Interim report Q1 200824 April 2008

Jan LidénPresident and CEO

(2)

Core business is doing well – challenging financial markets

• Solid business development with corporates and private customers

• Development as expected in the Baltic states

• Funding programmes continue to function well – conversion to covered bonds on 21 April

• Credit quality remains good, credit losses and impaired loans are increasing from low levels

• Lower commission income due to weaker equity markets and low corporate finance activity

• Net gains and losses on financial items were adversely affected by unrealized valuation effects caused by the credit crunch

(3)

Strong position for profitability and growth

Ukraine and RussiaBalticsSweden

Stable base Growth and experience

Future growth and profitability

Swedbank is the leading bank in Sweden. Profitability is high and stable and the bank is consolidating its market shares in important segments in both the private and corporate sectors.

Swedbank has a small but growing presence in Ukraine and Russia. In the long term, a significant share of Swedbank’s growth will be generated in these markets.

The Baltic economies are experiencing strong economic growth that is expected to remain for many years. As the largest bank in the region, growing with the market ensures attractive earnings growth.

Share of profit 2007: 65%

Share of lending 2007: 80%

Share of profit 2007: 3%

Share of lending 2007: 2%

Share of profit 2007: 32%

Share of lending 2007: 16%

(4)

Business volumes

102

19 31

340

102

385

1734

401

334

0

100

200

300

400

500

Deposits,Sweden

Deposits,Baltics

AM funds,Sweden

AM funds,Baltics

Structuredproducts,

bonds

Dec 2007 Mar 2008

SEKbn

Savings

475

390

77 1006178 104

68

1,103 1,131

484397

0

200

400

600

800

1,000

1,200

Lending,Group

Private,Sweden

Corporate,Sweden

Private,Baltics

Corporate, Baltics

Other

Dec 2007 Mar 2008

SEKbnLending

(5)

Margins

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08

Estonia LatviaLithuania Sweden

% Lending

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08

Estonia LatviaLithuania Sweden

Deposits%

Lower interest rates in Latvia and Lithuania adversely affected deposit margins.

Increased funding costs have not yet

been fully transferred to customers.

(6)

Credit quality, Group

0

1,000

2,000

3,000

4,000

5,000

6,000

03 S

ep

03 D

ec

04 M

ar

04 J

un

04 S

ep

04 D

ec

05 M

ar

05 J

un

05 S

ep

05 D

ec

06 M

ar

06 J

un

06 S

ep

06 D

ec

07 M

ar

07 J

un

07 S

ep

07 D

ec

08 M

ar

0.000.050.100.150.200.250.300.350.400.450.50

Impaired loansImpaired loan provisionsShare of impaired loans

SEKm %

(7)

Credit quality, Baltic Banking

Q4 07 2007 Q1 08Estonia 0.67% 0.21%

0.56%0.23%

-0.05%0.35%

Latvia 0.78%0.38%0.54%0.25%Lithuania 0.13%

0.39%Group level provision adjustment -0.28%Baltic Banking 0.28%*Loan loss ratio, net = (changes in provisions + net write offs) / credit portfolio at the beginning of the year

Loan loss ratio, net*

Overdue ratio (more than 60 days)*Q2 07 Q4 07 Q1 08

Corporate 0.58% 0.65%0.75%0.71%

Private 0.49%0.79%0.92%

Baltic Banking 0.56% 0.86%

*Overdue ratio (more than 60 days) = volume of loans more than 60 days overdue /12 month-old credit portfolio

(8)

Swedish Banking

• Continued solid volume growth• Net interest income increased

by 2% compared with Q4 2007• Lower equity related

commission income• Continuous work to adjust the

branch structure – sale of 8 branches to savings banks for SEK 440m

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Q306

Q406

Q107

Q2 07

Q307

Q407

Q108

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Income Costs C/I-ratio

C/I-ratioSEKm C/I-ratioSEKm

(9)

Baltic Banking Operations

• Profitability remained robust• Lending growth continued to

decrease• Net interest margins declined due

to decreasing local interest rates and higher funding costs

• Net loan losses as expected• Cost focus

– Operational excellence pilots indicate substantial potential

– No new net staff recruitments0

200400600800

1,0001,2001,4001,6001,8002,0002,2002,400

Q306

Q406

Q107

Q2 07

Q307

Q407

Q108

0.0

0.1

0.2

0.3

0.4

0.5

Income Costs C/I-ratio

SEKm C/I-ratio

(10)

Baltic macro development

Real GDP growth

0%2%4%6%8%

10%12%14%

2005 2006 2007 2008F 2009FEst Lat Lit

CPI growth

2%4%6%8%

10%12%14%16%

2005 2006 2007 2008F 2009FEst Lat Lit

• Economic slowdown in Estonia continues: GDP growth will fall to about 3.5% in 2008, with a recovery to 5% growth in 2009. The bottom of the cycle is expected to be in summer 2008

• In Latvia growth will decline to about 4% in 2008 and to about 3.5% in 2009. The bottom of the cycle is expected to be in winter 2008/2009

• Slowdown in Lithuania will be modest: expected GDP growth of about 6.7% in 2008 and about 5.8% in 2009

• Export growth remains relatively strong, while weak domestic demand is reducing imports. Trade and current account deficits are falling. CPI will peak in Q1 2008. Long-term GDP growth (6-7%) will be above EU average.

Source: Hansabank Markets

(11)

International Banking

• Continued solid performance in Ukraine– Launch of the new brand initiated– Expansion and restructuring of

the branch network continues– New corporate offering

• Cautious expansion in Russia– Raimo Valo new head of Russian

operations• Cooperation with FDB/COOP

regarding banking products in Denmark.

0

25

50

75

100

Q306

Q406

Q107

Q2 07

Q307

Q407

Q108

International Banking, profit for the periodof which Russian Bankingof which Ukrainian Banking Operations

SEKm

(12)

Swedbank Markets

• Fixed income and FX trading continued to do well

• Equity trading was weaker due to negative market sentiment

• Market leader position in structured products was improved, in a weaker market

• Weak quarter in Corporate Finance for First Securities

• Result was negatively affected by unrealized valuation effects as a result of the credit crunch.

050

100150200250300350400450500

Q106

Q206

Q306

Q406

Q107

Q2 07

Q307

Q407

Q108

Profit for the period attributable to shareholders of Swedbank First Securities

SEKm

(13)

Accounting and valuation effects

Accounting and valuation effects, SEKmQ1

2008Q4

2007Q3

2007

Swedbank Markets – 187 – 40 – 60

Group Treasury, intra-group lending – 253 20 – 90

Swedbank Mortgage – 22 66 – 129

Group Treasury, liquidity portfolio 69 – 5 – 68

(14)

Swedbank funding structure

Swedbank Treasury (excluding Mortgage)

• Large deposit base• Liquidity reserves• Net lender in the

interbank market• Liquidity limits –

conservative view

Swedbank Mortgage constitutes a larger part of Swedbank Group’s balance sheet compared with other financial institutions

Distribution of net funding requirementSwedbank Mortgage

Lending to the public: SEK 1,131bn

Deposits80%

Equity8%

Funding12%

Equity4%

Funding96%

50%50%Swedbank Group, excl. Swedbank Mortgage SEK

562bn

Swedbank Mortgage

SEK 569bn

(15)

Focus on funding

Funding costs have increased• Higher price of risk• Increased liquidity reserve• Short-term adverse effect on margins

Covered bonds as of 21 April 2008• AAA rating (S&P and Moody’s) ⇨ funding at lower cost• Facilitates access to a broader investor base – more stable liquidity• Provides substantially increased liquidity reserve.

(16)

Group resultsMikael Inglander

CFO

(17)

Income statement, Group

SEKmQ1

2008Q4

2007 %Q1

2007 %Net interest income 5,241 5,259 – 0 4,501 16Net commission income 2,180 2,536 – 14 2,289 – 5Net gains/losses on financial items at fair value 75 386 – 81 530 – 86Other income 950 693 37 473 101Total income 8,446 8,874 – 5 7,793 8Staff costs 2,311 2,111 9 1,932 20Profit-based staff costs 268 522 – 49 390 – 31Other expenses 1,861 1,893 – 2 1,615 15Total expenses 4,440 4,526 – 2 3,937 13Profit before loan losses 4,006 4,348 – 8 3,856 4Loan losses 288 238 21 49 488Operating profit 3,718 4,110 – 10 3,807 – 2Tax 805 950 – 15 851 – 5Profit for the period 2,913 3,160 – 8 2,956 – 1Attributable to shareholders of Swedbank 2,900 3,108 – 7 2,910 – 0

(18)

Net interest income Q1 08 (Q4 07)

5,259 5,241

55

-13

1 22

-215

132

4,600

4,800

5,000

5,200

5,400

Net

inte

rest

inco

me

Q4

07

Sw

edis

hB

anki

ng

Bal

tic B

anki

ngO

pera

tions

Bal

tic B

anki

ngIn

vest

men

t

Inte

rnat

iona

l B

anki

ng

Sw

edba

nk

Mar

kets

Sha

red

Ser

vice

s an

dot

her

Net

inte

rest

inco

me

Q1

08

SEKm

(19)

Swedish Banking, change in net interest income

SEKmQ1 2008

vs Q4 2007Q1 2008

vs Q1 2007Net interest income Q4 2007 2,927Net interest income Q1 2007 2,943

Changes:Higher lending volumes 55 234Decreased lending margins – 116 – 403Difference in number of days/quarter, lending – 18 18Higher deposit volumes 24 122Higher deposit margins 110 194Difference in number of days/quarter, deposits – 13 13Other changes 13 – 139

Total change 55 39Net interest income Q1 2008 2,982 2,982

(20)

Baltic Banking, change in net interest income

SEKmQ1 2008

vs Q4 2007Q1 2008

vs Q1 2007Net interest income Q4 2007 1,588Net interest income Q1 2007 1,215

Changes:Higher lending volumes 47 245Higher lending margins 3 8Difference in number of days/quarter, lending -11 11FX-effects, lending 14 21Higher deposit volumes 44 68Higher deposit margins 85Decreased deposit margins -148Difference in number of days/quarter, deposits -6 6FX-effects, deposits 10 11Other changes 34 -95Total change – 13 360Net interest income Q1 2008 1,575 1,575

(21)

Net commission income, Group

0

200

400

600

800

1,000A

sset

man

agem

ent

Pay

men

ts

Bro

kera

ge

Lend

ing

Insu

ranc

e

Cor

pora

tefin

ance

Oth

er

Q1 2008 Q4 2007

SEKm

(22)

Loan losses Q1 08 (Q4 07)

-1 000

1 000

3 000

5 000

7 000

9 000

11 000

13 000

15 000

17 000

2000 2001 2002 2003 2004 2005 2006 2007-1 000

1 000

3 000

5 000

7 000

9 000

11 000

13 000

15 000

17 000

Resultat före kreditförluster Reavinster EnterCard, KIABKreditförluster, netto* Rörelseresultat (exkl. reavinster)

mkr mkr

-100

-50

0

50

100

150

200

250

300

350

Group, total Swedish Banking Baltic BankingOperations

International Banking

Swedbank Markets

Shared Servicesand other

Q4 2007 Q1 2008

mkr

(23)

Expenses

SEKmQ1

2008Q4

2007 %Q1

2007 %Swedish Banking 2,255 2,279 – 1 2,183 3Baltic Banking 899 1,062 – 15 769 17International Banking 309 272 14 107 of which Ukrainian Banking 150 163 – 8 Swedbank Markets 456 560 – 19 517 – 12Asset Management & Insurance 253 230 10 183 38Other 268 123 178 51Total expenses 4,440 4,526 – 2 3,937 13of which staff costs in: Swedish Banking 1,099 1,096 0 1,023 7Baltic Banking 522 587 – 11 451 16International Banking 157 155 1 52 Swedbank Markets 258 351 – 26 345 – 25Asset Management & Insurance 110 138 – 20 76 45

(24)

Business areas

2008 vs 2007, SEKm 2008 % 2008 % 2008 % 2008 % 2008 %Net interest income 2,982 1 1,575 30 369 289 – 28 25 32Net commission income 1,025 – 5 458 8 54 26 227 – 38 416 4Other income 690 93 209 – 24 26 254 2 24 – 57Total income 4,697 7 2,242 17 449 770 – 24 465 – 2Staff costs 1,099 7 522 16 157 258 – 25 110 45Other expenses 1,156 – 0 377 19 152 198 15 143 34Total expenses 2,255 3 899 17 309 456 – 12 253 38Profit before loan losses 2,442 11 1,343 17 140 65 314 – 36 212 – 27Loan losses 95 173 62 26 ## 0 0 Operating profit 2,347 4 1,170 13 114 58 314 – 36 212 – 27Tax 656 4 107 20 28 75 88 – 36 53 – 23Profit for the period 1,691 4 1,063 12 86 54 226 – 37 159 – 28Attributable to Swedbank's shareholders 1,688 4 1,063 12 86 54 216 – 31 159 – 28Return on allocated equity, % 23.3 29.1 5.0 23.7 29.4

AssetMgmt

Int'l.Banking

Swedish Banking

BalticBanking

Swedbank Markets

(25)

Key figures

Jan-Mar2008

Jan-Mar2007

Return on equity, % 16.8 18.9Earnings per share, SEK 5.63 5.65Equity per share, SEK 136.43 122.84C/I ratio before loan losses 0.53 0.51Loan loss ratio, net, % 0.10 0.02Share of impaired loans, % 0.16 0.07Dividend, SEK 9.00* 8.25Tier 1 capital ratio, new rules, % 8.2 8.0Tier 1 capital ratio, transition rules, % 6.5 6.8 Capital adequacy ratio, new rules, % 11.7 11.8 * according to Board of Directors proposal

(26)

Core business is doing well – challenging financial markets

• Solid business development with corporates and private customers

• Development as expected in the Baltic states

• Funding programmes continue to function well – conversion to covered bonds on 21 April

• Credit quality remains good, credit losses and impaired loans are increasing from low levels

• Lower commission income due to weaker equity markets and low corporate finance activity

• Net gains and losses on financial items were adversely affected by unrealized valuation effects caused by the credit crunch

(27)

Appendix

(28)

Exposures• No direct US subprime exposure

– Minimal indirect exposure through investments of EUR 48m in bonds issued by US mortgage institutions. The bonds have about 5% exposure to US subprime

• Total exposure to structured credits is minimal– No commitments as regards conduits or SIVs of any kind– Negligible exposure to CDOs

• Swedbank holds a very small CDO trading stock for client trades in CDOs issued by Swedbank, with mainly large caps as underlying risk

• Holdings totalled EUR 18m at end Q1– Exposure to Mortgage Backed Securities was about EUR 714m

• European Aaa and mainly residential• Held for EUR liquidity purposes and client trading

• Hedge fund exposure was about EUR 500m, all collateralized• Exposure to private equity firms and their target companies was about

EUR 1,350m in total – Nordic related LBOs

• The above-mentioned exposures together represent less than 1.5% of total assets.

(29)

Baltic Banking lending by sectors

593

1,076

1,780

1,800

2,933

8,370

3,185

0 2,000 4,000 6,000 8,000 10,000

Other

Construction

Transport

Industry

Retail &Wholesale

Real-estatemgmt

Individuals

47

-35

88

64

-79

268

-2

-250 0 250 500 750

42%

xx% - share of portfolio and portfolio growth

3%

5%

9%

9%

15%

10%

-12%

41%

16% 0%

13%

-5%

7%

As of 2008, Bank of Estonia changed the official sector classification details. During the process of implementing the new classification, Hansabank switched to a different source system and reviewed the sector data in detail. This resulted in many reclassifications, particularly as regards the real estate management sector. The current classification better illustrates Baltic Banking’s exposure to the real estate sector. Real estate management portfolio growth prior to reclassification was EUR 145m in Q1 08.

Portfolio, March 2008 Portfolio growth, Q1 08