Handelsbanken (SHB) Investor presentation summary

Business model and customer position

• Full-service banking model built on decentralized decision-making, nationwide branches and long-term customer relationships; international growth through selected markets.

• Goal: profitability above the average of comparable banks in home markets.

• Customer satisfaction scores led peer and sector averages across Sweden, Denmark, Finland, Norway and Great Britain in the cited surveys.

• Main bank for 23% of Swedish large corporates with turnover above SEK 1bn; customer satisfaction score 0.54, ahead of peers.

Returns and earnings resilience

• Adjusted equity per share plus accumulated dividends grew at a 15% CAGR from Q3 2007 to Q2 2012, with dividends reinvested.

• Return on equity exceeded other Nordic banks over the long-term comparison shown for 1973–H1 2012.

• RoE did not fall below 12% in any quarter during the financial crisis, through Q2 2012.

• Average loan losses as a share of lending, 1998–2011: 0.04% versus 0.22% for other Nordic banks.

Financial strength and funding

• Q2 2012 capital ratios: Basel II capital ratio 19.9%, Tier I 19.4% and Core Tier 1 16.8%; Core Tier 1 was up 2.0 percentage points YoY.

• Liquidity reserve exceeded SEK 750bn; liquidity coverage ratio was 178% in Q2 2012.

• H1 2012 bond issuance totaled SEK 124bn: SEK 42bn senior bonds and SEK 82bn covered bonds.

• Bond maturities through H1 2013 were prefunded.

• Five-year senior CDS spread was 50 bps, the lowest among European banks in the comparison dated 14 September 2012.