Slide 1: Swedbank's first quarter 2014 results
Swedbank’s first quarter 2014 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO © Swedbank
Slide 2: Stronger market position in southern Sweden
Market position Stronger market position in southern Sweden • Acquisition of 100 per cent of Sparbanken Öresund • Creation of Sweden’s largest savings bank Sparbanken Skåne – Swedbank will own 22 per cent of Sparbanken Skåne • Significant financial upside for Swedbank – Cost and capital synergies •
Slide 3: Swedish Banking: Stable results
Swedish Banking Stable results SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y • Lower deposit margins Net interest income 3 314 3 448 3 331 - 134 -17 – Stibor Net commissions 1 649 1 649 1 589 0 60 – Number of days effect Total income 5 422 5 536 5 378 -114 44 Total expenses Profit before 2 443 2 526 2 399 -83
Slide 4: Large Corporates & Institutions: Strong Return on Equity
Large Corporates & Institutions Strong Return on Equity SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y • Strong client activity within Net interest income 867 889 783 -22 84 Debt Capital Markets and Net commissions 630 558 420 72 210 Corporate finance Net gains and losses 565 491 579 74 -14 Total income 2 099 1
Slide 5: Baltic Banking: Solid performance
Baltic Banking Solid performance SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y • Continued re-pricing Net interest income 874 844 742 30 132 Net commissions 429 454 388 -25 41 • Good underlying customer Total income 1 465 1 512 1 282 -47 183 activity Total expenses 607 664 589 -57 18 Profit before impairments
Slide 6: Group results: Stable quarter
Group results Stable quarter SEKm Q1 14 Q4 13 Q1 13 ▲Q/Q ▲Y/Y • Mixed margin development Net interest income 5 483 5 626 5 353 -143 130 Net commission 2 693 2 699 2 388 -6 305 - Lower deposit margins income Net gains and losses 345 461 557 -116 -212 - Stable mortgage margins Total income 9 320 9 652
Slide 7: Strong asset quality
Asset quality Strong asset quality • Legacy impaired portfolios almost worked-out • Ektornet – continued asset sales • Russia and Ukraine exited – limited remaining exposures Credit impairments, Impaired loans, SEKbn Q1 14 Q4 13 Q1 13 SEKm Swedish Banking 31 140 55 45 Large Corporates & 40 -30 5 74
Slide 8: Q&A
Swedbank’s first quarter 2014 results Q&A
Slide 9: Appendix
Appendix Swedbank @
Slide 10: Focus on customer activities
Expenses Focus on customer activities • Flat expenses target for 2014 Group Efficiency Ektornet functions measures Customer IT related development cost Expenses Expenses Expenses Expenses 2012 2013 2013 2014 10
Slide 11: Regulatory uncertainty – higher capital requirements
Capital Regulatory uncertainty – higher capital requirements • Countercyclical buffer 16.5 - ? % Other? • RW floor on mortgages 25% Risk weight floor on Swedish mortgages • Pillar 2 15% Risk weight floor on Swedish mortgages • Hard limits vs buffers 0-2.5% Countercyclical buffer • Leverage ratio – c
Slide 12: Conservative provision ratio
Asset quality Conservative provision ratio SEKm Provision ratio, % Q114 Swedish Banking 76 20 000 65% 64% LC&I 196 62% Baltic Banking 51 60% 57% Group 60 54% 53% 54% 15 000 2 040 1 774 10 000 1 545 10 951 1 420 5 000 9 934 1 398 1 325 7 077 1 256 1 238 4 429 4 047 3 570 2 818 2 514 0 Q212 Q312 Q412
Slide 13: Shipping and offshore
Credit portfolio – Large Corporates & Institutions Shipping and offshore • Lending exposure to Shipping & Offshore SEKbn Shipping and Offshore 30 sector of SEK 25.0bn 24 23 26 25 26 25 - Portfolio duration 3.77 years (weighted on 4 20 commitments) 5 - Average fleet age 7 years 10 - Strong employment
Slide 14: Lower funding needs
Liquidity and funding Lower funding needs • LCR 144% (Swedish FSA definition FFFS 2012:6) • NSFR 89% / 102% (Basel committee) • Issued SEK 36bn of term-funding in Q1 2014 • FY 2014 funding plan of SEK 120bn Term funding issuance – completed and planned SEKbn Covered bonds Senior unsecured 120 100 80
Slide 15: Long-term funding maturity profile
Liquidity and funding Long-term funding maturity profile • Funding plan of SEK 120bn to meet next 12 months’ nominal SEK 125bn maturities Long-term funding maturity profile, by funding source SEKbn 200 Government guaranteed debt Senior unsecured 150 debt Covered bonds 100 50 0 2014 2015 2016 2017 20
Slide 16: Prefunded in excess of 12 months
Liquidity and funding Prefunded in excess of 12 months SEKbn 250 200 150 100 50 0 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365 Days forward Source: Swedbank Mar 31, 2014 16
Slide 17: Real estate prices – Sweden 12-month development
Swedish housing and mortgage market Real estate prices – Sweden 12-month development Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5% Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 10% 6% Jul/13 4% 9% 6% Aug/13 5% 11% 7% Sep/13 5% 11% 7
Slide 18: Baltic real estate prices
1 000 1 200 1 800 1 400 1 600 0 200 400 600 800 1 000 1 200 1 800 1 400 1 600 0 200 400 600 800 Jan-05 Jan-05 Jul-05 Jul-05 Jan-06 Jan-06 EUR/m2 /Nr of deals EUR/m2 /Nr of deals Jul-06 Jul-06 Jan-07 Jan-07 Jul-07 Jul-07 Jan-08 Jan-08 Real estate prices Jul-08 Jul-08 Jan-09 Nr.of deals Jan-09 Nr.of d