Low risk and good control
Preventing and managing risk is central to Swedbank’s operations. Risk management begins with our business operations – in meetings with customers, for example – and encompasses every employee.
All financial operations entail risk, and managing them well is critical. A strong common risk culture within the Group, with decision-making and responsibility close to the customer, serves as the foundation for efficient risk management and, by extension, a strong risk-adjusted return.
Swedbank will maintain a low risk profile from both a capital and liquidity perspective. Swedbank’s long-term risk profile will be managed so that the effect of an extremely negative but possible scenario, as determined in Swedbank’s internal capital assessment process, does not reduce the core Tier 1 capital ratio by more than three percentage points. If the assessment process indicates an impact of over three percentage points, measures will be taken to reduce the Group’s risk taking.
The vast majority of Swedbank’s credit risk exposure is in Sweden in the form of low-risk mortgages. A favourable risk distribution is achieved through a broad customer base among private individuals and companies in many different industries.
Swedbank’s market funding is designed, as far as possible, to match assets of corresponding maturity and to maintain a sustainable balance between lending and deposits in all markets where the bank is active.