SBAB Year-end report 2013: Strong growth in customers but lower earnings

 (http://www.sbab.se/investor)
SBAB’s CEO, Per Anders Fasth, comments:
SBAB’s operating profit amounted to SEK 255 million for the fourth quarter and
to SEK 1,085 million for the 2013 full-year. For the full-year, the return on
equity was 9.5 percent. The capital base remained strong with a Core Tier 1
capital ratio of 23.3 percent.

In the fourth quarter, earnings continued to be affected by competition in
residential mortgages and real-estate lending, which led to pressure on margins
in both the retail and corporate markets. Combined with an increase in costs, to
some extent of a non-recurring nature, profit was lower than in preceding
quarters. These results lead to greater demands on cost and capital efficiency,
so that we can provide a strong customer offering while achieving healthy
profitability.

The strategy remains firm – customer experience is the key to success
On 13 January 2014, Carl-Viggo Östlund was dismissed as CEO. SBAB’s strategy of
broadening and developing its operations remains firm. This means that SBAB will
also offer everyday banking services within payments and cards in addition to
the current savings and loan products. I am convinced that customer experience
is the key to success in the Swedish banking market. Part of that experience
involves delivering new services and products in the most efficient manner
possible, not least to be able to offer our customers attractive prices.

The growth in customer numbers bodes well ahead of our upcoming bank launch
During the final quarter of the year, strong customer growth persisted and
SBAB’s popular savings accounts continued to attract customers. More than 50,000
new customers opened saving accounts over the year. Deposits increased by
slightly more than SEK 18 billion, corresponding to a growth of 66 percent.
SBAB’s market share of new deposits from households amounted to fully 22
percent. With more than 250,000 customers, we already have a firm foundation
ahead of the forthcoming launch of our everyday banking services.

Fourth quarter 2013 compared with third quarter 2013

  · Profit excl. net result from financial instruments amounted to SEK 135
million (291)
  · Operating profit totalled SEK 255 million (246)
  · NII amounted to SEK 443 million (480)
  · Expenses totalled SEK 252 million (167)
  · Loan losses amounted to SEK 29 million (positive 7), corresponding to a loan
loss level of 0.05 percent (-0.01)
  · Return on equity was 8.3 percent (8.3)
  · The Core Tier 1 capital ratio was 23.3 percent (25.8) without taking the
transitional regulations into account and 6.9 percent (7.3) taking the
transitional regulations into account

January-December 2013 compared with Januari-December 2012

  · Profit excl. net result from financial instruments amounted to SEK 1,046
million (1,101)
  · Operating profit totalled SEK 1,085 million (500)
  · NII amounted to SEK 1,963 million (1,941)
  · Expenses totalled SEK 815 million (728)
  · Loan losses amounted to positive SEK 7 million (loss 20), corresponding to a
loan loss level of -0.00 percent (0.01)
  · Return on equity was 9.5 percent (4.2)
  · The Core Tier 1 capital ratio was 23.3 percent (16.4) without taking the
transitional regulations into account and 6.9 percent (6.9) taking the
transitional regulations into account

SBAB’s year-end report for 2013 is available for download from:
www.sbab.se/investor
For further information, please contact:
Per Anders Fasth, CEO SBAB
+46 8-614 43 01, per.anders.fasth@sbab.se

Adrian Westman, Communications Manager SBAB
+46 8-614 43 29, +46 735-09 04 00, adrian.westman@sbab.se

 (adrian.westman@sbab.se)
SBAB offers residential mortgages and saving products through the Internet and
telephone, and also grants loans to the corporate sector and housing
associations. By offering products and services that challenge and simplify,
SBAB contributes to increased competition in the Swedish market. The company was
founded in 1985 and is wholly owned by the Swedish Government. In 2012, the
company’s lending volume amounted to SEK 258.7 billion and the deposit volume to
SEK 45.9 billion. SBAB Bank has about 470 employees, of whom approximately 200
work at the headquarters in Stockholm. Learn more at www.sbab.se/english