3. Highlights Q3 2008
Resilient underlying business; collective provisions in the Baltics
Negative financial effects due to financial crisis
Accelerated cost management due to economic downturn
Financial crisis impacts profit… …but underlying income generation is stable
5 000
10,000
4 000
8,000
3 000
6,000
2 000
4,000
1 000
2,000
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2007 2008 2007 2008
Lehman Brothers-related losses
Other income**
Portfolio losses Net fee and commission income
Reported operating profit* Net interest income
* Excluding sales of Baltic properties in Q4 2007 of SEK 785m ** Net financial income, Net insurance income and Other income
3
4. Net financial income
Group
SEK m
1,000
500
+ corp fin intäkter I
0
marknaden?
-500
FX Equities Capital CPM Other incl.
-1,000 Markets Treasury
Q3 07 Q2 08 Q3 08
Merchant Banking Investment portfolio
Structured
SEK
SEK m Q1 08 Q2 08 Q3 08
credits
12bn
Financial P/L -872 -66 -348
SEK
institutions
SEK 63bn
Equity -1,630 -56 -2,134
55bn
Covered
-2,502 -122 -2,482
bonds etc
4
5. Group credit exposure
By geography By sector
Total exposure = SEK 1,805bn Total exposure = SEK 1,805bn
Banks
Public
Corporate
admin. 14%
Nordics
6%
66%
40%
26%
Germany
14%
24%
House-
Lithuania holds
Property
5% Estonia
Latvia management
3%
2%
5
6. Households Credit Portfolio
SEK bn
Mortgage Other
79 78
76
73
68
235 235
227
219
186
22
21
20
20
27
11
11
11
10
72
70
68
67 10
55 50
47
45
44
28
Dec Dec Mar Jun Sep Dec Dec Mar Jun Sep Dec Dec Mar Jun Sep
'06 '07 '08 '08 '08 '06 '07 '08 '08 '08 '06 '07 '08 '08 '08
Nordic Germany Baltic
6
7. Corporate Credit Portfolio
SEB Group, SEK bn
720
12%
19%
573
11%
463
458
10%
27%
18%
3%
Finance and insurance Wholesale and retail
Transportation Other service sectors
Dec Dec Dec Sep
Construction Manufacturing
2005 2006 2007 2008 Other
7
8. Corporate Credit Portfolio
SEB Group, SEK 720bn
500
450
400
350
300
250
200
150
100
50
0
quot;Nordicquot; Larger German Larger Baltic Clients Swedish Retail Other
Clients Clients Clients
Dec '06 Jun '07 Dec '07 Jun '08 Sep '08
8
9. Property Management Credit Portfolio
SEB Group, SEK 245bn
Credit exposure
SEKbn
120
3%1%
Dec '06 Jun '07 Dec '07
8%
Jun '08 Sep '08
100
6%
2%
80
42%
3%
60
40
20
35%
0
German Nordic Nordic Baltic Sweden Germany Estonia
Clients Larger Retail Clients Latvia Lithuania Other Nordic
Other European Other
Clients Clients
* By obligor’s domicile
9
10. Asset quality
Estonia 1.31
Latvia 0.96
Impaired Loans Volumes Net Credit Losses Lithuania 0.43
% of Credit Portfolio* % of lending Baltics 0.85
3% 1.00
SEB Group Germany
Nordic Baltic Germany Baltics
Nordics SEB Group
0.80
2%
0.60
1.5%
1.4%
0.40
1%
0.6% 0.20
0.2%
0.00
0%
2006 2007 Q1 Q1-Q2 Q1-Q3
Mar Jun SepDec Mar Jun Sep Dec Mar Jun Sep
2008* 2008* 2008*
'06 '06 '06 '06 '07 '07 '07 '07 '08 '08 '08
*Annualised figures
10
11. Baltics – macro development
GDP, %
Lengthy recession in Estonia Estonia Latvia Lithuania
and Latvia; negative growth both 15
in 2008 and 2009 10
Weak growth in less overheated 5
Lithuanian economy
0
Domestic demand remains -5
depressed 2002 2003 2004 2005 2006 2007 2008 2009 2010
(f) (f) (f)
Increased exchange rate risk in
Estonia and Latvia Retail sales, Y-o-Y %
Estonia Latvia Lithuania
Large imbalances will dampen: 40
30
– Wage inflation declines
20
sharply 10
– Large current account deficits 0
-10
will shrink, but still high 2010
-20
01 02 03 04 05 06 07 08
11
12. Baltic countries – Credit exposure
On and off balance, SEK bn
SEB Estonia SEB Latvia SEB Lithuania
89
Total
76
Banks
26
56 22
52
50
Public
44 15
41
41 13 13 Administration
34
20
19 8 Households
14
14
14
10
8 8 6
5 45
8 4 39
34 Property
22
22 22 21
17 18 Management
Corporate
Dec Dec Sep '08 Dec Dec Sep '08 Dec Dec Sep '08
'06 '07 '06 '07 '06 '07
2006 2007 2008 YTD 2006 2007 2008 YTD 2006 2007 2008 YTD
+4%
+40% +18% +47% +30% +13%
+38% +17% +1%
Growth rates in local currency
12
17. Capitalisation and RWA growth
Tier 1 capital ratio Risk-weighted assets
Per cent SEK bn
Basel I Basel II
1,200
15%
Without transition rules
Tier 1
With transition rules
9,9 % 900
10%
600
Tier 1
8,1 %
6% Stability
5% 300
package
4% Swedish
FSA's
0
minimum rules
Q1 Q2 Q3 Q4 Q1 Q2 Q3
0% 2007 2007 2007 2007 2008 2008 2008
september 2008
17
18. Basel II Tier 1 ratios – Nordic banks
Last reported Basel II tier 1 ratios, excluding capital floors
Last reported Basel II tier 1 ratios, including capital floors
14.0
5
11.5
10.5
4
10.0
10.1
12.0 9.9
2 8.2
9.4 6.7
1.7
8.1
7.3 1
10.0 7.9 1.3
1.0
0.6
1.5
1.2 7.0 0.9
8.0
1.4 0.9 0.8
0.5
6.0
9.8 9.2
9.2
9.2 9.0
8.4 8.2 8.1
4.0
7.3 7.2
7.0 6.7
2.0
0.0 5
(0.9)
(1.2)
2
(1.8) (2.0) (2.2)
(3.3)
(2.0)
(4.0)
3
SEB DnB NOR Danske Bank Nordea SHB Swedbank
Core capital ratio (excl. 100% of insurance and capital floors) Impact of insurance capital (100% )
Impact of hybrid capital Impact of Basel II capital floor (as per Q3 08)
Notes:
1 RWA adjusted for life insurance impact (life insurance assets risk weighted under statutory disclosure) to allow comparison
2 According to guidance on RWA under full Basel II implementation and Vital RWA given on Q3 conference call
3 Including capital rasing announced 27 October 2008
4 Stated figure includes a 50% deduction of insurance capital from tier 1 capital. Adjusted for this deduction, Danske’s Tier 1 ratio is 10.3%
5 Assuming 1%-point improvement of core capital ratio (excluding hybrid and insurance capital) under full implementation, RWA only disclosed including Basel II
transition rule adjustment
Source: UBS
18
19. Basel II Tier 1 ratios – British banks
Pre announced capital increase (Q2 2008)
Stated Basel II tier 1 ratios as per 30/06/2008, including capital floors
14.0
12.0
8.7 8.6
8.6 8.6
10.0 7.9
0.9 0.9
8.0 1.2 1.3
0.2 1.4
0.8
1.0 2.1
1.0
6.0 1.4 1.4
1.2
2.6
4.0 7.7
6.7 6. 6. 5.7
5.1 5.0
4.5
2.0 3.6
5 2
0.0
HBOS2
HSBC Lloyds TSB RBS Barclays
Core capital (excluding insurance capital) Impact of insurance capital (100% )
Impact of preference shares Impact of hybrid
Post announced capital increase (Q2 2008)1
12.7
14.0 12.1 12.1 11.3
0.9
12.0 1.2 1.3
8.7 1.4
3.1
10.0 1.7 1.7
2.3
1.4
0.9 1.2
8.0 2.6
0.2
1.0
6.0
9.1
4.0 7.7 7.6
9.1 7.6 8.8
6.7 6.5
7.7
2.0
0.0
HSBC HBOS Lloyds TSB RBS Barclays
2
Core capital (excluding insurance capital) Impact of insurance capital (100% )
Impact of preference shares Impact of hybrid
Notes:
1 Capital raisings post 30 June 2008,
HSBC: 0, HBOS: £8.5bn of ordinary shares, £3.0bn of preference shares, Lloyds TSB: £4.5 of ordinary shares, £1.0bn of preference shares
Barclays: £5.1bn of ordinary shares, £3.0bn of preference shares, RBS: £15.0bn of ordinary shares, £5.0bn of preference shares
2 RWA adjusted for life insurance impact (life insurance assets risk weighted under statutory disclosure) to allow comparison
Source: UBS
19
20. Swedish stability package -
Guarantee pricing
Maximum scope: for each bank: its outstanding debt maturing until
April 30th, 2009; for the system: SEK 1,500bn
Participating banks to pay a risk-based fee for the guarantee; Fee
level: somewhere between today's funding costs in the market and the
notional funding costs under normal market circumstances
Allowed instruments: senior term debt with maturities between 3
months and 5 years, including covered bonds!
Unsecured <1 year: 50bps
Unsecured >1 year: 50bps+28bps (CDS) = 78bps
Covered bonds: 25bps+ ~10bps (AAA-CDS) = ~35bps
20
21. Going forward
● Holistic balance sheet management
● Robust capital and good liquidity
● Resilient customer business
● Lower absolute costs
21
