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© Swedbank
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Information class
1
Swedbank Green Bond presentation
March 2018
© Swedbank
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Information class
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. Sustainability within Swedbank 5
2. Swedbank’s Green bond framework 11
3. Targeted inaugural Green Bond transaction 19
Appendix
I. Sustainability and green assets 25
II. Swedbank overview and financial highlights 31
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
Dec 2017 4
■ ROE: 14.4% (15.0%)
■ Cost/income ratio: 0.42 (0.37)
■ CET1 capital ratio: 24.6% (23.9%) – with requirements of 21.9% (fully loaded CRD IV)
■ Leverage ratio: 5.2% (4.7%)
■ Credit impairment ratio: 0.08% (0.06%)
■ Share of impaired loans: 0.55% (0.55%)
■ Total provision ratio for impaired loans: 45% (45%)
■ Liquidity and funding: LCR: 173%, NSFR: 110%
■ Credit ratings: AA-(S)/AA-(S)/Aa3(S) from S&P/Fitch/Moody’s
Swedbank Q4 2017 (Q3 2017) – Robust performance!
Strong financial position Top 10 shareholders
Sweden
Estonia
Latvia
Lithuania
Our four
home
markets
*According to EBA stress test 2016
1. Sparbanksgruppen, 10.3%
2. Folksam, 7.0%
3. AMF, 5.5%
4. Alecta, 4.5%
5. Swedbank Robur, 4.1%
6. Sparbanksstiftelser, 3.3%
7. BlackRock, 2.5%
8. Vanguard, 2.4%
9. Norges Bank, 2.2%
10. SEB Fonder, 1.7%
Swedish owners, 59.2%
Int’l owners, 40.8%
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1. Sustainability within Swedbank
5
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Swedbank’s sustainability journey
March 2018
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2003
2016
2015
2014
2013
2012
2011
2010
• Environmental Management System ISO 14001 certified (first listed Nordic bank to be certified)
• Swedbank Environmental and Sustainability training awarded best e-learning in Swedish Learning Awards
• First Nordic bank to establish a group-wide ban on financial services to production of nuclear weapon and illegal weapons
• Group-wide Human Rights Risk Assessment carried out
• Group-wide sustainability e-learning developed and made mandatory
• Establishment of a group-wide Climate strategy including a group-wide exclusion of companies producing coal to
more than 30% of its turnover
• Development of group-wide sector guidelines for sustainability dialogues and sustainability assessment in investments,
lending and procurement
• Establishment of Swedbank sustainability week in order to promote social, environmental and economic sustainability
awareness
• Headquarters in Stockholm certified in accordance with EU Green Building and Miljöbyggnad SILVER
• Non-financial information integrated in the Annual Report
• Greenhouse gas emission reduction of 51% since 2010
• First group-wide sustainability report in accordance with GRI G4
• Establishment of a group-wide Swedbank’s Business Ethics council, replaced former Ethics Committee
2017 • Swedbank Green Bond Framework
1820 • Sweden’s first savings bank was started with the purpose to combat poverty
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Sustainability is core for Swedbank Our vision, strategy and goals
• Sustainability is core for Swedbank.
• We integrate sustainability considerations in our business
decisions, operations and business development.
• We take lead for systemic change and bring innovative
solutions that inspire people and businesses to make
sustainable choices.
March 2018
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Promote a sound and sustainable
economy by strengthening the bank’s
and our customers’ long-term
competitiveness.
Financial sustainability
Contribute to society’s development
through all our businesses by actively
promoting human rights, fair working
conditions, diversity and gender equality.
We are engaged in social challenges in
the areas of education, employment and
integration.
Social sustainability
Contribute to sustainable use of earth’s
finite resources and lower greenhouse
gas emissions through all our
businesses. Climate change and
resource efficiency issues are integrated
in our business decisions.
Environmental sustainability
We enable
people, businesses
and society to grow.
Open Simple Caring
Promoting a sound and sustainable financial
situation for the many households and businesses.
Apply Swedbank’s Code of Conduct,
Values and Culture as a starting point in
decision-making and how we behave.
Ethical sustainability
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Sustainability governance
March 2018
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Commitments Frameworks &
Guidelines Governance
• UN Global Compact
• UN Environmental Programme for the
Financial Sector
• UN Framework on Business and
Human Rights
• Financial Coalition against
Commercial Sexual Exploitation of
Children
• UN Principles for Responsible
Investments
• Montreal Carbon Pledge
• Global Investment Performance
Standards
• Policies
– Sustainability Policy
– Equality and diversity
– Credit policy
– Policy on Human Rights
– Environmental Policy
– Anti-corruption Policy
– AML
– CTF and KYC Declaration
– Tax Policy
• Position statements
– Paper Defense Equipment
– Statement Climate Change
– Exclusion list of companies that
Swedbank Group does not
finance or invest in
• Code of Conduct
• Sector Guidelines
• Board of directors are ultimately
responsible for governance of
Swedbank’s sustainability work
• CEO decides on the Group’s position
statements
• Swedbank’s Business Ethics Council
addresses issues where business
ethics and sustainability are critical
factors in business decisions
• ISO 14001 compliant environmental
management system
• Strategy and goals
Reporting
• Annual and Sustainability Report
• Climate review report
• Climate footprint funds
• Responsible investments
• Green Bond Impact Report
• International commitments:
− UN Global Compact
− UN Environment Programme Finance
Initiative (UNEPFI)
− UN Guiding Principles
− UN Principles for Responsible
Investment (UNPRI)
− ICC Business Charter for Sustainable
Development
− Montreal Carbon Pledge
− Global Investment Performance
Standards
• National commitments:
− Nätverket för Hållbart Näringsliv (NMC)
− Finanskoalitionen mot barnsexhandel
• Policies
– Sustainability
– Responsible investments
– Credit
– Anti-corruption
– Environmental
– Anti-money laundering and counter
terrorist financing
– Financial reporting, transparency and
tax
– Human Rights
– Diversity and gender equality
– Health and work
• Position statements
– Statement Defense Equipment
– Statement Climate Change
– Exclusion list of companies
• Code of Conduct
• Supplier Code of Conduct
• Sector Guidelines
• Board - accountable for governing
sustainability aspects in Swedbank
business through policies
• CEO - accountable for the Group’s
position statements
• Group Sustainability - supports,
governs and manages through
monitoring, follow-up and report across
the Group. Accountable for Sector
Guidelines
• Swedbank’s Business Ethics
Committee - guiding and put
recommendations in decisions where
sustainability and business ethics are
critical aspects
• Green Bond Committee – govern green
asset inclusion towards asset register
(chaired by Head of Group Sustainability)
• Group Savings Sustainability Forum –
proposing guidelines, targets and provide
sustainability advice in GS prod offerings
• ISO14001:2015 - certified EMS
• Sustainability strategy with targets
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The UN Sustainable Development Goals We put our focus on three core impact areas and two additional themes
WE ENABLE PEOPLE,
BUSINESSES AND
SOCIETY TO GROW
OPEN
SIMPLE
CARING
TR
AN
SP
AR
EN
CY
• Customers
• Society
• Customers
• Employees
• Society
• Suppliers
• Customers
• Society
SUSTAINABLE WORKFORCE
LOW-CARBON SOCIETY
• Employees
• Society
• Customers
• Employees
• Society
• Owners
• Suppliers
A BANK FOR
THE MANY…
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Swedbank´s current green position External recognition of our sustainability approach
March 2018 10
2011 2012 2013 2014 2015 2016 2017
Swedbank gradually increases the scoring in DJSI.
Swedbank is classified as Leader by Sustainalytics.
ESG Rating AA (AAA-CCC).
Sustainable Brand Index B2B 2017 Industry winner.
• Dow Jones Sustainability Indices
• Sustainalytics
• MSCI
• Sustainable Brand Index
Included in DJSI
Sustainability
Yearbook 2018
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2. Swedbank Green Bond Framework
1
1
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Swedbank Green Bond Framework In accordance with Green Bond Principles
• Renewable energy
• Energy efficiency
• Clean transportation Use of Proceeds
• Sustainability Risk Assessment in credit process
• Project selection and Green Asset Application
• Green bond sustainability analysis and recommendation
• Eligible asset approval in Green Bond Committee
Green Asset Selection Process
• Green Asset Register
• Tracking of green bond proceeds
Management of Proceeds
• Use of Proceeds Reporting
• Impact Reporting Reporting
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• Pollution prevention and control
• Sustainable management of living natural resources
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Use of Proceeds
March 2018
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Included
assets 2018
Category SDG Criteria
Renewable Energy SDG 7
SDG13
• Wind energy
• Solar energy
• Small scale hydro energy and refurbishment
Energy Efficiency SDG7
SDG11
SDG13
• Green Buildings
• Energy efficiency
Sustainable Management of Living Natural
Resources SDG15 • Sustainable forestry
• Sustainable agriculture
Pollution Prevention and Control SDG11 • Waste management
Clean Transportation SDG9
SDG11
SDG13
• Public passenger transport
• Low carbon vehicles
• Transportation solutions, systems and supporting infrastructure
1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
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Green Asset Selection Process
March 2018
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Ineligible
assets Swedbank Green
Bond Framework
and Eligible Sector
Criteria
Policy Framework,
Sector Guidelines
and Exclusion List
Ineligible
assets
Ineligible
assets
Client On-Boarding KYC
Credit Risk and Sustainability Risk Analysis
Screening for Eligible Assets
Green Bond Sustainability Analysis
Green Bond Committee
Eligible
Assets
1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
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Management of Proceeds
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1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
• The Green Asset Register
– comprises all approved eligible assets
– monitored and reviewed at least annually
– ensure all proceeds from Green Bond issuances are
allocated to a corresponding amount of Green Assets
– ensure Green Assets not are nominated to other bonds
during the term of the specific bond
• Turnover in Green Assets
– Green Assets are primarily replaced by other Green Assets
meeting the criteria of the Swedbank Green Bond
Framework
Green Bond
Proceeds
Green Asset
Register
Green Assets
Reserve
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Reporting
Use of Proceeds Reporting
The Green Bond proceeds published at least
annually on the Swedbank Green Bond website
• Total amount of Green Bonds issued
• Allocation of proceeds within each Green
Bond’s Asset Category
• Total amount of unused proceeds
• Share of proceeds used for financing/re-
financing
Impact Reporting
The environmental and climate impact published
annually in an Impact Report
• Details the environmental and climate impacts of
the financed portfolios
• Published until the maturity of each Green Bond
• Comprise relevant KPIs outlined in the table on
impact indicators
March 2018
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1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
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Impact indicators
March 2018
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Green Bond Principles category Swedbank category SDG Quantitative impact indicators
Renewable Energy Wind, Solar and Hydro energy SDG7
SDG13 Installed capacity added (MW)
Expected annual generation (MWh)
Estimated annual GHG emissions avoided (tCO2e)
Energy Efficiency
Energy storage, Smart grids, District heating
or cooling
SDG7
SDG11
SDG13
Storage capacity (MW)
Distribution capacity (MW)
Green Buildings Amount of energy saved (MW)
Estimated annual GHG emissions reduced or avoided (tCO2e)
Sustainable Management of Living Natural
Resources
Sustainable forestry and agriculture SDG15 Land area certified (hectare)
Cropland under organic agriculture practices (hectare)
Pollution Prevention and Control Waste management SDG11 Recycling (tons)
Production capacity (MW)
Clean Transportation Public passenger transport and low carbon
vehicles
SDG9 SDG11
SDG13 Passenger/public passenger transport (No)
Estimated annual GHG emissions reduced or avoided (tCO2e)
GHG emissions per kilometer (CO2e)
1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
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External review
Second opinion
• Second Opinion from DNV GL to confirm the
transparency and robustness of the
Swedbank Green Bond Framework.
• The Second Opinion is published on the
Swedbank Green Bond webpage.
Assurance
• An independent external auditor will be
requested to review the Eligible Green Asset
allocation, to provide limited assurance on the
allocation of proceeds conformity to the
Swedbank Green Bond Framework.
• The assurance report will be published on the
Swedbank Green Bond webpage.
March 2018
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3. Targeted inaugural Green Bond transaction
1
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Swedbank Green Bond Swedbank has the ambition to issue a Green Bond during 2018
March 2018 20
• Issuer: Swedbank AB
• Type: Senior unsecured note
• Currency: XXX
• Targeted volume: XXX
• Tenor: XXX
• Coupon: Fixed
Overview of targeted transaction
Swedbank intends to be a regular issuer in the Green Bond market
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Green Asset Register 2018 Portfolio distribution
Category Sub-category Green Asset Register
portfolio amount (mSEK)
Description of
underlying assets
Annual energy
generation (GWh)
Annual energy
saving (MWh)
Annual GHG emissions
avoided/reduced (tCO2e)
Renewable energy Wind 2 915,6 Wind farms 2 118 - 525 027
Green buildings Commercial and
Residential 5 505,4 Buildings* - 6 070 151
Total - 8 421 - 2 118 6 070 525 178
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* Buildings with at least; LEED “Gold”, BREEAM ”very good”, Miljöbyggnad ”silver” or Green Building
65%
35%
Distribution by category (SEK)
Green buildings
Renewable energy
Portfolio content:
• Swedish and Norwegian assets
• New and refinancing a selection of green assets of:
– Renewable energy
• Loans to finance wind energy power plants in Sweden and Norway
– Green buildings
• Residential mortgage loans for energy efficient buildings in Sweden
• Commercial real-estates loans for energy efficient buildings in Sweden
71%
1%
28%
Distribution by sub-category (SEK)
Commercial
Residential
Wind energy
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Impact reporting Wind energy
March 2018 22
Location: Norway
Wind farms: 171
Capacity: 1 809,45 GWh
Emissions avoided: 461 589 tCO2e
Total production
2 118 GWh/year
Total emissions avoided
525 027 tCO2e/year
525 027
331 857
193 170
0
100 000
200 000
300 000
400 000
500 000
600 000
Avoided emissions (tCO2e)
Total
Sweden
Norway
2118
1616
502
0
500
1000
1500
2000
2500
Annual renewable energyproduction (GWh)
Total
Sweden
Norway
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6 070
151
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Energy savings(MWh)
Avoided emissions(tCO2e)
Impact reporting Green Buildings
March 2018 23
Energy savings
6 070 MWh/year
Distribution of green buildings
Sweden: 25
Total emissions avoided
151 tCO2e/year
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Appendix
2
4
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I. Sustainability and Green assets
2
5
Liquidity
and
funding
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Social engagement is an important part of corporate identity
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Against bullying:
Internships internships for young people.
A Job at Last (Äntligen Jobb) - help
arrange internships for foreign-born
academics.
Financial literacy & education support private finance subject in
secondary schools
Publish Lyckoslanten, one of Sweden’s
biggest children’s magazines
Introduction to business life Företagsamhet), trains students in
entrepreneurship.
Junior Achievement initiative – encourage
entrepreneurial thinking
Introduction to business life I will be, an initiative introducing young
people to different professions in Lithuania.
Junior Achievement initiative – encourage
entrepreneurial thinking
Financial literacy & education Swedbank employees in the Baltics together with
social partners arrange lectures in economics and
finance for upper secondary students (1300
Support to teachers Through Mission Possible
we help students in Latvia to become
inspiring teachers and future leaders.
Local associations/communities
We engage in local community associations, focusing on initiatives that benefi
Portal for donations: Supporting I Love to Help portal for
donations in Estonia Collaboration with the Friends Foundation (Stiftelsen
Friends) to prevent bullying among children.
Supporting I Love to Help portal for
donations in Estonia.
Young Jobs (Unga Jobb) – helping to arrange
internships for young people.
A Job at Last (Äntligen Jobb) – helping to
arrange internships for foreign-born academics.
Back to school initiative, which encourages Estonians to
donate their time and knowledge as guest lecturers in schools.
Lectures in economics and finance for upper secondary
students arranged by Swedbank employees in the Baltics
together with social partners (1300 during 2016).
Young Economy (Ung Ekonomi) – supporting
private finance subject in secondary schools
Publishing Lyckoslanten, one of Sweden’s
biggest children’s magazines.
Through Mission Possible helping students in Latvia to become inspiring
teachers and future leaders.
Collaborating with Young Enterprise (Ung
Företagsamhet), training students in entrepreneurship.
Supporting Junior Achievement initiative to
encourage entrepreneurial thinking.
Who needs it, an initiative introducing young
people to different professions in Lithuania.
Prototron – a fund in Estonia, where young
entrepreneurs can apply for a grant to launch
innovative products they have developed.
Engaging in local community associations, focusing on initiatives that benefit young people.
Financial inclusion gage in local community associations,
focusing on initiatives that benefit young
people.
Offering prepaid cards, used to pay out financial
assistance and pensions to individuals without ID
numbers or bank accounts (e.g. asylum seekers).
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Use of Proceeds
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1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
Category SDG Criteria
Renewable Energy SDG 7
SDG13
• Wind energy
• Solar energy
• Small scale hydro energy or investments in existing larger hydro power plants for refurbishments without increasing the size of its impoundment facility
Energy Efficiency SDG7
SDG11
SDG13
• Buildings with an energy performance classification in the energy declaration issued by the Swedish National Board of Housing, Building and Planning (Sw. Boverket) of at least level B.
• Buildings which meet recognised environmental standards such as;
i. BREEAM or BREEAM-SE (minimum certification “very good”)
ii. LEED (minimum certification “gold”)
iii. Sweden Green Building Council Miljöbyggnad (minimum certification “silver”)
iv. Green Building
v. any equivalent certification as determined by Group Sustainability at Swedbank
• Property upgrade of existing commercial or residential buildings which results in an energy consumption of at least 25% below the average national energy consumption of an equivalent
building.
• Energy efficiency projects include infrastructure, technology and processes such as energy storage, smart grid solutions and district heating/cooling from renewable energy sources that
results in reduced energy losses of at least 25 per cent.
Sustainable Management of Living Natural Resources
SDG15 • Sustainable forestry defined as forestry certified by the Forest Stewardship Council (FSC) or the Programme for the Endorsement of Forest Certification (PEFC)
• Sustainable agriculture defined as certified organic farming in compliance with national and EU-legislation.
Pollution Prevention
and Control
SDG11 • Waste management such as recycling and waste to energy generation defined as biogas production of organic waste, non-recyclable municipal waste for incineration or forest biomass
from areas that have, or meet the requirements for, FSC or PEFC certification.
Clean Transportation SDG9
SDG11
SDG13
Clean transportation defined as public passenger transport and low carbon vehicle solutions, systems and charging/supporting infrastructure reducing air pollution and climate impact
including:
• Public passenger transport such as electric rail, metros, trams and electric or hybrid buses.
• Low carbon vehicles defined as electric, fuel cell and hybrid vehicles.
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Green Asset Selection Process Sustainability Analysis
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Review of; application,
environmental impact
assessment including
stakeholder engagement,
technical due diligence and
calculation of climate impact
Review of; application, energy
declaration/documentation,
certificates and calculation of
climate impact.
Green Bond Sustainability Analysis
TDD
Renewable energy Green buildings
Application EIA
Analysis
Evaluate eligibility against Green Bond
Framework
Energy
declaration Application Certificates
Analysis
Evaluate eligibility against Green Bond
Framework
Result and recommendation is sent to Green Bond Committee
Approval of eligible asset in Green Bond Committee
1. Use of Proceeds 2. Green Asset Selection
Process 3. Management of Proceeds 4. Reporting
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Green Bond Assets – ”pre-issuance impact report”
525 027
331 857
193 170
0
100 000
200 000
300 000
400 000
500 000
600 000
Avoided emissions(tCO2e)
Total
Sweden
Norway
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93
7
Distribution of building types (%)
Commercial
Residential
42
40
16
2
Distribution of Building Certificates (%)
Green building
Miljöbyggnad
BREEAM
LEED
6070
151
0
1000
2000
3000
4000
5000
6000
7000
Energy savings(MWh)
Avoidedemissions(tCO2e)
KPI Per Year Per 3 years Per 5 years
Energy savings (MWh) 6 070 18 210 30 350
Avoided emissions (tCO2e) 151 453 755
KPI Per Year Per 3 years Per 5 years
Energy production (GWh) 2 118 6 354 10 590
Avoided emissions (tCO2e) 525 027 1 575 081 2 625 135
Green Buildings Wind Energy
2118
1616
502
0
500
1000
1500
2000
2500
Annual renewableenergy production
(GWh)
Total
Sweden
Norway
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Green Bond Assurance – DNV-GL
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DNV GL has received numerous external recognitions and awards for our leadership in
non-financial assurance:
Corporate Register’s Credibility through assuranceaward
Best Verification Company EU ETS (2014)
Best Verification Company Kyoto Project Credits (JI & CDM, 2014)
Accredited verifier for Verified Carbon Standard and Gold Standard; accredited to American National
Standards Institute’s ISO Standards 14065/ 14064-3
The DNV approach:
Apply our technical expertise with access to over 16 000
specialists
Experienced in auditing, assurance, and certification
Rely on trusted standards and guidelines
Provide flexibility through partnership and dialogue with the
issuer
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II. Swedbank overview and financial highlights
3
1
This is
Swedbank
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Swedbank Low-risk, cost efficient and well capitalised
Note: Numbers for full year 2017
Source: Swedbank Fact book 4Q 2017 32
Large and diversified customer base Leading retail bank in our 4 home markets
7m PRIVATE CUSTOMERS
Solid capitalisation 270bps buffer to regulatory requirement
24.6%
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%
15.1%
Low risk Credit impairment ratio
0.08%
Market-leading cost efficiency Cost income ratio
39%
This is
Swedbank
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Market leading position in our home markets
33
This is
Swedbank Loans (private)* Loans (corporate)* Deposits (private) Deposits (corporate) Payments** Funds
* Excluding the Swedish National Debt Office and repurchase agreements** Bank Giro for Sweden, domestic payment transactions (Estonia, Latvia, Lithuania)
40%
60%
34%
66%
46%54% 55%
45%
31%
69%
32%
68%
59%
41%
50%50%
49%51%
21%
79%
36%
64%
18%
82%
37%
63%
18%
82%
17%
83%
23%
77%
44%56%
16%
84%
20%
80%
20%
80%
23%
77%Sweden
Estonia
Latvia
Lithuania
42%58%
42%58%
37%
63%
Swedbank Other
Source: Swedbank Fact book 4Q 2017
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Strong financial position
34
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
Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17
One-offs from disposals
-10
0
10
20
30
40
Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17
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 Target18
Acquisition of Sparbanken…
30
35
40
45
50
55
60
2012 2013 2014 2015 2016 2017
Source: Swedbank Fact book 4Q 2017
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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 35
• 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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Information class 36
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
© Swedbank
Public
Information class
Savings
Key priorities
37
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
© Swedbank
Public
Information class
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 38
• 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
© Swedbank
Public
Information class
2017 Strategic achievements
39
Launched in Sweden Already operating in the Baltics
Fully digital consumer lending
Strategic co-operation with Kepler Cheuvreux
Enhanced equity capabilities
Personal finance app for customers Mina Tjänster
Fintech partnership
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
© Swedbank
Public
Information class
Swedbank creates value
40
Dividend per share 75% payout ratio for 6th year in a row
SEK 13.00
Return on Equity >15% target
15.1% FY 2017
Common Equity Tier 1 ratio One of the highest among European banks
24.6%
Source: Swedbank Fact book 4Q 2017
Strategy
0
2
4
6
8
10
12
14
0
5
10
15
20
25
30
2012 2013 2014 2015 2016 2017
SEK%
Return on Equity (LHS) CET1 capital ratio (LHS)
Dividend per share (RHS)
*
* Dividend proposal (for the financial year of 2017) - to be decided by the Annual General Meeting in March 2018
© Swedbank
Public
Information class
Quarterly financial update
4
1
Quarterly
financial
update
© Swedbank
Public
Information class
Swedish Banking
Solid mortgage volume growth
SEKm Q4 17 Q3 17 ▲QoQ
Net interest income 3 861 3 812 49
Net commission income 1 952 1 859 93
Other income 625 443 182
Total income 6 438 6 114 324
Total expenses 2 309 2 204 105
Profit before impairments 4 129 3 910 219
Credit impairments 264 66 198
Dec 2017 42
• Net interest income
– Continued mortgage loan volume growth and
stable back book margins
• Net commission income
– Benign stock market development supported
asset management and brokerage income
– PayEx included for the full quarter
• Other income
– Higher contribution from Entercard and life
insurance
• Solid asset quality
Ratios Q4 17 Q3 17
ROE, % 21.2 21.6
C/I ratio 0.36 0.36
Volumes, SEKbn Q4 17 Q3 17 ▲QoQ
Loans 1 150 1 138 12
Deposits 525 519 6
Quarterly
financial
update
© Swedbank
Public
Information class
Baltic Banking
Record high profitability
SEKm Q4 17 Q3 17 ▲QoQ
Net interest income 1 116 1 060 56
Net commission income 711 565 146
Other income 226 218 8
Total income 2 053 1 843 210
Total expenses 737 647 90
Profit before impairments 1 316 1 196 120
Credit impairments -12 -26 14
Dec 2017 43
• Net interest income
– Lending to households continues to grow
– Stable margins
– Firm deposit growth
• Net commission income
– Benefited from annual performance fees
• Positive FX effects
• Stable asset quality Ratios Q4 17 Q3 17
ROE, % 20.8 18.2
C/I ratio 0.36 0.35
Volumes, SEKbn Q4 17 Q3 17 ▲QoQ
Loans 149 146 3
Deposits 185 172 13
Quarterly
financial
update
© Swedbank
Public
Information class
Large Corporates & Institutions
Result reflected mixed market dynamics
SEKm Q4 17 Q3 17 ▲QoQ
Net interest income 934 896 38
Net commission income 656 525 131
Net gains and losses 332 554 -222
Other income 42 32 10
Total income 1 964 2 007 -43
Total expenses 867 841 26
Profit before impairments 1 097 1 166 -69
Credit impairments 59 195 -136
Dec 2017 44
• Stable net interest income
• Net commission income
– PayEx contributed positively
– Positive stock market performance increased
asset management and custody income
– Annual covered bond market maker fees
• Net gains and losses
– Low FX and fixed income trading activity
– Negative valuation effects
• Lower credit impairments
Ratios Q4 17 Q3 17
ROE, % 14.2 13.0
C/I ratio 0.44 0.42
Volumes, SEKbn Q4 17 Q3 17 ▲QoQ
Loans 203 204 -1
Deposits 128 129 -1
Quarterly
financial
update
© Swedbank
Public
Information class
Group results
Robust performance
SEKm Q4 17 Q3 17 ▲QoQ
Net interest income 6 326 6 208 118
Net commission income 3 291 2 917 374
Net gains and losses 356 525 -169
Other income 1 003 768 235
Total income 10 976 10 418 558
Total expenses 4 563 3 883 680
Profit before impairments 6 413 6 535 -122
Credit impairments 311 235 76
Other impairments 86 107 -21
Tax 1 277 1 444 -167
Net profit 4 737 4 743 -6
Dec 2017 45
Ratios Q4 17 Q3 17
ROE, % 14.4 15.0
C/I ratio 0.42 0.37
CET1 capital ratio, % 24.6 23.9
• Mortgage volume growth strengthened net
interest income
• Stock market performance and full quarter
PayEx inclusion benefited net commission
income
• FX effects and lower market activity
impacted net gains and losses negatively
• Expenses
– Restructuring charge of SEK 300m
– PayEx included for the full quarter
• Solid asset quality
Quarterly
financial
update
© Swedbank
Public
Information class
Capital
Strong capitalisation – no excess capital
Dec 2017 46
• CET1 capital increased by SEK 0.4bn
– Positive effect from net profit of SEK 1.1bn
excl. dividend
– Negative effect from IAS19 of SEK 0.6bn
• REA decreased by SEK 11.1bn
• Buffer above minimum requirements of
around 270bps
24.2% 24.6% 23.9% 24.6%
21.9%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 CET1 capitalratio
requirement
Quarterly
financial
update
© Swedbank
Public
Information class
-7.3-1.1 -0.7
-2.0
419.5
408.4
400
405
410
415
420
425
Q3 2017 Credit risk Market risk CVA Other Q4 2017
Capital
Lower REA
Dec 2017 47
• REA decreased by SEK 11.1bn
– Received VISA-related proceeds
reduced REA
– Year-end effects reduced REA
SEKbn
Quarterly
financial
update
© Swedbank
Public
Information class
FY
financial
update
Group results – FY 2017
Strong result
SEKm FY 2017 FY 2016 ▲YoY
Net interest income 24 595 22 850 1 745
Net commission income 12 030 11 333 697
Net gains and losses 1 934 2 231 -297
Other income 3 879 4 407 -528
Total income 42 438 40 821 1 617
Total expenses 16 415 15 627 788
Profit before impairments 26 023 25 194 829
Credit impairments 1 285 1 367 -82
Other impairments 196 66 130
Tax 5 178 4 209 969
Net profit 19 350 19 539 -189
Dec 2017 48
Ratios FY 2017 FY 2016
ROE, % 15.1 15.8
C/I ratio 0.39 0.38
CET1 capital ratio, % 24.6 25.0
• ROE of 15.1% - target achieved
• Strong organic income generation
– One-off tax-free gains:
• SEK 2.1bn from VISA in 2016
• SEK 0.7bn from Hemnet in 2017
• Underlying expenses in line with FY 2017
guidance of SEK 16.1bn
• Strong asset quality
– Lower-than-anticipated credit impairments
• Higher tax expense - changed dividend
policy in Estonia and tax on subord. liabilities
• CET1 capital ratio of 24.6%
• Board proposal – dividend of SEK 13.00 per
share
– 75% pay-out ratio: Six consecutive years
© Swedbank
Public
Information class
Group
Solid asset quality
Credit impairments, SEKm Q4 17 Q3 17 ▲QoQ
Swedish Banking 264 66 198
Baltic Banking -12 -26 14
Large Corporates & Institutions 59 195 -136
Swedbank Group 311 235 76
Dec 2017 49
Ratios Q4 17 Q3 17
Credit impairment ratio, % 0.08 0.06
Share of impaired loans, gross % 0.55 0.55
Total provision ratio for impaired
loans, % 45 45
• Resilient asset quality in all business
segments
• Lower-than-anticipated credit
impairments for the full year (0.08%)
Quarterly
financial
update
© Swedbank
Public
Information class
Outlook
2018 ROE target of 15% remains
• Additional investments to further accelerate our digitisation and automation efforts
– Channel transformation
– Digital payment solutions and e-commerce
– Customer offerings
– Automation
• Investments will allow us to offset underlying cost inflation and over-time lead to net
cost reductions
– The re-organisation of our IT and business development processes – a key facilitator
• Total annual expenses for 2018 and 2019 will be below SEK 17bn
• ROE target of 15% remains
• No excess capital – dividend policy of 75% remains
50
© Swedbank
Public
Information class
3. Capital considerations
5
1
Capital
– fully
loaded
CRD IV
© Swedbank
Public
Information class
4.5% 4.5%
3.5%3.0%
3.0%
1.3%
1.3%
2.5%
11.3%
2.5%
14.8%
1.8%
2.3%6.8%
8.2%2.0%
13.3%
2.0%
15.9%
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
Dec 2017 52
21.9%
30.7%
24.6%
27.7%
270bp
Pill
ar
1
Pill
ar
2
Capital
– fully
loaded
CRD IV
Automatic MDA
Restrictions
Available Distributable Items
Swedbank AB (parent comp) FY 2016** FY 2017
Share premium reserve 13 206 13 206
Retained earnings 41 277 43 099
Available distributable items 54 483 56 305
Dividend* -14 695
Comprehensive income 6 988
other 195
ADI Q1 2017 46 971
* paid out in April 2017
** Based on fully audited numbers
** The calculation of the ADI is based on the Annual report,
why this exercise as per Q4 2017 should be seen as an
example based on changes during the year.
© Swedbank
Public
Information class
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
• IFRS 9
– Limited impact on CET1 capital ratio of – 6bps as per 1 Jan, 2018
Dec 2017 53
Capital
– fully
loaded
CRD IV
© Swedbank
Public
Information class
0%
2%
4%
6%
8%
10%
12%
14%
NDOrequirement
SREP 2017**
Swedbank totalliabilities + own
funds***
0
20
40
60
80
100
120
140
Loss absorption amount Swedbank total capital
Recapitalisation amount Senior unsecured debt >1Y*
MREL needs in line with expectations – no imminent issuance plan
Dec 2017 54
SEKbn
Swedbank MREL requirements
*Nominal amount, ** Based on FY 2016 numbers, *** FY 2017, based on consolidated situation
13.4%
21.4%
Capital
– fully
loaded
CRD IV
Based on Risk Exposure Amount Based on total liabilities
+ own funds
7.3%
• 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 87bn
in subordinated MREL eligible securities to meet
requirement by 1 Jan 2022
• Sweden to adopt EU insolvency law
– Expected by year end 2018
30.7% 31.8% 12.9%
© Swedbank
Public
Information class
55%45%
Private
Corporate
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
0%
5%
10%
15%
20%
25%
SHB Nordea SEB Swedbank
2015
2016
2017
2018
Asset portfolios – low risk
Dec 2017 55
Sweden Baltic banking
Group loan book* Q4 2017, total SEK 1 502bn CET1 – EBA stress test, 2016, %
* Loans to the public excl. loans to credit institutions and SNDO
Loan distribution
Asset
quality
70%
30%Private
Corporate
© Swedbank
Public
Information class
4. Liquidity and funding
5
6
Liquidity
and
funding
© Swedbank
Public
Information class
Core balance sheet structure
Dec 2017 57
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
Q4 2017
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Q4 2017
© Swedbank
Public
Information class
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 2016
Th
ou
sa
nd
s
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
58
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
Dec 2017
Liquidity
and
funding
© Swedbank
Public
Information class
0
20
40
60
2018 2019 2020 2021 2022 2023 2024-
Senior unsecured debt
Senior unsecured debt strategy
Dec 2017 59
Senior unsecured debt maturity profile SEKbn*
*Nominal amount
Liquidity
and
funding
© Swedbank
Public
Information class
0
10
20
30
40
50
60
70
80
90
100 Covered bonds Senior unsecured debt
Planned, covered bonds Planned, senior unsecured debt
0
100
200
300
400
500
600
700
0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365
Conservative funding position
Dec 2017 60
• LCR 173% (Swedish FSA definition FFFS 2012:6)
• NSFR 110% (Basel committee)
• Issued SEK 195bn of term funding FY 2017
• 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
© Swedbank
Public
Information class
0
50
100
150
200
2018 2019 2020 2021 2022 2023 2024-
Senior unsecured debt Covered bonds
Long-term funding maturity profile
Dec 2017 61
Long-term funding maturity profile, by funding source
SEKbn
Long-term funding maturity profile, by currency
Liquidity
and
funding
0
50
100
150
200
2018 2019 2020 2021 2022 2023 2024-
Other
GBP
USD
EUR
SEK
SEKbn
© Swedbank
Public
Information class
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
62
*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
© Swedbank
Public
Information class
Liquidity reserve
Dec 2017 63
According to the template defined by the Swedish Bankers' Association
Liquidity
and
funding
SEKm
Cash and holdings in central banks1
208 370
Deposits in other banks available overnight 3
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks 88 006
Securities issued or guaranteed by municipalities or public sector entities 5 636
Covered bonds 46 621
- Issued by other institutions 44 349
- Own issued 2 272
Securities issued by non-financial corporates 292
Securities issued by financial corporates (excl. covered bonds) 409
Other
Total2
349 337
1) Including loans to the Sw edish Ntional Debt Office
2) 95% of the securities in the liquidity reserve per Q4 2017 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
© Swedbank
Public
Information class
Rating
• On 1 September 2017, Moody’s affirmed Swedbank's ratings at Aa3/P-1 with a stable outlook. The ratings reflect Swedbank’s
strong credit quality, solid regulatory capital and stable earnings, underpinned by its established franchise in Sweden. Swedbank is
also expected to be broadly resilient to the risks in the residential housing market and household sector in Sweden.
• 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.
• 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.
Dec 2017 64
Liquidity
and
funding
Short Long SACP1 Short Long BCA1 Short Long VR1
Swedbank A-1+ AA- a+ P-1 Aa3 a3 F1+ AA- AA-
Swedbank Mortgage A-1+ AA- - P-1 Aa3 - - - -
Covered bonds - AAA - - Aaa - - - -
1 Standalone Rating
S&P (Stable) Moody's (Stable) Fitch (Stable)
© Swedbank
Public
Information class
5. Cover pool data
6
5
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
© Swedbank
Public
Information class
Cover pool data1
Dec 2017 66
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
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
Rating, S&P / Moody’s AAA / Aaa
Total pool size SEK 928.6bn
Geographic distribution Sweden 100%
Current OC-level 85.5%
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 Dec, 2017
2 Public sector loans not included
3 Index valuation as per Sep, 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
Dec 2017 67
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
Type of loans
(based on loan volume)
Residentials 91.9%
of w hich Single-family housing 56.9%
of w hich Tenant ow ner rights 20.7%
of w hich Tenant ow ner association 9.6%
of w hich Multi-family housing 4.7%
Public 0.7%
Commercial 0.8%
Forest & Agricultural 6.6%
100.0%
Geographical distribution, Sweden, per cent 31 Dec
(based on loan volume) 2017
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) 43.9
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) 26.7
South (including Göteborg and Malmö) 49.6
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) 12.9
Blekinge county (K) 1.4
Gotland county (I) 0.6
100.0
Population, Sep 2017
(thousands)
Sw eden 10 094
Stockholm, county 2 299
Västra Götaland, county (incl. Gothenburg) 1 686
Skåne, county (incl. Malmoe) 1 340
© Swedbank
Public
Information class
Cover pool loan-to-value distribution
• Weighted average LTV on property level 49%
Dec 2017 68
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
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
Cover pool loan type and loan-to-value distribution
Dec 2017 69
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
1excluding public sector loans of 0.7%
WA LTV per property type1
1
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 alltypes
Percentage of the pool Average LTV per loan type
© 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, Q417
Min req. 2%
Strong resilience to house price changes
Dec 2017 70
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
• Current OC-level of 85.5%
• 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
71
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
© Swedbank
Public
Information class
6. Swedish and Baltic economies
7
2
Swedish
and Baltic
macro
© Swedbank
Public
Information class
Sweden - Strong growth gradually slowing
73
• 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) 2.9 (Q3) 3.0 2.6 2.7 2.1
CPI growth, average 1.7 (Dec) 1.0 1.8 2.1 2.8
CPIF growth, average 1.9 (Dec) 1.4 2.0 1.9 1.9
Unemployment rate (15-74), % of labor force 6.5 (Dec)2 6.9 6.7 6.4 6.3
Savings ratio (households),% of disp. income … 16.5 16.1 16.9 16.5
Real disposable income (households) … 3.3 2.1 3.3 1.5
© Swedbank
Public
Information class
The Swedish economy
74
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.
75
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 76
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
© Swedbank
Public
Information class
Baltics – continued growth albeit at slower rates
77
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, 2015-2019
1 % growth rate unless indicated otherwise, Y/Y growth for the most recent data
Most recent 2016 2017E 2018F 2019F
Real GDP Estonia 4.2 (Q3) 2.1 4.4 3.9 3,0
Latvia 4.2 (Q4) 2.1 4.7 4.2 3.2
Lithuania 3.6 (Q4) 2.3 3.8 3.2 2.5
CPI growth, average Estonia 3.4 (Dec) 0.1 3.4 3,0 2.5
Latvia 2.2 (Dec) 0.1 2.9 3.7 2.5
Lithuania 3.9 (Dec) 0.9 3.7 3.3 2.5
Unemployment rate (15-74), % of labor force Estonia 5.2 (Q3) 6.8 6,0 7,0 7.2
Latvia 8.5 (Q3) 9.6 8.8 8.1 7.5
Lithuania 6.6 (Q3) 7.9 7.2 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
78
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
79
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
80
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
8
1
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
82
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, again in the Stockholm area
• Single-family houses are holding up better
83
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, February 20181) Price developments flats and single family houses1)
Tenant owner rights
1 month 3 months 12 months SEK/sqm2)
Sweden total -0.8% -1.0% -7.9% 38 974
Stockholm municipality -0.6% -0.6% -10.0% 55 508 (86 503)
Gothenburg municipality -0.8% -2.4% -4.6% 43 480 (58 274)
Malmoe municipality -0.2% -1.0% -4.8% 27 487 (29 954)
Single-family homes
1 month 3 months 12 months SEK2)
Sweden total -0.2% +2.2% -1.0% 3 264 000
Greater Stockholm -0.3% +0.6% -5.8% 5 464 000
Greater Gothenburg -1.1% +2.7% -1.7% 4 486 000
Greater Malmoe +0.1% +3.4% +5.1% 3 674 000
© Swedbank
Public
Information class
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
Housing starts (lagged 2 yr) Finished housing
• Following recent years’ investment increase, supply will continue to grow
• Demand and number of transactions is still high, especially in large city areas
• Housing shortages still persist, in particular in the larger cities
Housing investments support continued supply
Supply increase puts pressure on prices, but
supports transaction volumes
Transactions increase, as well as supply
5 000
7 000
9 000
11 000
13 000
15 000
17 000
19 000
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Number of transactions
Newly added for sale on Hemnet
Newly added for sale incl new production
Swedish
housing
and
mortgage
market
Source: Statistics Sweden Source: Mäklarstatistik and Hemnet
© Swedbank
Public
Information class
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
85
Low mortgage costs Mortgage growth and housing prices
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Structural foundation for the housing and mortgage market
86
• 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
87
Solid labour market Strong household balance sheets High population growth and urbanisation
Swedish
housing
and
mortgage
market
The overcrowding rate is defined as the
percentage of the population living in an
overcrowded household.
© 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%
88
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
89
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
-0.55
-0.35
-0.15
0.05
0.25
2015 2016 2017 2018 2019
Market pricing Swedbank forecast
Outcome Riksbank forecast December 2017
Sources: Swedbank Research & Macrobond
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Swedbank and the real estate 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
90
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 prioritised price and
risk over volume growth
• Bulk of assets in low risk segments
• Average LTVs in lower ranges
• Exposures towards residential
property developers of SEK 21bn
91
Real estate lending, net loans in Sweden, SEKbn
• Private mortgages: SEK 759bn, average
LTV 54%
• Tenant Owner Associations (“TOA”): SEK
109bn
SEK 95bn existing TOA, average LTV 40%
SEK 14 bn TOA under construction
• Property Management: SEK 187bn, average
LTV 58%
SEK 64bn in residential property management
(rental apartment properties)
SEK 123bn in other property management
• Construction SEK 16bn
SEK 7bn residential property development
SEK 9bn infrastructure, groundwork, craftsmen
16
123
64
109
759
0
200
400
600
800
1 000
1 200
Total real estateportfolio
Of which:Residential
propertydevelopment
21
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Private mortgages – a low risk portfolio
• Low average LTVs (54%)
• Low historic losses (0.04% 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 December 2017 92
Growth 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
759bn
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 LTV-bucket
87% with
LTV <50%
99% with
LTV <75%
Swedish
housing
and
mortgage
market
0
1
2
3
4
5
6
7
8
9
2015 2016 2017 Q3Loan growth Swedbank Loan growth total market
Loan growth in %
© Swedbank
Public
Information class
Tenant Owner Associations – low leverage
• Total loan portfolio SEK 109bn, of which SEK 14bn is construction loan for new
development: – 50-80% needs to be pre-sold and before final financing 100% needs to be sold
– 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)
1) As of 31 Dectember 2017 93
Growth but lower than the market Portfolio reflects market
37%
11% 10%
30%
12%
Loans net1) by geography
Stockholm region Gothenburg regionMalmö region >50 000 inhabitants<50 000 inhabitants
SEK
109bn
Average LTV of only 40%
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%
100% with
LTV <75%
Swedish
housing
and
mortgage
market
0
2
4
6
8
10
12
2015 2016 2017 Q3
Loan growth Swedbank
Loan growth total market
Loan growth in %
© Swedbank
Public
Information class
Residential property developers - low exposure
• Total exposures of SEK 21bn, more than half of it to the larger listed construction firms, with
which Swedbank has long-term relations
– SEK 14bn of the exposures are related to tenant-owner rights projects through loans to Tenant Owner
Associations backed by residential property developers
• 99% of these projects will be finalised in 2018 and 2019
– SEK 7bn of the exposures are related to residential rental housing and other non-residential projects
• Pre-sale level of tenant owner rights close to 90%
1) As of 31 December 2017 94
Mainly exposures to the larger construction firms
55%
9%
4%
25%
7%
By geography
Stockholm regionGothenburg regionMalmö region
0
10
20
30
40
50
60
70
80
90
100
2018 2019 2020-
Average % pre-sold by finalisation year2)
SEK
14bn
Tenant owner rights related construction loans1) – the risk is highly mitigated
7
4
10
0 10
Smaller building firms
New developers
Large building firms
Loans1), SEKbn
70%
29%
1%
Finalisation year
2018 2019
2020-
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Residential property management – stable cash-flow generation
• Total exposures of SEK 64bn 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 December 2017 95
Slower growth in 2017 Regional cities dominate
19%
8%
7%
41%
25%
Loans net1) by geography
Stockholm region Gothenburg region
Malmö region >50 000 inhabitants
<50 000 inhabitants
SEK
64bn
Average LTV of 58%
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 Prop Mgmt by LTV-bucket
86% with
LTV <50%
99.7% with
LTV <75%
-2
0
2
4
6
8
2015 2016 2017 Q3
Loan growth, %
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Other
9
6
© Swedbank
Public
Information class Source: Swedbank Factbook 4Q 2017
* Number of customers that have made a payment, transfer, application, investments or lending activity in the last month 97
Latvia
Population 2.0m
Private customers 0.9m
Corporate customers 83 000
Branches 36
Cards 1.0m
Number of card purchases 38.5m
Digitally active customers* 0.7m
Lithuania
Population 2.9m
Private customers 1.5m
Corporate customers 69 000
Branches 63
Cards 1.7m
Number of card purchases 36.3m
Digitally active customers* 0.7m
Estonia
Population 1.3m
Private customers 0.9m
Corporate customers 135 000
Branches 34
Cards 1.1m
Number of card purchases 50.9m
Digitally active customers* 0.6m
Sweden
Population 10.0m
Private customers 4.1m
Corporate customers 270 000
Organisations 68 000
Branches 218
Cards 4.2m
Number of card purchases 323m
Digitally active customers* 3.1m
* Share of loan book
Swedbank – largest retail bank in our four home markets
~86%*
~10%*
This is
Swedbank
© Swedbank
Public
Information class
Swedbank – strong and stable earnings capacity
Dec 2017 98
Profit before impairments, SEKbn
This is
Swedbank
0
2
4
6
8
10
Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17
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
Dec 2017 99
Total expenses, SEKm
C/I ratio, %
This is
Swedbank
© Swedbank
Public
Information class
Focus on sustainable business
100
Swedbank issued its first Green Bond
Proceeds will
• Finance sustainable real-estate
• Renewable energy
• Reduction of carbon emissions
• Contribute to several of the UN
Sustainable Development Goals. 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’s sustainability funds
Since October 2017, five of Swedbank Robur's active
managed sustainability funds have the Nordic Swan Ecolabel.
Sustainability work is also further progressing in the
management of the Access Index-based funds.
Dow Jones
Sustainability
Index
First green bond issued in October (5yr EUR 500m)
Swedbank is included in The Sustainability Yearbook 2018
The
Sustainability
Yearbook
Nordic Swan
Ecolabel
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 operations.
Improved sustainability scores
Approximately 72% of the amount was
allocated to investors with dedicated green
funds.
With our established Green Bond
framework Swedbank intends to be a
regular issuer in the green bond market.
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*
Footer
© Swedbank
Public
Information class
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
101
Strategy
© Swedbank
Public
Information class
0 200 400 600 800 1000 1200 1400
Other* 4.3%
Lithuania 3.1%
Latvia 2.1%
Estonia 4.7%
Sweden 85.8%
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 502bn (as per Q4 2017), out of
which around 86% is originated in Sweden
• Estonia makes up 48% of total lending in the Baltics
Dec 2017 102
Lending distributed by countries
SEK 1 288bn
This is
Swedbank
© Swedbank
Public
Information class
Oil sector still under pressure
• Loan portfolio negatively impacted by lower oil price, SEK 13.4bn
– Less than 1% of total loans gross
– Derivatives exposures of SEK 1.0bn (incl. collateral)
• Net, unchanged provisions* in Q4
* Total provisions of SEK 1 358m for the whole Shipping and Offshore sector with a provision ratio (for impaired
loans) of 30%. 103
0
2
4
6
8
10
12
14
Def 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
2014-12-31 2015-12-31 2016-12-31 2017-12-31
Oil-related, exposure by risk grade, SEKbn
0
2
4
6
8
10
2016-12-312 2017-12-31
LC&I Shipping & Offshore, loans gross, SEK 24bn
56% of the portfolio is
negatively impacted by
lower oil price
Asset
quality
© Swedbank
Public
Information class
11.3%
10.6%
Swedbank CET1 requirements
Pillar 2 CET1requirements
Pillar 1 CET1requirements
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.”
Dec 2017 104
Automatic MDA
Restrictions
21.9%
Capital
– fully
loaded
CRD IV
© Swedbank
Public
Information class
0
100
200
300
400
500
600
Covered bonds Senior unsecured Structured retailbonds
Short-termprogrammes
Q3 2017 Q4 2017
Wholesale funding profile
• Q4 2017 – 30% or SEK 252bn of wholesale funding < 12 months, SEK
208bn placed with central banks
• Average maturity for covered bonds, 39 months
• Average maturity for senior unsecured bonds, 30 months
Dec 2017 105
Maturity profile of outstanding wholesale funding Outstanding wholesale funding, SEK 844bn
Liquidity
and
funding
17%
14%
62%
8%
0-3M
3-12M
>1-5Y
>5Y
© Swedbank
Public
Information class
Funding sources
Dec 2017 106
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
© Swedbank
Public
Information class
Asset encumbrance
• Total balance sheet,
SEK 2 213bn
• Asset encumbrance ratio
of around 25%
Dec 2017 107
Liquidity
and
funding Type of assets (Balance Sheet items)
SEKm
Carry Amount Fair Value Carry Amount Fair Value
Assets of the reporting institution 542 520 1 489 970
Loans on demand 202 199
Equity instruments 19 754 19 754
Debt securities 16 077 16 075 128 542 129 120
Loans and advances other than loans on demand 526 443 1 051 532
of w hich mortgage loans 516 803 665 657
Other assets 87 943
Encumbered assets
Unencumbered assets,
additional assets
available for secured
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 3 851 28 805
Loans on demand
Equity instruments 2 943
Debt securities 3 851 15 010
Loans and advances other than loans on demand 9 135
Other collateral received 1 717
Ow n debt securities issued other than ow n
covered bonds or ABSs
Purpose for encumbrance (On- and off-balance sheet items) Encumbered Assets
SEKm 31 Dec 30 Sep 30 Jun 31 Mar
2017 2017 2017 2017
Carrying amount of selected financial liabilities 524 837 572 846 557 305 552 721
of w hich Derivatives 12 138 12 358 16 795 13 983
of w hich Deposits 14 104 30 183 24 579 23 850
of w hich Debt securities issued 498 595 530 305 515 931 514 888
Other sources of encumbrance 21 534 25 382 23 854 21 835
Total 546 371 598 228 581 159 574 556
© Swedbank
Public
Information class
Benchmark transactions, 2016 – YTD 2018
Feb 2018 108
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
© Swedbank
Public
Information class
Real estate price performance – Sweden, 12 month
Dec 2017 109
Single-family homes1 Tenant-owner rights2 Combined3
12M Δ 12M Δ 12M Δ
Jan 17 9% 8% 9%
Feb 17 9% 8% 9%
Mar 17 9% 8% 9%
Apr 17 8% 8% 8%
May 17 8% 9% 9%
Jun 17 9% 10% 10%
Jul 17 10% 9% 9%
Aug 17 10% 8% 9%
Sep 17 8% 4% 7%
Oct 17 4% 1% 3%
Nov 17 1% -3% 0%
Dec 17 0% -6% -2%
Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE (apartments), 3 HOXSWE
100
120
140
160
180
200
220
240
260
05 06 07 08 09 10 11 12 13 14 15 16 17
House price index, Sweden3
2005=100
Swedish
housing
and
mortgage
market
© Swedbank
Public
Information class
Swedbank – contacts and financial calendar
110
Tomas Hedberg, Head of Group Treasury
[email protected] +46 706 43 97 11
Gregori Karamouzis, Head of Investor Relations
[email protected] +46 727 40 63 38
DEBT INVESTORS
Peter Stenborn, Debt Investor Relations
[email protected] +46 8 585 909 30
Magnus Alvesson, Debt Investor Relations
[email protected] +46 8 585 933 41
Ulf Jakobsson, Head of Funding
[email protected] +46 8 700 90 61
Joakim Henriks, Money Markets and Short-Term Funding
[email protected] +46 8 700 90 62
EQUITY INVESTORS
Mattias Mauritzon, Investor Relations +46 8 585 907 56
Annie Ho, Investor Relations +46 8 585 922 69
2017 Annual Report 23 Feb 2018
2018 Annual General Meeting 22 Mar 2018
Q1 Interim report 24 Apr 2018
Q2 Interim report 18 Jul 2018
Q3 Interim report 23 Oct 2018
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:
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