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Financial targets

Swedbank’s Board of Directors decided in early 2011 to introduce a profitability target and a capitalisation target. In February 2012 the Board o Directors decided to withdraw its capital target. The Board of Directors will decide on a new target once the regulatory situation is deemed more stable. The bank’s dividend policy was changed in early 2013. The new dividend policy takes effect in the financial year 2012.

More on capital adequacy

 

Return on equity

  • The return on equity shall amount to 15 per cent.

The return on equity for the full year 2012 was 14.6 per cent (12.2). In 2012 Swedbank focused on cutting costs in the Group, repricing lending and improving capital efficiency. Expenses decreased by 8 per cent during the year.

Low interest rates and high capitalisation make it more difficult, but not impossible, to achieve the profitability goal. In 2013 Swedbank will continue to focus on expenses, repricing and capital efficiency in an effort to further improve the ROE.
 

Return on equity, total operations
 Q1 13Q4 12Q3 12Q2 12Q1 12
%13.816.9 14.313.214.1

 

Capitalisation

Because future capital rules are not yet complete, the Board of Directors has not established a capital goal. In the opinion of Swedbank’s executive management, we need a Common Equity Tier 1 capital ratio of 13 to 15 per cent (Basel 3). In the previous year our estimate was 13.5–14.5 per cent.
During 2012 the capital position continued to improve. The increase was due to profit for the year (after the proposed dividend) and lower risk in the lending portfolio, which has reduced risk weighted assets. In addition, the bank’s work with capital efficiency has helped to improve the Common Equity Tier 1 ratio.

 Common equity Tier 1 ratio (Basel 2)*

 Q1 13 Q4 12 Q3 12 Q2 12Q1 12 
 %17.316.716.716.215.6

Common equity Tier 1 ratio (Basel 3)**

 Q1 13 Q4 12 Q3 12 Q2 12 Q1 12
 %16.4 15.415.415.1 14.5

* From 2012 including IAS 19-effect

** Estimates based on Swedbank's current understanding of future regulations

Dividend
 

  • The dividend will correspond to 75 per cent of profit for the year

In early 2013 the Board of Directors changed its dividend policy to amount to 75 per cent of profit for the year from 50 per cent previously. The new policy reflects Swedbank’s robust earning capacity and low risk, coupled with the fact that lending growth is expected to be limited for the foreseeable future 

For 2012 the dividend was SEK 9.90 per ordinary share and preference share which corresponds to a payout ratio of 75 per cent (50).

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