Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q3 2021 Earnings Presentation
27 slides from Swedbank Ab Class A's earnings presentation, 2021
Slide 1: © Swedbank Information class Public
© Swedbank Information class Public
Slide 2: Q3 2021 income statement and key ratios
SEKm Q3 21 Q2 21 ▲% Net interest income 6 590 6 572 0% ● Stable net profit compared to strong Q2 Net commission income 3 799 3 674 3% ● Stable NII Net gains and losses 553 645 -14% Other income 927 979 -5% ● Higher NCI Total income 11 869 11 870 0% ● Expenses according to plan Total expenses 5 042 4
Slide 3: Dividend, capital and credit quality
- 2019/2020 Dividend, EGM, 28 Oct - Strong capital and liquidity position - Continued strong credit quality 3
Slide 4: Swedish mortgage market share incl. Savings Banks, 2021
Swedish mortgage market share incl. Savings Banks, 2021 20.4 20.3 18.7 17.2 17.3 12.7 9.2 8.0 Jan © Swedbank Feb Information class Mar Apr May Jun Jul Aug 4 Public
Slide 5: Corporate activity improving
Corporate activity improving Advice for covid impacted sectors Meeting and advising clients in all channels
Slide 6: High customer satisfaction in our digital channels
High customer satisfaction in our digital channels Improved sustainability metrics for fund selection More than 90% of saving and pension transactions made in digital channels © Swedbank Information class 6 Public
Slide 7: Our vision is a financially sound and sustainable society
Our vision is a financially sound and sustainable society ● EU Taxonomy – incorporating rulebook for sustainable business ● Green bonds – we originate on average two per week for our corporate customers ● Swedbank Robur – Paris aligned by 2025 © Swedbank Information class 77 Public
Slide 8: Baltic growth and Swedbank as leading retail bank
● Strong GDP growth ● Increased living standard ● Swedbank - the leading retail bank – Growth in consumer and mortgage lending – Savings & insurance opportunity ● Most loved brand © Swedbank Information class 8 Public
Slide 9: Profit by business segment, Q3 2021
SEKm +15 +19 * 1 651 1 653 15 4 2 1 637 -4 3 4 1 224 3 1 227 1 205 8 4 1 500 1 000 Q2 2021 Swedish Baltic LC&I Q3 excl. FX FX Q3 2021 Q2 2021* Swedish Baltic LC&I Group Q3 Excl. FX Q3 2021* banking banking banking banking functions* FX *Excluding Group Treasury, US money-market funds © Swedbank Info
Slide 10: Net interest income
SEKm 6 572 80 58 6 590 ● Stable NII -67 -53 – Underlying NII, SEK 70m +70 – Higher average loan volumes – Stable overall lending margins – Group Treasury result benefited from: 5 000 ● Internal pricing change Q2 2021 Volumes Margins Group Other Q3 2021 Treasury ● Interest rate risk management 6 886
Slide 11: Net commission income
SEKm 146 3 799 3 674 83 ● Another record high Net Commission -104 Income ● Asset Management income from positive stock market performance ● Cards income benefitted from seasonality Q2 2021 Cards & Asset Corporate Q3 2021 and improved consumption levels Payments Management advisory ● Corporate adviso
Slide 12: Net gains and losses
SEKm 910 669 645 585 553 ● Underlying NGL at normal level ● IPO valuation effect of SEK 111m from Hemnet shares in Q2 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 160 553 37 271 85 Bond Client trading Funding Other Total NGL © Swedbank Information class inventories Public 12
Slide 13: Other income
SEKm 975 979 911 916 927 396 ● Lower net insurance income due to 361 seasonally higher claims 247 239 336 327 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Other Associates Net insurance 1 200 1 000 800 600 400 200 0 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 © Swedbank Other income (excl. One-offs) Informat
Slide 14: Expenses
SEKm AML investigations Underlying expenses 5 586 170 4 974 4 989 5 042 4 761 77 90 96 63 ● FY underlying cost guidance of SEK 20.5bn 5 416 for 2021 and 2022 4 698 4 897 4 899 4 946 – AML investigation cost estimate of SEK 0.5bn per annum for 2021 and 2022 (YTD 2021, SEK 263m) 2 000 Q3 2020 Q4 2020
Slide 15: Credit impairments
SEKm 124 18 ● Continued strong asset quality -3 ● Recoveries in Swedish banking and Baltic -20 banking -83 ● LC&I impairments mainly related to Oil & Swedish Baltic LC&I Group Group offshore banking banking functions 2 151 1 235 425 523 246 18 -27 © Swedbank Information class 15 Q1 2020 Q2 2020 Q3 2
Slide 16: Credit impairment drivers
SEKm ● Good economic growth but momentum has weakened ● Management overlay adjustments − Partly released in unaffected sectors − Retained overlay for remaining covid-19 sensitive sectors and in the Baltic countries − Additional overlay for oil and offshore -184 ● Stage 3 individual provisions – main
Slide 17: Oil and offshore exposure
SEKm 12.9 11.9 11.3 3.7 9.8 3.9 ● Gross loans, SEK 6.5bn 4.6 7.3 4.5 7.0 6.5 ● Credit impairment provisions of SEK 2.7bn 2.4 2.4 9.2 8.0 2.7 ● Total stage 3 loans of SEK 3.5bn 6.6 5.3 5.0 4.6 3.8 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Loans carrying amount Provisions 2.3 2.5 1.1 0.8
Slide 18: Strong capitalisation
Common Equity Tier1 capital ratio, % 16.8% 17.5% 18.0% 18.5% 18.5% +480bps ● Strong capitalisation 13.7% ● CET1 capital ratio buffer of around 480bps above requirements – target of 100-300bps ● 50% dividend policy ● +150bps P2G implemented and -20bps in P2R Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 CE
Slide 19: © Swedbank Information class Public
© Swedbank Information class Public
Slide 20: Financial targets: ROE, cost efficiency, CET1 buffer, dividend
ROE target of 15% Market leading cost efficiency 18.9 17.6 17.3 14.3 (YTD Q3 2021) 0.54 11.5 0.39 0.43 0.43 0.38 15.1 16.1 14.7 13.5 8.9 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Earnings per share, SEK Return on equity, % Cost to income ratio CET1 capital ratio buffer target of 100-300bps a
Slide 21: Targets set for 2021 and recent developments
Targets set for 2021 Recent developments Set climate targets for the real estate sector that align with 1 1 Cooperation with Swedish Meterological and the Paris Agreement Hydrological Institute (SMHI) to better understand physical climate risks of our real estate exposure Progress: On track Increase
Slide 22: Recent recognitions and climate risk management
Swedbank recent recognitions Climate risk management Recognitions Assessing climate-related risks is important to ensure future profitability and security for • Swedbank is the Most Loved Brand in Baltics: On September 24 at the Baltic the bank and its customers. Swedbank has therefore initiated a c
Slide 23: Real estate lending
Property Real estate management lending Private Mortgage Loans Tenant-Owner Associations Property Management ● Low concentration risk due to many borrowers and • Low concentration risk due to many borrowers and • Commercial properties SEK 107bn - mostly office properties geographical split geographi
Slide 24: Property management
Property Property management Management Residential property management Non-residential property management • Low-risk portfolio1), supported by; • Mixed portfolio1) comprising: − Growing population − Office properties − High demand, and low supply of new − Logistic and warehouse properties SEK prod
Slide 25: Capital highlights
Capital Buffer of ~ 480bps 13.7% 18.5% 1.7% 2.4% 17.8% 22.6% 14.4% Highlights • REA increased by SEK 14.7bn to SEK 703.2bn 6.1 P2G (New) • 150bps REA and 45bps leverage ratio 1.5 Leverage ratio req. 6.3 exposure P2G implemented and -20bps 2.5 1.9 Capital Conservation Buffer P2R (removed corporate ma
Slide 26: Liquidity and funding
Liquidity and funding SEKbn Strong funding profile Liquidity reserve ● LCR 149% (EU 2015/61) 1 400 Outstanding volumes Q2 2021 Q3 2021 SEKbn 840 Level 1 assets ● NSFR 124% (CRD2) 1 200 1 000 179 ● Issued SEK 77bn of long-term 800 of which cash and balances funding YTD Q3 2021 600 400 646 with centra
Slide 27: Swedish housing and mortgage market
Swedish housing and mortgage market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Oct 20 13% 6% 10% Nov 20 13% 6% 10% Dec 20 16% 5% 12% Jan 21 15% 6% 11% House price index, Sweden 2005=100 (Data as per September 2021) Feb 21 17% 6% 13% 350 Mar 21 20% 8% 16% Total 300 Tenant-o