swedbank investor presentation q4 2020

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Page 1: Swedbank Investor presentation Q4 2020

© Swedbank

Public

Information class

Investor presentation

Q2 2021July 2021

Page 2: Swedbank Investor presentation Q4 2020

© Swedbank

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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 fromany 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 oremployees 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.

Page 3: Swedbank Investor presentation Q4 2020

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Table of contents

3

1 This is Swedbank – a sustainable bank 4

2 Quarterly financial update 18

4 Capital considerations 34

5 Liquidity and funding 41

6 Cover pool data 47

7 Swedish and Baltic economy 54

8 Swedish housing and mortgage market 60

9 Appendix 68

3 Asset quality 28

Page 4: Swedbank Investor presentation Q4 2020

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1. This is Swedbank- a sustainable bank for

the many

This is

Swedbank

Page 5: Swedbank Investor presentation Q4 2020

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High earnings capacity and strong capital generation

Q2 2021 5

• Good profitability

– Dividend policy of 50%

– Cost discipline

• Strong capital generation capacity

• Largest retail bank in our four

home markets

Earnings capacity(profit before impairments, SEKbn)

Key financial ratios

• ROE, 14.2%

• C/I-ratio, 0.42

• Low cost of risk

• CET1 capital ratio, 18.5%

– 610bps above requirements

• Liquidity coverage ratio, 143%

• Net stable funding ratio, 123%

20

-14

1 0 3 49 8

39

26

6

-1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2021

*Excluding administrative fine of SEK 4bn in Q1 2020

** YTD Q2 2021 annualised

Q1

bps 0

10

20

30

2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021**

Q2

Page 6: Swedbank Investor presentation Q4 2020

© Swedbank

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Information classSource: Swedbank Factbook Q2 2021 6

Latvia

Population 1.9m

Private customers 0.9m

Corporate customers 75 000

Branches 21

Cards 1.0m

Number of card purchases 95.5m

Digitally active customers 0.6m

Lithuania

Population 2.8m

Private customers 1.5m

Corporate customers 77 000

Branches 42

Cards 1.7m

Number of card purchases 121.7m

Digitally active customers 0.9m

Estonia

Population 1.3m

Private customers 0.85m

Corporate customers 130 000

Branches 17

Cards 1.1m

Number of card purchases106.8m

Digitally active customers 0.5m

Sweden

Population 10.3m

Private customers 4.0m

Corporate customers 269 000

Organisations 68 000

Branches 154

Cards 4.4m

Number of card purchases 611m

Digitally active customers 3.3m

* Share of loan book

Swedbank – a retail bank in four home markets This is

Swedbank

~86%*

~12%*

Sweden

Estonia

Latvia

Lithuania

Page 7: Swedbank Investor presentation Q4 2020

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StrategicDirection

Page 8: Swedbank Investor presentation Q4 2020

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Integrating sustainability in all our operations

Sustainability for Swedbank

Fully contributing to the transition through engagement with our customers

Empower the many Businesses to create a better future by supporting the transition

Empower the many People to create a better future by supporting sustainable choices

Societal engagement

Advisory, products

and services

Environmental Sustainability● Environmentally safe operations● Paris-aligned financing and investments

Social Sustainability● Diverse, inclusive and sustainable workforce● Fighting financial crime

Governance & Ethics● Responsible corporate governance and business

ethics incl. purchasing● Compliant business and transparent disclosure

Financial Sustainability● Profitable and financially stable● Secure, accessible and stable infrastructure

Page 9: Swedbank Investor presentation Q4 2020

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Sustainability targets and commitmentsSustainability is at the centre of our Strategic Direction

9

By 2050, Swedbank has committed to carbon neutrality and interim target setting

By 2040, The aggregate fund capital managed by Swedbank Robur will be placed in carbon neutral investments

By 2030, Reduce Swedbank’s direct greenhouse gas emissions by 60 per cent (base year 2019)

By 2025, Reduce energy consumption in the bank’s premises by 15 per cent (with interim 10% by 2021, base year 2017)

Sustainability Targets

(medium- and long term)

• Principles for Responsible Banking

• Science Based Targets initative

• Task Force on Climate related Financial Disclosures

• Net-Zero Banking Alliance

• Climate Action 100+ (Swedbank Robur)

• Net Zero Asset Managers Initiative (Swedbank Robur)

Impact analysis performed in 2020, targets set for 2021

Long term climate goals for real estate portfolio to be set in 2021

Reporting according to recommendations since 2018

Signatory since May 2021

Member since 2018, cooperation to engage with the largest GHG emitters

Signatory since 2020, climate targets set for 2025 and 2040

International commitments (examples) Status

Page 10: Swedbank Investor presentation Q4 2020

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Focus areas in 2021Good progress towards achieving short- and medium-term goals

Targets set for 2021 Swedbank’s sustainability agenda recognized

Set science based climate targets for the real estate

sector that align with the Paris Agreement. The baseline year

is 2020

1

Increase our sustainable finance offering compared with

2020. To achieve this the bank will work with customers by

offering advice & financing solutions to support transition

2

Progress: On track

Progress: Strong growth in green asset register: YTD: >100%,

mainly due to inclusion of existing green mortgages

Swedbank received an above-average score among

international banks and companies evaluated in the new

ESG evaluation from S&P Global Ratings

”Sustainability and digitalization are well embedded in

Swedbank’s long-term strategy.”

S&P Global Ratings, May 31 2021

1 2 successful green bond issuances (EUR 1bn and

GBP 350m) during Q2 2021

2

Swedbank joined Net-Zero Banking Alliance in May 2021

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Q2 sustainability accomplishments

Swedbank recent commitments and recognitions

Enabling customers to make smart and sustainable choices

Strong ESG footprint in Capital Markets

11

Swedbank issued two green bonds during the quarter:

- an inaugural GBP 350 m Green Senior Non-Preferred bond on June 1st

- a EUR 1 bn Green 6NC5 Senior Non-Preferred bond on May 12th

Committing to transfer the transactions’ greenium of 3-5 bps directly to the

business areas to further promote green lending at preferential rates.

Q2 2021 *ESG bonds includes Green, Social & Sustainability bonds

Commitments

• Swedbank joined Net-Zero Banking Alliance in May 2021 and by that committing

to achieve net zero emissions by 2050 at the latest.

• Swedbank part of Nordic Energy Efficient Mortgages (NEEM) hub to scale up

lending for energy renovations.

Recognitions

• Green light in Ambition index 2021. Haga Initiative report on listed large

Swedish companies with targets to reduce their GHG emissions by 50 % by 2030.

• Financial Times Climate Leaders 2021 ranked the 300 European companies

that have reduced greenhouse gas emissions between 2014 and 2019.

Swedbank is the highest-ranked financial company in Sweden.

S&P has finalized the ESG Evaluation and Swedbank ended up with an overall

score of 75 out of 100 (above average for banks).

In summary, S&P notes that Swedbank continues to implement remediation measures in

its governance structure and policies, and S&P believes that Swedbank’s disclosure

aligns with international best practice.

ESG-ratings

• During Q2 2021, ESG* bonds in SEK, NOK and EUR accounted for ~31% of the

total issuance volume arranged by Swedbank Capital Markets.

Financing according to

Green Bond Framework

DNV GL

Joint Lead Manager

May 2021

Due 2027

EUR 1bn

Financing according to

Green Bond Framework

CICERO

Joint Lead Manager

May 2021

Due 62NC7

SEK 3.5bn

Sustainability-linked bond

The Governance Group

Joint Lead Manager

May 2021

Due 2025

NOK 750m

• Swedbank acted as advisor to Nasdaq in the launch of its green equity designations.

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TCFD recommendations:Managing climate risks and opportunities

12

TCFD

portfolio

• Swedbank does not directly finance coal-fired power plants or finance companies that

generate over 5 per cent of their revenue from coal production.

• Swedbank does not grant new financing for the prospecting of new oil and gas fields or

for unconventional extraction of fossil fuels.

• The position statements serve as the basis of the Group’s exclusion list of companies it

will not work with.

Swedbank's position on climate change

We continuosly monitor our loan portfolio from the standpoint of climate-related risks and

have implemented the decision not to finance unconventional extraction of fossil fuels and

prospecting of new oil and gas sources, which means our oil-related lending will shrink.

• Support the increased investment need in the transition to a low carbon economy

• Identify, measure and monitor transition and physical climate risks

• Increase climate change awareness and enhance transparent reporting

Important areas for the bank to focus on to mitigate climate risks

Page 13: Swedbank Investor presentation Q4 2020

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Sustainability risk analysis in lendingRobust process in place continuously enhanced

13

Corporate lending

Industry

specific questionnaireGeographical assessment Automated ESG risk exposure tool Result

ESG-Score

NACE/SNI-code from the KYCCustomer segmentation

The current sustainability analysis for corporate credit applications in Swedbank is under

development. The aim of the development is to automate some parts of the process and

enable the level and detail of the analysis to vary depending on the size of the customer.

In the lending process sustainability risks are taken into consideration in credit

assessments. A detailed sustainability analysis is done for corporate credits applications

and reviews when the total credit limit is over SEK 8m in Sweden and EUR 0.8m in the

Baltic countries.

ESG risk exposure tool = based on sector specific

information including around 270 subsectors. The tool

reflects ESG risks stemming from the business

operations of the customer. Automated ESG tool for

micro, SSE, SME and Midcrop customers.

Geographical assessment = identifying risks

depending on where in the world the company is

operating

ESG Score: can be used in credit decision and

transition advisory. The ESG score summarizes the

assessments done on a specific customer.

More information

Page 14: Swedbank Investor presentation Q4 2020

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Key Features of Swedbank Green Bond Framework

• Green Bonds enable and support sustainable financing by

demonstrating commitment to Swedbank’s overall

sustainability goals

• Swedbank’s current Green Bond Framework is aligned to the

ICMA Green Bond Principles and eligibility criteria are in line

with market practice

• In April 2021, Swedish mortgages with energy performance

certificates A and B were included (18 401 m SEK)

• Analysis to map the Framework’s level of alignment to EU

Taxonomy is ongoing

• Pricing benefits from issuance (if any) are directly channelled

back to the businesses to further promote lending

• Green Asset Register continues to grow at a good pace, with

the buffer exceeding our target of 20%

Q2 2021 14

Outstanding Green Bonds

18.3

7

20.1

14

Green Asset Register Green bond proceeds

2020 2021

38.5

Green asset register and utilisation, SEKbn

Green asset buffer

21

Final terms

ISIN Currency Issued volume Coupon Maturity

millions % year

XS1711933033 EUR 500 0.250 2022

XS1800143650 SEK 1 000 1.000 2023

XS1800142330 SEK 500 FRN 2023

XS2343563214 EUR 1 000 0.300 2027

XS2350031048 GBP 350 1.375 2027

Page 15: Swedbank Investor presentation Q4 2020

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Green Asset Register

Renewable Energy

EnergyEfficiency

Sustainable Management of Living Natural

Resources

Pollution Prevention and Control

Clean Transportation

ProjectsWind

and Solar

Green

Buildings

Sustainable

Forestry

Waste

Management

Clean Public

Transport

Green Asset Register April 2021 38 733 2 566 34 096 628 1 166 277

---of which Mortgage Portfolio 18 401

Taxonomy alignment estimates Aligned Partially aligned Partially aligned To be defined Not aligned

Green Asset Register and the EU TaxonomyPreliminary, internal assessment of the register (April, 2021)

Alignment to

technical

screening criteria

of EU Taxonomy

15

• In April 2021, Swedish mortgages amounting to 18 401SEKm, with energy

performance certificates (EPC) level A and B were included

• Energy performance certificates (EPC) level A and B correspond to 7% of

Sweden’s national stock (Swedbank equivalent 7.5%)

EPC: SEKm: Taxonomy assessment:

EPC A 2 323 Aligned to technical screening criteria

EPC B 16 078Partially aligned to technical screening criteria

-- of which EPC post- Jan 2019 7 263Estimated to be aligned based on top 15% of

national stock (using “PED” methodology)

-- of which EPC pre- Jan 2019 8 815Yet to be determined as energy performance

measured using the older methodology in Sweden

“Specific Energy”

Details on the assessment of the mortgage portfolio

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79%

21%

84%

16%

81%

19%

84%

16%

65%

35%

79%

21%

SWEDEN

57%43%

63%

37%49%51%

57%43% 42%

58% 60%

40%

ESTONIA

65%

35%

79%

21%

65%

35%

72%

28%

45%55% 59%

41%

LATVIA

60%

40%

78%

22%

56%44%

67%

33%

49%51%63%

37%

LITHUANIA

Loans (private)* Loans (corporate)* Deposits (private) Deposits (corporate) Payments** Funds

* Excluding the Swedish National Debt Office and repurchase agreements ** BankGiro for Sweden, domestic payment transactions (Estonia, Latvia, Lithuania), Q2 2021

= Swedbank

Market leading position in our home markets

16

This is

Swedbank

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Swedbank – continuously innovative

17

Digitally focused organisation

• Board of directors with tech industry

experience

• Head of Digital Banking and IT part of

Group executive management team

Adaptive IT-infrastructure & organisation

• Modular architecture refurbished into a

flexible core platform

• IT and business development integrated

Large retail customer base and scalable

products

• High digital readiness in home markets

• Leverage to improve customer experience,

sales and efficiency

99% digital

customer

interactions

Customer driven availability

• Broadening omni-channel capabilities

• Branches, telephone 24/7, mobile, desktop

and 3rd party platforms

Inn

ovative c

ultu

re

76% of

sales* are

completed

digitally

77%digitally

active

customers

80%digital

customer

satisfaction

* Agreements entered between customers and the bank

COLLABORATING

WITH FINTECHS“A digital bank

with physical

meeting

points”

AUTOMATED

CREDIT CARD

APPLICATION

DIGITAL

ONBOARDING FOR

CORPORATES IN

BALTICS

1996 2006 2009 2012 2013

ONLINE BANKING

IS INTRODUCED

NEXT GENERATION

INTERNET BANK

FIRST APP

LAUNCHED

2ND GENERATION

APPS INCLUDING

TABLETS

LAUNCH OF

YOUTH AND

CORPORATE APPS

1995

ONLINE EQUITY

TRADE

INTRODUCED

2011 2014

FIRST APIs FIRST PFM AND

AGGREGATION OF

TRANSACTIONS

2016 2017

FIRST THIRD PARTY

INTEGRATION

OPEN

BANKING SITE

LAUNCHED

2014

VIRTUAL

ASSISTANT ON .SE

VIRTUAL

ASSISTANT ON

MOBILE

2017 2018 2019

2019 2020 2020

VIRTUAL

ASSISTANT

INTERNET BANK

IN BALTICS

LIVE CHAT WITH

ADVISORS VIA

INTERNETBANK AND

APP

2019

PROACTIVE

RECOMMENDATIONS

IN APP

Q2 2021

DIGITAL ONBOARDING

FOR PRIVATE CLIENTS IN

BALTICS

2020

NEW SERVICE PORTAL FOR

DIGITAL MAILING AND

UPDATE OF KYC

INFORMATION

2021

DIGITAL PIN CODE

DISTRIBUTION ON

SWEDISH CHANNELS

Page 18: Swedbank Investor presentation Q4 2020

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2. Quarterly financial update

Quarterly

financial

update

Page 19: Swedbank Investor presentation Q4 2020

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Growth, better profitability and a clear business focus

TOTAL

EXPENSES

CREDIT

IMPAIRMENTS

KEY RATIOS

TOTAL

INCOME

19

SEK -27m

SEK 11.9bn▪ Stable net interest income

▪ Record high net commission income

▪ Normalised NGL and stable other income

▪ Expenses in line with plan

▪ Strong asset quality

18.5% / 610bps-0.01%0.42

C/Iratio

14.2%

ROE CET1capital ratio / buffer

CREDIT Impairment ratio

Q2 2020

143%

LCR

SEK 5.0bn

0

5

10

15

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Total income, SEKbn

0

2

4

6

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Total expenses, SEKbn

-500

500

1 500

2 500

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Credit impairments, SEKm

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Group result

Income statement

SEKm Q2 21 Q1 21 ▲%

Net interest income 6 572 6 541 0%

Net commission income 3 674 3 360 9%

Net gains and losses 645 585 10%

Other income 979 916 7%

Total income 11 870 11 402 4%

Total expenses 4 989 4 974 0%

Profit before impairments 6 881 6 428 7%

Credit impairments -27 246 -111%

Profit before tax 6 852 6 182 11%

Tax 1 288 1 208 7%

Net profit 5 563 4 975 12%

20

Ratios Q2 21 Q1 21

ROE, % 14.2 12.8

C/I ratio 0.42 0.44

CET1 capital ratio, % 18.5 18.0

● Net profit increased by 12%

● Improved profitability, RoE of 14.2%

– Stable NII, higher NCI

● Expenses according to plan

● Continued strong asset quality with

positive macro outlook

● Strong capitalisation - CET1 capital

buffer of around 610bps above

requirements

Q2 2021

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Group result

Loan and deposit volumes

Q2 202121

*

*Excluding Group functions and other (Group Treasury)

+20 +36

Deposits, SEKbnLoans, SEKbn

SEKm

13 1 6

-4

1 621 1 641 1 637

Q1 2021 Swedishmortgage

loans

Balticbanking

Corporateand other

excl. Balticbanking

Q2 excl.FX

FX Q2 2021

33 4

-1 -51 174 1 210 1 205

Q1 2021* Swedishbanking

Balticbanking

LC&I Q2 excl.FX*

FX Q2 2021*

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Group result

Net interest income

22

3 000

• Stable NII

– Higher average loan volumes

– Lower margins on Swedish mortgages

– Excess liquidity placed with central banks offset

by lower funding costs

• Other

– ECB and Riksbanken liquidity facilities (+73m)

– Lower resolution fund fee (+57m)

– FX (+3m) and day count effects (+31m)

• Q1 included positive deposit guarantee fee

adjustment of 101m

48 84 52

-153

6 541 6 572

Q1 2021 Volumes Margins GroupTreasury

Other Q2 20213 000

6 607 6 553 6 4086 686

6 886 6 714 6 567 6 541 6 572

Q2 2019 Q2 2020 Q2 2021

SEKm

-69

Q2 2021

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Group result

Net commission income

23

• Record high Net Commission Income

• Asset Management income from positive

stock market performance

• High Cards income impacted by seasonality

and improved consumption levels

• Corporate advisory positively impacted by

IPO

181 49 843 360

3 674

Q1 2021 Cards &Payments

AssetManagement

Corporateadvisory

Q2 2021

0

500

1 000

1 500

2 000

Q2 2019 Q2 2020 Q2 2021

Asset Management Corporate advisory Cards & Payments

SEKm

Q2 2021

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Group result

Net gains and losses

24

• IPO valuation effect of SEK 111m from

Hemnet shares held by Fastighetsbyrån

• Underlying NGL at normal level

1 398

669

910

585645

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

102

227

11137

168 645

Bondinventories

Clienttrading

Shares Funding Other Total NGL

SEKm

Q2 2021

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Group result

Other income

25

305 336

237 247

374396

867

975911

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Other Associates Net insurance

979916

• Stable other income

• Higher income from net insurance,

Entercard and savings banks

0

200

400

600

800

1000

1200

Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021

Other income (excl. One-offs) Average for the period

SEKm

Q2 2021

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Group result

Expenses

26

SEKm

• FY underlying cost guidance of SEK 20.5bn

for 2021 and 2022

– AML investigation cost estimate of SEK 0.5bn per

annum for 2021 and 2022

• Expenses in line with plan4 800 4 698

5 4164 896 4 899

43 63

170

77 90

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

4 9894 843 4 761

5 586

4 973

AML investigations Underlying expenses

2 000

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Q2 2019 Q2 2020 Q2 2021

Staff cost IT expenses Consultants Other

Q2 2021

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Group result

Common Equity Tier 1 capital (CET1)

27

16.4% 16.8% 17.5% 18.0% 18.5%

12.4%

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 CET1 capital ratio

requirement

• Strong capitalisation

• CET1 capital buffer of around 610bps above

requirements – target of 100-300bps

• 50% dividend policy

• Remaining accrued dividend from 2019 &

2020 profits still deducted from CET1

• IRB model updates during 2021-2022

(higher REA)

• Swedish banking package

– P2G (SREP, Sept 2021)

• REA decreased by SEK 6.1bn to SEK

688.5bn

SEKbn

+610bps

5.6 0.1

-2.8

124.7 127.6

Q1 2021 Profit Anticipateddividend

Other Q2 2021

Q2 2021

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3. Asset quality

Quarterly

financial

update

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Group result

Credit impairments

29

• Continued strong asset quality

• Net recovery based on forward looking

assumptions and improved ratings

• Management overlay kept - pending

Covid-19 development and removal of

government support

SEKm

2 151

1 235

425 523246

-27

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

-34

-23

31

-1

-27

Swedishbanking

Balticbanking

LC&I Groupfunctions

Group

Q2 2021

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Group result

IFRS 9 distribution SEKm

Expert

portfolio

macro

adjustments

Individual

assessment

Macro-

economic

forecast Q2

Credit

impairments

Q2 2021

OtherRating and

stage

migrations

-276

144

298

-44

-149

-27

● Reduced credit impairments under IFRS9

● Partly counteracted by management

adjustments

● Individual assessment, mainly oil-related

Q2 2021

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Information class 31

Group result

Oil and offshore exposure SEKbn

9.28.0

6.65.3 5.0 4.6

3.7

3.94.6

4.5

2.4 2.4

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

Loans carrying amount Provisions

7.0

11.911.3

9.8

7.3

Drilling

rigs

Oil

services

Supply

vessels

Floating

productions

Stage 1 Stage 2 Stage 3

1.22.5 2.5

0.9

• Gross loans, SEK 7.0bn

• Credit impairment provisions of

SEK 2.4bn

• Total stage 3 loans of SEK 3.5bn

12.9

Q2 2021

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Information classQ2 2021 32

Credit impairments provisions

648 557

-773 -639

-200 -276

698

-698

886672

283 144

889

210

432

394

194298

969150

-124

138

-44

-84

197

-270

220

-169-149

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

246

523

2 151

425

Macro adj: SEK -683m

Expert adj: SEK 1 985m*

Ind. provisions: SEK 2 417m

Distribution by quarter and type

Rating migrations: SEK 1 089m

Other SEK -255m1 235

*Due to FX-change

-27

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1.0 0.9 0.8 0.7 0.7

2.3 2.3 2.3

2.6 2.3

6.0 5.7 5.0

2.7 2.8

0%

20%

40%

60%

80%

100%

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2022

Stage 1 Stage 2 Stage 3

1 491 1 4981 505 1 510 1 534

129 120108 109 101

14 13 11 8 7

86%

88%

90%

92%

94%

96%

98%

100%

Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2022

Stage 1 Stage 2 Stage 3

Distribution of loans by stages

Q2 2021 33

Credit impairment provisions, total, SEKbnTotal loans gross by stages, SEKbn

1 6241 631 1 6421 6271 634 8.18.9 5.86.09.3

• Provision ratio for stage 3 loans of 40%

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4. Capital considerations

Capital

– fully

loaded

CRD IV

Page 35: Swedbank Investor presentation Q4 2020

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Information class

4.5

11

1.5 2

8

14.5

3

3

1

1

2.5

2.5

1.4

7.5 0.30.4 2

7.6

12.4

CET1 req. Actual CET1Q2

AT1 req. T2 req. Total capitalreq.

Actual Totalcapital Q2

Leverageratio req.

Leverage ratio req.

Individual Pillar 2 Charge

Capital Conservation Buffer

Contracyclical Buffer (0.0%)

O-SII Buffer (new)

Systemic Risk Buffer

Minimi req.

Continued strong capital position, Q2 2021- Comfortable distance to loss absorption trigger

Q2 2021 35

Capital

• REA decreased by SEK 6.1bn to SEK

688.5bn

• Remaining accrued dividend from 2019

& 2020 profits still deducted from CET1

• Minimum leverage ratio requirement to

be fulfilled by Tier1 applies from June

2021

• Countercyclical buffer 0%

• CET1 capital buffer of around 610bps

above requirements - target of 100-

300bps

Highlights

More regulatory changes to come during 2021

Automatic MDA

Restrictions

12.4% 22.1%18.5% 16.5%

Buffer of ~ 610bps

1.8% 2.4% 12.4%

Page 36: Swedbank Investor presentation Q4 2020

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4.5

1.5 2

8

12.4

10.3

0.4

1.7

3

3

1

1

2.5

2.5

CET1 req.* AT1 req. T2 req. Total capital req. Leverage ratioreq.**

Pillar 2G (Sep 2021)

Capital conservation buffer

Countercyclical buffer (0.0%)

O-SII buffer (Dec 2020)

Systemic risk buffer

Pillar 2R (Sep 2021)

Minimi req.

Upcoming capital regulatory changes*

Q2 2021 36

”13.0%” ”17.2%”

Capital

• Swedish FSA banking package decided

– P2G – indicative level until Sep 2021 (SREP)

– P2R introduced in Sep 2021 (SREP)

replacing Individual Pillar2 charge

• Countercyclical buffer 0%

• Leverage ratio - additional indicative P2G

requirement set by SFSA to be fulfilled by

CET1, apply by Sep 2021 (SREP)

• IRB overhaul, update of PD and LGD

models will increase REA gradually in

2021 & 2022

Highlights??%1.8% 2.4%

Leverage

ratio P2G

Sep 2021

P2G + P2R

Sep 2021

* Indicative CET1 requirements from SFSA’s banking package memorandum, Nov 2020

P2R

Sep 2021

P2R

Sep 2021

0.8-2.1

** Indicative based on Q2, 2021 numbers, requirement based on Leverage Ratio Exposure (LRE) 0.2-0.5% but based on REA here to be comparable.

1-1.5Automatic MDA

Restrictions

1-1.5

P2G + P2R

Sep 2021

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6935

154

35

76 76

152

Recapitalisationamount

Senior debt >1year

MREL requirement Instruments tomeet MREL

Senior non-preferred Senior preferred > 1year Swedbank total capital

MREL needs in line with expectations

Q2 2021 37

* Based on Q2 2021 numbers

Capital

– MREL

• Requirements for 2021 set and published by the

Swedish National Debt office (NDO) on 16

December 2020

– Total MREL requirement: 6.22% Total liabilities +

Own funds (TLOF), from 23 December 2020

– Recapitalisation Amount (RCA): Minimum Pillar1+

Pillar2. The RCA is currently SEK 69bn

• New MREL requirements under the BRRDII

apply from 2022 (see next slide)

263

111

Swedbank MREL requirement, SEKbn*

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15.6

5.1

11.1

8

1.7

8

1.7

3

12.5

1-1.5

MREL proposed regulatory changes

Q2 2021 38

• Proposal for BRRDII requirements from 1

Jan 2024 published by the Swedish

National Debt office (NDO) on 2 July

2021.

– Total MREL requirement:

2x(P1+P2R)+CBR-Ccyb+P2G

– Subordination requirement: 2x(P1+P2R)

– In percent of Risk Exposure Amount (REA)

• Transition period until 1 Jan, 2024

– MREL and subordination requirements to be

linear faced in

• Subordination: 13.5% in 2022

• MCC 2022: 0%, 2023: 50% and 2024: 100%

• Still uncertainty regarding final

requirement and need (including internal

buffers)

Capital

– MREL

”26-27.4”

MC

C

31.7

* Indicative CET1 requirements from SFSA’s banking package memorandum, Nov 2020

P1

P2R

OSII buffer

CCB

P2G

Systemic

risk buffer

Proposed indicative

requirements, %*

…met by, %

Own funds**

Subordinated eligible

liabilities

Eligible liabilities

MREL requirements 2024* Own funds and eligible liabilities

Q2 2021

** Own funds less CBR (-6.5%)

Page 39: Swedbank Investor presentation Q4 2020

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MREL cont.

Q2 2021 39

Senior unsecured debt maturity profile

SEKbn

• Focus on both preferred and non-

preferred senior debt

• New MREL policy proposal in July

2021 – will adjust need for senior

non-preferred

• Buffer above requirement -

depending on balance sheet

growth and FX fluctuation

Capital

– MREL

Total LPP requirement

* % of Risk Exposure amount

78

0

20

40

60

80

2021 2022 2023 2024 2025 2026-

Senior preferred

SEKbn

0

20

40

60

80

Recapitalisation amount

10.0%*

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Further regulatory changes expected

• Includes amendments to

the frameworks for

calculating credit risk,

CVA, market risk and

operational risk

• Introduction of an output

floor of 72.5% of the

RWA calculated by the

standardised approach

with a phase-in period

from 2023 to 2028

• EU legal implementation

proposal expected in Q4

2021

• New MREL policy –

proposal published by

Swedish NDO on 2 July

– MREL decision

expected in Dec 2021 to

apply from 1 Jan 2022

• New guidelines to be

fully phased in by end of

2021 according to EBA

decision

• Dialogue with SFSA

needed on impact on

Swedbank

• Phase in may be

delayed according to

communication from the

SFSA

Revisions to Basel IIICRR2 / CRD5 /

BRRD2New IRB Regulations

Capital

Q2 2021

• New capital requirements

model to comply with

CRD5, including new

Pillar 2 framework to be

introduced in conjunction

with SREP decision 2021:

decreases distance to

MDA

• SFSA to align

methodology to EBA

guidelines on IRRBB –

revised calculation

method in SREP 2021

Local (SFSA)

requirements

40

Page 41: Swedbank Investor presentation Q4 2020

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5. Liquidity and funding

Liquidity

and

funding

Page 42: Swedbank Investor presentation Q4 2020

© Swedbank

Public

Information class

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Q2 2021

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Q2 2021

Core balance sheet structure

Q2 2021 42

LithuaniaLatvia

Other corporate

lending, Sweden &

other Nordic countries

Other private, Sweden

Swedish

mortgage loans

Senior non-preferred debt

Covered

bonds

Deposits

CET1

Assets LiabilitiesSEKbn SEKbn

Estonia

Liquidity

and

funding

▪ Simplified balance sheet

Suppl. capital

Senior preferred debt

Page 43: Swedbank Investor presentation Q4 2020

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Conservative funding position

Q2 2021 43

• LCR 143% (EU 2015/61)

• NSFR 123% (CRD2)

• Issued SEK 64bn of long-term

funding YTD Q2 2021

Liquidity

and

funding

0

50

100

150

200

2016 2017 2018 2019 2020 2021

Covered bonds Senior preferred Senior non-preferred Tier 2 AT1

SEKbn Issued, long-term debt SEKbn

0

50

100

150

200

2021 2022 2023 2024 2025 2026-

Tier2 (call) AT1 (call)

Senior non-preferred Senior preferred

Covered bonds

~67bn

0

50

100

150

200

2021 2022 2023 2024 2025 2026-

SEK EUR USD GBP Other

Maturity profile, by currency

More details on funding and liquidity in the Fact book, page 55-68

Maturity profile LT-funding

0

200

400

600

800

1 000

1 200

1 400

Coveredbonds

Seniorunsecured

SNP Short-termprogrammes

Deposits

Q1 2021 Q2 2021

SEKbn

Strong funding profile SEKbnOutstanding volumes

12

596

174

Liquidity reserve

Level 1 assets

of which cashand balanceswith centralbanks

Level 2 assets

Liquidity reserveSEKbn

782

Page 44: Swedbank Investor presentation Q4 2020

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Private placements – active in senior unsecured debt

• Senior preferred / Senior non-preferred format

• Major / opportunistic currencies

• Bullet format, FRN or Fixed

• EUR 20m equivalent minimum size

• Open to tap existing bonds

• Listing is optional

• FRN’s – if needed issued with a “strike adjustment spread”*

• Program formats available:

– Senior unsecured debt (preferred/non-preferred): GMTN,

potentially USD 144a format

Q2 2021 44

*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

Page 45: Swedbank Investor presentation Q4 2020

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Group liquidity reserve

Q2 2021 45

Liquidity

and

funding

Fact book, page 56 for currency distribution

1 Minimum reserve requirements held in Central Banks of Estonia, Latvia, Lithuania and Bank of Finland are excluded from Liquid Assets

2 Adjusted value according to Article 9 of Commission Delegated Regulation (EU 2015/61)

SEKm

Level 1 assets 770 563

Cash and balances with central banks 1 596 264

Securities issued or guaranteed by sovereigns, central banks or MDBs and international organisations 133 530

Securities issued or guaranteed by municipalities public sector entities 4 303

Extremely high quality covered bonds 36 466

Level 2 assets 11 959

Level 2A assets 6 236

Securities issued or guaranteed by sovereigns, central banks, municiapalities and PSEs

High quality covered bonds 6 210

Corporate debt securities (lowest rating AA-) 26

Level 2B assets 5 723

Asset backed securities

High quality covered bonds

Corporate debt securities (rated A+ to BBB-) 788

Shares (major stock index) 4 935

Total liquid assets (unadjusted market value) 782 522

LCR adjustments (haircuts) according to LCR DR 26 349

High Quality Liquid Assets 776 173

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Rating• On May 19, 2021, S&P wrote in its Update that Swedbank’s

rating is supported by strong earnings and a stable risk-adjusted

capital, while unresolved vulnerabilities in risk culture,

governance and anti-money laundering processes are key risks.

The outlook is stable based on the belief that Swedbank will be

able to deal with a short-term economic shock and maintain

resilient earnings and solid capital.

• On April 30, 2021, Moody’s stated in its Credit Opinion that

Swedbank’s ratings reflect the bank’s strong credit quality and

solid capitalisation, albeit weighed down by governance and risk

management deficiencies. The stable outlook reflects the view

that additional financial penalties arising from ongoing

investigations are unlikely to materially impact on the bank’s

creditworthiness and that the bank's financial performance will

remain resilient over the next 12-18 months.

• In its Rating Report from November 12, 2020, Fitch concluded

that Swedbank’s ratings reflect a conservative risk appetite and

strong asset quality, capitalisation and profitability balanced by

material shortcomings in the bank's anti-money laundering

(AML) risk controls. The stable outlook is underpinned by the fact

that Swedbank has sufficient rating headroom even under

credible downside scenarios.

46Q2 2021

Credit ratings Moody’s S&P Fitch

Covered bonds Aaa AAA -

Senior preferred Aa3 A+ AA-

Senior non-preferred Baa1 A- A+

Tier 2 Baa2 BBB+ A-

Additional Tier 1 Ba1 BBB- BBB

Short-term P-1 A-1 F1+

Outlook Stable Stable Stable

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6. Cover pool data

Swedbank is a labeled issuer of

the ECBC Covered Bond Label

Foundation

(www.coveredbondlabel.com )

Page 48: Swedbank Investor presentation Q4 2020

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Cover pool data1

Q2 2021 48

Repayment structure 7

– Amortising 69%

– Interest only 31%

Average loan size SEK 652 620

Number of loans outstanding 1 635 652

Number of borrowers 1 078 099

Number of properties 730 813

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 1033.6bn

Geographic distribution Sweden 100%

Current OC-level 116.9%

Weighted average seasoning 2 73 months

Average LTV 3, 4

– WA LTV on property level (Max LTV) 48%

Non-performing loans 5 None

Fixed /Floating interest loans 6

– Fixed 39.0%

– Floating 61.0%1 As per 30 Jun, 20212 Public sector loans not included3 Index valuation as per Mar, 20204 Maximum LTV: Residential 75%, Commercial 60%, Forest and Agriculture 70%5 Past due loans > 60 days are not eligible for the cover pool6 Fixed interest rate loans < 365 days7 Property level of cover pool

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Cover pool data

Q2 2021 49

Swedbank is a labeled issuer of

the ECBC Covered Bond Label

Foundation

(www.coveredbondlabel.com )

Type of loans 30 Jun

(based on loan volume) 2021

Residentials 92.9

of w hich Single-family housing 58.3

of w hich Tenant ow ner rights 22.4

of w hich Tenant ow ner association 7.7

of w hich Multi-family housing 4.5

Public 0.4

Commercial 1.1

Forest & Agricultural 5.6

100.0%

Population Mar

(thousands) 2021

Sw eden 10 390

Stockholm, county 2 396

Västra Götaland, county (incl. Gothenburg) 1 736

Skåne, county (incl. Malmoe) 1 391

Geographical distribution, Sweden, per cent 30 Jun

(based on loan volume) 2021

North 7.0

Norrbotten county (BD) 1.4

Västerbotten county (AC) 2.5

Västernorrland county (Y) 1.8

Jämtland county (Z) 1.3

Middle (including Stockholm) 43.7

Dalarna county (W) 2.1

Gävleborg county (X) 2.2

Värmland county (S) 2.0

Örebro county (T) 2.4

Västmanland county (U) 2.3

Uppsala county ( C) 4.1

Södermanland county (D) 1.8

Stockholm county (including Stockholm) (AB) 26.8

South (including Göteborg and Malmö) 49.3

Västra götaland county (Including Göteborg) (O) 17.9

Östergötland county (E) 4.5

Jönköping county (F) 3.6

Halland county (N) 4.1

Kronoberg county (G) 2.2

Kalmar county (H) 2.9

Skåne county (including Malmö) (M) 12.0

Blekinge county (K) 1.4

Gotland county (I) 0.7

100.0

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Cover pool loan-to-value distribution

• Weighted average LTV on property level 48%

Q2 2021 50

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 0.4% 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 70-750%

5%

10%

15%

20%

25%

30%

00-10 10-20 20-30 30-40 40-50 50-60 60-70 70-75

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Cover pool loan type and loan-to-value distribution

Q2 2021 51

Swedbank is a labeled issuer of

the ECBC Covered Bond Label

Foundation

(www.coveredbondlabel.com )

WA LTV per property type1

1

1excluding public sector loans of 0.4%

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 all types

Percentage of the pool Average LTV per loan type

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Strong resilience to house price changes

Q2 2021 52

Swedbank is a labeled issuer of

the ECBC Covered Bond Label

Foundation

(www.coveredbondlabel.com )

• Current OC-level of 116.8%

• 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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

0% -5% -10% -15% -20% -25% -30% -35% -40% -45% -50%

OC, Q221

OC, Q121

Min req. 2%

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Overview of the Swedish covered bond legislation

53

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 ofbankruptcy

The Covered Bond Act

Source: www.ascb.se

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7. The Swedish and Baltic economies

Swedish

and Baltic

macro

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Information class

Corona virus – infections down, societies reopen

55

Coronavirus, confirmed Cases – Nordics

Swedish

and Baltic

macro

Q2 2021

Coronavirus, confirmed Cases – Baltics

Extent of government restrictions to reduce the spread of infection Patients hospitalised due to coronavirus - Nordics

0

100

200

300

400

500

600

700

800

Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21

Daily cases per million inhabitants, 7-day ma

Finland Sweden Norway Denmark

Sources: WHO & Macrobond

0

200

400

600

800

1000

1200

1400

Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21

Daily cases per million inhabitants, 7-day ma

Latvia Lithuania Estonia

Sources: WHO & Macrobond

0

50

100

150

200

250

300

350

Mar-20 May-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21

Hospitalisation per million inhabitants

Finland Sweden Norway Denmark

Sources: Swedbank Research & Macrobond

30

40

50

60

70

80

90

Index

Germany Denmark FinlandFrance United Kingdom NorwaySweden United States

Sources: Oxford COVID-19 Government Response Tracker (OxCGRT)&MacroBond

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Sweden – The economic recovery is underway

56

• Kingdom of Sweden rated

Aaa/AAA/AAA

Broad-based decline in growth followed by rebound

Swedish

and Baltic

macro

Sources: Statistics Sweden & Swedbank Research1 Annual percentage growth in percent unless indicated otherwise. Forecasts from Swedbank Economic Outlook,

April 2021.2 Seasonally adjusted and smoothed

Key economic indicators1, 2019-2022

Q2 2021

Labour market conditions stabilizing

-2.8

3.6 3.6

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Contribution to growth (p.p.) and GDP (yoy%)

Household consumption Public consumption Investments

Net-export Inventories Gdp growth

Sources: Sw edbank Research & Macrobond

Most recent 2019 2020 2021F 2022F

Real GDP (calendar adjusted) 0.0 (Q1) 2.0 -3.0 3.5 3.6

CPI growth, average 1.8 (May) 1.8 0.5 1.4 1.3

CPIF growth, average 2.1 (May) 1.7 0.5 1.5 1.3

Unemployment rate (15-74), % of labor force 9.1 (May)2 6.8 8.3 8.5 7.6

Savings ratio (households),% of disp. income 15.6 17.9 17.4 15.7

Real disposable income (households) … 3.1 -0.8 3.5 3.2

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Employment, millions, sa , rhs Unemployment rate, %, trend

Redundancy notices, sa (Apr'20=1) Wage growth, yoy%

Sources: Swedbank Research & Macrobond

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The Swedish economy - market developments

Q2 2021 57

Household borrowing grows, corporate declines Interest rates remain low

Swedish

and Baltic

macroInflation reverses The krona stabilises

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Headline inflation (CPI) and with fixed interest rate (CPIF)

CPI, mom% CPIF, yoy% CPI, yoy%

Sources: Sw edbank Research & Macrobond

100

105

110

115

120

125

130

135

140

5

6

7

8

9

10

11

12

2008 2010 2012 2014 2016 2018 2020

Krona (SEK), US dollar (USD), euro (EUR) and trade-weighted index (KIX)

SEK/EUR SEK/USD KIX index, rhs

Sources: Swedbank Research & Macrobond

-10

-5

0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bank lending (annual change in %)

Households (housing) Non-Financial Corporations

Sources: Swedbank Research & Macrobond

-1

0

1

2

3

4

5

6

7

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Interest rates (%)

Mortgage lending rate (3m new loans) Government 10 year, yield

Repo rate STIBOR, 3m

Sources: Swedbank Research & Macrobond

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Baltics – ready for lift-off

58

Ratings

• Republic of Estonia: A1/AA-/A+

• Republic of Latvia: A3/ A-/A-

• Republic of Lithuania: A3/ A-/A-

Key economic indicators1, 2019-2022

1 % growth rate unless indicated otherwise, Y/Y growth for the most recent data

Swedish

and Baltic

macro

Q2 2021

-8

-6

-4

-2

0

2

4

6

8

2016 2017 2018 2019 2020 2021 2022

Estonia

Change yoy %

3.0%

5.0%

-2.9%

Sources: Sw edbank Research & Macrobond

-10

-8

-6

-4

-2

0

2

4

6

2016 2017 2018 2019 2020 2021 2022

Latvia

Change yoy %

3.1%

5.5%

-3.6%

Sources: Sw edbank Research & Macrobond

-6

-4

-2

0

2

4

6

2016 2017 2018 2019 2020 2021 2022

Lithuania

Change yoy %

3.0%

4.9%

-0.8%

Sources: Sw edbank Research & Macrobond

Most recent 2019 2020 2021F 2022F

Real GDP Estonia 5.4 (Q1) 5.0 -2.9 3.0 5.0

Latvia -1.3 (Q1) 2.1 -3.6 3.1 5.5

Lithuania 1.4 (Q1) 4.3 -0.8 3.0 4.9

CPI growth, average Estonia 3.8 (Jun) 2.3 -0.3 1.5 2.0

Latvia 2.6 (May) 2.8 0.2 1.8 3.0

Lithuania 3.6 (May) 2.7 1.2 2.3 3.3

Unemployment rate (15-74), Estonia 7.6 (Q4) 4.4 6.8 8.0 6.9

% of labor force Latvia 8.1 (Q1) 6.3 8.1 8.4 6.7

Lithuania 7.5 (Q1) 6.3 8.5 8.5 7.3

Real economic growth(Quarterly year-on-year change and annual growth projections)

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Sentiments strengthening in the Baltics

59

Economic sentimentConfidence indicators, sa, index represents deviations from long term average (=0)

Swedish

and Baltic

macro

Sources: Swedbank Research & Macrobond

Economic Sentiment Indicator, rhs Consumers Industry

Retail trade Construction Services

Q2 2021

-40

-30

-20

-10

0

10

20

-60

-50

-40

-30

-20

-10

0

10

20

30

Jun-18 Jan-19 Aug-19 Mar-20 Oct-20 May-21

Estonia

-40

-30

-20

-10

0

10

20

-40

-30

-20

-10

0

10

20

Jun-18 Jan-19 Aug-19 Mar-20 Oct-20 May-21

Latvia

-40

-30

-20

-10

0

10

20

-50

-40

-30

-20

-10

0

10

20

30

Jun-18 Jan-19 Aug-19 Mar-20 Oct-20 May-21

Lithuania

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8. Swedish housing and mortgage market

Swedish

housing

and

mortgage

market

Page 61: Swedbank Investor presentation Q4 2020

© Swedbank

Public

Information class

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Valueguard index & annual growth rates

Composite Flats Houses

Index

-10

0

10

20

30

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Composite Flats Houses

Annual rate (%)

Housing prices continue to rise

• Housing prices continue to rise after reaching record

levels in the first quarter of 2021

• Demand for single family homes unabated.

• In May monthly seasonally adjusted prices rose by

1.5%, apartments by 1.2% and single-family homes by

1.5%.

61

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, May 20211)

Price developments flats and single family houses1)

Q2 2021

1 month 3 months 12 months SEK/sqm2)

Tenant owner

Sweden total 0.8% 2.3% 12.1% 45 227

Greater Stockholm 1.0% 2.2% 12.3% 64 875 (104 310)

Greater Gothenburg 0.6% 1.7% 9.0% 49 778 (67 629)

Greater Malmoe 0.9% 4.4% 17.7% 36 532 (38 890)

Sweden total 1.7% 5.7% 21.4% 4 285 000

Greater Stockholm 1.8% 3.9% 22.9% 7 443 000

Greater Gothenburg 0.8% 6.0% 21.0% 6 043 000

Greater Malmoe 1.3% 4.9% 23.8% 5 644 000

Sweden 1.4% 4.4% 17.9% …

Single-family homes

Total Housing Index

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Buoyant housing market despite Corona

• Strong housing price developments since the immediate negative impact from Corona

• Housing market transactions stronger than normal

• Amortisation requirement on hold until September

Q2 2021 62

Housing prices

Swedish

housing

and

mortgage

market

Housing market transactions

Sources: Swedbank Research & Valueguard

-3

-2

-1

0

1

2

3

4

Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21

Seasonally adjusted housing prices: Jun 2019 - May 2021(Monthly change in %)

Tenant-Owner Rights Single Family Houses Housing prices

Source: Valueguard

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Housing transactions

Average 2015-19 Last observationSource: Mäklarstatistik

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Household borrowing grows, while borrowing costs remain subdued• Housing prices and transactions volumes grow, resulting in…

• ….increased mortgage volumes, while…

• …housing interest costs remain low due to supressed interest rates

63

Household interest expensesMortgage loan growth, housing prices and interest rate

Swedish

housing

and

mortgage

market

Q2 2021

160

180

200

220

240

260

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2014 2015 2016 2017 2018 2019 2020

index

Riksbank's policy rate Mortgage loans to households, yoy%

Mortgage lending rate (3m new loans) Housing price index, HOX, rhs

Sources: Sw edbank Research & Macrobond

percent

0

2

4

6

8

10

12

14

16

18

1980 1985 1990 1995 2000 2005 2010 2015 2020

Sources: Sw edbank Research & Macrobond

percent of disposable income

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Household fundamentals support the housing market

• Population growth slows, but lagging housing shortage remains

• The household debt ratio increased in 2020

• Balance sheets among households remain solid

Q1 2021 64

Strong household balance sheetsPopulation growth slows

Swedish

housing

and

mortgage

market

0

20000

40000

60000

80000

100000

120000

140000

160000

0

10000

20000

30000

40000

50000

60000

70000

80000

1976 1981 1986 1991 1996 2001 2006 2011 2016

Completed housing and population growth, no. of persons and housing

Completed Residential buildings Population growth, rhs

Sources: Sw edbank Research & Macrobond

0

100

200

300

400

500

600

Perc

ent

Share of disposable income

Currency&Deposits Financial assets Real assets

Insurance&Pensions Liabilities

Source: Statistics Sw eden

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Solid structural foundation for the housing and mortgage market

Swedbank’s underwriting criteria

– In the repayment ability calculation, the interest rate

used is the equivalence to the Mortgage company’s

5 year fixed interest rate + 3 percentage points,

with a minimum of at least 6 %.

– Amortisation rate requirement according to SFSA:• For LTV ≤ 70 %, then 1 % is used as rate.

• For LTV > 70 %, then 2 % is used as rate.

• For DTI > 450 %, then the amortisation rate is one

percentage more.

• Suspended due to COVID-19 pandemic

– For underwriting credits to tenant owner rights, the

tenant owner association’s financials are examined,

and based the interest rate sensitivity of the

association and price per square meter an add-on

to the tenants fee is applied in the affordability

calculation.

Q2 2021 65

• 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

• 65% 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

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A low-risk real estate portfolio, SEK 1 302bn, whereof 87% in residential properties

66

Property

management

Q2 2021

Real estate

lending

Private Mortgage Loans Tenant-Owner Associations Property Management

• Low-risk strategy with prudent origination standards

• Low concentration risk due to many borrowers and

geographical split

• Low historical losses: 0.01% on average last 10 years

• Low average LTV in Sweden (51%), Estonia (46%),Latvia

(72%), and Lithuania (54%) as of end-Q2 2021

• The portfolio grew by SEK 13bn (1.4%) in Q2 2021 and with

an annualised growth of 5.7%. Stable growth in all four

home markets

• Low concentration risk due to many borrowers and

geographical split

• High demand from households for living in a TOA

• Low average LTV at 32% in Q2 2021

• Low historical losses: 0.00% on average last 10 years

• The portfolio unchanged in Q2

• During the last three years, more project are finalised than

started. This, combined with intense competition from peers

has affected the portfolio growth negatively in recent years

Q1 2021

90%

4%2% 4%

Sweden Estonia Latvia Lithuania

Sweden dominate portfolio Geographically diversified

12%

29%

11%10%

38%

<50 000 inhabitants >50 000 inhabitants Gothenburg region

Malmoe region Stockholm region

Vast majority of portfolio in Sweden

82%

5%

2%2%

9%

Sweden Estonia Latvia Lithuania Other

SEK

251bn

SEK

960bn

SEK

91bn

• Commercial properties SEK 111bn - mostly office properties

with low vacancies in larger cities with low LTV

• Residential properties SEK 77bn - low risk portfolio,

supported by high demand due to e.g. growing population,

and low vacancies

• Industrial & Warehouse SEK 41bn - warehouse and logistic

properties supported by growing e-commerce, low

vacancies

• Other properties SEK 22bn - substantial share of community

properties

• Slightly increasing portfolio by SEK 5bn (2%) in Q2 2021

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

Residential property management

Share of loan-to-value >75%

Average loan-to-value, %

Property

management

Non-residential property management

1.2% 1.2% 0.0% 0.2% n.a. 0.0%

1) Some properties with mixed usage

55% 47% 28% 33% n.a. 47%

• Low-risk portfolio1), supported by;

− Growing population

− High demand, and low supply of new

production

− Stable rent levels

− Low vacancy rates

− Low interest rates

93.9% 0.1% 0.2% 0.0% 0% 5.0%

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

Share of loan-to-value >75%

Average loan-to-value, %

1.8% 0.8% 0.0% 2.6% 0.7% 0.4%

54% 54% 52% 48% 54% 47%

• Mixed portfolio1) comprising:

− Office properties

− Logistic and warehouse properties

− Industrial properties

− Community properties

− Retail real estate

− Hotel real estate

− Other non-residential real estate

76.9% 6.9% 2.5% 3.4% 7.7% 2.5%

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

SEK

77bn

SEK

173bn

67

Property

Management

Q2 2021

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9 Appendix

Page 69: Swedbank Investor presentation Q4 2020

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Information class

Two hundred years of working with sustainability

69

1980 2003

First SRI mutual fund

launched – excluding

sectors deemed

unethical

First listed Nordic bank to

receive ISO 14001 certification

for its Environmental

Management System

1820

Swedbank’s first Group-

wide sustainability report

complying with GRI G4

2014 2015

Headquarters in

Stockholm received EU

Green Building

certification

Achieved target to

reduce CO2 emissions

by 50% from 2010

2013

Sustainability Report

integrated in the Annual

Report

Group-wide exclusion of

companies whose coal

revenues exceed 30% of

turnover

2016 2017

Inaugural Swedbank

Green Bond issued

Launched Global

Impact Fund

2018

Ensuring a secure

operating environment

✓ Proactive strategy to information

security

✓ Systematic approach to AML with

same governance and processes

in all our home markets

✓ Low losses related to operational

risks

Commitment to govern

with impact

✓ UN Principles for Responsible

Banking – Founding Signatory

✓ TCFD Supporter and committed to

Science Based Target initiative

✓ Committed to SDGs 4, 8, 12, 16

✓ Member of UNEPFI Energy

Efficiency Finance Platform

✓ Aiming to reduce CO2 emissions

by 60% 2019-2030

Help our customers to

make sustainable

decisions

✓ Green mortgages

✓ Unique SDG fund (Global Impact

Fund)

✓ Market leading Green Bond

Nordic bookrunner

✓ Developed indicators to assess

progress towards the SDGs in our

home markets

Our legacy – roots, values

& conduct

✓ Sweden’s first savings bank in

1820 combating poverty

✓ Increasing financial literacy in

society

✓ Supporting development of

financial infrastructure in our

home markets

✓ Inclusive bank

✓ Our core values: Open, Simple,

Caring

2014

Swedbank acquired a majority

stake in Hansabank in the

Baltics

1998

Swedbank is the first

savings bank

established in Sweden

1820

1996

Launched fund investing in

companies with industry

leading environmental focus

2019

Launched Green Loans

and Sustainability

Improvement Loans

Launched

Transition Funds

2019 2020

Launched ‘Paris

Aligned’ Funds

Group-wide exclusion

of companies whose

coal revenues exceed

5% of turnover

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Principles for Responsible BankingCommitment to align business strategy to Paris Agreement and UN SDG:s

70

In 2020 Swedbank conducted its first Portfolio Impact Analysis using the methodology provided by UNEP Financial Initiative.

- Through the analysis, we determined that the bank, through its business, impacts climate change (emissions), resource efficiency (consumption),

access to housing and decent employment.

- The analysis shows that Swedbank, through activities in the real estate and manufacturing sectors, as well as the professional, scientific and technological

sectors, has a positive impact on housing and employment.

- Conversely, there were negative impacts on the areas of climate change and resource efficiency from activities in property management, manufacturing,

agriculture, forestry and fishing, as well as in the energy sector connected with the extraction of fossil fuels.

Portfolio Impact Analysis 2020

Set science based climate targets for the real estate sector that align with the Paris Agreement.

The baseline year is 2020

1

Increase our sustainable finance offering compared with 2020. To achieve this the bank will

work with customers by offering advice & financing solutions to support transition

2

Targets set for 2021 to address our impacts

Through our core business we have both:

• Positive Social impact

• Negative Environmental impact

Key conclusions on impact

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Swedbank 2017 Green Bond Framework In accordance with Green Bond Principles

• Renewable energy

• Energy efficiency

• Clean transportationUse 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 reviewed annually

• Swedbank targets a 20% buffer in the asset pool to accommodate redemptions or amortisation

• Tracking of green bond proceeds

Management of Proceeds

• Annual reporting on the use of proceeds and impact

• Reporting is externally verified to limited assurance by PWCReporting

External Review

71

• Pollution prevention and control

• Sustainable management of living natural resources

• DNV provided an external review on the Green Bond Framework, to confirm its alignment with ICMA Green

Bond Principles (GBP)

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Green Asset Register

RenewableEnergy

EnergyEfficiency

Sustainable Management of Living Natural

ResourcesPollution Prevention

and Control

Clean Transportation

Impact indicatorWind

and Solar

Green

Buildings

Sustainable

Forestry

Waste

Management

Clean Public

Transport

Avoided emissions (tCO2e) 589 547 574 780 6 120 8 647

Energy generation (MWh) 2 333 500 1 831 000 502 500

Energy savings (MWh) 19 477 19 477

FSC/ PEFC certified forest area (ha) 26 740 26 740

Certified standing stock (m3) 3 344 000 3 344 000

Waste treated (t) 150 000 150 000

Passenger kilometers (pkm) 94 029 698 94 029 698

Green Bond Impact 2020

72

Avoided emissions

tCO2e/SEKm

Avoided emissions

tCO2e

Green Asset Register as per 31 Dec 2020: 18 344SEKm

• Three new asset categories were added to the Green Asset

Register in 2020: Sustainable Management of Living

Natural Resources, Pollution Prevention and Control, and

Clean Transportation

• The geographic representation of assets has grown to

include all four Swedbank home markets*, in addition to

Norway and Finland

Impact metrics 2020:

Energy efficiency

Renewable energy

Pollution prevention andcontrol

Sustainable managementof living natural resources

Clean transportation

6%

75%

3%1%

15%

* Sweden, Estonia, Latvia and Lithuania

Green bond impact report 2020

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IFRS9 scenarios – Q2 2021

Q2 2021 73

Asset

quality

2021 2022 2023 2021 2022 2023 2021 2022 2023

Sweden

GDP (% annual growth) 4.3 4.1 1.8 3.7 3.5 1.9 -3.2 -0.1 3.8

Unemployment (%)2) 8.7 7.3 7.1 8.8 7.7 7.4 9.8 11.3 10.3

House prices (% annual change) 9.6 3.4 5.4 9.2 2.6 4.9 3.6 -3.8 1.7

Stibor 3m (%) -0.01 0.10 0.36 -0.01 0.08 0.23 -0.10 -0.20 -0.26

Estonia

GDP (% annual growth) 3.7 5.8 3.0 3.0 5.0 3.2 -2.4 1.4 3.7

Unemployment (%) 7.8 6.6 6.1 8.0 6.9 6.5 10.4 11.8 10.7

House prices (% annual change) 10.4 10.8 5.8 9.4 7.9 5.0 1.4 -1.9 4.1

Latvia

GDP (% annual growth) 3.8 6.2 3.6 3.1 5.5 3.5 -2.7 2.6 3.8

Unemployment (%) 8.2 6.4 5.6 8.4 6.7 6.0 11.0 12.8 11.3

House prices (% annual change) 4.7 7.0 6.4 3.8 5.2 5.4 -3.9 -4.4 4.7

Lithuania

GDP (% annual growth) 4.1 4.4 3.7 3.4 3.5 3.4 -1.1 0.8 3.8

Unemployment (%) 8.3 6.9 6.4 8.5 7.3 6.8 11.0 12.3 11.0

House prices (% annual change) 11.1 7.0 5.8 10.1 4.5 4.9 2.0 -5.1 4.1

Global indicators

US GDP (% annual) 7.3 4.5 1.7 6.8 3.9 2.3 2.0 -3.3 2.2

EU GDP (% annual) 5.0 4.4 2.0 4.0 4.0 2.2 -0.9 1.1 2.5

Brent Crude Oil (USD/Barrel) 65.8 64.1 61.8 63.9 61.1 58.8 47.3 24.9 31.8

Euribor 6m (%) -0.50 -0.40 0.16 -0.50 -0.46 -0.38 -0.08 -0.33 -0.44

Positive scenario Baseline scenario1) Negative scenario

1) The baseline scenario for 2021 and 2022 are based on the published Swedbank Economic Outlook in combination with later developments. The baseline scenario variables for 2023 are model-

based extrapolations. The scenarios were updated as per 30 June, 2021.

2) Unemployment rate, 16-64 years

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IFRS 9 – main characteristics of the different loan stages

Q2 2021 74

Sta

ge

1 lo

an

s

Initial recognition, or no

significant increase of

credit risk

Impairment amounting to

12-month expected credit

losses

1-29 days past due

Sta

ge

2 lo

an

s

Significant increase in

credit risk

Watchlist

30-89 days past due

Sta

ge

3 lo

an

s

Evidence of impairment

90 days past due

Impairment amounting to

lifetime expected credit

losses

Impairment amounting to

lifetime expected credit

losses

Probability of default = 1

Asset

quality

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IFRS 9 – Distribution of loans

Q2 2021 75

Sta

ge

1 lo

an

s

Sta

ge

2 lo

an

s

Sta

ge

3 lo

an

s

Asset

quality

0.4%

48.1%

Credit impairment provisions distribution, % (total, SEK 5 768m)

Loans to the public, gross, distribution, % (total, SEK 1 642bn)

12.2%

93.4%

39.7%

6.2%

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Funding programmes

Q2 2021 76

Swedbank AB Swedbank Mortgage AB

** Combined limit for unsecured- and covered bonds

*** Limited by cover pool size

100% owned

Liquidity

and

funding

Program Limit

Long Term

Global MTN USD 40bn

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 10bn

US CP USD 20bn

Yankee CD USD 20bn

Finnish CD EUR 4bn

Program Limit

Long Term

Domestic Benchmark CB Unlimited***

EMTN CB EUR 25bn

Norwegian Benchmark CB Unlimited***

AUD Covered bonds** AUD 10bn

Registered CB (stand alone doc.)

Short Term

Domestic CP SEK 50bn

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Benchmark transactions, 2018 – 2021

Q2 2021 77

Liquidity

and

funding

• The table excludes volumes issued

on tap in the Swedish domestic

covered bond market*

* https://www.swedbank.com/investor-

relations/debt-investor/funding/covered-

bonds/

ISIN Product Tenor Currency Amount, mn Type Spread Value date Maturity date

XS1778322351 CB 5.5Y EUR 1 000 Fixed MS-10 February 23, 2018 August 23, 2023

XS1800142330 SU Green 5Y SEK 500 FRN 3mStib+47 March 29, 2018 March 29, 2023

XS1800143650 SU Green 5Y SEK 1 500 Fixed MS+47 March 29, 2018 March 29, 2023

XS1844104437 SU 4.5Y GBP 400 Fixed G+80 June 28, 2018 December 28, 2022

XS1870225338 SU 5Y EUR 500 Fixed MS+18 Aug 29, 2018 August 29, 2023

XS1880928459 T2 10NC5 EUR 500 Fixed MS+128 September 18, 2018 September 18, 2028

XS1946788194 CB 7Y EUR 1 000 Fixed MS+13 February 5, 2019 February 5, 2026

XS2002504194 CB 6Y EUR 1 250 Fixed MS+2 May 28, 2019 May 28, 2025

XS2046625765 AT1 Perp. NC5 USD 500 Fixed 5.625 Aug 29, 2019 (call) Sep 17, 2024

XS2063261155 SNP 5Y EUR 750 Fixed MS+70 October 9, 2019 October 9, 2024

XS2167002521 SU 5Y EUR 1 000 Fixed MS+98 May 5, 2020 May 5, 2025

XS2182121405 SU 144a 3Y USD 1 000 Fixed T+112.5 June 2, 2020 June 2, 2023

XS2198236734 SU 3Y JPY 10 300 Fixed YOS+35 July 6, 2020 July 6, 2023

XS2198237039 SU 5Y JPY 10 700 Fixed YOS+40 July 6, 2020 July 4, 2025

XS2237318485 SU 144a 3Y USD 1 000 Fixed T+45 September 25, 2020 September 25, 2023

XS2282210231 SNP 7Y EUR 750 Fixed MS+63 January 12, 2021 January 12, 2028

XS2317119969 SU 144a 3Y USD 750 Fixed T+55 March 17, 2021 March 17, 2024

XS2343563214 SNP Green 6NC5 EUR 1 000 Fixed MS+57 May 20, 2021 May 20, 2027

XS2350031048 SNP Green 6.5NC5.5 GBP 350 Fixed T+100 June 8, 2021 December 8, 2027

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Swedbank – contacts and financial calendar

78

Annie Ho Markus Sandgren Henrik Asplund

Head of Investor Relations Investor Relations Officer, Equity Investor Relations Officer, Equity

Mobile: +46 703 43 78 15 Mobile: +46 727 31 62 84 Mobile: +46 704 33 60 40

[email protected] [email protected] [email protected]

Peter Stenborn Magnus Alvesson Karolina Skog

Investor Relations Officer, Debt Investor Relations Officer, Debt and Rating Investor Relations Officer, ESG

Mobile: +46 706 76 60 92 Mobile: +46 706 10 33 41 Mobile: +46 702 25 05 89

[email protected] [email protected] [email protected]

Gregori Karamouzis Ulf Jakobsson Kerstin Ahlqvist

Head of Group Treasury Head of Funding Head of long-term Funding

Mobile: +46 727 40 63 38 Tel: +46 8 700 90 61 Tel: +46 8 700 98 90

[email protected] [email protected] [email protected]

Q3 Interim report, 2021 21 Oct 2021

Q4 Interim report, 2021 2 Feb 2022

Q1 Interim report, 2022 28 Apr 2022

Q2 Interim report, 2022 19 Jul 2022

[email protected]

www.swedbank.com/investor-relations/debt-investor

Swedbank AB (publ) Landsvägen 40,

SE-105 34 Stockholm, Sweden Sundbyberg

Contact Investor Relations:

Financial calendar

Postal address: Visitors: Group Treasury

Investor Relations