Choices to create value

Swedbank is a bank for the many

Swedbank serves the many households and businesses with both simple and more complex financial needs. We are an inclusive bank and serve customers without preconceptions. Our aim is to maintain and develop large customer bases, long-term customer relationships and high market shares in our four home markets: Sweden, Estonia, Latvia and Lithuania.

We shall be close to our customers...

We firmly believe that a banking model based on closeness to customers best serves their needs, and Swedbank’s purpose. By being close to our customers, we gain a better understanding of their situation and needs, enabling us to provide the right advice and make fast decisions when required, even if it sometimes means that the bank loses business. Our advice is based on each customer’s needs, not the bank’s products, and our product and service development is driven by dialogue with our customers. Closeness to customers and long-term profitability are achieved with well-adapted products and services offered through suitable channels for our various customer segments. Being accessible to customers in a simple way through our broad-based branch network and innovative solutions offered by the Internet Bank, Telephone Bank and Mobile Bank is more important than whether we produce every available product and service ourselves. The unique accessibility afforded our customers in Sweden is also made possible by the collaboration with the savings banks and various franchise partners.

...which is facilitated by a uniform framework and local decision-making

A uniform framework for the entire Group, together with local decision-making authority, facilitates faster decisions close to the customer. The framework encompasses issues of governance, capital and liquidity management, risk management, performance evaluation and brand policy.

Local units are responsible for customer relationships and results. Development and production of the bank’s products are handled at Group level. To meet each customer’s specific needs as quickly as possible, local branches and units have the authority to decide on the range of products and services they offer, as well as pricing, within the framework’s limits.

Strong leadership is crucial to our governance model, with a clear delegation of responsibility. Good managers lead to committed employees, who deliver good results. We therefore focus on long-term recruitment, training and development of leaders.

Swedbank shall maintain a low risk level...

Swedbank shall have a low risk level from both an asset and liability perspective. The risk in its assets is managed with the long term in mind, so that the core Tier 1 capital ratio does not decline by more than three percentage points in an adverse scenario.

A vast majority of the bank’s exposures shall be in Sweden. Good risk diversification is achieved through a broad base of customers and businesses from many different industries. Customers’ cash flow, solvency and collateral shall always be the key lending variables. High-quality risk and credit decisions and proactive risk management contribute to a low risk profile. The bank will maintain a sustainable balance between lending and deposits in each of its home markets.

Growth can be associated with higher risks. Swedbank strives to maintain long-term sustainable growth. This means we will not grow faster than what is considered sustainable
for our customers and ourselves, regardless of market growth.

...with good control and focus on costs

Regulatory changes, e.g., in terms of capital requirements,  will entail higher costs in running banking operations. Staying competitive requires us to continuously work with costs. We do so primarily in three ways:

• Through a corporate culture where everyone is aware of and cautious about costs. The bank’s general remuneration programme, Eken, will help to strengthen this cost consciousness.

• By continuously adapting our organisation and costs to prevailing conditions. When the market changes, we have to
  be prepared to adapt accordingly.

• By capitalising on economies of scale based on our high market shares in each home market – not least in terms of effective process support and IT.

Large deposit volumes from private customers make Swedbank an interest rate-sensitive bank. As a result, it will be even more important to focus on cost efficiencies, especially when interest rates are low.