Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q1 2005 Earnings Presentation
30 slides from Swedbank Ab Class A's earnings presentation, 2005
Slide 1: Hansabank Q1, 2005
=a Hansabank Q1, 2005 Jan Lidén
Slide 2: Hansabank ownership and integration process
2 • Hansabank ownership 99.0 percent as of April 27 • Integration process has commenced • 12 working groups • joint/individual assignments to identify cross-border business flows, synergies and transfer of best practice • senior executives from both FSB and Hansabank will lead the integration proces
Slide 3: Purchase price and excess value of Hansabank
3 • Purchasing price of SEK 15.7 bn • Excess value of SEK 12.4 bn - Goodwill of SEK 9.0 bn - Write-up of SEK 3.4 bn attributed to Hansabank loan portfolio, amortized over 7 years and booked as a NII item • As of March 31, share purchases amounted to SEK 11.5 bn - Goodwill of SEK 5.8 bn - Write-up of
Slide 4: Tier 1 capital ratio development
4 10% 9% 8.2% 8% 7.1% 7.1% 7.2% 6.7% 6.9% 7% target 6.2% 6% 5% 4% 3% 2% 1% 0% 2000 2001 2002 2003 2004 Q1, 2005 Q2, 2005 • The Q2, 2005 bar is an example based on the assumptions that: a) the net profit from the joint venture with Barclays is included in Q2 results, b) Q2 underlying results are unch
Slide 5: EnterCard International joint venture
5 • Transaction expected to close in June/July • Venture will be named EnterCard International • CEO to be appointed shortly • Organisation in place in Q2 • Net gain of approx. SEK 800 M in Q3 • EnterCard International results will be consolidated in FSB accounts
Slide 6: Copenhagen branch and Helsinki affiliate office
6 • First Copenhagen branch office has opened, inauguration May 2 • More branches may follow in 2005/2006 • Affiliate office in Helsinki catering to corporate customers is set to open in second half of 2005
Slide 7: Q1 2005 highlights
7 • Operating profit rose by 17 percent to SEK 2,907 M (2,476) • Profit for the period rose by 13 percent to SEK 2,135 M (1,894) • The return on shareholders’ equity rose to 19.0 percent (18.3) • Shareholders’ earnings per share rose by 16 percent to SEK 4.16 (3.59) • Total income rose by 5 percent
Slide 8: Income statement summary Q1 2005 vs Q1 2004
8 SEK M Q1, 2005 Q1, 2004 Change % Operating profit 2,907 2,476 17 – excluding items affecting comparability 3,153 2,763 14 Total income 6,339 6,064 5 Net interest income 3,939 3,459 14 Net commissions 1,530 1,504 2 Net gains and losses on financial items at fair value 442 767 – 42 Expenses – 3,333
Slide 9: Group lending development
9 • Group lending rose by 2 percent to SEK 711 bn (694) • Spintabs’ household lending rose by 2 percent to SEK 306 bn (301) • Hansabank’s lending rose by 17 percent to SEK 61 bn (53) Figures in parentheses refer to December 31, 2004
Slide 10: Household deposits and funds under management
10 • Household deposits increased by 4 percent to SEK 164 bn (157) • The market share in Sweden for new savings net rose to 20 percent (17) • Funds under management increased by 6 percent to SEK 302 bn (286) Figures in parentheses refer to December 31, 2004
Slide 11: Income statement
11 SEK M Q1, 2005 Q1, 2004 Change % Net interest income 3,939 3,459 14 Net commissions 1,530 1,504 2 Net gains and losses on financial items at fair value 442 767 – 42 Other income 428 334 28 Total income 6,339 6,064 5 Staff costs – 1,697 – 1,675 1 Profit-based staff costs – 183 – 287 – 36 Other exp
Slide 12: Income statement, five quarters
12 Q1, Q4, Q3, Q2, Q1, SEK M 2005 2004 2004 2004 2004 Net interest income 3,939 4,039 3,979 3,722 3,459 Net commissions 1,530 1,554 1,533 1,531 1,504 Net profit on financial items at fair value 442 413 167 460 767 Other income 428 391 436 394 334 Total income 6,339 6,397 6,115 6,107 6,064 Staff cost
Slide 13: Profit-based staff costs
13 2005 SEK M Q1 Profit-based staff costs – 183 of which allocation to Kopparmyntet – 87 Costs for personnel changes – 58 Profit effect IAS 39 –5 Total – 246 2004 SEK M Q1 Profit-based staff costs – 287 of which allocation to Kopparmyntet – 131 Total – 287
Slide 14: Items affecting comparability Q1 2005
14 Q1 2005, SEK M Net interest income Increase in net interest income in Spintab repurchase differences 157 interest income compensation – 102 Net profit on financial items at fair value Valuation of derivatives in Spintab at fair value – 139 Repurchased Spintab bonds – 71 Inefficiency in hedging pa
Slide 15: Net interest income change by segment
15 Q1, 2005 compared to Q1, 2004, SEK M Swedish retail operations + 96 Swedbank Markets + 11 International banking operations + 131 Asset management and insurance – 2 Shared services and Group staffs + 93 Eliminations + 151 Total + 480
Slide 16: Swedish retail operations net interest income change
16 Swedish retail operations Q1, 2005 compared to Q1, 2004, SEK M Increased lending volumes + 80 Increased deposit volumes + 38 Lower lending margins – 80 Lower deposit margins due to lower overall interest rates – 113 Shareholders’ equity and other balance sheet items + 171 Total + 96
Slide 17: Net commissions
17 SEK M Q1, 2005 Q1, 2004 Change % Payment processing 587 520 13 Lending commissions 89 93 –4 Brokerage 111 136 – 18 Asset management 702 663 6 Insurance commissions 96 93 3 Other commissions – 55 –1 Total commissions, net 1,530 1,504 2
Slide 18: Net gains and losses on financial items at fair value
18 SEK M Q1, 2005 Q1, 2004 Change Financial instruments classified as trading and derivatives 255 633 – 378 Other financial instruments at fair value 83 8 75 Exchange rate fluctuations 104 126 – 22 Total 442 767 – 325
Slide 19: Cost/income ratio development
19 adjusted according to IFRS from Q1, 2004 80% 0,65 0,63 0,63 0,62 0,59 0,61 0,59 0,59 60% 0,56 0,56 0,55 0,58 0,57 0,56 0,56 0,530,53 target 40% 20% 0% Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 05
Slide 20: Income and costs by operation
20 Income Change Change SEK M Q1, 2005 Q4, 2004 SEK M % Q1, 2004 SEK M % Swedish operations 5,359 5,361 –2 5,178 181 3 International banking operations 980 1,036 – 56 –5 886 94 11 Total 6,339 6,397 – 58 –1 6,064 275 5 Costs Change Change SEK M Q1, 2005 Q4, 2004 SEK M % Q1, 2004 SEK M % Swedish opera
Slide 21: Staff costs
21 SEK M Q1, 2005 Q1, 2004 Change % Swedish operations Salaries and remuneration 1,383 1,428 –3 Profit-based staff costs 125 257 – 51 Costs for personnel changes 58 13 Other staff costs 55 49 12 Total 1,621 1,747 –7 International banking operations 259 215 20 Total staff costs 1,880 1,962 –4
Slide 22: Swedish operations headcount
22 Swedish operations 9 800 9680 9573 9 600 9531 9439 9 400 9276 9191 9 200 9134 9087 9 000 8932 8 800 8 600 8 400 Q4 '00 Q4 '01 Q4 '02 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Q4 '04 Q1 '05
Slide 23: Hansabank operating profit rose 22 percent
23 • Hansabanks operating profit rose by 22 percent to SEK 527 M (431) • Loan losses decreased by 18 percent to SEK 41 M (50) • Lending increased by 17 percent to SEK 61 bn (53, Dec 31, 2004) • Successful offer for the remaining shares in Hansabank Figures in parantheses refer to Q1 2004, if not oth
Slide 24: Hansabank income statement
24 SEK M Q1, 2005 Q1, 2004 Change % Net interest income 663 538 23 Net commissions 234 199 18 Net gains and losses on financial items at fair value 121 120 Other income 21 32 – 34 Total income 1,039 889 17 Staff costs – 255 – 214 19 Other expenses – 216 – 194 11 Total expenses – 471 – 408 15 Profit
Slide 25: Hansabank net interest income change
25 Hansabank Q1, 2005 compared to Q1, 2004, SEK M Increased lending volumes + 191 Increased deposit volumes + 21 Lower lending margins – 35 Lower deposit margins – 63 Treasury and trading + 24 Shareholders’ equity and other balance sheet items – 13 Total + 125
Slide 26: Results by business area Q1 2005
26 Q1, 2005 Asset Inter- Swedish retail Swedbank mgmt. & national SEK M operations Markets insurance banking Net interest income 3,119 200 8 640 Other income 1,232 273 333 340 Share of profit/loss of associated companies 46 15 Total income 4,397 6% 488 – 16% 341 – 4% 980 11% Staff costs – 1,043 – 15
Slide 27: Credit quality and loan losses
27 • Doubtful claims decreased by 17 percent to SEK 2,619 M (3,143) • The provision ratio rose to 151 percent (125) • Loan losses fell by 30 percent to SEK 99 M (142) • The loan loss level dropped to 0.05 percent (0.07) Figures in parantheses refer to Q1, 2004
Slide 28: Loan losses breakdown
28 SEK M Q1, 2005 Q1, 2004 Established 87 108 Provisions 149 226 Recoveries – 137 – 192 Change in value of property taken over 0 0 Total 99 142 of which collective provisions for claims assessed individually 67 103
Slide 29: Key ratios
29 Q1, 2005 Q1, 2004 Return on equity, % * 19.0 18.3 Earnings per share, SEK * 4.16 3.59 Equity per share, SEK * 88.89 80.31 C/I ratio before loan losses 0.53 0.57 Loan loss ratio, net % 0.05 0.07 Share of doubtful claims, % 0.18 0.26 ** Provision ratio for doubtful claims, % 151 125 ** Capital adeq
Slide 30: The leading Nordic-Baltic bank
30 The leading Nordic-Baltic bank