559 447(2 112 410 857(2 109

Branches 24 16 8 27 43 59

Customers 204 700 108 300 96 400 482 000 590 300 22

o/w Corporate (3 15 700 8 300 7 400 38 000 46 300 22

o/w Private 189 000 100 000 89 000 444 000 544 000 23

Lending, SEKbn 25 16 9 14 30 114

Mortgages, SEKbn (4 33 17 16 56 73 30

Deposits, SEKbn 24 12 12 34 46 35

Other (AUM, etc), SEKbn 20 10 10 34 44 29

1) In addition, one branch in Lomma will be sold to Swedbank by Sparbanken Skåne 2) Of which 61 relate to Cerdo Bankpartner 3) Includes micro corporates 4) Sparbanken Öresund is a distributor of SBAB mortgage loans. Volumes will gradually move to Swedbank’s balance sheet.

Conservative provision ratio

15

Asset quality

* Russia and Ukraine reported as discontinued operations

SEKm

10 951 9 934

7 0774 429 4 047 3 570 2 818 2 514 2 343

2 0401 774

1 545

1 420 1 398 1 3251 256 1 238 1 211

64% 65%62%

57%54% 53% 54%

60%56%

0

5 000

10 000

15 000

20 000

Q212 Q312 Q412 Q113* Q213* Q313* Q413* Q114* Q214*

Individual provisions Portfolio provisions Provision ratio

Provision ratio, % Q2 14

Swedish Banking 62LC&I 119Baltic Banking 50Group 56

0.57.4

1.53.4

1.31.5

0.62.4

0.73.0

0.20.7

1.8

0 2 4 6 8 10

CruiseDrilling & exploration

Oil serviceSupply

AccommodationFloating production

ChemicalProduct

Crude oilGas (LNG/LPG)

Dry bulkContainer

RORO

Q2-14

Q1-14

Shipping and offshore

16

Credit portfolio – Large Corporates & Institutions

• Lending exposure to Shipping & Offshore sector of SEK 26.0bn

- Portfolio duration 3.77 years (weighted on commitments)

- Average fleet age 7 years - Strong employment profiles

Shipping and Offshore Portfolio by currency, SEKbn

Shipping and Offshore Portfolio by subsegment, SEKbn

0 5 10 15 20 25

SEK

EUR

USD

NOK

JPY Q2-14Q1-14

16

5

423

2625

26 25 26

0

10

20

30

Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

SEKbn

Offshore Tanker Other

Shipping and Offshore

0

10

20

30

40

50

60

70

80

90

100

Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215

Covered bonds Senior unsecured

Lower funding needs • LCR 123% (Swedish FSA definition FFFS 2012:6)

• NSFR 102% (Basel committee)

• Issued SEK 69bn of term-funding in H1 2014, of which SEK 32bn in Q2.

• FY 2014 funding plan of SEK 120bn

17

Liquidity and funding

Term funding issuance – completed and planned

SEKbn

18

Long-term funding maturity profile • Funding plan of SEK 120bn to meet next 12 months’ nominal SEK 101bn maturities • All remaining government guaranteed debt (issued in 2009) matured in May 2014

Long-term funding maturity profile, by funding source

Liquidity and funding

SEKbn

0

50

100

150

200

2014 2015 2016 2017 2018 2019 2020-

Senior unsecureddebt

Covered bonds

Prefunded in excess of 12 months

19

Liquidity and funding

SEKbn

Days forward

1 As defined by the Swedish Bankers’ Association

0

50

100

150

200

250

300

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365

Real estate prices – Sweden 12 months development

20

Swedish housing and mortgage market

Single-family homes1 Tenant-owner rights2 Combined3

12M Δ

12M Δ

12M Δ

Jul/13 4% 9% 6%

Aug/13 5% 11% 7%

Sep/13 5% 11% 7%

Oct/13 6% 11% 8%

Nov/13 4% 13% 7%

Dec/13 4% 13% 7%

Jan/14 7% 13% 9%

Feb/14 7% 13% 9%

Mar/14 7% 13% 9%

Apr/14 8% 12% 9%

May/14 8% 12% 9%

Jun/14 8% 11% 9%

Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE

0200400600800

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Vilnius

Nr.of deals EUR/m2

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Tallinn

Nr.of deals EUR/m2

Baltic countries Real estate prices

21

EUR/m2 /Nr of deals

EUR/m2 /Nr of deals

EUR/m2 /Nr of deals

0200400600800

1 0001 2001 4001 6001 800

Jan-

05Ju

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14

Riga

Nr.of deals EUR/m2