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Our business model must be built on a sustainable economy

Swedbank offers its customers secure and effective solutions to manage their savings and at the same time meet their financing needs. This has to be done with the goal of a sound and sustainable financial situation for the many households and businesses.

An important part of society

Swedbank is part of the financial infrastructure, and thus an important part of society. By promoting savings and lending money to consumers and businesses, we increase financial well-being, support the national economy and help to create  jobs in our home markets. Our business is affected by a number of  factors, the most important of which are:

  • Customer choice – Customers are increasingly choosing phone, computer and tablet for their financial services. At the same time many still want personal assistance with more complex questions. Our aim is to make day-to-day banking fully digital, but also offer personal assistance at our physical meeting places.
  • Competition – Our competition consists of traditional banks  as well as new firms. We therefore have to continuously improve our offers in among other ways by analysing customer data to design more personalised services and products.
  • Macroeconomic development – As a deeply ingrained part  of economy, we are dependent on the business cycle and what happens globally. To stay competitive and relevant, we have to be able to quickly adapt to changing market conditions.
  • Regulation – The banking sector is subject to a number of regulations, many of which are designed to increase financial stability and empower customers. This affects competition and how we price our products.
  • Financial crime – Banks are to larger extent being used for financial crime. To improve security for our customers, but also for society as a whole, we have to continuously update  the methods we use. Our aim is to follow the industry’s best  practices.

Net interest income is our largest source of income

Swedbank’s main source of income is the interest paid on the money we lend. Lending must be financed, however, through deposits from businesses and private customers and through funding from the capital market. Net interest income, the bank’s most important profit variable, is the difference between the interest income on deposits and funding expenses.


To contribute to the stability of the financial system, we have to understand and correctly price risk. It is also crucial to our survival. The margin we earn on our lending has to be high enough to cover any credit impairments for borrowers who fail to pay interest or amortise their loans. It must also cover administrative expenses and provide a return on shareholders’ equity.


It is important for us that the money we lend contributes to sustainable development. This is manifested in many ways. In 2017, for example, we established a green asset framework that provides a foundation for the issuance of green bonds, two of which have already been issued. The money is used to finance sustainable investments in real estate and renewable energy sources that reduce carbon emissions. Net interest income and credit impairments are strongly tied to the real economy and are affected by factors such as economic growth, interest rates and unemployment. To limit the impact of a severe recession and continue to support our customers regardless of economic conditions, we also maintain capital for unforeseen losses. The size of this buffer, which largely consists of the capital our shareholders have invested, is determined by various regulators and depends in part on how risky the assets are considered to be. 

Funds and cards are important to net commission income

Net commission income is our second largest source of income  and is comprised of a range of services and products that mainly generate fees. This income, adjusted for transaction expenses, is reported in the income statement as net commission income. The large part comes from asset management and cards. Our asset management company, Robur, managed SEK 1 083bn at year-end 2019. To manage assets and cover costs, we charge a fee based on a percentage of the invested amount. Income in the fund business therefore depends on growth in assets under management, which in turn is affected by the stock market’s performance. Sustainability aspects are important in asset management as well, and we have a fund, Swedbank Robur Global Impact, which invests in companies that meet the UN’s 17 Sustainable Development Goals. In the card business, which represents the large share of our payment operations, we are both a card issuer and payment acquirer. Our income is generated from customers who use our cards to make purchases and the stores and restaurants that use our terminals for payments. The income consists of annual fees, but is also based on transaction volume.

Personnel and IT are our largest operating expenses

Swedbank’s largest operating expense is salaries. Other major expenses include IT as well as properties and rents, which is partly because of the distribution network we provide our customers in the form of digital channels and physical meeting places. Swedbank is also a major taxpayer in the markets where we operate.