EUR 1000.00 For Business Accounts Only

Swedbank - AGM 15 February 2021

We note that as a result of the Covid-19 pandemic the EGM will be held as an electronic meeting only. Consequently, it will not be possible to attend the EGM in person.

In general, Swedbank is in compliance with the Swedish regulations relating to the organization and procedures of the Extraordinary General Meeting.

Under ITEM 7 the board of directors proposes to distribute an extraordinary dividend of SEK 4.35 per share. ECGS notes that the Company decided to refrain from dividend payments at the AGM 2020 in view of the Covid-19 pandemic. As such it is proposed to reduce the aggregate dividend per share from SEK 14.20 to SEK 4.35 (-69%).

We furthermore note that, on December 18, 2020, the Swedish Financial Supervisory Authority (“SFSA”) stated that it, in light of the economic uncertainty caused by the ongoing Covid-19 pandemic, expects that, inter alia, banks should be restrictive with dividends and share buybacks up until September 30, 2021. The SFSA also stated that the total dividends from and buybacks by the banks should, up until such date, therefore not exceed 25% of the aggregate net earnings for the FY’s 2019 and 2020.

Although the dividend proposal would meet the SFSA’s restrictive guidelines (see above), We note that Swedbank’s results have been significantly impacted by the Covid-19 pandemic. Whereas total revenues remained stable (unchanged), operating income (-42%) and net income (-45%) substantially deteriorated up to and including Q3 2020 primarily due to an administrative fine of SEK 4.0 billion (almost EUR 400 million) in connection with breaching anti-money laundering regulations and credit impairments of SEK 3.8 billion (approx. EUR 375 million). The Company’s Tier one Ratio (Common equity tier 1 capital ratio) stood at 16.8% as of Q3-end, down from 17.0% as of FY-end 2019, and is considered sufficiently healthy to warrant the (proposed) dividend payments. The Company’s third quarter report does not mention anything regarding possible Covid-19-related government support, We therefore assume that such support has not been received.

Although we would have favoured a postponement of any dividend payments and/or share repurchases until more is clear regarding the possible consequences of the Covid-19 pandemic, the proposed dividend does not seem to impair the long-term development and sustainability of the bank. The proposal furthermore meets the current (more restrictive) guidelines of the SFSA. The pay-out ratio is limited, and the bank’s (core) Tier one Ratio is sufficient. Accordingly, we recommend to vote FOR.