Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q3 2024 Earnings Presentation
24 slides from Swedbank Ab Class A's earnings presentation, 2024
Slide 1: Third quarter results 2024
Third quarter results 2024
Slide 2: Macro outlook: growth, policy rates and home markets
Sweden Estonia Latvia Lithuania ● Increased geopolitical uncertainty, low growth, and high debt 2.2% 2.6% 1.5% 2.6% 2.8% 0.9% 0.3% ● Policy rate cuts -0.2% -0.3% -0.3% -0.6% ● Home markets among fastest growing in Europe -3.0% 2025 2023 2024F 2025F Sweden Estonia Latvia Lithuania Riksbank ECB (depos
Slide 3: Net profit SEK 9.4bn
▲ ● Net profit SEK 9.4bn Net interest income 12 229 12 165 1% Net commission income 4 286 4 169 3% ● Cost/Income ratio 0.31 Net gains and losses 1 170 911 28% ● Return on equity Other income 1 461 991 47% 18.4 per cent Total income 19 146 18 237 5% Total expenses 5 986 6 465 -7% ● EPS after dilution
Slide 4: Solid credit quality, capital buffer and liquidity
● Solid credit quality ● CET1 capital buffer 5.2 percentage points ● Strong liquidity position ● Positive outlook from S&P © Swedbank 4
Slide 5: Proactively improving our offering
● Proactively improving our offering ● Omni-communication platform ● A third of Swedish private customers migrated to the new savings platform © Swedbank 5
Slide 6: Swedish and Baltic mortgage and savings markets
● Swedish mortgage market – Was stable ● Baltic mortgage market – Increased in all three countries ● Savings – Seasonally down in Sweden – Increased deposits in the Baltics – Round-up savings function in the Baltics © Swedbank 6
Slide 7: Combining local presence with national expertise
● Combining local presence with national expertise ● Lending market – Muted in Sweden – Increased in Estonia, Latvia and Lithuania ● Bond market – 34% of arranged bonds were sustainability bonds – Issued our first green covered bond © Swedbank 7
Slide 8: Financial health and energy transition
● Financial health – Continued education efforts ● Energy transition – Launch of Incept platform with Ramboll © Swedbank 8
Slide 9: Lending volumes QoQ
QoQ -0.2% QoQ -0.6% SEKbn SEKbn 1 531 1 523 -2 -7 +0 1 799 9 1 799 1 796 -9 -3 Q2 2024 Private Corporate Q3 2024 QoQ +3.3% SEKbn 6 276 268 3 Q2 2024 Sweden 1) Baltic Banking Q3 excl. FX FX Q3 2024 Q2 2024 Private Corporate Q3 2024 1) Sweden including Swedish Banking, Premium and Private Banking, Cor
Slide 10: Deposit volumes QoQ
QoQ -0.7% QoQ -1.4% SEKbn SEKbn 879 867 -6 -7 -7 1 282 6 1 275 1 273 -13 -2 Q2 2024 Private Corporate Q3 2024 QoQ +1.3% SEKbn 403 5 1 408 Q2 2024 Sweden 1) Baltic Banking Q3 excl. FX FX Q3 2024 Q2 2024 Private Corporate Q3 2024 1) Sweden including Swedish Banking, Premium and Private Banking, Corpor
Slide 11: Net interest income
QoQ +0.5% SEKm ● Higher average lending and deposit volumes 43 65 366 89 12 229 12 165 ● SEK 89m from FX, day count and a correction -499 ● Total funding cost decreased -25 in line with lending income Business driven NII ● Gradual roll-in effects on lending Q2 2024 Lending Deposit Margins Treasury F
Slide 12: Net commission income
QoQ +3% SEKm ● Asset management impacted +116 by higher average stock market performance 62 15 48 4 286 4 169 ● Underlying card commissions -9 seasonally higher ● Introduction of new service concept in Latvia – Higher service concepts – Lower card commissions Q2 2024 Cards & Asset Securities & Other
Slide 13: Net gains and losses
SEKm ● Strong FX and Fixed income sales and trading 32 8 1 170 ● Positive revaluation from 422 funding related swaps 682 26 Client trading Bond inventories Funding Liquidity Other Total NGL (Treasury) portfolio © Swedbank 13
Slide 14: Other income
QoQ +47% SEKm ● Net insurance income +470 benefitted from revaluations in Baltic Banking 43 1 461 162 ● Associates increased due to a 266 credit impairment one-off adjustment in Entercard of 991 SEK 120m Q2 2024 Net insurance Associates Other Q3 2024 © Swedbank 14
Slide 15: Expenses and C/I ratio
QoQ -7% SEKm ● Lower consultancy costs after front-loading of projects in H1 Underlying expenses C/I ratio ● Lower FTEs 6 411 6 465 ● Seasonality and VAT refund 6 185 5 986 5 562 ● FY 2024 according to plan 0.35 – H2 costs similar to H1 0.34 0.34 (excluding FX) 0.31 – YTD FX SEK 150m 0.30 Q3 2023 Q4
Slide 16: Credit impairments
SEKm ● 1bp credit impairment ratio YTD ● Remaining post model 337 adjustment buffer of SEK 858m 428 111 271 -84 -426 -95 Macro Rating & stage Post model Individual Net Other Total credit scenarios migrations adjustments assessment repayments impairments and balances © Swedbank 16
Slide 17: Commercial real estate exposure
● Improved market sentiment Q2 2024 disclosures, per cent – Well functioning bond markets 8.4% 8.3% 8.6% 7.8% 8.0% 7.0% 7.2% 7.4% – Reduced financing cost ● Weak macro still impacting – Vacancies Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 – Transaction market still muted Q2 2024 disclosures (Q1
Slide 18: CET1 capital ratio of 20.4 per cent
● CET1 capital ratio of 20.4 per cent ~520bps ● 100-300bps capital buffer 0.6% 0.2% 20.4% buffer target range remains 20.1% -0.5% 15.1% Q2 2024 Profit after Credit risk Other Q3 2024 CET1 capital anticipated requirement dividend © Swedbank 18
Slide 19: Risk exposure amount increased by SEK 10bn
SEKbn ● REA increased by SEK 10bn ● ECB approval of Baltic banking IRB model plan increased credit 19.6 847.9 0.1 857.8 risk by SEK 10bn mitigated by - 9.5 - 0.4 Article 3 release Q2 2024 Credit risk Article 3 Article 458 Market & CVA Q3 2024 (RW-floors) risk © Swedbank 19
Slide 20: Summary: ROE 18.4 per cent, C/I 0.31
● Return on equity 18.4 per cent ● Cost to income ratio 0.31 ● Solid credit quality ● Strong capital position © Swedbank 20
Slide 21: Appendix
Appendix
Slide 22: Average loan-to-value of 56 per cent
Q3 2024, private mortgage loans, SEKbn 20 20 16 16 96% of portfolio below 70% LTV ● Average loan-to-value of 12 12 56 per cent 8 8 4 4 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 LTV per cent 2004 - YTD Q3 2024, per cent and SEKm of private
Slide 23: Liquidity coverage and funding
167% Liquidity Coverage Ratio Q3 2024, SEKbn Q3 2024, SEKbn 4 6 101 63 126% 5 277 Net Stable Funding Ratio 219 393 >2Y 287 Survival horizon Cash and balances with central banks SEK EUR USD OTHER Sovereigns, central banks or multilateral development banks1 Municipalities or public service entities Ex
Slide 24: Swedbank
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