INVESTOR PRESENTATION June 2020
SEK’s mission and vision SEK’s mission is to ensure access to sustainable financial solutions for the Swedish export industry 100% on commercial terms. SEK’s vision is to strengthen the competitiveness of owned by the Swedish exporters and help create employment and Swedish sustainable growth in Sweden. government SEK is 100% owned by the Swedish Government. 2
Kingdom of Sweden Population 10 million Surface 450 000 km 2 Capital Stockholm Language Swedish, English widely spoken Political system Parliamentary democracy European status Inside EU, outside Euro Currency Swedish Krona 3
Public Debt to GDP % Economy of Sweden 250 200 150 100 Rating AAA/Aaa/Aaa GDP Growth Q1 2020 (QoQ/YoY) 0.1% / 0.4% 50 GDP Growth 2019 1.2% 0 GDP 2019 USD 531 bn* GDP per capita 2019 USD 51 690* Japan Italy USA France Germany Sweden Unemployment April 2020 7 .9%** 5 year CDS spreads bps CPI/CPIF*** April 2020 (YoY) - 0.4% / -0.4% 300 Repo Rate April 2020 0% 250 200 150 100 * USD/SEK average 2019, 9.46 ** Seasonally adjusted, % of labour force 50 *** CPIF = CPI with fixed mortgage rates 0 2014 2015 2016 2017 2018 2019 Source: Bloomberg, IMF, SCB Sweden Italy France Germany Japan USA 4
Swedish Exports Large part of GDP and well diversified Exports and Imports Key export goods Share of GDP % 55 Materials 18% Machinery 15% 50 Auto 15% 45 Consumer goods 14% IT & telecom 11% 40 Pulp & paper 10% 35 Energy 7% 30 Health care 7% Construction 3% 25 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Export Import Source: SCB as of December 31, 2018 5
Well-known Swedish exporters 6
SEK has a complementary role in the market Our offering provides a complement to bank and capital market finance for exporters that want a range of different financing sources. SEK creates client value on market terms through its strong international network, extensive experience and expertise in export finance. Bank and capital market Customer SEK 7
Our offering • Export Finance • Project Finance • Trade Finance • Customer Finance • Small Ticket Finance • On-lending • Corporate Lending and Capital Market Products Our offer is available in all major currencies and selected emerging market currencies. 8
The Swedish Export Credit System SEK Exporter Bank EKN finances negotiates arranges guarantees with buyer 9
Ratings “...that there is an extremely high likelihood of timely support to SEK from the Swedish “SEK's senior debt instruments government..." continue to benefit from high government support, given its strong “Its elevated capital ratios reflect its high- links with the sovereign because of both quality loan book and associated guarantees, its government ownership, as well as the highly rated exposures in its liquidity special mandate that the bank has to portfolio, and superior capital base promote Swedish exports and manage consisting solely of core capital.” the CIRR system.” “In our view SEK will remain an important “Solid capital and stronger-than-peer pillar of Swedish exporters' success owing to leverage” its strong relationships with Sweden's largest exporters.” “This [leverage ratio] places SEK in a stronger position than its Nordic public- December 6, 2019 sector peers…” January 17, 2020 Aa1 (stable) AA+ (stable) 10
SEK’s sustainability framework Owner instruction Sustainability reporting Sustainability targets and strategies OECD Common Approaches OECD Convention on Combating Bribery • Equator Principles Equator Principles IFC Performance Standards UN Global Compact UN Guidelines on Business and Human Rights 11
Funding and liquidity: No refinancing risk USD bn 60 Loan facility with the Swedish National Debt Office 50 Borrowing total, including shareholder's funds 40 Lending with first possible 30 pre-payment, including the CIRR-system 20 10 0 As of March 31, 2020 12
Not to scale Total USD 36.4 bn Derivatives and other assets Derivatives and other liabilities Liquidity Portfolio Agreed but undisbursed credits Senior Debt Liabilities & Credit Portfolio Assets equity Equity As of March 31, 2020 13
Credit Portfolio • Demand for financing from the Swedish export industry increased dramatically New credits accepted during the financial crisis 2008/2009 USD bn 20 • The Swedish government heavily increased SEK’s lending capacity during the financial crisis 2008/2009 15 • Further measures were introduced 10 during Q1 2020 due to the COVIC-19 pandemic 5 • SEK secured access to financing for the Swedish exporters 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 • New credits accepted Q1 2020: 3.3 bn As of March 31, 2020 14
Counterparty exposures & risk mitigation 70% Export credit agency guarantees • Bank guarantees • 60% Credit derivatives • 50% Collateral agreements • Insurance company guarantees • 40% 30% 20% Gross exposure 10% Net exposure 0% Corporates Financial institutions Sovereigns (incl. local including covered bonds governments) As of March 31, 2020 15
Liquidity Portfolio 100% Investment profile 90% 80% Average duration of new • investments: 6 months 70% 60% Maximum maturity: Generally 24 • 50% months, with some exceptions 40% Minimum rating: Generally A-, • 30% 31 mar 2020 with some exceptions 20% 31 dec 2019 10% 0% M ≤ 1 year 1 year < M ≤ 3 years M > 3 years As of March 31, 2020 16
Funding: Flexible and diversified New funding by region, as of March 31, 2020 (2019, whole year) Multiple funding programmes in all • major currencies Japan 7% (19%) Funding in local currencies • North America 16% (26%) Europe excl. Nordic countries 28% (27%) Responsive to investor needs • Non-Japan Asia 10% (15%) An experienced benchmark issuer • Nordic countries 27% (2%) Middle East/Africa 5% (4%) Latin America 7% (7%) Oceania 0% (0%) New funding by structure, as of March 31, 2020 Risk Management policy (2019, whole year) No currency risk • Very limited interest rate risk • Plain Vanilla 93% (79%) All structured notes are hedged • Equity linked 7% (19%) FX linked 0% (1%) Commodity linked 0% (1%) As of March 31, 2020 17
Diversified funding, by region USD bn 16 14 12 10 8 6 4 2 0 2013 2014 2015 2016 2017 2018 2019 2020 Q1 North America Non-Japan Asia Europe Nordic Countries Middle East/Africa Latin America Oceania Japan As of March 31, 2020 18
Diversified funding, by structure USD bn 16 14 12 10 8 6 4 2 0 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Commodity linked Equity linked FX linked Plain Vanilla IR linked PRDC As of March 31, 2020 19
Awards 20
Capitalization and Profitability Return on equity (IFRS ) • Common Equity Tier 1 12% capital ratio of 19.9% as of March 31, 2020 10% • Leverage ratio of 5.4% as of March 31, 2020 8% • Dividend policy: 30% of profit 6% after tax to our owner 4% • Return on equity: 2.6% (target: 6%) 2% 0% As of March 31, 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 21
About SEK Owner: Swedish government, 100% SEK’s mission: To ensure access to sustainable financial solutions for the Swedish export industry on commercial terms Primary task: Financing of export credits Credit rating: S&P: AA+ /Stable/ A-1+ Moody’s: Aa1/ Stable/ P-1 Established: 1962 Financial information as of March 31, 2020 Total assets USD 36.4 bn Lending USD 24.1 bn Common Equity Tier 1 capital ratio 19.9% After-tax return on equity 2.6% As of March 31, 2020 22
MREL
SEK is a systemically important export vehicle As a credit institution Already in compliance SEK’s requirements Minimum Requirement SEK is subject to financial with MREL with own for own funds and MREL requirement is regulation, although funds and bail-inable Eligible Liabilities 7.2% (SEK 25 bn – senior unsecured bonds 100% owned by the (MREL) is the European around USD 2.5 bn) Kingdom of Sweden equivalence to TLAC based on Total After January 1, 2024, and affects each Liabilities and Own SEK is deemed the requirements have to countries’ systemically Funds systemically important be met with own funds important banks and and a second layer of for the Swedish financial financial institutions Of this SEK 25 bn, 11 bn system and is therefore senior bail-inable debt, (around USD 1.1 bn) has subject to MREL senior non-preferred to be met with senior bonds (SNP) non-preferred bonds 24
Strong capital position SEK’s own funds provide a significant buffer for investors 19.9% 19.9% • Substantial own funds: SEK 18.7 bn (around USD 1.9 bn) 15.0% • Actual buffer against CET1-requirement: 9.8% • Actual buffer against total capital 10.1% requirement: 4.9% (in excess of SEK’s management buffer: 2-4%) • Potential to further increase Total Capital Ratio by 4.9% to 24.8% by issuing AT1 and T2 capital CET1 CET1 Total Total Capital As of March 31, 2020 Capital Capital Ratio Capital Ratio Requirement Requirement 25
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