Swedbank A

Quarterly Report • Oct 20, 2020

Q3 2020

Interim report January-September 2020, 20 October 2020

SweQ320

Interim report for the third quarter 2020

• Lower net interest income due to lower market rates
• Stronger income from cards and asset management positively affected net commission income
• Stabilised net gains and losses on financial items after a volatile first half of the year
• Low investigation-related expenses due to Covid-19
• Lower provisions for potential credit impairments related to the effects of Covid-19
• "Swedbank delivered another strong quarter in uncertain times"

Interim report for the third quarter 2020 Third quarter 2020 compared with second quarter 2020				"Swedbank
				delivered
Lower net interest income due to lower market rates 
Stronger income from cards and asset management positively  affected net commission income				another strong quarter in
Stabilised net gains and losses on financial items after a volatile first  half of the year				uncertain
Low investigation-related expenses due to Covid-19 					times"
Lower provisions for potential credit impairments related to the effects  of Covid-19				Jens Henriksson, President and CEO
Solid capital and liquidity buffers 
Financial information SEKm	Q3 2020	Q2 2020	%	Jan-Sep 2020	Jan-Sep 2019	%
Total income	11 604	12 076	-4	33 912	34 004	0
Net interest income	6 714	6 886	-2	20 286	19 581	4
Net commission income	3 246	2 925	11	9 394	9 569	-2
Net gains and losses on financial items	669	1 398	-52	1 745	2 411	-28
Other income1)	975	867	12	2 487	2 443	2
Total expenses of which adminstrative fine	4 761 0	4 843 0	-2	18 974 4 000	14 435 0	31
Profit before impairment	6 843	7 233	-5	14 938	19 569	-24
Impairment of intangible and tangible assets	1	0		1	69	-99
Credit impairment	425	1 235	-66	3 811	481
Tax expense	1 155	1 154	0	2 707	3 738	-28
Profit for the period attributable to	5 261	4 845	9	8 419	15 269	-45
the shareholders of Swedbank AB
Earnings per share, SEK, after dilution	4.68	4.31		7.50	13.62
Return on equity, %	14.3	13.5		7.8	15.3
C/I ratio	0.41	0.40		0.56	0.42
Common Equity Tier 1 capital ratio, %	16.8	16.4		16.8	16.3
Credit impairment ratio, %	0.10	0.28		0.30	0.04
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income
statement.

CEO Comment

Swedbank has its origins in the first Swedish savings bank, which opened in Gothenburg in 1820. On 28 October we celebrate our first 200 years. Our first customer was three-year-old Carolina Bernhardina Hammardahl, who deposited 12 skilling banco.

The oak logotype from the last century has the inscription: "Firmly rooted in the security built on savings."

The coronavirus crisis has again demonstrated the importance of a financial buffer. During the quarter households saved more than usual. The same was true of companies. Total deposits reached record levels in the third quarter.

Swedbank's mission is to be there for our customers. It is important for us to help with advice. This includes advice on every type of support society offers. We also give individual advice to private and corporate customers. And we offer liquidity, both in the form of new loans and through temporary amortisation exemptions, where to date we have granted more than 70 000 applications. We will continue to work closely with customers and are there for them if the situation worsens.

Result and capital

Swedbank delivered a strong quarter in uncertain times. While there are now many signs of recovery in all our markets, it will take time before the economy returns to pre-crisis levels. The global economy has fluctuated significantly and we remain vigilant should conditions deteriorate.

Our core business is strong. Net interest income is stable. With the support of the strong stock market, net commission income is back to a normal level after a drop in the previous quarter. The card business has recovered as well. Underlying expenses were as planned, while the cost of measures in response to investigations and legal advice on money laundering issues continues to be lower than forecast.

In the third quarter we allocated additional provisions for credit impairments of SEK 425m in accordance with IFRS.

Swedbank has a strong capital buffer and the margin to the Swedish Financial Supervisory Authority's minimum Common Equity Tier 1 capital ratio requirement remains robust.

Anti-money laundering measures

Preventive work to detect and report suspected money laundering and terrorist financing has remained the highest priority at Swedbank. We are remedying the shortcomings identified by the Swedish and Estonian FSAs. Our action plan to strengthen the bank's capacity and capabilities to detect money laundering risks is progressing as scheduled with slight adjustments due to the coronavirus pandemic.

Know Your Customer (KYC) work is one of the bank's contributions to a safe and well-functioning society, while also preserving our reputation among shareholders and customers. The fight to stop criminals from exploiting banks' platforms starts with the information we have on our customers. The bank's many questions on transactions, counterparties and where the money comes from are of value to society's efforts to stop crime.

Sustainability

Sustainability and long-term profitability go hand in hand. Work is underway to integrate sustainability in everything we do. Swedbank Robur took an important step in its climate work during the quarter when it became the first fund manager to classify funds in line with the Paris Agreement. We call them "Paris aligned". Swedbank was also one of the joint lead managers for the Kingdom of Sweden's first sovereign green bond. On the mortgage side, we are currently participating in the European Energy Efficient Mortgages Initiative. ESG (Environmental, Social and Governance) bonds accounted for approximately 40 per cent of the total volume Swedbank Capital Markets helped its clients to issue.

Dividend

The Board of Directors is still considering the issue of a dividend for 2019. The bank's financial position is strong, and we want to pay a dividend. But we follow current development and take into consideration the assessments of the authorities and monitor the development of the pandemic.

Outlook

After a historic drop in GDP in the first half of 2020 we have seen a recovery this autumn. However, there is reason to be cautious of market fluctuations, currently Covid-19 cases are increasing in the world. Lastly, I would like to mention the review of the bank's wanted position that began in June and will be completed before the year is over. Through this work I can say that Swedbank is contributing to a sustainable economy – for individuals, companies and society. We are now looking ahead to the next 200 years.

Jens Henriksson President and CEO

Table of contents

	Page
Overview	5
Market	5
Important to note	5
Group development	5
Result third quarter 2020 compared with second quarter 2020	5
Result January-September 2020 compared with January-September 2019	6
Volume trend by product area	7
Credit and asset quality	8
Operational risks	9
Funding and liquidity	9
Ratings	9
Capital and capital adequacy	9
Other events	11
Swedbank's anti-money laundering work	11
Strategic programmes	11
Investigations	12
Events after 30 September 2020	12
Business segments
Swedish Banking	13
Baltic Banking	15
Large Corporates & Institutions	17
Group Functions & Other	19
Eliminations	20
Group
Income statement, condensed	22
Statement of comprehensive income, condensed	23
Balance sheet, condensed	24
Statement of changes in equity, condensed	25
Cash flow statement, condensed	26
Notes	27
Parent company	55
Alternative performance measures	60
Signatures of the Board of Directors and the President	62
Review report	62
Contact information	63

More detailed information can be found in Swedbank's Fact book, www.swedbank.com/ir, under Financial

Financial overview

information and publications.
Financial overview
Income statement	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Net interest income	6 714	6 886	-2	6 553	2	20 286	19 581	4
Net commission income	3 246	2 925	11	3 297	-2	9 394	9 569	-2
Net gains and losses on financial items	669	1 398	-52	457	46	1 745	2 411	-28
Other income1)	975	867	12	919	6	2 487	2 443	2
Total income	11 604	12 076	-4	11 226	3	33 912	34 004	0
Staff costs	2 930	2 868	2	2 763	6	8 668	8 304
Other expenses	1 831	1 975	-7	2 401	-24	6 306	6 131	3
Administrative fine		0 0		0		4 000	0
Total expenses	4 761	4 843	-2	5 164	-8	18 974	14 435	31
Profit before impairment	6 843	7 233	-5	6 062	13	14 938	19 569	-24
Impairment of intangible assets		0 0		66		0	66
Impairment of tangible assets		1 0		1	0	1	3	-67
Credit impairment	425	1 235	-66	154		3 811	481
Operating profit	6 417	5 998	7	5 841	10	11 126	19 019	-42
Tax expense	1 155	1 154	0	1 176	-2	2 707	3 738	-28
Profit for the period	5 262	4 844	9	4 665	13	8 419	15 281	-45
Profit for the period attributable to the shareholders of Swedbank AB	5 261	4 845	9	4 663	13	8 419	15 269	-45
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement.
Key ratios and data per share		Q3 2020		Q2 2020	Q3 2019	Jan-Sep 2020	Jan-Sep 2019
Return on equity, %		14.3		13.5	14.1	7.8	15.3
Earnings per share before dilution, SEK1)		4.70		4.33	4.17	7.52	13.66
Earnings per share after dilution, SEK 1)		4.68		4.31	4.16	7.50	13.62
C/I ratio		0.41		0.40	0.46	0.56	0.42
1) Equity per share, SEK		134.4		128.9	119.6	134.4	119.6
Loan/deposit ratio, %		143		147	168	143	168
Common Equity Tier 1 capital ratio, %		16.8		16.4	16.3	16.8	16.3
Tier 1 capital ratio, %		18.2		17.8	18.9	18.2	18.9
		20.6		20.2	21.4	20.6	21.4
Total capital ratio, % Credit impairment ratio, %		0.10		0.28	0.04	0.30	0.04

Profit for the period attributable to the shareholders of
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement.
Return on equity, %	14.3		13.5	14.1	7.8	15.3
Earnings per share before dilution, SEK1)	4.70		4.33	4.17	7.52	13.66
Earnings per share after dilution, SEK 1)	4.68		4.31	4.16	7.50	13.62
C/I ratio	0.41		0.40	0.46	0.56	0.42
1) Equity per share, SEK	134.4		128.9	119.6	134.4	119.6
Loan/deposit ratio, %	143		147	168	143	168
Common Equity Tier 1 capital ratio, %	16.8		16.4	16.3	16.8	16.3
Tier 1 capital ratio, %	18.2		17.8	18.9	18.2	18.9
Total capital ratio, %	20.6		20.2	21.4	20.6	21.4
Credit impairment ratio, %	0.10		0.28	0.04	0.30	0.04
Share of Stage 3 loans, gross, %	0.75		0.81	0.77	0.75	0.77
Total credit impairment provision ratio, %	0.53		0.56	0.38	0.53	0.38
Liquidity coverage ratio (LCR), %	153		164	151	153	151
Net stable funding ratio (NSFR), % 2)	124		125	121	124	121
1) The number of shares and calculation of earnings per share are specified on page 54. 2) NSFR calculated in accordance with Regulation (EU) 2019/876. Past NSFR numbers for 2019, that were based on the Basel III version, have been recalculated. Balance sheet data	30 Sep	31 Dec		30 Sep
SEKbn	2020	2019	%	2019	%
			1	1 613	1
Loans to the public, excl. the Swedish National Debt Office and repurchase agreements Deposits from the public, excl. the Swedish National Debt Office	1 622	1 606
and repurchase agreements	1 132		954 19	957	18
Equity attributable to shareholders of the parent company	151		139 9	134	13
Total assets Risk exposure amount	2 696 692	2 408	12 649 7	2 507 657	8 5

Loans to the public, excl. the Swedish National Debt Office and
Deposits from the public, excl. the Swedish National Debt Office

Overview

Market

In the third quarter economies recovered in a number of countries globally, including in the Nordic and Baltic regions. The recovery rests on shaky ground, however, due to the spread of Covid-19. Since the summer ended the infection rate has increased and several countries have again been forced to introduce restrictions. The extensive shutdowns of economies and societies we saw last spring seem, so far, to have been avoided this time.

After the recovery in global stock prices in the second quarter the trend was more mixed in the third quarter. The US and Nordic stock markets remained strong at the same time that stock markets in other parts of Europe were largely unchanged. This is probably tied to fears of increased infection and a slower recovery. Economic development going forward depends on further stimuli from central banks and governments, however. Indicators such as the PMI and other confidence surveys showed that expectations with regard to production and new orders continued to improve in the quarter. There is a big divergence between sectors, however, with sentiment in the industrial sector fairly positive at the same time that economic signals in the service sector remain weak. Oil prices initially rose during the quarter, but in early September Saudi Arabia cut its official sales prices, which, coupled with concerns about a renewed Covid-19 spread, led to a drop in prices.

To ensure functioning financial systems and support their economies, central banks added to the support they had introduced in the first quarter. This included asset purchases and other measures to maintain liquidity in the markets. During the quarter the euro appreciated against the dollar.

The recovery is continuing in the Swedish economy, but slowly, and it will take time until the economy returns to pre-crisis levels. In 2020 GDP is expected to shrink by 5.0 per cent before growing 3.2 per cent in 2021. The latest data indicate, however, that the 2020 decrease may be slightly less than that, but there is still great uncertainty about both Covid-19 and the economy.

Since last spring, Swedbank has published data on daily card transactions. They capture around 6 million transactions per day, or more than half of the total number of completed transactions, and provide an upto-date gauge of household consumption. In connection with the Covid-19 outbreak last spring, consumption fell by at most about 25 per cent compared with the same week in 2019, but it has now recovered and seems to have stabilised at a level of approximately 4 per cent lower than last year. It is mainly demand for and consumption of services that have yet to recover, though retail demand in some areas is also still lower year-over-year – an effect of the social distancing requirement. Other activity data show that the economy is recovering, especially the industrial sector. Fresh data also show that corporate bankruptcies dropped significantly in September compared with the same month in 2019. The labour market is lagging behind, however, and even though unemployment is not rising at the expected rate, it is still high at just over 9 per cent. There is a risk that unemployment will remain high for some time to come.

Although last spring's uncertainty caused the housing market to slow, the activity level increased in the third quarter. This was reinforced by a low supply of singlefamily homes and second homes and also led to higher prices. According to Valueguard in September house prices rose approximately 1.2 per cent compared with July and household mortgage volumes were up 5.5 per cent year-over-year in August. Inflation was higher in the summer than many analysts had expected and was clearly impacted by the pandemic. This has caused pricing volatility as well as a big drop in demand, which adds uncertainty to the current inflation calculation. The Riksbank has stressed on several occasions that the outcomes should be interpreted cautiously and that the uncertainty is likely to last for some time. At present the Riksbank's main focus, however, is to support the economy and ensure that the financial system functions.

While the Baltic countries have been hard hit by the pandemic, the economic impact has been less than in the rest of the eurozone. Consumer demand has recovered, but for industrial and export sectors it has been a slower process, since they are dependent on a recovery in demand from key trading partners. Lithuania is the country that has recovered the fastest because its industrial sector is focused on less cyclical segments such as timber products and furniture. In Estonia and Latvia GDP fell 6.9 and 8.9 per cent respectively in the second quarter compared with the same quarter in 2019, at the same time that GDP in Lithuania fell 4.2 per cent. The CPI inflation rate fell in Estonia and Latvia by 0.9 and 0.3 per cent respectively in September compared with September 2019, at the same time that inflation in Lithuania rose 0.7 per cent.

Important to note

The interim report contains alternative performance measures that Swedbank considers valuable information for the reader, since they are used by the executive management for internal governance and performance measurement as well as for comparisons between reporting periods. Further information on the alternative performance measures used in the interim report can be found on page 64.

Group development

Result third quarter 2020 compared with second quarter 2020

Swedbank's profit increased in the third quarter to SEK 5 261m (4 845), mainly due to lower credit impairments. Foreign exchange effects negatively affected profit before impairment by SEK 40m.

The return on equity was 14.3 per cent (13.5) and the cost/income ratio was 0.41 (0.40).

Income decreased to SEK 11 604m (12 076). The main reason was lower net gains and losses on financial items, though lower net interest income contributed as well. Net commission income and other income increased and positively affected income. Foreign exchange effects reduced income by SEK 73m.

Net interest income decreased 2 per cent to SEK 6 714m (6 886), mainly due to lower deposit margins. Higher lending margins offset this, but not to the same extent. The decrease is also due to foreign exchange effects and the fact that the second quarter was positively affected by a SEK 103m one-off within Group Treasury. The resolution fund fee was lower in the third quarter and the quarter also had one more day than the second quarter, which positively affected net interest income.

Net commission income increased 11 per cent to SEK 3 246m (2 925), mainly due to higher income from asset management and cards. Asset management income was primarily affected by higher assets under management due to the rising equity prices. Card income benefited from a gradual recovery in the number of card transactions after the initial impact of the Covid-19 pandemic and was also seasonally higher.

Net gains and losses on financial items decreased to SEK 669m (1 398). The result stabilised after a volatile period of fluctuating values in the first and second quarters. Large Corporates & Institutions' client activity remained good despite a seasonally lower activity level. Revaluation of the trading book and derivative value adjustments (CVA/DVA) positively affected the result due to lower credit spreads. The shareholding in Enento, formerly Asiakastieto, was divested in its entirety, which negatively affected the quarterly result by SEK 110m. The shareholding in Visa was hedged at the end of the second quarter. In the third quarter half of Swedbank's holding of convertible preference shares in Visa was converted to liquid A shares. Due to the conversion, a value adjustment of SEK 91m for lack of liquidity in the preference shares was reversed, which positively affected the result.

Other income including the share of profit or loss of associates and joint ventures increased to SEK 975m (867). The increase was mainly affected by a higher result in Entercard as well as higher net insurance.

Expenses decreased 2 per cent to SEK 4 761m (4 843). Expenses decreased partly due to lower activity in connection with the summer vacation. An increase in the number of employees in the second and third quarters led to higher staff costs. Consulting expenses to manage money laundering related investigations rose SEK 20m to SEK 63m. Foreign exchange effects reduced expenses by SEK 33m.

Credit impairments decreased to SEK 425m (1 235) and related in large part to provisions within Large Corporates & Institutions. Swedish Banking reported recoveries in the quarter.

The tax expense amounted to SEK 1 155m (1 154) and the effective tax rate was 18.0 per cent (19.2). The lower tax rate was mainly due to tax deferred assets of SEK 130m attributable to previous years.

Result January-September 2020 compared with January-September 2019

Swedbank's profit decreased to SEK 8 419m (15 281) due to higher expenses, including the Swedish FSA's administrative fine, higher credit impairments and lower net gains and losses on financial items. The table below shows a simplified income statement adjusted for the Swedish FSA's administrative fine.

Income statement,	Jan-Sep	Jan-Sep	Jan-Sep
SEKm	2020	2020	2019
		Excl
		administrative
		fine
Total income	33 912	33 912	34 004
Total expenses	18 974	14 974	14 435
of which administrative fine	4 000	0	0
Credit impairment and impairment	3 812	3 812	550
Operating profit	11 126	15 126	19 019
Tax expense	2 707	2 707	3 738
Profit for the period attributable to the shareholders of Swedbank AB	8 419	12 419	15 269
Non-controlling interests	0	0	12
Return on equity, %	7.8	12.7	15.3
Cost/Income ratio	0.56	0.44	0.42
Foreign exchange effects reduced profit before
impairment by SEK 56m.
The return on equity was 7.8 per cent (15.3) and the
cost/income ratio was 0.56 (0.42). Adjusted for the Swedish FSA's administrative fine, the return on equity

The return on equity was 7.8 per cent (15.3) and the cost/income ratio was 0.56 (0.42). Adjusted for the Swedish FSA's administrative fine, the return on equity was 12.7 per cent and the cost/income ratio was 0.44.

Income decreased to SEK 33 912m (34 004) and was negatively affected by lower net gains and losses on financial items and net commission income, but this was offset mainly by higher net interest income. Foreign exchange effects reduced income by SEK 96m.

Net interest income rose 4 per cent to SEK 20 286m (19 581). The increase was mainly due to a lower resolution fund fee and higher lending and deposit volumes.

Net commission income decreased 2 per cent to SEK 9 394m (9 569). Income primarily from cards decreased due to Covid-19, while asset management income increased due to a higher average volume of assets under management.

Net gains and losses on financial items decreased to SEK 1 745m (2 411). The main reason was a lower result within Large Corporates & Institutions, which was affected by revaluation in the trading book and derivative value adjustments (CVA/DVA). The appreciation in the value of the Visa and Enento shareholdings has also been lower this year.

Other income including the share of profit or loss of associates and joint ventures amounted to SEK 2 487m (2 433) and was stable.

Expenses increased to SEK 18 974m (14 435), mainly due to the Swedish FSA's administrative fine of SEK 4 000m. Adjusted for the administrative fine, expenses rose 4 per cent and were mainly affected by higher consulting expenses and staff costs. Consulting expenses to manage money laundering related investigations increased SEK 97m and other consulting expenses increased SEK 316m. Staff costs increased SEK 364m due to annual wage increases, higher pension expenses and a higher number of employees. Foreign exchange effects reduced expenses by SEK 41m.

Credit impairments increased to SEK 3 811 (481) against the backdrop of the deteriorating macroeconomic outlook in connection with the Covid-19 pandemic. A large part of the credit impairments was in Large Corporates & Institutions.

The tax expense amounted to SEK 2 707m (3 738). The effective tax rate was negatively affected by the Swedish FSA's administrative fine, which is not tax deductible, and positively by a deferred tax asset from previous years. Excluding the administrative fine and deferred tax asset, the adjusted effective tax rate was 19.9 per cent, against 19.7 per cent in the same period in 2019. The Group's effective tax rate is estimated at 19-21 per cent in the medium term.

Volume trend by product area

Lending

Loans to the public excl. the Swedish

previous years. Excluding the administrative fine and deferred tax asset, the adjusted effective tax rate was
19.9 per cent, against 19.7 per cent in the same period
in 2019. The Group's effective tax rate is estimated at
19-21 per cent in the medium term.
				The number of purchases with Swedbank cards in
Volume trend by product area				Sweden recovered after a drop in the spring. In the third
Swedbank's main business is organised in three product				quarter there were 342 million card purchases, which
areas: lending, payments and savings.				was 7 per cent lower than in the same quarter in 2019.
				In the Baltic countries there were 183 million card
Lending				purchases, which was 12 per cent above the level in the
Total lending to the public, excluding repos and lending				third quarter of 2019. The stronger recovery in the Baltic
to the Swedish National Debt Office, decreased by				countries compared to Sweden is partly due to stronger
SEK 3bn to SEK 1 622bn (1 635) compared with the				structural growth in the Baltic card business.
end of the second quarter 2020. Compared with the end
of the third quarter 2019 the increase was SEK 9bn,				The number of card transactions acquired by Swedbank
corresponding to growth of 1 per cent. Foreign				is in line with the year-earlier period. In Sweden,
				Norway, Finland and Denmark there were 727 million
exchange effects positively affected lending by SEK 1bn				transactions in the quarter, down 1 per cent compared
compared with the end of the second quarter 2020 and				with the same quarter in 2019. Transaction volumes
negatively by SEK 8bn compared with the end of the				rose 1 per cent in the quarter compared with the same
third quarter 2019.				period in 2019. In the Baltic countries the corresponding
				figure was 128 million transactions, up 7 per cent from
Loans to the public excl. the Swedish National Debt Office and repurchase	30 Sep	30 Jun	30 Sep	the previous year.
agreements, SEKbn	2020	2020	2019
Loans, private mortgage	933	923	901	Some of the sectors affected by the crisis such as hotels
of which Swedish Banking	841	833	814	and petrol clearly recovered in the third quarter. Others
of which Baltic Banking	92	90	87	such as travel, transport and restaurants have seen a
Loans, private other incl tenant-owner associations	146	146	151	smaller recovery, but are still at lower levels than last
of which Swedish Banking	127	128	133	year. Sectors where Covid-19 has had little impact such
of which Baltic Banking	18	17	17	as food and home electronics have continued to see
of which Large Corporates & Inst.	1	1	1	increased activity.
Loans, corporate	543	556	561
of which Swedish Banking	243	243	253	In Sweden there were 200 million domestic payments in
of which Baltic Banking	80	81	84	the third quarter, which is in line with the same period in
of which Large Corporates & Inst. Total	220 1 622	232 1 625	224 1 613
Lending to mortgage customers within Swedish Banking				2019. In the Baltic countries 97 million domestic
increased SEK 8bn to SEK 841bn compared with the				payments were processed, an increase of 30 per cent
end of the second quarter 2020. The market share in				year-over-year. Swedbank's market share of payments
mortgages was 23 per cent (24). Other private lending,				through the Bankgiro system was 36 per cent. The
				number of international payments in Sweden was in line
including lending to tenant-owner associations was				with the same quarter in 2019 at 1.4 million. The Baltic
unchanged in the quarter.				countries reported an increase in international payments

Swedish consumer finance volume amounted to SEK 32bn (31), corresponding to a market share of about 8 per cent. Consumer credit includes unsecured loans as well as loans secured by a car or a boat.

Baltic Banking's mortgage volume increased 1 per cent in local currency to the equivalent of SEK 91bn.

The Baltic consumer credit portfolio increased 1 per cent in local currency to the equivalent of SEK 9bn at the end of the quarter.

Corporate lending in all business segments decreased SEK 13bn in the quarter, to SEK 543bn (556). In Sweden the market share was 17 per cent (17).

For more information on lending, see page 36 of the Fact book.

Payments

The total number of Swedbank cards in issue at the end of the quarter was 8.2 million, in line with the end of the second quarter. In Sweden 4.4 million cards were in

issue and in the Baltic countries 3.8 million. During the quarter corporate card issuance grew 3 per cent and private card issuance 1 per cent compared with the
same quarter in 2019.
	30 Sep	30 Jun	30 Sep
Number of cards	2020	2020	2019
Issued cards, millon of which Sweden	8.2 4.4	8.1 4.3	8.1 4.3

of which Sweden 4.4 4.3 4.3 of which Baltic countries 3.8 3.8 3.8 The number of purchases with Swedbank cards in Sweden recovered after a drop in the spring. In the third quarter there were 342 million card purchases, which was 7 per cent lower than in the same quarter in 2019. In the Baltic countries there were 183 million card purchases, which was 12 per cent above the level in the third quarter of 2019. The stronger recovery in the Baltic countries compared to Sweden is partly due to stronger structural growth in the Baltic card business.

In Sweden there were 200 million domestic payments in the third quarter, which is in line with the same period in 2019. In the Baltic countries 97 million domestic payments were processed, an increase of 30 per cent year-over-year. Swedbank's market share of payments through the Bankgiro system was 36 per cent. The number of international payments in Sweden was in line with the same quarter in 2019 at 1.4 million. The Baltic countries reported an increase in international payments of 12 per cent compared with the third quarter 2019 to 3.7 million.

Savings

Total deposits within the business segments – Swedish Banking, Baltic Banking and Large Corporates & Institutions – rose to SEK 1 075bn (1 049). Compared with the end of the third quarter 2019 the increase was SEK 142bn, corresponding to growth of 15 per cent. All business segments contributed to the year-over-year increase. Exchange rates positively affected deposits by SEK 1bn compared with the end of the second quarter 2020 and negatively by SEK 8bn compared with the end of the third quarter 2019. Total deposits from the public, including volumes attributable to Group Treasury, amounted to SEK 1 132bn (1 108).

Deposits from the public excl. the Swedish National Debt Office and	30 Sep	30 Jun	30 Sep	Assets under management, life
repurchase agreements, SEKbn	2020	2020	2019
Deposits, private	577	568	527
of which Swedish Banking	419	416	387	of which collective occupational
of which Baltic Banking	158	152	140
Deposits, corporate of which Swedish Banking	555 208	540 197	430 180
of which Baltic Banking	114	107	92
of which Large Corporates & Inst.	176	177	134
of which Group Functions & Other	57	59	24
Total	1 132	1 108	957	Life insurance assets under management in the
Swedbank's deposits from private customers increased				Swedish operations increased 12 per cent in the third
SEK 9bn in the quarter to SEK 577bn (568).				quarter to SEK 235bn on 30 September. Premium
				income, consisting of premium payments and capital
Corporate deposits in the business segments increased				transfers, amounted in the third quarter to SEK 4bn
in total by SEK 17bn in the quarter.				(SEK 5bn in the second quarter).
Swedbank's market share for household deposits in				For premium income excluding capital transfers
Sweden was unchanged in the quarter at 19 per cent				Swedbank's market share in the second quarter was
(19). The market share for corporate deposits				6 per cent (6 per cent in the first quarter 2020). In the
decreased to 15 per cent (16). For more information on				transfer market Swedbank's market share in the second
deposits, see page 37 of the Fact book.				quarter was 9 per cent (10 per cent in the first quarter
				2020).
Asset management,	30 Sep	30 Jun	30 Sep
SEKbn	2020	2020	2019	In Estonia and Lithuania Swedbank is the largest life
Total asset management	1 609	1 499	1 488	insurance company and in Latvia it is the fourth largest.
Assets under management	1 155	1 064	1 033	The premium payments market shares in the first
Assets under management, Robur	1 153	1 064	1 027	quarter were 48 per cent in Estonia, 26 per cent in
of which Sweden of which Baltic countries	1 095 63	1 008 59	970 58	Lithuania and 21 per cent in Latvia.
of which eliminations	-5	-3	-1
Assets under management, Other, Baltic
		2 0	6	Credit and asset quality
countries		435	455	After the drastic economic slowdown in the second
Discretionary asset management Assets under management in Swedbank Robur rose	454

Swedish National Debt Office and	30 Sep	30 Jun	30 Sep
repurchase agreements, SEKbn	2020	2020	2019
				of which collective occupational
				Life insurance assets under management in the
Swedbank's deposits from private customers increased				Swedish operations increased 12 per cent in the third
SEK 9bn in the quarter to SEK 577bn (568).
				quarter to SEK 235bn on 30 September. Premium
Corporate deposits in the business segments increased				income, consisting of premium payments and capital
				transfers, amounted in the third quarter to SEK 4bn
in total by SEK 17bn in the quarter.				(SEK 5bn in the second quarter).
Sweden was unchanged in the quarter at 19 per cent (19). The market share for corporate deposits decreased to 15 per cent (16). For more information on deposits, see page 37 of the Fact book. Asset management,	30 Sep	30 Jun	30 Sep	Swedbank's market share in the second quarter was 6 per cent (6 per cent in the first quarter 2020). In the transfer market Swedbank's market share in the second quarter was 9 per cent (10 per cent in the first quarter 2020).
SEKbn	2020	2020	2019
Total asset management	1 609	1 499	1 488	In Estonia and Lithuania Swedbank is the largest life
Assets under management	1 155	1 064	1 033	insurance company and in Latvia it is the fourth largest.
Assets under management, Robur	1 153	1 064	1 027	The premium payments market shares in the first
of which Sweden	1 095	1 008	970	quarter were 48 per cent in Estonia, 26 per cent in
of which Baltic countries	63	59	58	Lithuania and 21 per cent in Latvia.
of which eliminations	-5	-3	-1
Assets under management, Other, Baltic
countries		2 0	6	Credit and asset quality
Discretionary asset management	454	435	455	After the drastic economic slowdown in the second
Assets under management in Swedbank Robur rose				quarter, a recovery began in the third quarter. Due to
8 per cent in the quarter to SEK 1 153bn (1 064) at 30				continued uncertainty surrounding Covid-19, however,
September, of which SEK 1 095bn (1 008) related to the
Swedish business and SEK 63bn (59) to the Baltic				the economy remains dependent on government
				support and recovery is expected to be slow and
business. The increases in both Sweden and the Baltic				uneven in the near term. Parts of the economy are still
countries were partly due to value appreciation and				heavily affected by restrictions and concerns about the

Assets under management in Swedbank Robur rose 8 per cent in the quarter to SEK 1 153bn (1 064) at 30 September, of which SEK 1 095bn (1 008) related to the Swedish business and SEK 63bn (59) to the Baltic business. The increases in both Sweden and the Baltic countries were partly due to value appreciation and partly to net fund inflows.

Net flows in the Swedish fund market were positive after the spring's outflows and amounted to SEK 38bn (41) in the quarter. The largest inflow,

SEK 25bn, was to actively managed equity funds. Index, mixed and fixed income funds all had net inflows while hedge funds accounted for an outflow of SEK 1bn.

Net inflow improved for Swedbank Robur's Swedish fund business and amounted to SEK 8bn (4) in the quarter. Primarily the institutional management business turned from negative to positive net flows. Sales via Swedbank, the savings banks and third party distribution also had net inflows in the quarter.

Actively managed equity funds had the largest inflows at SEK 8bn, with tech funds performing especially well. Mixed funds accounted for SEK 1bn in inflows at the same time that index-linked equity funds had equally as much in outflows.

The net inflow in the Baltic countries remained stable at SEK 1bn (1).

By assets under management Swedbank Robur is the largest player in the Swedish and Baltic fund markets. As of 30 September, the market share in Sweden was 21 per cent. The market shares in Estonia, Latvia and Lithuania were 40, 41 and 37 per cent respectively.

30 Sep 2020	30 Jun 2020	30 Sep 2019	Assets under management, life insurance SEKbn	30 Sep 2020	30 Jun 2020	30 Sep 2019
			Sweden	235	218	209
			of which collective occupational pensions	119	110	103
			of which endowment insurance	76	69	68
			of which occupational pensions	30	29	28
			of which other Baltic countries	10 7	10 6	10 6
			Life insurance assets under management in the Swedish operations increased 12 per cent in the third quarter to SEK 235bn on 30 September. Premium income, consisting of premium payments and capital

Credit and asset quality

After the drastic economic slowdown in the second quarter, a recovery began in the third quarter. Due to continued uncertainty surrounding Covid-19, however, the economy remains dependent on government support and recovery is expected to be slow and uneven in the near term. Parts of the economy are still heavily affected by restrictions and concerns about the coronavirus's continued spread, with hospitality and entertainment among the most vulnerable sectors. There is also a risk that previously hidden effects will become visible when temporary support from the authorities and banks is phased out.

Swedbank continues to support individuals and businesses with amortisation exemptions as well as companies in need of liquidity with expanded loan facilities. The number of new applications dropped in the third quarter, however, and granted volumes are only marginally higher than at the end of the second quarter. Utilisation of available loan facilities decreased in the quarter as a number of large corporate customers repaid previously utilised amounts.

In the third quarter Swedbank's credit impairments amounted to SEK 425m (SEK 1 235m in the second quarter), mainly due to increased provisions for a few oil-related commitments within Large Corporates & Institutions. According to IFRS 9, forward-looking macro scenarios have to be updated continuously, and this was again done in the third quarter. Indications of improved economic conditions led to a slightly more positive macroeconomic forecast than earlier, which has a positive effect in the models. Against the backdrop of the continued uncertainty about Covid-19, including the risk we are now seeing that more countries will be forced to reintroduce restrictions, the bank is making an expert adjustment to account for these effects.

All in all, the credit impairment ratio in the third quarter was 0.10 per cent (0.28). The share of loans in stage 3 (gross) was 0.75 per cent (0.81) and the provision ratio for loans in stage 3 was 46 per cent (44). For more information on asset quality, see pages 39–44 of the Fact book and note 11.

Credit impairments

Oil prices recovered after falling in the spring but are still at a lower level than before Covid-19. Demand remains dampened as does the outlook for the oil sector in general. Swedbank's oil-related portfolio is small, and the ongoing reduction and restructuring of the portfolio continues. In the third quarter additional individual provisions were deemed necessary for a few exposures.

The Swedish housing market has shown resilience during the pandemic. After the initial uncertainty in March and April, the market has recovered, and prices have risen. The coming year is expected to be stable with unchanged or slightly rising prices. Continued low interest rates and demand from a growing population are supporting factors, offset at the same time by a weaker economy and unemployment concerns.

The quality of Swedbank's mortgage portfolio, which accounts for just over half of total lending, is high and historical credit impairments are very low. Customers' long-term repayment capacity is a critical factor and ensures high quality and low risks for both the customer and the bank. The average loan-to-value ratios for the mortgage portfolio are 54 per cent in Sweden, 49 per cent in Estonia, 77 per cent in Latvia and 56 per cent in Lithuania. For more information, see pages 45-46 of the Fact book.

The commercial real estate market has varied by segment during the Covid-19 pandemic. Investors have shifted focus to more stable property segments – residential, public and logistics – which have not been greatly affected by the pandemic. Retail and hotel properties have been negatively affected by increased vacancies and the weakened repayment capacity of many tenants.

Swedbank's lending in property management accounts for approximately 15 per cent of the total loan portfolio and is mainly to real estate companies with strong finances and good collateral with low loan-to-value ratios. Less cyclical segments with low risk such as residential and public properties as well as logistics properties in prime locations account for about 40 per cent of the real estate portfolio. Swedbank's lending to retail and hotel properties represents a small share of the total loan volume in property management. Swedbank focuses its lending on commercial properties with stable cash flows and the customer's long-term ability to repay interest and amortisation. Loan-to-value ratios in lending to property management companies are generally low and average 57 per cent (58) in Sweden.

Operational risks

by business segment Q3 Q2 Q3 SEKm 2020 2020 2019 Swedish Banking -140 432 27 Baltic Banking 43 56 10 Estonia 35 51 -9 Latvia 10 -3 5 Lithuania -2 8 14 Large Corporates & Institutions 521 740 117 Group Functions & Other 1 7 ⁰ Total 425 1235 154 The Covid-19 pandemic is considered a critical risk for the bank, its employees and customers. Despite the pandemic, the bank has fully maintained its operations. The bank has taken a number of measures to reduce the risk of the virus's spread, protect customers and employees, and ensure customer service. In response to the pandemic, the bank has improved its preparedness e.g. by updating continuity plans. The bank has given employees more opportunity to work from home, allocated resources to ensure continuity in operations, and activated a crisis management unit to manage operational risks and reduce the risk of disruptions.

A number of less serious IT incidents occurred in the third quarter, which caused brief disruptions. Swedbank is working continuously to ensure a high level of availability for its customers.

Funding and liquidity

Swedbank's funding in the quarter was dominated by continued growth in deposits and a benchmark issue of senior unsecured debt in USD. In addition, the bank issued a small volume of covered bonds. The bank's leverage ratio increased in the quarter and liquidity is at a high and stable level.

During the year Swedbank has participated in central banks' various liquidity programmes and depending on our customers' needs the bank will also consider future participation. Swedbank has maintained sufficient liquidity and does not need government support.

Maturities in the calendar year 2020 amount to SEK 165bn calculated from the beginning of the year. The total issuance need for the full-year 2020 is expected to be lower compared with 2019. In the first nine months of 2020 Swedbank issued SEK 74bn in long-term debt, of which SEK 13bn in the third quarter. The issuance need is affected by future maturities and changes in deposit volumes and lending growth and is therefore adjusted over the course of the year. As of 30 September, outstanding short-term funding and commercial paper included in debt securities in issue amounted to SEK 158bn (SEK 185bn as of 30 June). Available cash and balances with central banks and reserves with the Swedish National Debt Office amounted to SEK 389bn (377). The liquidity reserve as of 30 September amounted to SEK 563bn (607). The Group's liquidity coverage ratio (LCR) was 153 per cent (164) and for EUR, USD and SEK was 241, 164 and 121 per cent respectively. The net stable funding ratio (NSFR) was 124 per cent (125). For more information on funding and liquidity, see notes 14-16 on pages 55-71 of the Fact book.

Ratings

There were no changes in Swedbank's ratings in the third quarter. For more information on the ratings, see page 71 of the Fact book.

Capital and capital adequacy

Capital ratio and capital requirement The Common Equity Tier 1 capital ratio increased to 16.8 per cent (16.4) in the third quarter. The total Common Equity Tier 1 capital requirement was 13.0 per cent (13.0) of the risk exposure amount (REA). Common Equity Tier 1 capital increased to SEK

116.4bn (113.4), mainly due to the quarterly profit after the estimated dividend.

Change in Common Equity Tier 1 capital, Swedbank consolidated situation

Total REA decreased to SEK 691.5bn (692.4).

REA for credit risk excluding FX decreased in the quarter by SEK 1.1bn. The decrease is mainly due to a lower volume of other assets and shorter corporate exposure maturities. The decrease was partly offset by higher lending in the quarter.

REA for market risk increased in the quarter by SEK 0.8bn to SEK 20.3bn (19.5). REA for credit value adjustments increased SEK 0.5bn to SEK 5.5bn (5.0), mainly due to increased exposures.

Additional REA according to article 3 of CRR and model updates reduced REA by SEK 1.2bn. In the quarter the LGD model was updated, which increased REA for credit risk by SEK 20.8bn.

Previously, capital in the form of REA according to article 3 of CRR of SEK 16.3bn had been allocated for the expected effects of the LGD model update, which has now been reversed. The quarterly review of REA for PD article 3 in CRR resulted in a decrease in REA of SEK 5.0bn. Other effects in article 3 CRR reduced REA by SEK 0.7bn.

The leverage ratio was 4.8 per cent (4.5). The ratio increased due to slightly higher Tier 1 capital and lower total assets at the end of the third quarter 2020.

Future capital regulations

In September 2020 the Swedish FSA proposed amended rules and a change in the application of banks' capital requirements. The change is based on the proposed amendments to the capital adequacy rules resulting from the implementation of the EU's banking package.

The proposal means among other things changes in how the Pillar 2 requirement is determined. According to the proposal, the Swedish FSA will set a Pillar 2 requirement and announce guidance for the capital it thinks banks should hold over and above the capital requirement to cover risks and manage future financial stresses.

Another proposed change is an expansion of the combined buffer requirement to include an O-SII buffer corresponding to 1% of REA.

In the proposal the Swedish FSA also gives its view of how a leverage ratio requirement should be introduced. The minimum leverage ratio requirement is 3% of the leverage exposure amount. In addition, the Swedish FSA will announce another leverage ratio requirement in the form of guidance.

The leverage ratio requirement will be met in parallel with the risk-based requirements, and for Swedbank the Swedish FSA estimates that the total leverage ratio requirement will be lower than the risk-based capital requirements. All in all, the Swedish FSA expects the amended application to essentially leave the capital requirements' nominal level unchanged.

The changes in the O-SII buffer will primarily be implemented at the same time that the amended Capital Buffers Act (2014:966) enters into force. The systemic risk charge in Pillar 2 will be removed when the amended Credit Institutions and Securities Companies (Special Supervision) Act (2014:968) enters into force. A decision on Pillar 2 requirements and information on Pillar 2 guidance will be announced after the first evaluation and review, which will be conducted once the amended supervisory act has entered into force. According to the Regulation (EU) No 575/2013 of the European Parliament and of the Council on supervisory requirements for credit institutions and securities companies, the minimum leverage ratio requirement will be applied as of 28 June 2021.

In January 2020 the Swedish FSA decided to increase the capital requirements on bank loans for commercial real estate. The actions were justified by the gradual increase in lending for commercial real estate to a level that represents a potential risk to financial stability. The capital requirement is expected to be introduced in the fourth quarter 2020 and means that the difference between the bank's average risk weights for commercial real estate and the risk weights that the FSA announced will be compensated through an add-on in Pillar 2. For commercial real estate the Swedish FSA set the average risk weight at 35 per cent and for commercial residential real estate at 25 per cent. According to the Swedish FSA, Swedbank's total capital requirement is thereby expected to increase 0.7 percentage points and Common Equity Tier 1 capital 0.5 percentage points.

In December 2019 the committee of inquiry appointed by the Swedish Ministry for Finance presented a proposal on the implementation of a collection of EU regulations, known as the banking package. The committee of inquiry's proposal includes an update of the Swedish Resolution Act, to harmonise Swedish law with the EU directive, called BRRD2. When the final amended law takes effect, Swedbank's issuance of eligible liabilities (e.g. senior non-preferred debt) may be affected. The amended law will take effect by 28 December 2020 and the changes related to the own funds and eligible liabilities requirement will be phased in. The phase-in will be completed by 1 January 2024.

In November 2018 the Swedish FSA published a memorandum explaining its view of the European Banking Authority's (EBA) updated guidelines on banks' internal risk rating based models. In the memorandum the Swedish FSA states that Swedish banks must analyse their internal rating based models to ensure that they continue to live up to the updated requirements. Implementation of the new guidelines must be completed by the end of 2021.

Other events

On 9 July it was announced that Charlotte Rydin will become the new Chief Legal Officer and Head of Group Legal and that Jon Lidefelt will become the Head of Baltic Banking. Charlotte Rydin comes from Alecta, where she held the position of Chief Legal Officer. Jon Lidefelt served as acting Head of Baltic Banking since the start of the year.

On 17 July it was announced that Gregori Karamouzis will become Head of Group Treasury and that Annie Ho was appointed Head of Investor Relations. Gregori Karamouzis was formerly Head of Investor Relations.

On 18 September Swedbank received notification from the Swedish FSA that the authority is investigating Swedbank for suspected breaches of the regulation on market abuse. The investigation encompasses the period 20 September 2018 until 20 February 2019 and pertains to disclosure of insider information and the obligation to establish an insider list (articles 17 and 18) in connection with the disclosure of suspected money laundering within the company.

In September additional steps were taken to transition to more sustainable funds. Among other things, Robur ensured that it's Access Edge funds are managed in line with the Paris Agreement. In addition, Robur's Råvarufond was converted to a new themed fund focusing on solar, wind and energy transition.

On 5 October it was announced that Swedbank's Annual General Meeting will be held on Thursday, 25 March 2021. The Nomination Committee consists of the following persons:

• Lennart Haglund, appointed by Sparbankernas Ägareförening and Chair of the Nomination Committee
• Ylva Wessén, appointed by Folksam
• Hans Sterte, appointed by Alecta
• Anders Oscarsson, appointed by AMF
• Peter Karlström, appointed by the owner-group Sparbanksstiftelserna
• Göran Persson, Chair of the Board of Directors of Swedbank AB (publ).

Swedbank's anti-money laundering work

During the past 18 months Swedbank has through a comprehensive programme tracked historical shortcomings connected to the anti-money laundering and terrorist financing (AML/CTF) measures in the bank. External reporting of this programme concluded in the third quarter. In the fourth quarter the bank will deliver on the measures that the Swedish and Estonian FSAs

have required. Subsequently the remaining parts of the 244-point plan will be addressed in the bank's operations.

Action plan

For the group-wide action plan follow-up reports are compiled on a monthly basis for the Board of Directors. The plan initially held 132 points and in the third quarter expanded to 244. Measures have been added based on decisions by the Swedish and Estonian FSAs and the findings of the Clifford Chance investigation, and this year's priority is to remedy the shortcomings identified by the Swedish and Estonian FSAs.

The plan is proceeding well, but work has been affected by the Covid-19 pandemic. During the quarter 28 points were completed, and so far the total number of completed points in the plan is 145. At the end of September 99 points remained. As planned, 63 will be completed in 2020.The remaining 36 points will be implemented in coming years.

Examples of activities during the quarter:

• A Group Sanctions Office has been established to strengthen coordination within the sanctions area and to manage customer and payments screening in the Swedish business operations related to the relevant sanctions.
• An assessment of the bank's money laundering and terrorist financing risk management has been carried out with the purpose of establishing the next steps regarding transaction monitoring development.

Assessment of action plan

An external consultancy firm will perform an annual AML maturity assessment in the coming three years. The assessment started with an initial analysis and identification of a suggested target for Swedbank. The first analysis phase concluded that Swedbank has maintained a fast pace in remediating historical shortcomings.

Strategic programmes

In addition to the 244-point Group-wide plan, Swedbank has during the past 18 months conducted an assessment of the bank's culture, corporate governance, internal steering and control in the Group.

In addition to strengthening oversight, steering and control, the corporate governance review at Group level will also ensure synergies. Important areas are for example allocation of roles, responsibilities, and principles for reporting and escalation.

The change in corporate governance is now in an execution phase, with several ongoing subprojects and workstreams. An evaluation of the Baltic Banking governance structure and the governance framework process is underway as well. The subproject for Baltic Banking will also ensure that steering and control of the business area are strengthened, both within the subsidiary banks themselves and from the parent company.

The Board of Directors plays an active role through the Governance Committee formed at the beginning of the year.

A compliance transformation programme has also been launched. It will ensure that the Group has robust

processes and that the Group compliance function proactively ensures compliance with regulatory requirements. The programme encompasses findings from the FSAs and Clifford Chance around Swedbank's internal structure regarding first- and second-line responsibilities.

Investigations

The Swedish and Estonian FSAs presented their investigations of Swedbank in March 2020. Swedbank paid an administrative fine of SEK 4 bn to the Swedish FSA. In November, the bank will report back to the Estonian FSA on measures that it had imposed on the Estonian subsidiary bank.

Part of the Estonian FSA's investigation was handed over to the Estonian Prosecutor's Office, which is investigating whether money laundering or other criminal activities have taken place in the Estonian bank. This investigation is ongoing.

In September Swedbank received notification from the Swedish FSA that the authority was investigating the bank for suspected breaches of the regulation on market abuse (MAR). The investigation encompasses the period 20 September 2018 until 20 February 2019 and pertains to disclosure of insider information and the obligation to establish an insider list (articles 17 and 18) in connection with the disclosure of suspected money laundering within the bank.

During the quarter the news site Buzzfeed published documents leaked from US authorities to which US banks report according to regulations. Swedbank noted that transactions related to Swedbank were mentioned. We are following media reports on this issue; so far what has been reported are transactions that were included in the Clifford Chance report. Swedbank files this type of report with the supervisory authorities in all markets where we are active.

The US authorities continue to investigate Swedbank's historical work within the AML area and historical disclosure of information. The investigations are progressing and Swedbank is, through US legal advisors, dialoguing with all relevant investigating authorities. Currently, it is not possible to assess when the investigations will be finalised or the potential outcome.

Events after 30 September 2020

No significant events have occurred after 30 September 2020.

Swedish Banking

• Good growth in mortgage volumes, but slightly lower combined deposit and lending margins
• Stronger net commission income due to higher income from cards and asset management
• Stronger login security for the Internet Bank and simplified loan application process

Income statement

Swedish Banking
 Good growth in mortgage volumes, but slightly lower combined deposit and lending margins
 Stronger net commission income due to higher income from cards and asset management
 Stronger login security for the Internet Bank and simplified loan application process
Income statement
	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Net interest income	4 063	4 178	-3	3 987	2	12 425	12 161	2
Net commission income	2 015	1 829	10	2 041	-1	5 822	5 837	0
Net gains and losses on financial items	104	93	12	107	-3	260	328	-21
Other income1)	525	360	46	482	9	1 173	1 261	-7
Total income	6 707	6 460	4	6 617	1	19 680	19 587	0
Staff costs	768	759	1	720	7	2 290	2 214	3
Variable staff costs	17	11	55	22	-23	31	42	-26
Other expenses	1 674	1 664	1	1 440	16	4 852	4 316	12
Depreciation/amortisation		13 14	-7	58	-78	41	218	-81
Total expenses	2 472	2 448	1	2 240	10	7 214	6 790	6
Profit before impairment	4 235	4 012	6	4 377	-3	12 466	12 797	-3
Credit impairment	-140	432		27		665	144
Operating profit	4 375	3 580	22	4 350	1	11 801	12 653	-7
Tax expense	855	723	18	837	2	2 344	2 480	-5
Profit for the period	3 520	2 857	23	3 513	0	9 457	10 173	-7
Profit for the period attributable to the shareholders of
Swedbank AB	3 519	2 858	23	3 511	0	9 457	10 161	-7
Non-controlling interests	1	-1		2	-50	0	12
Return on allocated equity, %	20.6	17.0		21.6		18.8	21.0
Loan/deposit ratio, %	193	196		212		193	212
Credit impairment ratio, %	-0.05	0.14		0.01		0.07	0.02
Cost/income ratio	0.37	0.38		0.34		0.37	0.35
Loans, SEKbn2)	1 211	1 204	1	1 200	1	1 211	1 200	1
Deposits, SEKbn2)	627	613	2	567	11	627	567	11
Full-time employees	3 936	3 843	2	3 662	7	3 936	3 662	7
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement.
2) Excluding the Swedish National Debt Office and repurchase agreements.
Result
Third quarter 2020 compared with second quarter

Result

Third quarter 2020 compared with second quarter 2020

Swedish Banking's profit increased to SEK 3 519m (2 858), mainly due to higher commission income and other income and lower credit impairments.

Net interest income decreased 3 per cent to SEK 4 063m (4 178). Lower market interest rates had a negative effect on deposit margins. This was offset to some extent by higher lending margins as well as higher lending and deposit volumes.

Household mortgage increased SEK 8bn to SEK 841bn in the quarter. Lending to tenant-owner associations decreased SEK 1bn to SEK 95bn. Corporate lending decreased SEK 1bn to SEK 243bn, mainly driven by lower volumes in the property management and retail sectors.

Deposits increased to SEK 627bn (613), of which household deposits increased SEK 3bn and corporate deposits SEK 11bn.

Net commission income increased 10 per cent to SEK 2 015m (1 829), mainly due to higher income from cards and asset management.

Other income including the share of profit or loss of associates and joint ventures increased, mainly due to a higher profit share from Entercard and higher net insurance.

Expenses increased 1 per cent to SEK 2 472m (2 448), mainly due to higher staff costs, primarily in the compliance area. Consulting expenses were slightly lower in the quarter.

During the quarter credit impairments were positive at SEK 140m, mainly due to lower provisions in certain hard-hit sectors. In the second quarter credit impairments amounted to SEK 432m.

January-September 2020 compared with January-September 2019

Profit decreased to SEK 9 457m (10 161), mainly due to higher expenses and credit impairments.

Net interest income increased 2 per cent to SEK 12 425m (12 161). Higher average market interest rates positively affected net interest income on deposits but were offset in part by lower lending margins. A lower resolution fee also contributed to the increase.

Net commission income was stable at SEK 5 822m (5 837). Higher income from asset management was offset by lower income from cards.

Other income including the share of profit or loss of associates and joint ventures decreased mainly due to a lower profit share from Entercard.

Expenses increased 6 per cent to SEK 7 214m (6 790), mainly due to increased compliance costs.

As a result of the continued economic slowdown and uncertainty in the period, credit impairments increased to SEK 665m (144).

Business development

During the quarter we continued to develop our services and products for both private and corporate customers. The ID function used for logins was improved to further strengthen stability for both private and corporate customers. Private customers now can also chat with the bank by mobile phone to get help with their questions. When ordering a new card, private customers can track the process digitally. The mobile app for young people has been integrated into the private customers app while maintaining functionality. Soon customers under 18 will also be able to link their debit card to Apple Pay. On the corporate side, the loan application process was simplified so that it can be completed digitally. We also launched a Swish service that enables immediate payments to private customers. Swedbank had already offered an integrated accounting function for corporate customers, which they now can also use through the Internet Bank.

We continued to help our customers manage the consequences of Covid-19 in the quarter with advice and information on the bank's services and opportunities to apply for government support. In late September the government decided to extend its credit guarantee programme for small and medium-sized enterprises affected by the coronavirus until 31

December 2020. During the quarter private and corporate customers were again able to apply for amortisation exemptions for mortgages and other loans. The number of applications has substantially dropped among both private and corporate customers.

During the quarter we received the results of this year's external customer satisfaction survey, the Swedish Quality Index (SQI), where around 200 private customers and 200 corporate customers from Swedbank participated. Compared with 2019, the result improved slightly among both private and corporate customers. We are continuing to improve our availability and service, as well as develop our product and service range to better suit customers.

In July Sweden's largest solar park was up and running in Linköping. The park is a collaborative effort between Swedbank, Alight, Infranode and Tekniska verken i Linköping to more sustainably supply energy in Sweden. Swedbank will buy all the electricity produced by the park as part of an effort to reduce our climate impact.

AML work is continuing within the framework of the action plan that was previously presented and is continuing according to plan. Centralisation of the KYC process was completed and capacity and competence were expanded. The business area continued to invest in the development of processes and systems support. The new model to classify customers' risk category was updated to take more factors into consideration.

Mikael Björknert Head of Swedish Banking

Sweden is Swedbank's largest market, with around 4 million private customers and over 250 000 corporate customers. This makes Swedbank Sweden's largest bank by number of customers. Through digital channels, the Telephone Bank and our branches, and through the cooperation with the savings banks and franchisees, we are always available. Swedbank is part of the local community. Branch managers have a strong mandate to act in their local communities. The bank's presence and engagement are expressed in various ways. A project called "Young Jobs", which has created thousands of trainee positions for young people, has played an important part in recent years. Swedbank has 160 branches in Sweden.

Baltic Banking

• Increased lending and deposits in the quarter
• Lower net interest income mainly due to lower deposit margins
• New service launched to encourage savings

Income statement

Baltic Banking
 Increased lending and deposits in the quarter
 Lower net interest income mainly due to lower deposit margins
 New service launched to encourage savings
Income statement
	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Net interest income	1 309	1 409	-7	1 345	-3	4 088	3 874	6
Net commission income	620	581	7	664	-7	1 824	1 956	-7
Net gains and losses on financial items	91	99	-8	101	-10	237	303	-22
Other income1)	212	249	-15	222	-5	645	632	2
Total income	2 232	2 338	-5	2 332	-4	6 794	6 765	0
Staff costs	291	278	5	284	2	837	783	7
Variable staff costs	9	8	13	15	-40	25	46	-46
Other expenses Depreciation/amortisation	548 43	495 43	11 0	517 44	6 -2	1 546 129	1 472 130	5 -1
Total expenses	891	824	8	860	4	2 537	2 431	4
Profit before impairment	1 341	1 514	-11	1 472	-9	4 257	4 334	-2
Impairment of tangible assets	1	0		2	-50	1	3	-67
Credit impairment	43	56	-23	10		245	6
Operating profit	1 297	1 458	-11	1 460	-11	4 011	4 325	-7
Tax expense	215	240		208		674	616
	1 082	1 218	-10 -11	1 252	3 -14	3 337	3 709	9 -10
Profit for the period		1 218	-11	1 252	-14	3 337	3 709	-10
Profit for the period attributable to the shareholders of
Swedbank AB	1 082			19.4		17.2	19.3
Return on allocated equity, %	16.7	18.9				70	81
Loan/deposit ratio, %	70	72		81			0.00
Credit impairment ratio, %	0.09	0.11		0.02		0.17
Cost/income ratio	0.40	0.35		0.37		0.37	0.36
Loans, SEKbn2)	190	187	2	188	1	190	188	1
Deposits, SEKbn2)	272	259	5	232	17	272	232	17
Full-time employees	3 619	3 595	1	3 556	2	3 619	3 556	2
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement. 2) Excluding the Swedish National Debt Office and repurchase agreements.
Result						Net commission income increased 9 per cent in local

Result

Third quarter 2020 compared with second quarter 2020

Profit in the third quarter amounted to SEK 1 082m (1 218). Profit decreased in local currency due to lower income and higher expenses, partly offset by lower credit impairments. Foreign exchange effects reduced profit by SEK 28m.

Net interest income decreased 5 per cent in local currency. Mortgage margins and margins on corporate lending were unchanged in the quarter. Deposit margins, on the other hand, decreased. Foreign exchange effects negatively affected net interest income by SEK 34m.

Lending increasede 1 per cent in the quarter in local currency. Corporate lending was stable while household lending increased 2 per cent. Foreign exchange effects positively contributed SEK 1.4bn.

Deposits increased 4 per cent in local currency due to growth in both corporate and private deposits in the quarter. Foreign exchange effects positively affected income by SEK 2bn.

Net commission income increased 9 per cent in local currency in the quarter, mainly related to higher commission income from cards driven by higher customer activity.

Net gains and losses on financial items decreased 6 per cent in local currency, mainly due to unrealised gains in asset management in the previous quarter.

Other income decreased 12 per cent in local currency, mainly due to higher insurance claims in the quarter.

Expenses increased 11 per cent in local currency, largely due to increased staff costs related to work to strengthen anti-money laundering functions as well as work to improve KYC processes.

Credit impairments amounted to SEK 43m (56) in the third quarter, mainly driven by expert adjustments in sectors hard hit by the pandemic. Underlying credit quality remains high.

January-September 2020 compared with January-September 2019

Profit decreased to SEK 3 337m (3 709), mainly due to increased expenses and credit impairments, which were partly offset by higher income. Foreign exchange effects negatively affected the result by SEK 3m.

Net interest income rose 6 per cent in local currency, largely due to increased lending volumes. Foreign exchange effects positively affected net interest income by SEK 1m.

Lending increased 3 per cent in local currency. Household lending increased 7 per cent at the same time that corporate lending decreased 2 per cent. Foreign exchange effects reduced lending growth by SEK 3bn.

Deposits grew 19 per cent in local currency. Deposits increased in all markets. Foreign exchange effects negatively contributed SEK 4.3bn.

Net commission income decreased 7 per cent in local currency, mainly due to lower income from cards and asset management. Changing consumption patterns and lower management fees due to Covid-19 explain the decrease.

Net gains and losses on financial items decreased 22 per cent in local currency, largely due to higher unrealised losses in the asset management and insurance businesses.

Other income increased 2 per cent in local currency due to an improved result in the insurance operations.

Expenses rose 4 per cent in local currency, largely due to higher staff costs and expenses related to AML work as well as improved customer due diligence. Consulting expenses and investments in digital solutions increased as well.

As a result of the continued economic slowdown and uncertainty in the period, credit impairments increased to SEK 245m, compared with SEK 6m in the equivalent period in 2019.

Business development

In response to the Covid-19 pandemic, the industrywide agreement on concessions and support that banks offer their customers was extended until the end of September. Demand for amortisation exemptions declined during the quarter. Some customers who were granted exemptions have now begun to amortise according to their previous amortisation schedule.

Several new services were launched in the quarter. We now offer a service that allows private customers to join Swedbank digitally. The solution gives those over 18 access to the bank's services simply by using valid digital ID tools such as Smart ID and without having to visit our branches. The option to become a customer digitally has been well received in all markets. Since current circumstances dictate that we book all branch meetings with customers in advance, we have added a reservation tool to our home page that allows even

those who are not yet customers to book a meeting. In the third quarter more than 80 000 meetings were held booked through digital channels. The Easy Saver solution was also introduced in the digital channels during the quarter. This lets customers set savings goals and, with the help of automated savings in connection with card purchases, reach these goals. The service has been well received and at present over 180 000 customers are using it.

During the quarter we launched a new sustainability loan for our private customers. They can now borrow up to EUR 20 000, without collateral, at lower fixed annual interest rates to purchase and install solar panels. We have signed agreements with more than 30 solar panel suppliers, and the first agreements have now also been signed with our customers. In asset management we are trying to manage assets according to sustainable principles and at present nearly 79 per cent of the pension assets under management in Latvia are invested in accordance with the bank's most extensive sustainability criteria.

Swedbank continued in the quarter to actively support charities in all three Baltic countries. In the third quarter Swedbank supported Latvia's largest opinion festival , LAMPA, by leading panel discussions on financial literacy and investments. In Estonia a new donation campaign was launched for organisations that help to solve health problems. In Lithuania Swedbank's employees participated during the summer in a voluntary initiative called "We Care", in which around 60 groups and nearly 600 employees did charity work.

In the quarter, to combat money laundering we continued to strengthen the internal control framework as well as raise the level of competence and risk awareness in the organisation. In addition to meeting the requirements placed by the Estonian FSA on the bank, our aim is to further improve quality and efficiency in AML work by strengthening capacity and competence within the entire organisation. The compliance unit has therefore been given additional resources and competence to ensure it can take overarching responsibility for this work.

Jon Lidefelt Head of Baltic Banking

Swedbank is the largest bank by number of customers in Estonia, Latvia and Lithuania, with around 3.2 million private customers and around 300 000 corporate customers. According to surveys, Swedbank is also the most loved brand in the Baltic countries. Through digital channels (Telephone Bank, Internet Bank and Mobile Bank) and branches, the bank is always available. Swedbank is part of the local community. Its local social engagement is expressed in many ways, with initiatives to promote education, entrepreneurship and social welfare. Swedbank has 24 branches in Estonia, 26 in Latvia and 42 in Lithuania.

Large Corporates & Institutions

• Lower income due to lower net gains and losses on financial items
• Net commission income rose due to higher income from asset management card
• Joint Lead Manager for the Kingdom of Sweden's first green bond issue

Income statement

Large Corporates & Institutions
 Lower income due to lower net gains and losses on financial items
 Net commission income rose due to higher income from asset management card
 Joint Lead Manager for the Kingdom of Sweden's first green bond issue
Income statement
	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Net interest income	925	1 007	-8	941	-2	2 892	2 838	2
Net commission income Net gains and losses on financial items	610 503	541 1 033	13 -51	560 312	9 61	1 787 1 220	1 693 1 534	6 -20
Other income1)	29	39	-26	60	-52	91	110	-17
Total income	2 067	2 620	-21	1 873	10	5 990	6 175	-3
Staff costs	534	553	-3	511	5	1 679	1 596	5
Variable staff costs	14	0		47	-70	40	166	-76
Other expenses	360	352	2	359	0	1 090	1 087	0
Depreciation/amortisation Total expenses	61 969	62 967	-2 0	58 975	5 -1	183 2 992	172 3 021	6 -1
Profit before impairment	1 098	1 653	-34	898	22	2 998	3 154	-5
Impairment of intangible assets	0	0		66		0	66
Credit impairment	521	740	-30	117		2 888	330
Operating profit	577	913	-37	715	-19	110	2 758	-96
Tax expense	-41	175		152		-418	636
Profit for the period	618	738	-16	563	10	528	2 122	-75
Profit for the period attributable to the shareholders of Swedbank AB	618	738	-16	563	10	528	2 122	-75
Return on allocated equity, %	7.3	8.9		8.1		2.2	10.5
Loan/deposit ratio, %	126	133		168		126	168
Credit impairment ratio, %	0.57	0.89		0.15		1.30	0.16
Cost/income ratio	0.47	0.37		0.52		0.50	0.49
Loans, SEKbn2)	221	234	-6	225	-2	221	225	-2
Deposits, SEKbn2)	176	176	0	134	31	176	134	31
Full-time employees	2 351	2 345	0	2 263	4	2 351	2 263	4
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement.
2) Excluding the Swedish National Debt Office and repurchase agreements.
						Credit impairments amounted to SEK 521m (740) in the
Result						third quarter. Market conditions for our oil-related
Third quarter 2020 compared with second quarter						counterparties remain challenging and reassessments of individual cases resulted in additional provisions of

Result

Third quarter 2020 compared with second quarter 2020

Profit decreased to SEK 618m (738), mainly due to lower net gains and losses.

Net interest income decreased to SEK 925m (1 007), mainly due lower average business volumes and lower deposit margins.

Net commission income increased to SEK 610m (541), driven by increased income from asset management, custodial services, loan commissions and card acquiring.

Net gains and losses on financial items decreased to SEK 503m (1 033) after a strong second quarter. The third quarter was, despite seasonally lower income, strong both with respect to client-related business and risk management. The effect of derivative valuation adjustments (CVA/DVA) contributed positively in the quarter, though less than in the previous quarter.

Expenses increased somewhat to SEK 969m (967), Higher variable staff costs was offset by seasonally lower costs.

Credit impairments amounted to SEK 521m (740) in the third quarter. Market conditions for our oil-related counterparties remain challenging and reassessments of individual cases resulted in additional provisions of SEK 719m in the quarter (147), which was partly offset by positive credit impairments in other commitments.

The lower tax rate is mainly due to a tax income of SEK 130m relating to previous years.

January-September 2020 compared with January-September 2019

Profit decreased to SEK 528m (2 122) due to higher credit impairments and lower net gains and losses on financial items.

Net interest income increased to SEK 2 892m (2 838), mainly due to increased deposits and a lower resolution fund fee. Lending was affected by changes in the product composition and increased funding expenses.

Net commission income increased to SEK 1 787m (1 693), driven by increased earnings from advisory commissions from M&A and share issues as well as an increase in lending commissions. Income from card acquiring decreased due to lower volumes in the wake of Covid-19.

Net gains and losses on financial items decreased to SEK 1 220m (1 534). Increased income from strong underlying customer-driven trading and risk management was offset by revaluations of bond holdings as well as derivative valuation adjustments (CVA/DVA), which is a direct result of the market turmoil that arose in connection with the accelerating spread of Covid-19 in the first quarter.

Total expenses decreased to SEK 2 992m (3 021) due to lower provisions for variable remuneration.

As a result of the continued economic slowdown and uncertainty in the period, credit impairments increased to SEK 2 888m (330).

Business development

Demand for Swedbank's advisory and execution services remained high in the quarter, partly against the backdrop of higher activity in the equity and credit bond markets. Targeted support from central banks due to Covid-19 contributed to this.

Swedbank helped a number of clients with bond issues. This included assisting the Kingdom of Sweden issue its first green bond, which amounted to SEK 20bn. The bank also participated in issues in the public sector. One example is a SEK 3bn sustainability awareness bond for the European Investment Bank. Activity among the bank's customers in the real estate sector also increased in the quarter and the bank helped K2A and Arwidsro Fastghets AB issue green bonds of SEK 400m each. The bank also participated in a number of issues in the euro market, including a green bond of EUR 400m for the Finnish company Sato.

In its equity business Swedbank has among other things helped Samhällsbyggnadsbolaget i Norden region and Outokumpu to issue convertible bonds of SEK 2.8bn and EUR 100m respectively. An IPO by Genvoa Property Group was successful and Swedbank also participated in the IPO for the leading Baltic energy company Ignitis Groupe in early October.

Swedbank is working continuously to strengthen its offering in sustainable financing solutions and advice in order to remain a sought-after partner in the transition to sustainable economic development. As part of this, the bank established a new unit in the quarter to develop sustainability offerings by supporting collaboration between customers, customer representatives and product development.

Covid-19 has affected the bank's opportunities to meet and help clients. This has meant more digital and fewer face-to-face meetings. To a degree, the transition from physical to digital contacts increased flexibility and accessibility for our customers, as digital solutions allowed us to meet more customers more often. One challenge we have worked with has been building deeper customer relations in a digital world.

As part of the work to reduce the risk of fraud, the ID function used for BankID logins was improved to further strengthen security.

The bank continues to invest in the development of processes and competence to combat money laundering and improve customer due diligence. The purpose of the investments is to further develop operating procedures and strengthen the organisation through new recruits as well as system-related improvements to increase automation and quality in processes and data. During the quarter we focused on the action plan that the bank previously presented. Work is progressing according to plan.

Ola Laurin Head of Large Corporates & Institutions

Large Corporates & Institutions is responsible for Swedbank's offering to clients with revenues above SEK 2 billion and those whose needs are considered complex due to multinational operations or a need for advanced financing solutions. They are also responsible for developing corporate and capital market products for other parts of the bank and the Swedish savings banks. Large Corporates & Institutions works closely with clients, who receive advice on decisions that create long-term profitability and sustainable growth. Large Corporates & Institutions is represented in Sweden, Norway, Estonia, Latvia, Lithuania, Finland, Denmark, China, the US and South Africa.

Group Functions & Other

Income statement

Group Functions & Other
Income statement
	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Net interest income	422	300	41	280	51	900	708	27
Net commission income	-15	-43	-65	0		-94	0
Net gains and losses on financial items	-29	173		-63	-54	28	247	-89
Other income1)	259	262	-1	209	24	737	605	22
Total income	637	692	-8	426	50	1 571	1 560	1
Staff costs	1 266	1 239	2	1 122	13	3 684	3 322	11
Variable staff costs	34	24	42	42	-19	92	135	-32
Other expenses	-1 111	-893	24	-276		-2 242	-1 820	23
Depreciation/amortisation	279	268	4	223	25	820	639	28
Administrative fine	0	0		0		4 000	0
	468	638	-27	1 111	-58	6 354	2 276
Total expenses		54		-685		-4 783	-716
Profit before impairment	169			-1		0	0
Impairment of tangible assets	0	0		0		13	1
Credit impairment	1	7	-86			-4 796	-717
Operating profit	168	47		-684		107	6
Tax expense	126	16		-21
Profit for the period		42 31	35	-663		-4 903	-723
Profit for the period attributable to the shareholders of
Swedbank AB	42	31	35	-663		-4 903	-723
Full-time employees	6 101	5 989	2	5 588	9	6 101	5 588	9
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income statement.
Net interest income and net gains and losses on financial items mainly stem from Group Treasury. Other income mainly refers to income from the savings
banks. Expenses mainly relate to Group Financial Products & Advice and Group Staffs and are allocated to a large extent.
Result

Result

Third quarter 2020 compared with second quarter 2020

Profit increased to SEK 42m (31) and was affected by a higher net interest income and lower expenses. Lower net gains and losses on financial items partly offset the increase.

Net interest income increased to SEK 422m (300). Net interest income within Group Treasury increased to SEK 465m (338). This was mainly because of the effects of the bank's internal pricing model. The increase was partly offset by a one-off effect within Group Treasury, which increased net interest income by SEK 103m in the second quarter.

Net gains and losses on financial items decreased to SEK -29m (173). Net gains and losses on financial items within Group Treasury decreased to SEK -44m (146). The effects of the divestment of the shareholding in Enento and the conversion of part of the shareholding in Visa largely offset each other and are described in more detail on page 6.

Expenses decreased to SEK 468m (638), mainly due to lower activity in connection with the summer vacation. Consulting expenses to manage money laundering related investigations increased SEK 20m.

January-September 2020 compared with January-September 2019

Profit decreased to SEK -4 903m (-723), largely due to the Swedish FSA's administrative fine.

Net interest income increased to SEK 900m (708). Group Treasury's net interest income increased to SEK 1 022m (807), mainly due to the effects of the bank's internal pricing model, as well as a one-off effect that raised net interest income by SEK 103m in the second quarter 2020.

Net gains and losses on financial items decreased to SEK 28m (247). Net gains and losses on financial items within Group Treasury decreased to SEK -14m (229), mainly due to lower valuations of the holdings in Visa and Asiakastieto.

Expenses increased to SEK 6 354m (2 276), mainly due to the Swedish FSA's administrative fine, higher money laundering related consulting expenses and higher staff costs. The increase was largely offset by one-off expenses for retroactive VAT and fraud in 2019. Consulting expenses to manage money laundering related investigations totalled SEK 682m (585). Staff costs increased due to annual salary increases and a higher number of employees.

Group Functions & Other consists of central business support units and the client advisory unit Group Financial Products & Advice. The central units serve as strategic and administrative support and comprise Accounting & Finance, Communication, Risk, Digital banking & IT, Compliance, Public Affairs, HR and Legal. Group Treasury is responsible for the bank's funding, liquidity and capital planning. Group Treasury sets the prices on all internal deposit and loan flows in the Group through internal interest rates, where the most important parameters are maturity, interest fixing period, currency, and need for liquidity reserves.

Eliminations

Income statement

Eliminations
Income statement
SEKm	Q3 2020	Q2 2020	%	Q3 2019	%	Jan-Sep 2020	Jan-Sep 2019	%
Net interest income	-5	-8	-38	0		-19	0
Net commission income	16	17	-6	32	-50	55	83	-34
Net gains and losses on financial items	0	0		0		0	-1
Other income1) Total income	-50 -39	-43 -34	16 15	-54 -22	-7 77	-159 -123	-165 -83	-4 48
Staff costs	-3	-4	-25	0		-10	0
Other expenses Total expenses	-36 -39	-30 -34	20 15	-22 -22	64 77	-113 -123	-83 -83	36 48

Group	Page
Income statement, condensed	22
Statement of comprehensive income, condensed	23
Balance sheet, condensed	24
Statement of changes in equity, condensed	25
Cash flow statement, condensed	26
Notes
Note 1 Accounting policies	27
Note 2 Critical accounting estimates	27
Note 3 Changes in the Group structure	27
Note 4 Operating segments (business areas)	28
Note 5 Net interest income	30
Note 6 Net commission income	31
Note 7 Net gains and losses on financial items	32
Note 8 Other general administrative expenses	32
Note 9 Credit impairment	33
Note 10 Loans	38
Note 11 Credit impairment provisions	40
Note 12 Credit risk exposures	43
Note 13 Intangible assets	43
Note 14 Amounts owed to credit institutions	43
Note 15 Deposits and borrowings from the public Note 16 Debt securities in issue, senior non-preferred liabilities and subordinated	44
liabilities	44
Note 17 Derivatives	44
Note 18 Fair value of financial instruments	45
Note 19 Assets pledged, contingent liabilities and commitments	47
Note 20 Offsetting financial assets and liabilities	48
Note 21 Capital adequacy, consolidated situation	49
Note 22 Internal capital requirement	53
Note 23 Risks and uncertainties	54
Note 24 Related-party transactions	54
Note 25 Swedbank's share	54

Parent company

Income statement, condensed	55
Statement of comprehensive income, condensed	55
Balance sheet, condensed	56
Statement of changes in equity, condensed	57
Cash flow statement, condensed	57
Capital adequacy	58

More detailed information including definitions can be found in Swedbank's Fact book, www.swedbank.com/ir, under Financial information and publications.

Income statement, condensed

Income statement, condensed
Group	Q3 2020	Q2 2020	%	Q3 2019	%	Jan-Sep 2020	Jan-Sep 2019	%
SEKm
Interest income on financial assets at amortised cost	8 027	8 244	-3	8 380	-4	24 720	25 380	-3
Other interest income	187	433	-57	463	-60	967	1 266	-24
Interest income	8 214	8 677	-5	8 843	-7	25 687	26 646	-4
Interest expense	-1 500	-1 791	-16	-2 290	-34	-5 401	-7 065	-24
Net interest income (note 5)	6 714	6 886	-2	6 553	2	20 286	19 581	4
Commission income	4 899	4 566	7	4 799	2	14 291	14 230	0
Commission expense	-1 653	-1 641	1	-1 502	10	-4 897	-4 661	5
Net commission income (note 6)	3 246	2 925	11	3 297	-2	9 394	9 569	-2
Net gains and losses on financial items (note 7)	669	1 398	-52	457	46	1 745	2 411	-28
Net insurance	424	390	9	379	12	1 110	1 066	4
Share of profit or loss of associates and joint ventures	231	134	72	213	8	460	570	-19
Other income	320	343	-7	327	-2	917	807	14
Total income	11 604	12 076	-4	11 226	3	33 912	34 004	0
Staff costs	2 930	2 868	2	2 763	6	8 668	8 304	4
Other general administrative expenses (note 8)	1 435	1 588	-10	2 018	-29	5 133	4 972	3
Depreciation/amortisation	396	387	2	383	3	1 173	1 159	1
Administrative fine	0	0		0		4 000	0	0
Total expenses	4 761	4 843	-2	5 164	-8	18 974	14 435	31
Profit before impairment	6 843	7 233	-5	6 062	13	14 938	19 569	-24
Impairment of intangible assets (note 13)	0	0		66		0	66
Impairment of tangible assets	1	0		1	0	1	3	-67
Credit impairment (note 9)	425	1 235	-66	154		3 811	481
Operating profit	6 417	5 998	7	5 841	10	11 126	19 019	-42
Tax expense	1 155	1 154	0	1 176	-2	2 707	3 738	-28
Profit for the period	5 262	4 844	9	4 665	13	8 419	15 281	-45
Profit for the period attributable to the
shareholders of Swedbank AB	5 261	4 845	9	4 663	13	8 419	15 269	-45
Non-controlling interests	1	-1		2	-50	0	12
SEK
Earnings per share, SEK	4.70	4.33		4.17		7.52	13.66
after dilution, SEK	4.68	4.31		4.16		7.50	13.62

Statement of comprehensive income, condensed

Statement of comprehensive income, condensed
Group	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Profit for the period reported via income statement	5 262	4 844	9	4 665	13	8 419	15 281	-45
Items that will not be reclassified to the income statement
Remeasurements of defined benefit pension plans	949	-1 178		-781		4 018	-4 957
Share related to associates and joint ventures:	-20	-45	-56	-29	-31	76	-159
Remeasurements of defined benefit pension plans
Change in fair value attributable to changes in own credit risk on	1	2	-50	5	-80	4	13	-69
financial liabilities designated at fair value through profit and loss
Income tax	-196	242		160		-829	1 018
Total	734	-979		-645		3 269	-4 085
Items that may be reclassified to the income statement Exchange rate differences, foreign operations:
Gains/losses arising during the period	371	-2 494		639	-42	499	1 971	-75
Hedging of net investments in foreign operations:
Gains/losses arising during the period	-291	1 928		-485	-40	-285	-1 576	-82
Cash flow hedges:
Gains/losses arising during the period Reclassification adjustments to the income statement,	34	-502		133	-74	54	409	-87
Net gains and losses on financial items	-33	489		-131	-75	-54	-398	-86
Foreign currency basis risk:
Gains/losses arising during the period	-14	-12	17	-10	40	-18	-12	50
Share of other comprehensive income of	-4	-9	-56	-4	0	-90	72
associates and joint ventures
Income tax	67	-409		106	-37	66	351	-81
Total	130	-1 009		248	-48	172	817	-79
Other comprehensive income for the period, net of tax	864	-1 988		-397		3 441	-3 268
Total comprehensive income for the period	6 126	2 856		4 268	44	11 860	12 013	-1
Total comprehensive income attributable to the
shareholders of Swedbank AB	6 125	2 857		4 266	44	11 860	12 001	-1
Non-controlling interests	1	-1		2	-50	0	12
For January-September 2020 a gain of SEK 4 018m						For January-September 2020 an exchange rate
(- 4 957) was recognised in other comprehensive						difference of SEK 499m (1 971) was recognised for the
						Group's foreign net investments in subsidiaries. The
income, regarding remeasurements of defined benefit
pension plans. As per 30 September the discount rate, which is used to calculate the closing pension						gain related to subsidiaries mainly arose because the Swedish krona weakened against the euro during the

For January-September 2020 a gain of SEK 4 018m (- 4 957) was recognised in other comprehensive income, regarding remeasurements of defined benefit pension plans. As per 30 September the discount rate, which is used to calculate the closing pension obligation, was 1.41 per cent, compared with 1.46 per cent at year end. More high quality bonds have been included in the determination of the discount rate from the first quarter 2020. The inflation assumption was 1.48 per cent compared with 1.98 per cent at year end. The changed assumptions together with gains and losses based on experience represented SEK 2 538 million of the positive result in other comprehensive income. The fair value of plan assets increased during the first nine months 2020 by SEK 1 480m. In total, the obligation for defined benefit pension plans exceeded the fair value of plan assets by SEK 4 800m compared with SEK 8 798m at year end.

For January-September 2020 an exchange rate difference of SEK 499m (1 971) was recognised for the Group's foreign net investments in subsidiaries. The gain related to subsidiaries mainly arose because the Swedish krona weakened against the euro during the year. In addition, an exchange rate difference of SEK - 90m (72) for the Group's foreign net investments in associates and joint ventures is included in Share of other comprehensive income of associates and joint ventures. The total gain of SEK 409m is not taxable. Since the large part of the Group's foreign net investments is hedged against currency risk, a loss of SEK 285m

(-1 576) arose for the hedging instruments.

The revaluation of defined benefit pension plans and translation of net investments in foreign operations can be volatile in certain periods due to movements in the discount rate, inflation and exchange rates.

Balance sheet, condensed

Balance sheet, condensed
Group SEKm	30 Sep 2020	31 Dec 2019	∆ SEKm	%	30 Sep 2019	%
Assets
Cash and balances with central banks	388 491	195 286	193 205	99	212 168	83
Treasury bills and other bills eligible for refinancing with central banks, etc.	116 060	137 094	-21 034	-15	167 244	-31
Loans to credit institutions (note 10)	50 839	45 452	5 387	12	39 981	27
Loans to the public (note 10)	1 683 986	1 652 296	31 690	2	1 668 023	1
Value change of interest hedged item in portfolio hedge	2 409	271	2 138		2 908	-17
Bonds and other interest-bearing securities	87 101	57 367	29 734	52	73 107	19
Financial assets for which customers bear the investment risk	240 129	224 893	15 236	7	213 735	12
Shares and participating interests	15 203	6 568	8 635		5 137
Investments in associates and joint ventures	7 127	6 679	448	7	6 423	11
Derivatives (note 17)	54 218	44 424	9 794	22	60 828	-11
Intangible assets (note 13)	18 482	17 864	618	3	17 927	3
Tangible assets	5 576	5 572	4	0	5 610	-1
Current tax assets Deferred tax assets	2 535 200	2 408 170	127 30	5 18	2 826 172	-10 16
Other assets	20 733	8 859	11 874		28 440	-27
Prepaid expenses and accrued income	2 661	3 025	-364	-12	1 993	34
Total assets	2 695 750	2 408 228	287 522	12	2 506 522	8
Liabilities and equity
Amounts owed to credit institutions (note 14)	166 237	69 686	96 551		103 251	61
Deposits and borrowings from the public (note 15) Financial liabilities for which customers bear the investment risk	1 155 921 240 970	954 013 225 792	201 908 15 178	21 7	974 351 214 562	19 12
Debt securities in issue (note 16)	814 976	855 754	-40 778	-5	918 601	-11
Short positions, securities	25 460	34 345	-8 885	-26	29 261	-13
Derivatives (note 17)	41 050	40 977	73	0	39 751	3
Current tax liabilities	440	836	-396	-47	730	-40
Deferred tax liabilities	2 514	1 571	943	60	1 287	95
Pension provisions	4 800	8 798	-3 998	-45	9 900	-52
Insurance provisions	1 951	1 894	57	3	1 964	-1
Other liabilities and provisions	50 866	28 807	22 059	77	41 811	22
Accrued expenses and prepaid income Senior non-preferred liabilities (not 16)	4 174 10 878	4 383 10 805	-209 73	-5 1	4 042 0	3
Subordinated liabilities (note 16)	24 924	31 934	-7 010	-22	33 241	-25
Total liabilities	2 545 161	2 269 595	275 566	12	2 372 752	7
Equity
Non-controlling interests	25	25	0	0	25	0
Equity attributable to shareholders of the parent company	150 564	138 608	11 956	9	133 745	13
	150 589	138 633	11 956	9	133 770	13
Total equity	2 695 750	2 408 228	287 522	12	2 506 522	8
Total liabilities and equity

Statement of changes in equity, condensed

Statement of changes in equity, condensed
Group SEKm				Equity attributable to shareholders of the parent company
		Other contri-	Exchange	Hedging of net		Foreign currency
	Share capital	buted equity1)	differences, subsidiaries and associates	investments in foreign	Cash flow hedge	basis reserve	Own credit risk	Retained earnings		Non- controlling
January-September 2020				operations	reserve		reserve		Total	interests	Total equity
Opening balance 1 January 2020	24 904	17 275	6 279	-3 880	8	-33	-5	94 060	138 608	25	138 633
Share based payments to employees Deferred tax related to share based payments to	0	0	0	0	0	0	0	95	95	0	95
employees		0 0	0	0	0	0	0	7	7	0	7
Current tax related to share based payments to employees		0 0	0	0	0	0	0	-6	-6	0	-6
Total comprehensive income for the period	0	0	409	-223	0	-14	3	11 685	11 860	0	11 860
of which reported through profit or loss of which reported through other comprehensive	0	0	0	0	0	0	0	8 419	8 419	0	8 419
income	0	0	409	-223	0	-14	3	3 266	3 441	0	3 441
Closing balance 30 September 2020	24 904	17 275	6 688	-4 103	8	-47	-2	105 841	150 564	25	150 589
January-December 2019 Opening balance 1 January 2019	24 904	17 275	5 508	-3 444	4	-19	-18	93 186	137 396	213	137 609
Dividends		0 0	0	0	0	0	0	-15 878	-15 878	-15	-15 893
Share based payments to employees	0	0	0	0	0	0	0	272	272	0	272
Deferred tax related to share based payments to employees		0 0	0	0	0	0	0	-34	-34	0	-34
Current tax related to share based payments to employees		0 0	0	0	0	0	0	13	13	0	13
Business disposal	0	0	0	0	0	0	0	0	0	-185	-185
Total comprehensive income for the period	0	0	771	-436	4	-14	13	16 501	16 839	12	16 851
of which reported through profit or loss of which reported through other comprehensive	0	0	0	0	0	0	0	19 697	19 697	12	19 709
income Closing balance 31 December 2019	0 24 904	0 17 275	771 6 279	-436 -3 880	4 8	-14 -33	13 -5	-3 196 94 060	-2 858 138 608	0 25	-2 858 138 633
January-September 2019 Opening balance 1 January 2019	24 904	17 275	5 508	-3 444	4	-19	-18	93 186	137 396	213	137 609
Dividends		0 0	0	0	0	0	0	-15 878	-15 878	-15	-15 893
Share based payments to employees Deferred tax related to share based payments to	0	0	0	0	0	0	0	247	247	0	247
employees		0 0	0	0	0	0	0	-34	-34	0	-34
Current tax related to share based payments to employees		0 0	0	0	0	0	0	13	13	0	13
Business disposal	0	0	0	0	0	0	0	0	0	-185	-185
Total comprehensive income for the period of which reported through profit or loss	0 0	0 0	2 043 0	-1 225 0	8 0	-9 0	10 0	11 174 15 269	12 001 15 269	12 12	12 013 15 281
of which reported through other comprehensive
income	0 24 904	0 17 275	2 043 7 551	-1 225 -4 669	8 12	-9 -28	10 -8	-4 095 88 708	-3 268 133 745	0 25	-3 268 133 770
Closing balance 30 September 2019

Cash flow statement, condensed

Cash flow statement, condensed
Group SEKm	Jan-Sep 2020	Full-year 2019	Jan-Sep 2019
Operating activities
Operating profit	11 126	24 420	19 019
Adjustments for non-cash items in operating activities	1 363	4 952	4 611
Income taxes paid	-3 012	-5 981	-5 664
Increase (-) / decrease (+) in loans to credit institutions Increase (-) / decrease (+) in loans to the public	-5 278 -32 670	-9 130 -27 282	-3 502 -37 598
Increase (-) / decrease (+) in holdings of securities for trading	-17 664	-43 187	-86 270
Increase (+) / decrease (-) in deposits and borrowings from the public including retail bonds	198 662	33 488	47 679
Increase (+) / decrease (-) in amounts owed to credit institutions	96 114	12 249	44 744
Increase (-) / decrease (+) in other assets	-24 312	-678	-37 325
Increase (+) / decrease (-) in other liabilities Cash flow from operating activities	20 135 244 464	8 556 -2 593	34 550 -19 756
Investing activities
Business disposal Acquisitions of and contributions to joint ventures	-11	52 -81	52 -38
Disposal of shares in associates	76	184	71
Dividend from associates and joint ventures	2	529	529
Acquisitions of other fixed assets and strategic financial assets	-309	-224	-224
Disposals of/maturity of other fixed assets and strategic financial assets	907	535	383
Cash flow from investing activities	665	995	773
Financing activities
Issuance of interest-bearing securities	74 161	148 250	125 141
Redemption of interest-bearing securities Issuance of commercial paper	-161 054 329 367	-94 929 483 569	-70 862 410 250
Redemption of commercial paper	-294 619	-487 865	-384 769
Amortisation of lease liabilities	-554	-718	542
Dividends paid		-15 893	-15 893
Cash flow from financing activities	-52 699	32 414	64 409
Cash flow for the period	192 430	30 816	45 426
Cash and cash equivalents at the beginning of the period	195 286	163 161	163 161
Cash flow for the period	192 430	30 816	45 426
Exchange rate differences on cash and cash equivalents	775	1 309	3 581
Cash and cash equivalents at end of the period During the third quarter of 2019, 11 per cent of the received a cash payment of SEK 5m and the capital	388 491	195 286	212 168
subsidiary Ölands Bank AB was sold. Swedbank AB´s gain was SEK 3m.
ownership subsequently amounts to 49 per cent, and as During the first quarter of 2017, the associated company
a result the company is accounted for as an associated Hemnet AB was sold. Swedbank received parts of the
company according to the equity method from the date cash payment, SEK 71m, in the first quarter of 2020 as of disposal. Swedbank received a cash payment of SEK well as in the first quarter of 2019.

During the third quarter of 2019, 11 per cent of the subsidiary Ölands Bank AB was sold. Swedbank AB´s ownership subsequently amounts to 49 per cent, and as a result the company is accounted for as an associated company according to the equity method from the date of disposal. Swedbank received a cash payment of SEK 52m. The capital gain was SEK 40m.

During the second quarter 2020 contributions were provided to Invidem AB of SEK 11m. During 2019, contributions were provided to the joint ventures Invidem AB of SEK 57m and P27 Nordic Payments Platform AB of SEK 24m.

During the second quarter 2020 the associated company Svensk Mäklarstatistik was sold. Swedbank During the fourth quarter of 2019, the associated company Babs Paylink AB was sold. Swedbank received a cash payment of SEK 113m. The capital gain was SEK 25m.

During the third quarter 2020, the shares in the Finnish credit information company Enento Group was sold. Swedbank received a cash payment of SEK 570m.

Note 1 Accounting policies

The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated financial statements have also been prepared in accordance with the recommendations and statements of the Swedish Financial Reporting Board, the Annual Accounts Act for Credit Institutions and Securities Companies and the directives of the SFSA.

The Parent Company report has been prepared in accordance with the Annual Accounts Act for Credit Institutions and Securities Companies, the directives of the SFSA and recommendation RFR 2 of the Swedish Financial Reporting Board.

The accounting policies applied in the interim report conform to those applied in the Annual and Sustainability Report for 2019, which was prepared in accordance with International Financial Reporting Standards as adopted by the European Union and interpretations thereof. There have been no significant changes to the Group's accounting policies set out in the 2019 Annual and Sustainability Report.

Other changes in accounting regulations

Other amended regulations that have been adopted from 1 January 2020 did not have a significant impact on the Group's financial position, results, cash flows or disclosures.

Standards issued but not yet adopted

The International Accounting Standards Board (IASB) has issued amendments to IFRS 17 Insurance contracts which are not yet applicable to Swedbank.

IFRS 17 was issued in May 2017 and amended in June 2020. The standard is applicable from 1 January 2023 and has not yet been approved by the EU. The new standard establishes principles for recognition, presentation, measurement and disclosure of insurance contracts issued. Insurance contracts in scope will be measured at current value, based on the current estimates of amounts expected to be collected from premiums and paid out for claims, benefits and expenses plus expected profit for providing insurance coverage. The impacts on the Group's financial reports are still being assessed by the Group.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 was issued in August 2020 and is applicable from 1 January 2021, with early application permitted. The amendments address the accounting issues that arise when financial instruments that reference IBORs transition to an alternative benchmark rate. The amendments include a practical expedient for modifications required by the Interest rate benchmark, to be treated as changes to a floating interest rate. They also permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued. The amendments have not yet been approved by the EU. The impacts on the Group's financial reports are still being assessed by the Group

Note 2 Critical accounting estimates

Presentation of consolidated financial statements in conformity with IFRS requires the executive management to make judgments and estimates that affect the recognised amounts for assets, liabilities and disclosures of contingent assets and liabilities as of the reporting date as well as the recognised income and expenses during the report period. The executive management continuously evaluates these judgments and estimates, including assessing control over investment funds, the fair value of financial instruments, provisions for credit impairment, impairment testing of goodwill, deferred taxes and defined benefit pension

provisions. Significant changes to the basis upon which the critical accounting judgments and estimates have been determined compared with 31 December 2019 related to provisions for credit impairments. The changes are described in Note 9. From the first quarter 2020 more high quality bonds have been included in the determination of the discount rate, which are used in the provision for the defined benefit pension plan. Beyond the above there have been no significant changes to the basis upon which the critical accounting judgments and estimates have been determined compared with 31 December 2019.

Note 3 Changes in the Group structure

No significant changes to the Group structure occurred during the first nine months 2020.

Note 4 Operating segments (business areas)

Note 4 Operating segments (business areas) Jan-Sep 2020
			Large	Group
SEKm	Swedish Banking	Baltic Banking	Corporates & Institutions	Functions & Other	Eliminations	Group
Income statement
Net interest income Net commission income	12 425 5 822	4 088 1 824	2 892 1 787	900 -94	-19 55	20 286 9 394
Net gains and losses on financial items	260 1 173	237 645	1 220 91	28 737	0 -159	1 745 2 487
Other income1) Total income	19 680	6 794	5 990	1 571	-123	33 912
of which internal income Staff costs	2 290	29 0 837	26 1 679	661 3 684	-716 -10	0 8 480
Variable staff costs	31	25	40	92	0	188
Other expenses Depreciation/amortisation	4 852 41	1 546 129	1 090 183	-2 242 820	-113 0	5 133 1 173
Administrative fine Total expenses	0 7 214	0 2 537	0 2 992	4 000 6 354	0 -123	4 000 18 974
Profit before impairment Impairment of tangible assets	12 466 0	4 257 1	2 998 0	-4 783 0	0 0	14 938 1
Credit impairment Operating profit	665 11 801	245 4 011	2 888 110	13 -4 796	0 0	3 811 11 126
Tax expense	2 344	674	-418	107	0	2 707
Profit for the period Profit for the period attributable to the	9 457	3 337	528	-4 903	0	8 419
shareholders of Swedbank AB	9 457	3 337	528	-4 903	0	8 419
Non-controlling interests	0	0	0	0	0	0
Net commission income Commission income
Payment processing Cards	533 1 648	484 1 155	426 1 466	73 0	-23 -327	1 493 3 942
Asset management and custody Lending	4 334 166	252 127	1 026 480	-9 9	-194 -5	5 409 777
Other commission income2)	1 572	372	706	26	-6	2 670
Total Commission income Commission expense	8 253 2 431	2 390 566	4 104 2 317	99 193	-555 -610	14 291 4 897
Net commission income	5 822	1 824	1 787	-94	55	9 394
Balance sheet, SEKbn Cash and balances with central banks	1	3	123	262	-1	388
Loans to credit institutions Loans to the public	7 1 211	0 190	97 282	192 2	-245 -1	51 1 684
Interest-bearing securities	0	1	82	123	-3	203
Financial assets for which customers bear inv. risk Investments in associates and joint ventures	234 5	6 0	0 0	0 2	0 0	240 7
Derivatives Total tangible and intangible assets	0	0 2 12	62 2	45 8	-53 0	54 24
Other assets Total assets	3 1 463	93 305	31 679	466 1 100	-548 -851	45 2 696
Amounts owed to credit institutions		30 0	210	161	-235	166
Deposits and borrowings from the public Debt securities in issue	627 0	272 1	206 7	59 811	-8 -4	1 156 815
Financial liabilities for which customers bear inv. risk	235	6	0	0	0	241
Derivatives Other liabilities	0 503	0 0	65 157	28 -18	-52 -552	41 90
Senior non-preferred liabilities Subordinated liabilities	0 0	0 0	0 0	11 25	0 0	11 25
Total liabilities	1 395	279	645	1 077	-851	2 545
Allocated equity Total liabilities and equity	68 1 463	26 305	34 679	23 1 100	0 -851	151 2 696
Key figures
Return on allocated equity, %	18.8	17.2	2.2	-33.9	0.0	7.8
Cost/income ratio Credit impairment ratio, %	0.37 0.07	0.37 0.17	0.50 1.30	4.04 0.09	0.00 0.00	0.56 0.30
Loan/deposit ratio, %	193	70	126	0	0	143
Loans to the public, stage 3, SEKbn 3)(gross) Loans to the public, total, SEKbn 3)	3 1 211	2 190	8 221	0 0	0 0	13 1 622
Provisions for loans to the public, total, SEKbn 3)	2	1	6	0	0	9
Deposits from the public, SEKbn 3) Risk exposure amount, SEKbn	627 400	272 95	176 170	57 27	0 0	1 132 692
Full-time employees	3 936	3 619	2 351	6 101	0	16 007
	67	26	32
Allocated equity, average, SEKbn				19	0	144

Jan-Sep 2019			Large	Group
	Swedish	Baltic	Corporates &	Functions
SEKm	Banking	Banking	Institutions	& Other	Eliminations	Group
Income statement Net interest income	12 161	3 874	2 838	708	0	19 581
Net commission income Net gains and losses on financial items	5 837 328	1 956 303	1 693 1 534	0 247	83 -1	9 569 2 411
Other income1)	1 261	632	110	605	-165	2 443
Total income of which internal income	19 587 63	6 765 0	6 175 -1	1 560 393	-83 -455	34 004 0
Staff costs	2 214	783	1 596	3 322	0	7 915
Variable staff costs Other expenses	42 4 316	46 1 472	166 1 087	135 -1 820	0 -83	389 4 972
Depreciation/amortisation Total expenses	218 6 790	130 2 431	172 3 021	639 2 276	0 -83	1 159 14 435
Profit before impairment Impairment of intangible assets	12 797 0	4 334 0	3 154 66	-716 0	0 0	19 569 66
Impairment of tangible assets	0	3	0	0	0	3
Credit impairment Operating profit	144 12 653	6 4 325	330 2 758	1 -717	0 0	481 19 019
Tax expense	2 480	616	636	6	0	3 738
Profit for the period Profit for the period attributable to the	10 173 0	3 709 0	2 122 0	-723 0	0 0	15 281 0
shareholders of Swedbank AB	10 161	3 709	2 122	-723	0	15 269
Non-controlling interests	12	0	0	0	0	12
Net commission income
Commission income
Payment processing	533	524	416	99	-17	1 555
Cards Asset management and custody	1 930 3 920	1 273 280	1 523 931	0 -1	-289 -180	4 437 4 950
Lending	188	127	424	6	1	746
Other commission income2)	1 594	359	520	76	-7	2 542
Total Commission income Commission expense	8 165 2 328	2 563 607	3 814 2 121	180 180	-492 -575	14 230 4 661
Net commission income	5 837	1 956	1 693	0	83	9 569
Balance sheet, SEKbn
Cash and balances with central banks Loans to credit institutions	6	1 3 0	3 83	206 179	-1 -228	212 40
Loans to the public	1 200	187	278	3	0	1 668
Interest-bearing securities Financial assets for which customers bear inv. risk	0 209	1 5	76 0	166 0	-3 0	240 214
Investments in associates	4	0	0	2	0	6
Derivatives Total tangible and intangible assets	0	0 2 12	67 2	49 8	-55 0	61 24
Other assets Total assets	3 1 425	58 266	22 531	483 1 096	-524 -811	42 2 507
Amounts owed to credit institutions	25	0	199	95	-216	103
Deposits and borrowings from the public Debt securities in issue	567 0	232 2	158 11	25 911	-8 -5	974 919
Financial liabilities for which customers bear inv. risk	209	6	0	0	0	215
Derivatives Other liabilities	0 559	0 0	68 67	26 -9	-54 -528	40 89
Senior non-preferred liabilities Subordinated liabilities	0 0	0 0	0 0	0 33	0 0	0 33
Total liabilities	1 360	240	503	1 081	-811	2 373
Allocated equity Total liabilities and equity	65 1 425	26 266	28 531	15 1 096	0 -811	134 2 507
Key figures	0 0	0 0	0 0	0 0	0 0	0 0
Return on allocated equity, %	21.0	19.3	10.5	-6.0	0.0	15.3
Cost/income ratio Credit impairment ratio, %	0.35 0.02	0.36 0.00	0.49 0.16	1.46 0.00	0.0 0.0	0.42 0.04
Loan/deposit ratio, %	212	81	168	1	0.0	168
Loans to the public, stage 3, SEKbn 3) (gross)	3	2	8	0	0.0	13
Loans to the public, total, SEKbn 3) Provisions for loans to the public, total, SEKbn 3)	1 200 1	188 1	225 4	0 0	0.0 0.0	1 613 6
Deposits, SEKbn 3)	567	232	134	24	0.0	957
Risk exposure amount, SEKbn Full-time employees	387 3 662	96 3 556	150 2 263	24 5 588	0 0.0	657 15 069
Allocated equity, average, SEKbn	64	26	27	16	0.0	133
1) Other income includes the items Net insurance, Share of profit or loss of associates and joint ventures and Other income from the Group income
statement. 2) Other commission income includes service concepts, corporate finance, securities, deposits, real estate brokerage, life and non-life insurance, guarantees.
3) Excluding the Swedish National Debt Office and repurchase agreements.
Swedbank – Interim report Q3 2020	29

Operating segments accounting policies

Note 5 Net interest income

Operating segments accounting policies
The operating segment report is based on Swedbank's accounting policies, organisation and management accounts. Market-based transfer prices are applied between operating segments, while all expenses for Group functions and Group staffs are transfer priced at cost to the operating segments. Cross-border transfer pricing is applied according to OECD transfer pricing guidelines. The Group's equity attributable to shareholders is allocated to each operating segment based on capital adequacy rules and estimated capital		Adequacy Assessment Process (ICAAP). one year the key ratio is annualised. During the first quarter 2020 Swedbank's Comparative figures have been restated.				requirements based on the bank's Internal Capital The return on allocated equity for the operating segments is calculated based on profit for the period for the operating segment (operating profit less estimated tax and non-controlling interests), in relation to average monthly allocated equity for the operating segment. For periods shorter than operating segments were changed slightly to coincide with the organisational changes made.
Note 5 Net interest income Group	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Interest income
Cash and balances with central banks	-211	-190	11	81		-382	404
Treasury bills and other bills eligible for refinancing with central banks, etc. Loans to credit institutions	56	15 16 80	-6 -30	43 151	-65 -63	61 268	127 409	-52 -34
Loans to the public	8 101	8 350	-3	8 311	-3	24 753	24 746	0
Bonds and other interest-bearing securities		176 104	69	-5		321	61
Derivatives	78	209	-63	358	-78	581	1 153	-50
Other assets	42	49	-14	55	-24	144	165	-13
Total	8 257	8 618	-4	8 994	-8	25 746	27 065	-5
Deduction of trading-related interests reported in Net gains and losses on
financial items	43	-59		151	-72	59	419	-86
Total interest income	8 214	8 677	-5	8 843	-7	25 687	26 646	-4
Interest expense
Amounts owed to credit institutions	-1	-78	-99	-269	-100	-214	-875	-76
Deposits and borrowings from the public	-148	-147	1	-391	-62	-623	-1 402	-56
of which deposit guarantee fees	-119	-118	1	-128	-7	-354	-341	4
Debt securities in issue Senior non-preferred liabilities	-1 594 -57	-1 951 -29	-18 97	-2 750 0	-42	-5 860 -112	-9 047 0	-35
Subordinated liabilities	-183	-189	-3	-247	-26	-651	-703	-7
Derivatives	781	938	-17	1 658	-53	2 889	5 814	-50
Other liabilities	-247	-277	-11	-314	-21	-729	-935	-22
of which resolution fund fee	-218	-249	-12	-278	-22	-643	-839	-23
Total	-1 449	-1 733	-16	-2 313	-37	-5 300	-7 148	-26
Deduction of trading-related interests reported in Net gains and losses on
financial items	51	58	-12	-23		101	-83
Total interest expense	-1 500	-1 791	-16	-2 290	-34	-5 401	-7 065	-24
	6 714	6 886	-2	6 553	2	20 286	19 581	4
Net interest income		1.01	-1	1.06	-5	1.02	1.06	-4
Net investment margin before trading-related interests are deducted	1.00				8	2 672 347	2 505 553	7
Average total assets	2 728 877	2 729 334	0	2 531 444
Interest expense on financial liabilities at amortised cost	1 954	2 375	-18	3 886	-50	7 398	12 803	-42
Negative yield on financial assets	355	268	32	562	-37	1 225	1 639	-25

Note 6 Net commission income

Note 6 Net commission income
Group	Q3	Q2		Q3		Jan-Sep	Jan-Sep
SEKm	2020	2020	%	2019	%	2020	2019	%
Commission income
Payment processing	499	487	2	515	-3	1 493	1 559	-4
Cards	1 380	1 233	12	1 589	-13	3 942	4 437	-11
Service concepts	306	312	-2	313	-2	930	932	0
Asset management and custody	1 895	1 721	10	1 614	17	5 409	4 950	9
Insurance	168	167	1	170	-1	526	509	3
Securities and corporate finance	140	169	-17	86	63	511	317	61
Lending	271	254	7	258	5	777	746	4
Other	240	223	8	254	-6	703	780	-10
Total commission income	4 899	4 566	7	4 799	2	14 291	14 230	0
Commission expense
Payment processing	-277	-285	-3	-277	0	-843	-876	-4
Cards	-667	-643	4	-713	-6	-1 936	-1 982	-2
Service concepts	-39	-36	8	-42	-7	-112	-125	-10
Asset management and custody	-431	-433	0	-257	68	-1 292	-1 059	22
Insurance	-70	-65	8	-61	15	-206	-177	16
Securities and corporate finance	-77	-91	-15	-69	12	-255	-224	14
Lending	-32	-31	3	-19	68	-83	-57	46
Other	-60	-57	5	-64	-6	-170	-161	5
Total commission expense	-1 653	-1 641	1	-1 502	10	-4 897	-4 661	5
Net commission income
Payment processing	222	202	10	238	-7	650	683	-5
	713	590	21	876	-19	2 006	2 455	-18
Cards		276	-3	271	-1	818	807	1
Service concepts	267				8	4 117	3 891	6
Asset management and custody	1 464	1 288	14	1 357
Insurance	98	102	-4	109	-10	320	332	-4
Securities and corporate finance	63	78	-19	17		256	93
Lending	239	223	7	239	0	694	689	1
Other	180	166	8	190	-5	533	619	-14

			Note 7 Net gains and losses on financial items

Note 7 Net gains and losses on financial items Group Q3 Q2 Q3 Jan-Sep Jan-Sep SEKm 2020 2020 % 2019 % 2020 2019 % Fair value through profit or loss Shares and share related derivatives -59 333 19 241 584 -59 of which dividend 13 7 86 3 29 130 -78 Interest-bearing securities and 430 949 -55 19 494 518 -5 interest related derivatives Financial liabilities 8 7 14 28 -71 30 63 -52 Other financial instruments -5 -19 -74 -14 -64 -18 -39 -54 Total fair value through profit or loss 374 1 270 -71 52 747 1 126 -34 Hedge accounting Ineffective part in fair value hedges 76 -168 -6 -55 -112 -51 of which hedging instruments -394 1 487 2 445 4 499 10 012 -55 of which hedged items 470 -1 655 -2 451 -4 554 -10 124 -55 Ineffective part in portfolio fair value hedges -72 96 8 13 85 -85 of which hedging instruments -166 -1 043 -84 -195 -15 -2 125 -2 054 3 of which hedged items 94 1 139 -92 203 -54 2 138 2 139 0 Ineffective part in cash flow hedges 0 -4 1 -60 -2 3 Total hedge accounting 4 -76 3 33 -44 -24 83 Derecognition gain or loss for financial assets at amortised 79 38 81 -2 151 157 -4 cost Derecognition gain or loss for financial liabilities at	-23 -14 64 -1 -113 -96 18 43 -59 152 -72 59 419 -86 51 58 -12 -23 101 -83 94 -1 129 -27 160 336 -52
amortised cost
Trading related interest
Interest income
Interest expense
Total trading related interest
	141 181 -22 193 -27 844 912 -7	Change in exchange rates
		Total net gains and losses on financial items	669	1 398	-52	457	46	1 745	2 411	-28

Note 8 Other general administrative expenses

Derecognition gain or loss for financial assets at amortised
Derecognition gain or loss for financial liabilities at
Trading related interest
SEKm	2020	2020	%	2019	%	2020	2019	%
Premises	112	92	22	117	-4	296	411	-28
IT expenses	566	596	-5	527	7	1 731	1 543	12
Telecommunications and postage	31	31	0	37	-16	108	92	17
Advertising, PR and marketing	62	83	-25	69	-10	222	200	11
	215	307	-30	409	-47	1 274	861	48
			0	58	0	174	169	3
Consultants
Compensation to savings banks	58	58
Other purchased services	218	233	-6	222	-2	682	666	2
Security transport and alarm systems	16	20	-20	17	-6	52	50	4
Supplies	17	22	-23	17	0	62	54	15
Travel	3	4	-25	44	-93	57	159	-64
Entertainment	4	2	100	3	33	17	26	-35
Repair/maintenance of inventories	21	24	-13	20	5	75	51	47
Other operating expenses	9	10	-10	139	-94	46	182	-75
Other administrative expenses Other general administrative expenses	103 1 435	106 1 588	-3 -10	339 2 018	-70 -29	337 5 133	508 4 972	-34 3

Note 9 Credit impairment

Note 9 Credit impairment
Group	Q3	Q2	Q3	Jan-Sep	Jan-Sep
SEKm	2020	2020	2019	2020	2019
Loans at amortised cost
Credit impairment provisions - Stage 1	-140	259	-26	416	23
Credit impairment provisions - Stage 2	16	398	-69	1 032	-412
Credit impairment provisions - Stage 3	-167	321	159	979	250
Credit impairment provisions - Credit-impaired purchased or
originated 1)	-1	0	-1	-2	-4
Total	-292	978	63	2 425	-143
Write-offs	773	107	214	1 017	606
Recoveries	-54	-31	-56	-131	-156
Total	719	76	158	886	450
Total loans at amortised cost	427	1 054	221	3 311	307
Commitments and financial guarantees
Credit impairment provisions - Stage 1	-19	79	4	144	19
Credit impairment provisions - Stage 2	27	113	-14	330	-73
Credit impairment provisions - Stage 3	-10	-11	-57	26	227
Total	-2	181	-67	500	173
Write-offs	0	0	0	0	1
Total commitments and financial guarantees	-2	181	-67	500	174
Total credit impairment	425	1 235	154	3 811	481
Credit impairment ratio, %	0.10	0.28	0.04	0.30	0.04
1) Of which SEK -1m (-1m) is a year to date change in the gross carrying amount of purchased or originated credit-impaired assets due to remeasurement of expected credit losses recognized as part of the gross carrying amount on initial recognition.

Credit impairment provisions are estimated using quantitative models, which incorporate inputs, assumptions and methodologies that involve a high degree of management judgement. They reflect the effect of a range of possible probability-weighted economic outcomes. In particular, the following can have a significant impact on the level of impairment provisions:

• measurement of both 12-month and lifetime expected credit losses;
• determination of a significant increase in credit risk; and
• incorporation of forward-looking macroeconomic scenarios.

Further details on the key inputs and assumptions used as at 30 September 2020 are provided below.

Measurement of 12-month and lifetime expected credit losses

The measurement of expected credit losses is described in Note G3.1 Credit risks on pages 67-70 of the Annual and Sustainability Report 2019. There have been no significant changes during the year to the methodology. However, key portfolio risks have changed as a consequence of Covid-19. The deterioration of macroeconomic indicators that contribute to credit risk and losses – inter alia GDP growth, housing and property prices, unemployment, oil prices and interest rates – have not yet resulted in a similar increase in credit losses or default rates, that historically have been observed in similar economic shocks. Government and regulator support measures and guidance on the treatment of customer impacts (for example, forbearance and payment moratoria) have significantly suppressed the impacts of Covid-19 in the short term there is a risk that credit quality may start to deteriorate as such measures end. The models do not capture these complexities, nor do they capture the continued uncertainty around further Covid-19 outbreaks, which were increasing during September and could further delay the recovery. Consequently, the modelled assumptions may not appropriately assess the credit quality levels and the credit impairments may not appropriately incorporate these factors. A post-model expert credit adjustment of SEK 886m was recognised to increase credit impairment provisions across all industry segments to account for the potential economic impacts of the Covid-19 pandemic that have not yet been realised.

Determination of a significant increase in credit risk

The Group uses both quantitative and qualitative indicators for assessing a significant increase in credit risk. The criteria are disclosed in the Annual and Sustainability Report of 2019 on page 62 and 68 - 69. There have been no significant changes during the year to the methodology. As a way of supporting both private and corporate customers with Covid-19 related liquidity constraints, Swedbank introduced standardised and collective methods for payment respites and grace periods for principal amounts due. Generally, these measures have not automatically or individually been treated as a Stage 2 trigger or forbearance measures, in accordance with the April 2020 EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in light of the Covid-19 crisis. EBA's Guidelines are however only effective for moratoria measures granted before 30 September 2020. Any new measures granted or extended from 30 September 2020 will be assessed for both Stage 2 and forbearance according to Swedbank's usual practice. The fact that certain borrowers need extensions of their payment moratoria also indicates further financial difficulties for these customers.

The tables below show the quantitative thresholds, namely:

• changes in the 12-month PD and internal risk rating grades, which have been applied for the portfolio of loans originated before 1 January 2018. For instance, for exposures originated with a risk grade between 0 and 5, a downgrade by 1 to 2 grades from initial recognition is assessed as a significant change in credit risk. Alternatively, for exposures originated with a risk grade between 13 and 21, a downgrade by 3 to 8 grades from initial recognition is considered significant. Internal risk ratings are assigned according to the risk management framework outlined in Note G3 Risks in the 2019 Annual and Sustainability Report.
• changes in the lifetime PD, which have been applied for the portfolio of loans originated on or after 1 January 2018. For instance, for exposures originated with a risk grade between 0 and 5, a 50 per cent increase in the lifetime

PD from initial recognition is assessed as a significant change in credit risk. Alternatively, for exposures originated with a risk grade between 13 and 21, an increase of 150-300 per cent from initial recognition is considered significant.

Significant increase in credit risk, financial instruments with initial recognition before 1 January 2018
Impairment provision impact of

Report. 	with a risk grade between 0 and 5, a downgrade by 1 to 2 grades from initial in credit risk. Alternatively, for exposures originated with a risk grade between 13 and Risks in the 2019 Annual and Sustainability or after 1 January 2018. For instance, for	recognition is assessed as a significant change 21, a downgrade by 3 to 8 grades from initial recognition is considered significant. Internal risk ratings are assigned according to the risk management framework outlined in Note G3 changes in the lifetime PD, which have been applied for the portfolio of loans originated on exposures originated with a risk grade between 0 and 5, a 50 per cent increase in the lifetime		These limits reflect a lower sensitivity to change in the low risk end of the risk scale and a higher sensitivity to change in the high-risk end of the scale. The Group has performed a sensitivity analysis on how credit impairment provisions would change if thresholds applied were increased or decreased. A lower threshold would increase the number of loans that have migrated from Stage 1 to Stage 2 and, also increase the estimated credit impairment provisions. A higher threshold would have the opposite effect. The tables below disclose the impacts of this sensitivity analysis on the 30 September 2020 credit impairment provisions. Positive amounts represent higher credit impairment provisions that would be recognised
Significant increase in credit risk, financial instruments with initial recognition before 1 January 2018				Impairment provision impact of
Internal risk rating grade at initial recognition	12-month PD band at initial recognition	Threshold, rating downgrade1) 2) 3)	Increase in threshold by 1 grade	Decrease in threshold by 1 grade	Recognised credit impairment provisions 30 Sep 2020	Share of total portfolio (%) in terms of gross carrying amount 30 Sep 2020
13-21	< 0.5%	3 - 8 grades	-6.5%	5.9%	812	36%
9-12	0.5-2.0%	1 - 5 grades	-10.9%	9.3%	469	7%
6-8	2.0-5.7%	1 - 3 grades	-11.2%	5.1%	111	3%
0-5	>5.7% and <100%	1 - 2 grades	-1.0%	0.0%	173	1%
			-7.6%	6.2%	1 565	47%
				Financial instruments subject to the low credit risk exemption
				Stage 3 financial instruments
				Post model expert credit adjustment4)	353	0%
1) Downgrade by 2 grades corresponds to approximately 100% increase in 12-month PD. 2) Thresholds vary within given ranges depending on the borrower's geography, segment and internal risk rating. 3) The threshold used in the sensitivity analyses is floored to 1 grade. 4) Represents post-model expert credit adjustments for stages 1 and 2. The sensitivity analysis is reflected on the model output prior to the post-model expert credit adjustment. 5) Of which provisions for off-balance exposures are SEK 752m.				Total provisions5)	7 3 333 5 258	11% 0% 58%

Significant increase in credit risk, financial instruments with initial recognition on or after 1 January 2018 Impairment provision impact of

grade at initial recognition	band at initial recognition	Threshold, rating downgrade1) 2) 3)	threshold by 1 grade	threshold by 1 grade	provisions 30 Sep 2020	carrying amount 30 Sep 2020
				Post model expert credit adjustment4)	353	0%
		1) Downgrade by 2 grades corresponds to approximately 100% increase in 12-month PD.
2) Thresholds vary within given ranges depending on the borrower's geography, segment and internal risk rating. 3) The threshold used in the sensitivity analyses is floored to 1 grade. 4) Represents post-model expert credit adjustments for stages 1 and 2. The sensitivity analysis is reflected on the model output prior to the post-model expert credit adjustment. 5) Of which provisions for off-balance exposures are SEK 752m. Significant increase in credit risk, financial instruments with initial recognition on or after 1 January 2018 Internal risk rating	Threshold,		Impairment provision impact of	Recognised credit		Share of total portfolio (%) in terms of gross
grade at initial	increase in	Increase in threshold by	Decrease in threshold by	impairment provisions		carrying amount
recognition	lifetime PD 6)	100%	50%	30 Sep 2020		30 Sep 2020
13-21 9-12	100-300% 100-200%	-2.5%		5.0%	487	29%
6-8	50-150%	-3.9% -0.6%		3.9% 1.6%	543 208	7% 2%
0-5	50%	-0.2%		0.6%	281	1%
		-2.3%		3.3%	1 519	40%
		Financial instruments subject to the low credit risk exemption			10	2%
			Stage 3 financial instruments		2 733	0%
			Post model expert credit adjustment7) Total provisions8)		467	0%

Incorporation of forward-looking macroeconomic scenarios

IFRS 9 scenarios

Forward-looking information is incorporated into both Outlook was published on 25 August which serves as the assessment of significant increase in credit risk and the base scenario, with an assigned probability weight calculation of expected credit losses. The formulation of 66.6 per cent. Aligned with the updated base and incorporation of multiple forward-looking scenarios scenario, new alternative scenarios were developed, are described in Note G3 Risks page 67 - 70 in the 2019 with assigned probability weights of 16.7 per cent on Annual and Sustainability Report. There have been no both the upside and downside scenario. These new significant changes during the year to the methodology. macroeconomic scenarios were included in the expected credit losses calculations according to the The macroeconomic scenarios are provided by Group's usual monthly process. Swedbank Macro Research and are aligned with the The increase in credit impairment provisions due to Swedbank Economic Outlook. The economic scenarios changes in macroeconomic scenarios was SEK 317m. are developed to reflect assumptions about future See the reconciliation of credit impairment provisions for economic conditions given the current state of the local loans in Note 11. and global economies. A new Swedbank Economic Compared with the Swedbank Economic Outlook, the GDP and unemployment rates used in the expected credit losses calculations are seasonally adjusted. 30 Sep 2020 Positive scenario Baseline scenario Negative scenario 2020 2021 2022 2020 2021 2022 2020 2021 2022 Sweden GDP (% annual) -4.4 4.1 2.7 -5.2 3.0 3.5 -8.3 -5.0 5.8 Unemployment (% annual)1) 8.4 8.4 7.5 8.6 9.4 8.9 8.9 12.4 11.8 House prices (% annual change) 5.8 4.5 4.5 5.5 3.5 3.7 4.3 -5.4 -1.1 Stibor 3m (%) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Estonia GDP (% annual) -2.5 5.9 3.4 -4.3 4.5 3.0 -7.7 -2.3 3.4 Unemployment (% annual) 7.6 6.5 5.8 8.1 7.4 6.9 9.0 13.9 12.4 House prices (% annual change) 6.0 10.1 7.8 4.3 2.7 5.0 2.0 -17.5 8.2 Latvia GDP (% annual) -3.6 5.8 3.6 -5.0 4.2 3.3 -8.9 -1.7 3.7 Unemployment (% annual) 8.0 6.9 5.9 8.3 7.8 6.5 9.4 14.9 13.9 House prices (% annual change) 3.5 11.2 8.2 1.4 4.4 5.9 -1.2 -16.7 6.7 Lithuania GDP (% annual) -1.2 6.2 4.0 -2.0 4.8 3.4 -5.8 -2.2 3.8 Unemployment (% annual) 7.3 6.2 5.6 7.5 6.6 6.3 9.1 14.4 13.4 House prices (% annual change) 12.5 8.5 7.8 9.1 1.6 5.5 7.3 -20.6 9.2 Global indicators US GDP (% annual) -4.5 5.4 3.4 -5.1 3.7 2.9 -6.9 -1.2 5.8 EU GDP (% annual) -7.6 6.4 2.3 -8.3 5.8 2.8 -11.6 0.1 6.3 Brent Crude Oil (USD) 36.2 31.4 37.8 43.8 47.8 49.4 47.6 59.7 64.4 Euribor 6m (%) -0.30 -0.01 0.73 -0.36 -0.45 -0.34 -0.56 -0.77 -0.66 1) Unemployment rate, 16-64 years	Incorporation of forward-looking macroeconomic scenarios
	IFRS 9 scenarios

30 Jun 2020	2019	Positive scenario 2020	2021	2019	Baseline scenario 2020	2021	2019	Negative scenario 2020	2021
Sweden
GDP (% annual)	1.2	-3.9	3.7	1.2	-5.1	1.7	1.2	-9.9	-2.0
Unemployment (% annual)1)	6.8	8.8	8.1	6.8	9.6	10.3	6.8	10.3	14.0
House prices (% annual change)	2.3	5.1	6.0	2.3	0.5	-1.5	2.3	-4.9	-6.7
Stibor 3m (%)	-0.03	0.18	0.24	-0.03	0.18	0.17	-0.03	-0.01	-0.57
Estonia
GDP (% annual)	4.4	-2.4	3.7	4.4	-7.0	5.0	4.4	-11.2	-1.0
Unemployment (% annual)	4.5	6.8	6.2	4.5	9.5	7.7	4.5	11.3	16.3
House prices (% annual change)	7.3	4.4	3.5	7.3	-0.9	0.5	7.3	-9.9	-16.1
Latvia
GDP (% annual)	2.2	-2.9	4.3	2.2	-7.5	4.3	2.2	-11.3	-1.3
Unemployment (% annual)	6.3	7.2	6.6	6.3	9.5	8.5	6.3	11.8	15.3
House prices (% annual change)	7.3	4.2	4.1	7.3	-3.1	0.8	7.3	-8.3	-16.2
Lithuania GDP (% annual)
Unemployment (% annual)	3.9 6.3	-1.2 7.2	3.6 6.4	3.9 6.3	-6.5 8.9	4.5 7.2	3.9 6.3	-9.7 11.9	-2.6 15.5
House prices (% annual change)	6.0	6.3	2.9	6.0	1.1	-0.4	6.0	-6.4	-15.4
Global indicators
US GDP (% annual) EU GDP (% annual)	2.3 1.2	-3.2 -5.4	5.0 2.0	2.3 1.2	-5.8 -6.9	4.1 4.6	2.3 1.2	-9.4 -10.8	-2.9 0.1
Brent Crude Oil (USD)	64.1	48.0	54.3	64.1	39.1	39.9	64.1	32.2	30.2
Euribor 6m (%)	-0.30	-0.31	0.16	-0.30	-0.39	-0.44	-0.30	-0.58	-0.74
1) Unemployment rate, 16-64 years
31 Dec 2019	20191)	Positive scenario 2020	2021	20191)	Baseline scenario 2020	2021	20191)	Negative scenario 2020	2021
Sweden
GDP (% annual)	1.7	2.2	2.1	1.3	1.0	1.4	0.3	-6.3	-1.5
Unemployment (% annual)2)	6.8	6.3	5.7	6.9	7.1	7.2	6.9	8.9	11.8
House prices (% annual change)	2.2	7.2	5.8	2.2	5.0	5.0	0.0	-14.9	-7.7
Stibor 3m (%)	-0.01	0.35	0.75	-0.03	0.15	0.15	-0.09	-0.53	-0.35
Estonia
GDP (% annual)	3.2	4.2	3.2	3.2	2.1	2.5	3.1	-6.1	-4.7
	4.9	4.7	4.6	4.9	5.1	5.4	5.0	9.1	13.7
Unemployment (% annual)		9.5	7.0	6.3	4.5	4.2	6.2	-15.2	-18.5
House prices (% annual change)	6.4

								-1.5
								11.8
								-7.7
								-0.35
								-4.7
								13.7
								-18.5
								-4.2
								15.1
8.4	10.9	9.3	8.2	4.9	4.8	8.2	-11.2	-14.0
								-3.3
								14.3
4.8	8.3	7.2	4.7	4.8	4.8	4.6	-14.7	-16.0
	2.7	2.8	2.3	1.5	2.0	2.2	-1.1	0.3
	2.0	2.2	1.1	1.0	1.4	1.1	-2.0	0.5
	61.0	70.8	62.8	50.8	55.3	58.7	32.7	39.3
-0.30	-0.10	0.61	-0.30	-0.35	0.00	-0.37	-0.71	-0.61
	1.7 6.8 2.2 -0.01 3.2 4.9 6.4 2.3 6.5 3.8 6.2	2.2 6.3 7.2 0.35 4.2 4.7 9.5 4.1 6.4 4.2 5.9 2.3 1.2 64.8	2.1 5.7 5.8 0.75 3.2 4.6 7.0 3.4 6.4 3.0 5.6	1.3 6.9 2.2 -0.03 3.2 4.9 6.3 2.3 6.5 3.7 6.2	1.0 7.1 5.0 0.15 2.1 5.1 4.5 2.0 6.6 2.0 6.2	1.4 7.2 5.0 0.15 2.5 5.4 4.2 2.4 6.6 2.5 6.0 1) Forecasted 2019 values, as the actual offical numbers were not published when the scenarios were set.	0.3 6.9 0.0 -0.09 3.1 5.0 6.2 2.2 6.6 3.7 6.2	-6.3 8.9 -14.9 -0.53 -6.1 9.1 -15.2 -5.8 10.7 -5.2 9.8

The Covid-19 pandemic has put the global economy in a severe recession, with GDP expected to contact by 3 per cent in 2020. We continue to think that the worst quarter was the second quarter of 2020, after which we expect to see a rebound, although it will be gradual and muted. Recent data indicates a faster recovery than was expected in the first half of the year, implying slightly improved growth prospects for all countries.

The forecast is based on a few important assumptions: the virus peaked in Europe and the US at the beginning of the second quarter; restrictive measures to stop the spread of the infection are now gradually being rolled back; several restrictions will remain in place for the rest of the year. In addition, we also assume that uncertainty will fade during the first half of 2021 and, while some government support measures from the acute phase will be ended, both monetary and fiscal policy will remain accommodative throughout the forecast horizon.

Sweden

The decline in GDP in the second quarter was historic but data suggests an improvement had already begun over the summer. However, the recovery will be slow due to cautious households and firms and high uncertainty. GDP is expected to decline by 5 per cent this year and increase by around 3 per cent in 2021 and 2022.

The Riksbank's repo rate is expected to remain at zero per cent while asset purchases continue. Fiscal policy is expected to stimulate the economy throughout the forecast period.

The housing market has been surprisingly resilient during the pandemic. Continued low interest rates, the absence of new credit restrictions and tax changes and a strong need for housing in a growing population suggest that house prices should continue to rise slightly during the autumn and in 2021 and 2022.

Baltics

The Baltic countries suffered a milder contraction than the rest of the euro area in the second quarter, and they seem to be recovering quickly. Given this and a very rapid recovery in household consumption, economies are expected to recover as the lockdowns ended and economic activity gradually returns to normal. Consumer confidence and retail trade have rebounded quickly, and consumption leads the way in recovery, while exports and investments are expected to lag. Supressed demand across the world will hurt manufacturing, export, and investment.

Sensitivity

2022.	but data suggests an improvement had already begun over the summer. However, the recovery will be slow due to cautious households and firms and high uncertainty. GDP is expected to decline by 5 per cent this year and increase by around 3 per cent in 2021 and		Supressed demand across the world will hurt manufacturing, export, and investment.	The impact on the labour market has been smaller than expected. The unemployment rate has increased only mildly and is expected to return to a downward path
people are unemployed.	In the labour market, the turnaround will be delayed until the beginning of next year, and unemployment will remain stubbornly high. We expect unemployment to continue to rise during the autumn and reach 10 per cent during the winter, implying that 170,000 more		will be sluggish this year but pick up again in 2021. decrease in demand and the low global oil price.	once economic recovery gathers speed. Wage growth Inflation will be very subdued in 2020, due to both a Monetary and fiscal policies remain very expansive.
Sensitivity	Set out below are the credit impairment provisions as at 30 September 2020 that would result from the downside			and upside scenarios, which are considered reasonably possible, being assigned probabilities of 100 per cent.
		Credit impairment provisions resulting	Difference from the recognised probability weighted credit impairment
Business area	Scenario	from the scenario	provisions, %
Swedish Banking	Downside scenario	2 502	22%
	Upside scenario	1 851	-10%
Baltic Banking	Downside scenario	1 048	25%
	Upside scenario	722	-14%
LC&I	Downside scenario	8 697	23%
	Upside scenario	5 640	-20%
Group1)	Downside scenario Upside scenario	12 261 8 227	23% -18%

Note 10 Loans

Note 10 Loans
			Non credit-impaired					Credit impaired
30 Sep 2020		Stage 1 12 month ECL2)			Stage 2 Lifetime ECL2)			Stage 3 Lifetime ECL2)
		Credit			Credit			Credit
Group SEKm	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Total
Loans to the public at amortised cost Private customers	1 031 434	143	1 031 291	45 895	342	45 553	2 311	517	1 794	1 078 638
Private mortgage	894 789	52	894 737	37 096	185	36 911	1 668	301	1 367	933 015
Tenant owner associations Private other	93 074 43 571	8 83	93 066 43 488	3 054 5 745	6 151	3 048 5 594	137 506	5 211	132 295	96 246 49 377
Corporate customers	466 584	708	465 876	74 562	1 979	72 583	10 218	5 215	5 003	543 462
Agriculture, forestry, fishing Manufacturing	57 567 33 470	23 99	57 544 33 371	8 161 7 280	86 218	8 075 7 062	179 377	29 139	150 238	65 769 40 671
Public sector and utilities Construction	23 757 14 824	32 31	23 725 14 793	1 064 5 256	21 161	1 043 5 095	110 404	45 44	65 360	24 833 20 248
Retail Transportation	22 142 12 214	64 10	22 078 12 204	7 774 2 387	325 46	7 449 2 341	590 30	250 7	340 23	29 867 14 568
Shipping and offshore	7 521	28	7 493	4 827	452	4 375	6 940	4 204	2 736	14 604
Hotels and restaurants Information and communication	5 646 8 842	9 18	5 637 8 824	3 805 3 084	59 52	3 746 3 032	357 17	49 4	308 13	9 691 11 869
Finance and insurance Property management, including	17 443 224 636	65 269	17 378 224 367	400 25 052	3 397	397 24 655	21 635	8 172	13 463	17 788 249 485
Residential properties Commercial	64 474 92 582	67 124	64 407 92 458	8 367 8 840	97 129	8 270 8 711	88 465	20 135	68 330	72 745 101 499
Industrial and Warehouse	43 483	50	43 433	2 764	21	2 743	59	9	50	46 226
Other Professional services	24 097 20 031	28 44	24 069 19 987	5 081 3 699	150 114	4 931 3 585	23 421	8 226	15 195	29 015 23 767
Other corporate lending	18 491	16	18 475	1 773	45	1 728	137	38	99	20 302
Loans to the public at fair value through profit or loss	0	0	0	0	0	0	0	0	0	120
Loans to the public excluding the Swedish National Debt Office and repurchase agreements	1 498 018	851	1 497 167	120 457	2 321	118 136	12 529	5 732	6 797	1 622 220
Swedish National Debt Office Repurchase agreements 1)	2	0	2	0	0	0	0	0	0	2
Loans to the public	0 1 498 020	0 851	0 1 497 169	0 120 457	0 2 321	0 118 136	0 12 529	0 5 732	0 6 797	61 764 1 683 986
Banks and other credit institutions Repurchase agreements 1)	41 946 0	31 0	41 915 0	67 0	1 0	66 0	0 0	0 0	0 0	41 981 8 858
Loans to credit institutions	41 946	31	41 915	67	1	66	0	0	0	50 839
Loans to the public and credit institutions 1) At fair value through profit or loss	1 539 966	882	1 539 084	120 524	2 322	118 202	12 529	5 732	6 797	1 734 825
2) ECL - Expected credit losses			Non credit-impaired					Credit impaired
31 Dec 2019		Stage 1 12 month ECL2)			Stage 2 Lifetime ECL2)			Stage 3 Lifetime ECL2)
Group		Credit			Credit			Credit
SEKm	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Total
Loans to the public at amortised cost Private customers	1 002 000	72	1 001 928	49 132	255	48 877	2 196	479	1 717	1 052 522
Private mortgage	864 774	26	864 748	38 657	159	38 498	1 661	301	1 360	904 606
Tenant owner associations Private other	95 372 41 854	6 40	95 366 41 814	4 131 6 344	12 84	4 119 6 260	126 409	4 174	122 235	99 607 48 309
Corporate customers	490 368	407	489 961	57 057	1 092	55 965	11 397	4 374	7 023	552 949
Agriculture, forestry, fishing Manufacturing	56 898 38 438	14 91	56 884 38 347	8 304 3 794	89 63	8 215 3 731	199 1 186	38 808	161 378	65 260 42 456
Public sector and utilities Construction	21 901 15 089	17 13	21 884 15 076	850 3 929	11 55	839 3 874	64 511	14 186	50 325	22 773 19 275
Retail Transportation	26 241 13 022	28 8	26 213 13 014	5 714 2 174	236 17	5 478 2 157	460 32	225 6	235 26	31 926 15 197
	10 483 8 208	28 6	10 455 8 202	3 982 1 315	203 27	3 779 1 288	6 837 103	2 596 21	4 241 82	18 475 9 572
Shipping and offshore	11 002	18	10 984	1 583	61	1 522	9	2	7	12 513
Hotels and restaurants Information and communication	16 300 233 217	10 144	16 290 233 073	643 20 515	2 244	641 20 271	12 1 454	8 239	4 1 215	16 935 254 559
Finance and insurance Property management, including			71 775
Residential properties	71 810	35		7 706	100	7 606	145	49	96	79 477
Commercial	93 108	61	93 047	5 401	64	5 337	1 137	147	990	99 374

1) At fair value through profit or loss 2) ECL - Expected credit losses 31 Dec 2019 Group SEKm	Gross carrying amount	Stage 1 12 month ECL2) Credit	Non credit-impaired		Stage 2 Lifetime ECL2)			Credit impaired Stage 3 Lifetime ECL2)
Information and communication	11 002	18	10 984	1 583	61	1 522	9	2	7	12 513
Finance and insurance	16 300	10	16 290	643	2	641	12	8	4	16 935
Property management, including	233 217	144	233 073	20 515	244	20 271	1 454	239	1 215	254 559
Residential properties	71 810	35	71 775	7 706	100	7 606	145	49	96	79 477
Commercial	93 108	61	93 047	5 401	64	5 337	1 137	147	990	99 374
Industrial and Warehouse	43 708	35	43 673	3 367	28	3 339	96	9	87	47 099
Other	24 591	13	24 578	4 041	52	3 989	76	34	42	28 609
Professional services	21 621	20	21 601	2 895	55	2 840	325	172	153	24 594
Other corporate lending	17 948	10	17 938	1 359	29	1 330	205	59	146	19 414
Loans to the public at fair value through profit or loss	0	0	0	0	0	0	0	0	0	154
Loans to the public excluding the Swedish National Debt Office and repurchase agreements	1 492 368	479	1 491 889	106 189	1 347	104 842	13 593	4 853	8 740	1 605 625
Swedish National Debt Office	4	0	4	0	0	0	0	0	0	4
Repurchase agreements 1)	0	0	0	0	0	0	0	0	0	46 667
Loans to the public	1 492 372	479	1 491 893	106 189	1 347	104 842	13 593	4 853	8 740	1 652 296
Banks and other credit institutions Repurchase agreements 1)	45 373	4	45 369	75	1	74	0	0	0	45 443
	0	0	0	0	0	0	0	0	0	9
Loans to credit institutions	45 373	4	45 369	75	1	74	0	0	0	45 452
Loans to the public and credit institutions	1 537 745	483	1 537 262	106 264	1 348	104 916	13 593	4 853	8 740	1 697 748
1) At fair value through profit or loss 2) ECL - Expected credit losses

			Non credit-impaired					Credit impaired
30 Sep 2019		Stage 1 12 month ECL2)			Stage 2 Lifetime ECL2)			Stage 3 Lifetime ECL2)
		Credit			Credit			Credit
Group SEKm	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Gross carrying amount	impairment provision	Net	Total
Loans to the public at amortised cost Private customers	1 001 020	82	1 000 938	49 396	268	49 128	2 342	485	1 857	1 051 923
Private mortgage	860 600	32	860 568	39 472	171	39 301	1 823	306	1 517	901 386
Tenant owner associations Private other	98 666 41 754	6 44	98 660 41 710	3 859 6 065	15 82	3 844 5 983	119 400	6 173	113 227	102 617 47 920
Corporate customers	498 956	436	498 520	57 230	1 111	56 119	10 336	3 881	6 455	561 094
Agriculture, forestry, fishing Manufacturing	57 339 38 991	16 96	57 323 38 895	9 083 4 124	93 60	8 990 4 064	179 1 373	29 635	150 738	66 463 43 697
Public sector and utilities	20 474	15	20 459	1 007	12	995	60	13	47	21 501
Construction Retail	15 822 26 581	16 35	15 806 26 546	3 939 5 825	79 152	3 860 5 673	398 723	36 528	362 195	20 028 32 414
Transportation	12 992	7	12 985	2 243	22	2 221	33	6	27	15 233
Shipping and offshore Hotels and restaurants	10 767 7 203	27 6	10 740 7 197	5 683 1 400	343 34	5 340 1 366	5 909 92	2 054 20	3 855 72	19 935 8 635
Information and communication	13 124	22	13 102	1 181	26	1 155	22	4	18	14 275
Finance and insurance Property management, including	14 343 238 856	9 151	14 334 238 705	495 17 577	2 192	493 17 385	13 839	9 288	4 551	14 831 256 641
Residential properties Commercial	71 355 97 291	38 66	71 317 97 225	6 979 4 828	73 45	6 906 4 783	150 521	88 164	62 357	78 285 102 365
Industrial and Warehouse	44 569	32	44 537	2 710	20	2 690	90	15	75	47 302
Other Professional services	25 641 23 176	15 23	25 626 23 153	3 060 3 262	54 70	3 006 3 192	78 400	21 179	57 221	28 689 26 566
Other corporate lending	19 288	13	19 275	1 411	26	1 385	295	80	215	20 875
Loans to the public at fair value through profit or loss	0	0	0	0	0	0	0	0	0	114
Loans to the public excluding the Swedish National Debt Office and repurchase agreements	1 499 976	518	1 499 458	106 626	1 379	105 247	12 678	4 366	8 312	1 613 131
Swedish National Debt Office Repurchase agreements 1)	2 004 0	0 0	2 004 0	0 0	0 0	0 0	0 0	0 0	0 0	2 004 52 888
Loans to the public	1 501 980	518	1 501 462	106 626	1 379	105 247	12 678	4 366	8 312	1 668 023
Banks and other credit institutions Repurchase agreements 1)	32 881	7	32 874	52	0	52	0	0	0	32 926
Loans to credit institutions	0 32 881	0 7	0 32 874	0 52	0 0	0 52	0 0	0 0	0 0	7 055 39 981
Loans to the public and credit institutions 1) At fair value through profit or loss	1 534 861	525	1 534 336	106 678	1 379	105 299	12 678	4 366	8 312	1 708 004
2) ECL - Expected credit losses
				30 Sep	31 Dec		30 Sep
Ratios				2020	2019		2019
Share of Stage 3 loans, gross, %
				0.75	0.82		0.77
Share of Stage 3 loans, net, %				0.41	0.53		0.50
Credit impairment provision ratio Stage 1 loans				0.06	0.03		0.03
Credit impairment provision ratio Stage 2 loans				1.93	1.27		1.29
Credit impairment provision ratio Stage 3 loans				45.75	35.70		34.44
				0.53	0.40		0.38

Ratios

Note 11 Credit impairment provisions

Reconciliation of credit impairment provisions for loans

Note 11 Credit impairment provisions Reconciliation of credit impairment provisions for loans
The table below provides a reconciliation of credit impairment provisions for loans to the public and credit institutions at amortised cost.
Loans to the public and credit institutions	Non Credit-Impaired		Credit-Impaired
Group			Stage 31)
SEKm	Stage 1	Stage 2		Total
Carrying amount before provisions
Opening balance as of 1 January 2020	1 537 745	106 264	13 593	1 657 602
Closing balance as of 30 September 2020	1 539 966	120 524	12 529	1 673 019
Credit impairment provisions
Opening balance as of 1 January 2020	483	1 348	4 853	6 684
Movements affecting Credit impairment line
New and derecognised financial assets, net	149	29	-755	-577
Changes in risk factors (EAD, PD, LGD)	107	63	20	190
Changes in macroeconomic scenarios	172	88	-1	259
Changes due to expert credit judgement (individual assessments and
manual adjustments)	253	364	1 517	2 134
Stage transfers	-265	488	328	551
from 1 to 2	-278	621	0	343
from 1 to 3	-2	0	108	106
from 2 to 1	15	-85	0	-70
from 2 to 3	0	-54	286	232
from 3 to 2	0	6	-32	-26
from 3 to 1	0	0	-34	-34
Other	0	0	-131	-131
Total movements affecting Credit impairment line	416	1 032	978	2 426
Movements recognised outside Credit impairment line
Interest	0	0	131	131
Change in exchange rates	-17	-58	-230	-305
Closing balance as of 30 September 2020	882	2 322	5 732	8 936
Carrying amount
Opening balance as of 1 January 2020	1 537 262	104 916	8 740	1 650 918
	1 539 084
Closing balance as of 30 September 2020		118 202	6 797	1 664 083

Loans to the public and credit institutions Credit-Impaired

Loans to the public and credit institutions	Non Credit-Impaired		Credit-Impaired
Group			Stage 31)
SEKm	Stage 1	Stage 2		Total
Carrying amount before provisions Opening balance as of 1 January 2019	1 510 787	107 664	11 239	1 629 690
Closing balance as of 30 September 2019	1 534 861	106 678	12 678	1 654 217
Credit impairment provisions
Opening balance as of 1 January 2019	492	1 737	3 797	6 026
Movements affecting Credit impairment line
New and derecognised financial assets, net	55	-218	-412	-575
Changes in risk factors (EAD, PD, LGD) Changes in macroeconomic scenarios	-27 40	-444 90	-11 -6	-482 124
Changes due to expert credit judgement (individual assessments and
manual adjustments)	0	0	-17	-17
Stage transfers	-46	159	802	915
from 1 to 2	-75	295	0	220
from 1 to 3	-4	0	117	113
from 2 to 1	33	-107	0	-74
from 2 to 3 from 3 to 2	0 0	-47 18	755 -64	708 -46
from 3 to 1	0	0	-6	-6
Other	1	1	-109	-107
Total movements affecting Credit impairment line	23	-412	247	-142
Movements recognised outside Credit impairment line
Disposal of subsidiary	-3	-5	-3	-11
Interest	0	0	109	109
Change in exchange rates	13	59	216	288
Closing balance as of 30 September 2019	525	1 379	4 366	6 270
Carrying amount
	1 510 295	105 927 105 299	7 442 8 312	1 623 664
Opening balance as of 1 January 2019 Closing balance as of 30 September 2019	1 534 336			1 647 947

Loan commitments and financial guarantees

Loan commitments and financial guarantees The table below provides a reconciliation of credit impairment provisions for loan commitments and financial guarantees.
	Non Credit-Impaired		Credit-Impaired
			Stage 31)
SEKm Nominal amount	Stage 1	Stage 2		Total
Opening balance as of 1 January 2020	322 384	11 325	1 248	334 957
Closing balance as of 30 September 2020	354 348	21 848	1 155	377 351
Credit impairment provisions
Opening balance as of 1 January 2020	113	144	326	583
Movements affecting Credit impairment line
New and derecognosed financial assets, net	49	23	-3	69
Changes in risk factors (EAD, PD, LGD)	35	86	0	121
Changes in macroeconomic scenarios	52	6	0	58
Changes due to expert credit judgement (individual assessments and	79	109	-48	140
manual adjustments)
Stage transfers	-71	106	77	112
from stage 1 to stage 2	-72	121	0	49
from stage 1 to stage 3	-1 2	0 -5	13 0	12 -3
from stage 2 to stage 1	0	-10	65	55
from stage 2 to stage 3 from stage 3 to stage 2	0	0	-1	-1
from stage 3 to stage 1	0	0	0	0
Other	0	0	0	0
Total movements affecting Credit impairment line	144	330	26	500
Movements recognised outside Credit impairment line
Change in exchange rates	-6	-8	-18	-32
Closing balance as of 30 September 2020	251	466	334	1 051
1) Including purchased or originated
	Non Credit-Impaired		Credit-Impaired
			Stage 31)
SEKm Nominal amount	Stage 1	Stage 2		Total
Opening balance as of 1 January 2019	312 311	9 969	804	323 084
Closing balance as of 30 September 2019	326 379	9 737	1 019	337 135
Credit impairment provisions
Opening balance as of 1 January 2019	94	208	105	407
Movements affecting Credit impairment line
New and derecognosed financial assets, net	15 -10	9 -78	-6 -19	18 -107
Changes in risk factors (EAD, PD, LGD)	17	14	0	31
Changes in macroeconomic scenarios Changes due to expert credit judgement (individual assessments and
manual adjustments)	0	0	156	156
Stage transfers	-3	-19	100	78
from 1 to 2	-6	21	0	15
from 1 to 3	0	0	26	26
from 2 to 1	3	-10	0	-7
from 2 to 3	0	-30	74	44
Other	0	1	-4	-3
Total movements affecting Credit impairment line	19	-73	227	173
Movements recognised outside Credit impairment line Change in exchange rates	5	10	18	33
Closing balance as of 30 September 2019	118	145	350	613

Movements recognised outside Credit impairment line
Changes due to expert credit judgement (individual assessments and

Note 12 Credit risk exposures

Note 12 Credit risk exposures
Group	30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
Assets
Cash and balances with central banks	388 491	195 286	99	212 168	83
Interest-bearing securities	203 161	194 461	4	240 351	-15
Loans to credit institutions	50 839	45 452	12	39 981	27
Loans to the public Derivatives	1 683 986 54 218	1 652 296 44 424	2 22	1 668 023 60 828	1 -11
Other financial assets	17 266	8 804	96	28 387	-39
Total	2 397 961	2 140 723	12	2 249 738	7
Contingent liabilities and commitments
Guarantees	51 461	52 008	-1	51 513	0
Loan commitments	325 890	287 413	13	289 844	12
Total	377 351	339 421	11	341 357	11
Total credit risk exposures	2 775 312	2 480 144	12	2 591 095	7
Note 13 Intangible assets
Group	30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
With indefinite useful life
Goodwill	13 821	13 709	1	13 990	-1
Brand name	92	94	-2	94	-2
Total	13 913	13 803	1	14 084	-1
With finite useful life
Customer base	305	336	-9	348	-12
Internally developed software	3 931	3 350	17	3 141	25
Other	333	375	-11	354	-6
Total	4 569	4 061	13	3 843	19

Note 13 Intangible assets

Contingent liabilities and commitments
Note 13 Intangible assets With indefinite useful life Goodwill Brand name Total With finite useful life	13 821 92 13 913	13 709 94 13 803	1 -2 1	13 990 94 14 084	-1 -2 -1
Customer base	305	336	-9	348	-12
Internally developed software	3 931	3 350	17	3 141	25
Other	333	375	-11	354	-6
Total	4 569	4 061	13	3 843	19
Total intangible assets	18 482	17 864	3	17 927	3
At 30 September 2020 there was no indication of an	development, a simplified test of the carrying amount of
impairment of intangible assets. Due to Covid-19 and continued uncertainty about the future economic Note 14 Amounts owed to credit institutions Group	goodwill has been performed during the year. There was no need for an impairment. 30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
Amounts owed to credit institutions
Central banks	84 735	6 306		16 020
Banks	63 484	57 878	10	76 097	-17
Other credit institutions	5 400	5 498	-2	4 909	10
Repurchase agreements - banks Repurchase agreements - other credit institutions	7 036 5 582	4 0		3 258 2 967	88

Note 14 Amounts owed to credit institutions

With finite useful life
Other	333	375	-11	354	-6
At 30 September 2020 there was no indication of an impairment of intangible assets. Due to Covid-19 and continued uncertainty about the future economic	goodwill has been performed during the year. There was no need for an impairment.			development, a simplified test of the carrying amount of
Note 14 Amounts owed to credit institutions
SEKm	2020	2019	%	2019	%
Amounts owed to credit institutions
Central banks	84 735	6 306		16 020
Banks	63 484	57 878	10	76 097	-17
Other credit institutions	5 400	5 498	-2	4 909	10
Repurchase agreements - banks	7 036	4		3 258
Repurchase agreements - other credit institutions	5 582	0		2 967	88

Note 15 Deposits and borrowings from the public

Note 15 Deposits and borrowings from the public
Group	30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
Deposits from the public
Private customers	577 460	531 139	9	526 589	10
Corporate customers	554 507	422 527	31	430 842	29
Deposits from the public excluding the Swedish National Debt Office			19
and repurchase agreements	1 131 967	953 666		957 431	18
Swedish National Debt Office	50	328	-85	341	-85
Repurchase agreements - Swedish National Debt Office	0	1	-86	1	-86
Repurchase agreements - public	23 904	18		16 578	44
Deposits and borrowings from the public	1 155 921	954 013	21	974 351	19
Note 16 Debt securities in issue, senior non-preferred liabilities and
subordinated liabilities
Group SEKm	30 Sep 2020	31 Dec 2019	%	30 Sep 2019	%
Commercial papers	158 302	128 772	23	164 063	-4
Covered bonds Senior unsecured bonds	514 109 136 129	589 627 128 445	-13 6	598 278 146 515	-14 -7
Structured retail bonds	6 436	8 910	-28	9 745	-34
Total debt securities in issue	814 976	855 754	-5	918 601	-11
Senior non-preferred liabilities	10 878	10 805	1	0
Subordinated liabilities	24 924	31 934	-22	33 241	-25
Total debt securities in issue, senior non-preferred liabilities and subordinated
liabilities	850 778	898 493	-5	951 842	-11
	Jan-Sep	Full-year		Jan-Sep

Note 16 Debt securities in issue, senior non-preferred liabilities and subordinated liabilities

Deposits from the public
Deposits from the public excluding the Swedish National Debt Office
subordinated liabilities
Covered bonds	514 109	589 627	-13	598 278	-14
Senior unsecured bonds	136 129	128 445	6	146 515	-7
Structured retail bonds Total debt securities in issue	6 436 814 976	8 910 855 754	-28 -5	9 745 918 601	-34 -11
Senior non-preferred liabilities	10 878	10 805	1	0
Subordinated liabilities	24 924	31 934	-22	33 241	-25
Total debt securities in issue, senior non-preferred liabilities and subordinated liabilities	850 778	898 493	-5	951 842	-11
	Jan-Sep	Full-year		Jan-Sep
Turnover during the period	2020	2019	%	2019	%
Opening balance	898 493	838 544	7	838 544	7
Issued	403 528	631 819	-36	535 391	-25
Repurchased	-49 889	-21 017		-13 861
Repaid	-405 786	-561 777	-28	-441 770	-8
Interest, change in fair value and fair value of hedged item in fair value hedge accounting	8 070	462		6 035	34
Changes in exchange rates	-3 638	10 462		27 503

Note 16 Debt securities in issue, senior non-preferred liabilities and
subordinated liabilities
Total debt securities in issue, senior non-preferred liabilities and subordinated
					Jan-Sep	Full-year		Jan-Sep
Turnover during the period					2020	2019	%	2019	%
Opening balance					898 493	838 544	7	838 544	7
Issued					403 528	631 819	-36	535 391	-25
Repurchased					-49 889	-21 017		-13 861
Repaid					-405 786	-561 777	-28	-441 770	-8
Interest, change in fair value and fair value of hedged item in fair value hedge accounting					8 070	462		6 035	34
Changes in exchange rates					-3 638	10 462		27 503
Closing balance					850 778	898 493	-5	951 842	-11
Note 17 Derivatives
		Nominal amount
		Remaining contractual maturity		Nominal amount		Positive fair value		Negative fair value
Group				30 Sep	31 Dec	30 Sep	31 Dec	30 Sep	31 Dec
SEKm	< 1 yr.	1-5 yrs.	> 5 yrs.	2020	2019	2020	2019	2020	2019
Derivatives in hedge accounting	228 473	724 614	62 205	1 015 292	1 011 702	16 793	13 905	3 067	1 898
Fair value hedges, interest rate swaps	122 886	395 739	46 109	564 734	608 694	16 512	13 013	55	534
Portfolio fair value hedges, interest rate swaps	105 165	328 032	8 615	441 812	393 728	64	702	2 986	1 331
	422	843	7 481	8 746	9 280	217	190	25	33
Cash flow hedges, foreign currency basis swaps		7 267 611	4 632 779	18 294 443	16 051 211	132 440	102 832	135 697	113 311
Non-hedging derivatives	6 394 053					149 233	116 738	138 764	115 209
Gross amount	6 622 526	7 992 225	4 694 984	19 309 735	17 062 913
Offset amount	-4 534 226	-6 198 651	-4 151 047	-14 883 924	-12 057 460	-95 015	-72 314	-97 714	-74 232

Note 17 Derivatives

		Nominal amount
		Remaining contractual maturity		Nominal amount		Positive fair value		Negative fair value
Group				30 Sep	31 Dec	30 Sep	31 Dec	30 Sep	31 Dec
SEKm	$<$ 1 yr.	$1-5$ yrs.	$> 5$ yrs.	2020	2019	2020	2019	2020	2019
Derivatives in hedge accounting	228 473	724 614	62 205	1 0 1 5 2 9 2	1011702	16793	13905	3 0 6 7	1898
Fair value hedges, interest rate swaps	122 886	395 739	46 109	564 734	608 694	16 5 12	13013	55	534
Portfolio fair value hedges, interest rate swaps	105 165	328 032	8615	441812	393 728	64	702	2986	331
Cash flow hedges, foreign currency basis swaps	422	843	7481	8746	9 2 8 0	217	190	25	33
Non-hedging derivatives	6394053	7 267 611	4632779	18 294 443	16 051 211	132 440	102832	135 697	113 311
Gross amount	6622526	7992225	4 694 984	19 309 735	17 062 913	149 233	116 738	138 764	115 209
Offset amount	-4 534 226	$-6$ 198 651	$-4$ 151 047	-14 883 924	$-12057460$	$-95015$	$-72.314$	$-97714$	$-74232$
Total	2088300	1793574	543 937	4 4 2 5 8 1 1	5 005 453	54 218	44 4 24	41 050	40 977

Note 18 Fair value of financial instruments

Note 18 Fair value of financial instruments
		30 Sep 2020			31 Dec 2019
Group	Fair	Carrying		Fair	Carrying
SEKm	value	amount	Difference	value	amount	Difference
Assets
Financial assets
Cash and balances with central banks	388 491	388 491	0	195 286	195 286	0
Treasury bills and other bills eligible for refinancing with central banks Loans to credit institutions	116 078 50 837	116 060 50 839	18 -2	137 119 45 452	137 094 45 452	25 0
Loans to the public	1 688 663	1 683 986	4 677	1 660 659	1 652 296	8 363
Value change of interest hedged items in portfolio hedge	2 409	2 409	0	271	271	0
Bonds and interest-bearing securities	87 102	87 101	1	57 369	57 367	2
Financial assets for which the customers bear the investment risk	240 129	240 129	0	224 893	224 893	0
Shares and participating interest	15 203	15 203	0	6 568	6 568	0
Derivatives	54 218	54 218	0	44 424	44 424	0
Other financial assets	20 683	20 683	0	8 804	8 804	0
Total	2 663 813	2 659 119	4 694	2 380 845	2 372 455	8 390
Investment in associates		7 127			6 679
Non-financial assets		29 504			29 094
Total		2 695 750			2 408 228
Liabilities
Financial liabilities
Amounts owed to credit institutions	166 237	166 237	0	69 569	69 686	-117
Deposits and borrowings from the public	1 155 911	1 155 921	-10	953 996	954 013	-17
Debt securities in issue	823 839	814 976	8 863	861 883	855 754	6 129
Financial liabilities for which the customers bear the investment risk	240 970	240 970	0	225 792	225 792	0
Senior non-preferred liabilities	10 878	10 878	0	10 805	10 805	0
Subordinated liabilities	28 224	24 924	3 300	31 730	31 934	-204
Derivatives	41 050	41 050	0	40 977	40 977	0
Short positions securities	25 460	25 460	0	34 345	34 345	0
Other financial liabilities Total	50 806 2 543 375	50 802 2 531 218	4 12 157	28 115 2 257 212	28 115 2 251 421	0 5 791
Non-financial liabilities		13 943			18 174
Total		2 545 161			2 269 595
The following tables present fair values of financial				Where the fair value is derived from a modelling
instruments recognised at fair value split between the				technique, the valuation is performed using mid prices.
three valuation hierarchy levels.				For any open net position, a bid/ask adjustment is applied to ensure that long positions are recognised at

The Group uses various methods to determine the fair value of financial instruments depending on the degree of observable market data in the valuation and activity in the market. An active market is considered a regulated or reliable marketplace where quoted prices are easily accessible, and which demonstrates regularity. Activity is continuously evaluated by analysing factors such as differences in bid and ask prices.

The methods are divided into three different levels: • Level 1: Unadjusted quoted price on an active market • Level 2: Adjusted quoted price or valuation model with valuation parameters derived from an active market • Level 3: Valuation model where significant valuation parameters are non-observable and based on internal assumptions.

When financial assets and financial liabilities in active markets have market risks that offset each other, an average of bid and ask prices is used as a basis to determine the fair value.

The Group has a continuous process that identifies financial instruments which indicate a high level of internal assumptions or low level of observable market data. The process determines how to make the calculation based on how the internal assumptions are expected to affect the valuation. In cases where internal assumptions have a significant impact on fair value, the financial instrument is reported in level 3. The process also includes an analysis based on the quality of valuation data and whether any types of financial instruments will be transferred between the various levels.

Transfers between fair value hierarchy levels are reflected as taking place at the end of each quarter. There were no transfers of financial instruments between valuation levels 1 and 2 during the quarter.

Financial instruments recognised at fair value

Group

Financial instruments recognised at fair value
Group
30 Sep 2020 SEKm	Level 1	Level 2	Level 3	Total
Assets
Treasury bills etc.	20 710	4 258	0	24 968
Loans to credit institutions	0	8 858	0	8 858
Loans to the public	0	61 884	0	61 884
Bonds and other interest-bearing securities	28 983	58 081	0	87 064
Financial assets for which the customers bear
the investment risk Shares and participating interests	240 129 14 040	0 0	0 1 163	240 129 15 203
Derivatives	64	54 154	0	54 218
Total	303 926	187 235	1 163	492 324
Liabilities
Amounts owed to credit institutions	0	12 618	0	12 618
Deposits and borrowings from the public	0	23 904	0	23 904
Debt securities in issue	0	8 263	0	8 263
Financial liabilities for which the customers bear
the investment risk	0	240 970	0	240 970
Derivatives	72	40 978	0	41 050
Short positions, securities	23 419	2 041	0	25 460
Total	23 491	328 774	0	352 265
Group 31 Dec 2019
SEKm	Level 1	Level 2	Level 3	Total
Assets
Treasury bills etc.	12 405	4 115	0	16 520
Loans to credit institutions	0	9	0	9
Loans to the public	0	46 821	0	46 821
Bonds and other interest-bearing securities Financial assets for which the customers bear	22 935	34 394	0	57 329
the investment risk	224 893	0	0	224 893
Shares and participating interests	4 714	0	1 854	6 568
Derivatives	12	44 412	0	44 424
Total	264 959	129 751	1 854	396 564
Liabilities
Amounts owed to credit institutions	0	4	0	4
Deposits and borrowings from the public	0	18	0	18
Debt securities in issue Financial liabilities for which the customers bear	0	10 785	0	10 785
the investment risk	0	225 792	0	225 792
Derivatives	16	40 961	0	40 977
Short positions, securities	31 864	2 481	0	34 345
Total	31 880	280 041	0	311 921
Level 3 primarily contains unlisted equity instruments,		shares are subject to selling restrictions for a period of
where the price is unobservable and the sensitivity in		up to 9 years and under certain conditions may have to
the value to changes in the unobservable parameter is		be returned. Liquid quotes are not available for these
linear in the model applied. To estimate the unobservable price different methods are applied		shares, therefore the fair value is established with significant elements of Swedbank's own internal

Level 3 primarily contains unlisted equity instruments, where the price is unobservable and the sensitivity in the value to changes in the unobservable parameter is linear in the model applied. To estimate the unobservable price different methods are applied depending on the type of available data. The primary method is based on executed transactions or quoted share price of similar equities. Other inputs to these methods are primarily prices, proxy prices, market indicators and company information.

The level 3 unlisted equity instruments include strategic investments. Swedbank's holdings in VISA Inc. C

shares are subject to selling restrictions for a period of up to 9 years and under certain conditions may have to be returned. Liquid quotes are not available for these shares, therefore the fair value is established with significant elements of Swedbank's own internal assumptions. During September Visa Inc converted half of the outstanding in Visa Inc C shares to Visa Inc A shares. The remaining Visa Inc C holdings are reduced and the fair value amounts to SEK 597m.

Financial instruments are transferred to or from level 3 depending on whether the internal assumptions have changed in significance to the valuation.

Changes in level 3		Assets
Group SEKm	Equity instruments		Total
January-September 2020 Opening balance 1 January 2020	1 854	0	1 854
Purchases	9	0	9
	-2	0
Sale of assets/ dividends received	-819	0	-2 -819
Conversion Visa Inc. shares	121	0
Gains and losses			121
of which changes in unrealised gains or losses for items held at closing day	-42	0	-42
Closing balance 30 September 2020	1 163	0	1 163
Changes in level 3		Assets
Group	Equity
SEKm	instruments	Derivatives	Total
January-September 2019
Opening balance 1 January 2019	1 264	2	1 266
Purchases	29	0	29
Sale of assets/ dividends received	-4	0	-4
Maturities	0	-1	-1
Settlements	-2	0	-2
Gains and losses	457	-1	456

Changes in level 3			Assets
January-September 2020
Purchases		9		0	9
Sale of assets/ dividends received		-2		0	-2
Conversion Visa Inc. shares		-819		0	-819
Gains and losses		121		0	121
of which changes in unrealised gains or losses for items held at closing day		-42		0	-42
Changes in level 3			Assets
Group		Equity
SEKm		instruments		Derivatives	Total
January-September 2019
Opening balance 1 January 2019		1 264		2	1 266
Purchases		29		0	29
Sale of assets/ dividends received		-4		0	-4
Maturities		0		-1	-1
Settlements		-2		0	-2
Gains and losses		457		-1	456
of which changes in unrealised gains or losses for items held at closing day		458		0	458
Closing balance 30 September 2019		1 744		0	1 744
Note 19 Assets pledged, contingent liabilities and commitments
Group	30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
Loan receivables1)	593 844	578 758	3	583 192	2
Financial assets pledged for insurance policy holders	235 633	220 589	7	209 565	12
Other assets pledged	117 585	52 720		56 713
Pledged collateral	947 062	852 067	11	849 470	11
Nominal amounts
Guarantees	51 461	52 008	-1	51 513	0
Other	184	27		292	-37
Contingent liabilities	51 645	52 035	-1	51 805	0

Note 19 Assets pledged, contingent liabilities and commitments

January-September 2019
Maturities 0 -1	-1
Settlements -2 0	-2
Note 19 Assets pledged, contingent liabilities and commitments
Financial assets pledged for insurance policy holders 235 633 220 589 7 209 565 Other assets pledged 117 585 52 720 56 713	12
Pledged collateral 947 062 852 067 11 849 470	11
Nominal amounts
Guarantees 51 461 52 008 -1 51 513	0
Other 184 27 292	-37
Contingent liabilities 51 645 52 035 -1 51 805	0
Nominal amounts
Loans granted not paid 258 248 223 108 16 226 856	14
Overdraft facilities granted but not utilised 67 642 64 305 5 62 988	7
Loan commitments 325 890 287 413 13 289 844	12
1) The pledge is defined as the borrower's nominal debt including accrued interest and refers to the loans of the total available collateral that are used as the pledge at each point in time.

Swedbank is cooperating with authorities in the United States who are conducting investigations into Swedbank's historic AML compliance and the Group's response thereto, as well as related issues involving the Group's anti-money laundering controls and certain individuals and entities who may at some time have

been customers of the Group. The timing of the completion of the investigations is still unknown and the outcome is still uncertain. At present, it is not possible to reliably estimate the amount of any potential settlement or fines, which could be material.

Note 20 Offsetting financial assets and liabilities

Note 20 Offsetting financial assets and liabilities
The table below present recognised financial
instruments that have been offset in the balance sheet						not qualify for offset. Such financial instruments relate to
						derivatives, repurchase and reverse repurchase
under IAS 32 and those that are subject to legally	agreements, securities borrowing and lending
enforceable master netting or similar agreements but do	transactions.
		Assets				Liabilities
Group	30 Sep		31 Dec		30 Sep	31 Dec
SEKm	2020		2019	%	2020	2019	%
Financial assets and liabilities, which have been offset or are subject to netting or
similar agreements
Gross amount	256 227		212 597	21	215 642	163 345	32
Offset amount	-132 630		-123 222	8	-135 329	-125 140	8
Net amounts presented in the balance sheet	123 597		89 375	38	80 313	38 205
Related amounts not offset in the balance sheet
Financial instruments, netting arrangements	30 022		15 338	96	30 022	15 338	96
Financial Instruments, collateral	59 414		46 961	27	33 800	3 264
Cash collateral Total amount not offset in the balance sheet	17 640 107 076		11 897 74 196	48 44	16 014 79 836	16 104 34 706	-1

				Note 21 Capital adequacy, consolidated situation
--	--	--	--	--------------------------------------------------	--

Note 21 Capital adequacy, consolidated situation Capital adequacy
SEKm	30 Sep 2020	31 Dec 2019	30 Sep 2019
Shareholders' equity according to the Group's balance sheet	150 564	138 608	133 745
Anticipated dividend6)	-14 065	-9 856	-7 634
Deconsolidation of insurance companies Value changes in own financial liabilities	-1 472 -84	-758 -90	-661 -83
Cash flow hedges	-5	-5	-9
Additional value adjustments 1) Goodwill	-605 -13 907	-454 -13 799	-638 -14 080
Deferred tax assets	-154	-108	-125
Intangible assets	-3 822	-3 433	-3 264
Net provisions for reported IRB credit exposures Shares deducted from CET1 capital	0 -32	0 -32	-12 -32
Common Equity Tier 1 capital	116 418	110 073	107 207
Additional Tier 1 capital Total Tier 1 capital	9 218 125 636	16 153 126 226	17 062 124 269
Tier 2 capital	16 714	15 328	15 887
Total own funds Minimum capital requirement for credit risks, standardised approach	142 350 3 860	141 554 3 614	140 156 3 641
Minimum capital requirement for credit risks, IRB	24 062	21 559	21 895
Minimum capital requirement for credit risk, default fund contribution	54	47	80
Minimum capital requirement for settlement risks Minimum capital requirement for market risks	0 1 626	0 1 308	0 1 305
Trading book	1 604	1 292	1 289
of which VaR and SVaR of which risks outside VaR and SVaR	1 151 453	1 021 271	965 324
FX risk other operations	22	16	16
Minimum capital requirement for credit value adjustment	438	378	387
Minimum capital requirement for operational risks Additional minimum capital requirement, Article 3 CRR 2)	5 716 1 507	5 481 2 451	5 481 2 650
Additional minimum capital requirement, Article 458 CRR 3)	18 059	17 101	17 083
Minimum capital requirement	55 322	51 939	52 522
Risk exposure amount credit risks, standardised approach Risk exposure amount credit risks, IRB	48 244 300 776	45 174 269 485	45 513 273 691
Risk exposure amount default fund contribution	681	584	1 000
Risk exposure amount settlement risks Risk exposure amount market risks	1 20 322	0 16 350	0 16 317
Risk exposure amount credit value adjustment	5 480	4 730	4 843
Risk exposure amount operational risks Additional risk exposure amount, Article 3 CRR 2)	71 454 18 840	68 514 30 635	68 514 33 120
Additional risk exposure amount, Article 458 CRR 3)	225 737	213 765	213 532
Risk exposure amount	691 535	649 237	656 530
Common Equity Tier 1 capital ratio, %	16.8	17.0	16.3
Tier 1 capital ratio, %	18.2	19.4	18.9
Total capital ratio, %	20.6	21.8	21.4
Capital buffer requirement4)	30 Sep	31 Dec	30 Sep
% CET1 capital requirement including buffer requirements	2020 10.0	2019 12.0	2019 12.0
of which minimum CET1 requirement	4.5	4.5	4.5
of which capital conservation buffer of which countercyclical capital buffer	2.5 0.0	2.5 2.0	2.5 2.0
of which systemic risk buffer	3.0	3.0	3.0
CET 1 capital available to meet buffer requirement5)	12.3	12.5	11.8
Leverage ratio	30 Sep	31 Dec	30 Sep
	2020	2019	2019
		126 226
Tier 1 Capital, SEKm Leverage ratio exposure, SEKm	125 636 2 636 884	2 353 631	124 269 2 429 497

2) To rectify for underestimation of default frequency in the model for corporate exposures, Swedbank has decided to hold more capital until the updated model has been approved by the Swedish FSA. The amount also includes planned implementation of Eba's Guideline on new default definition and increased safety margins. Additional risk exposure amount according to article 3 CRR per 31 December 2019 includes the mortgage floor effect for reclassification of mortgage offers of SEK 4.2bn. As of 31 March 2020 these are directly included in additional risk exposure amount according to article 458 CRR. As of 30 September 2020, Swedbank has updated the LGD-model which decreases the additional risk exposure amount according to article 3 CRR by SEK 16.3bn.

3) Additional risk exposure amount and minimum capital requirement following the changed application of the risk weight floor for Swedish mortgages according to decision from the SFSA.

4) Buffer requirement according to Swedish implementation of CRD IV.

5) CET1 capital ratio as reported, less minimum requirement of 4.5% (excluding buffer requirements) and less any CET1 items used to meet the Tier 1 and total capital requirements.

6) Expected dividend based on the annual profit for 2019 and 2020.

Capital requirements1)	30 Sep	31 Dec	30 Sep	31 Dec
SEKm / %	2020	2019	2020	2019
Capital requirement Pillar 1	93 357	100 766	13.5	15.5
			5.5	7.5
of which Buffer requirements 2)	38 034	48 827
Total capital requirement Pillar 2 3)	22 986	22 140	3.3	3.4
Total capital requirement Pillar 1 and 2	116 343	122 906	16.9	18.9
Own funds	142 350	141 554
1) Swedbank's calculation based on the SFSA's announced capital requirements, including Pillar 2 requirements.
2) Buffer requirements includes systemic risk buffer, capital conservation buffer and countercyclical capital buffer. 3) Systemic risk buffer as of 30 September 2020. The individual Pillar 2 charge items as of 31 December 2018, according to SFSA's SREP report of 30
September 2019, in relation to REA as of 30 September 2020.

1) Swedbank's calculation based on the SFSA's announced capital requirements, including Pillar 2 requirements. 2) Buffer requirements includes systemic risk buffer, capital conservation buffer and countercyclical capital buffer. 3) Systemic risk buffer as of 30 September 2020. The individual Pillar 2 charge items as of 31 December 2018, according to SFSA's SREP report of 30 September 2019, in relation to REA as of 30 September 2020.
The consolidated situation for Swedbank as of 30 September 2020 comprised the Swedbank Group with the exception of insurance companies. The EnterCard Group was included as well through the proportionate			periodic information according to Regulation (EU) No 575/2013 of the European Parliament and of the Council on supervisory requirements for credit institutions and Implementing Regulation (EU) No 1423/2013 of the European Commission can be found on Swedbank's
consolidation method. The note contains the information made public according to the Swedish Financial Supervisory Authority Regulation FFFS 2014:12, chap. 8. Additional		report/index.htm	website: https://www.swedbank.com/investor relations/financial-information-and-publications/risk
	Exposure		Average		Minimum capital
Swedbank consolidated situation Credit risk, IRB	value 30 Sep	31 Dec	risk weight, % 30 Sep	31 Dec	requirement 30 Sep	31 Dec
SEKm	2020	2019	2020	2019	2020	2019
Central government or central banks exposures Institutional exposures	521 322 60 638	362 380 53 466	1 19	1 18	516 922	402 788
Corporate exposures	542 874	544 080	36	31	15 712	13 546
Retail exposures	1 216 642	1 184 439	6	7	6 152	6 173
of which mortgage lending	1 121 609	1 070 279	4	5	3 968	3 928
of which other lending	95 033	114 160	29	25	2 184	2 245
Non credit obligation	13 458	12 581	71	65	760	650

30 Sep 2020		Risk exposure	Minimum capital
SEKm Credit risks, STD	Exposure amount 105 724	amount 48 244	requirement 3 860
Central government or central banks exposures	63	0	0
Regional governments or local authorities exposures	2 650	416	33
Public sector entities exposures	1 582	181	14
Multilateral development banks exposures	4 380	0	0
Institutional exposures	50 020	1 101	88
Corporate exposures	7 213	7 068	565
Retail exposures	20 448	14 748	1 183
Exposures secured by mortgages on immovable property Exposures in default	6 019 709	2 106 729	168 58
Exposures in the form of covered bonds	521	52	4
Exposures in the form of collective investment undertakings (CIUs)	4	4	0
Equity exposures	9 221	19 810	1 585
Other items	2 894	2 029	162
Credit risks, IRB	2 354 934	300 776	24 062
Central government or central banks exposures	521 322	6 446	516
Institutional exposures Corporate exposures	60 638 542 874	11 526 196 398	922 15 712
of which specialized lending in category 1	71	36	3
of which specialized lending in category 2	274	192	15
of which specialized lending in category 3	107	123	10
of which specialized lending in category 4	107	268	21
of which specialized lending in category 5	0	0	0
Retail exposures	1 216 642	76 902	6 152
of which mortgage lending	1 121 609	49 607	3 968
of which other lending Non-credit obligation	95 033 13 458	27 295 9 504	2 184 760
Credit risks, Default fund contribution	0	681	54
Settlement risks	0	1	0
Market risks	0	20 322	1 626
Trading book	0	20 048	1 604
of which VaR and SVaR	0	14 381	1 151
		0 5 667	453
of which risks outside VaR and SVaR	0	274 5 480	22 438
FX risk other operations			5 716
Credit value adjustment	22 868
Operational risks of which Standardised approach	0 0	71 454 71 454	5 716
Additional risk exposure amount, Article 3 CRR	0	18 840	1 507
Additional risk exposure amount, Article 458 CRR Total	0 2 483 526	225 737 691 535	18 059 55 322

31 Dec 2019		Risk exposure	Minimum capital
SEKm Credit risks, STD	Exposure amount	amount	requirement
Central government or central banks exposures	79 511 64	45 174 0	3 614 0
Regional governments or local authorities exposures	2 583	371	30
Public sector entities exposures	1 399	161	13
Multilateral development banks exposures	2 061	3	0
Institutional exposures	28 091	659	53
Corporate exposures	5 357	5 095	408
Retail exposures	19 575	14 101	1 128
Exposures secured by mortgages on immovable property	6 608	2 312	185
Exposures in default	736	749	60
Exposures in the form of covered bonds Exposures in the form of collective investment undertakings (CIUs)	564 6	56 6	4 0
Equity exposures	9 237	19 296	1 544
Other items	3 230	2 365	189
Credit risks, IRB	2 156 946	269 485	21 559
Central government or central banks exposures	362 380	5 021	402
Institutional exposures	53 466	9 855	788
Corporate exposures	544 080	169 325	13 546
of which specialized lending in category 1	50	29	2
of which specialized lending in category 2	284	240	19
of which specialized lending in category 3	141	162	13
of which specialized lending in category 4 of which specialized lending in category 5	116	289	23
Retail exposures	18 1 184 439	0 77 162	0 6 173
of which mortgage lending	1 070 279	49 094	3 928
of which other lending	114 160	28 068	2 245
Non-credit obligation	12 581	8 122	650
Credit risks, Default fund contribution	0	584	47
Settlement risks	0	0	0
Market risks	0	16 350	1 308
Trading book	0	16 150	1 292
of which VaR and SVaR of which risks outside VaR and SVaR	0	12 763	1 021
FX risk other operations	0 0	3 387 200	271 16
Credit value adjustment	19 004	4 730	378
Operational risks	0	68 514	5 481
of which Standardised approach	0	68 514	5 481
Additional risk exposure amount, Article 3 CRR	0	30 635	2 451
Additional risk exposure amount, Article 458 CRR	0	213 765	17 101
Total	2 255 461	649 237	51 939
Credit risks	for general interest rate risks, general and specific share price risks and foreign exchange risks in the trading
The Internal Ratings-Based Approach (IRB) is applied within the Swedish part of Swedbank's consolidated	book. The approval also covers operations in the Baltic countries with respect to general interest rate risks and

Credit risks

The Internal Ratings-Based Approach (IRB) is applied within the Swedish part of Swedbank's consolidated situation, including the branches in New York and Oslo but excluding PayEx, EnterCard and several small subsidiaries. IRB is also applied for the majority of Swedbank's exposure classes in the Baltic countries.

When Swedbank acts as a clearing member, the bank calculates an own funds requirement for its pre-funded, qualifying and non-qualifying central counterparty default fund contributions.

For exposures, excluding capital requirement for default fund contributions, where IRB-approach is not applied, the standardized approach is used.

Market risks

Under current regulations capital adequacy for market risks can be based on either the standardised approach or an internal Value at Risk model, which requires the approval of the SFSA. The parent company has received such approval and uses its internal VaR model for general interest rate risks, general and specific share price risks and foreign exchange risks in the trading book. The approval also covers operations in the Baltic countries with respect to general interest rate risks and foreign exchange risks in the trading book. Foreign exchange risks outside the trading book, i.e. in other operations, are mainly of structural and strategic nature and are less suited to a VaR model.

These risks are instead estimated according to the standardised approach, as per the Group's internal approach to managing these risks. Strategic foreign exchange risks mainly arise through risks associated with holdings in foreign operations.

Credit value adjustment

The risk of the credit value adjustment is estimated according to the standardised method.

Operational risk

Swedbank calculates operational risk using the standardised approach. The SFSA has stated that Swedbank meets the qualitative requirements to apply this method.

Note 22 Internal capital requirement

This note provides information on the internal capital assessment according to chapter 8, section 5 of the SFSA's regulation on prudential requirements and capital buffers (2014:12). The internal capital assessment is published in the interim report according to chapter 8, section 4 of the SFSA's regulation and general advice on annual reports from credit institutions and investment firms (2008:25).

A bank must identify, measure and manage the risks with which its activities are associated and have sufficient capital to cover these risks. The purpose of the Internal Capital Adequacy Assessment Process (ICAAP) is to ensure that the bank is sufficiently capitalised to cover its risks and to conduct and develop its business activities. Swedbank applies its own models and processes to evaluate its capital requirements for all relevant risks. The models that serve as a basis for the internal capital assessment evaluate the need for economic capital over a one-year horizon at a 99.9% confidence level for each type of risk. Diversification effects between various types of risks are not taken into account in the calculation of economic capital.

As a complement to the economic capital calculation, scenario-based simulations and stress tests are conducted at least once a year. The analyses provide an overview of the most important risks Swedbank is exposed to by quantifying their

Note 23 Risks and uncertainties

Swedbank's earnings are affected by changes in the global marketplace over which it has no control, including macroeconomic factors such as GDP, asset prices and unemployment as well as changes in interest rates, equity prices and exchange rates. The rapid spread of Covid-19 has had and will have further major consequences for the global economy and thus affect Swedbank in the future. The impact on society, private individuals, corporates and governments, could in some parts be long-lasting and severe. The repayment capability of our loan customers could be affected as unemployment increases and as a result of the changes in the corporate's business models.

For risks related to the ongoing investigations by the United States authorities related to the suspected money laundering issue arisen by media in 2019 it is referred to the Note 19 Assets pledged, contingent liabilities and commitments.

In addition to the observations reported on money laundering and terrorist financing, Swedbank has during the year identified areas that have led to

impact on the income statement and balance sheet as well as the capital base and risk-weighted assets. The purpose is to ensure efficient use of capital. The methodology serves as a basis of proactive risk and capital management.

As of 30 September 2020, the internal capital assessment for Swedbank's consolidated situation amounted to SEK 34.8bn (SEK 34.7bn as of 31 December 2019). The capital to meet the internal capital assessment, i.e. the capital base, amounted to SEK 142.4bn (SEK 141.6bn as of 31 December 2019) (see Note 21). Swedbank's internal capital assessment using its own models is not comparable with the estimated capital requirement that the SFSA releases quarterly and does not consider the SFSA risk-weight floor for Swedish mortgages.

The internally estimated capital requirement for the parent company is SEK 25.3bn (SEK 27.3bn as of 31 December 2019) and the capital base is SEK 115.1bn (SEK 122.5bn as of 31 December 2019) (see the parent company's note on capital adequacy).

In addition to what is stated in this interim report, risk management and capital adequacy according to the Basel 3 framework are described in more detail in Swedbank's annual report for 2019 as well as in Swedbank's yearly Risk and Capital Adequacy Report, available on www.swedbank.com.

unwanted compliance risks within the bank. These are related to internal governance as noted by supervisory authorities in their investigations of money laundering, and to the customer protection area. In both areas, work is ongoing within the bank to ensure that deficiencies identified are addressed adequately. The bank's Compliance function monitors the work.

The tax area is complex and leaves room for judgement. Practices and interpretations of applicable laws are often changed, sometimes retroactively. In the event that the tax authorities and, where appropriate, the tax courts decide on a different interpretation than what Swedbank initially made, then it could impact the Group's operations, results and financial position.

In addition to what is stated in this interim report, detailed descriptions are provided in Swedbank's 2019 Annual and sustainability report and in the annual disclosure in the Risk Management and Capital Adequacy report available at www.swedbank.com.

Effect on value of assets and liabilities in SEK and foreign currency, including derivatives if interest rates increase by 100bp, 30 Sep 2020 Group

Effect on value of assets and liabilities in SEK and foreign currency, including derivatives
if interest rates increase by 100bp, 30 Sep 2020 Group
SEKm	< 5 years	5-10 years	>10 years	Total
Swedbank,
the Group	-696	-680	-532	-1 908
of which SEK	-236	-1 334	217	-1 353
of which foreign currency	-460	654	-749	-555
Of which financial instruments at fair value
reported through profit or loss of which SEK	-3 530 716	3 822 -929	-625 203	-333 -10
of which foreign currency	-4 246	4 751	-828	-323
Note 24 Related-party transactions
During the period normal business transactions were executed between companies in the Group, including	associates	other related companies such as associates and joint ventures. Partly owned savings banks are important
Note 25 Swedbank's share
	30 Sep 2020	31 Dec 2019 %	30 Sep 2019	%
SWED A
Share price, SEK	140.74	139.45 1	141.70	-1
Number of outstanding ordinary shares	1 119 991 775	1 118 304 389 0	1 118 304 389	0
Market capitalisation, SEKm	157 628	155 948 1	158 464	-1
Number of outstanding shares	30 Sep 2020	31 Dec 2019	30 Sep 2019
Issued shares

Note 24 Related-party transactions

Note 25 Swedbank's share

Note 24 Related-party transactions
During the period normal business transactions were executed between companies in the Group, including	associates		other related companies such as associates and joint ventures. Partly owned savings banks are important
Note 25 Swedbank's share
SWED A
Number of outstanding ordinary shares	1 119 991 775	1 118 304 389	0 1 118 304 389	0
Market capitalisation, SEKm	157 628	155 948	1 158 464	-1
Number of outstanding shares	30 Sep 2020	31 Dec 2019	30 Sep 2019
Issued shares SWED A	1 132 005 722	1 132 005 722	1 132 005 722
Repurchased shares SWED A	-12 013 947	-13 701 333	-13 701 333

Note 24 Related-party transactions
During the period normal business transactions were executed between companies in the Group, including		associates	other related companies such as associates and joint ventures. Partly owned savings banks are important
Note 25 Swedbank's share
SWED A
Number of outstanding ordinary shares		1 119 991 775	1 118 304 389	0 1 118 304 389	0
Market capitalisation, SEKm		157 628	155 948	1 158 464	-1
		30 Sep	31 Dec	30 Sep
Number of outstanding shares		2020	2019	2019
Issued shares SWED A		1 132 005 722	1 132 005 722	1 132 005 722
Repurchased shares SWED A		-12 013 947	-13 701 333	-13 701 333
Number of outstanding shares on the closing day		1 119 991 775	1 118 304 389	1 118 304 389
Within Swedbank's share-based compensation programme, Swedbank AB has during 2020 transferred 1 687 386 shares at no cost to employees.
Earnings per share		Q3 2020	Q2 2020 2019	Q3 Jan-Sep	Jan-Sep 2020 2019
Average number of shares Average number of shares before dilution	1 119 991 714	1 119 924 076	1 118 302 842	1 119 629 504	1 117 971 681
Weighted average number of shares for potential ordinary shares that incur a dilutive effect due to share-based compensation programme	3 264 852	3 701 007	2 845 370	2 934 766	3 481 630
Average number of shares after dilution	1 123 256 566	1 123 625 083	1 121 148 212	1 122 564 270	1 121 453 311

SWED A
Issued shares
Repurchased shares
Within Swedbank's share-based compensation programme, Swedbank AB has during 2020 transferred 1 687 386 shares at no
cost to employees.
Earnings per share		Q3 2020	Q2 2020	Q3 2019	Jan-Sep 2020	Jan-Sep 2019
Average number of shares
Average number of shares before dilution	1 119 991 714	1 119 924 076	1 118 302 842		1 119 629 504	1 117 971 681
Weighted average number of shares for potential ordinary shares that incur a dilutive effect due to share-based compensation programme
	3 264 852	3 701 007	2 845 370		2 934 766	3 481 630
Average number of shares after dilution	1 123 256 566	1 123 625 083	1 121 148 212		1 122 564 270	1 121 453 311
Profit, SEKm
Profit for the period attributable to shareholders of Swedbank		5 261	4 845	4 663	8 419	15 269
Earnings for the purpose of calculating earnings per share		5 261	4 845	4 663	8 419	15 269
Earnings per share, SEK Earnings per share before dilution		4.70	4.33	4.17	7.52	13.66
Earnings per share after dilution		4.68	4.31	4.16	7.50	13.62
Swedbank – Interim report Q3 2020	54

Swedbank AB

Income statement, condensed

Q3 Q2 Q3 Jan-Sep Jan-Sep 2020 2020 % 2019 % 2020 2019 % 3 114 3 413 -9 3 113 0 9 920 9 380 1 384 1 561 -11 1 572 -12 4 564 4 637 -2 4 498 4 974 -10 4 685 -4 14 484 14 017 -637 -922 -31 -1 388 -54 -2 827 -4 345 -35 3 861 4 052 -5 3 297 17 11 657 9 672 21 2 930 2 664 10 3 214 -9 8 416 14 567 -42 1 919 1 816 6 2 574 -25 5 702 7 544 -24 -511 -545 -6 -972 -47 -1 560 -2 888 -46 1 408 1 271 11 1 602 -12 4 142 4 656 -11 439 1 431 -69 229 92 1 448 1 195 21 487 405 20 393 24 1 243 1 004 24 9 125 9 823 -7 8 735 4 26 906 31 094 -13 2 141 2 091 2 2 057 4 6 337 6 276 1 216 1 401 -13 1 891 -36 4 517 4 660 -3 1 164 1 212 -4 1 192 -2 3 612 3 560 0 0 0 4 000 0 4 521 4 704 -4 5 140 -12 18 466 14 496 27 4 604 5 119 -10 3 595 28 8 440 16 598 -49 0 0 -1 0 0 385 1 179 -67 183 3 503 525 4 219 3 940 7 3 413 24 4 937 16 073 -69 817 871 -6 788 4 1 752 2 456 -29 3 402 3 069 11 2 625 30 3 185 13 617 -77
Parent company SEKm Interest income on financial assets at amortised cost Other interest income Interest income Interest expense Net interest income Dividends received Commission income Commission expense Net commission income Net gains and losses on financial items Other income Total income Staff costs Other expenses Depreciation/amortisation and impairment of tangible and intangible fixed assets Administrative fine Total expenses Profit before impairment Impairment of financial assets Credit impairment Operating profit Tax expense Profit for the period
Swedbank AB Income statement, condensed
Statement of comprehensive income, condensed
	Parent company	Q3	Q2		Q3
Jan-Sep Jan-Sep		2020	2020	%	2019	%	2020	2019 %
SEKm		3 402	3 069	11	2 625	30	3 185	13 617 -77
Profit for the period reported via income statement
Total comprehensive income for the period 3 402 3 069 11 2 625 30 3 185 13 617 -77

Statement of comprehensive income, condensed

Parent company SEKm	Q 3 2020	Q2 2020	%	Q3 2019	%	Jan-Sep 2020	Jan-Sep 2019	%
Profit for the period reported via income statement	3402	3 0 6 9	11	2625	-30	3 1 8 5	13 617 -77
Total comprehensive income for the period	3402	3069	-11	2625	30	3 1 8 5	13 617 -77

Balance sheet, condensed

Balance sheet, condensed
Parent company	30 Sep	31 Dec		30 Sep
SEKm	2020	2019	%	2019	%
Assets
Cash and balance with central banks	275 699	107 596		134 437
				471 456	36
Loans to credit institutions	643 081	537 151	20
Loans to the public Interest-bearing securities	430 333 198 487	422 794 191 084	2 4	435 350 237 604	-1 -16
Shares and participating interests	79 983	71 632	12	69 133	16
Derivatives	59 588	48 332	23	66 515	-10
Other assets	47 884	43 321	11	51 429	-7
Total assets	1 735 055	1 421 910	22	1 465 924	18
Liabilities and equity
Amounts owed to credit institutions	268 188	161 454	66	124 913
Deposits and borrowings from the public	887 673	719 211	23	746 965	19
Debt securities in issue	297 558	263 181	13	316 432	-6
Derivatives	67 766	69 908	-3	78 334	-13
Other liabilities and provisions Senior non-preferred liabilities	70 647 10 878	61 275 10 805	15 1	66 372 0	6
Subordinated liabilities	24 924	31 934	-22	33 241	-25
Untaxed reserves	10 724	10 724	0	10 647	1
Equity	96 697	93 418	4	89 020	9
Total liabilities and equity	1 735 055	1 421 910	22	1 465 924	18
Pledged collateral	109 096	48 725		53 205
Other assets pledged	8 483	3 987		3 503
Contingent liabilities Commitments	353 630 319 999	498 891 258 148	-29 24	507 332 257 295	-30 24

Statement of changes in equity, condensed

Parent company

Statement of changes in equity, condensed
Parent company
SEKm
		Share
		premium	Statutory	Retained
	Share capital	reserve	reserve	earnings	Total
January-September 2020
Opening balance 1 January 2020	24 904	13 206	5 968	49 340	93 418
Share based payments to employees	0	0	0	95	95
Deferred tax related to share based payments to
employees	0	0	0	6	6
Current tax related to share based payments to
employees	0	0	0	-7	-7
Total comprehensive income for the period	0	0	0	3 185	3 185
Closing balance 30 September 2020	24 904	13 206	5 968	52 619	96 697
January-December 2019
Opening balance 1 January 2019	24 904	13 206	5 968	46 974	91 052
Dividend	0	0	0	-15 878	-15 878
Share based payments to employees	0	0	0	272	272
Deferred tax related to share based payments to
employees	0	0	0	-34	-34
Current tax related to share based payments to
employees	0	0	0	10	10
Total comprehensive income for the period	0	0	0	17 996	17 996
Closing balance 31 December 2019	24 904	13 206	5 968	49 340	93 418
January-September 2019
Opening balance 1 January 2019	24 904	13 206	5 968	46 974	91 052
Dividend	0	0	0	-15 878	-15 878
Share based payments to employees	0	0	0	247	247
Deferred tax related to share based payments to employees	0	0	0	-28	-28
Current tax related to share based payments to
employees	0	0	0	10
					10
Total comprehensive income for the period	0	0	0	13 617	13 617
Closing balance 30 September 2019	24 904	13 206	5 968	44 942	89 020
Cash flow statement, condensed
Parent company	Jan-Sep	Full-year	Jan-Sep
SEKm	2020	2019	2019
Cash flow from operating activities	125 446	78 503	60 822
Cash flow from investing activities	11 818	4 644	15 931
Cash flow from financing activities	30 839	-56 454	-23 219
Cash flow for the period	168 103	26 693	53 534
Cash and cash equivalents at beginning of period	107 596	80 903	80 903
Cash flow for the period	168 103	26 693	53 534
Cash and cash equivalents at end of period	275 699	107 596	134 437

Cash flow statement, condensed

Parent company SEKm	Jan-Sep 2020	Full-year 2019	Jan-Sep 2019
Cash flow from operating activities	125 446	78 503	60822
Cash flow from investing activities	11818	4644	15931
Cash flow from financing activities	30839	-56 454	$-23219$
Cash flow for the period	168 103	26 693	53 534
Cash and cash equivalents at beginning of period	107 596	80 903	80 903
Cash flow for the period	168 103	26 693	53 534
Cash and cash equivalents at end of period	275 699	107 596	134 437

Capital adequacy

Capital adequacy
Capital adequacy, Parent company SEKm				30 Sep 2020	31 Dec 2019	30 Sep 2019
Common Equity Tier 1 capital				89 317	90 305	87 909
Additional Tier 1 capital Tier 1 capital				9 218 98 535	16 153 106 458	17 062 104 971
Tier 2 capital				16 573	15 995	16 523
Total own funds				115 108	122 453	121 494
Minimum capital requirement				28 655	26 004	26 197
Risk exposure amount				358 186	325 056	327 461
Common Equity Tier 1 capital ratio, %				24.9	27.8	26.9
Tier 1 capital ratio, % Total capital ratio, %				27.5 32.1	32.8 37.7	32.0 37.1
Capital buffer requirement1) %				30 Sep 2020	31 Dec 2019	30 Sep 2019
CET1 capital requirement including buffer requirements				7.1	8.9	8.9
of which minimum CET1 requirement				4.5	4.5	4.5
of which capital conservation buffer of which countercyclical capital buffer				2.5 0.1	2.5 1.9	2.5 1.9
CET 1 capital available to meet buffer requirement 2)				20.4	23.3	22.4
Leverage ratio				30 Sep 2020	31 Dec 2019	30 Sep 2019
Tier 1 Capital, SEKm				98 535	106 458	104 971
Total exposure, SEKm				1 377 674	1 086 489	1 158 446
Leverage ratio, %				7.2	9.8	9.1
1) Buffer requirement according to Swedish implementation of CRD IV.
2) CET1 capital ratio as reported, less minimum requirement of 4.5% (excluding buffer requirements) and less any CET1 items used to meet the Tier 1 and total capital requirements.
Capital requirements1)	30 Sep	31 Dec	30 Sep	31 Dec
SEKm / %	2020 37 968	2019 40 307	2020 10.6	2019 12.4
	9 313	14 302	2.6	4.4
Capital requirement Pillar 1			1.5
of which Buffer requirements 2) Total capital requirement Pillar 2 3)	5 266	5 265		1.6
Total capital requirement Pillar 1 and 2 Own funds	43 234 115 108	45 572 122 453	12.1	14.0

Capital requirements 1)	30 Sep	31 Dec	30 Sep	31 Dec
SEKm/%	2020	2019	2020	2019
Capital requirement Pillar 1	37968	40 307	10.6	124
of which Buffer requirements 2)	9 3 1 3	14 302	2.6	4.4
Total capital requirement Pillar 2 3)	5 2 6 6	5 2 6 5	1.5	1.6
Total capital requirement Pillar 1 and 2	43 234	45 572	12.1	14.0
Own funds	115 108	122 453

30 Sep 2020		Risk exposure	Minimum capital
SEKm	Exposure amount	amount	requirement
Credit risks, STD Regional governments or local authorities exposures	1 030 022 86	86 096 17	6 888 1
Public sector entities exposures	881	157	13
Multilateral development banks exposures	4 339	0	0
Institutional exposures	949 172	5 508	441
Corporate exposures Retail exposures	5 289 289	5 196 216	416 17
Exposures secured by mortgages on immovable property	3 195	1 118	89
Equity exposures	66 742	73 884	5 911
Other items Credit risks, IRB	29 1 000 563	0 185 472	0 14 838
Central government or central banks exposures	398 482	4 491	359
Institutional exposures	63 285	12 157	973
Corporate exposures Retail exposures	437 958 96 635	146 084 18 872	11 687 1 510
of which mortgage lending	31 333	2 497	200
of which other lending	65 302	16 375	1 310
Non-credit obligation Credit risks, Default fund contribution	4 203 0	3 868 681	309 54
Settlement risks	0	1	0
Market risks	0	20 302	1 624
Trading book of which VaR and SVaR	0 0	20 011 14 363	1 601 1 149
of which risks outside VaR and SVaR	0	5 648	452
FX risk other operations	0	291	23
Credit value adjustment Operational risks	21 424 0	5 452 38 189	436 3 055
Standardised approach	0	38 189	3 055
Additional risk exposure amount, Article 3 CRR	0	16 658	1 333
Additional risk exposure amount, Article 458 CRR Total	0 2 052 009	5 335 358 186	427 28 655
Exposure amount, Risk exposure amount and Minimum capital requirement, parent company
31 Dec 2019 SEKm	Exposure amount	Risk exposure amount	Minimum capital requirement
Credit risks, STD	1 065 332	80 766	6 461
Central government or central banks exposures	6	0	0
Regional governments or local authorities exposures	28	6	0
Public sector entities exposures Multilateral development banks exposures	721 1 970	104 3	8 0
Institutional exposures	987 277	820	66
Corporate exposures	4 359	4 143	331
Retail exposures	247	184	15
Exposures secured by mortgages on immovable property	3 598	1 259	101
Exposures in default	0	0	0
Equity exposures Other items	67 123 3	74 247 0	5 940 0
Credit risks, IRB	860 044	158 540	12 683

Exposure amount, Risk exposure amount and Minimum capital requirement, parent company
31 Dec 2019		Risk exposure	Minimum capital
		amount	requirement
Central government or central banks exposures	6	0	0
Regional governments or local authorities exposures	28	6	0
Public sector entities exposures	721	104	8
Multilateral development banks exposures	1 970	3	0
Institutional exposures	987 277	820	66
Corporate exposures	4 359	4 143	331
Retail exposures	247	184	15
Exposures secured by mortgages on immovable property	3 598	1 259	101
Exposures in default	0	0	0
Equity exposures	67 123	74 247	5 940
Other items	3	0	0
Credit risks, IRB	860 044	158 540	12 683
Central government or central banks exposures	266 658	3 529	282
Institutional exposures	56 956	10 645	852
Corporate exposures	442 780	123 035	9 843
Retail exposures	90 955	19 056	1 524
of which mortgage lending	10 556	2 125	170
of which other lending	80 399	16 931	1 354
Non-credit obligation	2 695	2 275	182
Credit risks, Default fund contribution	0	584	47
Settlement risks	0	0	0
Market risks	0	16 207	1 297
Trading book	0	16 048	1 284
of which VaR and SVaR	0	12 701	1 016
of which risks outside VaR and SVaR	0	3 347	268
FX risk other operations	0	159	13
Credit value adjustment	17 628	4 644	372
Operational risks	0	36 815	2 945
Standardised approach	0	36 815	2 945
Additional risk exposure amount, Article 3 CRR	0	26 986	2 159
Additional risk exposure amount, Article 458 CRR	0	514	41
Total	1 943 004	325 056	26 004
Swedbank – Interim report Q3 2020 59

Alternative performance measures

Swedbank prepares its financial statements in accordance with IFRS as adopted by the EU, as set out in Note 1. The interim report includes a number of alternative performance measures, which exclude certain items that management believes are not representative of the underlying/ongoing performance of the business. Therefore the alternative performance measures provide more comparative information between periods. Management believes that inclusion of these measures provides information to the readers that enable comparability between periods.

Measure and definition	Purpose
Net investment margin before trading interest is deducted
Calculated as Net interest income before trading-related interest is deducted, in relation to average total assets. The average is calculated using month-end figures 1), including the prior year end. The nearest IFRS measure is Net interest income and can be reconciled in Note 5.	Considers all interest income and interest expense, independent of how it has been presented in the income statement.
Allocated equity
Allocated equity is the operating segment's equity measure and is not directly required by IFRS. The Group's equity attributable to shareholders is allocated to each operating segment based on capital adequacy rules and estimated capital requirements based on the bank's internal Capital Adequacy Assessment Process (ICAAP). The allocated equity amounts per operating segment are reconciled to the Group Total equity, the nearest IFRS measure, in Note 4.	Used by Group management for internal governance and operating segment performance management purposes.
Return on allocated equity
Calculated based on profit for the period for the operating segment (operating profit less estimated tax and non–controlling interests), in relation to average allocated equity for the operating segment. The average is calculated using month-end figures 1), including the prior year end. The allocated equity amounts per operating segment are reconciled to the Group Total equity, the nearest IFRS measure, in Note 4.	Used by Group management for internal governance and operating segment performance management purposes.
Income statement measures excluding expenses for the administrative fine
Amount related to expenses is presented excluding expenses for administrative fine. The amounts are reconciled to the relevant IFRS income statement lines on page 6.	Provides comparability of figures between reporting periods.
Return on equity excluding expenses for administrative fine
Represents profit for the period allocated to shareholders excluding expenses for the administrative fine in relation to average Equity attributable to shareholders' of the parent company. The average is calculated using month-end figures 1), including the prior year end. Profit for the period allocated to shareholders excluding expenses for administrative fine are reconciled to Profit for the period allocated to shareholders, the nearest IFRS measure, on page 6.	Provides comparability of figures between reporting periods.
Cost/Income ratio excluding expenses for administrative fine
Total expenses excluding expenses related to administrative fine in relation to total income. Total expenses excluding expense for administrative fine is reconciled to Total expenses, the nearest IFRS measure, on page 6.	Provides comparability of figures between reporting periods.

Adjusted effective tax rate

The adjusted effective tax rate is calculated as the Tax expense excluding tax income for previous years in relation to Operating profit excluding the administrative fine. For the first none months, tax expense excluding tax income for previous years of SEK 3 005m reconciles to the nearest IFRS measure, Tax expense of SEK 2 707m, with the previous years' tax income amount of SEK 298m.Operating profit excluding expense for administrative fine is reconciled on page 6.

Provides comparability and understanding of the Group's effective tax rate on underlying operations between the reporting periods.

Other alternative performance measures

These measures are defined in Fact book on page 81 and are calculated from the financial statements without adjustment.

• Cost/Income ratio
• Credit impairment provision ratio Stage 1 loans
• Credit impairment provision ratio Stage 2 loans
• Credit impairment provision ratio Stage 3 loans
• Credit Impairment ratio
• Loan/Deposit ratio
• Equity per share
• Return on equity1)
• Share of Stage 3 loans, gross
• Share of Stage 3 loans, net
• Total credit impairment provision ratio

1) The month-end figures used in the calculation of the average can be found on page 74 of the Fact book.

Used by Group management for internal governance and operating segment performance management purposes.

Signatures of the Board of Directors and the President

The Board of Directors and the President hereby certify that the Interim report for January-September 2020 provides a fair and accurate overview of the operations, position and results of the parent company and the Group and describes the significant risks and uncertainties faced by the parent company and the companies in the Group.

Stockholm, 19 October 2020

Göran Persson Chair

Board Member Board Member Board Member Board Member

Bo Bengtsson Göran Bengtsson Hans Eckerström Kerstin Hermansson

Bengt Erik Lindgren Josefin Lindstrand Bo Magnusson Anna Mossberg Board Member Board Member Board Member Board Member

Roger Ljung Åke Skoglund Board Member Board Member

Employee Representative Employee Representative

Jens Henriksson President and CEO

Review report

Introduction

We have reviewed the condensed interim financial information (interim report) of Swedbank AB as of 30 September 2020 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Annual accounts act for credit institutions and securities companies. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Annual accounts act for credit institutions and securities companies, regarding the Group, and with the Annual accounts act for credit institutions and securities companies, regarding the Parent Company.

Stockholm, 20 October 2020

PricewaterhouseCoopers AB

Anneli Granqvist Martin By Authorised Public Accountant Authorised Public Accountant Auditor in charge

Publication of financial information

The Group's financial reports can be found on www.swedbank.com/ir

Financial calendar

Year-end report 2020	27 January 2021
Annual report 2020	18 February 2021
Annual General Meeting	25 March 2021
Interim report for the first quarter 2021	22 April 2021
Interim report for the second quarter 2021	16 July 2021

For further information, please contact:

Jens Henriksson President and CEO Telephone +46 8 585 934 82 Anders Karlsson CFO Telephone +46 8 585 938 75 Annie Ho Head of Investor Relations Telephone +46 70 343 7815

Erik Ljungberg Head of Group Communications and Sustainability Telephone 08 +46 73-988 35 57

Unni Jerndal Press Officer Telephone +46 8 585 938 69 +46 73 092 11 80

Information on Swedbank's strategy, values and share is also available on www.swedbank.com

Swedbank AB (publ) Registration no. 502017-7753 Landsvägen 40 SE-105 34 Stockholm, Sweden Telephone +46 8 585 900 00 www.swedbank.com info@swedbank.se