Glossary
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Capital adequacy ratio
Capital base in relation to risk-weighted amount. Capital base
The sum of tier 1 and 2 capital less items in sccordance with chapter 3 section 5-8 of the Capital Adequacy and Large Exposures Act. Capital quotient
Capitalbase in relation to capital requirements.
Cash flow per share
Cash flow for the year in relation to the weighted average number of shares outstanding. Concentration risk
E.g. large exposures or concentrations in the credit portfolio to certain regions or industries. Cost/income ratio before loan losses
Costs in relation to income. Counterparty risk
The term is often used instead of credit risk when measuring credit exposure in financial instruments and arises as an effect of the possible failure by the counterparty in a financial transaction to meet its obligations. This risk is often expressed as the current market value of the contract adjusted with an add-on for future potential movements in the underlying risk factors. Credit risk
Credit risk is defined as the risk of a counterparty, or obligor, failing to meet contractual obligations to the lender and the risk that collateral will not cover the claim. Currency risk
Refers to the risk that the value of assets, liabilities and derivatives may fluctuate due to changes in exchange rates. D
Duration
The average weighted maturity of payment flows calculated at present value and expressed in number of years. E
Earnings per share after dilution
Profit for the financial year in relation to the average number of shares outstanding during the year adjusted for the dilution effect of potential shares. Earnings per share before dilution
Profit for the year allocated to shareholders in relation to the weighted average number of shares outstanding during the year. Equity per share
Shareholders’ equity in relation to the number of shares outstanding. Equity price risk
Refers to the risk that the value of a financial instrument may fluctuate due to chaanges in equity prices and expectations of future volatility. F
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Impaired loans
Loans where payments are unlikely to be made in accordance with contract terms. Such loan is not considered impaired if there is collateral that covers principal, interest and any late fees by a safe margin. Impaired loans, gross, less specific provisions for loans assessed individually and provisions for homogenous loans assessed collectively constitute impaierd loans, net. Interest fixing period
Contracted period during which interest on an asset or liability is fixed. Interest margin
The difference between the average interst on total assets and the average interest on total liabilities. Investment margin
Net interest income in relation to average total assets. Interest rate risk
Refers to the risk that the value of a financial instrument may fluctuate due to changes in interest rates. J
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Liquidity risk
Refers to the risk that Swedank cannot fulfill its payment commitments on any given due date, without significantly raising the cost to fund payments. Loan losses, net
Established and anticipated losses for the year less restored provisions and recoveries related to loans as well as the year’s net expense for discharging guarantees, other contingent liabilities and changes in the value of property taken over. Loan loss level, net
Loan losses, net, in relation to the loan balance brought forward as well as property taken over and loan guarantees. M
Market risk
Refers to the risk that changes in interest rates, exchange rates and share prices will lead to a decline in the value of Swedbank's net assets and liabilities, including derivatives. Maturity
The time remaining until an asset or liability’s terms change or its maturity date. N
Net asset value per share
Shareholders’ equity according to the balance sheet and the equity portion of the difference between the book value and fair value of the assets and liabilities divided by the number of shares outstanding at year-end. Number of employees
The number of employees at year-end, excluding long-term absences, in relation to the number of hours worked expressed in terms of full-time positions. O
Operational risk
The risk of losses due to inadequate or failed internal processes, human error and incorrect systems, or external events. P
P/E ratio
Share price at year-end in relation to earnings per share. Past due loans
Past due loans refer to unauthorized overdrafts or loans where, according to the terms of the loan, amounts due for payment have not been paid. These are not impaired. Price/equity
The share price at year-end in relation to the closing-day equity per share. Provision ratio for individually identified impaired loans
Specific provisions for loans assessed individually and provisions for homogenous groups of loans assessed collectively in relation to impaired loans, gross. Q
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Return on equity allocated to shareholders
Profit for the financial year allocated to shareholders in relation to average shareholders’ equity. Return on total capital
Operating profit in relation to average total assets. Risk
Risk denotes a potentially negative impact on a company that can arise due to current internal processess or future internal or external events. The concept of risk comprises bith the likelihood that an event will occur and the impact it would have on the company. Risk-weighted amount
Total assets on the balance sheet and off-balance sheet commitments divided by credit and market risks measured and risk-weighted according to current capital adequacy regulations. S
Share of impaired loans
Impaired loans, net, in relation to the book value of loans to credit institutions and the public. Supplementary capital
Supplementary capital (Tier 2 capital) includes fixed term subordinated loans, in some cases less term reductions if the remaining maturity is less than five years, undated subordinated loans and other capital contributions and provisions permitted for inclusion in the capital base as supplementary capital, as well as deductions to be made in accordance with Chapter 3 of the Capital Adequacy Act.
Supplementary capital (Tier 2 capital) is eligible for inclusion in the capital base up to an amount equal to Primary Capital (Tier 1 capital).
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Tier 1 capital
Equity less the proposed dividend, deferred tax assets, intangible assets and certain other adjustments. Equity contributions and reserves that may be incuded in the capital base as tier 1 capital according to chapter 3 section 4 of the Capital adequacy and Large Exposures Act are added as well. Tier 1 capital ratio
Tier 1 capital in relation to the risk-weighted amount. Tier 2 capital
Fixed-term subordinated liabilitie, less a certain reduction if their remaining maturity is less than five years, undated subordinated liabilities, equity contributions and reserves that may be included in the capital base as tier 2 capital according to chapter 3 section 4 of the Capital Adequacy and large Exposures Act. Total provision ratio for impaired loans
All provisions for loans in relation to impaired loans, gross. U
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Yield
Dividend per share in relation to the share price at year-end.
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