Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our

1. Macroeconomic and Banking Sector Developments in Latvia.
Performance of Swedbank in Latvia, Q3 2008.
Māris Avotiņš
CEO, Chairman of the Board
6 November, 2008

2. Swedbank group home markets

3. 3© Swedbank
Overview of the region:
Swedbank Group home markets - main facts
• Total population: 9.2m
• Private customers: 4.1m
• Corp. customers: 284,000
• Organisations: 117,000
• Branches: 432
• Typical market share: 25%
• GDP growth 2.7% (2007)
• Swedbank Group rating: Moody’s
Aa3; Fitch A+, S&P A
Sweden
• Total population: 141.6 m
• Private customers: 3 400
• Corp. customers: 600
• Branches: 6
• Niche player in Russian market
• GDP growth: 8.1% (2007)
Russia
• Total population: 46.4 m
• Private customers: 0.1 m
• Corp. customers: 19 000
• Branches: 197
•GDP growth: 7.6% (2007)
Ukraine
Lithuania
• Total population: 3.4m
• GDP growth: 8.8% (2007)
• Private customers: 3.0m
• Corp. customers: 82,000
• Branches: 119
• Typical market share: 30%
• Total population: 2.3m
• GDP growth: 10.3% (2007)
• Private customers: 0.9m
• Corp. customers: 58,000
• Branches: 73
• Typical market share: 30%
Latvia
• Total population: 1.3m
• GDP growth: 7.1% (2007)
• Private customers: 1.2m
• Corp. customers: 92,000
• Branches: 86
•Typical market share: 50%
Estonia

4. 4© Swedbank
Focus on credit quality and efficiency
Ukraine and RussiaBalticsSweden
• Stricter lending criteria
• Personal contact with all
customers with loans overdues
• Stricter requirements on
minimum margins
• Process efficiency measures
• Restrictive employment policy
• Increased product sales
• More focus on quality than
growth
• Implementation of Group credit
and risk systems
• Centralized credit decisions
• Group procurement process
successfully implemented
• Streamlining of distribution
network
• Stricter lending criteria
• Balanced goal for loan to
deposit ratio
• Personal contact with all
customers with loans overdues
• Increased margins for new
lending
• Staff reductions
• Self-adjusting performance pay
system
Share of lending: 78 % Share of lending: 16 % Share of lending: 2 %

5. Latvia: Macroeconomic Environment

6. 6© Swedbank
Summary
• Key changes in a baseline forecast for 2009-2010
– Recession has set in, lowest point in the business cycle in late in 2009 or early 2010, recovery expected in 2010
• Economic imbalances swiftly improve
– Necessity of current account deficit’s financing gap expected to narrow to ca 7% in 2009 from ca 21% in 2007
– Export potential remains strong: despite rising unit labour costs and real effective exchange rates, Latvian exporters
have retained their trade shares in the key export markets
– Inflation retreats: wage-inflation spiral breaks
• Labour market – key to adjustment
– Labour productivity growth is negative in H1 2008, adjustment still lagging
– Recovery will come through productivity growth, especially via total factor productivity
• Financial market – money market tightens, financial system remains stable
– Rising interest rates despite easing monetary policy
– Speculative attack on the lats technically close to impossible due to shallow forward market

7. 7© Swedbank
Baseline forecast: key changes
• Reasons for downward revisions
– Deepening and widening of global credit crunch, risk of global
recession
• Liquidity squeeze, cost of capital has risen
• Slowdown of external demand limits export potential
• Outlook
– Recession with the lowest point in H2 2009 or early 2010, sub-trend
positive growth recovery in 2010
– Contraction driven by domestic demand: household consumption
recovers very gradually in H2 2010 as unemployment remains high,
whereas investments bottom out in late 2009 predominately driven by
exporting sectors
– Economic recovery is driven by exports
• Risks to the forecast
Negative
• Deeper global recession extending well into 2010
• Delays in domestic restructuring build up pressure of
imbalances that may sharply deepen the recession
• Domestic financial failures, extraordinary market volatility
induces runs on banks destabilizing the financial system
Positive
• Global economic recovery commences in early 2H 2009
• Globally coordinated interventions by authorities effectively stop
disorderly deleveraging, i.e. containing the Minsky moment
• Further decrease in world commodity prices
Baseline forecast
2004 2005 2006 2007 2008f 2009f 2010f
GDP 8.7 10.6 12.2 10.3 -1.5 … -0.5 -5 … -2 -1 … 2
(-2…0) (-2…0) (1...3)
Inflation 6.2 6.7 6.5 10.1 15.5 … 16 5 … 6.5 2 … 4
(16.0) (7.5) (4.0)
CAD -12.8 -12.5 -22.5 -22.9 -16 … -14 -9 … -6 -8 … -5
(-15 … -13) (-9 … -7) (-8 … -6)
Unemployment 10.4 8.9 6.8 6.0 6 … 7 9 … 11 10 … 12
(7.0) (9.0) (8.5)
(…) August 2008 forecasts
Source: CSB and Eurostat, Swedbank calculations
Real Growth of GDP, % YoY
-20
-10
0
10
20
30
2004 2005 2006 2007 2008f 2009f 2010f
GDP Households consumption
Government consumption Gross fixed capital formation
Exports Imports

8. 8© Swedbank
Credit growth slows due to deleveraging
• Lending growth gradually decelerating driven by
deleveraging
– Retreating credit demand, e.g.
• Expectations of further asset price decreases reduce
willingness to borrow, consumption/ investment is
being postponed and/ or precautionary savings are
built up
• Rising uncertainty, weakening optimism, rising
lending rates
– Weaker supply, e.g.
• Global credit crunch raises interest rates and cuts
funding availability
• Tighter lending standards in response to domestic
slowdown and global credit crunch
• Outlook
– Bank lending expected to grow by 10%...15% in 2008 and
remain flat or possibly even decrease in 2009
– Corporate lending expected to pick up in late 2009
depending on recovery in global growth and exports
– Household credit growth expected to pick up in 2010 as
households regain their confidence
Domestic credit, % of GDP
0
20
40
60
80
100
Q104
Q304
Q105
Q305
Q106
Q306
Q107
Q307
Q108
Total
Households
Corporate
Domestic credit, % YoY
0
20
40
60
80
100
Q104
Q304
Q105
Q305
Q106
Q306
Q107
Q307
Q108
Q308
4
5
6
7
8 Total (l.s.)
Households (l.s.)
Corporate (l.s.)
Average lending
rate, eur, % (r.s.)
Source: CSB, FCMC and Swedbank estimate
Number of transactions with apartments and prices of block
house apartments in Riga, EUR/m 2
0
500
1 000
1 500
2 000
Jan.05 Jan.06 Jan.07 Jan.08
Transactions
EUR/m2

9. 9© Swedbank
Current account deficit: smaller external financing
necessity
• Current account deficit swiftly narrows as
– Trade deficit in goods and services expected to narrow from
21% of GDP in 2007 to ca 13% in 2008 and 7% in 2009 due
to decreasing domestic demand
– Net interest payments rise from ca 1% of GDP in 2007 to ca
2% due to higher cost of capital
– Net compensation of employees expected to remain at ca
1.5% of GDP in 2009-2010, i.e. lower than in 2007
– Net dividend payments assumed at 2% of GDP, less than a
half of the past few years, due to lower profitability
– Net transfers conservatively assumed at EU pre-accession
average level of 2%...3% in 2009-2010, i.e. EU farming
subsidies and long-term emigrants’ remittances
• Necessity of external financing to finance the current account
deficit shrinks to 6% of GDP in 2009-2010, with the likely
funding sources:
– EU structural funds expected at 2%...3% of GDP, according
to 2007-2013 EU budget pre-allocation
– Net FDI inflows expected at ca 2%, very conservatively
assuming all dividend earnings being withdrawn
– Net other borrowing expected to decrease to ca 5.5% in
2008 and ca 1% in 2009-2010, which could be met by
• Banks’ borrowing, i.e. increasing external debt
• Sales of residents’ foreign assets (54% of GDP in
June 2008, excluding BoL reserves)
• BoL reserves (18.4% of GDP in June 2008)
Current account, % of GDP
-30
-20
-10
0
10
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008f
2009f
2010f
Transfers
Dividends, net
Interest (debt &
portfolio)
Compens.of
employees, net
Trade in G&S
Current acc.
Source: Bank of Latvia , Swedbank calculations
Financing of current account deficit, % of GDP
-20
-10
0
10
20
30
40
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008f
2009f
2010f
BoL reserves
Long-term Banks'
Long-term others
Short-term Banks'
Short-term others
FDI retained
earnings, net
FDI new capital, net
Other borrowing, net
Capital acc.
Current acc. deficit

10. 10© Swedbank
Foreign trade: competitiveness retained
• Trade balance improves as imports plunge and exports
growth (albeit slowing) remains good
– Trade and service deficit improved to 140 LVLm in
August, back to the level of June 2006
• 8M 2008 cumulative import growth at -2% yoy
reflecting weak domestic demand
• 8M 2008 export growth still above 10% yoy
– Imports will contract further as domestic demand
weakens and global commodity prices retreat from
their recent highs
– Exports growth will undoubtedly moderate along with
slowing global economic growth, but still expected to
retain positive nominal growth throughout the cycle
• Export potential remains strong
– Latvia has retained and even boosted its share in key
trade partners imports despite the growing unit labour
cost and real effective exchange rate
Growth of Goods Exports and Imports in Current Prices,
YoY %
-20
0
20
40
60
Jan
04
Jul
04
Jan
05
Jul
05
Jan
06
Jul
06
Jan
07
Jul
07
Jan
08
Jul
08
Exports
Imports
Export market shares, 2001-2007, H1 2008, %
0.00
0.15
0.30
0.45
EU DE SE DK UK FI PL RU
0
2
4
6
8
EE LT
Source: CSB, Eurostat, Bank of Latvia

11. 11© Swedbank
Foreign trade: swift improvement through imports
Exports of Goods, LVLm
0 200 400 600
Metal etc.
Wood, etc.
Food, agricultural prod.
Machines, equipment
Transport
Chemical products
Textiles, wearing, leather etc.
Mineral products
Plastics
Furniture
Builiding materials
Pulp and paper
Other
Optical instruments
8M 2007
8M 2008 -20 0 20 40 60
Annual Growth, %
-60 -30 0 30 60 90
Annual Growth, %Imports of Goods, LVLm
0 300 600 900 1200
Machines, equipment
Mineral products
Food, agricultural prod.
Metal etc.
Transport
Chemical products
Textiles, wearing, leather etc.
Plastics
Pulp and paper
Builiding materials
Wood, etc.
Furniture
Optical instruments
Other
8M 2007
8M 2008
• Exports show solid growth in all sectors except for
– Housing related (wood and furniture): global shock
– Textiles due to rising unit labour cost and price of energy: long term trend, as expected
• Imports show across the board drop except for
– Food and minerals: result of global price rises earlier this year
– Metals, chemicals and optical instruments, which are closely related to exports and reflect global price developments
Source: CSB

12. 12© Swedbank
0.691
0.694
0.697
0.700
0.703
0.706
0.709
0.712
-150
-100
-50
0
50
100
150
Intervention, m LVL (r.s.) EUR/LVL (l.s.)
Lower band (l.s.) Higher/Lower band (l.s.)
0%
2%
4%
6%
8%
10%
12%
14%
Jan.07 Apr.07 Jul.07 Oct.07 Jan.08 Apr.08 Jul.08 Oct.08
3m Rigibor-Euribor spread
RIGIBOR 1m
RIGIBOR 3m
EURIBOR 3m
LVL/EUR exchange rate, BoL interventions and interbank interest rates
• Shortage of the lats is driving rates up, the
Bank of Latvia easing monetary policy
– The Bank of Latvia cut reserve
requirements on liabilities over 2 years
from 6% to 5% and for other liabilities
from 8% to 7%, effective from Oct24.
Further easing of monetary policy likely
– The lats interest rates have risen sharply
due to outflows and uncertainty related
to FX intervention
• Long term stability depends on macro
adjustment
– A successful speculative attack on
currency close to impossible (e.g. very
shallow forward market) but sustainable
growth and swift EMU entry requires
restructuring of the economy and
productivity growth
Devaluation
rumors
BoL restricts access to liquidity
and its forward market activities
LVL denominated loans
converted into EUR, BoL
intervenes
Liquidity tightening,
still high credit growth
State Treasury
runs down accrued
budget surplus
FX interventions
drive % rates up
BoL announces
cuts in reserve
requirement from
8% to 7%
BoL announces
cuts in reserve
requirement from
7% to 6%
Financial market: money market tightens
BoL announces
cuts in reserve
requirement from
6% to 5%

13. 13© Swedbank
Financial system remains stable
• Devaluation is not a policy decision
– Any benefits unlikely: strong inflationary effect, high labour
mobility, imports already contracting, export competitiveness
remains good
– Would produce a deep negative real shock: share of forex
denominated loans at ca 80% of GDP (ca 90% of domestic
credit), the lats denominated deposits ca 21% of GDP
• Financial system is robust to withstand global credit crunch
– Support from parent banks available
– Banks’ short term foreign assets other than deposits (e.g.
syndicates) at 23.9% of GDP in June 2008
– BoL reserves at 18.4% of GDP in June 2008
– Government external debt at 6.6% of GDP in June 2008
Resident deposit structure, %
0
20
40
60
80
100
Q104
Q304
Q105
Q305
Q106
Q306
Q107
Q307
Q108
others
USD
EUR
LVL
Domestic credit structure, %
0
20
40
60
80
100
Q104
Q304
Q105
Q305
Q106
Q306
Q107
Q307
Q108
others
USD
EUR
LVL
Source: the Bank of Latvia and FCMC
International investment position w/o FDI, % of GDP
0
20
40
60
80
100
120
140
A L A L A L
2006 2007 June 2008
BoL reserves
Short-term others
Banks nonresident demand
dep.
Short-term Banks, non deposit
Long-term others
Long-term Banks

14. 14© Swedbank
Labour market: key to adjustment
• Despite Latvia entering a recession, labour market
adjustment still lagging
– Average labour productivity shrinking for the second
quarter in a row (-1.7% and -3% YoY in Q1 and Q2
2008)
– Unemployment expectations are rising fast, while
unemployment rate inched up only marginally
– Labour hoarding is squeezing companies’ profits and
reducing their financial agility, making deleveraging
more difficult and potentially introducing a drag on the
future recovery
– Unemployment to rise significantly very soon, e.g.
anecdotal evidence: layoffs are rising, although official
statistics do not illustrate it yet
• Inflation retreats, wage-inflation spiral breaks
– Demand side inflation factors disappear as domestic
demand continuously weakens
– Inflation is over its peak and core inflation decelerates
– Lower world prices help disinflation
Labour Market Indicators, %
0
5
10
15
20
25
Q1 02 Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08
-5
0
5
10
15
Harmonised unemployment rate, n.s.a. (l.s.)
Official real net wage growth, YoY (l.s.)
Labour productivity growth, YoY (r.s.)
Consumer Price Inflation, %
0
5
10
15
20
Jan.04 Jan.05 Jan.06 Jan.07 Jan.08
-1
0
1
2
3
Contribution of core inflation, pp (l.s.)
Total inflation, YoY (l.s.)
Total inflation, MoM (r.s.)
Source: CSB and Eurostat

15. 15© Swedbank
Real Convergence: progress so far
• Real convergence a success: incomes relative to the Euro
area up by ca 75% over the last 10 years driven by
– Initial macro stabilisation and structural reforms of the
1990s to eliminate inefficiencies inherited from central
planning
– And further enhanced by EU accession (e.g. more
efficient legal/ institutional framework, product and
financial market integration, EU funds’ support, falling
risk premium)
• GDP per capita convergence due to
– Better labour utilisation (comparison to 2007):
• Employment up by 118k since 1997
• Participation rate up to 62% from 54% in 1997
for the age group of 15–74
• Population down by 6.7% (i.e. -163k) while the
share of population in working age up to 79%
from 75% in 1997
– Productivity growth on average 6.4% pa over 1997–
2007, which explains just over ¾ of GDP per capita
growth
EMPL
GDP
POPWA
EMPL
POP
POPWA
POP
GDP
××=
GDP per
capita Labour utilisation Average
labour
productivity
where POP – population
POPWA – working age population
EMPL – employment
Source: CSB and Eurostat; Swedbank calculations
GDP per capita & average labour productivity
-5
0
5
10
15
20
25
30
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
H108
0
10
20
30
40
50
60
Real GDP per cap., YoY % (ls) EMPL / POPWA., YoY % (ls)
POPWA / POP., YoY % (ls) Av. lab.prod., YoY % (ls)
GDP per cap., PPS, % of EA (rs) Av. lab.prod., % of EA, (rs)

16. 16© Swedbank
Real Convergence: progress so far
• Productivity growth largely in line with the neo-classical
growth theory, i.e. labour vs. capital abundance and
convergence of factor prices
– Using Cobb-Douglas production function with constant
returns to scale and α=0.36 we see that capital-labour
ratio has contributed ca 2/3 of productivity growth or on
average 4.5% pa
– Contribution of TFP on average 1.9% pa, which is the
lowest between the EU8 countries (see Arrabitel et al
(2008))
• Still huge growth potential
– Average labour productivity significantly less than 50%
of the euro area average: must discount for a longer
working week and ca a half fewer part-time workers
than in the euro area countries
– Recovery will come through growth of total factor
productivity as investments decrease due to rising cost
of capital and employment shrinks
– Huge potential to be realised via TFP
TFPCAPITALEMPLGDP ××= − αα )1(
TFP
EMPL
CAPITAL
EMPL
GDP
×⎟
⎠
⎞
⎜
⎝
⎛
=
α
Average
labour
productivity
Total factor
productivity
Capital deepening
Source: CSB; Swedbank calculations
Capital / labour ratio and total factor productivity,
YoY %
-4
-2
0
2
4
6
8
1996 1998 2000 2002 2004 2006 H1 08
Total factor
productivity
Capital /
labour

17. Swedbank in Latvia. Q3 2008 Performance.
Market Developments.

18. 18© Swedbank
Summary
• Strong performance of Swedbank in 9M 2008
– Strong revenues from core business
– Relatively stable margins
– Asset quality materially better than the market
– Focus on expense management
• Lending business
– Portfolio growth slowed
– Focus on risk management – minimizing credit losses
– Continuous monitoring and proactive work with problem clients and industries
– Stricter new lending policies
• Saving and investment products
– Focus on resident deposits
– Growing market shares in investment products
• Business priorities 2009

19. 19© Swedbank
Strong performance in 9M 2009
EUR million 9M 2008 9M 2007 +/-
Net interest income 164,6 151,4 9%
Net commission income 43,7 38,0 15%
Trading income 22,8 23,4 -3%
Other income 6,7 4,6 44%
Total income 237,8 217,4 9%
Personnel expenses 44,5 40,3 11%
Other expenses 46,5 36,8 27%
Total expenses 91,1 77,1 18%
Profit before loan losses 146,7 140,3 5%
Net credit losses 35,2 15,9 121%
Pre tax profit 111,5 124,4 -10%
Income tax 16,9 17,4
Net profit 94,6 107,0 -12%

20. 20© Swedbank
Lending margins
2,65%
2,48%
2,10%
1,89%
1,88% 1,64%
0,93%
0,78%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
Q1 07 Q2 07 Q3 07 Q4 07 1Q 08 2Q 08 3Q 08
Estonia Latvia Lithuania Sweden
Net Interest Margin (NIM)
2,78%
2,76%
2,95%
2,72%
2,76%
2,94%
1,5%
2,0%
2,5%
3,0%
3,5%
Q1 07 Q2 07 Q3 07 Q4 07 1Q 08 2Q 08 3Q 08
Estonia Latvia
Lithuania w/o bond portfolio revaluation
Deposit margins
2,35%
1,51%
2,54%
2,07%
2,12%
2,36%
1,34%
1,25%
0%
1%
2%
3%
4%
5%
Q1 07 Q2 07 Q3 07 Q4 07 1Q 08 2Q 08 3Q 08
0%
2%
4%
6%
8%
10%
Estonia (ls) Latvia (ls) Lithuania (ls)
Sweden (ls) Rigibor 1M (rs)
Deposit margin = (FTP-interest expense)/average deposits
Loan margin = (interest income-FTP)/average loans
Net income drivers: stable NIM and margins
Revaluation effect
2.90% in 3Q 08
Deposit margins
• Growing proportion of more expensive time deposits
• Deposit margins follow RIGIBOR trend
Lending margins
• New lending priced to reflect higher funding costs
• Transferring higher funding costs to existing clients takes time

21. 21© Swedbank
NLL by products
Financing portfolio
Net loan losses (NLL)
• NLL calculated as annualized net credit losses to portfolio at the beginning of the period
0.90%
0.91%
1.08%
0.76%
Q3 08
0.55%
0.31%
0.75%
0.58%
Q2 08
0.39%
0.25%
0.54%
0.38%
Q1 08
0.40%Baltic Banking
0.23%Lithuania
0.56%Latvia
0.39%Estonia
2007NLL by country
Net income drivers: asset quality
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
1M
07
2M
07
3M
07
4M
07
5M
07
6M
07
7M
07
8M
07
9M
07
10M
07
11M
07
12M
07
1M
08
2M
08
3M
08
4M
08
5M
08
6M
08
7M
08
8M
08
9M
08
Corporate lending Mortgage lending Consumer finance
0,00%
0,25%
0,50%
0,75%
1,00%
1,25%
1,50%
1,75%
Jan
07
Feb
07
Mar
07
Apr
07
May
07
Jun
07
Jul
07
Aug
07
Sep
07
Oct
07
Nov
07
Dec
07
Jan
08
Feb
08
Mar
08
Apr
08
May
08
Jun
08
Jul
08
Aug
08
Sep
08
NLL monthly NLL YTD
2%
34%
10%
1%
4%
13%
4%
33%
Mortgage
Consumer finance
Other
Large corporate
SME
Other
Private car leasing
Corporate ABF ABF
Corporate
lending
Private
lending

22. 22© Swedbank
Swedbank overdues over 90 days 3.6 times lower than for other Latvian banks as of June 30, 2008
• Swedbank level 0.91%, total market – 2.63% => other banks 3.24% (calculated based on Swedbank’s market share)
Drivers of higher overdues are largely cyclical
Net income drivers: credit losses much lower than in the market
Delayed principal amount and interest payment
starting from the 1st overdue day
1,15%
0,70%
1,15%
0,74%0,71%
0,27%
0
50
100
150
200
250
300
Q2 06 Q4 06 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
millionEUR
0,00%
0,25%
0,50%
0,75%
1,00%
1,25%
1,50%
%fromportfolio
total market overdues, in mEUR total Swedbank overdues, in mEUR
total market overdues, % from portfolio total Swedbank overdues, % from portfolio
Overdues: Swedbank vs. market (%)
1,84%
2,63%
0,09%
0,91%
1,16%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Market over 90 days, % of portfolio Sw edbank over 90 days, % of portfolio
•Decrease in consumer confidence
•High inflation
•Slower GDP growth
•Lower domestic consumption level

23. 23© Swedbank
Revenue & expense drivers
ROE and CI
43% 46%
37% 40% 38%
26%
32%
23% 28% 26% 27% 23%
20% 16%
20%
13%
43%
38% 34% 35%
40%
36%
0%
20%
40%
60%
Q1
06
Q2
06
Q3
06
4Q
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
555,5541,9526,9518,6Number of active private customers, th
57,856,554,852,9Number of corporate customers, th
Q1 08 Q2 08 Q3 082007
Revenue growth vs 9M 2007, EUR m
Revenue drivers
• Stable income from core businesses
• Growing number of clients
Expense drivers
• Adjustment of expenses to keep stable cost-income ratio
• 10% employee adjustment program implemented in October
• Lagging effect in administrative expenses
Expense growth vs 9M 2007, EUR m
6
13
2
217
9M 07 NII fees
-1
9M 08othertrading
238
+9%
5
5
4
9M 07 OtherPersonnel
91
Admin
77
9M 08
+18%
Number of employees
2489 2484 2476
2499
2517
2433 2415
2502
2476
2445
2300
2400
2500
2600
2007 J 08 F 08 M 08 A 08 M 08 J 08 J 08 A 08 S 08 O 08
-10%
Oct’08

24. 24© Swedbank
In 9 months banks earned EUR 293m, i.e. EUR 87m less than in 9M 2007 (-23%)
• Market returns to steady growth rates
• Administrative expenses rising
• More expensive funding
• Provisions increased
Swedbank the most profitable in Latvia
Net profit market shares
9M 2008
SEB
15,6%
Parex
6,0%
Nordea
7,3%
DnB NORD
6,5%
ab.lv
7,3%
Other banks
21,7%
Sw edbank
35,7%
Lending market shares
September 2008
SEB
14,4%
Parex
11,4%DnB NORD
10,1%
Nordea
12,1%
ab.lv
4,1%
Other banks
21,6%
Sw edbank
26,4%
Largest banks - net profit
108
64
38
33
41
18 21
46
24 21 18 21 19
105
0
20
40
60
80
100
120
Sw edbank SEB RietumuAizkraukles Parex Nordea DnB Nord
EURm
9M 2007
9M 2008
Net profit
272
188
108
105
0 50 100 150 200 250 300 350 400
9M 2007
9M 2008
EURm
Swedbank Others

25. 25© Swedbank
Mortgage portfolio, EUR m
167
234
684
322159
1 9451 851
1 382
13
25
52
0
500
1 000
1 500
2 000
2 500
2003 2004 2005 2006 2007 Sep 2008
Mortgage loans High margin loans
Mortgage margin
0%
1%
2%
2005 2006 2007 Mar 08 Jun 08 Sep 08
Mortgage market share
27,1%27,5%
24,5%
23,0%
27,3%27,6%
29,8%
27,1%
20%
22%
24%
26%
28%
30%
32%
2003 2004 2005 2006 2007 Mar 08 Jun 08 Sep 08
Stable margins
• Low pressure from competitors
• Transferring higher funding costs to customers
• Ability to increase margins if contract change initiated by the
client
Long term potential
• Only 18% of households in Latvia have mortgage loans
Lending portfolio: mortgage lending (1)

26. 26© Swedbank
Most of overdues come from people employed in industries
most sensitive to slowdown in economics
• Trade and personal service, RE, transportation
• Data quite precisely reflect latest information in media about
lay-offs in these particular sectors
Stricter lending conditions applied to new lending
• Precise risk profile of clients
• Avoiding risky industries
• Improved quality of new lending in 2Q and 3Q
Mortgage clients risk scores
• Rating 1 - 3- very good clients
• Rating 4 - 5- good clients
• Rating 6 - 7- medium-risk clients
• Rating 8 - 9 monitored clients
• Rating 10 - 12 risky clients
Mortgage overdues, % of 12 month old portfolio
0%
1%
2%
3%
4%
Sep 07 Dec 07 Mar 08 Jun 08 Sep 08
LV >60 days LT >60 days EE >60 days
Lending portfolio: mortgage lending (2)
Mortgage risk profile
0%
10%
20%
30%
40%
50%
60%
1 2 3 4 5 6 7 8 9 10 11 12
Portfolio, Dec 07
Portfolio, Sep 08
New sales, September

27. 27© Swedbank
Yield and margin
5%
10%
15%
20%
2005 2006 2007 Mar 08 Jun 08 Sep 08
Margin Yield
Consumer financing portfolio, EUR m
157
73
40
254238
0
100
200
300
2004 2005 2006 2007 Sep 08
Consumer overdues, % of 12 month old portfolio
0%
2%
4%
6%
8%
Sep 07 Dec 07 Mar 08 Jun 08 Sep 08
LV >60 days LT >60 days EE >60 days
Portfolio growth slows, margins driven by funding cost
• Margin decreases in short term due to fixed interest rate
contracts and increasing funding costs
Portfolio quality has not changed substantially in the last months
• Watch list creation
• Restructuring possibilities rather limited. Sale of debitor contracts
preferred
Lending portfolio: consumer financing

28. 28© Swedbank
Corporate financing market share (resident)
31,5%
28,3%
25,6%
29,3%29,5%29,6%
21,8%
26,0%
30,1%
27,6% 27,5% 27,7%
20%
25%
30%
35%
2004 2005 2006 2007 Mar 08 Jun 08
Corporate financing Corporate lending
Corporate lending margin
1%
2%
3%
2005 2006 2007 Mar 08 Jun 08 Sep 08
Corporate financing portfolio, EUR m
247
421
571
682
2 032
1 160681
2 971
2 515
0
1 000
2 000
3 000
4 000
2004 2005 2006 2007 Sep 2008
Bank lending portfolio ABF portfolio
Corporate financing market shares (by industries)
25,2%
33,0%
27,7%
25,0%
28,8%
36,6%
23,6%
14,2%
10%
20%
30%
40%
2005 2006 2007 Mar 08 Jun 08
Manufacturing Trade Real estate Agriculture
Lending portfolio: corporate financing (1)

29. 29© Swedbank
Main industries in large corporate overdues are real estate
and production
• Proportion of RE in large corporate portfolio is slowly
decreasing and in Sept’08 was 37.5%
Main industries in SME overdues are transportation and
production
• Limited new financing in problematic industries
• Pro-active monitoring of customers in these industries
Monitoring targeted risk distribution of clients
• Stricter lending conditions applied to new lending based
on customer ratings
• Restrictions in force for lending to customers in ratings 5
and 5-
Large corporate risk profiles
• Rating 1 - 2- low-risk portfolio
• Rating 3 - 4- moderate-risk portfolio
• Rating 5 - 5- vulnerable-risk portfolio
• Rating 6 - 7 high-risk and non-performing loans
Corporate overdue loans
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
Dec 07 Mar 08 Jun 08 Sep 08
31-60 days 61-90 days over 90 days
Lending portfolio: corporate financing (2)
Large corporate risk profile
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
1 1- 2 2- 3 3- 4 4- 5 5- 6 6- 7
Portfolio, Dec-07 Portfolio, Sep-08
Construction; 11%
Industry; 17%
Real estate; 33%
Trade (incl.
repairs); 13%
Transport and
communication; 8%
Other; 18%

30. 30© Swedbank
• Credit portfolio losses are recognised through special and portfolio provisions
• Main guidelines for estimating provisions:
• Key regulations for provision estimation are: provisioning principles and provisioning rates
• Supplementary regulations are: LGD methodology and rating methodology
• General and special provision rates are regularly back-tested
product specific LGDOverdue >90 daysFixed rate based on product typeRetail
fixed LGD (based on asset type for
leasing)
Overdue >90 daysFixed rate for all portfolioSME
Individual assessment based on Net
present value (based on discounted value
of revalued collateral and cashflow)
Rating 6 - 7
default frequency (based on rating) * LGD
(based on credit analyst estimate)
Large corporate
Special provisioning for
impaired assets
Impairment trigger
Portfolio provisions
(for performing portfolio)
Portfolio segment
LGD – loss given default
Risk management: provisioning principles

31. 31© Swedbank
Strengthening risk management capability
• Enhanced risk managment training for business units
• Built capacity to work with distressed clients
Portfolio monitoring
• Improved quality and increased frequency of portfolio quality reporting
• Regular loan review process includes
– Overall portfolio stress test
– Portfolio review
– Proactive “watch list” report
– IRB portfolio scoring once per month
• On individual loan basis
– Regular client rating review (rating classes 5 and higher - more frequent assessment)
– Quarterly financials/covenants assessment
– For SME/SSE and private portfolio regular overdue report (with client names identified)
Risk management: quality monitoring (1)

32. 32© Swedbank
New sales quality management
• Set targets for new origination quality (based on rating/score, RLSR and LTV)
• Limitation of sales to sectors under watch
• Internal target setting and incentives to reach targets
Proactive management of watch list clients
• Introduction of preventive and after-sales activities: proactive communication, frequent client meetings
• Development of standard proactive solutions to ensure serviceability of the credit
Overdue management
• Immediate communication with client: Internet bank, SMS, telephone calls
• Constant re-evaluation of the tactics on their effectiveness and adequacy
Distressed debt restructuring
• Defined tactics of restructuring
• Effective solutions for collected collaterals handling
Risk management: quality monitoring (2)

33. 33© Swedbank
Deposit market in Latvia: Swedbank focuses
on resident business and has higher share of more profitable demand deposits
Deposits by source
0
4 000
8 000
12 000
16 000
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208
millionEUR
Private, resident Corporates, residents
Private, non-resident Corporates, non-residents
56%
44%
Nearly half of total deposits in Latvia from non-residents
• Non-resident deposits make 16% of private, and 61% of
corporate deposits
• Swedbank focuses on resident market - resident deposits
make 92% of deposit portfolio
Swedbank demand deposit share in total deposits higher
than market average
• Swedbank share of demand deposits higher than average
on the market, i.e. 59.5% and 52,0% respectively
Global financial market developments influence Latvian
deposit market
• In September total deposits of the Latvian banks declined
by EUR 367 million, while Swedbank deposits declined by
EUR 88 million
Demand deposits share from total deposits
52,3%
56,3%59,0%
52,0%
71,6%
67,6%
62,7% 59,5%
0%
20%
40%
60%
80%
100%
Sep 07 2007 Mar 08 Jun 08
Market Sw edbank

34. 34© Swedbank
Total deposit margins
4,8%
3,1%
2,0%
3,7%
3,4%
3,9%
0,4%
0,6%
1,1%
0,1%
0,6%
3,0%
3,9%
7,2%
5,7%
4,2% 4,5%
0%
1%
2%
3%
4%
5%
2005 2006 2007 Mar 08 Jun 08 Sep 08
0%
2%
4%
6%
8%
Demand deposit margin (ls) Time deposit margin (ls)
Rigibor 1M (rs)
Private deposits, EUR m
195
282
490
761
716 655 676 600
731
353237167
702649
476
733
0
300
600
900
1 200
1 500
2003 2004 2005 2006 2007 Mar 08 Jun 08 Sep 08
Private time deposits Private demand deposits
Deposit market share
31,3%
30,2%
27,3%
29,8%29,6%
30,2%
27,2%27,7%
28,1%
25,8%
30,2%
31,5%
25%
27%
29%
31%
33%
35%
2004 2005 2006 2007 Mar 08 Jun 08
Private resident deposits Corporate resident deposits
Corporate deposits, EUR m
372
510
687 872
932 847
797 720
328
17197111
22014590
294
0
300
600
900
1 200
2003 2004 2005 2006 2007 Mar 08 Jun 08 Sep 08
Corporate time deposits Corporate demand deposits
• Deposit campaigns, more competitive interest rates and
flexible pricing to improve market position
Saving and investment products: deposits
• Number of time deposit contracts increased by 28% from
September 2007, reaching 112,500 on September 30, 2008

35. 35© Swedbank
Assets under management, EUR m
127
85
62
274
205
0
100
200
300
2004 2005 2006 2007 Sep 08
Market share by customers
38%39% 39% 38%
30%
33%
37%
21%
5%5%5%
20%19%
16%
0%
10%
20%
30%
40%
50%
2004 2005 2006 2007 Mar 08 Jun 08 Sep 08
Pension second pillar Pension third pillar
Life insurance market share by customers
10%11%
6%
14%
13%11%
16%
0%
5%
10%
15%
20%
25%
2005 2006 2007 Mar 08 Jun 08 Aug 08 Sep 08
Hansa funds
• Financial market developments put pressure on growing assets
under management
• Investors move to less risky investments incl. deposits
Pension second pillar
• Swedbank the largest P2P manager in Latvia
• Attracting large part of newcomers due to successful student
programme “Open”
Pension third pillar
• Effective sales campaigns
• Growing number of programme participants
Saving and investment products:
assets under managment growth impacted by financial market conditions

36. 36© Swedbank
Business priorities 2009
1
2
Manage credit portfolio through the cycle
Build domestic funding base
4
5 Talent retention and development
Build new operating model in Baltic banking
3 Improve operational efficiency and productivity

37. Thank you!

38. 38© Swedbank
Appendix

39. 39© Swedbank
56 55 54
15 1514
98
2 2
2
Q1 Q2 Q3
79
Other
Net fees
Trading
81
Net interest income
6
77
Total revenue
13
17 16
13
15
16
29
Q3
33
Q2
30
Personnel exp
Other exp.
Q1
Operating expenses
Performance by quarters
EUR millions Q1 2008 Q2 2008 Q3 2008
Net interest income 56 55 54
Net fees 14 15 15
Trading 8 9 6
Other 2 2 2
Total revenue 79 81 77
Personnel exp -16 -15 -13
Other exp. -13 -17 -16
Total operating exp. -29 -33 -30
Net loan losses -8 -11 -16
Net income 38 31 27

40. 40© Swedbank
1 078 1 286 1 562 1 862 2 146 2 359 2 507 2 639 2 719 2 782 2 848
1 689
1 963
2 172
2 561
2 797
3 004
3 232 3 297 3 408 3 614 3 821
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08
millionEUR
Private financing portfolio +14% Corporate financing portfolio +18%
Construction; 11%
Industry; 17%
Real estate; 33%
Trade (incl.
repairs); 13%
Transport and
communication; 8%
Other; 18%
by currencies
1 886 2 299 2 730
3 378 3 859
4 436
5 114
689
772
859
912
975
816
792 709 682
688 703
4 849
5 319 5587 5821
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08
millionEUR
EUR LVL USD Other
by customer type
Lending portfolio: structure
Car leasing; 8%
Consumer finance; 9%
Mortgage; 78%
Other; 5%