Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q4 2006 Earnings Presentation
33 slides from Swedbank Ab Class A's earnings presentation, February 2007
Slide 1: Year-end report 2006
Pe Year-end report 2006
Slide 2: Jan Lidén, CEO and President
Jan Lidén CEO and President (2)
Slide 3: Summary Q4 2006
Summary Q4 2006 • Continued strong profit, +13% vs. Q4 2005 • Swedish Banking, continued good profitability - Higher business volumes and increased market shares • Baltic Banking, another record quarter - Strong volume growth, coupled with increased market shares in important segments - Continuous i
Slide 4: Updated financial objectives reflect long-term growth targets
Updated financial objectives reflect long-term growth targets • Return on equity should exceed the average of peers* (unchanged) • A C/I ratio before loan losses of below 0.5 long-term (unchanged) • A tier 1 capital ratio of around 6.5 percent (previous objective: 7%) • Dividends shall constitute ar
Slide 5: Strong underlying development
Strong underlying development SEKm, Jan - Dec 2006 2005 % Net interest income 15,504 15,539 0 Net commission income 8,869 7,170 24 Net gains/losses on financial items at fair value 3,211 2,957 9 Other income 1,613 1,573 3 Capital gains 2,221 Excl. capital gains, Total income 29,197 29,460 – 1 income
Slide 6: Business volumes, lending
Business volumes, lending % Growth 2006 SEKbn Volume, Dec. 2006 80 75 1,000 919 70 800 60 50 48 600 40 379 30 400 344 20 15 11 12 200 10 80 42 0 0 Lending, Mortgage, Corporate, Mortgage, Corporate, Lending, Mortgage, Corporate, Mortgage, Corporate, Group private, Sweden private, Baltics Group privat
Slide 7: Business volumes, savings
Business volumes, savings % Growth 2006 SEKbn Volume, Dec. 2006 30 500 414 25 24 24 400 20 300 281 15 14 13 200 10 100 84 5 24 0 0 Deposits, Deposits, AM funds, Structured Deposits, Deposits, AM funds, Structured Sweden Baltics Group products, Sweden Baltics Group products, Group Group (7)
Slide 8: Margins
Margins % Lending Deposits % 3.5 3.5 3.0 3.0 Mix effect – continued margin 2.5 2.5 pressure in most product lines 2.0 2.0 Latvian short- 1.5 1.5 term rate 1.0 1.0 RIGIBOR decreased in Q4 0.5 0.5 0.0 0.0 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Estonia Latvia Estonia Latvia Lithuan
Slide 9: Swedish Banking
Swedish Banking SEKm % • Operating profit excl. capital gains 4,500 0.7 increased by 4 percent in 2006 4,000 0.6 3,500 • Mortgage loans in focus 0.5 – Market shares recovered 3,000 2,500 0.4 – Competition remains fierce 2,000 0.3 • Successful launch of new brand 1,500 – Significant investments in Q4
Slide 10: Occupational pensions, market share new sales
Occupational pensions, markets share new sales Swedish Banking % 7 6 5.3 5 4.5 3.8 4 3.2 2.9 3 Swedbank 2 1 0 2003 2004 2005 2005 2006 Sep (10)
Slide 11: SME/corporate market share, Swedish Banking
SME/corporate market share, Swedish Banking % 35 30 25 Mortgage lending 20 Bank lending 15 Deposits 10 5 0 2003 2004 2005 2006 (11)
Slide 12: Baltic Banking
Baltic Banking SEKm % • Record profits in practically all areas 2,000 0.6 • Continued robust macro economic 0.5 development 1,500 0.4 • Continuous investments to capture the market potential 1,000 0.3 – Number of employees increased 0.2 by 17 % in 2006 to 8,442 500 0.1 • Tough competition in terms o
Slide 13: Baltic Banking, market shares
Baltic Banking, market shares Estonia Latvia Lithuania Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Balance, % 2006 2005 2006 2005 2006 2005 Deposits, households 62.3 62.9 29.5 28.7 38.6 39.2 Mortgage lending, households 49.7 49.6 29.8 27.5 29.8 29.5 Consumer/bank lending 59.0 61.9 18.7 16.2 32.2
Slide 14: Swedbank Markets
Swedbank Markets SEKm • Best year so far, all business areas 450 reported all time high results 400 350 • Profit 2006 increased by 54 percent 300 • Market leader in corporate credit 250 200 bonds issuing in SEK and NOK 150 • Establishment of broker-dealer in 100 New York 50 0 • Chinese authorities a
Slide 15: Acquisition of TAS-Kommerzbank
Acquisition of TAS-Kommerzbank • Another step to enhance growth • Leverage Swedbank’s experience Sweden Finland and expertise from the Baltics Norway First Securities • Ukraine is one of the best growth Estonia Russia opportunities in Europe Latvia Denmark Lithuania • TAS has a good fit with its foc
Slide 16: Excellent long-term growth potential
Excellent long-term growth potential Real GDP Growth 2005-2010E • Ukraine is expected to have a continued 10% high GDP growth 7.9% 7.7% 8% • Under penetrated banking market 6% 6.4% 5.3% 5.0% – Retail loans/GDP, cards, current accounts 4% 2.6% 2.3% • TAS will continue to gain market share 2% – Clear
Slide 17: Expansion to Russian retail market
Expansion to Russian retail market • The Russian retail market has a substantial growth potential – Strong GDP growth – Increased demand for traditional retail banking products such as mortgages, cards and savings products • Leverage on our experience in fast growing markets through Hansabank • Init
Slide 18: Group results
Group results Mikael Inglander CFO (18)
Slide 19: Q4 summary
Q4 summary • Continued increase in net interest income, up 4 percent vs. Q3 – Good volume increase, lending margin pressure remains • Net commission income increased 9 percent vs. Q3 – Strong development of the securities market • Net gains and losses on financial items at fair value substantially u
Slide 20: Income statement, Group
Income statement, Group SEKm Q4 2006 Q3 2006 % Q4 2005 % Net interest income 4,049 3,895 4 3,712 9 Net commission income 2,309 2,109 9 1,896 22 Net gains and losses on financial items at fair value 1,162 757 54 1,006 16 Other income 392 403 – 3 383 2 Total income 7,912 7,164 10 6,997 13 Staff costs
Slide 21: Net interest income, by business area
Net interest income, by business area SEKm Q4 2006 Q3 2006 % Q4 2005 % Swedish Banking 2,950 2,937 0 2,924 1 Baltic Banking Operations 1,164 1,032 13 852 37 Baltic Banking Investments – 103 – 104 1 – 132 22 Swedbank Markets 192 197 – 2 237 – 19 Asset Management and Insurance 9 9 4 11 – 17 Shared Ser
Slide 22: Net interest income Swedish Banking, change
Net interest income Swedish Banking, change Q4 2006 Q4 2006 SEKm vs Q3 2006 vs Q4 2005 Net interest income Q3 2006 2,937 Net interest income Q4 2005 2,924 Changes: Higher lending volumes 46 228 Decreased lending margins – 46 – 307 Higher deposit volumes 21 79 Higher deposit margins 82 221 Other chan
Slide 23: Baltic Banking, change in net interest income
Baltic Banking, change in net interest income Q4 2006 Q4 2006 SEKm vs Q3 2006 vs Q4 2005 Net interest income Q3 2006 1,032 Net interest income Q4 2005 852 Changes: Higher lending volumes 95 399 Decreased lending margins – 25 – 170 Higher deposit volumes 20 43 Higher deposit margins 19 118 Accrued lo
Slide 24: Eliminations
Eliminations SEKm 300 200 100 0 -100 -200 -300 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Net interest income Net gains and losses on financial items at fair value Net change (24)
Slide 25: Net commission income
Net commission income SEKm Q4 2006 Q3 2006 % Q4 2005 % Payments 706 687 3 607 16 Lending 138 149 – 7 128 8 Brokerage 226 168 35 264 – 14 Asset management 953 915 4 880 8 Insurance 133 115 16 88 51 Corporate finance 140 125 12 63 222 Other 13 – 50 – 134 Total net commissions 2,309 2,109 9 1,896 22 (2
Slide 26: Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value mkr Q4 2006 Q3 2006 % 2006 2005 % Trading, derivatives and fair value option 372 392 –5 1,643 1,540 7 Net interest income 254 244 4 473 140 Change in value of Norweigan PCCs and shares etc * 24 77 – 69 257 510 – 50 Interest income compensation **
Slide 27: Net gains and losses on financial items at fair value
Net gains and losses on financial items at fair value SEKm Q4 2006 Q3 2006 % Q4 2005 % Swedish Banking 141 14 907 111 27 Baltic Banking 282 234 21 142 99 Swedbank Markets 413 176 135 262 58 Other business areas 326 333 – 2 491 – 34 Total net gains and losses 1,162 757 54 1,006 16 (27)
Slide 28: Expenses
Expenses SEKm Q4 2006 Q3 2006 % Q4 2005 % Swedish Banking – 2,335 – 2,065 13 – 2,348 –1 Baltic Banking – 866 – 698 24 – 703 23 Swedbank Markets – 550 – 436 26 – 472 17 Other business areas – 346 – 291 19 – 194 78 Total expenses – 4,097 – 3,490 17 – 3,717 10 of which staff costs in: Swedish Banking –
Slide 29: Loan losses, Group
Loan losses, Group SEKm % 500 0.25 400 0.20 300 0.15 200 0.10 100 0.05 0 0.00 -100 -0.05 -200 -0.10 Q4-02 Q2-03 Q4-03 Q2-04 Q4-04 Q2-05 Q4-05 Q2-06 Q4-06 Loan losses Loan loss level (29)
Slide 30: Business areas, summary
Business areas, summary Swedish Baltic Swedbank Asset Banking Banking Markets Mgmt Q4 Q4 Q4 Q4 Q4 06 vs Q4 05, SEKm 2006 % 2006 % 2006 % 2006 % Net interest income 2,950 1 1,164 37 192 – 19 9 – 18 Net commission income 1,093 11 426 35 369 33 395 30 Other income 348 24 365 111 423 52 62 – 19 Total in
Slide 31: Key figures
Key figures Dec 31, 2006 Dec 31, 2005 Return on equity, % 19.3 24.6 Return on equity excluding capital gains, % 19.3 19.7 Earnings per share, SEK 21.11 23.14 Equity per share, SEK 116.37 104.07 C/I ratio before loan losses 0.52 0.48 Loan loss ratio, net, % – 0.02 0.04 Share of impaired loans, % 0.07
Slide 32: Summary Q4 2006
Summary Q4 2006 • Continued strong profit, +13% vs. Q4 2005 • Swedish Banking, continued good profitability - Higher business volumes and increased market shares • Baltic Banking, another record quarter - Strong volume growth, coupled with increased market shares in important segments - Continuous i
Slide 33: Reminder: CFO presentation and Q&A in London, Feb 19th
Reminder: CFO presentation and Q&A in London, Feb 19th • 08.00 – 09.00 GMT • SEB Enskilda Scandinavian House 2 Cannon Street London EC4M 6XX • Confirm your attendance to ir@swedbank.se (33)