Slide 1: Swedbank year-end result 2020
Swedbank year-end result 2020 © Swedbank Information class Public
Slide 2: A flickering light at the end of the tunnel
“A flickering light at the end of the tunnel” 2019 2020F 2021F Swedbank January Forecast (Nov.) (Nov.) Global 2.8 % -3.4 % (-3.9%) 4.7 % (4.7%) Sweden 1.2 % -2.8 % (-3.5%) 3.0 % (2.1%) Estonia 4.4 % -2.7 % (-3.2%) 3.1 % (3.1%) Latvia 2.2 % -4.5 % (-5.0%) 2.8 % (3.1%) Lithuania 3.9 % -1.7 % (-1.7%) 2
Slide 3: A challenging year 2020
A challenging year 2020 WHO: 2,120,877deaths from Covid-19 © Swedbank Information class Public
Slide 4: Deliveries 2020
Deliveries 2020 Addressed AML Focused on Meeting customer needs in Covid-19 times shortcomings sustainability Online customer advice on support programs, private finance Keeping our branches open, video meetings with customers © Swedbank Information class 4 Public
Slide 5: © Swedbank Information class Public
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Slide 6: Stable result in difficult times
Stable result in difficult times Group result Q4 SEKm Q4 20 Q3 20 ▲QoQ Q4 19 ▲YoY • Increased AuM contributed to strong Net interest income 6 567 6 714 -147 6 408 159 NCI Net commission income 3 375 3 246 130 3 445 -39 • Positive valuation effect and client Net gains and losses 910 669 241 1 218 -30
Slide 7: A stable result considering fine and pandemic
A stable result considering fine and pandemic FY 2020 • Net profit SEK 12.9bn • ROE 8.9%, (excluding fine 11.4%), C/I 0.54 (0.45) • Fine of SEK 4bn + credit impairment provisions of SEK 4.3bn • CET1 capital ratio buffer of around 510bps • Dividend proposal SEK 4.35 per share for 2019* (EGM) • Divide
Slide 8: Loan and deposit volumes impacted by FX
Group result Loan and deposit volumes impacted by FX Loans, SEKbn Deposits, SEKbn -6 +55 * 1 622 6 1 616 44 1 130 -8 -4 1 075 11 Q3 2020 Swedish Baltic banking Corporate Q4 2020 Q3 2020* Private Corporate* Q4 2020* mortgage excl. Baltic loans banking Of which FX -12 Of which FX -14 *excl. Group func
Slide 9: Stable net interest income
Group result Stable net interest income NII, SEKm 262 • Continued mortgage loan growth 6 715 111 6 566 • Lower corporate loan volumes -4 -405 -93 -20 • Slightly lower net margin effect due to decreasing market rates -32 • Adjustment for higher 2020 deposit guarantee fee Q3 2020 Lending Lending Depos
Slide 10: Strong net commission income
Group result Strong net commission income NCI, SEKm • Lower income from cards due to lower activity and one-off fee to savings 158 3 376 banks of SEK 130m 3 246 140 • Asset management income positively -168 impacted by higher AuM – Positive stock market development – Net inflows in equity funds Q3 2
Slide 11: Higher net gains & losses
Group result Higher net gains & losses NGL, SEKm • Positive valuation effects 1 398 1 218 – Derivatives, CVA/DVA 910 – Bond inventories 669 • Good client FX trading activity Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 -322 Breakdown, Q4 2020 910 472 243 126 114 -45 CVA/DVA Bond Shares Client Other Q4 20
Slide 12: Stable other income
Group result Stable other income Other Income, SEKm • Stable income from insurance and 975 savings banks 915 867 911 645 • Lower income from Entercard due to lower activity Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 © Swedbank Information class Q4 2020 Public 12
Slide 13: Underlying expenses on target
Group result Underlying expenses on target Expenses, SEKm • FY 2020 underlying expenses 5 586 according to guidance of SEK 19.7bn 5 370 576 4 843 43 4 761 170 • Increased number of FTEs and 63 seasonality 5 416 • AML investigation expenses higher 4 794 4 800 4 698 Q120* Q220 Q320 Q420 Other cost AML
Slide 14: Solid asset quality
Group Solid asset quality Credit impairments per business area, SEKm • FY 2020 Credit impairments of SEK 4.3bn Swedish banking 4 334 ‒ Of which oil-related impairments of around SEK 3bn Baltic banking LC&I 664 • FY credit impairment ratio of 0.26% Group functions 237 ‒ Q4 credit impairment ratio of
Slide 15: IFRS 9 – high uncertainty remains
IFRS 9 – high uncertainty remains • Reduced credit impairments under IFRS9 • Counteracted by management adjustments • Individual assessment – oil-related 220 4 334 394 3 811 672 - 124 -639 523m (Q4) Credit Macro- Expert portfolio Individual Rating Other write- Credit impairments economic macro asses
Slide 16: Shipping and offshore by sub-sectors - half of portfolio in run-off
Shipping and offshore by sub-sectors - half of portfolio in run-off Loans carrying amount, SEK 12.6bn (offshore 5.4bn) Gross loans by stages, SEK 17bn (offshore 9.9bn) Credit impairment provisions, SEK 4.5bn (offshore) Total stage 3 loans, SEK 6.2bn (offshore) 6 6 5 Shipping 5 Offshore Shipping Offs
Slide 17: Stable Risk Exposure Amount (REA)
Capital Stable Risk Exposure Amount (REA) REA, SEKbn • REA decreased by SEK 1.9bn – Credit risk decreased mainly due 5.3 to stronger SEK 691.5 1.0 689.6 2.1 -6.2 – Market movements decreased -4.1 REA for market risk and derivatives – Annual calculation of REA for operational risk – PD increased Arti
Slide 18: Solid capital position
Capital Solid capital position CET1 capital ratio, % 16.1% 16.4% 16.8% 17.5% • Buffer of around 510bps above 12.4% minimum requirements – Regulatory requirements will lower the buffer during 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 CET1 capital – Remaining accrued dividend still ratio requirement deduct
Slide 19: Looking ahead
Looking ahead • NII development • 50% dividend policy • Management capital buffer target of 100-300bps Expected development, SEKm • Underlying expenses development reflect a continued 500 500 build out of the bank 852 ‒ Improvements in AML, Compliance and Governance 19 700 20 500 20 500 ‒ Additional
Slide 20: Appendix
Appendix © Swedbank Information class Public
Slide 21: A turbulent year led to a weaker result
Group result – FY 2020 A turbulent year led to a weaker result SEKm FY 2020 FY 2019 ▲YoY Net interest income 26 853 25 989 864 • ROE of 11.4% excluding fine Net commission income 12 770 12 984 -214 • Strong NII development Net gains and losses 2 655 3 629 -974 • Expenses in line with FY expectations
Slide 22: Strong financial position to manage uncertainty
Strong financial position to manage uncertainty Balance sheet Earnings capacity (profit before impairments, SEKbn) 30 • Liquidity coverage ratio, 174% 20 • Net stable funding ratio, 125% 10 • Liquidity reserve, SEK 485bn 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* – Of which SEK 315bn (65%)
Slide 23: Major part of Swedbank's loan portfolio insignificantly impacted by Covid-19
Major part of Swedbank’s loan portfolio insignificantly impacted by Covid-19 Loans carrying amount, SEKbn Distribution by sub-sector sensitivity* Distribution by sub-sector loan volume and share in stage2 Insignificantly impacted Slightly impacted Moderately impacted Materially impacted 1% ▪ Conside
Slide 24: Property management – focus on well-known companies with solid finances
Property management – focus on well-known Property management companies with solid finances Residential property management Commercial property management • Office properties with low vacancies in • Low risk portfolio, supported by; larger cities, appr. SEK 80bn − Growing population • Logistic prope
Slide 25: Strong commitment to sustainability
Strong commitment to sustainability A financially sound and sustainable society Our legacy – roots, values Commitment to govern Help our customers to Ensuring a secure & conduct with impact make sustainable operating environment decisions ✓ Sweden’s first savings bank in ✓ UN Principles for Responsi
Slide 26: Sustainable value creation
Sustainable value creation Long-term sustainable equals long-term profitability KEY MESSAGES • Empower the many People to • Empower the many Businesses to create a better future by Empower our customers to make create a better future by supporting ▪ We empower the many supporting sustainable choices
Slide 27: Sustainability in our DNA – Q4 accomplishments
Sustainability in our DNA – Q4 accomplishments Swedbank recent commitments and recognitions Proactive initiatives • Included in Dow Jones Sustainability Index • During the quarter Swedbank Robur signed two new initiatives: (World and Europe) • Net Zero Assets Managers initiatives – the purpose of th
Slide 28: Focus areas in 2021
Focus areas in 2021 A strategic direction on the basis of sustainability Focus on fundamentals – building robust sustainable finance compliance and strengthen sustainability governance and transparency A financially sound and sustainable Measure environmental and social impact and society performanc
Slide 29: Strong liquidity position
Strong liquidity position Liquidity and funding Strong funding profile Stable liquidity key ratios Net Stable Funding Ratio and Liquidity coverage ratio, % Outstanding volumes SEKbn • Solid liquidity buffer – prefunded 1 400 Q3 2020 Q4 2020 130 NSFR, CRD2 (LHS) LCR (RHS) 190 for more than 12 months
Slide 30: Real-estate price performance – Sweden
Swedish Real-estate price performance – Sweden, housing and mortgage 12 month market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jan 20 6% 6% 6% Feb 20 7% 7% 7% Mar 20 6% 6% 6% Apr 20 4% 2% 3% House price index, Sweden 2005=100 May 20 6% 2% 5% 350 Jun 20 7% 3% 6% Total 300