Nordea Kredit Performance Update

Nordic economies Interest rates are increasing rapidly throughout the Nordics Policy rates 3.5 3.0 % Policy rates 3.5 % 3.0 Public balance/debt, % of GDP, 2022E (IMF) Norway 2022E 7.5 5.0 2.5 I II | || 2.0 2.5 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 Fiscal Balance, % of GDP Denmark 2.5 7.5 5.0 2.5 Ireland Netherlands 0.0 0.0 Portugal -2.5 Finland Belgium -2.5 United States -5.0 -5.0 Sweden Germany Spain United Kingdom -7.5 -7.5 Austria -0.5 - -0.5 Italy China France -10.0 -10.0 -1.0 -1.0 11 12 13 14 15 16 17 18 19 20 21 22 23 ==Sweden Norway Euro Area Denmark 30 40 50 60 70 80 90 100 110 120 130 140 150 160 General Government Gross Debt, % of GDP Source: IMF World Economic Outlook, Nordea and Macrobond. . . . • Central banks are rapidly hiking interest rates to combat high inflation Norges Bank has hiked from 0 to 1.75% since last fall, and are expected to continue until they reach 3.25% at the end of 2023 The Swedish Riksbank raised the policy rate to 0.75% in June. It is expected to hike to 2.5% by February 2023, and stay put until 2024 The ECB exited its negative interest rate policy era with an unexpected 50bp hike in July. We predict that policy rates will rise by a total of 2.75 percentage points in the Euro Area and Denmark The ECB and the Riksbank are reducing the size of their balance sheets Solid public finances helped Nordic governments during the pandemic, which will help them handle the economic difficulties ahead 38 Source: Nordea Markets and Macrobond Nordea

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