Offering to subscribe for preference shares in Swedbank ABs new

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					                                   18NOV200812490184




Offering to subscribe for preference shares in

        Swedbank AB’s new issue 2008




                     Joint Bookrunners

J.P. Morgan   Merrill Lynch International              Swedbank Markets

                    December 1, 2008
                                                           TABLE OF CONTENTS

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .      1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     10
Invitation to Subscribe for Preference Shares in the Issuer . .                            ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     23
Background and Reasons . . . . . . . . . . . . . . . . . . . . . . . . . . . .             ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     24
Terms, Conditions and Instructions . . . . . . . . . . . . . . . . . . . .                 ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     26
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     30
Summary of Financial Information . . . . . . . . . . . . . . . . . . . . .                 ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     40
Commentary on the Financial Development . . . . . . . . . . . . .                          ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     42
Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     50
Share Capital and Ownership Structure . . . . . . . . . . . . . . . . .                    ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     62
Historical Share Price Movements . . . . . . . . . . . . . . . . . . . . .                 ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     66
Dividends and Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . .              ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     67
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     69
Banking Regulation and Supervision, etc. . . . . . . . . . . . . . . .                     ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     70
Board of Directors, Group Management and Auditors . . . . . .                              ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     73
Tax issues in Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     87
Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     90
Legal Considerations and Supplementary Information . . . . . .                             ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .     95
Restrictions on Sale and Transfer of Subscription Rights and                               Preference Shares   .   .   .   .   .   .   .   .   .   .   .   .   .   .    103
Exchange Rate Information and Regulations . . . . . . . . . . . . .                        ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    107
Selected Statistical and Other Information . . . . . . . . . . . . . .                     ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    108
Detailed Commentary on the Financial Development . . . . . .                               ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    123
Presentation of Financial and Other Information . . . . . . . . . .                        ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    173
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . .                 ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    174
Historical Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . .           ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    F-1
The Auditor’s Report on New Historical Financial Reports . .                               ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .    F-2
Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    ...............     .   .   .   .   .   .   .   .   .   .   .   .   .   .   F-97




  This document is an English translation of the approved Swedish prospectus. In the event of any
  discrepancy between this English translation and the Swedish prospectus, the Swedish prospectus shall
  prevail. The translation is made under the sole responsibility of the Board of Directors of Swedbank AB
  which is responsible for the Swedish prospectus.


                                                                           i
This prospectus has been prepared in relation to the new issue (the ‘‘Rights Offering’’) of up to 257,686,706
non-cumulative convertible preference shares (the ‘‘Preference Shares’’) with preferential rights for the
existing shareholders of Swedbank AB (the ‘‘Issuer’’ and, together with its subsidiaries and associates, the
‘‘Bank’’) and the listing of the Preference Shares on Nasdaq OMX Stockholm. The Preference Shares will
initially be offered to holders of the Issuer’s ordinary shares (the ‘‘Existing Shares’’).
This prospectus has been approved and registered by the Swedish Financial Supervisory Authority
(Sw: Finansinspektionen) (the ‘‘SFSA’’) in accordance with the provisions of Chapter 2, Sections 25 and 26 of
the Swedish Financial Instruments Trading Act (1991:980). Approval and registration by the SFSA does not
imply that the SFSA guarantees the factual information provided in the prospectus is correct or complete.
Disputes concerning, or related to, the Rights Offering, the contents of this prospectus or any connected
legal relation shall be settled exclusively in accordance with Swedish law and by Swedish courts. The district
                                                a
court of Stockholm (Sw: Stockholms tingsr¨ tt) shall be the court of first instance.
This prospectus is available on the Bank’s website, www.swedbank.se/prospekt and on the SFSA’s website
www.fi.se.
Subject to the terms and conditions set out in this prospectus, holders of Existing Shares as of November 28,
2008 (the ‘‘Record Date’’) will be granted one transferable subscription right (the ‘‘Subscription Rights’’) for
each Existing Share held on the Record Date. For every two Subscription Rights, the holder may subscribe for
one Preference Share in exchange for payment of a subscription price of SEK48 (the ‘‘Subscription Price’’) per
Preference Share.
The Subscription Rights are expected to be traded on Nasdaq OMX Stockholm during the period from and
including December 2, 2008 until and including December 11, 2008. Holders of Subscription Rights may
exercise their Subscription Rights from and including December 2, 2008 until and including December 16,
2008 (the ‘‘Subscription Period’’). The Subscription Period may be extended. Subscription Rights not
exercised within the Subscription Period will expire and become void.

Terms and conditions for the Rights Offering and timetable
•   Persons registered as shareholders on the Record Date, November 28, 2008, have preferential rights in
    the new issue. They will receive one Subscription Right for each ordinary share held.
•   Two Subscription Rights entitle to subscription of one preference share.
•   Subscription and payment: Subscription by exercise of Subscription Rights shall be made during the
    Subscription Period by way of cash payment. Please note that Subscription Rights that are not exercised
    must be sold on December 11, 2008 at the latest, in order to not expire and become void.
•   Subscription Price                                                     SEK48 per Preference Share
•   Trading in ordinary shares without Subscription Rights                 Starting November 26, 2008
•   Subscription Period                                                    December 2–16, 2008
•   Trading in Subscription Rights                                         December 2–11, 2008
•   Trading in paid subscribed shares (BTA)                                Starting December 2, 2008

Dates for financial information and the Annual General Meeting
Year end report for 2008                                                   February 12, 2009
Interim report, January–March 2009                                         April 23, 2009
Annual General Meeting 2009                                                April 24, 2009
Interim report, January–June 2009                                          July 17, 2009
Interim report, January–September 2009                                     October 21, 2009




                                                       ii
                                                                     NOTICE TO INVESTORS

In connection with the Rights Offering and the admission to trading of the Preference Shares on Nasdaq OMX Stockholm, the Issuer has prepared a Swedish
language prospectus, an English translation thereof and an English language offering memorandum for certain qualified investors in overseas countries.

The Subscription Rights and the Preference Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the
‘‘Securities Act’’) and may only be exercised, subscribed for, offered, acquired or sold within the United States to ‘‘qualified institutional buyers’’ as defined in
Rule 144A under the Securities Act and outside the U.S. in compliance with Regulation S under the Securities Act.

This prospectus is not an offer for sale or a solicitation of an offer to purchase securities other than the Preference Shares. In a number of countries, in
particular in the United States, Canada, Hong Kong, Japan, Australia and South Africa, the distribution of this prospectus, the exercise of Subscription Rights
with respect to the Preference Shares, the offer of the Preference Shares, as well as the sale of the Preference Shares, is subject to restrictions imposed by
law (such as registration, admission or other regulations). The offer to subscribe for Preference Shares does not include persons resident in the United
States, Canada, Hong Kong, Japan, Australia, South Africa or any other jurisdiction where such an offer would be illegal. No action has been or will be taken
by the Bank, J.P. Morgan Securities Ltd. (‘‘J.P. Morgan’’), Merrill Lynch International (‘‘Merrill Lynch’’) or Swedbank Markets (‘‘Swedbank Markets’’ and, together
with J.P. Morgan and Merrill Lynch, the ‘‘Joint Bookrunners’’) to permit the possession or distribution of this prospectus (or any other offering or publicity
materials or application form(s) relating to the Rights Issue) in any jurisdiction where such distribution may otherwise lead to a breach of any law or
regulatory requirement.

Accordingly, neither this prospectus nor any advertisement or any other offering material relating to the Rights Offering may be distributed or published in
any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this
prospectus may come are required to inform themselves about and comply with such restrictions, in particular not to publish or distribute the prospectus in
violation of applicable securities regulations. Any failure to comply with such restrictions may result in a violation of applicable securities regulations. The
prospectus does not constitute an offer to sell the Subscription Rights or the Preference Shares to any person in any jurisdiction in which it is unlawful to
make such offer to such person, or a solicitation of an offer to buy the Subscription Rights or the Preference Shares from a person in a jurisdiction in which it
is unlawful to make such solicitation.

No person is or has been authorized to give information or to make any representation regarding this Rights Offering other than those contained in this
prospectus and, if given or made, such information or representations shall not be relied upon as having been authorized. No representation or warranty,
express or implied, is made by the Joint Bookrunners as to the accuracy or completeness or verification of the information contained in this prospectus, and
nothing contained in this prospectus is, or shall be relied upon as, a promise or representation by the Joint Bookrunners in this respect, whether as to the
past or the future. The Joint Bookrunners assume no responsibility for its accuracy, completeness or verification and accordingly disclaim to the fullest
extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which they might otherwise be found to have in
respect of this document or any such statement. Information given or representations made in connection with the Rights Offering, the subscription or the
sale of the Subscription Rights or the Preference Shares that are inconsistent with those contained in this prospectus are invalid.

The distribution of this prospectus does not mean that the data contained herein is current as of any time after the date of this prospectus. Neither the
delivery of this prospectus, nor the offer, sale nor delivery of the Subscription Rights or the Preference Shares mean that no adverse changes have occurred
or events have happened, which may or could result in an adverse effect in the Bank’s business, financial condition or results of operations.

In making an investment decision, each investor must rely on their own examination, analysis and enquiry of the Bank and the terms of the Rights Offering,
including the merits and risks involved. Neither the Bank nor the Joint Bookrunners, nor any of their respective representatives, is making any
representation to any offeree, subscriber or purchaser of the Subscription Rights or the Preference Shares regarding the legality of an investment in the
Subscription Rights or the Preference Shares by such offeree, subscriber or purchaser under the laws applicable to such offeree, subscriber or purchaser.
Each investor should consult their own advisors before subscribing or purchasing the Preference Shares. Investors are required to make their independent
assessment of the legal, tax, business, financial and other consequences of a subscription or purchase of the Subscription Rights or the Preference Shares.
They are also required to make their independent assessment of the risks involved in the subscription or purchase of the Subscription Rights or the
Preference Shares.


                                               NOTICE TO INVESTORS IN THE EUROPEAN ECONOMIC AREA

In relation to each of the Member States of the European Economic Area (each, a Relevant Member State) which have implemented the Prospectus
Directive, an offer to the public of any the securities contemplated in this prospectus may not be made in that Relevant Member State (except for the offer
in Sweden and the offers in Denmark, Norway, United Kingdom and Germany when the SFSA has informed the relevant authorities in these countries that
the SFSA has approved the prospectus in accordance with the Prospectus Directive), except that an offer to the public in that Relevant Member State may
be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a)    to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose
       is solely to invest in securities;

(b)    to any legal entity which has two or more of the following criteria (1) an average of at least 250 employees during the last financial year; (2) a total
       balance sheet of more than EUR43,000,000 and (3) an annual net turnover of more than EUR50,000,000, as shown in its last annual or consolidated
       accounts;

(c)    to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); and

(d)    in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive

provided that no such offer of Preference Shares shall result in a requirement for the publications by the Issuer or the Joint Bookrunners of a prospectus
pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ‘‘Offer to the Public’’ in relation to any Subscription Rights or Preference Shares in any Relevant
Member State means the communication in any form and by any means of sufficient information on the terms of the Rights Offering, the Subscription
Rights and any Preference Shares to be offered so as to enable an investor to decide to purchase any Preference Shares, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State. The expression ‘‘Prospectus Directive’’ means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant Member State.




                                                                                 iii
                                                SUMMARY
This summary should be understood as an introduction to the prospectus, and highlights information
presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain
all the information you should consider before investing in the Preference Shares. You should carefully read
this entire prospectus before investing, including ‘‘Risk Factors,’’ ‘‘Detailed Commentary on the Financial
Development’’ and the financial statements. Every decision to invest in the Preference Shares should be
based on an assessment of the entire prospectus. See ‘‘Presentation of Financial and Other Information’’ for
information regarding the financial statements, exchange rates and other matters. An investor who
commences judicial proceedings as a result of the information included in this prospectus may be compelled
to pay for a translation of the prospectus. A person may be liable for information which is included in, or
omitted from, this summary or a translation thereof, only where this summary note or a translation thereof
is misleading or erroneous in relation to the other parts of the prospectus.

Overview
The Issuer is a public limited liability bank company (Sw: bankaktiebolag) incorporated under the laws of the
Kingdom of Sweden and headquartered in Stockholm. As of September 30, 2008, the Bank serves a total of
more than nine million private customers and more than 500,000 corporate customers through more than
900 branches in 14 countries, primarily in its four home markets of Sweden, Estonia, Latvia and Lithuania.
The Bank offers a broad range of services, including retail banking, corporate and investment banking, asset
management and insurance, with the majority of the Bank’s profit coming from retail banking. The Issuer’s
ordinary shares are listed on the Nasdaq OMX Stockholm. As of September 30, 2008, the Bank’s loans to the
public amounted to SEK1,218 billion (excluding repurchase agreements (‘‘repos’’)) and for the nine-month
period ended September 30, 2008, the Bank recorded SEK8,972 million in profit.
The Bank has a long-standing history dating back to 1820 when the first savings bank was founded in
                                                            ¨
Sweden. In the early 1990s, each of Sparbanken Sverige and Foreningsbanken were formed through mergers
of a number of regional savings banks and regional agricultural cooperative banks, respectively. In 1997,
                            ¨                                  ¨                       ¨
Sparbanken Sverige and Foreningsbanken merged to form ForeningsSparbanken. ForeningsSparbanken
changed its name to Swedbank in 2006. The Bank expanded into the Baltic region in 1996 when it acquired a
12.5% stake in Eesti Hoiupank, a bank that merged with Hansabank in 1998. In 1999, the Bank acquired in
excess of 50% of Hansabank’s shares and then in 2005 acquired all outstanding shares in Hansabank. Over
the past six years, Swedbank has expanded into Russia and, with the acquisition of TAS-Kommerzbank (now
OJSC Swedbank) in 2007, Ukraine. The Bank is undertaking a re-branding exercise in the Baltic region and by
autumn 2009, the Bank will operate in its home markets under one brand: Swedbank.
The Bank comprises six business areas:
•   Swedish Banking. Swedish Banking provides a full range of banking services to private individuals,
    businesses, organizations and municipalities through 432 branches, 867 ATMs, and telephone and
    Internet banking services. Through cooperation with 68 local savings banks and partly-owned banks,
    Swedish Banking can offer its products through approximately 260 additional branches. Swedish
    Banking has approximately 4.1 million private customers and 401,000 corporate and institutional
    customers. As of September 30, 2008, customer loans in Swedish Banking amounted to SEK926 billion,
    representing 76% of the Bank’s total customer loans outstanding. Profit for Swedish Banking for the
    nine-month period ended September 30, 2008 was SEK4,503 million, accounting for 50% of the Bank’s
    profit for the period.
•   Baltic Banking. Baltic Banking comprises the Bank’s operations in Estonia, Latvia and Lithuania. Baltic
    Banking provides a full range of banking services to 5.1 million private customers and 232,000
    corporate customers through 278 branches, as well as telephone and Internet banking. These
    operations were conducted under the Hansabank brand, but in autumn 2008 a re-branding exercise was
    initiated to change the brand name from Hansabank to Swedbank, as part of the Bank’s strategy to
    present a unified Swedbank Group brand. As of September 30, 2008, customer loans in Baltic Banking
    amounted to SEK201 billion, representing 17% of the Bank’s total customer loans outstanding. Profit
    for Baltic Banking for the nine-month period ended September 30, 2008 was SEK2,881 million,
    accounting for 32% of the Bank’s profit for the period.
•   International Banking. International Banking includes the Bank’s international operations outside its
    home markets of Sweden and the Baltic region, primarily its operations in Ukraine and Russia. Apart
    from the operations in Ukraine and Russia, the business area includes smaller operations in Denmark,



                                                     1
    Finland, Norway, the United States and China, a subsidiary in Luxembourg and representative offices in
    Japan, Ukraine and Spain. As of September 30, 2008, customer loans in International Banking amounted
    to SEK69 billion, representing 6% of the Bank’s total customer loans outstanding. Profit for
    International Banking for the nine-month period ended September 30, 2008 was SEK387 million,
    accounting for 4% of the Bank’s profit for the period.
•   Swedbank Markets. Swedbank Markets is the Bank’s investment bank, with activities in equity, fixed
    income and currency trading; project, export and acquisition financing; and corporate finance services.
    Outside Sweden, Swedbank Markets operates through its majority-owned subsidiaries First Securities
    ASA in Norway and Swedbank First Securities LLC in the United States, and its wholly-owned subsidiary
    ZAO Swedbank Markets in Russia as well as through business units in the Baltic. Profit for Swedbank
    Markets for the nine-month period ended September 30, 2008 was SEK371 million, accounting for 4%
    of the Bank’s profit for the period.
•   Asset Management and Insurance. Asset Management and Insurance is made up of the subsidiary
    Swedbank Robur with operations in fund management, institutional and discretionary asset
    management, and insurance and individual pension savings. As of September 30, 2008, assets under
    management in the business area amounted to SEK570 billion. Profit for Asset Management and
    Insurance for the nine-month period ended September 30, 2008 was SEK581 million, accounting for 6%
    of the Bank’s profit for the period.
•   Shared Services and Group Staffs. Shared Services and Group Staffs consists of internal service
    functions, including information technology, treasury, purchasing, legal and administrative services as
    well as the Bank’s internal insurance company, Sparia.

Background and reasons
Background
Over the past twelve months, market conditions for financial institutions have deteriorated markedly. The
current financial crisis, which started last year with the collapse of the U.S. subprime mortgage market, has
continued to deepen in 2008. Falling house prices in the United States have forced financial institutions to
take large write-downs on the value of mortgage-backed securities and the functioning of credit markets has
been severely impaired, resulting in a reduced supply of credit and higher borrowing costs. The sharp fall in
global equity markets has inflicted further stress on the financial system. Several major international
financial institutions have failed or have had to be rescued, causing a confidence crisis among market
participants as well as customers. In a concerted response to this turmoil, authorities around the world have
taken extraordinary measures aimed at stabilizing markets, including substantial liquidity measures,
injection of solvency capital and extending deposit insurance guarantees.
In its report of October 15, 2008, the SFSA expressed its belief that the Swedish banking system, generally
and hitherto, has coped comparatively well with the financial turmoil, with individual banks generally
exhibiting strong financial resilience, both from an earnings and a capital perspective. Swedish banks
traditionally have been relatively conservative in their lending and avoided large exposures to structured
credit securities and off-balance sheet vehicles. Nevertheless, Swedish banks are not immune to the
turbulence in the global capital markets and a number of measures have been taken to ensure the continued
stability of the Swedish banking system. Consistent with central banks in other European countries, the
Swedish Central Bank has offered funding support and the Swedish government has provided a funding
guarantee plan and a stabilization fund to manage potential solvency problems in Swedish banking
institutions.
The turmoil in financial markets has resulted in an increasingly uncertain macroeconomic outlook both in
developed and emerging markets and a more pronounced global economic downturn cannot be ruled out at
this stage. Lack of liquidity in credit markets has reduced investments and consumer demand, while inflation
has increased on the back of surging commodity prices. More recently however, as the global economy slows,
commodity prices have declined and headline inflation has receded. This is creating flexibility for economic
measures to focus on supporting growth.
The Bank’s home markets (Sweden and the Baltic region) are affected by the global economic slowdown. So
far, the Swedish economy has been in a relatively strong position with low unemployment and robust public
finances with a Government budget surplus, partly fuelled by the Government’s privatization program. Loan
losses in the Swedish market remain at low levels by European standards. However, weakening economic
conditions are having an increasing impact on the Swedish economy, partly due to its dependence on


                                                     2
exports, and unemployment is rising. For the Baltic economies, the economic environment has been
challenging for some time. Following a period of rapid credit growth, high inflation and large current account
deficits, all three Baltic countries are now facing an economic contraction with falling property prices, rising
unemployment and central bank intervention in the financial markets. The Bank and other banks active in the
region have seen rising loan losses in 2008 and the trend is expected to continue in 2009. The Bank is
monitoring the situation closely with a strong emphasis on credit quality and active credit management.

Reasons
The Bank believes it is currently in a sound financial position with adequate capitalization. However, against
the backdrop of continued extreme capital markets volatility and an uncertain macroeconomic outlook, the
Bank believes it is prudent and in the best interest of all stakeholders to proactively strengthen its capital
position above the existing Tier 1 ratio target of 8.5-9.0% assuming full implementation of Basel 2 rules. The
capital increase of SEK12.0 billion, after deducting expenses of approximately SEK400 million, will as of
September 30, 2008 on a pro forma basis enhance the Bank’s Tier 1 ratio from 8.7% to 10.5%, its core Tier 1
ratio from 7.4% to 9.2% and its capital adequacy ratio from 12.5% to 14.3%, in each case assuming full
implementation of Basel 2 rules. Based on Basel 2 transition rules, the capital increase will as of
September 30, 2008 on a pro forma basis enhance the Bank’s Tier 1 ratio from 6.8% to 8.2%, its core Tier 1
ratio from 5.8% to 7.2% and its capital adequacy ratio from 9.9% to 11.3%.
Investors and other stakeholders, as a result of the negative development in the financial system and the
global financial markets, have fundamentally reevaluated bank capital requirements. Banks in Europe and
other parts of the world have raised significant amounts of Tier 1 capital to bolster capital adequacy, thereby
changing the competitive landscape. The Rights Offering is in part a response to this capital requirement
reevaluation. With this capital increase, the Bank’s capitalization will compare favorably to other European
banks. It is the Bank’s belief that the enhanced capital base will strengthen the Bank’s competitive position
and enable it to consolidate its strong platform in the markets in which it operates.
Finally, the capital raising will remove uncertainty regarding the ability of the Bank’s shareholders to inject
new capital and demonstrate their strong commitment to the Bank’s long-term strategy.

Use of proceeds
The proceeds of the Rights Offering are expected to be approximately SEK12.4 billion, and approximately
SEK12.0 billion after deducting expenses of approximately SEK400 million. The Bank intends to use the net
proceeds to strengthen the Bank’s financial position and, accordingly, the Bank expects that the net proceeds
will, in the short term, largely be invested in low-risk interest-bearing securities.

Risk factors
Macroeconomic risks
•   The Bank’s business and results of operations are materially affected by conditions in the global
    financial markets and by global economic conditions.
•   Worsening economic conditions in the countries where the Bank operates, particularly emerging
    markets, including the Baltic region, Russia and Ukraine, have adversely impacted the Bank and are likely
    to continue to do so for as long as those conditions persist.

Risks relating to the Bank and its business
•   Current market conditions have increased the risk of loans being impaired.
•   The Bank’s loan losses are likely to increase as economic conditions continue to deteriorate, in particular
    in the Baltic region.
•   A significant amount of the Bank’s external long-term financing matures in the fourth quarter of 2008
    and in 2009; current market conditions may restrict the Bank’s ability to readily access financing to
    repay its outstanding debt.
•   The Bank is subject to the risk that liquidity may not always be readily available; this risk is exacerbated
    by current conditions in global financial markets.




                                                       3
•   Certain credit ratings of the Bank have been downgraded and the Bank has been placed on negative
    outlook by three ratings agencies.
•   Market fluctuations and volatility may adversely affect the value of the Bank’s positions, reduce its
    business activities, and make it more difficult to assess the fair value of certain of its assets.
•   In the current economic climate, the Bank is particularly susceptible to rumors or speculation in the
    marketplace; the Bank suffered outflows of deposits during the third quarter 2008 as a result.
•   The Bank is exposed to foreign exchange risk, and a devaluation or depreciation of any of the currencies
    in the Baltic countries, Ukraine or Russia could have a material adverse effect on the Bank’s assets,
    including its loan portfolio, and its results of operations.
•   The Bank may need additional capital in the future which may be difficult to obtain.
•   The Swedish government may, by operation of law or future contracts, acquire the Bank or its assets.
•   The IT and other systems on which the Bank depends for its day-to-day operations may fail for a variety
    of reasons which may be outside the Bank’s control; the Bank is subject to the risk of infrastructure
    disruptions or other effects on such systems.
•   Conflicts of interest, whether actual or perceived, and fraudulent actions may negatively impact the
    Bank.
•   The Bank is sensitive to the actions and inactions of savings banks which are parties to the cooperation
    agreements with the Bank.
•   In order to successfully compete, the Bank is dependent on highly skilled individuals; the Bank may not
    be able to retain or recruit key talent.
•   The Bank’s businesses, profitability and liquidity may be adversely affected by deterioration in the credit
    quality of, or defaults by, third parties who owe the Bank money, securities or other assets or whose
    securities or obligations the Bank holds.
•   The Bank has exposure to Lehman Brothers.
•   Any impairment of goodwill and other intangible assets would have a negative effect on the Bank’s
    financial position or profit.
•   The Bank may be required to make further contributions to its pension schemes if the value of pension
    fund assets is not sufficient to cover potential obligations.
•   The Bank’s guidelines and policies for risk management may be inadequate with respect to unidentified
    and unforeseen risks.

Political risks and regulatory risks
•   The banking industry is highly regulated; the Bank cannot predict to what extent regulations will
    change in the future or the impact of any such changes.
•   Governmental instability and governmental actions may adversely impact the Bank’s ability to conduct
    its business.
•   The Bank is subject to a variety of regulatory risks as a result of its operations in the Baltic region and its
    operations in Ukraine and Russia.
•   The Bank’s presence in Russia, Ukraine and the Baltic region increases risks in relation to money
    laundering; in 2007, the Central Bank of the Russian Federation restricted certain operations of the
    Bank in relation to compliance with local money laundering regulations.

Risks related to the Rights Offering and the Preference Shares
•   The future price of any ordinary shares and/or Preference Shares cannot be predicted and the Issuer’s
    recent share price volatility may continue in the future.
•   Shareholders who fail to respond to the Rights Offering, either by exercising or selling the Subscription
    Rights, in a timely manner will not be able to realize the value of the Subscription Rights and will suffer
    dilution of their holdings in the Issuer.




                                                        4
•   Shareholders outside Sweden are subject to exchange rate risk.
•   Preference Shares cannot be freely resold in the United States.
•   Dividends on the Preference Shares are discretionary, non-cumulative and may not be declared in full or
    in part. If the Bank’s financial condition were to deteriorate, investors could lose all or a part of their
    investment.
•   There is no limitation on the Issuer issuing senior or pari passu securities.
•   Legal considerations may restrict certain investments.
•   An active market for the Preference Shares may fail to develop or may not be sustainable.
•   Subscription undertakings regarding the Rights Offering are not secured.
•   If the Issuer is unable to successfully complete the Rights Offering, it may be required to find alternative
    methods of increasing its core Tier 1 and Tier 1 capital adequacy ratios.
•   The Swedish Supreme Administrative Court’s ruling on the advance ruling made by the Council for
    Advance Tax Rulings regarding the taxation of Preference Shares in connection with the mandatory
    conversion of Preference Shares into ordinary shares may create unfavorable tax consequences for
    subscribers of Preference Shares.

Miscellaneous
The Board of Directors of the Issuer, excluding employee representatives, consists of Carl Eric St˚ lberg a
                                                                                a                 ¨
(Chair), Ulrika Francke (Deputy Chair), Gail Buyske, Simon F. D. Ellis, Berith H¨ gglund-Marcus, Goran Johnsson,
Helle Kruse Nielsen and Anders Nyblom. The group executive management, excluding employee
                                     e                                             c
representatives, consists of Jan Lid´ n (President and CEO), Giedrius Duseviˇius, Catrin Fransson, Magnus
                                                                                          om.
Gagner Geeber, Kjell Hedman, Mikael Inglander, Erkki Raasuke and Annika Wijkstr¨ Michael Wolf will
                 ´
succeed Jan Liden as President and CEO of the Issuer as of March 1, 2009. The Bank’s auditor is Deloitte AB,
with Jan Palmqvist as lead auditor, see ‘‘Board of Directors, Group Management and Auditors.’’
The Issuer’s registered office is at Brunkebergstorg 8, SE-105 34 Stockholm, Sweden (telephone:
+46 8 5859 0000). The Issuer is registered with the bank register maintained by the Swedish Companies
Registration Office in Sundsvall under corporate registration number 502017-7753.




                                                       5
                     SUMMARY OF THE RIGHTS OFFERING AND THE PREFERENCE SHARES
Rights Offering . . . . . . . . . . . . . . . . . .        A total of up to 257,686,706 Preference Shares are being offered
                                                           with preferential right for existing holders of the Issuer’s ordinary
                                                           shares as of the Record Date.
Subscription Price . . . . . . . . . . . . . . . .         SEK48 per Preference Share.
Subscription Rights . . . . . . . . . . . . . . .          Holders of ordinary shares will be granted one Subscription Right
                                                           for every ordinary share they hold, according to the Issuer’s share
                                                           register on the Record Date. Two Subscription Rights entitle a
                                                           holder to subscribe for one Preference Share.
Subscription for and allotment of
Preference Shares without
Subscription Rights . . . . . . . . . . . . . . .          In the event that the Rights Offering is not fully subscribed
                                                           through the exercise of Subscription Rights during the
                                                           Subscription Period (as defined below), any unsubscribed
                                                           Preference Shares will be allocated to investors who have
                                                           exercised their Subscription Rights and who have applied for
                                                           subscription of additional Preference Shares. For additional
                                                           information and procedures, see ‘‘Terms, Conditions and
                                                           Instructions — Allotment and subscription for Preference Shares
                                                           without Subscription Rights.’’
Undertakings to subscribe . . . . . . . . . .              A group of existing shareholders, including Folksam, the savings
                                                           banks foundations, in excess of 60 savings banks, AMF Pension,
                                                           AFA Insurance and the Swedish national pension funds, AP1
                                                           and AP2, which group together represented 42% of the total
                                                           number of shares of the Issuer at the time of the announcement
                                                           of the Rights Offering on October 27, 2008, have agreed, in the
                                                           aggregate, to subscribe for all the Preference Shares offered
                                                           pursuant to the Rights Offering. The agreements consist of a
                                                           combination of undertakings to subscribe for up to the pro rata
                                                           number of Preference Shares to which they are entitled and/or
                                                           undertakings to subscribe for Preference Shares not otherwise
                                                           subscribed for in the Rights Offering. Accordingly, the Rights
                                                           Offering is fully underwritten. See ‘‘Legal Considerations and
                                                           Supplementary Information.’’
Record Date for the Rights Offering . .                    November 28, 2008.
Trading in Subscription Rights . . . . . . .               December 2, 2008 to December 11, 2008.
Subscription Period . . . . . . . . . . . . . . .          December 2, 2008 to December 16, 2008.
Transfer of Subscription Rights . . . . . .                The Subscription Rights are freely transferable and are expected
                                                           to trade on the Nasdaq OMX Stockholm under the symbol
                                                           ‘‘SWED TR PR’’ from and including December 2, 2008 to and
                                                           including December 11, 2008. Subscription Rights that are not
                                                           exercised prior to the end of the Subscription Period will expire
                                                           valueless without any compensation.
Dividend . . . . . . . . . . . . . . . . . . . . . . .     Subject to a resolution on payment of dividends by a general
                                                           meeting of shareholders, holders of the Preference Shares have
                                                           preference to an annual preferential non-cumulative dividend of
                                                           up to SEK4.80 per share, unless a higher dividend is declared on
                                                           the ordinary shares, in which case such higher dividend will be
                                                           paid on the Preference Shares (except in 2009, when the
                                                           Preference Shares will only have a preference to a fixed dividend
                                                           of up to SEK2.40 per share). If, during any year, dividends are not
                                                           paid on a Preference Share or an ordinary share, the shortfall will
                                                           not be carried into any subsequent year.
Voting . . . . . . . . . . . . . . . . . . . . . . . . .   Preference Shares have the same voting rights as the ordinary
                                                           shares.



                                                                      6
Liquidation preference . . . . . . . . . . . . .             Upon the liquidation of the Issuer, each Preference Share shall be
                                                             entitled to a liquidation preference in an amount of SEK48 per
                                                             Preference Share, together with interest on such amount equal to
                                                             10% per annum to be calculated daily from the day of the
                                                             preceding Annual General Meeting up to and including the day of
                                                             payment.
Voluntary conversion . . . . . . . . . . . . . .             An owner of a Preference Share is entitled, during the months of
                                                             February and August each year, commencing August 2009 (the
                                                             ‘‘Conversion Periods’’), to request the conversion of a Preference
                                                             Share into an ordinary share. Request for conversion may only be
                                                             made in relation to the owners’ entire holding of Preference
                                                             Shares.
Mandatory conversion . . . . . . . . . . . . .               Unless previously converted at the request of a holder, all
                                                             Preference Shares will be converted into ordinary shares during
                                                             the calendar month immediately following the month in which
                                                             the 2013 Annual General Meeting is held (however, if applicable,
                                                             not earlier than the day after the record day for the right to
                                                             receive dividends resolved at such Annual General Meeting).
Delivery of shares . . . . . . . . . . . . . . . .           Following payment and subscription for Preference Shares by
                                                             exercise of Subscription Rights, VPC AB, the Swedish Central
                                                             Securities Depository (‘‘VPC’’), will send out a notice confirming
                                                             that paid subscribed shares (‘‘BTA’’) have been registered on the
                                                             subscriber’s VP account. The BTAs will be re-registered as
                                                             Preference Shares after the Swedish Companies Registration
                                                             Office has registered the newly issued Preference Shares. No
                                                             securities notification will be issued in connection with this
                                                             re-registration. Registration of the newly issued Preference
                                                             Shares subscribed based on Subscription Rights is expected to be
                                                             made with the Swedish Companies Registration Office on or
                                                             around December 29, 2008.
Settlement . . . . . . . . . . . . . . . . . . . . .         Subscription for Preference Shares by exercise of Subscription
                                                             Rights shall be made by way of cash payment. Payment for
                                                             allocated Preference Shares not subscribed for pursuant to the
                                                             exercise of Subscription Rights shall be made according to
                                                             instructions set forth on the contract note that will be sent to
                                                             such subscribers that have been allotted Preference Shares.
Issue proceeds . . . . . . . . . . . . . . . . . . .         The Bank intends to use the proceeds of approximately
                                                             SEK12.4 billion (prior to deduction of commissions, fees and
                                                             estimated expenses of approximately SEK400 million) from the
                                                             offering to strengthen its capital position and hence the Bank
                                                             expects that the net proceeds will, in the short-term, largely be
                                                             invested in low risk interest-bearing securities.
Listing and admission to trading . . . . .                   The Subscription Rights and BTAs will be traded on Nasdaq OMX
                                                             Stockholm. The Issuer will apply for listing of the new Preference
                                                             Shares on Nasdaq OMX Stockholm in connection with the
                                                             completion of the offering.
Trading symbols . . . . . . . . . . . . . . . . .            Preference Shares:       SWED   PREF
                                                             Subscription Rights:     SWED   TR PR
                                                             BTA 1:                   SWED   BTA PR 1
                                                             BTA 2:                   SWED   BTA PR 2
                                                             BTA 3:                   SWED   BTA PR 3
ISIN . . . . . . . . . . . . . . . . . . . . . . . . . . .   Preference Shares:       SE0002687749
                                                             Subscription Rights:     SE0002687756
                                                             BTA 1:                   SE0002687764
                                                             BTA 2:                   SE0002687772
                                                             BTA 3:                   SE0002687780



                                                                       7
                                              SUMMARY OF FINANCIAL INFORMATION
The summary financial data as of and for the years ended December 31, 2007, 2006 and 2005 has been
derived from the audited consolidated financial statements included elsewhere in this prospectus, which
were prepared in accordance with IFRS. The summary financial information as of September 30, 2008 and for
the nine-month periods ended September 30, 2008 and 2007 has been derived from the unaudited
condensed consolidated interim financial statements included elsewhere in this prospectus. The unaudited
condensed consolidated financial statements have been prepared using the same accounting principles and
on the same basis as the audited consolidated financial statements and in the opinion of the Bank’s
management include all adjustments, consisting of normal recurring adjustments that management
considers necessary for a fair representation of interim results. The results for the nine-month period ended
September 30, 2008 are not necessarily indicative of the results expected for the entire year ending
December 31, 2008. The data set forth below should be read in conjunction with ‘‘Detailed Commentary on
the Financial Development’’, ‘‘Presentation of Financial and Other Information’’ and with the audited
consolidated financial statements and the unaudited condensed consolidated interim financial statements
appearing elsewhere in this prospectus.

                                                         January 1 - September 30                       Whole year
SEKm                                                               2008             2007        2007          2006           2005

INCOME STATEMENT DATA
Net interest income . . . . . . . . . . .                      15,960             13,898      19,157       15,977          15,679
Net commission income . . . . . . . .                           6,819              7,344       9,880        8,869           7,170
Net gains and losses on financial
  items at fair value . . . . . . . . . .                        1,107             1,305       1,691        2,738           2,817
Other income . . . . . . . . . . . . . . . .                     2,231             1,503       2,196        1,613           3,794
Total income . . . . . . . . . . . . . . . .                  26,117              24,050      32,924      29,197           29,460

Staff costs . . . . . . . . . . . . . . . . . .                  7,490             7,159       9,792        8,560           8,191
Other expenses . . . . . . . . . . . . . .                       5,693             5,034       6,927        6,579           5,965
Total expenses . . . . . . . . . . . . . .                    13,183              12,193      16,719      15,139           14,156

Profit before loan losses . . . . . . .                        12,934             11,857      16,205       14,058          15,304
Loan losses, net . . . . . . . . . . . . . .                    1,523                381         619         (205)            294
Operating profit . . . . . . . . . . . . .                    11,411              11,476      15,586      14,263           15,010

Tax expense . . . . . . . . . . . . . . . . .                    2,380             2,500       3,450        3,211           2,781
Profit for the period . . . . . . . . .                         9,031              8,976      12,136      11,052           12,229

Profit for the period
  attributable to the
  shareholders of
  Swedbank AB . . . . . . . . . . . . .                         8,972              8,888      11,996      10,880           11,879

                                                                               As of
                                                                           September 30,            As of December 31,
SEKm                                                                                2008        2007          2006           2005

BALANCE SHEET DATA
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .            1,696,319   1,607,984   1,352,989        1,197,283
Loans to the public . . . . . . . . . . . . . . . . . . . . . . .               1,254,879   1,135,287     946,319         822,425
Deposits and borrowings from the public . . . . . .                              506,741     458,375      400,035         338,894
Debt securities in issue . . . . . . . . . . . . . . . . . . .                   635,135     673,116      561,208         517,582
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          73,255      68,323       60,277          53,869




                                                                            8
                                                                       As of and for
                                                                         the nine
                                                                       month period
                                                                          ended              As of and for the year ended
                                                                      September 30,                 December 31,
                                                                              2008           2007              2006             2005

KEY RATIOS
Return on equity . . . . . . . . . . . . . . . . . . . . . . .    .          17.0%         18.9%             19.3%            24.6%
Earnings per share, SEK . . . . . . . . . . . . . . . . . .       .          17.41         23.28             21.11            23.14
Cost/income ratio before loan losses . . . . . . . .              .            0.50          0.51              0.52             0.48
Equity per share, SEK . . . . . . . . . . . . . . . . . . . .     .         141.68        131.96            116.37           104.07
Capital quotient excluding complement* . . . . .                  .            1.57          1.59              1.22             1.21
Tier 1 capital ratio, excluding complement* . . .                 .           8.7%          8.5%              6.5%             6.5%
Capital adequacy ratio, excluding complement*                     .          12.5%         12.7%              9.8%             9.7%
Tier 1 capital ratio, transition rules* . . . . . . . .           .           6.8%          6.2%              6.5%             6.5%
Capital adequacy ratio, transition rules* . . . . . .             .           9.9%          9.3%              9.8%             9.7%
Loan loss ratio, net . . . . . . . . . . . . . . . . . . . . .    .          0.18%         0.07%           (0.02)%            0.04%
Share of impaired loans** . . . . . . . . . . . . . . . . .       .          0.32%         0.13%             0.07%            0.12%
Risk weighted assets, old rules*, SEKbn . . . . . . .                          979            892               727              616
Risk weighted assets, new rules*, SEKbn . . . . . .                            667            600                 —                —
Risk weighted assets, transition rules*, SEKbn . .                             847            822                 —                —
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         21,990        22,148            17,399           16,148
*     Risk-weighted assets are defined by the capital adequacy rules in Sweden and represent a measure of the Bank’s risk-taking. The
      capital adequacy rules changed in 2007, and accordingly, the Bank is required to present its risk-weighted assets in accordance
      with the old rules, new rules and transition rules. The capital adequacy rules also define the computations for capital quotient,
      Tier 1 capital ratio and the capital adequacy ratio. See ‘‘Risk Management—New Capital Adequacy Rules’’ and ‘‘Detailed
      Commentary on the Financial Development—Capital adequacy’’ for further information, including the timing and implications of
      the risk weighted asset rules.

**    Impaired Loans, net, divided by book value of loans to credit institutions and the public.




                                                                       9
                                                     RISK FACTORS
An investment in Preference Shares involves risks. You should consider carefully the risks described below
and all of the information contained in this prospectus before deciding whether or not to purchase
Subscription Rights and/or subscribe for the Preference Shares. The order in which these risks are presented
is not intended to provide an indication of the likelihood of their occurrence nor of their severity or
significance. If any of the following risks actually occurs, the Bank’s business, financial condition, results of
operation, liquidity, and/or prospects may be adversely affected. The trading value of the Preference Shares
could decline, and you may lose all or part of your investment. Other risks that the Bank is not currently
aware of may also have an adverse effect on the Bank and on the trading value of the Preference Shares or
Subscription Rights.
This prospectus also contains forward-looking statements that are subject to future events, risks and
uncertainties. The Bank’s actual results could differ materially from those anticipated in these forward-
looking statements as a result of many factors, including but not limited to the risks described below and
elsewhere in this prospectus.

Macroeconomic risks
The Bank’s business and results of operations are materially affected by conditions in the global
financial markets and by global economic conditions.
There has been extreme volatility and disruption in global capital and credit markets in the last 18 months,
with these reaching unprecedented levels in the second half of 2008. The Bank’s results of operations for the
nine-month period ended September 30, 2008 have been adversely impacted by these conditions. The
disruptions recently experienced in the global capital and credit markets have led to reduced liquidity and
increased credit risk premiums for many market participants and have resulted in a reduction in the
availability of financing, both for financial institutions and their customers. Increasing or high interest rates
and/or widening credit spreads have created a less favorable environment for most of the Bank’s businesses,
have impaired the ability of some of the Bank’s clients to repay debt that they owe to the Bank, have affected
the fair value of financial instruments that the Bank has issued or holds and are reducing the Bank’s
flexibility in planning for, or reacting to, changes in its operations and the financial industry overall.
Accordingly, the Bank’s results of operations are likely to continue to be affected by conditions in the global
financial markets as long as they remain volatile and subject to disruption and uncertainty.

Worsening economic conditions in the countries where the Bank operates, particularly emerging
markets, including the Baltic region, Russia and Ukraine, have adversely impacted the Bank and are
likely to continue to do so for as long as those conditions persist.
Sweden(1)
The majority of the Bank’s profit is generated by its operations in Sweden. The Swedish Banking segment
(which does not include all of the Bank’s operations in Sweden) accounted for 50% of the Bank’s profit for
the nine-month period ended September 30, 2008.
The Swedish economy is affected by the weakening global economic conditions and the turmoil in the
financial markets. Sweden, being a small and open economy, is heavily dependent on exports. In the third
quarter of 2008, calendar-adjusted GDP growth was 0.0%, compared to 0.8% in the second quarter of 2008.
The slowdown is especially evident in the manufacturing sector, where the situation worsened substantially
during September and October 2008. Unemployment is starting to increase. Inflation increased to 4.0% in
October 2008, and is now expected to reach Sveriges Riksbank’s (the ‘‘Riksbank’’) inflation target of 2% in
2009. The Bank expects no or very low GDP growth in 2009. Domestic demand is weakened by lower
confidence among households and companies. The overall financial situation has been exacerbated by recent
sharp declines in the market valuations of companies listed on the Nasdaq OMX Stockholm, with the
exchange’s OMXSPI index, for example, losing 30% of its value between January 1, 2008 and September 30,
2008. As of November 28, 2008, this index had lost 44% of its value since January 1, 2008. For so long as
these worsening conditions persist, the Bank’s financial condition and profit are likely to suffer.




(1)   Sources: GDP and inflation figures from Statistics Sweden and stock exchange figures from Nasdaq OMX.



                                                             10
The Baltic region(2)
During the first nine months of 2008, 32% of the Bank’s profit was generated from its operations in the
Baltic region. After a period of overheating, with rising external and internal imbalances, economic conditions
have deteriorated sharply during 2008 in line with falling household and business confidence. The slowdown
is driven by a decrease in private consumption and investment spending. According to internal estimates, real
estate prices fell by 16%, 24% and 10% in Estonia, Latvia and Lithuania, respectively, year-on-year in the
second quarter. Estonia and Latvia are already in recession, and growth in Lithuania is slowing down. In the
third quarter, preliminary GDP figures show a contraction of 3.3% for Estonia, a contraction of 4.2% for
Latvia and growth of 3.1% for Lithuania. The Bank expects negative growth in Estonia and Latvia in 2009,
and Lithuania’s slowdown is expected to continue even if growth remains positive. External and internal
imbalances are improving as domestic demand is slowing down. Inflation rates are still high in all three
countries, but they are falling due to lower commodity prices and a weaker domestic demand. In October
2008, inflation stood at 13.8% in Latvia, 10.5% in Lithuania and 9.8% in Estonia. The negative trends in
general economic indicators highlighted above had a negative impact on the local stock markets, with indices
in Estonia, Latvia and Lithuania falling by 37%, 35% and 38%, respectively, during the first three quarters of
2008. The Baltic countries’ credit ratings have been downgraded; most recently Latvia was given a rating of
BBB- with negative outlook by the credit rating agency Fitch.
As the largest financial institution in the Baltic region, the Bank is particularly exposed to these worsening
economic conditions. The Bank expects that its financial condition and results of operations will suffer,
among other things, through lower loan growth and higher loan losses, as poor economic conditions in the
Baltic region persist or worsen. Latvia is examining multiple measures to support the economy, and has
sought aid from the International Monetary Fund and the European Union.
Within the banking sector, Parex banka was taken over by the Latvian government to prevent a chain of
actions that could have adversely affected the Baltic economies. Parex banka, Latvia’s second largest bank by
total assets and the largest independent Baltic bank, received state guarantees to mitigate liquidity issues
and the Latvian government received ownership as part of this stabilization package.
The risk for a prolonged recession in the Baltic States has increased due to the global financial crisis and the
worsening economic conditions in Europe. Baltic households are facing a period of slow wage growth and
large wealth adjustments. Even if external and internal imbalances are improving, there is a risk that current
account deficits will remain high and that the Baltic region will experience continued financial difficulties.
Slower growth could also lead to increased budget deficits, and in combination with high inflation, the
adoption of the euro could be delayed. There is also a risk of devaluation, due to the high imbalances and the
recession. Devaluations are expected to lead to increased inflation, which could also lead to a more severe
recession. In addition, as large shares of mortgages are denominated in euro, a devaluation would also have a
negative impact on the financial and real estate markets, which in turn would have a material adverse effect
on the Bank’s business and results of operations in the Baltic region and on a consolidated basis.

Ukraine, Russia and Norway(3)
The Bank’s operations in Ukraine and Russia are currently far smaller and more limited in scope than those in
Sweden and the Baltic region, comprising 1% and 2%, respectively, of the Bank’s profit in the first nine
months of 2008.
GDP growth in Ukraine has averaged 7.7% per year for the last 7 years. The Bank’s opinion is that the
growth will decline substantially in 2009 as the financial crisis and falling steel prices are expected to have a
negative effect on the outlook, possibly resulting in zero or negative growth. The Ukrainian stock market has
fallen by approximately 80% this year. Domestic banks are adversely impacted by the shortage of liquidity
and the Ukrainian currency, the hryvnia, is depreciating against key currencies. The inflation rate reached
26% in August 2008. A loan from the IMF amounting to U.S.$16.5 billion should facilitate the financing of
the current account deficit over the coming year, and the government has adopted a restructuring program
focusing on financial stability, fiscal and monetary/currency policy.



(2)   Sources: GDP and inflation figures from Statistics Estonia and Statistics Lithuania, respectively. Stock exchange figures from
               Nasdaq.

(3)   Sources: Ukranian GDP figures from National Bank of Ukraine, inflation figures from State Statistics Committee of Ukraine and
               stock exchange figures from PFTS Stock Exchange. Russian GDP figures from Rosstat, inflation figures from Federal
               State Statistics Service and stock exchange figures from MICEX.



                                                                11
Global economic conditions are also expected to cause a slowdown in Russia’s GDP growth. In the second
quarter 2008, GDP growth stood at 7.5%, but falling commodity prices and the financial crisis are expected
to dampen growth sharply. The Russian banking sector is adversely affected by the global financial turmoil.
The ruble has depreciated and capital is flowing out of the country. The Moscow stock market has fallen by
more than 70% this year. Inflation remains high in Russia (measuring 9% in the second quarter of 2008), but
is expected to slowly come down. Russia has the world’s third largest foreign currency reserves, as well as a
surplus in the current account and in the budget, which may help Russia maintain financial stability.
The Bank is exposed to the adverse effects of worsening political and economic conditions in Ukraine and
Russia. The risks for Ukraine and Russia include political turmoil, large depreciation of the currencies and
increased financial sector instability. The economic conditions may thus worsen more than expected, and
impact the Bank and its financial result.
The price of energy has dropped dramatically in recent months, which affects some of the Bank’s clients in
Ukraine and Russia. In addition to this, some of the Bank’s clients in Norway could be affected by
developments in the oil, gas and shipping industries. Any of the foregoing adverse market trends could have
a material adverse effect on the Bank’s business and financial result.

Risks relating to the Bank and its business
Current market conditions have increased the risk of loans being impaired.
The Bank is exposed to the risk that its borrowers may not repay their loans according to their contractual
terms and that the collateral securing the payment of these loans may be insufficient. Accordingly, the Bank
may experience significant loan losses which could have a material adverse effect on its profits. The Bank
maintains an allowance for loan losses to cover estimated probable incurred loan losses inherent in its loan
portfolio. The Bank’s loan losses, net amounted to SEK1,523 million or a loan loss ratio of 0.18%, for the
nine-month period ended September 30, 2008 compared to SEK381 million or a loan loss ratio of 0.06% for
the first three quarters of 2007.
The fall of real estate prices in the Baltic countries and lack of market liquidity has had an effect on the value
of the collateral held by the Bank, and some construction projects currently do not generate any cash flow.
There is a risk of higher unemployment due to lower activity in the construction sector and accordingly the
Baltic mortgage portfolio as well as the real estate portfolio may be adversely affected. The risks in Ukraine
and Russia have also increased due to lower commodity prices, which has caused a severe slow-down in the
economy in each respective country. In Sweden, job losses in the car industry have increased and a slow
down in the service and retail sector can be detected. Accordingly the Bank expects a deterioration of the
private individuals loan portfolio, as well as loans related to the car industry and its subcontractors. The Bank
will also likely see a deterioration of the loan portfolio of resellers of durable goods such as boats, cars and
major household appliances (white goods).
The Bank believes that additional loan losses in the future will occur at a higher rate than previously due to
the prevailing economic conditions in the markets in which it operates. A significant increase in the size of
the Bank’s allowance for loan losses could have a materially adverse effect on the Bank’s financial position.

The Bank’s loan losses are likely to increase as economic conditions continue to deteriorate, in
particular in the Baltic region.
The Bank’s allowance for losses on loans is based, among other things, on its analysis of current and
historical delinquency rates and loan management and the valuation of the underlying assets, as well as
numerous other management assumptions, which may be inaccurate predictions of credit performance in
this environment. As the economic conditions have worsened during the last months, the Bank has noticed a
corresponding increase of bad debt and credit losses within Baltic Banking. The net credit loss within Baltic
Banking amounted to SEK823 million or a credit loss level of 0.62% for the nine-month period that ended
September 30, 2008, compared to SEK334 million, or a credit loss level of 0.35% for the nine-month period
that ended September 30, 2007.
The Bank has previously indicated that its expected loan losses in the Baltic region are approximately 1.2% of
loans in 2009. The Bank continuously reviews and analyzes its loan portfolio and credit risks, and in view of
the further deteriorating conditions, this work has intensified. The uncertainty as to the speed and
magnitude of the downturn, and the timing of any potential recovery, make it difficult to estimate the size of
the probable increase in future loan losses. Accordingly, the Bank currently cannot provide any assurances
that its loan losses in the Baltic region in 2009 will not be materially higher than those previously indicated.


                                                       12
A material increase in loan losses, in particular in the Baltic region, would have a material adverse effect on
the Bank’s business and results of operations. In addition, a devaluation or depreciation of the currency in any
of the Baltic countries would likely lead to further loan losses. See ‘‘The Bank is exposed to foreign exchange
risk and a devaluation or depreciation of any of the currencies in the Baltic countries, Ukraine or Russia could
have a material adverse effect on the Bank’s assets, including its loan portfolio, and its results of operations.’’

A significant amount of the Bank’s external long-term financing matures in the fourth quarter of
2008 and in 2009; current market conditions may restrict the Bank’s ability to readily access
financing to repay its outstanding debt.
During the fourth quarter of 2008, an estimated SEK43 billion of the Bank’s external long-term financing
matures, with a further estimated SEK142 billion maturing during the course of 2009. See ‘‘Detailed
Commentary on the Financial Development — Sources of Funding.’’ Disruptions, uncertainty or volatility in
the capital and credit markets may limit the Bank’s ability to refinance maturing liabilities, in a commercially
reasonable manner if at all. As such, the Bank may have no choice but to fund its operations at a cost that it
would not otherwise consider, which in turn could have a material adverse effect on the Bank’s business and
results of operations and significantly reduce its financial flexibility.
In the event current resources, including the capital raised in this offering, are insufficient to satisfy the
Bank’s liquidity requirements, the Bank may need to seek additional financing. The availability of additional
financing will depend on a variety of factors, such as market conditions, the availability of credit generally
and specifically to borrowers in the financial services industry, the volume of trading activities, the Bank’s
financial condition, its credit ratings and credit capacity, as well as the possibility that customers or lenders
could develop a negative perception of the Bank’s financial prospects if, for example, the Bank incurs large
losses, experiences significant deposit outflows or if the level of the Bank’s business activity decreases due
to a market downturn. In particular, the Bank’s access to funds may be impaired if regulatory authorities or
rating agencies impose additional regulatory capital requirements or downgrade the debt ratings of the
Bank. The Bank’s internal sources of liquidity may prove to be insufficient, and in such case, the Bank may not
be able to successfully obtain additional financing on favorable terms, or at all, which would have a material
adverse effect on the Bank’s business and results of operations.

The Bank is subject to the risk that liquidity may not always be readily available; this risk is
exacerbated by current conditions in global financial markets.
The Bank’s liquidity could be impaired by an inability to access debt markets, an inability to sell assets or
redeem its investments, outflows of cash or collateral deterioration. This situation may arise due to
circumstances that the Bank is unable to control, such as continued general market disruption, loss in
confidence in financial markets, uncertainty and speculation regarding the solvency of market participants,
further rating downgrades, or operational problems that affect third parties. Recent events in global markets
have exacerbated this risk. Even a perception among market participants that a financial institution is
experiencing greater liquidity risk can cause significant damage to the institution. The Bank’s ability to sell
assets at a commercially desirable price or at all may be impaired if other market participants are seeking to
sell similar assets at the same time or are not in the position to finance themselves, or when the market
value of assets, including financial instruments underlying derivative transactions to which the Bank is a
party, is difficult to ascertain, as has occurred in current market conditions. In addition, financial institutions
with which the Bank interacts may exercise set-off rights or the right to require additional collateral, which
could further impair the Bank’s access to liquidity.
An increase in interest rates and/or credit spreads, as well as the restriction on the availability of credit,
including, but not limited to, inter-bank credit, can impact the Bank’s ability to borrow on a secured or
unsecured basis, which may have a material adverse effect on the Bank’s liquidity and results of operations.
In difficult times in the credit markets, such as the current credit disruption, the Bank may be forced to fund
its operations at a higher cost or it may be unable to raise as much short- or long-term funding as it needs to
support its business activities. This could cause the Bank to curtail its business activities and could increase
its cost of funding, both of which could have a material adverse effect on the Bank’s business and results of
operations.




                                                        13
Certain credit ratings of the Bank have been downgraded and the Bank has been placed on negative
outlook by three ratings agencies.
The Bank’s credit ratings are important to its business. In October 2008, both Standard & Poor’s and Moody’s
cut the long-term credit rating of the Bank from A+ and Aa2, respectively, to A and Aa3, respectively, and
have placed a negative outlook on the Bank’s credit ratings, citing in particular the Bank’s exposure to the
Baltic region and the Bank’s borrowing structure. Moody’s has also cut the Bank’s financial strength rating.
At the same time Fitch revised the outlook of the Bank from stable to negative. Any reduction in the Bank’s
credit ratings could adversely affect its liquidity and competitive position, undermine confidence in the Bank,
increase its borrowing costs, limit its access to the capital markets or trigger obligations under certain
bilateral provisions in some of its trading and collateralized financing contracts, including requiring the
provision of additional collateral and as well as limiting the range of counterparties willing to enter into
transactions with the Bank.

Market fluctuations and volatility may adversely affect the value of the Bank’s positions, reduce its
business activities, and make it more difficult to assess the fair value of certain of its assets.
Market volatility has increased significantly in recent months, making it more difficult for the Bank to assess
the fair value of certain assets. The fair value of interest bearing securities trading in active markets is
ordinarily based on market prices (‘‘mark-to-market’’). However, where quoted prices on instruments are not
readily and regularly available, as has been the case in recent months due in part to the dislocation of the
global financial markets, fair value is estimated using an internal model (‘‘mark-to-model’’). However, these
valuation models are generally based on observable market data, i.e., the prices of financial instruments that
are as similar as possible and for which transactions have been completed. These values are then adjusted to
best reflect the value of the Bank’s securities. Adjustments for the relevant credit risk are based on the
derivatives market.
The fair value of certain of the Bank’s assets may decline significantly due to the dislocated financial markets
and may fluctuate over short periods of time. In addition, the Bank’s estimates of fair value may differ
materially both from similar estimates made by other financial institutions and from the values that would
have been used if a market for these assets had been readily available. An increase in volatility increases the
Bank’s measured risk, which might cause the Bank to reduce its proprietary positions or to reduce its
business activities. Any change in the fair values of the financial instruments could have a material adverse
effect on the Bank’s financial position and results of operations and could cause the Bank to reduce its
proprietary positions or certain of its business activities.

In the current economic climate, the Bank is particularly susceptible to rumors or speculation in the
marketplace; the Bank suffered outflows of deposits during the third quarter 2008 as a result.
As global financial markets experienced tumultuous events during 2008, financial institutions were
particularly impacted by rumors and speculation regarding their solvency and their ability to access liquidity.
The Bank has limited or no control over the commencement of such rumors or speculation and has limited or
no ability to stop such rumors or speculation. The Bank experienced deposit outflows during the third quarter
of 2008 following heightened concern by depositors over the financial standing of the Bank. In Swedish
Banking, these outflows primarily related to customers whose accounts contained more than SEK250,000,
which used to be the maximum deposit guarantee provided by the Swedish government. The Swedish
government raised the maximum deposit guarantee to SEK500,000 in October 2008.
During the third quarter of 2008, total deposits from the public in the Bank decreased by SEK9.8 billion, a
decrease of 3%. Total deposits decreased by SEK9.9 billion (3%) in Sweden, increased by SEK1.1 billion (1%)
in Baltic Banking and decreased by SEK1.0 billion (8%) in International Banking during the third quarter of
2008. However, in local currencies, deposits in Baltic Banking decreased by 2% during the same period. The
Bank has limited control over the nature of rumors and speculation in the media and the reaction of its
customers to such rumors and speculation. If global economic conditions continue to weaken and continue to
particularly impact the financial services sector (in either the Bank’s home markets or more generally), the
Bank may suffer from rumors and speculation regarding, among other things, its solvency and liquidity
situation, which could adversely impact its financial condition and results of operations.




                                                      14
The Bank is exposed to foreign exchange risk, and a devaluation or depreciation of any of the
currencies in the Baltic countries, Ukraine or Russia could have a material adverse effect on the
Bank’s assets, including its loan portfolio, and its results of operations.
The Bank is exposed to foreign exchange rate risk, as loans to customers outside of Sweden are not typically
denominated in SEK. In the Baltic region, a large part of lending is denominated in euros. These customers
typically derive their main income in local currencies, which leaves them exposed to currency risk. A
significant devaluation or depreciation of the relevant local currency against the euro would make it more
difficult for these customers to repay their loans, and the credit risk associated with these customers and
default rates could increase. In addition, such an event could cause adverse foreign exchange effects on the
Bank’s income statement and equity.
A devaluation or depreciation of any of the national currencies in the Baltic region, and to a lesser extent,
Russia or the Ukraine, would likely require the Bank to make impairment, since the fair value of the assets,
expressed in SEK, would decrease. Further, the Bank may have to account for higher credit losses since
certain borrowers would be exposed to interest payments on loans in foreign currencies while having income
in local currencies. The Bank’s profit, expressed in SEK, would also be adversely affected by the relative
weakness of that currency compared to the SEK.
To reduce currency risk, the Bank’s strategic holdings in foreign operations and subsidiaries are generally
funded in each entity’s national currency or in a currency that is linked to the country’s currency. For
example, the Issuer’s holding in AS Hansapank is denominated in Estonian kroon, but funded in euro. The
exception is the holding in Swedbank in Ukraine, which is denominated in the Ukrainian currency hryvnia and
funded with SEK and U.S. dollars. Notwithstanding the Bank’s actions to reduce currency risk, exchange rate
movements between the SEK, the euro, the U.S. dollar and the local currencies in the Baltic region and
Ukraine could have a significant effect on the Bank’s balance sheet positions and, over the long term, the
income statement which are stated in SEK. The effects of exchange rate fluctuations on the Bank’s financial
statements are more fully explained in ‘‘Risk Management—Market Risk—Currency Risk.’’

The Bank may need additional capital in the future which may be difficult to obtain.
The capital provided to the Bank through this Rights Offering may not be sufficient to cover future losses
and the Bank may need to obtain additional capital in the future and may not be able to obtain debt financing
on attractive terms, or at all. If the Bank cannot obtain adequate funds to satisfy its capital requirements, the
Bank may need to increase its equity. Any additional funding obtained through share capital increases may
dilute the ownership percentage held by current shareholders. In addition, in light of the international credit
crisis which has adversely affected the equity markets, the Bank may not be able to obtain additional capital
on favorable terms, or at all.
Given the current international credit crisis, the Bank may see a downgrade of parts of the credit portfolio in
the risk classification system. Although the regulatory capital requirement in the IRB model is based on
through-the-cycle estimates of probability of default, there is still a risk that such migration will result in a
higher regulatory capital requirement, which may lead to a need to obtain additional capital.

The Swedish government may, by operation of law or future contracts, acquire the Bank or its
assets.
As worsening global economic conditions increasingly began to impact Sweden, in October 2008 the
Swedish Parliament adopted an act providing for state aid to banks and certain other credit institutions, such
as the Issuer. The act provides, among other things, that the Swedish state under certain conditions and in
exchange for a fee will guarantee certain debt securities issued by banks and other credit institutions such as
the Issuer. On November 4, 2008, the Issuer announced that it would make an application to the Swedish
National Debt Office to participate in this guarantee plan and a guarantee agreement with the Swedish
National Debt Office was entered into on November 7, 2008. Under the act, the Swedish state has the right
to exercise a compulsory acquisition of the shares of institutions, including the shares of the Issuer, provided
it is considered to be of material importance from a public view, and provided (i) the institute has not
accepted a guarantee agreement proposed by the Swedish National Debt Office which has not been
considered unreasonable by an appeal board, (ii) the institute has not fulfilled an obligation under a
guarantee agreement which is of material importance, or (iii) the institute’s capital base is below one fourth
of the required capital calculated as set out in Chapter 2, Section 1, First paragraph, Item 1 in the Swedish act
on capital adequacy and large exposures. Participation in the guarantee plan involves agreeing to certain
limitations on operations. See ‘‘Detailed Commentary on the Financial Development—Liquidity and Capital


                                                       15
Resources’’ and ‘‘Banking Regulation and Supervision etc.—The Swedish Financial Stabilization Plan’’ below.
The Issuer’s operations may not, among other things, be substantially expanded if such expansion would not
have taken place had the Issuer not been subject to the governmental support. This undertaking could
prevent the Issuer from participating in a strategic deal or from taking certain other measures. The Swedish
government may also take possession over the Bank or part of it or its assets by way of future contractual
arrangements or otherwise, which the Bank may have to enter into by operation of law or necessity. In the
event of a government takeover, the value of the Bank or its assets may be considered to be limited and the
Bank or its shareholders may not receive compensation. Swedbank Hypotek AB has also entered into a
guarantee agreement with the Swedish National Debt Office on similar terms and conditions.

The IT and other systems on which the Bank depends for its day-to-day operations may fail for a
variety of reasons which may be outside the Bank’s control; the Bank is subject to the risk of
infrastructure disruptions or other effects on such systems.
The Bank’s operations are highly dependent on its ability to process and monitor, on a daily basis, a large
number of transactions, many of which are highly complex, across numerous and diverse markets in many
currencies. The Bank’s financial, accounting, data processing or other operating systems and facilities may
fail to operate properly or become disabled due to, for example, a spike in transaction volume, which may
have an adverse effect, on the Bank’s ability to process these transactions or provide these services. In
addition, other factors which could cause the Bank’s operating systems to fail or not operate properly,
include a deterioration in the quality of IT development, support and operations processes and, in the Baltic
region, Russia and Ukraine, in particular, high turnover of employees resulting in an inadequate number of
personnel to handle the growth and increasing complexity of operations. Certain of the Bank’s processing
and monitoring operations in the Baltic region, Russia and Ukraine are currently being conducted manually,
which may increase the risk of administrative and reporting errors. The Bank is in the process of upgrading its
IT development, support and operating systems in these regions so that the processing and monitoring of
transactions is conducted through such operating systems, in addition to manual oversight. The Bank
expects to fully implement these upgrades in 2009. Any disruption in the Bank’s IT or other systems may
have a material adverse effect on the Bank’s financial condition and results of operations.
Despite the contingency plans and facilities the Bank has in place, its ability to conduct business may be
adversely impacted by a disruption in the infrastructure that supports the businesses and the countries in
which the Bank is located. This may include a disruption involving electrical, communications, transportation
or other services used by the Bank or third parties with which it conducts business, or a catastrophic event
involving any location where the Bank has a significant operational base.
The Bank’s operations rely on the secure processing, storage and transmission of confidential and other
information in its computer systems and networks. The Bank’s computer systems, software and networks
may be vulnerable to unauthorized access, computer viruses or other malicious code and other external
attacks or internal breaches that could have a security impact. If one or more of such events occur, this
potentially could jeopardize the Bank’s or the Bank’s clients’ or counterparties’ confidential and other
information. The Bank may be required to spend significant additional resources to modify its protective
measures or to investigate and remediate vulnerabilities or other exposures, and it may be subject to
litigation and financial losses as well as reputation risks that are either not insured against or not fully
covered through any insurance maintained by the Bank.

Conflicts of interest, whether actual or perceived, and fraudulent actions may negatively impact the
Bank.
The Bank’s reputation is one of its most important assets. As the Bank expands the scope of its businesses
and its client base, the Bank increasingly has to implement policies on corporate governance on a group-wide
level and address potential conflicts of interest, including situations where the Bank’s services to a particular
client or its own proprietary investments or other interests conflict, or are perceived to conflict, with the
interests of another client, as well as situations where one or more of the Bank’s businesses have access to
material non-public information that may not be shared with other businesses within the firm. The Bank has
procedures and controls that are designed to identify and address conflicts of interest, including those
designed to prevent the improper sharing of information among its businesses. However, appropriately
identifying and dealing with conflicts of interest is complex, in part because internal breaches of policy can be
difficult to discover, and the Bank’s reputation could be damaged and the willingness of clients to enter into
transactions in which such a conflict might arise may be affected if the Bank fails, or appears to fail, to
identify and deal appropriately with conflicts of interest. Additionally, many financial institutions, including


                                                       16
the Bank, are negatively impacted by fraudulent acts or violations of internal instructions committed by their
own employees. The Bank cannot predict whether such instances of internal fraud will occur or, if they were
to occur, the extent to which these acts would negatively impact the Bank.

The Bank is sensitive to the actions and inactions of savings banks which are parties to the
cooperation agreements.
In the normal course of business the Bank enters into various commercial agreements with companies
related to the banking industry. The Bank has entered into a cooperation agreement with 68 savings banks
pursuant to which the cooperating banks market and distribute a range of the Bank’s products and services
through their own local branch networks. Should one or more of the cooperating savings banks cause,
through action or inaction, its reputation or financial condition to be adversely affected while operating
under the Bank’s trademark, the ‘‘coin’’, which is a joint symbol for the co-operation, the Bank’s reputation
would also be adversely affected regardless of whether the Bank contributed to the action or inaction
causing the reputational or financial injury, which in turn would have a material adverse effect on the Bank’s
business and results of operations.

In order to successfully compete, the Bank is dependent on highly skilled individuals; the Bank may
not be able to retain or recruit key talent.
The Bank’s performance is largely dependent on the talents and efforts of highly skilled individuals. The
Bank’s continued ability to compete effectively in its businesses and to expand into new businesses and
geographic areas depends on the Bank’s ability to attract new employees and to retain and motivate its
existing employees. Competition from within the financial services industry and from businesses outside the
financial services industry, such as hedge funds, private equity funds and venture capital funds, for qualified
employees is intense. This is particularly the case in Russia and Ukraine, where the Bank is often competing
for qualified employees with entities that have a significantly greater presence or more extensive experience
in the region. In addition, current and future laws (including laws relating to immigration and outsourcing)
may restrict the Bank’s ability to move responsibilities or personnel from one jurisdiction to another or to
offer competitive compensation to attract new employees and to retain and motivate its existing employees.
This may impact the Bank’s ability to take advantage of business opportunities or potential efficiencies.

The Bank’s businesses, profitability and liquidity may be adversely affected by deterioration in the
credit quality of, or defaults by, third parties who owe the Bank money, securities or other assets or
whose securities or obligations the Bank holds.
The Bank is exposed to the risk that third parties that owe it money, securities or other assets will not
perform their obligations. These parties may default on their obligations to the Bank due to bankruptcy, lack
of liquidity, operational failure or other reasons. The Bank is also subject to the risk that its rights against
third parties may not be enforceable in all circumstances. In addition, deterioration in the credit quality of
third parties whose securities or obligations the Bank holds could result in losses and/or adversely affect its
ability to rehypothecate or otherwise use those securities or obligations for liquidity purposes. A significant
downgrade in the credit ratings of the Bank’s counterparties could also have a negative impact on the Bank’s
results. While in many cases the Bank is permitted to require additional collateral from counterparties that
experience financial difficulty, disputes may arise as to the amount of collateral the Bank is entitled to receive
and the value of pledged assets. The termination of contracts and the foreclosure on collateral may subject
the Bank to claims for the improper exercise of its rights. Bankruptcies, downgrades and disputes with
counterparties as to the valuation of collateral tend to increase in times of market stress and illiquidity.

The Bank has exposure to Lehman Brothers.
Since the early 1990’s, the Bank has been engaged in a reciprocal business relationship with Lehman
Brothers Holdings Inc. (‘‘LBHI’’) and various affiliates of LBHI.
As of September 15, 2008 (the date LBHI filed for protection under Chapter 11 of the U.S. Bankruptcy Code),
the Bank had significant exposure against an affiliate of LBHI through a whole loan repurchase agreement
(the ‘‘Master Repurchase Agreement’’) between the Bank and Lehman Commercial Paper, Inc. (‘‘LCPI’’) and
certain of its affiliates. On September 24, 2008, the date the Bank notified LCPI that an event of default
existed under the Master Repurchase Agreement, LCPI owed the Bank U.S.$1,350 million plus accrued
‘‘interest’’ (price differential).




                                                       17
Pursuant to the terms of the Master Repurchase Agreement, when LCPI did not pay the Bank the money it
owed to the Bank, the Bank became the owner (subject to certain conditions set forth in the Master
Repurchase Agreement) of 69 whole commercial mortgage loans. On October 5, 2008, LCPI filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. However, LCPI’s Chapter 11 bankruptcy has as of
the date hereof not had a material adverse affect on the Bank’s ability to exercise control over the
69 commercial mortgage loans it owns because the U.S. Bankruptcy Code contains certain protections for
the non-defaulting party to a whole loan repurchase agreement such as the Master Repurchase Agreement.
Although there is no assurance that the Bank will not suffer a loss with regard to the Master Repurchase
Agreement the Bank has determined that there is no need at this time for a loss provision. However, as
volatility in world financial markets continues and the U.S. economy continues to face difficulties, the Bank
cannot predict to what extent the borrowers on the commercial mortgage loans in the future will be able to
make timely payments or if the value of collateral will continue to exceed the total exposure. Accordingly, the
Bank may need to reassess its opinion.
In addition to the Master Repurchase Agreement, the Bank has certain unsecured obligations with six
affiliates of LBHI, composed of derivatives and bonds, amounting to SEK209 million as of September 30,
2008. The Bank has as of September 30, 2008 allocated provisions of SEK169 million, or 80% of the
exposure, for probable loan losses on these transactions.

Any impairment of goodwill and other intangible assets would have a negative effect on the Bank’s
financial position or profit.
The Issuer makes impairment tests on goodwill and other intangible assets at least once a year or whenever
there are indications of impairment of any such assets. An impairment test on a significant portion of the
Bank’s goodwill, relating to the Issuer’s acquisitions of the Baltic and Ukraine businesses, was made at the
end of September 2008 as a result of the global financial turmoil and the worsening macroeconomic
situation. Based on the assumptions made as of September 30, 2008 the Issuer determined that there was
not a need for an impairment charge to be recorded. Should the global economic conditions continue to
worsen, especially with regard to the financial sector (either in any of the Bank’s home markets or in
general), the need for an impairment may occur, which may have a material adverse effect on the Bank’s
financial position and profits.

The Bank may be required to make further contributions to its pension schemes if the value of
pension fund assets is not sufficient to cover potential obligations.
The Bank maintains a number of defined benefit pension schemes for past and current employees. Pensions
risk is the risk that the liabilities of the Bank’s various defined benefit pension schemes which are long term
in nature will exceed the schemes’ assets, as a result of which the Bank is required or chooses to make
additional contributions to the schemes. The schemes’ assets comprise investment portfolios that are held to
meet projected liabilities to the scheme members. Risk arises from the schemes because the value of these
asset portfolios and returns from them may be less than expected and because there may be greater than
expected increases in the estimated value of the schemes’ liabilities. In these circumstances, the Bank could
be obliged, or may choose, to make additional contributions to the schemes, and during recent periods, the
Bank has voluntarily made such contributions. Given the current economic and financial market difficulties
and the prospects for them to continue over the near and medium term, the Bank may be required or elect to
make further contributions to the pension schemes and such contributions could be significant and have a
negative impact on the Bank’s results of operations.

The Bank’s guidelines and policies for risk management may be inadequate with respect to
unidentified and unforeseen risks.
The Bank’s guidelines and policies for identifying, monitoring and managing risks may be inadequate. Some
of the measures taken by the Bank to manage various risks are to enter into hedging transactions to manage
market risks, to issue credit risk limits for each counterparty to which the Bank is exposed in its lending
business, to have full security for credits provided, and to do customary due diligence to manage legal risks.
Some of these and other methods used by the Bank to manage risk are based on perceived historic market
behavior. The methods may therefore prove to be inadequate for predicting future risk exposure, which may
prove to be significantly greater than what is suggested by historic experience. Other methods for risk
management are based on evaluation of information regarding markets, customers or other information that
is publicly known or otherwise available to the Bank. Such information may not always be correct, updated or



                                                      18
correctly evaluated. The management of business, regulatory and legal risks require, inter alia, guidelines and
policies for the accurate registration and control of a large number of transactions and events. Such
guidelines and policies may not always be adequate.

Political and regulatory risks
The banking industry is highly regulated; the Bank cannot predict to what extent regulations will
change in the future or the impact of any such changes.
The Bank is subject to extensive regulation in all jurisdictions in which it operates. The Bank faces the risk of
significant intervention by regulatory authorities in all jurisdictions in which it conducts its businesses.
Among other things, the Bank could be fined, prohibited from engaging in some of its business activities or
subject to limitations or other restrictions on its business activities.
New laws or regulations or changes in enforcement of existing laws or regulations applicable to the Bank’s
businesses or those of its clients may also adversely affect the Bank’s businesses. Regulatory changes could
lead to business disruptions, could require the Bank to change certain of its business practices and could
expose the Bank to additional costs and liabilities as well as other obligations and reputational harm.
Any determination by local regulators that the Bank has not acted in compliance with the application of local
laws in a particular market or the Bank’s failure to develop effective working relationships with local
regulators could have a significant and negative effect not only on the Bank’s businesses in that market but
also on its reputation generally. The Bank is also subject to the enhanced risk that transactions it structures
might not be legally enforceable.

Governmental instability and governmental actions may adversely impact the Bank’s ability to
conduct its business.
In conducting its businesses and maintaining and supporting its global operations, the Bank is subject to
risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other
restrictive governmental actions, as well as the outbreak of hostilities, risks that are especially relevant in
Russia and Ukraine. In many countries, the laws and regulations applicable to the securities and financial
services industries and many of the transactions in which the Bank is involved are uncertain and evolving. In
the case of expropriation, nationalization or the imposition of restrictions, the Bank and its shareholders may
not receive fair compensation or may not receive compensation at all.

The Bank is subject to a variety of regulatory risks as a result of its operations in the Baltic region
and its operations in Ukraine and Russia.
As a region, the Baltic States are only in the early stages of developing a market economy. New laws are
being enacted but many remain untested. Although the Bank believes that Estonia, Lithuania and Latvia
have advanced in the area of commercial law, the laws and courts of these countries have not been
well-tested in contract enforcement and other types of commercial disputes. While the laws of each of the
Baltic countries in respect of foreign investment provide guarantees against nationalization and
expropriation, there is little or no judicial precedent in this area. Additionally, the laws on foreign investment
currently allow free repatriation of funds to the home country. However, no assurances can be given that
these provisions will not be modified or repealed in the future.
As is typical of emerging markets, Russia and Ukraine do not possess well-developed businesses or legal and
regulatory infrastructure that would generally exist in a more mature free market economy. In addition, in
recent years, Russia and Ukraine have undergone substantial political, economic and social change. Russia
and Ukraine retain certain of the laws and customs from the former Soviet Union, but have developed and
continue to develop their own legal, regulatory and financial systems. As the regulatory environments in
Russia and Ukraine change, the Bank may face uncertainty with respect to the interpretation of the Bank’s
agreements and in the event of dispute, may have limited recourse within the current or future legal and
political systems. This creates uncertainty, both in the application of these regulations and in the
harmonization and the monitoring of the implementation of Bank-level policies, which can result in a number
of risks for the Bank, including difficulties in ascertaining whether a loan should be treated as impaired
(which is a particular problem in Ukraine), conflicting local, regional and federal rules and regulations, the lack
of judicial and administrative guidance on interpreting legislation, a high degree of discretion on the part of
governmental authorities (which could result in arbitrary or selective actions against the Bank, including
suspension or termination of licenses the Bank needs to operate), less developed bankruptcy procedures that



                                                        19
are subject to abuse; and incidents or periods of high crime or corruption that could disrupt the Bank’s ability
to conduct its business effectively.

The Bank’s presence in Russia, Ukraine and the Baltic region increases risks in relation to money
laundering; in 2007, the Central Bank of the Russian Federation restricted certain operations of the
Bank in relation to compliance with local money laundering regulations.
In general, the risk that banks will be subjected to or used for money laundering has increased worldwide.
The risk of money laundering is higher in Russia, Ukraine and the Baltic region than in Sweden. The high
turnover of employees, the difficulty in consistently implementing related policies and technology systems,
and the general business conditions in Russia, Ukraine and the Baltic region, mean that the risk of the
occurrence of money laundering is higher in these countries. If financial market conditions, both globally and
regionally, continue to deteriorate, there is a risk that incidents involving money laundering may increase and
this may affect the Bank’s ability to monitor, detect and respond to such incidents. On June 6, 2007, the
Central Bank of the Russian Federation issued an order to restrict certain operations of the Bank in Russia,
including correspondent banking, foreign exchange operations, interbank lending and the ability to attract
new customers, for a period of three months, citing possible violations of the laws and regulations of the
Russian Federation in relation to the prevention of money laundering. A number of measures were adopted
or undertaken to accommodate and meet the Central Bank of the Russian Federation’s demands. On
August 31, 2007, the Central Bank of the Russian Federation announced that the Bank could resume
full-scale operations in Russia. However, the Bank may have suffered reputational harm as a result of the
restriction imposed by the Central Bank of the Russian Federation. The risk of future incidents in relation to
money laundering always exists for financial institutions. Any violation of anti-money laundering rules or
even the suggestion of violations may have severe legal and reputational consequences for the Bank,
especially in terms of its business relations with institutions based or active in the United States, and may, as
a result, adversely affect the Bank’s business.

Risks related to the Rights Offering and the Preference Shares
The future price of any ordinary shares and/or Preference Shares cannot be predicted and the
Issuer’s recent share price volatility may continue in the future.
The Issuer’s ordinary share price has been and may continue to be volatile. On February 15, 2007, the Issuer’s
ordinary shares closed at SEK282 per share. At the close of trading on October 27, 2008, the date the Issuer
announced this offering, the closing price of the Issuer’s ordinary shares was SEK52 per share. A fall in the
price of the Issuer’s shares could have a material adverse impact on the value of the Subscription Rights and
the Preference Shares. Accordingly, shareholders who have acquired Subscription Rights in the secondary
market and/or subscribers of the Preference Shares, whether existing shareholders or not, may suffer a loss.

Shareholders who fail to respond to the Rights Offering, either by exercising or selling the
Subscription Rights, in a timely manner will not be able to realize the value of the Subscription
Rights and will suffer dilution of their holdings in the Issuer.
If a shareholder does not exercise any or all of the Subscription Rights by way of payment by the close of
business on December 16, 2008 or does not sell the Subscription Rights at the latest on December 11, 2008,
such shareholder’s Subscription Rights to subscribe for Preference Shares will lapse with no value and the
holder will not be entitled to compensation. Accordingly, holders and financial intermediaries must ensure
that all required exercise instructions are duly complied with (see ‘‘Terms, Conditions and Instructions’’). If a
holder or its financial intermediary fails to follow the procedures applicable to exercising the Subscription
Rights, the Subscription Rights will lapse with no value and will no longer exist. Furthermore, to the extent
that a shareholder does not exercise its Subscription Rights, such shareholder’s proportionate ownership and
voting interest in the Issuer will be reduced accordingly, and the percentage that such shareholder’s original
shares represent in the Issuer’s share capital after the capital increase will be reduced accordingly.

Shareholders outside Sweden are subject to exchange rate risk.
The Subscription Rights and the Preference Shares are priced in SEK. Accordingly, any investor outside
Sweden is subject to adverse movements in the SEK against their local currency.




                                                       20
Preference Shares cannot be freely resold in the United States.
The Subscription Rights and Preference Shares will not be registered under the Securities Act or any U.S.
state securities laws or, except when stated in this prospectus, any other jurisdiction and, unless so
registered, may not be offered or sold except pursuant to an exemption from the registration requirements of
the Securities Act and applicable securities laws. See ‘‘Restrictions on Sale and Transfer of Subscription
Rights and Preference Shares.’’

Dividends on the Preference Shares are discretionary, non-cumulative and may not be declared in
full or in part. If the Bank’s financial condition were to deteriorate, investors could lose all or a part
of their investment.
Swedish law provides that any declaration of dividends must be adopted by the general meeting of
shareholders. Dividends may only be declared to the extent there are distributable funds in the Issuer and
provided that such declaration is prudent taking into consideration the demands with respect to size of
shareholders’ equity which are imposed by the nature, scope and risks associated with the operations and
the Bank’s need to strengthen the balance sheet, liquidity and financial position. The shareholders may
further, as a general rule, not declare higher dividends than the Board of Directors of the Issuer has proposed
or approved.
If the general meeting of shareholders, for any reason, does not declare dividends in accordance with the
above, then holders of such Preference Shares will have no claim in respect of such non-payment and the
Issuer will have no obligation to pay the dividend accrued for the dividend period or to pay any interest on
the dividend, whether or not dividends on the Preference Shares are declared for any future dividend period.
Holders of Preference Shares will hence have no absolute right to participate in the Bank’s profits.
If the Issuer’s financial condition were to deteriorate, the Bank may be unable to pay dividends on the
Preference Shares. If the Issuer liquidates, dissolves or is wound up, the Issuer would be unable to pay such
dividends and investors could lose all or part of their investment. If the Rights Offering is not successfully
completed, the capital ratios, credit rating and funding costs of the Bank could be adversely affected and the
price of the Issuer’s shares could drop sharply. In either case, the rights of the Preference Shares could
become worthless.

There is no limitation on the Issuer issuing senior or pari passu securities.
There is no restriction on the amount of securities or other liabilities which the Issuer may issue or incur and
which rank senior to, or pari passu with, the Preference Shares, and there is no restriction on the number of
preference shares, except for the limitations set forth in the Issuer’s Articles of Association (which can be
amended by a resolution by the shareholders’ meeting), which the Issuer may issue and which ranks senior or
pari passu with the Preference Shares. The issue of any such securities or share capital or the incurrence of
any such other liabilities may reduce the amount recoverable by holders of the Preference Shares on a
winding up of the Bank and/or may increase the likelihood of non-payment of dividends on the Preference
Shares.

Legal considerations may restrict certain investments.
The investment activities of certain investors are subject to investment laws and regulations, or review or
regulation by certain authorities. Each potential investor should consult its legal advisers to determine
whether and to what extent (1) the Preference Shares are legal investments for it, (2) the Preference Shares
can be used as collateral for various types of borrowing, and (3) other restrictions apply to its purchase or
pledge of any Preference Shares. Financial institutions should consult their legal advisers or the appropriate
regulators to determine the appropriate treatment of Preference Shares under any applicable risk-based
capital or other rules.

An active market for the Preference Shares may fail to develop or may not be sustainable.
Prior to the Rights Offering, there has been no trading market for the Preference Shares. The Issuer cannot
assure investors that an active or liquid market will develop or be sustainable for the Preference Shares.
Therefore, investors may not be able to sell their Preference Shares easily or at prices that will provide them
with a yield comparable to similar investments that have a developed secondary market. Illiquidity may have
a material adverse effect on the market value of the Preference Shares.




                                                      21
Subscription undertakings regarding the Rights Offering are not secured.
A group of existing shareholders in the Issuer, together representing 42% of the total number of shares in
the Issuer, have undertaken to subscribe for in total in excess of 100% of the Preference Shares offered in the
Rights Offering. The names of such shareholders are set out in ‘‘Legal Considerations and Supplementary
Information—Material Contracts—Subscription Undertakings.’’ However, the subscription undertakings are
not secured. Thus, there is a risk that such shareholder or a number of such shareholders may not be able to
fulfill their subscription undertakings, which could have a negative impact on the Issuer’s possibilities to
successfully complete the Rights Offering. In addition, should a substantial portion of the Preference Shares
remain unsubscribed at the end of the Subscription Period, the Guarantors (as defined in ‘‘Legal
Considerations and Supplementary Information—Material Contracts—Subscription Undertakings) will be
obliged to acquire such unsubscribed Preference Shares and, as a result, will materially increase their holding
of the Issuer’s equity securities. Certain of these Guarantors may even, under such circumstances, be in a
                                                                                                     ¨
position to exercise significant influence and control over the Issuer. For example, Folksam omsesidig
                             ¨
livf¨ akring and Folksam omsesidig sakf¨ akring have undertaken to subscribe for their pro rata share of
    ors¨                                   ors¨
the Preference Shares (596,118 Preference Shares), and such number of Preference Shares which
                                                                                       ¨
corresponds to Subscription Rights, acquired from Sparbankstiftelsernas Forvaltning AB and/or
                                                 ¨             ors¨                    ¨             ors¨
Sparbanksstiftelsen Alfa. In addition, Folksam omsesidig livf¨ akring and Folksam omsesidig sakf¨ akring
have undertaken to, by themselves or through group companies, subscribe for a maximum of 103,570,549
additional Preference Shares should such Preference Shares not be subscribed or paid for by others in the
                                                          ¨
Rights Offering. If this were to occur, Folksam omsesidig livf¨ akring and/or Folksam omsesidig
                                                                        ors¨                         ¨
     ors¨
sakf¨ akring may be required to obtain certain regulatory consents, and there can be no assurances that
                                                                      ¨              ors¨
such consents would be granted, which could result in Folksam omsesidig livf¨ akring and/or Folksam
¨                ors¨
omsesidig sakf¨ akring having to divest shares in the Issuer.

If the Issuer is unable to successfully complete the Rights Offering, it may be required to find
alternative methods of increasing its core Tier 1 and Tier 1 capital adequacy ratios.
The principal purpose of this Rights Offering is to allow the Bank to strengthen its capital position. If the
Issuer is unable to successfully complete the offering, it will need to assess its capital position and may be
required to find alternative methods for strengthening its capital position. Such methods could include
issuance of Tier 1 instruments in the capital markets, sale of assets or reductions of lending. There can be no
assurance that any of these alternative methods would be successful in increasing the Bank’s capital ratios
sufficiently or on the timetable currently envisaged. If the Issuer is unable to increase its capital ratios
sufficiently, its credit ratings may drop, its cost of funding may increase and its share price may decline.

The Swedish Supreme Administrative Court’s ruling on the advance ruling made by the Council for
Advance Tax Rulings regarding the taxation of Preference Shares in connection with the mandatory
conversion of Preference Shares into ordinary shares may create unfavorable tax consequences for
subscribers of Preference Shares.
A conversion of preference shares into ordinary shares through a compulsory conversion in accordance with
the conditions in the Articles of Association is not regarded as a taxable sale according to an advance tax
ruling of the Council for Advance Tax Rulings on November 7, 2008. However, the Tax Agency has appealed
the ruling to the Swedish Supreme Administrative Court. If the Swedish Supreme Administrative Court takes
a different view from the Council for Advance Tax Rulings, there is a risk that the ordinary shares received
through a mandatory conversion would be subject to taxation in the same manner as in connection with
voluntary conversion, in other words, as a taxable disposal. See ‘‘Taxation—Tax issues in Sweden—Special
rules on converting Preference Shares into ordinary shares’’.




                                                      22
               INVITATION TO SUBSCRIBE FOR PREFERENCE SHARES IN THE ISSUER
On October 26, 2008, the Board of Directors of the Issuer resolved, subject to subsequent approval by the
shareholders’ meeting, to increase the share capital by not more than SEK5,411,420,826 through a rights
offering of not more than 257,686,706 Preference Shares. On November 25, 2008 an extraordinary general
meeting of the shareholders approved the resolution by the Board of Directors. The shareholders in the
Issuer have preferential right to subscribe for the Preference Shares in relation to the number of Existing
Shares held. Shareholders will receive one (1) Subscription Right for each Existing Share held on the Record
Date, November 28, 2008. Two (2) Subscription Rights are required for subscription of one (1) Preference
Share. The Preference Shares are being issued at a Subscription Price of SEK48 per Preference Share. A fully
subscribed Rights Offering will raise approximately SEK12.4 billion (prior to deduction of issue costs of
approximately SEK400 million). See ‘‘Background and Reasons.’’
Shareholders who do not participate in the Rights Offering will have their ownership stake diluted, but have
the possibility to obtain economic compensation for the dilution effect by selling their Subscription Rights.
The dilution will not exceed 331⁄3% or 257,686,706 shares.

Subscription undertakings
A group of existing shareholders, including Folksam, the savings banks foundations, in excess of 60 savings
banks, AMF Pension, AFA Insurance and the Swedish national pension funds, AP1 and AP2, which group
together represented 42% of the total number of shares of the Issuer at the time of the announcement of
the Rights Offering on October 27, 2008, have agreed, in the aggregate, to subscribe for all the Preference
Shares offered pursuant to the Rights Offering. The agreements consist of a combination of undertakings to
subscribe for up to the pro rata number of Preference Shares to which they are entitled and/or undertakings
to subscribe for Preference Shares not otherwise subscribed for in the Rights Offering. See ‘‘Legal
Considerations and Supplementary Information — Subscription undertakings.’’
The shareholders of the Issuer are hereby invited, with preferential rights, to subscribe for Preference Shares
in the Issuer in accordance with the terms and conditions set forth in this prospectus.

                                       Stockholm, December 1, 2008
                                           The Board of Directors
                                            Swedbank AB (publ)




                                                      23
                                      BACKGROUND AND REASONS
Background
Over the past twelve months, market conditions for financial institutions have deteriorated markedly. The
current financial crisis, which started last year with the collapse of the U.S. subprime mortgage market, has
continued to deepen in 2008. Falling house prices in the United States have forced financial institutions to
take large write-downs on the value of mortgage-backed securities and the functioning of credit markets has
been severely impaired, resulting in a reduced supply of credit and higher borrowing costs. The sharp fall in
global equity markets has inflicted further stress on the financial system. Several major international
financial institutions have failed or have had to be rescued, causing a confidence crisis among market
participants as well as customers. In a concerted response to this turmoil, authorities around the world have
taken extraordinary measures aimed at stabilizing markets, including substantial liquidity measures,
injection of solvency capital and extending deposit insurance guarantees.
In its report of October 15, 2008, the SFSA expressed its belief that the Swedish banking system, generally
and hitherto, has coped comparatively well with the financial turmoil, with individual banks generally
exhibiting strong financial resilience both from an earnings and a capital perspective. Swedish banks
traditionally have been relatively conservative in their lending and avoided large exposures to structured
credit securities and off-balance sheet vehicles. Nevertheless, Swedish banks are not immune to the
turbulence in the global capital markets and a number of measures have been taken to ensure the continued
stability of the Swedish banking system. Consistent with central banks in other European countries, the
Swedish Central Bank has offered funding support and the Swedish government has provided a funding
guarantee plan and a stabilization fund to manage potential solvency problems in Swedish banking
institutions.
The turmoil in financial markets has resulted in an increasingly uncertain macroeconomic outlook both in
developed and emerging markets and a more pronounced global economic downturn cannot be ruled out at
this stage. Lack of liquidity in credit markets has reduced investments and consumer demand, while inflation
has increased on the back of surging commodity prices. More recently however, as the global economy slows,
commodity prices have declined and headline inflation has receded. This is creating flexibility for economic
measures to focus on supporting growth.
The Bank’s home markets (Sweden and the Baltic region) are affected by the global economic slowdown. So
far, the Swedish economy has been in a relatively strong position with low unemployment and robust public
finances with a Government budget surplus, partly fuelled by the Government’s privatization program. Loan
losses in the Swedish market remain at low levels by European standards. However, weakening economic
conditions are having an increasing impact on the Swedish economy partly due to its dependence on exports
and rising unemployment. For the Baltic economies, the economic environment has been challenging for
some time. Following a period of rapid credit growth, high inflation and large current account deficits, all
three Baltic countries are now facing an economic contraction with falling property prices, rising
unemployment and central bank intervention in the financial markets. The Bank and other banks active in the
region have seen rising loan losses in 2008 and the trend is expected to continue in 2009. The Bank is
monitoring the situation closely with a strong emphasis on credit quality and active credit management.

Reasons
The Bank believes it is currently in a sound financial position with adequate capitalization. However, against
the backdrop of continued extreme capital markets volatility and an uncertain macroeconomic outlook, the
Bank believes it is prudent and in the best interest of all stakeholders to proactively strengthen its capital
position above the existing Tier 1 ratio target of 8.5-9.0% assuming full implementation of Basel 2 rules. The
capital increase of SEK12.0 billion, after deducting expenses of approximately SEK400 million, will as of
September 30, 2008 on a pro forma basis enhance the Bank’s Tier 1 ratio from 8.7% to 10.5%, its core Tier 1
ratio from 7.4% to 9.2% and its capital adequacy ratio from 12.5% to 14.3%, in each case assuming full
implementation of Basel 2 rules. Based on Basel 2 transition rules, the capital increase will as of
September 30, 2008 on a pro forma basis enhance the Bank’s Tier 1 ratio from 6.8% to 8.2%, its core Tier 1
ratio from 5.8% to 7.2% and its capital adequacy ratio from 9.9% to 11.3%.
Investors and other stakeholders, as a result of the negative development in the financial system and the
global financial markets, have fundamentally reevaluated bank capital requirements. Banks in Europe and
other parts of the world have raised significant amounts of Tier 1 capital to bolster capital adequacy, thereby
changing the competitive landscape. The Rights Offering is in part a response to this capital requirement



                                                      24
reevaluation. With this capital increase, the Bank will compare favorably to other European banks in terms of
capitalization. It is the Bank’s belief that the enhanced capital base will strengthen the Bank’s competitive
position and enable it to consolidate its strong platform in the markets in which it operates.
Finally, the capital raising will remove uncertainty regarding the ability of the Bank’s shareholders to inject
new capital and demonstrate their strong commitment to the Bank’s long-term strategy.

Use of proceeds
The gross proceeds of the Rights Offering are expected to be approximately SEK12.4 billion, and
approximately SEK12.0 billion after deducting expenses of approximately SEK400 million. The Bank intends
to use the net proceeds of the Rights Offering to strengthen the Bank’s capital position and, accordingly, the
Bank expects that the net proceeds will, in the short term, largely be invested in low-risk interest-bearing
securities.
The Board of Directors of Swedbank AB is responsible for the contents of this prospectus. Information
regarding the members of the Board of Directors is available in the section ‘‘Board of Directors, Group
Management and Auditors’’. The Board of Directors of Swedbank AB hereby declares that, having taken all
reasonable care to ensure that such is the case, the information contained in this prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its import.

                                       Stockholm, December 1, 2008
                                           The Board of Directors
                                            Swedbank AB (publ)




                                                      25
                                TERMS, CONDITIONS AND INSTRUCTIONS
Preferential rights and Subscription Rights
The Issuer’s share capital will be increased by up to SEK5,411,420,826 through a Rights Offering of up to
257,686,706 Preference Shares, each with a quotient value of SEK21. The Preference Shares will be issued
at a subscription price of SEK48 per Preference Share. Shareholders in the Issuer will have preferential right
to subscribe for the Preference Shares in relation to the number of Existing Shares held. Shareholders will
receive one (1) Subscription Right for each Existing Share held on the Record Date. Two (2) Subscription
Rights entitle to subscription of one Preference Share.
The Rights Offering, if fully subscribed, will result in an increase of number of shares in the Issuer from
515,373,412 shares to up to 773,060,118 shares, corresponding to an increase of 50%. Shareholders who
do not participate in the Rights Offering will have their ownership stake diluted, but have the possibility to
obtain economic compensation for the dilution effect by selling their Subscription Rights. The dilution will
not exceed 331⁄3%. Dilution in percent for shareholders who do not subscribe for Preference Shares in the
Rights Offering is calculated as the number of Preference Shares compared to the total number of shares
following a fully subscribed Rights Offering.

Subscription Price
The Preference Shares will be issued at a subscription price of SEK48 per Preference Share. No commission
will be payable.

Record Date
The Record Date for determining the right to receive Subscription Rights was November 28, 2008. Existing
Shares in the Issuer were traded exclusive of the right to participate in the Rights Offering since
November 26, 2008. The final day for trading inclusive of the right to participate was November 25, 2008.

Issue statement to directly registered shareholders
An information brochure and pre-printed issue statement with attached bank giro form will be sent to
directly registered shareholders and representatives of shareholders who, on the Record Date, are registered
in the share register maintained by VPC on behalf of the Issuer. The issue statement includes, among other
things, the number of Subscription Rights received and the full number of Preference Shares which may be
subscribed for. No securities notification will be sent out regarding the registration of Subscription Rights on
security accounts.
Shareholders who are included in the special list of pledge holders and trustees which is maintained in
connection with the share register will not receive an issue statement but will be informed separately.

Nominee-registered holdings
Shareholders whose holdings are nominee-registered at a bank or other nominee will not receive an issue
statement. Subscription and payment will, instead, take place in accordance with the nominee’s instructions.

Trading in Subscription Rights
Trading in Subscription Rights will take place on the Nasdaq OMX Stockholm during the period from and
including December 2, 2008 to and including December 11, 2008. The Issuer and other securities institutions
with the required licenses will provide brokerage services for the sale and purchase of Subscription Rights.
The ISIN code for the Subscription Rights is SE0002687756.

Subscription by virtue of using Subscription Rights
Subscription for Preference Shares by virtue of Subscription Rights may be made during the period from and
including December 2, 2008 until and including December 16, 2008. At the end of the Subscription Period,
unexercised Subscription Rights will expire and will be removed from VP accounts without any notification
from VPC.
In order not to lose the value of received Subscription Rights, a shareholder must either:
•   exercise received Subscription Rights and subscribe for Preference Shares no later than December 16,
    2008; or
•   sell received and unexercised Subscription Rights no later than December 11, 2008.


                                                      26
The Board of Directors of the Issuer shall be entitled to extend the Subscription Period. A subscription for
Preference Shares by virtue of Subscription Rights is irrevocable and the shareholder may not cancel or
modify a subscription for Preference Shares.

Shareholders resident in certain unauthorized jurisdictions
The allotment of Subscription Rights and the issuance of Preference Shares upon exercise of Subscription
Rights to persons who are resident in, or citizens of, countries other than Sweden, United Kingdom, Denmark,
Norway and Germany may be affected by securities legislation in such countries. See ‘‘Restrictions on Sale
and Transfer of Subscription Rights and Preference Shares.’’ Consequently, subject to certain exceptions,
shareholders whose Existing Shares in the Issuer are registered directly on a VP account and whose
registered address is in, inter alia, Australia, Canada, Hong Kong, Japan, South Africa or the United States will
not receive this prospectus. Nor will they receive any Subscription Rights on their respective VP accounts.
The Subscription Rights which otherwise would have been registered for such shareholders will be sold and
the sales proceeds, less deductions for costs, will be paid to such shareholders. Amounts of less than SEK100
will not be paid out. See ‘‘Restrictions on Sale and Transfer of Subscription Rights and Preference Shares.’’

Shareholders entitled to subscription by virtue of Subscription Rights resident in Sweden
Subscriptions for Preference Shares by virtue of Subscription Rights will be made by way of cash payment,
either by using the pre-printed bank giro form or the special application form with simultaneous payment in
accordance with the alternatives below.
The bank giro form should be used if all Subscription Rights in accordance with the issue statement from VPC
are to be exercised.
The application form should be used if Subscription Rights have been purchased or transferred from another
VP account or if, for some other reason, the number of Subscription Rights to be exercised for subscription
differs from the number on the pre-printed issue statement. Payment for the subscribed Preference Shares
shall be made simultaneously when sending in the application form. Payment may be made in the same way
as when using a bank-giro form, for example via Internet bank, giro or at any bank office.
Application forms may be obtained from any Swedbank branch in Sweden, Swedbank’s website,
www.swedbank.se/prospekt or be ordered from Swedbank via telephone during office hours,
+46-771-606503. Payment must be made no later than December 16, 2008.

Shareholders entitled to subscription by virtue of Subscription Rights not resident in Sweden
Directly registered shareholders entitled to subscription by virtue of Subscription Rights who are not
resident in Sweden and who cannot use the pre-printed bank giro form should make payment in SEK through
SWIFT according to the instructions specified below.
Swedbank
Issues Department E676
SE-105 34 Stockholm, Sweden
BIC/SWIFT: SWEDSESS
IBAN No: SE56 8000 0890 1100 4100 8061
Account name: Swedbank
In conjunction with payment, the subscriber’s name, address, VP account number and the reference ‘‘ISSUE
Swedbank’’ must be stated. The application form and payment must be received by Swedbank, Issues
Department E676, SE-105 34 Stockholm, Sweden, no later than December 16, 2008.

Paid subscribed shares
Following payment and subscription, VPC will send out a notice confirming that paid subscribed shares
(Sw: betalda tecknade aktier; ‘‘BTA’’) have been registered on the VP account. The newly subscribed
Preference Shares will be registered as BTAs on the VP account until the Rights Offering has been registered
with the Swedish Companies Registration Office. It is expected that the Rights Offering will be registered
with the Swedish Companies Registration Office in tranches and therefore different series of BTAs will be
registered on the VP account where the first series will be named ‘‘BTA 1’’ in the VP system. After the
registration of the first tranche of the Rights Offering with the Swedish Companies Registration Office,
which is expected to take place on or around December, 29, 2008, BTA 1 will be re-registered as Preference



                                                       27
Shares. Another series of BTAs (‘‘BTA 2’’) will be registered on the VP account as regards shares subscribed
and paid for at such time that they were not included in the registration of the first tranche of the Rights
Offering with the Swedish Companies Registration Office. Re-registration of BTA 2 to Preference Shares will
be made when the Swedish Companies Registration Office has registered the second tranche of the Rights
Offering, which is expected to occur mid January 2009. No securities notification will be issued in connection
with this re-registration. If the Issuer deems it necessary, an additional series of BTAs (‘‘BTA 3’’) will be
issued.

Trading in BTAs
Trading in BTAs on the Nasdaq OMX Stockholm is expected to occur during the period December 2, 2008
until December 18, 2008 for BTA 1 and during the period December 19, 2008 until the registration of the
second tranche of the Rights Offering with the Swedish Companies Registration Office for BTA 2. The Issuer
and other securities institutions will provide brokerage services regarding the sale and purchase of BTAs.
The ISIN codes are SE0002687764 for BTA 1, SE0002687772 for BTA 2 and SE0002687780 for BTA 3.

Subscription for and allotment of Preference Shares without Subscription Rights
Subscription by directly registered shareholders
An application to subscribe for Preference Shares without Subscription Rights must be made on
the application form intended. Therefore, only one application form may be submitted. Only the application
form received first by Swedbank will be considered if more than one application form has been submitted.
Application forms can be obtained from any Swedbank branch in Sweden, Swedbank’s website,
www.swedbank.se/prospekt, or be ordered from Swedbank via telephone during office hours,
+46-771-606503.
The application form should be sent to Swedbank, Issue Department E676, and SE-105 34 Stockholm,
Sweden. The application form must be received by Swedbank no later than December 16, 2008. The Board of
Directors of the Issuer is entitled to extend the Subscription Period.

Subscription by nominee-registered shareholders
Custody account holders at a nominee who wish to subscribe for Preference Shares without preferential
rights must be registered for subscription in accordance with instructions from the nominee.

Allotment
Where all Preference Shares have not been subscribed for by virtue of Subscription Rights, the Board of
Directors will resolve if and to what extent Preference Shares subscribed for without Subscription Rights will
be allocated. Any such allocation will be made to those that subscribed for Preference Shares by virtue of
Subscription Rights, regardless of whether or not the subscriber was a shareholder on the Record Date and,
in case of over subscription, in relation to the number of Subscription Rights used for subscription of shares
and, where this is not possible, by drawing of lots. In the event that all Preference Shares have not been
allocated in accordance with the above, the Board of Directors shall have the right to resolve if, and to what
extent, and how, further allocation of the remaining Preference Shares will be made to a consortium of
guarantors comprising, among others, Folksam, AMF Pension, AFA Insurance and SPK (see ‘‘Legal
Considerations and Supplementary Information—Subscription Undertakings’’), shareholders or other
subscribers.
To confirm the allotment of Preference Shares subscribed for without Subscription Rights, a contract note
will be sent to the subscriber on or around December 29, 2008. No notification will be sent to subscribers
that have not received an allotment. Preference Shares subscribed for and allotted must be paid for in cash
according to the instructions on the contract note that has been sent to the subscriber. Preference Shares
will be delivered as soon as the Swedish Companies Registration Office has registered the increase in share
capital. This is expected to take place mid January 2009, see ‘‘—Paid Subscribed Shares.’’

Right to dividends
The Preference Shares entitle holders to dividends from and including the financial year 2008.




                                                     28
Announcement of the outcome of the Rights Offering
The outcome of the Rights Offering will be announced through a press release from the Issuer on or about
December 23, 2008.

Listing and admission to trading
The Subscription Rights and BTAs will be traded on Nasdaq OMX Stockholm. The Issuer will apply for listing
of the Preference Shares on Nasdaq OMX Stockholm in connection with the completion of the Rights
Offering.

Other information
The Issuer is not entitled to discontinue the Rights Offering. In the event that a subscriber remits money for
the Preference Shares in excess of the amount owed, the Issuer will arrange for the excess sum to be
refunded.
A subscription for Preference Shares, whether by exercise of Subscription Rights or not, is irrevocable and
the subscriber may not cancel or alter a subscription for Preference Shares.
Incomplete or incorrectly completed application forms may be left without consideration. If the subscription
payment is paid too late, is insufficient or payment is made incorrectly, the subscription application may be
left without consideration or subscription may be made for a lesser amount. In such case, any subscription
payment not used for payment will be refunded.
Additional questions regarding the Rights Offering will be answered by telephone during office hours:
+46-771-606503.




                                                     29
                                                  BUSINESS
Overview
The Issuer is a public limited liability bank company (Sw: bankaktiebolag) incorporated under the laws of the
Kingdom of Sweden and headquartered in Stockholm. As of September 30, 2008, the Bank serves a total of
more than nine million private customers and more than 500,000 corporate customers through more than
900 branches in 14 countries, primarily in its four home markets of Sweden, Estonia, Latvia and Lithuania.
The Bank offers a broad range of services, including retail banking, corporate and investment banking, asset
management and insurance, with the majority of the Bank’s profit coming from retail banking. The Issuer’s
ordinary shares are listed on the Nasdaq OMX Stockholm. As of September 30, 2008, the Bank’s loans to the
public amounted to SEK1,218 billion (excluding repurchase agreements (‘‘repos’’)) and for the nine-month
period ended September 30, 2008, the Bank recorded SEK8,972 million in profit.
The Bank has a long-standing history dating back to 1820 when the first savings bank was founded in
                                                            ¨
Sweden. In the early 1990s, each of Sparbanken Sverige and Foreningsbanken were formed through mergers
of a number of regional savings banks and regional agricultural cooperative banks, respectively. In 1997,
                            ¨                                  ¨                       ¨
Sparbanken Sverige and Foreningsbanken merged to form ForeningsSparbanken. ForeningsSparbanken
changed its name to Swedbank in 2006. The Bank expanded into the Baltic region in 1996 when it acquired a
12.5% stake in Eesti Hoiupank, a bank that merged with Hansabank in 1998. In 1999, the Bank acquired in
excess of 50% of Hansabank’s shares and then in 2005 acquired all outstanding shares in Hansabank. Over
the past six years, Swedbank has expanded into Russia and, with the acquisition of TAS-Kommerzbank (now
OJSC Swedbank) in 2007, Ukraine. The Bank is undertaking a re-branding exercise in the Baltic region and by
autumn 2009, the Bank will operate in its home markets under one brand: Swedbank.

Strengths
Leading market positions in the Bank’s home markets
In its largest market, Sweden, the Bank is one of the leading(1) retail banks with a strong local presence as a
result of a broad distribution network under an established brand name. The Bank enjoys the leading market
position in several key segments, including retail deposits, retail mortgages and fund management. The
leadership position in retail banking enables the Bank to benefit from economies of scale and provides a
strong platform for sustained profitability in the Swedish banking market.
The Bank is the leading(1) bank in the Baltic region, with strong positions in Estonia, Latvia and Lithuania, and
significant market shares in major product areas such as retail deposits and retail mortgages. The Baltic
operations have developed strongly over the past years, both in terms of growth and profitability, although
the business is currently facing a slowdown in line with the broader economies in these countries. While the
near-term economic outlook is challenging, the Bank believes the openness and flexibility characterizing the
Baltic economies position them to recover promptly once the global macroeconomic environment improves.
The longer term growth potential in the Baltic region remains attractive with lower GDP per capita and
banking penetration levels when compared to Western European banking markets. In addition, the relatively
high degree of market concentration, with Nordic banking groups dominating the market, provides a basis for
stability in the longer term.

The leading market positions in the home markets are complemented by growth platforms in Russia
and Ukraine
Over the past six years, the Bank has established a presence in Russia and Ukraine, countries with significant
long-term growth potential due to the low use and penetration of financial services in, and the large
populations of, these countries. The Bank’s operations in Russia and Ukraine remain small in the context of
the Bank, but as the markets develop, the Bank expects an increasing share of the Bank’s profit to be
generated in these countries.

Well-diversified loan portfolio with the largest part consisting of Swedish mortgages
The Bank’s loan portfolio has low concentration risk reflecting its large number of client relationships across
a wide range of different segments and industries. Together with the Bank’s policy of rigorous cash flow
analysis and lending based on collateral, the Bank believes that it maintains a low risk profile.


(1)   See ‘‘—Competition and markets.‘‘



                                                       30
Swedish mortgage lending through the wholly-owned subsidiary Swedbank Hypotek AB (‘‘Swedbank
Mortgage’’) represents 48% of the Bank’s total customer loans outstanding, and residential mortgages
account for 90% of the lending in Swedbank Mortgage. The average loan-to-value ratio in Swedbank
Mortgage’s loan portfolio was 44% as of September 30, 2008.

Resilient business model in turbulent financial markets
Despite challenging market conditions in 2008, the Bank has continued to exhibit strong profitability,
reporting a return on equity of 17% and a profit of SEK8,972 million for the nine-month period ended
September 30, 2008. The Bank believes that the resilience of its earnings capacity to date in this challenging
market environment reflects its conservative risk management and the orientation of its business model
towards traditional retail banking services. The Bank has minimal exposure to structured credit and no
structured investment vehicle (‘‘SIV’’) off-balance sheet positions.

Strategy
Large customer base and broad distribution network
The Bank seeks large customer bases, long-term customer relationships and high market shares in its home
markets. Customer relationships and distribution of financial services are more important than designing and
structuring products in-house. The Bank is offering its Swedish customers access to certain financial services
from external providers, including mutual funds, insurance as well as payment and credit cards. Sales and
customer service are provided at branches, by telephone, on the Internet and through ATMs, making the Bank
easily accessible and giving it a widespread presence. The branch network is complemented by 168 in-store
banking locations and cash services at around 1,400 ICA food supermarkets. Distribution is bolstered
through cooperation agreements with the Swedish savings banks, agreements with franchisees of
                          a                                                 a
Swedbank Fastighetsbyr˚ AB (real estate brokerage), Swedbank Juristbyr˚ AB (legal advisory services) and
             ¨
Swedbank Foretagsf¨   ormedling AB (corporate finance services for small businesses), as well as various
collaborations with suppliers and brokers.

Focus on home markets and long-term growth areas
The Bank currently has four home markets—Sweden, Estonia, Latvia and Lithuania—where the Bank serves
key customer segments through its extensive branch network, providing custom-designed, easy-to-use
financial services at competitive prices. In addition to traditional banking and financial services, the Bank’s
product and service offering in its home markets includes advanced business services, capital market
services, asset management and insurance.
The Bank’s long-term aim is to maintain its strong positions in Sweden and the Baltic region, and to extend
its home market territory to include Ukraine and Russia, which the Bank believes provides it with attractive
opportunities for future growth. Such growth opportunities will be pursued in a disciplined manner, always
applying stringent risk management and control.
To support business in its home markets, the Bank has expanded into neighboring markets such as Finland,
Norway and Denmark as well as important financial centers such as the United States, China, Japan and
Luxembourg. Many of these countries constitute important trade partners for clients in the Bank’s home
markets.

Low risk through diversification and decentralized decision making
The Bank aims to maintain a well-diversified loan portfolio with a low risk profile. This is primarily achieved
by targeting sizable customer segments across different industries, low concentration and increasing
geographic diversification as well as lending based on cash flow analysis and collateral. All business
operations are conducted locally as close to the customer as possible, thereby further improving credit risk
management.

‘‘One Swedbank’’
The Bank’s strategy is centered on a decentralized model of strong local units with full responsibility for
customer relations and sales. Nevertheless, the Bank aims for central product organizations and service
units, thereby creating synergies in terms of scale, governance, product offering, competence and IT
platforms. In addition, the Bank has initiated a rebranding exercise to operate under a single brand name in all




                                                      31
its markets. The Bank believes that the greatest value from a communication perspective with customers,
partners and marketplaces is created through a unified brand.

Service leader
The Bank aims to be seen by customers as a service leader. Customers should perceive the Bank as:
•   Accessible: the Bank is open literally and figuratively; it should always be easy to contact the Bank
    regardless of the channel, and the customer should always be met in a friendly manner and feel
    welcome;
•   Uncomplicated: financial services can be complicated but the customers should not feel apprehensive,
    the products and services offered should always be based on the customer needs and be easy to use and
    understand; and
•   Proactive: as a service leader the Bank should always be proactive, take initiative and offer financial
    advice in addition to new products and services. The Bank always strives to improve.

Business Areas
Swedish Banking
Swedish Banking is the Bank’s largest business area. As of September 30, 2008, customer loans in Swedish
Banking amounted to SEK926 billion, representing 76% of the Bank’s total customer loans outstanding.
Swedish Banking’s total income for the nine-month period ended September 30, 2008 was
SEK13,168 million, accounting for 50% of the Bank’s total income for the period, and its profit was
SEK4,503 million, accounting for 50% of the Bank’s profit for the period. As of September 30, 2008 Swedish
Banking had 6,094 full-time employees, of which approximately 4,700 were responsible for retail operations.
Swedish Banking includes 432 branches and through cooperation with savings banks and partly-owned
banks Swedish Banking can offer its products through approximately another 260 branches. This gives the
Bank access to the largest branch network in the Swedish market according to the Swedish Bank
Association. The branch network is complemented by 168 in-store banking locations and cash services at
around 1,400 ICA (a Swedish retail chain of food supermarkets) locations. The business area also includes
telephone and Internet banking. The core customer base consists of private individuals, small and medium
sized companies, municipalities and large corporations. As of September 30, 2008, Swedish Banking had
approximately 4.1 million private customers and 401,000 corporate and institutional customers.
Swedish Banking also includes a number of subsidiaries, including Swedbank Mortgage (responsible for the
Bank’s long-term mortgage financing), Swedbank Finance (leasing products) and Swedbank Babs (card
transaction services) whose products are primarily distributed through the Bank’s own branches as well as
the savings banks and the partly owned banks. In addition, Swedish Banking has franchise operations that
                                                     a),                                 a)
offer real estate brokerage (Swedbank Fastighetsbyr˚ legal services (Swedbank Juristbyr˚ and company
                            ¨      ¨
sales services (Swedbank Foretagsformedling). The card company EnterCard, jointly owned with Barclays
with operations in Sweden, Norway and Denmark, is also included in Swedish Banking.
The cooperation with the savings banks and the partly-owned banks has a long history and is an important
part of the Bank’s operations in Sweden. The cooperating banks market and distribute a range of the Bank’s
products and services through their own local branch networks. There are 68 savings banks and partly-
owned banks; each savings bank and partly-owned bank operates within a specified geographic area.
Swedish Banking provides a comprehensive range of products and services to private customers,
corporations, municipalities and labor unions. Lending products are mainly mortgages, but also include
corporate and consumer lending. Swedish Banking’s deposit related products include traditional savings
accounts and current accounts tailored to its customer segments. In addition, the Bank offers its customers a
comprehensive range of investment products, as well as debit and credit card and other payment services.

Baltic Banking
Baltic Banking comprises the Bank’s operations in Estonia, Latvia and Lithuania, with approximately
5.1 million private customers and 232,000 corporate customers as of September 30, 2008. As of
September 30, 2008, customer loans in Baltic Banking amounted to SEK201 billion, representing 17% of the
Bank’s total customer loans outstanding. Baltic Banking’s total income for the nine-month period ended
September 30, 2008 was SEK6,722 million, accounting for 26% of the Bank’s overall total income and its



                                                     32
profit was SEK2,881 million, accounting for 32% of the Bank’s profit for the period. As of September 30,
2008, Baltic Banking had 8,791 full-time employees.
Baltic Banking operations were conducted under the Hansabank brand until autumn 2008, when the Bank
initiated a re-branding process to Swedbank as part of the Bank’s strategy to present a unified Swedbank
Group brand. The Bank believes that Baltic Banking has the widest banking distribution networks in the
Baltic region, consisting of 278 branches and over 1,300 ATMs. The Bank has issued approximately
3.6 million bank cards and more than 1.3 million customers are using the Bank’s Internet bank solution.
Each of the Baltic countries has its own manager responsible for operations within its respective country. IT,
product development, risk and financial management are managed centrally by the Bank. Baltic Banking is
changing its business and management model starting from January 2009. The most important step in the
current change is the creation of a Business Development (BD) unit. This unit will have four main pan-Baltic
functions: client concept design; product units handling the whole product lifecycle; process design; and
cross-border marketing.
The Bank had a market share of approximately one-third of the total market in the Baltic region as of
December 31, 2007, according to the Lithuanian central bank, and is the market leader in retail deposits,
retail loans, cards and pensions in the Baltic region according to the bank association in each country. The
Bank is also market leader in corporate deposits and corporate loans in Estonia as of September 30, 2008
according to the Bank Association of Estonia.
Baltic Banking offers a wide range of products and services ranging from mortgages, corporate lending, retail
lending, savings accounts and current accounts to life insurance, leasing and investment banking through a
comprehensive branch network and through its telephone and Internet bank.

Estonia
Swedbank Estonia’s operations started in 1992 under the name AS Hansapank. Estonia is the dominant unit
in Baltic Banking. As of September 30, 2008, Estonia accounted for 40% of lending and 45% of deposits in
Baltic Banking.

Latvia
In June 1996, Hansabank commenced operations in Latvia with its acquisition of A/S Deutsche Lettische
bank. Latvia is the second largest unit in Baltic Banking, accounting for 32% of lending and 22% of deposits
in Baltic Banking as of September 30, 2008.

Lithuania
In 2001, the Bank entered the Lithuanian market by acquiring the operations of Lietuvos Taupomasis
Bankas. As of September 30, 2008, Lithuania accounted for 28% of lending and 33% of deposits in Baltic
Banking.

International Banking
International Banking includes all international business units which are not at present defined as home
markets and individual strategic business areas. As of September 30, 2008, this means Ukrainian and
Russian Banking, branches in Denmark, Finland, Norway, the United States and China, a subsidiary in
Luxembourg and representative offices in Japan, Ukraine and Spain. In addition, International Banking is
responsible for the Bank’s group-wide relations with banks and financial institutions.
As of September 30, 2008, customer loans in International Banking amounted to SEK69 billion, representing
6% of the Bank’s total customer loans. International Banking’s total income for the nine-month period ended
September 30, 2008 was SEK1,840 million, accounting for 7% of the Bank’s overall total income for that
period and its profit was SEK387 million, accounting for 4% of the Bank’s profit for the period. As of
September 30, 2008, International Banking had 4,366 full-time employees, most of whom are based in
Ukraine.
In 2007 the Bank acquired TAS-Kommerzbank (now OJSC Swedbank), a bank with over 15 years of operation
in the Ukrainian banking market. Ukraine is the second largest country in Eastern Europe, with a population
of 46 million. OJSC Swedbank is Ukraine’s fifteenth largest bank based on total assets in the retail banking
segment as of September 30, 2008, according to the Association of Ukrainian Banks. The OJSC Swedbank has




                                                     33
over 190 branches, 3,500 employees, 150,000 retail customers and 19,000 corporate customers as of
September 30, 2008.
In 2005 the Bank entered the Russian market. The Bank is developing its branch network in Moscow,
St. Petersburg and Kaliningrad, offering banking services for medium-sized enterprises and since 2008 to
private customers. The major lines of activities in the field of retail banking are mortgages, car loans and
consumer credit.
Swedbank S.A. has been operating in Luxembourg since 1973 and is a wholly-owned subsidiary of the Bank.
Swedbank S.A. provides a complete range of international private banking services such as investment advice
and asset management for individuals and companies, mainly targeting Swedish citizens living abroad.
The Bank established its own branch office in Helsinki in October 2005. The branch office in Helsinki offers its
corporate customers account and cash management services, Internet banking, overdraft/bilateral/
syndicated facilities, guarantees, card acquiring in cooperation with a partner bank and cash handling
operations.
The Bank’s Oslo branch was established in 1999 and provides a broad range of products to corporate clients,
banks, financial institutions and private customers. Product offerings to corporate customers include cash
management solutions, foreign exchange products, loans and credits, certificates and bonds, deposits, card
acquiring and trade finance. Product offerings to banks and financial institutions include loans, as well as
credit and foreign exchange products.
The Bank established a presence in Copenhagen in 2005 and offers a wide range of products and services to
both private and corporate customers and has special offerings for those private customers who commute
between Sweden and Denmark. For corporate customers the Bank provides ordinary credit lines, guarantees
and leasing products, property financing, project and acquisition financing, syndicated loans, marine
financing and trade finance services.
The Bank’s New York branch was established in 1991 to facilitate funding for the Bank and to provide
services to corporate customers. For example, if a company in Sweden has subsidiaries in the United States,
the New York branch can help rationalize the flow of credits and debits between the companies.
The Bank’s branch in Shanghai was established as a representative office in 2001 and converted to a full
branch in 2007. It provides Nordic and Baltic corporate customers with full lending and deposit-taking
services in foreign currencies, as well as trade finance, treasury and payment services.

Swedbank Markets
Swedbank Markets focuses on serving the Bank’s clients in relation to equity, fixed income and foreign
exchange trading, corporate, project, export and acquisition financing, and corporate finance services. The
total income of Swedbank Markets for the nine-month period ended September 30, 2008 was
SEK2,111 million, accounting for 8% of the Bank’s overall total income for that period and its profit was
SEK371 million, accounting for 4% of the Bank’s profit for the period. As of September 30, 2008, Swedbank
Markets had 722 full-time employees, most of whom are based in Stockholm. Outside Sweden, Swedbank
Markets operates through the majority-owned subsidiaries First Securities ASA in Norway and Swedbank
First Securities LLC in the United States and the wholly-owned subsidiary ZAO Swedbank Markets in Russia
and through business units in the Baltic region.
The key components of Swedbank Markets’ business include:
•   fixed income and currency sales and trading operations, including the use of government bonds,
    mortgage bonds, treasury bills, interest rate swaps, forward rate agreements, credit bonds, commercial
    papers as well as different types of currency securities;
•   equities sales and trading operations, including the use of shares, equity options and equity linked
    products. The Bank’s share of equity trading on the Nasdaq OMX Stockholm during the first three
    quarters of 2008 was 4.2%. In addition, Swedbank Markets offers securities lending and repurchase
    agreements;
•   advisory services in relation to bond capital structure and the origination of bonds and commercial
    papers. Swedbank Markets has been one of the market leaders in the Swedish credit bond market for a
    number of years;




                                                      34
•   custodial services for institutional customers, administration and safekeeping of Swedish and foreign
    securities, and registration and monitoring of corporate events;
•   a limited range of structured products for retail, corporate, private banking and institutional clients;
•   corporate finance services, including advisory on public and private mergers and acquisitions, initial
    public offerings, rights issues, private placements and company valuations; and
•   project, export and acquisition financing.

Asset Management and Insurance
Asset Management and Insurance includes the Swedbank Robur group and its operations in fund
management, institutional and discretionary asset management, insurance and individual pension savings,
as well as corporate related pension solutions for their owners and employees. As of September 30, 2008,
the Asset Management and Insurance division managed SEK570 billion of assets in total. The total income of
the Asset Management and Insurance segment for the nine-month period ended September 30, 2008 was
SEK1,421 million, accounting for 5% of the Bank’s overall total income and its profit was SEK581 million,
accounting for 6% of the Bank’s profit for the period. As of September 30, 2008, Asset Management and
Insurance had 346 full-time employees, most of whom are based in Stockholm.
Swedbank Robur is well-recognized in its home market, as evidenced by a number of awards in recent years,
such as being named the ‘‘Best’’ in the category ‘‘Overall Group — Large Fund Group over Three Years 2007’’
by Lipper and ‘‘Fund Management Company of the Year 2007’’ by Dagens Industri and Morningstar.
Swedbank Robur was the largest fund manager in Sweden with a market share of 27% in terms of fund
assets under management as of September 30, 2008.
Asset Management and Insurance provides pensions solutions to institutional clients, individual customers
and small and medium-sized companies. It also provides asset management products and services, including
mutual funds, fund portfolios and separate accounts. Its mutual fund offerings cover a broad array of
investment strategies and products. Products are sold through the Bank’s branch networks in the Swedish
and Baltic Banking segments, the savings banks and through external parties such as Aktia Finland, Odin
Norge, Avanza, Nordnet and Skandiabanken.
All funds are actively managed, which means that the fund manager makes calculated deviations against
indexes with the aim to create a higher return over time.
In addition to equity-based and fixed-income funds, the Bank offers mixed funds, fund-of-funds and hedge
funds.
As of September 30, 2008, Swedbank Robur managed 98 funds, ten of which were socially responsible or
environmental funds. Together with the 134 external funds offered through the Bank’s fund marketplace,
the total number of funds offered to customers was 232 as of September 30, 2008.
In September 2008, the Bank announced that it had agreed to acquire Banco Fonder AB, a specialist in the
Swedish fund management field. Banco Fonder currently has approximately 126,000 customers and offers
26 mutual fund products. The acquisition is scheduled to close in January 2009.
On November 18, 2008, Swedbank Robur AB announced the acquisition of two mutual funds from Carnegie.
The acquisition comprised a transfer of management of the funds, capital and customers to the Bank. The
funds have approximately SEK1.4 billion in assets under management. The acquisition has been approved by
the SFSA.
In private pension savings, the Bank offers Individual Pension Savings (IPS), Swedbank Traditional Pension,
          ors¨
Pensionsf¨ akring Fond and a number of premium pension funds. The Bank is a full-range supplier in the
occupational insurance area. In the investment area, the Bank offers both the Endowment Fund and
Endowment Insurance Custody products. The Bank is one of the five selected underwriters of unit-linked
insurance for the new ITP plan, a pension agreement that covers 700,000 private salaried employees.
The Bank has a strong relationship with Folksam, a leading Swedish insurer, and entered into an agreement
in February 2008 whereby Folksam sells non-life products through the Bank’s network and Swedbank via
Swedbank Robur manages a significant portion of Folksam’s assets. The scope of the agreement also entails
Folksam and the Bank operating as joint venture partners in a vehicle, Aktiv, providing administration
services for the unit-linked policies sold by the Bank.




                                                    35
Shared Services and Group Staffs
Shared Services’ role is to capitalize on the economies of scale that arise when several units of the Bank use
similar services. Shared Services is responsible for IT and back office functions for the Swedish retail
operations and other shared support functions in Sweden. As the Bank becomes more international, Shared
Services also allows for the creation of cross-border integration and cross-border synergies.
A significant share of the Bank’s operating expenses is for IT. Cost efficiency in this area is therefore a high
priority. Despite substantial increases in transaction volumes, particularly for the Internet bank and in the
card area, IT costs for the Swedish operations have essentially remained unchanged for several years.
Group Staffs are in place for finance, treasury, investor relations, IT governance and control, legal affairs,
communications, risk control, credit, human resources and public affairs. These staffs support the President
and Group Executive Management in relation to oversight, monitoring and control.
As of September 30, 2008, Shared Services and Group Staffs had 1,671 full-time employees.

Products and services
Mortgages
The offered products primarily consist of loans secured by underlying collateral in residential, agricultural and
forest properties. Consumer real estate products include fixed and variable rate loans for home purchase and
refinancing needs.
The Bank is one of Sweden’s leading mortgage lenders through Swedbank Mortgage in terms of market
share according to the Swedish Bank Association. As of September 30, 2008, Swedbank Mortgages’
outstanding Swedish mortgage loan portfolio amounted to SEK580 billion and consisted of around one
million mortgage customers. Swedish mortgage lending represented 48% of the Bank’s total customer loans
outstanding, and residential mortgages accounted for 90% of the lending in Swedbank Mortgage as of
September 30, 2008. The average loan-to-value ratio in Swedbank Mortgage’s loan portfolio was 44% as of
September 30, 2008. To benefit customers while creating openings for more and better business, the Bank
cooperates with a number of partners in addition to the Bank’s subsidiary Swedbank Fastighetsbyr˚     a,
including various home builders and other construction companies.
The Bank is also a leading mortgage lender in the Baltic region, according to the bank association in each
country, respectively, and the mortgage products are adapted to its client base comprising Baltic
homeowners. The main products offered by Baltic Banking include residential loans for home buying or
building and loans which are mainly used for renovating and furnishing homes. Both products are continually
adapted to customer needs.

Corporate banking products
The Bank offers a full range of corporate banking products and services for small and medium sized business
clients, and large and multinational corporate customers, including financing, cash management, investment
and risk management. In addition, the Bank offers leasing products through Swedbank Finans as well as
mortgage lending and lending to the agricultural and forestry industry through Swedbank Mortgage.
The products offered include corporate loans as well as credit facilities adapted to the customers’ needs. Real
estate loans are primarily aimed at public and private developers, home builders and commercial real estate
companies.
Asset-based financing provides a wide range of products, such as equipment leasing, stock financing, fleet
management and car leasing. Together with partners, the Bank’s equipment leasing operations provide
agricultural, construction, industrial, office appliances, recreational craft and also medical equipment leasing.

Consumer lending products
The Bank offers a range of personal loans to its retail customers. These can be made for specific purposes,
such as auto loans, or simply as general purpose personal loans.

Savings and investment products
The Bank offers a comprehensive range of deposit related products, including traditional savings accounts
and current accounts tailored to different customer segments. Through Asset Management and Insurance,



                                                       36
the Bank offers its customers a comprehensive range of investment products, including equity funds, fixed
income funds, insurance products and individual pension savings products.

Payment services
The Bank offers a broad range of products, including debit and credit cards, transaction services and card
infrastructure. The Bank offers a variety of products, such as membership cards, and has become the leading
issuer of credit cards. As of September 30, 2008, the Bank had 7.6 million bank cards in circulation.
In retail transactions, the emphasis is on convenience and time savings by making automatic payments for
the Bank’s customers through direct debit or other electronic channels, such as e-bills or mobile and card
payments. In corporate cash management the focus is on integration: offering the clients an integrated and
packaged solution.

Competition and markets
The Bank has a leading market position in Sweden with respect to mortgages, private deposits and mutual
funds. As of September 30, 2008, it held leading retail market shares in private mortgage lending (29%),
household deposits (25%) and mutual funds (27%). In the Swedish corporate market, the Bank’s market
share varied between approximately 16% and 25%, for each of deposits, lending and installment financing
and leasing as of September 30, 2008, according to Statistics Sweden and The Swedish Investment Fund
Association.
The Bank also has leading market positions in the Baltic region. The Bank’s strongest position is in Estonia,
where it holds leading positions, in terms of market shares, in corporate lending (44%), private mortgage
lending (49%) and household deposits (59%) as of August 31, 2008 according to the Estonian Central Bank.
In Latvia, the Bank’s market shares varied between 26% and 28%, as of August 31, 2008 according to the
Association of Commercial Banks of Latvia, in areas such as household lending and deposits and corporate
lending. The market shares in Lithuania are about the same as in Latvia, with 27% of household lending, 34%
of household deposits, and 24% of corporate lending as of August 31, 2008 according to the Association of
Lithuanian Banks.
The Bank’s primary competitors within its most important product areas in Sweden are Svenska
Handelsbanken, Nordea and SEB. These competitors and the Bank together account for the predominant
share of the total assets of the Swedish banks and credit institutions. While there has been significant
consolidation among the largest Swedish financial institutions during the 1990s, the number of participants
in the Swedish banking market has increased mainly through the entry of certain niche-players as well as a
limited number of foreign full-service banks. In the Baltic region, the Group’s main competitors are SEB, DnB
NORD, Nordea and Sampo Bank (a subsidiary of Danske Bank).
                                                                                    a ors¨
Examples of niche players entering the Swedish banking market are Skandia and L¨ nsf¨ akringar (both
insurance companies), ICA (a Swedish retail chain of food supermarkets) and Ikanobanken (owned by IKEA, a
Swedish furniture manufacturer). In the savings market, online brokers and banks such as Nordnet and
Avanza are competing aggressively for customers who actively manage their own assets such as stocks,
mutual funds and pensions and insurance solutions.

       Distribution of the profit for the periods                                                     Distribution of customer loans
100%                                                                                    100%
             12%                                                                                      11%
90%                                                                                     90%                                 14%                 16%            17%
80%           0%                   22%                                                                1%
                                                                                        80%                                  2%
                                                        32%            32%                                                                      4%              6%
70%                                 1%                                                  70%
60%                                                     3%              4%              60%
50%                                                                                     50%
             88%                                                                                      88%                   84%
40%                                77%                                                  40%                                                     80%            77%
30%                                                     65%            64%              30%
20%                                                                                     20%
10%                                                                                     10%
 0%                                                                                      0%
             2005                  2006                 2007          Jan 1 -                        2005                  2006                 2007          Sept 30
        Sweden*           International          The Baltic region    Sept 30                  Sweden*             International          The Baltic region    2008
                                                                       2008
   *including Swedbank Markets international business          29NOV200820325405           *including Swedbank Markets international business          29NOV200820325234
See ‘‘Detailed Commentary on the Financial Development’’ for further information on the Bank’s operations
in different markets.




                                                                                   37
Sweden
In Sweden there are four major Swedish bank groups, Swedbank, Svenska Handelsbanken, Nordea and SEB,
which, according to the Riksbank, by year end 2007 represented 80% of the total book assets of Swedish
banks and branches. All four banks are universal banks, meaning that they offer services and products within
the whole financial sector. In addition to limited liability bank companies, there are savings banks and
members banks in the Swedish market. In contrast to limited liability bank companies, savings banks and
members’ banks have no share capital and thus, have no shareholders. According to the Riksbank, by year end
2007, a total of 126 banks were established in Sweden, 30 of these were limited liability bank companies (of
which two were foreign), 69 were savings banks, 25 were foreign branches and two members banks.
According to the Riksbank, the Swedish credit institutions total lending to the public amounted to SEK
4,679 billion as of December 31, 2007, compared to SEK 4,080 billion as of December 31, 2006 and SEK
3,614 billion as of December 31, 2005.

Estonia
The Estonian banking system is highly consolidated and is dominated by four large Scandinavian banking
groups which, according to the Estonian central bank, holds a total market share of approximately 95% of the
lending to and deposits from the public. Swedbank and SEB are the largest two groups, with a total market
share of more than 70% of the lending as per the end of the first three months of 2008. There are, in total,
seven credit institutions with a licence and eight foreign credit institutions with branches in Estonia. The
growth in lending has been high during several years, but has decreased since mid 2007, due to slowing
economic development and credit restraints. According to the Estonian central bank, a substantial part of the
lending to the non-financial sector, approximately 80%, was in foreign currencies as of the end of the first
three months of 2008.

Latvia
As of September 30, 2008, 21 banks and four foreign banks with branches were registered in Latvia. The five
largest banks, Swedbank, Parex banka, SEB, Nordea, and DnB NORD held approximately 68% of banking
assets, according to Latvia’s banking association. The growth in lending has weakened substantially due to
slowing economic development, in particular lending to individuals due to the weak housing market.
According to the Latvian central bank, a large part of lending to the non-financial sector, approximately 90%
as of September 30, 2008, was in foreign currency, predominantly the euro.

Lithuania
As of the end of June 2008, nine banks and six foreign banks with branches were registered in Lithuania. As
in Estonia, the banking market is highly consolidated and the five largest banking groups held, according to
the Lithuanian central bank, more than 80% of the total loan market and profit as per year end 2007. SEB,
which held 31% of the loan market, was the largest bank followed by Swedbank which held 24% of the loan
market. A large part of lending to the non-financial sector is in foreign currencies.

Russia
According to the Russian central bank, the total number of credit institutions in Russia at year end 2007
amounted to 1,136, compared to 1,189 at year end 2006. The total number of branches of those banks,
excluding Sperbank, however, increased during this period from 2,422 at year end 2006 to 2,646 at year end
2007, according to the Russian central bank. By the end of 2007, Sberbank had, according to the Russian
central bank, 809 branches, corresponding to 23% of the total number of bank branches.
In terms of total assets, the 200 largest credit institutions held, according to the Russian central bank, 91.6%
thereof at year end 2007, compared to 90.6% at year end 2006. In 2007, the five largest credit institutions
held, according to the Russian central bank, 42.3% of the total assets, compared to 42.5% in 2006.
According to the Russian central bank, total assets in the Russian banking sector in relation to the GDP
increased by 9.1%-points to 61.4% in 2007. The total lending in relation to the GDP increased by 8.1%-
points to 43.2% during the same period, according to the Russian central bank.




                                                      38
Ukraine
The total number of banks with a licence in Ukraine were 182 as of November 1, 2008. Several foreign
companies have entered the Ukrainian market and most of the Ukrainian banks have foreign owners. The
Ukrainian banking market is relatively fragmented. According to the Ukrainian central bank, the largest
company, Privatbank, held approximately 10% of the market’s total assets and the five largest companies
hold approximately 33% thereof at the end of September 2008.
According to the Ukrainian central bank, the total book assets of the banks increased by 76% in 2007 and by
32% during the first ten months of 2008. The growth is expected to slow down due to the economic
conditions and certain restrictions, which have been introduced by the Ukrainian central bank during autumn
2008.
For information regarding economic developments in the Bank’s markets, see ‘‘Detailed Commentary on the
Financial Development — General macroeconomic factors’’.

Ratings
The Issuer has been assigned ratings by Standard & Poor’s, Moody’s and Fitch as set forth in the table below,
all currently with a negative outlook:

                                                S&P                           Moody’s                     Fitch
October 2008                            Short-term   Long-term   Short-term   Long-term   BFSR*   Short-term   Long-term

Swedbank . . . . . . . .    .   .   .         A-1           A          P-1         Aa3      C+          F1          A+
Swedbank Mortgage           .   .   .         A-1                      P-1         Aa3                 F1+        AA
Covered bonds . . . . .     .   .   .                    AAA                       Aaa
Hansabank . . . . . . . .   .   .   .                                  P-1          A1     C             F1           A
*    Bank Financial Strength Ratings




                                                                  39
                                                   SUMMARY OF FINANCIAL INFORMATION
The financial data for 2007, 2006 and 2005 provided below has been derived from the audited consolidated
financial statements included elsewhere in this prospectus, which were prepared in accordance with IFRS for
the years ended December 31, 2007, 2006 and 2005. The summary of financial information as of and for the
nine-month period ended September 30, 2008 and the nine-month period ended September 30, 2007 have
been derived from the unaudited condensed consolidated interim financial statements included elsewhere in
this prospectus. The unaudited condensed consolidated financial statements have been prepared using the
same accounting principles and on the same basis as the audited consolidated financial statements and in
the opinion of the Bank’s management include all adjustments, consisting of normal recurring adjustments
that management considers necessary for a fair representation of interim results. The results for the
nine-month period ended September 30, 2008 are not necessarily indicative of the results expected for the
entire year ending December 31, 2008. The data set forth below should be read in conjunction with ‘Detailed
Commentary on the Financial Development’’ and with the audited consolidated financial statements and the
unaudited condensed interim financial statements appearing elsewhere in this prospectus.
                                                                    January 1 - September 30                      Whole year
SEKm                                                                       2008             2007         2007           2006             2005
INCOME STATEMENT DATA
Net interest income . . . . . . . . .      . . . .       . .   .          15,960           13,898       19,157         15,977       15,679
Net commission income . . . . . .          . . . .       . .   .           6,819            7,344        9,880          8,869        7,170
Net gains and losses on financial          items         at
  fair value . . . . . . . . . . . . . .   . . . .       . .   .           1,107            1,305        1,691          2,738            2,817
Other income . . . . . . . . . . . . .     . . . .       . .   .           2,231            1,503        2,196          1,613            3,794
Total income . . . . . . . . . . . . . . . . . . . .                     26,117           24,050       32,924         29,197        29,460

Staff costs . . . . . . . . . . . . . . . . . . . . . .                    7,490            7,159        9,792          8,560            8,191
Other expenses . . . . . . . . . . . . . . . . . . .                       5,693            5,034        6,927          6,579            5,965
Total expenses . . . . . . . . . . . . . . . . . .                       13,183           12,193       16,719         15,139        14,156

Profit before loan losses . . . . . . . . . . . . .                       12,934           11,857       16,205         14,058       15,304
Loan losses, net . . . . . . . . . . . . . . . . . .                       1,523              381          619           (205)         294
Operating profit . . . . . . . . . . . . . . . . .                       11,411           11,476       15,586         14,263        15,010

Tax expense . . . . . . . . . . . . . . . . . . . . .                      2,380            2,500        3,450          3,211            2,781
Profit for the period . . . . . . . . . . . . . .                          9,031            8,976      12,136         11,052        12,229

Profit for the period attributable to the
  shareholders of Swedbank AB . . . . . .                                  8,972            8,888      11,996         10,880        11,879


                                                                                       As of
                                                                                   September 30,             As of December 31,
SEKm                                                                                       2008         2007           2006              2005
BALANCE SHEET DATA
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1,696,319    1,607,984      1,352,989     1,197,283

Loans to the public . . . . . . . . . . . . . . . . . . . . . . . . . . . .             1,254,879    1,135,287       946,319       822,425

Deposits and borrowings from the public . . . . . . . . . . . . .                        506,741      458,375        400,035       338,894
Debt securities in issue, etc. . . . . . . . . . . . . . . . . . . . . .                 635,135      673,116        561,208       517,582
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            73,255       68,323         60,277        53,869
                                                                   For the nine month period
                                                                     ended September 30,               For the year ended December 31,
SEKm                                                                    2008               2007         2007           2006              2005
CASH FLOW STATEMENT
Cash and equivalents at beginning of
  period . . . . . . . . . . . . . . . . . . . .     .    .           100,763              83,032       83,032         89,514        80,032
Cash flow from operations . . . . . . . .            .    .           (64,235)            (33,400)     (75,085)       (58,747)      (44,719)
Cash flow from investing activities . .              .    .              (224)             (6,457)      (6,203)         1,076       (12,788)
Cash flow from financing activities . .              .    .           (23,922)             84,361       97,626         52,074        66,192
Cash flow for the period . . . . . . . . . . .                         (88,381)           44,504       16,338         (5,597)        8,685
Cash and equivalents at end of period . .                               13,205           128,243      100,763         83,032        89,514

*      of which, securities pledged for OMX AB
       at beginning of year . . . . . . . . . .                         8,086              4,384        4,384          2,729             2,296
       at end of year . . . . . . . . . . . . . .                       1,905              4,093        8,086          4,384             2,729



                                                                                   40
                                                                       As of and for
                                                                      the nine month
                                                                       period ended
                                                                      September 30,    As of and for the year ended December 31,
                                                                               2008           2007             2006             2005

KEY RATIOS
Return on equity . . . . . . . . . . . . . . . . . . . . . . .    .          17.0%          18.9%            19.3%            24.6%
Earnings per share, SEK . . . . . . . . . . . . . . . . . .       .          17.41          23.28            21.11            23.14
Cost/income ratio before loan losses . . . . . . . .              .            0.50           0.51             0.52             0.48
Equity per share, SEK . . . . . . . . . . . . . . . . . . . .     .         141.68         131.96           116.37           104.07
Capital quotient excluding complement* . . . . .                  .            1.57           1.59             1.22             1.21
Tier 1 capital ratio, excluding complement* . . .                 .           8.7%           8.5%             6.5%             6.5%
Capital adequacy ratio, excluding complement*                     .          12.5%          12.7%             9.8%             9.7%
Tier 1 capital ratio, transition rules* . . . . . . . .           .           6.8%           6.2%             6.5%             6.5%
Capital adequacy ratio, transition rules* . . . . . .             .           9.9%           9.3%             9.8%             9.7%
Loan loss ratio, net . . . . . . . . . . . . . . . . . . . . .    .          0.18%          0.07%          (0.02)%            0.04%
Share of impaired loans** . . . . . . . . . . . . . . . . .       .          0.32%          0.13%            0.07%            0.12%
Risk weighted assets, old rules*, SEKbn . . . . . . .                           979           892               727              616
Risk weighted assets, new rules*, SEKbn . . . . . .                             667           600                 —                —
Risk weighted assets, transition rules*, SEKbn . .                              847           822                 —                —
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         21,990         22,148           17,399           16,148

*     Risk-weighted assets are defined by the capital adequacy rules in Sweden and represent a measure of the Bank’s risk-taking. The
      capital adequacy rules changed in 2007, and accordingly, the Bank is required to present its risk-weighted assets in accordance
      with the old rules, new rules and transition rules. The capital adequacy rules also define the computations for capital quotient,
      Tier 1 capital ratio and the capital adequacy ratio. See ‘‘Risk Management—New Capital Adequacy Rules’’ and ‘‘Detailed
      Commentary on the Financial Development—Capital adequacy’’ for further information, including the timing and implications of
      the risk weighted asset rules.
**    Impaired loans, net, divided by book value of loans to credit institutions and the public.

                                                     DEFINITIONS OF KEY RATIOS
Return on equity, % . . . . . . . . . . . .           Profit for the period attributable to the shareholders of
                                                      Swedbank AB in relation to average shareholder’s equity
Earnings per share . . . . . . . . . . . . .          Profit for the period attributable to the shareholders of
                                                      Swedbank AB in relation to the weighted average number of
                                                      shares outstanding
Cost/income ratio before loan
  losses . . . . . . . . . . . . . . . . . . . . .    Costs in relation to income
Equity per share . . . . . . . . . . . . . . .        Shareholder’s equity in relation to the number of shares
                                                      outstanding
Capital quotient . . . . . . . . . . . . . . .        The capital base in relation to the capital requirement
Tier 1 capital ratio, % . . . . . . . . . . .         Tier 1 capital in relation to the risk-weighted amount
Capital adequacy ratio, % . . . . . . . .             The capital base in relation to the risk-weighted amount
Loan loss ratio, net, % . . . . . . . . . .           Loan losses, net, in relation to the loan opening balance as well
                                                      as property taken over and loan guarantees
Share of impaired loans, % . . . . . . .              Impaired loans, net, in relation to the book value of loans to
                                                      credit institutions and the public




                                                                      41
                           COMMENTARY ON THE FINANCIAL DEVELOPMENT
The following discussion on the financial condition and result of operations should be read in conjunction
with the audited consolidated financial statements for the years 2007, 2006, 2005, and the reviewed but
unaudited condensed consolidated interim financial statements for the nine month periods ended
September 30, 2008 and 2007 included elsewhere in this prospectus, as well as with the information
presented under ‘‘Presentation of Financial and Other Information’’ and ‘‘Selected Statistical and Other
Information.’’
The following discussion contains forward-looking statements that are based on estimates and assumptions
that are subject to risks and uncertainties. The actual results may differ materially from what is discussed in
the forward-looking statements as a result of various factors, including those set forth in ‘‘Forward-Looking
Statements’’ and ‘‘Risk Factors.’’
Further discussion on the Bank’s financial condition and result of operations can be found in ‘‘Management’s
Discussion of Financial Condition and Results of Operations’’ which among other things covers the financial
development per business area.

Nine-month period ended September 30, 2008 compared to nine-month period ended
September 30, 2007
Global financial crisis
The turmoil in global financial markets adversely affected the Bank’s third quarter 2008 results, mainly due
to lower net gains and losses on financial items at fair value and increased loan loss provisions. Ways in
which the Bank was affected in the third quarter of 2008 include:
•   decrease in fair value of SEK217 million in Swedbank Markets’ credit bond portfolio with respect to
    transactions in derivatives and bonds;
•   SEK169 million of loan loss provisions in unsecured exposure to Lehman Brothers;
•   decrease of SEK356 million in Swedbank Mortgage’s income (net interest income and net gains and
    losses on financial items at fair value) due to turbulence in the funding markets, dislocations in the
    credit markets and the Bank consequently requiring higher liquid reserves, among other things;
•   decrease in fair value effects of SEK98 million in the Baltic trading, liquidity and insurance portfolios;
    and
•   lower income of SEK98 million in the Asset Management and Insurance segment, mainly due to lower
    commission income.
The credit crunch in global financial markets has escalated during the third quarter of 2008, and thereafter.
As of the date hereof, global capital markets remain substantially impaired, creating a liquidity crisis for the
entire financial system. Since mid-September 2008, the normal functioning of the Swedish and international
capital markets has been severely curtailed. The continuing dislocation of global financial markets impacts
the Bank’s business and results of operations in two primary ways.
Firstly, investors’ lack of confidence in the banking industry has adversely impacted wholesale funding
markets, leading to higher borrowing costs and restricting banks’ access to liquidity. Rating downgrades have
further exacerbated the issue for several banks, including the Bank, as discussed below. Any increased cost of
funding that cannot be passed on to customers can be expected to narrow the Bank’s profit margins going
forward.
Secondly, the Bank recognizes certain of its assets at fair value. The fair value of investment securities
trading in active markets is based on models which utilize market prices or, if no market prices are readily
available or identifiable, the Bank relies on its own assumptions and models to estimate fair value. The fair
value of certain assets has been significantly affected in the current volatile markets, thereby negatively
impacting the Bank’s capital adequacy ratios.
On July 1, 2008, the Bank chose to reclassify certain interest-bearing securities which had become illiquid
due to the extraordinary market conditions. These securities, with a carrying value amounting to
SEK7,376 million, were reclassified from the ‘‘held-for-trading’’ category to the ‘‘held-to-maturity’’ category
since the instruments are no longer tradable but management intends and has the ability to hold them to
maturity. Financial instruments categorized as ‘‘held-for-trading’’ are recognized at fair value, with fair value
changes recognized in the income statement, and financial instruments categorized as ‘‘held for maturity’’


                                                       42
are recognized at amortized cost. The fair valuation of these holdings, based on available information,
resulted in a theoretical value that management does not believe reflects a true value, being a value that
does not reflect the amount to which they could be exchanged between knowledgeable, willing parties in an
arm’s-length transaction. In the third quarter of 2008, accounting according to theoretical fair value would
have decreased the Bank’s total income by SEK610 million.

Profit for the period attributable to the shareholders of Swedbank AB
Consolidated profit for the period attributable to the shareholders of Swedbank AB for the nine-month
period ended September 30, 2008 was SEK8,972 million, compared to SEK8,888 million in the nine-month
period ended September 30, 2007. Return on equity was 17.0% in the nine-month period ended
September 30, 2008, compared to 19.0% in the nine-month period ended September 30, 2007. The cost/
income ratio was 0.50 in the nine-month period ended September 30, 2008, compared to 0.51 in the
nine-month period ended September 30, 2007.

Net interest income
Consolidated net interest income increased by SEK2,062 million or 15% to SEK15,960 million in the
nine-month period ended September 30, 2008, compared to SEK13,898 million in the nine-month period
ended September 30, 2007. Net interest income from the lending portfolio increased by SEK850 million
despite continued margin pressure and higher funding costs. Net interest income from deposits increased by
SEK847 million through a volume increase and improved interest margins. Net interest income from other
operations increased by SEK365 million.

Net commission income
Consolidated net commission income decreased by SEK525 million or 7% to SEK6,819 million in the
nine-month period ended September 30, 2008, compared to SEK7,344 million in the nine-month period
ended September 30, 2007. Payment commissions increased by SEK311 million, while income from stock
market-related operations decreased primarily due to falling stock prices. Income from asset management
commissions decreased by SEK472 million, reflecting decreases from brokerage commissions by
SEK207 million, from corporate finance by SEK136 million and from unit-linked insurance by SEK47 million.

Net gains and losses on financial items at fair value
Consolidated net gains and losses on financial items at fair value decreased by SEK198 million or 15% to
SEK1,107 million in the nine-month period ended September 30, 2008, compared to SEK1,305 million in the
nine-month period ended September 30, 2007. The change in the market valuation of Swedbank Markets’
credit bond portfolio was a significant contributor to the decrease in the nine-month period ended
September 30, 2008.
For Baltic Banking, net gains and losses on financial items at fair value were SEK263 million lower than in the
previous year mainly due to the decrease in the value of investment assets held by the insurance operations
and weak earnings in equity trading.
For Swedbank Mortgage AB, the market valuation of its lending and funding including derivatives reduced
income by SEK158 million in the nine-month period ended September 30, 2008, compared with a positive
effect of SEK19 million in the nine-month period ended September 30, 2007. The negative change in value is
due to the major fluctuations in the market between interest rates on mortgage bonds and interbank rates.
The negative change in the value of Bank’s treasury derivatives linked to the financing of euro lending in the
Baltic region amounted to SEK163 million. To reduce the accounting volatility in these transactions, cash
flow hedges are applied as of the third quarter of 2008, as a result of which unrealized changes in value are
no longer recognized through profit or loss but instead directly through shareholders’ equity.

Share of profit or loss of associates
The consolidated share of the profit or loss of associates increased by 6% to SEK376 million in the
nine-month period ended September 30, 2008, compared to SEK354 million in the nine-month period ended
September 30, 2007, primarily as a result of higher profit from EnterCard Holding AB.




                                                      43
Other income
Consolidated other income increased to SEK1,855 million in the nine-month period ended September 30,
2008, compared to SEK1,149 million in the nine-month period ended September 30, 2007. The change
resulted mainly from a capital gain of SEK440 million on branch sales to two savings banks in western and
southern Sweden as well as capital gains of SEK95 million on the sale of SPS Reinsurance and SEK66 million
on Hansabank’s partly owned card company, Pankade Kaardikeskus. The nine-months ended September 30,
2007 included a capital gain on the sale of CEK AB of SEK40 million.

Staff costs, profit-based staff costs
Consolidated staff costs increased by SEK779 million or 13% to SEK6,802 million in the nine-month period
ended September 30, 2008, compared to SEK6,023 million in the nine-month period ended September 30,
2007. The cost increase was primarily outside Sweden. Consolidated profit-based staff costs decreased by
SEK448 million or 39% to SEK688 million in the nine-month period ended September 30, 2008, compared to
SEK1,136 million in the nine-month period ended September 30, 2007. The decrease related primarily to
Baltic Banking and Swedbank Markets.

Other general administrative expenses
Consolidated other general administrative expenses increased by SEK469 million or 10% to SEK4,990 million
in the nine-month period ended September 30, 2008, compared to SEK4,521 million in the nine-month
period ended September 30, 2007, mainly due to expansion and changes outside Sweden as well as higher
expenses for cash transport and security in Sweden. Recovered VAT in the Russian leasing operations
reduced expenses by SEK83 million.

Depreciation/amortization and impairments of tangible and intangible fixed assets
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
SEK190 million or 37% to SEK703 million in the nine-month period ended September 30, 2008, compared to
SEK513 million in the nine-month period ended September 30, 2007. Amortization attributable to the
‘‘Hansabank’’ trademark amounted to SEK63 million in 2008.

Loan losses, net
Consolidated loan losses net amounted to SEK1,523 million in the nine-month period ended September 30,
2008, compared to SEK381 million during the corresponding period in 2007. The loan loss ratio was 0.18% in
the nine-month period ended September 30, 2008, compared to 0.06% in the nine-month period ended
September 30, 2007.

Tax expense
Consolidated profit before tax amounted to SEK11,411 million in the nine-month period ended
September 30, 2008, compared to SEK11,476 million in the nine-month period ended September 30, 2007,
and the tax expense was SEK2,380 million in the nine-month period ended September 30, 2008, compared
to SEK2,500 million in the nine-month period ended September 30, 2007, corresponding to an effective tax
rate of 21% in the nine-month period ended September 30, 2008, compared to 22% in the nine-month
period ended September 30, 2007.

Year ended December 31, 2007 compared with years ended December 31, 2006 and December 31,
2005
Profit for the year attributable to the shareholders of Swedbank AB
Consolidated profit for the year attributable to the shareholders of Swedbank AB in 2007 was
SEK11,996 million, compared to SEK10,880 million in 2006 and SEK11,879 million in 2005. Return on equity
was 18.9% in 2007, compared to 19.3% in 2006 and 24.6% in 2005. The cost/income ratio was 0.51 in
2007, compared to 0.52 in 2006 and 0.48 in 2005.

Net interest income
Consolidated net interest income increased by 20% to SEK19,157 million in 2007, compared to
SEK15,977 million in 2006. Net interest income from the lending portfolio increased by SEK1,236 million as



                                                    44
a result of volume increases despite continued margin pressure. Net interest income from deposits increased
by SEK2,342 million due to volume increases and higher interest margins. Net interest income from other
operations decreased by SEK398 million.
Consolidated net interest income increased by SEK298 million or 2% to SEK15,977 million in 2006, compared
to SEK15,679 million in 2005.

Net commission income
Consolidated net commission income increased by 11% to SEK9,880 million in 2007, compared to
SEK8,869 million in 2006. This was mainly due to higher income from asset management and payment
services. Brokerage and lending commissions also increased. Consolidated net commission income increased
by SEK1,699 million or 24% to SEK8,869 million in 2006, compared to SEK7,170 million in 2005. Asset
management commissions increased by 18% or SEK569 million. Brokerage commissions increased by 42% or
SEK291 million.

Net gains and losses on financial items at fair value
Consolidated net gains and losses on financial items at fair value amounted to SEK1,691 million during 2007,
compared to SEK2,738 million in 2006. In the second half of 2007 income was negatively affected by
turbulence in the financial markets. Income in 2006 was positively affected by SEK267 million from the
change in the value of Norwegian primary capital certificates and the shareholding in SpareBank 1 Gruppen.
Consolidated net gains and losses on financial items at fair value amounted to SEK2,738 million in 2006,
compared to SEK2,817 million in 2005, primarily as a result of changes in the value of Norwegian primary
capital certificates.

Share of profit or loss in associates
The consolidated share of the profit or loss in associates increased to SEK424 million in 2007, compared to
SEK222 million in 2006, primarily as a result of improved profit in EnterCard Holding AB and NCSD Holding
AB (VPC).
The consolidated share of the profit or loss in associates decreased to SEK222 million in 2006, compared to
SEK301 million in 2005, primarily as a result of lower profit from NCSD Holding AB (VPC).

Other income
Consolidated other income increased by 27% to SEK1,772 million in 2007, compared to SEK1,391 million in
                                                ¨ a
2006, primarily due to income from Swedbank Fors¨ kring related to a surplus from the loan protection
product and income from the sale of CEK AB.
Consolidated other income decreased by SEK2,102 million to SEK1,391 million in 2006, compared to
SEK3,493 million in 2005, primarily due to capital gains from the sale of 50% of EnterCard Holding AB
SEK800 million) and the sale of KIAB to Lindorff (SEK1,421 million). Excluding capital gains, other income
increased by SEK119 million or 3% from 2005 to 2006.

Staff costs, profit-based staff costs
Consolidated staff costs increased by SEK881 million or by 12% to SEK8,134 million in 2007, compared to
SEK7,253 million in 2006. Rapid growth in the Baltic region, salary increases, the acquisition of the Ukrainian
                      ¨
Banking Operations, Soderhamns Sparbank and the Folksam agreement contributed to the increase in staff
costs.
Consolidated staff costs increased by SEK416 million or 6% to SEK7,253 million in 2006, compared to
SEK6,837 million in 2005, mainly due to the international expansion as well as contractual salary increases.
Consolidated profit-based staff costs increased by 27% to SEK1,658 million in 2007, compared to
SEK1,307 million in 2006.
Consolidated profit-based staff costs decreased by SEK47 million or 3% to SEK1,307 million in 2006,
compared to SEK1,354 million in 2005.




                                                      45
Other general administrative expenses
Consolidated other general administrative expenses increased by SEK302 million or by 5% to
SEK6,222 million in 2007, compared to SEK5,920 million in 2006, primarily due to IT and armored transport
costs, as well as changes in the Bank’s structure. A VAT refund of SEK60 million in Russia in 2007 compared
with provisions of SEK151 million in 2006 contributed to the comparison of expenses by SEK211 million.
Consolidated other general administrative expenses increased by SEK558 million or 10% to SEK5,920 million
in 2006, compared to SEK5,362 million in 2005, primarily due to increased expenses in Baltic Banking. IT
expenses increased by 3% to SEK1,257 million, compared to SEK1,216 million in 2005. Russian Banking was
affected by a provision of SEK151 million in 2006 regarding a VAT dispute in Russia.

Depreciation/amortization and impairments of tangible and intangible fixed assets
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
7% to SEK705 million in 2007, compared to SEK659 million in 2006.
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
9% to SEK659 million in 2006, compared to SEK603 million in 2005.

Loan losses, net
Consolidated loan losses amounted net to an expense of SEK619 million in 2007, compared to an income of
SEK205 million in 2006, corresponding to a loan loss ratio of 0.07% in 2007, compared to a negative loan
loss ratio of 0.02% in 2006.
Consolidated loan losses amounted to net income of SEK205 million in 2006, compared to expense of
SEK294 million in 2005, corresponding to a negative loan loss ratio of 0.02% in 2006, compared to 0.04% in
2005.

Tax expense
Consolidated profit before tax amounted to SEK15,586 million in 2007, compared to SEK14,263 million in
2006 and the consolidated tax expense was SEK3,450 million in 2007, compared to SEK3,211 million in
2006, giving an effective tax rate of 22% in 2007, compared to 23% in 2006.
Consolidated profit before tax amounted to SEK14,263 million in 2006, compared to SEK15,010 million in
2005 and the consolidated tax expense was SEK3,211 million in 2006, compared to SEK2,781 million in
2005, giving an effective tax rate of 23% in 2006, compared to 19% in 2005.

Cash flow
The cash flow statement shows receipts and disbursements during the year as well as cash and cash
equivalents at the beginning and end of the year. The cash flow statement is reported using the indirect
method and is divided into receipts and disbursements from operating activities, investing activities and
financing activities.

Operating activities
Cash flow from operating activities is based on operating profit for the year. Adjustments are made for items
not included in cash flow from operating activities. Changes in assets and liabilities from operating activities
consist of items that are part of normal business activities—such as loans to and deposits and borrowings
from the public and credit institutions—and that are not attributable to investing and financing activities.
Cash flow includes interest receipts of SEK64,704 million, SEK46,558 million, and SEK38,455 million
and interest payments, including capitalized interest, of SEK46,034 million, SEK30,055 million, and
SEK23,009 million, for 2007, 2006, and 2005, respectively. The decrease in cash flow from operations during
the three year period is due to an increase in loans to the public. Due to the financial turbulence in 2008 the
Bank has, to a larger extent, used cash and cash equivalents to finance its operations. Cash and cash
equivalents decreased by SEK88,381 million in the first nine months of 2008.




                                                      46
Investing activities
Investing activities consist of the purchase and sales of fixed assets and strategic investments. When
businesses are acquired or divested, the cash and cash equivalents included in them are reported as separate
items.
During the first nine months of 2008 the Bank acquired all shares in Folksam Fond AB, which was settled in
cash for SEK463 million. During the first nine months of 2008 the Bank also sold eight branches to savings
banks for a price of SEK440 million.
In 2007, financial assets were acquired for SEK5,783 million, of which SEK4,943 million was paid in cash. The
significant acquisitions were OJSC Swedbank (former name JSCB TAS–Kommerzbank), Soderhamns        ¨
                                                                   ¨
Sparbank AB and Zamsos AB. With respect to the acquisition of Soderhamns Sparbank AB, assets excluding
acquired cash and cash equivalents amounted to SEK1,154 million, of which lending to the public was
                   ¨
SEK871 million. Soderhamns Sparbank’s liabilities amounted to SEK1,039 million, of which deposits from the
public were SEK1,027 million. With respect to the acquisition of OJSC Swedbank, assets excluding acquired
cash and cash equivalents amounted to SEK9,071 million, of which lending to the public was
SEK7,737 million. OJSC Swedbank’s liabilities amounted to SEK8,448 million, of which SEK3,009 million was
owed to credit institutions and deposits from the public was SEK4,583 million. In 2007, the Bank sold certain
shares and received total consideration of SEK333 million. The most significant sales were shares in CEK AB,
MasterCard and primary capital certificates in Sparbanken Nord.
In 2006, shares were sold and cash received in an amount of SEK1,632 million. The most significant sales
consisted of Sparebank 1, Rogaland, Sparebank Midt and Mastercard.
In 2005 shares for a total purchase price of SEK16,046 million were acquired. The most significant
acquisitions consisted of an outstanding minority interest in AS Hansabank and supplementary acquisitions
of First Securities ASA, which was, as a result, entered in the accounts as a subsidiary. At the time of the
acquisition of First Securities ASA, assets excluding acquired cash amounted to SEK1,111 million, of which
loans to the public amounted to SEK920 million. The entity’s liabilities amounted to SEK1,345 million, of
which amounts owed to credit institutions amounted to SEK384 million and deposits from the public
amounted to SEK452 million. In 2005, shares were sold and cash received to an amount of SEK3,545 million.
The most significant sales consisted of Kundinkasso AB and the part-divestment of EnterCard Holding AB
and Aktia Sparbank Ab. At the time of the sale of EnterCard Holding AB, which is now entered in the accounts
as an associated entity, its assets amounted to SEK6,506 million, of which loans to the public amounted to
SEK5,846 million and liabilities amounted to SEK3,841 million (of which amounts owed to credit institutions
amounted to SEK3,361 million). At the time of the sale of Kundinkasso AB, which had previously been a
subsidiary, assets amounted to SEK311 million and liabilities amounted to SEK17 million.
The Bank has signed an agreement to acquire Banco Fonder AB. The acquisition is scheduled to close on
January 20, 2009 when the purchase price will be paid.
Swedbank Robur AB made public on November 18, 2008 that two funds have been acquired from Carnegie.
Apart from normal IT development projects, construction and reconstruction of offices, opening of new
branches in Ukraine and Russia and what has been mentioned above, the Bank does not have any material
ongoing investments or undertakings to make material investments. The investments will be financed
through internally generated funds.

Financing activities
Issue and redemption of bond loans with maturities exceeding one year are reported gross. Change in other
borrowing includes the net change in borrowing with shorter terms and high turnover. The primary cause of
changes in cash flow from financing activities is due to changes in the amount of interest bearing securities
issued and redeemed during the relative period.

Cash and cash equivalents
Cash and cash equivalents consist of cash and balances with central banks, for net claims the net of
overnight deposit receivables and overnight deposit liabilities with maturities up to five days, and treasury
bills, other bills and mortgage bonds eligible for refinancing with Central banks taking into account repos and
short-selling.




                                                      47
Liquidity and capital resources
Liquidity
Liquidity risks refer to the risk that the bank cannot fulfill its payment commitments on any given due date,
without significantly raising the cost to fund payments. In other words, liquidity risks arise when the
maturities of the Bank’s assets and liabilities, including derivatives, do not coincide. Liquidity risks can arise
from banking operations and from trading. The Bank defines liquidity risk as the risk that, in a strained
market situation, it will have difficulty meeting its payment commitments or be forced to borrow money on
unfavorable terms.
For more information regarding liquidity risk management see ‘‘Risk Management.’’
The working capital and the capital resources are, in the opinion of the Bank, sufficient for the Bank’s
requirements for a period of 12 months from the date of this prospectus.

Sources of funding
The main funding sources in the Bank consist of deposits from the public, covered bonds and unsecured
issued debt. Both the Bank and its mortgage subsidiary Swedbank Mortgage AB have a well-diversified
investor base. In line with the funding strategy, as of September 30, 2008, more than 50% of the funding in
the Bank is in currencies other than SEK.
During autumn 2008, the access of banks to wholesale funding markets was substantially reduced. This
trend was exacerbated by the collapse of Lehman Brothers in September 2008. The activity in the markets
for commercial paper, covered bonds and unsecured bonds remain low. As these markets constitute
important funding sources for the Bank, it has, in common with most other European banks, been forced to
utilize facilities made available by central banks, in the Bank’s case, primarily the Swedish Riksbank.
The following table shows the breakdown of the Bank’s different funding sources:

Swedbank
SEKm, nominal amounts
As per September 30, 2008                                                                                                                                                                                                                          Total

Domestic Commercial Paper . . . . .                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    13,554
Euro Commercial Paper . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    20,665
US Commercial Paper . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    66,178
Certificates of Deposits New York .                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    21,405
Medium Term Notes . . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    34,191
Global Medium Term Notes . . . . . .                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    81,181
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                     237,174

Swedbank Mortgage
SEKm, nominal amounts
As per September 30, 2008                                                                                                                                                                                                                          Total

Euro Commercial Paper . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    38,228
French Certificates Deposits                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    14,295
US Commercial Paper . . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    23,351
Domestic Commercial Paper                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    21,971
Euro Medium Term Notes . .                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    71,702
Domestic Benchmark . . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   273,482
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                     443,029

Deposits from the public
Swedish Banking is the main deposit-taking entity within the group although all the three Baltic subsidiaries
also receive significant amounts of deposits. The loan portfolio of the Issuer is primarily sourced through
deposits. As of September 30, 2008, the Bank’s total deposits and borrowings from the public amounted to
SEK507 billion.




                                                                                                                48
Covered bonds
Swedbank Mortgage’s lending to the public is financed through capital markets borrowing, primarily covered
bonds. The covered bonds are rated with an AAA rating from Standard and Poor’s and an Aaa rating from
Moody’s. The quality of the covered bonds results from the high quality in Swedbank Mortgage’s secured
credit portfolio, which consists of loans with collateral in Swedish real estate currently with an average
loan-to-value ratio of 43% (compared to 44% for the entire loan portfolio) or loans to or with a guarantee
from Swedish municipalities. During the first nine-months of 2008, Swedbank Mortgage issued covered
bonds for SEK94 billion to investors in the Swedish and international markets. During the third quarter of
2008, the corresponding amount was SEK29 billion. During the fourth quarter 2008, SEK25 billion of
external long-term financing matures and in 2009 SEK102 billion matures. As of September 30, 2008,
Swedbank Mortgage had SEK409 billion of covered bonds outstanding.

Other issued debt
As a source of long term funding, the Bank issues unsecured bonds, mainly used as a supplementary funding
source for the Bank’s business outside Sweden. Both the Issuer and Swedbank Mortgage have several
programs for short term funding and can issue certificates and commercial papers under those programs. As
a further source of funding, the Bank had outstanding as of September 30, 2008 issued subordinated
liabilities, mainly accounted as Tier 1 or Tier 2 capital for the purposes of capital adequacy amounting to
SEK41 billion (excluding covered bonds).

Interbank funding
The Bank’s capital markets funding is mostly program financed. A minor part of the funding comes from
interbank funding through loans or deposits from financial institutions.

Loans from the Swedish Central Bank, the National Debt Office and the ECB
During the autumn market turmoil, both the European central banks and the Swedish National Debt Office
opened different loan facilities for banks in order to improve the market liquidity. The Bank has used these
facilities as an additional source of funds and borrowed funds from the Swedish Central Bank, the National
Debt Office, the Bank of Norway and the ECB.

Refinancings
As of September 30, 2008, it was estimated that the Issuer needs to refinance its outstanding debt of
SEK18 billion in 2008 and SEK40 billion in 2009. As of September 30, 2008, it was estimated that Swedbank
Mortgage needs to refinance its outstanding debt of SEK25 billion in 2008 and SEK102 billion in 2009.

Swedish government guarantee plan
The Swedish government launched a Financial Stabilization Plan in October 2008 with the purpose of
stabilizing the Swedish financial system that involved the establishment of a medium-term credit guarantee
plan (the ‘‘Guarantee Plan’’) of up to SEK1,500 billion, of which up to SEK500 billion is for covered bonds with
a term of three to five years. The principal objective of the Guarantee Plan is to improve the liquidity of
Swedish banks and credit institutions. The Guarantee Plan applies to bonds, commercial papers, certificates
of deposits and other non-subordinated debt instruments (including covered bonds) with terms longer than
90 days but less than three years, but excludes complex and structured financial products. The Guarantee
Plan applies also to the covered bonds that have a term exceeding 90 days, but not exceeding maturity of up
to five years. The institution can choose to apply for a guarantee for one or more loans. Guarantees may be
provided until April 30, 2008, with a possible extension to December 31, 2009.
On November 4, 2008, the Issuer confirmed that it intended to apply to participate in the Guarantee Plan and
on November 7, 2008 the Issuer entered into a guarantee commitment with the Swedish National Debt
Office. To guarantee the Bank’s funding under the Guarantee Plan the Swedish National Debt Office receives
a fee of 50 basis points for unsecured debt with maturities of 91 days up to one year. The fee is 83 basis
points for unsecured debt with maturities longer than 1 year and not longer than 3 years. For covered bonds
the annual fee is expected to be slightly above 25 basis points although the final outcome must be confirmed
by National Debt Office in cooperation with ECB.
The Issuer and Swedbank Mortgage have started to issue debt instruments pursuant to the Guarantee Plan.
As of November 26, 2008, the Issuer had issued SEK26.2 billion and Swedbank Mortgage had issued
SEK3.5 billion under the Domestic Commercial Paper program. As of November 28, 2008 the Issuer had
issued a further EUR2 billion, CHF200 million, SEK14 billion under its Global Medium Term Note program and
SEK5 billion under the Domestic Paper program pursuant to the Guarantee Plan.


                                                      49
                                               RISK MANAGEMENT
A central part of the Bank’s activities consists of identifying, measuring, controlling and reporting internally
the risks associated with its operations. The Bank’s risk taking is made within the limits set by policies and
instructions decided by the Board of Directors and the CEO. Below is a description of how the Bank manages
the risks associated with its operations.
The Bank has identified the risks that its operations generate and has designed a generic process for
managing them. The principal risks facing the Bank’s business segments are credit risk, liquidity risk, market
risk (which encompasses interest rate, currency risk and derivative risks) and operational risk. The purpose of
the Bank’s risk management process is to continuously evaluate, monitor and manage the size and
concentration of these risks.
The Bank’s risk management process covers seven steps: preventing risks, identifying risks, quantifying risks,
analyzing risks, proposing measures, monitoring and following up risks and finally reporting risks. The
process encompasses each identified area of risk, and specific activities are adjusted to the nature of each risk
area in order to protect the Bank against unwanted risk-taking. The risk process also provides a clear
description of the Bank’s risk profile, which then serves as the basis for the Bank’s internal capital adequacy
assessment process. This process entails an evaluation of capital needs based on the Bank’s overall risk level
and business strategy. The aim is to ensure the efficient use of capital and to ensure that the Bank will meet
the minimum legal capital requirement and maintain access to domestic and international capital markets
even under adverse market conditions.
The Bank’s Board of Directors bears the ultimate responsibility for the Bank’s risk management and
associated capital assessment. A comprehensive risk and capital policy and special policy documents for the
various risk areas set out overall guidelines for risk-taking. The ability to assume risks within the Bank’s
business segments is restricted by limits on individual transactions and on portfolio level.
The system to measure risk is an integral part of risk management. Market risks are quantified in terms of
Value-at-Risk (‘‘VaR’’) complemented by various types of sensitivity analyses. Credit risks are quantified
through the internal rating system in combination with assessments based on local competence. Liquidity
risks are quantified through cash flow analysis. In addition, all risks, including operational risks, are also
evaluated by reference to the likelihood that an event will occur and the financial consequences of that event.
Each of the Bank’s business segments has responsibility for the risks that its operations generate. The Bank’s
aim is to localize risk management and accordingly the chief executive of each segment is responsible for risk
management at that particular segment. This means that those responsible for operations must ensure that
the risk process is applied within each business segment and that they follow the standards set by the Board
of Directors and the CEO of the Bank.
In addition to the control and monitoring performed by the business segments, the Bank has an independent
group level risk control function. This is consolidated in a single organization called ‘‘Group Risk Control’’.
Group Risk Control is responsible for developing the risk management processes and providing methods for
risk identification, risk quantification, analysis and reporting of all risks, such as financial risks, credit risks and
operational risks.
Group Risk Control also regularly conducts analyses of how recent events in the market and economy affect
the Bank’s risks as well as stress tests that calculate the effect on the Bank of dramatic potential changes.
Market and liquidity risks are reported daily and credit risks are reported monthly. Changes over time in risk
profiles within various credit portfolios are analyzed as well.
The Bank’s various risk-control units report risks directly to their business unit’s executive management and
also to Group Risk Control. The Chief Risk Officer is the Head of Group Risk Control and reports risks on a
consolidated basis directly to the CFO and CEO and the Board of Directors.

New capital adequacy rules
On February 1, 2007, new capital adequacy rules, Basel 2, entered into force in Sweden. The rules on capital
adequacy set out how much capital a credit institution such as a bank must have in relation to the size of its
risk-taking, expressed in the form of risk-weighted assets (‘‘RWA’’). The most important part of the capital
base is shareholders’ equity, although certain subordinated liabilities such as subordinated loans may be
included as well. The legal minimum requirement stipulates that the capital base must correspond to at least
8% of risk-weighted assets. The Bank’s total capital base as of September 30, 2008 was 9.9% of




                                                          50
risk-weighted assets. For more information relating to this calculation see ‘‘Management’s Discussion and
Analysis—Capital Adequacy.’’
Since the new Basel 2 rules entail major changes, these are being implemented in stages over a three-year
period (the transition period) extending until the end of 2009. The transition rules require, among other
things, that the Bank’s capital base must at least correspond to 95% (2007), 90% (2008) and 80% (2009) of
the capital requirements for credit and market risks calculated according the previous capital adequacy rules.
According to the new rules there are two main methods for calculating the capital requirement for credit risk:
the standardized approach and the internal ratings based (IRB) approach. In March 2007, the Bank received
authorization from the SFSA to apply the IRB approach when calculating the capital requirement for credit
risk for the major part of its Swedish credit portfolio. As of September 30, 2008, the Bank applies the IRB
approach to the majority of the Bank’s credit exposure. The SFSA is currently assessing whether the IRB
approach can also be applied to the Baltic part of the credit portfolio and in spring 2009 will assess whether
this approach can be applied to the credit portfolio of Swedbank Finance. Assuming the Bank receives
authorization from the SFSA, the Bank’s goal is to apply the IRB approach to these portfolios during 2009.
Market risk assessments are based on the Bank’s VaR model for the Issuer and Baltic subsidiaries relating to
interest rate risk in the trading book, and currency risk. In addition, the VaR model is used for general and
specific equity risk in the Issuer. Other risks are treated by the standardized approach. The regulatory capital
requirement relating to market risk amounted to SEK1,600 million as of September 30, 2008.
The new Basel 2 rules provide that there are three methods for calculating the capital requirement for
operational risk: the basic indicator approach, the standardized approach and the advanced measurement
approach. The Bank uses the standardized approach. The regulatory capital requirement for operational risk
amounted to SEK3,888 million on September 30, 2008. The Bank’s capital base on that date was
SEK83,606 million.
One of the most important changes in the new rules is the requirement that the institution prepare and
document its own processes and methods to assess its capital needs (Pillar 2). It must systematically
evaluate its capital requirements in relation to the total level of risks that it is or may be exposed to. The rules
stress that all risks must be taken into account in the assessment, not just those already included when
calculating the capital requirement for credit, market and operational risks (Pillar 1). Moreover, the new rules
place greater requirements on the institution to publish information on its risks, risk management and
associated capital requirements (Pillar 3).

Internal capital adequacy assessment process
The internal capital adequacy assessment process at the Bank is based on well-established processes and
systems for steering and supervision including principles for risk management and strategic planning. In
addition, regular scenario-based simulations and stress tests form other key components.
The Bank’s risk profile and the Board of Directors’ risk tolerance serve as a starting point for the internal
capital adequacy assessment process. The next step in the process involves the formulation of one or more
scenarios. The scenarios are forward looking and characterized by hypothetical drastic negative changes in
macroeconomic variables. The scenario analyses provide an overall picture of key risks to which the Bank is
exposed by quantifying their impact on the income statement (credit losses, net interest income,
commissions and changes in net gains and losses on financial items at fair value), balance sheet, capital base
and risk-weighted assets under the adverse macroeconomic scenario. The Bank makes use of its collective
macroeconomic expertise to construct the adverse scenarios. In turn, the business segments are involved in
assessing how the macroeconomic variables affect their business, such as margins, volumes and credit
losses. In recent years, several different recession scenarios have been applied.
The analyses also take into account inflexible costs and business cycle effects on the risk-weighted amount.
The Bank believes that a major advantage of the overall and comprehensive picture that the scenario model
provides is that it facilitates proactive risk and capital management. Business cycle effects are considered,
since the scenarios cover a relatively long time horizon (at least three years) and are characterized by
substantial adverse volatility in economic variables.
In this way, the Bank obtains a comprehensive overview of the Bank’s financial stability and strength and
corresponding capital required, based on the overall risk level and current business strategy. The capital
required is defined as the current capital buffer considered necessary to protect the Bank against future
losses with the purpose of meeting the minimum capital requirements during every single year of the chosen



                                                        51
scenario. The quantitative result of the scenario analysis is a key component for the formulation of
capitalization targets and capital strategy.
In addition to analyzing various recession scenarios, the Bank allocates capital requirements to each of the
risks identified below. The aim of this calculation, which the Bank refers to as the ‘‘Building Block’’ calculation,
is to estimate the immediate loss of the core Tier 1 capital that may occur, due to each risk type, over a period
of one year and with a 0.1% probability of occurrence (i.e., calibrated to the regulatory confidence level).
The following risks are considered in the Bank’s internal ‘‘Building Block’’ risk scenario analysis:
•    Credit risk;
•    Market risk (which encompasses interest rate, currency and derivative risk);
•    Operational risk;
•    Income volatility risk;
•    Strategic risk related to organic growth and acquisitions; and
•    Risk related to post-employment benefits.
Strategic (other than risk related to organic growth and acquisitions) and reputational risks are not usually
addressed in the simulations, although the capital buffer implicitly also serves to mitigate these risks. These
risks are still an essential part of the Bank’s potential risk exposure and are accordingly carefully monitored
and managed. The Bank does not view capital as the primary and most efficient means to mitigate
reputational risk and strategic risk (other than risk arising from organic growth and acquisitions). Instead, the
Bank applies a structured process for strategic decision-making and a strong internal control processes to
manage reputational risk.
The quantitative calculations are augmented by a qualitative assessment and discussion, where e.g. peer
group analysis and rating ambition is taken into account.

Credit risk
Credit risk is defined as the risk of a counterparty, or obligor, failing to meet contractual obligations to the
lender and the risk that collateral will not cover the claim. The term counterparty risk is often used instead of
credit risk when measuring credit exposure in financial instruments and arises as an effect of the possible
failure by the counterparty in a financial transaction to meet its obligations. This risk is often expressed as
the current market value of the contract adjusted with an add-on for future potential movements in the
underlying risk factors.

Credit policies
The Bank has a corporate credit policy which is reviewed and approved annually by the Board of Directors.
The Bank’s corporate credit policy provides the basic rules for its lending business with, and other extensions
of credit to, corporate customers, retail customers, financial institutions, and public sector entities. Baltic
Banking has its own credit policy which is modeled on the Bank’s corporate credit policy and adapted for local
conditions. The Bank’s credit policy applies certain limits and standards under which the business segments
operate.
The decision whether or not to extend a loan to a customer depends primarily on the customer’s financial
standing, as measured by cash flow, the customer’s credit rating and potential collateral. The customer’s
credit rating is assigned under the Bank’s internal rating system described below.

Internal rating system
The Bank’s rating system is primarily a business-support tool that makes the credit process more efficient by
ensuring that credits with higher risk are either rejected directly or analyzed very carefully, while credits
with lower risk are managed in a more standardized fashion. Further, approval limits are higher for rating
grades that indicate low risks. Using refined calculations, the system can more easily identify the risk-taking
cost in individual transactions, at the same time that the cost of risk and risk-adjusted profitability can be
calculated for the Bank’s various business units and credit portfolios. Moreover, it facilitates the analysis of
the Bank’s credit risks for both individual commitments and at the portfolio level. The rating system has also
been designed to be used for calculations and reporting according to the new Basel 2 capital adequacy rules.




                                                        52
The purpose of the system is to measure with as much accuracy as possible the risk that a customer or a
contract will default and thereby estimate the losses that the Bank would incur. The key to the rating system
are the models that measure risks in lending to retail customers, SMEs, large corporates, credit institutions
and sovereigns. There are large differences between countries, customer groups and forms of collateral, and
to achieve an optimal level of precision in the measurements and ensure equitable and professional
treatment of customers, around 80 different models have been developed. The rating system is applied, with
the exception of several small portfolios, within the entire Bank.
Internal rating means that the Bank, with the help of the models, assigns each customer or exposure a value
on a rating scale, a so-called rating grade. With the help of the rating scale, customers or exposures are
ranked from highest to lowest risk, with risk quantified for each step along the scale. The rating of the risk
that a customer will default is expressed on a scale of 23 grades, where grade 0 represents the highest risk
and grade 21 the lowest, along with grade ‘‘F’’ for credits that have defaulted.
The Bank’s internal rating system serves several purposes:
•   risk assessments, credit decisions, monitoring and management of credit risk;
•   estimating risk adjusted profitability;
•   analyzing the risk profile of the Bank’s credit portfolios;
•   developing the credit strategy and subsequent risk management activities;
•   reporting credit risks to the Board of Directors, the CEO and senior management; and
•   determining capital requirements and capital allocation for credit risk.
The following charts set out the Bank’s risk profile for retail and corporate lending according to its internal
rating system as of September 30, 2008:

                                               Lending to the public—Retail*

       30%



       25%



       20%



       15%



       10%



        5%



        0%
              F     0    1    2    3   4   5     6   7   8    9    10   11   12   13   14   15   16   17   18   19   20   21

                  = Investment grade
                                                             Risk rating
                                                                                                           29NOV200820325987
*   The risk classification system is not yet implemented in Swedbank Finans, the branches in Finland and Denmark and some smaller
    subsidiaries in the Bank. Lending classified according to the standardized approach, which is used in, for example, Ukraine and
    Russia, is not included.




                                                              53
                                             Lending to the public—Corporate*

      20%




      15%




      10%




       5%




       0%
              F      0    1   2    3   4      5      6      7      8     9     10     11   12     13     14        15   16   17   18   19   20   21

                  = Investment grade                                    Risk rating
                                                                                                                                  29NOV200820325848
*   The risk classification system is not yet implemented in Swedbank Finans, the branches in Finland and Denmark and some smaller
    subsidiaries in the Bank. Lending classified according to the standardized approach, which is used in, for example, Ukraine and
    Russia, is not included.

The following chart sets out the composition of the Bank’s lending to the public as of September 30, 2008:

                                                           Lending by Sector


                                                                                           Corporate excl. real
                                           Swedbank Mortgage,                                 estate mgmt.
                                            private individuals                                   28%
                                                   37%




                                                                                                    Municipalities
                                                                                                        2%

                                                                                             Private Individuals
                                                                                                    12%
                                                                  Real Estate Mgmt.
                                                                        21%


                                                                                       29NOV200820330703
Loan approval
The Bank has a decentralized loan approval process, which take essential matters and risk factors into
account. Even in the lowest level of the decision mandates, the Bank always uses the four eyes principles,
which mean that at least two people are involved in the credit decisions or one person including a scoring
system.
The Bank maintains a Credit Committee structure in all home markets where the country Credit Committee
represents the highest level. On top of that there is the Swedbank Group credit committee structure. The
highest level is the Swedbank Board Credit Committee. Proposals relating to the most important principles
are decided by the Swedbank Board of Directors.

Credit monitoring
Formal monitoring is done through regular credit reviews. Corporate customers, financial institutions, and
sovereigns undergo review at least once a year. If the customer’s risk profile has deteriorated, a range of



                                                                          54
corrective measures may be considered and implemented. The customer’s rating may be increased or
decreased based on the credit review.
The Bank applies a proactive, ‘‘bottom-up’’ approach to monitor exposures with increased risk which is
performed on a segment level. Under this approach, a local client manager determines on a quarterly basis
the increased risk and expected loss with respect to credits over an upcoming 3-24 month period. The local
credit manager’s decisions are reviewed on a regional level. If there is a decision which includes an increased
risk, the Bank’s department Financial Restructuring and Recovery (‘‘FRR’’) will be involved in planning actions
to minimize the risk. Those staff members play a decisive part in charting, analyzing, and allocating any
impairment losses on loans and advances (impairments, value adjustments, or provisioning). By becoming
involved at an early stage, they aim to minimize any future losses. Cases in which restructuring or
settlements take place are analyzed by the Group Credit Committee to ascertain their causes. Lending
processes are then adapted as necessary on the basis of such analysis.
A credit exposure is considered in default if any of the following criteria are met:
•    the counterparty is past due more than 90 days on any material credit obligation to the Bank; and
•    there has been an assessment indicating that the counterparty is unlikely to pay its credit obligations as
     agreed, and the Bank will have to enforce its collateral interest or take other similar action.

Liquidity risk
Liquidity risks refer to the risk that the Bank cannot fulfill its payment commitments on any given due date,
without significantly raising the cost to fund payments. In other words, liquidity risks arise when the
maturities of the Bank’s assets and liabilities, including derivatives, do not coincide. Liquidity risks can arise
from banking and trading. The Bank defines liquidity risk as the risk that, in a strained market situation, it will
have difficulty meeting its payment commitments or be forced to borrow money on unfavorable terms.
The Bank strives to avoid large liquidity risks and maintain good liquidity preparedness based on a
conservative risk profile. Liquidity risks are reduced through the Bank’s efforts to ensure stable sources of
financing, such as deposits from the public and diversified funding from a large number of capital markets
instruments. The Bank works actively to maintain and further develop its well-diversified funding base.
Another important aspect of liquidity risk management are the liquidity reserves in the form of liquid
securities held by both the Swedish and Baltic operations. Furthermore, the Bank’s liquidity situation is
continuously monitored and analyzed to avoid excessive short-term payment commitments. The Bank uses
liquidity limits, which limits the payment commitments allowed during a specific day or other predetermined
time periods. Liquidity management is overseen by Group Treasury and centralized within a limited number
of units, which improves efficiency and facilitates review and control of the Bank’s liquidity risks.
Special continuity plans to manage serious disruptions to liquidity have been prepared at the Bank level and
locally in the countries where the bank conducts significant operations.
In 2007, the SFSA gave Swedbank Mortgage permission to issue covered bonds. Swedbank Mortgage’s
Swedish and international bonds were converted into covered bonds in the second quarter of 2008, resulting
in a higher credit rating. Accordingly, the Bank’s liquidity improved, as its funding base expanded and the
opportunity to maintain liquidity reserves was enhanced.
Recent developments relating to the international credit crisis have affected the market for covered bonds,
unsecured debt such as commercial papers and interbank deposit markets, and as result conditions for
liquidity planning have significantly changed. The Bank works proactively to secure sufficient collateral for
participation in different central banking operations. Accordingly, the Bank has decided to participate in the
Swedish government’s guarantee program which guarantees senior unsecured bank debt and covered bonds.
This means that the Bank has the opportunity, but not the obligation, to use this guarantee when funding is
raised.

Market risk
Market risks refer to the risk that changes in interest rates, exchange rates and share prices will lead to a
decline in the value of the Bank’s net assets and liabilities, including derivatives. The predominant market
risks in the Bank are structural and are managed centrally by Group Treasury with the objective of
minimizing the negative impact on the Bank’s profit and shareholders’ equity. Examples of structural risks
include interest rate risks, which arise when the interest fixing periods in the Bank’s lending operations do



                                                        55
not precisely correspond with the interest fixing periods in its financing, and currency risks, which arise in
the funding of acquired shares in foreign businesses. In the past, the Bank’s largest individual market risk has
generally been interest risk. Due to the international expansion in recent years, the structural currency risks
have grown and the largest individual market risk in the Bank is now structural currency risk, followed by
interest-rate risk.
Market risks in the Bank’s trading operations are low in relation to the Bank’s total risks, as illustrated by the
fact that market risks’ share of the total risk-weighted amount in the calculation of the Bank’s capital
adequacy amounted to only 2.4% as of September 30, 2008.
The Bank’s total market risks, expressed as VaR at a confidence level of 99% and over a time period of
12 months, divided among risk-taking units, show that the Bank’s market risks largely consist of structural
risks concentrated in Group Treasury and the subsidiary Swedbank Mortgage.
The Bank’s VaR model includes interest rate risk, share price risk, and currency risk (not including spread risk
in corporate bonds). The Bank’s total VaR increased by 46% from SEK197 million to SEK288 million during
the nine-month period ended September 30, 2008, excluding OJSC Swedbank. During the nine-month period
ended September 30, 2007, VaR decreased by 25% to SEK166 million. The higher VaR reflects higher
volatility in the financial markets and larger strategic currency risks due to the purchase of OJSC Swedbank in
2007. The chart below shows changes in VaR from October 1, 2007 to September 30, 2008:

                  The Bank’s market risks, expressed in VaR, distributed by risk-taking unit
                                October 1, 2007 to September 30, 2008(1)


                       0

                   -50

                  -100
           SEKm




                  -150

                  -200

                  -250

                  -300

                  -350
                                                                                  08
                           7



                                     7



                                               7


                                                        08


                                                                08


                                                                        08




                                                                                          08


                                                                                                  08


                                                                                                          08


                                                                                                                  08


                                                                                                                          08
                       00



                                    00



                                              00




                                                                               20
                                                    20


                                                              20


                                                                      20




                                                                                        20


                                                                                                20


                                                                                                        20


                                                                                                                20


                                                                                                                        20
                    /2



                                /2



                                          /2




                                                                             1/
                                                   1/


                                                             1/


                                                                     1/




                                                                                       1/


                                                                                               1/


                                                                                                       1/


                                                                                                               1/


                                                                                                                       1/
                   /1



                                /1



                                          /1




                                                                             4/
                                                   1/


                                                             2/


                                                                     3/




                                                                                       5/


                                                                                               6/


                                                                                                       7/


                                                                                                               8/


                                                                                                                       9/
                  10



                               11



                                         12




                                Hansabank group                                             SwedbankMortgage
                                Parent Company, Swedbank Markets                            Parent Company, Group Treasury
                                Total Swedbank group
                                                                                                                    29NOV200820330415
(1)   excluding OJSC Swedbank.

The earnings level in Swedbank Markets’ trading operations, which accounts for 90% of the Bank’s trading
operations, decreased by 10% to SEK972 million in the nine-month period ended September 30, 2008,
compared to SEK1,080 million in the nine-month period ended September 30, 2007. Swedbank Markets
incurred trading losses on 53 days in the nine-month period ended September 30, 2008, compared to
33 days in the nine-month period ended September 30, 2007. The Swedbank Market’s VaR increased by 40%
to SEK30 million in the nine-month period ended September 30, 2008, compared to SEK21 million in the
nine-month period ended September 30, 2007. The increase in the number of days with recorded losses and
in VaR reflects an increasingly volatile market. Nonetheless, the Bank’s trading operations managed to
maintain a relatively stable earnings level while avoiding major losses, which the Bank attributes to a low
level of risk which it believes is maintained in its trading operations.




                                                                          56
Interest rate risk
Interest rate risk refers to the risk that the value of a financial instrument may fluctuate due to changes in
interest rates. Interest rate risks arise when interest fixing periods on assets and liabilities, including
derivatives, do not coincide. The Bank’s fixed-rate assets consist primarily of loans. The Bank aims to
minimize interest rate risk in these assets by using fixed-term funding or swap contracts where it pays a
fixed interest rate. In Sweden, in principle, all fixed interest rate loans have credit agreements that do not
permit early repayment without compensation for any losses that may arise due to changes in the interest
rates since the loan was paid out, known as an early repayment charge.
From an interest rate risk perspective, demand deposits can also be considered, in part, as having fixed
interest. These are large volumes of deposits with a floating interest rate that are considered unlikely to be
further reduced even if Swedish repo rates are cut.
Interest-rate risk is measured in the Bank for all positions, both those recorded at fair value in the accounting
and those recorded at cost. The Issuer has also decided to assign a part of the demand deposits a duration of
between two and three years in its risk measurement.
Interest rate changes also affect net interest income. The magnitude of the effect depends on the remaining
interest fixing period of the Bank’s fixed-rate assets, liabilities and derivatives and the extent to which the
Bank is able to match the interest rates on floating rate deposits and lending. The Bank calculates the
sensitivity of net interest income to interest rate changes regularly.

      Effect on value of assets and liabilities including derivatives in SEK and foreign currency, if
                interest rates increase by 100 basis points, as of September 30, 2008
SEKm                         <3 mths. 3-6 mths. 6-12 mths. 1-2 yrs. 2-3 yrs. 3-4 yrs. 4-5 yrs. 5-10 yrs. >10 yrs.                                           Total
The Bank . . . . . . . .            3                       133              (913)        (945)    1,000       (469)    (32)          (365)      (133)     (1,721)
of which foreign
  currency . . . . . . .            55                      (218)              20          (54)            5    (99)    (93)           (235)     (150)       (769)
of which financial current assets at fair value,
the Bank . . . . . . . . 203        360          (343)                                    (141)       (49)     (134)    159             20         87        162
of which foreign
  currency . . . . . . .  71       (112)           37                                       17         48        (5)     (9)            (62)          70      55

                                                    Effect on net interest income and other items
                                                                                                   January 1 -
                                                                                                  September 30                          Whole year
The Bank                                                                        Change            2008         2007           2007             2006         2005
                                                    (1)
Net interest income, 12 months
Increased interest rates . . . . . . . . . . . .                               +1%-p.p.             552          641            586             609           878
Decreased interest rates . . . . . . . . . . .                                  1%-p.p.            (803)        (950)          (960)           (942)         (917)
Change in value(2)
Market interest rate . . . . . . . . . . . . . .                               +1%-p.p.             162           88           (296)           (207)          (19)
                                                                                1%-p.p.            (259)        (110)           136              91           (82)
Stock prices . . . . . . . . . . . . . . . . . . . .                             +10%                (2)          65             (4)             (3)            3
                                                                                  10%               (23)         (28)           (14)            (13)           15
Exchange rates . . . . . . . . . . . . . . . . . .                                +5%                60          (13)            18              24             9
                                                                                   5%                14           14             (0)            (16)            1
Other
Stock market performance(3)         .   .   .   .   .   .   .   .   .       +/ 10%                  180           242           309             253          236
Staff changes . . . . . . . . .     .   .   .   .   .   .   .   .   .   +/  100 empl.                47            49            50              51           51
Payroll changes . . . . . . . .     .   .   .   .   .   .   .   .   .     +/ 1%-p.p.                 89            85            87              78           71
Impaired loans(4) . . . . . . . .   .   .   .   .   .   .   .   .   .   +/ SEK 1 bn                  59            48            50              40           30
Loan loss level . . . . . . . . .   .   .   .   .   .   .   .   .   .   +/ 0.1%-p.p.              1,277         1,107         1,152             851          830

(1)    The calculation is based on the assumption that market interests rates rise (fall) by one percentage point and thereafter remain at
       this level for one year and that the consolidated balance sheet remains essentially unchanged during the period. The calculation
       also presumes that deposit rates are slow moving in connection with changes in market rates, which better reflects actual
       conditions.
(2)    The calculation refers to the immediate effect on profit of each scenario for the group’s interest rate positions at fair value and its
       equity and currency positions.
(3)    Refers to the effect on net commission income from a change in value of Swedbank Robur’s equity funds.
(4)    The interest rate for the calculation for the nine-month period ended September 30, 2008 was 5.9%, for the nine-month period
       ended September 30, 2007 was 4.8%, for the year ended 2007 was 5%, for the year ended 2006 was 4%, and for the year ended
       2005 was 3%.



                                                                                          57
Currency risk
Currency risk refers to the risk that the value of assets, liabilities and derivatives may fluctuate due to
changes in exchange rates. The Bank’s currency risks are managed by adapting the total value of assets and
liabilities, including derivatives, in a currency to the desired level. This is mainly done using derivatives, such
as cross currency interest rate swaps and forward exchange agreements.
A large part of lending in Baltic Banking is denominated in euro, while deposits are mainly denominated in
the local currency (the Estonian kroon, the Latvian lat and the Lithuanian litas). In addition, a large part of
Baltic Banking’s liquidity reserves are placed in euro-denominated securities, which leads to an asset position
in euro and an approximately equally large liability position in the local currencies. The currencies in the
respective Baltic countries are pegged against the euro (the Latvian authorities allow the Latvian lat to
fluctuate 2% against the euro.) The value of the Estonian currency is based on a currency board with the
euro, and the exchange rate against the euro has been fixed according to Estonian law, while awaiting the
planned entry to the euro zone. Similar arrangements exist in Latvia and Lithuania. Hansabank in Estonia
also hold strategic positions in Latvian lats and Lithuanian litas due to investments in subsidiaries in Latvia
and Lithuania.
To reduce currency risk, the Bank’s strategic holdings in foreign operations and subsidiaries are generally
funded in each entity’s national currency or in a currency that is linked to the country’s currency. For
example, the Issuer’s holding in Hansabank is denominated in Estonian kroon but funded in euro. The
exception is the holding in OJSC Swedbank, which is denominated in the Ukrainian currency hryvnia and
funded with SEK and U.S. dollars.
The Bank’s exposure to currency risk that could have an immediate effect on profit (that is, excluding
exposures related to holdings in foreign subsidiaries, goodwill and other intangible assets) is limited. A
change in exchange rates between the SEK and foreign currencies of +/-5 percent would in the worst case
have had a direct negative effect on the Bank’s reported profit of SEK14 million for the nine-month period
ended September 30, 2008.

Derivatives
Derivatives are financial instruments, such as futures, forwards, swaps or option contracts, that derive their
value from underlying assets, indices, reference rates or a combination of these factors. Derivatives may be
privately negotiated contracts, which are often referred to as OTC derivatives, or they may be listed and
traded on an exchange.
Certain of the Bank’s derivatives are settled via clearing organizations in which case the Bank has a clearing
organization receivable. The clearing organization manages and reduces counterparty risks through the use
of margin security and continuous settlements. As a result, the Bank considers the counterparty risk in these
contracts negligible. OTC derivatives, however, entail a degree of credit risk and accordingly the Bank
generally enters into agreements with counterparties that contain netting clauses, which provide that in the
event of the counterparty’s insolvency, any transactions by the Bank with negative market values can be
netted against transactions with positive market values thereby reducing the credit exposure in the total net
value of the derivatives.
Substantially all of the Bank’s derivative transactions are entered into to facilitate client transactions to take
proprietary positions or as a means of risk management. In addition to derivative transactions entered into
for trading purposes, the Bank enters into derivative transactions to manage currency exposure on its net
investment in non-Swedish operations and to manage the interest rate and currency exposure on its fixed
rate Lending, long-term borrowings and certain short-term borrowings.
Interest rate swaps that safeguard the interest rate risk associated with certain loans and subordinated
liabilities are sometimes recognized as hedging instruments in hedge accounting at fair value. The
derivatives are recognized at fair value with changes in value through profit or loss in the same manner as
for other derivatives. In ‘‘Net Gains and Losses on Financial Items at Fair Value,’’ any ineffectiveness of the
hedges is recognized as the change in value of the derivative together with the change in value of the
hedged risk component. Interest rate swaps sometimes also hedge projected future interest payments,
so-called cash flow hedges. The future cash flows from interest swaps that are recognized as cash flow
hedges on the balance-sheet date will be paid or received, and affect profit or loss on a daily basis, as the
projected future interest payments. Since the derivatives are recognized as hedging instruments, their fair
value is recognized directly in equity. Any ineffectiveness is recognized in ‘‘Net Gains and Losses on Financial




                                                        58
Items at Fair Value.’’ The carrying amount for derivatives in hedge accounting is reported separately below.
The carrying amounts of all derivatives refer to fair value including accrued interest.
The following tables set out the Bank’s derivative positions organized by interest, currency and equity
derivatives, as of September 30, 2008.
Due to netting agreements, derivatives with a value of SEK 2,276 million are reported net in the balance
sheet.

SEKm                                                          Interest-rate-related        Currency-related         Equity-related etc.
Derivatives with positive values or                            Carrying       Nominal     Carrying      Nominal     Carrying       Nominal
nil value:                                                      amount          value      amount         value      amount          value

Hedge accounting
Options held . . . . . .      .   .   .   .   .   .   .   .          —                —        —             —            —               —
Forward contracts .           .   .   .   .   .   .   .   .                                    3            55            8               4
Swaps . . . . . . . . . . .   .   .   .   .   .   .   .   .        686        22,682         505         1,767            —               —
Other derivatives . .         .   .   .   .   .   .   .   .          —             —           —             —            —               —
Total . . . . . . . . . . . . . . . . . . .                       686        22,682          508        1,822             8               4
of which cleared . . . . . . . . . . .                               —                —         —              —          —               —

SEKm                                                          Interest-rate-related        Currency-related         Equity-related etc.
Derivatives with positive values                              Carrying        Nominal     Carrying      Nominal     Carrying       Nominal
or nil value:                                                  amount           value      amount         value      amount          value

Other derivatives
Options held . . . . .        .   .   .   .   .   .   .   .      614         94,256          159        8,165        4,104         63,360
Forward contracts .           .   .   .   .   .   .   .   .    6,136      3,867,680       38,210      610,382           17            109
Swaps . . . . . . . . . .     .   .   .   .   .   .   .   .   20,291      1,323,114        7,113      116,508            —              —
Other derivatives . .         .   .   .   .   .   .   .   .        —              8            2          141           30            615
Total . . . . . . . . . . . . . . . . . . .                   27,041 5,285,059            45,484     735,196        4,151         64,084
of which cleared . . . . . . . . . .                            2,469                 —         —              —         91               —

                                                              Interest-rate-related        Currency-related         Equity-related etc.
SEKm                                                           Carrying       Nominal     Carrying      Nominal     Carrying       Nominal
Derivatives with negative values:                               amount          value      amount         value      amount          value

Hedge accounting
Options issued . . . .        .   .   .   .   .   .   .   .          —             —            —              —          —               —
Forward contracts .           .   .   .   .   .   .   .   .          —             —            —              —          —               —
Swaps . . . . . . . . . . .   .   .   .   .   .   .   .   .        104         8,652            —              —          —               —
Other derivatives . .         .   .   .   .   .   .   .   .          —             —            —              —          —               —
Total . . . . . . . . . . . . . . . . . . .                       104          8,652            —              —          —               —
of which cleared . . . . . . . . . . .                               —                —         —              —          —               —

                                                              Interest-rate-related        Currency-related         Equity-related etc.
SEKm                                                          Carrying        Nominal     Carrying      Nominal     Carrying       Nominal
Derivatives with negative values:                              amount           value      amount         value      amount          value

Other derivatives
Option issued . . . . .       .   .   .   .   .   .   .   .      499        121,050          116        8,703        2,890         35,389
Forward contracts .           .   .   .   .   .   .   .   .    5,757      3,569,734       24,022      370,076            6            134
Swaps . . . . . . . . . .     .   .   .   .   .   .   .   .   21,330      1,269,634        3,517       78,168            —          6,362
Other derivatives . .         .   .   .   .   .   .   .   .        —             25            2          621           29          2,053
Total . . . . . . . . . . . . . . . . . . .                   27,586 4,960,443            27,657     457,568        2,925         43,937
of which cleared . . . . . . . . . .                            2,233                 —         1             448    1,029                —




                                                                                 59
The following tables set out the Bank’s derivative positions organized by interest, currency and equity
derivatives, as of December 31, 2007:
Due to netting agreements, derivatives with a value of SEK 1,826 million are reported net in the balance
sheet.

SEKm                                                         Interest-rate-related        Currency-related       Equity-related etc.
Derivatives with positive values or                           Carrying       Nominal     Carrying      Nominal   Carrying       Nominal
nil value:                                                     amount          value      amount         value    amount          value

Derivatives in hedge
  accounting
Options held . . . . . . . .         .   .   .   .   .   .          —             —            —             —         —               —
Forward contracts . . .              .   .   .   .   .   .          —             —            —             —         —               —
Swaps . . . . . . . . . . . . .      .   .   .   .   .   .        737        24,469            —             —         —               —
Other derivatives . . . .            .   .   .   .   .   .          —             —            —             —         —               —
Total . . . . . . . . . . . . . . . . . . .                      737        24,469             —             —         —               —
of which cleared . . . . . . . . . . .                              —                —         —             —         —               —

SEKm                                                         Interest-rate-related        Currency-related       Equity-related etc.
Derivatives with positive values                             Carrying        Nominal     Carrying      Nominal   Carrying       Nominal
or nil value:                                                 amount           value      amount         value    amount          value

Other derivatives
Options held . . . . .       .   .   .   .   .   .   .   .      652        151,644          200        6,863      6,574         63,900
Forward contracts .          .   .   .   .   .   .   .   .    1,520      2,435,453        8,010      397,882         28            167
Swaps . . . . . . . . . .    .   .   .   .   .   .   .   .   14,856      1,010,173        6,203      177,367          —              —
Other derivatives . .        .   .   .   .   .   .   .   .        —            313            —            1         30            767
Total . . . . . . . . . . . . . . . . . . .                  17,028 3,597,583            14,413     582,113      6,632         64,834
of which cleared . . . . . . . . . .                             586       463,375             —             —    2,458                —

                                                             Interest-rate-related        Currency-related       Equity-related etc.
SEKm                                                          Carrying       Nominal     Carrying      Nominal   Carrying       Nominal
Derivatives with negative values:                              amount          value      amount         value    amount          value

Derivatives in hedge
  accounting
Options issued . . . . . .           .   .   .   .   .   .          —             —            —             —         —               —
Forward contracts . . .              .   .   .   .   .   .          —             —            —             —         —               —
Swaps . . . . . . . . . . . . .      .   .   .   .   .   .         43         5,788            —             —         —               —
Other derivatives . . . .            .   .   .   .   .   .          —             —            —             —         —               —
Total . . . . . . . . . . . . . . . . . . .                        43         5,788            —             —         —               —
of which cleared . . . . . . . . . . .                              —                —         —             —         —               —

                                                             Interest-rate-related        Currency-related       Equity-related etc.
SEKm                                                         Carrying        Nominal     Carrying      Nominal   Carrying       Nominal
Derivatives with negative values:                             amount           value      amount         value    amount          value

Other derivatives
Option issued . . . . .      .   .   .   .   .   .   .   .      702        265,105          154        7,013      4,844         23,073
Forward contracts .          .   .   .   .   .   .   .   .    1,507      2,287,875        8,799      412,046         15            341
Swaps . . . . . . . . . .    .   .   .   .   .   .   .   .   17,604      1,051,491        4,397      103,260          1          6,932
Other derivatives . .        .   .   .   .   .   .   .   .        —              2            —            1         27            895
Total . . . . . . . . . . . . . . . . . . .                  19,813 3,604,473            13,350     522,320      4,887         31,241
of which cleared . . . . . . . . . .                             622       353,237             —             —    1,240                —




                                                                                60
Operational risks, compliance and security
Operational risk is defined as the risk of losses resulting from inadequate or failed internal processes or
systems, human errors or from external events. The definition also includes legal risk and reputational risk.
Compliance risk refers to failures to comply with laws, ordinances and other external regulations, as well as
policies, instructions and internal rules, including ethical guidelines that govern how the Bank conducts its
operations. Security risk comprises risks in the areas of physical security, information security, continuity
planning and money laundering.
Based on the definition of operational risks formulated by the Board of Directors, a standardized risk
structure has been created, where personnel risk, process risk, IT and system risk, and external risk are
separately analyzed. The risk structure serves as the basis of the methods used in the Bank:
self-assessments, loss and incident reports, and risk indicators. This facilitates analyses and comprehensive
assessments, while at the same time ensuring uniform risk management. Risk analyses are executed on a
local operational level in all strategic business areas and reported to the Group Risk Control. The Group Risk
Control consolidates and validates this information and sends reports quarterly to the CEO and the Board of
Directors.
Self-assessment is one of the most important operational risk identification tools. Self-assessments are
conducted on a regular basis in each business segment and relevant support functions.
The Bank coordinates efforts to prevent and manage serious events that impact the Bank’s ability to
maintain services and offerings. The Board of Directors has established a crisis management policy, where
the organization and procedures for managing and leading crisis situations are defined. A central crisis
management group and specialists are prepared at a moment’s notice to detect and manage incidents. In
addition, continuity plans are in place for all business-critical operations. The plans describe how the Bank
would operate in the event of a serious disruption. The Bank also has extensive insurance protection, with an
emphasis on catastrophe protection, for significant parts of its operations.
The total operational risk level in the Bank for the six-month period ending June 30, 2008 was assessed as
normal, as a large part of the Bank’s operations consists of low risk retail operations compared to other types
of bank operations. During the nine-month period ending September 30, 2008, however, the total
operational risk level in the Bank was assessed as higher than normal due to the turbulence in the financial
markets.
In the Baltic Banking operations, the risk level is considered slightly higher than in the Bank’s Swedish
operations, particularly with regard to external risks, partly due to the greater risk of money laundering and
attacks against Internet-related channels. The risk level in Ukraine and Russia is generally considered to be
higher than in the rest of the Bank, partly due to the greater political and reputational risks. However,
business volumes in Ukraine and Russia account for a relatively small share of the Bank’s total business
volume.
Internet-related risks have increased in the last year due to the growing number of advanced attacks in
Sweden and around the world. The attacks have become more sophisticated and well-organized. IT warfare
and politically motivated intrusions against national IT infrastructure have grown in the form of targeted
attacks aimed at overloading the computer systems of government agencies and other institutions. The
Bank has invested in secure solutions for its Internet-related services and these are continuously reviewed
and adapted to withstand relevant threats. To strengthen security, the threat scenarios and IT security area
are regularly analyzed by the Bank and external parties such as the Swedish Bankers’ Association.
The total number of bank robberies of Swedish banks has increased dramatically during 2008. Accordingly,
the Bank has made significant technological investments relating to new business processes which allow the
Bank to further reduce the amount of cash available in the branch offices.
It is the goal of the Bank to always comply with laws and regulations relating to the money laundering area
and the Bank focus continuously on identifying risks and implementing measures to counteract money
laundering and terrorist financing. In particular, the Bank has made considerable efforts to ensure compliance
with the EU’s third money laundering directive, and the Bank has implemented a comprehensive Anti-Money
Laundering Program including IT-developments, more extensive Know-Your-Customer procedures in
combination with training efforts for all relevant employees.




                                                      61
                             SHARE CAPITAL AND OWNERSHIP STRUCTURE
Share information
The Issuer is a public limited liability bank company (Sw: bankaktiebolag), which was formed and registered
on April 24, 1942 in Sweden. The Issuer’s current name was registered with the Swedish Companies
Registration Office (Sw. Bolagsverket) on September 8, 2006. The Issuer’s corporate registration number is
502017-7753.
Under its Articles of Association, the Issuer may issue two classes of shares; ordinary shares and preference
shares. The Issuer’s share capital before the Rights Offering amounts to SEK10,822,841,652, represented by
515,373,412 ordinary shares. The ordinary shares have been issued, and the Preference Shares will be
issued, in accordance with Swedish law. The rights associated with the ordinary shares and the Preference
Shares respectively, as set forth in the Articles of Association, can only be changed in accordance with the
procedures stipulated in the Swedish Banking and Financing Act (Sw: (2004:297) lagen om bank- och
              o
finansieringsr¨ relse) and the Swedish Companies Act (Sw: aktiebolagslagen (2005:551)). Furthermore, any
amendments of the Articles of Association will be subject to the approval of the SFSA. There have been no
public tender offers for the Issuer’s shares during the current or preceding financial year.
At the general meetings of shareholders, each share, ordinary share as well as Preference Share carries one
vote. Each shareholder is entitled to vote for the full number of shares in the Issuer held by him/her.
In the event that the Issuer resolves, by a cash issue or a set-off issue, to issue new shares of different
classes, the holders of ordinary shares and Preference Shares shall have preferential rights to subscribe for
new shares of the same class in relation to the number of shares already held by each holder (primary
preferential right). Shares not subscribed for on the basis of primary preferential rights shall be offered for
subscription to all shareholders (secondary preferential right). If the number of shares offered in this manner
is insufficient for subscription based on secondary preferential rights, the shares shall be allocated among
the subscribers in relation to the total number of shares held in the Issuer. To the extent this is not possible
for certain share(s), the allocation shall be effected by drawing of lots.
In the event that the Issuer resolves to issue new shares, whether in a cash issue or a set-off issue, and only
one class of shares will be issued, all shareholders, regardless of whether they hold ordinary shares or
Preference Shares, will have preferential rights to the new shares in relation to the number of shares held in
the Issuer.

Conversion
According to the Issuer’s Articles of Association, the Preference Shares are subject to voluntary and
mandatory conversion by which one Preference Share will be converted into one ordinary share as follows:
An owner of a Preference Share is, during the months of February and August each year, starting August
2009 (the ‘‘Conversion Periods’’), entitled to request from the Board of Directors that the share is converted
into an ordinary share. Request for conversion shall be made in writing on the form prescribed by the Board
of Directors, and must be received by the Board of Directors not later than the last day of the applicable
Conversion Period. Request for conversion may only be made in relation to the owners’ entire holding of
Preference Shares. The Board of Directors is obliged to resolve, during the month immediately following each
Conversion Period, on conversion of the Preference Shares held by shareholders that have requested
conversion during the relevant Conversion Period.
The Board of Directors is obliged, during the calendar month immediately following the month in which the
Annual General Meeting 2013 is held (however, if applicable, not earlier than the day after the record day for
the right to receive dividends resolved at such Annual General Meeting), to resolve to convert all Preference
Shares into ordinary shares. At such time, the Board of Directors shall also establish and announce the record
day for conversion.
Voluntary and mandatory conversion resolved by the Board of Directors as discussed above must
immediately be submitted for registration with the Swedish Companies Registration Office. The conversion
is executed when registration has been made and the conversion has been noted in the VPC-register
         a
(Sw: Avst¨ mningsregistret).




                                                      62
Preference rights to dividends and in the event of liquidation
The Issuer’s Articles of Association contain provisions on Preference Shares’ preference rights to dividends
and distribution of funds in the event of liquidation. For preference rights to dividends, see ‘‘Dividends and
Dividend Policy.’’
If the Issuer shall be dissolved through liquidation, the Preference Shares and the ordinary shares shall have a
right to the assets in the Issuer in accordance with the following:
•      Firstly, each Preference Share shall receive up to an amount of SEK48 per Preference Share together
       with an annual interest on such amount of 10% to be calculated daily from the day of the preceding
       Annual General Meeting up to and including the day of distribution.
•      Secondly, to the extent that distributable funds remain after distribution, each ordinary share will
       receive up to the same amount together with interest as the Preference Share.
•      Thirdly, to the extent that distributable funds remain in accordance with the above, those funds will be
       distributed equally to all shares regardless of class.

Share capital information
The share capital of the Issuer before the Rights Offering amounts to SEK10,822,841,652 divided into
515,373,412 ordinary shares, each with a quotient value of SEK21. The ordinary shares are, and the
Preference Shares will be, denominated in SEK. The number of shares outstanding as per the date of this
prospectus is the same as in the beginning of 2008. The Bank did not hold any shares in the Issuer as of
November 28, 2008. The table below sets out the history of the Issuer’s share capital.
                                            Change in number of shares                     Total number of shares
                                                                           Total
                                                                       change in                                      Total    Change in
           Quotient                         Ordinary    Preference    number of        Ordinary    Preference     number of share capital,       Share capital,
Year          value           Change          shares       shares*        shares         shares        shares        shares          SEK                  SEK
2005   .        20    Rights Offering     2,502,100           —   2,502,100        530,310,943           —      530,310,943    50,042,000      10,606,218,860
2006   .        20    Reduction          14,937,531           —           —        515,373,412           —      515,373,412   298,750,620      10,307,468,240
2006   .        21    Bonus issue                 —           —           —        515,373,412           —      515,373,412   515,373,412      10,822,841,652
2008   .        21    Rights Offering*            — 257,686,706 257,686,706        515,373,412 257,686,706      773,060,118 5,411,420,826      16,234,262,478

*      The Board of Directors of Swedbank resolved to issue up to 257,686,706 new Preference Shares in Swedbank on October 26, 2008, subject to subsequent
       approval by the shareholders’ meeting. The shareholders’ meeting approved the Board of Director’s resolution on November 25, 2008. As of the date of this
       prospectus, the Preference Shares have not yet been subscribed for or allocated.


VPC affiliation
The Issuer and its shares are cleared through an electronic securities system, the VP-system, with VPC, as its
central securities and clearing organization. VPC also maintains the Issuer’s share register. No share
certificates have been issued with respect to the Issuer’s ordinary shares and no share certificates will be
issued with respect to the Preference Shares. The address for VPC is: VPC AB, Regeringsgatan 15, Box 7822
SE-103 97 Stockholm, Sweden.

Buy back program and acquisition of own shares
At the 2008 Annual General Meeting the Issuer’s shareholders resolved that the Issuer, during the period up
to the 2009 Annual General Meeting, will be permitted to acquire its own shares through its securities
transactions in accordance with the Swedish Securities Market Act (Sw. lag (2007:528) om
 a
v¨ rdepappersmarknaden) in a number that at any given time may not exceed 1% of the Issuer’s outstanding
shares. The price of shares acquired in this manner shall correspond to the current market price at the time.
The Annual General Meeting also decided to authorize the Board of Directors for the period up to the Annual
General Meeting in 2009 to decide to acquire the Issuer’s own shares, in addition to the amount stated
above, on one or more occasions through acquisitions on the Nasdaq OMX Stockholm. The acquisitions on
Nasdaq OMX Stockholm may not result in the Issuer’s total holdings of its own shares, excluding shares
acquired through the Issuer ‘s securities transactions, at any given time amounting to more than 5% of the
total number of the shares in the Issuer. Acquisitions must be made to a price between the highest buying
rate and the lowest selling rate officially quoted for shares in the Issuer at the time of acquisition.




                                                                             63
Trading in the Issuer’s shares
The Issuer’s ordinary shares are traded on the Nasdaq OMX Stockholm on the Large Cap list. The ticker name
is SWEDA. The ISIN code for the ordinary share is SE0000242455. For information on the market price of the
ordinary shares, see ‘‘Historical share price movements.’’
The Issuer will apply for listing of the Preference Shares on the Nasdaq OMX Stockholm in connection with
the completion of the Rights Offering. The earliest possible date for listing of the Preference Shares is
22 December 2008. The ticker name will be SWED PREF. The ISIN-code for the Preference Shares will be
SE0002687749.
American Depositary Receipts (‘‘ADRs’’) relating to shares in the Issuer are traded over the counter in the
United States with JPMorgan Chase Bank, N.A. acting as depositary bank. The ticker name for the ADRs is
SWDBY.

Major shareholders
The Issuer’s ten largest shareholders (based on the Issuer’s shareholder structure as of September 30, 2008
and changes known to have occurred thereafter) are set out below.

                                                                            Ordinary   Preference   Percentage of    Percentage of
Shareholder                                                                  Shares       Shares*    Share capital   Voting Rights

Savings bank foundations . . . . . . . .            .   .   .   .   .   119,850,245            —            23.3               23.3
Savings banks . . . . . . . . . . . . . . . . .     .   .   .   .   .    45,666,093            —             8.9                8.9
Swedbank Robur funds . . . . . . . . . .            .   .   .   .   .    18,278,296            —             3.5                3.5
Capital Group funds . . . . . . . . . . . .         .   .   .   .   .    16,113,000            —             3.1                3.1
Swedbank profit-sharing funds . . . .               .   .   .   .   .    12,692,435            —             2.5                2.5
AFA Insurance . . . . . . . . . . . . . . . . .     .   .   .   .   .    11,589,269            —             2.2                2.2
AMF Pension . . . . . . . . . . . . . . . . . .     .   .   .   .   .    10,000,000            —             1.9                1.9
Skandia Life . . . . . . . . . . . . . . . . . .    .   .   .   .   .     8,149,210            —             1.6                1.6
SPP Funds . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .     8,067,847            —             1.6                1.6
Second National Pension Fund AP2                    .   .   .   .   .     7,579,687            —             1.5                1.5

*     The Board of Directors of the Issuer resolved to issue Preference Shares in Swedbank on October 26, 2008, subject to subsequent
      approval by the shareholders’ meeting. The shareholders’ meeting approved the Board’s resolution on November 25, 2008. As per
      the date of this prospectus, the Preference Shares have not yet been subscribed for or allocated.

         ¨            ors¨                    ¨             ors¨
Folksam omsesidig livf¨ akring and Folksam omsesidig sakf¨ akring have undertaken to subscribe for their
pro rata share of the Preference Shares (596,118 Preference Share), and such Preference Shares, which
                                                                                    ¨
correspond to Subscription Rights acquired from Sparbankstiftelsernas Forvaltning AB and/or
                                                ¨            ors¨                   ¨             ors¨
Sparbanksstiftelsen Alfa. In addition, Folksam omsesidig livf¨ akring and Folksam omsesidig sakf¨ akring
have undertaken to, by themselves or through group companies, subscribe for a maximum of 103,570,549
additional Preference Shares should such Preference Shares not be subscribed or paid for by others in the
Rights Offering. According to a press release from Folksam dated October 27, 2008, Folksam have entered
into agreements with Sparbanksstiftelserna regarding the acquisition of Subscription Rights with the
purpose of using these for subscription of 30,200,000 Preference Shares. In the same press release Folksam
also stated that Folksam’s ownership in the Issuer following the Rights Offering will be at least 5%. For
further information regarding subscription undertakings see ‘‘Legal Considerations and Supplementary
Information — Subscription undertakings’’ and ‘‘Risk Factors — Risks related to the Rights Offering and the
Preference Shares — Subscription undertakings regarding the Rights Offering are not secured.’’




                                                                             64
The following table shows the distribution of shares in the Issuer as of September 30, 2008 by size of
holding:

                                                                                                                                                                                                      Shares                                                                     Shareholders
                                                                                                                                                                              Number of                                                                                     Number of           % of all
Shareholding                                                                                                                                                                     shares                               % of all shares                                     shareholders     shareholders

1-100 . . . . . . . . . .         .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                 5,997,254                                                              1.2%                             180,664              56.9%
101-500 . . . . . . . .           .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                26,073,727                                                              5.1%                             112,151              35.3%
501-1,000 . . . . . .             .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                11,493,925                                                              2.2%                              15,904               5.0%
1,001-2,000 . . . . .             .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                 6,916,489                                                              1.3%                               4,701               1.5%
2,001-5,000 . . . . .             .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                 7,093,339                                                              1.4%                               2,192               0.7%
5,001-10,000 . . . .              .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                 4,397,918                                                              0.9%                                 588               0.2%
10,001-100,000 . .                .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                23,105,109                                                              4.5%                                 710               0.2%
100,001-500,000 .                 .       .       .       .       .       .       .       .       .       .       .       .       .       .       .                52,336,288                                                             10.2%                                 227               0.1%
500,001- . . . . . . .            .       .       .       .       .       .       .       .       .       .       .       .       .       .       .               377,959,363                                                             73.3%                                 150               0.0%
Total . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                       515,373,412                                                             100.0%                               317,287              100.0%

The following table shows the five countries with the largest shareholdings in the Issuer as of September 30,
2008:

Shareholdings by Country—five largest                                                                                                                                                                                                                                      Holdings (%)         Vote (%)

Sweden . . . . . . .      .   .       .       .       .       .       .       .       .       .       .       .       .       .       .       .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         74.4%            74.4%
United Kingdom .          .   .       .       .       .       .       .       .       .       .       .       .       .       .       .       .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         10.9%            10.9%
United States. . .        .   .       .       .       .       .       .       .       .       .       .       .       .       .       .       .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          5.2%             5.2%
Luxembourg . . . .        .   .       .       .       .       .       .       .       .       .       .       .       .       .       .       .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          2.4%             2.4%
Iceland . . . . . . . .   .   .       .       .       .       .       .       .       .       .       .       .       .       .       .       .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          1.1%             1.1%

Shareholdings among employees, etc
There is a profit-sharing fund, Kopparmyntet, that covers all Sweden-based employees of the Issuer. The
amount to be transferred each year is based upon the Issuer’s return on equity in comparison with the return
on equity of Handelsbanken, SEB, Nordea, Danske Bank and DnB NOR. The constitutive documents of the
fund provide that the amount transferred should primarily be invested in shares of the Issuer and can be paid
out after five years, at the earliest. As of September 30, 2008 Kopparmyntet owned 12,036,400 shares of
the Issuer.
There are also two old profit-sharing funds, stemming from the time before the merger of Sparbanken
              ¨                                                                                   ¨
Sverige and Foreningsbanken in 1997. There are no new transfers made to these funds by the Bank. Karven
profit-sharing fund owned 1,431,000 shares and Guldeken profit-sharing fund owned 656,035 shares as of
September 30, 2008.




                                                                                                                                                                                              65
                                                                 HISTORICAL SHARE PRICE MOVEMENT
Since 1995, the Issuer’s ordinary shares have been listed on the Nasdaq OMX Stockholm and are traded
under the symbol ‘‘SWED A.’’ The following table provides an overview of changes in the share price of the
Issuer (based on the closing price on the Nasdaq OMX Stockholm) since January 1, 2005:

Period                                                                                                                                                                                   High Price   Low Price
                                                                                                                                                                                             (SEK)        (SEK)
Year ended December 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    220.00       160.00
Year ended December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    253.00       168.50
Year ended December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    282.00       175.50
1st quarter 2006         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    225.50       207.00
2nd quarter 2006         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    223.50       168.50
3rd quarter 2006         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    219.50       178.50
4th quarter 2006         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    253.00       216.50
1st quarter 2007         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    282.00       236.00
2nd quarter 2007         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    269.50       241.00
3rd quarter 2007         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    262.00       200.50
4th quarter 2007         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    229.50       175.50
1st quarter 2008         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    182.50       153.00
2nd quarter 2008         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    178.00       113.50
3rd quarter 2008         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    136.25        82.25
August 2008 . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    136.25       113.75
September 2008       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    117.00        82.25
October 2008 . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    103.50        52.00
November 2008        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     78.00        54.25
The closing share price on the Nasdaq OMX Stockholm of the Issuer on November 28, 2008 was SEK57.75.
The Existing Shares have traded exclusive of the right to participate in the Rights Offering since
November 26, 2008.




                                                                                                                                 66
                                                   DIVIDENDS AND DIVIDEND POLICY
Dividend policy
The Board of Directors of the Issuer has declared a dividend policy the objective of which is to maintain a
dividend payout ratio corresponding to around 40% of the profit for the year, excluding non-recurring items.
For the 2007 financial year the Annual General Meeting in 2008 declared dividend of SEK9.00 per share. This
corresponded to a total dividend of SEK4,638 million and a dividend payout ratio of 39%.
The following table sets forth the dividends per share paid by the Issuer over the last financial years. No
inferences as to the amount of future dividends can be drawn from dividends paid in the past.

                                                                                                                                               Dividend
For financial year ended December 31,                                                                                                        distributed
                                                                                                                                                   SEK
                                                                                                                                              per share
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        9.00
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        8.25
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        7.50

Dividends under Swedish law
Declaration of dividends under Swedish law must be adopted by the general meeting of shareholders.
Dividends may only be declared to the extent there are distributable funds in the Issuer and to the extent
that such declaration is prudent taking into consideration the demands with respect to size of shareholders’
equity which are imposed by the nature, scope and risks associated with operations and the Bank’s need to
strengthen its balance sheet, liquidity and financial position. The shareholders may further, as a general rule,
not declare higher dividends than the Board of Directors has proposed or approved.
Under Swedish law, shareholders owning in aggregate a tenth of all outstanding shares of a company have
the right to demand the payment of dividends from the profits of the Issuer. Following such request, the
Annual General Meeting of shareholders shall resolve upon the distribution of one-half of the remaining
profit for the year pursuant to the adopted balance sheet after deductions have been made for (i) losses
carried forward that exceed unrestricted reserves; (ii) amounts which, by law or the Articles of Association,
must be transferred to restricted equity; and (iii) amounts which, pursuant to the Articles of Association,
shall be used for any purpose other than distribution to the shareholders. The general meeting of
shareholders is not, however, obliged to resolve upon dividends in excess of 5% of the Issuer’s shareholders’
equity. Further, the general meeting may never declare dividend in excess of distributable funds nor in
violation of the prudence rule described above.
It should be noted that the general meeting of shareholders is the superior body of a Swedish limited liability
bank company and the only one competent to decide upon distribution of dividends to shareholders.
Furthermore, it should be noted that, except as stated above, the Preference Shares are only entitled to
preferential right to any dividends resolved by the general meeting of shareholders. If the general meeting of
shareholders resolves not to distribute dividends, the Preference Shares will not receive dividends.

Payment of dividends
Dividends are normally paid in cash per share through VPC, but may also be paid in kind (property dividend).
On the record date established by the general meeting of shareholders, persons registered as owners of the
shares in the share register maintained by VPC will be entitled to receive dividends. If the shareholder cannot
be contacted through VPC, the shareholder still retains his claim on the Issuer to the dividend amount and
this may only be limited through the statute of limitations. When the claim becomes statute barred, the
dividend amount is forfeited to the Issuer. Neither the Swedish Companies Act nor the Issuer’s Articles of
Association contain any restrictions regarding the dividend rights of shareholders resident outside Sweden.
With the exception of any restrictions pursuant to the bank and clearing system, payment to such
shareholders is executed in the same manner as for shareholders resident in Sweden. However, shareholders
with a tax domicile outside Sweden are normally subject to Swedish withholding tax. See ‘‘Tax issues in
Sweden.’’




                                                                             67
Preference to dividends in the Issuer
Upon a resolution on payment of dividends by a general meeting of shareholders, the dividends must, under
the Issuer’s Articles of Association be distributed in accordance with the following:
•   Firstly, each Preference Share shall receive up to an amount of SEK2.40 per Preference Share as regards
    dividends resolved in 2009 and up to an amount of SEK4.80 per Preference Share as regards dividends
    resolved in each of the years 2010, 2011, 2012 and 2013.
•   Secondly, to the extent that distributable funds remain after distribution in accordance with the
    resolution of the general meeting of shareholders, each ordinary share shall receive up to the same
    amount as the Preference Share in each of the years 2009, 2010, 2011, 2012 and 2013.
•   Thirdly, to the extent that distributable funds remain, those funds shall, with regard to dividends
    resolved in 2009, be paid only to ordinary shares and with regard to dividends resolved in each of the
    years 2010, 2011, 2012 and 2013 be distributed equally to all shares regardless of class. Thus, holders
    of Preference Shares shall not have any right to receive dividends resolved in 2009 under this item, but
    only according to the first item above.
If, during any year dividends are not paid to a Preference Share or an ordinary share as prescribed under the
first two items above, such share shall not have any right to recover in any subsequent year what has not
been paid.




                                                     68
                                                               CAPITALIZATION
The following table sets forth the capitalization of the Bank as of September 30, 2008.

                                                                                                                                                                                            As of
                                                                                                                                                                                    September 30,
                                                                                                                                                                                            2008
SEKm

Indebtedness*
Current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                          634,476
Non current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            723,775
Total indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                         1,358,251
As of September 30, 2008 no third party had issued any guarantee in respect of the Bank’s financial debt.

Shareholders’ equity
Ordinary shares
  Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .......................                                                                          10,823
  Other capital contributions . . . . . . . . . . . . . . . . . . . . . . . .           .......................                                                                           4,068
Preference shares
  Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             —
  Other capital contributions . . . . . . . . . . . . . . . . . . . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             —
Other equity attributable to shareholders of Swedbank AB .                              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        58,126
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           238
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                      73,255
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                       1,431,506

                                                                                                                                                                                            As of
                                                                                                                                                                                    September 30,
SEKm                                                                                                                                                                                       2008*

Net indebtedness
Cash and balances with central banks . . . . . . . . . . . . . . . . . .                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        19,315
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (6,110)
Cash and cash equivalents according to cash flow statement                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        13,205
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        55,771
Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       68,976
Current financial receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                355,831
Current bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                         163,436
Current portion of non current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                     4,912
Other current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            466,128
Current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           634,476
Net current financial indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                     209,669
Non current bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  0
Debt securities in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                          228,101
Other non current loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            35,729
Non current financial indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                     263,830
Deposits from the public, excluding repos** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                            459,945
Net Financial Indebtedness*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  933,444
*     The Bank does not analyse the current and non current portion of its financial debt on a monthly basis. Accordingly, the current
      and non-current portion of the Bank’s financial debt as of September 30, 2008 has to some extent been calculated by applying the
      proportion of the Bank’s current and non current financial debt as of December 31, 2007 to the Bank’s total financial debt as of
      September 30, 2008.
**    Bank deposits are, according to contractual agreements, in general payable on request. However, customers’ savings behavior are
      in practice very long term.
***   The net financial indebtedness is used to finance lending to the public, excluding lending with a shorter duration than 1 year, and
      non monetary assets, such as intangible, tangible and share assets.



                                                                          69
                             BANKING REGULATION AND SUPERVISION, ETC
The Banking and Financing Business Act and Ownership and Management Assessment
Banking and financing business in Sweden is regulated by the Swedish Banking and Financing Business Act
                                                             o
(‘‘BFBA’’) (Sw: lagen (2004:297) om bank- och finansieringsr¨ relse). The Issuer is a public limited liability bank
company and has been granted a license from the SFSA to conduct banking business under the BFBA.
Furthermore, many of the Issuer’s subsidiaries are regulated under Swedish or foreign laws regulating
financial institutions and insurance companies, and are also subject to the supervision of the SFSA or the
                                                                                                     ¨ a
corresponding authority in other jurisdictions. In Sweden, there are for example Swedbank Fors¨ kring AB
which is a life insurance company authorized under the Swedish Insurance Business Act (Sw:
 o a          o
f¨ rs¨ kringsr¨ relselagen (1982:713)), Swedbank Robur Fonder AB which is a fund management company
authorized under the Swedish Investment Funds Act (Sw: lagen (2004:46) om investeringsfonder),
Swedbank Robur Kapitalf¨    orvaltning AB which is an investment firm authorized under the Swedish Securities
                                               a
Markets Act (Sw: lagen (2007:528) om v¨ rdepappersmarknaden), and Swedbank Card Services AB,
Swedbank Finans Aktiebolag and Swedbank Hypotek AB, which are all credit institutions authorized under
the BFBA. The Bank is subject to substantial regulation, including without limitation, consumer protection, in
all markets in which it operates.
The SFSA is the regulator and supervisory authority for financial and insurance institutions in Sweden,
including the Issuer and certain of its subsidiaries. The SFSA issues regulations and supervises the operations
of financial institutions, inter alia, with regard to capital adequacy under the Basel 2 rules, accounting,
governance structures, risk control and procedures for the prevention of money laundering. Furthermore,
members and alternate members of the Board of Directors and the managing director and deputy managing
director must be approved by the SFSA. The SFSA is empowered with a range of tools to facilitate its
supervision, including the right to do site visits and to interview the employees of an institution. Should the
SFSA consider that the operations of an institution are not sound or that the institution otherwise is
breaching laws or regulations, the SFSA may impose administrative sanctions on an institution, such as
disciplinary reprimands, warnings, fines and revoking the license to operate.
Special provisions in the BFBA notable to the Issuer’s shareholders, are the rules on ownership and
management assessment which involves, inter alia, that approval from the SFSA must be obtained prior to a
shareholder acquiring shares in the Issuer that brings the shareholder’s holding to or exceeds certain
thresholds (10%, 20%, 33% or 50% of the shares or votes of the Issuer or the Issuer becoming a subsidiary
of the acquirer) or the shareholder otherwise would obtain a substantial influence over the Issuer.

The Swedish Financial Stabilization Plan
On October 29, 2008 the Swedish parliament approved the Government bill: the Swedish Financial
Stabilization Plan intended to enhance the stability of Sweden’s financial system and to address negative
effects of the 2008 global financial crisis, including systemic illiquidity and high borrowing costs. In
accordance with the EC Treaty, the Swedish Financial Stabilization Plan was notified by Sweden to the
European Commission pursuant to Article 87(3) of the EC Treaty as state aid (as defined in Article 87(1) of
the EC Treaty). On October 29, 2008 the European Commission found the notified measures to be compatible
with the Common market and accordingly decided not to raise objections. The Swedish National Debt Office,
which is already responsible for administering Sweden’s national deposit guarantee, is responsible for
administering the Swedish Financial Stabilization Plan.
On October 29, 2008 the Swedish parliament also approved an increase of the guaranteed amount effective
from October 6, 2008 under the Swedish deposit guarantee from SEK250,000 to SEK500,000.

The Guarantee Plan
The Swedish Financial Stabilization Plan provides for the establishment of a guarantee plan (the ‘‘Guarantee
Plan’’). The Guarantee Plan provides banks, major mortgage institutions and certain other credit market
companies an opportunity to contract with the government, represented by the Swedish National Debt
Office, for guarantees covering part of their borrowings. The purpose of the Guarantee Plan is to facilitate
borrowings of banks and certain credit market companies and reduce their borrowing costs during the
prevailing global financial crisis. Banks and major mortgage institutions based in Sweden are eligible to
participate in the Guarantee Plan. Credit market companies that are oriented towards municipalities may also
apply. In order to obtain a guarantee the applicant must meet certain requirements regarding the
composition and size of its capital base.



                                                        70
The guarantee may be applied for in relation to bonds, certificates of deposit and other debt securities,
provided they have a term which exceed 90 days but not three years and are not subordinated. Covered
bonds may have terms of up to five years. Complex and structured products are not included in the Guarantee
Plan. An application under the Guarantee Plan can be made up to and including April 30, 2009. There are
discussions that this period may be extended up to December 31, 2009, subject to the approval from the
European Commission. The maximum amount to be covered under the Guarantee Plan is SEK1,500 billion, of
which at most SEK500 billion may relate to covered bonds with terms of between three and five years.
The Guarantee Plan is funded by charges to be paid by the institutions for each loan guaranteed. In order to
participate in the Guarantee Plan, an institution must first enter into a guarantee agreement with the
Swedish National Debt Office. Then the institution can choose to apply for a guarantee for one or more loans.
However, the total guaranteed amount for each institution under the Guarantee Plan must never exceed the
greater amount of (i) the total of the institution’s loans as of October 30, 2008 having an original term of
over 90 days that fall due for payment between September 1, 2008 and April 30, 2009, and (ii) 20% of the
institution’s deposits from the public as of September 1, 2008. The Issuer’s maximum amount to be covered
by the Guarantee Plan is SEK196.4 billion.
The charge for debt securities covered by the Guarantee Plan having a term that does not exceed one year is
0.5% of the amount guaranteed and the same charge is applied to all institutions. For debt securities that
have terms longer than one year, the charge is differentiated on the basis of the risk associated with each
institution. The risk is measured by the market price for credit default swaps during normal market conditions
for each institution plus a supplement. The supplement is 0.25 percentage points for covered bonds and
0.50 percentage points for other securities. The price for the Issuer for non-covered debt securities will be
0.33 percentage points, the applicable supplement not included. The corresponding figure for Svenska
Handelsbanken is 0.25, for Nordea 0.26 and for SEB 0.28. The price for covered bonds remains to be decided.
Under the guarantee agreement with the Swedish National Debt Office, the institution must make a number
of undertakings, inter alia, undertake not to use or refer to the guarantees issued under the Guarantee Plan
in the marketing of credits, accept certain restrictions with respect to wage increases, bonus payments,
increases in board remuneration and bank executives’ severance packages during the guarantee period (see
‘‘Legal Considerations and Supplementary Information’’ regarding the guarantee agreement concluded by
the Issuer), and undertake not to undergo a significant expansion of operations which would not have taken
place if the Issuer had not benefited from state support.
The Issuer announced on November 4, 2008 that it would apply for participation in the Guarantee Plan and
entered into a guarantee agreement with the Swedish National Debt Office on November 7, 2008 (see
further ‘‘Legal Considerations and Supplementary Information’’).

Targeted Support and Compulsory Purchase of Shares
The Swedish National Debt Office may under the Swedish Financial Stabilization Plan intervene with
targeted support should a financial institution encounter such grave financial difficulties that there is a risk
of serious disruption to the Swedish financial system. An institution may obtain support (i) when it is
considered that its business is long-term sustainable or (ii) to facilitate the reconstruction or winding up of
an institution that is not considered to be long-term sustainable. The conditions for the support must be
designed so that the institution receiving support and its owners must, in the first instance, bear its losses.
The support must be provided on a commercial basis and must not distort competition. Examples of possible
interventions are liquidity support, support in connection with acquisitions and capital reinforcement.
It should also be noted that under the Swedish Financial Stabilization Plan, the Swedish state has the right
to compulsory purchase the shares of institutions from the shareholders, including the shares of the Issuer,
provided it is considered to be of material importance from a public view and provided (i) the institution or the
shareholder has not accepted a guarantee agreement proposed by the Swedish National Debt Office which
has been considered not unreasonable by an appeal board, (ii) the institution or a shareholder have not
fulfilled an obligation under a guarantee agreement under the Swedish Financial Stabilization Plan which is
of material importance, or (iii) the institution’s capital base is below a fourth of the required capital,
calculated as set out in Chapter 2, Section 1, first paragraph, of the Swedish law on capital adequacy and
                                                        a
large exposures (Sw: lagen (2006:1371) om kapitalt¨ ckning och stora exponeringar).




                                                       71
The Stabilization Fund and Stabilization Charges
The Swedish Financial Stabilization Plan provides for the establishment of a SEK15 billion stabilization fund
(the ‘‘Stabilization Fund’’) to finance any support measures taken by the government. Payments to the
Stabilization Fund will comprise charges for guarantees issued, stabilization charges, deposit guarantee
charges and recoveries from support measures provided under the Swedish Financial Stabilization Plan.
In addition to the guarantee charges, stabilization charges will be introduced when the situation improves in
the market. The government has estimated that the total charges will be approximately SEK2.6 billion per
year to be allocated between the institutions depending upon their size and the level of risk that they
present to the financial system. The stabilization charges have not yet been subject to legislation and how
the charges are to be designed and applied remains to be decided.




                                                     72
                       BOARD OF DIRECTORS, GROUP MANAGEMENT AND AUDITORS
Board of Directors
The Board of Directors currently consists of eight members, including the Chair, appointed for the period up
until and including the Annual General Meeting in 2009, as well as one employee representative and two
deputy employee representatives. Normally, the Board of Directors includes two employee representatives
and two deputy employee representatives. However, when one employee representative resigned during
2008 a new employee representative was for the time being not appointed. Instead, one of the deputy
employee representatives (Kristina Janson) is currently an acting employee representative.
The members of the Board of Directors, their year of birth, the year of their initial election as regards the
directors and the year of their initial appointment as regards the employee representatives, their position,
whether or not they are independent as defined by Nasdaq OMX Stockholm’s Rule Book for Issuers and the
Swedish Code of Corporate Governance, their total annual fees for 2007 and expected total annual fees for
2008 and their and their direct relatives’ shareholding in the Issuer as per November 14, 2008 are set forth
in the below following table.

Remuneration to the Board of Directors
                                                                               Total annual
                                                                             remuneration,                          Of which
                                                                               SEK in 2008                      compensation
                                                                                  (including                              for     Shareholding
                        Board                                                compensation        Total annual      committee      in the Issuer
             Year of   member                      Independent/              for committee     remuneration,            work,    November 14,
Name           birth     since   Position          dependent                           work)    SEK in 2007      SEK in 2007              2008

Carl Eric     1951       2001    Chair             Dependent in relation     See separate      See separate          250,000    10,000 ordinary
  a
St˚ lberg                                          to the Issuer due to      table below.      table below.                     shares
                                                   employment and
                                                   independent in relation
                                                   to the Issuer’s major
                                                   shareholders.

Ulrika        1956       2002    Deputy Chair      Independent                   1,200,000        1,025,000          375,000    3,000 ordinary
Francke                                                                                                                         shares

Gail          1954       2007    Member            Independent                     525,000          425,000           75,000    2,000 ordinary
Buyske                                                                                                                          shares

Simon F.D.    1955       2007    Member            Independent                     650,000          350,000                —    1,000 ordinary
Ellis                                                                                                                           shares

Berith        1950       2005    Member            Independent                     625,000          425,000           75,000    300 ordinary
 a
H¨ gglund-                                                                                                                      shares
Marcus

  ¨
Goran         1945       1997    Member            Independent                     650,000          600,000          250,000    1,000 ordinary
Johnsson                                                                                                                        shares

Helle         1953       2008    Member            Independent                     400,000                 —               —    Holds no shares
Kruse
Nielsen

Anders        1954       2006    Member            Independent                     400,000          600,000          250,000    12,500 ordinary
Nyblom                                                                                                                          shares

Bengt         1946       2005    Deputy            —                                      —                —               —    Holds no shares
Fogelfors                        Employee
                                 Representative

Monica        1948       2003    Employee          —                                      —                —               —    610 ordinary
       om
Hellstr¨                         Representative                                                                                 shares

Kristina      1953       2007    Deputy            —                                      —                —               —    400 ordinary
Janson                           Employee                                                                                       shares
                                 Representative/
                                 Acting
                                 Employee
                                 Representative

For 2008, an annual board fee of SEK1,350,000 to the Chair, SEK675,000 to the Deputy Chair and
SEK400,000 to the ordinary members was approved by the Annual General Meeting. Furthermore, the
Annual General Meeting approved a fee of SEK250,000 to each member of the Credit Committee,
SEK175,000 to the Chair of the Audit Committee, SEK125,000 to each ordinary member of the Audit
Committee and SEK100,000 to each member of the Compensation Committee. Board fees are not paid to




                                                                   73
Employee Representatives or persons having an employment contract with the Issuer, with the exception of
            a
Carl Eric St˚ lberg.

Limitations regarding board fees due to agreement with the Swedish National Debt Office
      a
(Riksg¨lden)
                                                                                          a
The Issuer has entered into an agreement with the Swedish National Debt Office (Riksg¨ lden); see ‘‘Legal
Considerations and Supplementary Information—Material Contracts.’’ According to this agreement, the Issuer
has agreed, inter alia, to ensure that the fees to the Board of Directors and other compensation paid to the
members of the Board of Directors is limited to the level decided upon prior to October 20, 2008.

Compensation to the Chair of the Board of Directors, SEK

            a
Carl Eric St˚lberg                                                                                                         2008        2007

Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                3,075,000   2,975,000
Within framework of board fees set by the Annual General Meeting . . . . . .                                          1,700,000   1,550,000
Other compensation/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    60,000      60,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4,835,000   4,585,000
of which pensionable compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       3,075,000   2,975,000
Pension cost, including payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   3,603,000   3,116,000

Pension obligations for the Chair of the Board of Directors
                                                  a
As an employee from January 1, 2003, Carl Eric St˚ lberg is entitled to a defined-benefit pension from the age
of 60 and lifelong. His pension entitlement is the vested portion of 75% of his salary. The vested portion is
based on his length of employment in months divided by 360. The Issuer also pays a pension premium of
SEK360,000 per year. Previously vested pension benefits remain unaffected. Benefits are accrued
continuously until retirement and are vested after they have been accrued.

Termination conditions for the Chair of the Board of Directors
                                                         a
Depending on the reason for his termination, Carl Eric St˚ lberg, in accordance with his employment contract
with the Issuer, may be entitled to pensionable compensation equivalent to his previous salary for a period of
24 months after termination. Under special circumstances, the period may be extended to 36 months.
                                                                             a
However, under no circumstances will severance be paid after Carl Eric St˚ lberg reaches the age of 60, in
January 2011. The right to compensation is conditional on, among other things, the settlement of 50% of
any income from new employment, etc. against the severance, unless the Board of Directors decides
otherwise.

            a
Carl Eric St˚ lberg, born 1951
            a
Carl Eric St˚ lberg is the Chair of the Board of Directors since 2003 and has been a member since 2001. In
addition, he serves as the Chair of the Credit Committee and the Compensation Committee (both of which
are committees of the Board of Directors), the Swedish Ski Association, the Sweden-Japan Foundation,
                       ¨
Kungliga Tekniska Hogskolan’s Center for Bank and Finance, the Ingemar Stenmark/Herman Nogler Fund, the
        ¨
Gunde Arliga Tag Fund, Deputy Chair of the Board of Directors of the International Ski Federation and the
European Savings Bank Group, and a member of the Supervisory Board of Aktia Sparbank Abp and the
Boards of Directors of Finansmarknadsr˚       adet, the Swedish-American Chamber of Commerce Inc.,
                                           a
Insamlingsstiftelsen Erik Paulssons sextio˚ rsfond, the Foundation Nils Adlers Stipendiefond and the Swedish
                                                  a
Chamber of Commerce for the UK. Carl Eric St˚ lberg holds a B.Sc. in Economics.
            a
Carl Eric St˚ lberg is dependent in relation to the Issuer and the Issuer’s management due to employment and
independent in relation to the Issuer’s major shareholders.
            a
Carl Eric St˚ lberg and his direct relatives together hold 10,000 ordinary shares in the Issuer.

Ulrika Francke, born 1956
Ulrika Francke has been a member of the Board of Directors since 2002, a second Deputy Chair since 2003
and the Deputy Chair since 2006. She is also the Chair of the Audit Committee, a member of the Credit
Committee and the Compensation Committee (all of which are committees of the Board of Directors). Ulrika
                                       ens                                               ens
Francke is the President and CEO of Tyr´ AB, the Chair of Stockholm’s Stadsteater and Tyr´ Temaplan


                                                                             74
AB, the Deputy member of the City Council of Stockholm and a member of the Boards of Directors of
                        ors¨                 ens        ens
Stockholms Stads Brandf¨ akringskontor, Tyr´ AB, Tyr´ Prefab AB, Stockholm Business Region AB, STD
Svensk Teknik och Design and the Foundation Nils Adlers Stipendiefond. During the last five years, Ulrika
                                                                             ¨
Francke has been, but is no longer, the Chair of the Boards of Directors of Sodersjukhuset AB, Tidskriften
Byggm¨ staren AB, Byggnadsf¨
       a                                   ¨
                              oreningens Forvaltnings AB and SBC Mark AB, a member of the Board of
Directors of Skanska AB and Econova AB, Deputy Board member of the Board of Directors of Brumbrum AB,
the President and CEO of SBC Sveriges Bostadsr¨  attscentrum AB and the CEO of SBC ekonomisk f¨   orening.
Ulrika Francke has undertaken university level studies.
Ulrika Francke is independent in relation to the Issuer, the Issuer’s management and the major shareholders
in the Issuer.
Ulrika Francke and her direct relatives together hold 3,000 ordinary shares in the Issuer.

Gail Buyske, born 1954
Gail Buyske is an ordinary member of the Board of Directors since 2007. In addition, she serves on the Board
of Directors’ Audit Committee. Gail Buyske is an International Banking Consultant, a consultant to the
European Bank for Reconstruction & Development, a non-executive director and Chair of the Audit
Committee of Kazkommertsbank and URSA Bank and a member of the Board of Directors of the Foundation
Nils Adlers Stipendiefond. During the last five years, Gail Buyske has been, but is no longer, the Chair of the
Board of Directors and the Audit Committee of KMB Bank, a non-executive director of Kredyt Bank Ukraine
and DAI Europe, a consultant to Standard & Poor’s, the World Bank, Development Alternatives Inc., Asian
Development Bank, Bannock & Co, Ltd. and the Consultative Group to Assist the Poor. Gail Buyske holds a
PhD in political science, a MPA (Master in Public Administration) in international relations and a BA in Russian
studies.
Gail Buyske is independent in relation to the Issuer, the Issuer’s management and the major shareholders in
the Issuer.
Gail Buyske and her direct relatives together hold 2,000 ordinary shares in the Issuer.

Simon F. D. Ellis, born 1955
Simon F. D. Ellis is an ordinary member of the Board of Directors since 2007. In addition, he is a member of the
Board of Directors’ Credit Committee. Simon F.D. Ellis is the Director of Marketing of Hakluyt and a member of
the Board of Directors of the Foundation Nils Adlers Stipendiefond. During the last five years, Simon F. D.
Ellis, has been, but is no longer, a Managing Director within Morgan Stanley’s Investment Banking division.
During his time at Morgan Stanley, Simon F.D. Ellis was a financial advisor to the Bank in relation to the
acquisition of the minority shares in AS Hansapank. Simon F. D. Ellis holds a BA/MA in Modern History from
Oxford University.
Simon F. D. Ellis is independent in relation to the Issuer, the Issuer’s management and the major shareholders
in the Issuer.
Simon F. D. Ellis and his direct relatives together hold 1,000 ordinary shares in the Issuer.

        a
Berith H¨ gglund-Marcus, born 1950
        a
Berith H¨ gglund-Marcus is an ordinary member of the Board of Directors since 2005. She is also a member of
the Audit Committee and the Compensation Committee (both of which are committees of the Board of
                    a
Directors). Berith H¨ gglund-Marcus is Director of HR Group Staff & Functions of AB Electrolux, a member of
the Boards of Directors of Electrolux IT Solutions AB, Muscito Group AB and the Foundation Nils Adlers
                                                   a
Stipendiefond. During the last five years, Berith H¨ gglund-Marcus has been, but is no longer, the Senior Vice
President of Electrolux IT and the CEO of Electrolux IT Solutions AB and a member of the Board of Directors
                                    ˚                               a
of Sparbankernas Service AB and Atvidabergs Sparbank. Berith H¨ gglund-Marcus holds a BA in Business
Administration.
        a
Berith H¨ gglund-Marcus is independent in relation to the Issuer, the Issuer’s management and the major
shareholders in the Issuer.
        a
Berith H¨ gglund-Marcus and her direct relatives together hold 300 ordinary shares in the Issuer.




                                                      75
 o
G¨ ran Johnsson, born 1945
  ¨
Goran Johnsson is an ordinary member of the Board of Directors since 1997. He is also a member of the Board
                                 ¨
of Directors’ Credit Committee. Goran Johnsson is the Chair of the Boards of Directors of the Centre for High
                           a
Performance Steel at Lule˚ university, Calmando AB, the Labour Movement’s Tankesmedja and Unionkonsult
    a
i R˚ dhusgruppen AB, the First Deputy Chair of the Board of Directors of the Swedish Export Credits
                                                                   a
Guarantee Board and a member of the Boards of Directors of Ume˚ university, Elanders AB, IQ-initiativet AB,
Swedish Foundation for Strategic Research, Sveriges Television AB and the Foundation Nils Adlers
                  ¨                                                                        ¨
Stipendiefond. Goran Johnsson is also an advisor to Vinnova. During the last five years, Goran Johnsson has
been, but is no longer, a member of the Board of Directors of the Fourth Swedish National Pension Fund and
Stockholm Business Region AB and the General Secretary of the Swedish Metal-Workers’ Union. Goran        ¨
Johnsson has a degree from Elementary School and has done labor union training.
  ¨
Goran Johnsson is independent in relation to the Issuer, the Issuer’s management and the major shareholders
in the Issuer.
 ¨
Goran Johnsson and his direct relatives together hold 1,000 ordinary shares in the Issuer.

Helle Kruse Nielsen, born 1953
Helle Kruse Nielsen is an ordinary member of the Board of Directors since 2008. She is also a member of the
Boards of Directors of Aker BioMarine ASA, Oriflame Cosmetics SA, Gumlink A/S and the Foundation Nils
Adlers Stipendiefond. During the last five years, she has been, but is no longer, a member of the Board of
Directors of V&S Vin och Sprit AB. Helle Kruse Nielsen holds a B.Sc. degree in Economics.
Helle Kruse Nielsen is independent in relation to the Issuer, the Issuer’s management and the major
shareholders in the Issuer.
Helle Kruse Nielsen and her direct relatives hold no shares in the Issuer.

Anders Nyblom, born 1954
Anders Nyblom is an ordinary member of the Issuer’s Board of Directors since 2006. Anders Nyblom is the
President and CEO of Nyblomgruppen Sverige AB, Nyblomgruppen Invest AB and Nyblomgruppen AB. He is
                                                                                                  oping AB,
also the Chair of the Boards of Directors of Nyblomgruppen Sverige AB, Paul Hall AB, Pacson i Link¨
AB Gunnar Pellvik, Pacson AB, N G Import & Agentur AB, Nybloms Pappers AB, Nyblomgruppen AB,
 ¨
OresundsPappper AB, AB Helmer Nilsson, AB Br¨                              ¨              ¨     ¨
                                                  oderna Nyblom, TA-MIX i Solvesborg AB, Ostgota Pappers
AB, AK Fastighetspartner i Kalmar AB, Nyblomgruppen Invest AB and the Foundation Kulebostiftelsen. He is
a member of the Boards of Directors of the Foundation Nils Adlers Stipendiefond and the Foundation Bosse
Intersport minnesfond. During the last five years Anders Nyblom has been, but is no longer, the Chair of the
                                         ¨
Board of Directors of Severin Nilssons Mobler AB, Rydbergs Motor AB and a member of the Board of Directors
of Inside Kalmar AB, Kepab AB, Destination Kalmar AB and Stiftelsen Barometern. Anders Nyblom holds a
degree from upper secondary school and has undertaken studies at university.
Anders Nyblom is independent in relation to the Issuer, the Issuer’s management and the major shareholders
in the Issuer.
Anders Nyblom and his direct relatives together hold 12,500 ordinary shares in the Issuer.

Bengt Fogelfors, born 1946
Bengt Fogelfors is a deputy employee representative of the Board of Directors since 2005 and has been
employed by the Bank since 1985 as a bank employee/internal lawyer. He is also a Deputy Board member of
                            ¨
the Boards of Directors of Forsta Sparbankens Bostadsstiftelse Ekkronan and Kommun-Eken AB. Bengt
Fogelfors holds an LL.M. degree.
Bengt Fogelfors and his direct relatives hold no shares in the Issuer.

              o
Monica Hellstr¨ m, born 1948
              om
Monica Hellstr¨ is an employee representative of the Board of Directors since 2003 (deputy employee
representative from 1999) and has been employed by the Bank as a bank employee since 1981. She is also a
member of the Boards of Directors of the Foundation Nils Adlers Stipendiefond, SPK Sparinstitutens
Pensionskassa and Stiftelsen Guldeken. She has a degree from upper secondary school.
              om
Monica Hellstr¨ and her direct relatives together hold 610 ordinary shares in the Issuer.


                                                     76
Kristina Janson, born 1953
Kristina Janson is a deputy employee representative (currently Kristina Janson is an acting employee
representative since one ordinary employee representative has resigned) of the Board of Directors since
2007 and is also a member of the Board of Directors of the Foundation Nils Adlers Stipendiefond. In addition,
Kristina Janson was an adjunct member in the Board of Directors’ Compensation Committee in relation to the
recruitment process of a new CEO of the Issuer. Kristina Janson has been employed by the Bank as a bank
employee since 1972. Kristina Janson has a degree from upper secondary school.
Kristina Janson and her direct relatives together hold 400 ordinary shares in the Issuer.

Other
The office address of the members of the Board of Directors is c/o Swedbank AB (publ), 115 34 Stockholm,
Sweden. None of the Board members have any family relationship with any other Board member or members
of group executive management.
During the last five years none of the members of the Board of Directors have been involved in any
bankruptcies, receiverships or liquidations in any capacity as a member of the Board of Directors of a
company or members of the management of a company. None of the members of the Board of Directors have
been convicted of fraudulent conduct during the last five years or been subject to any public incrimination or
sanctions by statutory or regulatory authorities (including designated statutory bodies), and none of the
directors have been disqualified by a court from acting as members of the administrative, management or
supervisory bodies of a company or otherwise from conducting the affairs of a company during the last five
years.
There are no conflicts of interest between any duty owed to the Issuer by any director and such director’s
personal interests and/or other duties.
Some or all of the members of the Board of Directors are customers of the Bank and accordingly have
ordinary customer relationships with the Bank.
The members of the Board of Directors are not entitled to any benefits upon retirement from the Board, with
                             a
the exception of Carl Eric St˚ lberg, see ‘‘Termination conditions for the Chair of the Board of Directors.’’

Group executive management
The table below sets forth the name, year of birth, current position, year of employment at the Bank and
shareholding in the Issuer as per November 14, 2008, of members of the Issuer’s group executive
management and the new President and CEO.

                                       Year of                                         Year of        Shareholding in the Issuer
Name                                     Birth   Position                          Employment              November 14, 2008
       e
Jan Lid´ n . . . . . . . . . . . . .     1949    President and CEO                       1990    20,081
Michael Wolf . . . . . . . . . .         1963    New President and CEO                   2008    Holds no shares
                   c
Giedrius Duseviˇius . . . . . .          1971    Head of Business Development of         1996    2,000 ordinary shares and 2,000
                                                 Baltic Banking                                  options for ordinary shares
Catrin Fransson . . . . . . . .          1962    Executive Vice President and            1987    600 ordinary shares
                                                 Head of Customer Offerings and
                                                 Products in Swedish Banking
Magnus Gagner Geeber . . .               1969    Head of Swedbank Markets                1990    Holds no shares
Kjell Hedman . . . . . . . . . .         1951    Executive Vice President and            1985    2,000 ordinary shares
                                                 Head of Swedish Banking
Mikael Inglander . . . . . . . .         1963    Executive Vice President and            1988    4,000 ordinary shares
                                                 Chief Finance Officer and Chief
                                                 Administration Officer
Erkki Raasuke . . . . . . . . .          1971    Head of Baltic Banking                  1994    12,000 ordinary shares
              om
Annika Wijkstr¨ . . . . . . .            1951    Executive Vice President and            1986    2,000 ordinary shares
                                                 Head of International Banking
Kristina Janson . . . . . . . . .        1953    Employee Representative                 1972    400 ordinary shares


       e
Jan Lid´ n, born 1949
       e
Jan Lid´ n has been the President and Chief Executive Officer of the Issuer since 2004 and an employee of the
                                                                                  e
Bank since 1990. He is the Chair of group executive management. Jan Lid´ n is also the Chair of the
AS Hansabank Council, OJSC Swedbank (Ukraine) Council, CJSC Swedbank Invest (Ukraine) Council,
OAO Swedbank (Russia) Council and the Chair of the Boards of Directors of Swedbank Finans AB, Visa Europe,


                                                                    77
   a
Aff¨ rsbankernas Serviceaktiebolag, Swedbank Hypotek AB and a member of the Boards of Directors of the
Swedish Bankers’ Association, Swedbankkoncernens Gemensamma Pensionsstiftelse I and
Swedbankkoncernens Gemensamma Pensionsstiftelse II. During the last five years, he has been, but is no
                                                                       a
longer, the Chair of the Board of Directors of Swedbank Fastighetsbyr˚ AB, a member of the Board of
                                                                                          ¨
Directors of PNA Card Service AB, Visa International, Visa Sweden Service AB/VISA Sweden Forening. Jan
   e
Lid´ n holds an M.Pol.Sc.
       e
Jan Lid´ n and his direct relatives together hold 20,081 ordinary shares in the Issuer.

Michael Wolf, born 1963
On November 5, 2008, the Issuer engaged Michael Wolf to the position of President and CEO. Michael Wolf
will begin his employment with the Issuer on December 1, 2008. He will be introduced to the Bank’s business
during three months and take up the positions as the President and CEO on March 1, 2009. During the last
five years, Michael Wolf has been, but is no longer, President and CEO of Intrum Justitia, the CEO and Chair of
                                                                     ¨
the Board of Directors of Skandia Europe AB, the Deputy CEO of Forsakrings AB Skandia, a member of the
Boards of Directors of Intrum Justitia Sverige AB, Intrum Justitia Sweden Holding AB, Intrum Justitia AB,
Skandia Capital AB, Skandia Global Investments AB, DnB Nor Absolute Return Investments AB, DIAL
  ¨ a
Fors¨ krings AB and East Capital AB. Michael Wolf holds a M.Sc. in Business Administration and Economics.
Michael Wolf and his direct relatives hold no shares in the Issuer.

               c
Giedrius Duseviˇius, born 1971
               c
Giedrius Duseviˇius is the Head of Business Development of Baltic Banking and has been an employee of AB
Bankas Hansabankas since 1996. He is a member of group executive management and is a member of
Hansapank Management Board. During the last five years, he has also been, but is no longer, the CEO and
Chair of AB Bankas Hansabankas Council. Between 1996-2004, he was the Managing Director of UAB Hansa
Lizingas, the Chair of UAB Baltijos Autolixingas, UAB Baltijos Realizacijos Centras and UAB Investciju
                                     c
Draudimo Brokeris. Giedrius Duseviˇius holds an M.Sc. in Economics and a degree from the Institute of
International Relations and Political Sciences.
               c
Giedrius Duseviˇius and his direct relatives together hold 2,000 ordinary shares and 2,000 options for
ordinary shares in the Issuer.

Catrin Fransson, born 1962
Catrin Fransson is Executive Vice President and Head of Customer Offerings and Products in Swedish
Banking and has been an employee of the Bank since 1987. She is also a member of group executive
management, the Deputy Chair of the Swedish Banking Management and the CEO of Swedbank Hypotek AB.
Catrin Fransson holds an M.Sc. in Business Administration and Economics.
Catrin Fransson and her direct relatives together hold 600 ordinary shares in the Issuer.

Magnus Gagner Geeber, born 1969
Magnus Gagner Geeber is the Head of Swedbank Markets and has been an employee of the Bank since 1990.
He is also a member of group executive management and the Chair of ZAO Swedbank Markets (Russia)
                                                                  ¨
Council and a member of the Board of Directors of Swedbank Foretagsf¨     ormedling AB. During the last five
years, he has also been, but is no longer, an associate of Bagg Agenturer HB. Magnus Gagner Geeber studied
economics at high school.
Magnus Gagner Geeber and his direct relatives hold no shares in the Issuer.

Kjell Hedman, born 1951
Kjell Hedman is Executive Vice President and Head of Swedish Banking and has been an employee of the
Bank since 1985. He is also a member of group executive management and the Chair of Swedish Banking
Management. Kjell Hedman is the Chair of Swedbank Jordbrukskredit AB, VISA Sweden Service AB/Visa
Sweden f¨ orening, EnterCard Holding AB, Swedbank Finans AB, Swedbank Card Service AB and the
Infrastructure Council of the Swedish Bankers’ Association and the Deputy Chair of Swedbank Hypotek AB.
Furthermore, he is a member of the Boards of Directors of BABS Paylink AB, BDB Bankernas Dep˚ AB,         a
KC Kontocentralen AB and a member of the European Payment Council and a Deputy Board member of PNA
Card Service AB. During the last five years, Kjell Hedman has been, but is no longer, the Chair of the Boards of


                                                      78
Directors of Allround AB, BABS Holding AB and Bankgirocentralen BGC AB, Lindorff Sverige AB, Niam III Altak
AB, Device Business Transactions Sweden AB, BGC Holding AB, EnterCard Sverige AB and a member of the
Board of Directors of the Pan Nordic Card Association. Kjell Hedman is an economist.
Kjell Hedman and his direct relatives together hold 2,000 ordinary shares in the Issuer.

Mikael Inglander, born 1963
Mikael Inglander is Executive Vice President, Chief Finance Officer and Chief Administration Officer and has
been an employee of the Bank since 1988. He is also a member of group executive management and a
member of the OJSC Swedbank (Ukraine) Council, CJSC Swedbank Invest (Ukraine) Council and AS Hansapank
Council. During the last five years, Mikael Inglander has been, but is no longer, a member of the Board of
                                                       ¨
Directors of VISA Sweden Service AB/Visa Sweden Forening, EnterCard Holding AB, EnterCard Sverige AB
             a
and FSB Bol˚ ndirekt Bank AB. Mikael Inglander holds an M.Sc. in Business Administration and Economics.
Mikael Inglander and his direct relatives together hold 4,000 ordinary shares in the Issuer.

Erkki Raasuke, born 1971
Erkki Raasuke is the Head of Baltic Banking and has been an employee of AS Hansapank since 1994. He is a
member of group executive management and the Chair of AS Hansabank Management Board, AB Bankas
Hansabankas (Lithuania) Council, OAO Swedbank (Russia) Council, AS Hansa Liising Eesti Council, AS Hansa
Capital Council, a member of Hansa Investeerimisfondid (Estonia) Council, SA Eesti Terviserjad Council, AS
Varakindlustus Council, the Board of the Estonian Banking Association, Tallinn Stock Exchange Listing
Committee and a member of the Board of Directors of EnterCard Holding AB. During the last five years, Erkki
Raasuke has been, but is no longer, the CEO of AS Hansapank, a member of AS Hansa Elukindlustus Council,
OJSC Swedbank (Ukraine) Council and CJSC Swedbank Invest (Ukraine) Council. Erkki Raasuke holds an M.Sc.
in Business Administration and Economics.
Erkki Raasuke and his direct relatives together hold 12,000 ordinary shares in the Issuer.

              o
Annika Wijkstr¨ m, born 1951
              om
Annika Wijkstr¨ is Executive Vice President and Head of International Banking and has been an employee of
                                                                                           om
the Bank since 1986. She is also a member of group executive management. Annika Wijkstr¨ was the Head
                                                             om
of Swedbank Markets from 2003 to 2008. Annika Wijkstr¨ is a member of the Board of Directors of
Swedbank Gemensamma Pensionsstiftelse II and Deputy Board member of the Board of Directors of the
                                               om
Swedish Bankers’ Association. Annika Wijkstr¨ is a member of OAO Swedbank (Russia) Council, CJSC
Swedbank Invest (Ukraine) Council, OJSC Swedbank (Ukraine) Council and AS Hansapank Council and a
                               a
Deputy Board member of Aff¨ rsbankernas Serviceaktiebolag. During the last five years, Annika Wijkstr¨  om
has been, but is no longer, the Chair of the Board of Directors of First Securities ASA and a member of the
                                   ¨
Boards of Directors in Swedbank Foretagsf¨                      a
                                            ormedling AB and F¨ rs & Frosta Sparbank AB. Annika Wijkstr¨om
                                                           om
holds a BA in Languages and Economics. Annika Wijkstr¨ and her direct relatives together hold 2,000
ordinary shares in the Issuer.

Kristina Janson, born 1953
See above under ‘‘Board of Directors.’’

Other
The office address of the members of group executive management is c/o Swedbank AB (publ), 115 34
Stockholm, Sweden. None of the members of group executive management has any family relationship with
any other member of group executive management or member of the Board of Directors.
None of the members of group executive management have, during the past five years, been involved in any
bankruptcies, receiverships or liquidations in any capacity as a member of the Board of Directors of a
company or members of the management of a company. None of the members of group executive
management have been convicted of fraudulent conduct during the last five years or been subject to any
public incrimination or sanctions by statutory or regulatory authorities (including designated statutory
bodies), and none of the members of group executive management have been disqualified by a court from
acting as members of the administrative, management or supervisory bodies of a company or otherwise
from conducting the affairs of a company during the last five years.



                                                    79
There are no conflicts of interest between any duty owed to the Issuer by any member of group executive
management and such member’s personal interests and/or other duties.
Some or all of the members of group executive management are customers of the Bank and accordingly have
ordinary customer relationships with the Bank.

Remuneration to the President and senior executives
                                              e
Employment terms for President and CEO Jan Lid´ n
       e
Jan Lid´ n’s remuneration consists of a fixed annual salary with no variable compensation in the form of
                                                            e
bonus, etc. His ordinary retirement age is 60 years. Jan Lid´ n disposes of an annual premium of approximately
SEK3.6 million for defined contribution pension purposes. The Issuer’s obligation extends only to the size of
the premium. The premium is index-linked on a yearly basis at the highest percentage applied by BAO,
                                                                                  e
Sparinstitutens Pensionskassa and Alecta. If terminated by the Issuer, Jan Lid´ n will receive salary during a
12-month notice period, plus a severance pay corresponding to 12 monthly salaries. A deduction is made for
                                                e
income earned from new employment. If Jan Lid´ n resigns, the term of notice is six months and severance pay
is only payable if the resignation is caused by material breach of contract by the Issuer.
          e
As Jan Lid´ n reaches retirement age in 2009, he will retire from his position as President and CEO. The Bank
has engaged a new President and CEO (Michael Wolf) who will take up his new position on March 1, 2009.
                                                            e
See ‘‘Group Executive Management—Michael Wolf.’’ Jan Lid´ n will remain in the service of the Issuer until the
end of his contract on April 25, 2009.

Remuneration of the President and CEO,
       e
Jan Lid´n, SEK thousands                                                                                      2008                 2007        2006
Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         8,000                8,000       7,250
Variable compensation, bonuses . . . . . . . . . . . . . . . . . . . . . . . . .                                 —                    —           —
Other remuneration/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .                              189                  194         183
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             8,189                8,194        7,433
Pension cost incl. payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . .                         4,562                4,464       4,399

Employment terms for the new President and CEO Michael Wolf
On November 5, 2008, the Issuer engaged Michael Wolf to the position of President and CEO. Michael Wolf
will begin his employment with the Issuer on December 1, 2008. He will be introduced to the Bank’s business
during three months and take up the positions as the President and CEO on March 1, 2009.
Michael Wolf’s remuneration consists of a fixed annual salary with no variable compensation in the form of
bonus, etc. His ordinary retirement age is 60 years. Michael Wolf disposes of an annual premium of MSEK 3,2
for defined contribution pension purposes. The Issuer’s obligation extends only to the size of the premium. If
terminated by the Issuer, Michael Wolf will receive salary during a 12-month notice period, plus severance
pay corresponding to 12 monthly salaries. A deduction is made for income earned from new employment. If
Michael Wolf resigns, the applicable notice period is six months.

Remuneration of the new President and CEO,
Michael Wolf, SEK thousands                                                                                                                    2009

Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                8,000(1)
Variable compensation, bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        —
Other remuneration/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   150(2)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8,150
Pension cost incl. payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              3,976

(1)    Annual salary
(2)    Estimated figure


Employment terms for Head of Swedish Banking
Kjell Hedman’s remuneration normally consists of a fixed salary and variable compensation which is
maximized at 25% of the annual salary. The variable compensation consists of 2⁄3 bonuses tied to payouts by
the Kopparmyntet profit sharing foundation and 1⁄3 bonuses tied to individual goals. Variable compensation is



                                                                              80
not pensionable. However, variable compensation will not be paid to Kjell Hedman during the period when
                                     a
the Bank’s agreements with Riksg¨ lden are applicable (provided that the limitations in such agreements
remain applicable to Kjell Hedman), see ‘‘Legal Considerations and Supplementary Information—Material
Contracts.’’ Kjell Hedman has a defined-benefit pension amounting to 70% of 54.57 income base amounts, in
addition to which he receives a supplementary defined-contribution pension in which the Issuer is committed
to pay premiums to a company-owned endowment insurance for the equivalent of 35% of salary segments
not secured by the defined-benefit entitlement. If terminated by the Issuer Kjell Hedman will receive salary
during a twelve-month notice period, plus a severance pay corresponding to 12 monthly salaries. The
severance pay is pensionable. A deduction is made for income earned from new employment. If Kjell Hedman
resigns, the term of notice is six months and severance pay is only payable if the resignation is caused by
material breach of contract by the Issuer.

Remuneration to the Head of Swedish Banking,
Kjell Hedman, SEK thousands                                                                                                2008      2007

Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  3,420     2,650
Variable compensation, bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          —       420
Other remunerations/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       94        91
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,514     3,161
Pension cost incl. payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                7,406     4,299

Remuneration to other senior executives(1), MSEK                                                           2008(2)        2007(3)    2006

Fixed compensation, salaries . . . . . . . . . . . . . . . . . . . . . . . . . . .                              18            18      17
                                                                                                                    (4)
Variable compensation, bonuses . . . . . . . . . . . . . . . . . . . . . . . . .                                               7       8
Other remuneration/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  1           1       1
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 19(5)        26       26
                                           (6)
Pension cost incl. payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . .                              12            10       9
No. of persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       7             7       7
(1)   Includes compensation paid during the year from all group entities, Swedish and international. The remuneration shown refers to
      the full year for the members of the group management at the end of the year, excluding the President.
(2)   The other senior executives 2008 include Kjell Hedman, Catrin Fransson, Giedrius Dusevicius, Mikael Inglander, Erkki Rausuke,
                    om
      Annika Wijkstr¨ and Magnus Gagner Geeber.
(3)   The other senior executives 2007 included Kjell Hedman, Catrin Fransson, Giedrius Dusevicius, Mikael Inglander, Erkki Rausuke,
                    om
      Annika Wijkstr¨ and Anders Ek.
(4)   Not yet possible to establish. As set out in ‘‘Limitations regarding terms and conditions for the five most well paid senior
                                                                               a
      executives due to agreement with the Swedish National Debt Office (Riksg¨ lden),’’ variable compensation will in any event not be
                                                                                                   a
      paid to some of the senior executives during the period when the agreement with Riksg¨ lden is applicable.
(5)   Excluding variable remuneration, if any.
(6)   Calculated in accordance with IAS 19.

Normally, variable compensation paid to the Swedish Executive Management is maximized at 25% of annual
salary and consists of 2⁄3 bonuses tied to payouts by the Kopparmyntet profit sharing foundation and
1⁄3 bonuses tied to individual goals. However, variable compensation will not be paid to certain members of

                                                                                                a
the Swedish Executive Management during the period when the Bank’s agreements with Riksg¨ lden applies
(provided that the limitations remain applicable to them), see ‘‘Legal Considerations and Supplementary
Information—Material Contracts.’’
Variable compensation paid to the Baltic Executive Management is maximized at 13 monthly wages per
person. In addition 1% of EVA (Economic Value Added) is divided equally between the senior executives,
maximized at e360,000 per holder of the position. Variable compensation is not pensionable. Directors’ fees
are deducted against salary, unless otherwise agreed.

Limitations regarding terms and conditions for the five most well paid senior executives due to
                                                         a
agreement with the Swedish National Debt Office (Riksg¨lden)
                                                                                    a
The Bank has entered into agreements with the Swedish National Debt Office (Riksg¨ lden); see ‘‘Legal
Considerations and Supplementary Information—Material Contracts.’’ Under such agreements, the Bank has




                                                                             81
undertaken to, inter alia, ensure that the following applies to the five most well paid senior executives
employed by the Issuer:
•   the fixed salary and other fixed compensation must not exceed the remuneration decided prior to
    October 20, 2008;
•   variable remuneration, including options etc., must not be agreed upon during the period when the
                           a
    agreements with Riksg¨ lden applies and circumstances attributable to this time period must not be
    taken into account when variable remuneration according to already existing agreements is calculated
                                                                               a
    and no variable remuneration decided upon prior to the agreement with Riksg¨ lden may be executed or
    paid; and
•   agreements concerning severance pay must not be more favorable than the terms and conditions that
    follows from the guidelines for terms and conditions of employment for top executives in companies
    owned by the Swedish government.
The Issuer believes that the current terms and conditions for the relevant senior executives comply with the
                                                   a                                           a
limitations set out in the agreements with Riksg¨ lden. However, as a matter of policy Riksg¨ lden has not
                                                                                          a
confirmed the Issuer’s view and, accordingly, the Issuer cannot be certain whether Riksg¨ lden might have a
different view.

Pension obligations
Other senior executives comprise a total of seven persons. A defined-benefit pension is payable to three
persons from age 60 and lifelong and to two persons from age 62 and lifelong. For five persons, a deduction
is made for previously vested pension entitlement. Benefits are accrued continuously until retirement and
are vested after they have been accrued. For two other senior executives, there is no pension commitment.
For three of the five individuals with a defined-benefit pension entitlement, the pensionable salary for 2004
in the defined-benefit pension plan has been locked in terms of income base amounts, in addition to which
they receive a supplementary defined-contribution pension where the Issuer has committed to premium to a
company-owned endowment insurance for the equivalent of 35% of salary segments not secured by the
defined-benefit entitlement. Two of the five individuals with a defined-benefit pension entitlement, receive
a supplementary defined-contribution pension where the Issuer has committed to premium a company-
owned endowment insurance for the equivalent of 35% of salary segments between 30 and 80 income base
amounts.
The defined benefit pension obligation relating to the senior executives is secured through pension funds
and insurance. The value of the plan assets equaled the defined benefit pension obligation, hence the Bank
had no net liability for these pension obligations as of September 30, 2008.

Termination conditions for other senior executives
If terminated by the Bank, salary is payable during a notice period of 0-12 months. To this is added severance
pay corresponding to 6-12 monthly salaries. A deduction is made for income earned from new employment.
For two senior executives, the severance pay is pensionable. If a senior executive resigns, the notice period is
not more than six months and in certain cases severance will be paid if the resignation is caused by material
breach of contract by the Bank.

General principles for remuneration to top executives
A remuneration policy for top executives in the Bank was adopted by the Annual General Meeting held on
April 25, 2008 which shall apply until the Annual General Meeting of 2009 and cover remuneration
agreements with the Issuer’s CEO and the other executives who are reporting to the CEO and who also are
members of the group executive management (top executives), including changes in remuneration for top
executives. Based on the principles set out in the remuneration policy, the Board shall decide on the
remuneration terms for each top executive. If specific reasons, in the opinion of the Board, apply in an
individual case, the Board may decide to deviate from the remuneration policy. Remuneration to top
executives may consist of the main components: base salary, short-term incentive program (STI program),
long-term incentive program (LTI program) benefits and pension. Each top executive may be entitled to
general benefits as well as certain additional extra benefits. Pension benefits can be defined benefit schemes
or defined contribution schemes, and are vested. Swedish employees have defined benefit pensions
according to the applicable collective agreement. If in addition to that pension, benefits are to apply they
shall be defined contribution pension.


                                                      82
The STI program shall be structured in accordance with the Issuer’s general policy for incentive programmes
and shall have a cap. Relevant performance goals, which promote the interests of the Issuer and its
shareholders, shall be established in advance, including performance goals connected to the business area of
the top executive in question. Any outcome shall be based on an assessment of how relevant performance
goals have been achieved, and payment shall be made in cash after the end of each financial year. The
performance goal for a STI program shall normally be based on the performance during a financial year. Due
to market changes, the Issuer may from time to time want to adjust the performance goals in order to
achieve an efficient incentive structure. Consequently, the Board have the right to adopt STI programs
running from the beginning of an accounting year.
Currently, the Issuer has not adopted any LTI program.
The total remuneration cost shall cover the annual cost of base salary, STI, LTI, benefits and pension,
including social security contributions, and payroll tax. The following maximum benefit costs shall apply until
the Annual General Meeting of 2009: the CEO—400 income base amounts; other executive who is reporting
to the CEO and who also is a member of the group executive management—350 income base amounts, each.
When determining the individual remuneration each executive shall be evaluated in accordance with an
acknowledged, structured benchmark procedure for establishing and comparing salaries and benefit levels.
Top executives employed after 2006 may have a notice period of 0-12 months. In addition, severance pay
may be paid for 6-12 months. For certain top executives employed prior to 2006, longer periods may apply.

Audit
Internal control
The Board of Directors has ultimate responsibility for operations and processes involving risk management
and control within the Bank. Under the direction of the CEO, managers with operational responsibility are
charged with ensuring that risk management and control processes work as specified in the Board’s
guidelines.
Every manager with operational responsibility in the organization is responsible for risk management and
control within their operating area. This includes periodic evaluation of control methods, which must be
identified, appropriate, effective and stable. Good risk management and control require clearly defined
delegation of responsibilities and duties, as well as observance of the duality principle, which means that no
one person alone should handle a routine or oversee a case without control or supervision. Responsibility for
risk management and control is part of operational responsibility. Thus, risk management and control are
integral to operations.

External auditor
The Issuer’s Articles of Association provide that it must have one or two external auditors. The election is
made by the Issuer’s shareholders for a four-year term. At the 2007 Annual General Meeting, the accounting
firm Deloitte AB was elected as the Issuer’s auditor. Lead auditor is Jan Palmqvist, Deloitte AB (address:
Deloitte AB, SE-11379 Stockholm, Sweden). Deloitte AB and Jan Palmqvist are members of FAR SRS (the
Swedish Institute of Authorized Public Accountants).
From the 2004 Annual General Meeting until the 2007 Annual General Meeting, Deloitte AB and Ernst &
Young Aktiebolag (address: Ernst & Young AB, Box 7850, SE-10399 Stockholm, Sweden) were joint external
auditors. At the 2007 Annual General Meeting, the Nomination Committee proposed that the Issuer should
have only one auditor and that Deloitte AB should be elected. The 2007 Annual General Meeting resolved in
accordance with the Nomination Committee’s proposal. Ernst & Young and the previously primarily
                            aff,
responsible auditor, Lars Tr¨ are members of FAR SRS.
According to Chapter 13 Section 9 of the Banking and Financing Business Act (Sw: lagen (2004:297) om
                         o
bank- och finansieringsr¨ relse) (the ‘‘BFBA’’), the SFSA may appoint one or more auditors to participate in the
audit of a credit institution together with the other auditors. For the years 2005, 2006 and 2007, BDO
Nordic AB (address: BDO Nordic AB, Karlav¨   agen 100, Box 24193, SE-10451 Stockholm, Sweden) Stockholm
was appointed by the SFSA to participate in the audit of the Issuer. For 2008, the SFSA has not appointed
                                                                                                    a
any auditors for the Issuer. BDO Nordic AB and the previously primarily responsible auditor, Ulf J¨ rlebro, are
members of FAR SRS.
The external audit of the accounts of the Issuer and its subsidiaries as well as management by the Board of
Directors and group management are conducted in accordance with generally accepted auditing standards in


                                                      83
Sweden. The auditor attends at least two Board meetings per year at which it goes through the audit for the
year and discusses the audit with the members of the Board once without the President being present. For
information regarding fees to the auditors, see ‘‘Notes to the Consolidated Financial Statements—Note 8.’’

Corporate Governance
The corporate governance of the Issuer is based upon Swedish legislation, the Nasdaq OMX Stockholm’s Rule
Book for Issuers (the ‘‘Rule Book’’), the Swedish Code of Corporate Governance 2008 (the ‘‘Code’’) and
internal rules and regulations. The Code, which is an element in the self-regulation of Swedish businesses, is
based on the principle ‘‘comply or explain.’’ This means that a company that applies the Code may deviate
from individual provisions of the Code provided that the reason for each deviation is explained in the
company’s Corporate Governance Report. The Issuer has not reported any deviations from the Code in its
Corporate Governance Report.

Corporate Governance Report
Pursuant to the Code, the Issuer is obliged to attach a special report, a ‘‘Corporate Governance Report,’’ to its
annual report. Such Corporate Governance Report shall contain a statement that the Code is being applied
and a brief description of how such application has been conducted during the recent financial year. It shall
also, if applicable, indicate in what respects the Code has not been applied and clearly explain the reasons
therefore. The Corporate Governance Report shall include a statement on whether or not the Issuer’s
auditors have reviewed the report. The Issuer has, in accordance with the Code, a special section on its
website for corporate governance matters which provides current information as regards the state of
corporate governance in the Issuer that is included in the Corporate Governance Report, together with other
information that is required under the Code.

General Meeting
The shareholders exercise their rights at General Meetings of the Issuer. In addition to the Annual General
Meeting, Extraordinary General Meetings can be convened. Pursuant to the Issuer’s Articles of Association
the Annual General Meeting shall normally be held in April each year unless special circumstances dictate
otherwise.
                                                                                     ¨              ¨
The Annual General Meeting is normally held in Stockholm, but can also be held in Goteborg, Malmo or Ume˚ .  a
In its third interim report and on its web site, the Issuer announces where and when the Annual General
Meeting will be held. The notice of the Annual General Meeting is normally published around five weeks in
advance in the Swedish daily newspapers Dagens Nyheter, Svenska Dagbladet and Dagens Industri as well
as Post och Inrikes Tidningar (the Official Swedish Gazette). The notice is also made available on the Issuer’s
website. The Annual General Meeting is held in Swedish with simultaneous interpretation into English. The
material released prior to and in connection with the meeting as well as the minutes from the meeting are in
Swedish, but is translated to English. The documents are made available on the Issuer’s website.

Right to attend the General Meeting
The Issuer is a so-called VPC company, which means that its share register is maintained by VPC. All
shareholders who are directly recorded in the share register on five weekdays before the General Meeting
and who have notified the Issuer not later than 3:00 p.m. on the day indicated in the notice of the General
Meeting their intention to participate are entitled to attend the Meeting. Shareholders may attend the
Meeting in person or by proxy. Shareholders may be accompanied by a maximum of two assistants. It is
normally possible for the shareholders to register for the Meeting in several different ways. The notice
indicates in which ways and by which dates shareholders must register and notify the Issuer in order to be
entitled to attend the Meeting.

Agenda for the General Meeting
Shareholders who wish to have an issue brought before the General Meeting must submit a request in
writing to the Board of Directors. The request must normally be received by the Board not later than seven
weeks prior to the meeting.




                                                       84
Board of Directors
Under the BFBA and the Swedish Companies Act (Sw: aktiebolagslagen (2005:551)), the Board of Directors is
ultimately responsible for the organization and management of the Issuer. The Annual General Meeting
elects the members of the Board, including the Chair, and, if an election is scheduled, the auditors. Pursuant
to the Code, the nomination of Board members, including the Chair and the auditors, is made by the
Nomination Committee. The principles for appointing the Nomination Committee are set by the Annual
General Meeting. The Board’s current composition complies with the requirements of the Rule Book and the
Code in terms of applicable independence requirements, meaning that more than half of the members of the
Board elected by the shareholders shall be independent in relation to the Issuer and the group management
of the Issuer and that at least two Board members are independent in relation to the Issuer’s major
shareholders.
Under Swedish law, the CEO and at least half of the board members must be residents of a country within
the European Economic Area, unless the Swedish Companies Registration Office grants an exemption. The
Articles of Association of the Issuer provide that Board members who are elected at a General Meeting of
shareholders shall serve for a term expiring at the next Annual General Meeting. Board members elected by
the shareholders may be removed from office at any time by a General Meeting of the shareholders, and
vacancies on the Board may only be filled by a resolution at a General Meeting. Under Swedish law, the CEO
of a Swedish public limited liability bank company may not serve as the Chair. Furthermore, all board
members must be approved by the SFSA.

The Board’s organization and work
The Board’s working procedures are set out in its rules of procedure. The delegation between the Board and
the President, including the Chair of the Board and the President, is stipulated in the Board’s rules of
procedure and the instruction for the President. The Board has established a Credit Committee, a
Remuneration Committee, and an Audit Committee. An overview of each committee is set out below:
•   the Credit Committee prepares credit issues before they are discussed by the Board and takes other
    decisions on credit-related issues. The Committee also recommends credit risk strategies before they are
    discussed by the Board. The Credit Committee is the only committee with decision-making power;
•   the Remuneration Committee annually reviews the Issuer’s remuneration policy for top executives (‘‘the
    General principles for remuneration to top executives’’) and prepare a proposal to the Board. Based on
    the Remuneration Committee’s proposal, the Board shall each year propose General principles for
    remuneration to top executives to the Annual General Meeting for approval. The General principles for
    remuneration to top executives applies until the next Annual General Meeting. Based on the principles
    set out in the General principles for remuneration to top executives, the Board shall annually, upon
    proposal by the Remuneration Committee, decide on the specific remuneration terms for each of the
                                                                                                    ˚
    Issuer’s top executives. The present members of the Remuneration Committee are Carl Erik Stalberg,
                               a
    Ulrika Francke and Berit H¨ gglund-Marcus; and
•   the primary duties of the Audit Committee are to provide the Board with greater access to information
    on potential deficiencies in routines and organization through governance, risk management and
    control. The Audit Committee reviews the reliability and effectiveness of the financial reporting and
    whether the auditor’s work is being done effectively and otherwise satisfactorily. The present members
                                                                          a
    of the Audit Committee are Ulrika Francke, Gail Buyske and Berith H¨ gglund-Marcus.
The Chair of the Board has certain specific areas of responsibility, including:
•   overseeing the President’s work, be a discussion partner and support him, as well as monitoring that the
    Board’s decisions and instructions are implemented;
•   ensuring the Board’s responsibility for risk and capital assessment is carried out through the necessary
    instructions and reports;
•   ensuring that the Board maintains its responsibility for the independent review (that is, that the
    function works and reports according to established instructions); and
•   organizing and managing the Board’s work, encouraging an open and constructive discussion within the
    Board, and initiating the development of the Board’s competence in issues of importance to operations,
    including the evaluation of the Board’s work.




                                                     85
The Board’s rules of procedure mainly cover the Board’s strategic and supervisory roles, responsibility for
risks, conflicts of interest and disqualifications, the Remuneration Committee and other committees, special
issues decided by the Board, the decisions taken at the statutory meeting following the Annual General
Meeting, signatories, evaluations, confidentiality and formalities (for example, the distribution of information
prior to meetings, the attendance of individuals other than Board members, presentations, and the signing,
content and distribution of the minutes). At least twice a year, the auditor reports to the Board on the
auditor’s review and observations, once in the presence of the President. In addition, the auditor regularly
meets the Chair of the Board and the Chair of the Board’s Audit Committee.
In addition, and with regard to the process of the internal control of the Bank, the Board has at its disposal an
independent audit function directly subordinated to the Board (the Internal Audit). The Internal Audit’s task
is to assure that the competent decision making bodies and other personnel have an appropriate and
efficient organization, that the financial reporting is reliable, that the Bank is in compliance with laws and
regulations, internal rules and banking practice and protection of the Bank’s and its clients from losses. The
Internal Audit’s responsibility is to review and evaluate efficiency, governance, risk management and control
in the Bank. The function is designed to work proactively to propose improvements to internal control.




                                                       86
                                                   TAX ISSUES IN SWEDEN
The following is a summary of the tax consequences which, according to current Swedish tax legislation, may
arise as a consequence of ownership of shares and Subscription Rights in the Issuer or as a consequence of
the offer to subscribe for Preference Shares in the Issuer. Unless otherwise stated, the summary only applies
to holders of shares and Subscription Rights who are tax resident in Sweden. The summary does not purport
to exhaustively address all tax issues which may arise in the context. It does not, for example, address the
special rules which apply with respect to shares owned by partnerships or which are held as trading stock in
business operations. The special rules applicable to the corporate sector with respect to exemption from
taxation on capital gains (including non-deductible capital losses) and dividends on shares held for business
purposes(1) as well as share-based securities held for business purposes(2) are not addressed. Furthermore,
the summary does not cover foreign companies conducting business from a permanent establishment in
Sweden and foreign companies that have been Swedish companies. Specific tax consequences which are not
described may also arise with respect to other categories of shareholders, for example investment
companies, investment funds and persons who are not tax resident in Sweden. Each shareholder and holder
of Subscription Rights is recommended to consult a tax advisor regarding the tax consequences which may
arise from ownership of shares and Subscription Rights in the Issuer or as a consequence of the offer to
subscribe for Preference Shares in the Issuer, including the applicability and effect of foreign rules and double
taxation treaties.

Taxation upon sale of Preference Shares in the Issuer
Private individuals
Upon a sale of Preference Shares in the Issuer, private individuals and decedents’ estates are taxed on the
entire capital gain in the income from capital category. Tax is charged at rate of 30% of the capital gain.
Capital gains and capital losses are calculated as the difference between the selling price less selling
expenses and the sold shares’ acquisition cost for tax purposes.
The acquisition cost for tax purposes for all shares of the same class and type is added together and
calculated jointly applying the average method. In this context, Preference Shares and ordinary shares in the
Issuer are not deemed to be of the same class and type. Nor are paid and subscribed shares (Sw: BTA) deemed
to be of the same class and type as Preference Shares in the Issuer until the resolution regarding the Rights
Offering has been registered. Since the Preference Shares will be listed on the Nasdaq OMX Stockholm, the
standard method may be used as an alternative to the average method when calculating the acquisition cost
for tax purposes. This rule implies that the acquisition cost for tax purposes may be calculated at 20% of the
selling price less selling expenses.
Capital losses upon sale of Preference Shares in the Issuer are tax deductible. Such losses may be set-off in
their entirety against taxable capital gains on listed shares and the taxable part of capital gains on unlisted
shares realized in the same year as the losses. Set-off may also take place in full against taxable capital gains
on other listed securities taxed as shares (for example, subscription rights), with the exception of units in
investment funds containing only Swedish debt instruments (fixed income funds). 70% of any excess loss is
deductible. If a net loss arises in the income from capital category, a reduction is granted of the tax on income
from employment and business as well as property tax (governmental and local). Such a tax reduction is
granted at a rate of 30% of the net loss that does not exceed SEK100,000 and 21% of the net loss in excess
thereof. Excess net losses cannot be carried forward to a subsequent fiscal year.

Limited liability companies
Limited liability companies are taxed on all income in the income from business category. The tax rate is
28%(3). Capital gains and capital losses are calculated in the same manner as set forth above with respect to
private individuals. Deductions for capital losses on shares are granted only against taxable capital gains on

(1)   Listed shares are held for business purposes if the holding constitutes a capital asset and the total number of votes for all of the
      owner company´s shares amounts to not less than 10% of the votes for all shares in the company or where the holding is required
      for the business conducted by the owner company or another affiliated company defined in a special manner.

(2)   Subscription rights are deemed to constitute share-based securities held for business purposes if the underlying shares which
      provided an entitlement to the Subscription Rights are held for business purposes. Accordingly, Subscription Rights which are
      acquired in another manner, for example through purchase, can never be held for business purposes.

(3)   There is a proposal in the government bill 2008/09:65 to decrease the tax rate to 26.3% regarding fiscal years starting after
      December 31, 2008.



                                                                   87
shares and other securities taxed as shares. Provided that certain conditions are fulfilled, such capital losses
may also be set-off against taxable capital gains on shares and other securities taxed as shares in another
company within the same group, on condition that there is a right to make group contributions between this
company and the company that has suffered the capital loss. Capital losses on shares and other securities
taxed as shares which cannot be utilized during a certain fiscal year may be carried forward and set off
against taxable capital gains on shares and other securities taxed as shares during subsequent fiscal years,
without limitation in time.
If the Issuer’s shares constitute shares held for business purposes, special rules apply.

Special rules on converting Preference Shares into ordinary shares
A holder of Preference Shares, who applies for a voluntary conversion of Preference Shares into ordinary
shares according to the conditions in this offer, is deemed to have disposed of the Preference Shares for a
consideration in form of the ordinary shares received. Such a sale will be taxed in the same manner as set
forth above, whereupon the market value of the ordinary shares should constitute the selling price.
A conversion of Preference Shares into ordinary shares through a compulsory conversion according to the
conditions in this offer is, however, not regarded as a taxable sale according to an advance tax ruling decided
by the Council for Advance Tax Rulings on November 7, 2008. Consequently, ordinary shares which are
received pursuant to the compulsory conversion are deemed to have been acquired at the same time and for
the same acquisition cost as the Preference Shares. However, the Tax Agency has appealed the advance tax
ruling to the Supreme Administrative Court.

Exercise of Subscription Rights
No taxation is triggered when Subscription Rights are exercised for subscription of Preference Shares. The
acquisition expense for a preference share corresponds to the issue price. Upon the sale of shares acquired
through the exercise of Subscription Rights, the shareholder’s acquisition costs for tax purposes for all
shares of the same class and type shall be added together and calculated applying the average method. Any
sums paid for Subscription Rights which are exercised for subscription of Preference Shares may be included
when calculating the acquisition cost for tax purposes of the Preference Shares.

Sale of received Subscription Rights
The Subscription Rights will be listed. Shareholders who do not wish to exercise their preferential rights to
participate in the Rights Offering may sell their Subscription Rights. Upon a sale of the Subscription Rights a
taxable capital gain shall be calculated. Subscription rights which are received pursuant to this offer on basis
of shareholdings in the Issuer are deemed to have been acquired for SEK zero. The standard method may not
be used in this case. The entire selling price after deduction of selling expenses must thus be reported for
taxation. The acquisition cost for tax purposes of the original ordinary shares is not affected.
If received Subscription Rights constitute share-based securities held for business purposes, special rules
apply.

Sale of acquired Subscription Rights
A sale of Subscription Rights will trigger capital gains taxation. If the sold Subscription Rights were
purchased, or acquired in a similar way, in exchange for a consideration, the consideration constitutes the
acquisition expense for such Subscription Rights. The acquisition cost for tax purposes for the Subscription
Rights is calculated in accordance with the average method. The standard method may be used to calculate
the acquisition cost for tax purposes of listed Subscription Rights acquired in this manner.
Regarding the right to make deductions for capital losses on listed Subscription Rights, corresponding rules
apply as with respect to capital losses on listed shares; see above under the heading ‘‘Taxation Upon Sale of
Preference Shares in the Issuer.’’

Lapse of Subscription Rights
A Subscription Right which is not used or sold but, rather, lapses is deemed disposed of for SEK zero.




                                                      88
Taxation on dividends
With respect to individuals and decedents’ estates, dividends on Preference Shares in the Issuer are taxed in
the income from capital category at a rate of 30%. For individuals and decedents’ estates, the tax is withheld
by VPC as preliminary income tax or, in the case of nominee-registered shares, is withheld by the nominee.
For limited liability companies, dividends are taxed at a rate of 28%(4) in the income from business category. If
the Issuer’s shares constitute shares held for business purposes, special rules apply. The Issuer is not
responsible for any tax at source being withheld.

Shareholders with limited tax liability
For shareholders that are not tax resident in Sweden, Swedish withholding tax is normally payable on all
dividends from listed Swedish companies. Dividends from the Issuer are subject to Swedish withholding tax
at a rate of 30%.(5) Generally, however, this tax rate is reduced through tax treaties between Sweden and
other countries for the avoidance of double taxation. Withholding tax is withheld by VPC upon distribution of
the dividends. Where the shares are nominee-registered, the nominee is responsible for the deduction of tax.
Receipt of Subscription Rights does not trigger any withholding tax liability.
Shareholders and holders of Subscription Rights that are not tax resident in Sweden and do not conduct
operations from a permanent establishment in Sweden are normally not taxed in Sweden on capital gains
upon the sale of shares or Subscription Rights. Shareholders and holders of Subscription Rights may,
however, be subject to taxation in their countries of domicile. However, according to a special rule a private
individual who is domiciled outside Sweden may nevertheless be taxed in Sweden upon the sale of shares or
Subscription Rights, if, on any occasion during the calendar year in which the sale occurs or during the ten
immediately preceding years, the person was domiciled or had an habitual abode in Sweden. The application
of this rule may, however, to a certain extent be mitigated through tax treaties between Sweden and other
countries for the avoidance of double taxation.




(4)   There is a proposal in the government bill 2008/09:65 to decrease the tax rate to 26.3% regarding fiscal years starting after
      December 31, 2008.

(5)   The same withholding tax applies to certain of the payments made by a Swedish limited liability company, for example payments
      as a result of redemption of shares, distribution of liquidation proceeds and repurchase of shares through an offer directed to all
      shareholders or all holders of shares of a certain class.



                                                                  89
                                        ARTICLES OF ASSOCIATION
                                                      for
                                            SWEDBANK AB (publ)

                                                    §1
                                               Name and object
The name of the Bank is Swedbank AB. The company is a public company.
The object of the Bank, which was originally formed by Swedish savings banks, is to conduct banking
business and financing operations, and operations naturally connected therewith.

                                                     §2
                                                  Operations
The Bank will conduct such banking operations as are intended in the Banking and Financing Business Act
(2004:297). This Act states that by banking operations is meant operations including
1.   Payment services via the general clearing systems, and
2.   Receipt of funds which, following notice of termination, are available to the creditor within not more
     than 30 days.
General clearing systems means systems for the forwarding of payments from a large number of payers,
who are not associated with each other, which are otherwise intended to reach a large number of ultimate
payees who are not associated with each other.
The Bank may also—in its operations—conduct financing operations naturally connected therewith, in
accordance with the Banking and Financing Business Act, among other things
1.   Borrow funds, for example by accepting deposits from the general public, or by issuing bonds or other
     comparable debt instruments,
2.   Grant and broker loans, for example in the form of consumer credit and loans secured by charges over
     real property or claims,
3.   Participate in financing, for example by acquiring claims and leasing property,
4.   Negotiate payments,
5.   Provide means of payment,
6.   Issue guarantees and assume similar obligations,
7.   Participate in the issue of securities,
8.   Provide financial advice,
9.   Hold securities in safekeeping,
10. Conduct letters of credit operations,
11. Provide safety deposit services,
12. Engage in currency trading,
13. Engage in securities operations, and
14. Provide credit information

                                                      §3
                                               Share capital, etc.
The share capital of the bank shall be not less than ten billion five hundred million Swedish kronor
(SEK 10,500,000,000) and not more than forty-two billion Swedish kronor (SEK 42,000,000,000). The
number of shares shall be not less than five hundred million (500,000,000) and not more than two billion
(2,000,000,000).
Each share is entitled to one vote.



                                                       90
It shall be possible to issue two classes of shares, ordinary shares and preference shares. Ordinary shares may
be issued up to a number corresponding to the highest number of shares permitted according to these
Articles of Association. Preference shares may be issued up to a maximum of three hundred million
(300,000,000) preference shares.
In the event that the Bank resolves to, by a cash issue or a set-off issue, issue new shares of different classes,
the holders of ordinary shares and preference shares shall have preferential rights to subscribe for new
shares of the same class in relation to the number of shares already held by each holder (primary preferential
right). Shares not subscribed for on the basis of primary preferential rights shall be offered for subscription to
all shareholders (secondary preferential right). If the number of shares offered in this manner is insufficient
for subscription based on secondary preferential rights, the shares shall be allocated among the subscribers
in relation to the total number of shares in the Bank held. To the extent this is not possible as regards a
certain share/certain shares, the allocation shall be done by drawing of lots.
In the event that the Bank resolves to issue new shares, by a cash issue or a set-off issue, and only one class
of shares is issued, all shareholders, regardless of whether they hold ordinary shares or preference shares,
shall have preferential rights to the new shares in relation to the number of shares in the Bank held.
In the event that the Bank resolves to issue new warrants or convertibles, by a cash issue or a set-off issue,
the shareholders shall have preferential rights to the subscription of the new warrants as if the issue related
to the shares that may be subscribed for following an exercise of the warrants or, in case of an issue of
convertibles, as if the issue related to the shares that the convertibles may be converted into.
What is stipulated above shall not restrict the possibilities for resolving on a cash issue or set-off issue with
deviation from the shareholders’ preferential rights.
If the share capital is increased through a bonus issue, new shares of each class shall be issued in relation to
the number of shares of each class previously issued. In such case, old shares of each class shall have
preferential rights to new shares of the same class. What is hereby stipulated shall not restrict the
possibilities for resolving, after necessary amendments of the Articles of Association, on a bonus issue of
shares of a new class.
A preference share shall be converted (transformed) into an ordinary share as follows.
1.   Voluntary conversion
An owner of a preference share is during the months of February and August each year, starting August
2009 (the ‘‘Conversion Periods’’), entitled to request from the Board of Directors that the share is converted
into an ordinary share. Request for conversion shall be made in writing on the form prescribed by the Board
of Directors, and must be received by the Board of Directors not later than last day of the relevant Conversion
Period. Request for conversion may only be made in relation to the owners’ entire holding of preference
shares. The Board of Directors is obliged to resolve, during the month immediately following each Conversion
Period, on conversion of the preference shares held by shareholders that have requested conversion during
the relevant Conversion Period.
2.   Mandatory conversion
The Board of Directors is obliged to, during the calendar month immediately following the month in which
the Annual General Meeting 2013 is held, however, if applicable, not earlier than the day after the record day
for the right to receive dividends resolved at such Annual General Meeting, resolve to convert all preference
shares into ordinary shares. At such time, the Board of Directors shall also establish and announce the record
day for conversion.
Conversion resolved by the Board of Directors in accordance with items 1 and 2 above shall immediately be
submitted for registration with the Swedish Companies Registration Office (Sw. Bolagsverket). The
conversion is executed when registration has been made and the conversion has been noted in the VPC
                  a
register (Sw. Avst¨ mningsregistret).

                                                    §4
                                            Record day provision
The Bank’s shares shall be registered in a register in accordance with the Financial Instruments Accounts Act
(1998:1479).




                                                       91
                                                  §5
                                            Registered office
The registered office of the Bank shall be in Stockholm.

                                                  §6
                                         The Board of Directors
In addition to those Directors who, by law, are appointed other than by the General Meeting, the Bank’s
Board of Directors shall consist of no less than seven and no more than eleven members.

                                                  §7
                                              Quorum, etc
With regard to the Board forming a quorum and the majority requirements for Board decisions, the relevant
provisions of the Companies Act (2005:551) shall apply.
The Board of Directors shall, as a rule, meet once a month.
The Board is entitled to authorise a member of the Board or another person to represent the Bank and sign
for the Bank in accordance with the relevant provisions of the Companies Act (2005:551) and the relevant
provisions of the Banking and Financing Business Act (2004:297).

                                                   §8
                                              Financial year
The Bank’s financial year shall be the calendar year.

                                                   §9
                                                 Auditors
The Bank shall have at least one and no more than two auditors and with no more than an equal number of
alternates. Auditors, and alternates if appointed, shall be authorised public accountants.
Registered firms of auditors may also be appointed.

                                               § 10
                                  Timing of Annual General Meeting
The Annual General Meeting shall be held before the end of April unless special circumstances dictate
otherwise. In no event however, shall the Annual General Meeting be held after the end of June.

                                                § 11
                               Business of the Annual General Meeting
The following business shall be considered at the Annual General Meeting:
1.   Election of Chairman of the Meeting,
2.   Drawing up and approval of voting register,
3.   Approval of the Agenda,
4.   Election of two members to scrutinise the Minutes,
5.   Question whether the Meeting has been properly called,
6.   Submission of the Board of Directors’ Annual Report and Audit Report, and Consolidated Report and
     Consolidated Audit Report for the past financial year,
7.   Matter of adopting the Profit and Loss Account and Balance Sheet, and the Consolidated Profit and Loss
     Account and Consolidated Balance Sheet,
8.   Appropriations regarding the profits or losses of the Bank in accordance with the adopted Balance
     Sheet,
9.   Matter of discharging Board members and President from liability for the period covered by the report,
10. Deciding the number of Board members to be appointed by the Meeting,


                                                    92
11. Where appropriate, deciding the number of auditors and their alternates to be appointed by the Meeting,
12. Deciding the remuneration for Board members, auditors and their alternates,
13. Election of Board members,
14. If applicable, election of auditors and their alternates,
15. Any other business required by law or the Articles of Association to be considered by the Meeting,
16. Matters which are properly to be referred to the Meeting for decision.

                                                 § 12
                                Right to vote at General Meetings, etc.
                                                              ¨        a
General Meetings are to be held in Stockholm, Gothenburg, Malmo, or Ume˚ .
General Meetings shall be opened by the Chairman of the Board or the person appointed by the Board for this
purpose.
Voting at a General Meeting shall take place in accordance with voting procedures prescribed in the relevant
provisions of the Companies Act (2005:551).

                                                 § 13
                                Notice convening General Meetings, etc.
Notices convening General Meetings and other communications with shareholders shall be made by public
notice in Post- och Inrikes Tidningar (the Swedish Official Gazette), Dagens Nyheter, Svenska Dagbladet and
at least one other newspaper.
Notices convening the Annual General Meeting and notice of Extraordinary General Meetings where the
question of amendments to the Articles of Association will be considered, shall be issued no earlier than six
weeks and no later than four weeks prior to the General Meeting. Notices convening other Extraordinary
General Meetings shall be issued no earlier than six weeks and no later than two weeks prior to the General
Meeting.
In the cases referred to in the Companies Act (2005:551), written notice shall also be sent to each
shareholder whose mailing address is known to the Bank. Shareholders wishing to participate in a General
Meeting shall be entered as shareholders in a print-out or other listing of the entire share register updated
five business days prior to the Meeting, and notify the Bank’s Head Office no later than 3:00 pm on the day
indicated in the notice convening the General Meeting. This day shall not fall on a Sunday, other public
holiday, Saturday, Midsummer’s Eve, Christmas Eve, or New Year’s Eve and may not fall earlier than five
business days prior to the General Meeting.
At General Meetings, shareholders are permitted to be accompanied by one or two assistants, provided that
the shareholder has notified the Bank of the number of assistants in accordance with the preceding
paragraph concerning notification of shareholders’ attendance at General Meetings.

                                                  § 14
                                         Right to dividends, etc.
Upon a resolution on payment of dividends by a General Meeting, the dividends shall be distributed in
accordance with the following:
1. Firstly, each preference share shall receive up to an amount of Swedish kronor two point forty (SEK 2.40)
per preference share as regards dividends resolved in 2009 and up to an amount of Swedish kronor four point
eighty (SEK 4.80) per preference share as regards dividends resolved in each of the years 2010, 2011, 2012
and 2013.
2. Secondly, to the extent that distributable funds remain after distribution in accordance with item 1 above
under the resolution of the General Meeting, each ordinary share shall receive up to the same amount as the
preference share in accordance with item 1 above as regards dividends resolved in each of the years 2009,
2010, 2011, 2012 and 2013.
3. Thirdly, to the extent that distributable funds remain after distribution in accordance with items 1 and 2
above under the resolution of the General Meeting, these funds shall, with regard to dividends resolved in
2009, be paid only to ordinary shares and with regard to dividends resolved in each of the years 2010, 2011,


                                                     93
2012 and 2013 be distributed equally to all shares regardless of class. Thus, holders of preference shares
shall not have any right to receive dividends resolved in 2009 under this item 3, but only according to item 1
above.
If, during any year dividends are not paid to a preference share or an ordinary share as prescribed under
items 1 and 2 above, such share shall not have any right to recover in any subsequent year what has not
been paid.
If the Bank shall be dissolved through liquidation, the preference shares and the ordinary shares shall have
right to the assets in the Bank in accordance with the following:
A. Firstly, each preference share shall receive up to an amount of Swedish kronor forty-eight (SEK 48) per
preference share together with an annual interest on such amount of ten (10) per cent to be calculated daily
from the day of the preceding Annual General Meeting up to and including the day of distribution.
B. Secondly, to the extent that distributable funds remain after distribution in accordance with item A above,
each ordinary share shall receive up to the same amount together with interest as the preference share in
accordance with item A above.
C. Thirdly, to the extent that distributable funds remain after distribution in accordance with items A and B
above, these funds shall be distributed equally to all shares regardless of class.
If the number of issued preference shares or ordinary shares is changed by a resolution on a bonus issue or a
resolution on split or consolidation of shares, the amount that the preference shares and the ordinary shares,
respectively, are entitled to according to this § 14 shall be adjusted accordingly.




                                                     94
                    LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION
Material contracts
The Issuer’s agreement with Swedish National Debt Office under the Guarantee Plan
The Swedish Financial Stabilization Plan for the Swedish financial system provides for the establishment of
the Guarantee Plan, see ‘‘Banking Regulation and Supervision etc.—The Swedish Financial Stabilization Plan.’’
The Issuer announced on November 4, 2008 that it would apply to the Swedish National Debt Office for
participation in the Guarantee Plan and entered into a guarantee agreement with the Swedish National Debt
Office on November 7, 2008.
Under the Guarantee Plan, the Swedish National Debt Office will guarantee the Issuer’s performance under
the debt securities covered by the guarantee agreement. The maximum amount of the Issuer’s debt
securities to be covered by the Guarantee Plan is SEK196,431,700,000. It should be noted that there is no
undertaking from the Swedish National Debt Office that any amount will be guaranteed. The Issuer must
apply to the Swedish National Debt Office for each debt security or debt security program that the Issuer
would like to have covered by the Guarantee Plan. The guarantee may be applied for in relation to bonds,
certificates of deposit and other debt securities, provided they have a term of more than 90 days and less
than three years and are not subordinated. Covered bonds may have a term of up to five years. Complex and
structured products are not included in the Guarantee Plan. An application under the Guarantee Plan may be
made up to and including April 30, 2009.
The annual fee to be paid by the Issuer for having its debt securities guaranteed is 0.5% of the guaranteed
amount for debt securities with a term of one year or less. The fee for covered bonds remains to be decided.
The annual fee for other debt securities is 0.83% of the guaranteed amount.
Should the terms and conditions for debt securities deviate from what has been stated in the application or
be changed, or should the Issuer otherwise not be eligible for the guarantee, the Swedish National Debt
Office may require the Issuer to pay monies as security for the Swedish National Debt Office’s liability at such
amount, terms and conditions and term as requested by the Swedish National Debt Office.
The guarantee agreement contains undertakings from the Issuer to inform the Swedish National Debt Office
of matters of relevance for the debt securities, the financial position of the Issuer, information provided to the
SFSA, material changes in the Issuer’s business or ownership structure, and any insolvency procedures or
capital deficiency procedures relating to the Issuer.
Furthermore, the Issuer undertakes not to use or refer to the guarantees issued under the Guarantee Plan in
the marketing of credits, accepts certain restrictions with respect to wage increases, bonus payments,
increases in board remuneration and bank executives’ severance packages during the guarantee period and
undertakes not to undergo a significant expansion of operations which would not have taken place in
absence of the Guarantee Plan.
Upon breach of any material undertaking in the guarantee agreement, including the above undertakings, the
Swedish National Debt Office may in its own discretion decide on liquidated damages to be paid by the Issuer
of the smaller amount of (i) SEK10 million, and (ii) 1% of the Issuer’s turnover the previous year.
The Issuer has undertaken to pay to the Swedish National Debt Office any amount paid out by the Swedish
National Debt Office under the guarantee agreement, including any costs or expenses incurred.
Swedbank Hypotek AB has also entered into a guarantee agreement with the Swedish National Debt Office
on similar terms and conditions.

EnterCard Joint Venture
On February 4, 2005, the Issuer and Barclays Bank plc entered into a joint venture agreement to sell and
distribute credit cards in the Nordic market with the purpose of strengthening the Issuer’s market position in
credit cards by offering competitive cards and card-based consumer credits. The joint venture operates
through EnterCard Holding AB, a company which is jointly owned by the parties. The joint venture will
continue as long as the parties hold their shares in the jointly owned entity unless the joint venture is
otherwise terminated by either party upon 18-months notice, but any notice of termination shall only take
effect at or after the expiration of the initial term of the agreement, which shall occur in 2010. In the event
that the joint venture agreement is terminated by either party, the agreement also contains provisions
which give the respective parties the right to acquire the other party’s shares or other interests in the jointly
owned company. In addition, the agreement may be terminated upon the occurrence of certain events,


                                                       95
including, but not limited to, a material breach of the agreement or a change of control in the respective
parties.

Agreements with savings banks and partly-owned banks
The cooperation between the Bank, and (i) each of the 68 savings banks, and (ii) each of the six Swedish
banks, in which the Bank is a part owner, is governed by a master agreement (the ‘‘Master Agreement’’), to
which a number of other agreements are attached regarding specific activities (the ‘‘Sub-Agreements’’). The
agreements presume that the savings banks have a certain basic offering of services and products, as well as
access to competency in certain areas.
The Master Agreement sets forth the basic principles and the forms in relation to the cooperation between
the Bank and the relevant savings bank and includes, inter alia, rights for the savings bank to use the Bank’s
                                                                                    o
trademark and, through the Savings Banks Association (Sw: Sparbankernas Riksf¨ rbund), to nominate up to
two board members in the Issuer’s Swedish subsidiaries that provide services and products under the
agreements. The extent and the detailed terms and conditions of the cooperation under the Master
Agreement are further elaborated in the Sub-Agreements, including the terms for distribution of long-term
credits and savings and insurance products and IT cooperation.
The Master Agreement is effective until July 1, 2011 and is automatically prolonged for a period of two years
unless terminated not less than 18 months before the expiration of the term of the agreement. The term of
the Sub-Agreements follow that of the Master Agreement.
Through the cooperation, the Bank’s Swedish customers gain access to a nationwide network. At the same
time, the savings banks and the partly-owned banks will have the possibility to offer to their customers the
products and services provided by the Bank. Together, the savings banks and partly-owned banks accounted
for about one quarter of the Bank’s product sales in the Swedish market during 2007. The cooperation also
offers the possibility to create economies of scale and to distribute costs over a larger business volume.
The savings banks and partly-owned banks jointly represent one of the largest shareholding groups in the
Issuer, with a total of 8.9% of the shares and voting rights. See ‘‘Share Capital and Ownership Structure.’’

Agreements regarding significant acquisitions and divestments during 2007 and 2008
Sale of shares in NCSD Holding AB (VPC)
On June 2, 2008 the Issuer announced that it had entered into an agreement regarding the sale of its holding
in NCSD Holding AB to the Euroclear S.A. The share transfer agreement contains customary terms and
conditions. The transaction was completed on October 31, 2008.

Acquisition of JSCB TAS-Kommerzbank
On July 9, 2007, the Issuer acquired 99.9978% of the shares in JSCB TAS-Kommerzbank, name later changed
to OJSC Swedbank. In turn, OJSC Swedbank owned all the shares in CJSC TAS-Investbank, name changed to
CJSC Swedbank Invest. The acquisition was settled for cash. In addition, a maximum supplemental payment
of USD 250 million could be paid, however, not later than within three years from the acquisition. The
supplemental payment is based on the acquired company’s earnings and financial performance and was
valued on the acquisition date at USD 125 million. At the acquisition of OJCS Swedbank, assets excluding
acquired cash and cash equivalents amounted to SEK9,071 million, of which lending to the public accounted
for SEK7,737 million. OJSC Swedbank’s liabilities amounted to SEK8,448 million, of which SEK3,009 million
was attributable to amounts owed to credit institutions and of which SEK4,583 million was accounted for by
deposits from the public.

Subscription undertakings
A group of existing shareholders in the Issuer (the ‘‘Principal Shareholders’’), which group together
represented 42% of the total number of shares of the Issuer at the time of the announcement of the Rights
Offering on October 27, 2008, have agreed, in the aggregate to subscribe for all the Preference Shares
offered pursuant to the Rights Offering. The undertakings, that were made in relation to the Issuer and to
                         ¨                      ¨
Sparbanksstiftelsernas Forvaltnings AB or ForeningsSparbanken Koncernens Resultatandelsstiftelse
Kopparmyntet, were executed by the Principal Shareholders during the period October 24, 2008 until
October 27, 2008. The names and addresses of the Principal Shareholders are set forth below.




                                                     96
The Principal Shareholders (in total 94) have undertaken to subscribe for Preference Shares by exercising
Subscription Rights in the Rights Offering. Further, some of the Principal Shareholders (in total 60) (the
‘‘Guarantors’’) have undertaken to subscribe for Preference Shares by exercising Subscription Rights,
undertaken to subscribe for Preference Shares not subscribed and paid for by other subscribers in the Rights
Offering. The number of Preference Shares that each such Guarantor shall subscribe for will be allocated pro
rata in relation to the size of their commitments, to the extent this is possible, and in excess thereof, by
drawing of lots. The Guarantors have undertaken, in addition to subscribing for Preference Shares by
exercising Subscription Rights, to subscribe for in total not more than 152,509,769 additional Preference
                                                                                ¨             ors¨
Shares of which the three largest undertakings have been made by Folksam omsesidig livf¨ akring and
          ¨               ors¨
Folksam omsesidig sakf¨ akring that have undertaken to subscribe for a maximum of 103,570,549
                                       ors¨                  ors¨
Preference Shares, Arbetsmarknadsf¨ akringar, pensionsf¨ akringsaktiebolag that has undertaken to
subscribe for a maximum of 13,200,000 Preference Shares, and Sparinstitutens Pensionskassa,
  ors¨
f¨ akringsf¨ orening that has undertaken to subscribe for a maximum of 7,583,333 Preference Shares. See
‘‘Share capital and ownership structure—Major shareholders.’’ For the Guarantors’ undertakings, the
Guarantors will receive compensation of 3% of the committed amount for such undertaking. In total,
approximately SEK220 million will be paid by the Issuer to the Guarantors as compensation for these
undertakings.
Pursuant to the undertakings, the Principal Shareholders have in aggregate undertaken to subscribe for
more than 257,686,706 Preference Shares.
The subscription undertakings are not secured. Thus, there is a risk that one or more of the Principal
Shareholders may not be able to fulfill their subscription undertakings. See ‘‘Risk Factors—Risks Related to
the Rights Offering and the Preference Shares.’’

Names and addresses of the Principal Shareholders
Name                                                                                                         Address    Guarantor
1.            ors¨
     AFA Sjukf¨ akringsaktiebolag . . . . . . . . . . . . . . . . . . . . . . . . . .              106 27 Stockholm     X
2.           ors¨
     AFA Livf¨ akringsaktiebolag AGB . . . . . . . . . . . . . . . . . . . . . . .                 106 27 Stockholm     X
3.           ors¨
     AFA Livf¨ akringsaktiebolag TGL . . . . . . . . . . . . . . . . . . . . . . .                 106 27 Stockholm     X
4.                 ors¨
     AFA Trygghetsf¨ akringsaktiebolag . . . . . . . . . . . . . . . . . . . . . .                 106 27 Stockholm     X
5.   Andra AP-fonden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 111 55
                                                                                                            ¨
                                                                                                    404 24 Goteborg
6.   Arbetsmarknadsf¨ akringar, pensionsf¨ akringsaktiebolag . . . . . .
                    ors¨                 ors¨                                                       ¨
                                                                                             Klara Sodra Kyrkogata 18   X
                                                                                                    113 88 Stockholm
7.        a
     Bjurs˚ s Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            a       agen 2
                                                                                                     M˚ rtsbov¨
                                                                                                                  a
                                                                                                     790 21 Bjurs˚ s
8.   Ekeby Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     Box 6     X
                                                                                                       260 51 Ekeby
9.   Falkenbergs Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       Box 32    X
                                                                                                   311 32 Falkenberg
10. Farstorps Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              Farstorp 1271
                                                                                                             a
                                                                                                    280 23 H¨ stveda
11. Fryksdalens Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 223     X
                                                                                                       686 25 Sunne
            ¨             ors¨
12. Folksam omsesidig livf¨ akring . . . . . . . . . . . . . . . . . . . . . . . . .                 Bohusgatan 14      X
                                                                                                   116 67 Stockholm
            ¨             ors¨
13. Folksam omsesidig sakf¨ akring . . . . . . . . . . . . . . . . . . . . . . . .                   Bohusgatan 14      X
                                                                                                   116 67 Stockholm
14. FSR Holding AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 162 49
                                                                                                   103 24 Stockholm
     ¨
15. Forsta AP-fonden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 16294
                                                                                                   103 25 Stockholm
     ¨
16. ForeningsSparbanken Koncernens Resultatandelsstiftelse                                             Swedbank, C6
    KopparMyntet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         105 36 Stockholm
        a
17. Glim˚ kra Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 119
                                                                                                                a
                                                                                                     280 64 Glim˚ kra




                                                                              97
Name                                                                                                       Address    Guarantor

18. Hudiksvalls Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 1202      X
                                                                                                 824 15 Hudiksvall
     a                 ¨     as
19. H¨ radssparbanken Monster˚ . . . . . . . . . . . . . . . . . . . . . . . . . .                         Box 93     X
                                                                                                         ¨     as
                                                                                                 383 22 Monster˚
     ¨
20. Hogsby Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 134      X
                                                                                                           ¨
                                                                                                   579 23 Hogsby
                            ¨
21. Ivetofta Sparbank i Bromolla . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 42      X
                                                                                                             ¨
                                                                                                  295 25 Bromolla
22. Kinda-Ydre Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 93      X
                                                                                                      590 40 Kisa
23. Kollektivavtalsstiftelsen Trygghetsfonden TSL . . . . . . . . . . . . . . .                        Box 19081      X
                                                                                                 104 32 Stockholm
24. Laholms Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 77      X
                                                                                                   312 22 Laholm
25. Lekebergs Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 66      X
                                                                                                  716 21 Fjugesta
26. Leksands Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 77     X
                                                                                                   793 22 Leksand
     ¨
27. Lonneberga-Tuna-Vena Sparbank . . . . . . . . . . . . . . . . . . . . . . . .                          agen 2
                                                                                                      Tunav¨          X
                                                                                                  577 90 Hultsfred
28. Markaryds Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 124      X
                                                                                                  285 23 Markaryd
      ¨ a
29. Mjob¨ cks Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 4025
                                                                                                          ¨
                                                                                                   512 04 Overlida
             a
30. Nordals H¨ rads Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 33      X
                                                                                                  464 21 Mellerud
         a
31. Norrb¨ rke Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 505      X
                                                                                              777 25 Smedjebacken
32. Orust Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 73      X
                                                                                                              a
                                                                                                    473 22 Hen˚ n
33. Roslagens Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 236      X
                                                                                                              a
                                                                                                  761 23 Norrt¨ lje
     oke
34. R¨ Socken Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     oke
                                                                                                        R¨ 4077       X
                                                                                                              oke
                                                                                                      282 93 R¨
35. Sala Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               Box 43      X
                                                                                                      733 21 Sala
           ¨
36. Sidensjo Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               a
                                                                                                    Bred˚ ker 101     X
                                                                                                                ¨
                                                                                                  893 95 Sidensjo
37. Skurups Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 14     X
                                                                                                    274 21 Skurup
38. Snapphanebygdens Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . .                         Box 33
                                                                                                           a
                                                                                                  280 20 Bj¨ rnum
                     a
39. Sparbanken Alings˚ s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 553      X
                                                                                                               a
                                                                                                  441 16 Alings˚ s
40. Sparbanken Boken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              ¨ agen 1
                                                                                                     Mollev¨          X
                                                                                                   310 21 Hishult
41. Sparbanken Eken AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              Brunnsgatan 1     X
                                                                                                       360 10 Ryd
42. Sparbanken Gotland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            Eskelhem 622      X
                                                                                                 70 Gotlands Tofta
43. Sparbanken Gute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      Kommunhuset Garde      X
                                                                                                  623 63 Ljugarn
                    oping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44. Sparbanken i Enk¨                                                                                    Box 912      X
                                                                                                            oping
                                                                                                  745 25 Enk¨
45. Sparbanken i Karlshamn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     Box 44     X
                                                                                                 374 21 Karlshamn
                   oping AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46. Sparbanken Lidk¨                                                                                   Box 2410       X
                                                                                                            oping
                                                                                                 531 02 Lidk¨




                                                                               98
Name                                                                                                       Address    Guarantor

47. Sparbanken Nord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 735     X
                                                                                                                 a
                                                                                                      941 28 Pite˚
48. Sparbanken Skaraborg AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 163      X
                                                                                                     532 22 Skara
49. Sparbanken Tanum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     Box 3      X
                                                                                               457 21 Tanumshede
50. Sparbanken Tranemo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 202
                                                                                                  514 24 Tranemo
                astra M¨ lardalen . . . . . . . . . . . . . . . . . . . . . . . . . .
51. Sparbanken V¨      a                                                                                 Box 904      X
                                                                                                            oping
                                                                                                    731 29 K¨
52. Sparbanksstiftelsen ALFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 1037
                                                                                                          ¨ oping
                                                                                                  551 11 Jonk¨
                         ¨
53. Sparbanksstiftelsen Forsta . . . . . . . . . . . . . . . . . . . . . . . . . . . .         ¨
                                                                                              Sodra Hamngatan 27
                                                                                                          ¨
                                                                                                  404 80 Goteborg
                         a
54. Sparbanksstiftelsen F¨ rs & Frosta . . . . . . . . . . . . . . . . . . . . . . .                      Box 23      X
                                                                                                              ¨
                                                                                                     275 21 Sjobo
55. Sparbanksstiftelsen Bergslagen . . . . . . . . . . . . . . . . . . . . . . . . .              Klockaregatan 7
                                                                                                711 31 Lindesberg
56. Sparbanksstiftelsen Dalarna . . . . . . . . . . . . . . . . . . . . . . . . . . .                    Box 717
                                                                                                     791 36 Falun
                         a          a
57. Sparbanksstiftelsen J¨ mtlands l¨ n . . . . . . . . . . . . . . . . . . . . . . .                     Box 358
                                                                                                        ¨
                                                                                                 831 25 Ostersund
58. Sparbanksstiftelsen Kronan . . . . . . . . . . . . . . . . . . . . . . . . . . . .               Storgatan 17
                                                                                                             axj ¨
                                                                                                     352 30 V¨ o
                                      ¨
59. Sparbanksstiftelsen Kronan i Syd Forvaltnings AB . . . . . . . . . . . . .                       Storgatan 17
                                                                                                             axj ¨
                                                                                                     352 30 V¨ o
                                     a
60. Sparbanksstiftelsen Norrbottens l¨ n . . . . . . . . . . . . . . . . . . . . . .                      agen 1 G
                                                                                                     Slipv¨
                                                                                                     973 41 Lule˚a
61. Sparbanksstiftelsen Norrland . . . . . . . . . . . . . . . . . . . . . . . . . . .               Storgatan 26
                                                                                                                 a
                                                                                                 931 32 Skellefte˚
62. Sparbanksstiftelsen Norrlands Riskkapitalstiftelse . . . . . . . . . . . . .                     Storgatan 26
                                                                                                                 a
                                                                                                 931 32 Skellefte˚
63. Sparbanksstiftelsen Nya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             Stora gatan 39
                                                                                                   722 12 V¨     as
                                                                                                            aster˚
64. Sparbanksstiftelsen Rekarne . . . . . . . . . . . . . . . . . . . . . . . . . . .                Kyrkogatan 8
                                                                                                 632 20 Eskilstuna
                          ane . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65. Sparbanksstiftelsen Sk˚                                                                             Box 4003
                                                                                                               ¨
                                                                                                    203 11 Malmo
                         ¨
66. Sparbanksstiftelsen Soderhamn . . . . . . . . . . . . . . . . . . . . . . . . .                 Kyrkogatan 16
                                                                                                         ¨
                                                                                                826 60 Soderhamn
67. Sparbanksstiftelsen Tjustbygden . . . . . . . . . . . . . . . . . . . . . . . .                      Box 322      X
                                                                                                          astervik
                                                                                                  593 24 V¨
68. Sparbanksstiftelsen Upland . . . . . . . . . . . . . . . . . . . . . . . . . . . .               c/o Swedbank
                                                                                                    Kungsgatan 40
                                                                                                   753 40 Uppsala
69. Sparbanksstiftelsen Varberg . . . . . . . . . . . . . . . . . . . . . . . . . . .                     Box 74
                                                                                                   132 22 Varberg
70. Sparbanksstiftelsen Vimmerby . . . . . . . . . . . . . . . . . . . . . . . . . .                              a
                                                                                            c/o Vimmerby Juristbyr˚   X
                                                                                                      Storgatan 50
                                                                                                  598 37 Vimmerby
                         ast
71. Sparbanksstiftelsen V¨ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               c/o Swedbank
                                                                                                           ¨
                                                                                                  404 80 Goteborg
                        ¨
72. Sparbanksstiftelsen Oland . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           Gyngev¨agen 18
                                                                                                       ¨    a
                                                                                               380 62 Morbyl˚ nga
                            ¨
73. Sparbanksstiftelsernas Forvaltnings AB . . . . . . . . . . . . . . . . . . . .               c/o Brandkontoret
                                                                                                         Box 2196
                                                                                                 103 15 Stockholm




                                                                             99
Name                                                                                                     Address   Guarantor

                                    ors¨      orening . . . . . . . . . . . .
74. Sparinstitutens Pensionskassa, f¨ akringsf¨                                                 Kungsgatan 34      X
                                                                                              111 35 Stockholm
                ¨                      a
75. Stiftelsen Foreningssparbanken Sjuh¨ rad . . . . . . . . . . . . . . . . . . .                    Box 1730     X
                                                                                                             as
                                                                                                   501 17 Bor˚
76. Stiftelsen Guldeken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      Swedbank, H 685     X
                                                                                              105 34 Stockholm
     ¨
77. Sodra Dalarnas Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 204
                                                                                               776 28 Hedemora
     ¨
78. Sodra Hestra Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     Storgatan 14, Box 14   X
                                                                                                314 22 Hyltebruk
     ¨           a
79. Solvesborg Mj¨ llby Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 77    X
                                                                                                      ¨
                                                                                              294 22 Solvesborg
     ¨
80. Sormlands Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 156
                                                                                             641 22 Katrineholm
81. Tidaholms Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 23    X
                                                                                                522 21 Tidaholm
82. Tjustbygdens Sparbank Bankaktiebolag . . . . . . . . . . . . . . . . . . . .                       Box 322
                                                                                                        astervik
                                                                                                593 24 V¨
      ¨
83. Tjorns Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               Box 55     X
                                                                                                        arhamn
                                                                                               471 21 Sk¨
84. Ulricehamns Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 304
                                                                                              523 26 Ulricehamn
85. Vadstena Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 155
                                                                                                592 23 Vadstena
86. Valdemarsviks Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 144     X
                                                                                            615 23 Valdemarsvik
87. Varbergs Sparbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  Box 74     X
                                                                                                 132 22 Varberg
88. Westra Wermlands Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . .                     Box 19     X
                                                                                                  671 21 Arvika
         ¨
89. Vinslovs Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              Box 103     X
                                                                                                             ¨
                                                                                                 288 22 Vinslov
90. Virserums Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 16     X
                                                                                                570 80 Virserum
     astra Sveriges Sparbanksf¨
91. V¨                        orening . . . . . . . . . . . . . . . . . . . . . . .                     Box 304    X
                                                                                              523 26 Ulricehamn
    ˚
92. Alems Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                Box 15     X
                                                                                                          ˚
                                                                                                   384 02 Alem
    ˚              a
93. Ase och Viste h¨ rads Sparbank . . . . . . . . . . . . . . . . . . . . . . . . .                   Box 210     X
                                                                                                         astorp
                                                                                                467 23 Gr¨
    ˚
94. Atvidabergs Sparbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 Box 246
                                                                                                     ˚
                                                                                              597 26 Atvidaberg


Legal and arbitration proceedings
The Bank is party to a number of judicial and administrative proceedings. In the majority of these, the Bank is
acting as plaintiff seeking to recover unpaid debts owed to the Issuer. The Bank is also defendant in a number
of proceedings that occurred in the ordinary course of the Bank’s business. None of these proceedings are
considered to have a significant effect on the financial position or profitability of the Bank. On June 5, 2008,
the Issuer and certain of its subsidiaries terminated their cooperation agreements with Sparbanken Syd. In
August 2008 Sparbanken Syd initiated arbitral proceedings against the Issuer and certain of its subsidiaries
claiming that the termination was unfounded and has also sought injunctions in court. As of the date of this
prospectus, Sparbanken Syd has not filed a claim for damages from the Bank.

Interests of Joint Lead Managers and Bookrunners
J.P. Morgan, Merrill Lynch and Swedbank Markets have acted as Joint Lead Managers and Bookrunners in
connection with the Rights Offering and receive compensation for their respective work in connection
herewith. Certain of the Joint Bookrunners and their respective affiliates have performed, and may in the



                                                                            100
future perform, various financial advisory, investment banking, commercial banking or other services for the
Bank or its affiliates, for which they have received and are likely to continue to receive customary fees and
expenses. The Bank and its affiliates have performed, and may also in the future perform, various financial
advisory, investment banking, commercial banking or other services for certain of the Joint Bookrunners or
their respective affiliates, for which they have received and are likely to continue to receive customary fees
and expenses.
In addition, certain of the Joint Bookrunners have advised the Bank that they currently are making a market
for the Issuer’s Existing Shares and that they intend to make a market in the Subscription Rights and the
Preference Shares. The Joint Bookrunners may also engage in transactions for the accounts of others in the
Existing Shares, the Subscription Rights and the Preference Shares, as well as certain derivatives linked to
the Issuer’s Existing Shares, Subscription Rights and Preference Shares.

Agreements with related parties, etc.
Cooperation between the Bank and Folksam
On April 23, 2007 the Issuer (including its subsidiaries Swedbank Robur AB, Swedbank Robur Fonder AB,
Swedbank Robur Kapitalf¨                                     ¨ a
                          orvaltning AB and Swedbank Fors¨ kring AB) and Folksam (including Folksam
¨               ors¨                   ¨                  ors¨
omsesidig livf¨ akring, Folksam omsesidig sakf¨ akring, Folksam Spar AB and Folksam
      ors¨
Fondf¨ akringsaktiebolag) signed a framework agreement regarding cooperation between the parties. The
main areas of the cooperation were initially (i) property and liability insurance, (ii) asset management also
including administrative tasks and reporting, (iii) administration of fund insurances, and (iv) reinsurance of
group life insurances and provision of individual risk insurance products. In addition to the framework
agreement, a number of sub-agreements were entered into, which includes cooperation agreements
regarding the specific areas and agreements regarding the implementation of the parties’ cooperation
structure.
Pursuant to the sub-agreements, the following was agreed regarding the cooperation structure:
•   Folksam agreed to transfer its asset management of interest-bearing securities and shares to
                           orvaltning AB.
    Swedbank Robur Kapitalf¨
•   Swedbank Robur AB agreed to acquire Folksam Fond AB. The purchase sum was SEK463 million.
•   Folksam agreed to deliver property and liability insurances to the Bank. Property and liability insurance
    are included in the Bank’s product offering and are sold via existing distribution channels under the
                                            ¨ a                                                     ¨
    Bank’s brand. The Issuer is Tre Kronor Fors¨ kring AB, a wholly owned subsidiary of Folksam omsesidig
        ors¨
    sakf¨ akring.
•   The Bank reinsured its group life business with Folksam, which also provides individual risk insurance
    products.
•                                                                             ¨ a
    The Bank and Folksam also agreed to found a joint company, Aktiv Fors¨ kringsadministration i
    Stockholm AB, for the administration of the Bank’s life and pension insurance business.
The main purpose of the framework agreement and the sub-agreements was to create synergy benefits
with regard to certain of Folksam’s and the Bank’s existing administration and provision of services as
described above. Unless agreed otherwise regarding a specific sub-agreement, the cooperation is
non-exclusive and do not cover the saving banks. The agreements do not provide for that the parties should
act together as one unit towards the market or use/combine their respective trade marks.
The framework agreement is valid until December 31, 2017. Unless terminated giving two years’ notice prior
to the expiry of such term, the framework agreement is automatically prolonged until further notice with a
one-year notice period. Specific provisions regarding term and notice periods apply to each of the
sub-agreements. If any of the sub-agreements cease to be in force the framework agreement will no longer
apply to such area of the cooperation. However, if all sub-cooperation agreements cease to be in force the
framework agreement shall also cease to be in force. If notice of termination is given under any of the
sub-cooperation agreements the other party shall have the right to terminate the other sub-cooperation
agreements subject to a notice period of 12 months. However, if notice of termination is given under a
sub-cooperation agreement where any of Swedbank Robur AB, Swedbank Robur Kapitalf¨          orvaltning AB, Tre
          ¨ a                ¨ a
Kronor Fors¨ kring or Aktiv Fors¨ kringsadministration i Stockholm AB is a party, and the reason for the notice
is that a change of control have occurred in any of these companies pursuant to which the companies are no




                                                     101
longer controlled by the other party (i.e., the Bank or Folksam, as applicable), the other party shall not have
the right to terminate the other sub-cooperation agreements as set out in the preceding sentence.
The Bank’s income pursuant to the above agreements with Folksam is less than 1% of the Bank’s total
income.

Purchase of shares in Ukrainian debt collecting company
The Bank has entered into an agreement regarding the acquisition of 51% of the shares in a Ukrainian debt
collecting company from the President of the Issuer’s Ukrainian subsidiary OJSC Swedbank. The purchase
price amounts to approximately UAH8,760,000, to be paid in US dollars based on the official exchange rate of
the National Bank of Ukraine five days prior to the payment of the purchase price. The agreement contains
standard terms and conditions and was entered into on an arms-length basis.

Intellectual property rights
The Bank holds various intellectual property rights including trade marks. The Bank is of the view the
trademarks ‘‘Swedbank’’ (word and figure) and ‘‘Robur’’ are of material significance for the operations. The
trademark ‘‘Swedbank’’ is subject to an EU and Swedish trademark and also of an international registration
under the Madrid Protocol, designating, inter alia, United States of America, Russia, Norway and a number of
other countries. The Bank is dependent on IT and other operating systems for its day-to-day operations.
Such systems have been developed both in-house and by third parties. The Bank is further of the view that,
to the extent necessary, the Bank protects its intellectual property rights, among other things through
trademark protection.

Insurance
In the normal course of its business, the Bank has entered into insurance contracts relating to, among other
things, damages caused at the Bank’s properties and certain losses resulting from litigation. The Bank
believes that its insurance policies are consistent with industry practice.

Significant subsidiaries
The Issuer is the parent company of the group. The Issuer’s significant subsidiaries are Swedbank
Hypotek AB (Sweden), Swedbank Robur AB (Sweden), AS Hansapank (Estonia), A/S Hansabanka (Latvia) and
AB Bankas Hansabankas (Lithuania). These subsidiaries are wholly-owned with the exception of
A/S Hansabanka which is owned to 99.9% by AS Hansapank and AB Bankas Hansabankas which is owned to
99.98% by AS Hansapank. The share of votes in the respective subsidiary corresponds to the equity holding.

Documents on display
The following documents are on display during normal office hours at Swedbank’s offices at
Brunkebergstorg 8, SE-105 34, Stockholm, Sweden, during the subscription period:
(a) the articles of association of the Issuer;
(b) the financial reports of the Issuer for the financial years 2005, 2006 and 2007;
(c) the financial reports for the interim period ended September 30, 2008; and
(d) the Swedish language prospectus and the translation thereof.
Copies of the documents are also available on the Bank’s website, www.swedbank.se. The information
contained on the Bank’s website is not incorporated in this prospectus and does not form part of this
prospectus.




                                                     102
 RESTRICTIONS ON SALE AND TRANSFER OF SUBSCRIPTION RIGHTS AND PREFERENCE SHARES
General
The grant of Subscription Rights and issue of Preference Shares upon exercise of Subscription Rights and the
offer of unsubscribed Preference Shares to persons resident in, or who are citizens of, countries other than
Sweden, Denmark, Norway, the United Kingdom or Germany may be affected by the laws of the relevant
jurisdiction. Investors should consult their professional advisers as to whether they require any
governmental or other consents or need to observe any other formalities to enable them to exercise
Subscription Rights or purchase Preference Shares.
The Issuer is not taking any action to permit a public offering of the Preference Shares being offered in the
Rights Offering (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other
than Sweden, Denmark, Norway, the United Kingdom or Germany. Receipt of this prospectus will not
constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those
circumstances, this prospectus is for information only and should not be copied or redistributed. Except as
otherwise disclosed in this prospectus, if an investor receives a copy of this prospectus in any other
jurisdiction than Sweden, Denmark, Norway, United Kingdom or Germany the investor may not treat this
prospectus as constituting an invitation or offer to it, nor should the investor in any event deal in the
Subscription Rights or the Preference Shares, unless, in the relevant jurisdiction, such an invitation or offer
could lawfully be made to that investor, or the Subscription Rights or the Preference Shares could lawfully be
dealt in without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an
investor receives a copy of this prospectus, the investor should not distribute or send the same, or transfer
Subscription Rights or Preference Shares, to any person or in or into any jurisdiction where to do so would or
might contravene local securities laws or regulations.
If any person (including a financial intermediary) forwards this prospectus into any such territories (whether
under a contractual or legal obligation or otherwise), such person should draw the recipient’s attention to
the contents of this section. Except as otherwise expressly noted in this prospectus: (i) the Subscription
Rights and Preference Shares being granted or offered, respectively, in the Rights Offering may not be
offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Member States of the European
Economic Area that have implemented the Prospectus Directive, unless pursuant to applicable exemptions
under the Prospectus Directive, and South Africa, Australia, the United States, Canada, Hong Kong, Japan, or
any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Preference
Shares (the ‘‘Ineligible Jurisdictions’’); (ii) this prospectus may not be sent to any person in any Ineligible
Jurisdiction; and (iii) the crediting of Subscription Rights to an account of a shareholder or other person in an
Ineligible Jurisdiction or a citizen of an Ineligible Jurisdiction (referred to as ‘‘Ineligible Persons’’) does not
constitute an offer to such persons of the Preference Shares. Ineligible Persons may not exercise
Subscription Rights.
If an investor takes up, delivers or otherwise transfers Subscription Rights, exercises Subscription Rights to
obtain Preference Shares or trades or otherwise deals in Subscription Rights or the Preference Shares being
granted or offered, respectively, in the Rights Offering, that investor will be deemed to have made, or, in
some cases, be required to make, the following representations and warranties to the Issuer and any person
acting on its behalf, unless the Issuer waives such requirement:
(a) the investor is not located in an Ineligible Jurisdiction;
(b) the investor is not an Ineligible Person;
(c) the investor is not acting, and has not acted, for the account or benefit of an Ineligible Person;
(d) unless the investor is an existing shareholder and a ‘‘Qualified Institutional Buyer’’ or ‘‘QIB’’ as defined in,
    and in accordance with, Rule 144A under the Securities Act, the investor is located outside the United
    States, and any person for whose account or benefit it is acting on a non-discretionary basis is located
    outside the United States and, upon acquiring Preference Shares, the investor and any such person will
    be located outside the United States;
(e) the investor understands that neither the Subscription Rights nor the Preference Shares being granted
    and offered, respectively, in the Rights Offering have been or will be registered under the Securities Act
    and may not be offered, sold, pledged, resold, delivered, allotted, taken up or otherwise transferred
    within the United States or to or for the account or benefit of U.S. persons except pursuant to an
    exemption from, or in a transaction not subject to, registration under the Securities Act; and




                                                       103
(f)   the investor may lawfully be offered, take up, subscribe for and receive Subscription Rights and the
      Preference Shares being offered in the Rights Offering in the jurisdiction in which it resides or is
      currently located.
The Issuer and any persons acting on behalf of the Issuer will rely upon the investor’s representations and
warranties. Any provision of false information or subsequent breach of these representations and warranties
may void a transaction in the Subscription Rights or Preference Shares, and subject the investor to liability.
If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee,
custodian or trustee), that person will be required to provide the foregoing representations and warranties
to the Issuer with respect to the exercise of Subscription Rights on the holder’s behalf. If such person cannot
provide the foregoing representations and warranties, the Issuer will not be bound to authorize the
allocation of, any of the Subscription Rights or the Preference Shares to that person or the person on whose
behalf the other is acting. Subject to the specific restrictions described below, if an investor (including,
without limitation, its nominees and trustees) located outside Sweden, Denmark, Norway, United Kingdom
or Germany wishes to exercise or otherwise deal in Subscription Rights or subscribe for the Preference
Shares, the investor must satisfy itself as to full observance of the applicable laws of any relevant
jurisdiction, including obtaining any requisite governmental or other consents, observing any other requisite
formalities and paying any issue, transfer or other taxes due in such territories. The information set out in
this section is intended as a general guide only. If the investor is in any doubt as to whether it is eligible to
exercise its Subscription Rights or subscribe for the Preference Shares, that investor should consult
professional adviser without delay.
As regards shareholders who on the Record Date hold shares in the Issuer through a financial intermediary,
all Subscription Rights will initially be credited to the intermediary. A financial intermediary may not exercise
any Subscription Rights on behalf of any person in the Ineligible Jurisdictions or any Ineligible Persons and
may be required in connection with any exercise of Subscription Rights to certify the same.
Subject to certain exceptions, financial intermediaries are not permitted to send this prospectus or any other
information about the Rights Offering into any Ineligible Jurisdiction or to any Ineligible Persons. The
crediting of Subscription Rights to the account of persons in Ineligible Jurisdictions or to Ineligible Persons
does not constitute an offer of the Preference Shares to such persons. Financial intermediaries, which include
brokers, custodians and nominees, holding for Ineligible Persons may consider selling any and all Subscription
Rights held for the benefit of such persons to the extent permitted under their arrangements with such
persons and applicable law and to remit the net proceeds to the accounts of such persons.
Subject to certain exceptions, exercise instructions sent from or postmarked in any Ineligible Jurisdiction will
be deemed to be invalid and the Preference Shares being offered in the Rights Offering will not be delivered
to an addressee in any Ineligible Jurisdiction. The Issuer reserves the right to reject any exercise (or
revocation of such exercise) in the name of any person who provides an address in an Ineligible Jurisdiction
for acceptance, revocation of exercise or delivery of such Preference Shares, who is unable to represent or
warrant that such person is not in an Ineligible Jurisdiction and is not an Ineligible Person, who is not acting
on a discretionary basis for such persons, or who appears to the Issuer or its agents to have executed its
exercise instructions or certifications in, or dispatched them from, an Ineligible Jurisdiction. Furthermore, the
Issuer reserves the right, with sole and absolute discretion, to treat as invalid any exercise or purported
exercise of Subscription Rights which appear to it to have been executed, effected or dispatched in a manner
that may involve a breach or violation of the laws or regulations of any jurisdiction.
Despite any other provision of this prospectus, the Issuer reserves the right to permit a holder to exercise its
Subscription Rights if the Issuer in its absolute discretion is satisfied that the transaction in question is
exempt from or not subject to the laws or regulations giving rise to the restrictions in question. Applicable
exemptions in certain jurisdictions are described further below. In any such case, the Issuer does not accept
any liability for any actions that a holder takes or for any consequences that it may suffer by them accepting
the holder’s exercise of Subscription Rights.

United States
The Subscription Rights and Preference Shares have not been and will not be registered under the Securities
Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and
may only be offered or sold within the United States to persons who are reasonably believed to be ‘‘Qualified
Institutional Buyers’’ and who have executed and timely returned an investor letter to the Issuer.




                                                      104
Until 40 days after the commencement of the Rights Offering, an offer, sale or transfer of the Subscription
Rights or Preference Shares within the United States by a dealer (whether or not participating in the Rights
Offering) may violate the registration requirements of the Securities Act. The Subscription Rights and
Preference Shares have not been approved or disapproved by any U.S. federal or U.S. state securities
commission or U.S. regulatory authority. Furthermore, the foregoing authorities have not passed upon or
endorsed the merits of the Rights Offering, the Subscription Rights and the Preference Shares or the
accuracy, adequacy or completeness of this document. Any representation to the contrary is a criminal
offence in the United States. Each holder of Subscription Rights or Preference Shares, by accepting delivery
of this prospectus, will be deemed to have represented, agreed and acknowledged that, among other things
(terms used in this paragraph that are defined in Rule 144A or Regulation S are used herein as defined
therein):
(a) it: (i) is a ‘‘Qualified Institutional Buyer’’, or QIB; (ii) is aware, and each beneficial owner of such
    Subscription Rights or Preference Shares has been advised, that the sale of the Subscription Rights or
    the Preference Shares to it may be being made in reliance on an exemption from the registration
    requirements of the Securities Act, which may include Rule 144A, or in a transaction not subject to, the
    registration requirements of the Securities Act; and (iii) is acquiring such Subscription Rights or
    Preference Shares for its own account or for the account of a QIB; or it is exercising, subscribing for or
    otherwise acquiring the Subscription Rights or Preference Shares in an offshore transaction in
    accordance with Rule 903 or 904 of Regulation S;
(b) it acknowledges that the Subscription Rights and Preference Shares are ‘‘Restricted Securities’’ within
    the meaning of Rule 144(a)(3) under the Securities Act and understands that such securities have not
    been and will not be registered under the Securities Act and may not be offered, sold, pledged or
    otherwise transferred except: (i) in a transaction exempt from the registration requirements of the
    Securities Act under Rule 144 (a ‘‘Rule 144 Transaction’’) and provide an opinion of counsel reasonably
    satisfactory to the Issuer that states that the transfer is exempt from the registration requirements of
    the Securities Act and that the securities, as the case may be, following such transfer are freely
    transferable; (ii) in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the
    Securities Act (a ‘‘Regulation S Transaction’’); or (iii) pursuant to an effective registration statement
    under the Securities Act, in each case in accordance with any applicable securities law of any state of
    the United States;
(c) it represents that if, in the future, it offers, resells, pledges or otherwise transfers the Subscription
    Rights or Preference Shares, it shall notify such subsequent transferee of the transfer restrictions set
    out in paragraphs (a) to (c) above;
(d) it is not an affiliate (as defined in Rule 501 (b) under the Securities Act) of the Issuer, and is not acting on
    behalf of an affiliate of the Issuer;
(e) if the subscriber is acquiring any Subscription Rights or Preference Shares for the account of one or
    more other investors, it represents that it has sole investment discretion with respect to each such
    account and that it has full power to make the foregoing acknowledgements, representations and
    agreements on behalf of each such account; and
(f)   the Issuer, the Joint Bookrunners and each of their respective affiliates and agents, and others, will rely
      upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and
      agreements.
Persons receiving this prospectus are hereby notified that the Issuer and other sellers of Subscription Rights
or Preference Shares may be relying on an exemption from the registration requirements of Section 5 of the
Securities Act.

European Economic Area
In relation to other Member States of the European Economic Area other than Sweden, Denmark, Norway,
the United Kingdom or Germany, which have implemented the Prospectus Directive (each, a ‘‘Relevant
Member State’’), an offer to the public of any Subscription Rights or Preference Shares contemplated by this
prospectus may not be made in that Relevant Member State except that an offer to the public in that




                                                       105
Relevant Member State may be made under the following exemptions under the Prospectus Directive, if they
have been implemented in that Relevant Member State:
(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so
    authorized or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of the following criteria (1) an average of at least 250
    employees during the last financial year; (2) a total balance sheet of more than e43,000,000 and (3) an
    annual net turnover of more than e50,000,000, as shown in its last annual or consolidated accounts;
    and
(c) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant
    to Article 3 of the Prospectus Directive
provided that no such offer of Preference Shares shall result in a requirement for the publications by the
Issuer or the Joint Bookrunners of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an ‘‘Offer to the Public’’ in relation to any Subscription
Rights or Preference Shares in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the Rights Offering, the Subscription Rights and any
Preference Shares to be offered so as to enable an investor to decide to purchase any Preference Shares, as
the same may be varied in that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression ‘‘Prospectus Directive’’ includes any relevant implementing measure in
each Relevant Member State.




                                                    106
                                                     EXCHANGE RATE INFORMATION AND REGULATIONS
Exchange rate information
The following table sets forth, for the periods and dates indicated, certain information regarding the ECB
daily reference exchange rate published by the European Central Bank (the ‘‘ECB Daily Reference Rate’’) for
SEK, expressed in SEK per euro, and the noon buying rate in the City of New York for wire transfers between
the SEK and U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York (the
‘‘Noon Buying Rate’’), expressed in SEK per U.S. dollar, in each case, rounded to the nearest three decimal
places. No representation is made that SEK amounts have been, could have been or could be converted into
euro or U.S. dollars, or vice versa, at such exchange rates or at any other exchange rate.
                                                                                                                                     SEK per one euro
                                                                                                                        (1)
Period                                                                                                       Period end       Average rate(2)               High    Low

2003     ...................                                         .   .   .   .   .   .   .   .   .   .        9.080               9.124           9.315        8.885
2004     ...................                                         .   .   .   .   .   .   .   .   .   .        9.021               9.124           9.281        8.899
2005     ...................                                         .   .   .   .   .   .   .   .   .   .        9.389               9.282           9.633        8.976
2006     ...................                                         .   .   .   .   .   .   .   .   .   .        9.040               9.254           9.473        8.966
2007     ...................                                         .   .   .   .   .   .   .   .   .   .        9.442               9.250           9.475        9.019
2008     (through November 28)                                       .   .   .   .   .   .   .   .   .   .       10.306               9.513          10.403        9.279
Month in 2008
June . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        9.470              9.374            9.470        9.312
July . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        9.465              9.457            9.516        9.394
August . . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        9.438              9.398            9.462        9.348
September . . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        9.794              9.564            9.794        9.459
October . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        9.906              9.851           10.123        9.651
November . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       10.306             10.128           10.403        9.851
(1)   Represents the exchange rate on the last business day of the applicable period.
(2)   Represents the average of the ECB Daily Reference Rates on each business day of each month during the relevant one-year period
      and, with respect to monthly information, the average of the ECB Daily Reference Rates on each business day for the relevant
      period.
                                                                                                                                  SEK per one U.S. dollar
Period                                                                                                       Period end(1)    Average rate(2)               High    Low

2003     ...................                                         .   .   .   .   .   .   .   .   .   .         7.195              8.078             8.792      7.195
2004     ...................                                         .   .   .   .   .   .   .   .   .   .         6.669              7.346             7.773      6.594
2005     ...................                                         .   .   .   .   .   .   .   .   .   .         7.937              7.471             8.243      6.686
2006     ...................                                         .   .   .   .   .   .   .   .   .   .         6.834              7.372             7.966      6.767
2007     ...................                                         .   .   .   .   .   .   .   .   .   .         6.457              6.757             7.106      6.236
2008     (through November 28)                                       .   .   .   .   .   .   .   .   .   .         8.120              6.448             8.438      5.835
Month in 2008
June . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         6.021              6.025             6.095      5.924
July . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         6.053              6.001             6.079      5.953
August . . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         6.440              6.284             6.440      6.076
September . . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         6.946              6.682             6.946      6.507
October . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         7.782              7.443             8.081      6.911
November . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         8.120              7.961             8.438      7.596
(1)   Represents the exchange rate on the last business day of the applicable period.
(2)   Represents the average of the Noon Buying Rates on each business day of each month during the relevant period and, with
      respect to monthly information, the average of the Noon Buying Rates on each business day for the relevant period.

Exchange control regulations in Sweden
There are currently no foreign exchange control restrictions in Sweden, other than in certain national crisis
situations, that would restrict the payment of dividends to a shareholder outside Sweden, and there are
currently no restrictions that would affect the right of shareholders who are not residents of Sweden to
dispose of their shares and receive the proceeds from a disposal outside Sweden. There is no maximum
transferable amount either to or from Sweden, although transferring banks are required to report to the
Swedish tax authorities any payments to or from Sweden exceeding SEK150,000. Such information may
also be forwarded to authorities in the countries where the holders of the shares are resident.

                                                                                                                 107
                                              SELECTED STATISTICAL AND OTHER INFORMATION
The information below is derived from the Bank’s consolidated financial information and should be read with
the Bank’s financial statements and accompanying notes included elsewhere in this prospectus, as well as
with ‘‘Presentation of Financial and Other Information’’ and ‘‘Detailed Commentary on the Financial
Development.’’
In this section, the term ‘‘domestic’’ refers to the following operations of the Bank: (i) Swedish Banking,
(ii) the Swedish portion of Swedbank Markets’ business, (iii) the Swedish portion of the Bank’s Asset
Management and Insurance business, and (iv) the Swedish portion of the Bank’s Shared Services and Group
Staff business. Branches relating to the Swedish business are also included in ‘‘domestic.’’ The term ‘‘foreign’’
refers to all other operations of the Bank and term ‘‘Group’’ refers to domestic and foreign operations
together.

Distribution of assets, liabilities and stockholders’ equity; interest rates and interest differential
Average balance sheet information and information on interest rates
The following tables set forth the average balances of the Bank’s interest-earning assets and interest-
bearing liabilities, other assets and liabilities, the interest generated from such assets and liabilities and
average return rate at each date presented. Average balances were calculated on the basis of monthly data.

                                                                                   As of September 30, 2008
                                                            Group                             Domestic                          Foreign
                                                                       Average                             Average                         Average
                                                 Average                   rate     Average                    rate   Average                  rate
SEKm                                             balance    Interest         %      balance     Interest         %    balance   Interest         %
Assets
Loans to credit institutions . . . .              178,721     3,544     2.64%       164,613      3,078      2.49%      14,108       466     4.40%
Loans to the public . . . . . . . . .           1,191,623    50,531     5.65%       977,024     38,325      5.23%     214,599    12,206     7.58%
Bonds and other interest-bearing
  securities . . . . . . . . . . . . . .         109,851      3,260     3.96%        99,265       2,917     3.92%      10,586       343     4.32%
Total interest-earning assets .                1,480,195    57,335      5.16%     1,240,902     44,320      4.76%     239,293   13,015      7.25%

Derivatives and other interest
  bearing assets . . . . . . . . . . .                        1,339                                650                              689
Other non-interest bearing
  assets . . . . . . . . . . . . . . . .         193,647
Total average assets . . . . . . .             1,673,842

Liabilities
Amounts owed to credit
  institutions . . . . . . . . . . .    . .      178,347      5,217     3.90%       172,082       4,928     3.82%       6,265       289     6.15%
Deposits and borrowings from
  the public . . . . . . . . . . . .    . .      477,238     12,001     3.35%       364,942      9,231      3.37%     112,296     2,770     3.29%
Debt securities in issue . . . . .      . .      674,378     22,379     4.42%       666,421     21,989      4.40%       7,957       390     6.54%
Subordinated liabilities . . . . .      . .       38,425      1,599     5.55%        38,303      1,594      5.55%         122         5     5.74%
Total interest-bearing
  liabilities . . . . . . . . . . . . . .      1,368,388    41,196      4.01%     1,241,748     37,742      4.05%     126,640    3,454      3.64%

Derivatives and other interest
  bearing liabilities . . . . . . . . .                       1,518                               1,360                             158
Other non-interest bearing
  liabilities . . . . . . . . . . . . . . .      235,275
Equity . . . . . . . . . . . . . . . . . .        70,179
Total average liabilities and
  equity . . . . . . . . . . . . . . . .       1,673,842

Net interest income . . . . . . . .                         15,960                               5,868                          10,092

Net yield on interest-earning
  assets . . . . . . . . . . . . . . . .                                1.44%                               0.63%                           5.62%




                                                                            108
                                                                                  As of December 31, 2007
                                                          Group                             Domestic                          Foreign
                                                                     Average                             Average                         Average
                                                Average                  rate     Average                    rate   Average                  rate
SEKm                                            balance   Interest         %      balance     Interest         %    balance   Interest         %
Assets
Loans to credit institutions . . . .            191,996     6,518     3.39%       180,410      6,034      3.34%      11,586       484     4.18%
Loans to the public . . . . . . . . .         1,043,084    52,535     5.04%       874,822     40,876      4.67%     168,262    11,659     6.93%
Bonds and other interest-bearing
  securities . . . . . . . . . . . . . .        112,583     2,680     2.38%       103,741       2,375     2.29%       8,842       305     3.45%
Total interest-earning assets .               1,347,663   61,733      4.58%     1,158,973     49,285      4.25%     188,690   12,448      6.60%

Derivatives and other interest
  bearing assets . . . . . . . . . . .                      5,354                               4,952                             402
Other non-interest bearing
  assets . . . . . . . . . . . . . . . .        173,738
Total average assets . . . . . . .            1,521,401

Liabilities
Amounts owed to credit
  institutions . . . . . . . . . . .    . .     153,641     8,482     5.52%       148,550       8,193     5.52%       5,091       289     5.68%
Deposits and borrowings from
  the public . . . . . . . . . . . .    . .     431,146    11,011     2.55%       334,613      8,617      2.58%      96,533     2,394     2.48%
Debt securities in issue . . . . .      . .     636,566    22,661     3.56%       629,612     22,273      3.54%       6,954       388     5.58%
Subordinated liabilities . . . . .      . .      36,732     1,973     5.37%        36,705      1,973      5.38%          27         —         —
Total interest-bearing
  liabilities . . . . . . . . . . . . . .     1,258,085   44,127      3.51%     1,149,480     41,056      3.57%     108,605    3,071      2.83%

Derivatives and other interest
  bearing liabilities . . . . . . . . .                     3,803                               3,719                              84
Other non-interest bearing
  liabilities . . . . . . . . . . . . . . .     199,899
Equity . . . . . . . . . . . . . . . . . .       63,417
Total average liabilities and
  equity . . . . . . . . . . . . . . . .      1,521,401

Net interest income . . . . . . . .                       19,157                               9,462                           9,695

Net yield on interest-earning
  assets . . . . . . . . . . . . . . . .                              1.42%                               0.82%                           5.14%




                                                                          109
                                                                          As of December 31, 2006
                                                  Group                             Domestic                          Foreign
                                                             Average                            Average                          Average
                                        Average                  rate     Average                   rate    Average                  rate
SEKm                                    balance   Interest         %      balance    Interest         %     balance   Interest         %
Assets
Loans to credit institutions . .        160,407    4,643      2.89%       149,178     4,248         2.85%    11,229       395     3.52%
Loans to the public . . . . . . .       893,350   36,594      4.10%       783,199    30,291         3.87%   110,151     6,303     5.72%
Bonds and other interest-
  bearing securities . . . . . .         97,193     2,069     2.13%        90,570      1,846        2.04%     6,623       223     3.37%
Total interest-earning
  assets . . . . . . . . . . . . . 1,150,950      43,306      3.76%     1,022,947    36,385      3.56%      128,003    6,921      5.41%
Derivatives and other
  interest bearing assets . . .                     3,859                              3,545                              314
Other non-interest bearing
  assets . . . . . . . . . . . . . .    145,366
Total average assets . . . . . 1,296,316

Liabilities
Amounts owed to credit
  institutions . . . . . . .    . . .   126,711     6,066     4.79%       122,817      5,961        4.85%     3,894       105     2.70%
Deposits and borrowings
  from the public . . . . .     . . .   368,426    5,729      1.55%       290,712     4,379         1.51%    77,714     1,350     1.74%
Debt securities in issue .      . . .   551,284   15,775      2.86%       542,901    15,503         2.86%     8,383       272     3.24%
Subordinated liabilities . .    . . .    34,020    1,836      5.40%        34,019     1,836         5.40%         1         —         —
Total interest-bearing
  liabilities . . . . . . . . . . . 1,080,441     29,406      2.72%      990,449     27,679      2.79%       89,992    1,727      1.92%
Derivatives and other
  interest bearing liabilities .                    1,782                              1,719                               63
Other non-interest bearing
  liabilities . . . . . . . . . . . .   159,641
Equity . . . . . . . . . . . . . . .     56,235
Total average liabilities
  and equity . . . . . . . . . . 1,296,316
Net interest income . . . . .                     15,977                             10,532                            5,445
Net yield on interest-
  earning assets . . . . . . .                                1.39%                              1.03%                            4.25%




                                                                    110
                                                                               As of December 31, 2005
                                                         Group                           Domestic                          Foreign
                                                                    Average                           Average                         Average
                                               Average                  rate   Average                    rate   Average                  rate
SEKm                                           balance   Interest         %    balance     Interest         %    balance   Interest         %
Assets
Loans to credit institutions . . . . .         133,785     3,007     2.25%     124,568      2,774      2.23%      9,217        233     2.53%
Loans to the public . . . . . . . . . .        772,863    31,921     4.13%     701,853     28,025      3.99%     71,010      3,896     5.49%
Bonds and other interest-bearing
  securities . . . . . . . . . . . . . . .      83,061     1,644     1.98%      77,565       1,453     1.87%       5,496       191     3.48%
Total interest-earning assets . .              989,709   36,572      3.70%     903,986     32,252      3.57%     85,723     4,320      5.04%
Derivatives and other interest
  bearing assets . . . . . . . . . . .                     2,568                             2,008                             560
Other non-interest bearing assets              138,882
Total average assets . . . . . . . . 1,128,591

Liabilities
Amounts owed to credit
  institutions . . . . . . . . . .     . . .   124,413     5,031     4.04%     119,082       4,911     4.12%       5,331       119     2.23%
Deposits and borrowings from           the
  public . . . . . . . . . . . . . .   . . .   318,595     3,746     1.18%     260,274      2,913      1.12%     58,321        833     1.43%
Debt securities in issue . . . .       . . .   470,892    11,635     2.47%     457,092     11,277      2.47%     13,800        358     2.59%
Subordinated liabilities . . . . .     . . .    30,649     1,601     5.22%      30,598      1,601      5.23%         51          —         —
Total interest-bearing liabilities             944,549   22,012      2.33%     867,046     20,702      2.39%     77,503     1,310      1.69%
Derivatives and other interest
  bearing liabilities . . . . . . . . . .                  1,448                             1,346                             102
Other non-interest bearing
  liabilities . . . . . . . . . . . . . . .    136,864
Equity . . . . . . . . . . . . . . . . . .      47,178
Total average liabilities and
  equity . . . . . . . . . . . . . . . . 1,128,591
Net interest income . . . . . . . .                      15,679                            12,212                           3,468
Net yield on interest-earning
  assets . . . . . . . . . . . . . . . .                             1.58%                             1.35%                           4.05%




                                                                         111
Changes in interest income; volume and rates analysis
The following tables set forth the effect of changes in the Bank’s interest income resulting from fluctuations
in the average volumes and average yield rate at each date presented:

                                                                      December 31, 2007 compared to December 31, 2006
                                                            Group                          Domestic                         Foreign
                                                     Increase/(decrease)             Increase/(decrease)             Increase/(decrease)
                                                       due to changes                  due to changes                  due to changes
                                                           Average                         Average                          Average
                                                 Average   interest        Net   Average   interest      Net     Average    interest       Net
SEKm                                              volume       rate     change    volume       rate   change      volume        rate    change
Assets
Loans to credit institutions . . . . . .             914       961       1,875       902       884     1,786          13         76         89
Loans to the public . . . . . . . . . . .          6,134     9,807      15,941     2,808     7,777    10,585       3,325      2,031      5,356
Bonds and other interest-bearing
  securities . . . . . . . . . . . . . . . .        328        283         611      253        276         529       75           7         82
Total interest on interest-
  earning assets . . . . . . . . . . .            7,376    11,051      18,427     3,963      8,937    12,900      3,413       2,114     5,527
Derivatives and other interest
  bearing assets . . . . . . . . . . . .                                 1,495                         1,407                                88
Total interest income . . . . . . . .                                  19,922                         14,307                            5,615

Liabilities
Amounts owed to credit
  institutions . . . . . . . . . . . . .     .     1,289     1,127       2,416     1,257       975     2,232         32         152        184
Deposits and borrowings from the
  public . . . . . . . . . . . . . . . . .   .       975     4,307       5,282       648     3,590     4,238        327         717      1,044
Debt securities in issue . . . . . . .       .     2,440     4,446       6,886     2,487     4,283     6,770        (46)        162        116
Subordinated liabilities . . . . . . . .     .       146        (9)        137       146        (9)      137          —           —          —
Total interest on interest-
  bearing liabilities . . . . . . . . . .         4,850      9,871     14,721     4,538      8,839    13,377        313       1,031     1,344
Derivatives and other interest
  bearing liabilities . . . . . . . . . . .                              2,021                         2,000                                21
Total interest expense . . . . . . .                                   16,742                         15,377                            1,365


                                                                      December 31, 2006 compared to December 31, 2005
                                                            Group                          Domestic                         Foreign
                                                     Increase/(decrease)             Increase/(decrease)             Increase/(decrease)
                                                       due to changes                  due to changes                  due to changes
                                                           Average                         Average                          Average
                                                 Average   interest        Net   Average   interest      Net     Average    interest       Net
SEKm                                              volume       rate     change    volume       rate   change      volume        rate    change
Assets
Loans to credit institutions . . . . . .             598     1,038       1,636       548       926     1,474          51        111        162
Loans to the public . . . . . . . . . . .          4,976      (303)      4,673     2,829      (563)    2,266       2,147        260      2,407
Bonds and other interest-bearing
  securities . . . . . . . . . . . . . . . .        280        145         425      241        152         393       39           (7)       32
Total interest on interest-
  earning assets . . . . . . . . . . .            5,854        880       6,734    3,618        515     4,133      2,237         364     2,601
Derivatives and other interest
  bearing assets . . . . . . . . . . . .                                 1,291                         1,537                               (246)
Other non-interest bearing assets .
Total interest income . . . . . . . .                                    8,025                         5,670                            2,355

Liabilities
Amounts owed to credit
  institutions . . . . . . . . . . . . .     .       93        943       1,036      125        925     1,050         (32)        18         (14)
Deposits and borrowings from the
  public . . . . . . . . . . . . . . . . .   .       586     1,397       1,983       309     1,157     1,466         277        240        517
Debt securities in issue . . . . . . .       .     1,986     2,154       4,140     2,127     2,099     4,226        (141)        55        (86)
Subordinated liabilities . . . . . . . .     .       176        59         235       176        59       235           —          —          —
Total interest on interest-
  bearing liabilities . . . . . . . . . .         2,841      4,553       7,394    2,737      4,240     6,977        104         313        417
Derivatives and other interest
  bearing liabilities . . . . . . . . . . .                                334                             373                              (39)
Total interest expense . . . . . . .                                     7,728                         7,350                               378




                                                                           112
Investment portfolio
The following tables set forth information regarding the Bank’s investment portfolio of debt securities at the
dates presented, together with information regarding when the instruments comprising the portfolio are
due to mature:
                                                                                                 Book value
                                                                                    As of
                                                                                                     As of December 31,
                                                                            September 30,
SEKm                                                                                2008         2007            2006        2005

Treasury bills
Swedish government . . . . . . . . . . . . . . . . . . . . .                      15,498      32,139          12,977      16,012
Swedish municipalities . . . . . . . . . . . . . . . . . . . .                       674       1,426           1,817         681
Foreign governments . . . . . . . . . . . . . . . . . . . . .                      2,551       3,569           8,230       9,830
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           18,723      37,134          23,024      26,523

Bonds
Swedish mortgage entities . . .                .............                      34,200      36,636          37,485      30,701
Other Swedish entities
  Non-financial institutions(1) . .            .............                      10,715       4,532           5,731       5,658
  Other financial institutions(1)              .............                       3,695       7,701           7,062       5,539
Foreign issuers . . . . . . . . . . . . .      .............                      32,880      29,489          26,298      19,085
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           81,490      78,358          76,576      60,983

                                                                                            As of December 31, 2007
                                                                                   Within         1 to            5 to        Over
SEKm                                                                               1 year      5 years        10 years    10 years

Treasury bills
Swedish government . . . . . . . . . . . . . . . . . . . . . .                    15,551        6,192          1,621       8,774
Swedish municipalities . . . . . . . . . . . . . . . . . . . . .                   1,426            —              —           —
Foreign governments . . . . . . . . . . . . . . . . . . . . . .                      684          741            911       1,233
Bonds
Swedish mortgage entities . . . .               ..............                    12,368      22,210           1,824         235
Other Swedish entities
  Non-financial institutions(1) . .             ..............                     1,762        1,929            841           —
  Other financial institutions(1) .             ..............                     7,046          567             44          44
Foreign issuers . . . . . . . . . . . . .       ..............                    24,142        4,518            412         417
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         62,979      36,157           5,653      10,703

(1)   There are no issuers where the aggregated book value of the securities exceeds 10% of shareholders’ equity.




                                                                            113
Types of loans
The following table sets forth a breakdown of the Bank’s loan portfolio at the dates presented:

                                                                                               As of
                                                                                                               As of December 31,
                                                                                       September 30,
SEKm                                                                                           2008         2007         2006          2005

Domestic
Private individuals, mortgage loans                .   .   .   .   .   .   .   .   .       451,228       426,417     379,216        340,211
Private individuals, other . . . . . . . .         .   .   .   .   .   .   .   .   .        50,551        47,938      45,453         43,382
Real estate management . . . . . . . .             .   .   .   .   .   .   .   .   .       208,611       182,439     166,683        151,748
Retail, hotels and restaurants . . . . .           .   .   .   .   .   .   .   .   .        20,492        19,712      16,459         15,866
Construction . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .        10,947         9,334       8,158          7,990
Manufacturing . . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .        18,855        14,207      13,788         13,782
Transportation . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .         8,234         8,462       6,564          7,040
Forestry and agriculture . . . . . . . . .         .   .   .   .   .   .   .   .   .        47,735        45,644      42,255         39,609
Other corporate lending . . . . . . . . .          .   .   .   .   .   .   .   .   .       140,228       116,540      87,451         84,469
Municipalities . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .        21,787        16,820      13,949         13,980
Financial institutions . . . . . . . . . . .       .   .   .   .   .   .   .   .   .        59,248        68,507      55,924         32,778
Total domestic . . . . . . . . . . . . . . . . . . . . . . . .                          1,037,916       956,020     835,900         750,855

Foreign
Private individuals, mortgage loans                .   .   .   .   .   .   .   .   .         63,056       57,281      40,904         24,949
Private individuals, other . . . . . . . .         .   .   .   .   .   .   .   .   .         34,521       28,641      14,687          9,609
Real estate management . . . . . . . .             .   .   .   .   .   .   .   .   .         42,899       35,856      24,562         12,560
Retail, hotels and restaurants . . . . .           .   .   .   .   .   .   .   .   .         25,838       23,342      18,177         11,805
Construction . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .          8,241        7,121       4,892          3,396
Manufacturing . . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .         31,282       23,475      16,833         10,617
Transportation . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .         15,892       13,510      10,041          6,825
Forestry and agriculture . . . . . . . . .         .   .   .   .   .   .   .   .   .          5,737        4,399       3,133          2,183
Other corporate lending . . . . . . . . .          .   .   .   .   .   .   .   .   .         46,852       50,760      27,730         25,653
Financial institutions . . . . . . . . . . .       .   .   .   .   .   .   .   .   .         65,353      112,587     113,736        120,105
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . .                         339,671       356,972     274,695         227,702

Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . .                       1,377,587      1,312,992   1,110,595        978,557

Total provisions/allowances . . . . . . . . . . . . .                                        4,735        3,691        3,179          3,783
Total loans, net . . . . . . . . . . . . . . . . . . . . . . .                          1,372,852      1,309,301   1,107,416        974,774




                                                                                       114
Foreign outstandings
The following tables set forth information regarding the Bank’s non-Swedish loan portfolio, broken down by
jurisdiction. The Bank’s lending operations in Russia and Ukraine constitute less than one percent of the
Bank’s total assets and have been excluded from these tables:

                                                                                         As of September 30, 2008
SEKm                                                             Estonia        Latvia      Lithuania         Norway     Denmark          USA
Private individuals, mortgage loans            .   .   .   .      23,066        22,173           17,699          677         191            —
Private individuals, other . . . . . . .       .   .   .   .      14,978         5,454            4,611           59          82            —
Real estate management . . . . . . .           .   .   .   .      11,357        10,237            8,479        5,487         415            —
Retail, hotels and restaurants . . . .         .   .   .   .       7,383         6,253            7,339            —          10           52
Construction . . . . . . . . . . . . . . .     .   .   .   .       1,974         2,526            1,345            —           1
Manufacturing . . . . . . . . . . . . . .      .   .   .   .       5,123         7,829            7,050            —       1,822         1,373
Transportation . . . . . . . . . . . . . .     .   .   .   .       2,774         2,878            4,424        4,830           —             —
Forestry and agriculture . . . . . . . .       .   .   .   .       2,234         1,989            1,226            —           —             —
Other corporate lending . . . . . . . .        .   .   .   .      10,154         5,738            4,601       10,486         881         9,661
Municipalities . . . . . . . . . . . . . . .   .   .   .   .          83           199              359            —           —             —
Financial institutions . . . . . . . . . .     .   .   .   .           —             —                —        2,321      21,773         9,377
Total . . . . . . . . . . . . . . . . . . . . . . . .            79,126        65,276            57,133       23,860      25,174       20,463


                                                                                          As of December 31, 2007
SEKm                                                             Estonia        Latvia      Lithuania         Norway     Denmark          USA
Private individuals, mortgage loans            .   .   .   .      21,126        20,283           15,413          164          88             —
Private individuals, other . . . . . . .       .   .   .   .      12,748         4,913            3,810            9          46             —
Real estate management . . . . . . .           .   .   .   .      11,779         9,658            7,814        3,038         403             —
Retail, hotels and restaurants . . . .         .   .   .   .       6,494         6,059            6,576          260           1            54
Construction . . . . . . . . . . . . . . .     .   .   .   .       1,608         2,405            1,124            2           —             —
Manufacturing . . . . . . . . . . . . . .      .   .   .   .       4,674         6,237            6,861            —          88           442
Transportation . . . . . . . . . . . . . .     .   .   .   .       3,074         2,157            4,228        2,937           1             —
Forestry and agriculture . . . . . . . .       .   .   .   .       1,631         1,621              855            —           —             —
Other corporate lending . . . . . . . .        .   .   .   .       6,042         5,102            4,214        7,325         734         2,616
Financial institutions . . . . . . . . . .     .   .   .   .           —             —                —        3,718      39,399        36,333
Total . . . . . . . . . . . . . . . . . . . . . . . .            69,178        58,435            50,895       17,453      40,760       39,445


                                                                                          As of December 31, 2006
SEKm                                                             Estonia        Latvia      Lithuania         Norway     Denmark          USA
Private individuals, mortgage loans            .   .   .   .      16,922        13,888            9,920           94           —            —
Private individuals, other . . . . . . .       .   .   .   .       7,868         3,081            2,097            —           —            —
Real estate management . . . . . . .           .   .   .   .       9,574         6,762            4,100          712           —            —
Retail, hotels and restaurants . . . .         .   .   .   .       4,651         4,850            5,335            —           —          126
Construction . . . . . . . . . . . . . . .     .   .   .   .       1,219         2,510              857          472           —
Manufacturing . . . . . . . . . . . . . .      .   .   .   .       3,905         4,621            5,386            2           —           225
Transportation . . . . . . . . . . . . . .     .   .   .   .       2,751         1,506            2,810          447           —             —
Forestry and agriculture . . . . . . . .       .   .   .   .       1,443           997              587            —           —             —
Other corporate lending . . . . . . . .        .   .   .   .       7,580         2,669            2,571        4,888          27         3,059
Financial institutions . . . . . . . . . .     .   .   .   .           —             —                —        6,220      17,441        34,802
Total . . . . . . . . . . . . . . . . . . . . . . . .            55,913        40,884            33,663       12,835      17,468       38,212


                                                                                          As of December 31, 2005
SEKm                                                           Estonia     Latvia    Lithuania     Denmark        USA       UK     Netherlands
Private individuals, mortgage loans            .   .   .   .   11,804       7,259        5,867            —          —        —              —
Private individuals, other . . . . . . .       .   .   .   .    4,831       1,602        1,490           53          —        —              —
Real estate management . . . . . . .           .   .   .   .    5,552       3,623        2,306            —          —        —              —
Retail, hotels and restaurants . . . .         .   .   .   .    3,598       3,443        4,008            —          —        —              —
Construction . . . . . . . . . . . . . . .     .   .   .   .      776       1,716          806            —          —        —              —
Manufacturing . . . . . . . . . . . . . .      .   .   .   .    2,989       2,266        4,678            —        440        —              —
Transportation . . . . . . . . . . . . . .     .   .   .   .    1,845         981        2,055            —          —      186            568
Forestry and agriculture . . . . . . . .       .   .   .   .    1,176         578          423            —          —        —              —
Other corporate lending . . . . . . . .        .   .   .   .    7,153       1,589        1,508            7      3,540      203              —
Financial institutions . . . . . . . . . .     .   .   .   .        —           —            —       19,536     29,166   13,201         23,468
Total . . . . . . . . . . . . . . . . . . . . . . . .          39,724      23,057     23,140         19,596    33,146    13,590        24,036




                                                                               115
Maturities of loans
The following table sets forth maturities of the Bank’s loan portfolio as of December 31, 2007:

                                                                                                                    Total in
                                                       Within      1 to                    Over     Fair value      Balance
SEKm                                                   1 year   5 years   5-10 years   10 years   adjustments         sheet
DOMESTIC
Loans to credit institutions
Swedbank AB . . . . . . . . . . . . .         .   .   151,373       802          32        309              —       152,516
of which repurchase agreements                .   .    90,595         —           —          —              —
Swedbank Mortgage AB . . . . . .              .   .       605         —           —          —              —           605
Swedbank Finans AB . . . . . . . .            .   .       132         —           —          —              —           132
Swedbank Robur . . . . . . . . . . .          .   .       327         —           —          —              —           327
Swedbank Babs AB . . . . . . . . .            .   .       569         —           —          —              —           569
¨
Olands Bank AB . . . . . . . . . . .          .   .         5         —           —          —              —             5
Other corporate lending . . . . . .           .   .         2         —           —          —              —             2
Total . . . . . . . . . . . . . . . . . . . .         153,013      802           32        309              —      154,156

Loans to the public
Swedbank AB . . . . . . . . . . . . .         .   .   140,221    88,459      32,898      77,398           (160)     338,816
of which repurchase agreements                .   .    30,200         —           —           —              —
Swedbank Mortgage AB . . . . . .              .   .   277,003   250,451      36,484       1,040         (4,345)     560,633
Swedbank Finans AB . . . . . . . .            .   .    30,096       127           1           —              —       30,224
Swedbank Robur . . . . . . . . . . .          .   .         0         —           —           —              —            0
Swedbank Babs AB . . . . . . . . .            .   .         0         —           —           —              —            0
¨
Olands Bank AB . . . . . . . . . . .          .   .       340       451         262         919              —        1,972
Other corporate lending . . . . . .           .   .         7         —           —           —              —            7
Total . . . . . . . . . . . . . . . . . . . .         477,667   339,488      69,645     79,357         (4,505)     931,652
Total domestic . . . . . . . . . . . . .              600,680   340,290      69,677     79,666         (4,505)    1,085,808

FOREIGN
Loans to credit institutions
Hansabank . . . . . . . . . . . . .   .   .   .   .    17,680        —            —          —              —        17,680
OJSC Swedbank . . . . . . . . . .     .   .   .   .     1,250        —            —          —              —         1,250
First Securities ASA . . . . . . .    .   .   .   .       853        —            —          —              —           853
Swedbank Luxembourg SA . .            .   .   .   .        71        —            —          —              —            71
Other corporate lending . . . .       .   .   .   .         4        —            —          —              —             4
Total . . . . . . . . . . . . . . . . . . . .          19,858        —            —          —              —       19,858

Loans to the public
Hansabank . . . . . . . . . . . . . . .       .   .    53,379    66,438      29,695      39,719           986       190,217
of which repurchase agreements                .   .     2,089         —           —           —             —
OJSC Swedbank . . . . . . . . . . . .         .   .     2,571     5,935       1,721         649           128        11,004
First Securities ASA . . . . . . . . .        .   .     1,938         —           —           —             —         1,938
Swedbank Luxembourg SA . . . .                .   .       162       203          93          18             —           476
Total . . . . . . . . . . . . . . . . . . . .          58,050    72,576      31,509     40,386          1,114      203,635
Total foreign . . . . . . . . . . . . . . .            77,908    72,576      31,509     40,386          1,114      223,493

Total lending . . . . . . . . . . . . . . .           678,588   412,866     101,186    120,052         (3,391)    1,309,301




                                                                   116
Risk elements
Impaired loans
The following tables set forth information regarding the amounts of impaired loans. Impaired loans are those
in respect of which the Bank has made an assessment that a customer will not be able to meet its financial
commitments to the Bank.

                                                                                 As of
                                                                                               As of December 31,
                                                                         September 30,
SEKm                                                                             2008       2007          2006             2005

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               1,547     1,198         1,184           1,693
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              4,991     1,877           450             526
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           6,538      3,075        1,634            2,219

The following table sets out gross interest income that would have been recorded if the loans had been
current:
                                                                                  As of
                                                                                               As of December 31,
                                                                        September 30,(1)
SEKm                                                                              2008      2007          2006             2005

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  68       65             52               70
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                220      102             20               22
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              288      167             72               92

The following table sets out interest income on those loans that were included in the profit for the year:
                                                                                  As of
                                                                                               As of December 31,(1)
                                                                        September 30,(1)
SEKm                                                                              2008      2007          2006             2005
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  29       29             29               42
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                106       41             14               14
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              135       70             43               56

(1)   The amounts have been calculated using the actual non-accruing loan balances and the average interest rates of 5.9% for the
      respective loan category.




                                                                         117
Analysis of the allowance for loan losses
The following table sets out information regarding the Bank’s allowance for loan losses as of the dates
presented:

                                                                                  As of
                                                                                               As of December 31,
                                                                          September 30,
SEKm                                                                              2008     2007         2006         2005

Balance at the beginning of the period . . . .                                  3,694     3,183        3,784        3,906
Reversal of previous provisions for probable
  loan losses that now are reported as
  established losses
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (196)    (152)        (181)        (247)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (69)     (84)         (26)         (23)
                                                                                  (265)    (236)        (207)        (270)
Provisions for probable loan losses
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              354       242          158          336
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           653       211           64          154
                                                                                 1,007      453          222          490
Reversal of provisions for probable loan
  losses no longer required
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               (68)     (99)        (207)        (123)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (101)     (27          (57)         (56)
                                                                                  (169)    (126)        (264)        (179)
Provisions/(reversal) for collectively
  assessed loan losses that are not
  individually impaired
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (68)     (330)        (606)        (269)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           368       291          287          146
                                                                                  300       (39)        (319)        (123)
Provisions/(reversal) for collectively
  assessed loan losses
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                26       23            (9)         10
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             77       50            26          13
                                                                                  103        73            17          23
Acquisition of subsidiaries and other
  financial assets
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 —        —             —        (111)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (42)     340             —           —
                                                                                   (42)     340             —        (111)
Translation differences
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               (5)        3            (6)          1
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           118        43           (44)         47
                                                                                  113        46           (50)         48

Balance at the end of the period . . . . . . . . . .                            4,741     3,694        3,183        3,784

Ratio of net charge-offs during the period
  to average loans outstanding during the
  period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            0.17%     0.06%      (0.02%)        0.04%
Ratio of net charge-offs during the period
  to opening balance of outstanding
  loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           0.18%     0.07%      (0.02%)        0.04%




                                                                          118
Allocation of the allowance for loan losses
The following tables set forth an analysis of the Bank’s allocation of its allowance for loan losses as of the
dates presented:
                                                                                                  As of December 31,
                                                As of September 30,
                                                       2008                     2007                     2006                     2005
                                                           Percent of              Percent of              Percent of
                                                              loans in                loans in                loans in               Percent of
                                              Amount of each category Amount of each category Amount of each category Amount of         loans in
                                               loan loss       to total loan loss      to total loan loss      to total loan loss each category
SEKm                                           provision  gross loans   provision gross loans   provision gross loans   provision to total loans

Domestic
Private individuals, mortgage
  loans . . . . . . . . . . . . . .   .   .         33         32.8%         33         32.5%         25         34.2%         26         34.8%
Private individuals, other . . .      .   .        183          3.7%        146          3.7%        132          4.1%        154          4.4%
Real estate management . . .          .   .        137         15.1%        192         13.9%        225         15.0%        261         15.5%
Retail, hotels and restaurants        .   .        206          1.5%        279          1.5%        366          1.5%        452          1.6%
Construction . . . . . . . . . . .    .   .        106          0.8%         85          0.7%         83          0.7%        111          0.8%
Manufacturing . . . . . . . . . .     .   .        243          1.4%        278          1.1%        352          1.2%        469          1.4%
Transportation . . . . . . . . . .    .   .         63          0.6%         40          0.6%         40          0.6%         48          0.7%
Forestry and agriculture . . .        .   .         40          3.5%         52          3.5%         66          3.8%        186          4.0%
Other corporate lending . . . .       .   .        660         10.2%        512          8.9%        628          7.9%      1,053          8.6%
Municipalities . . . . . . . . . .    .   .          —          1.6%          —          1.3%          —          1.3%          —          1.4%
Financial institutions . . . . . .    .   .          —          4.3%          —          5.2%          —          5.0%          —          3.3%
Total domestic . . . . . . . . . . .             1,671        75.3%       1,617         72.8%      1,917         75.3%      2,760         76.7%

Foreign
Private individuals, mortgage
  loans . . . . . . . . . . . . . .   .   .        224          4.6%        168          4.4%         89          3.7%         48          2.5%
Private individuals, other . . .      .   .        665          2.5%        438          2.2%        147          1.3%         91          1.0%
Real estate management . . .          .   .        449          3.1%        226          2.7%        129          2.2%         68          1.3%
Retail, hotels and restaurants        .   .        361          1.9%        275          1.8%        136          1.6%         92          1.2%
Construction . . . . . . . . . . .    .   .        138          0.6%         67          0.5%         34          0.4%         45          0.3%
Manufacturing . . . . . . . . . .     .   .        379          2.3%        278          1.8%        215          1.5%        199          1.1%
Transportation . . . . . . . . . .    .   .        135          1.2%         95          1.0%         63          0.9%         40          0.7%
Forestry and agriculture . . .        .   .        105          0.4%         80          0.3%         38          0.3%         25          0.2%
Other corporate lending . . . .       .   .        608          3.4%        434          3.9%        385          2.5%        380          2.6%
Financial institutions . . . . . .    .   .          —          4.7%         13          8.6%         26         10.2%         35         12.3%
Total foreign . . . . . . . . . . . .            3,064        24.7%       2,074         27.2%      1,262         24.7%      1,023         23.3%

Allowances other assets . . . . .                     6           N/A         3           N/A          4           N/A          1           N/A

Total allowance for loan
  losses . . . . . . . . . . . . . . .           4,741       100.0%       3,694        100.0%      3,183        100.0%      3,784        100.0%




                                                                            119
      Short term borrowings
      The following table sets out information regarding the Bank’s short-term borrowings for the periods presented:
                                                                          As of December 31, 2007                             As of December 31, 2006                             As of December 31, 2005
                                                                                  Maximum     Average Average                         Maximum     Average Average                         Maximum     Average Average
                                                                                 month end    interest interest                      month end    interest interest                      month end    interest interest
                                                                Period   Monthly   balance rate during  rate at     Period   Monthly   balance rate during  rate at     Period   Monthly   balance rate during  rate at
                                                                   end   Average    during the period    period        end   Average    during the period    period        end   Average    during the period    period
      SEKm                                                     balance   balance    period          %    end %     balance   balance    period          %    end %     balance   balance    period          %    end %
120




      Amounts owed to credit
        institutions
      Swedish banks . . . . . . . . . . . . .     .   .   .    66,852    52,225    66,852                          42,881    38,288    42,881                          32,246    37,770    49,897
      Other Swedish credit institutions .         .   .   .     3,661     1,445     3,661                           2,120     2,215     3,880                             945     1,582     3,385
      Foreign banks . . . . . . . . . . . . . .   .   .   .    92,875    98,794   109,031                          82,506    85,485   100,605                          76,758    84,536   100,401
      Other foreign credit institutions .         .   .   .       397     1,177     3,553                           3,135       723     3,508                             117       525     1,897
      Total . . . . . . . . . . . . . . . . . . . . . . 163,785 153,641 183,097                  5.5%    5.2% 130,642 126,711 150,873                4.8%    4.6% 110,066 124,413 155,580                4.0%    4.6%

      Debt securities in issue etc
      Debt securities in issue etc . . . . . . . .            431,375                                             349,825                                             309,365
      Total . . . . . . . . . . . . . . . . . . . . . . 431,375                                          3.4% 349,825                                        2.8% 309,365                                        2.2%
Deposits
Transaction accounts include all deposits against which the account holder is permitted to make withdrawals
by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized
transfers for the purpose of making payments to third persons or others.
Saving accounts are accounts with the purpose of accumulating funds over a period of time. With savings
accounts customers may make withdrawals, but do not have the flexibility of using credit cards to do so.
Some savings accounts require funds to be kept on deposit for a minimum length of time, but most permit
unlimited access to funds.
Other deposits consists mainly of bank drafts and currency accounts.
The following tables set forth information regarding the Bank’s deposit base at the dates presented:

Domestic

                                                                                  As of
                                                                                                As of December 31,
                                                                          September 30,
SEKm                                                                              2008       2007        2006           2005

Interest paid to the            customer/YTD
Transaction accounts            .....................                             2,513     2,730       1,160            737
Savings accounts . . .          .....................                             4,900     4,020       1,707            821
Other deposits . . . . .        .....................                             1,143     1,547       1,046            904
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          8,556      8,296       3,913          2,462

Volumes/YTD average
Transaction accounts . . . . . . . . . . . . . . . . . . . . .                  142,742   150,363    126,535         115,758
Savings accounts . . . . . . . . . . . . . . . . . . . . . . . .                177,788   147,093    116,716          86,790
Other deposits . . . . . . . . . . . . . . . . . . . . . . . . . .               21,793    27,571     20,994          22,979
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      342,324      325,027   264,245          225,528

Interest rate/YTD, %
Transaction accounts . . . . . . . . . . . . . . . . . . . . .                   2.35%      1.82%       0.92%          0.64%
Savings accounts . . . . . . . . . . . . . . . . . . . . . . . .                 3.68%      2.73%       1.46%          0.95%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          3.34%     2.55%       1.48%          1.09%

Foreign

                                                                                  As of
                                                                                                As of December 31,
                                                                          September 30,
SEKm                                                                              2008       2007        2006           2005

Interest paid to the            customer/YTD
Transaction accounts            .....................                               633       805         510            311
Savings accounts . . .          .....................                             1,903     1,488         607            407
Other deposits . . . . .        .....................                               250       421         320            369
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          2,785      2,715       1,437          1,087

Volumes/YTD average
Transaction accounts . . . . . . . . . . . . . . . . . . . . .                   64,479    66,166      55,104         39,266
Savings accounts . . . . . . . . . . . . . . . . . . . . . . . .                 47,801    33,074      22,620         15,975
Other deposits . . . . . . . . . . . . . . . . . . . . . . . . . .                   88        95         101              —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      112,368       99,336     77,825          55,241

Interest rate/YTD, %
Transaction accounts . . . . . . . . . . . . . . . . . . . . .                   1.31%      1.22%       0.93%          0.79%
Savings accounts . . . . . . . . . . . . . . . . . . . . . . . .                 5.32%      4.50%       2.68%          2.55%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          3.31%     2.73%       1.85%          1.97%




                                                                          121
                                                                                       As of December 31, 2007, the maturity of deposits
                                                                                                                                                                   Without
                                                                                                                                                                  maturity
                                Payable on                            Within                           3 months-                                    Over       date/change
SEKm                               demand                          3 months                                 1yrs           1-5 yrs   5-10 yrs      10 yrs          in value
Domestic . . . . . . . . .        336,408                                   9,280                                  26          46            —         —               (10)
Foreign . . . . . . . . . .        69,913                                  26,407                              13,066       3,216            9         7                 7
Total . . . . . . . . . . . .     406,321                              35,687                                  13,092       3,262            9         7                (3)


Return on equity and assets
The following table sets out the Bank’s return on total capital, return on equity, dividend payout ratio and
equity to assets ratio as of the dates presented:

                                                                                                                         As of
                                                                                                                                          As of December 31,
                                                                                                                 September 30,
                                                                                                                         2008        2007          2006              2005
                                                                                                                            %            %            %                  %
Return on total capital .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             0.72         0.79          0.85             1.08
Return on equity . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             17.0         18.9          19.3             24.6
Dividend payout ratio . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             N/A          38.7          39.1             32.4
Equity to assets ratio .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .              4.2          4.2           4.3              4.3

Definitions

Return on total capital . . . . . . .                              Profit for the period divided by average total assets
Return on equity . . . . . . . . . . .                             Profit for the period divided by average equity
Dividend payout ratio . . . . . . . .                              Dividends declared per share divided by profit for the period per
                                                                   share
Equity to assets ratio . . . . . . . .                             Average equity divided by average total assets




                                                                                                                122
                     DETAILED COMMENTARY ON THE FINANCIAL DEVELOPMENT
The following discussion on the financial condition and result of operations should be read in conjunction
with the audited consolidated financial statements for the years 2007, 2006, 2005, and the reviewed but
unaudited condensed consolidated interim financial statements for the nine month periods ended
September 30, 2008 and 2007 included elsewhere in this prospectus, as well as with the information
presented under ‘‘Presentation of Financial and Other Information’’ and ‘‘Selected Statistical and Other
Information.’’
The following discussion contains forward-looking statements that are based on estimates and assumptions
that are subject to risks and uncertainties. The actual results may differ materially from what is discussed in
the forward-looking statements as a result of various factors, including those set forth in ‘‘Forward-Looking
Statements’’ and ‘‘Risk Factors.’’

Overview
As of September 30, 2008, the Bank served a total of more than nine million private customers and more
than 500,000 corporate customers through more than 900 branches in 14 countries, primarily in its home
markets of Sweden and the Baltic region. The Bank offers a broad range of services, including retail banking,
corporate and investment banking, asset management and insurance, with the majority of the Bank’s income
and profit generated from its retail banking operations. As of September 30, 2008, the Bank’s loans to the
public amounted to SEK1,218 billion, excluding repos and for the nine-month period ended September 30,
2008, the Bank recorded SEK8,972 million in profit. The Bank divides its operations into six areas: Swedish
Banking, which generated a majority of the Bank’s consolidated income and profit in the nine-month period
ended September 30, 2008, Baltic Banking, International Banking, Swedbank Markets, Asset Management
and Insurance and Shared Services and Group Staffs.

Significant factors affecting results of operations and business conditions
The Bank believes that its business, results of operations and financial condition have been affected, and may
continue to be affected by the significant factors described below. The impact of these and other potential
factors may vary significantly in the future. Rapidly unfolding events relating to the current global financial
crisis mean that past performance is less of a predictor of future performance than is usually the case.

Global financial crisis
The turmoil in global financial markets adversely affected the Bank’s third quarter 2008 results, mainly due
to lower net gains and losses on financial items at fair value and increased loan loss provisions. Ways in
which the Bank was affected in the third quarter of 2008 include:
•   decrease in fair value of SEK217 million in Swedbank Markets’ credit bond portfolio concerning
    transactions in derivatives and bonds;
•   SEK169 million of loan loss provisions in unsecured exposure to Lehman Brothers;
•   decrease of SEK356 million in Swedbank Mortgage’s income (net interest income and net gains and
    losses on financial items at fair value) due to turbulence in the funding markets, dislocations in the
    credit markets and the Bank consequently requiring higher liquid reserves, among other things;
•   decrease in fair value effects of SEK98 million in the Baltic trading, liquidity and insurance portfolios;
    and
•   lower income of SEK98 million in the Asset Management and Insurance segment, mainly due to lower
    commission income.
The credit crunch in global financial markets has escalated during the third quarter of 2008, and thereafter.
As of the date hereof, global capital markets remain substantially impaired, creating a liquidity crisis for the
entire financial system. Since mid-September 2008, the normal functioning of the Swedish and international
capital markets has been severely curtailed. The continuing dislocation of global financial markets impacts
the Bank’s business and results of operations in two primary ways.
Firstly, investors’ lack of confidence in the banking industry has adversely impacted wholesale funding
markets, leading to higher borrowing costs and restricting banks’ access to liquidity. Rating downgrades have
further exacerbated the issue for several banks, including the Bank, as discussed below. Any increased cost of




                                                     123
funding that cannot be passed on to customers can be expected to narrow the Bank’s profit margins going
forward.
Secondly, the Bank recognizes certain of its assets at fair value. The fair value of certain securities trading in
active markets is based on models which utilize market prices or, if no market prices are readily available or
identifiable, the Bank relies on its own assumptions and models to estimate fair value. The fair value of
certain assets has been significantly affected in the current volatile markets, thereby negatively impacting
the Bank’s capital adequacy ratios.
On July 1, 2008, the Bank chose to reclassify certain interest-bearing securities which had become illiquid
due to the extraordinary market conditions. These securities, with a carrying value amounting to
SEK7,376 million, were reclassified from the ‘‘held-for-trading’’ category to the ‘‘held-to-maturity’’ category
since the instruments are no longer held for trading purposes but management intends and has the ability to
hold them to maturity. Financial instruments categorized as ‘‘held-for-trading’’ are recognized at fair value,
with fair value changes recognized in the income statement, and financial instruments categorized as ‘‘held
for maturity’’ are recognized at amortized cost. The fair valuation of these holdings, based on available
information, resulted in a theoretical value that management does not believe reflects a true value, being a
value that does not reflect the amount to which they could be exchanged between knowledgeable, willing
parties in an arm’s-length transaction. In the third quarter of 2008, accounting according to theoretical fair
value would have decreased the Bank’s total income by SEK610 million.

General macroeconomic factors
Sweden(1)
The majority of the Bank’s profit, on a consolidated basis, is generated by its operations in Sweden. The
Swedish Banking segment (which does not include all of the Bank’s operations in Sweden) represented 50%
of the Bank’s profit for the nine month period ending September 30, 2008.
The Swedish economy is affected by the weakening global economic conditions and the turmoil in the
financial markets. Sweden, being a small and open economy, is heavily dependent on exports. In the third
quarter of 2008, calendar-adjusted GDP growth was 0.0%, compared to 0.8% in the second quarter of 2008.
The slowdown is especially evident in the manufacturing sector, where the situation worsened substantially
during September and October 2008. Unemployment is starting to increase. Inflation increased to 4.0% in
October 2008 and is now expected to reach the Riksbank’s inflation target of 2% for 2009. The Bank expects
no or very low GDP growth during 2009. Domestic demand is weakened by lower confidence among
households and companies. The financial situation was exacerbated by recent sharp declines in the market
valuations of companies listed on the OMX Nordic Exchange Stockholm, with the exchange’s OMXSPI index,
for example, losing 30% of its value between January 1, 2008 and September 30, 2008. As of November 28,
2008, this index had lost 44% of its value since January 1, 2008. For so long as these worsening conditions
persist, the Bank’s financial condition and profit are likely to suffer.

The Baltic region(2)
During the first three quarters of 2008, 32% of the Bank’s profit was generated from its activities in the
Baltic region. After a period of overheating, with rising internal and external imbalances, economic conditions
have deteriorated sharply during 2008 in line with falling household and business confidence. The slowdown
is driven by a decrease in private consumption and investment spending. According to internal estimates, real
estate prices fell by 16%, 24% and 10% in Estonia, Latvia and Lithuania, respectively, year-on-year in the
second quarter. Estonia and Latvia are already in recession, and growth in Lithuania is also slowing down. In
the third quarter, preliminary GDP figures show a contraction of 3.3% for Estonia, a contraction of 4.2% for
Latvia and a growth of 3.1% for Lithuania. The Bank expects negative growth in Estonia and Latvia in 2009,
and Lithuania’s slowdown is expected to continue even if growth remains positive. External and internal
imbalances are improving as domestic demand is slowing down. Inflation rates are still high in all three
countries, but they are falling due to lower commodity prices and a weaker domestic demand. In October
2008, inflation stood at 13.8% in Latvia, 10.5% in Lithuania and 9.8% in Estonia. The negative trends in
general economic indicators highlighted above had a negative impact on the local stock markets, with indices
in Estonia, Latvia and Lithuania falling by 37%, 35% and 38%, respectively, during the first three quarters of

(1)   Sources: GDP and inflation figures from Statistics Sweden and stock exchange figures from Nasdaq OMX.

(2)   Sources: GDP and inflation figures from Statistics Estonia, Statistics Latvia and Statistics Lithuania, respectively. Stock exchange
               figures from Nasdaq OMX.



                                                                  124
2008. The Baltic countries’ ratings have been downgraded; most recently Latvia was given a rating of BBB-
with negative outlook by the credit rating agency Fitch.
As the largest financial institution in the Baltic region, the Bank is particularly exposed to these worsening
economic conditions. The Bank expects that its financial condition and results of operations will suffer,
among other things through lower loan growth and higher loan losses as poor economic conditions in the
Baltic region persist or worsen. Latvia is examining multiple measures to rescue the economy, and has
sought aid from the International Monetary Fund and the European Union.
Within the banking sector, Parex banka was taken over by the Latvian government to prevent a chain of
actions that could have adversely affected the Baltic economies. Parex banka, Latvia’s second largest bank by
total assets, and the largest independent Baltic bank, received state guarantees to mitigate liquidity issues
and the Latvian government received ownership as part of this stabilization package.
The risk for a prolonged recession in the Baltic States has increased due to the global financial crisis and the
worsening economic conditions in Europe. Baltic households are facing a period of slow wage growth and
large wealth adjustments. Even if external and internal imbalances are improving, there is a risk that current
account deficits will remain high and that the Baltic region will experience continued financial difficulties.
Slower growth could also lead to increased budget deficits, and in combination with high inflation, the
adoption of the euro could be delayed. There is also a risk of devaluation, due to the high imbalances and the
recession. Devaluations are expected to lead to increased inflation, which could also lead to a more severe
recession. In addition, as large shares of mortgages are denominated in euro, a devaluation would also have a
negative impact on the financial and real estate markets, which in turn would have a material adverse effect
on the Bank’s business and results of operations in the Baltic region and on a consolidated basis.

Ukraine, Russia and Norway(3)
The Bank’s operations in Ukraine and Russia currently are far smaller and more limited in scope than those in
the Bank’s home markets, comprising 1% and 2% respectively, of the Bank’s profit in the first three quarters
of 2008.
GDP growth in Ukraine has averaged 7.7% per year for the last 7 years. The Bank’s opinion is that the
growth will decline substantially in 2009 as the financial crisis and falling steel prices are expected to have a
negative effect on the outlook, possibly resulting in zero growth or negative growth. The Ukrainian stock
market has fallen by some 80% this year. Domestic banks are adversely impacted by the shortage of liquidity
and the value of Ukrainian currency, the hryvnia, is depreciating against key indicators. The inflation rate
reached 26% in August 2008. A loan from the IMF amounting to U.S.$16,500 million should facilitate the
financing of the current account deficit over the coming year, and the government has adopted a
restructuring program focusing on financial stability, fiscal and monetary/currency policy.
Global economic conditions are also expected to cause a slowdown in Russia’s GDP growth. In the second
quarter 2008, GDP growth stood at 7.5%, but falling commodity prices and the financial crisis are expected
to dampen growth sharply. The Russian banking sector is adversely affected by the global financial turmoil.
The ruble has depreciated and capital is flowing out of the country. The Moscow stock market has fallen by
more than 70% this year. Inflation remains high in Russia (measuring 9% in the second quarter of 2008), but
is expected to slowly come down. Russia has the world’s third largest foreign currency reserves, as well as a
surplus in the current account and in the budget, which may help Russia maintain financial stability.
The Bank is exposed against negative effects of worsening political and economic conditions in Ukraine and
Russia. The risks for Ukraine and Russia include political turmoil, large depreciation of the currencies and
increased financial sector instability. The economic conditions may thus worsen more than expected, and
adversely impact the Bank and its financial results.
The price of energy has dropped dramatically in recent months, which affects some of the Bank’s clients in
Ukraine and Russia. In addition to this, some of the Bank’s clients in Norway could be affected by
developments in the oil, gas and shipping sectors. Any of the foregoing adverse market trends could have a
material adverse effect on the Bank’s business and its financial results.




(3)   Sources: Ukranian GDP figures from National Bank of Ukraine, inflation figures from State Statistics Committee of Ukraine and
               stock exchange figures from PFTS Stock Exchange. Russian GDP figures from Rosstat, inflation figures from Federal
               State Statistics Service and stock exchange figures from MICEX.



                                                               125
Interest rates
An interest rate increase of one percentage point would have increased the Bank’s net gains and losses on
items at fair value by SEK162 million for the nine month period ended September 30, 2008.
Changes in interest rates also affect future net interest income, the magnitude of the effect depending on
the remaining interest fixing period of the Bank’s fixed-rate assets, liabilities and derivatives and the extent
to which the Bank is able to match the interest rates on floating rate deposits and lending. The Bank’s income
is more sensitive to interest rate decreases than to interest rate increases, since a part of the Bank’s funding
is derived from deposits, which have low yielding interest rates. For more information relating to interest
rate risk management see ‘‘Risk Management.’’

Exchange rates
The Bank’s exposure to currency risk that could have an immediate effect on profit (which excludes
exposures related to holdings in foreign subsidiaries, goodwill and other intangible assets) is limited. The
effects of the Bank’s ownership of Hansabank are reported in Baltic Banking in the form of financing costs,
Group goodwill and amortization of the surplus values in the lending and deposit portfolios identified at the
time of the acquisition in 2005. For more information relating to exchange rate risk management, see ‘‘Risk
Management.’’

Financial Markets
Net commission income in the Asset Management and Insurance segment is directly impacted by
fluctuations in global securities markets because net commission income is related to the value of assets
under management. Accordingly, the Bank’s net commission income for the nine month period ended
September 30, 2008 was negatively impacted by the global declines in stock market prices, and volatility in
stock prices will continue to have a significant effect on the Bank’s results of operations. A decline in stock
market prices by 10% would have reduced the Bank’s net commission by SEK180 million in the nine month
period ended September 30, 2008.

Funding
The main funding sources of the Bank consist of deposits from the public, covered bonds and unsecured
issued debt. Both the Issuer and its mortgage subsidiary Swedbank Mortgage have a well diversified investor
base. In line with the funding strategy, as of September 30, 2008, more than 50% of the funding in the Bank
is in currencies other than SEK. Following the bankruptcy of Lehman Brothers in the fall of 2008, the
Riksbank, the Swedish National Debt Office and other European central banks, responding to the worsening
conditions in the financial markets, have opened different loan facilities for banks. The Bank has selectively
utilized loan facilities made available by the Swedish government as an additional source of funding.
For more information relating to funding, see ‘‘Liquidity and Capital Resources.’’

Swedish government guarantee plan
The Swedish government launched the Financial Stabilization Plan in October 2008 which provides for the
establishment of a medium-term credit guarantee plan (the ‘‘Guarantee Plan’’) of up to SEK1,500 billion, of
which up to SEK500 billion is for covered bonds with a term of three to five years. The principal objective of
the Guarantee Plan is to improve the liquidity of Swedish banks and credit institutions. For more information
regarding this guarantee plan see ‘‘Liquidity and Capital Resources’’ and ‘‘Banking Regulation and
Supervision etc.’’
Except for the Bank’s agreements with the Swedish National Debt Office under the Guarantee Plan
discussed in ‘‘Legal Considerations and Supplementary Information’’ there has been no significant change in
the financial position or market position of the Bank since the publication on October 23, 2008 of the interim
report relating to results for the nine month period ended September 30, 2008.

Corporate Income Tax in Estonia
Hansabank in Estonia does not pay corporate income tax until the profits are distributed to the parent
company. If the remaining profits in Hansabank were to be distributed, it would trigger a tax cost of up to
SEK3,360 million. No deferred tax has been booked since the Issuer can decide when a dividend distribution




                                                     126
should take place and that is not expected to happen in the near future. Accordingly, any possible future
dividend distributions are expected to relate to future profits.

Valuation of financial instruments at fair value
The fair value of financial instruments is determined based on quoted market prices in an active market. Fair
value for a financial asset or financial liability in an active market is the current bid or offer price times the
number of units of the instrument held. Where a trading portfolio contains both financial assets and financial
liabilities which are derivatives of the same underlying instrument, fair value is determined by valuing the
gross long and short positions at current mid market prices, with an adjustment at portfolio level to the net
open long or short position to amend the valuation to bid or offer prices.
When quoted market prices are not available, the Bank primarily uses generally accepted valuation models
such as discounting of future cash flows. These valuation models are based on observable market data, being
the prices of financial instruments that are as similar as possible and for which transactions have been
completed. When necessary these values are adjusted to best reflect the value of the Bank’s securities. These
valuation models may involve some element of estimation by the Bank, the extent of which depends on the
instrument’s complexity and the availability of market data.
Due to recent changes in the global economical market, the Bank is using valuation models more frequently
than it has in the past. For example, as of September 30, 2008 approximately 81% (SEK74 billion) of the
Bank’s interest-bearing debt securities that were valued at fair value were valued in accordance with the
Bank’s model, compared to approximately 5% (SEK6 billion) as of December 31, 2007. Accordingly, the fair
values as of September 30, 2008 are more subjective than those as of December 31, 2007.
For loans measured at fair value where observable market data on the credit margin are not available at the
time of measurement, the Bank uses the credit margin for the most recent transaction with the same
counterparty.
The table below shows financial instruments carried at fair value at September 30, 2008, by valuation
method.

                                                                                                                                              2008/09
                                                                                                                                   Quoted
                                                                                                                                   market      Valuation
SEKbn                                                                                                                              price(1)      models     Total

Assets
Treasury bills and other bills eligible to refinancing                                     with
  central banks etc. . . . . . . . . . . . . . . . . . . . . . . . .                       .....               .   .   .   .   .     17.4                   17.4
Loans to credit institutions . . . . . . . . . . . . . . . . . .                           .....               .   .   .   .   .                  58.3      58.3
Loans to the public . . . . . . . . . . . . . . . . . . . . . . . .                        .....               .   .   .   .   .                 481.9     481.9
Bonds and other interest-bearing securities . . . . . .                                    .....               .   .   .   .   .                  73.8      73.8
Shares and participating interests . . . . . . . . . . . . .                               .....               .   .   .   .   .      4.1          0.1       4.2
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  .....               .   .   .   .   .                  75.6      75.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     21.5        689.7      711.2

Liabilities
Amounts owed to credit institutions . . . .                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                  44.0      44.0
Deposits and borrowings from the public                        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                  70.8      70.8
Debt securities in issue etc. . . . . . . . . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                 627.9     627.9
Derivatives . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                  56.0      56.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       0.0       798.7      798.7

(1)   Financial assets and financial liabilities valued using unadjusted quoted prices in active markets for identical assets or liabilities.
      This category includes, for example, Treasury bills and listed shares.


Critical accounting policies and estimates
The Bank’s accounting policies are integral to understanding the financial condition and results of operations
presented in the consolidated financial statements and the related notes thereto. The Bank’s significant
accounting policies according to the 2007 financial statements are described in note 2 to the financial
statements appearing in section ‘‘Financial Information.’’ The preparation of financial statements requires the


                                                                                       127
Bank’s management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the reported amounts of income and expenses during the reported period. On an ongoing basis,
the Bank’s management evaluates its estimates and judgements, including those related to fair value of
financial instruments, allowance for impairment of loans and receivables and impairment of intangible
assets.
Management bases its estimates and judgements on historical experience and on various other factors that
are believed to be reasonable under the circumstances. Actual results may differ from estimates under
different assumptions or conditions.

Assets and liabilities in foreign currency
The consolidated financial statements are presented in SEK, which is also the Issuer’s functional currency and
presentation currency. Functional currency refers to the main currency used in an entity’s cash flows. Each
entity within the group determines its own functional currency.
Transactions in a currency other than the functional currency are initially recorded at the exchange rate
prevailing at the transaction day. Monetary assets and liabilities in foreign currency and non-monetary
assets in foreign currency measured at fair value are translated at the closing rates in effect prevailing at the
closing day. Outstanding forward exchange contracts are translated at closing day forward rates. Holdings of
foreign bank notes are translated at the buying rates for the notes as of the closing day. All gains and losses
on the translation of monetary items, including the currency component in forward exchange contracts, and
non-monetary items measured at fair value are recognized through profit or loss as changes in exchange
rates in net gains and losses on financial items at fair value.
Assets and liabilities in subsidiaries and associates with a functional currency other than SEK are translated
to the presentation currency at the closing day exchange rate. The income statements are translated at the
average rate for the financial year. Exchange rate differences that arise are recognized directly in equity. As a
result, exchange rate differences attributable to currency hedges of investments in foreign operations are
also taken directly to equity, taking into account deferred tax. This is applied when the requirements for
hedge accounting are met. Ineffectiveness in hedges is recognized directly through profit or loss in net gains
and losses on financial items at fair value. When subsidiaries and associates are divested, the accumulated
translation differences and exchange rate differences are recognized through profit or loss.

Classification of financial instruments
The Bank classifies financial instruments as follows: (i) financial instruments at fair value through profit or
loss, (ii) loans and receivables, (iii) held-to-maturity investments, and (iv) other financial liabilities.
All financial instruments are initially recognized at fair value, which corresponds to cost. Subsequent
measurements are made depending on the valuation category to which the financial instrument is
attributed. Financial instruments are recognized on the trade date when an acquisition agreement has been
entered into, with the exception of loans and receivables, which are recognized on the settlement date.
Financial assets are removed from the balance sheet when the right to obtain the cash flows from a financial
instrument has expired or the right to receive the cash flows is transferred to another party. Financial
liabilities are removed from the balance sheet when the obligation in the agreement has been discharged,
cancelled or expired.

Financial instruments at fair value through profit or loss
Financial instruments at fair value through profit or loss comprise instruments held for trading and all
derivatives (excluding those designated for hedge accounting according to the method for cash flow hedges
or hedges of net investments in foreign operations).
Financial instruments held for trading have been acquired for the purpose of selling or repurchasing in the
near term or are part of a portfolio for which there is evidence of a pattern of short-term profit-taking.
This category also includes other financial instruments that upon initial recognition have irrevocably been
designated as at fair value. The option to irrevocably measure financial instruments at fair value is used for
individual portfolios of loans, securities in issue and deposits, when they together with derivatives
essentially eliminate the portfolio’s aggregate interest rate risk. These financial instruments typically carry a
fixed contractual interest rate. Financial liabilities in insurance operations, where the customer bears the
investment risk are categorized in the same way when corresponding assets are also measured at fair value.


                                                      128
The fair value of financial instruments is determined based on quoted market prices in an active market. Fair
value for a financial asset or financial liability in an active market is the current bid or offer price times the
number of units of the instrument held. Where a trading portfolio contains both financial assets and financial
liabilities which are derivatives of the same underlying instrument, fair value is determined by valuing the
gross long and short positions at current mid market prices, with an adjustment at portfolio level to the net
open long or short position to amend the valuation to bid or offer prices.
When quoted market prices are not available, the Bank primarily uses generally accepted valuation models
such as discounting of future cash flows. These valuation models are based on observable market data, being
the prices of financial instruments that are as similar as possible and for which transactions have been
completed. When necessary these values are adjusted to best reflect the value of the Bank’s securities. These
valuation models may involve some element of estimation by the Bank, the extent of which depends on the
instrument’s complexity and the availability of market data.
Changes in value are recognized through profit or loss in net gains and losses on financial items at fair value.
For financial instruments in trading operations, the profit or loss also includes dividends from shares.
Changes in value owing to changes in exchange rates are recognized as changes in exchange rates in the
same profit or loss item. Changes in the value of financial liabilities owing to changes in the Bank’s credit
worthiness are also recognized separately when they arise. Decreases in value attributable to debtor
insolvency are attributed to loan losses, net.
As the primary driver of fair value is market prices, the continued global market volatility may have a
significant impact on fair value in future periods.

Loans and loan receivables
Loans are initially recognized at cost, which consists of the loan amount paid out less fees received and any
costs that constitute an integral part of the effective interest rate. The interest rate that produces the loan’s
cost as a result of the calculation of the present value of future payments is considered the effective interest
rate. The loan’s amortized cost is calculated by discounting the remaining future payments by the effective
interest rate. Interest income includes interest payments received and the change in the loan’s amortized
cost during the period, which produces a consistent return.
The Bank regularly reviews its loans to assess whether there is objective evidence to indicate an impairment
need for a loan or group of loans. If, after the loan is initially recognized, one or more events has occurred that
negatively impact estimated future cash flows (loss events), and the impact can be estimated reliably, the
Bank classifies the loan as impaired. All loans past due more than 60 days are impaired if not the collateral
materially exceeds the loan’s carrying amount. The amount of the impairment is calculated as the difference
between the loan’s carrying amount and the present value of estimated future cash flows discounted by the
loan’s original effective interest rate. The Bank determines first whether there is objective evidence for
impairment of each individual loan. Loans for which such evidence is lacking are included in portfolios with
similar credit risk characteristics. These portfolios are subsequently measured collectively in the event
objective evidence of impairment exists. Any impairment is then calculated for the portfolio as a whole.
Homogenous groups of loans with limited value and similar credit risk that have been individually identified
as having objective evidence of impairment are measured individually based on the loss risk in the portfolio
as a whole.
The Bank considers accounting estimates related to impairment of loans a key source of estimation
uncertainty because they are highly susceptible to change from period to period as the assumptions about
future cash flows are based on recent performance experience, and any significant difference between the
Bank’s probable losses and established losses will require the Bank to make provisions which, if significantly
different, could have a material impact on its future consolidated income statement and its consolidated
balance sheet.
The Bank uses management’s judgement to estimate the amount of any impairment loss in cases where a
borrower is experiencing financial difficulties and there are few available sources of historical data relating to
similar borrowers. Similarly, the Bank estimates changes in future cash flows based on past performance,
past customer behaviour, observable data indicating an adverse change in the payment status of other
borrowers in the relevant borrower’s group, and national or local economic conditions that correlate with
defaults on assets in the Bank. Management estimates are based on the historical loss experience for assets
with credit risk characteristics and objective evidence of impairment similar to those in the relevant




                                                       129
borrower’s group loans. Management uses its judgement to adjust observable data for the relevant
borrower’s group loans or receivables to reflect current circumstances not reflected in the historical data.

Held-to-maturity investments
Certain financial assets acquired to hold to maturity are categorized as held-to-maturity investments. These
instruments have fixed maturities, are not derivatives and were at initial recognition quoted on an active
market. These investments are initially recognized on their trade day at cost and subsequently at amortized
cost less any impairment. The Bank accounts for these instruments using the same methods as described
above in respect of loans and receivables.

Hedge accounting at fair value
Hedge accounting at fair value is applied in certain cases when the interest rate exposure in a recognized
financial asset or financial liability is hedged with derivatives. The hedged risk in the hedged instrument is
also measured at fair value. Both the change in the value of the hedging instrument, the derivative and the
change in the value of the hedged risk are recognized through profit or loss in net gains and losses on
financial items at fair value.

Cash flow hedges
Derivative transactions are sometimes made to hedge the exposure to variations in future cash flows
resulting from changes in interest rates or exchange rates. These hedges can be recognized as cash flow
hedges, whereby the effective portion of the change in the value of the derivative, the hedging instrument,
is recognized directly in equity. Any ineffective portion is recognized through profit or loss in net gains and
losses on financial items at fair value. When a projected cash flow leads to the recognition of a non-financial
item, any gains or losses on the hedging instrument are eliminated from equity and included in the
acquisition cost of the hedged item. If a projected cash flow leads to the recognition of a financial item, any
gains or losses on the hedging instrument are eliminated from equity and recognized through profit or loss in
the same periods that the hedged item affects profit or loss.

Repos
A repurchase transaction (or repo) is defined as a contract where the parties have agreed on the sale of
securities and the subsequent repurchase of corresponding assets at a predetermined price. In a repo, the
sold asset remains on the balance sheet and the payment received is recognized as a financial liability. The
securities sold are also recognized as a pledged asset. The proceeds paid for acquired securities are classified
as a loan to the selling party.

Provisions
A provision is recognized in the balance sheet when the Bank has a legal or constructive obligation arising
from past events and it is likely that an outflow of resources will be required to settle the obligation.
Estimated outflows are calculated at present value. Provisions are tested on each closing date and adjusted
when needed so that they correspond to the current estimate of the value of the obligations.

Impairment
For assets that are not assessed for impairment according to other standards, primarily intangible and
tangible assets, the Bank periodically determines whether there are indications of a decrease in value. If such
indications exist, the asset is assessed for impairment by estimating its recoverable amount. Assets with an
indefinite useful life are periodically assessed for impairment regardless of whether or not there are
indications that they have decreased in value. An asset’s recoverable amount is the higher of its fair value
less costs to sell and its value in use. If the carrying amount exceeds the recoverable amount, the asset is
reduced to its recoverable amount. When estimating value in use, estimated future cash flows are discounted
using a discount rate before tax that includes the market’s estimate of the time value of money and other
risks associated with the specific asset. Due to their subjective nature, these estimates could likely differ
from actual results, and it is possible these differences could be material.
An assessment is also made on each reporting date whether there are indications that the need for previous
impairments has decreased or no longer exists. If such indications exist, the recoverable amount is




                                                     130
determined. Previously impairment losses are reversed only if there were changes in the estimates made
when the impairment was recognized.

Goodwill impairment
Goodwill is the excess cost of an acquisition over the fair value of its net assets. The determination of fair
value of assets and liabilities of businesses acquired requires the exercise of management judgement; for
example those financial assets and liabilities for which there are no quoted prices and those non-financial
assets where valuations reflect estimates of market conditions. Different fair values would result in changes
to the goodwill arising and to the post-acquisition performance of the acquired entity. Goodwill is not
amortized but is tested for impairment annually or more frequently if events or changes in circumstances
indicate that it might be impaired. The Bank’s goodwill has arisen primarily from the acquisitions of
Hansabank and TAS-Kommerzbank (now OJSC Swedbank).
For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of
the Bank’s cash-generating units or groups of cash-generating units expected to benefit from the
combination. Goodwill impairment testing involves the comparison of the carrying value of a
cash-generating unit or group of cash generating units with its recoverable amount. The Bank has used
value in use as recoverable amount.
Calculating the value in use involves a number of judgmental areas: the preparation of cash flow forecasts
for periods that are beyond the normal requirements of management reporting; the assessment of the
discount rate appropriate to the business; estimation of the fair value of cash-generating units; and the
valuation of the separable assets of each business whose goodwill is being reviewed.
Should the estimated value in use change in future periods due to changes in the underlying assumptions, a
need for an impairment may occur which could have a significant negative impact on the Bank’s financial
position and results.




                                                    131
Results of operations
The segmented income statement data set out below does not include intra-group eliminations. The effects
of the Bank’s ownership of Hansabank are reported in Baltic Banking in the form of financing costs, Group
goodwill and amortization of the surplus values in the lending and deposit portfolios identified at the time of
the acquisition in 2005. The effects of the Bank’s ownership of OJSC Swedbank (formerly TAS-
Kommerzbank) are reported in International Banking.
                                                                        For the nine month period
                                                                          ended September 30,         For the year ended December 31,
SEKm                                                                         2008            2007      2007           2006               2005
Swedish Banking
Net interest income . . . . . . . . . . . . . . . . .               .        8,810           8,774    11,701         11,468             12,298
Net commission income . . . . . . . . . . . . . . .                 .        3,120           3,321     4,504          4,174              3,894
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .           69             219      335             408                540
Share of profit or loss of associates . . . . . . .                 .          309             279      331             230                205
Other income . . . . . . . . . . . . . . . . . . . . .              .          860             530      807             667              2,907
Total income . . . . . . . . . . . . . . . . . . . . . .                    13,168          13,123    17,678         16,947         19,844
Baltic Banking
Net interest income . . . . . . . . . . . . . . . . .               .        4,433           3,775     5,248          3,331              2,561
Net commission income . . . . . . . . . . . . . . .                 .        1,428           1,377     1,854          1,517              1,094
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .          390             653      816             603               435
Net insurance . . . . . . . . . . . . . . . . . . . . .             .          210             128      212              99                19
Share of profit or loss of associates . . . . . . .                 .            2               4        7               6                 4
Other income . . . . . . . . . . . . . . . . . . . . .              .          259             160      217             169                92
Total income . . . . . . . . . . . . . . . . . . . . . .                     6,722           6,097     8,354          5,725             4,205
International Banking
Net interest income . . . . . . . . . . . . . . . . .               .        1,415             799     1,150            582               241
Net commission income . . . . . . . . . . . . . . .                 .          257             223       304            208                82
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .          130              57       87              48                14
Other income . . . . . . . . . . . . . . . . . . . . .              .           38              13       23              13                23
Total income . . . . . . . . . . . . . . . . . . . . . .                     1,840           1,092     1,564            851               360
Swedbank Markets
Net interest income . . . . . . . . . . . . . . . . .               .        1,125             679     1,179            714               697
Net commission income . . . . . . . . . . . . . . .                 .          797             936     1,333          1,377               812
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .          152             586      723           1,151               902
Share of profit or loss of associates . . . . . . .                 .            —               6        2               —                25
Other income . . . . . . . . . . . . . . . . . . . . .              .           37              21       35              35                78
Total income . . . . . . . . . . . . . . . . . . . . . .                     2,111           2,228     3,272          3,277             2,514
Asset Management and Insurance
Net interest income . . . . . . . . . . . . . . . . .               .           77              62        83             33                 35
Net commission income . . . . . . . . . . . . . . .                 .        1,217           1,453     1,868          1,601              1,258
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .           (4)              3        2               2                11
Net insurance . . . . . . . . . . . . . . . . . . . . .             .          100             133      194             150               121
Other income . . . . . . . . . . . . . . . . . . . . .              .           31              27       36              42                40
Total income . . . . . . . . . . . . . . . . . . . . . .                     1,421           1,678     2,183          1,828             1,465
Shared Services and Group Staffs
Net interest income . . . . . . . . . . . . . . . . .               .           89            (191)     (196)           (141)             (145)
Net commission income . . . . . . . . . . . . . . .                 .            —              34        17              (9)               30
Net gains and losses on financial items at fair
  value . . . . . . . . . . . . . . . . . . . . . . . . .           .          381            (215)     (246)           523                912
Net insurance . . . . . . . . . . . . . . . . . . . . .             .           41              53        61             80                 80
Share of profit or loss of associates . . . . . . .                 .           65              65        84            (14)                67
Other income . . . . . . . . . . . . . . . . . . . . .              .        2,416           2,253     3,029          3,022              3,112
Total income . . . . . . . . . . . . . . . . . . . . . .                     2,992           1,999     2,749          3,461             4,056
Consolidated total income . . . . . . .         .   .   .   .   .   .       26,117          24,050    32,924         29,197         29,460
Consolidated staff costs . . . . . . . . .      .   .   .   .   .   .        6,802           6,023     8,134          7,253          6,837
Consolidated profit-based staff costs .         .   .   .   .   .   .          688           1,136     1,658          1,307          1,354
Consolidated other expenses . . . . . .         .   .   .   .   .   .        4,990           4,521     6,222          5,920          5,362
Consolidated depreciation/amortization          .   .   .   .   .   .          703             513       705            659            603
Consolidated total expenses . . . . . . . . . . .                           13,183          12,193    16,719         15,139         14,156
Consolidated profit before loan losses . . . .                              12,934          11,857    16,205         14,058         15,304
Consolidated loan losses, net . . . . . . . . . . . .                        1,523             381       619            (205)          294
Consolidated operating profit . . . . . . . . . .                           11,411          11,476    15,586         14,263         15,010
Consolidated tax expense . . . . . . . . . . . . . .                         2,380           2,500     3,450          3,211          2,781
Consolidated profit for the period . . . . . . .                             9,031           8,976    12,136         11,052         12,229
Consolidated profit for the period
  attributable to:
Shareholders of Swedbank AB . . . . . . . . . . .                            8,972           8,888    11,996         10,880             11,879
Consolidated minority interest . . . . . . . . . . .                            59              88      140             172               350




                                                                                      132
For information on balance sheet data, see ‘‘Selected Statistical and Other Information—Average Balance
Sheet Information and Information on Interest Rates.’’

Nine month period ended September 30, 2008 compared to nine month period ended
September 30, 2007
Swedish Banking

                                                                                                                                                                                               For the nine month period
                                                                                                                                                                                                 ended September 30,
SEKm                                                                                                                                                                                                2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       8,810          8,774
Net commission income . . . . . . . . . . . . . . . . . . . . . . .                                                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,120          3,321
Net gains and losses on financial items at fair value                                                              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          69            219
Share of profit or loss of associates . . . . . . . . . . . . .                                                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         309            279
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         860            530
Total income . . . . . . . . . . . .       ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     13,168         13,123
Staff costs . . . . . . . . . . . . . .    ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      2,980          2,959
Profit-based staff costs . . . .           ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        182            241
Other general administrative               expenses                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      3,447          3,451
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . .                                                                                      ......                     6,609           6,651
Depreciation/amortization and impairments of tangible and intangible                                                                                                   fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                               ......                        82              70
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                     ......                     6,691           6,721
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                           6,477           6,402
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    307              (51)
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    6,170           6,453
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                 1,657           1,807
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                       4,513           4,646

Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                              4,503          4,637
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                       10              9
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                  29,159         26,174
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                             20.6           23.6
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         926            832
Deposits . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         322            300
Mutual funds & insurance . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         203            263
Other investment volume . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          26             23
Risk-weighted assets, old rules                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         667            601
Total assets . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,072            910

      Profit for the period attributable to the shareholders of Swedbank AB
Profit for the period attributable to shareholders of Swedbank AB from Swedish Banking for the nine-month
period ended September 30, 2008 was SEK4,503 million (accounting for 50% of the consolidated profit for
the period), compared to SEK4,637 million in the nine month period ended September 30, 2007 (or 52% of
the consolidated profit for the period). Return on allocated equity was 20.6% in the nine month period ended
September 30, 2008, compared to 23.6% in the nine month period ended September 30, 2007. The cost/
income ratio was 0.51 in the nine month period ended September 30, 2008, compared to 0.51 in the nine
month period ended September 30, 2007.




                                                                                                           133
      Net interest income
Net interest income increased by SEK36 million to SEK8,810 million in the nine month period ended
September 30, 2008, compared to SEK8,774 million in the nine-month period ended September 30, 2007.
The components of net interest income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  5,179          5,225
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 3,364          2,712
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  267            837
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               8,810           8,774

Increases in deposit and lending volumes raised net interest income by SEK1,065 million. The lending margin
decreased by 11 basis points to 0.77%, which affected net interest income negatively by SEK753 million. For
deposits, the interest margin improved by 11 basis points to 1.39%, which affected net interest income
positively by SEK263 million. Other effects were SEK539 million lower. Net interest income for Swedbank
Mortgage decreased by SEK506 million.

      Net commission income
Net commission income decreased by 6% to SEK3,120 million in the nine-month period ended September 30,
2008, compared to SEK3,321 million in the nine-month period ended September 30, 2007. The components
of net commission income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Payment processing .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,534          1,432
Lending . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         185            190
Mutual funds . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,033          1,293
Insurance . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         323            324
Securities . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         236            338
Corporate finance . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           1              1
Other . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (192)          (257)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               3,120           3,321

The primary drivers of this decrease were lower commission income from mutual fund products and
unit-linked savings.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value decreased by 68% to SEK69 million in the nine-month
period ended September 30, 2008, compared to SEK219 million in the nine-month period ended
September 30, 2007. The components of net gains and losses on financial items at fair value are set out
below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Swedbank Mortgage AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                              (158)            19
MasterCard shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                          110             89
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  117            111
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   69            219

The primary driver of this decrease was related to decreases in Swedbank Mortgage AB’s lending and
funding, including derivatives marked-to-model, offset by a capital gain on shares in MasterCard during the
second quarter of 2008.



                                                                                                                             134
      Share of the profit or loss of associates
Share of the profit or loss of associates increased by 11% to SEK309 million in the nine-month period ended
September 30, 2008, compared to SEK279 million in the nine-month period ended September 30, 2007,
primarily due to higher profit from EnterCard.

      Other income
Other income was SEK860 million in the nine-month period ended September 30, 2008, compared to
SEK530 million in the nine-month period ended September 30, 2007, partially reflecting the SEK440 million
in branch transfers in 2008 and the SEK40 million capital gain from the sale of CEK AB in 2007.

      Staff costs, profit-based staff costs
Staff costs increased by 1% to SEK2,980 million in the nine-month period ended September 30, 2008,
compared to SEK2,959 million in the nine-month period ended September 30, 2007, primarily due to salary
increases. Profit-based staff costs decreased by 24% to SEK182 million in the nine-month period ended
September 30, 2008, compared to SEK241 million in the nine-month period ended September 30, 2007,
primarily due to lower allocations to incentive programs for branch employees.

      Other general administrative expenses
Other general administrative expenses decreased by SEK4 million to SEK3,447 million in the nine-month
period ended September 30, 2008, compared to SEK3,451 million in the nine-month period ended
September 30, 2007.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased by 17% to
SEK82 million in the nine-month period ended September 30, 2008, compared to SEK70 million in the
nine-month period ended September 30, 2007.

      Loan losses, net
Loan losses, net were SEK307 million in the nine-month period ended September 30, 2008, compared to net
recoveries of SEK51 million in the nine-month period ended September 30, 2007. The components of loan
losses are set out below:

                                                                                                                                            For the nine month period
                                                                                                                                              ended September 30,
SEKm                                                                                                                                             2008           2007

Loans assessed individually:
  Established loan losses . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         414            138
  Reversal of previous provisions . . . . . . . . . . . . . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (200)           (83)
  Provision for probable loan losses . . . . . . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         184            130
  Recoveries from previous years’ established loan losses                       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (33)           (73)
  Recovered provisions . . . . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (67)           (91)
Net expense for individually assessed loans . . . . . . . . . . . . . . . . . . . . .                                   .   .   .   .   .         298             21
Allocations/withdrawals from collective provisions . . . . . . . . . . . . . . . .                                      .   .   .   .   .          (62)         (104)
Net expense for collectively valued homogenous claims . . . . . . . . . . . .                                           .   .   .   .   .           70            42
Net expense for discharged guarantees and other contingent liabilities                                                  .   .   .   .   .            1           (10)
Net loan loss expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         307            (51)

The primary driver of this increase was the effects of the cyclical economic downturn in Sweden. The loan
loss ratio was 0.05% in the nine-month period ended September 30, 2008, compared to a negative loan loss
ratio of 0.01% in the nine-month period ended September 30, 2007.

      Tax expense
Profit before tax amounted to SEK6,170 million in the nine-month period ended September 30, 2008,
compared to SEK6,453 million in the nine-month period ended September 30, 2007, and the tax expense



                                                                    135
was SEK1,657 million in the nine-month period ended September 30, 2008, compared to SEK1,807 million in
the nine-month period ended September 30, 2007, corresponding to an effective tax rate of 27% in the
nine-month period ended September 30, 2008, compared to 28% in the nine-month period ended
September 30, 2007.

Baltic Banking

                                                                                                                                                                                                For the nine month period
                                                                                                                                                                                                  ended September 30,
SEKm                                                                                                                                                                                                 2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       4,433          3,775
Net commission income . . . . . . . . . . . . . . . . . . . . . . .                                                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,428          1,377
Net gains and losses on financial items at fair value                                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         390            653
Share of profit or loss of associates . . . . . . . . . . . . .                                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           2              4
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         469            288
Total income . . . . . . . . . . . .        ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      6,722           6,097
Staff costs . . . . . . . . . . . . . .     ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,287           1,048
Profit-based staff costs . . . .            ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         61             409
Other general administrative                expenses                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,113             891
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                      2,461           2,348
Depreciation/amortization and impairments of tangible and intangible fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                  291            208
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     2,752           2,556
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                            3,970           3,541
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     823             334
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     3,147           3,207
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    266             298
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                        2,881           2,909

Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               2,881          2,909
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                   21,980         20,748
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                              17.5           18.7
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         201            165
Deposits . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         106             92
Mutual funds & insurance . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          17             18
Risk-weighted assets, old rules                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         188            160
Total assets . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         263            223

      Profit for the period attributable to the shareholders of Swedbank AB
Profit for the period attributable to the shareholders of Swedbank AB from Baltic Banking for the
nine-month period ended September 30, 2008 was SEK2,881 million (accounting for 32% of the
consolidated profit for the period), compared to SEK2,909 million in the nine-month period ended
September 30, 2007 (or 33% of the consolidated profit for the period). Return on allocated equity was 17.5%
in the nine-month period ended September 30, 2008, compared to 18.7% in the nine-month period ended
September 30, 2007. The cost/income ratio was 0.41 in the nine-month period ended September 30, 2008,
compared to 0.42 in the nine-month period ended September 30, 2007.




                                                                                                            136
      Net interest income
Net interest income increased by 17% to SEK4,433 million in the nine-month period ended September 30,
2008, compared to SEK3,775 million in the nine-month period ended September 30, 2007. The components
of net interest income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  2,873          2,331
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 1,704          1,553
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 (144)          (109)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               4,433           3,775

The primary drivers of this increase were increases in deposit and lending volumes in line with market
growth, which increased net interest income by SEK841 million. However, several items partially offset these
increases. The lending margin decreased by 14 basis points to 2.14%, which reduced net interest income by
SEK265 million, primarily due to increased funding costs that could not be fully passed on to lending
customers. In terms of deposits, the interest margin decreased by 12 basis points to 2.20%, which reduced
net interest income by SEK137 million. Falling local money market rates, combined with higher price
competition for deposits, explain the margin pressure, particularly in Latvia. Other effects increased net
interest income by SEK219 million.

      Net commission income
Net commission income increased by 4% to SEK1,428 million in the nine-month period ended September 30,
2008, compared to SEK1,377 million in the nine-month period ended September 30, 2007. The components
of net commission income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Payment processing .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         942            822
Lending . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         168            169
Mutual funds . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         253            220
Insurance . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          25             50
Securities . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          67            143
Corporate finance . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           1              0
Other . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (28)           (27)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               1,428           1,377

Increases in the amount of commissions for payment processing were the primary drivers of this increase.
The increase was partially offset by decreases in income related to the performance of stock markets.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value decreased by 40% to SEK390 million in the nine-month
period ended September 30, 2008, compared to SEK653 million in the nine-month period ended




                                                                                                                             137
September 30, 2007. The components of net gains and losses on financial items at fair value are set out
below:

                                                                                                                                                                                                      For the nine month period
                                                                                                                                                                                                        ended September 30,
SEKm                                                                                                                                                                                                       2008           2007

Equity trading . . . . . . . . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (279)           110
Interest-bearing securities .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (26)            45
Other financial instruments               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         115            (10)
Foreign exchange . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         544            456
Other . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          36             52
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                       390            653

The primary drivers of this decrease were slower customer activity, lower trading income and the negative
change in the value of assets in the insurance operations.

      Other income
Other income increased by 63% to SEK469 million in the nine-month period ended September 30, 2008,
compared to SEK288 million in the nine-month period ended September 30, 2007, primarily due to a capital
gain of SEK66 million on the sale of the partly owned Estonian card processing company Pankade
Kaardikikeskus (PKK) and the income from insurance operations which increased by SEK82 million.

      Staff costs, profit-based staff costs
Staff costs increased by 23% to SEK1,287 million in the nine-month period ended September 30, 2008,
compared to SEK1,048 million in the nine-month period ended September 30, 2007, primarily due to higher
salaries in line with general market trends.
The number of full-time employees decreased by 321 to 8,791, 145 in Estonia and 245 in Lithuania, while
the number increased by 69 in Latvia. In 2008, the Bank closed 22 branches (10 in Estonia, three in Latvia
and nine in Lithuania) to increase operational efficiency in the branch network. Profit-based compensation
decreased by 85% to SEK61 million in the nine-month period ended September 30, 2008, compared to
SEK409 million in the nine-month period ended September 30, 2007, primarily due to a decrease of
SEK185 million in reserves resulting from lower provision requirements for profit sharing.

      Other general administrative expenses
Other general administration expenses increased by 25% to SEK1,113 million in the nine-month period
ended September 30, 2008, compared to SEK891 million in the nine-month period ended September 30,
2007, primarily due to higher expenses for premises and information technology as well as expenses for
organizational changes.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased by
SEK83 million to SEK291 million in the nine-month period ended September 30, 2008, compared to
SEK208 million in the nine-month period ended September 30, 2007, primarily due to depreciation of the
‘‘Hansabank’’ brand of SEK63 million.




                                                                                                                  138
      Loan losses, net
Loan losses, net increased by 146% to SEK823 million in the nine-month period ended September 30, 2008,
compared to SEK334 million in the nine-month period ended September 30, 2007. The components of loan
losses are set out below:

                                                                                                                                            For the nine month period
                                                                                                                                              ended September 30,
SEKm                                                                                                                                             2008           2007

Loans assessed individually:
  Established loan losses . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          92             41
  Reversal of previous provisions . . . . . . . . . . . . . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (45)           (23)
  Provision for probable loan losses . . . . . . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         475            128
  Recoveries from previous years’ established loan losses                       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (23)           (21)
  Recovered provisions . . . . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (43)           (22)
Net expense for individually assessed loans . . . . . . . . . . . . . . . . . . . . .                                   .   .   .   .   .         456            103
Allocations/withdrawals from collective provisions . . . . . . . . . . . . . . . .                                      .   .   .   .   .         261            144
Net expense for collectively valued homogenous claims . . . . . . . . . . . .                                           .   .   .   .   .         113             45
Net expense for discharged guarantees and other contingent liabilities                                                  .   .   .   .   .          (7)            42
Net loan loss expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         823            334

The primary driver was the increase of provisions for private customers and real estate management
companies in Latvia and Estonia. The loan loss ratio was 0.62% in the nine-month period ended
September 30, 2008, compared to 0.35% in the nine-month period ended September 30, 2007.

      Tax expense
The tax expense was SEK266 million in the nine-month period ended September 30, 2008, compared to
SEK298 million in the nine-month period ended September 30, 2007, corresponding to an effective tax rate
of 8% in the nine-month period ended September 30, 2008, compared to 9% in the nine-month period ended
September 30, 2007.




                                                                    139
International Banking

                                                                                                                                                                                                For the nine month period
                                                                                                                                                                                                  ended September 30,
SEKm                                                                                                                                                                                                 2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,415            799
Net commission income . . . . . . . . . . . . . . . . . . . . . . .                                                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         257            223
Net gains and losses on financial items at fair value                                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         130             57
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          38             13
Total income . . . . . . . . . . . .        ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,840           1,092
Staff costs . . . . . . . . . . . . . .     ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        508             271
Profit-based staff costs . . . .            ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         81              25
Other general administrative                expenses                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        379             267
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                         968            563
Depreciation/amortization and impairments of tangible and intangible fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    90             36
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     1,058             599
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               782            493
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                      230            109
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                        552            384
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     165            104
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                           387            280

Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 387            280
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    8,480          3,892
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                6.1            9.6
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          69              34
Deposits . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          12              11
Mutual funds & insurance . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           1               2
Risk-weighted assets, old rules                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          73              42
Total assets . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         110              64

      Profit for the period attributable to the shareholders of Swedbank AB
Profit for the period attributable to the shareholders of Swedbank AB from International Banking for the
nine-month period ended September 30, 2008 was SEK387 million (accounting for 4% of the consolidated
profit for the period), compared to SEK280 million in the nine-month period ended September 30, 2007 (or
3% of the consolidated profit for the period). Return on allocated equity was 6.1% in the nine-month period
ended September 30, 2008, compared to 9.6% in the nine-month period ended September 30, 2007. The
cost/income ratio was 0.58 in the nine-month period ended September 30, 2008, compared to 0.55 in the
nine-month period ended September 30, 2007. TAS-Kommerzbank (now OJSC Swedbank) was acquired in
July 2007. The net profit from OJSC Swedbank for the nine-month period ended September 30, 2008
amounted to SEK130 million compared to SEK17 million for the nine-month period ended September 30,
2007.




                                                                                                            140
      Net interest income
Net interest income increased by 77% to SEK1,415 million in the nine-month period ended September 30,
2008, compared to SEK799 million in the nine-month period ended September 30, 2007. The components of
net interest income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    882            584
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   126             79
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  407            136
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               1,415             799

The primary drivers of this increase were the inclusion of Ukrainian Banking after the acquisition in July 2007
and expansion of operations in Russia and the Nordic region. Net interest income in Ukrainian Banking
increased by SEK569 million and amounted to SEK749 million in the nine-month period ended September 30,
2008, compared to SEK180 million in the nine-month period ended September 30, 2007.

      Net commission income
Net commission income increased by 15% to SEK257 million in the nine-month period ended September 30,
2008, compared to SEK223 million in the nine-month period ended September 30, 2007.

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Payment processing .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           75             40
Lending . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           44             23
Mutual funds . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           16             26
Insurance . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            2              8
Securities . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           22             35
Other . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           98             91
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  257            223

The primary drivers of this increase were the inclusion of Ukrainian Banking after the acquisition in July 2007
and higher commissions received for payment processing. Net commission income in Ukrainian Banking
increased by SEK52 million and amounted to SEK74 million in the nine-month period ended September 30,
2008, compared to SEK22 million in the same period in 2007.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value increased by 128% to SEK130 million in the nine-month
period ended September 30, 2008, compared to SEK57 million in the nine-month period ended
September 30, 2007, primarily due to changes in exchange rates in Ukrainian Banking, that was included in
July 2007, and Russian Banking. Net gains and losses on financial items at fair value in Ukrainian Banking
increased by SEK34 million and amounted to SEK71 million in the nine-month period ended September 30,
2008, compared to SEK37 million in the nine-month period ended September 30, 2007.

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Change in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                               104              43
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   26              14
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  130             57




                                                                                                                             141
      Other income
Other income increased by 192% to SEK38 million in the nine-month period ended September 30, 2008,
compared to SEK13 million in the nine-month period ended September 30, 2007, primarily due to reversed
tax on lease assets in Russian Banking operations.

      Staff costs, profit-based staff costs
Staff costs increased by 87% to SEK508 million in the nine-month period ended September 30, 2008,
compared to SEK271 million in the nine-month period ended September 30, 2007, primarily due to the
inclusion of Ukrainian Banking in the second half of 2007. Staff costs in Ukrainian Banking increased by
SEK165 million and amounted to SEK233 million in the nine-month period ended September 30, 2008,
compared to SEK68 million in the nine-month period ended September 30, 2007. Profit-based staff costs
increased by 224% to SEK81 million in the nine-month period ended September 30, 2008, compared to
SEK25 million in the nine-month period ended September 30, 2007, primarily due to the inclusion of
Ukrainian Banking in the second half of 2007. Profit-based staff costs in Ukrainian Banking amounted to
SEK44 million in the nine-month period ended September 30, 2008, compared to SEK nil in the nine-month
period ended September 30, 2007.

      Other general administrative expenses
Other general administrative expenses increased by 42% to SEK379 million in the nine-month period ended
September 30, 2008, compared to SEK267 million in the nine-month period ended September 30, 2007,
primarily due to the inclusion of Ukrainian Banking after its acquisition in July 2007. Other general
administrative expenses in Ukrainian Banking increased by SEK148 million and amounted to SEK188 million
in the nine-month period ended September 30, 2008, compared to SEK40 million in the nine-month period
ended September 30, 2007.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased by 150% to
SEK90 million in the nine-month period ended September 30, 2008, compared to SEK36 million in the
nine-month period ended September 30, 2007, primarily as a result of the acquisition of Ukrainian Banking
and the related amortization of identified surplus values in connection with the acquisition of TAS-
Kommerzbank (now OJSC Swedbank).

      Loan losses, net
Loan losses net increased by 111% to SEK230 million in the nine-month period ended September 30, 2008,
compared to SEK109 million in the nine-month period ended September 30, 2007. The components of loan
losses are set out below:

                                                                                                                                            For the nine month period
                                                                                                                                              ended September 30,
SEKm                                                                                                                                             2008           2007

Loans assessed individually:
  Established loan losses . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          26               0
  Reversal of previous provisions . . . . . . . . . . . . . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (20)              0
  Provision for probable loan losses . . . . . . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         178               8
  Recoveries from previous years’ established loan losses                       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           0               1
  Recovered provisions . . . . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (59)              0
Net expense for individually assessed loans . . . . . . . . . . . . . . . . . . . . .                                   .   .   .   .   .         125              9
Allocations/withdrawals from collective provisions . . . . . . . . . . . . . . . .                                      .   .   .   .   .         105            101
Net expense for collectively valued homogenous claims . . . . . . . . . . . .                                           .   .   .   .   .           1              0
Net expense for discharged guarantees and other contingent liabilities                                                  .   .   .   .   .          (1)            (1)
Net loan loss expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         230            109

The primary driver of this increase was the inclusion of Ukrainian Banking in the second half of 2007. The
loan loss ratio was 0.75% in the nine-month period ended September 30, 2008, compared to 0.61% in the
nine-month period ended September 30, 2007. Loan losses, net in Ukrainian Banking amounted to



                                                                    142
SEK140 million in the nine-month period ended September 30, 2008, compared to SEK80 million in the
nine-month period ended September 30, 2007.

      Tax expense
Profit before tax amounted to SEK552 million in the nine-month period ended September 30, 2008,
compared to SEK384 million in the nine-month period ended September 30, 2007, and the tax expense was
SEK165 million in the nine-month period ended September 30, 2008, compared to SEK104 million in the
nine-month period ended September 30, 2007, corresponding to an effective tax rate of 30% in the
nine-month period ended September 30, 2008, compared to 27% in the nine-month period ended
September 30, 2007.

Swedbank Markets

                                                                                                                                                                                                For the nine month period
                                                                                                                                                                                                  ended September 30,
SEKm                                                                                                                                                                                                 2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,125            679
Net commission income . . . . . . . . . . . . . . . . . . . . . . .                                                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         797            936
Net gains and losses on financial items at fair value                                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         152            586
Share of profit or loss of associates . . . . . . . . . . . . .                                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           0              6
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          37             21
Total income . . . . . . . . . . . .        ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      2,111           2,228
Staff costs . . . . . . . . . . . . . .     ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        558             460
Profit-based staff costs . . . .            ........                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        275             382
Other general administrative                expenses                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        511             482
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                      1,344           1,324
Depreciation/amortization and impairments of tangible and intangible fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    10              8
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     1,354           1,332
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               757            896
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                      169              0
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                        588            896
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     168            250
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                           420            646

Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 371            567
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                        49             79
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    3,220          3,365
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                              15.4           22.5
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          22             12
Deposits . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          17             27
Mutual funds & insurance . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           0              2
Other investment volumes . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          32             29
Risk-weighted assets, old rules                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          42             40
Total assets . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         536            424

      Profit for the period attributable to the shareholders of Swedbank AB
Profit for the period attributable to the shareholders of Swedbank AB from Swedbank Markets for the
nine-month period ended September 30, 2008 was SEK371 million (accounting for 4% of the consolidated
profit for the period), compared to SEK567 million in the nine-month period ended September 30, 2007 (or
6% of the consolidated profit for the period). Return on allocated equity was 15.4% in the nine-month period
ended September 30, 2008, compared to 22.5% in the nine-month period ended September 30, 2007. The




                                                                                                            143
cost/income ratio was 0.64 in the nine-month period ended September 30, 2008, compared to 0.60 in the
nine-month period ended September 30, 2007.

      Net interest income
Net interest income increased by 66% to SEK1,125 million in the nine-month period ended September 30,
2008, compared to SEK679 million in the nine-month period ended September 30, 2007, primarily due to
higher trading income.

      Net commission income
Net commission income decreased by 15% to SEK797 million in the nine-month period ended September 30,
2008, compared to SEK936 million in the nine-month period ended September 30, 2007. The components of
net commission income are set out below:

                                                                                                                                                                                                                 For the nine month period
                                                                                                                                                                                                                   ended September 30,
SEKm                                                                                                                                                                                                                  2008           2007

Payment processing .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         (12)           (13)
Lending . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         136            124
Securities . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         358            427
Corporate finance . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         217            393
Other . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          98              5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                  797            936

The primary drivers of this decrease were lower brokerage income and lower corporate finance income.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value decreased by 74% to SEK152 million in the nine-month
period ended September 30, 2008, compared to SEK586 million in the nine-month period ended
September 30, 2007.
The decrease in net gains and losses on financial items at fair value is primarily due to revaluations of the
credit bond portfolio in the nine-month period ended September 30, 2008. Other net gains and losses on
financial items at fair value primarily consists of interest, foreign exchange and stock trading.

      Staff costs, profit-based staff costs
Staff costs increased by 21% to SEK558 million in the nine-month period ended September 30, 2008,
compared to SEK460 million in the nine-month period ended September 30, 2007, primarily due to increased
number of employees and higher salaries. Profit-based staff costs decreased by 28% to SEK275 million in the
nine-month period ended September 30, 2008, compared to SEK382 million in the nine-month period ended
September 30, 2007.

      Other general administrative expenses
Other general administrative expenses increased by 6% to SEK511 million in the nine-month period ended
September 30, 2008, compared to SEK482 million in the nine-month period ended September 30, 2007.

      Loan losses, net
Loan losses amounted to SEK169 million net in the nine-month period ended September 30, 2008, compared
to SEKnil in the nine-month period ended September 30, 2007. The SEK169 million is a provision for probable
losses in relation to the Bank’s unsecured exposure to Lehman Brothers with respect to derivative and bond
transactions, corresponding to a loan loss ratio of 1.61%.




                                                                                                                             144
Asset Management and Insurance

                                                                                                                                                                                   For the nine month period
                                                                                                                                                                                     ended September 30,
SEKm                                                                                                                                                                                    2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .                                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          77             62
Net commission income . . . . . . . . . . . . . . . . . . . . . . .                                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,217          1,453
Net gains and losses on financial items at fair value                                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          (4)             3
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         131            160
Total income . . . . . . . . . . . .        ........       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,421           1,678
Staff costs . . . . . . . . . . . . . .     ........       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        281             254
Profit-based staff costs . . . .            ........       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         26              33
Other general administrative                expenses       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        328             368
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                            635            655
Depreciation/amortization and impairments of tangible and intangible fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                       24              3
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           659            658
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           762          1,020
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        181            251
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                              581            769

Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    581            769
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                       2,175          1,715
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                 35.6           59.8
Business volumes, SEKbn
Mutual funds & insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                 350            415
Other investment volumes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                 220            202
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        65             78

      Profit for the period attributable to the shareholders of Swedbank AB
Profit for the period attributable to the shareholders of Swedbank AB from Asset Management and
Insurance for the nine-month period ended September 30, 2008 was SEK581 million (accounting for 6% of
the consolidated profit for the period), compared to SEK769 million in the nine-month period ended
September 30, 2007 (or 9% of the consolidated profit for the period). Return on allocated equity was 35.6%
in the nine-month period ended September 30, 2008, compared to 59.8% in the nine-month period ended
September 30, 2007. The cost/income ratio was 0.46 in the nine-month period ended September 30, 2008,
compared to 0.39 in the nine-month period ended September 30, 2007.

      Net interest income
Net interest income increased by 24% to SEK77 million in the nine-month period ended September 30, 2008,
compared to SEK62 million in the nine-month period ended September 30, 2007.

      Net commission income
Net commission income decreased by 16% to SEK1,217 million in the nine-month period ended
September 30, 2008, compared to SEK1,453 million in the nine-month period ended September 30, 2007,




                                                                                               145
primarily due to the lower value of assets under management as a result of falling stock prices. The principal
components of net commission income are set out below:

                                                                                                                        For the nine month period
                                                                                                                          ended September 30,
SEKm                                                                                                                         2008           2007

Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              971          1,157
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           246            295
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,217           1,453

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value were a loss of SEK4 million in the nine-month period
ended September 30, 2008, compared to a gain of SEK3 million in the nine-month period ended
September 30, 2007.

      Other income
Other income decreased by 18% to SEK131 million in the nine-month period ended September 30, 2008,
compared to SEK160 million in the nine-month period ended September 30, 2007, primarily due to lower net
insurance income.

      Staff costs, profit-based staff costs
Staff costs increased by 11% to SEK281 million in the nine-month period ended September 30, 2008,
compared to SEK254 million in the nine-month period ended September 30, 2007, primarily due to an
increased number of employees and higher salaries. Profit-based staff costs decreased by 21% to
SEK26 million in the nine-month period ended September 30, 2008, compared to SEK33 million in the
nine-month period ended September 30, 2007.

      Other general administrative expenses
Other general administrative expenses decreased by 11% to SEK328 million in the nine-month period ended
September 30, 2008, compared to SEK368 million in the nine-month period ended September 30, 2007,
primarily due to lower consulting costs.




                                                                            146
Shared Services and Group Staffs
                                                                                                                                                             For the nine month period
                                                                                                                                                               ended September 30,
SEKm                                                                                                                                                              2008           2007

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         89             (191)
Net commission income . . . . . . . . . . . . . . . . . . . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          0               34
Net gains and losses on financial items at fair value                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        381             (215)
Share of profit or loss of associates . . . . . . . . . . . . .                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         65               65
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      2,457           2,306
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      2,992           1,999
Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,191           1,049
Profit-based staff costs . . . . . . . . . . . . . . . . . . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         63               46
Other general administrative expenses . . . . . . . . . . .                      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      1,346           1,211
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   2,600           2,306
Depreciation/amortization and impairments of tangible and intangible fixed
  assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                               206            188
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                  2,806           2,494
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            186           (495)
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                     (6)           (11)
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                     192           (484)
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                   (57)          (210)
Profit for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                        249           (274)
Profit for the period attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                              249           (274)
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                 5,171          6,509
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             6.4           neg.
Business volumes, SEKbn
Risk-weighted assets, old rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                              9              5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                 274            242

      Net interest income
Net interest income amounted to SEK89 million in the nine-month period ended September 30, 2008,
compared to negative net interest income of SEK191 million in the nine-month period ended September 30,
2007, mainly reflecting effects of the Bank’s treasury operations.

      Net commission income
No net commission income was recorded in the nine-month period ended September 30, 2008, compared to
SEK34 million in net commission income in the nine-month period ended September 30, 2007.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value were SEK381 million in the nine-month period ended
September 30, 2008, compared to a loss of SEK215 million in the nine-month period ended September 30,
2007, primarily as a result of the market valuation of derivatives tied to the financing of euro lending in the
Baltic countries.
                                                                                                                                                             For the nine month period
                                                                                                                                                               ended September 30,
SEKm                                                                                                                                                              2008           2007

Market valuation of derivatives tied to funding in euros . . . . . . . . . . .                                                       ......                        163               —
Norwegian primary capital certificates and shareholding in Sparebank                                                                 1
  Gruppen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                ......                         31             21
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            ......                        187           (236)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                              381           (215)




                                                                            147
    Share of the profit or loss of associates
The share of the profit or loss of associates remained stable at SEK65 million in the nine-month period ended
September 30, 2008, compared to the nine-month period ended September 30, 2007.

    Other income
Other income (primarily internally sold services) increased by 7% to SEK2,457 million in the nine-month
period ended September 30, 2008, compared to SEK2,306 million in the nine-month period ended
September 30, 2007, partially reflecting a capital gain of SEK95 million from the sale of SPS Reinsurance in
2008.

    Staff costs, profit-based staff costs
Staff costs increased by 14% to SEK1,191 million in the nine-month period ended September 30, 2008,
compared to SEK1,049 million in the nine-month period ended September 30, 2007, primarily due to higher
pension costs.
Profit-based staff costs increased by 37% to SEK63 million in the nine-month period ended September 30,
2008, compared to SEK46 million in the nine-month period ended September 30, 2007, primarily due to a
higher allocation approved for the Kopparmyntet profit-sharing scheme in 2007 than had been allocated in
the annual accounts.

    Other general administrative expenses
Other general administrative expenses increased by 11% to SEK1,346 million in the nine-month period
ended September 30, 2008, compared to SEK1,211 million in the nine-month period ended September 30,
2007, primarily due to higher IT expenses related to the Bank’s international expansion and integration
processes.

    Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased to
SEK206 million in the nine-month period ended September 30, 2008, compared to SEK188 million in the
nine-month period ended September 30, 2007.

    Loan losses, net
Loan losses amounted to net recoveries of SEK6 million in the nine-month period ended September 30, 2008,
compared to net recoveries of SEK11 million in the nine-month period ended September 30, 2007.

Consolidated
    Profit for the period attributable to the shareholders of Swedbank AB
Consolidated profit for the period attributable to the shareholders of Swedbank AB for the nine-month
period ended September 30, 2008 was SEK8,972 million, compared to SEK8,888 million in the nine-month
period ended September 30, 2007. Return on equity was 17.0% in the nine-month period ended
September 30, 2008, compared to 19.0% in the nine-month period ended September 30, 2007. The cost/
income ratio was 0.50 in the nine-month period ended September 30, 2008, compared to 0.51 in the
nine-month period ended September 30, 2007.

    Net interest income
Consolidated net interest income increased by SEK2,062 million or 15% to SEK15,960 million in the
nine-month period ended September 30, 2008, compared to SEK13,898 million in the nine-month period
ended September 30, 2007. Net interest income from the lending portfolio increased by SEK850 million
despite continued margin pressure and higher funding costs. Net interest income from deposits increased by
SEK847 million through a volume increase and improved interest margins. Net interest income from other
operations increased by SEK365 million.




                                                    148
      Interest income
Consolidated interest income increased by 22% to SEK58,674 million in the nine-month period ended
September 30, 2008, compared to SEK47,940 million in the nine-month period ended September 30, 2007.
The components of interest income are set out below:

                                                                                                                                                                                                        For the nine month period
                                                                                                                                                                                                          ended September 30,
SEKm                                                                                                                                                                                                         2008           2007

Credit institutions . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,544          4,577
Loans to the public . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      50,820         37,318
Interest-bearing securities             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,260          2,009
Other . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,051          4,036
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     58,674         47,940

      Interest expenses
Consolidated interest expenses increased by 25% to SEK42,714 million in the nine-month period ended
September 30, 2008, compared to SEK34,043 million in the nine-month period ended September 30, 2007.
The components of interest expense are set out below:

                                                                                                                                                                                                        For the nine month period
                                                                                                                                                                                                          ended September 30,
SEKm                                                                                                                                                                                                         2008           2007
Credit institutions . . . . .         .............                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       5,217          6,013
Deposits and borrowings               from the public                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      12,002          7,762
Debt securities in issue .            .............                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      22,379         16,138
Subordinated liabilities . .          .............                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,599          1,430
Other . . . . . . . . . . . . . . .   .............                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,517          2,699
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                     42,714         34,043

      Net commission income
Consolidated net commission income decreased by SEK525 million or 7% to SEK6,819 million in the
nine-month period ended September 30, 2008, compared to SEK7,344 million in the nine-month period
ended September 30, 2007. Payment commissions increased by SEK311 million, while income from stock
market-related operations decreased primarily due to falling stock prices. Income from asset management
commissions decreased by SEK472 million, reflecting decreases from brokerage commissions by
SEK207 million, from corporate finance by SEK136 million and from unit-linked insurance by SEK47 million.

      Net gains and losses on financial items at fair value
Consolidated net gains and losses on financial items at fair value decreased by SEK198 million or 15% to
SEK1,107 million in the nine-month period ended September 30, 2008, compared to SEK1,305 million in the
nine-month period ended September 30, 2007. The change in the market valuation of Swedbank Markets’
credit bond portfolio was a significant contributor in the nine-month period ended September 30, 2008 and
2007, respectively.
For Baltic Banking, net gains and losses on financial items at fair value were SEK263 million lower for the
nine-month period ended September 30, 2008 compared to the nine-month period ended September 30,
2007 mainly due to the decrease in the value of investment assets held by the insurance operations and
weak earnings in equity trading.
For Swedbank Mortgage, the market valuation of its lending and funding including derivatives reduced
income by SEK158 million in the nine-month period ended September 30, 2008, compared with a positive
effect of SEK19 million in the nine-month period ended September 30, 2007. The negative change in value is
due to the major fluctuations in the market between interest rates on mortgage bonds and interbank rates.
The change in the value of Bank’s treasury derivatives linked to the financing of euro lending in the Baltic
region amounted to SEK163 million. To reduce the accounting volatility in these transactions, cash flow




                                                                                                                    149
hedges are applied as of the third quarter of 2008, as a result of which unrealized changes in value are no
longer recognized through profit or loss but instead directly through shareholders’ equity.

    Share of profit or loss of associates
The consolidated share of the profit or loss of associates increased by 6% to SEK376 million in the
nine-month period ended September 30, 2008, compared to SEK354 million in the nine-month period ended
September 30, 2007, primarily as a result of higher profit from EnterCard.

    Other income
Consolidated other income increased to SEK1,855 million in the nine-month period ended September 30,
2008, compared to SEK1,149 million in the nine-month period ended September 30, 2007. The change
resulted mainly from a capital gain of SEK440 million on branch sales to two savings banks in western and
southern Sweden as well as capital gains of SEK95 million on the sale of SPS Reinsurance and SEK66 million
on Hansabank’s partly owned card company, Pankade Kaardikeskus. The nine-months ended September 30,
2007 included a capital gain on the sale of CEK AB of SEK40 million.

    Staff costs, profit-based staff costs
Consolidated staff costs increased by SEK779 million or 13% to SEK6,802 million in the nine-month period
ended September 30, 2008, compared to SEK6,023 million in the nine-month period ended September 30,
2007. The cost increase was primarily outside Sweden. Consolidated profit-based staff costs decreased by
SEK448 million or 39% to SEK688 million in the nine-month period ended September 30, 2008, compared to
SEK1,136 million in the nine-month period ended September 30, 2007. The decrease related primarily to
Baltic Banking and Swedbank Markets.

    Other general administrative expenses
Consolidated other general administrative expenses increased by SEK469 million or 10% to SEK4,990 million
in the nine-month period ended September 30, 2008, compared to SEK4,521 million in the nine-month
period ended September 30, 2007, mainly due to expansion and changes outside Sweden as well as higher
expenses for cash transport and security in Sweden. Recovered VAT in the Russian leasing operations
reduced expenses by SEK83 million.

    Depreciation/amortization and impairments of tangible and intangible fixed assets
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
SEK190 million or 37% to SEK703 million in the nine-month period ended September 30, 2008, compared to
SEK513 million in the nine-month period ended September 30, 2007. Amortization attributable to the
Hansabank trademark amounted to SEK63 million in the nine-month period ended September 30, 2008.

    Loan losses, net
Consolidated loan losses net amounted to SEK1,523 million in the nine-month period ended September 30,
2008, compared to SEK381 million during the corresponding period in 2007. The loan loss ratio was 0.18% in
the nine-month period ended September 30, 2008, compared to 0.06% in the nine-month period ended
September 30, 2007.

    Tax expense
Consolidated profit before tax amounted to SEK11,411 million in the nine-month period ended
September 30, 2008, compared to SEK11,476 million in the nine-month period ended September 30, 2007,
and the tax expense was SEK2,380 million in the nine-month period ended September 30, 2008, compared
to SEK2,500 million in the nine-month period ended September 30, 2007, corresponding to an effective tax
rate of 21% in the nine-month period ended September 30, 2008, compared to 22% in the nine-month
period ended September 30, 2007.




                                                   150
Year Ended December 31, 2007 compared with Years Ended December 31, 2006 and December 31,
2005
Swedish Banking

                                                                                                                                                    For the year ended December 31,
SEKm                                                                                                                                                 2007           2006              2005

Net interest income . . . . . . . . . . . . . . .                      ...........                                 .   .   .   .   .   .   .   .   11,701        11,468         12,298
Net commission income . . . . . . . . . . . .                          ...........                                 .   .   .   .   .   .   .   .    4,504         4,174          3,894
Net gains and losses on financial items                                at fair value .                             .   .   .   .   .   .   .   .      335           408            540
Share of profit or loss of associates . . .                            ...........                                 .   .   .   .   .   .   .   .      331           230            205
Other income . . . . . . . . . . . . . . . . . . . .                   ...........                                 .   .   .   .   .   .   .   .      807           667          2,907
Total income . . . . . . . . . . . . . . . . . . . .                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   17,678       16,947         19,844
Staff costs . . . . . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    3,954        3,847          3,940
Profit-based staff costs . . . . . . . . . . . .                       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      342          177            471
Other general administrative expenses                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    4,620        4,549          4,667
Total general administrative expenses . . . . . . . . . . . . . . . . .                                                                             8,916         8,573          9,078
Depreciation/amortization and impairments of tangible and
  intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  84            125               85
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            9,000         8,698          9,163
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                 8,678         8,249        10,681
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             71           (499)          28
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            8,607         8,748        10,653
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                         2,413         2,436         2,326
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             6,194         6,312         8,327

Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                     6,182          6,314         8,322
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                              12             (2)            5
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                         26,658        28,270         26,125
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                    23.2          22.3           31.9
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      867            762              687
Deposits . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      317            267              231
Mutual funds & insurance . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      251            255              235
Other investment volume . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       25             19               16
Risk weighted assets, old rules                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      623            536              468
Total assets . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      972            840              746

      Profit for the year attributable to the shareholders of Swedbank AB
Profit for the year attributable to the shareholders of Swedbank AB from Swedish Banking in 2007 was
SEK6,182 million (accounting for 52% of consolidated profit for the year), compared to SEK6,314 million in
2006 (or 58% of consolidated profit for the year) and SEK8,322 million in 2005 (or 70% of consolidated
profit for the year). Return on allocated equity was 23.2% in 2007, compared to 22.3% in 2006 and 31.9% in
2005. The cost/income ratio was 0.51 in 2007, compared to 0.51 in 2006 and 0.46 in 2005.




                                                                                                       151
      Net interest income
Net interest income was SEK11,701 million in 2007, compared to SEK11,468 million in 2006 and
SEK12,298 million in 2005. The components of net interest income are set out below:

                                                                                                                                                                        For the year ended December 31,
SEKm                                                                                                                                                                     2007           2006              2005

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           6,914          7,182         8,013
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                          3,768          2,628         2,158
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                         1,019          1,658         2,127
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        11,701       11,468         12,298

The 2% increase in 2007 compared to 2006 was primarily due to increases in deposit and lending volumes,
which raised net interest income by SEK1,304 million. The lending margin decreased by 14 basis points to
0.86%, which reduced net interest income by SEK1,135 million. The interest margin on deposits improved by
24 basis points to 1.30% mainly due to a higher repo rate, which positively affected net interest income by
SEK703 million. Other effects were SEK639 million lower. The 7% decrease in 2006 compared to 2005 was
primarily due to lower margins in the lending portfolio, which was offset to a certain extent by the volume
increases in the lending portfolio as well as higher deposit volumes and higher deposit margins.

      Net commission income
Net commission income was SEK4,504 million in 2007, compared to SEK4,174 million in 2006 and
SEK3,894 million in 2005. The components of net commission income are set out below:

                                                                                                                                                                        For the year ended December 31,
SEKm                                                                                                                                                                     2007           2006              2005

Payment processing             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    1,973          1,696         1,720
Lending . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      290            314           295
Mutual funds . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    1,678          1,604         1,439
Insurance . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      526            459           436
Securities . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      245            260            84
Other . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (208)          (159)          (80)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                         4,504         4,174          3,894

The 8% increase in 2007 compared to 2006 was primarily due to higher income from payment services as
well as asset management and unit-linked operations. The 7% increase in 2006 compared to 2005 was
primarily due to higher income from asset management and securities.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value amounted to SEK335 million in 2007, compared to
SEK408 million in 2006 and SEK540 million in 2005. The components of net gains and losses on financial
items at fair value are set out below:

                                                                                                                                                                        For the year ended December 31,
SEKm                                                                                                                                                                     2007           2006              2005

Swedbank Mortgage AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                         86            185              397
MasterCard shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                    89              0                0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           160            223              143
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           335           408               540

The 18% decrease in 2007 compared to 2006 was primarily due to marking to fair value of lending, funding
and derivatives at Swedbank Mortgage AB. The 24% decrease in 2006 compared to 2005 was primarily due
to changes in the fair value of Swedbank Mortgage AB’s lending and funding including derivatives.




                                                                                                                           152
    Share of profit or loss of associates
The share of the profit or loss of associates was SEK331 million in 2007, compared to SEK230 million in 2006
and SEK205 million in 2005. The 44% increase in 2007 compared to 2006 was primarily due to higher profit
from EnterCard Holding AB and partly owned banks. The 12% increase in 2006 compared to 2005 was
primarily due to higher profit from EnterCard Holding AB, BGC (a payment and transfer clearing company)
and partly-owned banks.

    Other income
Other income was SEK807 million in 2007, compared to SEK667 million in 2006 and SEK2,907 million in
2005. The 21% increase in 2007 compared to 2006 was primarily due to a capital gain from the sale of CEK
                                ¨ a
AB and income from Swedbank Fors¨ kring related to a surplus from a loan protection product. The 77%
decrease in 2006 compared to 2005 was primarily due to capital gains of SEK2,221 million in 2005 from the
sale of 50% of EnterCard Holding AB to BarclayCard (SEK800 million) and the sale of KIAB to Lindorff
(SEK1,421 million).

    Staff costs, profit-based staff costs
Staff costs were SEK3,954 million in 2007, compared to SEK3,847 million in 2006 and SEK3,940 million in
2005. The 3% increase in 2007 compared to 2006 was primarily due to contractual salary increases. The 2%
decrease in 2006 compared to 2005 was primarily due to a lower number of full-time employees. Profit-
based staff costs were SEK342 million in 2007, compared to SEK177 million in 2006 and SEK471 million in
2005. The 93% increase in 2007 compared to 2006 was primarily due to higher expenses for the profit-
sharing and incentive programs. The 62% decrease in 2006 compared to 2005 was primarily due to lower
allocation for the Kopparmyntet profit-sharing scheme.

    Other general administrative expenses
Other general administrative expenses were SEK4,620 million in 2007, compared to SEK4,549 million in
2006 and SEK4,667 million in 2005. The 2% increase in 2007 compared to 2006 was primarily due to higher
IT expenses and expenses for security. The 3% decrease in 2006 compared to 2005 was primarily due to the
sale of 50% of EnterCard Holding AB and the sale of KIAB, which resulted in lower expenses.

    Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets amounted to
SEK84 million in 2007, SEK125 million in 2006 and SEK85 million in 2005.

    Loan losses, net
Loan losses amounted to net expense of SEK71 million in 2007, compared to net income of SEK499 million in
2006 and a net loss of SEK28 million in 2005, corresponding to a loan loss ratio of 0.01% in 2007, compared
to a negative loan loss ratio of 0.07% in 2006 and 0.00% in 2005. The changes in these periods primarily
reflect reversals of collective provisions and inclusion of increased provisions for loan losses. The reversal of




                                                      153
provisions in 2006 reflected rebalancing of provisions in prior years in response to economic cycles, a trend
reversed in the following year.

                                                                                                                                                                                                            For the year ended
                                                                                                                                                                                                              December 31,
SEKm                                                                                                                                                                                                          2007           2006

Loans assessed individually:
  Established loan losses . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      394            413
  Reversal of previous provisions . . . . . . . . . . . . . . . . . . .                                                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (125)          (181)
  Provision for probable loan losses . . . . . . . . . . . . . . . . .                                                                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      230            158
  Recoveries from previous years’ established loan losses                                                                                       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (146)          (134)
  Recovered provisions . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (99)          (205)
Net expense for individually assessed loans . . . . . . . . . . . . . . . . . . . . .                                                                                                   .   .   .   .   .      254             51
Allocations/withdrawals from collective provisions . . . . . . . . . . . . . . . .                                                                                                      .   .   .   .   .     (259)          (610)
Net expense for collectively valued homogenous claims . . . . . . . . . . . .                                                                                                           .   .   .   .   .       70             41
Net expense for discharged guarantees and other contingent liabilities                                                                                                                  .   .   .   .   .        6             19
Net loan loss expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                       71          (499)

      Tax expense
The tax expense was SEK2,413 million in 2007, compared to SEK2,436 million in 2006 and SEK2,326 million
in 2005. This corresponds to an effective tax rate of 28%, 28% and 22% for 2007, 2006 and 2005,
respectively. The low effective tax rate in 2005 is mainly due to capital gains from the sale of subsidiaries.

Baltic Banking
                                                                                                                                                                                        For the year ended December 31,
SEKm                                                                                                                                                                                        2007              2006           2005
Net interest income . . . . . . . . . . . . . . . . . . . . . . . .                                         .   .   .   .   .   .   .   .   .   .   .   .   .                            5,248               3,331          2,561
Net commission income . . . . . . . . . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .                            1,854               1,517          1,094
Net gains and losses on financial items at fair value                                                       .   .   .   .   .   .   .   .   .   .   .   .   .                              816                 603            435
Share of profit or loss of associates . . . . . . . . . . . .                                               .   .   .   .   .   .   .   .   .   .   .   .   .                                7                   6              4
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      .   .   .   .   .   .   .   .   .   .   .   .   .                              429                 268            111
Total income . . . . . . . . . . . . . . . . . .                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           8,354                5,725          4,205
Staff costs . . . . . . . . . . . . . . . . . . . .                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           1,475                1,127            858
Profit-based staff costs . . . . . . . . . . .                      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                             569                  384            282
Other general administrative expenses                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           1,315                1,022            853
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . .                                                                                                         3,359                2,533          1,993
Depreciation/amortization and impairments of tangible and intangible
  fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                282            264               232
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                          3,641                2,797          2,225
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                               4,713                2,928          1,980
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                          450                  270            212
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                          4,263                2,658          1,768
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                           404                  216            112
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                           3,859                2,442          1,656

Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    3,859               2,442          1,395
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                              0                   0            261
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                        21,139              16,652         10,983
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 18.3                14.7           12.7
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                                   178            128                85
Deposits . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                                   102             84                67
Mutual funds & insurance . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                                    19             13                 8
Risk-weighted assets, old rules             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                                   176            126                87
Total assets . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                                   246            180               126




                                                                                                                    154
      Profit for the year attributable to the shareholders of Swedbank AB
Profit for the year attributable to the shareholders of Swedbank AB from Baltic Banking in 2007 was
SEK3,859 million (accounting for 32% of consolidated profit for the year), compared to SEK2,442 million in
2006 (or 22% of consolidated profit for the year) and SEK1,395 million in 2005 (or 12% of consolidated
profit for the year). Return on allocated equity was 18.3% in 2007, compared to 14.7% in 2006 and 12.7% in
2005. The cost/income ratio was 0.44 in 2007, compared to 0.49 in 2006 and 0.53 in 2005.

      Net interest income
Net interest income was SEK5,248 million in 2007, compared to SEK3,331 million in 2006 and
SEK2,561 million in 2005. The components of net interest income are set out below:

                                                                                                                                                                       For the year ended December 31,
SEKm                                                                                                                                                                    2007           2006              2005

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                          3,262          2,128         2,051
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                         2,236          1,137           464
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                         (249)            66            46
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        5,248         3,331          2,561

The driver of the 58% increase in 2007 compared to 2006 was primarily the increase in deposit and lending
volumes driven by growth in economic activity in the Baltic region, which alone increased net interest
income by SEK1,428 million. The lending margin decreased by 7 basis points to 2.28%, which reduced net
interest income by SEK96 million. The interest margin on deposits improved by 93 basis points to 2.47%
mainly due to higher interest rates, which positively affected net interest income by SEK840 million. Other
effects reduced net interest income by SEK255 million. The 30% increase in 2006 compared to 2005 was
primarily due to volume growth and higher deposits margins, supported by rising base rates.

      Net commission income
Net commission income was SEK1,854 million in 2007, compared to SEK1,517 million in 2006 and
SEK1,094 million in 2005. The components of net commission income are set out below:

                                                                                                                                                                       For the year ended December 31,
SEKm                                                                                                                                                                    2007           2006              2005

Payment processing             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   1,125            957              780
Lending . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     224            173               54
Mutual funds . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     307            182              104
Insurance . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      61             75               63
Securities . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     197            135               94
Other . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (60)            (5)              (1)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        1,854         1,517          1,094

The 22% increase in 2007 compared to 2006 was due to higher card and payment processing commissions
resulting from a higher volume of transactions. Brokerage and lending commissions also increased. The 39%
increase in 2006 compared to 2005 was primarily due to higher payment processing and lending
commissions.




                                                                                                                           155
      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value was SEK816 million in 2007, compared to SEK603 million
in 2006 and SEK435 million in 2005. The components of net gains and losses on financial items at fair value
are set out below:

                                                                                                                                                          For the year ended December 31,
SEKm                                                                                                                                                       2007           2006              2005

Equity trading . . . . . . . . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      33            152                7
Interest-bearing securities .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      56             (9)               8
Other financial instruments               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      50            (81)              33
Foreign exchange . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     623            499              358
Other . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      53             43               29
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             816           603               435

The 35% increase in 2007 compared to 2006 was due to higher trading income. The 39% increase in 2006
compared to 2005 was primarily due to a considerable increase in trading activity by clients and the Bank’s role
in several successful IPOs in the Baltic market.

      Share of profit or loss of associates
The share of profit or loss of associates was SEK7 million in 2007, compared to SEK6 million in 2006 and
SEK4 million in 2005.

      Other income
Other income was SEK429 million in 2007, compared to SEK268 million in 2006 and SEK111 million in 2005.
The 60% increase in 2007 compared to 2006 was primarily due to increased insurance income. The 141%
increase in 2006 compared to 2005 was primarily due to higher insurance and real estate income.

      Staff costs, profit-based staff costs
Staff costs were SEK1,475 million in 2007, compared to SEK1,127 million in 2006 and SEK858 million in 2005.
The 31% increase in 2007 compared to 2006 was primarily due to increases in the number of employees and
salaries. The number of full-time employees increased by 994 to 9,203 in 2007 compared to 2006 (305 in
Estonia, 336 in Latvia and 353 in Lithuania). The 31% increase in 2006 compared to 2005 was primarily due to
salary increases as well as the increase in the number of employees. In 2006, the number of employees grew by
16% to 8,209 full-time employees.
Profit-based staff costs were SEK569 million in 2007, compared to SEK384 million in 2006 and SEK282 million
in 2005. The 48% increase in 2007 compared to 2006 and the 36% increase in 2006 compared to 2005 were
primarily due to better performance.

      Other general administrative expenses
Other general administrative expenses amounted to SEK1,315 million in 2007, compared to SEK1,022 million
in 2006 and SEK853 million in 2005. The 29% increase in 2007 compared to 2006 was primarily due to
increased business volumes. The 20% increase in 2006 compared to 2005 was primarily due to growing
business volumes and investments in information technology and distribution.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased by SEK18 million
to SEK282 million during 2007, compared to SEK264 million in 2006 and SEK232 million in 2005.




                                                                                                              156
       Loan losses, net
Loan losses, net amounted to SEK450 million in 2007, compared to SEK270 million in 2006 and SEK212 million
in 2005. The loan loss ratio was 0.35% in 2007, compared to 0.32% in 2006 and 0.42% in 2005.
                                                                                                                                                                                                                For the year ended
                                                                                                                                                                                                                  December 31,
SEKm                                                                                                                                                                                                              2007           2006
Loans assessed individually:
  Established loan losses . . . . . . . . . . . . . . . . . . . . . . . . .                                                                 .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      110                80
  Reversal of previous provisions . . . . . . . . . . . . . . . . . . .                                                                     .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (40)              (26)
  Provision for probable loan losses . . . . . . . . . . . . . . . . .                                                                      .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      178                62
  Recoveries from previous years’ established loan losses                                                                                   .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (32)              (86)
  Recovered provisions . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (27)              (57)
Net expense for individually assessed loans . . . . . . . . . . . . . . . . . . . . .                                                                                                   .   .   .   .   .   .      189               (27)
Allocations/withdrawals from collective provisions . . . . . . . . . . . . . . . .                                                                                                      .   .   .   .   .   .      170               259
Net expense for collectively valued homogenous claims . . . . . . . . . . . .                                                                                                           .   .   .   .   .   .       65                28
Net expense for discharged guarantees and other contingent liabilities                                                                                                                  .   .   .   .   .   .       26                10
Net loan loss expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                         450            270

       Tax expense
The tax expense was SEK404 million in 2007, compared to SEK216 million in 2006 and SEK112 million in
2005. This corresponds to an effective tax rate of 9% during 2007, 8% in 2006 and 6% in 2005.

International Banking
                                                                                                                                                                                            For the year ended December 31,
SEKm                                                                                                                                                                                            2007              2006          2005*
Net interest income . . . . . . . . .           ..............                                          .   .   .   .   .   .   .   .   .       .   .   .   .   .                               1,150              582               241
Net commission income . . . . . . .             ..............                                          .   .   .   .   .   .   .   .   .       .   .   .   .   .                                 304              208                82
Net gains and losses on financial               items at fair value                                     .   .   .   .   .   .   .   .   .       .   .   .   .   .                                  87               48                14
Other income . . . . . . . . . . . . . .        ..............                                          .   .   .   .   .   .   .   .   .       .   .   .   .   .                                  23               13                23
Total income . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                           1,564                  851               360
Staff costs . . . . . . . . . . . . . . . . . . . .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                             409                  213                99
Profit-based staff costs . . . . . . . . . . .                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                              60                   23                10
Other general administrative expenses                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                             366                  421               170
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . .                                                                                                                835               657               279
Depreciation/amortization and impairments of tangible and intangible
  fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                        66            9                5
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   901               666               284
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                        663               185                76
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                 170                23                30
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                   493               162                46
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                117                71                 3
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                    376                91                43

Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                             376             91                40
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                     0              0                 3
Allocated equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                4,674            1,850               529
Return on allocated equity, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                          8.0              4.9               7.6
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                                       41          18                 5
Deposits . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                                       14           5                 4
Mutual funds & insurance . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                                        2           2                 2
Risk-weighted assets, old rules             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                                       48          26                 5
Total assets . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .   .   .   .   .                                       73          30                11

*     The branches in the United States and China, along with customer responsibility for financial institutions and banks, were transferred
      from Swedbank Markets to International Banking as of September 30, 2008. These changes have been retroactively reflected in 2007
      and 2006, but have not been reflected in 2005 as it was impracticable to do so. As of September 30, 2008, the transferred operations
      included 91 employees, SEK6.2 billion in lending volumes and SEK2.7 billion in deposit volumes.



                                                                                                                    157
      Profit for the year attributable to the shareholders of Swedbank AB
Profit for the year attributable to the shareholders of Swedbank AB from International Banking in 2007 was
SEK376 million, compared to SEK91 million in 2006 and SEK40 million in 2005. Return on allocated equity was
8.0% in 2007, compared to 4.9% in 2006 and 7.6% in 2005. The cost/income ratio was 0.58 in 2007, compared
to 0.78 in 2006 and 0.79 in 2005. Profit for the year in Ukrainian Banking amounted to SEK52 million in 2007.
Ukranian Banking was acquired in July 2007.

      Net interest income
Net interest income was SEK1,150 million in 2007, compared to SEK582 million in 2006 and SEK241 million in
2005. The components of net interest income are set out below:

                                                                                                                                                                       For the year ended December 31,
SEKm                                                                                                                                                                    2007           2006              2005

Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                            834            443              193
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           129             24               17
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                          186            115               31
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                        1,150           582               241

The primary driver of the 98% increase in 2007 compared to 2006 was the inclusion of Ukrainian Banking as
part of the Bank’s International Banking segment in the second half of 2007 and growth consistent with the
market trends. Net interest income in Ukrainian Banking amounted to SEK372 million in 2007. The 141%
increase in 2006 compared to 2005 was primarily due to increased lending and deposit volumes in Russia and
the Nordic branches and the financial institutions and branches that were transferred from Swedbank Markets,
in respect of which 2005 data has not been adjusted.

      Net commission income
Net commission income was SEK304 million in 2007, compared to SEK208 million in 2006 and SEK82 million in
2005. The components of net commission income are set out below:

                                                                                                                                                                       For the year ended December 31,
SEKm                                                                                                                                                                    2007           2006              2005

Payment processing             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      67             10
Lending . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      30             17
Mutual funds . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      35             26               16
Insurance . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      11              9                5
Securities . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      43             39               33
Corporate finance . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       0              0               11
Other . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     118            107               17
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                         304            208                82

The primary driver of the 46% increase in 2007 compared to 2006 was the inclusion of Ukrainian Banking as
part of the Bank’s International Banking in the second half of 2007 and increased commissions for payments.
Net commission income in Ukrainian Banking amounted to SEK51 million in 2007. The 154% increase in 2006
compared to 2005 was primarily due to the inclusion of financial institutions and branches that were
transferred from Swedbank Markets, in respect of which 2005 data has not been adjusted.




                                                                                                                           158
      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value amounted to SEK87 million in 2007, compared to
SEK48 million in 2006 and SEK14 million in 2005. The components of net gains and losses on financial items at
fair value are set out below:

                                                                                                  For the year ended December 31,
SEKm                                                                                               2007           2006              2005

Change in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 70             20                8
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      17             28                6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      87             48               14

The 81% increase in 2007 compared to 2006 was primarily due to the inclusion of Ukrainian Banking as part of
the Bank’s International Banking segment in the second half of 2007, as well as changes in exchange rates. Net
gains and losses on financial items at fair value in Ukrainian Banking amounted to SEK61 million in 2007. The
243% increase in 2006 compared to 2005 was primarily due to changes in exchange rates, particularly in
Russian Banking.

      Other income
Other income was SEK23 million in 2007, compared to SEK13 million in 2006 and SEK23 million in 2005. The
77% increase in 2007 compared to 2006 was primarily due to the inclusion of Ukrainian Banking as part of the
Bank’s International Banking segment in the second half of 2007.

      Staff costs, profit-based staff costs
Staff costs were SEK409 million in 2007, compared to SEK213 million in 2006 and SEK99 million in 2005. The
92% increase in 2007 compared to 2006 was primarily due to the inclusion of Ukrainian Banking as part of the
Bank’s International Banking segment in the second half of 2007. Staff costs in Ukrainian Banking amounted
to SEK124 million in 2007. The 115% increase in 2006 compared to 2005 was primarily due to expansion in
Russia and the transfer of the financial institutions and branches from Swedbank Markets to International
Banking. Profit-based staff costs amounted to SEK60 million in 2007, compared to SEK23 million in 2006 and
SEK10 million in 2005. The 161% increase in 2007 compared to 2006 was primarily due to the inclusion of
Ukrainian Banking as part of the Bank’s International Banking segment in the second half of 2007. Profit-based
staff costs in Ukrainian Banking amounted to SEK25 million in 2007.

      Other general administrative expenses
Other general administrative expenses amounted to SEK366 million in 2007, compared to SEK421 million in
2006 and SEK170 million in 2005. The 13% decrease in 2007 compared to 2006 was primarily related to a
refund of VAT in the amount of SEK60 million in 2007, for which the Bank in 2006 was charged with a
provision of SEK151 million in connection with a VAT dispute in its leasing operations in Russia. The inclusion of
Ukrainian Banking as part of the Bank’s International Banking segment increased other general administrative
expenses by SEK96 million. The 148% increase in 2006 compared to 2005 was primarily due to the fact that in
2006 the Bank was charged with a provision of SEK151 million for a VAT dispute in the leasing operations in
Russia and the transfer of financial institutions and branches from Swedbank Markets to International Markets,
for which no adjustments for 2005 were made.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets increased by 633% to
SEK66 million in 2007 compared to SEK9 million in 2006 and SEK5 million in 2005. The increase in 2007 was
primarily as a result of the inclusion of Ukrainian Banking and amortization of identified surplus values in
connection with the acquisition of TAS-Kommerzbank (now OJSC Swedbank).

      Loan losses, net
Loan losses net amounted to SEK170 million in 2007, compared to SEK23 million in 2006 and SEK30 million in
2005. The loan loss ratio was 0.71% in 2007, compared to 0.29% in 2006 and 0.35% in 2005. These results
were primarily due to the inclusion of Ukrainian Banking as part of the Bank’s International Banking segment in
the second half of 2007. Loan losses, net in Ukrainian Banking amounted to SEK122 million in 2007.



                                                                           159
       Tax expense
The tax expense was SEK117 million in 2007 compared to SEK71 million in 2006 and SEK3 million in 2005,
giving an effective tax rate of 24% in 2007 compared to 44% in 2006 and 7% in 2005.

Swedbank Markets

                                                                                                                                                                For the year ended December 31,
SEKm                                                                                                                                                             2007           2006          2005*
Net interest income . . . . . . . . . . . . . . . . . . . . . . .                                       .   .   .   .   .   .   .   .   .   .   .   .   .   .    1,179           714              697
Net commission income . . . . . . . . . . . . . . . . . . . . .                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .    1,333         1,377              812
Net gains and losses on financial items at fair value                                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .      723         1,151              902
Share of profit or loss of associates . . . . . . . . . . . .                                           .   .   .   .   .   .   .   .   .   .   .   .   .   .        2             0               25
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                    .   .   .   .   .   .   .   .   .   .   .   .   .   .       35            35               78
Total income . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   3,272          3,277          2,514
Staff costs . . . . . . . . . . . . . . . . . . . .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     635            553            526
Profit-based staff costs . . . . . . . . . . .                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     540            643            366
Other general administrative expenses                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     675            620            565
Total general administrative expenses . . . . . . . . . . . . . . . . . . . . . .                                                                               1,850          1,816          1,457
Depreciation/amortization and impairments of tangible and intangible
  fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   12             10              12
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  1,862          1,826          1,469
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                       1,410          1,451          1,045
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                    —              (3)            7
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  1,410          1,454          1,038
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                 380            388            291
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   1,030          1,066           747

Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                           902            892              666
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                 128            174               81
Allocated equity . . . . . . . . . . .      .............................                                                                                        3,379         2,808          3,308
Return on allocated equity, % .             .............................                                                                                         26.7          31.8           20.1
Business volumes, SEKbn
Lending . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      17             11               19
Deposits . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      17             21               23
Mutual funds & insurance . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1              1                2
Other investment volume . . . .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      30             23               18
Risk-weighted assets, old rules             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      40             34               47
Total assets . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     420            308              305

*     The branches in the United States and China, along with customer responsibility for financial institutions and banks, were transferred
      from Swedbank Markets to International Banking as of September 30, 2008. These changes have been retroactively reflected in 2007
      and 2006, but have not been reflected in 2005 as it was impracticable to do so. As of September 30, 2008, the transferred operations
      included 91 employees, SEK6.2 billion in lending volumes and SEK2.7 billion in deposit volumes.


       Profit for the year attributable to the shareholders of Swedbank AB
Profit for the year attributable to the shareholders of Swedbank AB from Swedbank Markets in 2007 was
SEK902 million, compared to SEK892 million in 2006 and SEK666 million in 2005. Return on allocated equity
was 26.7% in 2007, compared to 31.8% in 2006 and 20.1% in 2005. The cost/income ratio was 0.57 in 2007,
compared to 0.56 in 2006 and 0.58 in 2005.

       Net interest income
Net interest income was SEK1,179 million in 2007, compared to SEK714 million in 2006 and SEK697 million in
2005.




                                                                                                                    160
    Net commission income
Net commission income was SEK1,333 million in 2007, compared to SEK1,377 million in 2006 and
SEK812 million in 2005. The 70% increase in 2006 compared to 2005 was primarily due to increased income
from First Securities in 2006 because First Securities was incorporated in 2005.

    Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value were SEK723 million in 2007, compared to
SEK1,151 million in 2006 and SEK902 million in 2005.
Net gains and losses on financial items at fair value at First Securities decreased by SEK155 million in 2007
compared to 2006. Net gains and losses on financial items at fair value at First Securities in 2006 increased
to SEK220 million compared to SEK93 million in 2005. Other net gains and losses on financial items at fair
value primarily consists of interest, foreign exchange and stock trading.

    Share of profit or loss of associates
The share of profit or loss of associates amounted to SEK2 million in 2007, compared to SEK0 million in 2006
and SEK25 million in 2005. The decrease in 2006 compared to 2005 was primarily due to the fact that First
Securities was incorporated in 2005.

    Other income
Other income amounted to SEK35 million in 2007 compared to the same level in 2006 and SEK78 million in
2005.

    Staff costs, profit-based staff costs
Staff costs were SEK635 million in 2007, compared to SEK553 million in 2006 and SEK526 million in 2005.
The 15% increase in 2007 compared to 2006 was primarily due to contractual salary increases and an
increased number of employees. The 5% increase in 2006 compared to 2005 was primarily due to staff costs
in First Securities amounting to SEK145 million in 2006, compared to SEK78 million in 2005 (First Securities
was incorporated in 2005). Profit-based staff costs amounted to SEK540 million in 2007, compared to
SEK643 million in 2006 and SEK366 million in 2005. The 16% decrease in 2007 compared to 2006 was
primarily due to lower revenue, impacting the level of profit-based compensation in First Securities compared
to 2006. The 76% increase in 2006 compared to 2005 was primarily due to the substantial increase in
revenue in 2006.

    Other general administrative expenses
Other general administrative expenses amounted to SEK675 million in 2007, compared to SEK620 million in
2006 and SEK565 million in 2005.




                                                    161
Asset Management and Insurance

                                                                                                                                         For the year ended December 31,
SEKm                                                                                                                                      2007           2006              2005

Net interest income . . . . . . . . . . . . . . .            ...........                                 .   .   .   .   .   .   .   .      83             33            35
Net commission income . . . . . . . . . . . .                ...........                                 .   .   .   .   .   .   .   .   1,868          1,601         1,258
Net gains and losses on financial items                      at fair value .                             .   .   .   .   .   .   .   .       2              2            11
Other income . . . . . . . . . . . . . . . . . . . .         ...........                                 .   .   .   .   .   .   .   .     230            192           161
Total income . . . . . . . . . . . . . . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   2,183         1,828          1,465
Staff costs . . . . . . . . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     346           261            231
Profit-based staff costs . . . . . . . . . . . .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      79            41             59
Other general administrative expenses                        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     459           373            341
Total general administrative expenses . . . . . . . . . . . . . . . . .                                                                    884           675               631
Depreciation/amortization and impairments of tangible and
  intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                         4             2                2
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                   888           677               633
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                 1,295         1,151               832
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                320           274               183
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                    975           877               649
Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . .                  ....................                                                              975            877           649
Allocated equity . . . . . . . . . . . . . . . . .       ....................                                                            1,712          1,671         1,669
Return on allocated equity, % . . . . . .                ....................                                                             57.0           52.5          38.9
Business volumes, SEKbn
Mutual funds & insurance . . . . . . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     401            398              355
Other investment volume . . . . . . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     205             26               24
Risk-weighted assets, old rules . . . . .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       0              1                0
Total assets . . . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      75             71               60

      Profit for the year attributable to the shareholders of Swedbank AB
Profit for the year attributable to the shareholders of Swedbank AB from Asset Management and Insurance
in 2007 was SEK975 million, compared to SEK877 million in 2006 and SEK649 million in 2005. Return on
allocated equity was 57.0% in 2007, compared to 52.5% in 2006 and 38.9% in 2005. The cost/income ratio
was 0.41 in 2007, compared to 0.37 in 2006 and 0.43 in 2005.

      Net interest income
Net interest income was SEK83 million in 2007, compared to SEK33 million in 2006 and SEK35 million in
2005.

      Net commission income
Net commission income was SEK1,868 million in 2007, compared to SEK1,601 million in 2006 and
SEK1,258 million in 2005. The components of net commission income are set out below:

                                                                                                                                         For the year ended December 31,
SEKm                                                                                                                                      2007           2006              2005

Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                               1,451          1,250              987
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                              391            350              272
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                             26              1               (1)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          1,868         1,601          1,258

These increases were driven by increases in the value of assets under management primarily as a result of
increasing global stock prices.




                                                                                             162
      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value amounted to SEK2 million in 2007, compared to
SEK2 million in 2006 and SEK11 million in 2005.

      Other income
Other income was SEK230 million in 2007, compared to SEK192 million in 2006 and SEK161 million in 2005.

      Staff costs, profit-based staff costs
Staff costs were SEK346 million in 2007, compared to SEK261 million in 2006 and SEK231 million in 2005.
The 33% increase in 2007 compared to 2006 was primarily due to an increase of 51 employees, of which
43 employees were added as a result of the cooperation with Folksam. Profit-based staff costs amounted to
SEK79 million in 2007, compared to SEK41 million in 2006 and SEK59 million in 2005.

      Other general administrative expenses
Other general administrative expenses amounted to SEK459 million in 2007, compared to SEK373 million in
2006 and SEK341 million in 2005. The 23% increase in 2007 compared to 2006 was primarily due to added
expenses related to the cooperation with Folksam.

Shared Services and Group Staffs

                                                                                                                                      For the year ended December 31,
SEKm                                                                                                                                   2007           2006              2005
Net interest income . . . . . . . . . . . . . . .         ...........                                 .   .   .   .   .   .   .   .    (196)          (141)         (145)
Net commission income . . . . . . . . . . . .             ...........                                 .   .   .   .   .   .   .   .      17             (9)           30
Net gains and losses on financial items                   at fair value .                             .   .   .   .   .   .   .   .    (246)           523           912
Share of profit or loss of associates . . .               ...........                                 .   .   .   .   .   .   .   .      84            (14)           67
Other income . . . . . . . . . . . . . . . . . . . .      ...........                                 .   .   .   .   .   .   .   .   3,090          3,102         3,192
Total income . . . . . . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   2,749         3,461          4,056
Staff costs . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   1,361         1,280          1,214
Profit-based staff costs . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      68            39            166
Other general administrative expenses                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   1,617         1,799          1,719
Total general administrative expenses . . . . . . . . . . . . . . . . .                                                               3,046         3,118          3,099
Depreciation/amortization and impairments of tangible and
  intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                   257            249              267
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                              3,303         3,367          3,366
Profit before loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                    (554)           94            690
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                               (72)           4             17
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                               (482)            90              673
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                             (184)         (174)             (134)
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                (298)          264               807
Profit for the year attributable to:
Shareholders of Swedbank AB . . . . . .                ....................                                                            (298)           264           807
Allocated equity . . . . . . . . . . . . . . . . .     ....................                                                           5,962          5,104         5,723
Return on allocated equity, % . . . . . .              ....................                                                             neg.            5.2         14.1
Business volumes, SEKbn
Risk-weighted assets, old rules . . . . .              ....................                                                               5              4                9
Total assets . . . . . . . . . . . . . . . . . . . .   ....................                                                             246            229              164

      Net interest income
Net interest income was an expense of SEK196 million in 2007, compared to an expense of SEK141 million in
2006 and an expense of SEK145 million in 2005.




                                                                                          163
      Net commission income
Net commission income was income of SEK17 million in 2007, compared to an expense of SEK9 million in
2006 and income of SEK30 million in 2005.

      Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value amounted to SEK(246) million in 2007, compared to
SEK523 million in 2006 and SEK912 million in 2005. The components of net gains and losses on financial
items at fair value are set out below:

                                                                                                      For the year ended December 31,
SEKm                                                                                                    2007          2006          2005

Norwegian primary capital certificates and shareholding in
  Sparebank 1 Gruppen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   21           267              501
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (267)          256              411
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (246)          523           912

The loss in 2007 compared to the gain in 2006 was primarily due to the lower value of the shareholding in
Norwegian banks and primary capital certificates, which were disposed of in 2006 and 2007. The 43%
decrease in 2006 compared to 2005 was primarily due to changes in the value of Norwegian primary capital
certificates.

      Share of profit or loss of associates
The share of profit or loss of associates was SEK84 million in 2007, compared to a loss of SEK14 million in
2006 and profit of SEK67 million in 2005. The change to profit in 2007 compared to a loss in 2006 was
primarily due to higher profit from NCSD Holding AB (VPC). The change to a loss in 2006 compared to profit
in 2005 was primarily due to lower profit from NCSD Holding AB (VPC).

      Other income
Other income (primarily internally sold services) was SEK3,090 million in 2007, compared to
SEK3,102 million in 2006 and SEK3,192 million in 2005.

      Staff costs, profit-based staff costs
Staff costs were SEK1,361 million in 2007, compared to SEK1,280 million in 2006 and SEK1,214 million in
2005. The 6% increase in 2007 compared to 2006 was primarily due to contractual salary increases. The 5%
increase in 2006 compared to 2005 was primarily due to contractual salary increases. Profit-based staff
costs were SEK68 million in 2007, compared to SEK39 million in 2006 and SEK166 million in 2005. The 77%
decrease in 2006 compared to 2005 was primarily due to a lower allocation for the Kopparmyntet profit-
sharing scheme.

      Other general administrative expenses
Other general administrative expenses amounted to SEK1,617 million in 2007, compared to
SEK1,799 million in 2006 and SEK1,719 million in 2005.

      Depreciation/amortization and impairments of tangible and intangible fixed assets
Depreciation/amortization and impairments of tangible and intangible fixed assets amounted to
SEK257 million in 2007, SEK249 million in 2006 and SEK267 million in 2005.

      Loan losses, net
Loan losses, all relating to collective provisions, amounted to an income of SEK72 million in 2007, compared
to expense of SEK4 million in 2006 and an income of SEK17 million in 2005.




                                                                           164
Consolidated
      Profit for the year attributable to the shareholders of Swedbank AB
Consolidated profit for the year attributable to the shareholders of Swedbank AB in 2007 was
SEK11,996 million, compared to SEK10,880 million in 2006 and SEK11,879 million in 2005. Return on equity
was 18.9% in 2007, compared to 19.3% in 2006 and 24.6% in 2005. The cost/income ratio was 0.51 in
2007, compared to 0.52 in 2006 and 0.48 in 2005.

      Net interest income
Consolidated net interest income increased by 20% to SEK19,157 million in 2007, compared to
SEK15,977 million in 2006. Net interest income from the lending portfolio increased by SEK1,236 million as
a result of volume increases despite continued margin pressure. Net interest income from deposits increased
by SEK2,342 million due to volume increases and higher interest margins. Net interest income from other
operations decreased by SEK398 million.
Consolidated net interest income increased by SEK298 million or 2% to SEK15,977 million in 2006, compared
to SEK15,679 million in 2005.

      Interest income
Consolidated interest income was SEK67,087 million in 2007, compared to SEK47,165 million in 2006 and
SEK39,140 million in 2005. The components of interest income are set out below:

                                                                                                                                                             For the year ended December 31,
SEKm                                                                                                                                                          2007           2006              2005
Credit institutions . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    6,518         4,643          3,007
Loans to the public . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   52,535        36,594         31,921
Interest-bearing securities             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    2,680         2,069          1,644
Other . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    5,354         3,859          2,568
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             67,087       47,165         39,140

      Interest expenses
Consolidated interest expenses were SEK47,930 million in 2007, compared to SEK31,188 million in 2006
and SEK23,460 million in 2005. The components of interest expense are set out below:

                                                                                                                                                             For the year ended December 31,
SEKm                                                                                                                                                          2007           2006              2005

Credit institutions . . . . . . . . .               .........                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    8,482         6,066          5,031
Deposits and borrowings from                        the public                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   11,011         5,729          3,746
Debt securities in issue . . . . .                  .........                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   22,661        15,775         11,635
Subordinated liabilities . . . . . .                .........                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    1,973         1,836          1,601
Other . . . . . . . . . . . . . . . . . . .         .........                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    3,803         1,782          1,449
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                             47,930       31,188         23,460

      Net commission income
Consolidated net commission income increased by 11% to SEK9,880 million in 2007, compared to
SEK8,869 million in 2006. This was mainly due to higher income from asset management and payment
services. Brokerage and lending commissions also increased. Consolidated net commission income increased
by SEK1,699 million or 24% to SEK8,869 million in 2006, compared to SEK7,170 million in 2005. Asset
management commissions increased by 18% or SEK569 million. Brokerage commissions increased by 42% or
SEK291 million.

      Net gains and losses on financial items at fair value
Consolidated net gains and losses on financial items at fair value amounted to SEK1,691 million during 2007,
compared to SEK2,738 million in 2006. In the second half of 2007 income was negatively affected by




                                                                                                                165
turbulence in the financial markets. Income in 2006 was positively affected by SEK267 million from the
change in the value of Norwegian primary capital certificates and the shareholding in SpareBank 1 Gruppen.
Consolidated net gains and losses on financial items at fair value amounted to SEK2,738 million in 2006,
compared to SEK2,817 million in 2005, primarily as a result of changes in the value of Norwegian primary
capital certificates.

    Share of profit or loss in associates
The consolidated share of the profit or loss in associates increased to SEK424 million in 2007, compared to
SEK222 million in 2006, primarily as a result of improved profit in EnterCard and NCSD Holding AB (VPC).
The consolidated share of the profit or loss in associates decreased to SEK222 million in 2006, compared to
SEK301 million in 2005, primarily as a result of lower profit from NCSD Holding AB (VPC).

    Other income
Consolidated other income increased by 27% to SEK1,772 million in 2007, compared to SEK1,391 million in
                                                ¨ a
2006, primarily due to income from Swedbank Fors¨ kring related to a surplus from the loan protection
product and capital gain from the sale of CEK AB.
Consolidated other income decreased by SEK2,102 million to SEK1,391 million in 2006, compared to
SEK3,493 million in 2005, primarily due to capital gains from the sale of 50% of EnterCard Holding AB
SEK800 million) and the sale of KIAB to Lindorff (SEK1,421 million). Excluding capital gains, other income
increased by SEK119 million or 3% from 2005 to 2006.

    Staff costs, profit-based staff costs
Consolidated staff costs increased by SEK881 million or by 12% to SEK8,134 million in 2007, compared to
SEK7,253 million in 2006. Rapid growth in the Baltic region, salary increases, the acquisition of the Ukrainian
                      ¨
Banking Operations, Soderhamns Sparbank and the Folksam agreement contributed to the increase in staff
costs.
Consolidated staff costs increased by SEK416 million or 6% to SEK7,253 million in 2006, compared to
SEK6,837 million in 2005, mainly due to the international expansion as well as contractual salary increases.
Consolidated profit-based staff costs increased by 27% to SEK1,658 million in 2007, compared to
SEK1,307 million in 2006.
Consolidated profit-based staff costs decreased by SEK47 million or 3% to SEK1,307 million in 2006,
compared to SEK1,354 million in 2005.

    Other general administrative expenses
Consolidated other general administrative expenses increased by SEK302 million or by 5% to
SEK6,222 million in 2007, compared to SEK5,920 million in 2006, primarily due to IT and armored transport
costs, as well as changes in the Bank’s structure. A VAT refund of SEK60 million in Russia in 2007 compared
with provisions of SEK151 million in 2006 contributed to the comparison of expenses by SEK211 million.
Consolidated other general administrative expenses increased by SEK558 million or 10% to SEK5,920 million
in 2006, compared to SEK5,362 million in 2005, primarily due to increased expenses in Baltic Banking. IT
expenses increased by 3% to SEK1,257 million, compared to SEK1,216 million in 2005. Russian Banking was
affected by a provision of SEK151 million regarding a VAT dispute in Russia.

    Depreciation/amortization and impairments of tangible and intangible fixed assets
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
7% to SEK705 million in 2007, compared to SEK659 million in 2006.
Consolidated depreciation/amortization and impairments of tangible and intangible fixed assets increased by
9% to SEK659 million in 2006, compared to SEK603 million in 2005.




                                                     166
    Loan losses, net
Consolidated loan losses amounted net to an expense of SEK619 million in 2007, compared to an income of
SEK205 million in 2006, corresponding to a loan loss ratio of 0.07% in 2007, compared to a negative loan
loss ratio of 0.02% in 2006.
Consolidated loan losses amounted to net income of SEK205 million in 2006, compared to expense of
SEK294 million in 2005, corresponding to a negative loan loss ratio of 0.02% in 2006, compared to 0.04% in
2005.

    Tax expense
Consolidated profit before tax amounted to SEK15,586 million in 2007, compared to SEK14,263 million in
2006 and the consolidated tax expense was SEK3,450 million in 2007, compared to SEK3,211 million in
2006, giving an effective tax rate of 22% in 2007, compared to 23% in 2006.
Consolidated profit before tax amounted to SEK14,263 million in 2006, compared to SEK15,010 million in
2005 and the consolidated tax expense was SEK3,211 million in 2006, compared to SEK2,781 million in
2005, giving an effective tax rate of 23% in 2006, compared to 19% in 2005.

Off-balance sheet obligations
The Bank has no SIV (structured investment vehicle) off-balance sheet obligations.

Liquidity and capital resources
Liquidity
Liquidity risks refer to the risk that the bank cannot fulfill its payment commitments on any given due date,
without significantly raising the cost to fund payments. In other words, liquidity risks arise when the
maturities of the Bank’s assets and liabilities, including derivatives, do not coincide. Liquidity risks can arise
from banking operations and from trading. The Bank defines liquidity risk as the risk that, in a strained
market situation, it will have difficulty meeting its payment commitments or be forced to borrow money on
unfavorable terms.
For more information regarding liquidity risk management see ‘‘Risk Management.’’
The working capital and the capital resources are, in the opinion of the Bank, sufficient for the Bank’s
requirements for a period of 12 months from the date of this prospectus.

Sources of funding
The main funding sources in the Bank consist of deposits from the public, covered bonds and unsecured
issued debt. Both the Bank and its mortgage subsidiary Swedbank Mortgage AB have a well-diversified
investor base. In line with the funding strategy, as of September 30, 2008, more than 50% of the funding in
the Bank is in currencies other than SEK.
During the autumn 2008, the access of banks to wholesale funding markets have been substantially reduced.
This trend was exacerbated by the collapse of Lehman Brothers in September 2008. The activity in the
markets for commercial paper, covered bonds and unsecured bonds remain low. As these markets constitute
important funding sources for the Bank, it has, in common with most other European banks, been forced to
utilize facilities made available by central banks, in the Bank’s case, primarily the Swedish Riksbank.




                                                      167
The following table shows the breakdown of the Bank’s different funding sources:

Swedbank
SEKm, nominal amounts
As per September 30, 2008                                                                                                                                                                                                                          Total

Domestic Commercial Paper . . . . .                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    13,554
Euro Commercial Paper . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    20,665
US Commercial Paper . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    66,178
Certificates of Deposits New York .                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    21,405
Medium Term Notes . . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    34,191
Global Medium Term Notes . . . . . .                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    81,181
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                     237,174

Swedbank Mortgage
SEKm, nominal amounts
As per September 30, 2008                                                                                                                                                                                                                          Total

Euro Commercial Paper . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    38,228
French Certificates Deposits                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    14,295
US Commercial Paper . . . . .               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    23,351
Domestic Commercial Paper                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    21,971
Euro Medium Term Notes . .                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    71,702
Domestic Benchmark . . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   273,482
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                     443,029

Deposits from the public
Swedish Banking is the main deposit-taking entity within the group although all the three Baltic subsidiaries
also receive significant amounts of deposits. The loan portfolio of the Issuer is primarily sourced through
deposits. As of September 30, 2008, the Bank’s total deposits and borrowings from the public amounted to
SEK507 billion.

Covered bonds
Swedbank Mortgage’s lending to the public is financed through capital market borrowing primarily covered
bonds. The covered bonds are rated with an AAA rating from Standard and Poor’s and an Aaa rating from
Moody’s. The quality of the covered bonds results from the high quality in Swedbank Mortgage’s secured
credit portfolio, which consists of loans with collateral in Swedish real estate currently with an average
loan-to-value ratio of 43% (compared to 44% for the entire loan portfolio) or loans to or with a guarantee
from Swedish municipalities. During the first nine-months of 2008, Swedbank Mortgage issued covered
bonds for SEK94 billion to investors in the Swedish and in the international markets. During the third quarter
of 2008, the corresponding amount was SEK29 billion in the international market. The Bank estimates that
during the fourth quarter 2008, SEK25 billion of external long-term financing matures and in 2009
SEK102 billion matures. As of September 30, 2008, Swedbank Mortgage had SEK409 billion of covered
bonds outstanding.

Other issued debt
As a source of long term funding, the Bank issues unsecured bonds, mainly used as a supplementary funding
source for the Bank’s business outside Sweden. Both the Issuer and Swedbank Mortgage have several
programs for short term funding and can issue certificates and commercial papers under those programs. As
a further source of funding, the Bank had outstanding as of September 30, 2008 issued subordinated
liabilities, mainly accounted as Tier 1 or Tier 2 capital for the purposes of capital adequacy amounting to
SEK41 billion (excluding covered bonds).

Interbank funding
The Bank’s capital markets funding is mostly program financed. A minor part of the funding comes from
interbank funding through loans or deposits from financial institutions.




                                                                                                                168
Loans from the Swedish Central Bank, the National Debt Office and the ECB
During the autumn market turmoil both the European central banks and the Swedish National Debt Office
opened different loan facilities for banks in order to improve the market liquidity. The Bank has used these
facilities as an additional source of funds and borrowed funds from the Swedish Central Bank, the National
Debt Office, the Bank of Norway and the ECB.

Refinancings
As of September 30, 2008, it was estimated that the Issuer needs to refinance its outstanding debt of
SEK18 billion in 2008 and SEK40 billion in 2009. As of September 30, 2008, it was estimated that Swedbank
Mortgage needs to refinance its outstanding debt of SEK25 billion in 2008 and SEK102 billion in 2009.

Swedish government guarantee plan
The Swedish government launched a Financial Stabilization Plan in October 2008 with the purpose of
stabilizing the Swedish financial system that involved the establishment of a medium-term credit guarantee
plan (the ‘‘Guarantee Plan’’) of up to SEK1,500 billion, of which up to SEK500 billion is for covered bonds with
a term of three to five years. The principal objective of the Guarantee Plan is to improve the liquidity of
Swedish banks and credit institutions. The Guarantee Plan applies to bonds, commercial papers, certificates
of deposits and other non-subordinated debt instruments (including covered bonds) with terms longer than
90 days but less than three years, but excludes complex and structured financial products. A guarantee
under the Guarantee Plan may be given for the covered bonds that have a term exceeding 90 days, but not
exceeding maturity of up to five years. The institution can choose to apply for a guarantee for one or more
loans. Guarantees may be provided until April 30, 2009, with a possible extension to December 31, 2009.
On November 4, 2008, the Issuer confirmed that it intended to apply to participate in the Guarantee Plan and
on November 7, 2008 the Issuer entered into a guarantee commitment with the Swedish National Debt
Office. To guarantee the Bank’s funding under the Guarantee Plan the Swedish National Debt Office receives
a fee of 50 basis points for unsecured debt with maturities of 91 days up to one year. The fee is 83 basis
points for unsecured debt with maturities longer than 1 year and not longer than 3 years. For covered bonds
the annual fee is expected to be slightly above 25 basis points, although the final outcome must be
confirmed by National Debt Office in cooperation with ECB.
The Issuer and Swedbank Mortgage have started to issue debt instruments pursuant to the Guarantee Plan.
As of November 26, 2008, the Issuer had issued SEK26.2 billion and Swedbank Mortgage had issued
SEK3.5 billion under the Domestic Commercial Paper program. As of November 28, 2008 the Issuer had
issued a further EUR2 billion, CHF200 million, SEK14 billion under its Global Medium Term Note program and
SEK5 billion under the Domestic Commercial Paper program pursuant to the Guarantee Plan.

Cash flow
The table below shows the composition of the Bank’s cash flow for the periods indicated.

                                                                                       For the nine month
                                                                                                                   For the year ended
                                                                                             period ended
                                                                                                                     December 31,
                                                                                            September 30,
SEKm                                                                                                 2008      2007         2006          2005

Cash and cash equivalents at
  beginning of year* . . . . . . . .           .   .   .   .   .   .   .   .   .   .             100,763     83,032       89,514         80,032
Cash from operating activities .               .   .   .   .   .   .   .   .   .   .             (64,235)   (75,085)     (58,747)       (44,719)
Cash from investing activities .               .   .   .   .   .   .   .   .   .   .                (224)    (6,203)       1,076        (12,788)
Cash from financing activities .               .   .   .   .   .   .   .   .   .   .             (23,922)    97,626       52,074         66,192
Cash flow for the year . . . . . . . . . . . . . . . .                                           (88,381)    16,338       (5,597)        8,685
Cash and cash equivalents at
  end of year . . . . . . . . . . . . . . . . . . . . . . .                                       13,205    100,763       83,032        89,514

*     of which, securities pledged for OMX AB
      at beginning of year . . . . . . . . . . . . . . . . . . .                                               4,384        2,729         2,296
      at end of year . . . . . . . . . . . . . . . . . . . . . . .                                             8,086        4,384         2,729




                                                                                           169
Operating activities
Cash flow from operating activities is based on profit for the year, adjusted for non-cash items and items not
related to operating activities. Changes in assets and liabilities from operating activities consist of items that
are part of normal business activities, such as loans to and deposits and borrowings from the public and
credit institutions, and that are not attributable to investing and financing activities. Cash flow included
interest receipts of SEK64,704 million in 2007, compared to SEK46,558 million in 2006, and interest
payments, including capitalized interest, of SEK46,034 million in 2007, compared to SEK30,055 million in
2006. The decrease in cash flow from operations during the three year period is due to an increase in loans to
the public.
Due to the financial turbulence in 2008 the Bank has, to a larger extent, used cash and cash equivalents to
finance its operations. Cash and cash equivalents decreased by SEK88,381 million in the first nine months
of 2008.

Investing activities
Investing activities consist of the purchase and sales of fixed assets and strategic investments. When
businesses are acquired or divested, the cash and cash equivalents included in them are reported as separate
items.
During the first nine months of 2008 the Bank has acquired all shares in Folksam Fond AB, which was settled
in cash for SEK463 million. During the first nine months of 2008 the Bank has also sold eight branches to
savings banks for a price of SEK440 million.
In 2007, financial assets were acquired for SEK5,783 million, of which SEK4,943 million was paid in cash. The
significant acquisitions were OJSC Swedbank (former name JSCB TAS–Kommerzbank), Soderhamns        ¨
                                                                   ¨
Sparbank AB and Zamsos AB. With respect to the acquisition of Soderhamns Sparbank AB, assets excluding
acquired cash and cash equivalents amounted to SEK1,154 million, of which lending to the public was
                   ¨
SEK871 million. Soderhamns Sparbank’s liabilities amounted to SEK1,039 million, of which deposits from the
public were SEK1,027 million. With respect to the acquisition of OJSC Swedbank, assets excluding acquired
cash and cash equivalents amounted to SEK9,071 million, of which lending to the public was
SEK7,737 million. OJSC Swedbank’s liabilities amounted to SEK8,448 million, of which SEK3,009 million was
owed to credit institutions and deposits from the public was SEK4,583 million. In 2007, the Bank sold certain
shares and received total consideration of SEK333 million. The most significant sales were shares in CEK AB,
MasterCard and primary capital certificates in Sparbanken Nord.
In 2006, shares were sold and cash received in an amount of SEK1,632 million. The most significant sales
consisted of Sparebank 1, Rogaland, Sparebank Midt and Mastercard.
In 2005 shares for a total purchase price of SEK16,046 million were acquired. The most significant
acquisitions consisted of an outstanding minority interest in AS Hansabank and supplementary acquisitions
of First Securities ASA, which was, as a result, entered in the accounts as a subsidiary. At the time of the
acquisition of First Securities ASA, assets excluding acquired cash amounted to SEK1,111 million, of which
loans to the public amounted to SEK920 million. The entity’s liabilities amounted to SEK1,345 million, of
which amounts owed to credit institutions amounted to SEK384 million and deposits from the public
amounted to SEK452 million. In 2005, shares were sold and cash received to an amount of SEK3,545 million.
The most significant sales consisted of Kundinkasso AB and the part-divestment of EnterCard Holding AB
and Aktia Sparbank Ab. At the time of the sale of EnterCard Holding AB, which is now entered in the accounts
as an associated entity, its assets amounted to SEK6,506 million, of which loans to the public amounted to
SEK5,846 million and liabilities amounted to SEK3,841 million (of which amounts owed to credit institutions
amounted to SEK3,361 million). At the time of the sale of Kundinkasso AB, which had previously been a
subsidiary, assets amounted to SEK311 million and liabilities amounted to SEK17 million.
The Bank has signed an agreement to acquire Banco Fonder AB. The acquisition is scheduled to close on
January 20, 2009 when the purchase price will be paid.
Swedbank Robur AB made public on November 18, 2008 that two funds have been acquired from Carnegie.
Apart from normal IT development projects, construction and reconstruction of offices, opening of new
branches in Ukraine and Russia and what has been mentioned above, the Bank does not have any material
ongoing investments or undertakings to make material investments. The investments will be financed
through internally generated funds.




                                                      170
Financing activities
Issue and redemption of bond loans with maturities exceeding one year are reported gross. Change in other
borrowing includes the net change in borrowing with shorter terms and high turnover. The primary cause of
changes in cash flow from financing activities is due to changes in the amount of interest bearing securities
issued and redeemed during the relative period.

Cash and cash equivalents
Cash and cash equivalents consist of cash and balances with central banks, for net claims the net of
overnight deposit receivables and overnight deposit liabilities with maturities up to five days, and treasury
bills, other bills and mortgage bonds eligible for refinancing with central banks taking into account repos and
short-selling.

Capital adequacy
The following table sets forth the financial companies group capital adequacy data as of the dates indicated.

                                                                                                             Capital
                                                                                                          requirement
                                                                                                          according to
                                                                                                           older rules
                                                                                         September 30,   September 30,   December 31,
SEKm                                                                                             2008            2008           2007

Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        57,792                         50,920
Tier 2 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        27,764                         27,458
Settlements, equities, etc. . . . . . . . . . . . . . . . . . . . . . . . . . .               (1,951)                        (1,922)
Total capital base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             83,606                         76,456
Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .                666,612         978,806        600,238
Capital requirement for credit risks, standardized approach .                                 19,293          75,706         19,364
Capital requirement for credit risks, IRB . . . . . . . . . . . . . . . .                     28,541                         24,737
Capital requirement for settlement risks . . . . . . . . . . . . . . .                             7                7             7
Capital requirement for market risks . . . . . . . . . . . . . . . . . .                       1,600            2,591         1,242
of which, risks in the trading book outside VaR . . . . . . . . .                                799            1,791           891
of which, currency risks outside VaR . . . . . . . . . . . . . . . . . .                           9                9             0
of which, risks where VaR models are applied . . . . . . . . . . .                               791              791           351
Capital requirement for operational risks . . . . . . . . . . . . . . .                        3,888                          2,669
Capital requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              53,329           78,305        48,019
Complement during transition period . . . . . . . . . . . . . . . . . .                       14,463                         17,770
Capital requirement including complement . . . . . . . . . .                                 67,792                         65,789
Capital quotient excluding complement . . . . . . . . . . . . . . . .                            1.57                           1.59
Tier 1 capital ratio,%, excluding complement . . . . . . . . . . . .                              8.7                            8.5
Total capital adequacy ratio,%, excluding complement . . . .                                     12.5                           12.7
Capital quotient, transition rules . . . . . . . . . . . . . . . . . . . . .                     1.23                           1.16
Tier 1 capital ratio,%, transition rules . . . . . . . . . . . . . . . . .                        6.8                            6.2
Total capital adequacy ratio,%, transition rules . . . . . . . . . .                              9.9                            9.3
The capital adequacy ratio, which is calculated for the financial companies of the group, was 12.5% as of
30 September 2008 with full effect of the new rules (12.7% as of 31 December 2007), of which the tier 1
capital ratio was 8.7% (8.5%). The capital adequacy quotient was 1.57 (1.59). Tier 1 capital includes profit
for the period after deducting the estimated dividend. Taking into account the transitional rules, the tier 1
capital ratio was 6.8% (6.2%), the capital adequacy ratio was 9.9% (9.3%) and the capital adequacy quotient
was 1.23 (1.16).
The transition to the new Basel 2 rules is being implemented gradually. The Bank will not be subject to the
full anticipated effect of a reduced capital requirement until 2010. As of 2008, all companies in the financial
companies of the Group report according to the new Basel 2 rules. The other companies that reported strictly
according to the old Basel 1 rules in 2007 are now reporting according to the standard method in the new
rules. These companies include the Bank’s subsidiaries in the Baltic region, Russia and Ukraine as well as
Swedbank Finans.




                                                                         171
Significant changes in financial and market position
Except for the Bank’s agreements with the Swedish National Debt Office under the Guarantee Plan
discussed in ‘‘Swedish government guarantee plan’’ above and in ‘‘Legal Considerations and Supplementary
Information’’ there has been no significant change in the financial position or market position of the Bank
since the publication on October 23, 2008 of the interim report relating to results for period ended
September 30, 2008.




                                                   172
                       PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Financial data
The Bank has prepared its audited consolidated annual financial statements as of and for the years ended
December 31, 2007, 2006 and 2005 in accordance with International Financial Reporting Standards as
adopted by the European Union (‘‘IFRS’’). The Bank has prepared the reviewed but unaudited condensed
consolidated financial statements as of and for the nine month periods ended September 30, 2008 and 2007
in accordance with International Accounting Standard 34 (‘‘IAS 34’’), ‘‘Interim Financial Reporting.’’ The
financial information included in the discussion of the results of operations should be read in conjunction
with ‘‘Summary of Financial Information,’’ ‘‘Exchange Rate Information and Regulations’’ and the financial
statements, including the notes thereto, included elsewhere in this prospectus.
The Bank presents certain measures on a consolidated and/or segmental basis, which management uses to
measure the profitability of its individual segments, including the following measures:
•   Return on allocated equity: The Bank allocates its total equity to its various business segments, and
    computes return on allocated equity on the basis of the segment’s profit attributable to shareholders of
    Swedbank AB.
•   Cost/income ratio: is computed as the segment’s total expenses divided by total income. Total expenses
    do not include net loan losses.
•   Risk weighted assets: is a measure defined by the capital adequacy rules in Sweden and represent a
    measure of the Bank’s risk-taking. The capital adequacy rules changed in 2007, and accordingly, the
    Bank is required to present its risk-weighted assets in accordance with the old rules, new rules and
    transition rules. See ‘‘Risk Management—New Capital Adequacy Rules’’ for further information,
    including the timing and implications of the risk weighted asset rules.
The Bank presents its financial statements in Swedish krona (‘‘SEK’’). For certain information regarding the
rates of exchange between SEK and euros and between SEK and U.S. dollars (‘‘U.S.$’’ or ‘‘USD’’), see
‘‘Exchange Rate Information and Regulations.’’
Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures
shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Market shares and other information
Information regarding the markets, the size of the markets and the growth rates of the markets the Bank
operates in as well as the Bank’s market share and market position in such markets and other industry data
pertaining to the Bank’s business contained in this prospectus has been extracted from external sources such
as industry or general publications or state statistical organizations or, when such sources were not
available, prepared in good faith by the Bank based on its knowledge of its operations and these markets.
It should be noted that certain data is largely derived from industry statistics, which are inherently predictive
and subject to uncertainty, and are not necessarily reflective of actual market conditions or the competitive
pressure to which the Bank is subject. Where information has been sourced from a third party, this
information has been accurately reproduced and, as far as the Issuer is aware and is able to ascertain from
information published or provided by that third party, no facts have been omitted which would render the
reproduced information inaccurate or misleading. The sources of information which are published or provided
by third parties are provided wherever such third party information is used in the prospectus.




                                                      173
                                          FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Forward-looking statements are all statements in this
prospectus that do not relate to historical facts and events. Forward-looking statements can be identified by
the use of the words ‘‘should,’’ ‘‘may,’’ ‘‘will,’’ ‘‘believes,’’ ‘‘assumes,’’ ‘‘expects,’’ ‘‘estimates,’’ ‘‘plans,’’ ‘‘intends’’
or, in each case their negative formulations, or other formulations of a similar meaning. Forward-looking
statements are set forth in a number of places in this prospectus including in the sections ‘‘Summary,’’ ‘‘Risk
Factors,’’ ‘‘Background and Reasons,’’ ‘‘Business,’’ ‘‘Detailed Commentary on the Financial Development,’’
‘‘Dividends and Dividend Policy’’ and wherever this prospectus includes information on the future results,
plans and expectations with regard to the Bank’s business, and on growth, profitability and the general
economic conditions to which the Bank is exposed. Such statements relate to, among others:
•    the expectations of the financial markets that the current global credit crisis is capable of some form of
     resolution;
•    the expectations of the Bank in regard to the effects of risks concerning its business, such as the
     actuarial risk and the risks associated with changes in the value of investments;
•    certain operational and financial targets of the Bank and its dividend policy;
•    the impact of movements in foreign exchange rates and, in particular, the impact of a potential
     devaluation or depreciation of any of the national currencies of the Baltic countries, Russia or Ukraine.
•    the competitive environment in which the Bank operates; and
•    other statements in regard to future business development of the Bank and general economic
     developments and trends.
These forward-looking statements are based on the Bank’s present plans, estimates, projections and
expectations. They are based on certain expectations, which, even though they seem to be adequate at
present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and
certain factors and are subject to risks and uncertainties. The reader should not unduly rely on these
forward-looking statements. Numerous factors may cause actual results, realized revenues or performance
to differ materially from the results, revenues or performance expressed or implied in the forward-looking
statements of the Bank. These factors include, among others:
•    the impact of the global credit crisis and the reactions of investors, national and transnational regulators
     and financial institutions to the crisis and attempts to address it;
•    a decline in the availability of financing at acceptable prices;
•    changes in actuarial assumptions;
•    changes in general economic and business conditions;
•    changes and fluctuations in interest rates, share prices and exchange rates;
•    political and regulatory changes or changes in political or social conditions;
•    changes in the competitive environment;
•    changes in the Bank’s credit ratings;
•    success of acquisitions;
•    economic developments in the three Baltic countries, Estonia, Latvia and Lithuania, or in Russia or
     Ukraine, and the potential devaluation of any of the national currencies of these countries;
•    the Bank’s ability to increase market share for its products and services and control expenses;
•    the Bank’s ability to recruit and retain qualified personnel;
•    the Bank’s ability to manage successfully the risks associated with the aforementioned factors;
•    other factors, which are discussed in more detail under the heading ‘‘Risk Factors’’; and
•    factors which are presently unknown to the Bank or not currently considered by the Bank to be material.
The absence or the occurrence of these factors may cause actual results, including the financial position and
profitability of the Bank, to differ significantly from the results stated or described, expressly or implicitly, in
the sections containing such forward-looking statements. Therefore, the sections ‘‘Risk Factors,’’ ‘‘Business’’


                                                              174
and ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ should in
particular be read carefully, as they describe in detail factors which may influence the business development
of the Bank and the banking industry.
In light of the risks, uncertainties, assumptions and other factors referred to in this C, events described in the
forward-looking statements may not occur or may fail to materialize. The same applies to future-related
estimates and projections from third-party sources referred to herein, see ‘‘Presentation of Financial and
Other Information.’’
Consequently, neither the Bank, its Board of Directors or its management, nor the Joint Bookrunners can
guarantee the accuracy and completeness of any of the forward-looking statements contained in this
prospectus or the actual materialization of predicted developments. The Bank and the Joint Bookrunners
expressly disclaim any obligation to update such forward-looking statements and to adjust them in light of
future events or developments save as required by law.




                                                      175
                                                HISTORICAL FINANCIAL REPORTS

Auditor’s Report on New Historical Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   F-2
Audited Consolidated Financial Statements as of and for the Financial Years Ended December 31,
2007, 2006 and 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    F-3
Consolidated Income Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         F-3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      F-4
Consolidated Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           F-6
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                F-8
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                F-10
Unaudited Condensed Consolidated Financial Statements as of and for the Nine-Month Periods
Ended September 30, 2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               F-80
Unaudited Condensed Consolidated Income Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        F-80
Unaudited Condensed Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    F-81
Unaudited Condensed Consolidated Statements of Changes in Equity . . . . . . . . . . . . . . . . . . . . . .                                F-82
Unaudited Condensed Consolidated Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          F-83
Notes to the Unaudited Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . .                                F-84
Auditors’ Report on Review of Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 F-96




                                                                       F-1
                THE AUDITOR’S REPORT ON NEW HISTORICAL FINANCIAL REPORTS
To the Board of Directors of Swedbank AB
We have audited the financial reports of Swedbank AB (publ), which comprise the balance sheets as at
December 31, 2007, December 31, 2006, and December 31, 2005 and the income statements, the cash flow
statements and statements of changes in equity for the years then ended and a summary of significant
accounting principles and other explanatory notes.

The Board of Directors and President’s responsibility for the Financial Reports
The Board of Directors and the President are responsible for the preparation and fair presentation of these
Financial Reports in accordance with IFRS as adopted by the EU, and in accordance with the requirements in
the Prospectus Directive for the implementation of the Prospectus Regulation, 809/2004/EC. This
responsibility includes: designing, implementing and maintaining internal controls relevant to the
preparation and fair presentation of the Financial Reports that are free from material misstatements,
irrespective of whether such are due to fraud or errors.

Auditors’ responsibility
Our responsibility is to express an opinion on these Financial Reports based on our audit. We conducted our
audit in accordance with FAR SRS’s RevR5, Granskning av prospekt. This recommendation requires that we
plan and perform the audit to obtain reasonable assurance whether the Financial Reports are free from any
material misstatement.

Work performed
An audit pursuant to FAR SRS’s RevR 5, Granskning av prospekt, involves performing procedures to obtain
audit evidence about the amounts and disclosures in the Financial Reports. The audit procedures selected
depend on the auditor’s judgment, including our assessment of the risk of material error in the Financial
Reports, irrespective of whether such are due to fraud or errors. In making those risk assessments, we
consider internal control relevant to the company’s preparation and fair presentation of the Financial Reports
as a basis for designing the audit procedures that are appropriate in the circumstances, but not for the
purpose of issuing an opinion on the effectiveness of the company’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of the significant
estimates made by the Board of Directors and the President, as well as evaluating the overall Financial
Reports presentation. We believe that the audit evidence obtained is sufficient and appropriate as a basis for
our opinion.

Opinion
In our opinion, the Financial Reports give a true and fair view in accordance with IFRS, as adopted by the EU,
of the financial position of Swedbank AB (publ) as per December 31, 2007, December 31, 2006, and
December 31, 2005 and the results and cash flows for the years then ended.

                                      Stockholm, November 30, 2008
                                                Deloitte AB
                                               Jan Palmqvist
                                       Authorized Public Accountant




                                                     F-2
                                                             INCOME STATEMENT

SEKm                                                                                                 Note     2007        2006      2005

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      67,087     47,165     39,140
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     (47,930)   (31,188)   (23,461)
Net interest income . . . . . . . . . . . . . . . . . . . . . . . .                                    3    19,157     15,977     15,679
Commission income . . . . . . . . . . . . . . .              ......                  ....                   12,939     11,465       9,525
Commission expenses . . . . . . . . . . . . . .              ......                  ....                   (3,059)    (2,596)     (2,355)
Net commissions . . . . . . . . . . . . . . . .              ......                  ....              4     9,880      8,869      7,170
Net gains and losses on financial items                      at fair
   value . . . . . . . . . . . . . . . . . . . . . . . . .   ......                  ....              5      1,691      2,738     2,817
Insurance premiums . . . . . . . . . . . . . . .             ......                  ....                     1,711      1,353     1,114
Insurance provisions . . . . . . . . . . . . . . .           ......                  ....                    (1,163)    (1,089)     (960)
Net insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        548        264        154
Share of profit or loss of associates . . . . . . . . . . . . .                                       21       424        222        301
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               6     1,224      1,127      3,339
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                    32,924     29,197     29,460
Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             7    9,792      8,560      8,191
Other general administrative expenses . . . . . . . . . .                                            8, 9    6,222      5,920      5,362
Total general administrative expenses . . . . . . . .                                                       16,014     14,480     13,553
Depreciation and amortization . . . . . . . . . . . . . . . . .                                       10       705        659        603
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      16,719     15,139     14,156
Profit before loan losses . . . . . . . . . . . . . . . . . . . .                                           16,205     14,058     15,304
Loan losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              11       619        (205)      294
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      15,586     14,263     15,010
Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             12     3,450      3,211      2,781
Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . .                                       12,136     11,052     12,229

Profit for the year attributable to:

Shareholders of Swedbank AB . . . .                      .   .   .   .   .   .   .   .   .   .   .          11,996     10,880     11,879
Minority interest . . . . . . . . . . . . . . . .        .   .   .   .   .   .   .   .   .   .   .             140        172        350
Earnings per share, SEK . . . . . . . . . . .            .   .   .   .   .   .   .   .   .   .   .    13     23.28      21.11      23.14
Earnings per share after dilution, SEK                   .   .   .   .   .   .   .   .   .   .   .    13     23.28      21.11      23.14




                                                                                         F-3
                                                                  BALANCE SHEET

SEKm                                                                                                   Note        2007        2006        2005
Assets
Cash and balances with central banks . . . . . . . . . . . . . . .                                .               21,200      17,310      12,011
Treasury bills and other bills eligible for refinancing with
   central banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    .       15      37,134      23,024      26,523
Loans to credit institutions . . . . . . . . . . . . . . . . . . . . . . .                        .       16     174,014     161,097     152,348
Loans to the public . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       .   17, 18   1,135,287     946,319     822,425
Bonds and other interest-bearing securities . . . . . . . . . . .                                 .       19      78,358      76,576      60,983
Fund shares for which customers bear the investment risk                                          .               69,324      65,008      55,008
Shares and participating interests . . . . . . . . . . . . . . . . . .                            .      20        6,101       5,610       6,462
Investments in associates . . . . . . . . . . . . . . . . . . . . . . . .                         .      21        2,193       1,971       1,868
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   .      22       36,984      23,864      32,170
Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . .                       .      23       20,139      15,066      15,574
Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     .      24        2,688       1,853       1,859
Current tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      .                  686           —          14
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       .      12           11           6           5
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    .      25       14,157       8,217       3,695
Prepaid expenses and accrued income . . . . . . . . . . . . . . .                                 .      26        9,708       7,068       6,338
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               1,607,984   1,352,989   1,197,283
Liabilities and equity
Liabilities
Amounts owed to credit institutions . . . . . . . . .                 ........                           27      163,785     130,642     110,066
Deposits and borrowings from the public . . . . . .                   ........                           28      458,375     400,035     338,894
Debt securities in issue . . . . . . . . . . . . . . . . . . .        ........                           29      673,116     561,208     517,582
Financial liabilities for which customers bear the
  investment risk . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .   .   .               69,819      65,289      55,249
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .      22       36,267      31,607      30,144
Current tax liabilities . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .   .   .                  536         810         848
Deferred tax liabilities . . . . . . . . . . . . . . . . . . .        .   .   .   .   .   .   .   .      12        2,196       1,424       1,479
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .   .   .      30       75,366      49,806      41,487
Accrued expenses and prepaid income . . . . . . . .                   .   .   .   .   .   .   .   .      31       15,511      12,813      11,439
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .      32        4,954       4,653       4,005
Subordinated liabilities . . . . . . . . . . . . . . . . . . .        .   .   .   .   .   .   .   .      33       39,736      34,425      32,221
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              1,539,661   1,292,712   1,143,414
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       34
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      315         303         232
Equity attributable to shareholders of the parent . . . . . . . .                                                 68,008      59,974      53,637
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 68,323      60,277      53,869
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . .                                     1,607,984   1,352,989   1,197,283

Pledged assets, contingent liabilities and commitments . . .                                             35

Notes not directly related to the income statement, the balance sheet, the cash flow statement or statement
of changes in equity:
Note 1—Corporate information
Note 2—Accounting policies
Note 14—Dividend paid and proposed
Note 36—Business segments
Note 37—Business combinations
Note 38—Fair value of financial instruments
Note 39—Credit risks
Note 40—Financial risks and other risks
Note 41—Change in value if the market interest rate rises by one percentage point



                                                                                          F-4
Note 42—Currency distribution
Note 43—Summary of maturities
Note 44—Capital adequacy analysis
Note 45—Related parties and other significant relationships
Note 46—Sensitivity analysis
Note 48—Events after December 31, 2007




                                                  F-5
                                                            CASH FLOW STATEMENT

SEKm                                                                                                           Note       2007        2006        2005

Cash and cash equivalents at beginning of year* . . . . .                                                              83,032      89,514      80,032
Operating activities
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          15,586      14,263      15,010
Adjustments for non-cash items in operating activities                                                          47         903       2,158      (1,284)
Taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        (3,311)     (3,356)     (5,206)
Increase/decrease in loans to credit institutions . . . . . .                                                           22,153     (12,858)    (18,288)
Increase/decrease in loans to the public . . . . . . . . . . . .                                                      (183,846)   (127,010)    (76,661)
Increase/decrease in holdings of securities for trading .                                                              (18,913)     (4,910)    (15,111)
Increase/decrease in deposits and borrowings from the
   public including retail bonds . . . . . . . . . . . . . . . . . . .                                                 67,976      58,012      46,569
Increase/decrease in amounts owed to credit
   institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        23,805       2,878      13,620
Change in other assets and liabilities, net . . . . . . . . . . .                                                         562      12,076      (3,368)
Cash flow from operating activities . . . . . . . . . . . . .                                                         (75,085)    (58,747)    (44,719)
Investing activities
Purchase of fixed assets and strategic investments** .                                                                  (6,614)     (1,067)    (18,638)
Sales of fixed assets and strategic investments . . . . . .                                                                411       2,143       5,850
Cash flow from investing activities . . . . . . . . . . . . .                                                          (6,203)      1,076     (12,788)
Financing activities
Proceeds from debt securities issuance .                       .   .   .   .   .   .   .   .   .   .   .   .           176,569     244,650     151,267
Redemption of debt securities issued . .                       .   .   .   .   .   .   .   .   .   .   .   .          (173,605)   (194,897)   (124,914)
Increase/decrease in other funding . . . .                     .   .   .   .   .   .   .   .   .   .   .   .            98,914       6,293      42,705
Dividend paid . . . . . . . . . . . . . . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .            (4,252)     (3,972)     (3,334)
New share issue . . . . . . . . . . . . . . . . . .            .   .   .   .   .   .   .   .   .   .   .   .                                       468
Cash flow from financing activities . . . . . . . . . . . . .                                                          97,626      52,074      66,192
Cash flow for the year . . . . . . . . . . . . . . . . . . . . . . . .                                                 16,338      (5,597)      8,685
Exchange rate differences on cash and cash
  equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                           1,099        (885)        470
Cash and cash equivalents in acquired entities . . . . . . .                                                              294           —         327
Cash and cash equivalents at end of year* . . . . . . . . . .                                                         100,763      83,032      89,514
*     of which, securities pledged for OMX AB
      at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      4,384       2,729       2,296
      at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                    8,086       4,384       2,729

**    The term strategic investments includes shares and participating interests in group entities, associates and certain, long-term
      holdings.


Comments on the consolidated cash flow statement
The cash flow statement shows receipts and disbursements during the year as well as cash and cash
equivalents at the beginning and end of the year. The cash flow statement is reported using the indirect
method and is divided into receipts and disbursements from operating activities, investing activities and
financing activities.

Operating activities
Cash flow from operating activities is based on operating profit for the year. Adjustments are made for items
not included in cash flow from operating activities. Changes in assets and liabilities from operating activities
consist of items that are part of normal business activities—such as loans to and deposits and borrowings
from the public and credit institutions—and that are not attributable to investing and financing activities.
Cash flow includes interest receipts of SEK 64,704m, SEK 46,558m, and SEK 38,455m and interest
payments, including capitalized interest, of SEK 46,034m, SEK 30,055m, and SEK 23,009m, for 2007, 2006,
and 2005, respectively.




                                                                                               F-6
Investing activities
Investing activities consist of the purchase and sales of fixed assets and strategic investments. When
businesses are acquired or divested, the cash and cash equivalents included in them are reported as separate
items. In 2007, financial assets were acquired for SEK 5,783m, of which SEK 4,943m was paid in cash. The
significant acquisitions were OJSC Swedbank (former name JSCB TAS–Kommerzbank), Soderhamns       ¨
                                                ¨
Sparbank AB and Zamsos AB. At acquisition of Soderhamns Sparbank AB, assets excluding acquired cash and
cash equivalents amounted to SEK 1,154m, of which lending to the public of SEK 871m. Soderhamns  ¨
Sparbank’s liabilities amounted to SEK 1,039m, of which deposits from the public of SEK 1,027m. At
acquisition of OJSC Swedbank, assets excluding acquired cash and cash equivalents amounted to
SEK 9,071m, of which lending to the public of SEK 7,737m. OJSC Swedbank’s liabilities amounted to
SEK 8,448m, of which SEK 3,009m owed to credit institutions and deposits from the public of SEK 4,835m. In
2007, shares were sold for a payment consideration of SEK 333m. The most significant sales comprised
CEK AB, MasterCard and primary capital certificates in Sparbanken Nord.
In 2006, shares were sold and cash received to an amount of SEK 1,632m. The most significant sales
consisted of Sparebank 1, Rogaland, Sparebank Midt and Mastercard.
Investing activities consist of the purchase and sale of fixed assets and strategic financial assets. When
businesses are acquired or divested, the cash and cash equivalents included in them are reported as separate
items. In 2005 shares for a total purchase price of SEK16,046m were acquired. The most significant
acquisitions consisted of an outstanding minority interest in AS Hansabank and supplementary acquisitions
of First Securities ASA, which is thus entered in the accounts as a subsidiary. At the time of the acquisition of
First Securities ASA the assets excluding acquired cash amounted to SEK1,111m, of which loans to the
public amounted to SEK920m. The entity’s liabilities amounted to SEK1,345m, of which amounts owed to
credit institutions amounted to SEK384m and deposits from the public amounted to SEK452m. In 2005,
shares were sold and cash received to an amount of SEK3,545m. The most significant sales consisted of
Kundinkasso AB and the part-divestment of EnterCard Holding AB and Aktia Sparbank Ab. At the time of the
sale of EnterCard Holding AB, which is now entered in the accounts as an associated entity, the assets
amounted to SEK6,506m, of which loans to the public amounted to SEK5,846m and liabilities amounted to
SEK3,841m, of which amounts owed to credit institutions amounted to SEK3,361m. At the time of the sale
of Kundinkasso AB, which had previously been a subsidiary, the assets amounted to SEK311m and the
liabilities amounted to SEK17m.

Financing activities
Issue and redemption of bond loans with maturities exceeding one year are reported gross. Change in other
borrowing includes the net change in borrowing with shorter terms and high turnover.

Cash and cash equivalents
Cash and cash equivalents consist of cash and balances with central banks, overnight deposit receivables and
overnight deposit liabilities with maturities up to five days, and treasury bills, other bills and mortgage bonds
eligible for refinancing with Central banks taking into account repos and short-selling.

Specification of cash and cash equivalents                                                           2007     2006     2005

Cash and balances with central banks . . . . . .                      ..............               21,200   17,310   12,011
Overnight deposits, net . . . . . . . . . . . . . . . . .             ..............                2,371        —        —
Securities eligible for refinancing adjusted for                      repos and short-
  selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   ..............               77,192   65,722   77,503
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   100,763   83,032   89,514




                                                                           F-7
                                                                                                                                         STATEMENT OF CHANGES IN EQUITY

                                                                                                                             Minority                                                                                                      Total
                                                                                                                             interest                         Equity attributable to shareholders of Swedbank AB                          equity
                                                                                                                                                                     Translation    Hedging of net
                                                                                                                                                          Other       difference,     investments        Cash
                                                                                                                                           Share    contributed     subsidiaries         in foreign      flow      Retained
      SEKm                                                                                                                                capital       equity*   and associates        operations      hedge      earnings      Total
      Closing balance December 31, 2004 . . . . . . . . . . . . .                                                              3,169      10,556         3,650               (31)               54          —       29,959     44,188     47,357
      Change in accounting policies relating to IAS 39 . . . . . . .                                                               —           —             —                 —                 —          —           (13)       (13)       (13)
      Opening balance January 1, 2006 . . . . . . . . . . . . . . .                                                            3,169      10,556         3,650               (31)               54          —       29,946     44,175     47,344
      Currency translation from foreign operations . . . . . . . . . .                                                            59           —             —               722              (371)         —            —        351        410
      Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                     —           —             —                 —               104          —            —        104        104
      Profit/(expense) recognized directly in equity . . . . . . .                                                                59           —             —              722               (267)         —            —        455        514
      Profit for the year recognized through profit or loss . . . . .                                                            350           —             —                 —                 —          —        11,879    11,879     12,229
      Total recognized income/(expenses) for the year . . . . .                                                                  409           —             —              722               (267)         —       11,879     12,334     12,743
F-8




      New share issue . . . . . . . . . . . . . . . . . . . . . . . . . .                                            .   .          —         50           418                 —                 —          —             —        468        468
      Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         .   .         (1)         —             —                 —                 —          —        (3,334)    (3,334)    (3,335)
      Revaluation of net assets on acquisitions of subsidiaries                                                      .   .          —          —             —                 —                 —          —            (6)        (6)        (6)
      New minority interest on acquisitions of subsidiaries . . .                                                    .   .         44          —             —                 —                 —          —             —          —         44
      Acquisitions from minority . . . . . . . . . . . . . . . . . . .                                               .   .     (3,389)         —             —                 —                 —          —             —          —     (3,389)
      Closing balance December 31, 2005 . . . . . . . . . . . . .                                                                232      10,606         4,068              691               (213)         —       38,485     53,637     53,869
      Opening balance January 1, 2006 . . . . . . . . . . . . . . .                                                              232      10,606         4,068              691               (213)         —       38,485     53,637     53,869
      Currency translation of foreign operations . . . . . . . . . . .                                                            (11)         —             —            (1,031)              490          —            —        (541)      (552)
      Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                      —          —             —                 —              (137)         —            —        (137)      (137)
      (Expenses)/Income recognized directly in equity . . . . .                                                                  (11)          —             —            (1,031)             353           —            —       (678)      (689)
      Profit for the year recognized through profit or loss . . . . .                                                            172           —             —                 —                 —          —        10,880    10,880     11,052
      Total recognised income/(expense) for the year . . . . .                                                                   161           —             —            (1,031)             353           —       10,880     10,202     10,363
      New share issue . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        20           —             —                 —                 —          —             —          —         20
      Dividend . . . . . . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (107)          —             —                 —                 —          —        (3,865)    (3,865)    (3,972)
      Decrease in share capital .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         —        (299)            —                 —                 —          —           299          —          —
      Bonus issue . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         —         516             —                 —                 —          —          (516)         —          —
      Acquisitions from minority         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (3)          —             —                 —                 —          —             —          —         (3)
      Closing balance December 31, 2006 . . . . . . . . . . . . .                                                                303      10,823         4,068              (340)             140           —       45,283     59,974     60,277

      *      Other contributed equity consist mainly of share market premiums.
                                                                                              STATEMENT OF CHANGES IN EQUITY

                                                                                   Minority                                                                                                     Total
                                                                                   interest                        Equity attributable to shareholders of Swedbank AB                          equity
                                                                                                                          Translation    Hedging of net
                                                                                                               Other       difference,     investments        Cash
                                                                                                Share    contributed     subsidiaries         in foreign      flow      Retained
      SEKm                                                                                     capital       equity*   and associates        operations      hedge      earnings      Total
      Opening balance January 1, 2007 . . . . . . . . . . . . . . .                    303     10,823         4,068              (340)             140           —       45,283     59,974     60,277
      Currency translation of foreign operations . . . . . . . . . . .                  16          —             —               860              (716)         —            —        144        160
      Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           —          —             —                 —               211          —            —        211        211
      Cash flow hedges:
F-9




      —Gains/losses recognized directly in equity . . . . . . . . . . .                  —          —             —                 —                 —         (40)          —        (40)       (40)
      —Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            —          —             —                 —                 —          44           —         44         44
      —Transferred to acquisition cost of hedged item . . . . . . . .                    —          —             —                 —                 —         157           —        157        157
      —Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            —          —             —                 —                 —         (44)          —        (44)       (44)
      —Transferred to the income statement, Net interest income                          —          —             —                 —                 —        (182)          —       (182)      (182)
      Profit/(expenses) recognized directly in equity . . . . . .                       16          —             —              860               (505)       (65)           —        290        306
      Profit for the year recognized through profit or loss . . . . .                  140          —             —                 —                 —          —        11,996    11,996     12,136
      Total recognised income/(expense) for the year . . . . .                         156          —             —              860               (505)       (65)      11,996     12,286     12,442
      New share issue . . . . . . . . . . . . . . . . . . . . . . . . . . . .           18          —             —                 —                 —          —             —          —         18
      Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (172)         —             —                 —                 —          —        (4,252)    (4,252)    (4,424)
      Minority interest in newly started business . . . . . . . . . . .                 10          —             —                 —                 —          —             —          —         10
      Closing balance December 31, 2007 . . . . . . . . . . . . .                      315     10,823         4,068              520               (365)       (65)      53,027     68,008     68,323

      *      Other contributed equity consist mainly of share market premiums.
                                                   NOTES
All amounts in the notes are in millions of Swedish kronor (SEKm) and book values unless indicated
otherwise. Figures in parentheses refer to the previous year. The group’s notes are prepared according to
IFRS as adopted by the EU.

1   Corporate information
Swedbank (the ‘‘Group’’) consists of Swedbank AB (the ‘‘Parent’’ or ‘‘Parent Company’’), its subsidiaries,
associates and a joint venture. The parent company, Swedbank AB, maintains its registered office in
Stockholm, Sweden. Swedbank also operates branches in Copenhagen, Helsinki, New York, Oslo, and
Shanghai. The company’s share is traded on the OMX Nordic Exchange Stockholm’s Nordic Large Cap
segment.
The consolidated financial statements were approved by the Board of Directors and the President for
Issuance on             , 2008.

2   Basic accounting policies
BASIS OF ACCOUNTING
The consolidated financial statements are prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU and interpretations of them. The standards are issued by the
International Accounting Standards Board (IASB) and its interpretations by the International Financial
Reporting Interpretations Committee (IFRIC). The standards and interpretations become mandatory for listed
companies’ consolidated financial statements concurrently with their approval by the EU.
The consolidated financial statements have also been prepared in accordance with the Swedish Financial
Accounting Standards Council’s recommendation RR 30 on complementary accounting rules for groups, the
pronouncements of the Swedish Emerging Issues Task Force and regulations of the Swedish Financial
Supervisory Authority (FFFS 2006:16, 2007:6, 2007:13). The Swedish Financial Reporting Board (‘‘the
Board’’) replaced the Swedish Financial Accounting Standards Council on April 1, 2007.
The financial statements are based on the historical cost basis, except for financial instruments, which are
recorded at amortized cost or fair value. The carrying amounts of financial assets and liabilities subject to
hedge accounting at fair value have been adjusted for changes in fair value attributable to the hedged risk.
The financial statements are presented in Swedish kronor and all figures are rounded to millions of kronor
(SEKm) unless indicated otherwise.

NEW STANDARDS AND INTERPRETATIONS
In 2006 the International Accounting Standards Board (IASB) issued IFRS 8, Operating Segments. The
standard replaced IAS 14, Segment reporting, and will be applied by 2009. The standard was adopted by the
EU in 2007.
During the year the International Financial Reporting Interpretations Committee (IFRIC) issued
interpretations IFRIC 13 Customer Loyalty Programmes and IFRIC 14 IAS 19 The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their Interaction. The interpretations have not yet been adopted
by the EU, nor has IFRIC 12 Service Concessions, which was issued in 2006. The interpretations will be
applied as of 2008.
None of the new standards or interpretations were applied in 2007, nor are they expected to have an effect
on the group’s future financial reporting other than that IFRS 8 requires more disclosures compared with
current segment reporting.

CHANGES IN ACCOUNTING POLICIES
Interest income and interest expenses related to financial instruments held for trading are recognized in the
consolidated income statement as net interest income as of 2007. Previously they were recognized in the
consolidated income statement as net gains and losses on financial items at fair value. Comparative figures
have been restated. The group has irrevocably elected fair value to measure certain portfolios of loans and
deposits, since they, together with derivatives, essentially eliminate the portfolio’s aggregate interest rate
risk.




                                                    F-10
During the third quarter of 2008 (before the issuance of these financial statements), management
transferred the international branches in the United States of America and China as well as customer
responsibility for financial institutions and banks from the Swedbanks Markets segment to the International
Banking segment. The 2007 and 2006 segments have been restated to conform to the 2008 segment
presentation. But the 2005 amounts have not been amended as it was impracticable to do so.

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
Presentation of consolidated financial statements in conformity with IFRS requires the entity to make
judgments and estimates that affect the recognized amounts for assets, liabilities and disclosures of
contingent liabilities as of the closing day as well as recognized income and expenses during the report
period. Actual results may deviate from estimates.

Judgments
Entities in the group have established investment funds for their customers’ savings needs. The group
manages the assets of these funds on behalf of customers in accordance with predetermined provisions
approved by the Swedish Financial Supervisory Authority. The return generated by these assets accrues to
customers. Within the framework of the approved fund provisions, the group receives management fees as
well as in certain cases application and withdrawal fees for the management duties it performs. Because
decisions regarding the management of an investment fund are governed by the fund’s provisions, the group
is not considered to have the opportunity to control or dominate decision-making in the investment funds in
order to obtain economic benefits. The group’s compensation and risk is limited to the fee charges. In certain
cases, group entities also invest in investment funds to fulfill their obligations to customers. Shares in the
investment funds do not represent any influence, regardless of whether the holding exceeds 50 percent or
not. Taken together, the above-mentioned conditions are the basis for not consolidating the investment
funds.
The group has determined that the option to measure financial instruments at fair value provides the fairest
account for certain portions of the group’s loan portfolios with fixed interest rates, since the interest rate risk
is hedged with the help of securities in issue and derivatives. The application eliminates the accounting
volatility that otherwise arises because different measurement principles are used for the instruments
involved.

Estimates
The group makes various estimates to determine the value of certain assets and liabilities. When the value of
loans, for which loss events have occurred, is tested for impairment, an estimate is made of when in the
future the loan’s cash flow will be received as well as of its size. The measurement of financial instruments is
described in the section, Significant accounting policies, Financial instruments (IAS 39). Impairment tests of
goodwill and other intangible assets with indefinite useful life estimate when the assets’ future cash flows
will be received as well as their size. A suitable discount rate is also determined that not only reflects the
time value of money but also the risk with which the asset is associated. For pension provisions, a number of
actuarial assumptions are used to calculate future cash flows.

SIGNIFICANT ACCOUNTING POLICIES
Consolidated financial statements (IFRS 3, IAS 27)
The consolidated financial statements comprise the parent company and these entities in which the parent
company has control, i.e., the power to govern decision-making in the entity to obtain economic benefits.
These entities, subsidiaries, are included in the consolidated financial statements in accordance with the
purchase method, which means that the acquired unit’s identifiable assets, liabilities and contingent
liabilities that satisfy the recognition criteria under IFRS 3 are recorded at fair values upon acquisition. The
difference between the cost of the business acquired and the net fair value of the acquired share of the
identifiable assets, liabilities and reported contingent liabilities is recognized as goodwill. For business
combinations achieved in stages, the size of the goodwill is determined at the time of each transaction.
Subsidiaries are consolidated when control is received and until control is ceased, which normally coincides
with disposal date.
A subsidiary’s contribution to equity includes only the equity that arises between acquisition and disposal.
All intra-group transactions and intra-group gains are eliminated.



                                                      F-11
Assets and liabilities in foreign currency (IAS 21)
The consolidated financial statements are presented in SEK. Functional currency refers to the main currency
used in an entity’s operations. Each entity within the group determines its own functional currency.
Transactions in a currency other than the functional currency (foreign currency) are initially recorded at the
exchange rate prevailing at the transaction day. Monetary assets and liabilities in foreign currency and
non-monetary assets in foreign currency measured at fair value are translated at the closing rates in effect
prevailing at the closing day. Holdings of foreign bank notes are translated at the buying rates for the notes
as of the closing day. All gains and losses on the translation of monetary items, including the currency
component in forward exchange contracts, and non-monetary items measured at fair value are recognized
through profit or loss as changes in exchange rates in Net gains and losses on financial items at fair value.
Assets and liabilities in subsidiaries and associates with a functional currency other than SEK are translated
to the presentation currency at the closing day exchange rate. The income statements are translated at the
average rate for the financial year. Exchange rate differences that arise are recognized directly in equity. As a
result, exchange rate differences attributable to currency hedges of investments in foreign operations are
also taken directly to equity, taking into account deferred tax. This is applied when the requirements for
hedge accounting are met. Ineffectiveness in hedges is recognized directly through profit or loss in net gains
and losses on financial items at fair value. When subsidiaries and associates are divested, the translation
differences and exchange rate differences are recognized through profit or loss.

Financial instruments (IAS 39)
The group’s financial instruments are divided into the valuation categories financial instruments at fair value
through profit or loss, loans and receivables, held-to-maturity investments and other financial liabilities. A
few individual holdings of insignificant amount have been categorized as investments available for sale. All
financial instruments are initially recognized at fair value, which corresponds to cost. Subsequent
measurements are made depending on the valuation category of the financial instrument. Financial
instruments are recognized on the trade day when an acquisition agreement has been entered into, with the
exception of loans and receivables, which are recognized on the settlement day.
Financial assets are derecognized when the right to obtain the cash flows from a financial instrument has
expired or the right to receive the cash flows is essentially transferred to another party.
Financial liabilities are removed from the balance sheet when the obligation in the agreement has been
discharged, cancelled or expired.

Financial instruments at fair value through profit or loss
Financial instruments at fair value through profit or loss comprise instruments held for trading and all
derivatives, excluding those designated for hedge accounting according to the method for cash flow hedges.
Financial instruments held for trading have been acquired for the purpose of selling or repurchasing in the
near term or are part of a portfolio for which there is evidence of a pattern of short-term profit-taking.
This category also includes other financial instruments that upon initial recognition have irrevocably been
designated as at fair value, the so-called fair value option. The option to irrevocably measure financial
instruments at fair value is used in the group for individual portfolios of loans, securities in issue and
deposits, when they together with derivatives essentially eliminate the portfolio’s aggregate interest rate
risk. Typical of these financial instruments is that they have a fixed contractual interest rate. The option is
used to eliminate the accounting volatility that would otherwise arise because different measurement
principles are normally used for derivatives and other financial instruments. Financial liabilities in insurance
operations, where the customer bears the investment risk, are categorized in the same way when
corresponding assets are also measured at fair value. The group has chosen to categorize holdings of shares
and participating interests that are not associated entities or intended for trading at fair value through profit
or loss since they are managed and evaluated based on fair value. In the notes to the balance sheet, these
financial instruments are classified at fair value through profit or loss, Other.
The fair value of financial instruments is determined based on quoted market prices. When quoted market
prices are not available, generally accepted valuation models such as discounting of future cash flows are
used. The valuation models are based on observable market data. For loans measured at fair value where
observable market data on the credit margin are not available at the time of measurement, the credit margin
for the most recent transaction with the same counterparty is used.



                                                     F-12
Changes in value are recognized through profit or loss in net gains and losses on financial items at fair value.
For financial instruments in trading operations, the group’s profit or loss item also includes share dividends.
Changes in value owing to changes in exchange rates are recognized as changes in exchange rates in the
same profit or loss item. Changes in the value of financial liabilities owing to changes in the group’s credit
worthiness are also recognized separately when they arise. Decreases in value attributable to debtor
insolvency are attributed to loan losses, net.

Loans and receivables
Loans to credit institutions and the public, categorized as loans and receivables, are recognized in the balance
sheet on the settlement day. These loans are measured at amortized cost as long as there is no objective
evidence indicating that a loan or group of loans is impaired.
Loans are initially recognized at cost, which consists of the loan amount paid out less fees received and any
costs that constitute an integral part of the effective interest rate. The interest rate that produces the loan’s
cost as a result of the calculation of the present value of future payments is considered the effective interest
rate. The loan’s amortized cost is calculated by discounting the remaining future payments by the effective
interest rate. Interest income includes interest payments received and the change in the loan’s amortized
cost during the period, which produces a consistent return.
On the closing day it is determined whether there is objective evidence to indicate an impairment need for a
loan or group of loans. If, after the loan is initially recognized, one or more events has occurred that
negatively impact estimated future cash flows, and the impact can be estimated reliably, impairment is made.
The impairment is calculated as the difference between the loan’s carrying amount and the present value of
estimated future cash flows discounted by the loan’s original effective interest rate. The group determines
first whether there is objective evidence for impairment of each individual loan. Loans for which such
evidence is lacking are included in portfolios with similar credit risk characteristics. These portfolios are
subsequently measured collectively in the event objective evidence of impairment exists. Any impairment is
then calculated for the portfolio as a whole. Homogenous groups of loans with limited value and similar
credit risk that have been individually identified as having objective evidence of impairment are measured
individually based on the loss risk in the portfolio as a whole. If the impairment decreases in subsequent
periods, reversals are maximized at previously recognized impairment losses.
Impairment of loans are recognized through profit or loss as loan losses, net, through either the write-off of
established loan losses, provisions for loan losses or collective provisions. Losses are established when their
amounts can be fully or partly determined and a loss has occurred. Repayments of such losses are recognized
in loan losses. The carrying amount of loans is amortized cost less impairments and provisions. Provisions for
assumed losses on guarantees and other contingent liabilities are recognized on the liability side.
Impaired loans are those for which it is likely that payment will not be received in accordance with the
contract terms. A loan is not impaired if there is collateral that covers the principal, unpaid interest and any
late fees by a satisfactory margin.

Held-to-maturity investments
Certain financial assets acquired to hold to maturity have been categorized as held-to-maturity investments.
They have fixed maturities, are not derivatives and are quoted on an active market. These investments are
initially recognized on their trade day at cost and subsequently at amortized cost less any impairment.
Measurements are made in the same way as for loans and receivables.

Other financial liabilities
Financial liabilities that are not recognized as financial instruments at fair value through profit or loss are
initially recognized on the trade day at cost and subsequently measured at amortized cost. Amortized cost is
calculated in the same way as for loans and receivables.

Fair value hedges
Fair value hedges are applied in certain cases when the interest rate exposure in a recognized financial asset
or financial liability is hedged with derivatives. With hedge accounting, the hedged risk in the hedged
instrument is also measured at fair value. Both the change in the value of the hedging instrument, the
derivative, and the change in the value of the hedged risk are recognized through profit or loss in net gains
and losses on financial items at fair value.


                                                      F-13
One requirement to apply hedge accounting is that the hedge has been formally identified and documented.
The hedge’s efficiency must be measurable in a reliable way and must be expected to be and during reported
periods have been very effective in offsetting changes in value.

Cash flow hedges
Derivative transactions are sometimes made to hedge the exposure to variations in future cash flows
resulting from changes in interest rates or exchange rates. These hedges can be recognized as cash flow
hedges, whereby the effective portion of the change in the value of the derivative, the hedging instrument,
is recognized directly in equity. Any ineffective portion is recognized through profit or loss in net gains and
losses on financial items at fair value. When a projected cash flow leads to the recognition of a non-financial
item, any gains or losses on the hedging instrument are eliminated from equity and included in the
acquisition cost of the hedged item. If a projected cash flow leads to the recognition of a financial item, any
gains or losses on the hedging instrument are eliminated from equity and recognized through profit or loss in
the same periods that the hedged item affects profit or loss. One of the prerequisites of hedge accounting is
that the hedge is formally identified and documented. Its effectiveness must be measurable in a reliable way
and expected to remain, and during reported periods have been, very effective in offsetting changes in value.

Repos and reverse Repos
A genuine repurchase transaction (repo) is defined as a contract where the parties have agreed on the sale of
securities and the subsequent repurchase of corresponding assets at a predetermined price. In a repo, the
sold asset remains on the balance sheet and the payment received is recognized as a financial liability. The
securities sold are also recognized as a pledged asset. Reverse Repos are recognized as a loan to the selling
party.

Security loans
Securities that have been lent out remain on the balance sheet as securities and are recognized on the trade
day as assets pledged, while borrowed securities are not reported as assets. Securities that are lent out are
carried in the same way as other security holdings of the same type. In cases where the borrowed securities
are sold, i.e. short-selling, an amount corresponding to the fair value of the security is recognized as a
liability.

Leases (IAS 17)
The group’s leasing operations consist of finance leases and are therefore recognized as loans and
receivables. This means that lease payments received are recognized in part as interest income and in part as
installment. A finance lease means that the economic risks and benefits associated with ownership of an
asset are essentially transferred from the lessor to the lessee. When the lessor bears the economic risks and
benefits, the lease is classified as operating. The group is the lessee in operating leases. Lease payments for
these agreements are expensed linearly over the lease term. The group is also the lessor in a few operating
leases of insignificant amount.

Investment in associates (IAS 28)
Investments in associates, entities where the owner has significant influence but not control, are
consolidated according to the equity method. The equity method means that the participating interests in an
entity are recognized at cost at the time of acquisition and subsequently adjusted for the owned share of the
change in the associate’s net asset.
Goodwill attributable to the associate is included in the carrying amount of the participating interests and is
not amortized. The carrying amount of the participating interests is subsequently compared with the
recoverable amount of the net investment in the associate to determine whether an impairment need exists.
The owned share of the associate’s profit according to the associate’s income statement, together with any
impairment, is recognized on a separate line. The share of the associate’s tax is recognized in the income
statement as tax.
The associates’ reporting dates and accounting policies conform to the group’s.




                                                     F-14
Joint ventures (IAS 31)
Investments in joint ventures are recognized as associates according to the equity method; see Investment in
Associates above. A joint venture is a contractually based relationship where the group, together with
another party, jointly manages an economic activity and where the parties jointly control that activity.

Intangible assets (IAS 38)
Goodwill
Goodwill acquired through a business combination is initially measured at cost, which corresponds to the
portion of the cost of the acquired operations exceeding the net fair value of the acquired unit’s identifiable
assets, liabilities and contingent liabilities. Goodwill is subsequently measured at cost less accumulated
impairment. Goodwill is tested annually for impairment or if events or circumstances indicate a decrease in
value.
In order to test goodwill from business combinations for impairment, it is allocated upon acquisition to the
cash-generating unit or units that are expected to benefit from the acquisition. Identified cash-generating
units correspond to the lowest level in the entity at which the goodwill is monitored in the internal control of
the entity. A cash-generating unit is not larger than a business segment in the segment reporting.
Impairment needs are determined by estimating the recoverable amount of the cash-generating unit that
the goodwill is allocated to. When the recoverable amount is lower than carrying amount, impairment is
recognized.

Other intangible assets
Intangible assets are initially measured at cost. The cost of intangible assets in a business combination
corresponds to fair value upon acquisition. They are subsequently measured at cost less accumulated
amortization and accumulated impairment. The useful life of an intangible asset is assessed to be either
finite or indefinite. Intangible assets with a finite useful life are amortized over their useful life and tested for
impairment when impairment needs are indicated. Useful life and amortization methods are reassessed and
adapted when needed in connection with each closing day. Intangible assets with indefinite useful life are
tested for impairment in the same way as goodwill rather than amortized systematically. The decision that a
useful life is indefinite is reassessed annually to establish whether it is still indefinite. If it instead is finite,
amortization begins.
Development expenses whose cost can be calculated in a reliable way and for which it is likely that future
economic benefits attributable to the assets will accrue to the group are recognized in the balance sheet. In
other cases, development is expensed when it arises.

Tangible assets (IAS 16)
Tangible fixed assets such as equipment and properties for own uses are initially recognized at cost. They are
subsequently measured at cost less accumulated depreciation. Depreciation begins when an asset is ready
for use and is reported systematically over each component’s useful life down to its estimated residual value.
The depreciation method reflects how the asset’s value is gradually consumed. The useful life is periodically
reassessed and changed when needed. The carrying amount is tested for impairment when events or
circumstances indicate a lower recoverable amount.

Provisions (IAS 37)
A provision is recognized in the balance sheet when the group has a legal or constructive obligation arising
from past events and it is likely that an outflow of resources will be required to settle the obligation. In
addition, a reliable estimation of the amount must be made. Estimated outflows are calculated at present
value. Provisions are tested on each closing day and adjusted when needed, so that they correspond to the
current estimate of the value of the obligations.

Pension obligations (IAS 19)
The group’s post-employment benefits, which consist of pension obligations, are classified as either defined
contribution plans or defined benefit plans. In defined contribution plans, the group pays contributions to
separate legal entities, and the risk of a change in value until the funds are paid out rests with the employee.




                                                        F-15
Thus, the group has no further obligations once the contribution is paid. Other pension obligations are
classified as defined benefit plans.
Premiums for defined contribution plans are recognized as cost when paid.
In defined benefit plans, the present value of pension obligations is calculated and recognized as a provision.
Both legal and constructive obligations that arise as a result of informal practices are taken into account. The
calculation is made according to the Projected Unit Credit Method. As such, future benefits are attributed to
periods of service. The fair value of the assets (plan assets) that are allocated to cover obligations and the
unrecognized actuarial net loss are deducted from the provision. The profit or loss is charged with the net of
service costs, interest on obligations and the anticipated return on plan assets. The calculations are based on
the group’s actuarial assumptions, i.e., the group’s best estimate of future developments. If the actual
outcome deviates or the assumptions change, so-called actuarial gains and losses arise. The net of actuarial
gains and losses is not recognized through profit or loss until it exceeds ten percent of the higher of the
present value of the obligations or the value of plan assets. The excess is recognized through profit or loss
over the employees’ remaining working lives.
Provisions for payroll tax are allocated on a nominal basis based on the difference between the group’s
pension cost and the pension cost that serves as the basis for the actual payroll tax.

Revenues (IAS 18)
The principles of revenue recognition for financial instruments are described in a separate section. Fees for
services are recognized as revenue when the service is provided. Such revenue is reported under both
Commission income and Other operating income.

Insurance contracts (IFRS 4)
In the financial statements, insurance policies refer to policies where significant insurance risk is transferred
from insured to insurer. The majority of the group’s insurance policies do not transfer significant insurance
risk, due to which they are instead recognized as financial instruments.
For insurance policies with significant insurance risk, actuarial provisions are allocated corresponding to
pledged obligations. In the income statement, premiums received and provisions are reported on separate
lines.

Impairment (IAS 36)
For long-lived assets that are not assessed for impairment according to other standards, the group
periodically determines whether there are indications of a decrease in value. If such indications exist, the
asset is assessed for impairment by estimating its recoverable amount. Assets with an indefinite useful life
are periodically assessed for impairment regardless of whether or not there are indications that they have
decreased in value. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value
in use. If the carrying amount exceeds the recoverable amount, the asset is reduced to its recoverable
amount. When estimating value in use, estimated future cash flows are discounted using a discount rate
before tax that includes the market’s estimate of the time value of money and other risks associated with the
specific asset. An assessment is also made on each reporting date whether there are indications that the
need for previous impairments has decreased or no longer exists. If such indications exist, the recoverable
amount is determined. Previously recognised impairment losses are reversed only if there were changes in
the estimates made when the impairment was recognized.

Tax (IAS 12)
Current tax assets and tax liabilities for the current and previous periods are measured at the amount
expected to be obtained from or paid to tax authorities. Deferred taxes refer to tax on differences between
carrying amount and tax base of an asset or liability, which in the future serves as the basis for current tax.
For the parent company’s Estonian subsidiary, Hansabank, income taxation is triggered only if dividends are
paid. Because the parent company controls whether dividends are paid, provisions for taxation are allocated
only if the intent is to pay a dividend. Deferred tax assets attributable to tax loss carry-forwards are
recognized on each closing day to the extent it is likely they can be utilized. The carrying amount of deferred
tax is reassessed on each closing day. Confirmed tax rates on the closing day are used in the calculations. The
group’s deferred tax assets and tax liabilities are estimated at nominal value using each country’s tax rate.
Deferred tax assets are netted against deferred tax liabilities for group entities that have offsetting rights.


                                                      F-16
All current and deferred taxes are reported in the income statement as tax expense with the exception of tax
attributable to items recognized directly in equity.

Cash and cash equivalents (IAS 7)
Cash and cash equivalents consist of cash and balances with central banks and the net claim of overnight
deposit receivables and overnight deposit liabilities with maturities up to five days. Cash and cash
equivalents include Treasury bills, other bills and mortgage bonds eligible for refinancing with central banks
taking into account repos and short selling.

Segment reporting (IAS 14)
Segments refer to business segments and geographical segments. The group’s business segments agree
with its geographical segments. The accounting policies for a business segment are comprised of the
accounting policies above and the policies that specifically refer to the business segment reporting.
The business segment report is based on the group’s organization and internal accounts. Market-based
compensation is applied between business segments, while all costs for IT, other shared services and Group
Staffs are transferred at full cost-based internal prices to the business segments. Executive Management
expenses are not distributed. Average equity during the year attributable to the shareholders is allocated to
each business segment. The allocation is based on capital adequacy rules and estimated capital requirements
during the year. Interest income received on allocated equity is calculated based on relevant market rates.
Finance costs for goodwill and other surplus values are allocated to each business segment. The return on
equity for the business segments is based on profit for the year attributable to shareholders in relation to
equity allocated to the business segments.




                                                    F-17
3      Net interest income

                                                                                                                                                           2007         2006         2005

Interest income
Credit institutions . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       6,518        4,643        3,007
   SEK . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,055        1,730        1,091
   foreign currency . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,463        2,913        1,916
Loans to the public . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      52,535       36,594       31,921
   SEK . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      37,974       29,063       27,133
   foreign currency . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      14,561        7,531        4,788
Interest-bearing securities .             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       2,680        2,069        1,644
   SEK . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,199          770        1,564
   foreign currency . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       1,481        1,299           80
Other . . . . . . . . . . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       5,354        3,859        2,568
   SEK . . . . . . . . . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       3,000        2,384        1,826
   foreign currency . . . . . .           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       2,354        1,475          742
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           67,087       47,165       39,140
    SEK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            45,228       33,947       31,614
    foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   21,859       13,218        7,526
Interest expenses
Credit institutions . . . . . . . . . . . . . . . . . .                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (8,482)      (6,066)      (5,031)
  SEK . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (4,731)      (3,650)      (3,053)
  foreign currency . . . . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (3,751)      (2,416)      (1,978)
Deposits and borrowings from the public                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (11,011)      (5,729)      (3,746)
  SEK . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (7,947)      (3,945)      (2,342)
  foreign currency . . . . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (3,064)      (1,784)      (1,404)
Debt securities in issue . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (22,661)     (15,775)     (11,634)
  SEK . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (6,206)      (5,953)      (5,494)
  foreign currency . . . . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     (16,455)      (9,822)      (6,140)
Subordinated liabilities . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (1,973)      (1,836)      (1,601)
  SEK . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (533)        (327)        (255)
  foreign currency . . . . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (1,440)      (1,509)      (1,346)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (3,803)      (1,782)      (1,449)
  SEK . . . . . . . . . . . . . . . . . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      (3,698)      (1,719)        (193)
  foreign currency . . . . . . . . . . . . . . . . .                                  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        (105)         (63)      (1,256)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           (47,930)     (31,188)     (23,461)
    SEK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           (23,115)     (15,594)     (11,337)
    foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  (24,815)     (15,594)     (12,124)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           19,157       15,977       15,679
    SEK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                            22,113       18,353       20,276
    foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   (2,956)      (2,376)      (4,597)
Total average balance, assets . . . . . . . . . . . . . . . . . . . . . . .                                                                           1,521,401    1,296,316    1,128,591
Total average balance, liabilities . . . . . . . . . . . . . . . . . . . . .                                                                          1,457,835    1,240,081    1,081,466
Investment margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                               ..           1.25         1.23         1.38
Average interest rate on loans to public . . . . . . . . . . . . . . .                                                                        ..           5.04         4.10         4.06
Average interest rate on deposits to public . . . . . . . . . . . .                                                                           ..           2.55         1.55         1.11
Interest income on financial assets measured at amortized
   cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                     ..         34,007       22,782       17,692
Interest expenses on financial liabilities measured at
   amortized cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           ..         11,556       11,093        7,480
Interest income on impaired loans . . . . . . . . . . . . . . . . . . .                                                                       ..             68           41           54
The group’s income statement item Net interest income 2006 and 2005 have been adjusted and increased by
SEK 473m and SEK 140m, respectively, since interest related to financial instruments for trading is now




                                                                                                                  F-18
recognized in net interest. In the 2006 and 2005 Annual Reports, interest is reported in the income
statement item Net gains and losses on financial items at fair value.

4     Net commissions

                                                                                                                                                        2007       2006       2005

Commission income
Payment processing commissions . . . .                                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    4,612      4,010      3,690
Lending commissions . . . . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      671        605        454
Deposit commissions . . . . . . . . . . . . .                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       70         60         51
Guarantee commissions . . . . . . . . . . .                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .      231        196        164
Securities commissions
  Brokerage . . . . . . . . . . . . . . . . . . . .                   ....................                                                             1,064        989        698
  Asset management . . . . . . . . . . . . .                          ....................                                                             4,226      3,719      3,150
  Other securities commissions . . . . .                              ....................                                                               104        119        106
Other commissions
  Real estate brokerage commissions                                   ....................                                                               152        147        144
  Other . . . . . . . . . . . . . . . . . . . . . . .                 ....................                                                             1,809      1,620      1,068
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                       12,939     11,465     9,525

Commission expenses
Payment processing commissions . . . . . . . . . . . . . . . . . . . . . . . .                                                                         (1,592)    (1,376)   (1,176)
Securities commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   (290)      (240)     (206)
Other commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                (1,177)      (980)     (973)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                       (3,059)    (2,596)    (2,355)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                        9,880      8,869     7,170

5     Net gains and losses on financial items at fair value

                                                                                                                                                        2007       2006       2005

Valuation category, fair value through profit                                                         or loss
Trading and derivatives
Shares/participating interests . . . . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .      757         888       567
   of which, change in value . . . . . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .      432         677       420
   of which, dividend . . . . . . . . . . . . . . . . . . . . .                                       .   .   .   .   .   .   .   .   .   .   .   .      325         211       147
Interest-bearing instruments . . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .    6,670      (7,292)    1,052
Other financial instruments . . . . . . . . . . . . . . . .                                           .   .   .   .   .   .   .   .   .   .   .   .       60         (74)       39
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                        7,487     (6,478)    1,658
Other
Shares/participating interests .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       117       352        572
   of which, change in value . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        85       257        510
   of which, dividends . . . . . . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        32        95         62
Interest-bearing instruments .                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (7,174)    8,064       (257)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                       (7,057)     8,416       315
Hedge accounting at fair value
Hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   (199)      (496)      (335)
Hedged item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                              163        458        413
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                          (36)       (38)       78
Valuation category, loans and receivables . . . . . . . . . . . . . .                                                                                     16         51       177
Change in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                       1,281        787       589
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                        1,691      2,738     2,817

No change has arisen in the value of financial liabilities as a result of the change in the group’s credit
worthiness. No inefficiency has arisen in cash flow hedges.



                                                                                                          F-19
The group’s income statement item Net gains and losses on financial items has been reduced by SEK 473m
and SEK 140m in 2007 and 2006, respectively, since interest related to financial instruments for trading is
now recognized in net interest.

6     Other income

                                                                                                                                                   2007    2006    2005

Profit from sale of subsidiaries . . . . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .     58            2,221
Income from real estate operations . . . . . . . . . . . . .                                                  .   .   .   .   .   .   .   .   .    120     104       83
Capital gains on sales of properties, equipment, etc                                                          .   .   .   .   .   .   .   .   .             31       12
IT services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   .   .   .   .   .   .   .   .   .    739     725      741
Other operating income . . . . . . . . . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .    307     267      272
Capital gains on sales of associates . . . . . . . . . . . . .                                                .   .   .   .   .   .   .   .   .      —       —       11
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                   1,224   1,127   3,339

7     Staff costs

                                                                                                                                                   2007    2006    2005

Salaries and other remuneration                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   5,955   5,311   4,704
Pension costs* . . . . . . . . . . . . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     813     751     725
Social insurance charges . . . . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   1,883   1,704   1,668
Allocation to profit-sharing fund                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     783     492     831
Training costs . . . . . . . . . . . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     173     149     124
Other staff costs . . . . . . . . . . . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     185     153     139
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                   9,792   8,560   8,191
    of which, profit-based staff costs . . . . . . . . . . . . . . . . . . . . . .                                                                1,658   1,307   1,354
*     The group’s pension cost for the year is specified in note 32.




                                                                                                      F-20
                                                                                                                 2007                                      2006                                      2005
                                                                                                  Board,                                    Board,                                    Board,
                                                                                               President,                                President,                                President,
                                                                                               EVPs and                                  EVPs and                                  EVPs and
                                                                                                    other                                     other                                     other
                                                                                                   senior               Other                senior               Other                senior               Other
       Salaries and other remuneration                                                        executives    Bonuses employees   Total   executives    Bonuses employees   Total   executives    Bonuses employees   Total
       Sweden . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           73         9      3,994   4,076           74         7      3,711   3,792           71         8      3,601   3,680
F-21




       Denmark . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            —         —         14      14            —         —          8       8            —         —          —       —
       Estonia . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           10        13        404     427           10        10        323     343            8        11        263     282
       Latvia . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            8         3        299     310           10         8        222     240            6         5        156     167
       Lithuania . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           12         6        341     359           12         5        269     286           12         2        198     212
       Luxembourg . .         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           10         1         39      50            8                   32      40            8         0         25      33
       Norway . . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            6        50        413     469            3        15        499     517            2         2        252     256
       Russia . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            9         2         72      83            7         2         39      48            3         2         15      20
       Ukraine . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            7        13         99     119            —         —          —       —            —         —          —       —
       USA . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            2         6         24      32            2         3         21      26            —         —          —       —
       Other countries        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            —         —         16      16            —         —         11      11            —         —         54      54
       Total . . . . . . . . . . . . . . . . . . . . . . .                                          137        103      5,715   5,955         126         50      5,135   5,311         110         30      4,564   4,704
                                                                                                                                                                                           2007                 2006          2005

Costs during the year for pensions and similar benefits:
To Board, President and EVPs, current and former . . . . . . . . . .                                                                                                                               59              65           74
No. of persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                         69              69           65
Costs in the group are calculated in accordance with IAS 19. Pension obligations for current and former
Presidents and Executive Vice Presidents have been secured through insurance and pension funds. The
obligations secured by pension funds amounted to SEK 412m, SEK 424m, SEK 484m for 2007, 2006, and
2005, respectively.

                                                                                                                                                                                           2007                 2006          2005

Loans to President and EVPs . . .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .       .       .       .                                       94             88            84
No. of persons with loans . . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .       .       .       .                                       32             42            36
Loans to Directors and deputies .              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .       .       .       .                                       97            102            82
No. of persons with loans . . . . .            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .       .       .       .       .                                       55             56            48
The group has not pledged any assets or other collateral or committed to contingent liabilities on behalf of
any senior executives.

Information regarding senior executives
Senior executives refer to members of the Board Directors, the President and CEO as well as members of
group management. Other senior executives refer here to members of the group management at the end of
the year.
A Compensation Committee, consisting of the Chair of the Board, the Vice Chair and one other Director,
prepares decisions prior to Board meetings on salaries and other benefits for the President, Group Executive
Management, persons in the respective management groups for the strategic business areas, Presidents of
large subsidiaries, corporate staff managers in Swedbank AB and the head of Internal Audit.
Fees paid to the President, members of the group management or Executive Vice Presidents of the parent
company for Board duties are deducted against salaries, unless otherwise agreed.

                                                                                                                                                                                                                   2007
                                                                                                                                                                                                          Board fees,
                                                                                                                                                                                                              salary,      Of which
                                                                                                                                                                                                            vacation      committee
The Board of Directors, SEK thousands                                                                                                                                                                   compensation          work

Board fees and compensation
Annual Board fee decided by the Annual General                                                     Meeting
            a
Carl Eric St˚ lberg, Chair . . . . . . . . . . . . . . . . . . .                                   .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .          1,550            250
Ulrika Francke, Vice Chair . . . . . . . . . . . . . . . . . .                                     .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .          1,025            375
Gail Buyske, Director . . . . . . . . . . . . . . . . . . . . . .                                  .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            425             75
Simon F.D. Ellis, Director . . . . . . . . . . . . . . . . . . .                                   .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            350              —
         a
Berith H¨ gglund-Marcus, Director . . . . . . . . . . . .                                          .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            425             75
  ¨
Goran Johnsson, Director . . . . . . . . . . . . . . . . . . .                                     .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            600            250
Anders Nyblom, Director . . . . . . . . . . . . . . . . . . .                                      .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            600            250
Caroline Sundewall, Director . . . . . . . . . . . . . . . .                                       .......                     .       .       .       .       .   .   .   .   .   .   .   .   .   .            425             75
                                                                                                                                                                                                             5,400          1,350




                                                                                                   F-22
An annual Board fee of SEK 5,400,000, 5,250,000, and 5,800,000 for 2007, 2006, and 2005, respectively,
was approved by the AGM. Board fees are not paid to persons having an employment contract with the
group.

Compensation to the Board Chair, SEK thousands                                                     2007     2006     2005

               a
To Carl Eric St˚ lberg
Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2,975    2,875    2,800
Within framework of Board fees set by the Board . . . . . . . . .                                 1,550    1,550    1,450
Other compensation/benefits . . . . . . . . . . . . . . . . . . . . . . . . .                        60       74       72
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4,585    4,499    4,322
  of which pension-based compensation . . . . . . . . . . . . . . . .                             2,975    2,875    2,800
Pension cost, including payroll tax . . . . . . . . . . . . . . . . . . . . .                     3,116    2,904    2,751

Pension obligations for the Chair of the Board
                                                   a
As an employee from January 1, 2003, Carl Eric St˚ lberg is entitled to a defined-benefit pension from the age
of 60. His pension entitlement is the vested portion of 75 percent of his salary. The vested portion is based on
his length of employment in months divided by 360. The parent company also pays a pension premium of
SEK 360,000 per year. Previously vested pension benefits remain unaffected. Benefits are accrued
continuously until retirement and are vested after they have been accrued.

Termination conditions for the Chair of the Board
                                                         a
Depending on the reason for his termination, Carl Eric St˚ lberg, in accordance with his employment contract
with the parent company, may be entitled to pensionable compensation equivalent to his previous salary for
a period after termination. That period amounts to 24 months. Under special circumstances, the period may
                                                                                                      a
be extended to 36 months. However, under no circumstances will severance be paid after Carl Eric St˚ lberg
reaches the age of 60, in January 2011. The right to compensation in accordance with what is stated herein is
conditional on, among other things, the settlement of 50 percent of any income from new employment, etc.
against the severance, unless the Board decides otherwise.

Pension obligations to other Directors
The group has no pension obligations for other Directors.

Remuneration to the President, SEK thousands                                                        2007     2006    2005

          e
To Jan Lid´ n
Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               8,000    7,250   6,750
Other compensation/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .                    194      183     167
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8,194   7,433    6,917
Pension costs including payroll tax . . . . . . . . . . . . . . . . . . . . . .                    4,464    4,399   4,373

Employment terms for the President
                                        e
Employment terms for President Jan Lid´ n call for an annual base salary with no variable compensation in
                                                                     e
the form of bonuses, etc. His ordinary retirement age is 60. Jan Lid´ n disposes over an annual premium of
SEK 3.6 M for defined-contribution pension purposes. The parent company’s obligation extends only to the
size of the premium. The premium is index-linked on a yearly basis at the highest percentage applied by BAO,
Sparinstitutens Pensionskassa and Alecta.
                                            e
If terminated by the parent company, Jan Lid´ n will receive a salary during a 12-month term of notice. To this
is added severance pay for 12 months. A deduction is made for income earned from new employment. If Jan
    e
Lid´ n resigns, the term of notice is six months and there is no severance.




                                                                           F-23
The bank has several Executive Vice Presidents. In accordance with the Board’s instructions, the order of
succession is that the head of Swedish Banking is first to take over in place of the President.

Remuneration to head of Swedish Banking, SEK thousands                                                                                         2007

To Kjell Hedman
Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                2,650
Variable compensation, paid out in 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           420
Other compensation/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      91
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,161
Pension costs including payroll tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   4,299

Employment terms for head of Swedish Banking
Kjell Hedman’s variable compensation is maximized at 25 percent of annual salary and consists of 2⁄3 bonuses
tied to payouts by the Kopparmyntet profit participation fund and 1⁄3 bonuses tied to individual goals.
Variable compensation is not pensionable. Kjell Hedman has a defined-benefit pension amounting to
75 percent of 54.57 income based amounts, in addition to which he receives a supplementary defined-
contribution pension in which the parent company is committed to pay premiums to a company-owned
endowment insurance for the equivalent of 35 percent of salary segments not secured by the defined-
benefit entitlement.
If terminated by the parent company, Kjell Hedman will receive a salary during a six-month term of notice. To
this is added severance pay for 12 months. A deduction is made for income earned from new employment. If
Kjell Hedman resigns, the term of notice is six months and there is no severance.

Remuneration to the other senior executives*                                                                  2007                 2006        2005

Fixed compensation, salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             18                   17        15
Variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    7                    8         8
Other compensation/benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 1                    1         0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  26                   26        23
Pension costs including payroll tax . . . . . . . . . . . . . . . . . . . . . .                                  10                     9       14
No. of persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        7                     7        6

*      Includes compensation paid during the year from all group entities, Swedish or international. The remuneration shown refers to
       the full year for the members of the group management at the end of the year, excluding the President.

Variable compensation paid to the Swedish Executive Management is maximized at 25 percent of annual
salary and consists of 2⁄3 bonuses tied to payouts by the Kopparmyntet profit participation fund and 1⁄3
bonuses tied to individual goals. Variable compensation paid to the Baltic Executive Management is
maximized at 13 monthly wages. In addition 1 percent of EVA (Economic Value Added) is divided equally
between the senior executives, maximized at EUR 360,000 per holder of the position. In 2007,
SEK 7,416,000 in variable compensation was paid to other senior executives. SEK 8,515,000 was charged
against income. Variable compensation is not pensionable. Directors’ fees are deducted against salary, unless
otherwise agreed.

Pension obligations
Other senior executives comprise a total of seven persons at year-end. A defined- benefit pension is payable
to four persons from age 60 and to one person from age 62. For four persons, a deduction is made for
previously vested pension entitlement. Benefits are accrued continuously until retirement and are vested
after they have been accrued. For one person, previously vested benefits are not coordinated, but the period
of service is reduced and the pension entitlement is fully vested at the age of 59. For two executives, there is
no pension commitment.
For four of the five individuals with a defined-benefit pension entitlement, the pensionable salary for 2004
in the defined-benefit pension plan has been locked in terms of income base amounts, in addition to which
they receive a supplementary defined-contribution pension where the parent company has committed to
premium to a company-owned endowment insurance for the equivalent of 35 percent of salary segments
not secured by the defined-benefit entitlement.




                                                                            F-24
Termination conditions
If terminated by the company, salary is payable during the term of notice of 0-12 months. To this is added
severance pay for 6-12 months. A deduction is made for any income earned from new employment. If a
senior executive resigns, the term of notice is not more than six months and there is no severance.

Average number of employees based on 1,585 hours per employee                                                                                                                                        2007          2006         2005

Swedbank AB . . . . . . . . . . . . . . . .                                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         8,892         8,891        8,979
Swedbank Hypotek . . . . . . . . . . . .                                              .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            14            17           20
Swedbank Finans . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           160           152          134
Swedbank Robur . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           320           269          273
     ı ¨ a
Spar´a Fors¨ krings AB . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             2             2            2
                     a
Swedbank Juristbyr˚ AB . . . . . . . .                                                .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             5             5            6
                             a
Swedbank Fastighetsbyr˚ . . . . . . .                                                 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            39            56           55
Kundinkasso AB . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             —             —           26
             ¨
Swedbank Foretagsf¨    ormedling AB                                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             5             1            —
Swedbank Card Services AB . . . . .                                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            54             9            —
Allround AB . . . . . . . . . . . . . . . . .                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             —             3            3
¨
Olands Bank AB . . . . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            60            60           61
Swedbank Luxembourg S.A. . . . . .                                                    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            76            72           67
Hansabank . . . . . . . . . . . . . . . . . .                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .        10,215         8,917        7,368
OJSC Swedbank . . . . . . . . . . . . . . .                                           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         1,850             —            —
First Securities ASA . . . . . . . . . . .                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           242           169          154
First Securities LLC . . . . . . . . . . . .                                          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            21             —            —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                            21,955        18,623     17,148
   of which in
Denmark . . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            26            17            9
Estonia . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         3,558         3,142        2,724
Finland . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             9             8            2
Japan . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             2             2            2
China . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            17            15            3
Latvia . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         2,725         2,398        1,782
Lithuania . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         3,633         3,206        2,824
Luxembourg .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            76            72           67
Norway . . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           273           186          169
Russia . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .           299           171           35
UK . . . . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             —             1           11
Ukraine . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .         1,850             —            3
USA . . . . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            37            15           14
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                            12,505         9,233       7,645
Number of hours worked (thousands) . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                                 34,803        29,517      27,183
Number of group employees at year-end excluding long-term
  absentees in relation to hours worked expressed as full-time
  positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                                22,148        17,399      16,148
Employee turnover in Swedish entities was 8.9 percent.

                                                                                                          December 31, 2007                                                       December 31, 2006               December 31, 2005
Distribution by gender, %                                                                                         Female                                  Male                        Female            Male       Female       Male

All employees . . . . . . . . . . . . . . . . . . .                                                                       68                                  32                              67            33         66         34
Directors . . . . . . . . . . . . . . . . . . . . . . .                                                                   27                                  73                              28            72         21         79
Other senior executives including the
   President . . . . . . . . . . . . . . . . . . . . .                                                                    16                                  84                              17            83         18         82




                                                                                                                                      F-25
Other senior executives refer to individuals who are President or Vice President, but not members of the
Board of Directors.

                                                                                                            December 31, 2007                                                   December 31, 2006       December 31, 2005
Distribution by gender, %                                                                                       Female                                  Male                     Female          Male     Female      Male
Sweden . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           57                              43                       57           43         57         43
Denmark . . .       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           49                              51                       35           65         44         56
Estonia . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           78                              22                       79           21         78         22
Finland . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           54                              46                       57           43         50         50
Japan . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           50                              50                       50           50         50         50
China . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           63                              37                       50           50         67         33
Latvia . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           76                              24                       75           25         73         27
Lithuania . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           82                              18                       81           19         81         19
Luxembourg          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           42                              58                       39           61         36         64
Norway . . . .      .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           24                              76                       22           78         19         81
Russia . . . . .    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           66                              34                       64           36         66         34
Ukraine . . . .     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           71                              29                        —            —        100          0
USA . . . . . . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                           35                              65                       27           73         21         79
Great Britain       .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .                            —                               —                        —            —         27         73

8     Other general administrative expenses

                                                                                                                                                                                          2007           2006         2005

Expenses for premises . . . . . . . . . . . . .                                                     .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .             42               22           18
Rents, etc. . . . . . . . . . . . . . . . . . . . . . .                                             .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          1,181            1,061        1,069
IT expenses . . . . . . . . . . . . . . . . . . . . .                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .          1,467            1,257        1,216
Telecommunications, postage . . . . . . . .                                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            425              426          437
Consulting and outside services . . . . . .                                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            936              804          712
Travel, entertainment . . . . . . . . . . . . . .                                                   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            426              371          314
Office supplies . . . . . . . . . . . . . . . . . . .                                               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            263              261          283
Advertising, public relations, marketing                                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            467              458          410
Security transports, alarm systems . . .                                                            .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            371              280          271
Other administrative expenses . . . . . . .                                                         .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            538              672          509
Other operating expenses . . . . . . . . . .                                                        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .            106              308          123
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                                       6,222             5,920       5,362

Remuneration to the group’s auditors

                                                                                                            Audit                                                                                 Consultation
                                                                            2007                                    2006