Interim report Q4 2024

Swedbank once again delivers a strong result supported by timing effects. We create value for our customers and shareholders in good times and bad.

The global economy remains weak. Falling interest rates are slowly starting to have a positive effect on economic activity, but regional differences are growing while the geopolitical situation has deteriorated. During the quarter, the Federal Reserve, the European Central Bank and the Riksbank continued to cut policy rates.

In Lithuania economic activity is strong, while developments in Estonia, Latvia and Sweden are more restrained. Strong public finances, rising real wages, innovative companies and lower interest rates mean that our home markets are expected to be among the fastest growing in Europe in 2025.

Swedbank's result for the quarter amounted to SEK 8 465m. For the full-year 2024, profit totalled SEK

34 866m. The retuon equity was 15.8 per cent for the quarter and 17.1 per cent for the full-year. Income decreased during the quarter but rose for the full-year. Costs developed according to plan. Thanks to strict cost control, the cost/income ratio for the full-year was 0.34. Credit quality is solid.

Swedbank's Board of Directors has changed the Dividend Policy to between 60 and 70 per cent of the annual profit. This implies that Swedbank has the possibility to both develop the bank for our customers and to increase lending as the business environment changes, while securing a strong capital position. The Board of Directors therefore intends to propose a dividend for 2024 of 21 kronor and 70 öre per share, corresponding to 70 per cent of the profit, at the Annual General Meeting.

Swedbank is the leader in mortgage lending in all four home markets and we are maintaining our position in the face of fierce competition. In Sweden, lending was stable in 2024. In Estonia, Latvia and Lithuania, lending increased in 2024, driven by our green mortgage loans.

Deposit volumes were stable in Sweden in 2024 and increased in Estonia, Latvia and Lithuania.

Savings growth remains strong with significant inflows to our Robur funds in 2024. In Estonia, Latvia and Lithuania, the development in savings has been very good. We are proud to contribute to a strong savings culture in all of our home markets.

Inflows to the pension and insurance businesses were also strong in 2024. Premium and Private Banking has

reached a new milestone: In 2024, more than 10 000 customers signed up for our service concepts.

In Sweden, demand for corporate loans remains muted and Swedbank maintained its market share during the year in a declining bank lending market. The combination of local presence and national expertise remains in focus for our corporate business.

Corporate lending increased in Estonia, Latvia and Lithuania for the full-year and also in the quarter. We are the leading corporate bank in Estonia and Lithuania. Our ambition is to also become the leader in Latvia, but we will be more selective going forward due to the new bank tax.

Lending to sustainable investments is growing and Swedbank's Sustainable Asset Register exceeded SEK 120 billion at year-end, after having risen by more then 70 per cent in 2024. In 2024, 36 per cent of the bonds Swedbank arranged were sustainable bonds.

Our customer promise is an easier financial life. In 2024, we accelerated the investments in our advisory platform, omni channel communication platform and in an improved end-to-end lending process. Customer behaviour is constantly changing and we see that our customers increasingly want to interact digitally and by phone. We are therefore reallocating resources to advisory meetings in these channels to increase our availability and speed.

Fraud is a serious societal problem and we are continuing to develop more secure services. In 2024, we implemented a number of important measures. For example, we launched Savings Account Plus with delayed withdrawals and we introduced a time delay in connection with raising the daily transfer limits.

Swedbank is strongly engaged in the community. In 2024, we educated more than 100 000 children and young adults in personal finances in Sweden.

At Swedbank's Investor Day in 2022, the road to a sustainable retuon equity of at least 15 per cent was formulated, which we have delivered on. We look forward to presenting an updated strategic plan for the coming years at a new Investor Day before the summer.

Our customers' future is our focus.

Jens Henriksson

President and CEO

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This interim report contains alternative performance measures that Swedbank considers valuable information for the reader, since they are used by the executive management for internal governance and performance measurement as well as for comparisons between reporting periods. Further information on the alternative performance measures used in the interim report can be found on page 56.

Result fourth quarter 2024 compared to third quarter 2024

Swedbank's profit increased to SEK 8 465m (9 379). Income, the tax expense and credit impairments decreased, while expenses rose on a seasonal basis. Impairments of intangible assets contributed negatively to profit. Foreign exchange effects positively impacted profit before impairments, bank taxes and resolution fees by SEK 22m.

The retuon equity was 15.8 per cent (18.4) and the cost/income ratio was 0.36 (0.31).

Income decreased to SEK 18 634m (19 146). Foreign exchange effects positively impacted income by SEK 38m.

Net interest income was stable at SEK 12 274m

(12 229). Lower costs for market funding and increased mortgage margins contributed positively, offset by lower income from central bank investments and lower deposit margins.

Net commission income was unchanged at SEK 4 285m (4 286). Income increased mainly in asset management, due to market gains and income related to Swedbank's commitment as a market maker for covered bonds. This was offset by lower income from the card business.

Net gains and losses on financial items decreased to SEK 923m (1 170). The change was mainly related to positive revaluation effects of interest rate derivatives in Group Treasury in the previous quarter.

Other income decreased to SEK 1 152m (1 461). The change was primarily due to revaluation effects in the insurance business as well as lower results from partly- owned companies, of which half is related to a one-off effect of SEK 120m linked to a revision to Entercard's credit impairment model in Sweden in the previous quarter.

Expenses increased to SEK 6 740m (5 986) mainly due to seasonality. The item other expenses was higher primarily as a result of one-off effects in the previous quarter, while IT and consulting expenses rose on a seasonal basis. The increase in staff costs was mainly due to higher pension expenses during the quarter and a seasonal cost decline in the previous quarter. Foreign exchange effects increased expenses by SEK 16m.

Impairments of intangible assets amounted to SEK 757m (0) and is related to IT investments that will no longer be used. The bank follows a structured and continuous process for valuing intangible assets in accordance with the accounting rules. The bank has a high development rate, and after deploying new solutions, previous systems are phased out, which may lead to write-downs of capitalised software with no remaining useful life.

Credit impairments amounted to SEK -394m (271), corresponding to -0.08 per cent (0.06). The change included rating and stage migrations of SEK 353m (428), while post-model adjustments decreased by SEK 146m (-84). Updated macroeconomic scenarios resulted in a decrease of SEK 212m (-95) and individually assessed loans in a decrease of SEK 56m (337).

Bank taxes and resolution fees amounted to SEK 858m (1 012).

The income tax expense amounted to SEK 2 208m (2 497) and corresponded to an effective tax rate of

20.7 per cent (21.0). The lower effective tax rate in the quarter was mainly due to a higher valuation of deferred tax assets in Lithuania that resulted from a higher tax rate and revised tax rules for the Lithuanian insurance business.

Result January-December 2024 compared to January- December 2023

Swedbank's profit increased to SEK 34 866m (34 130) as a result of higher income and lower credit impairments, partly offset by higher expenses. Expenses rose primarily due to increased staff costs and IT expenses. Bank taxes in the Baltic countries negatively impacted profit, as did impairments of intangible assets. Foreign exchange effects negatively impacted profit before impairments, bank taxes and resolution fees by SEK 102m.

The retuon equity was 17.1 per cent (18.3) and the cost income ratio was 0.34 (0.33).

1. Income statement excluding expenses for the administrative fines.

Income increased to SEK 74 104m (73 057) mainly due to higher net commission income. Net gains and losses on financial items and other income also contributed, while net interest income fell. Foreign exchange effects negatively impacted profit by SEK 144m.

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Net interest income amounted to SEK 49 267m

(50 933). Net interest income was negatively impacted by falling interest rates, partly offset by lower funding costs.

Net commission income increased by 11 per cent to SEK 16 716m (15 088). The rise was primarily related to asset management, which benefitted from the positive market development.

Net gains and losses on financial items increased by 25 per cent to SEK 3 687m (2 938) mainly due to revaluation effects within Group Treasury as well as Corporates and Institutions.

Other income increased by 8 per cent to SEK 4 435m (4 098). The increase was primarily related to revaluation effects within the insurance business as well as increased sales of IT and administrative services.

Expenses increased by 5 per cent to SEK 25 376m

(24 100). The increase was mainly driven by higher staff costs related to higher salaries and more employees on average, as well as increased IT expenses.

Credit impairments amounted to SEK -268m (1 674), corresponding to -0.01 per cent (0.09). The change compared to the previous year was primarily due to improved macroeconomic scenarios.

Bank taxes and resolution fees amounted to

SEK 4 019m (3 574). The increase was mainly related to the introduction of temporary bank taxes in Lithuania and Latvia.

The income tax expense amounted to SEK 9 320m (9 492), corresponding to an effective tax rate of

21.1 per cent (21.8). The lower effective tax rate in 2024 was primarily because the previous year's tax expense included an additional one-off deferred tax related to an extra dividend from the Estonian subsidiary Swedbank AS. There is no corresponding tax expense for 2024.

Swedbank mainly conducts business in the product areas of lending, deposits, fund savings and life insurance, and payments.

Lending

Loans to customers increased by SEK 4bn to

SEK 1 800bn (1 796) during the quarter. Compared to the same quarter in 2023, lending increased by

SEK 18bn. Foreign exchange effects positively impacted lending volumes by SEK 6bn compared to the third quarter of 2024 and positively by SEK 12bn compared to the same quarter in 2023.

1) Other consist of loans in Norway, Finland, China and the USA.

In Sweden, loans to customers decreased by SEK 8bn in the quarter to SEK 1 446bn (1 454). Compared to the same quarter in 2023, lending decreased by SEK 14bn.

Loans to mortgage customers in Sweden decreased by SEK 2bn in the quarter to SEK 913bn (914). Compared to the same quarter in 2023, loans to mortgage customers was unchanged. The market share for mortgages in Sweden was 22 per cent as of 30 November.

Other private lending in Sweden, including to tenant- owner associations, was unchanged at SEK 117bn (117).

Corporate lending in Sweden decreased by SEK 7bn during the quarter and amounted to SEK 416bn (423). Compared to the same quarter in 2023, corporate lending fell by SEK 13bn. In Sweden, the market share for corporate loans was 15 per cent as of 30 November.

In the Baltic countries, lending volume increased by

5 per cent in local currency during the quarter. Lending to mortgage customers rose by 3 per cent, while lending to corporate customers increased by 6 per cent in local currency.

The sustainable asset register increased by SEK 18bn to SEK 128bn (110) during the quarter. The increase was primarily related to financing of green buildings, followed by renewable energy and the financing of assets within socioeconomic development and self- determination/empowerment. At the end of the quarter, the register contained SEK 119bn in green assets and SEK 9bn in social assets, which are financed by the bank's sustainable bonds. For more information on lending and the sustainable asset registry, see pages 37 and 70 of the Factbook.

Deposits

Total deposits increased by SEK 12bn to SEK 1 285bn (1 273) compared to the previous quarter and by SEK 55bn compared to the same quarter in 2023. Foreign exchange effects positively impacted total deposit volume by SEK 8bn compared to the previous quarter and positively by SEK 15bn compared to the same quarter in 2023.

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1. Other consist of deposits in Norway, Finland, China, the USA and Denmark.

Deposits in Sweden decreased by SEK 13bn to

SEK 849bn (862). Deposits from private customers in Sweden decreased by SEK 1bn to SEK 477bn (478), while corporate deposits fell by SEK 12bn to SEK 372bn (384). Compared to the same quarter in 2023, deposits in Sweden increased by SEK 4bn.

In the Baltic countries, deposits in local currency increased by 5 per cent in the quarter. Deposits from private customers rose by 7 per cent, while corporate deposits rose by 2 per cent. Compared to the same quarter in 2023, deposits increased by 10 per cent in local currency.

As of 30 November, Swedbank's market share for deposits from private customers in Sweden was 18 per cent. The market share for corporate deposits as of 30 November was 13 per cent. For more information on deposits, see page 38 of the Factbook.

Assets under management

Fund assets under management increased by 3 per cent during the quarter to SEK 1 953m (1 888). The rise was primarily due to the positive market development, but net inflows also contributed.

The net inflow in the Swedish fund market amounted to SEK 70bn (34), of which approximately SEK 50bn relates to the annual contribution through the Swedish Pensions Agency (PPM).

The net flow to Swedbank Robur's funds in Sweden amounted to SEK 1bn (2), of which SEK 5bn relates to the annual PPM contribution. Distributions through Swedbank and the savings banks were positive, in line with the previous quarter. However, there were net outflows in the quarter in both third-party distributions and the institutional business. In Estonia, Latvia and Lithuania, the net flow amounted to SEK 3bn (2).

By assets under management, Swedbank Robur is largest in Sweden, Estonia, Latvia and Lithuania. As of 31 December, the market share in Sweden was unchanged at 22 per cent. Market shares were also unchanged in Estonia and Latvia, at 40 and 39 per cent, respectively, while the market share in Lithuania fell to 37 per cent (38).

Assets under management within life insurance in the Swedish operations grew by 3 per cent in the fourth quarter to SEK 412bn as of 31 December (401). Premium income, consisting of premium payments and capital transfers, amounted to SEK 9bn (10).

For premium income, excluding capital transfers, Swedbank's market share in the third quarter (latest available information) was 7 per cent (7 per cent in the second quarter). In the transfer market, Swedbank's market share in the third quarter was 12 per cent (14).

Payments

The total number of card transactions acquired by Swedbank during the quarter was 967 million, 5 per cent higher than the same quarter in 2023. The total number of transactions acquired in Sweden, Norway, Finland and Denmark increased by 28 million, equivalent to a rise of 4 per cent, while total card transactions acquired in the Baltic countries rose by 9 per cent.

Acquired transaction volumes in Sweden, Norway, Finland and Denmark totalled SEK 234bn, corresponding to an increase of 1 per cent compared to the same period in 2023. In the Baltic countries, transaction volumes rose by 7 per cent to SEK 39bn.

The total number of Swedbank cards in issue at the end of the quarter was 8.5 million, in line with the end of the previous quarter.

The number of purchases in Sweden with Swedbank cards increased by 4 per cent during the quarter compared to the same quarter in 2023. A total of

374 million card purchases were made. In the Baltic countries, the number of card purchases rose by 9 per cent in the same period and totalled 261 million purchases during the quarter.

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In Sweden, a total of 211 million domestic payments were made during the quarter, an increase of 4 per cent compared to the same period in 2023. Swedbank's market share of payments executed via Bankgirot was 33 per cent. In the Baltic countries, 138 million domestic payments were processed, an increase of 6 per cent compared to the same period in 2023.

The number of international payments in Sweden increased by 5 per cent compared to the same quarter in 2023 and amounted to 1.9 million. In the Baltic countries, international payments rose by 18 per cent to 9 million, including transactions between the Baltic countries. The increase was partly driven by cheaper payment options and smaller amounts. The total transaction volume increased by 3 percent during the corresponding period.

The credit quality of Swedbank's lending is solid and credit impairments were low despite geopolitical and economic uncertainty. Total credit impairment provisions amounted to SEK 7 257m (7 907), of which SEK 720m (858) was post-model adjustments.

For mortgages in Sweden, forborne loans continued to increase but at a slower rate than the previous quarter. Loans with late payments also increased slightly.

The total share of loans in stage 2, gross, amounted to

9.1 per cent (9.4). For personal loans, the corresponding share was 6.7 per cent (7.1) and for corporate loans it was 14.2 per cent (14.4).

The share of loans in stage 3, gross, was 0.65 per cent (0.60).

For more information on credit exposures, provisions, and credit quality, see notes 10 and 12-14 as well as pages 40-48 of the Factbook.

During the quarter, central banks in Sweden, Europe and the U.S. continued to cut their policy rates. Despite this, long-term bond yields have risen in Sweden and the U.S. In the U.S., the reason is a combination of consistently strong macroeconomic data and the outcome of the U.S. election. In Europe, macroeconomic data have instead been weaker than expected, which when combined with political uncertainty in both Germany and France, has led to lower long-term bond yields and higher credit spreads. This contributed to a slight increase in the credit spreads for the SEK covered bonds issued in the fourth quarter.

Swedbank remained active in the funding markets. During the quarter, issuance primarily consisted of covered bonds in SEK as well as a green senior non- preferred bond in euro. In total for the full-year, Swedbank issued SEK 145bn in long-term debt instruments, including SEK 32bn in the fourth quarter.

As of 31 December, Swedbank's outstanding short-term funding in issue amounted to SEK 266bn (384).

The funding plan for 2025 is largely in line with 2024 and during the year long-term funding of SEK 115bn matures. One difference is that the bank now has the desired buffers above the requirements of the resolution regulation and therefore can focus on maintaining these levels going forward. The need for financing is affected by the current liquidity situation, future maturities and changes in deposit and lending volumes, and therefore is adjusted over the course of the year. For more information on funding and liquidity, see notes 16-18 and pages 57-69 of the Factbook.

1. USD 333 %; EUR 287 %; SEK 102 %
2. The liquidity coverage ratio has been recalculated and figures prior to 2024 have been adjusted.

There were no changes in Swedbank's ratings during the quarter. For more information on the ratings, see page 69 of the Factbook.

The bank works continuously with operational risks with a special focus on areas where the risks are considered to be the highest. Threats to information security, including cybersecurity risks and external fraud risk, are growing in line with digitalisation, which requires increased security measures for both Swedbank and our customers. The bank has strengthened its digital operational resilience frameworks and processes to ensure the robustness of the Group's critical and key functions.

The risk of fraud from organised crime persists. Swedbank has continued to invest to protect customers against fraud. For example, Swedbank has implemented a security portal that enables private customers to manage their own security settings based on their preferences and transaction history, and also introduced Savings Account Plus, which includes delayed withdrawals to protect customers against unintended transactions.

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Capital ratio and capital requirement

The Common Equity Tier 1 (CET1) capital ratio was

19.8 per cent (20.4) at the end of the quarter. The total CET1 capital requirement, including Pillar 2 guidance, was 15.2 per cent (15.1) of the Risk Exposure Amount (REA), which resulted in a CET1 capital buffer of 4.6 per cent (5.2). CET1 capital decreased to SEK 173bn (175) and was mainly affected by the changed dividend policy to between 60 and 70 per cent of the group's profit.

Change in Common Equity Tier 1 capital

(Refers to Swedbank consolidated situation)

Risk Exposure Amount (REA)

REA increased to SEK 872bn (858) in the fourth quarter.

REA for credit risks increased by SEK 6bn mainly due to increased lending in the Baltic countries as well as foreign exchange effects. This was offset by a decrease in counterparty risk primarily due to a decrease in corporate derivatives.

The annual update for operational risk increased REA by SEK 16bn due to the increase in the moving three-year average of total income compared to 2023.

REA for market risk decreased by SEK 4bn mainly due to smaller covered bond positions in Swedish institutions.

Change in REA

(Refers to Swedbank consolidated situation)

The leverage ratio was 6.8 per cent (6.4) and therefore exceeds the leverage ratio requirement including Pillar 2 guidance of 3.5 per cent.

Capital and resolution regulations

On account of the guidelines from the European Banking Authority, as well as the forthcoming implementation of CRR 3, Swedbank is applying for approval of new internal risk classification (IRB) models. The bank estimates that the review process will continue with approvals being granted in 2025 and 2026.

Swedbank previously decided on an Article 3 add-on corresponding to the bank's estimate of the remaining impact on REA after the introduction of the remaining IRB models. This add-on has been reduced to SEK 7bn in line with the phase-in that has already occurred. The Swedish FSA has also introduced a temporary add-on of 1 per cent in P2R related to the ongoing review of the models.

The revised Capital Requirements Regulation CRR 3 took effect on 1 January 2025 with a phase-in period through 2032. The revisions include changes to the standardised approaches and internal models used to calculate capital requirements for credit, market and operational risk, as well as an output floor for internal models. The implementation of the requirements for market risk has been postponed by one year and they take effect in 2026. The revised CRR 3 is expected to result in a limited increase in REA, based on revised coefficients for operational risk.

U.S. authorities continue to investigate Swedbank's historical anti-money laundering and counter-terrorism financing work and historical information disclosures. The investigations, which are being conducted by the Department of Justice (DoJ), the Securities and Exchange Commission (SEC) and the Department of Financial Services in New York (DFS), are continuing and the bank is holding individual discussions with the authorities through its U.S. legal advisors. The investigations are at different stages and the bank cannot at this time determine any financial consequences or when the investigations will be completed.

On 17 October 2024, it was announced that Jon Lidefelt has been appointed the Chief Financial Officer of Swedbank. He was most recently head of the business area Baltic Banking and has therefore been a member of the Group Executive Committee. He assumed his new role on 1 November 2024. Olof Sundblad has been appointed acting head of Baltic Banking and will become a member of the Group Executive Committee.

Swedbank Robur was awarded "Best Regional Leader Europe" in the category Fund companies with 50-99 fund managers at Citywire's Gender Diversity Awards 2024. The awards are based on data from Citywire's Alpha Female Report. The jury's evaluation included questions about the companies' overall work on gender

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