Swedbank reports recoveries and positive one-off items amounting to SEK 1.3 bn

Swedbank reports recoveries and positive one-off items amounting to SEK 1.3 bn, of which SEK 720 million refers to the net outcome of a transaction agreed with the bankruptcy estate of Lehman Brothers, and SEK 540 million refers to loan recoveries made during the period January - February 2011.

In the autumn of 2008 Swedbank had an outstanding repurchase agreement of USD 1.35 bn with a subsidiary of Lehman Brothers. Shortly after Lehman Brothers filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code, Swedbank took possession of the approximately 50 commercial real estate loans that served as underlying security for the repurchase agreement. These loans were recognised in line with practice applied to Swedbank’s ordinary loan portfolio. In accordance with the terms of the repurchase agreement, Swedbank also valued the commercial real estate loans at market value as of the time of the bankruptcy, which constituted the foundation for a collateral deficiency claim and subsequent negotiations where the parties have come to an agreement. This agreement, which has been approved by the U.S. Bankruptcy Court supervising the Lehman Brothers Chapter 11 case, provides for the exchange of a number of loans and for Swedbank to receive two approved non-secured claims against the Lehman Brothers estate, which have subsequently been sold. As a result, Swedbank will report one-off pre-tax income of USD 114 million (SEK 720 million). The remaining carrying amount of loans relating to the repurchase agreement, amounted to USD 940 million (SEK 6.0 bn) as of 8 March, 2011. ”We are very happy to have come to this agreement and having achieved positive financial outcome in relation to our Lehman repo loan exposure which benefits both the bank and our shareholders,” commented Swedbank’s Chief Risk Officer Göran Bronner. Swedbank will also report recoveries of a one-off nature for the period January - February 2011 of approximately SEK 540 million as a consequence of further improved credit quality in the credit portfolio in the Baltic countries and Eastern Europe. A conference call with CRO Göran Bronner will be held today 8 March at 10 am CET. To attend the conference call, please dial +44 (0) 203 043 24 36 or +46 (0)8 505 598 53. Further information, please contact: Göran Bronner, Chief Risk Officer, Swedbank, phone: +46 70 717 17 32 Thomas Backteman, Head of Corporate Affairs, Swedbank, phone: +46 708 311 166 Johannes Rudbeck, Head of Investor Relations, Swedbank, phone: +46 70 582 56 56