Swedbank AB (publ)

Good morning and thank you for dialing into Swedbank's first quarter result presentation. My name is Magnus Alvesson, Acting Head of Investor Relations, and I have with me here our CEO Jens Henriksson and our CFO Jon Lidefelt. Jens and Jon, we'll start with the presentation and then there will be an opportunity for questions. Jens, I hand over to you.

Thank you, Magnus. Swedbank has once again delivered a strong result. in uncertain times. We are creating value for our customers and shareholders in both good and bad times. When I presented our results three months ago, I said that the global economy was weak, but that falling interest rates were cautiously beginning to have a positive impact on economic development. Since then, uncertainty has increased. During the quarter, the European Central Bank and the Riksbank cut their policy rates, while the Federal Reserve held its rate unchanged. Economic activity was strong in Lithuania, while the development in Estonia, Latvia and Sweden was more cautious. After the end of the quarter, uncertainty has reached new heights. Twice a year, the world's decision makers meet at the IMF, and the foundation for the meeting is the IMF's World Economic Outlook, which a week ago stated that, and I quote, global growth is expected to decline and downside risk to intensify as major policy shifts unfold, end of quote. The situation is so uncertain that the IMF presents three different forecasts for the global economy. But in all cases, they foresee lower global growth for both 2025 and 2026. But even in this new situation, our four home markets stand out. Strong public finances, low government debt, real wage growth, innovative companies, profitable banks and lower rates means that our home markets remain well prepared for the future. Despite downward revisions in growth for Sweden and the Baltics, it is expected that growth will be higher in both 2025 and 2026 than in the Eurozone and the US. In these uncertain times, Swedbank stands strong. Today I am proud to report the return on equity of 15.2% and earnings per share of 7 kronor and 26 öre for the first quarter. Net interest income continues to be robust, and the decrease we see is explained by lower market rates, fewer days in the quarter, and currency effects. Net commission income is down due to falling stock prices, seasonal lower activity in the card business, and here as well, day and currency effects. Costs decreased on a seasonal basis during the quarter. And our cost to income was 0.35. Strict cost control is producing results. Swedbank has a conservative and thorough lending process. And our credit quality is thus solid. And during the first quarter, we had credit impairment reversals of 140 million kronor. We have a strong capital position with a buffer of 4.5 percentage points. And our liquidity position is strong. And the fact that Moody's raised Swedbank's credit rating after the quarter ended is one testament to the bank's strength. Swedbank is the leader in mortgages in all our home markets, and we maintain our position in tough competition. During the quarter, we cut our mortgage rates, lending increased in Estonia, Latvia, and Lithuania, while it decreased somewhat in Sweden. Deposit volumes were unchanged in the Baltics. In Sweden, deposit volumes increased slightly. After a positive start to the year, global stock markets have fallen. And during the quarter, we saw outflows and reallocations within savings. In times of uncertainty, staying close to our customers, providing advice, and emphasizing the importance of long-term savings is central for us, being a bank rooted in savings banks' traditions. Despite market volatility, the premium and private banking business area has generated good customer inflows, and a large portion comes from the corporate segment. Corporate lending decreased slightly on the Baltic markets. However, we see that the demand for sustainable loans remains stable, and energy efficiency improvements are high on the agenda. In Sweden, corporate lending increased and our focus on the corporate business and partner strategy is producing results. Together with Sparabanken En, we are establishing a new Nordic investment bank, SB1 Markets. This partnership will enable us to better meet the needs of our corporate customers through increased industry expertise as well as expanded equity research and equity trading. We invest for a better and stronger Swedbank to sustainably deliver on our customer promise of an easier financial life. Thanks to our investments in technology and processes within Swedish banking, we have improved availability for our customers. In March, we adjusted the opening hours for dropping customer visits at our local branch offices so that our employees can spend more time meeting with the customers in scheduled appointments and by phone. The efforts are producing results, with an increase in scheduled advisory meetings and significantly reduced waiting times for customer service by phone. At the end of the quarter, more than 50% of incoming calls were answered within three minutes, compared to the meager 20% at the beginning of the quarter. And our goal is to reach 80%. Facilitating the transition to a sustainable society is a significant business opportunity for Swedbank. being named the most sustainable brand among Swedish banks, encourage us to continue driving change by helping our customers transition. And it's a strong testament to our sustainability efforts. We are now taking further steps to integrate sustainability more deeply into the bank's business processes by moving group sustainability to the CFO office. In our annual report for 2024, we reported in accordance with CSRD one year before it comes into effect. The bank's sustainable asset register continued to grow and amounted to 136 billion kroner at the end of the quarter. And we have successfully issued two green bonds. a third of our range bonds were classified as sustainable during the quarter. When it comes to financial health, that's a topic very close to our hearts, we continue to help raise general awareness of financial concepts and promote better financial decision-making in our home markets. In the Baltic countries, we have launched MyBudget for children and young adults. And in Estonia, we invested 10 million euros in the educational foundation that we established at the end of 2024. Strengthening financial health is especially important in these uncertain times. And with that, I give the floor to Jun, who will deep dive into the financials.

Thank you, Jens. Before I go through the numbers for yet another strong quarter, let me just reiterate our commitment to ensuring long-term shareholder value and hence have a diligent focus on long-term income growth, cost and capital efficiency, as well as on asset quality. Let me then start with lending and deposits. The overall loan portfolio increased by 9 billion, excluding a negative FX effect. Corporate lending volumes in the Swedish business areas increased by 10 billion, excluding FX. Also this quarter, we saw a positive development in terms of customer activity as a result of our increased focus on corporate business in Sweden. In the Swedish mortgage market, we continued with our pricing strategy and maintained focus on the balance between volumes and long-term profitability. Mortgage volumes decreased by 2 billion during the quarter. In Baltic banking, lending continued to grow. Private lending increased, supported by improved housing affordability, while there was a small decrease in corporate lending. Customer deposits increased in the quarter by 6 billion, excluding FX. In the Swedish business area, the increase was primarily due to corporate deposits growing by 6 billion. In Baltic banking, deposit volumes were stable following a fourth quarter inflow from public funds and a payment of a 13th month's salary in Lithuania. Turning to P&L, NII declined in the quarter by 785 million, driven by lower market rates, fewer days in the quarter, and FX effects. As expected in contrast to previous quarter, timing effects contributed negatively this quarter. Lending income decreased due to lower customer rates, stemming both from central bank rate cuts in the quarter and from roll-in effects. Lower deposit rates and funding costs, as well as higher business volumes, mitigated the decline. Mortgage margins in Sweden have remained stable when excluding negative timing effects in the quarter. Deposit margins decreased in the quarter due to transaction accounts already being at zero interest rates. Our NII sensitivity is unchanged, however, reminding you that the NII peak should not be used as the starting point since all contracts were not repriced at that time. Hence, the theoretical starting point is higher. Let me also remind you that the full repricing of the loan book takes at least three months in Sweden and six months in the Baltics. Over to net commission income, which decreased in the quarter, mainly driven by seasonally lower card commissions. Asset management commissions were affected by fewer days in the quarter and by FX, as well as market developments. Furthermore, we saw a decline in payment processing due to higher commission costs. However, during the quarter, the strong performance related to insurance and corporate finance continued and earnings from savings service concepts increased. Net gains and losses decreased in the quarter following a strong fourth quarter outcome. The decrease was mainly due to negative valuation effects in Treasury, mitigated by positive valuation effects due to equity investments. Business-related NGL was however slightly higher in the quarter, driven by fixed income sales and trading. Other income increased by 95 million, net insurance Income increased despite the negative revaluation effect. Both higher premium income and lower claims had a positive impact during the quarter. Income from partly owned companies was also higher. Total expenses were seasonally lower and decreased by 625 million in the quarter, amounting to 6.1 billion. The decrease includes VAT repayment, which lowered costs by 205 million. This was a result of a decision by the Swedish Tax Authority and is related to the tax year 2017. We will, as a consequence of this, also review possible VAT repayments for other years. A one-off donation to the Estonian Education Foundation added 113 million to the expenses. Despite annual salary increases, staff costs were stable in the quarter as the number of employees continued to decline. Looking ahead, I will continue to ensure a strong cost discipline and a focus on efficiency. Moving to bank taxes, which increased in the quarter, driven by changes in the Latvian bank tax. Credit quality remained solid. During the quarter, we made credit impairment reversals of 141 million. The reversals were mainly explained by exposure reductions due to customary payments, while individually assessed loans increased provision somewhat. The post-model adjustment was stable and amounted to 715 million. I feel comfortable with our strict credit origination standards and the solid collaterals that secure our lending as we go into times with increased uncertainty. Turning to capital and liquidity. REA increased by 5 billion and ended the quarter at 877 billion. The implementation of CRR3 increased REA by 20 billion, while credit growth added 3 billion and FX subtracted 9 billion. The remaining reduction in REA by 10 billion was primarily driven by improvements in asset quality and shortening of loan maturities in corporate loans. Our CET1 capital ratio was 19.7%, meaning we have a buffer of around 450 basis points above the requirement. The implementation of CRR3 reduced the buffer by 46 basis points, while profits added around 30. Our liquidity position remains strong. Back to you, Jens.