of tangible and intangible fixed assets
2008 Credit risks according to IRB
the standardised approach 3 454 20 528 10 941 13 091
Credit risks according to IRB 37 997 28 908 22 076 23 436 of which institutional exposures 1 834 1 339 2 324 1 414 of which corporate exposures 27 581 20 257 16 915 18 045
of which retail exposures 7 407 5 402 2 273 2 717
of which securitisations 64 73 64 73
of which non-credit-obligation
asset exposures 1 111 1 837 500 1 187
Total 41 451 49 436 33 017 36 527
2009 Credit risks according to IRB
Financial companies group
Institutional exposures 79 011 29% 1 834
Corporate exposures 447 223 77% 27 581
Retail exposures 833 222 11% 7 407
Securitisations 6 753 12% 64
Non-credit-obligation asset exposures 48 381 29% 1 111
Total 1 414 590 34% 37 997
2009 Credit risks according to IRB
Parent Company
Institutional exposures 87 218 33% 2 324
Corporate exposures 299 866 71% 16 915
Retail exposures 97 415 29% 2 273
Securitisations 6 753 12% 64
Non-credit-obligation asset exposures 8 552 73% 500
Total 499 804 55% 22 076
Note 55, cont.
2008
Credit risks according to IRB Financial companies group
Institutional exposures 64 049 26% 1 339
Corporate exposures 348 142 73% 20 257
Retail exposures 695 841 10% 5 402
Securitisations 7 762 12% 73
Non credit-obligation asset exposures 53 761 43% 1 837
Total 1 169 555 31% 28 908
2008 Credit risks according to IRB
Parent Company
Institutional exposures 69 958 25% 1 414
Corporate exposures 310 360 73% 18 045
Retail exposures 104 257 33% 2 717
Securitisations 7 762 12% 73
Non-credit-obligation asset exposures 16 854 88% 1 187
Total 509 191 58% 23 436
Capital requirement for market risks
companies group Company
2009 2008 2009 2008
Interest rate risks 711 997 568 814
of which for specific risk 711 997 568 814
of which for general risk 0 0
Share price risks 73 17 1
of which for specific risk 19 6
of which for general risk 54 11 1
Capital requirement according
to VaR calculation* 327 790 324 782
Total 1 111 1 804 893 1 596
* The Parent Company’s capital requirement for general interest-rate risk, share price risk and currency risk in the trading-book as well as Hansabank’s capital requirement for general interest-rate risk and currency risk in the trading-book are calculated in accordance with the VaR model.
Capital requirement
Corporate finance 0 1 0 1
Trading and sales 285 1 008 811 866
Retail banking 2 660 1 905 1 341 1 246
Commercial banking 860 648 231 195
Payment and settlement 247 202 51 52
Agency services 38 44 15 12
Asset management 149 72 0 0
Retail brokerage 5 10 5 10
Total 4 244 3 888 2 454 2 381
The standardised approach is used for calculating capital requirements for operational risk.
Group entities
All Group entities are consolidated according to the purchase method, which means that internal transactions are eliminated at the Group level. Each note to the balance sheet specifies assets and liabilities between the Parent Company and its subsidiaries.
Income and expenses in the Parent Company 2009 2008 Received from other Group entities
Financial income 11 881 17 260
Other 6 062 554
Paid to other Group entities
Financial expenses 2 285 4 556
Other 19 30
Associates
Each note to the balance sheet specifies assets and liabilities between the Group and its associates. Investments in associates are specified in note 31. During the year the Group has provided capital injections of SEK 4.8m (50) to associates and issued guarantees and pledged assets of SEK 115m (538) on behalf of associates.
The Group has sold services to associates primarily in the form of the development of products and systems and some marketing. The Group’s expenses to other associates mainly consist of payment services. The partly owned banks sell products that are provided by the Group and receive commissions for servicing the products. The co- operation between the partly owned banks and Swedbank is based on the agreements described in the section on Savings banks and partly owned banks.
56 Related parties and other significant relationships
Received from partly owned banks
Financial income 23 41
Income from services sold 130 84
Paid to partly owned banks
Financial expenses 59 75
Other expenses 318 221
Received from EnterCard
Financial income 179 357
Income from services sold 70 44
Paid to EnterCard
Financial expenses 7 20
Other expenses
Received from other associates
Financial income 32 48
Income from services sold 1 5
Paid to other associates
Financial expenses 1 1
Other expenses 274 498
During the year Privatgirot AB was divested and the remaining shares in DocHotel were acquired.
Senior executives etc.
Information is provided in note 12 Staff costs.
Swedbank’s pension funds and Sparinstitutens Pensionskassa secure employees’
post-employment benefits. These related parties rely on Swedbank for traditional banking services.
Savings banks operations and partly owned banks
The co-operation between Swedbank and the 64 savings banks, including six of Swedbank’s partly owned banks, in Sweden is governed by a master agreement to which a number of other agreements are attached regarding specific activities. In 2006 the agreement was updated and adapted. The new agreement extends through March 2012 and presumes that the savings banks have a certain basic offering of services and products as well as access to competency in certain areas. A few small savings banks currently do not fulfill the requirements. These savings banks have instead signed clearing agreements with Swedbank.
Through the co-operation, Swedbank’s Swedish customers gain access to a nationwide network. At the same time the savings banks and partly owned banks have the possibility to offer the products and services of Swedbank and its subsidiaries to their customers. Together, the savings banks and partly owned banks account for about 30 per cent of the Group’s product sales in the Swedish market. In addition to marketing and product issues, a close co-operation exists in a number of administrative areas.
Swedbank is the clearing bank for the savings banks and partly owned banks and provides a wide range of IT services. The co-operation also offers the possibility to distribute development costs over a larger business volume.
Savings banks and partly owned banks together represent one of the largest shareholder groups in Swedbank, with a total of 7.8 per cent of the voting rights.
Färs & Frosta Sparbank AB
The associated company Färs & Frosta Sparbank AB has acquired 3 720 000 shares in Swedbank AB, including in connection with the two rights issues. The Group’s share of these shares has reduced equity by SEK 58m in the consolidated statements.
Swedish Savings Banks Academy
Swedbank has 17.5 per cent of the voting rights in the non-profit association, the Swedish Savings Banks Academy. The Group has no loans to the association, nor has it issued any guarantees or pledged assets for the benefit of the association.
notes Swedbank Annual Report 2009
123
58 Specification of adjustments for non-cash items in operating activities
Group Parent Company
2009 2008 2009 2008
Amortised origination fees 497 554 174 142
Unrealised changes in value/currency changes –1 302 –2 401 158 –2 754
Capital gains on sales of subsidiaries and associates –3 –846 –15 –961
Capital gains/losses on property and equipment –397 –454 –433 –440
Undistributed share of equity in associates –822 –424
Depreciation and impairment of tangible fixed assets 572 577 201 238
Amortisation and impairment of financial fixed assets 7 114 2 964
Amortisation and impairment of goodwill and other intangible fixed assets 1 620 1 798 158 157
Credit impairment 24 857 2 981 2 599 836
Changes to provisions for insurance contracts 453 867
Dividend Group entities* –1 217 –1 355
Prepaid expenses and accrued income –377 3 435 4 160 –3 823
Accrued expenses and prepaid income 1 566 –2 942 –2 176 3 081
Other –40 –40 4 4
Total 26 624 3 105 10 728 –1 911
* Refers to the net between the unpaid dividend recognised as income during the financial year and the dividend paid this year for the previous financial year.
59 Events after 31 December 2009
During February 2010 Swedbank agreed with EBRD, European Bank for Reconstruction and Development, to acquire its 15 per cent ownership in OAO Swedbank in accordance with the shareholder agreement which has been in place since EBRD’s original acquisition. The transaction is expected to close during the second quarter 2010 and to have no material impact on the Group.
Swedbank’s Board of Directors has decided to withdraw the previously set financial goals, with the exception of the dividend policy.
57 Sensitivity analysis
Group Change 2009 2008
Net interest income,12 months1)
Increased interest rates + 1 %-enhet 1 720 830
Decreased interest rates – 1 %-enhet –584 –1 014
Change in value 2)
Market interest rate + 1 %-enhet –173 310
– 1 %-enhet 195 –285
Stock prices + 10 % 12 18
– 10 % –6 –10
Exchange rates + 5 % –5 16
– 5 % 29 –20
Other
Stock market performance 3) +/– 10 % +/–259 +/–196
Staff changes +/– 100 personer –/+ 45 –/+ 46
Payroll changes +/– 1 %-enhet –/+ 88 –/+ 90
Impaired loans 4) +/– 1 mdkr –/+35 –/+55
Credit impairment ratio +/– 0.1 %-enhet –/+1 383 –/+1 416
1) The calculation is based on the assumption that market interest rates rise (fall) by one percentage point and thereafter remain at this level for one year and that the consolidated balance sheet remains essentially unchanged during the period. The calculation also presumes that deposit rates are slow moving in connection with changes in market rates, which better reflects actual conditions.
2) The calculation refers to the immediate effect on profit of each scenario for the Group’s interest rate positions at fair value and its equity and currency positions.
3) Refers to the effect on net commission income from a change in value of Swedbank Robur’s equity funds.
4) The interest rate for the calculation in 2009 is 3.50 per cent (5.50).
Swedbank has received permission from the Financial Supervisory Authority to redeem two of its outstanding subordinated bonds: the Hybrid Tier 1 subordinated bond in the amount of USD 300 000 000 and the Lower Tier 2 subordinated bond in the amount of USD 246 550 000. Each redemption will take place on the first available date, i.e., 17 March 2010 for the Hybrid Tier 1 bond and 30 April 2010 for the Lower Tier 2 bond.
Swedbank has at this point no intention to replace either of these bonds by issuing new subordinated instruments.