Swedbank's Year-End Report 2012

Fourth quarter 2012
Compared with third quarter 2012
Profit for the quarter

SEKm 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 Q42011 Q12012 Q22012 Q32012 Q42012
The result for the quarter amounted to SEK 4 340m (3 511) Earnings per share before dilution amounted to SEK 3.95* (3.20) and earnings per share after dilution amounted to SEK 3.94* (3.19) The return on equity was 16.7 per cent (14.1) The cost/income ratio was 0.45 (0.44) Net interest income amounted to SEK 5 465m (5 263) Profit before impairments increased by 3 per cent to SEK 5 204m (5 053) Swedbank reported net credit impairments of SEK 11m (204) The Common Equity Tier 1 ratio was 17.4 per cent according to Basel 2 (15.7 per cent on 31 December 2011). The Common Equity Tier 1 ratio according to Basel 3 (incl. IAS 19) was 15.4** per cent (14.3 per cent on 31 December 2011).
Earnings per share before dilution*
SEK
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Q42011 Q12012 Q22012 Q32012 Q42012
Full-year 2012
Compared with full-year 2011
Return on equity % 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
The result for the period amounted to SEK 14 438m (11 744) Earnings per share before dilution amounted to SEK 12.24* (9.53) and earnings per share after dilution amounted to SEK 12.19* (9.52) The return on equity was 14.4 per cent (12.2) The cost/income ratio was 0.46 (0.54) Net interest income increased by 11 per cent to SEK 21 188m (19 014) Profit before impairments increased by 26 per cent to SEK 19 671m (15 646) Swedbank reported net credit impairments of SEK 687m (net recoveries of 1 911) The Board of Directors has adjusted the dividend policy to 75% of the profit for the year (50%) and proposes a dividend per share of SEK 9.90 for both the ordinary shares and preference shares (5.30) to the Annual General Meeting.
Q42011
Q12012
Q22012
Q32012
Q42012
Common Equity Tier 1 ratio, %, Basel 3 incl IAS 19 ** %
16.0 15.0
14.0 13.0
12.0 11.0
* In the calculation of earnings per share for the first quarter of 2012, the preference share dividend is deducted from profit. The calculation of earnings per share is specified on page 45. ** Swedbanks estimate based on current knowledge of future regulations.
10.0 Q42011 Q12012 Q22012 Q32012 Q42012
Swedbank Year-end report 2012
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CEO Comment
The year began with cautious confidence in an economic recovery after, among other things, a liquidity stimulus by the European Central Bank. The real economy deteriorated during the year, however, not least in Sweden. In August the European Central Bank announced additional stimulus designed for weaker members of the European currency union. This reduced the perceived risk of a financial collapse in Europe, and the financial markets recovered. There has not yet been an obvious impact on the real economy, however, and macroeconomic development remains uncertain. 2012 was a successful year financially for Swedbank. We have re-established robust profitability at the same time that we further reduced the risk level in the bank. We have now created a position where we are wellprepared for future challenges in the economy as well as new business opportunities. A stable earnings level will benefit our customers, our equity and our debt investors. With a secure balance sheet and good profitability, we can now invest in the customer experience and in our employees. Heading in the right direction For the full-year 2012 Swedbank reported a profit of SEK 14.4bn, compared with SEK 11.7bn for 2011. The improvement was mainly the result of higher net interest income and lower costs. The cost reduction of SEK 1.4bn (excluding variable costs) well exceeds the target to reduce costs by SEK 1bn in 2012. Every part of the organisation has actively contributed to the lower cost level, and we are now beginning to create a culture where all our employees are aware of the importance of continuous efficiency improvements. A more correct risk- and capital-adjusted lending margin has strengthened net interest income. The main priority left in 2013 is a repricing for certain small and mediumsized companies. In 2012 we improved the understanding of risk weighted assets and capital efficiency in the organisation. Our advisors should be well aware of how capital is tied up and how it is affected by the structure of a business loan, for example. The Riksbanks November 2012 Stability Report confirms that Swedbank has made considerable progress in adapting to new rules and increasing transparency. This has helped to improve our relative costs for capital market funding. We believe this trend towards increased openness will and should continue. Increased transparency by banks will help to create a more balanced and sustainable sector, which will reduce the need for new, potentially costly rules. Profitability provides room to focus on customer benefits Swedbank should be a bank that benefits society and a bank with satisfied customers. Banks, including ourselves, have to better explain our role in society to the public and media. Sweden has one of the most stable banking systems in the world, with competitive products and profitable banks, which provides a solid foundation for building confidence. Surveys, including the latest from SQI, show that Swedbank has work left to do to improve its customer experience in Sweden. The majority of our customers do most of their banking through our digital channels. We will invest more in their functionality and user friendliness. We have made considerable progress through our new mobile bank and iPad app, which have been popular among customers. The number of mobile banking users doubled during the year to 1.5 million, and since October more than 130 000 customers have downloaded our iPad app. The number of transactions in the mobile channels has grown by more than 200 per cent during the last year. This is a trend that we believe is just in its infancy. We want to make our mobile channels even better and at the same time seek inspiration there to make the Internet Bank more user friendly. We also want to offer more advice through the digital channels to further increase the value of our services. To adapt to an increasingly complex market and customers with tougher demands, we will also invest in better advisory services at our branches and through the Telephone Bank. We will hire more advisors and provide further training for those we have. Swedbank also has good potential to grow in segments in need of professional financial advice such as high net worth individuals and medium-sized businesses. Three fourths of our branches in Sweden today do not handle cash, which means that we can create branches that are better suited for advisory services and are more efficient. By clarifying our offering so that every customer knows what they are paying for and what kind of service to expect, we want to create the right expectations. To meet these aims, we have put a new organisation in place from 1 January 2013. The top layer within Retail has been eliminated and the regions report directly to me. At the same time the regions have become more independent and fully decide on how they want to adapt their businesses and what they want to offer every customer. A new commercially driven unit, Concepts and Channels, is being created to develop, manage and drive business in the digital channels and the Telephone Bank in Sweden. By managing the digital channels and the Telephone Bank as an independent unit, we will increase the pressure to create better and more userfriendly services. We are also creating a specific unit for products and product development for the entire Group, which also reports directly to me. It includes our funds, cards and insurance, among other things. Capital and dividend Today Swedbank is probably the strongest of Sweden's banks and has the lowest overall risks. For example, we are the only bank in the Riksbanks stress test to report a profit every year, even in stressed scenarios. We are at the same time one of Europes best capitalised banks. Normally a bank that has taken on more risk requires more capital, and vice versa. As a result we expect our relative rating to improve in 2013. Based on our stress tests and a conservative view of what pending regulations will ultimately look like, Swedbanks executive management believes we need a Common Equity Tier 1 ratio of 13 to 15 per cent when all the new rules have fully taken effect. Swedbanks Common Equity Tier 1 ratio increased during the year to 15.4 per cent (14.3) (Basel 3 incl. IAS19), including the proposed dividend for the year.
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The Board of Directors has decided to amend the banks dividend policy so that 75 per cent of the shareholders profit for the year will be distributed, compared with 50 per cent earlier. As a result, it is proposing to the Annual General Meeting a dividend of SEK 9.90 (5.30) per share for 2012. The decision is supported by the banks robust earning capacity and low risk, combined with limited credit demand in the foreseeable future. With the new dividend policy, we will continue to build capital in the bank, but not as quickly as before.
Outlook With a slowing economy and rising unemployment, we are humble in our forecast about the future and are planning for an environment with low interest rates and weak credit demand. We are therefore planning to maintain our total costs in 2013 at the same level as in 2012. We will continue to focus on profitability and capital efficiency at the same time that we invest in a better customer experience and development opportunities for our employees.
Common Equity Tier 1 ratio % 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2007 2008
Basel 2 17.4 15.7 14.3 15.4
Michael Wolf President and CEO
2009
2010
2011
2012
Basel 3 incl IAS 19
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Table of contents
Page Financial summary Overview Market Important events during the quarter Fourth quarter 2012 compared with third quarter 2012 Result Full-year 2012 compared with full-year 2011 Result Credit and asset quality Funding and liquidity Ratings Capital and capital adequacy Market risk Operational risks Other events Events after 31 December 2012 Business areas Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other Eliminations Product areas Financial information Group Income statement, condensed Statement of comprehensive income, condensed Balance sheet, condensed Statement of changes in equity, condensed Cash flow statement, condensed Notes Parent company Signatures of the Board of Directors and the President Review report Contact information 26 27 27 28 29 29 46 49 49 50 13 15 17 19 20 22 23 5 6 6 6 6 6 7 7 8 9 10 10 12 12 12 12
More detailed information can be found in Swedbanks fact book, www.swedbank.com/ir, under Financial information and publications.
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Financial summary
Income statement SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Other income Total income Staff costs Other expenses Total expenses Profit before impairments Impairment of intangible assets Impairment of tangible assets Credit impairments Operating profit Tax expense Profit for the period from continuing operations Profit for the period from discontinued operations, after tax Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Q4 2012 5 465 2 504 752 770 9 491 2 355 1 932 4 287 5 204 17 199 11 4 977 640 4 337 4 4 341 4 340 Q3 2012 5 263 2 381 568 839 9 051 2 252 1 746 3 998 5 053 -1 102 204 4 748 1 220 3 528 -17 3 511 3 511 24 24 % 4 5 32 -8 5 5 11 7 3 95 -95 5 -48 23 Q4 2011 4 967 2 291 559 839 8 656 2 651 2 296 4 947 3 709 1 960 170 -174 1 753 790 963 4 967 965 0 % 10 9 35 -8 10 -11 -16 -13 40 -99 17 Full-year Full-year 2012 2011 21 188 9 636 2 534 3 262 36 620 9 413 7 536 16 949 19 671 20 466 687 18 498 4 039 14 459 -13 14 446 14 438 19 014 9 597 1 584 3 850 34 045 9 917 8 482 18 399 15 646 1 960 174 -1 911 15 423 3 669 11 754 4 11 758 11 744 23 23 % 11 0 60 -15 8 -5 -11 -8 26 -99
20 10 23
-19
Key ratios and data per share Return on equity, % Earnings per share before dilution, SEK Earnings per share after dilution, SEK 1) Cost/income ratio Equity per share, SEK Loan/deposit ratio, % Common Equity Tier 1 ratio, %, Basel 3 incl IAS 19 Tier 1 capital ratio, %, Basel 3 incl IAS 19 2) Capital adequacy ratio, %, Basel 3 incl IAS 19 2) Common Equity Tier 1 ratio, %, Basel 2 Tier 1 capital ratio, %, Basel 2 Capital adequacy ratio, %, Basel 2 Common Equity Tier 1 ratio, %, transition rules Tier 1 capital ratio, %, transition rules Capital adequacy ratio, %, transition rules Credit impairment ratio, % Share of impaired loans, gross, % Total provision ratio for impaired loans, %
2) 1) 1)
Q4 2012 16.7 3.95 3.94 0.45 93.70 212 15.4 16.8 18.5 17.4 18.7 19.6 10.5 11.3 11.9 0.00 1.05 62
Q3 2012 14.1 3.20 3.19 0.44 89.48 194 15.4 16.9 18.0 17.3 18.8 19.2 10.6 11.6 11.8 0.06 1.32 65
Q4 2011 3.9 0.88 0.88 0.57 84.40 213 14.3 15.8 18.1 15.7 17.2 18.9 10.2 11.2 12.3 -0.05 1.87 62
Full-year Full-year 2012 2011 14.4 12.24 12.19 0.46 93.70 212 15.4 16.8 18.5 17.4 18.7 19.6 10.5 11.3 11.9 0.05 1.05 62 12.2 9.53 9.52 0.54 84.40 213 14.3 15.8 18.1 15.7 17.2 18.9 10.2 11.2 12.3 -0.14 1.87 62
Balance sheet data SEKbn Loans to the public Deposits and borrowings from the public Shareholders' equity Total assets Risk weighted assets, Basel 3 incl IAS 19 2) Risk weighted assets, Basel 2 Risk weighted assets, transition rules Risk weighted assets, Basel 1
1)
31 Dec 2012 1 239 580 106 1 847 487 464 769 991
31 Dec 2011 1 211 562 98 1 857 515 492 757 969
% 2 3 8 -1 -5 -6 2 2
In the calculation of earnings per share the preference share dividend is deducted from profit in the quarter the dividend is declared. The calculation of earnings per share is specified on page 45. 2) Swedbanks estimate based on current knowledge of future regulations. The key ratios are based on profit and shareholders equity allocated to shareholders of Swedbank.
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Overview
Market
The resilience of the Swedish economy to weaker global conditions decreased during the latter part of 2012. Economic data indicate that GDP fell during the fourth quarter after having grown at a quarterly rate of 0.5-0.7 per cent during the first three quarters. Exporters have been most affected by weaker global demand, at the same time that the krona has strengthened. The Swedish labour market also weakened in late 2012. Weaker market demand led to a slowing growth rate in the Baltic economies during the fourth quarter, particularly for exporters. Domestic demand was held up by increased consumption and investment. The number of unemployed continued to fall at the same time that lower global commodity prices kept inflation in check, which strengthened the disposable income of Baltic households. A slowing economy, low inflation and a downward revision in the growth outlook contributed to the Riksbanks decision in December to cut the repo rate for the third time in 2012, to 1.0 per cent. The Swedish krona remains relatively strong, despite having weakened slightly after a significant appreciation during the first half of 2012. The Stockholm stock exchange (OMXSPI) rose by 12 per cent during the year. The Tallinn stock exchange (OMXT) rose by 38 per cent, the Vilnius stock exchange (OMXV) by 19 per cent and the Riga stock exchange (OMXR) by 7 per cent.
Fourth quarter 2012

Compared with third quarter 2012 Result
Profit before impairments increased by 3 per cent to SEK 5 204m (5 053). The increase was mainly due to increased profit within Large Corporates & Institutions (LC&I) and Group Treasury, while profit for Retail decreased during the quarter.
Profit before impairments by business area SEKm Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other Total excl FX effects FX effects Total
Q4 2012 2 675 1 020 644 221 644 5 204 5 204
Q3 2012 2 852 870 731 193 412 5 058 -5 5 053
Q4 2011 2 418 691 766 148 -360 3 663 46 3 709
Important events during the quarter

On 29 January 2013, the Board of Directors adjusted Swedbanks dividend policy from the previous 50 per cent of profit for the year to 75 per cent. The Board of Directors proposes a dividend of SEK 9.90 (5.30) per ordinary share and SEK 9.90 (5.30) per preference share for the financial year 2012. This corresponds to a dividend ratio of 75 per cent (50). The Riksbanks Stability Report (Financial Stability 2012:2) showed that Swedbank is well capitalised even in a stressed scenario and has a good liquidity compared with the average for Swedens major banks. The bank announced an organisational change that took effect on 1 January 2013. For more information, see page 12. Swedbanks iPad app was launched and had over 130 000 users on 31 December. Together with several other banks, Swedbank launched Swish, a new service that makes it easy to send and receive money by mobile phone. Swedbank submitted an application to the Swedish Financial Supervisory Authority to use the so-called advanced Internal Ratings-Based Approach (IRBA) to calculate credit risks for corporate exposures.
The quarterly result attributable to the shareholders amounted to SEK 4 340m (3 511). Credit impairments amounted to SEK 11m (204). Impairments of tangible assets amounted to SEK 199m (102). The reduction in the Swedish corporate tax rate to 22 per cent affected profit positively by SEK 505m. The return on equity was 16.7 per cent (14.1). Excluding the effect of the reduction in the Swedish corporate tax rate, the return on equity was 14.9 per cent. The cost/income ratio was 0.45 (0.44). Income increased by 5 per cent to SEK 9 491m (9 051). Net interest income, net gains and losses on financial items at fair value and net commission income all increased. Net interest income rose by 4 per cent to SEK 5 465m (5 263). The increase was mainly attributable to Group Treasury, while net interest income was stable in the business areas. Group Treasurys net interest income has been temporarily strengthened by positions that have benefited from lower market rates. In addition, a one-off adjustment of SEK 78m related to the buyback of covered bonds affected net interest income positively in the fourth quarter. Lower deposit margins due to falling Stibor and Euribor rates, as well as increased competition for deposits in Sweden, affected net interest income negatively. This was largely offset by the repricing of lending in all the business areas. Net commission income increased by 5 per cent to SEK 2 504m (2 381), mainly due to higher income from corporate finance and asset management. Net gains and losses on financial items at fair value increased by 32 per cent to SEK 752m (568), mainly due to higher earnings from fixed income and currency trading within LC&I as well as Group Treasury, where repurchases of subordinated loans affected net gains and losses positively by SEK 319m. In addition, a oneoff adjustment related to the buyback of covered bonds had a negative effect of SEK 68m in the fourth quarter. Expenses increased by 7 per cent from the previous quarter to SEK 4 287m (3 998). The increase was
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mainly due to higher staff costs, including as a result of adjustments in pension provisions as well as seasonally higher costs for IT and marketing.
Expense analysis Group SEKm Expenses excluding variable pay and compensation to savings banks Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other and Eliminations Total Variable pay Compensation to Savings Banks Restructuring expenses FX effects Total expenses
Profit before impairments by business area SEKm Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other Total excl FX effects FX effects Total
Full-year Full-year 2012 2011 11 101 3 943 3 038 811 778 19 671 19 671 9 589 3 323 3 398 733 -1 543 15 500 146 15 646
Q4 2012
Q3 2012
Q4 2011
2 254 626 617 174 292 3 963 157 165 2 4 287
2 168 633 554 170 151 3 676 184 146 0 -8 3 998
2 272 732 658 208 518 4 388 47 138 330 44 4 947
Profit for the period attributable to the shareholders increased by 23 per cent to SEK 14 438m (11 744). Credit impairments amounted to SEK 687m (net recoveries of 1 911). Tangible asset writedowns amounted to SEK 466m (174). Intangible asset writedowns amounted to SEK 20m (1 960). The reduction in the Swedish corporate tax rate to 22 percent affected profit positively by SEK 505m. Changes in exchange rates, primarily the appreciation of the Swedish krona against the euro and the Baltic currencies, reduced profit by SEK 89m. The return on equity was 14.4 per cent (12.2). The cost/income ratio was 0.46 (0.54). Income rose by 8 per cent to SEK 36 620m (34 045). The increase was mainly due to higher net interest income in Retail and Group Treasury (Group Functions & Other) and higher net gains and losses on financial items at fair value in LC&I. Changes in exchange rates reduced income by SEK 233m. Net interest income increased by 11 per cent to SEK 21 188m (19 014). The repricing of lending within Retail and LC&I affected net interest income positively. Expenses for the banks funding decreased. Moreover, the fee for the state-guaranteed funding decreased by SEK 776m due to maturing state-guaranteed funding. Lower deposit margins due to falling Stibor and Euribor rates as well as increased competition for deposits in Sweden affected net interest income negatively. Net interest income from fixed income and currency trading within LC&I as well as the operations in Russia and Ukraine also reduced net interest income. Changes in exchange rates reduced net interest income by SEK 125m. Net commission income was stable at SEK 9 636m (9 597). Higher commission income from corporate finance affected net commission income positively, while income from securities trading and asset management decreased. Net gains and losses on financial items at fair value increased by 60 per cent to SEK 2 534m (1 584). The increase was mainly due to stronger results in fixed income trading within LC&I. Expenses decreased by 8 per cent to SEK 16 949m (18 399). In 2011 one-off expenses of SEK 430m were reported. Swedbank surpassed by SEK 370m its aim to reduce costs for the full-year 2012 by SEK 1bn compared with the full-year 2011 (excluding variable remuneration). Fixed staff costs decreased by SEK 847m and consulting costs fell by SEK 241m. Variable staff costs rose to SEK 738m (395). Changes in exchange rates reduced expenses by SEK 87m.
During the fourth quarter restructuring expenses of SEK 44m were reported in Russia and Ukraine, at the same time that SEK 42m of previously booked restructuring expenses were reversed in other parts of the Group, mainly in Group Functions & Other, LC&I and Retail.
The number of full-time employees decreased during the quarter by 434, to 14 861. Of this decrease, 260 positions related to Ektornet and 207 to Ukraine. Credit impairments amounted to SEK 11m (204). LC&I, Ukraine and Retail reported credit impairments, while Baltic Banking reported net recoveries. Tangible asset writedowns amounted to SEK 199m (102) due to property revaluations in Ektornet and Ukraine. The tax expense amounted to SEK 640m (1 220), corresponding to an effective tax rate of 12.9 per cent (25.7). The low effective rate is due to a one-off effect due to the reduction of the Swedish corporate tax rate. The one-off effect reduced the quarterly tax expense by SEK 505m. In addition, a one-off tax reduction of SEK 79m arose in other comprehensive income.
Full-year 2012
Compared with full-year 2011 Result
Profit before impairments increased by 26 per cent to SEK 19 671m (15 646). In 2011 Swedbank received one-off revenue of SEK 922m from a settlement with the Lehman Brothers bankruptcy estate. In 2011 restructuring expenses totalling SEK 430m were reported, mainly related to personnel redeployments in 2012. The profit increase for 2012 was mainly due to stronger net interest income and net gains and losses on financial items at fair value as well as lower expenses.
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Expense analysis Group SEKm Expenses excluding variable pay and compensation to savings banks Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other and Eliminations Total Variable pay Compensation to Savings Banks Restructuring expenses FX effects Total expenses
Full-year Full-year 2012 2011
SEKm
Credit and asset quality

Swedbanks credit and asset quality further improved during the year, mainly driven by a continued decrease in problem loans in the Baltic operations and the divestment of parts of the Ukrainian credit portfolio. The Swedish operations continued to report low credit impairments. The Baltic countries reported increased recoveries during the fourth quarter due to the completion of a number of major reconstructions with positive results. Compared with 2011 recoveries were lower in Baltic Banking. In Ukraine, credit impairments increased during the year, mainly due to the decision to exit the retail segment, where portions of the retail portfolio have been sold. Global unease during the year has not had a major impact on the banks balance sheet. This was partly the result of a careful credit analysis, but also because customers have been quick to adapt to market uncertainty and shown great resilience. The bank carefully monitors changes in the credit portfolio. In the Internal Capital Adequacy Assessment Process (ICAAP), the Swedish Financial Supervisory Authoritys stress test and the Riksbanks Stability Report, Swedbanks resilience was considered good should the situation in Europe worsen significantly. Because asset quality improved in 2012, the results of the 2013 ICAAP are expected to show that Swedbanks resilience has further improved. Swedbanks lending increased by a total of SEK 18bn to SEK 1 184bn. Lending to Swedish mortgage customers continued to grow, but at a slower rate than in previous years. Corporate lending within LC&I and Retail rose by SEK 4bn to SEK 365bn. The lending portfolio in Baltic Banking was essentially unchanged in local currency during the year and amounted to SEK 115bn. During the second half of 2012 lending volumes rose slightly in local currency. The increases in Estonia and Lithuania were due to higher demand, while the volume increase in Latvia was largely the result of Swedbanks acquisition of Hipoteku Banks loan portfolio, which amounted to SEK 1.6bn. The lending portfolios in Russia and Ukraine continued to decrease. The stable or positive trend in house prices in major Baltic cities continued. The average loan-to-value ratio was 68 per cent in Estonia on 31 December 2012 (75 as of 31 December 2011), 128 per cent in Latvia (149) and 88 per cent in Lithuania (96). Within Baltic Banking the share of the mortgage portfolio where exposures exceed the current market value of the underlying collateral was SEK 5.5bn (6.3). The average loan-tovalue ratio in Swedbank Mortgage was 60 per cent (60) on 31 December based on property level (45 per cent by loan level). For new mortgages granted in Sweden in 2012 the average loan-to-value ratio is 68 per cent (69), at the same time that the amortisation rate increased. For new lending in 2012, 92 per cent of the households with a loan-to-value ratio of over 75 per cent of their propertys value are amortising. Of the 8 per cent that were not amortising on their payment dates, practically all have an amortisation plan which will begin within two years. For the portfolio as a whole, 73 per cent (71) of households with a loan-to-value ratio exceeding 75 per cent are amortising their loans. Impaired loans decreased during the year to SEK 14bn (25). The decrease affected Baltic Banking and Ukraine, while Retail reported a marginal increase. The decrease was due to a combination of a slower inflow of new
8 722 2 473 2 332 698 1 362 15 587 738 622 2 16 949
8 915 2 741 2 505 765 2 031 16 957 395 530 430 87 18 399
-193 -268 -173 -67 -669 -1 370 343 92 -428 -87 -1 450
Underlying expenses excluding exchange rate effects decreased by SEK 1 370m compared with the previous year. In 2012 a new principle was implemented for allocating internal expenses from Group Treasury. In 2012 expenses therefore increased by SEK 113m for Retail, SEK 83m for LC&I and SEK 26m for Baltic Banking, with a corresponding decrease in Group Functions & Other.
Since 1 July 2010 Swedbank pays parts of its variable remuneration in the form of shares. This remuneration is accrued as an expense until the shares are settled. As a result, variable remuneration allocated to employees during the period differs from the recognised amount. During the period recognised variable remuneration was SEK 738m. A more detailed analysis of variable 1 remuneration is provided on page 13 of the fact book . The number of full-time positions has decreased in one year by 1 426, including 788 in Ukraine, 139 in Retail, 148 in Group Business Support (Group Functions & Other), 107 in Baltic Banking and 70 in LC&I. Credit impairments of SEK 687m were reported in 2012 (net recoveries of 1 911). The credit impairments are primarily attributable to Ukraine, while the Baltic countries reported net recoveries. Tangible asset writedowns rose by SEK 292m to SEK 466m due to the revaluation of property holdings in Ektornet and the banks properties in Ukraine. Intangible asset writedowns decreased to SEK 20m (1 960). In 2011 goodwill attributable to Latvia was written down by SEK 1 913m. The tax expense amounted to SEK 4 039m (3 669), corresponding to an effective tax rate of 21.8 per cent (23.8). The tax expense was affected positively by a one-off effect of SEK 505m caused by the lowering of the Swedish corporate tax rate to 22 per cent. The effective tax rate in 2012 was affected negatively by the loss reported in Ukraine during the year, for which no deferred tax assets have been recognised. In the medium term the effective tax rate is estimated at 19-21 per cent after the corporate tax cut. The lower corporate tax rate in Sweden also had a positive one-off effect of SEK 79m on other comprehensive income.
More detailed information can be found in Swedbanks fact book, www.swedbank.com/ir, under Financial information and publications.
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impaired loans, amortisation of impaired loans and the fact that certain large corporate commitments are no longer impaired. Write-offs and the sale of the retail portfolio in Ukraine also contributed to the decrease (see also page 48 of the fact book). The volume in Baltic Banking related to problem loans from the crisis years is gradually declining as the loans are restructured, amortised or written off. Loans past due by more than 60 days continued to decrease within Baltic Banking during the year. Within Retail, private mortgages and corporate loans past due by more than 60 days increased, but without causing higher credit impairments. All in all, Swedbanks corporate customers within Retail and LC&I demonstrated continued resilience, with few customers with loans past due by more than 60 days or other financial problems.
Credit impairments, net by business area SEKm Retail Large Corporates & Institutions Baltic Banking Estonia Latvia Lithuania Other Group Functions & Other Russia Ukraine Other Total
Assets taken over and cancelled leases by business area SEKm Retail Baltic Banking Estonia Latvia Lithuania Group Functions & Other Russia Ukraine Ektornet Sweden Norway Finland Estonia Latvia Lithuania USA Ukraine Total
31 Dec 2012 9 169 11 97 61 4 888 137 145 4 606 377 0 281 340 1 665 351 1 228 364 5 066
31 Dec 2011 44 216 9 117 90 6 115 10 286 5 819 305 102 709 569 1 721 448 1 522 443 6 375
Q4 2012 102 152 -329 -242 86 -173 0 86 -30 117 -1 11
Q3 2012 69 -35 -18 2 8 -28 0 188 28 140 20 204
Q4 2011 216 4 -117 -55 158 -232 12 -277 -269 9 -17 -174
Swedbanks exposure to counterparties in Greece, Ireland, Italy, Portugal and Spain continued to decrease. The exposures totalled SEK 396m as of 31 December 2012 (763).
GIIPS exposure 31 Dec 2012 SEKm Bonds of which soveriegn of which held to maturity1 Loans (money market and commercial paper) Loans (committed credit facilities) Derivatives net2 Other3 Total
1 2
Greece Ireland 0 0 0
Italy Portugal 84 84 84 26 26 26
Spain 5 5 5
Total 115 115 115
Credit impairments totalled SEK 687m for 2012 (net recoveries of SEK 1 911m). Credit impairments within Retail and LC&I remain very low and are mainly related to a few corporate commitments. Recoveries in the Baltic countries primarily related to a limited number of corporate commitments. In Ukraine, credit impairments increased during the year to SEK 915m (-526). The increase was primarily related to the sale of parts of the private portfolio and to additional provisions in the remaining portfolio. The value of repossessed assets in the Group fell by SEK 1 309m to SEK 5 066m during the year, of which tangible asset writedowns accounted for SEK 466m. During the year Ektornet acquired properties for SEK 1 006m and sold properties with a book value of SEK 1 655m. For more information on Ektornet, see page 21.
47 0 0 47
37 15 136
26
102 80 187
186 95 396
Current market values are approximately SEK 23m below the carrying amounts.
Derivatives at market value taking into account netting and collateral agreements. The derivatives gross value, i.e. market value plus internal add-ons, amount to: Ireland SEK 72m, Italy SEK 396m and Spain SEK 218m. Total SEK 686m. 3 Includes trade finance and mortgage loans.
During the year Swedbank reviewed all its major commitments in the Swedish and Baltic operations to ensure correct risk classifications and updated collateral values. Moreover, the banks risk classification models for small and medium-sized enterprises were updated to better reflect the underlying risk of default. Work to improve the customer representatives understanding of the design and impact of the risk classification models on capital requirements and profitability has been completed as well.
Funding and liquidity

Swedbank saw strong demand from domestic and international debt investors in 2012. During the year the bank attracted new investors and thereby broadened its investor base. In 2012 Swedbank issued a total of SEK 142bn in long-term debt instruments, of which SEK 14bn during the fourth quarter. Covered bond issuance amounted to SEK 77bn in 2012, while issued senior debt amounted to SEK 60bn. In 2013 Swedbank plans to issue approximately SEK 120bn to meet maturing long-term funding with a nominal value of SEK 86bn.
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The average maturity of all capital market funding arranged through the banks short- and long-term programmes was 33 months as of 31 December 2012 (35). Long-term funding with an original maturity of over one year had an average maturity of 38 months (41), of which 39 months for covered bonds (43) and 31 months for senior funding (19). The average maturity of longterm funding issued during the fourth quarter was 69 months. The banks short-term funding is used mainly as a cash management tool, not to finance the banks lending to the public. During the fourth quarter Swedbank extended the average maturity of its shortterm financing. The outstanding volume decreased during the year to SEK 115bn. As central banks increased support to southern European banks and the debate on the new bail-in rules intensified, the market increasingly turned its focus to the asset encumbrance level of the banks. To increase transparency in this area, Swedbank has reported not only encumbered assets in its fact book but also assets available to be pledged. Swedbank considers increased transparency to be an important element to improve its relative position and pricing in the capital market. Due to the composition of its assets, Swedbank has limited structural needs for senior funding. The share of senior funding is mainly determined by the banks liquidity needs and the buffer it wants to maintain in its cover pool in the form of overcollateralisation in order to withstand fluctuations in house prices. During the year the over collateralisation level in the cover pool increased to 35 per cent (29).
Issued long-term debt SEKbn Covered bonds of which SEK of which EUR of which USD of which Other Senior unsecured bonds Structured retail bonds (SPAX) Total Q4 Q3 2012 2012 9 6 2 0 1 4 1 14 18 17 1 0 13 0 31 Q2 2012 20 18 2 0 19 2 41 Q1 2012 30 17 3 10 24 2 56
the Swedish Financial Supervisory Authoritys definition. According to Swedbanks interpretation of the current draft regulation, the Groups NSFR amounted to 91 per cent on 31 December (94). In the Riksbanks Financial Stability Report published in November 2012 average NSFR was 84 per cent for the four major Swedish banks based on reports as per September 2012. The main liquidity measure used by the Board of Directors and executive management is the so-called survival horizon, which shows how long the bank can manage long periods of stress in capital markets, where access to new financing would be limited. At present, the bank would be able to survive for more than 12 months with the capital markets completely shut down. This applies to the Groups total liquidity as well as liquidity in USD and EUR. As of this quarter Swedbank reports its survival horizon in the fact book. For more information on Swedbanks funding and liquidity (including the survival horizon), see pages 5872 of the fact book.
Ratings events during the period

The banks positive development in recent years has been noticed by the rating agencies. For example, Fitch upgraded Swedbanks long-term rating during the summer 2012 from A to A+. At the end of 2012 the rating agencies took a number of general actions. Moodys upgraded the Swedish banking systems outlook from negative to stable and Standard & Poors downgraded its view of the Swedish economy, due to which the Swedish banks outlook was downgraded from stable to negative. Swedbanks aim is to have a credit rating on the same level as the highest rated banks in the Nordic region.
Capital and capital adequacy

The Common Equity Tier 1 ratio according to Basel 2 continued to strengthen during the fourth quarter 2012 to 17.4 per cent on 31 December 2012 (15.7 per cent on 31 December 2011). Common Equity Tier 1 capital increased by SEK 3.4bn from the beginning of the year to SEK 80.7bn. The increase was mainly due to profit for the year (after the anticipated dividend). Subordinated loans included in the capital base decreased by SEK 5.2bn, mainly due to redemptions and repurchases. Of this decrease, SEK 3.9bn relates to loans included in Tier 2 capital, despite that the bank issued a new EUR 500m subordinated loan during the fourth quarter. The rest of the decrease relates to loans included in Tier 1 capital. Risk weighted assets decreased by SEK 28bn from the beginning of the year to SEK 464bn. The risk weighted amount for credit risks decreased by SEK 27bn. Exposures, mainly in the form of corporate exposures in Sweden, increased the risk weighted amount by SEK 12bn, while cutbacks in Russia and Ukraine led to a reduction of SEK 5bn. The decrease in the risk weighted amount is primarily attributable to positive rating migrations for corporate exposures due to improved risk assessment processes and methods. This includes a rating model update for exposures to small and medium-sized enterprises (SME), which was approved by the Swedish Financial Supervisory Authority (SFSA) during the second quarter and led to a SEK 9bn reduction of the risk weighted amount as of 31
In 2012 Swedbank repaid and repurchased subordinated debt with a total volume of SEK 9bn. During the fourth quarter Swedbank issued a EUR 500m subordinated bond. It was Swedbanks first subordinated debt issue since 2008. Swedbanks liquidity reserve, which is reported in accordance with the Swedish Bankers Associations definition, amounted to SEK 216bn on 31 December 2012 (247). In addition to the liquidity reserve, liquid securities in other parts of the Group amounted to SEK 58bn (62). The liquidity reserve and the Liquidity Coverage Ratio (LCR) will fluctuate over time depending, among other things, on the maturity structure of the banks issued securities. According to current Swedish regulations, the Groups LCR amounted to 130 per cent as of 31 December (139). Distributed by USD and EUR, LCR was 296 per cent and 267 per cent, respectively. Based on the new, updated Swedish regulations (FFFS 2012:6), which apply as of 1 January 2013, LCR amounts to 139 per cent. In early 2013 the Basel Committee published a new recommendation on the definition of LCR, which would make Swedbanks LCR level significantly higher than in
Swedbank Year-end report 2012 Page 10 of 50
December. Changes in exchange rates, mainly attributable to the Baltic credit portfolio, have reduced the risk weighted amount for credit risks by SEK 4bn due to the appreciation of the Swedish krona against the euro. The risk weighted amounts for market risks and operational risks were practically unchanged as of 31 December compared with the beginning of the year.
Change in risk weighted assets 2012, Swedbank financial companies group
Estimated impact of new regulations on the Common Equity Tier 1 ratio

20% 19% 18% 17%
16% 17.4
-1.3 - 0.7 15.4
15% 14%
13%
SEKbn
505
6.8
12% 11% 10% Q4 2012 Basel 3* IAS 19** Q4 2012 Retail Internal incuding mortgage measures Basel 3 and risk-weights (IRB IAS 19 Advanced etc.) Decrease
500 495 490 485

Increase
492.3
480
475
* Estimated based on Swedbank's current understanding of future regulations. ** Estimated based on unrecognized actuarial losses as of 31 December 2012.
- 23.2 - 4.2 464.3 - 6.7 - 0.3 - 0.4
470 465 460
Increase
Decrease
The Common Equity Tier 1 ratio according to Basel 3, including IAS 19, was 15.4 per cent (14.3), according to Swedbanks estimate based on prevailing knowledge of future regulations. Swedbank estimates that the Basel 3 regulations will negatively affect its Common Equity Tier 1 ratio by 1.3 percentage points when introduced. EU negotiations on the future regulations were scheduled to be completed in 2012, but have been postponed and are not expected to be finalised until early 2013. Consequently, the new rules will probably take effect on 1 January 2014. The new accounting standard for pensions (IAS 19) took effect on 1 January 2013 and Swedbanks reported pension debt will increase by about SEK 4bn and equity will decrease by about SEK 3bn. As a result, the Common Equity Tier 1 ratio will drop by about 0.7 percentage points (0.4) calculated as of 31 December 2012. Falling discount rates during the second half-year explain the increase in the estimated negative effect. The changes in IAS 19 will create volatility in the estimated pension debt and hence in banks equity. On 26 November SFSA published a memo describing the introduction of a risk weight floor of 15 per cent for Swedish mortgage portfolios. The floor is being introduced as part of SFSAs overall capital assessment under the supervisory measure in the so called Pillar 2. Since the risk weight floor will be introduced, as proposed, as part of the overall capital assessment under Pillar 2, reported capital ratios will not be affected, since these calculations are made according to the rules for Pillar 1. The floor means that an institution must keep more capital if it does not already allocate capital in excess of the floor for Swedish mortgages. Within the framework of the internal capital assessment in Pillar 2 and in its internal controls, Swedbank has for some time been allocating additional capital to its mortgage business, corresponding to the proposed risk weight floor. These provisions are of the same size that SFSA is now proposing. When implementing the current EU directive, Sweden choosed to introduce an exemption whereby insurance holdings in Swedish banks could be deducted from their total capital base, rather than deducting half from Tier 1 capital and half from Tier 2 capital in accordance with the directives main rule. This exemption expired on 1 January 2013. Half of Swedbanks deduction for insurance holdings, which amounted to SEK 2.9bn as of
Risk-weighted assets by business area SEKbn Retail Large Corporates & Institutions Baltic Banking Estonia Latvia Lithuania Asset Management Group Functions & Other Group Business Support Treasury Russia Ukraine Ektornet Other Total risk-weighted assets
31 Dec 2012 208 127 95 38 31 26 3 31 2 15 4 4 6 0 464
31 Dec 2011 219 129 102 41 33 28 3 39 1 15 6 9 7 1 492
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31 December 2012, will therefore come from Tier 1 capital from the first quarter 2013. This would affect the Tier 1 ratio negatively by about 0.3 percentage points, while leaving the total capital adequacy ratio unchanged. The change is temporary and a consequence of the delay in the EUs implementation of the Basel 3 rules. The future Basel 3 rules will treat insurance holdings differently, where the deduction from the capital base will be replaced by a risk-weighting. The effect attributable to insurance holdings calculated according to the Basel 3 rules is included in the banks estimated Basel 3 figures. In December 2012 Swedbank applied to FI to use a socalled advanced internal risk classification model (IRBA) to measure credit risks for corporate exposures. An answer is expected in the second half of 2013. Swedbanks Internal Capital Adequacy Assessment Process (ICAAP) for 2012 shows that Swedbank has limited risks and is well capitalised for future regulatory changes and a potentially highly negative scenario that includes a major recession in Sweden and the Baltic countries which adversely affects the bank. For more information on Swedbanks ICAAP for 2012, see page 56 of the fact book.
kronor would have been SEK 267m (-656), while positions in foreign currency would have increased in value by SEK 150m (-332). With an interest rate increase of one percentage point, the Groups net gains and losses on financial items at fair value would have decreased by SEK 52m as of 31 December 2012, compared with a decrease of SEK 434m as of 31 December 2011.
Operational risks
The operational risk level remains elevated despite the financial effect in the form of operational losses being low. Swedbank has implemented extensive stabilisation measures to ensure its IT operations and accessibility through the Internet Bank and ATMs. The work to modernise, consolidate and improve efficiency in the banks IT infrastructure has begun to have a positive effect on operational risks.
Other events
The Board of Directors proposes a dividend of SEK 9.90 (5.30) per ordinary share and SEK 9.90 (5.30) per preference share for the financial year 2012, corresponding to SEK 10 880m and a dividend ratio of 75 per cent. The proposed record day for the 2012 dividend is 25 March 2013. The last day for trading in the banks shares with the right to the dividend will be 20 March 2013. If the Annual General Meeting accepts the Boards proposal, the cash dividend is expected to be paid out by Euroclear on 28 March 2013. Swedbanks Annual General Meeting will be held at Dansens Hus (Folkets Hus) in Stockholm on Wednesday, 20 March 2013.
Market risk
Swedbank measures market risks those of a structural nature and those that arise in trading operations with a Value-at-Risk (VaR) model. For each portfolio, VaR expresses a loss level that statistically will be exceeded by a specific probability during a set time horizon. Swedbank uses a 99 per cent probability and a time horizon of one day. This means that the potential loss for the portfolio, based on historical data, will exceed VaR on one day of 100. The table below shows Swedbanks VaR*) performance during the year.
VaR by risk category SEKm Interest risk Currency rate risk Stock price risk Diversification Total Jan-Dec 2012 (2011) Max Min Average 141 (186) 14 (29) 14 (14) 0 131 (175) 69(56) 102 (108) 3 (2) 6 (7) 3 (2) 7 (6) 0 -19 (-20) 66 (52) 96 (101) 31 Dec 31 Dec 2012 2011 71 5 4 -14 66 91 7 5 -19 84
Events after 31 December 2012

During the fourth quarter the bank announced an organisational change that takes effect on 1 January 2013. The new organisation improves opportunities for even better customer service on the internet, in mobile channels and by telephone through a new unit, Channels and Concepts. The change also gives the branches and regions greater independence in working with selected customer groups in local markets. Swedbanks Group Executive Committee has been expanded to include the six regional managers Stojko Gjurovski, Marie Halling, Lena Smeby-Udesen, Ulf Ejelv, Johan Smedman and Bjrn Elfstrand as well as CIO Mats Engstrand. Tomas Hedberg was appointed CEO of Swedbank Robur. Lars Friberg was appointed Head of Group HR. Swedbanks Nomination Committee proposes Anders Sundstrm as the new Chair of the Board of Directors of Swedbank AB. The Nomination Committee further proposes the re-election of all current Board members: Olav Fjell, Ulrika Francke, Gran Hedman, Lars Idermark, Anders Igel, Pia Rudengren, Charlotte Strmberg, Karl-Henrik Sundstrm and Siv Svensson.
*) VaR here excludes market risks within Swedbank Ukraine as well as strategic currency rate risks. For Swedbank Ukraine, VaR is misleading because of the illiquid and undeveloped financial markets in Ukraine. Regarding strategic currency rate risks, a VaR measurement based on a time horizon of one day is not relevant.
For individual risk types, VaR is supplemented with risk measurements and limits based on sensitivity to changes in various market prices. Risk-taking is also monitored with stress tests. An increase in all market interest rates of one percentage point as of 31 December 2012 would have reduced the value of the Groups assets and liabilities, including derivatives, by SEK 117m, compared with a decrease of SEK 987m as of 31 December 2011. This calculation includes the portion of the banks deposits assigned a duration of between two and three years. The decrease in the value of positions in Swedish
Page 12 of 50
Retail

Stable net interest income Good cost control Development of digital services
Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Share of profit or loss of associates Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Credit impairments Operating profit Tax expense Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Non-controlling interests Return on allocated equity, % Loan/deposit ratio, % Credit impairment ratio, % Total provision ratio for impaired loans, % Share of impaired loans, gross, % Cost/income ratio Full-time employees Q4 2012 3 407 1 320 47 155 178 5 107 864 24 1 517 27 2 432 2 675 102 2 573 446 2 127 2 127 0 26.2 244 0.04 75 0.19 0.48 4 807 Q3 2012 3 447 1 269 51 222 220 5 209 848 43 1 444 22 2 357 2 852 69 2 783 733 2 050 2 047 3 24.4 246 0.03 77 0.20 0.45 4 775 % -1 4 -8 -30 -19 -2 2 -44 5 23 3 -6 48 -8 -39 4 4 Q4 2011 3 244 1 259 59 159 183 4 904 937 14 1 509 26 2 486 2 418 216 2 202 532 1 670 1 668 2 25.7 244 0.09 90 0.19 0.51 4 946 % 5 5 -20 -3 -3 4 -8 71 1 4 -2 11 -53 17 -16 27 28 Full-year Full-year 2012 2011 13 665 5 098 203 788 823 20 577 3 475 143 5 762 96 9 476 11 101 295 10 806 2 583 8 223 8 213 10 25.5 244 0.03 75 0.19 0.46 4 807 12 317 5 183 216 769 706 19 191 3 674 95 5 738 95 9 602 9 589 335 9 254 2 267 6 987 6 973 14 28.4 244 0.04 90 0.19 0.50 4 946 % 11 -2 -6 2 17 7 -5 51 0 1 -1 16 -12 17 14 18 18 -29
-3
-3
Development January-December Weaker economic conditions, not least in the eurozone, clearly impacted the Swedish economy during the fourth quarter. Households became more pessimistic about the Swedish economy and their own finances at the same time that corporate investment and employment plans have been postponed. The economic slowdown has led to lower credit growth, mainly in corporate lending. A rapidly growing number of notices of layoffs and an increase in the number of bankruptcies suggest a deeper and more protracted slowdown. Open unemployment rose to 8.1 per cent in November, the highest level in over two years. Profit for 2012 amounted to SEK 8 213m, an increase of 18 per cent year-on-year. The increase was mainly the result of stronger net interest income. Net interest income rose by 11 per cent for the full-year, mainly as the result of the repricing of mortgages and corporate credits. Deposit margins were negatively affected by falling interest rates. The fourth quarters net interest income was stable compared with the third quarter. Falling interest rates affected net interest income on deposits negatively. This was largely offset by the repricing of corporate credits. Deposit margins on mortgages were stable during the quarter.
Household deposit volume rose by 3 per cent from the beginning of the year and was stable during the fourth quarter. Swedbanks share of household deposits was 22 per cent (23 per cent as of 31 December 2011). Deposits from corporate customers rose by 3 per cent from the beginning of the year. Growth during the fourth quarter was 5 per cent and the volume amounted to SEK 108bn as of 31 December 2012. Swedbanks market share was 17 per cent (16). Total deposit volume increased for both current accounts and savings accounts. Market growth for household mortgage lending was 5 per cent on an annual basis, in line with growth in 2011 (5 per cent). Swedbanks share of growth was 14 per cent during the period January-November, while its share of the total market was 26 per cent (26 per cent as of 31 December 2011). Swedbanks mortgage volume in the private market, including housing cooperatives, has increased by 4 per cent since the beginning of the year. Lending volume to corporate customers was unchanged from the beginning of the year. The bank's market share was 17 per cent (17).
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Risk weighted assets amounted to SEK 208bn, a decrease of SEK 11bn during the year. Risk weighted assets for credit risks decreased by SEK 14bn despite an increase in lending. A calibration of the risk classification model for SMEs accounted for SEK 8bn of the decrease. A review of all major corporate commitments to ensure correct risk classifications and updated collateral values contributed nearly as much. The elimination of a previous cap on the risk classification of housing cooperatives also reduced risk weighted assets. Risk weighted assets for operational risks rose by SEK 3bn during the year, mainly as a result of amended internal capital allocation principles. During the fourth quarter risk weighted assets decreased by SEK 10bn, with the large part of the decrease coming from the review of corporate commitments. The change in the model for risk classification of housing cooperatives also contributed to the decline. A change in the customer composition led to lower risk weighted assets as well during the fourth quarter. Net commission income fell by 2 per cent year-on-year. A lower opening balance of assets under management due to the weak stockmarket in 2011, together with weak securities trading in 2012, affected net commission income negatively. Fund volumes, which had a positive flow since the end of the summer, continued to improve during the fourth quarter, with the biggest impact on fixed income funds and funds that target customers in specific segments e.g. private banking. Developing the digital channels is an important part of the banks strategy. An iPad banking app was launched in October and had over 130 000 users after just over two months. The total number of mobile banking users in Swedbank and the savings banks now exceeds1.2 million, an increase of nearly 80 per cent during the year. A new common banking service, Swish, was
launched in December to facilitate payments by mobile phone. During its first weeks around 36 000 customers of Swedbank and the savings banks have signed up and have sent or received over 20 000 payments. Expenses fell by 1 per cent year-on-year. The fourth quarter 2011 included an expense of SEK 62m related to staff redeployment. During the third quarter 2012 a new principle was implemented for the allocation of internal expenses from Group Treasury, which added SEK 113m to expenses for the second half-year. A corresponding decrease arose in Group Functions & Other. As a result of continued efficiency improvements as well as generation and competence change, the number of employees decreased by 139 during the year. 240 branches, or just over three fourths of the total number, have stopped handling cash manually, which has also reduced transport and security expenses. Consulting expenses have decreased as well. As part of the ongoing review of the retail network, 8 branches were merged with larger units during the period. There are now 310 branches. The cost/income ratio was 0.46 (0.50). Insurance-related income for the period amounted to SEK 1 442m (1 360), of which SEK 1 026m (1 058) consisted of net commission income. The increase was primarily due to an improved risk result, where the number of claims has declined in pace with lower morbidity rates. Assets under management amounted to SEK 103bn, an increase of SEK 9bn from the beginning of the year. Of the assets under management, SEK 90.9bn relates to unit linked and variable universal life insurance. Credit quality remained good. The number of small businesses with payment difficulties increased due to the slowing economy. The migration to better risk classes affected provisions positively. The share of impaired loans was 0.19 per cent (0.19).
Retail, Swedbanks dominant business area, is responsible for all Swedish customers except for large corporates and financial institutions. Banking services are sold through Swedbanks own branch network, the Telephone Bank, the Internet Bank and the savings banks distribution network. The business area also includes a number of subsidiaries as well as the retail operations in branch offices in Denmark, Norway, Finland and Luxembourg.
Large Corporates & Institutions

High business activity in Large Corporates Continued good activity and market leading position in SEK bond issues Increased corporate finance income in Norway
Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Share of profit or loss of associates Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Credit impairments Operating profit Tax expense Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Return on allocated equity, % Loan/deposit ratio, % Credit impairment ratio, % Total provision ratio for impaired loans, % Share of impaired loans, gross, % Cost/income ratio Full-time employees Q4 2012 824 443 412 0 24 1 703 269 71 331 12 683 1 020 0 152 868 62 806 806 17.5 200 0.23 166 0.10 0.40 1 006 Q3 2012 852 379 341 0 9 1 581 255 66 372 11 704 877 0 -35 912 210 702 702 14.2 183 -0.06 148 0.11 0.45 1 021 -5 -70 15 15 % -3 17 21 Q4 2011 1 051 269 224 -5 -5 1 534 422 13 379 17 831 703 17 4 682 252 430 430 12.3 218 0.00 134 0.13 0.54 1 076 27 -75 87 87 % -22 65 84 Full-year Full-year 2012 2011 3 388 1 602 1 717 6 50 6 763 1 099 361 1 317 43 2 820 3 943 4 185 3 754 947 2 807 2 807 15.1 200 0.08 166 0.10 0.42 1 006 3 514 1 340 705 -5 748 6 302 1 361 152 1 411 46 2 970 3 332 17 -189 3 504 1 128 2 376 2 376 15.5 218 -0.06 134 0.13 0.47 1 076 % -4 20
8 5 8 -11 9 -3 16
11 -36 -13 -29 -18 45
-93 7 -19 -7 -7 -5 18 -76 7 -16 18 18
-1
-7
-7
Development January-December The fourth quarter saw cautiousness in the financial markets. The generally negative outlook for the global economy persisted. Leading European and US stock indices fell during the first half of the quarter before recovering during the second half. Yields remained low on both short- and long-term Swedish sovereign bonds. Profit for the year amounted to SEK 2 807m (2 376). In 2011 profit was affected by one-off revenue of SEK 461m from the settlement with the Lehman Brothers bankruptcy estate. The increase in profit was mainly due to higher income in Large Corporates and FX & Fixed income unit as well as lower expenses. Net interest income in the FX & Fixed income unit decreased, while net gains and losses on financial items at fair value increased. Net interest income decreased by 4 per cent compared with 2011. Net interest income for Large Corporates rose by 40 per cent from the previous year to SEK 2 736m for the full-year. The lending margin widened through the continued repricing of loans, partly as a result of stricter requirements from the authorities on capital adequacy and liquidity. In the fourth quarter net interest income decreased by 3 per cent to SEK 824m compared with the previous quarter, with net interest income from Large Corporates rising by 6 per cent to SEK 729m. Business activity and income within Large Corporates remained positive, and the client centric
business model with a broad-based offering posted good results. In Norway, package solutions comprising several units such as bank financing, bond issues and equity have been especially successful. The margin on the loan portfolio increased somewhat during the fourth quarter. Lending increased by SEK 2bn from 31 December 2011 to SEK 136bn, while deposits rose by SEK 6bn to SEK 68bn. Lending declined by SEK 6bn against 30 September, mainly due to a couple of discontinued loans with low margins as well as a lower utilisation rate among a few customers. Risk weighted assets decreased by approximately SEK 2bn from the beginning of the year to SEK 127bn on 31 December. The change was due to a lower risk weighted amount for operational risk following a change in the internal allocation model, while credit and market risks were at about the same level during the year. Net commission income rose by 20 per cent year-onyear to SEK 1 602m, mainly due to income growth within Corporate Finance. During the fourth quarter net commission income rose by 17 per cent due to income growth within Corporate Finance in Norway. Low revenues and slow activity in equity markets during the fourth quarter made it more difficult to generate profit from proprietary risk management, and total income from equity trading decreased. During the fourth quarter
2012 one-off revenue of SEK 37m was reported for a VAT refund, which had been reported in the Norwegian corporate finance operations in the fourth quarter 2011. Net gains and losses on financial items at fair value increased by 144 per cent compared with 2011 to SEK 1 717m, mainly due to higher income from the FX & Fixed income unit. Compared with the previous quarter, net gains and losses on financial items at fair value rose by 21 per cent. Bond issue activity remained good during the fourth quarter, while customer activity in fixed income and currency trading was affected by the macroeconomic slowdown and was slightly lower than normal. Swedbank retained its strong position in the area of bond issues. Its market share for SEK issues was 21.3 per cent for the year, making it the market leader. In Norway, Swedbanks market share was 14.9 per cent, making it the second largest player. Swedbanks focus on euro bonds resulted in several issues on behalf of customers during the fourth quarter. Total expenses decreased by 5 per cent compared with 2011. Excluding variable staff costs, total expenses fell
by 13 per cent. Expenses of SEK 82m related to personnel redeployment were reported during the fourth quarter 2011. As a result of the review of the cost structure launched in the second half of 2011, a lower cost level was established during the year, with the biggest impact on staff and consulting costs. A large part of the redeployment was in the Investment Banking unit. During the third quarter 2012 a new principle was implemented for allocating internal expenses from Group Treasury, which resulted in expenses of SEK 84m in the second half of the year. A corresponding decrease arose in Group Functions & Other. Credit quality in the loan portfolio remained good and the share of impaired loans was low. Credit impairments amounted to SEK 152m in the fourth quarter, the large part of which consisted of a realised credit impairment related to the divestment of a commitment in the shipping and offshore sector. In TNS SIFO Prosperas survey of credit products, Swedens largest investors (tier 1) rated Swedbank as the best in the country in credit products and credit research.
Large Corporates & Institutions is responsible for large corporates, financial institutions and banks as well as for trading and capital market products. Operations are carried out by the parent bank in Sweden, branch offices in Norway, Denmark, Finland, the US and China, and through the trading and capital market operations in subsidiary banks in Estonia, Latvia and Lithuania.
Baltic Banking
Lower Euribor rates negatively affected net interest income Increased lending volumes during the fourth quarter
Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Impairment of tangible assets Credit impairments Operating profit Tax expense Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Return on allocated equity, % Loan/deposit ratio, % Credit impairment ratio, % Total provision ratio for impaired loans, % Share of impaired loans, gross, % Cost/income ratio Full-time employees Q4 2012 761 351 79 84 1 275 190 16 395 30 631 644 0 8 -329 965 116 849 849 13.7 108 -1.15 52 7.37 0.49 4 150 Q3 2012 755 360 72 86 1 273 168 12 343 30 553 720 0 5 -18 733 58 675 675 11.0 113 -0.07 56 9.62 0.43 4 130 % 1 -3 10 -2 0 13 33 15 0 14 -11 60 32 100 26 26 Q4 2011 901 380 84 156 1 521 221 5 461 32 719 802 1 913 21 -117 -1 015 71 -1 086 -1 086 -18.9 122 -0.37 55 12.57 0.47 4 257 % -16 -8 -6 -46 -16 -14 -14 -6 -12 -20 -62 Full-year Full-year 2012 2011 3 298 1 460 288 384 5 430 730 62 1 476 124 2 392 3 038 0 15 -685 3 708 347 3 361 3 361 13.6 108 -0.59 52 7.37 0.44 4 150 3 910 1 454 280 503 6 147 802 34 1 675 132 2 643 3 504 1 913 34 -1 002 2 559 449 2 110 2 110 8.0 122 -0.76 55 12.57 0.43 4 257 % -16 0 3 -24 -12 -9 82 -12 -6 -9 -13 -56 -32 45 -23 59 59
63
-3
-3
Development January-December In the third quarter 2012 GDP grew by 3.5 per cent in Estonia, 5.2 per cent in Latvia and 4.4 per cent in Lithuania compared with the previous year. Economic growth is expected to slow during the first half of 2013 due to weak demand from outside the region. Credit demand is still relatively weak in the Baltic countries, with businesses and consumers cautious about taking on more debt due to market uncertainty. Profit for 2012 amounted to SEK 3 361m, against SEK 2 110m in the previous year. The 2011 result was charged with goodwill impairment of SEK 1 913m in the Latvian banking operations. Net recoveries amounted to SEK 685m (1 002). Net interest income fell by 13 per cent in local currency compared with 2011. Lower market rates and a lower average lending volume affected net interest income negatively whilst increased deposits had a positive impact. Fluctuations in exchange rates reduced net interest income by SEK 110m. In the fourth quarter net interest income fell by 1 per cent in local currency. This was mainly due to falling market rates, which affected net interest income negatively. The acquisition of Hipoteku Bank and its gradual consolidation with Swedbank in the latter half of 2012 affected net interest income positively by SEK 28m in the fourth quarter and SEK 9m in the third quarter. Fluctuations in exchange rates affected net interest income positively by SEK 14m.
Lending volumes were largely unchanged in local currency during the year. Volumes decreased during the first quarter before stabilising during the second quarter. During the second half of 2012 lending volumes increased slightly in local currency. The increase in Estonia and Lithuania was due to higher demand, while the volume gain in Latvia was largely due to Swedbanks acquisition of Hipoteku Banks loan portfolio. The volumes in the acquired lending portfolios amounted to about SEK 1.6bn, while the deposit portfolio amounted to about SEK 1.8bn. Swedbanks market share in lending was 27 per cent as of 30 November (27 per cent as of 31 December 2011). Deposits increased by 13 per cent in local currency during the year, with deposits from private customers growing by 13 per cent and corporate deposits by 15 per cent. Swedbanks market share for deposits was 30 per cent as of 30 November (29 per cent as of 31 December 2011). The loan-to-deposit ratio was 108 per cent (122 per cent as of 31 December 2011). Net commission income increased by 4 per cent in local currency compared with 2011. The increase was due primarily to higher commissions from payment services. During the fourth quarter Swedbank in Lithuania was charged a fine of EUR 4m (SEK 35m) when the competition authority ruled that its cash management agreement with G4S adversely affected competition in
the market. Swedbank has appealed against the decision. The number of active customers and the number of transactions continue to rise, reflecting a high level of customer activity on the heels of improved macroeconomic conditions in the Baltic countries. The number of active customers increased by 120 000 in 2012. Expenses decreased by 6 per cent in local currency from the previous year, mainly due to lower fixed staff, IT, consulting and marketing expenses. The fourth quarter 2011 was charged with expenses of SEK 22m for personnel redeployment. The number of full-time employees has been reduced by 107, or down 3 per cent for the year. As a result of the continued review of the retail network, 13 branches were closed during the year, leaving 193 branches in the Baltic countries. At the same time that it is reviewing its retail network, the bank is improving the level of service in its digital channels. The cost/income ratio was 0.44 (0.43). Net recoveries amounted to SEK 685m, compared with SEK 1 002m for 2011. Recoveries were generated in the corporate portfolios in all three countries, while the mortgage portfolios generated additional impairments in Latvia and Lithuania. Impaired loans, gross, decreased during the year to SEK 9bn (SEK 16bn on 31 December 2011). The decrease was due to write-offs, to certain commitments no longer being impaired, to amortisations and to a lower inflow of new impaired loans. Credit quality has strengthened through a gradual increase in new lending, which carries a lower risk.
Risk weighted assets decreased by SEK 7bn from the beginning of the year to SEK 95bn. Risk weighted assets have stabilised or decreased in most lending portfolios, mainly due to improved credit quality, which led to an improved internal rating. Fluctuations in exchange rates contributed about SEK 3bn to the decrease in risk weighted assets. Insurance-related income amounted to SEK 428m (394) during the period. The improvement was mainly due to increased premium volumes and somewhat higher risk results. Assets under management amounted to SEK 3.2bn (3.3). During the year Baltic Banking continued to implement a customer-oriented business model based on long-term, full-service relationships. Our surveys show that customer satisfaction has increased at the same time that we are winning a larger share of their banking business. Functionality and service in the digital channels were improved during the year, primarily in terms of user friendliness, sales activities and certain types of advice. Around 85 per cent of customers in Baltic Banking are internet banking customers and more than 180 000 use the banks mobile applications. Swedbank has received several awards for its digital channels in recently published surveys. Global Finance Magazine ranked Swedbanks mobile banking solution for corporate customers the best in the world. In addition, Swedbanks Internet Bank was named the best in Estonia and Latvia.
Baltic Banking has business operations in Estonia, Latvia and Lithuania. The banks services are sold through Swedbanks own branch network, the Telephone Bank and the Internet Bank.
Asset Management

Positive fund inflows Investors are reducing their risks
Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Operating profit Tax expense Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Return on allocated equity, % Cost/income ratio Full-time employees Fund assets under management, SEKbn Discretionary assets under mangement, SEKbn Total assets under mangement, SEKbn Q4 2012 1 404 1 2 408 87 13 75 12 187 221 17 204 29 175 175 39.8 0.46 278 527 253 780 Q3 2012 2 370 3 1 376 84 13 73 13 183 193 0 193 49 144 144 33.2 0.49 271 474 283 757 % -50 9 -67 100 9 4 0 3 -8 2 15 6 -41 22 22 Q4 2011 0 380 -1 2 381 113 9 99 12 233 148 30 118 29 89 89 21.0 0.61 286 446 271 717 % 6 0 7 -23 44 -24 0 -20 49 -43 73 0 97 97 Full-year Full-year 2012 2011 11 1 527 8 4 1 550 349 41 300 49 739 811 17 794 179 615 615 35.1 0.48 278 527 253 780 0 1 560 -9 5 1 556 387 42 345 49 823 733 30 703 178 525 525 28.1 0.53 286 446 271 717 % -2 -20 0 -10 -2 -13 0 -10 11 -43 13 1 17 17
3 11 -11 3
-3 18 -7 9
-3 18 -7 9
Development January-December Concerns in the European financial markets eased slightly as a result of stimulus packages by various central banks. Many financial markets developed well at the end of the period, which affected fund flows positively. During the year the total net inflow to Swedish funds was SEK 74bn (16). The net inflow to Swedbank Roburs funds in Sweden was SEK 6.6bn. The positive net flows were attributable to fixed income and mixed funds, while equity funds had a net outflow of SEK 7.1bn. Swedbank Roburs assets under management at the end of the period amounted to SEK 527bn, compared with SEK 446bn at the beginning of the year. In 2012 Folksam incorporated the LO funds, with total assets under management of SEK 39bn. Swedbanks market share in Sweden measured as assets under management was 24.7 per cent (23.6 per cent in 2011) and its share of net fund contributions was 8.9 per cent, compared with a net outflow in 2011. Profit for the year increased by 17 per cent to SEK 615m, mainly due to lower expenses. Net commission income decreased by 2 per cent compared with the previous year. The decrease was mainly due to a redistribution from equity to fixed
income funds. Income from institutional asset management excluding Swedbank Roburs funds amounted to SEK 172m (140). During the fourth quarter 2012 performance related income from institutional management services amounted to SEK 49m. Expenses were reduced by 10 per cent year-on-year due to efficiency improvements, which led to fewer employees and lower consulting costs. Intangible asset writedowns from previous acquisitions amounted to SEK 17m during the fourth quarter. A total expense of SEK 16m related to personnel redeployment was reported in the fourth quarter 2011. In 2012 the business area continued to clarify and simplify its customer offering. Twenty funds have been consolidated and two have been discontinued. Four new offerings have been launched, including three ETFs (exchange traded funds). Moreover, a number of funds have been changed to become purely allocation offerings. As of 1 January 2013 Asset Management is no longer a separate business area within Swedbank. Like the Groups other product companies, Swedbank Robur will be part of Group Products within Group Functions & Other. Income from the products will be recognised primarily within each business area, and Group Products will have its expenses covered by the business areas.
Asset Management comprises the Swedbank Robur Group and its operations in fund management, institutional and discretionary asset management. Asset Management is represented in Swedbanks four home markets.
Group Functions & Other

Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Share of profit or loss of associates Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Impairment of tangible assets Credit impairments Operating profit Tax expense Profit for the period from continuing operations Profit for the period from discontinued operations, after tax Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Non-controlling interests Full-time employees Q4 2012 485 -31 213 1 559 1 227 801 33 -390 139 583 644 0 191 86 367 -13 380 4 384 383 1 4 620 Q3 2012 208 -14 101 2 506 803 714 50 -503 131 392 411 -1 97 188 127 170 -43 -17 -60 -57 -3 5 098 -9 % Q4 2011 -221 -14 193 1 562 521 920 6 -233 190 883 -362 0 149 -277 -234 -94 -140 4 -136 -136 0 5 722 -19 % Full-year Full-year 2012 2011 842 -115 318 3 2 129 3 177 3 036 131 -1 338 570 2 399 778 -1 451 892 -564 -17 -547 -13 -560 -558 -2 4 620 -714 2 392 3 1 861 1 544 3 308 72 -1 013 689 3 056 -1 512 0 140 -1 055 -597 -353 -244 4 -240 -240 0 5 722 -19 %
-50 10 53 12 -34 -22 6 49 57 97 -54
10 0 -1 -13 67 -27 -34
-19 0 14 -8 82 -32 -17 -21
28
-6 -95
-86 0
Development January-December Group Functions & Other comprises the bank's group functions (including Group Business Support), the banking operations in Russia and Ukraine, and Ektornet. Income for Group Functions & Other consists of net interest income, which mainly comes from Group Treasury, the banking operations in Russia and Ukraine, and net gains and losses on financial items at fair value from Group Treasury. Other income primarily consists of revenue from the savings banks as well as sales gains from Ektornet. Income amounted to SEK 3 177m (1 544). Expenses for Group Functions & Other decreased by 21 per cent compared with the previous year to SEK 2 399m (3 056). Excluding the net of services purchased and sold internally, expenses fell by 12 per cent to SEK 6 705m (7 613). The decrease was mainly due to lower costs for staff, IT and consultants. Group Business Support Group Business Support (GBS) currently consists of just over 2 800 employees in Sweden, Estonia, Latvia and Lithuania. GBS comprises Swedbanks business support units, including the IT organisation, most of Swedbanks product units and units responsible for facilities, procurement and training. GBSs strategy is to improve the bank's productivity by reducing complexity, cutting lead times, capitalising on economies of scale and better utilising available competence. In GBSs revenue and expense model, revenue from Swedbanks customers is posted by each business area and GBS receives compensation to cover its expenses.
GBSs external revenue comes largely from the savings banks, primarily for IT services. Expenses for 2012 (excluding internally sold services) amounted to SEK 4 102m (4 628). The decrease was mainly due to lower costs for personnel and consultants. Group IT manages Swedbanks IT operations. In 2012 there was a temporary reduction in IT development, along with more long-term cost cuts through efficiency improvements in the Group IT systems. Investments will be made in the next few years to further develop the digital channels. In addition, investment is needed to meet changes in regulatory requirements and replace older systems. During the year GBS worked on the preparations for the move of Swedbanks head office to Sundbyberg and began a consolidation of the Groups loan management, which is expected to reduce costs over time. The product units are responsible for large parts of Swedbanks product areas, including insurance, cards, payments and lending. During the year an analysis of the product range was conducted, based on which measures to simplify and reduce the number of products will be intensified in 2013. The product areas for cards and insurance are described in more detail on page 23. Group Treasury Group Treasury is responsible for the banks funding, liquidity and capital planning, including internal control and pricing. The Groups equity is allocated to each business area on the basis of capital adequacy rules and how much capital will be needed according to the bank's Internal Capital Adequacy Assessment Process (ICAAP).
Page 20 of 50
Group Treasury prices funding and liquidity in an internal pricing system, where the most important parameters for setting internal rates are maturity, interest fixing period, currency and the need for liquidity reserves. Swedbank is conducting a project to further refine internal rate setting in 2013. Group Treasurys result over time shall be nearly nil, with the exception of earnings that may arise in debt and liquidity management within the given risk mandate. The fee paid to the Swedish National Debt Office for the state guaranteed funding is charged against Group Treasury. Risk hedging by Group Treasury is generally achieved with financial derivatives. The volatility in results over time is largely due to accounting-based fluctuations in these hedges. Net interest income amounted to SEK 675m in 2012, compared with SEK -1 145m in 2011. Of the change of SEK 1 820m, SEK 776m is due to lower fees for the state guaranteed funding. The remainder is due to a better result within liquidity management, lower funding costs, and because the banks funding costs are more accurately reflected in the internal rate charged to the business areas. In addition, a one-time correction related to the buyback of covered bonds affected net interest income positively by SEK 78m during the fourth quarter 2012. The correction also affected net gains and losses on financial items at fair value negatively by SEK 68m. Treasurys net interest income has been temporarily strengthened by positions that have benefited from lower market rates and to a certain extent by credit and basis swap spreads. Consequently, net interest income is likely to trend lower in 2013, as position extensions are made at lower interest rates and spreads. Net gains and losses on financial items at fair value amounted to SEK 316m in 2012, compared with SEK 187m in the previous year. Profit for the year is attributable to a positive performance in liquidity management as well as repurchases of subordinated loans, while other valuation effects and one-time effects contributed negatively by around SEK 350m. During the year SEK 351m of net gains and losses on financial items at fair value were attributable to management of the banks liquidity portfolio. The liquidity portfolio has a remaining maturity of nearly two years. During the fourth quarter Swedbank repurchased subordinated debt instruments with a nominal value of SEK 1.6bn, which produced a positive effect on net gains and losses on financial items of approximately SEK 319m. Russia and Ukraine The process of exiting the retail operations in Russia and Ukraine is progressing according to plan. During the fourth quarter the last 10 branches in Ukraine were closed. The result in Russia amounted to SEK 50m (568). Net interest income decreased by 39 per cent during the year to SEK 183m, mainly due to amortisations of the performing part of the loan portfolio and the sale of the private portfolio. Since the beginning of the year the Russian loan portfolio has decreased by 44 per cent in local currency. Total expenses in Russia decreased by SEK 48m. During the fourth quarter 2012 redeployment expenses totalled SEK 24m. The number of full-time positions in
Russia was reduced from 174 at the beginning of the year to 114. Credit quality was stable. Net recoveries of SEK 43m (512) were the result of recoveries from a few previously impaired loans. Impaired loans, gross, decreased by 68 per cent from the beginning of the year. The result in Ukraine amounted to SEK -1 013m (470) for 2012. Net interest income was SEK 151m (267). The decrease was mainly due to amortisations in the performing part of the loan portfolio and the sale of private portfolios. From the beginning of the year the Ukrainian loan portfolio decreased by 64 per cent in local currency. Total expenses in Ukraine amounted to SEK 266m (425). During the fourth quarter 2012 redeployment expenses totalled SEK 20m. The previous year included an expense of SEK 100m for the transformation of the Ukrainian operations. The number of full-time positions in Ukraine was reduced from 1 037 at the beginning of the year to 249. Credit impairments amounted to SEK 915m (-526). The increase related mainly to sales of portions of the private portfolio as well as additional provisions in the remaining portfolio. Impaired loans, gross, decreased by 52 percent from the beginning of the year. Ektornet Ektornet manages and develops Swedbanks repossessed assets to recover as much value as possible. The value of repossessed assets decreased during the period to SEK 4 606m.
Assets taken over SEKm Sweden Norway Finland Estonia Latvia Lithuania USA Ukraine Total properties Shares Total 31 dec 2012 374 0 281 304 1 665 351 1 217 364 4 556 50 4 606 31 dec 2011 305 102 709 569 1 721 448 1 415 443 5 712 107 5 819
In 2012 properties were acquired for SEK 1 006m (the majority in Latvia and Lithuania), at the same time properties with a book value of SEK 1 655m (the majority in Latvia and Lithuania) were sold for an aggregate capital gain of SEK 212m. During the fourth quarter properties with a book value of SEK 720m were sold, generating a capital gain of SEK 64m. Ektornets result amounted to SEK -406m (-118) for 2012. A large share of the properties has negative cash flows because they do not generate rental revenue. Depreciation according to plan amounted to SEK 103m (122). Property values were written down by SEK 392m for the full-year (126). Property acquisitions are expected only in exceptional cases going forward. At the same time sales work is intensifying. This means that other revenue, including
sales gains, will increase and that impairment losses on tangible assets (properties) may continue. All in all, the volume of repossessed assets is expected to decrease
significantly next year. It is estimated at present that there are surplus values in the property portfolio.
Eliminations
Income statement
SEKm Net interest income Net commissions Net gains and losses on financial items at fair value Other income Total income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Q4 2012 -13 17 0 -233 -229 -13 0 -216 0 -229 Q3 2012 -1 17 0 -207 -191 -1 0 -190 0 -191 % Q4 2011 -8 17 0 -214 -205 -9 0 -196 0 -205 % Full-year Full-year 2012 2011 -16 64 0 -925 -877 -14 0 -863 0 -877 -13 58 0 -740 -695 -10 0 -685 0 -695 %
Group eliminations mainly consist of eliminations of internal transactions between Group Functions and the other business areas.
Group Functions & Other comprise, in addition to the Group Functions, Russia, Ukraine and Ektornet. The Group Functions operate across the business areas and serve as strategic and administrative support for them. The Group Functions are Group Business Support, Accounting & Finance (including Group Treasury), Risk (including Compliance). Corporate Affairs (communication, strategic marketing and community affairs), HR and Legal. The Group Executive Committee and Internal Audit are also included in Group Functions.
Product areas
Swedbank intends to gradually expand its product reporting. This is being done outside the consolidated accounts, which means that the figures cannot be traced to specific lines in the financial statements. Responsibility for the product units currently rests with Group Products within Group Functions & Other, but the results are reported in several legal units and in the Retail and Baltic Banking business areas. Card business Swedbank issues cards and acquires card payments from merchants in all its home markets as well as in Denmark and Norway. All card operations are handled within Swedbank, with the exception of the credit card operations in Sweden, Denmark and Norway, which are conducted through Entercard AB, a joint venture with Barclays Bank. Measured in number of transactions, Swedbank is the fifth largest card payment acquirer and tenth largest card issuer in Europe. In its four home markets as a whole, Swedbank has a market share for card acquiring and issuing of nearly 50 per cent. The number of transactions made by card versus cash is increasing in all of Swedbanks home markets. Card volumes are also growing as a function of underlying economic growth. A large share of Swedbanks transaction revenue is based on the number of transactions, not solely on the transactions value, which makes issuing and acquiring revenue less volatile during periods of slower economic growth. In Sweden nearly 80 per cent of store purchases are made by card, giving it one of the highest levels of card usage in the world, with volume growth of about 10 per cent per year. In Estonia the percentage of card transactions is also high (55 per cent), with an annual growth rate of about 8 per cent. In Latvia and Lithuania card use is lower (35 and 20 per cent respectively), but the growth rate is expected to be higher than in Sweden and Estonia. Within card payments, one of Swedbanks most important growth areas is rapidly growing e-commerce, where we have a slightly lower market share than in the grocery and retail sectors, for example. Online purchases by our card customers are increasing by about 16 per cent per year, and our volume of e-commerce payments is growing by 7 per cent per year. Swedbank is playing a part in developing solutions in mobile payments with the help of cards and during the fourth quarter signed an agreement with Axfood on the distribution of a newly developed mobile payment service, Bart, to all of D-Gruppens 360 stores in 2013. In card issuing, Swedbank sees growth opportunities in corporate cards, where we have historically been weaker. As a first step, an improved business debit card was launched in Sweden in 2012. During the year a long-term agreement took effect with MasterCard as the main card network supplier for both private and corporate services. The migration of our customers cards to MasterCard has begun and is resulting in better customer offerings and lower production costs. Swedbanks total card revenue amounted to SEK 4 121m (3 908) during the period. The positive revenue trend was mainly due to an increase in the number of transactions (both card acquiring and card issuing) as well as higher credit volumes in EnterCard.
Baltic countries credit volumes have decreased, but are being offset by an increased number of transactions. Card issuance revenue in the Baltic countries fell by 6 per cent in local currency partly as a result of new bilateral agreements on interbank compensation, which reduces costs for the Baltic card payment operations, however.
Card related income SEKm Card acquiring of which Nordic countries of which Baltic countries Card issuing of which Sweden of which Baltic countries Net interest income, credit cards of which Sweden of which Baltic countries Entercard* Total Card related income Full-year Full-year 2012 2011 787 667 120 1 748 1 243 505 295 64 231 1 291 4 121 730 638 92 1 708 1 196 512 276 64 212 1 194 3 908
% 8 5 30 2 4 -1 7 0 9 8 5
* Swedbank's share of Entercard's total income. Entercard is consolidated into Swedbank Group by the equity method.
The value of processed payments increased by 6 per cent to SEK 402bn compared with the previous year and the number of transactions processed grew by 9 per cent to 1.6 billion, compared with 6 and 8 per cent respectively for the market as a whole. The reason why revenue is not growing at the same rate as the volume of acquired payments or the number of transactions is price pressure at the retail level. The expansion of the payment business to Norway and Denmark is generating a significant share of the total inflow of new customers, transactions and income. Growth is higher in the Baltic countries than in Sweden, but the Nordic countries still account for about 90 per cent of card processing volume. The number of card purchases increased by 10 per cent during the year to 1 080 million. The number of cards issued by Swedbank rose by 1 per cent to 7.8 million from the previous year, while the market grew by 1.6 per cent.
Full-year Full-year 2012 2011 1 595 402 7.8 1 080 63 1 462 379 7.6 982 61
Key ratios, cards Card acquiring transactions, millions Card acquiring volume, SEKbn Issued cards, millions Card purchases (POS), millions POS/total card turnover, %
% 9 6 2 10
Insurance business Swedbank has life insurance operations in Sweden as well as life and non-life operations in the Baltic countries. In addition, Swedbank offers non-life
insurance in Sweden through a third-party solution with the insurance company Tre Kronor. Swedbank Frskring AB, the Groups Swedish life insurance company, is the sixth largest company in the Swedish life insurance market, with a market share of about 8 per cent in terms of premium income. In Estonia, Latvia and Lithuania the corresponding market shares are 37, 17 and 24 per cent, which makes Swedbank the largest life insurer in the Estonian and Lithuanian markets and among the three largest in Latvia. The corresponding market shares for the Baltic non-life insurance company are 14 per cent in Estonia, 3 per cent in Latvia and 1 per cent in Lithuania. Insurance products are sold through the distribution channels of Swedbank and the savings banks.
Premium payments SEKm Sweden of which collective occupational pension of which endowment insurance of which occupational pension of which risk insurance of which other Baltic countries of which life insurance of which property insurance Full-year Full-year 2012 2011 12 566 3 392 6 139 1 795 627 613 988 619 369 16 435 3 673 9 680 1 705 585 792 1 010 659 351
in unit linked insurance and deposit insurance and SEK 12bn was in traditional insurance.
Assets under management SEKbn Sweden of which collective occupational pension of which endowment insurance of which occupational pension of which other Baltic countries of which life insurance 31 Dec 2012 103.0 39.3 45.7 10.0 8.0 3.2 3.2 31 Dec 2011 94.5 33.5 45.4 8.0 7.6 3.2 3.2
% 9 17 1 25 5 0 0
% -24 -8 -37 5 7 -23 -2 -6 5
Baltic countries Life insurance operations in the Baltic countries are divided into two main groups: risk and savings products. Swedbank focuses mainly on risk products, where it sees major growth potential. Premium income for risk products rose by 6 percent in local currency compared with 2011 to SEK 106m. Premium payments in the Baltic life insurance operations amounted to SEK 619m during the period, down 6 per cent in local currency from the previous year, mainly due to a shift from insurance savings to risk insurance, where the premiums, but not necessarily the earnings, are lower. In the Baltic non-life operations, Swedbank offers solutions for private customers. The largest product areas are car and home insurance. The number of policies amounts to 49 000 (43 000). Since car and home sales have decreased in recent years, the focus has been on boosting sales to new customer segments and launching new and simpler products in other areas e.g. travel insurance. Moreover, a new branch office was opened in Lithuania during the year. Premium payments for Baltic non-life insurance amounted to SEK 369m during the period, an increase of 9 per cent in local currency. Revenue Swedbanks aggregate insurance revenue amounted to SEK 1 870m (1 754) during the year and SEK 437m (449) during the fourth quarter. The revenue increase for the Swedish life insurance operations during the year was mainly due to an improved risk result, where claim numbers were favourable. The main reason for the improvement is the positive change in reserves due to lower morbidity rates. Revenue in the Baltic life and non-life operations was stable during the period.
Insurance related income SEKm Sweden of which life insurance of which property insurance Baltic countries of which life insurance of which property insurance Total insurance related income Full-year Full-year 2012 2011 1 442 1 396 46 428 216 212 1 870 1 360 1 323 37 394 202 192 1 754
Sweden Despite a difficult year for the insurance industry, the future outlook for the industry is good. An ageing population and shift in responsibility from society to the individual means that demand for pension and insurance products will grow. In September a national life insurance commission presented a draft law on an expanded rate of transfer. The proposal, which is expected to enter into force in 2015, could potentially create considerable new business for Swedbank. In Sweden endowment insurance has historically been the largest life insurance product. The introduction of investment savings accounts at the beginning of the year placed pressure on endowment insurance. New sales fell by 64 per cent compared with 2011 to SEK 135m. Withdrawals from endowment insurance increased to SEK 7.9bn, compared with SEK 6.2bn in 2011. The largest potential for Swedbank in Sweden today is considered to be in risk products such as life and health insurance as well as occupational pensions. Swedbanks new disability insurance product, the Trygga concept, was launched during the year. The concept comprises unemployment, life and health insurance, and around 100 000 policies were sold in 2012 to about 50 000 customers. Premium payments from occupational pensions amounted to SEK 5.2bn (5.4), of which occupational pensions excluding collective pensions increased by 5 per cent from the previous year to SEK 1.8bn. The market share for occupational pensions excluding collective pensions is about 3 per cent. Total insurance assets under management in Sweden amounted to SEK 103bn (94.5), of which SEK 91bn was
% 6 6 24 9 7 10 7
Financial information - contents

Group Income statement, condensed Statement of comprehensive income, condensed Balance sheet, condensed Statement of changes in equity, condensed Cash flow statement, condensed Notes Note 1 Accounting policies Note 2 Critical accounting estimates Note 3 Changes in the Group structure Note 4 Operating segments (business areas) Note 5 Net interest income Note 6 Net commissions Note 7 Net gains and losses on financial items at fair value Note 8 Other expenses Note 9 Credit impairments Note 10 Loans Note 11 Impaired loans etc. Note 12 Assets taken over for protection of claims and cancelled leases Note 13 Credit exposures Note 14 Intangible assets Note 15 Amounts owed to credit institutions Note 16 Deposits from the public Note 17 Debt securities in issue Note 18 Derivatives Note 19 Financial instruments carried at fair value Note 20 Pledged collateral Note 21 Capital adequacy Note 22 Risks and uncertainties Note 23 Related-party transactions Note 24 Swedbanks share Parent company Income statement, condensed Statement of comprehensive income, condensed Balance sheet, condensed Statement of changes in equity, condensed Cash flow statement, condensed Capital adequacy 46 46 47 47 48 48 29 30 30 31 33 34 34 35 35 36 37 37 37 38 39 39 39 40 40 41 42 44 44 44 Page 26 27 27 28 29
More detailed information can be found in Swedbanks fact book, www.swedbank/se/ir, under Financial information and publications.
Income statement, condensed

Group SEKm Interest income Interest expenses Net interest income (note 5) Commission income Commission expenses Net commissions (note 6) Net gains and losses on financial items at fair value (note 7) Insurance premiums Insurance provisions Net insurance Share of profit or loss of associates Other income Total income Staff costs Other expenses (note 8) Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets (note 14) Impairment of tangible assets Credit impairments (note 9) Operating profit Tax expense Profit for the period from continuing operations Profit for the period from discontinued operations, after tax Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Profit for the period from continuing operations Profit for the period from discontinued operations Non-controlling interests Profit for the period from continuing operations Profit for the period from discontinued operations Earnings per share, total operations, SEK1) after dilution1) Earnings per share, continued operations, SEK1) after dilution1) Earnings per share, discontinued operations, SEK after dilution1) Equity per share, SEK Return on equity, % Credit impairment ratio, %
1)
Q4 2012 12 171 -6 706 5 465 3 362 -858 2 504 752 494 -367 127 156 487 9 491 2 355 1 712 220 4 287 5 204 17 199 11 4 977 640 4 337 4 4 341 4 340 4 336 4 1 1 0 3.95 3.94 3.95 3.94
1)
Q3 2012 13 033 -7 770 5 263 3 142 -761 2 381 568 380 -233 147 224 468 9 051 2 252 1 539 207 3 998 5 053 -1 102 204 4 748 1 220 3 528 -17 3 511 3 511 3 525 -14 0 3 -3 3.20 3.19 3.22 3.21 -0.02 -0.02 89.48 14.1 0.06
% -7 -14 4 7 13 5 32 30 58 -14 -30 4 5 5 11 6 7 3 95 -95 5 -48 23 24 24 23
Q4 2011 14 360 -9 393 4 967 3 097 -806 2 291 559 346 -212 134 155 550 8 656 2 651 2 019 277 4 947 3 709 1 960 170 -174 1 753 790 963 4 967 965 962 3 2 1 1 0.88 0.88 0.88 0.88 0.00 0.00 84.40 3.9 -0.05
% -15 -29 10 9 6 9 35 43 73 -5 1 -11 10 -11 -15 -21 -13 40 -99 17
Full-year Full-year 2012 2011 52 883 -31 695 21 188 12 830 -3 194 9 636 2 534 1 802 -1 207 595 797 1 870 36 620 9 413 6 654 882 16 949 19 671 20 466 687 18 498 53 577 -34 563 19 014 12 655 -3 058 9 597 1 584 1 341 -835 506 767 2 577 34 045 9 917 7 471 1 011 18 399 15 646 1 960 174 -1 911 15 423 3 669 11 754 4 11 758 11 744 11 741 3 14 13 1 9.53 9.52 9.53 9.52 0.00 0.00 84.40 12.2 -0.14
% -1 -8 11 1 4 0 60 34 45 18 4 -27 8 -5 -11 -13 -8 26 -99
20 10 23 23 23 23 -43 -15
-19
4 039 14 459
-13 14 446 14 438 14 448 -10 8 11 -3 12.24 12.19 12.25 12.20 -0.01 -0.01 93.70 14.4 0.05
33 -50 0
-67
0.00 0.00 93.70 16.7 0.00
In the calculation of earnings per share the preference share dividend is deducted from profit in the period the dividend is declared. The calculation of earnings per share is specified on page 45.
Page 26 of 50
Statement of comprehensive income, condensed

Group SEKm Profit for the period reported via income statement Exchange differences, foreign operations Gains/losses arising during the period Reclassification adjustments to income statement, net gains and losses on financial items at fair value Hedging of net investments in foreign operations:* Gains/losses arising during the period Cash flow hedges: Gains/losses arising during the period Reclassification adjustments to income statement, net interest income Share of other comprehensive income of associates Income tax relating to components of other comprehensive income Other comprehensive income for the period, net of tax Total comprehensive income for the period Total comprehensive income attributable to the shareholders of Swedbank AB Non-controlling interests * The Group hedges in principle all foreign net investments except goodwill. Q4 2012 4 341 837 1 -668 -116 29 22 296 401 4 742 4 741 1 Q3 2012 3 511 -1 700 0 1 265 -37 43 -18 -339 -786 2 725 2 725 0 74 74 -33 % 24 Q4 2011 967 -1 310 0 1 138 304 77 -18 -396 -205 762 759 3 -67 -62 % Full-year Full-year 2012 2011 14 446 -1 480 0 1 050 -614 193 21 -74 -904 13 542 13 534 8 11 758 -284 0 379 78 345 -2 -210 306 12 064 12 049 15 -44 % 23
-65 12 12 -47
Balance sheet, condensed

Group SEKm Assets Cash and balance with central banks Loans to credit institutions (note 10) Loans to the public (note 10) Interest-bearing securities Financial assets for which customers bear the investment risk Shares and participating interests Investments in associates Derivatives (note 18) Intangible fixed assets (note 14) Investment properties Tangible assets Current tax assets Deferred tax assets Other assets Prepaid expenses and accrued income Group of assets classified as held for sale Total assets Liabilities and equity Amounts owed to credit institutions (note 15) Deposits and borrowings from the public (note 16) Debt securities in issue (note 17) Financial liabilities for which customers bear the investment risk Derivatives (note 18) Current tax liabilities Deferred tax liabilities Short positions, securities Other liabilities Accrued expenses and prepaid income Provisions Subordinated liabilities Liabilities directly associated with group of assets classified as held for sale Equity of which non-controlling interests of which equity attributable to shareholders of Swedbank AB Total liabilities and equity
31 Dec 2012 130 058 85 480 1 238 864 135 807 104 194 8 106 3 633 102 265 13 440 2 393 4 638 1 082 657 8 380 7 736 208 1 846 941 122 202 579 663 767 454 105 104 92 141 1 378 3 476 18 229 16 624 16 782 3 281 14 307 76 106 224 154 106 070 1 846 941
31 Dec 2011 164 307 97 195 1 211 454 138 311 95 747 2 015 3 111 103 726 13 799 3 910 4 383 2 083 872 7 531 8 371 250 1 857 065 139 598 561 696 781 458 96 449 90 484 472 3 183 30 603 13 059 18 612 3 690 19 531 97 98 133 140 97 993 1 857 065
% -21 -12 2 -2 9 17 -1 -3 -39 6 -48 -25 11 -8 -17 -1 -12 3 -2 9 2 9 -40 27 -10 -11 -27 -22 8 10 8 -1
Statement of changes in equity, condensed

Group SEKm Shareholders' equity Other Exchange Hedging of net contridifferences, investments in buted subsidiaries foreign equity* and associates operations** Non-controlling interests Total equity
Share capital January-December 2011 Opening balance 1 January 2011 Dividends New share issue Reversal of VAT costs incurred on rights issue 2009 Repurchased shares Share based payments to employees Associates' acquisition of shares in Swedbank AB Business combinations Total comprehensive income for the period Closing balance 31 December 2011 January-December 2012 Opening balance 1 January 2012 Dividends Decrease in share capital Bonus issue Reversal of VAT costs incurred on rights issues in 2008 and 2009 Share based payments to employees Deferred tax related with share based payments to employees Associates' acquisition of shares in Swedbank AB Changes in ownership interest in subsidiary Business disposals Contribution Total comprehensive income for the period Closing balance 31 December 2012 24 904 -611 1 132 24 383 24 383 32 24 351
Cash flow hedges
Retained earnings
Total
17 152
-2 102
-144
-44
55 684 -2 995
94 897 -2 995 32
138 -15
95 035 -3 010 32 35 -6 180 159 -4
35 -6 180 159 -4 -287 17 187 -2 389 280 136 312 268 11 744 58 408
35 -6 180 159 -4 2 12 049 97 993 15 140
2 12 064 98 133
17 187
-2 389
136
268
58 408 -5 825 611 -1 132
97 993 -5 825
140 -6
98 133 -5 831 0 0
88 314 19 -54 1 0 0 -1 459 17 275 -3 848 865 1 001 -310 -42 14 438 66 780
88 314 19 -54 1 0 0 13 534 106 070 -2 -2 16 8 154
88 314 19 -54 -1 -2 16 13 542 106 224
In connection to the rights issues in 2008 and 2009 an assessment was made on the non-deductable VAT Swedbank AB would have to pay on the transaction costs. This assessment was partly changed in the second quarter 2011 based on a new tax case ruling. The VAT expense decreased by SEK 35m after income tax. The income tax expense on the VAT amount was SEK 12m. After a reassessment made by the Swedish Tax Agency, the VAT expense was further decreased by SEK 88m after income tax during the third quarter 2012. The income tax expense on the VAT amount was SEK 31m. *Other contributed equity consists mainly of share premiums. ** The Group hedges in principle all foreign net investments except goodwill.
Page 28 of 50
Cash flow statement, condensed

Group SEKm Operating activities Operating profit Profit for the period from discontinued operations Adjustments for non-cash items in operating activities Taxes paid Increase/decrease in loans to credit institutions Increase/decrease in loans to the public Increase/decrease in holdings of securities for trading Increase/decrease in deposits and borrowings from the public including retail bonds Increase/decrease in amounts owed to credit institutions Increase/decrease in other assets Increase/decrease in other liabilities Cash flow from operating activities Investing activities Business combinations Business disposals Acquisitions of and contributions to associates Acquisitions of other fixed assets and strategic financial assets Disposals/maturity of other fixed assets and strategic financial assets Cash flow from investing activities Financing activities Issuance of interest-bearing securities Redemption of interest-bearing securities Issuance of commercial paper etc. Redemption of commercial paper etc. Dividends paid Changes in ownership interest in subsidiary Contribution New share issue Repurchased shares Cash flow from financing activities Cash flow for the period Cash and cash equivalents at the beginning of the period Cash flow for the period Exchange rate differences on cash and cash equivalents Cash and cash equivalents at end of the period 142 962 -155 970 485 486 -494 412 -5 831 -1 16 0 0 -27 750 -33 911 164 307 -33 911 -338 130 058 253 855 -237 487 319 621 -260 254 -3 010 0 0 32 -6 184 66 573 147 260 17 109 147 260 -62 164 307 18 498 -13 -1 707 -1 971 10 760 -32 215 -6 334 21 504 -15 011 610 -2 202 -8 081 15 423 4 -17 -2 456 69 012 -23 100 -467 28 222 3 448 -32 139 22 655 80 585 Full-year 2012 Full-year 2011
-6 2 -30 -1 842 3 796 1 920
-2 6 -50 -4 396 4 544 102
Note 1 Accounting policies

The year-end report has been prepared in accordance with IAS 34, Interim Financial Reporting. Consistent with prior periods, the Parent Company has prepared its accounts in accordance with the Annual Accounts Act for Credit Institutions and Securities Companies, the directives of the Swedish Financial Supervisory Authority and recommendation RFR 2 of the Financial Reporting Council. The accounting policies applied in the year-end report conform to the accounting policies applied in the preparation of the consolidated financial statements and the annual report for 2011 with the exceptions below. The savings banks are compensated for sales to their customers of Swedbanks products and services. In mid-2011 a new agreement entered into force which governs this compensation. Presentation of the compensation in the income statement has been adjusted as of 2012 based on the new agreement, to
better illustrate its meaning. Comparative figures have been restated; see table below. The change affects interest income, commission expenses and expenses, but not the result in its entirety. The operating segments were changed in 2012 to coincide with the organisational changes implemented in Swedbanks business area organisation. Responsibility for the retail operations of the Nordic branch offices has been transferred from Large Corporates & Institutions to Retail. Responsibility for coordinating the life insurance operations in Sweden and the Baltic countries and for the Baltic P&C insurance operations has been transferred from Retail and Baltic Banking to Group Functions & Other. Furthermore, a number of product and staff functions have been transferred from Retail, LC&I, Baltic Banking and Asset Management to Group Functions & Other. Russia, Ukraine and Ektornet are no longer reported as separate segments and instead are included in Group
Functions & Other. Comparative figures have been restated.
New or revised IFRS and IFRIC interpretations have not had a significant effect on the financial position, results or disclosures pertaining to the Group or parent company.
New reporting Q4 2011 12 743 14 360 4 967 43 806 2 291 352 2 019 4 947 Full-year 2011 47 509 53 577 19 014 207 3 058 9 597 1 351 7 471 18 399 Previous reporting Q4 2011 12 770 14 387 4 994 208 971 2 126 214 1 881 4 809 Full-year 2011 47 613 53 681 19 118 841 3 692 8 963 821 6 941 17 869
Reporting of compensation to savings banks Group SEKm Interest income from the public Interest income Net interest income Other commission expenses Commission expenses Net commission income Other purchased services Other expenses Total expenses
Note 2 Critical accounting estimates

The Group uses various estimates and assumptions about the future to determine the value of certain assets and liabilities. The most important assumptions in terms of amount are made with regard to provisions for impairments and impairment testing of goodwill. The changes were based on the losses that executive management judged as most likely against the backdrop of the current economic outlook within the range of reasonable assumptions.
Impairment testing of goodwill Provisions for impairments

For loans that have been identified as impaired as well as portfolios of loans with similar credit terms affected by a loss event, assumptions are made as to when in the future the cash flows will be received as well as their size. Provisions for impairments are made for the difference between the present value of these projected cash flows and the claims carrying amount. Decisions are therefore based on various estimates and executive managements judgments about current market conditions. Portfolio provisions are based on loss estimates made in accordance with capital adequacy rules. The Groups provisions in the operations in the Baltic countries decreased during 2012 from SEK 8 819m to SEK 4 578m. Provisions in the Ukrainian operations decreased from SEK 3 856m to SEK 2 021m. When goodwill is tested for impairment, future cash flows are estimated for the cash-generating unit that the goodwill refers to and has been allocated to. As far as possible, the assumptions that are used, or part of those assumptions, are based on outside sources. Nevertheless, the calculation largely depends on the executive management's own assumptions. The assumptions are made based on indefinite ownership of the asset. The Groups goodwill amounted to SEK 11 452m as of 31 December 2012, of which SEK 8 735m related to the investment in the operations in the Baltic countries. The annual impairment test did not lead to any impairment. A minor goodwill item of SEK 3m was written down during the year.
Note 3 Changes in the Group structure

The acquisition of Hipolizings SIA has been deemed a business combination. The Latvian subsidiary Swedbank Lizings SIA acquired Hipolizings SIA on 1 August 2012. The company manages a leasing business in Latvia. to Swedbank ABs Luxembourg branch office. Both sales were made with local tax continuity i.e. without local tax consequences. During the third quarter 2012 Mandab AB, Swedbank Fretagskredit AB and Nordic Foodservice Investment AB were merged with Swedbank AB. The mergers were made with tax continuity i.e. without tax consequences. The changes do not affect the Group in its entirety or the reporting of the operating segments.
Internal structural changes

On 1 January 2012 the assets and liabilities of the Norwegian subsidiary First Securities AS were sold to Swedbank ABs Norwegian branch office. During the second quarter the banking operations of the Luxembourg subsidiary Swedbank S.A. were transferred
Page 30 of 50
Note 4 Operating segments (business areas)

Full-year 2012 SEKm Retail Large Corporates & Institutions Baltic Banking Asset Management Group Functions & Other Eliminations Group
Income statement
Net interest income Net commissions Net gains and losses on financial items at fair value Share of profit or loss of associates Other income Total income of which internal income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Impairment of tangible assets Credit impairments Operating profit Tax expense Profit for the period from continuing operations Profit for the period from discontinued operations, after tax Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Non-controlling interests 13 665 5 098 203 788 823 20 577 268 3 475 143 5 762 96 9 476 11 101 0 0 295 10 806 2 583 8 223 0 8 223 8 213 10 3 388 1 602 1 717 6 50 6 763 7 1 099 361 1 317 43 2 820 3 943 4 0 185 3 754 947 2 807 0 2 807 2 807 0 3 298 1 460 288 0 384 5 430 2 730 62 1 476 124 2 392 3 038 0 15 -685 3 708 347 3 361 0 3 361 3 361 0 11 1 527 8 0 4 1 550 0 349 41 300 49 739 811 17 0 0 794 179 615 0 615 615 0 842 -115 318 3 2 129 3 177 369 3 036 131 -1 338 570 2 399 778 -1 451 892 -564 -17 -547 -13 -560 -558 -2 -16 64 0 0 -925 -877 -646 -14 0 -863 0 -877 0 0 0 0 0 0 0 0 0 0 0 21 188 9 636 2 534 797 2 465 36 620 0 8 675 738 6 654 882 16 949 19 671 20 466 687 18 498 4 039 14 459 -13 14 446 14 438 8
Balance sheet, SEKbn

Cash and balances with central banks Loans to credit institutions Loans to the public Bonds and other interest-bearing securities Financial assets for which customers bear inv. risk Investments in associates Derivatives Total tangible and intangible assests Other assets Total assets Amounts owed to credit institutions Deposits and borrowings from the public Debt securities in issue Financial liabilities for which customers bear inv. risk Derivatives Other liabilities Subordinated liabilities Total liabilities Allocated equity Total liabilities and equity 1 33 924 0 102 3 0 3 9 1 075 74 380 0 103 0 486 0 1 043 32 1 075 7 262 188 57 0 0 125 1 14 654 206 90 16 0 121 203 0 636 18 654 3 0 115 2 2 0 0 10 3 135 0 107 1 2 0 0 0 110 25 135 0 2 0 0 0 0 0 1 1 4 0 0 0 0 0 2 0 2 2 4 119 193 13 83 0 1 41 6 652 1 108 238 9 762 0 35 21 14 1 079 29 1 108 0 -405 -1 -6 0 0 -64 0 -653 -1 129 -396 -6 -12 0 -64 -651 0 -1 129 0 -1 129 130 85 1 239 136 104 4 102 21 26 1 847 122 580 767 105 92 61 14 1 741 106 1 847
Key figures
Return on allocated equity, % Loan/deposit ratio, % Credit impairment ratio, % Share of impaired loans, gross, % Cost/income ratio Risk-weighted assets, SEKbn Full-time employees 25.5 244 0.03 0.19 0.46 208 4 807 15.1 200 0.08 0.10 0.42 127 1 006 13.6 108 -0.59 7.37 0.44 95 4 150 35.1 0.0 0.0 0.0 0.48 3 278 -2.5 261 3.79 11.14 0.76 31 4 620 14.4 212 0.05 1.05 0.46 464 14 861
Page 31 of 50
Full-year 2011 SEKm
Retail
Large Corporates & Institutions
Baltic Banking
Asset Management
Group Functions & Other
Eliminations
Group
Income statement
Net interest income Net commissions Net gains and losses on financial items at fair value Share of profit or loss of associates Other income Total income of which internal income Staff costs Variable staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of intangible assets Impairment of tangible assets Credit impairments Operating profit Tax expense Profit for the period from continuing operations Profit for the period from discontinued operations, after tax Profit for the period Profit for the period attributable to the shareholders of Swedbank AB Non-controlling interests 12 317 5 183 216 769 706 19 191 262 3 674 95 5 738 95 9 602 9 589 3 514 1 340 705 -5 748 6 302 6 1 361 152 1 411 46 2 970 3 332 17 335 9 254 2 267 6 987 0 6 987 6 973 14 -189 3 504 1 128 2 376 0 2 376 2 376 0 3 910 1 454 280 503 6 147 4 802 34 1 675 132 2 643 3 504 1 913 34 -1 002 2 559 449 2 110 0 2 110 2 110 0 1 560 -9 5 1 556 0 387 42 345 49 823 733 30 140 -1 055 -597 -353 -244 4 -240 -240 0 -714 2 392 3 1 861 1 544 174 3 308 72 -1 013 689 3 056 -1 512 -13 58 19 014 9 597 1 584 767 3 083 34 045 9 522 395 7 471 1 011 18 399 15 646 1 960 174 -1 911 15 423 3 669 11 754 4 11 758 11 744 14
-740 -695 -446 -10 0 -685 -695
703 178 525 0 525 525
Balance sheet, SEKbn

Cash and balances with central banks Loans to credit institutions Loans to the public Bonds and other interest-bearing securities Financial assets for which customers bear inv. risk Investments in associates Derivatives Total tangible and intangible assests Other assets Total assets Amounts owed to credit institutions Deposits and borrowings from the public Debt securities in issue Financial liabilities for which customers bear inv. risk Derivatives Other liabilities Subordinated liabilities Total liabilities Allocated equity Total liabilities and equity 1 32 899 0 94 1 0 3 10 1 040 76 368 0 94 0 466 10 1 014 26 1 040 7 297 179 63 0 0 122 1 12 681 232 76 18 0 120 216 6 668 13 681 3 0 119 2 2 0 0 10 2 138 0 98 1 2 0 12 4 117 21 138 0 2 0 0 0 0 0 1 1 4 0 0 0 0 0 2 0 2 2 4 153 207 15 82 0 2 36 7 644 1 146 268 25 775 0 25 17 0 1 110 36 1 146 0 -441 -1 -9 0 0 -54 0 -647 -1 152 -436 -5 -13 0 -55 -643 0 -1 152 -1 152 164 97 1 211 138 96 3 104 22 22 1 857 140 562 781 96 90 70 20 1 759 98 1 857
Key figures
Return on allocated equity, % Loan/deposit ratio, % Credit impairment ratio, % Share of impaired loans, gross, % Cost/income ratio Risk-weighted assets, SEKbn Full-time employees 28.4 244 0.04 0.19 0.50 219 4 946 15.5 218 -0.06 0.13 0.47 129 1 076 8.0 122 -0.76 12.57 0.43 102 4 257 28.1 -0.8 66 -6.98 23.74 1.98 39 5 722 12.2 213 -0.14 1.87 0.54 492 16 287
0.53 3 286
0.00
Page 32 of 50
Operating segments accounting policies

The operating segment reporting is based on Swedbanks accounting policies, organisation and management accounts. Market-based transfer prices are applied between operating segments, while all expenses within Group Business Support and other Group Functions are transfer priced at cost to the operating segments. Executive management expenses are not distributed. The net of services purchased and sold internally is recognised as other expenses in the income statements of the operating segments. Cross-border transfer pricing is applied according to OECD transfer pricing guidelines. The Groups equity attributable to shareholders is allocated to each operating segment based on capital adequacy rules and estimated capital requirements based on the banks Internal Capital Adequacy Assessment Process (ICAAP). Return on equity for the operating segments are based on operating profit less estimated tax and non-controlling interests in relation to average allocated equity. During the first quarter 2012 the assumptions for the internal capital allocation were changed due to expected changes in capital adequacy requirements. This change means that more capital is allocated to the business areas, which affects net interest income positively for the business areas and negatively for Group Treasury. A further SEK 17bn has been allocated to the business areas from Treasury compared with the fourth quarter 2011.
Note 5 Net interest income

Group SEKm Interest income Loans to credit institutions Loans to the public Interest-bearing securities Derivatives Other Total interest income Interest expenses Amounts owed to credit institutions Deposits and borrowings from the public of which deposit guarantee fees Debt securities in issue of which commissions for government guaranteed funding Subordinated liabilities Derivatives Other of which government stabilisation fund fee Total interest expenses Net interest income Net interest margin Q4 2012 228 11 352 542 -65 114 12 171 -230 -1 576 -147 -5 016 -81 -192 487 -179 -147 -6 706 5 465 1.15 Q3 2012 315 11 970 724 -78 102 13 033 -279 -1 895 -139 -5 489 -85 -252 305 -160 -134 -7 770 5 263 1.11 % -28 -5 -25 -17 12 -7 -18 -17 6 -9 -5 -24 60 12 10 -14 4 Q4 2011 436 12 743 916 -6 271 14 360 -345 -2 197 -131 -5 965 -245 -341 -348 -197 -159 -9 393 4 967 1.07 % -48 -11 -41 -58 -15 -33 -28 12 -16 -67 -44 -9 -8 -29 10 Full-year Full-year 2012 2011 1 161 48 180 2 840 198 504 52 883 -1 108 -7 415 -555 -21 741 -387 -999 244 -676 -569 -31 695 21 188 1.13 1 805 47 509 3 429 283 551 53 577 -1 305 -7 585 -506 -22 847 -1 163 -1 244 -945 -637 -545 -34 563 19 014 1.07 % -36 1 -17 -30 -9 -1 -15 -2 10 -5 -67 -20 6 4 -8 11
Page 33 of 50
Note 6 Net commissions

Group SEKm Commission income Payment processing Service concepts Asset management Life insurance Brokerage Other securities Corporate finance Lending Guarantees Deposits Real estate brokerage Non-life insurance Other commission income Total commission income Commission expenses Payment processing Service concepts Asset management Life insurance Brokerage Other securities Lending and guarantees Other commission expenses Total commission expenses Total net commissions Q4 2012 1 423 91 988 111 88 63 123 182 44 -2 44 15 192 3 362 -639 -5 -40 -43 0 -67 -13 -51 -858 2 504 Q3 2012 1 418 88 946 110 74 17 26 173 42 22 38 15 173 3 142 -588 -3 -30 -41 0 -40 -13 -46 -761 2 381 % 0 3 4 1 19 Q4 2011 1 400 59 930 135 101 13 -14 185 49 6 35 25 173 3 097 -601 -4 -31 -48 -5 -61 -17 -39 -806 2 291 % 2 54 6 -18 -13 Full-year Full-year 2012 2011 5 512 337 3 826 443 351 154 338 702 185 61 158 62 701 12 830 -2 394 -16 -133 -167 0 -244 -51 -189 -3 194 9 636 5 454 199 3 928 521 483 115 154 670 195 67 160 59 650 12 655 -2 228 -13 -120 -208 -13 -220 -62 -194 -3 058 9 597 % 1 69 -3 -15 -27 34 5 -5 -9 -1 5 8 1 7 23 11 -20 11 -18 -3 4 0
5 5 16 0 11 7 9 67 33 5 68 0 11 13 5
-2 -10 26 -40 11 9 6 25 29 -10 10 -24 31 6 9
Note 7 Net gains and losses on financial items at fair value

Group SEKm Valuation category, fair value through profit or loss Shares and related derivatives of which dividend Interest-bearing securities and related derivatives Loans Financial liabilities Other financial instruments Total fair value through profit or loss Hedge accounting Ineffective part in hedge accounting at fair value of which hedging instruments of which hedged items Ineffective part in hedging of net investments in foreign operations Total hedge accounting Loan receivables at amortised cost Financial liabilities valued at amortised cost Change in exchange rates Total net gains and losses on financial items at fair value Q4 2012 39 8 4 562 450 -4 652 4 403 53 -1 111 1 164 -19 34 34 47 234 752 Q3 2012 27 7 -8 810 1 636 7 345 -3 195 9 3 518 -3 509 2 11 30 -2 334 568 -30 32 13 % 44 14 -72 Q4 2011 73 7 -5 550 379 5 252 45 199 5 1 868 -1 863 0 5 25 -9 339 559 -31 35 36 % -47 14 19 91 Full-year Full-year 2012 2011 176 266 -5 780 1 570 4 905 0 871 215 4 301 -4 086 36 251 111 51 1 250 2 534 666 148 326 3 114 -3 907 10 209 -93 11 208 -11 301 0 -93 80 -63 1 451 1 584 -14 60 39 % -74 80 -50
-62 64
Distribution by business purpose

Financial instruments for trading related business Financial instruments intended to be held to contractual maturity Total
576 176 752
261 307 568 -43 32
235 324 559 -46 35
1 833 701 2 534
1 232 352 1 584
49 99 60
Page 34 of 50
Note 8 Other expenses

Group SEKm Premises and rents IT expenses Telecommunications and postage Advertising, PR and marketing Consultants Compensation to savings banks Other purchased services Security transport and alarm systems Supplies Travel Entertainment Repair/maintenance of inventories Other expenses Total other expenses Q4 2012 331 419 56 120 79 165 150 94 35 51 15 29 168 1 712 Q3 2012 313 366 57 57 65 146 146 96 26 30 10 34 193 1 539 % 6 14 -2 22 13 3 -2 35 70 50 -15 -13 11 Q4 2011 350 518 52 139 112 138 214 107 49 67 24 36 213 2 019 % -5 -19 8 -14 -29 20 -30 -12 -29 -24 -38 -19 -21 -15 Full-year Full-year 2012 2011 1 289 1 603 230 333 289 622 604 393 133 173 50 141 794 6 654 1 337 1 696 251 401 530 530 821 436 201 239 86 168 775 7 471 % -4 -5 -8 -17 -45 17 -26 -10 -34 -28 -42 -16 2 -11
Note 9 Credit impairments

Group SEKm Provision for loans individually assessed as impaired Provisions Reversal of previous provisions Provision for homogenous groups of impaired loans, net Total Portfolio provisions for loans individually assessed as not impaired Write-offs Established losses Utilisation of previous provisions Recoveries Total Credit impairments for contingent liabilities and other credit risk exposures Credit impairments Credit impairment ratio, % Q4 2012 Q3 2012 % Q4 2011 % Full-year Full-year 2012 2011 %
247 -672 -59 -484 -224 3 209 -2 328 -90 791 -72 11 0.00
442 -141 21 322 -269 1 076 -858 -83 135 16 204 0.06
-44
299 -958 -160 -819
-17 -30 -63 -41
1 267 -1 458 -114 -305 -351 7 150 -5 385 -388 1 377 -34 687 0.05
1 415 -3 481 -27 -2 093 -829 4 882 -3 300 -364 1 218 -207 -1 911 -0.14
-10 -58 -85 -58 46 63 7 13 -84
-17
-55 1 049 -264 -81 704 -4 -174 -0.05
11 12
-95
Page 35 of 50
Note 10 Loans
Group 31 Dec 2012 Loans after provisions Carrying amount 31 Dec 2011 Loans after provisions Carrying amount
SEKm Loans to credit institutions Banks Repurchase agreements, banks Other credit institutions Repurchase agreements, other credit institutions Loans to credit institutions Loans to the public Private customers Private, mortgage Housing cooperatives Private,other Corporate customers Agriculture, forestry, fishing Manufacturing Public sector and utilities Construction Retail Transportation Shipping and offshore Hotels and restaurants Information and communications Finance and insurance Property management Residential properties Commercial Industrial and Warehouse Other Professional services Other corporate lending Loans to the public excluding the Swedish National Debt Office and repurchase agreements Swedish National Debt Office Repurchase agreements, Swedish National Debt Office Repurchase agreements, public Loans to the public Loans to the public and credit institutions
Loans before provisions
Provisions
68 950 4 975 671 10 948 85 544
64 0 0 0 64
68 886 4 975 671 10 948 85 480
63 686 6 856 1 052 25 601 97 195
8 -27 -36 -57 -12
757 552 640 756 82 209 34 587 435 449 66 100 46 065 19 666 14 643 29 378 14 339 21 382 6 163 2 746 18 675 160 006 48 285 76 663 24 559 10 499 11 973 24 313 1 193 001 6 470 7 957 39 994 1 247 422 1 332 966
2 761 1 872 78 811 5 797 265 1 068 53 597 872 194 225 107 36 80 1 326 361 467 273 225 379 595 8 558 0 0 0 8 558 8 622
754 791 638 884 82 131 33 776 429 652 65 835 44 997 19 613 14 046 28 506 14 145 21 157 6 056 2 710 18 595 158 680 47 924 76 196 24 286 10 274 11 594 23 718 1 184 443 6 470 7 957 39 994 1 238 864 1 324 344
737 650 628 823 71 467 37 360 428 631 62 223 29 745 14 942 13 191 23 567 11 689 23 291 6 412 2 412 16 662 144 664 0 0 0 0 30 343 49 490 1 166 281 2 776 13 834 28 563 1 211 454 1 308 649
2 2 15 -10 0 6 51 31 6 21 21 -9 -6 12 12 10
-62 -52 2
-42 40 2 1
Page 36 of 50
Note 11 Impaired loans etc.

Group SEKm Impaired loans, gross Provisions for individually assessed impaired loans Provision for homogenous groups of impaired loans Impaired loans, net of which private customers of which corporate customers Portfolio provisions for loans individually assessed as not impaired Share of impaired loans, gross, % Share of impaired loans, net, % Provision ratio for impaired loans, % Total provision ratio for impaired loans, % * Past due loans that are not impaired of which past due 5-30 days of which past due 31-60 days of which past due 61 days or more * Total provision i.e. all provisions for claims in relation to impaired loans, gross. 31 Dec 2012 13 938 4 942 2 135 6 861 3 046 3 815 1 545 1.05 0.52 51 62 6 633 4 188 1 408 1 037 31 Dec 2011 24 805 9 246 3 575 11 984 4 896 7 088 2 435 1.87 0.92 52 62 6 884 4 510 1 637 737 -4 -7 -14 41 % -44 -47 -40 -43 -38 -46 -37
Note 12 Assets taken over for protection of claims and cancelled leases
Group SEKm Buildings and land Shares and participating interests Other property taken over Total assets taken over for protection of claims Cancelled leases Total assets taken over for protection of claims and cancelled leases of which acquired by Ektornet 31 Dec 2012 4 905 50 16 4 971 95 5 066 4 606 31 Dec 2011 6 067 107 54 6 228 147 6 375 5 819 % -19 -53 -70 -20 -35 -21 -21
Note 13 Credit exposures

Group SEKm Assets Cash and balances with central banks Interest-bearing securities Loans to credit institutions Loans to the public Derivatives Other financial assets Total assets Contingent liabilities and commitments Loan guarantees Loan commitments Total contingent liabilities and commitments Total credit exposure 31 Dec 2012 31 Dec 2011 %
130 058 164 307 135 807 138 311 85 480 97 195 1 238 864 1 211 454 102 265 103 726 14 547 14 357 1 707 021 1 729 350 22 342 188 176 210 518 24 251 185 959 210 210
-21 -2 -12 2 -1 1 -1 -8 1 0 -1
1 917 539 1 939 560
Page 37 of 50
Note 14 Intangible assets

Group SEKm With indefinite useful life Goodwill Total With finite useful life Customer base Other Total Total intangible assets 876 1 112 1 988 13 440 Full-year Goodwill Cost Opening balance Translation differences Closing balance Accumulated amortisation and impairments Opening balance Impairments Translation differences Closing balance Carrying amount 2012 992 1 045 2 037 13 799 Full-year 2011 -12 6 -2 -3 11 452 11 452 11 762 11 762 -3 -3 31 Dec 2012 31 Dec 2011 %
15 996 -314 15 682
16 026 -30 15 996
-4 234 -3 7 -4 230 11 452
-2 293 -1 930 -11 -4 234 11 762
Impairment testing of intangible assets

Goodwill and other intangible assets are tested for impairment annually or when there are indications that the recoverable amount of the assets is lower than their carrying amount. The recoverable amount is the higher of fair value less costs to sell and value in use. Swedbank calculates value in use by estimating an assets future cash flows and calculating them at present value with a discount rate. Estimated cash flows and discount rates are derived from external sources whenever possible and appropriate, but must in large part be determined based on the executive managements own assumptions. The executive management also determines whether there is any need for a new test during the year. The test as of year-end 2011 led to goodwill impairment of SEK 1 913m related to the Latvian operations and SEK 17m in the Norwegian operations. Estimated future cash flows are affected by the level of equity required in the cash-generating unit for continuing operations. Since capital adequacy requirements were raised in 2011, the impairment tests were updated accordingly. The increase was the main driver behind a writedown of the investment in the Latvian banking operations. In 2012 a minor goodwill item was impaired by SEK 3m. There were otherwise no indications to necessitate a new impairment test of goodwill during the year, nor did the annual test lead to any impairment.
Page 38 of 50
Note 15 Amounts owed to credit institutions

Group SEKm Amounts owed to credit institutions Central banks Banks Other credit institutions Repurchase agreements - banks Repurchase agreements - other credit institutions Amounts owed to credit institutions 31 Dec 2012 3 574 106 262 3 656 5 976 2 734 122 202 31 Dec 2011 3 665 109 559 3 789 17 174 5 411 139 598 % -2 -3 -4 -65 -49 -12
Note 16 Deposits from the public

Group SEKm Deposits from the public Private customers Corporate customers Deposits from the public excluding the Swedish National Debt Office and repurchase agreements Swedish National Debt Office Repurchase agreements - Swedish National Debt Office Repurchase agreements - public Deposits and borrowings from the public 31 Dec 2012 332 264 225 633 557 897 1 7 107 14 658 579 663 31 Dec 2011 319 123 228 254 547 377 1 12 163 2 155 561 696 % 4 -1 2 0 -42 3
Note 17 Debt securities in issue

Group SEKm Commercial paper Covered bonds Government guaranteed bonds Senior unsecured bonds Structured retail bonds Total debt securities in issue Turnover during the period Opening balance Issued Repurchased Repaid Change in market value Changes in exchange rates Closing balance 31 Dec 2012 115 135 518 238 30 392 88 747 14 942 767 454 Full-year 2012 781 458 628 448 -76 725 -572 509 12 329 -5 547 767 454 31 Dec 2011 122 970 525 892 75 568 39 440 17 588 781 458 Full-year 2011 686 517 573 476 -110 790 -378 875 11 663 -533 781 458 % -6 -1 -60 -15 -2 % 14 10 -31 51 6 -2
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Note 18 Derivatives
The Group trades derivatives in the normal course of business and to hedge certain positions with regard to the value of equities, interest rates and currencies.
Nominal amount 31 Dec 2012 Remaining contractual maturity Group SEKm Derivatives in fair value hedges Derivatives in cash flow hedges Derivatives in hedges of net investment in foreign operations Other derivatives Netting agreements Total of which cleared < 1 yr. 60 272 10 629 1 698 7 670 296 7 742 895 3 233 011 1-5 yrs. 334 559 14 547 0 2 957 833 3 306 939 595 775 > 5 yrs. 33 977 9 287 0 580 129 623 393 0 Nominal amount 31 Dec 31 Dec 2012 2011 428 808 34 463 1 698 11 208 258 11 673 227 3 828 786 399 101 38 554 0 12 652 187 13 089 842 3 038 232 Positive fair value 31 Dec 31 Dec 2012 2011 23 649 0 0 81 140 -2 524 102 265 2 530 19 026 0 0 88 012 -3 312 103 726 3 587 Negative fair value 31 Dec 31 Dec 2012 2011 56 5 289 75 89 245 -2 524 92 141 3 142 2 3 949 0 89 845 -3 312 90 484 3 838
Note 19 Financial instruments carried at fair value

Instruments with quoted market prices in active markets (Level 1) Valuation techniques using observable market data (Level 2) Valuation techniques using nonobservable market data (Level 3)
Group 31 Dec 2012 SEKm
Total
Determination of fair value from quoted market prices or valuation techniques Assets Treasury bills and other bills eligible for refinancing with central banks 17 812 Loans to credit institutions 60 Loans to the public 0 Bonds and other interest-bearing securities 83 263 Financial assets for which the customers bear the investment risk 104 194 Shares and participating interests 7 866 Derivatives 7 Total 213 202 Liabilities Amounts owed to credit institutions Deposits and borrowings from the public Debt securities in issue Financial liabilities for which the customers bear the investment risk Derivatives Short positions, securities Total 0 0 33 900
1 846 15 923 489 126 30 182 0 160 102 195 639 432 8 710 46 865 39 360 105 104 91 516 0 291 555
0 0 0 342 0 14 63 419 0 0 0 0 0 0
19 658 15 983 489 126 113 787 104 194 8 040 102 265 853 053 8 710 46 865 73 260 105 104 92 141 18 229 344 309
625 18 229 52 754
The table above contains financial instruments measured at fair value as of 31 December 2012 by valuation level. Level 1 contains financial instruments where fair value is determined on the basis of quoted market prices on an active market. Level 2 contains financial instruments where fair value is determined on the basis of valuation models based on observable market data. Level 3 contains financial instruments where fair value is determined on the basis of valuation models based primarily on observable market data, but in this case also using internal estimates. Level 3 principally contains corporate bonds. For corporate bonds where there is no observable quoted price for the current credit spread, a reasonable assumption is used, such as a comparison with similar counterparties where there is an observable quoted credit spread.
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Group 31 Dec 2011 SEKm
Instruments with quoted market prices in active markets (Level 1)
Valuation techniques using observable market data (Level 2)
Valuation techniques using nonobservable market data (Level 3)
Total
Determination of fair value from quoted market prices or valuation techniques Assets Treasury bills and other bills eligible for refinancing with central banks 24 402 Loans to credit institutions 160 Loans to the public Bonds and other interest-bearing securities 80 606 Financial assets for which the customers bear the investment risk 95 747 Shares and participating interests 1 768 Derivatives 337 Total 203 020 Liabilities Amounts owed to credit institutions Deposits and borrowings from the public Debt securities in issue Financial liabilities for which the customers bear the investment risk Derivatives Short positions, securities Total 0 0 79 709
209 32 309 508 682 28 762 0 112 103 389 673 463 22 585 50 402 32 813 96 449 89 865 292 114
0 0 0 390 0 71 461 0 0 0 0
24 611 32 469 508 682 109 758 95 747 1 951 103 726 876 944 22 585 50 402 112 522 96 449 90 484 30 603 403 045
619 30 603 110 931
Note 20 Pledged collateral

Group SEKm Loan receivables Financial assets pledged for policyholders Other assets pledged Pledged collateral 31 Dec 2012 700 907 103 432 54 369 858 708 31 Dec 2011 673 410 94 971 67 313 835 694 % 4 9 -19 3
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Note 21 Capital adequacy

Swedbank financial companies group SEKm Shareholders' equity according to the Group's balance sheet Non-controlling interests Anticipated dividend Deconsolidation of insurance companies Associated companies consolidated according to purchase method Unrealised value changes in financial liabilities due to changes in own creditworthiness Cash flow hedges Goodwill Deferred tax assets Intangible assets Net provisions for reported IRB credit exposures Shares deducted from Tier 1 capital Common Equity Tier 1 capital Tier 1 capital contributions of which undated Tier 1 instruments that must be converted in a critical situation of which undated Tier 1 instruments without incentives to redeem of which fixed-term Tier 1 instruments or undated Tier 1 instruments with incentives to redeem Total Tier 1 capital Undated subordinated loans Fixed-term subordinated loans Net provisions for reported IRB credit exposures Shares deducted from Tier 2 capital Total Tier 2 capital Deduction of shares in insurance companies Total capital base Capital requirement for credit risks, standardised approach Capital requirement for credit risks, IRB Capital requirement for settlement risks Capital requirement for market risks of which risks in the trading book outside VaR of which currency risks outside VaR of which risks where VaR models are applied Capital requirement for operational risks Capital requirement RWA credit risks RWA settlement risks RWA market risks RWA operational risks Risk-weighted assets Common Equity Tier 1 ratio, %, Basel 2 Tier 1 capital ratio, %, Basel 2 Total capital adequacy ratio, %, Basel 2 Capital quotient, Basel 2 Capital adequacy Basel 2 transition rules SEKm Capital requirement Complement during transition period Capital requirement including complement Common Equity Tier 1 ratio, %, transition rules Tier 1 capital ratio, %, transition rules Total capital adequacy ratio, %, transition rules Capital quotient, transition rules Capital adequacy Basel 3 incl IAS 19* SEKm Common Equity Tier 1 capital, Basel 3 incl IAS 19 Tier 1 capital, Basel 3 incl IAS 19 Total capital base, Basel 3 incl IAS 19 Risk-weighted assets, Basel 3 incl IAS 19 Common Equity Tier 1 ratio, %, Basel 3 incl IAS 19 Tier 1 capital ratio, Basel 3 incl IAS 19 Total capital adequacy ratio, %, Basel 3 incl IAS 19 31 Dec 2012 106 070 154 -10 880 -2 444 1 978 92 42 -10 894 -567 -1 880 -938 -36 80 697 6 270 0 528 5 742 86 967 28 8 028 -938 -36 7 082 -2 894 91 155 2 276 28 819 3 1 723 526 695 502 4 326 37 147 388 688 26 21 544 54 081 464 339 0 17.4 18.7 19.6 2.45 31 Dec 2012 37 147 24 382 61 529 0 10.5 11.3 11.9 1.48 31 Dec 2012 75 242 81 661 89 917 487 105 15.4 16.8 18.5 31 Dec 2011 97 993 140 -5 825 -1 980 1 742 -23 -268 -11 085 -843 -1 767 -748 -34 77 302 7 553 0 535 7 018 84 855 1 616 10 389 -748 -34 11 223 -2 905 93 173 2 427 30 850 1 1 750 455 766 529 4 359 39 387 415 957 13 21 880 54 487 492 337 0 15.7 17.2 18.9 2.37 31 Dec 2011 39 387 21 154 60 541 0 10.2 11.2 12.3 1.54 31 Dec 2011 73 595 81 286 93 473 515 137 14.3 15.8 18.1 % or pp 8 10 87 -23 14
2 33 -6 -25 -6 4 -17 0 -1 -18 2 -98 -23 -25 -6 -37 0 -2 -6 -7 -2 16 -9 -5 -1 -6 -7 100 -2 -1 -6 0 1.7 1.5 0.7 0.09 % or pp -6 15 2 0 0.3 0.1 -0.5 -0.06 % or pp 2 0 -4 -5 1.2 1.0 0.3
* According to Swedbank's estimate based on current knowledge of future regulations.
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The Internal Ratings-Based approach (IRB) is applied to the Swedish parts of Swedbank financial companies group, including the branch offices in New York and Oslo, but excluding EnterCard and certain exposure classes such as the Swedish state and Swedish municipalities, where the method is considered less suitable. The IRB approach is also applied to the majority of Swedbanks exposure classes in the Baltic countries.
Exposure after credit risk protection 31 Dec 31 Dec 2012 2011 147 467 631 146 836 421 781 63 421 718 868 307 13 794 944 73 350 1 122 13 993 1 452 670 131 337 805 130 532 413 739 41 413 698 855 675 1 777 816 77 858 1 598 17 726 1 420 075
As of 31 December 2012 the Swedbank financial companies group included the Swedbank Group, the EnterCard Group, Sparbanken Rekarne AB, Frs och Frosta Sparbank AB, Swedbank Sjuhrad AB, Vimmerby Sparbank AB and Bankernas Dep AB. The insurance companies are included in the Group but not in the financial companies group under the capital adequacy rules.
Swedbank financial companies group Credit risks, IRB SEKm Institutional exposures of which repurchase agreements of which other lending Corporate exposures of which repurchase agreements of which other lending Retail exposures of which repurchase agreements of which mortgage lending of which other lending Securitisation Exposures without counterparties Total credit risks, IRB
% 12 -22 12 2 55 2 1 2 -6 -30 -21 2
Average risk weighting, % 31 Dec 31 Dec 2012 2011 15 8 15 58 40 58 10 0 7 40 11 82 25 13 6 13 64 14 64 10 0 7 41 11 89 27
Capital requirement 31 Dec 31 Dec 2012 2011 1 757 4 1 753 19 540 0 19 539 6 592 0 4 220 2 372 10 920 28 819 1 357 4 1 353 21 232 0 21 232 6 983 0 4 447 2 536 15 1 263 30 850
% 29 -2 30 -8 -8 -6 -5 -6 -31 -27 -7
Capital base
A deduction was made from the capital base for the difference between expected losses and provisions in the accounts for the part of the portfolio calculated according to IRB. These expected losses are estimated in accordance with legislative and regulatory requirements and using information drawn from Swedbanks internal risk classification system. The calculations are based on the prudence concept, so that risks are overestimated rather than underestimated. The Swedish Financial Supervisory Authoritys interpretation of legislation and regulations has, furthermore, built additional safety margins into the risk classification system. As a result, expected losses calculated in accordance with the new capital adequacy rules exceed Swedbanks best estimate of loss levels and required provisions.
Market risks
Under current regulations, capital adequacy for market risks can be based either on a standardised approach or on an internal Value at Risk model, which requires the approval of the Swedish Financial Supervisory Authority. The parent company has received such approval and uses its own internal VaR model for general interest rate risks, general and specific share price risks as well as currency risks in the trading book. The approval also comprises the operations in the Baltic countries, Swedbank Estonia AS, Swedbank Latvia AS and Swedbank Lithuania AB with respect to general interest rate risks and currency risks in the trading book. Exchange rate risks outside the trading book, i.e., in other operations, are mainly of a structural and strategic nature and are less suited to a VaR model. These risks are instead estimated according to the standardised approach, as per the Groups internal approach to managing these risks.
Capital requirements for credit risks according to the standardised approach

Associated companies with the exception of the partly owned banks, a few minor subsidiaries and the subsidiaries in Russia and Ukraine use the standardised approach to calculate credit risks.
Operational risk
Swedbank calculates operational risk using the standardised approach. The Swedish Financial Supervisory Authority has stated that Swedbank meets the qualitative requirements to apply this method.
Capital requirements for credit risks according to IRB

The capital adequacy requirement for the portion of the portfolio calculated according to IRB was largely unchanged compared with the beginning of the year. The average risk weight for retail exposures was 10 per cent, of which 37 per cent was in the portfolios in the Baltic countries and 7 per cent in other portfolios. The risk weight for corporate exposures was 58 per cent, of which 96 per cent was in the portfolios in the Baltic countries and 52 per cent for other portfolios. For institutional exposures, the average risk weight was 27 per cent in the portfolios in the Baltic countries and 15 per cent in other portfolios, in total 15 per cent.
Transition rules
The transition rules, which state that the capital requirement may not fall below 80 per cent of the requirement according to the Basel 1 rules, have been extended with no expiry date yet decided. An update to the Swedish capital adequacy rules at the turn of the year 2011/2012 affected, among other things, how preference shares are included in Tier 1 capital. The preference shares amounting to SEK 8.3bn that
Swedbank issued in 2008 are included in Common Equity Tier 1 capital and correspond to 1.9 percentage points of the Common Equity Tier 1 ratio as of 31 December 2012. Since the rule change does not alter the view of the loss-absorbing capacity of the preference shares, Swedbank will continue to include
them in its reporting of Common Equity Tier 1 capital. Swedbanks preference shares will be converted to ordinary shares no later than the first half of 2013.
Note 22 Risks and uncertainties

Swedbanks earnings are affected by changes in the global marketplace over which it has no control, including macroeconomic changes and changes in interest rates, stock prices and exchange rates. Swedbank has subsidiaries with operations in countries with currencies other than Swedish kronor. Moreover, in Latvia, Lithuania, Russia and Ukraine, a significant share of lending is in foreign currency, i.e., euros or US dollars. In the event of a devaluation of the domestic currency in any of these countries, three main factors would affect the Groups income statement and balance sheet. Firstly, a gain on financial items at fair value would generally arise due to the impact of changes in exchange rates on the assets and liabilities of the subsidiary. Normally, this would produce an exchange rate gain, since the company has larger assets than liabilities in foreign currencies (euro or dollar). Secondly, a negative translation effect would arise on the parent companys net investment in the subsidiary, since the subsidiarys equity would be worth less when expressed in Swedish kronor. This negative exchange rate effect is recognised in other comprehensive income, not the consolidated income statement. Thirdly, it would be more difficult for domestic customers to pay the interest and principal on their loans in foreign currency, which would become higher in the local currency. This would eventually lead to higher impairment losses in the subsidiary. In addition to what is stated in this year-end report, detailed descriptions are provided in Swedbanks 2011 annual report and in the annual disclosure on risk management and capital adequacy according to the Basel 2 rules, available on www.swedbank.com.
Note 23 Related-party transactions

During the period normal business transactions were executed between companies in the Group, including other related companies such as associates. Significant associates include the partly owned savings banks. Frs & Frosta Sparbank AB holds 5 330 000 shares in Swedbank AB. The Groups share of these shares has reduced equity in the consolidated statements by SEK 116m. Other significant relations are with Swedbanks pension funds and Sparinstitutens Pensionskassa SPK, which safeguard employees post-employment benefits. These related parties use Swedbank for customary banking services.
Note 24 Swedbanks share

31 Dec 2012 SWED A Share price, SEK Number of outstanding ordinary shares Market capitalisation, SEKm SWED PREF Share price, SEK Number of outstanding preference shares Market capitalisation, SEKm SWED C Share price, SEK Number of outstanding shares Market capitalisation, SEKm Total market capitalisation, SEKm 127.00 917 549 816 116 529 31 Dec 2011 89.15 907 421 303 80 897 % 42 1 44
126.80 179 856 906 22 806
89.15 190 434 519 16 977
42 -6 34
0 0 139 335
0 0 97 874 42
Repurchased shares have been taken into consideration when calculating the market capitalisation. Swedbanks share, ticker symbol SWED A and the preference share, ticker symbol SWED PREF, are listed on the OMX Nordic Exchange and traded in the Large cap segment.
Page 44 of 50
Number of outstanding shares Issued shares SWED A SWED PREF SWED C Repurchased shares SWED A SWED PREF SWED C Swedbank's share of associates' holding of shares SWED A SWED PREF Number of outstanding shares on the closing day
31 Dec 2012 951 149 816 180 855 906 0 -33 000 000 0 0 -600 000 -999 000
31 Dec 2011 965 190 117 194 400 060 1 500 000 -57 168 814 -3 415 641 -1 500 000 -600 000 -549 900
1 097 406 722 1 097 855 822
In February and August of each year, starting in August 2009, holders of preference shares may request to convert their preference shares to ordinary shares. The request must pertain to the shareholders entire holding. If the shareholder previously has not requested a conversion, all their outstanding preference shares will be converted into ordinary shares as soon as possible after the Annual General Meeting 2013, however, if applicable, not earlier than the day after the record day for the right to receive the dividend, as resolved at the said Annual General Meeting. Preference shares carry the same voting rights as ordinary shares. During the year 10 128 513 preference shares have been converted to ordinary shares. Swedbanks share capital decreased by SEK 610 773 555 in May 2012, through cancellation of own shares equivalent to 24 168 814 ordinary shares, 3 415 641 preference shares and 1 500 000 C shares. Earnings per share Average number of shares Average number of shares before dilution Weighted average number of shares for potential ordinary shares that incur a dilutive effect due to share-based compensation programme Average number of shares after dilution Profit, SEKm Profit for the period attributable to shareholders of Swedbank Preference dividends on non-cumulative preference shares declared in respect of the period Earnings for the purpose of calculating earnings per share Earnings per share, SEK Earnings per share before dilution Earnings per share after dilution 3.95 3.94 3.20 3.19 0.88 0.88 12.24 12.19 9.53 9.52 4 340 3 511 0 4 340 3 511 965 965 14 438 1 004 13 434 11 744 995 10 749 Q4 2012 Q3 2012 Q4 2011 Full-year 2012 Full-year 2011
1 097 479 079 1 097 770 581 1 097 855 822
1 097 720 626 1 128 159 473
4 973 985
4 546 602
1 381 120
4 223 670
1 406 573
1 102 453 064 1 102 317 183 1 099 236 942
1 101 944 296 1 129 566 046
When calculating earnings per share the preference share dividend is deducted from profit in the period the dividend is declared.
Page 45 of 50
Swedbank AB Income statement, condensed

Parent company SEKm Interest income Interest expenses Net interest income Dividends received * Commission income Commission expenses Net commissions Net gains and losses on financial items at fair value Other income Total income Staff costs Other expenses Depreciation/amortisation Total expenses Profit before impairments Impairment of financial fixed assets Credit impairments Operating profit Appropriations Tax expense Profit for the period Q4 2012 5 640 -2 851 2 789 5 989 1 637 -299 1 338 602 370 11 088 1 752 1 079 136 2 967 8 121 743 227 7 151 3 539 1 170 2 442 Q3 2012 6 160 -3 375 2 785 537 1 482 -270 1 212 407 332 5 273 1 702 927 138 2 767 2 506 36 55 2 415 29 576 1 810 10 11 10 48 11 3 16 -1 7 % -8 -16 0 Q4 2011 6 969 -4 436 2 533 2 593 1 421 -304 1 117 -791 436 5 888 1 828 1 260 107 3 195 2 693 63 168 2 462 1 867 218 377 15 -2 20 -15 88 -4 -14 27 -7 % -19 -36 10 Full-year Full-year 2012 2011 24 730 -13 835 10 895 6 830 6 233 -1 192 5 041 2 889 1 314 26 969 7 069 4 113 566 11 748 15 221 1 154 434 13 633 3 626 2 937 7 070 26 419 -16 822 9 597 5 003 5 831 -1 241 4 590 -102 2 118 21 206 6 852 4 621 350 11 823 9 383 137 -8 9 254 1 867 1 629 5 758 % -6 -18 14 37 7 -4 10 -38 27 3 -11 62 -1 62
35 90
47 94 80 23
35
* During the third quarter 2012 the assets and liabilities of Mandab AB, Swedbank Fretagskredit AB and Nordic Foodservice Investment AB were transferred to Swedbank AB. As a whole this produced a merger result of SEK 531m, which is recognised as dividends received.
Statement of comprehensive income, condensed

Parent company SEKm Profit for the period reported via income statement Cash flow hedges: Gains/losses arising during the period Reclassification adjustments to income statement, net interest income Income tax relating to components of other comprehensive income Other comprehensive income for the period, net of tax Total comprehensive income for the period Q4 2012 2 442 -13 29 -3 13 2 455 Q3 2012 1 810 -25 43 -5 13 1 823 % 35 -48 -33 40 0 35 Q4 2011 377 -58 77 -5 14 391 78 -62 40 -7 % Full-year Full-year 2012 2011 7 070 -71 193 -31 91 7 161 5 758 -97 345 -65 183 5 941 % 23 -27 -44 52 -50 21
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Balance sheet, condensed

Parent company SEKm Assets Cash and balance with central banks Loans to credit institutions Loans to the public Interest-bearing securities Shares and participating interests Derivatives Other assets Total assets Liabilities and equity Amounts owed to credit institutions Deposits and borrowings from the public Debt securities in issue Derivatives Other liabilities and provisions Subordinated liabilities Untaxed reserves Equity Total liabilities and equity Pledged collateral Other assets pledged Contingent liabilities Commitments 31 Dec 2012 31 Dec 2011 % -29 8 1 -4 9 6 15 0 -2 3 -4 5 -22 -27 3 0 -16 -66 -3 3
109 898 154 392 350 439 325 896 347 233 342 394 131 593 136 530 66 245 60 711 125 926 119 320 18 393 15 935 1 149 727 1 155 178 195 584 200 430 473 104 459 720 242 295 251 764 117 471 111 752 35 947 46 256 14 522 19 833 6 299 2 672 64 505 62 751 1 149 727 1 155 178 62 375 1 090 546 571 166 087 74 479 3 249 560 835 161 709
Statement of changes in equity, condensed

Parent company SEKm Share premium reserve Statutory reserve Cash flow hedges Retained earnings
Share capital January-December 2011 Opening balance 1 January 2011 Dividend New share issue Reversal of VAT costs incurred on rights issue 2009 Repurchased shares Share based payments to employees Total comprehensive income for the period Closing balance 31 December 2011 January-December 2012 Opening balance 1 January 2012 Dividend Decrease share capital Bonus issue Reversal of VAT costs incurred on rights issues in 2008 and 2009 Share based payments to employees Deferred tax related with share based payments to employees Total comprehensive income for the period Closing balance 31 December 2012 24 383 0 -611 1 132 0 0 0 0 24 904 0 24 383 32 24 351
Total
13 083
6 489
-306
22 142 -2 995
65 759 -2 995 32
35 -6 180 159 0 13 118 0 6 489 183 -123 5 758 18 884
35 -6 180 159 5 941 62 751
13 118 0 0 0 88 0 0 0 13 206
6 489 0 0 -521 0 0 0 0 5 968
-123 0 0 0 0 0 0 91 -32
18 884 -5 825 611 -611 0 314 16 7 070 20 459
62 751 -5 825 0 0 88 314 16 7 161 64 505
In connection to the rights issues in 2008 and 2009 an assessment was made on the non-deductable VAT Swedbank AB would have to pay on the transaction costs. This assessment was partly changed in the second quarter 2011 based on a new tax case ruling. The VAT expense decreased by SEK 35m after income tax. The income tax expense on the VAT amount was SEK 12m. After a reassessment made by the Swedish Tax Agency, the VAT expense was further decreased by SEK 88m after income tax during the third quarter 2012. The income tax expense on the VAT amount was SEK 31m.
Cash flow statement, condensed

Parent company SEKm Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash flow for the period Cash and cash equivalents at beginning of period Cash flow for the period Cash and cash equivalents at end of period Full-year 2012 -25 955 3 891 -22 430 -44 494 154 392 -44 494 109 898 Full-year 2011 181 337 6 111 -37 758 149 690 4 702 149 690 154 392
Capital adequacy
Parent company SEKm Common Equity Tier 1 capital Tier 1 capital contribution Total Tier 1 capital Tier 2 capital Settlements, equities, etc. Total capital base Capital requirement Capital requirement including complement Risk-weighted assets Common Equity Tier 1 ratio, %* Tier 1 capital ratio, %* Total capital adequacy ratio, %* Capital quotient* * Key ratios refer to both transition rules and Basel 2. 31 Dec 2012 55 945 6 270 62 215 7 710 -2 905 67 020 26 387 26 387 329 837 17.0 18.9 20.3 2.54 31 Dec 2011 57 521 7 553 65 074 11 572 -2 902 73 744 29 201 29 201 365 013 15.8 17.8 20.2 2.53 % or pp -3 -17 -4 -33 0 -9 -10 -10 -10 1.2 1.0 0.1 0.01
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Signatures of the Board of Directors and the President

The Board of Directors and the President certify that the year-end report for January-December 2012 provides a fair and accurate overview of the operations, financial position and results of the parent company and the Group and describes the significant risks and uncertainties faced by the parent company and the companies in the Group.
Stockholm, 29 January 2013
Lars Idermark Chair
Anders Sundstrm Deputy Chair
Olav Fjell Board Member
Ulrika Francke Board Member
Gran Hedman Board Member
Anders Igel Board Member
Pia Rudengren Board Member
Charlotte Strmberg Board Member
Karl-Henrik Sundstrm Board Member
Siv Svensson Board Member
Kristina Janson Board Member Employee Representative
Jimmy Johnsson Board Member Employee Representative
Michael Wolf President
Review report
Introduction We have reviewed the year-end report for Swedbank AB (publ) for the period 1 January to 31 December 2012. The Board of Directors and the President are responsible for the preparation and presentation of this year-end report in accordance with IAS 34 and the Annual Accounts Act for Credit Institutions and Securities Companies. Our responsibility is to express a conclusion on this year-end report based on our review. Scope of review We conducted our review in accordance with the Standard on Review Engagements (SG) 2410 Review of Interim Financial Information performed by the companys auditors. A review consists of making inquiries, primarily with persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the year-end report for the Group is not, in all material aspects, in accordance with IAS 34 and the Annual Accounts Act for Credit Institutions and Securities Companies and as regards the parent company in accordance the Annual Accounts Act for Credit Institutions and Securities Companies. Stockholm, 29 January 2013 Deloitte AB
Svante Forsberg Authorised Public Accountant

Publication of financial information

The Groups financial reports can be found on www.swedbank.com/ir or www.swedbank.com Swedbank will publish financial results on the following dates in 2013: Interim report for the first quarter 2013 on 23 April 2013 Interim report for the second quarter 2013 on 16 July 2013 Interim report for the third quarter 2013 on 22 October 2013 Swedbank will publish its annual report for 2012 on 20 February 2013. Swedbanks Annual General Meeting will be held at Dansens hus (Folkets hus) in Stockholm on Wednesday, 20 March 2013.
For further information, please contact:

Michael Wolf President and CEO Telephone +46 8 585 926 66 Gran Bronner CFO Telephone +46 8 585 906 67 Johannes Rudbeck Head of Investor Relations Telephone +46 8 585 933 22 +46 70 582 56 56 Thomas Backteman Head of Group Corporate Affairs Telephone +46 8 585 933 66 +46 70 831 11 66
Information on Swedbanks strategy, values and shares is also available on www.swedbank.com
Swedbank AB (publ)
Registration no. 502017-7753 Brunkebergstorg 8 SE-105 34 Stockholm, Sweden Telephone +46 8 585 900 00 www.swedbank.com info@swedbank.se
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Swedbank's Year-End Report 2012

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Fourth quarter 2012

Compared with third quarter 2012

Profit for the quarter

Earnings per share before dilution*

Common Equity Tier 1 ratio, %, Basel 3 incl IAS 19 ** %

10.0 Q42011 Q12012 Q22012 Q32012 Q42012

Swedbank Year-end report 2012

Swedbank Year-end report 2012

Michael Wolf President and CEO

Basel 3 incl IAS 19

Swedbank Year-end report 2012

Swedbank Year-end report 2012

31 Dec 2011 1 211 562 98 1 857 515 492 757 969

Swedbank Year-end report 2012

Fourth quarter 2012

Q4 2012 2 675 1 020 644 221 644 5 204 5 204

Q3 2012 2 852 870 731 193 412 5 058 -5 5 053

Q4 2011 2 418 691 766 148 -360 3 663 46 3 709

Important events during the quarter

Swedbank Year-end report 2012

2 254 626 617 174 292 3 963 157 165 2 4 287

2 168 633 554 170 151 3 676 184 146 0 -8 3 998

2 272 732 658 208 518 4 388 47 138 330 44 4 947

Swedbank Year-end report 2012

Full-year Full-year 2012 2011

Credit and asset quality

8 722 2 473 2 332 698 1 362 15 587 738 622 2 16 949

Swedbank Year-end report 2012

Q4 2012 102 152 -329 -242 86 -173 0 86 -30 117 -1 11

Q3 2012 69 -35 -18 2 8 -28 0 188 28 140 20 204

Total 115 115 115

Funding and liquidity

Swedbank Year-end report 2012

Ratings events during the period

Capital and capital adequacy

Estimated impact of new regulations on the Common Equity Tier 1 ratio

-1.3 - 0.7 15.4

500 495 490 485

- 23.2 - 4.2 464.3 - 6.7 - 0.3 - 0.4

470 465 460

31 Dec 2012 208 127 95 38 31 26 3 31 2 15 4 4 6 0 464

31 Dec 2011 219 129 102 41 33 28 3 39 1 15 6 9 7 1 492

Swedbank Year-end report 2012

Events after 31 December 2012

Swedbank Year-end report 2012

Swedbank Year-end report 2012

Large Corporates & Institutions

11 -36 -13 -29 -18 45

-93 7 -19 -7 -7 -5 18 -76 7 -16 18 18

Group Functions & Other

-50 10 53 12 -34 -22 6 49 57 97 -54

10 0 -1 -13 67 -27 -34

-19 0 14 -8 82 -32 -17 -21

Swedbank Year-end report 2012

% -24 -8 -37 5 7 -23 -2 -6 5

Financial information - contents

Income statement, condensed

% -7 -14 4 7 13 5 32 30 58 -14 -30 4 5 5 11 6 7 3 95 -95 5 -48 23 24 24 23