Morgan Stanley European Banks & Financials Conference

Mr Jan Lidén
CEO
London, 3 April 2008
Strong position for profitability and growth
Sweden Baltics Ukraine and Russia

Swedbank is the leading bank in
Sweden. Profitability is high and
stable and the bank is
consolidating its market shares in
important segments in both the
private and corporate sectors.
The Baltic economies are
experiencing strong economic
growth that is expected to remain
for many years. As the largest
bank in the region, growing with
the market ensures attractive
earnings growth.
Swedbank has a small but
growing presence in Ukraine and
Russia. In the long term, a
significant share of Swedbank’s
growth will be generated in these
markets.

Growth and Future growth and

Stable base
experience profitability

Share of profit Share of profit Share of profit

2007: 66% 2007: 32% 2007: 2%

Share of lending Share of lending Share of lending

2007: 80% 2007: 16% 2007: 2%

© Swedbank 2
Growing number of home markets

2003 2008 2012

Business is conducted through decentralized decision making,

but supported by common methodology and processes
© Swedbank 3
Strong profit development
SEKm SEKm
17,000 17,000
15,000 15,000
13,000 13,000
11,000 11,000
9,000 9,000
7,000 7,000
5,000 5,000
3,000 3,000
1,000 1,000
-1,000 -1,000
2000 2001 2002 2003 2004 2005 2006 2007

Profit before loan losses Capital gains EnterCard and KIAB *Loan losses, net = write-offs
Loan losses, net* Operating profit (excl. capital gains) + provisions – recoveries
+ change in property taken over

© Swedbank 4
Strategic priorities for the coming year

Efficiency Growth

© Swedbank 5
Strategic priorities for the coming year – Efficiency

Broad client base and large volumes together with efficient processes will drive
operational efficiency

Sweden The Baltic region Ukraine

• Structural measures • Improve cross-border • HR management
(operational and capabilities
• Competence build-
branch structure) • Productivity - up and growth
measurement and
• Channel management
continuous
management improvement scheme • Process
• Cash handling • Employee retention management
• IT management • IT systems
development

© Swedbank 6
Strategic priorities for the coming year – Growth

From a strong position in several markets there is an excellent organic growth

opportunity for Swedbank in many areas – with some differences in regional focus

Sweden The Baltic region Ukraine

• Private banking and • Leverage on pan- • Capture growth
wealth management Baltic position within • Grow distribution
• Metropolitan areas corporate sector network – ATMs,
• Corporate market • Broaden client branches and
• New initiatives to offerings agency network
come – life and • Investment • Broader product
pension, etc management range
growth

© Swedbank 7
Swedbank Markets – Objectives
Swedbank Market’s profit to Swedbank’s shareholders
SEKm

• Swedbank Markets shall be a 1,200

leading multi-domestic player in 1,000

the region with the competitive 800

advantage of serving our 600

customers with access to/from
400
the CEE region.
200
• Overall priority is to further
increase cross-border capital 0
2003 2004 2005 2006 2007
markets business in the region. Swedbank Markets excluding First Securities

First Securities

In 2007 Swedbank Markets delivered a record profit

© Swedbank 8
Swedbank Russia – Objectives

• Long-term vision of a universal bank in Russia intact

– but a relatively slow pace during 2008
• Building robust administrative routines
• Growing corporate business
• Open a few new retail branches during 2008
– retail products development
• Implementation of new IT system
• Risk management improvement

In 2007 Swedbank Russia faced significant challenges but

still increased lending and profits
© Swedbank 9
Swedbank funding structure
Lending to the public – SEK 1,103bn

Swedbank Group Swedbank

excl. Swedbank 49% 51% Mortgage
Mortgage SEK 542bn SEK 561bn

Distribution of net funding need

Swedbank Treasury (excl. Swedbank Mortgage) Swedbank Mortgage

Funding Equity
• Large deposits 8% 5%
Deposits Swedbank Mortgage
Equity 84% Funding constitutes a larger part of
• Liquidity reserves
8% 95% Swedbank Group’s balance
• Net lender in the interbank market sheet compared to other
• Liquidity limits – conservative view financial institutions

© Swedbank 10
Swedbank Mortgage – credit risk
31 Dec
700
Municipalities
Commercial 3% (4) Agriculture 600
buildings 6% (6)
1% (1) 500

400
Multi-family housing

SEKm
incl. c ondominium 300
associations
16% (17) 200

100
Single-family homes
Individual 61% (61) 0
condominiums
13% (11) -100
2000 2001 2002 2003 2004 2005 2006 2007

Credit losses
= 90% Residential loans -net recoveries during 2007

Net
60%
3,000

50% 2,500

40% 2,000

SEKm
30% 1,500

1,000
20%

500
10%

0
0% 2000 2001 2002 2003 2004 2005 2006 2007
<30% 30-60% 60-75% 75-85% >85%
Distribution of loan to value

Average LTV of 44% Impaired, restructured and past due loans

© Swedbank
“80% percent of the portfolio has an LTV of 50% or lower” – at historically low levels 11
Converting to covered bonds, Q2 2008

• Possibility to meet a broader investor base

• Larger investor base ensures even more stable liquidity
• AAA rating – funding at lower cost
• Increased liquidity reserve through Swedbank’s possibility
to pledge subsidiary covered bonds in the Swedish
Central Bank
• Funding strategy to prolong maturity structure with
covered bonds

© Swedbank 12
Summary

• Swedbank offers a strong and stable banking operation

with high profitability across several geographical areas
• Swedbank has a solid foundation that offers very good
organic growth opportunities
• Focus on efficiency will secure continued profitable growth
for the Group
• Stable funding structure

Swedbank - Positioned for profitability and growth

© Swedbank 13