Swedbank AB (publ)

I am Maria Kahneman, Head of Investor Relations here at Swedbank. Welcome to our third quarter results presentation. With me today is our CEO, Jens Henriksson, and our CFO, Jon Lidefelt. Jens and Jon will start with the presentation, and then there will be an opportunity to ask questions. Jens, I hand over to you.

Thank you, Maria. Swedbank has once again delivered a strong result in uncertain times. The geopolitical situation, continued uncertainty about tariffs and trade, and the increasing concerns about weak public finances across the world are slowing down global growth. Twice a year, the world's economic policy decision makers meet at the IMF, The sorting point for their discussions is the World Economic Outlook, which was published a week ago with the headline, and I quote, global economy influx, prospects remain dim, end of quote. With that said, our four home markets have healthy fundamentals. strong public finances, low government debt, innovative companies, profitable banks and low interest rates. In Sweden, we see signs of improvement. Our economists forecast growth of 2% next year, while the Swedish government is more optimistic and projects 3%. In Estonia, economic development is still subdued and we are seeing some recovery in Latvia and the development in Lithuania continues to be strong. In these uncertain times, Swedbank stands strong and is well positioned for sustainable growth and profitability. We can today report a return on equity of 16% and earnings per share of 7,53 kronor for the third quarter. During the quarter, income increased while cost decreased. Our cost-to-income ratio was 0.35. Strict cost control is producing results. We had the conservative and 4-0 lending process, and during the quarter we saw credit impairment reversals. We had the robust ability to generate capital, and we had the very strong capital and liquidity position. During the quarter, Standard & Poor's upgraded Swedbank's credit rating. In their decision, they highlight the bank's improved governance, regulatory compliance and risk management. Furthermore, during the quarter, the U.S. Authority SEC ended its investigation into the bank's historical shortcomings without enforcement. We are delivering according to our plan Swedbank 1527. And as you know, it focuses on three areas. Strengthen customer interactions, grow volumes and increase efficiency. Our customer focus is producing results. We have further improved our availability during the quarter and now 70% of incoming calls in Sweden are answered within three minutes. And we are thereby getting closer to our target of at least 80%. We consistently work to improve our digital offerings and we see that more and more customers do their everyday banking through our app or the internet bank. We have also increased our efficiency. Our employees can spend more time meeting customers and less time on administration using new AI tools. And the number of advisory sessions per employee has increased. During the quarter, we lowered mortgage rates due to lower policy and market rates. Mortgage loans increased by 5.2 billion kronor and mortgages in Sweden distributed through our own channels accounted for 4.2 billion kronor. Deposits from private customers are stable and we continue to be close to our customers and give them advice. Strengthening their financial health is an important task for the bank. Savings and pensions continued to develop positively. Swedbank Robo saw a net inflow of 9 billion kronor in our four-home market. As announced in August, we want to acquire the remaining part of Entercard. Thereby, Swedbank will have the largest card business in the Nordic Baltic region. This will develop our business and strengthen our customer offering. In Lithuania, the business climate remains strong. In Sweden, Estonia and Latvia, economic activity is improving, but from low levels. During the quarter, corporate lending increased by 7 billion kronor. Our customers are showing a high demand for sustainable investments. 36% of the bonds arranged by Swedbank during the quarter were classified as sustainable, and our sustainable asset register has now surpassed 150 billion kronor. We now own 20% of the investment bank SP1 markets. And during the quarter they started up in Sweden. It's an important step in further developing our offering to corporate customers. In addition, our customers will get access to an expanded range of equity research. In the Baltic market, we launched the card payment feature Click2Pay, a secure and convenient service that simplifies payments. Jun, it's your turn now to deep dive into the financials.

Thank you, Jens. We delivered a strong result in the third quarter, with volume growth across markets and increasing income. We have continued our work with focus on long-term shareholder value through business growth and cost efficiency. Cost to income ratio was 35% and return on equity 16%. Lending volumes grew in the quarter and the increase came mainly from Baltic banking, where we continue to see solid growth on both the private and corporate side. Mortgage volumes in Sweden sold through our own channels increased by 4.2 billion, while the savings banks reduced their mortgage volumes on our balance sheet by 1.6 billion. We see continued results of our increased efforts on customer interactions and availability, as we are capturing a larger share of the market. In August, our front book market share through owned channels was 16.4%, still below the back book market share of 17.8%, but the development continued in the right direction. Also for the corporate business in Sweden, the positive development continued with increasing volumes. though somewhat offset by repayments related to a couple of larger exposures. Customer deposit volumes were stable in the quarter. In Sweden, private deposits decreased somewhat from a high level as the second quarter was impacted by seasonal inflow of tax returns. In Baltic banking, deposit volumes were overall stable. Net interest income decreased by 0.9% compared to the previous quarter, driven mainly by lower mortgage rates. Lower deposit rates impacted NII in Q3 with a full quarter effect. while lower rates on the lending side were gradually rolled in during the quarter. Higher business volumes had a positive impact of 94 million in the quarter. Wholesale funding costs continued to decrease in the quarter. Liquidity was, however, reallocated from the market's business, increasing liability volumes, but also positively impacted central bank placements, and hence had an overall neutral NII effect. Day count and FX effects impacted NII positively in the quarter. The Swedish central bank cut policy rates effective as of the 1st of October, and ECB cut rates effectively as of the 11th of June. Hence, there are further repricing dynamics in play. Reminding you that the positive effect on the funding side materialize ahead of the negative effect on the asset side. Furthermore, that it takes approximately three months in Sweden for a rate cut to roll in and six months in the Baltics. We will continue with our pricing strategy on both sides of the balance sheet and maintain focus on the balance between volumes and long-term profitability. Net commission income increased in the quarter, driven mainly by strong asset management commissions. Mutual funds had a net inflow of $9 billion, and combined with a positive stock market performance, increased asset under management to $2,471 billion. Card commissions were seasonally higher in the quarter following higher spending abroad during the summer months, while brokerage and corporate finance commissions were seasonally lower. In addition, we saw positive development in commissions from insurance products. Net gains and losses remained at a high level in the quarter and amounted to 847 million. Income was strong, driven by high business activity, mainly within fixed income. Positive revaluations supported the Treasury result. Other income increased by 2.7%. Net insurance decreased driven by both normalized levels of claims compared to the low levels we saw in the second quarter and the effects from revaluations of future cash flows. One-off transfer in connection with the establishment of SB1 markets on the 1st of September also contributed. The results from partly owned companies supported as well as increased income from services to the savings banks. As a reminder, our collaboration with the savings banks include cost sharing for IT development and administrative services. The savings bank's share of the cost is included in Swedbank's total cost, and you can see the corresponding income as services to the savings banks here under other income. Total expenses were 1.4% lower. Fewer employees, together with seasonally lower staff costs, IT maintenance and consultancy costs contributed. As announced in conjunction to the Q2 presentation, a VAT recovery of 197 million related to the year 2016 was received in the beginning of the third quarter. In line with previous patents, costs will be seasonally higher towards the end of the year. Costs for the full year 2025 is expected to be around 25.3 billion at current exchange rates. This includes the already received VAT recoveries related to the year 2016, 2017 and 2018 amounting to 576 million. It also includes 200 million lower temporary investments this year and an estimated 300 million lower costs due to FX. Asset quality is solid. During the quarter, there were reversals of credit impairments amounting to 398 million, which corresponds to an impairment ratio of minus 8 basis points. The reversals are mainly driven by improved macro scenarios, and we have continued to reduce the post-model adjustment, which now stand at 364 million. Individual assessments resulted in a 568 million increase, driven by a few larger corporate exposures. At the same time, repayments and reversals of previously written-off exposures resulted in a release of 451 million. I feel comfortable with our strict origination standards and the solid collaterals that secure our lending. Our CET1 capital ratio was stable at 19.7%. In the 2025 SREP, our Pillar 2 requirement was lowered by 40 basis points, and our CET1 capital requirement now stands at 14.8%, meaning we have a buffer of around 480 basis points above the requirement. The reduction by the Swedish FSA stems from two parts. Firstly, 20 basis points are related to the new CRR3 risk weights for standardized credit risks. This has an impact on the Pillar 2 add-on that we shall hold until the new Swedish IRB models are approved. Thereby, approximately 20 basis points of the expected capital relief of at least 50 basis points from the new IRB models has now materialized. We continue to expect most of the remaining impact from the IRB model updates to materialize during next year. The Swedish FSA also approved parts of our non-maturing deposit model resulting in 20 basis points lower capital requirement for interest rate risk in the banking book. To conclude, we continue to focus on growth and efficiency. We deliver strong profitability while maintaining prudent underwriting standards, strong liquidity and capital positions. Back to you, Jens.