© Swedbank

Public

Information class

Swedbank year-end result 2020

© Swedbank

Public

Information class

“A flickering light at the end of the tunnel”

2019 2020F 2021F

Swedbank January Forecast

Global 2.8 % -3.4 % (-3.9%) 4.7 % (4.7%)

Sweden 1.2 % -2.8 % (-3.5%) 3.0 % (2.1%)

Estonia 4.4 % -2.7 % (-3.2%) 3.1 % (3.1%)

Latvia 2.2 % -4.5 % (-5.0%) 2.8 % (3.1%)

Lithuania 3.9 % -1.7 % (-1.7%) 2.7 % (4.0%)

2

** Swedbank Economic Outlook, January 2021 https://internetbank.swedbank.se/ConditionsEarchive/download?bankid=1111&id=WEBDOC-PRODE72140614

(Nov.) (Nov.)

© Swedbank

Public

Information class

A challenging year 2020

WHO: 2,120,877deaths from Covid-19

© Swedbank

Public

Information class 4

Meeting customer needs in Covid-19 timesFocused on

sustainability

Addressed AML

shortcomings

Keeping our branches open, video meetings with customers

Deliveries 2020

Online customer advice on support programs, private finance

© Swedbank

Public

Information class

▪

▪

▪

▪

▪

▪

▪

© Swedbank

Public

Information class

Stable result in difficult timesGroup result Q4

SEKm Q4 20 Q3 20 ▲QoQ Q4 19 ▲YoY

Net interest income 6 567 6 714 -147 6 408 159

Net commission income 3 375 3 246 130 3 445 -39

Net gains and losses 910 669 241 1 218 -308

Other income 911 975 -64 915 -4

Total income 11 764 11 604 160 11 956 -192

Total expenses 5 586 4 761 825 5 549 37

Profit before impairments 6 178 6 843 -665 6 407 -229

Credit impairments 523 425 98 988 -465

Tax 1 144 1 155 -11 973 -17

Net profit 4 510 5 261 -751 4 428 82

Q4 2020 6

Ratios Q4 20 Q3 20 Q4 19

ROE, % 11.8 14.3 13.0

C/I ratio 0.47 0.41 0.46

CET1 capital ratio, % 17.5 16.8 17.0

• Increased AuM contributed to strong

NCI

• Positive valuation effect and client

activity improved NGL

• NII impacted by higher full year

deposit guarantee fee

• Seasonal effects and increased

staffing impacts cost

• Credit impairments related to

provisions in the oil and offshore

sector

• Return on Equity of 11.8% and a

CET1 buffer of 510bps

© Swedbank

Public

Information class 7

A stable result considering fine and pandemicFY 2020

• Net profit SEK 12.9bn

• ROE 8.9%, (excluding fine 11.4%), C/I 0.54 (0.45)

• Fine of SEK 4bn + credit impairment provisions of SEK 4.3bn

• CET1 capital ratio buffer of around 510bps

• Dividend proposal SEK 4.35 per share for 2019* (EGM)

• Dividend proposal, SEK 2.90 per share for 2020* (AGM)

*Proposal for EGM (15 Feb, 2021) and AGM (25 Mar, 2021) based on the Swedish FSA’s decision to limit until 30 September 2021 any dividend to 25% of the

aggregate 2019 and 2020 net earnings

© Swedbank

Public

Information class

Group result

Loan and deposit volumes impacted by FX

Q4 2020 8

Of which FX -14

*

*excl. Group functions and other (Group Treasury)

Of which FX -12

-6 +55

Deposits, SEKbnLoans, SEKbn

1144

1 0751 130

Q3 2020* Private Corporate* Q4 2020*

6

-8 -4

1 622 1 616

Q3 2020 Swedishmortgage

loans

Baltic banking Corporateexcl. Baltic

banking

Q4 2020

© Swedbank

Public

Information class

Group result

Stable net interest income

Q4 2020 9

• Continued mortgage loan growth

• Lower corporate loan volumes

• Slightly lower net margin effect due to

decreasing market rates

• Adjustment for higher 2020 deposit

guarantee fee

• Negative FX impact

NII, SEKm

Increase Decrease

262

111

-4-405 -93 -20

6 7156 566

Q3 2020 Lendingvolumes

Lendingmargins

Depositmargins

Treasury Depositguarantee

fee

FX Q4 2020

-32

© Swedbank

Public

Information class

Group result

Strong net commission income

• Lower income from cards due to lower

activity and one-off fee to savings

banks of SEK 130m

• Asset management income positively

impacted by higher AuM

– Positive stock market development

– Net inflows in equity funds

– Annual performance fees

• Advisory contributed positively

Q4 2020 10

NCI, SEKm

Increase Decrease

140

158

-168

3 246

3 376

Q3 2020 Cards &Payments

Assetmanagement

Corporateadvisory

Q4 2020

© Swedbank

Public

Information class

Group result

Higher net gains & losses

Q4 2020 11

NGL, SEKm • Positive valuation effects

– Derivatives, CVA/DVA

– Bond inventories

• Good client FX trading activity

Breakdown, Q4 2020

1 218

-322

1 398

669

910

Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

126 114

-45

472

243

910

CVA/DVA Bondinventories

Shares Clienttrading

Other Q4 2020

© Swedbank

Public

Information class

Group result

Stable other income

Q4 2020 12

Other Income, SEKm

• Stable income from insurance and

savings banks

• Lower income from Entercard due to

lower activity

915

645

867975

911

Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

© Swedbank

Public

Information class 13

• FY 2020 underlying expenses

according to guidance of SEK 19.7bn

• Increased number of FTEs and

seasonality

• AML investigation expenses higher4 794 4 800 4 698

5 416

57643 63

170

Q120* Q220 Q320 Q420

Other cost AML investigations

4 761

5 5865 3704 843

* Excluding administrative fine

Expenses, SEKm

Group result

Underlying expenses on target

Q4 2020

© Swedbank

Public

Information class

• FY 2020 Credit impairments of SEK 4.3bn

‒ Of which oil-related impairments of around SEK 3bn

• FY credit impairment ratio of 0.26%

‒ Q4 credit impairment ratio of 0.12%

Group

Solid asset quality

Q4 2020 14

1 627

740 521 537

373

432

-140

146

5643

-1

Q1 Q2 Q3 Q4

Swedish bankingBaltic banking

LC&I

Credit impairments per business area, SEKm

2 151

1 235

425 523

Group functions

-8

664

237

3 425

4 334

FY 2020

Q4 2020

8

© Swedbank

Public

Information class Q4 2020 15

IFRS 9 – high uncertainty remains

Expert portfolio

macro

adjustments

Individual

assessment

Macro-

economic

forecast Q4

Credit

impairments

YTD Q3

Credit

impairments FY

2020

Other write-

offs

• Reduced credit impairments under IFRS9

• Counteracted by management adjustments

• Individual assessment – oil-related

Rating

migrations, LGD,

prepayments etc.

672

394 220

-639

- 124 3 811

4 334

523m (Q4)

Q4 2020

© Swedbank

Public

Information class

0

1

2

3

4

5

6

IndustrialShipping

CommodityShipping

Infra-structure

DrillingRigs

OilServices

SupplyVessels

FloatingProduction

Stage 1 Stage 2 Stage 3

Shipping Offshore

Shipping and offshore by sub-sectors- half of portfolio in run-off

Q4 2020 16

Loans carrying amount, SEK 12.6bn (offshore 5.4bn)

Credit impairment provisions, SEK 4.5bn (offshore)

0

1

2

3

4

5

6

IndustrialShipping

CommodityShipping

Infra-structure

DrillingRigs

OilServices

SupplyVessels

FloatingProduction

Loans carrying amount Provisions

Shipping Offshore

Gross loans by stages, SEK 17bn (offshore 9.9bn)

Total stage 3 loans, SEK 6.2bn (offshore)

© Swedbank

Public

Information class

Capital

Stable Risk Exposure Amount (REA)

Q4 2020 17

REA, SEKbn• REA decreased by SEK 1.9bn

– Credit risk decreased mainly due

to stronger SEK

– Market movements decreased

REA for market risk and

derivatives

– Annual calculation of REA for

operational risk

– PD increased Article 3 add-on

5.3

2.1 1.0

-6.2-4.1

691.5 689.6

Q3 2020 Credit riskexcl. FX

Credit riskFX

Market riskand CVA

Operationalrisk

Article 3 andmodelupdate

Q4 2020

© Swedbank

Public

Information class

Capital

Solid capital position

18

• Buffer of around 510bps above

minimum requirements

– Regulatory requirements will lower

the buffer during 2021

– Remaining accrued dividend still

deducted

• CET1 capital increased by SEK 4.1bn

– Positive effect from net profit

– Positive IAS19 pension valuation

effect

– REA decreased by SEK 1.9bn

• Management capital buffer target of

100-300bps

CET1 capital ratio, %

Increase Decrease

CET1 capital, SEKbn

Q4 2020

2.9 0.9 0.3116.4120.5

Q3 2020 Profit IAS19 Other Q4 2020

16.1% 16.4% 16.8% 17.5%

12.4%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 CET1 capitalratio

requirement

© Swedbank

Public

Information class

Looking ahead

Q4 2020 19

• NII development

• 50% dividend policy

• Management capital buffer target

of 100-300bps

20222020 2021

AML investigation costs Underlying expenses

20 50020 50019 700

500852

500• Underlying expenses development reflect a continued

build out of the bank

‒ Improvements in AML, Compliance and Governance

‒ Additional IT investments

• Expenses will peak at SEK 20.5bn for 2021 and 2022

‒ 2021 and 2022 AML investigation cost estimate of SEK 0.5bn

Expected development, SEKm

© Swedbank

Public

Information class

Appendix

© Swedbank

Public

Information class

Group result – FY 2020

A turbulent year led to a weaker resultSEKm FY 2020 FY 2019 ▲YoY

Net interest income 26 853 25 989 864

Net commission income 12 770 12 984 -214

Net gains and losses 2 655 3 629 -974

Other income 3 398 3 358 40

Total income 45 676 45 960 -284

Total expenses 24 560 19 984 4 576

Total expenses excl.

administrative fine20 560 19 984 576

Profit before impairments 21 116 25 976 -4 860

Credit impairments 4 334 1 469 2 865

Other impairments 2 87 -85

Tax 3 851 4 711 -860

Net profit 12 929 19 697 -6 768

Q4 20XX 21

Ratios FY 2020 FY 2019

ROE, % (excl. fine) 8.9 (11.4) 15.3

C/I ratio (excl. fine) 0.54 (0.45) 0.43

CET1 capital ratio, % 17.5 17.0

• ROE of 11.4% excluding fine

• Strong NII development

• Expenses in line with FY expectations

• Higher provisions due to pandemic

– Asset quality remains strong

• Solid capital buffer to requirements

• 50% dividend policy still stands

– Remaining accrued dividend still

deducted

© Swedbank

Public

Information class

Strong financial position to manage uncertainty

Q4 2020 22

• Solid private and SME customer

profile

• Low share of capital markets

related income

• Strong capital generation capacity

Earnings capacity(profit before impairments, SEKbn)

Balance sheet

• Liquidity coverage ratio, 174%

• Net stable funding ratio, 125%

• Liquidity reserve, SEK 485bn

– Of which SEK 315bn (65%) placed with

central banks

• Capital buffer of SEK 35bn to

CET1 capital requirement.

• Credit impairment ratio, bps20

-14

1 0 3 49 8

39

26

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

* Excluding administrative fine of SEK 4bn in Q1 2020

0

10

20

30

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

© Swedbank

Public

Information class

0 5 10 15 20 25 30 35 40

Other corporate lending

Professional services

Property management

Finance and insurance

Information and communication

Hotels and restaurants

Shipping and offshore

Transportation

Retail

Construction

Public sector and utilities

Manufacturing

Agriculture, forestry, fishing

Private other

Tenant owner associations

Private mortgage

Insignificantly impacted Slightly impacted Moderately impacted Materially impacted

Major part of Swedbank’s loan portfolio insignificantly impacted by Covid-19

Q4 2020 23

* Most sectors include at least one sub sector with higher or lower risk compared to the classification of the main sector – which we illustrate in the right hand bar where we bundled together sub-sectors, regardless of the sector, with the same

risk classification (i.e. considerably, moderately, slightly or insignificantly impacted).

Loans carrying amount, SEKbn

Sub-sectors

▪ Considerably impacted sub-

sectors− Extraction & Processing of raw

materials

− Clothing

− Transportation, passenger

− Offshore (oil)

− Hotels

− Restaurants

− Recreation and entertainment

facilities

5022

280

1 258

Distribution by sub-sector sensitivity*

1%

3%

18%

78%

Distribution by sub-sector loan volume and share in stage2

4%

4%

11%

11%

11%

2%

15%

9%

4%

19%

49%

29%

20%

23%

15%

8%

© Swedbank

Public

Information class

Property management – focus on well-known companies with solid finances

24

Residential property management

Share of loan-to-value >75%

Average loan-to-value, %

Property

management

Commercial property management

0.3% 1.7% 0.0% 0.0% 0.0% 0.0%

55% 47% 45% 37% 49% 60%

• Low risk portfolio, supported by;

− Growing population

− High demand, and low supply of new

production

− Stable rent levels

− Low vacancy rates

94.0% 0.1% 0.2% 0.0% 1.9% 3.8%

▪Sweden ▪Estonia ▪Latvia ▪Lithuania ▪Norway ▪Finland

Share of loan-to-value >75%

Average loan-to-value, %

2.3% 0.5% 0.0% 0.3% 1.5% 0.1%

57% 53% 52% 44% 57% 57%

• Office properties with low vacancies in

larger cities, appr. SEK 80bn

• Logistic properties supported by growing

e-commerce, appr. SEK 16bn

• Community properties, appr. SEK 11bn

• Retail real estate, appr. SEK 21bn

• Hotel real estate, appr. SEK 8bn

– Focus on low, to moderate risk segments

78.0% 6.7% 2.3% 3.3% 6.4% 3.3%

▪Sweden ▪Estonia ▪Latvia ▪Lithuania ▪Norway ▪Finland

SEK

74bn

SEK

173bn

© Swedbank

Public

Information class

Strong commitment to sustainabilityA financially sound and sustainable society

25

1980 2003

First SRI mutual fund

launched – excluding

sectors deemed

unethical

First listed Nordic bank to

receive ISO 14001 certification

for its Environmental

Management System

1820

Swedbank’s first Group-

wide sustainability report

complying with GRI G4

2014 2015

Headquarters in

Stockholm received EU

Green Building

certification

Achieved target to

reduce CO2 emissions

by 50% from 2010

2013

Sustainability Report

integrated in the Annual

Report

Group-wide exclusion of

companies whose coal

revenues exceed 30% of

turnover

2016 2017

Inaugural Swedbank

Green Bond issued

Launched Global

Impact Fund

2018

Ensuring a secure

operating environment

✓ Proactive strategy to information

security

✓ Systematic approach to AML with

same governance and processes

in all our home markets

✓ Low losses related to operational

risks

Commitment to govern

with impact

✓ UN Principles for Responsible

Banking – Founding Signatory

✓ TCFD Supporter and committed to

Science Based Target initiative

✓ Committed to SDGs 4, 8, 12, 16

✓ Member of UNEPFI Energy

Efficiency Finance Platform

✓ Aiming to reduce CO2 emissions

by 60% 2019-2030

Help our customers to

make sustainable

decisions

✓ Green mortgages

✓ Unique SDG fund (Global Impact

Fund)

✓ Market leading Green Bond

Nordic book runner

✓ Developed indicators to assess

progress towards the SDGs in our

home markets

Our legacy – roots, values

& conduct

✓ Sweden’s first savings bank in

1820 combating poverty

✓ Increasing financial literacy in

society

✓ Supporting development of

financial infrastructure in our

home markets

✓ Inclusive bank

✓ Our core values: Open, Simple,

Caring

2014

Swedbank acquired a majority

stake in Hansabank in the

Baltics

1998

First savings bank

established in Sweden

1996

Launched fund investing in

companies with industry

leading environmental focus

2019

Launched Green Loans

and Sustainability

Improvement Loans

Launched

Transition Funds

2019 2020

Launched ‘Paris Aligned’

Funds

Group-wide exclusion of

companies whose coal

revenues exceed 5% of

turnover

© Swedbank

Public

Information class

Sustainable value creation Long-term sustainable equals long-term profitability

26

Empower our customers to make

sustainable choices

KEY MESSAGES

▪ We empower the many

people and businesses

to create a better future

▪ A new proactive role of

banking is emerging• Set corporate level targets in

alignment with Paris and the

fulfillment of the UN SDGs

• Provision of finance to

investments with environmental,

social and governance

considerations

• Empower the many People to

create a better future by

supporting sustainable choices

• Offer sustainable savings,

green mortgages, solar cell

loans

• Empower the many Businesses to

create a better future by supporting

the transformation

• Offer green loans, sustainability

improvement loans, ESG-bonds,

renewable energy investments

• The SDGs: 17 global goals

• United Nations General

Assembly’s vision of society

in 2030

▪ The Paris Agreement

and UN SDGs

determine the future

operating environment

• Limit global warming

• Align finance flows with low

greenhouse gas emissions

and climate-resilient

development

© Swedbank

Public

Information class

Sustainability in our DNA – Q4 accomplishments

Swedbank recent commitments and recognitions

Enabling customers to make smart and sustainable choices

Position Statement on Climate change

• Swedbank updated its position statement on climate change stating that the bank will

divest all companies mining and producing coal to more than 5% of its turnover

(previously 30%) from our internal funds and equity offerings.

• Advocate for portfolio companies’ and corporate customers’ adaptation of the TCFD

requirements to ensure their alignment with the Paris Agreement.

• Not directly finance unconventional fossil fuel production such as shale oil/gas, arctic

oil/gas or oil sand.

• Not directly finance exploration of new oil or gas fields, although we can finance

clients with such activities if the business strategy is aligned with the Paris

Agreement.

• During Q4 2020, ESG bonds in SEK, NOK and EUR accounted for ~23% of the total

issuance volume arranged by Swedbank Capital Markets.

Strong ESG footprint in Capital Markets

27

Swedbank Robur's Råvarufond was transformed into a new thematic fund with a focus

on solar, wind and energy transition. The new fund, Transition Energy, will invest in

companies worldwide that will contribute to a future renewable energy system.

Q4 2020

*ESG bonds includes Green, Social & Sustainability bonds

Developed and launched sustainability offerings in Baltic banking focusing on reducing

our climate impact, example of new products; Home Energy efficiency loan (for energy

efficiency improvements in your private house), Green car leasing loan, Solar panels loan

and Renewable energy loan for small business.

• In the beginning of November, the Swedish property company Platzer announced

the launch of its Green Equity Framework, making them the second company in the

world to shade its shares, both current and future, as green. Swedbank acted as

Sole Structuring Advisor for the framework, and CICERO Shades of Green has

provided a Second Opinion.

Financing of green and

energy efficient buildings

Due 2023

NOK 800m

Issued November 2020

CICERO

Joint Lead Manager

Financing according to

Green Financing

Framework

Due 2027

SEK 7bn

Issued November 2020

CICERO

Joint Lead Manager

Financing according to

Green Bond Framework

Due 2027

EUR 750m

Issued October 2020

ISS ESG

Joint Lead Manager

• Included in Dow Jones Sustainability Index

(World and Europe)

• Highest rating among Swedish large banks in

Fair Finance Guides policy review

• Maintains score B in the yearly CDP 2020

Swedbanks Sustainability Report will be published February 25th

• During the quarter Swedbank Robur signed two new initiatives:• Net Zero Assets Managers initiatives – the purpose of the initiative is for asset

managers to undertake and work to reduce the carbon dioxide development in its

investment portfolios.

• Finance for Biodiversity – that involves cooperation around and a commitment to

decrease negative impact on biodiversity, focusing on target setting and reporting.

Proactive initiatives

© Swedbank

Public

Information class

Focus areas in 2021A strategic direction on the basis of sustainability

28

Drive further integration of

sustainability –

in everything we do every day

A financially sound and

sustainable society

Focus on fundamentals – building robust

sustainable finance compliance and strengthen

sustainability governance and transparency

Focus on customer value creation – empower

customers to make sustainable choices supporting

the transformation

Measure environmental and social impact and

performance – develop and set long-term and

science based climate targets (SBT)

© Swedbank

Public

Information class

0

100

200

300

400

500

600

Liquidity reserve

Level 1 assets

...of which cash andbalances with centralbanks

Level 2 assets

Strong liquidity position

Q4 2020 29

Strong funding profile

SEKbn

Liquidity reserve

Stable liquidity key ratios

SEKbn

Net Stable Funding Ratio and Liquidity coverage ratio, %Outstanding volumes

• Solid liquidity buffer – prefunded

for more than 12 months

(survival horizon)

• Term funding, issued SEK 78bn

2020 – FY 2021 maturities of

SEK 124bn

• Significant over-collateralisation

in the cover pool (76.2%)

• No reliance on short-term

funding - central bank holdings in

excess of short-term funding

• Stable deposit base

• LCR 174% and NSFR (CRD2)

125%

Liquidity

and

funding

0

200

400

600

800

1 000

1 200

1 400

Coveredbonds

Seniorunsecured

SNP Structuredretail bonds

Short-termprogrammes

Deposits

Q3 2020 Q4 2020

100

110

120

130

140

150

160

170

180

190

100

105

110

115

120

125

130

Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

NSFR, CRD2 (LHS) LCR (RHS)

© Swedbank

Public

Information class

Real-estate price performance – Sweden, 12 month

Q4 2020 30

Single-family homes1 Tenant-owner rights2 Combined3

12M Δ 12M Δ 12M Δ

Jan 20 6% 6% 6%

Feb 20 7% 7% 7%

Mar 20 6% 6% 6%

Apr 20 4% 2% 3%

May 20 6% 2% 5%

Jun 20 7% 3% 6%

Jul 20 11% 4% 8%

Aug 20 11% 4% 8%

Sep 20 11% 5% 9%

Oct 20 13% 6% 10%

Nov 20 13% 6% 10%

Dec 20 16% 5% 12%

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

Swedish

housing

and

mortgage

market

House price index, Sweden2005=100

0

50

100

150

200

250

300

350

05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Total

Tenant-owner rights (apartments)

Single-family houses