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1
Birgitte Bonnesen (CEO), Anders Karlsson
(CFO), Helo Meigas (CRO)
Swedbank’s third quarter 2018 results
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2
Swedbank in the Baltics
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Swedbank’s customers in the Baltics Market leader with a strong focus on domestic customers
3
Source: Baltic central banks, Swedbank Fact book Q3 2018
Private customers 3.2m
Corporate customers 283 000
TOTAL BALTICS
(p) private (c) corporate
Domestic payment transactions (Estonia, Latvia, Lithuania)
ESTONIA
Private customers 0.9m
Corporate customers 132 000
Loans
(p)
Loans
(c)
Deposits
(p)
Deposits
(c)
Payments
46% 37% 55% 43% 59%
LATVIA
Private customers 0.9m
Corporate customers 83 000 31% 18% 34% 19% 50%
Loans
(p)
Loans
(c)
Deposits
(p)
Deposits
(c)
Payments
LITHUANIA
Private customers 1.5m
Corporate customers 68 000 34% 19% 40% 26% 49%
Loans
(p)
Loans
(c)
Deposits
(p)
Deposits
(c)
Payments
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The low number of Swedbank non-resident customers are mainly EU private individuals
4
NON-RESIDENT SHARE OF TOTAL SWEDBANK
BALTIC BANKING CUSTOMERS
NON-RESIDENT SHARE OF TOTAL SWEDBANK
ESTONIAN CUSTOMERS
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jun18
Non-residents Corporate Non-residents
Corporate Non-residents outside EU Private Non-residents inside EU
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Non-residents Corporate Non-residents
Corporate Non-residents outside EU Private Non-residents inside EU
Very low share
of corporates
outside EU
Source: Swedbank
Total non-resident Total non-resident
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Swedbank’s payments market share shows a business model built on a domestic customer base
5
MARKET SHARES BASED ON TOTAL ASSETS AND VOLUME OF OUTGOING CROSS BORDER PAYMENTS, ESTONIA, %
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013 2014 2015
Market share by balance sheet size
Market share by outgoing cross border payments
DANSKE BANK VERSOBANK SEB
SWEDBANK NORDEA OTHER BANKS
Source: Bank of Estonia
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Swedbank’s cross border payments have grown in line with economy
6
OUTGOING CROSS BORDER PAYMENTS, ESTONIA
EURbn
Source: Bank of Estonia
Market dynamics
influenced by non-resident
business models
Market, EURbn Swedbank, EURbn
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We have continuously worked with anti-money laundering
7
Systematic approach to assure detection of suspicious transactions
and business activities
Systematic approach to KYC and on-boarding process
Swedbank’s policy is to serve customers with clear local business ties
Work closely with authorities, regulators as well as with correspondent
banks
Zero tolerance AML in all markets where we operate
Throughout the years reacted on all signals, from our own channels as
well as from external parties.
Same governance, systems and processes to detect money
laundering on all our markets
No ongoing investigations from any of our regulators concerning
AML-practices
Swedbank acts
forcefully on all
signals
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8
Swedbank third quarter financial results
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Group financial highlights, Q3 2018
TOTAL
EXPENSES
CREDIT
IMPAIRMENTS
KEY RATIOS
TOTAL
INCOME
9
SEK 117m
SEK 11.2bn Continued loan volume growth
Strong net commission income from
cards and asset management
Underlying expenses in line
with FY 2018 guidance
Solid asset quality
24.3% 0.03% 0.36
C/I ratio
16.9%
ROE
CET1 capital ratio
Credit impairment ratio
Q3 2018
110%
NSFR
SEK 4.0bn
0
4
8
12
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Total income, SEKbn
0
2
4
6
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Total expenses, SEKbn
-200
-100
0
100
200
300
400
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Credit impairments, SEKm
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Group result
Higher net interest income
Q3 2018 10
• Continued loan volume growth
• Stable margins
• Lower resolution fund fee
• One more day in the quarter
• Less favorable USD funding market
NII, SEKm
84 4336 5
-9 -1076 275
6 327
Q2 2018 Loanvolumes
Margins Resolutionfund anddeposit
guaranteefee
Day count FX Treasury &Other
Q3 2018
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Group result
Strong net commission income
• Seasonally higher cards income
• Asset management income
supported by positive asset value
development and mutual fund
inflows
Q3 2018 11
NCI, SEKm
4554
-2
33 236
3 336
Q2 2018 Cards &Payments
Assetmanagement
Lending &guarantees
Other Q3 2018
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Group result
Stable underlying revenue generation
Q3 2018 12
NGL, SEKm
Other Income, SEKm
• Stable client trading activity
• Positive valuation effect on
derivatives
• Negative impact from higher
covered bond buy-back volumes
• Negative impact from widening
credit and basis swap spreads
723
959806
976
1 026677
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Other income UC, one-off
1 653 • Positive impact from changed
valuation of Visa shares
• Continued good performance in
recurring revenue items –
insurance, Entercard, savings
banks/associates
525
356
559
635
488
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
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Group result
Underlying expenses in line with FY2018 guidance
Q3 2018 Bar chart proportions for illustration purposes only 13
Total Expenses FY2018 guidance, SEK
FX impact YTD 2018 vs YTD 2017, SEK
+150m
+300m
-200m
Market-dependent headwinds
Restructuring charge
release
FX
Pension cost
Main currencies breakdown in cost base
76%
3%
19%
NOK
EUR
SEK
Original expense guidance of below SEK 17bn 2% USD
Income:
469m
Expenses:
189m
FX
sensitivity
comes
mainly from
EUR
Income benefit
from FX
outweighs
impact on
expenses
SEK has depreciated ~10% YoY
95
100
105
110
115
Oct2017
Nov2017
Dec2017
Jan2018
Feb2018
Mar2018
Apr2018
May2018
Jun2018
Jul2018
Aug2018
Sep2018
Oct2018
USD EUR NOK Trend (EUR)
Index 100= Oct 2, 2017
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Group result
Strong core revenues
SEKm Q3 18 Q2 18 ▲QoQ
Net interest income 6 326 6 273 53
Net commission income 3 336 3 236 100
Net gains and losses 488 635 -147
Other income 1 026 1 653 -627
Total income 11 176 11 797 -621
Total expenses 3 998 4 262 -264
Profit before impairments 7 178 7 535 -357
Credit impairments 117 -135 252
Other impairments 282 -282
Tax 1 530 1 369 161
Net profit 5 525 6 014 -489
Q3 2018 14
Ratios Q3 18 Q2 18
ROE, % 16.9 19.2
C/I ratio 0.36 0.36
CET1 capital ratio, % 24.3 23.6
• Continued mortgage and corporate
loan volume growth
• Strong net commission income
supported by solid macroeconomic
fundamentals
• Lower Group Treasury income
• Expenses in line with FY guidance
• Solid asset quality
• One-off income of SEK 677m in Q2
(UC)
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Capital
Strong capitalisation – no excess capital
Q3 2018 15
• CET1 capital increased by SEK
1.4bn
– Positive effect from net profit of
SEK 1.0bn excl. dividend
– Positive IAS19 pension
valuation effect of SEK 0.2bn
• REA decreased by SEK 7bn
• Buffer of around 280bps above
minimum requirements
CET1 capital ratio, %
23.9% 24.6% 24.8%23.6% 24.3%
21.5%
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 CET1 capitalratio
requirement
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Capital
Decreased Risk Exposure Amount (REA)
Q3 2018 16
REA, SEKbn
-7.3
0.2 0.1
434.5
427.5
Q2 2018 Credit risk Market risk CVA risk Q3 2018
• REA decreased by SEK 7bn
– Positive collateral valuation
effect
– Positive FX effect
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Group
Solid asset quality
Credit impairments, SEKm Q3 18 Q2 18 ▲QoQ
Swedish Banking 71 84
Baltic Banking 8 -87
Large Corporates & Institutions 37 -126
Swedbank Group 117 -135
Q3 2018 17
Ratios Q3 18 Q2 18
Credit impairment ratio, % 0.03 -0.03
Share of Stage 3 loans, gross % 0.67 0.67
Total credit impairment provision
ratio, % 0.33 0.33
• Resilient asset quality in all
business segments
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Appendix
1
8
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Group results
Strong core revenues
SEKm Q3 18 Q2 18 ▲QoQ Q3 17 ▲YoY
Net interest income 6 326 6 273 53 6 208 118
Net commission income 3 336 3 236 100 2 962 374
Net gains and losses 488 635 -147 525 -37
Other income 1 026 1 653 -627 723 303
Total income 11 176 11 797 -621 10 418 758
Total expenses 3 998 4 262 -264 3 883 115
Profit before impairments 7 178 7 535 -357 6 535 643
Credit impairments 117 -135 252 235 -118
Other impairments 282 -282 107 -107
Tax 1 530 1 369 161 1 444 86
Net profit 5 525 6 014 -489 4 743 782
Q3 2018 19
Ratios Q3 18 Q2 18 Q3 17
ROE, % 16.9 19.2 15.0
C/I ratio 0.36 0.36 0.37
CET1 capital ratio, % 24.3 23.6 23.9
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Continued volume growth
Q3 2018 20
Loans
+11bn
Swedish
mortgage loans
Baltic Banking
+0bn +4bn
Corporate excl.
Baltic Banking
Deposits
+2bn
Private Corporate
Of which FX -2
+8bn -6bn
*
*excl. Group functions and other (Group Treasury)
+8bn
Of which FX -2 Of which FX -1
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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 18bn
Q3 2018 21
Real estate lending, net loans in Sweden, SEKbn
• Private mortgages: SEK 788bn, average
LTV 56%
• Tenant owner associations (“TOA”): SEK
109bn
SEK 97bn existing TOA, average LTV 39%
SEK 12bn TOA under construction
• Property management: SEK 197bn
SEK 69bn in residential property management
(rental apartment properties)
SEK 128bn in other property management
• Construction SEK 17bn
SEK 6bn residential property development
SEK 11bn infrastructure, groundwork, craftsmen
17
128
69
109
788
Total real estateportfolio
Of which:Residential property
development
18
Swedish
housing
and
mortgage
market
1 111
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Residential property developers - low exposure
• Total loan portfolio of SEK 18bn, mainly to the larger listed
construction firms, with which Swedbank has long-term relations
• SEK 12bn of the loans are related to tenant-owner rights projects
• SEK 6bn of the loans are related to construction activities
• 90% of these projects will be finalised in 2018 and 2019
1) As of 30 September 2018
2) Share of exposure 22
SEK
10bn
Tenant-owner rights related construction loans1) – the risk is highly mitigated
Swedish
housing
and
mortgage
market
57%
10%
4%
24%
5%
By geography1)
Stockholm region Gothenburg region
Malmö region >50 000 inhabitants
<50 000 inhabitants
52% 38%
10%
Finalisation year2)
2018 2019 2020-0
10
20
30
40
50
60
70
80
90
100
2018 2019 2020-
Average % pre-sold by finalisation year 2)
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0
10
20
30
0
50
100
150
200
2013 2014 2015 2016 2017 Q3 2018
NSFR LCR* CET1 ratio, CRDIV (RHS)
-10
0
10
20
30
40
Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Q3 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 85% of total loans originated in Sweden - Swedish mortgages account for
around 60% of total loans
– 90% of total loans are collateralised (77.1% real estate and 12.9% 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 280bps
• Conservative funding and liquidity position – survival horizon longer than 12 months
assuming closed funding markets, NSFR 110% and LCR 148%*
• Baltic operations self-funded – loan-to-deposit ratio < 100%
Q3 2018 23
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)
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Swedbank – strong and stable earnings capacity
Q3 2018 24
Profit before impairments, SEKbn
This is
Swedbank
• 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
0
2
4
6
8
10
Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Q3 18
Disposal, one-off
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30
35
40
45
50
55
60
2012 2013 2014 2015 2016 2017
12
14
16
18
20
2012 2013 2014 2015 2016 2017 2018Cap
Acquisition, one-off
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
Q3 2018 25
Total expenses, SEKbn
C/I ratio, %
This is
Swedbank
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Focus on sustainable business
26
Swedbank Robur’s new sustainability equity fund, Global Impact, invests in companies
that through their products, services and activities, contribute to reaching the UN’s
SDGs. The fund allows our customers to earn capital returns while contributing to a
better, more sustainable world. The fund was among the 10 most popular funds in the
quarter.
2011 2012 2013 2014 2015 2016 2017
Green mortgage launch
To encourage a sustainable choice of housing Swedbank
launched the “Green mortgage loan” for private customers.
Swedbank’s ambition is to offer and constantly develop products
and services that help both private and corporate customers to
make long-term sustainable choices.
Dow Jones
Sustainability
Index
Swedbank Robur launches unique SDG equity fund
Swedbank is included in The Sustainability Yearbook 2018
The
Sustainability
Yearbook
Green
mortgage
Stronger Environmental Management System (EMS)
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
Landmark green bond investment
The World Bank has issued green bonds to finance water treatment projects and
projects to conserve the marine environment. Swedbank Robur has acted as key
investor and invested SEK 550m in the transaction.
Swedbank’s first Green Bond Impact Report released
In accordance with Swedbank’s Green Bond Framework established last year the Green
Bond Impact Report for 2017 has now been released. It shows that resulting investment
in eligible green assets reduced CO2 emissions by 457 309 tonnes (annualised).
Top rank for gender equality
Swedbank top ranked in Allbright’s annual review of gender equality in listed
companies.
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Swedbank creates value
27
Dividend per share 75% payout ratio for 6th year in a row
SEK 13.00
Return on Equity >15% target
17.0% (YTD)
Common Equity Tier 1 ratio One of the highest among European banks
24.3%
Q3 2018
Strategy
0
2
4
6
8
10
12
14
0
5
10
15
20
25
30
2013 2014 2015 2016 2017 YTD 2018
SEK%
Return on equity (LHS) CET1 capital ratio (LHS)
Dividend per share (RHS)
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0
100
200
300
400
500
600
700
800
0 20 40 60 80 1001201401601802002202402602803003203403650
10
20
30
40
50
60
70
80
90
100Covered bonds Senior unsecured debt
Planned, covered bonds Planned, senior unsecured debt
Tier 2
Conservative funding position
Q3 2018 28
• LCR 148% (EU 2015/61)
• NSFR 110% (Basel committee)
• Issued around SEK 104bn YTD Q3 2018 (in addition, around SEK 8bn in Tier 2)
• Initial plan to issue around SEK 145bn in 2018 has been revised down due to deposit inflow
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
Q3 2018 29
Long-term funding maturity profile, by funding source
SEKbn
Long-term funding maturity profile, by currency
Liquidity
and
funding
SEKbn
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0
50
100
150
200
250
300
350
05 06 07 08 09 10 11 12 13 14 15 16 17 18
Total
Tenant-owner rights (apartments)
Single-family houses
Real-estate price performance – Sweden, 12 month
Q3 2018 30
Single-family homes1 Tenant-owner rights2 Combined3
12M Δ 12M Δ 12M Δ
Oct 17 4% 1% 3%
Nov 17 1% -3% 0%
Dec 17 0% -6% -2%
Jan 18 0% -6% -2%
Feb 18 -1% -8% -4%
Mar 18 -2% -9% -4%
Apr 18 -2 -7 -4
May 18 -2 -7 -4
Jun 18 -2 -7 -4
Jul 18 -3 -7 -5
Aug 18 -3 -7 -5
Sep 18 -3 -5 -4
Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE (apartments), 3 HOXSWE
House price index, Sweden
2005=100
Swedish
housing
and
mortgage
market