Swedbank AB (publ)

Good morning everybody and welcome to Swedbank's first quarter 2024 results presentation. My name is Annie Ho from Investor Relations and with me in the room today is Jens Henriksson, Anders Garsson and Rolf Marquardt, our CEO, CFO and CRO. We'll start as usual with our presentation and follow up with Q&A. With that I hand over to you Jens.

Thank you Annie. Swedbank has again delivered a strong and sustainable result and our profit increased compared to both the previous quarter and year. Despite geopolitical uncertainties with war in Europe, turbulence in the Middle East and climate change, I still feel somewhat optimistic for the economic development. The global economy remains remarkably resilient, with growth holding steady as inflation returns to target. In the US, inflation remained high while dropping in the Eurozone. In Latvia and Lithuania, the recovery has been rapid and inflation has fallen to normal and low levels. Estonia is on its way out of the recession. In Sweden, the recovery is in sight, and the Riksbank left the policy rate unchanged. The view that inflation is heading lower was reaffirmed, and the first rate cut could happen in the second quarter. At the same time, interest rates will remain high for longer. Despite difficult economic times, the Swedish economy has shown more resilience than expected. Consumer purchasing power remained under pressure, but there is a positive outlook. There is fiscal space in all our home markets, especially comparing with the rest of Europe. Our economies expect that growth in Sweden, Estonia, Latvia and Lithuania next year will be among the highest in Europe. In these times, Swedbank delivered a strong result of 8.4 billion krona for the first quarter. Net interest income decreased by 5%, half of which were business-driven. Continued increases in equity prices positively impacted commission income, which was up by 6%. Costs have fallen compared to last quarter as planned, and our cost-to-income ratio was unchanged from the previous quarter at 0.34%. As we announced last quarter, Our high profitability enabled us to strengthen and accelerate investments to fight fraud and improve data processing, not the least for the IRB overhaul. At the same time, the number of employees has continued to increase due to lower turnover than we had forecasted. We have therefore implemented a temporary hiring freeze with exceptions for business-critical positions. As you know, we have strong ambitions regarding the fight against financial crime. We want Swedbank to be on the forefront. Five years ago, the group function Anti-Financial Crime, AFC, was created. Now, we take the next step on our maturity journey and consolidate AFC within group products and advice, to enable greater efficiency by integrating operations in the product and service offering with a focus on digitization. And the group executive committee thereby shrinks with one member. Summing up, we delivered a return on equity of 16.9% and an earnings per share of 7 kronor and 47 öre for the first quarter. A sustainable bank is a profitable bank. And it's worth reiterating that our dividend for 2023 is now being put to use by the savings banks, insurance companies, pension funds, funds, retail investors, and foundations. The dividend goes back to and benefits society. Swedbank has a conservative and thorough lending process, and our credit quality is solid. Credit impairments for the first quarter amounted to 144 million kronor. We have a strong ability to generate capital and a strong capital position with a buffer of 4.2%. Our liquidity position is strong and our digital availability was stable at high levels in the quarter. And Swedbank is an important part of our society's infrastructure. Every day we assess risk and ensure that we are resilient to withstand cyber threats. But alone is not strong. We therefore have a good collaboration with both the private and the public sector. Our customer promise is to make our customers' financial life easier. During the quarter, we changed our organization in Sweden based on how private and corporate customers meet us. In this way, we can even better customize services and adapt our offering to our customers' needs. We shall be proactive and make the right competence available to the right customer at the right time. And these are actions that are important for customer satisfaction. Swedish banking has retail customers and micro-corporate customers, and the business area plays a key part in increasing availability and is an engine for the entire Swedish market. Retail customers with more complex needs receive dedicated service throughout the country from our specialists and advisors in the new business area, premium and private banking. and our extensive knowledge of the local market is a strength. Corporate customers who need specialized expertise are brought together under the business area, corporate and institutions, with access to our entire product offering. And as you know, this reorganization is a part of our Plan 1525. Swedbank is the leader in mortgages in our four home markets, and during the quarter, our lending increased. In Sweden, the housing market remained sluggish, but during the quarter, we saw an increase in housing prices. At the same time, housing investments continue to be slow. We have the best full service offering in our home markets and are ready with financing for our customers when they want to move. During the last six months, we have grown our mortgage portfolio every month through our own channels. And during the quarter, our market share rose. In the Baltic markets, activity was high and we have a strong homeowners insurance offering in connection with the home buying process. The savings business is keeping pace with the market and we offer competitive rates in tough competition in all our home markets. Deposits were stable and in Sweden, the high cost of living continued to squeeze households. We are the leading bank in Estonia, Latvia and Lithuania. And that is a responsibility that we are happy to take, not the least by building a savings culture. In 2019, we established a savings strategy. Five years later, we can see the results. Our robo-fonds have become a popular investment alternative, and more than 60,000 customers have chosen to invest in them. In the quarter, more than 500 million kroner was invested in the three Baltic countries. This is three times more than in the first quarter last year. Our corporate customers remain cautious in all our home markets. The central bank's tightening has had an effect, and we see that there is less money in the system. Our corporate lending was stable in the Baltic markets, but decreased slightly in Sweden during the quarter. At the end of the quarter, however, we saw a slight increase in business activity in Sweden due to expectations of rate cuts. Swedbank contribute to a better and more sustainable society, and we're doing it together with our customers. And sustainability is at the core of our business strategy. we continuously find ways to give our customers better advice in the area of sustainability in cooperation with partners such as Hemma, Rambol and Agronod. Swedbank's customers can find help and support to implement a green and smart energy transition. Our Green Zero Margin loan was a success in Estonia and Latvia in 2023. We are now launching a new green offering in all our Baltic home markets, and we see a continuing strength demand. And with that, I give the floor to Anders Karlsson, who will deep dive into the financials.

Thank you, Jens. Good morning, everyone. Let's start with lending and deposits. The underlying total loan portfolio decreased slightly, excluding a positive FX impact of 12 billion. In Sweden, total private mortgage lending was stable, and Swedbank's own channels continue to deliver consistent mortgage inflows, and we are attracting more volumes from other banks on a net basis. But the outflows to the savings banks continued. Mortgage volumes are still low, but house prices have started to increase, and transaction volumes year over year have improved somewhat. Total corporate lending in Sweden decreased by 6 billion. Lending to property management increased, while other sectors such as Public sector and utilities, professional services and shipping saw large individual repayments. In Baltic banking, both private and corporate lending increased by 1 billion each. Customer deposits increased by 19 billion, excluding a 16 billion positive FX impact. In Sweden, private deposits were stable, and corporate deposits increased by 15 billion in money market deposits. In Baltic banking, both private and corporate deposits were stable. Turning to the revenue lines, beginning with net interest income, which decreased by 5% quarter on quarter, but is 663 million higher compared to Q1 2023. Half of the quarter-on-quarter decrease was due to non-business-driven items, FX and day count, as well as Q4 adjustments for the deposit guarantee fee and CNI's origination fees. The other half came from known headwinds, such as lower average lending volumes in CNI, lower deposit margins due to mixed shifts, and proactive wholesale funding costs, both 81 and senior non-preferred issuance. We have, for the last two years, seen the effects of QT, primarily impacting corporate deposit volumes in higher margin accounts. And in both Swedish and Baltic banking, we continue to see mix shifts to fixed-term accounts but at the lower level. Looking ahead in terms of NII drivers, our macro research team predict that the Riksbank will make the first rate cut in May, which could be followed by three more cuts at the end of the year. The outlook for the economies in our home markets is positive. and this will provide an opportunity for lending demand to return. Going forward, we will continue with our proven pricing strategy and actively work with our administratively priced core products on both sides of the balance sheet. Over to net commission income, which increased by $222 million, mainly driven by stock market performance and net sales in asset management, but also debt capital markets within securities and corporate finance performed well. Net gains and losses ended at a good level. Fixed income and FX sales and trading performed well, contributing 590 million to NGL, There were negative revaluations from funding-related swaps and the 137 million in other was mainly due to equity investments revaluations The quarter-over-quarter decrease was mainly due to high positive revaluation impact within Treasury last quarter Other income decreased by 270 million While underlying net insurance income improved, revaluation effects accounted for essentially all of the Q-on-Q change. Income from partly owned companies were slightly higher. Total expenses came at 6.2 billion in the quarter, which is in line with our full year guidance, and to a large extent, a result of us speeding up the temporary investments that we communicated last quarter. Underlying costs increased due to salary reviews in Sweden and third-party contracts that continue to reprice at higher levels. Now over to you, Rolf, to talk about asset quality and credit impairments.