Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2014 Earnings Presentation
21 slides from Swedbank Ab Class A's earnings presentation, 2014
Slide 1: Swedbank's second quarter 2014 results
Swedbank’s second quarter 2014 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO © Swedbank
Slide 2: Swedish Banking - Stable result (excl. Sparbanken Öresund)
Swedish Banking - excluding Sparbanken Öresund Stable result SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y • Lower deposit margins Net interest income 3 314 3 314 -71 Net commission income 1 771 1 649 121 283 • Mortgage margins Other income 604 459 146 206 – Improved towards end of quarter Total income 5 689 5 422 2
Slide 3: Sparbanken Öresund impact in Q2
Sparbanken Öresund Sparbanken Öresund impact in Q2 Ordinary SEKm One-offs Total business Net interest income 48 48 Net commission income 18 18 Other income 13 461 474 Total income 79 461 540 Staff costs 47 393 440 Other expenses 39 222 261 Total expenses 86 615 701 Credit impairments 4 4 Tax expense
Slide 4: Swedish Banking - Stable result (incl. Sparbanken Öresund)
Swedish Banking – including Sparbanken Öresund Stable result SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y Sparbanken Öresund impact: Net interest income 3 362 3 314 48 -23 Net commission income 1 790 1 649 141 301 • Total income SEK 540m Other income 1 077 459 618 679 – Of which SEK 461m in one-off Total income 6 2
Slide 5: Large Corporates & Institutions - Good customer activity
Large Corporates & Institutions Good customer activity SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y • NII Net interest income 846 867 -21 79 – Loan volume growth Net commission income 496 630 -134 184 – Lower accrued fees Net gains and losses 575 565 10 58 Total income 1 945 2 099 -154 306 • Continued high customer
Slide 6: Baltic Banking - Strong revenues
Baltic Banking Strong revenues SEKm Q2 14 Q1 14 ▲ Q/Q ▲ Y/Y • No financial impact from the crisis in Net interest income 894 874 20 263 Ukraine Net commission income 522 429 93 118 Total income 1 596 1 465 131 401 • Increased market activity Total expenses 621 607 14 45 • Good cost efficiency Profit
Slide 7: Group results - Strong result
Group results – including Sparbanken Öresund Strong result SEKm Q2 14 Q1 14 ▲Q/Q ▲Y/Y • Growth Net interest income 5 521 5 483 38 242 Net commission 2 813 2 693 120 593 • Mixed margins income Net gains and losses 773 345 428 265 • Strong commission income Other income 1 348 799 549 614 Total income
Slide 8: Reduced REA following A-IRB approval
Capital Reduced REA following A-IRB approval • REA decreased by SEK 42bn to SEK 406.7bn during the quarter • A-IRB approval, Sparbanken Öresund acquisition and higher lending volumes impacted the most • No regulatory excess capital SEKbn Swedbank REA development CET1 capital ratio 460 448.8 24% 440
Slide 9: Strong asset quality
Asset quality Strong asset quality Credit impairments, Q2 14 Q1 14 • Low risk position confirmed by SEKm Fitch and S&P Swedish Banking 25 31 Large Corporates & 21 -30 Institutions Baltic Banking -16 -101 Group Functions & Other 0 0 Swedbank Group 30 -100 9
Slide 10: Q&A
Swedbank’s second quarter 2014 results Q&A
Slide 11: Appendix
Appendix Swedbank @
Slide 12: Long-term financial impact from Sparbanken Öresund
Sparbanken Öresund Long-term financial impact from Sparbanken Öresund • P&L impact 2016-2017 – Estimated net profit contribution of SEK 350-450m – Incremental RoE to reach group target 2016 • Long term – Estimated net profit contribution of at least SEK 500m – Incremental RoE >25 per cent 12
Slide 13: Sparbanken Öresund - ownership structure
Sparbanken Öresund Sparbanken Öresund – ownership structure Before transaction Today Sparbanksstiftelsen Sparbanksstiftelsen Sparbanksstiftelsen Swedbank Gripen Öresund 1826 22% 78% Sparbanksstiftelsen Sparbanken Färs & Frosta Öresund Sparbanksstiftelsen Öresund Sparbanksstiftelsen Swedbank Färs & F
Slide 14: Sparbanken Öresund - Facts
Sparbanken Öresund Sparbanken Öresund - Facts Split up of Sparbanken Öresund Swedbank Skåne (1 Sparbanken Swedbank Sparbanken Current Proforma Increase Öresund Skåne % Employees 559 447(2 112 410 857(2 109 Branches 24 16 8 27 43 59 Customers 204 700 108 300 96 400 482 000 590 300 22 o/w Corporate (3
Slide 15: Conservative provision ratio
Asset quality Conservative provision ratio SEKm Provision ratio, % Q2 14 20 000 Swedish Banking 62 64% 65% 62% LC&I 119 60% Baltic Banking 50 57% 56% 54% 54% Group 56 53% 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 1 211 4 429 4 047 3 570 2 818 2 514 2 343
Slide 16: Shipping and offshore
Credit portfolio – Large Corporates & Institutions Shipping and offshore SEKbn Shipping and Offshore • Lending exposure to Shipping & Offshore sector of 30 26 SEK 26.0bn 23 25 26 25 26 - Portfolio duration 3.77 years (weighted on 4 20 commitments) 5 - Average fleet age 7 years - Strong employment pr
Slide 17: Lower funding needs
Liquidity and funding Lower funding needs • LCR 123% (Swedish FSA definition FFFS 2012:6) • NSFR 102% (Basel committee) • Issued SEK 69bn of term-funding in H1 2014, of which SEK 32bn in Q2. • FY 2014 funding plan of SEK 120bn Term funding issuance – completed and planned Covered bonds Senior unsecu
Slide 18: 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 101bn maturities • All remaining government guaranteed debt (issued in 2009) matured in May 2014 Long-term funding maturity profile, by funding source SEKbn 200 Senior unsecured d
Slide 19: Prefunded in excess of 12 months
Liquidity and funding Prefunded in excess of 12 months SEKbn 300 250 200 150 100 50 0 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365 Days forward 1 As defined by the Swedish Bankers’ Association 19
Slide 20: Real estate prices - Sweden 12 months development
Swedish housing and mortgage market Real estate prices – Sweden 12 months development Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jul/13 4% 9% 6% Aug/13 5% 11% 7% Sep/13 5% 11% 7% Oct/13 6% 11% 8% Nov/13 4% 13% 7% Dec/13 4% 13% 7% Jan/14 7% 13% 9% Feb/14 7% 13% 9% Mar/14 7%
Slide 21: Real estate prices - Baltic countries
1 000 1 200 1 400 1 600 1 800 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 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 Jan-09 Nr.of deals Nr.of d