Year-end report 2006: Continued strong momentum on all markets

Stable net profit for the fourth quarter 2006*
• Net profit amounted to SEK 2,913m (2,911)
• Earnings per share amounted to SEK 5.65 (5.65)
• Return on equity amounted to 19.8 percent (20.8)
• The cost/income ratio amounted to 0.52 (0.49)
• Net interest income increased by 4 percent to SEK 4,049m (3,895)
• Operating profit amounted to SEK 3,887m (3,741)
• Recoveries exceeded loan losses which amounted to a net of SEK -72m (-67).

*) Compared with the third quarter 2006

Net profit for full year 2006 increased by 13 percent excluding capital gains in 2005**
• Net profit amounted to SEK 10,880m (11,879)
• Excluding capital gains in 2005, net profit increased by 13 percent
• Earnings per share amounted to SEK 21.11 (23.14)
• Return on equity amounted to 19.3 percent (24.6)
• The cost/income ratio amounted to 0.52 (0.48)
• The tier 1 capital ratio was unchanged at 6.5 percent
• Total income decreased to SEK 29,197m (29,460)
• Excluding capital gains in 2005, income increased by 7 percent
• The proposed dividend is raised by 10 percent to SEK 8.25 (7.50).

**) Compared with full year 2005


The CEO comments on the fourth quarter:
“Swedbank continues to develop positively. Net interest income is up for the fourth consecutive quarter, this time by 4 percent compared with the previous quarter. Commission income and net gains on financial items also had a strong quarter. In Baltic Banking further investments and new recruitments are being made to meet demand in the growing market. The launch of our new brand Swedbank has been successful and has exceeded our expectations. The launch contributed to the increased expenses during the quarter.

Swedish Banking, Baltic Banking and Swedbank Markets all reported increased income compared with the previous quarter. Business volumes continued to grow in lending and savings at the same time that market shares in several core product lines increased. Market shares in mortgage lending to private individuals and lending to corporate clients increased in all four home markets, Sweden, Estonia, Latvia and Lithuania.

Early in 2007 we announced two long-term initiatives to sustain earnings growth. In Ukraine, with a population of 47 million, we have signed an agreement to acquire TAS-Kommerzbank. The bank is the thirteenth largest bank in the country and one of the fastest growing. This combined with a young and still undeveloped banking market and a strongly growing economy leads to a considarable long term potential. In Russia we plan to expand to the private market in the years ahead. This market is also characterized by high growth and big potential. In both cases we have an excellent opportunity to leverage our experience from Sweden and the Baltics.”