Swedbank A

Quarterly Report • Oct 24, 2017

Q3 2017

Interim report for the third quarter 2017

Third quarter 2017 compared with second quarter 2017

• Stable profit in a quarter with seasonally lower activity
• Increased lending volumes in our home markets supported net interest income
• The consolidation of PayEx positively affected net commission income
• Higher volumes of covered bond repurchases weighed on net gains and losses on financial items
• Seasonally lower costs
• Good credit quality
• Strong capitalisation

"The current high level
of activity means we
can aim even higher."

Birgitte Bonnesen, President and CEO

Financial information SEKm	Q3 2017	Q2 2017	%	Jan-Sep 2017	Jan-Sep 2016	%
Total income	10 418	10 393	0	31 462	30 874	2
Net interest income	6 208	6 090	2	18 269	16 850	8
Net commission income	2 917	3 000	- 3	8 739	8 278	6
Net gains and losses on financial items at fair value2)	525	567	- 7	1 578	1 946	-19
Other income1)2)3)	768	736	4	2 876	3 800	-24
Total expenses	3 883	3 966	- 2	11 852	11 470	3
Profit before impairments	6 535	6 427	2	19 610	19 404	1
Impairment of intangible and tangible assets	107	1		110	10
Credit impairments	235	400	-41	974	774	26
Tax expense	1 444	1 276	13	3 901	3 213	21
Profit for the period attributable to the shareholders of Swedbank	4 743	4 746	0	14 613	15 397	- 5
Earnings per share, SEK, after dilution	4.24	4.24		13.07	13.80
Return on equity, %	15.0	15.6		15.4	16.8
C/I ratio	0.37	0.38		0.38	0.37
Common Equity Tier 1 capital ratio, %	23.9	24.6		23.9	23.8
Credit impairment ratio, %	0.06	0.10		0.08	0.07

1) One-off income from sale of Hemnet of SEK 680m during first quarter 2017.

2) One-off income from VISA, SEK 2 115m during first half year 2016 of which Net gains and losses on financial items at fair value SEK 457m and Other income SEK 1 658m.

³⁾ Other income in the table above includes the items Net insurance, Share of profit or loss of associates, and Other income from the Group income statement.

CEO Comment

In the third quarter we finalised two important strategic investments. Firstly, the acquisition of the payment services provider PayEx was approved by the authorities and the company's results were consolidated in Swedbank in August. The acquisition complements our offering in the strategically important payments area and facilitates the further development of competitive payment services for retailers and their customers. The integration of PayEx's payment services into our product offering has begun. Secondly, the partnership with the brokerage firm Kepler Cheuvreux in Stockholm and Oslo is now in place. Together, Swedbank and Kepler Cheuvreux offer a broad range of equity advisory services in the Nordic region as well as a global distribution network of 1 350 institutional clients.

It is also gratifying to see how two of our digital initiatives are making banking easier for customers. Since the launch of a fully digitised consumer credit process in Sweden, mobile applications have risen significantly. In the Baltic countries, the introduction of Smart ID, the app used as an identification tool and to sign contracts, has already added 270 000 users within the span of a few months.

In terms of sustainability, Swedbank excelled in several respects during the quarter. One of the most important was that five of Swedbank Robur's sustainability funds were approved for the Nordic Swan Ecolabel, which guides customers who want to invest in funds that live up to high sustainability requirements and pushes companies and society in a more sustainable direction. In addition, decision-makers in Sweden's largest companies named Swedbank the most sustainable bank in the Sustainable Brand Index Business to Business. We were also pleased to receive over 4 000 entries to an entrepreneurial contest in Sweden called Rivstart ("Flying Start"), which was completed in September. A total of ten winners were announced, each of whom received SEK 250 000 in seed capital and support to develop and implement their ideas. These awards and initiatives show how deeply rooted social engagement and a sustainability perspective are in Swedbank.

Long-term measures to improve customers' opinions of us continue. In the annual Finansbarometern survey, Swedbank raised its rankings in the categories of Sweden's best small business bank and the year's best commercial bank. In this year's Swedish Quality Index survey, however, in which around 600 of Swedbank's private and corporate customers took part, we lost ground slightly compared with last year. This autumn we are conducting a broader customer survey in which around 5 000 private and corporate customers will be interviewed. Deeper insight and understanding of our customers' opinions will help us to deliver even greater value in the future.

Solid macroeconomic growth in all our home markets

High, stable growth continues in Sweden and the Baltic countries. In Sweden, along with housing investment

and domestic consumption, exports provided a bigger contribution to growth due to improved global economic conditions. Higher demand from abroad has also benefited exports in the Baltic countries, and investments have increased. Inflation is expected to rise, which could eventually allow the Riksbank and the European Central Bank to begin phasing out the extraordinary stimulus measures they have taken since the financial crisis. Political uncertainty, natural disasters and geopolitical tensions have not been able to buck the positive economic trend, which bodes well.

The Swedish housing market showed signs of further slowdown in the third quarter. The rise in house prices and increase in household debt have dampened. This is positive, as it contributes to more sustainable economic development, but action is still needed to increase mobility in the housing market and facilitate the construction of affordable housing.

Stable financial results

We delivered stable results for the quarter. Mortgage demand remains strong, while we saw slightly broader loan demand than before in the corporate sectors. The acquisition of PayEx and high card activity kept commission income stable in an otherwise seasonally weaker summer period.

In the Baltic countries, household and corporate lending increased in all three countries. Our Estonian subsidiary's strong capital position allowed for an increase in its dividend policy during the quarter, which resulted in a slightly higher tax expense, since dividends are taxed in Estonia.

In the large corporate segment, the normal negative seasonal effects in funding and securities trading, among other areas, were offset by positive currency fluctuations and stable lending volumes.

High cost efficiency is part of the bank's corporate culture, as evident in this past quarter. Following the consolidation of PayEx, we estimate the Group's total expenses for full-year 2017 at around SEK 16.1bn.

Credit quality remains good, both in Sweden and the Baltic countries.

Even higher aims

During the final months of the year the Group Executive Committee and I will focus on completing planning for next year and formulating our priorities. The current high level of activity means we can aim even higher. Next year's priorities will be to further increase customer value at the same time that we consolidate the bank's long-term financial position.

Birgitte Bonnesen President and CEO

Table of contents

	Page
Overview	5
Market	5
Important to note	5
Group development	5
Result third quarter 2017 compared with second quarter 2017	5
Result January-September 2017 compared with January-September 2016	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	10
Events after 30 September 2017	10
Business segments
Swedish Banking	11
Baltic Banking	13
Large Corporates & Institutions	15
Group Functions & Other	17
Eliminations	18
Group
Income statement, condensed	20
Statement of comprehensive income, condensed	21
Balance sheet, condensed	22
Statement of changes in equity, condensed	23
Cash flow statement, condensed	24
Notes	25
Parent company	47
Alternative performance measures	53
Signatures of the Board of Directors and the President	55
Review report	55
Contact information	56

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

Financial overview

Income statement	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	6 208	6 090	2	5 837	6	18 269	16 850	8
Net commission income	2 917	3 000	- 3	2 838	3	8 739	8 278	6
Net gains and losses on financial items at fair value	525	567	- 7	669	-22	1 578	1 946	-19
Other income1)	768	736	4	696	10	2 876	3 800	-24
Total income	10 418	10 393	0	10 040	4	31 462	30 874	2
Staff costs	2 414	2 386	1	2 315	4	7 248	6 936	4
Other expenses	1 469	1 580	- 7	1 489	- 1	4 604	4 534	2
Total expenses	3 883	3 966	- 2	3 804	2	11 852	11 470	3
Profit before impairments	6 535	6 427	2	6 236	5	19 610	19 404	1
Impairment of intangible assets	96	0		0		96	0
Impairment of tangible assets	11	1		1		14	10	40
Credit impairments, net	235	400	-41	201	17	974	774	26
Operating profit	6 193	6 026	3	6 034	3	18 526	18 620	- 1
Tax expense	1 444	1 276	13	1 215	19	3 901	3 213	21
Profit for the period	4 749	4 750	0	4 819	- 1	14 625	15 407	- 5
Profit for the period attributable to the
shareholders of Swedbank AB	4 743	4 746	0	4 816	- 2	14 613	15 397	- 5

1) Other income in the table above includes the items Net insurance, Share of profit or loss of associates, and Other income from the Group income statement.

	Q3 Q2		Q3 Jan-Sep Jan-Sep
Key ratios and data per share	2017	2017	2016	2017	2016
Return on equity, % 1)	15.0	15.6	15.8	15.4	16.8
Earnings per share before dilution, SEK 2) Earnings per share after dilution, SEK 2)	4.26 4.24	4.26 4.24	4.33 4.31	13.13 13.07	13.87 13.80
C/I ratio	0.37	0.38	0.38	0.38	0.37
Equity per share, SEK 2)	115.7	111.3	111.6	115.7	111.6
Loan/deposit ratio, %	164	166	166	164	166
Common Equity Tier 1 capital ratio, % Tier 1 capital ratio, %	23.9 26.5	24.6 27.8	23.8 26.2	23.9 26.5	23.8 26.2
Total capital ratio, %	30.9	32.5	29.3	30.9	29.3
Credit impairment ratio, %3)	0.06	0.10	0.05	0.08	0.07
Share of impaired loans, gross, %	0.55	0.53	0.35	0.55	0.35
Total provision ratio for impaired loans, %	45	45	57	45	57
Liquidity coverage ratio (LCR), % 4)	145	128	131	145	131
Net stable funding ratio (NSFR), %	109	110	104	109	104

Balance sheet data SEKbn	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Loans to the public, excluding the Sw edish National Debt Office and repurchase agreements	1 488	1 453	2	1 439	3
Deposits and borrow ings from the public, excluding the
Sw edish National Debt Office and repurchase agreements	910	782	16	865	5
Shareholders' equity	129	130	- 1	124	4
Total assets	2 460	2 154	14	2 394	3
Risk exposure amount	420	394	6	404	4

1) Average shareholders' equity can be found on pages 73-74 in the Fact book.

2) The number of shares and calculation of earnings per share are specified on page 44.

3) For more information about the credit impairment ratio, see page 42 of the Fact book.

4) LCR - calculated in accordance with SFSA's regulations (FFFS 2012:6.).

Definitions of all key ratios can be found in Swedbank's Fact book on page 81.

Overview

Market

The global economic recovery is continuing. US GDP grew by 3.1 per cent on an adjusted annual basis in the second quarter. In the eurozone it rose by 2.3 per cent compared with the second quarter of 2016. Unemployment in the Eurozone is declining and is at the lowest level (9.1 per cent) since the financial crisis in 2008-2009, while in the US it remains around 4.5 per cent. The inflation rate is still at low levels, however.

Stronger macro data in the eurozone and growing expectations that the ECB may soon introduce a less expansionary policy strengthened the euro against the dollar in the third quarter. Oil prices rose in the quarter in the wake of stronger global demand.

The Swedish economy grew by 1.3 per cent in the second quarter and GDP rose by 3.1 per cent on an annual basis (calendar adjusted). The biggest contributor to growth was fixed gross investment, mainly housing investment, followed by exports and consumer spending. Tendency surveys and the Purchasing Managers' Index show that the Swedish economy remained strong in the third quarter.

Swedish short- and long-term market interest rates rose in the quarter, while the krona appreciated against both the dollar and the euro. Inflation and inflation expectations rose, although the increase was partly driven by temporary factors. CPIF inflation – CPI at fixed interest rates – was 2.3 per cent in September, the third consecutive month that inflation exceeded the Riksbank's target of 2 per cent. The government's budget bill for 2018 promises around SEK 44bn in investments, targeting pensioners and families, which could increase consumer spending. Household lending from monetary financial institutions rose in August by 7.1 per cent on an annual basis. House prices rose slightly in the last three months. Residential housing supply has also risen, however, as has the number of apartment starts.

The Baltic economies continued to report robust growth. The strongest growth is evident in Estonia, where GDP rose by 5.7 per cent in the second quarter compared with the same period in 2016, followed by Lithuania (4.1 per cent) and Latvia (4.0 per cent). Growth broadened from being primarily domestically driven to also include stronger exports in the wake of improving global economic conditions. Investment, which recovered at the end of last year in all three Baltic countries thanks to increased flows from the EU's structural funds, received further support from improved export conditions and higher industrial production. Housing investment in particular has accelerated in 2017. Consumer spending is getting support from higher wages and falling unemployment, although the rising inflation rate cut into real wage growth. The inflation rate rose due to stronger domestic demand and rising commodity prices. This led to an inflation rate of over 3 per cent on average so far in 2017, the highest level since 2011. Inflation was highest in Lithuania, 4.8 per cent in August, followed by Estonia (3.7 per cent) and Latvia (2.9 per cent).

A brighter economic picture and low interest rates have been a support for global equities, despite increased geopolitical tension between the US and North Korea after the North Korean government conducted several missile tests. Stock indices in the US, Europe, and Stockholm rose during the quarter, although the OMXS30 Index was lower on average than in the previous quarter.

Important to note

Swedbank has previously estimated expenses for fullyear 2017 at around SEK 15.8bn. Since the payment services provider PayEx was consolidated as of 15 August, after the acquisition was approved by regulatory authorities, total expenses for the full-year 2017 are estimated at around SEK 16.1bn.

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 53.

Group development

Result third quarter 2017 compared with second quarter 2017

Swedbank reported profit of SEK 4 743m in the third quarter of 2017, compared with SEK 4 746m in the previous quarter. Higher net interest income and lower credit impairments had a positive effect, but were offset by higher tax. FX changes reduced profit by SEK 14m.

The return on equity was 15.0 per cent (15.6) and the cost/income ratio was 0.37 (0.38).

Income of SEK 10 418m was slightly higher than in the previous quarter (10 393) due to higher net interest income. PayEx, which was consolidated on 15 August, contributed SEK 38m, which mainly affected net commission income positively in the quarter (see note 25 for further information on PayEx).

In total, net interest income rose by 2 per cent to SEK 6 208m (6 090). The main reason was an increase in Swedish mortgage lending volumes and improved net interest income within Group Treasury. Improved deposit margins due to higher short-term market interest rates and an extra day in the quarter also had a positive effect. Margins on the Swedish mortgage portfolio were stable. The resolution fund fee negatively affected net interest income by SEK 300m (261). The fee in the previous quarter was affected by the final decision of the National Debt Office on the fee level for the resolution fund for 2017. This represents a decrease compared with the previously estimated amount, of which SEK 83m related to the first half year.

Net commission income decreased by 3 per cent to SEK 2 917m (3 000). Lower income from securities trading and corporate finance had a negative effect. Card commissions were seasonally higher, while asset management income was stable. PayEx positively affected net commission income by SEK 38m.

Net gains and losses on financial items at fair value decreased somewhat to SEK 525m (567) due to slightly larger covered bond repurchases within Group Treasury. Net gains and losses on financial items within Large Corporates & Institutions were positively affected by currency fluctuations during the quarter, but were otherwise weaker due to lower market volatility.

Other income increased to SEK 768m (736) because the value of the Visa shares within Visa Sweden, in which Swedbank is a member, increased during the quarter.

Expenses were seasonally lower at SEK 3 883m (3 966). Staff costs amounted to SEK 2 414m (2 386). Other expenses decreased due to lower activity during the summer months with lower costs for travel, consultants and marketing. PayEx affected expenses by SEK 34m.

Credit impairments decreased to SEK 235m (400) mainly due to lower provisions within Large Corporates & Institutions for oil related commitments. Credit impairments also decreased in Swedish Banking, and Baltic Banking reported net recoveries.

Impairment of intangible assets amounted to SEK 96m since a previous payment solution project was no longer estimated to have any value for the Group due to the acquisition of PayEx. Impairment of tangible assets amounted to SEK 11m.

The tax expense amounted to SEK 1 444m (1 276), corresponding to an effective tax rate of 23.3 per cent (21.2). The difference in the effective tax rate between quarters is largely due to a new dividend policy adopted in Estonia in the third quarter, which means that 100 per cent of profit for the year will be distributed, compared with 60 per cent previously. Since dividends are taxed in Estonia, the tax expense increased by SEK 115m in the quarter, of which SEK 80m related to the first half year 2017. The Group's effective tax rate is estimated at 21- 23 per cent in the medium term.

Result January-September 2017 compared with January-September 2016

Profit fell to SEK 14 613m, compared with SEK 15 397m in the same period in 2016. The decrease was mainly because one-off income was higher in the same period in 2016 (sale of Visa Europe) compared with the same period in 2017 (sale of Hemnet). Tax increased as well during the period because of the new dividend policy in Estonia and the elimination of the tax deductibility of interest on certain subordinated debt in 2017. FX changes increased profit by SEK 64m.

The return on equity was 15.4 per cent (16.8) and the cost/income ratio was 0.38 (0.37). Excluding one-off income, the return on equity was 14.7 per cent (14.6).

The table below shows profit excluding the gains on the sales of Hemnet in 2017 and Visa in 2016.

		Jan-Sep Jan-Sep Jan-Sep		Jan-Sep
	2017	2017	2016	2016
		excl. one		excl. one
		off		off
		income		income
Income statement, SEKm		Hemnet		VISA
Net interest income	18 269	18 269	16 850	16 850
Net commission income	8 739	8 739	8 278	8 278
Net gains and losses on
financial items at fair value	1 578	1 578	1 946	1 489
of which VISA			457	0
Share of profit or loss of
associates	624	624	2 358	700
of which VISA			1 658	0
Other income1)	2 252	1 572	1 442	1 442
of which Hemnet	680		0	0
Total income	31 462	30 782	30 874	28 759
Total expenses	11 852	11 852	11 470	11 470
Impairments	1 084	1 084	784	784
Operating profit	18 526	17 846	18 620	16 505
Tax expense	3 901	3 901	3 213	3 213
Profit for the period
attributable to the
shareholders of Swedbank
AB	14 613	13 933	15 397	13 282
Return on equity	15.4	14.7	16.8	14.6

Cost/Income ratio 0.38 0.39 0.37 0.40 1) Other income in the table above includes the items Net insurance and Other income from the Group income statement.

Income increased to SEK 31 461m (30 874). Excluding one-off items income rose by SEK 2 023m.

FX changes increased income by SEK 163m.

Net interest income rose by 8 per cent to SEK 18 269m (16 850). The increase was mainly due to higher lending volumes and margins on Swedish mortgages. The increase in the resolution fund fee of SEK 418m had a negative effect on net interest income.

Net commission income rose by 6 per cent to SEK 8 739m (8 278) mainly due to increased asset management income resulting from higher equity prices. Increased card income also contributed positively, while lower commissions from corporate finance and securities trading had a negative effect.

Net gains and losses on financial items at fair value fell to SEK 1 578m (1 946), mainly because income related to the Visa Europe sale had a positive effect on Group Treasury's result in the first nine months of 2016.

Other income including the share of profit of associates declined to SEK 2 876m (3 800) mainly due to income from the Visa sale in the same period in 2016.

Expenses rose to SEK 11 852m (11 470) mainly due to increased staff costs. FX effects raised expenses by SEK 76m.

Credit impairments increased to SEK 974m (774) due to increased provisions for oil related commitments within Large Corporates & Institutions as well as increased credit impairments within Swedish Banking. Baltic Banking reported net recoveries.

The tax expense amounted to SEK 3 901m (3 213), corresponding to an effective tax rate of 21.1 per cent (17.3). The effective tax rate for 2017 was affected by the tax-exempt capital gain on the Hemnet sale, the elimination of the deductibility of interest on subordinated liabilities introduced in 2017 and the new dividend policy in Estonia. The same period in 2016 was affected by Swedbank's membership of Visa, which generated tax-exempt income from the sale of shares in Visa Europe. The Group's effective tax rate is estimated at 21-23 per cent in the medium term.

Volume trend by product area

Swedbank's main business is organised in two product areas: Group Lending & Payments and Group Savings.

Lending

Total lending to the public, excluding repos and the Swedish National Debt Office, increased by SEK 18bn to SEK 1 488bn (1 470) compared with the second quarter. Compared with 30 September 2016 the increase was SEK 49bn, or growth of 3 per cent.

Loans to the public excl.
the Swedish National Debt Office
and repurchase agreements,	30 Sep	30 Jun	30 Sep
SEKbn	2017	2017	2016
Loans, private mortgage	813	802	761
of w hich Sw edish Banking	747	737	698
of w hich Baltic Banking	66	65	63
of w hich Large Corporates & Inst.	0	0	0
Loans, private other incl tenant
ow ner associations	153	152	148
of w hich Sw edish Banking	139	139	135
of w hich Baltic Banking	13	12	13
of w hich Large Corporates & Inst.	1	1	0
Loans, corporate	522	516	530
of w hich Sw edish Banking	252	249	278
of w hich Baltic Banking	67	65	65
of w hich Large Corporates & Inst.	203	202	187
Total	1 488	1 470	1 439

Lending to Swedish mortgage customers within Swedish Banking increased by SEK 10bn to SEK 747bn (737) compared with 30 June. As of 31 August 2017 the share of the year's net growth for mortgages was 18 per cent and the total market share was 24.5 per cent (24.8 per cent as of 31 December 2016). In Baltic Banking mortgage volume grew by 1 per cent in local currency to the equivalent of SEK 66bn.

Other private lending, including to tenant-owner associations, grew by SEK 1bn in the quarter.

Swedbank's Swedish consumer loan volume amounted to SEK 31bn, corresponding to a market share of about 10 per cent. Consumer loans include unsecured loans as well as loans secured by a car or boat. The Baltic consumer loan portfolio grew in the quarter by 3 per cent in local currency to the equivalent of SEK 7.9bn.

Corporate lending increased by SEK 6bn in the quarter to SEK 522bn. Corporate lending increased by SEK 3bn within Swedish Banking, SEK 2bn within Baltic Banking and SEK 1bn within Large Corporates & Institutions.

In Sweden the market share was 17.4 per cent in August (18.4 per cent as of 31 December 2016).

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

Payments

The total number of cards in issue at the end of the quarter was 8.0 million, unchanged compared with the end of the second quarter. Compared with the third

quarter of 2016 the number of cards in issue increased by 1 per cent.

In Sweden the number of cards in issue was 4.2 million at the end of the third quarter. Compared with the same period in 2016 corporate card issuance increased by 1 per cent and consumer card issuance increased by 2 per cent. The increase in the number of consumer cards is largely driven by the growing number of young people who are signing up for cards. The bank's many small business customers offer further growth potential in the corporate card issuance business. In the Baltic countries the number of cards in issue was 3.8 million.

	30 Sep	30 Jun	30 Sep
Number of cards	2017	2017	2016
Issued cards, millon	8.0	8.0	7.9
of w hich Sw eden	4.2	4.2	4.1
of w hich Baltic countries	3.8	3.8	3.8

A total of 323 million purchases were made in Sweden with Swedbank cards in the third quarter, an increase of 5 per cent compared with the third quarter of 2016. In the Baltic countries there were 124 million card purchases, an increase of 13 per cent.

The number of acquired card transactions also increased year-on-year. In the Nordic countries the number of acquired card transactions was 631 million in the third quarter, an increase of 8 per cent compared with the third quarter of 2016. In the Baltic countries the corresponding figures were 93 million and 11 per cent.

The share of retail payments made by card in the overall market exceeded 85 per cent in Sweden and 50 per cent in Estonia, while the figures were slightly lower in Latvia and Lithuania. Swedbank is working actively to increase card payments in stores by encouraging more retailers to accept cards and advising customers to pay by card instead of cash.

To make it easier for customers to pay for small purchases by card, Swedbank has added contactless cards. The launch began in the Baltic countries in 2016 and is continuing gradually in Sweden in 2017 for various types of cards. At the same time payment terminals at stores are being upgraded to accept contactless cards. In the Baltic countries more than 50 per cent of terminals support contactless payments. In Sweden the corresponding figure is currently around 20 per cent, but the number of terminals with contactless functionality is expected to grow quickly and reach more than 50 per cent of stores in 2018.

The number of domestic payments rose by 16 per cent in Sweden and by 4 per cent in the Baltic countries compared with the third quarter of 2016. Swedbank's market share of payments through the Bankgiro system was 37 per cent. The number of international payments rose by 6 per cent in Sweden and 18 per cent in the Baltic countries compared with the third quarter of 2016.

To better capitalise on emerging opportunities in ecommerce, Swedbank created a new unit, Group Commerce, within Group Lending & Payments, which focus on providing retailers with comprehensive payment solutions.

The acquisition of the payment service provider PayEx was finalised in mid-August after the deal was approved by regulatory authorities. The acquisition complements

Swedbank's payment and financing services, primarily through PayEx's PSP and solutions for invoicing and partial payments. It also creates opportunities to continue developing attractive long-term payment services for retailers and their customers.

Savings

Total deposits within the business segments – Swedish Banking, Baltic Banking and Large Corporates & Institutions – increased by SEK 15bn to SEK 820bn (805) compared with the end of the second quarter. Of this total, 59 per cent (58) related to on demand deposits. Total deposits from the public, including volumes attributable to Group Treasury within Group Functions & Other, increased by SEK 22bn in the quarter to SEK 910bn.

Deposits from the public excl.

the Swedish National Debt Office

and repurchase agreements, SEKbn	30 Sep 2017	30 Jun 2017	30 Sep 2016
Deposits, private	467	457	435
of w hich Sw edish Banking	363	355	341
of w hich Baltic Banking	104	102	94
Deposits, corporate	443	431	430
of w hich Sw edish Banking	156	155	147
of w hich Baltic Banking	68	67	72
of w hich Large Corporates & Inst.	129	126	123
of w hich Group Functions & Other	90	83	88
Total	910	888	865

Swedbank's deposits from private customers increased by SEK 10bn in the quarter to SEK 467bn (457). The large part of the inflow was within Swedish Banking.

Corporate deposits increased by a total of SEK 12bn in the quarter. Deposits within Large Corporates & Institutions increased by SEK 3bn. In Swedish Banking corporate deposits increased by SEK 1bn and in Baltic Banking they increased by SEK 1bn. Deposits within Group Treasury increased by SEK 7bn largely due to higher volumes from US money market funds.

Market shares in Sweden were stable in the quarter. The market share for household deposits was 21 per cent as of 30 August (21 per cent as of 31 December 2016) and for corporate deposits was 19 per cent (20). For more information on deposits, see page 37 of the Fact book.

Asset management,	30 Sep	30 Jun	30 Sep
SEKbn	2017	2017	2016
Total Asset Management	1 237	1 226	1 137
Assets under management	853	840	769
Assets under management, Robur	848	835	764
of w hich Sw eden	809	797	728
of w hich Baltic countries	40	39	33
of w hich Norw ay	0	0	4
of w hich eliminations	-1	-1	-1
Assets under management, Other,
Baltic countries	5	5	5
Disc re tiona ry a sse t ma na ge me nt	384	386	369

Fund assets under management by Swedbank Robur rose during the quarter to SEK 848bn (835) as of 30 September, of which SEK 809bn (797) related to the Swedish fund business. The increase was due in its entirety to higher asset values. Fund assets under management by Swedbank Robur's Baltic business amounted to SEK 40bn (39) with positive net flows and rising asset values contributing to the increase.

The total net inflow to the Swedish fund market decreased in the third quarter to SEK 8.6bn (33.4). Of this inflow, SEK 6.9bn was in fixed income funds, SEK 1.2bn in mixed funds and SEK 1.0bn in hedge funds and other funds. The outflow from equity funds was SEK 0,5bn.

Swedbank Robur's net inflow in the Swedish fund market improved during the quarter but remained negative at SEK -1.7bn (-5.6 in the second quarter)

Institutional clients accounted for a negative net flow of SEK -0.4bn (-10.9 in the second quarter). Swedish Banking and the savings banks had negative flows of SEK -1.1bn (1.5 in the second quarter). Third-party business had a negative net flow of SEK -0.4bn (0.9). Like for the rest of the market, the beginning of the quarter saw outflows from equity funds. Rising equity prices in September contributed to a trend reversal, but for the quarter as a whole Swedbank Robur's net flow was negative for equity funds at SEK -1.9bn. The net flow for fixed income funds was also negative, at SEK -0.9bn, while mixed funds had a positive net flow of SEK 1.1bn.

The net flow in the Baltic countries stayed positive in the third quarter at SEK 1.0bn (1.1 in the second quarter).

By assets under management, Swedbank Robur is the largest player in the Swedish and Baltic fund markets. In Sweden the market share as of 30 September was 20.8 per cent, which, despite a negative net flow during the quarter, is at the same level as of 30 June. Swedbank Robur's fund assets under management therefore trended higher than the Swedish fund market as a whole. The market share was 42 per cent in Estonia and Latvia and 37 per cent in Lithuania.

Assets under management, life insurance	30 Sep	30 Jun	30 Sep
SEKbn	2017	2017	2016
Sw eden of w hich collective occupational	173	170	153
pensions	78	76	66
of w hich endow ment insurance	64	63	59
of w hich occupational pensions	21	21	19
of w hich other	9	9	9
Baltic countries	5	5	5

Life insurance assets under management in Sweden increased by 2 per cent in the quarter to SEK 173bn. The net inflow was SEK 0.9bn.

Swedbank remained the eighth largest life insurance company in Sweden in the second quarter of 2017, with a market share of about 7 per cent in premium payments excluding capital transfers. In total, capital transfers amounted to SEK 28.2bn. The market share for transferred capital increased from 9 per cent in the first quarter to about 11 per cent in the second quarter, ranking Swedbank third in the overall transfer market. Swedbank is the largest life insurance company in Estonia and the second largest in Lithuania and Latvia. Its market shares as of 30 June were 43 per cent in Estonia, 23 per cent in Lithuania and 25 per cent in Latvia.

Credit and asset quality

Strong economic growth in our home markets contributed to continued development with generally low credit impairments. In the third quarter credit

impairments amounted to SEK 235m (SEK 400m in the second quarter) and mainly related to provisions for anticipated credit impairments for a limited number of commitments within Large Corporates & Institutions.

The credit impairment ratio was 0.06 per cent (0.10).

Credit impairments, net by business segment SEKm	Q3 2017	Q2 2017	Q3 2016
Sw edish Banking	66	86	41
Baltic Banking	-26	7	-28
Estonia	-16	10	-1
Latvia	-4	2	8
Lithuania	-6	-5	-35
Large Corporates & Institutions	195	307	188
Total	235	400	201

Major oil companies remain reluctant to invest due to the continued low oil prices and the uncertainty in oilrelated sectors persists. Swedbank continues to carefully follow the developments maintains a close dialogue with impacted customers. The share of impaired loans (gross) was 0.55 per cent (0.53 as of 30 June) of total lending. The total provision ratio for impaired loans was 45 per cent (45). For more information on asset quality, see pages 39-45 of the Fact book.

New residential construction in Sweden remains high, which in combination with increased house prices has contributed to increased mortgage volumes. While new construction has caught up with demand in some locations, the housing shortage still persists in many larger areas. Lending volumes and house prices are rising more slowly than before, however, partly due to the amortisation requirement introduced last year.

Swedbank's Swedish mortgages increased by 1.4 per cent in the quarter, or 5.6 per cent on an annual basis. The average loan-to-value ratio of Swedbank's mortgages was 53 per cent (53) in Sweden, 48 per cent (48) in Estonia, 83 per cent (82) in Latvia and 67 per cent (67) in Lithuania, based on property level. For new lending in the quarter the loan-to-value ratio was 68 per cent in Sweden, 69 per cent in Estonia, 76 per cent in Latvia and 75 per cent in Lithuania. Amortisations in the Swedish mortgage portfolio amounted to about SEK 13bn in the last 12-month period. For more information, see pages 46-47 of the Fact book.

Operational risks

Losses related to operational risks remained low. One incident that occurred in the third quarter affected our customers, however. In August the bank suffered a disruption to equity trading over a period of about 8 hours, during which orders could not be placed and trading came to a halt. The disruption was due to a software error by a supplier.

Funding and liquidity

In the third quarter Swedbank stayed active in the international bond markets. The bank took advantage of favourable market conditions and chose to fund future maturities early on. Swedbank issued SEK 46bn in longterm debt, of which SEK 39bn related to covered bond issues. The total issuance volume for 2017 is expected to be slightly higher than in 2016. Maturities for the fullyear 2017 are nominally SEK 166bn from the beginning of the year.

Issuance plans are mainly affected by changes in deposit volumes and lending growth and are adjusted over the course of the year. Outstanding short-term funding, commercial paper and Certificates of Deposit included in debt securities in issue, amounted to SEK 188bn as of 30 September (SEK 159bn as of 30 June 2017). At the same time, cash and balance with central banks amounted to SEK 337bn (435). The liquidity reserve amounted to SEK 536bn (559) as of 30 September. The Group's liquidity coverage ratio (LCR) was 145 per cent (128), and for USD and EUR was 121 and 191 per cent respectively. The net stable funding ratio (NSFR) was 109 per cent (110). For more information on funding and liquidity, see notes 15-17, and pages 56-71 of the Fact book.

Ratings

During the third quarter there were no changes in Swedbank's ratings.

Capital and capital adequacy

Capital ratio

The Common Equity Tier 1 capital ratio was 23.9 per cent on 30 September (24.6 per cent as of 30 June). Common Equity Tier 1 capital decreased by SEK 0.1bn in the quarter to SEK 100.1bn. Profit, after deducting the proposed dividend, positively affected Common Equity Tier 1 capital by SEK 0.9bn.

The acquisition of PayEx was finalised in the third quarter, which negatively affected the Common Equity Tier 1 capital by SEK 1.1bn, mainly through increased intangible assets.

During the quarter Swedbank called an Additional Tier 1 capital (AT1) with a nominal value of SEK 2bn on the call date. Swedbank had previously issued Additional Tier 1 capital to ensure that it meets the capital requirements imposed by supervisory authorities.

Change in Common Equity Tier 1 capital, 2017, Swedbank consolidated situation

Swedbank's leverage ratio as of 30 September 2017 was 4.7 per cent (4.8). The ratio decreased because total assets were higher and the capital base was lower at the end of the third quarter of 2017 than at the end of the second quarter of 2017.

Change in REA, 2017, Swedbank consolidated situation

The risk exposure amount (REA) increased by SEK 12.8bn in the third quarter to SEK 419.5bn (406.7bn as of 30 June 2017). After the quarterly review of additional risk exposure amounts in accordance with article 3 of the EU's Capital Requirements Regulation (CRR), Swedbank decided to add SEK 7.6bn to the REA. This relates to the previously announced update of the model for large corporates. In connection with the update Swedbank also intends to adapt to the European Banking Authority's default definition guidelines.

REA for credit risk rose by a total of SEK 4.4bn, of which SEK 0.6bn related to PayEx. Within REA for credit risk, exposure changes contributed with an increase of SEK 6.3bn. Rating migration increased REA by SEK 0.2bn. These increases were offset by higher collateral values, which have a positive effect on Loss Given Default (LGD). Increased collateral values reduced REA by SEK 1.5bn. Other credit risk reduced REA by SEK 0.6bn, mainly driven by shorter maturities for exposures.

REA for valuation adjustments (CVA risk) decreased by SEK 0.4bn due to lower exposures, while REA for market risks increased by SEK 0.1bn. REA for operational risks increased during the quarter by SEK 1.1bn due to the consolidation of PayEx.

Capital requirement

Swedbank's total Common Equity Tier 1 capital requirement decreased in the quarter to 21.6 per cent, compared with the reported Common Equity Tier 1 capital ratio of 23.9 per cent as of 30 September 2017. The requirement decreased because the capital requirement with respect to the risk weight floor for mortgages in Pillar 2 decreased, as REA increased. The requirement for interest rate risk in the banking book also decreased because REA increased. The total requirement takes into account Swedbank's Common Equity Tier 1 capital requirement for individual Pillar 2 risks of 1.7 per cent as well as all announced increases in the contracyclical buffer values.

Future capital regulations

In November 2016 the EU Commission proposed changes to the EU's rules for banks. The proposal covers a number of areas, including the framework for a minimum requirement for own funds and eligible

liabilities (MREL). The proposal also introduces a new category of debt that banks can use to fulfil MREL. The Resolution Act enables the Swedish National Debt Office to write down a bank's liabilities in a crisis in order to absorb losses or convert the debt to equity. To ensure that they have sufficient capital and liabilities to write down or convert, banks will have to fulfil MREL as of 1 January 2018. Swedbank currently meets this requirement.

As of 2022, banks' eligible liabilities must be subordinated to the liabilities that are excluded from write-down or conversion. To enable Swedish banks to issue debt instruments that meet this requirement, Sweden has to amend its Rights of Priority Act in 2018 or possibly the beginning of 2019.

The Basel Committee has been working for several years to limit the international differences between banks' risk weights, probably including a capital floor for banks that use internal models. The Basel Committee has not completed the rule changes.

Until the new rules are finalised, it remains uncertain how Swedbank will be affected. With its robust profitability and strong capitalisation, however, Swedbank is well positioned to meet future changes in capital requirements.

Other events

On 16 August it was announced that Swedbank's acquisition of the payment service provider PayEx had been approved after the customary review by competition authorities in Sweden and Norway as well as the SFSA.

On 6 September it was announced that Swedbank's Annual General Meeting will be held on Thursday, 22 March 2018 in Stockholm. The Nomination Committee consists of the following members:

• Lennart Haglund, appointed by the owner-group Föreningen Sparbanksintressenter, Chair of the Nomination Committee
• Jens Henriksson, appointed by the owner-group Folksam
• Ramsay Brufer, appointed by Alecta
• Johan Sidenmark, appointed by AMF
• Peter Karlström, appointed by the owner-group Sparbanksstiftelserna
• Lars Idermark, Chair of the Board of Directors of Swedbank AB

On 29 September Ragnar Gustavii was appointed as the new Head of the CEO Office at Swedbank and a member of Swedbank's Group Executive Committee. Ragnar Gustavii currently works at the consulting firm EY, where he is part of the Nordic management team. The current head of the CEO Office, Mikael Björknert, has been appointed head of the new unit Group Strategy.

Events after 30 September 2017

No major events have occurred since 30 September 2017.

Swedish Banking

• Increased lending volumes supported net interest income
• PayEx affected net commission income and expenses
• Increased number of consumer loan applications

Income statement

	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	3 811	3 792	1	3 577	7	11 240	10 310	9
Net commission income	1 860	1 881	- 1	1 806	3	5 498	5 149	7
Net gains and losses on financial items at fair value	88	105	-16	74	19	290	248	17
Share of profit or loss of associates	217	208	4	211	3	569	672	-15
Other income4)	139	129	8	128	9	1 096	422
Total income	6 115	6 115	0	5 796	6	18 693	16 801	11
Staff costs	794	797	0	828	- 4	2 418	2 463	- 2
Variable staff costs	38	32	19	48	-21	102	106	- 4
Other expenses	1 363	1 371	- 1	1 341	2	4 066	4 021	1
Depreciation/amortisation	18	17	6	26	-31	52	76	-32
Total expenses	2 213	2 217	0	2 243	- 1	6 638	6 666	0
Profit before impairments	3 902	3 898	0	3 553	10	12 055	10 135	19
Credit impairments	66	86	-23	41	61	149	- 7
Operating profit	3 836	3 812	1	3 512	9	11 906	10 142	17
Tax expense	812	823	- 1	749	8	2 392	2 205	8
Profit for the period	3 024	2 989	1	2 763	9	9 514	7 937	20
Profit for the period attributable to the
shareholders of Swedbank AB	3 018	2 985	1	2 760	9	9 502	7 927	20
Non-controlling interests	6	4	50	3	100	12	10	20
Return on allocated equity, % 1)	21.5	21.4		20.4		22.8	20.1
Loan/deposit ratio, %	219	221		228		219	228
Credit impairment ratio, % 2)	0.02	0.03		0.01		0.02	0.00
Cost/income ratio	0.36	0.36		0.39		0.36	0.40
Loans, SEKbn3)	1 138	1 125	1	1 111	2	1 138	1 111	2
Deposits, SEKbn3)	519	510	2	488	6	519	488	6
Full-time employees	4 042	4 091	- 1	4 192	- 4	4 042	4 192	- 4

1) For information about average allocated equity see page 16 of the Fact book.

2) For more information about the credit impairment ratio see page 42 of the Fact book.

3) Excluding the Swedish National Debt Office and repurchase agreements.

4)Other income in the table above includes the items Net insurance and Other income from the Group income statement.

Result

Third quarter 2017 compared with second quarter 2017

Profit increased to SEK 3 018m (2 985) mainly due to higher net interest income and lower credit impairments.

Net interest income rose by 1 per cent to SEK 3 811m (3 792). Increased mortgage and corporate lending volumes positively affected net interest income. Margins in the mortgage portfolio were stable. Slightly higher margins in corporate lending contributed positively. Deposit margins were positively affected by higher market interest rates. The resolution fund fee negatively affected the development in net interest income.

Household mortgage volume amounted to SEK 747bn at the end of the quarter, an increase of SEK 10bn. Corporate lending increased by SEK 3bn to SEK 252bn (249), of which SEK 107bn was loans to property management companies.

Household deposit volumes increased by SEK 8bn in the quarter. Corporate deposits within Swedish Banking increased by SEK 1bn in the quarter.

Net commission income decreased by 1 per cent to SEK 1 860m (1 881) mainly due to seasonally lower income from securities trading and lending commissions. This was partly offset by higher income from card commissions and asset management as well as the positive effect of the consolidation of PayEx as of the third quarter.

Other income increased slightly mainly as a result of higher net insurance driven by lower claims provisions in the life insurance business.

Total expenses were unchanged. Staff costs, maintenance costs for premises, and marketing costs decreased slightly. This was offset in its entirety by higher costs owing to the consolidation of PayEx.

Credit impairments of SEK 66m were reported in the third quarter, compared with credit impairments of SEK 86m in the second quarter.

January-September 2017 compared with January-September 2016

Profit increased to SEK 9 502m (7 927) mainly due to increased income.

Net interest income increased by 9 per cent to SEK 11 240m (10 310) mainly through increased lending volumes and mortgage margins. This was offset by the transfer of business volumes and financial results for a number of large corporate customers to Large Corporates & Institutions in the first quarter of 2017 and a higher resolution fund fee compared with 2016.

Net commission income increased by 7 per cent to SEK 5 498m (5 149). The increase was mainly due to higher equity prices and net fund inflows as well as increased card and payment commissions. This was offset by lower income from securities trading and lending commissions mainly explained by the transferred mortgage volumes from SBAB in 2016.

Other income increased mainly due to the sale of Fastighetsbyrån's holding in Hemnet.

Total expenses were stable. Staff costs decreased along with costs for premises and IT operations. This was largely offset by higher costs for internally purchased services.

Credit impairments of SEK 149m were reported during the period, compared with net recoveries of SEK 7m in the same period in 2016.

Business development

Our work to simplify for our customers continues. Among other things, this has resulted in a marked increase in the total number of digital consumer loan applications, since it became possible in June to manage the entire process from application to payout through the Mobile Bank. Mobile applications now account for about 75 per cent of the flow.

Swedbank was named this year's winner of "Anna's Award" for excellence in gender equality and diversity, presented by the Financial Sector Union of Sweden and the banking sector's employer federation, which cited the impacts that our long-term efforts have had at every level of the organisation and that we live up to our vision to be a bank for the many households and businesses.

Swedbank also received an award for pension information for last spring's campaign called "First Pension Aid". The jury cited the campaign's informative and humorous tone to a target group that needs to think more about saving for retirement. This autumn we are following up with a new campaign to demonstrate the impact of long-term savings and encourage adults to save for children. There will also be a corporate campaign to promote the importance of saving on a regular basis.

Entrepreneurship is important to Swedbank, and it was why we ran a campaign called Swedbank Rivstart ("Flying Start"), which ended in September. After a selection process among over 4 000 entries, ten winners were named, each of whom received SEK 250 000 in seed capital and support to develop and implement their ideas.

Our efforts to increase customer satisfaction are continuing. In the annual Finansbarometern survey Swedbank improved its rankings in the categories of Sweden's best bank for small businesses and best commercial bank. However, in this year's Swedish Quality Index survey, in which around 600 of Swedbank's private and corporate customers took part, we declined slightly compared with last year's results. This autumn we are conducting our own, broader, customer survey in which around 5 000 private and corporate customers will be interviewed.

Christer Trägårdh Head of Swedish Banking

Sweden is Swedbank's largest market, with around 4 million private customers and more than 250 000 corporate customers. This makes it Sweden's largest bank by number of customers. Through our digital channels (Internet Bank and Mobile Bank), the Telephone Bank and branches, and with the cooperation of savings banks and franchisees, we are always available. Swedbank is part of the 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 several thousand trainee positions for young people, has played an important part in recent years. Swedbank has 220 branches in Sweden.

Baltic Banking

• Increased lending volumes in all three Baltic countries
• Strong credit quality
• Higher tax expense due to change in dividend policy in Estonia

Income statement

	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	1 060	1 044	2	1 045	1	3 105	2 933	6
Net commission income	565	561	1	511	11	1 653	1 492	11
Net gains and losses on financial items at fair value	56	52	8	59	- 5	161	158	2
Other income4)	163	157	4	126	29	457	373	23
Total income	1 844	1 814	2	1 741	6	5 376	4 956	8
Staff costs	221	222	0	234	- 6	662	657	1
Variable staff costs	12	11	9	18	-33	40	53	-25
Other expenses	390	400	- 3	364	7	1 163	1 056	10
Depreciation/amortisation	25	25	0	28	-11	77	86	-10
Total expenses	648	658	- 2	644	1	1 942	1 852	5
Profit before impairments	1 196	1 156	3	1 097	9	3 434	3 104	11
Impairment of tangible assets	11	1		1		14	1
Credit impairments	-26	7		-28	- 7	-85	-20
Operating profit	1 211	1 148	5	1 124	8	3 505	3 123	12
Tax expense	283	155	83	152	86	597	417	43
Profit for the period	928	993	- 7	972	- 5	2 908	2 706	7
Profit for the period attributable to the
shareholders of Swedbank AB	928	993	- 7	972	- 5	2 908	2 706	7
Return on allocated equity, % 1)	18.2	19.7		19.2		19.0	17.5
Loan/deposit ratio, %	85	84		85		85	85
Credit impairment ratio, % 2)	-0.07	0.02		-0.08		-0.08	-0.02
Cost/income ratio	0.35	0.36		0.37		0.36	0.37
Loans, SEKbn3)	146	142	3	141	4	146	141	4
Deposits, SEKbn3)	172	169	2	166	4	172	166	4
Full-time employees	3 588	3 653	- 2	3 872	- 7	3 588	3 872	- 7

1) For information about average allocated equity see page 18 of the Fact book.

2) For more information about the credit impairment ratio see page 42 of the Fact book.

3) Excluding the Swedish National Debt Office and repurchase agreements.

4)Other income in the table above includes the items Net insurance and Other income from the Group income statement.

Result

Third quarter 2017 compared with second quarter 2017

Baltic Banking's profit decreased to SEK 928m (993) in the quarter. Higher income was offset by an increased tax expense after Swedbank decided to raise the dividend payout ratio in the Estonian sub-group from 60 to 100 per cent. FX effects reduced profit by SEK 11m.

Net interest income rose by 3 per cent in local currency due to higher lending volumes and an extra day in the quarter. The margins in the mortgage portfolio increased somewhat; the margins in corporate lending were stable. FX effects reduced net interest income by SEK 12m.

Lending to corporates and households both rose by about 2 per cent in local currency. Growth was evident in all three Baltic countries.

Deposits grew by 1 per cent in local currency. Corporates and households both contributed to the increase.

Net commission income rose by 1 per cent in local currency mainly due to seasonally higher card usage.

Net gains and losses on financial items increased mainly as a result of revaluations of interest-bearing assets. Other income also improved as repossessed assets in the form of properties were sold during the quarter.

Total expenses were unchanged in local currency. Higher staff costs were offset by lower marketing expenses.

Net recoveries amounted to SEK 26m. Recoveries were reported in all three Baltic countries. Impairment of tangible assets increased to SEK 11m (1) due to the revaluation of a repossessed asset. Underlying credit quality remained strong.

January-September 2017 compared with January-September 2016

Profit increased to SEK 2 908m (2 706) mainly due to stronger net interest income and net commission income compared with the same period in 2016. FX effects raised profit by SEK 65m.

Net interest income rose by 3 per cent in local currency. The increase was mainly a result of higher lending volumes. A change in the internal allocation of fees related to the resolution fund and deposit guarantee positively affected net interest income. FX effects raised net interest income by SEK 70m.

Lending volumes rose by 3 per cent in local currency driven by increased household borrowing. Lending grew in all three Baltic countries.

Deposit volumes increased by 3 per cent in local currency mainly as a result of strong growth from households, while corporate deposits decreased.

Net commission income rose by 8 per cent in local currency thanks to higher income from asset management and cards as well as the service packages introduced in Lithuania.

Net gains and losses on financial items were unchanged in local currency. Other income rose by 20 per cent in local currency thanks to higher income from the insurance business.

Total expenses rose by 2 per cent in local currency mainly due to higher staff costs.

Net recoveries amounted to SEK 85m, compared with net recoveries of SEK 20m in 2016.

Business development

The Estonian government has introduced changes in the taxation of corporate profits and dividends. The new rules, which will be phased in between 2018 and 2020, mean among other things that the tax on stable dividends will be reduced over time from 20 to 14 per cent. Banks will also have to pay an advanced tax of 14 per cent on their current year's profit, which can be offset when actual dividends occur.

Since the Estonian subsidiary is very well-capitalised, Swedbank has decided to raise the dividend payout ratio from 60 to 100 per cent. The change affects profits as of January 2017.

A new tax reform will be implemented in Latvia in 2018 to increase transparency in the economy. The principal changes are that the tax on profits that are reinvested in a business will be 0 per cent, while the tax on dividends will increase from 15 to 20 per cent. The progressive system of personal income tax has also been changed to benefit low income earners.

The number of active mobile banking customers has nearly doubled in one year. To further improve the digital customer experience, we introduced push notifications for electronic invoices and loan payments in the mobile app.

The launch of Smart ID in the first quarter of 2017 was successful and has increased customer convenience. Smart ID is used as an identification tool and to sign contracts as well as to confirm payments by mobile phone. The number of users rose to 271 000 in September, compared with 174 000 in June.

New digital solutions have been developed for our corporate customers. Among other things, we are testing a new digital accounting tool, which has been developed in cooperation with a third-party provider and is scheduled for launch in the fourth quarter.

Charlotte Elsnitz Head of Baltic Banking

Swedbank is the largest bank by number of customers in Estonia, Latvia and Lithuania, with around 3.3 million private customers and over 300 000 corporate customers. According to surveys, Swedbank is also the most respected company in the financial sector. Through its 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 34 branches in Estonia, 36 in Latvia and 64 in Lithuania.

Large Corporates & Institutions

• Lower credit impairments for oil related commitments
• Currency fluctuations positively affected net gains and losses on financial items
• Partnership with Kepler Cheuvreux implemented

Income statement

	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	896	892	0	833	8	2 611	2 424	8
Net commission income	525	587	-11	542	- 3	1 692	1 643	3
Net gains and losses on financial items at fair value	554	515	8	583	- 5	1 521	1 538	- 1
Other income4)	32	21	52	18	78	81	64	27
Total income	2 007	2 015	0	1 976	2	5 905	5 669	4
Staff costs	335	380	-12	348	- 4	1 097	1 061	3
Variable staff costs	41	42	- 2	62	-34	155	172	-10
Other expenses	444	445	0	410	8	1 342	1 225	10
Depreciation/amortisation	20	17	18	28	-29	53	57	- 7
Total expenses	840	884	- 5	848	- 1	2 647	2 515	5
Profit before impairments	1 167	1 131	3	1 128	3	3 258	3 154	3
Impairment of tangible assets	0	0		1		0	8
Credit impairments	195	307	-36	188	4	910	830	10
Operating profit	972	824	18	939	4	2 348	2 316	1
Tax expense	237	177	34	209	13	518	374	39
Profit for the period	735	647	14	730	1	1 830	1 942	- 6
Profit for the period attributable to the
shareholders of Swedbank AB	735	647	14	730	1	1 830	1 942	- 6
Return on allocated equity, % 1)	13.1	11.4		14.6		11.3	13.3
Loan/deposit ratio, %	158	160		153		158	153
Credit impairment ratio, % 2)	0.28	0.43		0.24		0.50	0.44
Cost/income ratio	0.42	0.44		0.43		0.45	0.44
Loans, SEKbn3)	204	203	0	187	9	204	187	9
Deposits, SEKbn3)	129	126	2	123	5	129	123	5
Full-time employees	1 244	1 266	- 2	1 259	- 1	1 244	1 259	- 1

1) For information about average allocated equity see page 24 of the Fact book.

2) For more information about the credit impairment ratio see page 42 of the Fact book.

3) Excluding the Swedish National Debt Office and repurchase agreements.

4)Other income in the table above includes the items Net insurance and Other income from the Group income statement.

Result

Third quarter 2017 compared with second quarter 2017

Profit increased to SEK 735m (647) due to lower expenses and lower credit impairments.

Net interest income was largely unchanged between quarters at SEK 896m (892). Volumes and margins were unchanged.

Net commission income decreased to SEK 525m (587). The decrease was mainly related to lower net commission income from securities trading and seasonally lower activity in corporate finance and the market for bond issues.

Net gains and losses on financial items at fair value increased to SEK 554m (515). The main reason was positive FX effects. The third quarter was otherwise weak, as low market activity resulted in lower demand for risk management products.

Compared with the previous quarter total expenses decreased by 5 per cent mainly as a result of seasonally lower staff costs in Norway and because employees

were transferred to Kepler Cheuvreux in connection with the new partnership.

Credit impairments amounted to SEK 195m (307) in the third quarter, corresponding to a credit impairment ratio of 0.28 per cent. The credit impairments were attributable to a few commitments in both Sweden and Norway.

January-September 2017 compared with January-September 2016

Profit decreased to SEK 1 830m (1 942). Higher income mainly attributable to net interest income was offset by higher expenses.

Net interest income increased by 8 per cent to SEK 2 611m (2 424). Net interest income from lending rose due to increased volumes attributable to the transfer of a number of corporate customers from Swedish Banking to Large Corporates & Institutions. Net interest income related to deposits rose due to increased volumes from financial institutions, which are charged for negative interest rates. A higher resolution fund fee had a negative effect.

Net commission income increased to SEK 1 692m (1 643). The increase is mainly related to higher lending and guarantee commissions. Income from payment processing as well as asset management and custody fees also contributed positively. Corporate Finance income from equity issues decreased after last year's high level, which was partly compensated by higher income from bond issues.

Net gains and losses on financial items at fair value decreased to SEK 1 521m (1 538). Low volatility in the financial markets resulted in lower income from equity and FX trading. The decrease was however offset by positive valuation adjustments in the derivative portfolio (CVA).

Total expenses increased due to higher staff costs attributable to the transfer of employees from Swedish Banking to Large Corporates & Institutions, annual salary increases, and increased IT expenses.

Credit impairments amounted to SEK 910m, compared with SEK 830m in the same period last year. Credit impairments were mainly attributable to increased provisions for exposures in oil related sectors.

The share of impaired loans was 1.7 per cent.

Business development

In the third quarter Swedbank implemented its partnership with Kepler Cheuvreux, one of Europe's leading equity brokers, in Stockholm and Oslo. Together, Swedbank and Kepler Cheuvreux offer topranked advisory services in the Nordic region as well as a global distribution network with 1 350 institutional clients. Recruitment is underway to broaden Nordic coverage to around 300 companies. The new partnership was positively received by clients.

Corporate Solutions was created in the first quarter of 2016 to strengthen advice on capital structures and strategic risk. In the last year the unit has among other things expanded to comprise competencies in credit, equity, and risk analysis as well as specific industry expertise. Corporate Solutions saw a high level of activity in the quarter related to advice on capital structures, especially for companies in the real estate and IT industries.

During the quarter Swedbank strengthened its focus on green and sustainable funding solutions for issuers in the capital market. The bank is building a dedicated team in Debt Capital Markets (DCM) to offer green and social bonds that meet environmental, social and corporate governance (ESG) criteria, and related advice in the area.

Since the beginning of September we offer FX trading 24 hours a day, enabling our clients to hedge currencies whenever it suits them. Corporate and institutional clients now have access to our services round-the-clock through electronic channels and can place orders for monitoring and execution.

The number of users of the social equity trading platform Sprinklebit, where clients can discuss and learn to trade equities, is growing The number of users rose by 62 per cent in August to 17 250. During the same period, the total of number of transactions increased by 79 per cent to 42 745.

Elisabeth Beskow & Ola Laurin Co-Heads of Large Corporates & Institutions

Large Corporates & Institutions is responsible for Swedbank's offering to customers 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 customers, who receive advice on decisions that create sustainable profits and growth. Large Corporates & Institutions is represented in Sweden, Norway, Estonia, Latvia, Lithuania, Finland, Luxembourg, China, the US and South Africa.

Group Functions & Other

Income statement

	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	443	363	22	382	16	1 318	1 183	11
Net commission income	-54	-39	38	-30	80	-147	-27
Net gains and losses on financial items at fair value	-173	-106	63	-49		-393	0
Share of profit or loss of associates	28	- 4		27	4	55	1 686	-97
Other income1)	260	298	-13	235	11	820	718	14
Total income	504	512	- 2	565	-11	1 653	3 560	-54
Staff costs	923	870	6	728	27	2 641	2 285	16
Variable staff costs	50	32	56	49	2	133	139	- 4
Other expenses	-829	-714	16	-755	10	-2 231	-2 132	- 5
Depreciation/amortisation	90	82	10	85	6	247	257	- 4
Total expenses	234	270	-13	107		790	549	44
Profit before impairments	270	242	12	458	-41	863	3 011	-71
Impairment of intangible assets	96	0		0		96	0
Impairment of tangible assets	0	0		- 1		0	1
Credit impairments	0	0		0		0	-29
Operating profit	174	242	-28	459	-62	767	3 039	-75
Tax expense	112	121	- 7	105	7	394	217	82
Profit for the period	62	121	-49	354	-82	373	2 822	-87
Profit for the period attributable to the
shareholders of Swedbank AB	62	121	-49	354	-82	373	2 822	-87
Full-time employees	5 646	5 176	9	4 679	21	5 646	4 679	21

1) Other income in the table above includes the items Net insurance 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 Lending & Payments, Group Savings and Group Staffs and are allocated to a large extent.

Third quarter 2017 compared with second quarter 2017

Profit decreased to SEK 62m (121) in the quarter. Profit within Group Treasury decreased to SEK 165m (148).

Net interest income increased to SEK 443m (363). Net interest income within Group Treasury rose to SEK 460m (395) mainly because of positive effects from covered bond repurchases, but also due to favourable conditions in the short-term fixed income market.

Net gains and losses on financial items fell to SEK - 173m (-106). Net gains and losses on financial items within Group Treasury declined to SEK -173m (-100) as a result of slightly larger covered bond repurchases in the quarter.

Expenses decreased to SEK 234m (270).

Impairment of intangible assets amounted to SEK 96m (0) as the acquisition of PayEx meant that a previous payment solution project no longer had any value for the Group.

January-September 2017 compared with January-September 2016

Profit decreased to SEK 373m (2 822). Group Treasury's profit decreased to SEK 543m (2 706).

Net interest income rose to SEK 1 318m (1 183). Group Treasury's net interest income increased to SEK 1 369m (1 241) due to more favourable terms for currency swaps in early 2017.

Net gains and losses on financial items at fair value decreased to SEK -393m (0). Net gains and losses on financial items within Group Treasury decreased to SEK -391m (5). The first nine months of 2016 were positively affected by a gain of SEK 457m on the sale of Visa Europe. Excluding the Visa effect net gains and losses on financial items increased within Group Treasury mainly due to year-end related volatility in the currency swap market at the start of 2017.

The share of the profit or loss of associates decreased to SEK 55m (1 686) due to the positive effect of the Visa sale in the same period in 2016.

Expenses increased to SEK 790m (549), mainly due to higher staff and IT costs.

Group Functions & Other consists of central business support units and the product areas Group Lending & Payments and Group Savings. The central units serve as strategic and administrative support and comprise Accounting & Finance, Communication, Risk, 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

Income statement
	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Net interest income	- 2	- 1	100	0		- 5	0
Net commission income	21	10		9		43	21
Net gains and losses on financial items at fair value	0	1		2		- 1	2
Other income1)	-71	-73	- 3	-49	-45	-202	-135	-50
Total income	-52	-63	-17	-38	37	-165	-112	-47
Staff costs	0	0		0		0	0
Variable staff costs	0	0		0		0	0
Other expenses	-52	-63	-17	-38	37	-165	-112	-47
Depreciation/amortisation	0	0		0		0	0
Total expenses	-52	-63	-17	-38	37	-165	-112	-47

1) Other income in the table above includes the items Net insurance and Other income from the Group income statement.

Group eliminations mainly consist of eliminations of internal transactions between Group Functions and the other business segments.

Group	Page
Income statement, condensed	20
Statement of comprehensive income, condensed	21
Balance sheet, condensed	22
Statement of changes in equity, condensed	23
Cash flow statement, condensed	24
Notes
Note 1 Accounting policies	25
Note 2 Critical accounting estimates	25
Note 3 Changes in the Group structure	25
Note 4 Operating segments (business areas)	26
Note 5 Net interest income	28
Note 6 Net commission income	29
Note 7 Net gains and losses on financial items at fair value	30
Note 8 Other expenses	31
Note 9 Credit impairments	31
Note 10 Loans	32
Note 11 Impaired loans etc.	33
Note 12 Assets taken over for protection of claims and cancelled leases	33
Note 13 Credit exposures	33
Note 14 Intangible assets	34
Note 15 Amounts owed to credit institutions	34
Note 16 Deposits and borrowings from the public	34
Note 17 Debt securities in issue and subordinated liabilities	35
Note 18 Derivatives	35
Note 19 Financial instruments carried at fair value	36
Note 20 Pledged collateral	38
Note 21 Offsetting financial assets and liabilities	38
Note 22 Capital adequacy consolidated situation	39
Note 23 Internal capital requirement	42
Note 24 Risks and uncertainties	42
Note 25 Business combinations 2017	43
Note 26 Related-party transactions	44
Note 27 Swedbank's share	44
Note 28 Effects of changed reporting of the compensation to the Savings banks for mortgage loans	45
Parent company
Income statement, condensed	47
Statement of comprehensive income, condensed	47
Balance sheet, condensed	48
Statement of changes in equity, condensed	49
Cash flow statement, condensed	49
Capital adequacy	50

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

Group SEKm	Q3 2017	Q2 2017	%	Q3 2016	%	Jan-Sep Jan-Sep 2017	2016	%
Interest income	8 752	8 688	1	8 306	5	25 774	24 986	3
Negative yield on financial assets Interest income, including negative yield on financial	-631	-592	7	-469	35	-1 647	-1 166	41
assets	8 121	8 096	0	7 837	4	24 127	23 820	1
Interest expenses	-2 130	-2 208	- 4	-2 143	- 1	-6 425	-7 348	-13
Negative yield on financial liabilities	217	202	7	143	52	567	378	50
Interest expenses, including negative yield on
financial liabilities	-1 913	-2 006	- 5	-2 000	- 4	-5 858	-6 970	-16
Net interest income (note 5)	6 208	6 090	2	5 837	6	18 269	16 850	8
Commission income	4 275	4 317	- 1	4 027	6	12 628	11 721	8
Commission expenses	-1 358	-1 317	3	-1 189	14	-3 889	-3 443	13
Net commission income (note 6)	2 917	3 000	- 3	2 838	3	8 739	8 278	6
Net gains and losses on financial items at fair value (note 7)	525	567	- 7	669	-22	1 578	1 946	-19
Insurance premiums	603	671	-10	501	20	1 914	1 555	23
Insurance provisions	-373	-464	-20	-327	14	-1 281	-1 021	25
Net insurance	230	207	11	174	32	633	534	19
Share of profit or loss of associates	245	204	20	238	3	624	2 358	-74
Other income	293	325	-10	284	3	1 619	908	78
Total income	10 418	10 393	0	10 040	4	31 462	30 874	2
Staff costs	2 414	2 386	1	2 315	4	7 248	6 936	4
Other expenses (note 8)	1 316	1 439	- 9	1 322	0	4 175	4 058	3
Depreciation/amortisation	153	141	9	167	- 8	429	476	-10
Total expenses	3 883	3 966	- 2	3 804	2	11 852	11 470	3
Profit before impairments	6 535	6 427	2	6 236	5	19 610	19 404	1
Impairment of intangible assets (note 14)	96	0		0		96	0
Impairment of tangible assets	11	1		1		14	10	40
Credit impairments (note 9)	235	400	-41	201	17	974	774	26
Operating profit	6 193	6 026	3	6 034	3	18 526	18 620	- 1
Tax expense	1 444	1 276	13	1 215	19	3 901	3 213	21
Profit for the period	4 749	4 750	0	4 819	- 1	14 625	15 407	- 5
Profit for the period attributable to the
shareholders of Swedbank AB	4 743	4 746	0	4 816	- 2	14 613	15 397	- 5
Non-controlling interests	6	4	50	3	100	12	10	20
SEK
Earnings per share, SEK	4,26	4,26		4,33		13,13	13,87
after dilution	4,24	4,24		4,31		13,07	13,80

Statement of comprehensive income, condensed

Statement of comprehensive income, condensed
Group	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Profit for the period reported via income statement	4 749	4 750	0	4 819	- 1	14 625	15 407	- 5
Items that will not be reclassified to the income
statement
Remeasurements of defined benefit pension plans	-37	-511	-93	-775	-95	-1 152	-4 892	-76
Share related to associates	- 5	-16	-69	-23	-78	-41	-141	-71
Income tax	9	116	-92	176	-95	262	1 108	-76
Total	-33	-411	-92	-622	-95	-931	-3 925	-76
Items that may be reclassified to the income
statement
Exchange differences, foreign operations
Gains/losses arising during the period	134	298	-55	772	-83	345	1 900	-82
Reclassification adjustments to income statement,
net gains and losses on financial items at fair value	0	0		- 3		0	- 3
Hedging of net investments in foreign operations:
Gains/losses arising during the period	-122	-176	-31	-650	-81	-217	-1 558	-86
Cash flow hedges:
Gains/losses arising during the period	3	0		72	-96	-110	131
Reclassification adjustments to income statement,
net interest income	3	4	-25	4	-25	10	13	-23
Share of other comprehensive income of associates	25	-42		72	-65	-31	146
Income tax
Income tax	26	40	-36	127	-80	72	315	-77
Reclassification adjustments to income statement, tax	- 1	- 1	0	- 1	-25	- 2	- 3	-23
Total	68	123	-45	393	-83	67	941	-93
Other comprehensive income for the period, net of tax	35	-288		-229		-864	-2 984	-71
Total comprehensive income for the period	4 784	4 462	7	4 590	4	13 761	12 423	11
Total comprehensive income attributable to the
shareholders of Swedbank AB	4 778	4 459	7	4 587	4	13 749	12 413	11
Non-controlling interests	6	3	100	3	100	12	10	20

For January-September 2017 an expense of SEK 931m (3 925) was recognised in other comprehensive income after tax, including remeasurements of defined benefit pension plans in associates. The 2017 expense arose primarily because market interest rates fell from year end. As per September 30 the discount rate, which is used to calculate the closing pension obligation, was 2.59 per cent, compared with 2.79 per cent at year end. The market's future inflation expectations increased slightly compared with the beginning of the year. The inflation assumption was 1.91 per cent. Actuarial losses based on experience by SEK 231m included. The fair value of plan assets increased during the first nine months 2017 by SEK 96m. As a whole, the obligation for defined benefit pension plans exceeded the fair value of plan assets by SEK 2 495m.

For January-September 2017 an exchange difference of SEK 345m (1 900) was recognised for the Group's foreign net investments in subsidiaries. In addition, an exchange rate difference of SEK -31m (146) for the Group's foreign net investments in associates is included in Share related to associates. The gain related to subsidiaries mainly arose because the Swedish krona weakened during the year against the euro. The total gain of SEK 314m is not taxable. Since the large part of the Group's foreign net investments is hedged against currency risk, a loss of SEK 217m before tax arose for the hedging instruments, compared with a year-earlier loss of SEK 1 558m.

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

Group SEKm	30 Sep 2017	31 Dec 2016	∆ SEKm	%	30 Sep 2016	%
Assets
Cash and balance w ith central banks	336 283	121 347	214 936		262 773	28
Loans to credit institutions (note 10)	37 988	32 197	5 791	18	94 354	-60
Loans to the public (note 10)	1 541 548	1 507 247	34 301	2	1 526 635	1
Value change of interest hedged item in portfolio hedge	918	1 482	-564	-38	2 413	-62
Interest-bearing securities	210 205	182 072	28 133	15	182 525	15
Financial assets for w hich customers bear the investment risk	176 196	160 114	16 082	10	155 859	13
Shares and participating interests	25 532	23 897	1 635	7	24 200	6
Investments in associates	7 423	7 319	104	1	7 228	3
Derivatives (note 18)	66 127	87 811	-21 684	-25	93 294	-29
Intangible fixed assets (note 14)	15 961	14 279	1 682	12	14 293	12
Tangible assets	1 970	1 864	106	6	1 928	2
Current tax assets	1 019	1 796	-777	-43	3 858	-74
Deferred tax assets	161	160	1	1	183	-12
Other assets	33 260	8 067	25 193		18 948	76
Prepaid expenses and accrued income	5 284	4 551	733	16	5 252	1
Total assets	2 459 875	2 154 203	305 672	14	2 393 743	3
Liabilities and equity
Amounts ow ed to credit institutions (note 15)	136 687	71 831	64 856	90	158 128	-14
Deposits and borrow ings from the public (note 16)	935 754	792 924	142 830	18	879 181	6
Financial liabilities for w hich customers bear the investment risk	176 900	161 051	15 849	10	156 741	13
Debt securities in issue (note 17)	911 833	841 673	70 160	8	905 496	1
Short positions, securities	30 789	11 614	19 175		19 424	59
Derivatives (note 18)	53 331	85 589	-32 258	-38	81 014	-34
Current tax liabilities	1 579	992	587	59	1 329	19
Deferred tax liabilities	2 371	2 438	-67	- 3	1 987	19
Pension provisions	2 495	1 406	1 089	77	3 337	-25
Insurance provisions	1 905	1 820	85	5	1 854	3
Other liabilities and provisions	38 114	14 989	23 125		26 541	44
Accrued expenses and prepaid income	8 607	10 917	-2 310	-21	11 629	-26
Subordinated liabilities (note 17)	30 448	27 254	3 194	12	22 899	33
Total liabilities	2 330 813	2 024 498	306 315	15	2 269 560	3
Equity
Non-controlling interests	198	190	8	4	184	8
Equity attributable to shareholders of the parent company	128 864	129 515	-651	- 1	123 999	4
Total equity	129 062	129 705	-643	0	124 183	4
Total liabilities and equity	2 459 875	2 154 203	305 672	14	2 393 743	3

Balance sheet analysis

Total assets have increased by SEK 306bn from 1 January 2017. Assets increased mainly due to higher cash and balances with central banks, which rose by SEK 215bn. The increases are mainly attributable to higher deposits with the US Federal Reserve and central banks in the euro system. Deposits and borrowings from the public, excluding the National Debt Office and repos rose by a total of SEK 128bn mainly volumes from US money market funds, which increased by SEK 89bn. Interest-bearing securities, Treasury bills, increased by SEK 28bn. Lending to the public, excluding the National Debt Office and repos, increased by SEK 35bn. The increase primarily relates to Sweden of which SEK 28bn was mortgages. Lending to credit

institutions increased by SEK 6bn at the same time that amounts owed to them increased by SEK 65bn. Balance sheet items related to credit institutions fluctuate over time depending on repos, among other things. The market value of derivatives decreased on both the asset and liability side, mainly due to large movements in interest rates and currencies. The increase in securities in issue was mainly a result of higher issued volumes compared with repaid short-term securities funding of SEK 102bn. Long-term securities funding increased by SEK 73bn as an effect of higher issued volumes compared with repaid funding. The increase of Securities in issue was offset by repurchased covered bond loans of SEK 70bn.

Statement of changes in equity, condensed

Group			Shareholders'				Non-controlling Total
SEKm			equity					interests	equity
		Other	Exchange differences,	Hedging of net
		contri	subsidiaries	investments	Cash
	Share	buted	and	in foreign	flow	Retained
	capital	equity1)	associates	operations	hedges	earnings	Total
January-September 2016
Opening balance 1 January 2016	24 904	17 275	836	-704	17		80 835 123 163	179	123 342
Dividends	0	0	0	0	0	-11 880	-11 880	- 5	-11 885
Share based payments to employees	0	0	0	0	0	304	304	0	304
Deferred tax related to share based payments to
employees	0	0	0	0	0	-36	-36	0	-36
Current tax related to share based payments to
employees	0	0	0	0	0	35	35	0	35
Total comprehensive income for the period	0	0	2 042	-1 214	113	11 472	12 413	10	12 423
of w hich reported through profit or loss	0	0	0	0	0	15 397	15 397	10	15 407
of w hich reported through other comprehensive
income	0	0	2 042	-1 214	113	-3 925	-2 984	0	-2 984
Closing balance 30 September 2016	24 904	17 275	2 878	-1 918	130		80 730 123 999	184	124 183
January-December 2016
Opening balance 1 January 2016	24 904	17 275	836	-704	17		80 835 123 163	179	123 342
Dividends	0	0	0	0	0	-11 880	-11 880	- 5	-11 885
Share based payments to employees	0	0	0	0	0	378	378	0	378
Deferred tax related to share based payments to employees	0	0	0	0	0	-15	-15	0	-15
Current tax related to share based payments	0	0	0	0	0	34	34	0	34
Contribution	0	0	0	0	0	0	0	3	3
Total comprehensive income for the period	0	0	1 765	-1 044	60	17 054	17 835	13	17 848
of w hich reported through profit or loss	0	0	0	0	0	19 539	19 539	13	19 552
of w hich reported through other comprehensive income	0	0	1 765	-1 044	60	-2 485	-1 704	0	-1 704
Closing balance 31 December 2016	24 904	17 275	2 601	-1 748	77		86 406 129 515	190	129 705
January-September 2017
Opening balance 1 January 2017	24 904	17 275	2 601	-1 748	77		86 406 129 515	190	129 705
Dividends	0	0	0	0	0	-14 695	-14 695	- 4	-14 699
Share based payments to employees	0	0	0	0	0	270	270	0	270
Deferred tax related to share based payments to
employees	0	0	0	0	0	-13	-13	0	-13
Current tax related to share based payments to
employees	0	0	0	0	0	38	38	0	38
Total comprehensive income for the period	0	0	314	-169	-78	13 682	13 749	12	13 761
of w hich reported through profit or loss	0	0	0	0	0	14 613	14 613	12	14 625
of w hich reported through other comprehensive
income	0	0	314	-169	-78	-931	-864	0	-864
Closing balance 30 September 2017	24 904	17 275	2 915	-1 917	- 1		85 688 128 864	198	129 062

*Other contributed equity consists mainly of share premiums. 1) Other contributed equity consists mainly of share premiums.

Cash flow statement, condensed

Group	Jan-Sep	Full-year	Jan-Sep
SEKm	2017	2016	2016
Operating activities
Operating profit	18 526	23 761	18 620
Adjustments for non-cash items in operating activities	-3 023	-2 174	1 203
Taxes paid	-2 417	-3 583	-4 891
Increase/decrease in loans to credit institutions	-5 445	54 341	-7 802
Increase/decrease in loans to the public	-34 299	-90 692	-107 913
Increase/decrease in holdings of securities for trading	-29 476	-29 220	-30 777
Increase/decrease in deposits and borrow ings from the public including retail bonds	141 065	38 245	123 248
Increase/decrease in amounts ow ed to credit institutions	64 926	-79 929	6 209
Increase/decrease in other assets	-3 886	7 829	-9 525
Increase/decrease in other liabilities	-24 340	27 777	33 922
Cash flow from operating activities	121 631	-53 645	22 294
Investing activities
Business combinations	-1 268	-19	-19
Business disposals	6	20	0
Acquisitions of and contributions to associates	0	- 7	- 5
Acquisitions of other fixed assets and strategic financial assets	-520	-451	-370
Disposals/maturity of other fixed assets and strategic financial assets	1 067	763	928
Cash flow from investing activities	-715	306	534
Financing activities
Issuance of interest-bearing securities	161 004	160 474	116 799
Redemption of interest-bearing securities	-158 420	-147 393	-107 923
Issuance of commercial paper etc.	827 094	816 259	711 431
Redemption of commercial paper etc.	-721 436	-831 404	-657 455
Dividends paid	-14 699	-11 885	-11 885
Cash flow from financing activities	93 543	-13 949	50 967
Cash flow for the period	214 459	-67 288	73 795
Cash and cash equivalents at the beginning of the period	121 347	186 312	186 312
Cash flow for the period	214 459	-67 288	73 795
Exchange rate differences on cash and cash equivalents	477	2 323	2 666
Cash and cash equivalents at end of the period	336 283	121 347	262 773

During the first quarter of 2017, the associated company Hemnet AB was sold. Swedbank received a payment of SEK 649m. The capital gain was SEK 680 million.

During the third quarter of 2017 we made an acquisition of PayEx Holding AB of SEK 1 268 million.

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 Financial Reporting Council, 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 Financial Reporting Council.

The accounting policies applied in the interim report conform to those applied in the Annual Report for 2016, 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 2016 Annual Report, except for the changes as set out below.

Changed reporting of the compensation to the Savings banks for mortgage loans

Swedbank and the Savings banks, as of 1 January 2017, changed their bilateral contract regarding how the compensation will be divided between brokerage services and on-going administrative services for mortgages. Brokerage services costs for loans will be added to the loans acquisitions value and will be part of the loans effective interest. It causes that the transaction cost reports as a reduction of the interest income during the loans term. Costs for administrative services will be reported as an expense. Restatement of the historical comparative figures has been made according the new agreement to better illustrate trends

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 closing day 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 impairments, impairment testing of goodwill, deferred taxes and defined benefit pension provisions. There have been no significant changes to

Note 3 Changes in the Group structure

On August 15, 2017 the Group acquired all the shares in PayEx Holdings AB for SEK 1 268m. PayEx Holding AB owns the subsidiaries: PayEx Norge AS and their subsidiaries PayEx Danmark A/S, PayEx Collection AB, PayEx Sverige AB and the subsidiaries PayEx Solution OY, PayEx Suomi OY and PayEx Invest AB and the subsidiaries Faktab B1 AB, Faktab

between periods. The change affects the interest income and expenses, but not the total result. Change in presentation of revenues and expenses will be presented in the note 28.

IFRS 9

Information on new accounting standards issued but not yet adopted can be found on pages 68 to 70 of the Annual Report 2016. During 2017, the Swedbank IFRS 9 Programme has delivered according to the established plans and the impairment parallel run in accordance with the new standard was initiated from the beginning of Q3 2017. The focus during the remainder of Q4 2017 will continue to be on the finalisation of processes, governance and associated business transformation, testing and calibration of models, quantification of impacts and internal education. Swedbank will disclose the impact on the Group's financial reports when these activities are sufficiently further advanced. As communicated in the Annual Report 2016, this is expected to be not later than at the issuance of the Annual Report 2017.

Other IFRS changes

IFRS 17, Insurance Contracts, was issued in May 2017 and is applicable from 1 January 2021. The standard 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 pay 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.

the basis upon which the critical accounting policies and judgments have been determined compared with 31 December 2016.

S1 AB and Faktab V1 AB. See note 25 Business combinations.

Note 4 Operating segments (business areas)

Jan-Sep			Large	Gro up
2017	Swedish	B altic C o	rpo rates &	F unctio ns
SEKm	B anking	B anking	Institutio ns		& Other Eliminatio ns	Gro up
Income statement
Net interest income	11 240	3 105	2 611	1 318	-5	18 269
Net commission income	5 498	1 653	1 692	-147	43	8 739
Net gains and losses on financial items at fair value	290	161	1 521	-393	-1	1 578
Share of profit or loss of associates	569	0	0	55	0	624
Other income1	1 096	457	81	820	-202	2 252
T o tal inco me	18 693	5 376	5 905	1 653	-165	31 462
of which internal income	80	0	29	515	-624	0
Staff costs	2 418	662	1 097	2 641	0	6 818
Variable staff costs	102	40	155	133	0	430
Other expenses	4 066	1 163	1 342	-2 231	-165	4 175
Depreciation/amortisation	52	77	53	247	0	429
T o tal expenses	6 638	1 942	2 647	790	-165	11 852
P ro fit befo re impairments	12 055	3 434	3 258	863	0	19 610
Impairment of intangible assets Impairment of tangible assets	0	0	0	96	0	96
Credit impairments	0 149	14 -85	0 910	0 0	0 0	14 974
Operating pro fit	11 906	3 505	2 348	767	0	18 526
Tax expense	2 392	597	518	394	0	3 901
Profit for the period	9 514	2 908	1 830	373	0	14 625
P ro fit fo r the perio d attributable to the
shareho lders o f Swedbank A B	9 502	2 908	1 830	373	0	14 613
Non-controlling interests	12	0	0	0	0	12
Balance sheet, SEKbn
Cash and balances with central banks	0	3	8	325	0	336
Loans to credit institutions	5	0	58	205	-230	38
Loans to the public	1 138	146	258	0	0	1 542
Bonds and other interest-bearing securities	0	1	48	164	-3	210
Financial assets for which customers bear inv. risk Investments in associates	172	4	0	0	0	176
Derivatives	4 0	0 0	0 73	3 28	0 -35	7 66
Total tangible and intangible assets	1	11	1	5	0	18
Other assets	8	32	48	486	-507	67
T o tal assets	1 328	197	494	1 216	-775	2 460
Amounts owed to credit institutions	25	0	187	148	-223	137
Deposits and borrowings from the public	525	172	155	91	-7	936
Debt securities in issue Financial liabilities for which customers bear inv.	0	0	18	900	-6	912
risk	173	4	0	0	0	177
Derivatives	0	0	71	17	-35	53
Other liabilities	549	0	41	0	-504	86
Subordinated liabilities	0	0	0	30	0	30
T o tal liabilities	1 272	176	472	1 186	-775	2 331
Allocated equity	56	21	22	30	0	129
T o tal liabilities and equity	1 328	197	494	1 216	-775	2 460
Key figures
Return on allocated equity, %	22.8	19.0	11.3	1.7	0.0	15.4
Cost/income ratio	0.36	0.36	0.45	0.48	0.00	0.38
Credit impairment ratio, %2	0.02	-0.08	0.50	0.00	0.00	0.08
Loan/deposit ratio, %	219	85	158	0	0	164
Loans, SEKbn3
	1 138	146	204	0	0	1 488
Deposits, SEKbn3	519	172	129	90	0	910
Risk exposure amount, SEKbn	173	80	140	27	0	420
Full-time employees	4 042	3 588	1 244	5 646	0	14 520
Allocated equity, average, SEKbn	56	20	22	29	0	126

1) Other income in the table above includes the items Net insurance and Other income from the Group income statement.

2) For more information about the Credit impairment ratio see page 42 of the Fact book.

3) Excluding the Swedish National Debt Office and repurchase agreements.

Jan-Sep			Large	Gro up
2016 SEKm	Swedish	B altic C	o rpo rates &	F unctio ns
Income statement	B anking	B anking	Institutio ns		& Other Eliminatio ns	Gro up
Net interest income Net commission income	10 310	2 933	2 424	1 183	0	16 850
Net gains and losses on financial items at fair value	5 149 248	1 492 158	1 643 1 538	-27 0	21 2	8 278 1 946
Share of profit or loss of associates	672	0	0	1 686	0	2 358
Other income1	422	373	64	718	-135	1 442
T o tal inco me	16 801	4 956	5 669	3 560	-112	30 874
of which internal income	81	0	46	488	-615	0
Staff costs	2 463	657	1 061	2 285	0	6 466
Variable staff costs	106	53	172	139	0	470
Other expenses	4 021	1 056	1 225	-2 132	-112	4 058
Depreciation/amortisation	76	86	57	257	0	476
T o tal expenses	6 666	1 852	2 515	549	-112	11 470
P ro fit befo re impairments Impairment of tangible assets	10 135	3 104	3 154	3 011	0	19 404
Credit impairments	0 -7	1 -20	8 830	1 -29	0 0	10 774
Operating pro fit	10 142	3 123	2 316	3 039	0	18 620
Tax expense	2 205	417	374	217	0	3 213
Profit for the period	7 937	2 706	1 942	2 822	0	15 407
P ro fit fo r the perio d attributable to the
shareho lders o f Swedbank A B	7 927	2 706	1 942	2 822	0	15 397
Non-controlling interests	10	0	0	0	0	10
Balance sheet, SEKbn
Cash and balances with central banks	0	3	3	257	0	263
Loans to credit institutions	40	0	70	201	-217	94
Loans to the public	1 111	141	267	8	0	1 527
Bonds and other interest-bearing securities	0	1	73	113	-4	183
Financial assets for which customers bear inv. risk	153	3	0	0	0	156
Investments in associates	4	0	0	3	0	7
Derivatives	0	0	101	45	-53	93
Total tangible and intangible assets	2	11	0	3	0	16
Other assets T o tal assets	3	32	45	556	-581	55
	1 313	191	559	1 186	-855	2 394
Amounts owed to credit institutions	60	0	191	120	-213	158
Deposits and borrowings from the public Debt securities in issue	492 0	167 0	133 18	91 894	-4 -7	879 905
Financial liabilities for which customers bear inv. risk	153	4	0	0	0	157
Derivatives	0	0	106	28	-53	81
Other liabilities	554	0	91	0	-578	67
Subordinated liabilities	0	0	0	23	0	23
T o tal liabilities	1 259	171	539	1 156	-855	2 270
Allocated equity	54	20	20	30	0	124
T o tal liabilities and equity	1 313	191	559	1 186	-855	2 394
Key figures
Return on allocated equity, %	20.1	17.5	13.3	12.8	0.0	16.8
Cost/income ratio	0.40	0.37	0.44	0.15	0.00	0.37
Credit impairment ratio, %2	0.00	-0.02	0.44	-0.18	0.00	0.07
Loan/deposit ratio, %	228	85	153	0	0	166
Loans, SEKbn3	1 111	141	187	0	0	1 439
Deposits, SEKbn3
Risk exposure amount, SEKbn	488	166	123	88	0	865
Full-time employees	182 4 192	81 3 872	119 1 259	22 4 679	0 0	404 14 002
Allocated equity, average, SEKbn	52	21	19	29	0	122

1) Other income in the table above includes the items Net insurance and Other income from the Group income statement.

2) For more information about the Credit impairment ratio see page 42 of the Fact book.

3) Excluding the Swedish National Debt Office and repurchase agreements.

Operating segments' accounting policies

Operating segment reporting is based on Swedbank's accounting policies, organisation and management accounting. Market-based transfer prices are applied between operating segments, while all expenses within Group functions are transfer priced at cost to the operating segments. The net of services purchased and sold internally is recognised as other expenses in the income statements of 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 taking into account capital adequacy rules and estimated capital requirements based on the bank's Internal Capital Adequacy Assessment Process (ICAAP). All equity is allocated.

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 period shorter than one year the key ratio is annualised.

Note 5 Net interest income

Group SEKm	Q3 2017	Q2 2017	%	Q3 2016	%	Jan-Sep 2017	Jan-Sep 2016	%
Interest income
Loans to credit institutions	-19	8		15		-10	108
Loans to the public	7 534	7 523	0	7 507	0	22 520	22 476	0
Interest-bearing securities	38	50	-24	137	-72	158	535	-70
Derivatives	226	209	8	256	-12	724	914	-21
Other	358	367	- 2	231	55	999	755	32
Total interest income including negative yield on
financial assets	8 137	8 157	0	8 146	0	24 391	24 788	- 2
deduction of trading interests reported in net gains and
losses on financial items at fair value	16	61	-74	309	-95	264	968	-73
Interest income, including negative yield on
financial assets, according to income statement	8 121	8 096	0	7 837	4	24 127	23 820	1
Interest expenses
Amounts ow ed to credit institutions	-243	-175	39	-134	81	-566	-367	54
Deposits and borrow ings from the public	-371	-339	9	-293	27	-976	-934	4
of w hich deposit guarantee fees	-99	-119	-17	-101	- 2	-336	-356	- 6
Debt securities in issue	-2 977	-2 935	1	-3 649	-18	-9 041	-9 849	- 8
Subordinated liabilities	-310	-311	0	-235	32	-925	-726	27
Derivatives	2 357	2 089	13	2 507	- 6	6 786	5 446	25
Other	-304	-263	16	-176	73	-917	-526	74
of w hich government resolution fund fee	-300	-261	15	-164	83	-904	-486	86
Total interest expenses including negative yield on
financial liabilities	-1 848	-1 934	- 4	-1 980	- 7	-5 639	-6 956	-19
deduction of trading interests reported in net gains and
losses on financial items at fair value	65	72	-10	20		219	14
Interest expenses, including negative yield on
financial liabilities, according to income statement	-1 913	-2 006	- 5	-2 000	- 4	-5 858	-6 970	-16
Net interest income	6 208	6 090	2	5 837	6	18 269	16 850	8
Net interest margin before trading interest is
deducted	1.04	1.01		1.01		1.03	0.99
Average total assets		2 413 614 2 464 936	-	2 2 449 167	-	1 2 418 703 2 391 602		1

Note 6 Net commission income

Group	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Commission income
Payment processing	445	435	2	430	3	1 304	1 282	2
Card commissions	1 332	1 275	4	1 257	6	3 740	3 486	7
Service concepts	159	157	1	132	20	463	391	18
Asset management and custody fees	1 511	1 524	- 1	1 361	11	4 489	3 902	15
Life insurance	164	168	- 2	163	1	501	490	2
Brokerage and other securities	91	144	-37	106	-14	403	375	7
Corporate finance	17	49	-65	55	-69	111	220	-50
Lending	232	239	- 3	251	- 8	693	731	- 5
Guarantees	53	68	-22	55	- 4	175	160	9
Deposits	51	51	0	33	55	151	99	53
Real estate brokerage	53	57	- 7	57	- 7	153	173	-12
Non-life insurance	20	20	0	18	11	53	48	10
Other commission income	147	130	13	109	35	392	364	8
Total commission income	4 275	4 317	- 1	4 027	6	12 628	11 721	8
Commission expenses
Payment processing	-277	-268	3	-255	9	-789	-749	5
Card commissions	-544	-533	2	-475	15	-1 546	-1 395	11
Service concepts	- 4	- 3	33	- 3	33	- 9	-11	-18
Asset management and custody fees	-337	-352	- 4	-298	13	-1 013	-862	18
Life insurance	-46	-48	- 4	-43	7	-140	-133	5
Brokerage and other securities	-78	-60	30	-64	22	-214	-139	54
Lending and guarantees	-16	-15	7	-15	7	-42	-53	-21
Non-life insurance	- 6	- 5	20	- 4	50	-15	-10	50
Other commission expenses	-50	-33	52	-32	56	-121	-91	33
Total commission expenses	-1 358	-1 317	3	-1 189	14	-3 889	-3 443	13
Total Net commission income	2 917	3 000	- 3	2 838	3	8 739	8 278	6

Note 7 Net gains and losses on financial items at fair value

Group	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Valuation category, fair value through profit or loss
Shares and share related derivatives	67	373	-82	185	-64	373	895	-58
of w hich dividend	3	126	-98	8	-63	227	33
Interest-bearing securities and interest related derivatives	184	10		568	-68	487	1 095	-56
Loans to the public	-226	-258	-12	-464	-51	-861	-1 011	-15
Financial liabilities	64	53	21	109	-41	197	107	84
Other financial instruments	- 7	0		-119	-94	- 7	-245	-97
Total fair value through profit or loss	82	178	-54	279	-71	189	841	-78
Hedge accounting
Ineffective part in hedge accounting at fair value	-11	22		28		28	-107
of w hich hedging instruments	-695	-1 319	-47	-1 192	-42	-4 079	5 060
of w hich hedged items	684	1 341	-49	1 220	-44	4 107	-5 167
Ineffective part in portfolio hedge accounting at fair value	6	29	-79	-47		4	-81
of w hich hedging instruments	94	251	-63	19		568	-1 484
of w hich hedged items	-90	-221	-59	-66	36	-565	1 403
Total hedge accounting	- 5	51		-19	-74	32	-188
Loan receivables at amortised cost	26	30	-13	36	-28	82	111	-26
Financial liabilities valued at amortised cost	-75	-42	79	-70	7	-361	-282	28
Trading related interest
Interest income	16	61	-74	308	-95	264	968	-73
Interest expense	65	72	-10	20		219	14
Total trading related interest	81	133	-39	328	-75	483	982	-51
Change in exchange rates	416	217	92	115		1 153	482
Total net gains and losses on financial items
at fair value	525	567	- 7	669	-22	1 578	1 946	-19
Distribution by business purpose
Financial instruments for trading related business	516	853	-40	692	-25	2 194	2 351	- 7
Financial instruments intended to be held to
contractual maturity	9	-286		-23		-616	-405	52
Total	525	567	- 7	669	-22	1 578	1 946	-19

Note 8 Other expenses

Group	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Premises and rents	277	279	- 1	282	- 2	843	816	3
IT expenses	444	475	- 7	437	2	1 410	1 310	8
Telecommunications and postage	27	30	-10	21	29	97	91	7
Advertising, PR and marketing	51	74	-31	62	-18	195	196	- 1
Consultants	67	90	-26	76	-12	227	238	- 5
Compensation to savings banks	55	56	- 2	58	- 5	167	176	- 5
Other purchased services	194	169	15	177	10	540	516	5
Security transport and alarm systems	17	19	-11	18	- 6	50	51	- 2
Supplies	20	21	- 5	17	18	59	66	-11
Travel	45	67	-33	39	15	171	152	13
Entertainment	10	11	- 9	10	0	32	33	- 3
Repair/maintenance of inventories	14	41	-66	25	-44	86	79	9
Other expenses	95	107	-11	100	- 5	298	334	-11
Total other expenses	1 316	1 439	- 9	1 322	0	4 175	4 058	3

Note 9 Credit impairments

Group	Q3	Q2		Q3		Jan-Sep Jan-Sep
SEKm	2017	2017	%	2016	%	2017	2016	%
Provision for loans individually assessed
as impaired
Provisions	282	2		135		668	734	- 9
Reversal of previous provisions	-23	-23	0	-28	-18	-93	-272	-66
Provision for homogenous groups of impaired loans, net	1	6	-83	-12		18	- 2
Total	260	-15		95		593	460	29
Portfolio provisions for loans individually assessed
as not impaired	-38	16		-10		-79	151
Write-offs
Established losses	121	252	-52	283	-57	478	1 197	-60
Utilisation of previous provisions	-57	-197	-71	-135	-58	-304	-905	-66
Recoveries	-51	-44	16	-106	-52	-209	-196	7
Total	13	11	18	42	-69	-35	96
Credit impairments for contingent liabilities and
other credit risk exposures	0	388		74		495	67
Credit impairments	235	400	-41	201	17	974	774	26
Credit impairment ratio, %1)	0.06	0.10		0.05		0.08	0.07

1) For more information about credit impairment ratio, see page 42 of the Fact book.

Note 10 Loans

		30 Sep 2017		31 Dec 2016		30 Sep 2016
			Loans after	Loans after		Loans after
			provisions	provisions		provisions
Group	Loans before		Carrying	Carrying		Carrying
SEKm	provisions	Provisions	amount	amount	%	amount	%
Loans to credit institutions
Banks	21 546	0	21 546	18 579	16	69 508	-69
Repurchase agreements, banks	1 566	0	1 566	617		2 040	-23
Other credit institutions	14 381	0	14 381	12 766	13	13 214	9
Repurchase agreements, other credit institutions	495	0	495	235		9 592	-95
Loans to credit institutions	37 988	0	37 988	32 197	18	94 354	-60
Loans to the public
Private customers	966 924	768	966 156	931 670	4	909 315	6
Private, mortgage	813 973	468	813 505	782 972	4	761 072	7
Housing cooperatives	109 876	29	109 847	107 762	2	107 268	2
Private,other	43 075	271	42 804	40 936	5	40 975	4
Corporate customers	525 158	3 085	522 073	521 638	0	529 955	- 1
Agriculture, forestry, fishing	68 576	97	68 479	65 992	4	66 174	3
Manufacturing	45 009	264	44 745	44 940	0	45 425	- 1
Public sector and utilities	23 964	47	23 917	25 264	- 5	26 671	-10
Construction	20 810	122	20 688	19 777	5	20 622	0
Retail	29 683	179	29 504	28 202	5	30 397	- 3
Transportation	15 478	27	15 451	15 265	1	13 772	12
Shipping and offshore	24 987	1 358	23 629	27 567	-14	29 851	-21
Hotels and restaurants	7 306	30	7 276	8 893	-18	8 935	-19
Information and communications	10 726	38	10 688	8 064	33	7 069	51
Finance and insurance	12 048	22	12 026	12 497	- 4	12 811	- 6
Property management	221 457	239	221 218	223 404	- 1	225 119	- 2
Residential properties	66 064	49	66 015	64 154	3	62 495	6
Commercial	84 228	79	84 149	87 942	- 4	95 152	-12
Industrial and Warehouse	45 415	37	45 378	45 145	1	42 759	6
Other	25 750	74	25 676	26 163	- 2	24 713	4
Professional services	25 886	555	25 331	23 221	9	25 677	- 1
Other corporate lending	19 228	107	19 121	18 552	3	17 432	10
Loans to the public excluding the Swedish National
Debt Office and repurchase agreements	1 492 082	3 853	1 488 229	1 453 308	2	1 439 270	3
Sw edish National Debt Office	831	0	831	5 079	-84	9 080	-91
Repurchase agreements,
Sw edish National Debt Office	18 480	0	18 480	3 797		6 918
Repurchase agreements, public	34 008	0	34 008	45 063	-25	71 367	-52
Loans to the public	1 545 401	3 853	1 541 548	1 507 247	2	1 526 635	1
Loans to the public and credit institutions	1 583 389	3 853	1 579 536	1 539 444	3	1 620 989	- 3

Note 11 Impaired loans etc.

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Impaired loans, gross	8 655	8 095	7	5 708	52
Provisions for individually assessed impaired loans	2 388	2 254	6	1 477	62
Provision for homogenous groups of impaired loans	494	453	9	627	-21
Impaired loans, net	5 773	5 388	7	3 604	60
of w hich private customers	964	1 113	-13	1 223	-21
of w hich corporate customers	4 809	4 275	12	2 381
Portfolio provisions for loans individually assessed as not impaired	971	1 048	- 7	1 173	-17
Share of impaired loans, gross, %1)	0.55	0.52	6	0.35	57
Share of impaired loans, net, %1)	0.37	0.35	6	0.22	68
Provision ratio for impaired loans, %1)	33	33	0	37	-11
Total provision ratio for impaired loans, % 1)	45	46	- 2	57	-21
Past due loans that are not impaired	3 427	3 164	8	3 917	-13
of w hich past due 5-30 days	2 132	1 768	21	2 671	-20
of w hich past due 31-60 days	732	857	-15	565	30
of w hich past due 61-90 days	297	269	10	279	6
of w hich past due more than 90 days	266	270	- 1	402	-34

1) For more information about impaired loans see page 44-45 in the Fact book.

Note 12 Assets taken over for protection of claims and cancelled leases

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Buildings and land	161	257	-37	269	-40
Shares and participating interests	25	3		3
Other property taken over	91	120	-24	136	-33
Total assets taken over for protection of claims	277	380	-27	408	-32
Cancelled leases	24	25	- 4	26	- 8
Total assets taken over for protection of claims
and cancelled leases	301	405	-26	434	-31
of w hich acquired by Ektornet group	41	139	-71	174	-76

Note 13 Credit exposures

Group	30 Sep	31 Dec		30 Sep
SEKm	2017	2016	%	2016	%
Assets
Cash and balances w ith central banks	336 283	121 347		262 773	28
Interest-bearing securities	210 205	182 072	15	182 525	15
Loans to credit institutions	37 988	32 197	18	94 354	-60
Loans to the public		1 541 548 1 507 247		2 1 526 635	1
Derivatives	66 127	87 811	-25	93 294	-29
Other financial assets	36 141	10 853		22 154	63
Total assets		2 228 292 1 941 527		15 2 181 735	2
Contingent liabilities and commitments
Guarantees	44 017	42 750	3	38 809	13
Commitments	266 827	262 701	2	264 696	1
Total contingent liabilities and commitments	310 844	305 451	2	303 505	2
Total credit exposures		2 539 136 2 246 978		13 2 485 240	2

Note 14 Intangible assets

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
With indefinite useful life
Goodw ill	12 923	12 408	4	12 468	4
Total	12 923	12 408	4	12 468	4
With finite useful life
Customer base	548	559	- 2	580	- 6
Brand name	162	0		0
Internally developed softw are	1 558	989	58	871	79
Other	770	323		374
Total	3 038	1 871	62	1 825	66
Total intangible assets	15 961	14 279	12	14 293	12

Impairment testing of intangible assets

During the third quarter, a write-down of SEK 96m was made for previously internally developed software. Similar software was obtained through the acquisition of our new subsidiary PayEx Holding AB.

Note 15 Amounts owed to credit institutions

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Amounts owed to credit institutions
Central banks	17 503	22 079	-21	24 941	-30
Banks	116 358	47 771		127 820	- 9
Other credit institutions	1 753	1 968	-11	2 973	-41
Repurchase agreements - banks	972	13		1 951	-50
Repurchase agreements - other credit institutions	101	0		443	-77
Amounts owed to credit institutions	136 687	71 831	90	158 128	-14

Note 16 Deposits and borrowings from the public

Group	30 Sep	31 Dec		30 Sep
SEKm	2017	2016	%	2016	%
Deposits from the public
Private customers	466 586	441 817	6	435 275	7
Corporate customers	443 253	340 214	30	429 483	3
Deposits from the public excluding the Swedish National Debt Office
and repurchase agreements	909 839	782 031	16	864 758	5
Sw edish National Debt Office	309	1		1
Repurchase agreements - public	25 606	10 892		14 422	78
Deposits and borrowings from the public	935 754	792 924	18	879 181	6

Note 17 Debt securities in issue and subordinated liabilities

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Commercial Paper and Certificates of Deposits	188 056	102 225	84	162 544	16
Covered bonds	554 723	558 295	- 1	563 218	- 2
Senior unsecured bonds	154 291	166 161	- 7	164 665	- 6
Structured retail bonds	14 763	14 992	- 2	15 069	- 2
Total debt securities in issue	911 833	841 673	8	905 496	1
Subordinated liabilities	30 448	27 254	12	22 899	33
Total debt securities in issue and subordinated liabilities	942 281	868 927	8	928 395	1

	Jan-Sep	Full year		Jan-Sep
Turnover during the period	2017	2016	%	2016	%
Opening balance	868 927	851 148	2	851 148	2
Issued	988 099	976 733	1	827 439	19
Repurchased	-70 369	-44 963	57	-18 336
Repaid	-809 490	-933 835	-13	-747 169	8
Change in market value or in hedged item in fair value hedge accounting	-8 993	-8 240	9	427
Changes in exchange rates	-25 893	28 084		14 886
Closing balance	942 281	868 927	8	928 395	1

Note 18 Derivatives

		Nominal amount 31 Mar 2017
		Remaining contractual maturity		Nominal amount		Positive fair value		Negative fair value
Group				2017	2016	2017	2016	2017	2016
SEKm	< 1 yr.	1-5 yrs.	> 5 yrs.	30 Sep	31 Dec	30 Sep	31 Dec	30 Sep	31 Dec
Derivatives in fair value hedges	86 110	377 970	58 190	522 270	531 489	11 104	16 676	913	587
Derivatives in portfolio fair value
hedges	37 000	165 355	13 350	215 705	171 230	278	223	1 487	2 063
Derivatives in cash flow hedges	0	1 718	7 573	9 291	9 364	0	0	484	494
Non-hedging derivatives	5 004 045	3 373 749	666 503	9 044 297	9 614 077	63 945	82 749	62 021	96 150
Gross amount	5 127 155	3 918 792	745 616	9 791 563	10 326 160	75 327	99 648	64 905	99 294
Offset amount (see also note 21)	-1 999 071	-1 250 105	-320 383	-3 569 559	-3 332 268	-9 200	-11 837	-11 574	-13 705
Total	3 128 084	2 668 687	425 233	6 222 004	6 993 892	66 127	87 811	53 331	85 589

The Group trades derivatives in the normal course of business and to hedge certain positions with regard to the value of equities, interest rates and currencies.

The amounts offset for derivative assets and derivative liabilities include cash collateral offsets of SEK 2 726m and SEK 352m respectively.

Note 19 Financial instruments at fair value

		30 Sep 2017		31 Dec 2016
Group	Fair	Carrying		Fair	Carrying
SEKm	value		amount Difference	value		amount Difference
Assets
Financial assets covered by IAS 39
Cash and balances w ith central banks	336 283	336 283	0	121 347	121 347	0
Treasury bills etc.	134 390	134 328	62	107 647	107 571	76
Loans to credit institutions	37 988	37 988	0	32 197	32 197	0
Loans to the public	1 545 728	1 541 548	4 180	1 512 686	1 507 247	5 439
Value change of interest hedged items in portfolio hedge	918	918	0	1 482	1 482	0
Bonds and interest-bearing securities	75 883	75 877	6	74 508	74 501	7
Financial assets for w hich the customers bear the investment risk	176 196	176 196	0	160 114	160 114	0
Shares and participating interest	25 532	25 532	0	23 897	23 897	0
Derivatives	66 127	66 127	0	87 811	87 811	0
Other financial assets	36 141	36 141	0	10 851	10 851	0
Total	2 435 186	2 430 938	4 248	2 132 540	2 127 018	5 522
Investment in associates		7 423			7 319
Non-financial assets		21 514			19 866
Total		2 459 875			2 154 203
Liabilities
Financial liabilities covered by IAS 39
Amounts ow ed to credit institutions	136 687	136 687	0	71 615	71 831	-216
Deposits and borrow ings from the public	935 737	935 754	-17	792 905	792 924	-19
Debt securities in issue	918 743	911 833	6 910	849 097	841 673	7 424
Financial liabilities for w hich the customers bear the investment risk	176 900	176 900	0	161 051	161 051	0
Subordinated liabilities	30 467	30 448	19	27 254	27 254	0
Derivatives	53 331	53 331	0	85 589	85 589	0
Short positions securities	30 789	30 789	0	11 614	11 614	0
Other financial liabilities	43 798	43 798	0	22 524	22 524	0
Total	2 326 451	2 319 540	6 911	2 021 649	2 014 460	7 189
Non-financial liabilities		11 273			10 038
Total		2 330 813			2 024 498

Group 30 Sep 2017 SEKm	Instruments with quoted market prices in active markets (Level 1)	Valuation techniques using observable market data (Level 2)	Valuation techniques using non observable market data (Level 3)	Total
Assets
Treasury bills etc.	17 190	6 731	0	23 921
Loans to credit institutions	0	2 061	0	2 061
Loans to the public	0	160 447	0	160 447
Bonds and other interest-bearing securities	32 550	40 013	0	72 563
Financial assets for w hich the customers bear the investment risk	176 196	0	0	176 196
Shares and participating interests	25 095	0	437	25 532
Derivatives	167	65 919	41	66 126
Total	251 198	275 171	478	526 847
Liabilities
Amounts ow ed to credit institutions	0	1 073	0	1 073
Deposits and borrow ings from the public	0	25 606	0	25 606
Debt securities in issue	3 121	19 426	0	22 547
Financial liabilities for w hich the customers bear the investment risk	0	176 900	0	176 900
Derivatives	130	53 201	0	53 331
Short positions, securities	30 789	0	0	30 789
Total	34 040	276 206	0	310 246

The table above contains financial instruments measured at fair value by valuation level. The Group uses various methods to determine the fair value for financial instruments depending on the degree of observable market data in the valuation and activity in the market. 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 a majority of 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 values of the risk positions that offset each other. For any open net positions, bid rates are applied for long positions and ask rates for short positions.

The Group has a continuous process whereby financial instruments that indicate a high level of internal estimates or low level of observable market data are captured. The process determines the way to calculate and how the internal assumptions are expected to affect the valuation. In cases where internal assumptions have a material impact on fair value, the financial instrument is reported in level 3. The process also includes an analysis and evaluation based on the quality of the valuation data as well as whether a type of financial instrument is to be transferred between levels.

When transfers occur between fair value hierarchy levels those 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.

Group 31 Dec 2016 SEKm	Instruments with quoted market prices in an active market (Level 1)	Valuation techniques using observable market data (Level 2)	Valuation techniques using non observable market data (Level 3)	Total
Assets
Treasury bills etc.	16 740	5 429	0	22 169
Loans to credit institutions	0	852	0	852
Loans to the public	0	190 512	0	190 512
Bonds and other interest-bearing securities	42 650	28 183	0	70 833
Financial assets for w hich the customers bear the investment risk	160 115	0	0	160 115
Shares and participating interests	23 604	135	158	23 897
Derivatives	138	87 608	65	87 811
Total	243 247	312 719	223	556 189
Liabilities
Amounts ow ed to credit institutions	0	13	0	13
Deposits and borrow ings from the public	0	10 892	0	10 892
Debt securities in issue	3 270	19 830	0	23 100
Financial liabilities for w hich the customers bear the investment risk	0	161 051	0	161 051
Derivatives	75	85 514	0	85 589
Short positions, securities	11 614	0	0	11 614
Total	14 959	277 300	0	292 259

Changes in level 3	Assets
Group	Equity
SEKm	instruments Derivatives		Total
January-September 2017
Opening balance 1 January 2017	158	65	223
Purchases	207	0	207
Sale of assets	- 2	0	- 2
Maturities	0	-21	-21
Transferred from Level 2 to Level 3	64	0	64
Transferred from Level 3 to Level 2	0	- 2	- 2
Gains or losses	10	- 1	9
of w hich in the income statement, net gains and losses on financial
items at fair value	10	- 1	9
of w hich changes in unrealised gains or losses
for items held at closing day	0	3	3
Closing balance 30 September 2017	437	41	478

Level 3 primarily contains unlisted equity instruments and illiquid options. In connection with the sale of shares in VISA Europe convertible preference shares in VISA Inc. were obtained. The shares are subject to selling restrictions for a period of up to 12 years and under certain conditions may have to be returned. Because liquid quotes are not available for the instrument, its fair value is established with significant elements of own internal assumptions and reported in level 3 as equity instruments. The options hedge changes in the market value of hybrid debt instruments, so-called structured products. Structured products consist of a corresponding option element and a host contract, which in principle is an ordinary interestbearing bond. When the Group evaluates the level on which the financial instruments are reported, the entire instrument is assessed on an individual basis. Since the bond portion of the structured products represents the majority of the financial instrument's fair value, the internal assumptions

used to value the illiquid option element normally do not have a significant effect on the valuation and the financial instrument is typically reported in level 2. However, the Group typically hedges the market risks that arise in structured products by holding individual options. The internal assumptions used to in the valuation of the individual financial instruments are therefore of greater significance, because of which several are reported as derivatives in level 3.

For all options included in level 3 an analysis is performed based on historical movements in contract prices. Given this, it is not likely that future price movements will affect the market value for options in level 3 with more than +/- SEK 4m.

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 Derivatives		Total
January-September 2016
Opening balance 1 January 2016	73	114	187
Purchases	4	0	4
VISA Inc. C shares received	62	0	62
Sale of assets	-55	0	-55
Maturities	0	-13	-13
Issues	0	2	2
Transferred from Level 1 to Level 3	66	0	66
Transferred from Level 2 to Level 3	0	2	2
Transferred from Level 3 to Level 2	0	- 3	- 3
Gains or losses	16	-20	- 4
of w hich in the income statement, net gains and losses on financial
items at fair value	16	-20	- 4
of w hich changes in unrealised gains or losses
for items held at closing day	18	-14	4
Closing balance 30 September 2016	166	82	248

Note 20 Pledged collateral

Group SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Loan receivables1	550 404	542 278	1	541 663	2
Financial assets pledged for policyholders	173 422	157 804	10	153 727	13
Other assets pledged	46 087	37 546	23	42 457	9
Pledged collateral	769 913	737 628	4	737 847	4

1) The pledge is defined as the borrower's nominal debt including accrued interest. Refers to the loans of the total available collateral that are used as the pledge at each point in time.

Note 21 Offsetting financial assets and liabilities

	Assets			Liabilities
Group	30 Sep	31 Dec		30 Sep	31 Dec
SEKm	2017	2016	%	2017	2016	%
Financial assets and liabilities, which have been offset or are subject to
netting or similar agreements
Gross amount	137 317	152 098	-10	103 145	111 865	- 8
Offset amount	-18 336	-16 340	12	-20 710	-18 208	14
Net amounts presented in the balance sheet	118 981	135 758	-12	82 435	93 657	-12
Related amounts not offset in the balance sheet
Financial instruments, netting arrangements	38 708	46 691	-17	38 708	46 691	-17
Financial Instruments, collateral	41 908	40 853	3	22 423	4 391
Cash, collateral	10 959	12 676	-14	9 203	13 775	-33
Total amount not offset in the balance sheet	91 575	100 220	- 9	70 334	64 857	8
Net amount	27 406	35 538	-23	12 101	28 800	-58

The amounts offset for financial assets and financial liabilities include cash collateral offsets of SEK 2 726 m and SEK 352m respectively.

Note 22 Capital adequacy, consolidated situation

Capital adequacy	30 Sep	31 Dec	30 Sep
SEKm	2017	2016	2016
Shareholders' equity according to the Group's balance sheet	128 864	129 515	123 999
Non-controlling interests	73	78	79
Anticipated dividend Deconsolidation of insurance companies	-10 959 41	-14 695 96	-11 548 204
Value changes in ow n financial liabilities	37	- 2	- 9
Cash flow hedges	1	-77	-129
Additional value adjustments 1)	-729	-598	-918
Goodw ill	-13 012	-12 497	-12 558
Deferred tax assets	-120	-114	-109
Intangible assets	-2 553	-1 601	-1 547
Net provisions for reported IRB credit exposures	-1 505	-1 376	-1 370
Shares deducted from CET1 capital	-51	-50	-45
Common Equity Tier 1 capital	100 087	98 679	96 049
Additional Tier 1 capital	11 115	14 281	9 634
Total Tier 1 capital	111 202	112 960	105 683
Tier 2 capital	18 580	12 229	12 526
Total capital	129 782	125 189	118 209
Minimum capital requirement for credit risks, standardised approach	3 272	3 800	4 005
Minimum capital requirement for credit risks, IRB	21 592	21 478	21 830
Minimum capital requirement for credit risk, default fund contribution	43	34	3
Minimum capital requirement for settlement risks	0	0	0
Minimum capital requirement for market risks	784	754	918
Trading book	768	732	910
of w hich VaR and SVaR	501	563	515
of w hich risks outside VaR and SVaR	267	169	395
FX risk other operations	16	22	8
Minimum capital requirement for credit value adjustment	353	424	500
Minimum capital requirement for operational risks	5 079	4 972	4 972
Additional minimum capital requirement, Article 3 CRR 2)	2 437	69	69
Minimum capital requirement Risk exposure amount credit risks, standardised approach	33 560 40 894	31 531 47 503	32 297 50 068
Risk exposure amount credit risks, IRB	269 902	268 473	272 874
Risk exposure amount default fund contribution	548	431	38
Risk exposure amount settlement risks	1	0	0
Risk exposure amount market risks Risk exposure amount credit value adjustment	9 803 4 415	9 419 5 297	11 472 6 247
Risk exposure amount operational risks	63 482	62 152	62 152
Additional risk exposure amount, Article 3 CRR 2)	30 460	860	860
Risk exposure amount	419 505	394 135	403 711
Common Equity Tier 1 capital ratio, %	23.9	25.0	23.8
Tier 1 capital ratio, %	26.5	28.7	26.2
Total capital ratio, %	30.9	31.8	29.3
Capital buffer requirement 3 )	30 Sep	31 Dec	30 Sep
%	2017	2016	2016
CET1 capital requirement including buffer requirements	11.3	11.0	11.0
of w hich minimum CET1 requirement	4.5	4.5	4.5
of w hich capital conservation buffer	2.5	2.5	2.5
of w hich countercyclical capital buffer	1.3	1.0	1.0
of w hich systemic risk buffer	3.0	3.0	3.0
CET 1 capital available to meet buffer requirement 4)	19.4	20.5	19.3
Capital adequacy Basel 1 floor 5)
SEKm	30 Sep 2017	31 Dec 2016	30 Sep 2016
Capital requirement Basel 1 floor	76 502	75 749	73 406
Ow n funds Basel 3 adjusted according to rules for Basel 1 floor	131 287	126 565	119 579
Surplus of capital according to Basel 1 floor	54 785	50 816	46 173

Leverage ratio	30 Sep 2017	31 Dec 2016	30 Sep 2016
Tier 1 Capital, SEKm	111 202	112 960	105 683
Leverage ratio exposure, SEKm	2 376 836	2 098 179	2 358 761
Leverage ratio, %	4.7	5.4	4.5

1) Adjustment due to the implementation of EBA's technical standards on prudent valuation. The objective of these standards is to determine prudent values of fair valued positions.

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.

3) Buffer requirement according to Swedish implementation of CRD IV

4) 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.

5) Basel 1 floor based on the higher of the Basel 3 capital requirement and 80% of Basel 1 capital requirement. In the latter case the own funds is adjusted according to CRR article 500.4

The consolidated situation for Swedbank as of 30 September 2017 comprised the Swedbank Group with the exception of insurance companies. The Entercard Group was included as well through the proportionate consolidation method.

The note contains the information made public according to the Swedish Financial Supervisory Authority Regulation FFFS 2014:12, chap. 8. Additional 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 website: https://www.swedbank.com/investorrelations/financial-information-and-publications/riskreport/index.htm

Swedbank Consolidated situation	Exposure value			Average risk weight, %		Minimum capital requirement
Credit risk, IRB	30 Sep	31 Dec	30 Sep	31 Dec	30 Sep	31 Dec
SEKm	2017	2016	2017	2016	2017	2016
Central government or central banks exposures	494 492	0	1	0	514	0
Institutional exposures	80 518	83 959	16	16	1 014	1 072
Corporate exposures	511 924	508 765	34	35	13 805	14 065
Retail exposures	1 088 717	1 032 298	7	7	5 912	5 772
of w hich mortgage	987 040	936 542	5	5	3 724	3 633
of w hich other	101 677	95 756	27	28	2 188	2 139
Non credit obligation	7 396	12 182	59	58	347	569
Total credit risks, IRB	2 183 047	1 637 204	12	16	21 592	21 478

requirement, consolidated situation 30 Sep 2017	Exposure amount	Risk exposure	Minimum capital
SEKm		amount	requirement
Credit risks, STD	56 645	40 894	3 272
Central government or central banks exposures	261	0	0
Regional governments or local authorities exposures	1 631	209	17
Public sector entities exposures	4 919	113	9
Multilateral development banks exposures	4 271	0	0
International organisation exposures	424	0	0
Institutional exposures	7 551	232	19
Corporate exposures	5 381	4 997	400
Retail exposures	13 600	9 939	795
Exposures secured by mortgages on immovable property	5 953	2 086	167
Exposures in default	513	521	42
Exposures in the form of covered bonds	125	13	1
Equity exposures	8 283	19 890	1 591
Other items	3 733	2 894	231
Credit risks, IRB	2 183 047	269 902	21 592
Central government or central banks exposures	494 492	6 422	514
Institutional exposures	80 518	12 676	1 014
Corporate exposures	511 924	172 568	13 805
of w hich specialized lending in category 1	12	8	1
of w hich specialized lending in category 2	309	259	21
of w hich specialized lending in category 3	395	454	36
of w hich specialized lending in category 4	185	461	37
of w hich specialized lending in category 5	310	0	0
Retail exposures	1 088 717	73 902	5 912
of w hich mortgage lending	987 040	46 551	3 724
of w hich other lending	101 677	27 351	2 188
Non-credit obligation	7 396	4 334	347
Credit risks, Default fund contribution	0	548	43
Settlement risks	3	1	0
Market risks	0	9 803	784
Trading book	0	9 607	768
of w hich VaR and SVaR	0	6 260	501
of w hich risks outside VaR and SVaR	0	3 347	267
FX risk other operations	0	196	16
Credit value adjustment	20 730	4 415	353
Operational risks	0	63 482	5 079
of w hich Basic indicator approach	0	1 137	91
of w hich Standardised approach	0	62 345	4 988
Additional risk exposure amount, Article 3 CRR	0	30 460	2 437
Total	2 260 425	419 505	33 560

Exposure amount, Risk exposure amount and Minimum capital
requirement, consolidated situation
31 Dec 2016	Exposure amount	Risk exposure	Minimum capital
SEKm		amount	requirement
Credit risks, STD	351 879	47 503	3 800
Central government or central banks exposures	245 746	449	36
Regional governments or local authorities exposures	32 453	276	22
Public sector entities exposures	5 551	60	5
Multilateral development banks exposures	6 411	20	2
International organisation exposures	609	0	0
Institutional exposures	5 456	127	10
Corporate exposures	4 909	4 630	370
Retail exposures	14 315	10 485	839
Exposures secured by mortgages on immovable property	23 884	8 361	669
Exposures in default	391	403	32
Exposures in the form of covered bonds	69	7	1
Equity exposures	8 088	19 691	1 575
Other items	3 997	2 994	240
Credit risks, IRB	1 637 204	268 473	21 478
Institutional exposures	83 959	13 406	1 072
Corporate exposures	508 765	175 810	14 065
of w hich specialized lending in category 1	13	9	1
of w hich specialized lending in category 2	321	274	22
of w hich specialized lending in category 3	555	638	51
of w hich specialized lending in category 4	261	654	52
of w hich specialized lending in category 5	260	0	0
Retail exposures	1 032 298	72 151	5 772
of w hich mortgage lending	936 542	45 410	3 633
of w hich other lending	95 756	26 741	2 139
Non-credit obligation	12 182	7 106	569
Credit risks, Default fund contribution	0	431	34
Settlement risks	0	0	0
Market risks	0	9 419	754
Trading book	0	9 147	732
of w hich VaR and SVaR	0	7 033	563
of w hich risks outside VaR and SVaR	0	2 114	169
FX risk other operations	0	272	22
Credit value adjustment	21 393	5 297	424
Operational risks	0	62 152	4 972
of w hich Standardised approach	0	62 152	4 972
Additional risk exposure amount, Article 3 CRR	0	860	69
Total	2 010 476	394 135	31 531

Credit risks

The Internal Ratings-Based Approach (IRB) is applied within the Swedish part of Swedbank's consolidated situation, including the branch offices in New York and Oslo but excluding 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 clearing member, the bank calculates a capital base 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 a 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 a 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 a credit value adjustment is estimated according to the standardised approach and was added after the implementation of the new EU regulation (CRR).

Operational risk

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

Basel 1 floor

The transition rules state that the minimum capital requirement must not fall below 80 per cent of the requirement according to the older Basel 1 rules.

Note 23 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

Note 24 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.

exposed to by quantifying their 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 2017 the internal capital assessment for Swedbank's consolidated situation amounted to SEK 30.1bn (SEK 29.2bn as of 30 June 2017). The capital to meet the internal capital assessment, i.e. the capital base, amounted to SEK 129.8bn (SEK 132.0bn as of 30 June 2017) (see Note 22). Swedbank's internal capital assessment using its own models is not comparable with the estimated capital requirement that the SFSA releases quarterly.

The internally estimated capital requirement for the parent company is SEK 23.1bn (SEK 24.8bn as of 30 June 2017) and the capital base is SEK 106.7bn (SEK 107.8bn as of 30 June 2017) (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 2016 as well as in Swedbank's yearly Risk and Capital Adequacy Report, available on www.swedbank.com.

In addition to what is stated in this interim report, detailed descriptions are provided in Swedbank's 2016 annual report and in the annual disclosure on risk management and capital adequacy available on 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 2017
Group
SEKm	< 5 years	5-10 years	>10 years	Total
Swedbank,
the Group	-378	-392	165	-605
of w hich SEK	-1 346	-47	124	-1 270
of w hich foreign currency	968	-345	42	665
Of which financial instruments at fair value
reported through profit or loss	615	-326	77	366
of w hich SEK	-409	-14	22	-402
of w hich foreign currency	1 024	-312	56	768

Note 25 Business Combinations 2017

On August 15, 2017 the Group acquired all the shares in PayEx Holdings AB for SEK 1 268m. PayEx Holding AB owns the subsidiaries: PayEx Norge AS and their subsidiaries PayEx Danmark A/S, PayEx

Collection AB, PayEx Sverige AB and the subsidiaries PayEx Solution OY, PayEx Suomi OY and PayEx Invest AB and the subsidiaries Faktab B1 AB, Faktab S1 AB and Faktab V1 AB.

	Recognised
	in the Group at
Group	aquisition date
SEKm	15 August 2017
Cash and balances w ith central banks	0
Loans to credit institutions	330
Loans to the public Interest-bearing securities	271 28
Intangible fixed assets	653
Tangible assets	146
Current tax assets	21
Deferred tax assets	13
Other assets	88
Prepaid expenses and accrued income	79
Total assets	1 629
Deposits and borrow ings from the public	224
Current tax liabilities	2
Deferred tax liabilities	153
Other liabilities	158
Accrued expenses and prepaid income	84
Pension provisions	152
Total liabilities	773
Total identifiable net assets	856
Acquistion cost, cash	1 268
Goodwill	412
Cash flow
Cash and cash equivalents in the acquired company	0
Acquistion cost, cash	-1 268
Net	-1 268
Acquired loans, fair value	271
Acquired loans, gross contracutal amounts Acquired loans, best estimate of the contractual cash flow s not expected to be collected	398 127
From the acquisition date the acquired company contributed w ith SEK xm to revenue and w As from the acquisition date the acquired company would have been contributed with about SEK 321m in If it had been acquired at the beginning of the financial year, the company w ould have contributed w	ith SEK xm to profit for 2017. ith approximately SEK

If it had been acquired at the beginning of the financial year, the company w ould have contributed w ith approximately SEK xm to revenue and w ith approximately SEK xm to profit. As from the acquisition date the acquired company contributed SEK 38m to income and SEK 3m to profit after tax. If the company had been acquired at the beginning of the 2017 financial year, the company

would have been contributed with about SEK 321m in income through September 2017 and contributed with about SEK -14m profit after tax

Note 26 Related-party transactions

During the period normal business transactions were executed between companies in the Group, including other related companies such as associates. Partly owned savings banks are major associates.

Note 27 Swedbank's share

	30 Sep 2017	31 Dec 2016	30 Sep % 2016	%
SWED A
Share price, SEK	225.20	220.30	2 201.60	12
Number of outstanding ordinary shares	1 113 629 621 1 110 731 820		0 1 110 731 820	0
Market capitalisation, SEKm	250 789	244 694	2 223 924	12
Number of outstanding shares	30 Sep 2017	31 Dec 2016	30 Sep 2016
Issued shares SWED A		1 132 005 722 1 132 005 722 1 132 005 722
Repurchased shares SWED A	-18 376 101	-21 273 902	-21 273 902
Repurchase of own shares for trading purposes SWED A	0	0	0
Number of outstanding shares on the closing day		1 113 629 621 1 110 731 820 1 110 731 820
Within Sw edbank's share-based compensation programme, Sw 801 shares at no cost to employees.	edbank AB has during 2017 transferred 2 897

801 shares at no cost to employees.

Earnings per share	Q3 2017	Q2 2017	Q3 2016	Jan-Sep 2017	Jan-Sep 2016
Average number of shares
Average number of shares before dilution		1 113 629 566 1 113 487 141 1 110 731 820		1 113 086 410 1 109 796 224
Weighted average number of shares for potential ordinary shares
that incur a dilutive effect due to share-based compensation
programme	4 327 582	4 598 508	5 562 781	5 115 206	6 101 720
Average number of shares after dilution		1 117 957 147 1 118 085 649 1 116 294 601		1 118 201 616 1 115 897 944
Profit, SEKm
Profit for the period attributable to shareholders of Sw edbank	4 743	4 746	4 816	14 613	15 397
Earnings for the purpose of calculating earnings per share	4 743	4 746	4 816	14 613	15 397
Earnings per share, SEK
Earnings per share before dilution	4.26	4.26	4.33	13.13	13.87
Earnings per share after dilution	4.24	4.24	4.31	13.07	13.80

Note 28 Effects of changed reporting of the compensation to the Savings banks for mortgage loans

Income statement

	New		Previous	New		Previous	New		Previous
	reporting		reporting	reporting		reporting	reporting		reporting
Group SEKm	2016	Q3 Change	2016 Q3	2016 Jan-Sep	Change	2016 Jan-Sep	2016 Full-year	Change	2016 Full-year
Interest income	8 306	-225	8 531	24 986	-567	25 553	32 914	-814	33 728
Negative yield on financial assets	-469	0	-469	-1 166	0	-1 166	-1 543	0	-1 543
Interest income, including negative yield on financial
assets	7 837	-225	8 062	23 820	-567	24 387	31 371	-814	32 185
Interest expenses	-2 143	0	-2 143	-7 113	0	-7 113	-9 256	0	-9 256
Negative yield on financial liabilities	143	0	143	143	0	143	735	0	735
Interest expenses, including negative yield on
financial liabilities	-2 000	0	-2 000	-6 970	0	-6 970	-8 521	0	-8 521
Net interest income (note 5)	5 837	-225	6 062	16 850	-567	17 417	22 850	-814	23 664
Net commission income (note 6)	2 838	0	2 838	8 278	0	8 278	11 333	0	11 333
Net gains and losses on financial items at fair value (note 7)	669	0	669	1 946	0	1 946	2 231	0	2 231
Net insurance	174	0	174	534	0	534	754	0	754
Share of profit or loss of associates	238	0	238	2 358	0	2 358	2 467	0	2 467
Other income	284	0	284	908	0	908	1 186	0	1 186
Total income	10 040	-225	10 265	30 874	-567	31 441	40 821	-814	41 635
Staff costs	2 315	0	2 315	6 936	0	6 936	9 376	0	9 376
Other expenses (note 8)	1 322	-225	1 547	4 058	-567	4 625	5 622	-814	6 436
Depreciation/amortisation	167	0	167	476	0	476	629	0	629
Total expenses	3 804	-225	4 029	11 470	-567	12 037	15 627	-814	16 441
Profit before impairments	6 236	0	6 236	19 404	0	19 404	25 194	0	25 194
Impairment of intangible assets (note 14)	0	0	0	0	0	0	35	0	35
Impairment of tangible assets	1	0	1	10	0	10	31	0	31
Credit impairments (note 9)	201	0	201	774	0	774	1 367	0	1 367
Operating profit	6 034	0	6 034	18 620	0	18 620	23 761	0	23 761
Tax expense	1 215	0	1 215	3 213	0	3 213	4 209	0	4 209
Profit for the period	4 819	0	4 819	15 407	0	15 407	19 552	0	19 552
Profit for the period attributable to the
shareholders of Swedbank AB	4 816	0	4 816	15 397	0	15 397	19 539	0	19 539
Non-controlling interests	3	0	3	10	0	10	13	0	13
C/I-ratio	0.38		0.39	0.37		0.38	0.38		0.39

For more information see note 1 Accounting policies.

Net interest income

	New		Previous	New		Previous	New		Previous
	reporting		reporting	reporting		reporting	reporting		reporting
Group SEKm	2016 Q3	Change	2016 Q3	2016 Jan-Sep	Change	2016 Jan-Sep	2016 Full-year	Change	2016 Full-year
Interest income
Loans to credit institutions	15	0	15	108	0	108	64	0	64
Loans to the public	7 507	-225	7 732	22 476	-567	23 043	30 031	-814	30 845
Interest-bearing securities	137	0	137	535	0	535	651	0	651
Derivatives	256	0	256	914	0	914	1 093	0	1 093
Other	231	0	231	755	0	755	764	0	764
Total interest income including negative yield on
financial assets	8 146	-225	8 371	24 788	-567	25 355	32 603	-814	33 417
deduction of trading interests reported in net gains and
losses on financial items at fair value	309	0	309	968	0	968	1 232	0	1 232
Interest income, including negative yield on
financial assets, according to income statement	7 837	-225	8 062	23 820	-567	24 387	31 371	-814	32 185
Interest expenses
Amounts ow ed to credit institutions	-134	0	-134	-367	0	-367	-269	0	-269
Deposits and borrow ings from the public	-293	0	-293	-934	0	-934	-1 100	0	-1 100
of w hich deposit guarantee fees	-101	0	-101	-356	0	-356	-466	0	-466
Debt securities in issue	-3 649	0	-3 649	-9 849	0	-9 849	-13 013	0	-13 013
Subordinated liabilities	-235	0	-235	-726	0	-726	-977	0	-977
Derivatives	2 507	0	2 507	5 446	0	5 446	7 638	0	7 638
Other	-176	0	-176	-526	0	-526	-689	0	-689
of w hich government stabilisation fund fee	-164	0	-164	-486	0	-486	-646	0	-646
Total interest expenses including negative yield on
financial liabilities	-1 980	0	-1 980	-6 956	0	-6 956	-8 410	0	-8 410
deduction of trading interests reported in net gains and
losses on financial items at fair value	20	0	20	14	0	14	111	0	111
Interest expenses, including negative yield on
financial liabilities, according to income statement	-2 000	0	-2 000	-6 970	0	-6 970	-8 521	0	-8 521
Net interest income	5 837	-225	6 062	16 850	-567	17 417	22 850	-814	23 664
Net interest margin before trading interest is
deducted	1.01	-0.04	1.04	0.99	-0.03	1.03	1.02	-0.03	1.05
Average total assets	2 449 167	0	2 449 167	2 391 602	0	2 391 602	2 373 930	0	2 373 930

Other expenses

	New reporting		Previous reporting	New reporting		Previous reporting	New reporting		Previous reporting
Group SEKm	2016 Q3	Change	2016 Q3	2016 Jan-Sep	Change	2016 Jan-Sep	2016 Full-year	Change	2016 Full-year
Premises and rents	282	0	282	816	0	816	1 131	0	1 131
IT expenses	437	0	437	1 310	0	1 310	1 834	0	1 834
Telecommunications and postage	21	0	21	91	0	91	118	0	118
Advertising, PR and marketing	62	0	62	196	0	196	285	0	285
Consultants	76	0	76	238	0	238	314	0	314
Compensation to savings banks	58	-225	283	176	-567	743	236	-814	1 050
Other purchased services	177	0	177	516	0	516	708	0	708
Security transport and alarm systems	18	0	18	51	0	51	72	0	72
Supplies	17	0	17	66	0	66	103	0	103
Travel	39	0	39	152	0	152	226	0	226
Entertainment	10	0	10	33	0	33	51	0	51
Repair/maintenance of inventories	25	0	25	79	0	79	111	0	111
Other expenses	100	0	100	334	0	334	433	0	433
Total other expenses	1 322	-225	1 547	4 058	-567	4 625	5 622	-814	6 436

Swedbank AB

Income statement, condensed

Parent company SEKm	Q3 2017	Q2 2017	%	Q3 2016	%	Jan-Sep 2017	Jan-Sep 2016	%
Interest income	4 543	4 520	1	4 270	6	13 344	12 716	5
Negative yield on financial assets	-583	-546	7	-467	25	-1 512	-1 155	31
Interest income, including negative yield on financial
assets	3 960	3 974	0	3 803	4	11 832	11 561	2
Interest expenses	-1 146	-1 111	3	-835	37	-3 302	-2 953	12
Negative yield on financial liabilities	205	186	10	134	53	531	359	48
Interest expenses, including negative yield on
financial liabilities	-941	-925	2	-701	34	-2 771	-2 594	7
Net interest income	3 019	3 049	- 1	3 102	- 3	9 061	8 967	1
Dividends received	5 207	3 368	55	655		11 591	13 783	-16
Commission income	2 383	2 444	- 2	2 321	3	7 116	6 814	4
Commission expenses	-819	-786	4	-707	16	-2 321	-2 143	8
Net commission income	1 564	1 658	- 6	1 614	- 3	4 795	4 671	3
Net gains and losses on financial items at fair value	504	742 -32		160		1 899	669
Other income	372	376	- 1	310	20	1 105	954	16
Total income	10 666	9 193	16	5 841	83	28 451	29 044	- 2
Staff costs	1 942	1 985	- 2	1 897	2	5 959	5 763	3
Other expenses	1 169	1 313 -11		1 040	12	3 679	3 308	11
Depreciation/amortisation and impairments of tangible
and intangible fixed assets	1 112	1 116	0	1 114	0	3 321	3 303	1
Total expenses	4 223	4 414	- 4	4 051	4	12 959	12 374	5
Profit before impairments	6 443	4 779	35	1 790		15 492	16 670	- 7
Impairment of financial fixed assets	0	0		1		0	88
Credit impairments	261	385 -32		221	18	1 042	807	29
Operating profit	6 182	4 394	41	1 568		14 450	15 775	- 8
Tax expense	1 457	992	47	230		2 737	1 130
Profit for the period	4 725	3 402	39	1 338		11 713	14 645	-20

Statement of comprehensive income, condensed

Parent company SEKm	Q3 2017	Q2 2017	%	Q3 2016	%	2017	Jan-Sep Jan-Sep 2016	%
Profit for the period reported via income statement	4 725	3 402	39	1 338		11 713	14 645	-20
Total comprehensive income for the period	4 725	3 402	39	1 338		11 713	14 645	-20

Balance sheet, condensed

Parent company SEKm	30 Sep 2017	31 Dec 2016	%	30 Sep 2016	%
Assets
Cash and balance w ith central banks	281 744	64 193		208 490	35
Loans to credit institutions	467 574	409 763	14	483 453	- 3
Loans to the public	422 205	430 406	- 2	474 957	-11
Interest-bearing securities	207 517	175 865	18	174 960	19
Shares and participating interests	89 191	82 267	8	80 153	11
Derivatives	73 561	96 243	-24	103 511	-29
Other assets	52 298	35 437	48	42 624	23
Total assets	1 594 090 1 294 174			23 1 568 148	2
Liabilities and equity
Amounts ow ed to credit institutions	211 346	129 276	63	247 339	-15
Deposits and borrow ings from the public	763 351	617 704	24	705 121	8
Debt securities in issue	356 218	282 369	26	341 061	4
Derivatives	72 037	114 620	-37	113 911	-37
Other liabilities and provisions	68 055	27 390		47 346	44
Subordinated liabilities	30 211	27 254	11	22 899	32
Untaxed reserves	10 206	10 206	0	10 021	2
Equity	82 666	85 355	- 3	80 450	3
Total liabilities and equity	1 594 090 1 294 174			23 1 568 148	2
Pledged collateral	39 884	33 624	19	38 774	3
Other assets pledged	7 673	4 241	81	3 685
Contingent liabilities	586 220	588 167	0	583 381	0
Commitments	234 238	232 134	1	231 484	1

Statement of changes in equity, condensed

Parent company SEKm
		Share
	Share	premium	Statutory	Retained
	capital	reserve	reserve	earnings	Total
January-September 2016
Opening balance 1 January 2016	24 904	13 206	5 968	33 304	77 382
Dividend	0	0	0	-11 880	-11 880
Share based payments to employees	0	0	0	304	304
Deferred tax related to share based payments
to employees	0	0	0	-32	-32
Current tax related to share based payments
to employees	0	0	0	31	31
Total comprehensive income for the period	0	0	0	14 645	14 645
Closing balance 30 September 2016	24 904	13 206	5 968	36 372	80 450
January-December 2016
Opening balance 1 January 2016	24 904	13 206	5 968	33 304	77 382
Dividend	0	0	0	-11 880	-11 880
Share based payments to employees	0	0	0	378	378
Deferred tax related to share based payments
to employees	0	0	0	-13	-13
Current tax related to share based payments
to employees	0	0	0	30	30
Total comprehensive income for the period	0	0	0	19 458	19 458
Closing balance 31 December 2016	24 904	13 206	5 968	41 277	85 355
January-September 2017
Opening balance 1 January 2017	24 904	13 206	5 968	41 277	85 355
Dividend	0	0	0	-14 695	-14 695
Share based payments to employees	0	0	0	270	270
Deferred tax related to share based payments
to employees	0	0	0	-13	-13
Current tax related to share based payments
to employees	0	0	0	36	36
Total comprehensive income for the period	0	0	0	11 713	11 713
Closing balance 30 September 2017	24 904	13 206	5 968	38 588	82 666

Cash flow statement, condensed

Parent company SEKm	Jan-Sep 2017	Full-year 2016	Jan-Sep 2016
Cash flow from operating activities	127 617	-61 179	14 664
Cash flow from investing activities	2 931	13 493	17 482
Cash flow from financing activities	87 003	-19 980	44 485
Cash flow for the period	217 551	-67 666	76 631
Cash and cash equivalents at beginning of period	64 193	131 859	131 859
Cash flow for the period	217 551	-67 666	76 631
Cash and cash equivalents at end of period	281 744	64 193	208 490

Capital adequacy

Capital adequacy, Parent company	30 Sep	31 Dec	30 Sep
SEKm	2017	2016	2016
Common Equity Tier 1 capital	77 270	73 361	71 173
Additional Tier 1 capital	11 105	14 270	9 624
Tier 1 capital	88 375	87 631	80 797
Tier 2 capital	18 329	12 204	12 502
Total capital	106 704	99 835	93 299
Minimum capital requirement	25 743	23 537	24 368
Risk exposure amount	321 784	294 210	304 601
Common Equity Tier 1 capital ratio, %	24.0	24.9	23.4
Tier 1 capital ratio, %	27.5	29.8	26.5
Total capital ratio, %	33.2	33.9	30.6
Capital buffer requirement1)	30 Sep	31 Dec	30 Sep
%	2017	2016	2016
CET1 capital requirement including buffer requirements	8.4	8.3	8.3
of w hich minimum CET1 requirement	4.5	4.5	4.5
of w hich capital conservation buffer	2.5	2.5	2.5
of w hich countercyclical capital buffer	1.4	1.3	1.3
CET 1 capital available to meet buffer requirement 2)	19.5	20.4	18.9
Capital adequacy transition rules Basel 1 floor 3)	30 Sep	31 Dec	30 Sep
SEKm	2017	2016	2016
Capital requirement Basel 1 floor	28 263	29 553	28 233
	107 213	100 318	93 809
Ow n funds Basel 3 adjusted according to rules for Basel 1 floor
Surplus of capital according to Basel 1 floor	78 950	70 765	65 576

Leverage ratio	30 Sep	31 Dec	30 Sep
%	2017	2016	2016
Tier 1 Capital, SEKm	88 375	87 631	80 797
Total exposure, SEKm 4)	1 241 048	1 004 780	1 287 086
Leverage ratio, % 4)	7.1	8.7	6.3

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.

3) Basel 1 floor based on the higher of the Basel 3 capital requirement and 80% of Basel 1 capital requirement. In the latter case the own funds is adjusted according to CRR article 500.4.

4) Taking into account exemption according to CRR article 429.7 excluding certain intragroup exposures.

Exposure amount, Risk exposure amount and Minimum capital
requirement, parent company
30 Sep 2017	Exposure amount	Risk exposure	Minimum capital
SEKm		amount	requirement
Credit risks, STD	1 073 321	77 276	6 182
Central government or central banks exposures	15	0	0
Regional governments or local authorities exposures	73	15	1
Public sector entities exposures	2 611	0	0
Multilateral development banks exposures	3 061	0	0
International organisation exposures	271	0	0
Institutional exposures	996 173	504	40
Corporate exposures	3 841	3 727	298
Retail exposures	420	314	25
Exposures secured by mortgages on immovable property	2 426	849	68
Exposures in default	0	0	0
Equity exposures	63 829	71 278	5 702
Other items	601	589	48
Credit risks, IRB	1 025 275	164 482	13 159
Central government or central banks exposures	431 242	5 187	415
Institutional exposures	90 300	14 793	1 183
Corporate exposures	405 607	120 611	9 649
of w hich specialized lending	0	0	0
Retail exposures	94 940	20 872	1 670
of w hich mortgage lending	13 155	2 703	216
of w hich other lending	81 785	18 169	1 454
Non-credit obligation	3 186	3 019	242
Credit risks, Default fund contribution	0	548	43
Settlement risks	3	1	0
Market risks	0	9 721	778
Trading book	0	9 532	763
of w hich VaR and SVaR	0	6 262	501
of w hich risks outside VaR and SVaR	0	3 270	262
FX risk other operations	0	189	15
Credit value adjustment	19 688	4 381	351
Operational risks	0	35 317	2 825
Standardised approach	0	35 317	2 825
Additional risk exposure amount, Article 3 CRR	0	30 058	2 405
Total	2 118 287	321 784	25 743

Exposure amount, Risk exposure amount and Minimum capital
requirement, parent company
31 Dec 2016	Exposure amount	Risk exposure	Minimum capital
SEKm		amount	requirement
Credit risks, STD	1 230 996	76 530	6 122
Central government or central banks exposures	185 049	70	6
Regional governments or local authorities exposures	23 475	60	5
Public sector entities exposures	4 034	46	4
Multilateral development banks exposures	3 890	1	0
International organisation exposures	20	0	0
Institutional exposures	944 642	753	60
Corporate exposures	3 734	3 665	293
Retail exposures	656	490	39
Exposures secured by mortgages on immovable property	2 317	811	65
Exposures in default	2	2	0
Equity exposures	62 321	69 787	5 583
Other items	856	846	68
Credit risks, IRB	600 185	166 590	13 327
Institutional exposures	90 999	14 860	1 189
Corporate exposures	409 505	124 448	9 956
of w hich specialized lending	0	0	0
Retail exposures	91 458	21 429	1 714
of w hich mortgage lending	13 949	3 014	241
of w hich other lending	77 509	18 415	1 473
Non-credit obligation	8 223	5 853	468
Credit risks, Default fund contribution	0	431	35
Settlement risks	0	0	0
Market risks	0	9 291	743
Trading book	0	9 026	722
of w hich VaR and SVaR	0	7 030	562
of w hich risks outside VaR and SVaR	0	1 996	160
FX risk other operations	0	265	21
Credit value adjustment	20 138	5 252	420
Operational risks	0	35 659	2 853
Standardised approach	0	35 659	2 853
Additional risk exposure amount, Article 3 CRR	0	458	37
Total	1 851 319	294 210	23 537

Alternative performance measures

Swedbank prepares its financial statements in accordance with IFRS as issued by the IASB, as set out in Note 1. The interim report includes a number of alternative performance measures, which exclude certain items which 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	Definition	Purpose
Net stable funding ratio (NSFR)	NSFR aims to have a sufficiently large proportion of stable funding in relation to long-term assets. The measure is governed by the EU's Capital Requirements Regulation (CRR); however no calculation methods have yet been established. Consequently, the measure cannot be calculated based on current rules. NSFR is presented in accordance with Swedbank's interpretation of the Basel Committee's recommendation (BCBS295).	This measure is relevant for investors since it will be required in the near future and as it is already followed as part of internal governance.
Net interest margin before trading interest is deducted	Net interest margin before trading interest is deducted is calculated as Net interest income before trading interest is deducted, in relation to average total assets. The average is calculated using month-end figures, including the prior year end. The closest IFRS measure is Net interest income and can be reconciled in Note 5.	The presentation of this measure is relevant for investors as it 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 a measure that is 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.	The presentation of this measure is relevant for investors since it used by Group management for internal governance and operating segment performance management purposes.
Return on allocated equity	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 allocated equity for the operating segment. The average is calculated using month end figures, 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.	The presentation of this measure is relevant for investors since it used by Group management for internal governance and operating segment performance management purposes.
Income statement measures excluding one off VISA and Hemnet income	Amounts related to Net gains and losses on financial items at fair value, Share of profit or loss of associates and other income are presented excluding the one-off income related to the VISA (2016) and Hemnet (2017). The amounts are reconciled to the relevant IFRS income statement lines on page 7.	The presentation of this measure is relevant for investors as it provides comparability of figures between reporting periods.
Return on equity excluding VISA and Hemnet income	Profit for the period allocated to shareholders excluding one-off VISA and Hemnet income in relation to average Equity attributable to shareholders' of the parent company. The average is calculated using month-end figures, including the prior year end. Profit for the period allocated to shareholders excluding one-off VISA (2016) and Hemnet (2017) income are reconciled to Profit for the period allocated to shareholders, the nearest IFRS measure on page 7.	The presentation of this measure is relevant for investors as it provides comparability of figures between reporting periods.

Cost/Income ratio excluding VISA and Hemnet income	Total expenses in relation to total income excluding one-off VISA and Hemnet income. Total income excluding one-off VISA (2016) and Hemnet (2016) income are reconciled to Total income, the nearest IFRS measure on page 7.	The presentation of this measure is relevant for investors as it provides comparability of figures between reporting periods.
	The alternative performance measures set out below are calculated from the financial statements without adjustment.	The presentation of these measures is relevant for investors
Cost/Income ratio	Total expenses in relation to total income.	since they are used by Group management for
Credit Impairment ratio	Credit impairment on loans and other credit risk provisions (annualised), net, in relation to the opening balance of loans to credit institutions and loans to public after provisions.	internal governance and operating segment performance management purposes.
Loan/Deposit ratio	Lending to the public excluding Swedish National Debt Office and repurchase agreements in relation to deposits from the public excluding Swedish National Debt Office and repurchase agreements.
Equity per share	Shareholders' equity in relation to the number of shares outstanding.
Provision ratio for impaired loans	Provisions for impaired loans assessed individually in relation to impaired loans, gross.
Return on equity	Profit for the period (annualised) allocated to shareholders in relation to average equity attributable to shareholders' of the parent company. The average is calculated using month-end figures, including the prior year end.
Share of impaired loans, gross	Carrying amount of impaired loans, gross, in relation to the carrying amount of loans to credit institutions and the public excluding provisions.
Share of impaired loans, net	Carrying amount of impaired loans, net, in relation to the carrying amount of loans to credit institutions and the public.
Total provision ratio for impaired loans	All provisions (individually assessed and portfolio) for loans in relation to impaired loans, gross.

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 2017 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, 23 October 2017

Chair Deputy Chair

Lars Idermark Ulrika Francke

Bodil Eriksson Mats Granryd Bo Johansson Board Member Board Member Board Member

Peter Norman Annika Poutiainen Siv Svensson Magnus Uggla Board Member Board Member Board Member Board Member

Camilla Linder Roger Ljung Board Member Board Member Employee Representative Employee Representative

Birgitte Bonnesen President and CEO

Review report

Introduction

We have reviewed the interim report for Swedbank AB (publ) for the period 1 January – 30 September 2017. The Board of Directors and the President are responsible for the preparation and presentation of this interim report 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 Financial Information performed by the company's auditors. A review consists of making inquiries, primarily with 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 ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report for the Group is not, in all material aspects, in accordance with IAS 34 and the Annual Accounts Act for Credit Institutions and Securities Companies and as regards the parent company in accordance the Annual Accounts Act for Credit Institutions and Securities Companies.

Stockholm, 23 October 2017 Deloitte AB

Patrick Honeth Authorised Public Accountant

Publication of financial information

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

Financial calendar 2017

Year-end report 2017 6 February 2018

Annual report for 2017 23 February 2018

For further information, please contact:

Birgitte Bonnesen President and CEO Telephone +46 8 585 906 53 Anders Karlsson CFO Telephone +46 8 585 938 75 Gregori Karamouzis Head of Investor Relations Telephone +46 72 740 63 38

Gabriel Francke Rodau Head of Communications Telephone +46 8 585 921 07 +46 70 144 89 66

Josefine Uppling Press Officer Telephone +46 8 585 920 70 +46 76 114 54 21

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