Slide 1: Swedbank's year-end 2013 results
Swedbank’s year-end 2013 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO © Swedbank
Slide 2: Swedish Banking: Stable results
Swedish Banking Stable results SEKm Q4 13 Q3 13 ▲ Q/Q • Stable NII Net interest income 3 448 3 473 -25 – Loan growth Net commissions 1 649 1 577 72 – Stable back-book mortgage Total income 5 536 5 491 45 margins Total expenses 2 533 2 389 144 – Lower deposit margins Profit before 3 003 3 102 -99 imp
Slide 3: Large Corporates & Institutions: Good performance
Large Corporates & Institutions Good performance SEKm Q4 13 Q3 13 ▲Q/Q • Improved NII Net interest income 889 864 25 – Loan and deposit growth Net commissions 559 467 92 • Better trading income Total income 1 987 1 755 232 Total expenses 878 759 119 • Strong commission income Profit before 1 109 996
Slide 4: Baltic Banking: Continued improvement
Baltic Banking Continued improvement SEKm Q4 13 Q3 13 ▲Q/Q • Improved NII Net interest income 844 807 37 – Continued re-pricing Net commissions 454 446 8 – Deposit growth Total income 1 511 1453 58 • Strong commission income Total expenses 661 604 57 Profit before impairments 850 849 1 • Operational
Slide 5: Group results: Improving revenue and increasing cost
Group results Improving revenue and increasing cost SEKm Q4 13 Q3 13 ▲Q/Q • Stable NII Net interest income 5 626 5 641 -15 – Volume growth Net commission income 2 699 2 520 179 – Margins Net gains and losses 461 170 291 Total income 9 652 9 225 427 • Strong commission income Total expenses 4 484 3 9
Slide 6: Expenses: Focus on customer activities
Expenses Focus on customer activities • Flat expenses target for 2014 Group Efficiency Ektornet functions measures Customer IT related development cost Expenses Expenses Expenses Expenses 2013 2012 2013 2014 6
Slide 7: Capital: Increased RWA
Capital Increased RWA Swedbank’s RWA development • Loan growth SEKbn 455 11.1 2.5 Basel 2 451.9 • Positive rating migration 2.2 450 0.0 -2,9 -0,8 445 - 1.8 • Market risk 440 Basel 2 435 441.6 • FX 430 425 420 7
Slide 8: Capital: Regulatory uncertainty – higher capital requirements
Capital Regulatory uncertainty – higher capital requirements • Countercyclical buffer 16.5 - ? % Other? • RW floor on mortgages 25% Risk weight floor on Swedish mortgages • Pillar 2 15% Risk weight floor on Swedish mortgages • Hard limits vs buffers 0-2.5% Countercyclical buffer • Leverage ratio – c
Slide 9: Asset quality: Continued strong asset quality
Asset quality Continued strong asset quality Credit impairments, SEKm Q4 13 Q3 13 ▲Q/Q • Continued solid asset quality Swedish Banking 140 106 34 in Sweden Large Corporates & Institutions 5 7 -2 • Net recoveries in Baltic Baltic Banking -177 -147 -30 Banking Estonia -139 -38 -101 Latvia 50 -70 120 •
Slide 10: Q&A
Swedbank’s year-end 2013 results Q&A
Slide 11: Appendix
Appendix Swedbank @
Slide 12: Swedish housing market: Regulatory initiatives targeting the mortgage market
Swedish housing market Regulatory initiatives targeting the mortgage market Swedbank’s equity doubled • LTV cap of 85% Total equity, SEKbn 120 • Amortisation 100 • Risk-weight floor of up to 25% on 80 mortgage loans 60 40 • Capital and liquidity requirements 20 – High minimum regulatory requirements
Slide 13: Swedish housing market: Shortage of housing
Swedish housing market Shortage of housing Housing completions 1975-2012 Population and housing growth 1990-2012 80 000 Apartment buildings Single-family dwellings 1 200 Acc increase in population 70 000 Number of homes / persons, thousands Acc increase in housing completions 60 000 1 000 Number of
Slide 14: Asset quality: Conservative provision ratio
Asset quality Conservative provision ratio SEKm 20 000 Provision ratio, % Q413 64% 65% 62% Swedish Banking 73 57% LC&I 42 54% 53% 54% Baltic Banking 51 15 000 Group 54 2 040 1 774 10 000 1 545 10 951 1 420 5 000 9 934 1 398 1 325 7 077 1 256 4 429 4 047 * 3 570 * 2 818 * 0 Q212 Q312 Q412 Q113* Q213*
Slide 15: Credit portfolio: Shipping and offshore
Credit portfolio – Large Corporates & Institutions Shipping and offshore SEKbn Shipping and Offshore 30 24 26 25 • Lending exposure to Shipping & Offshore 23 26 4 sector of SEK 25.5 bn 20 6 – Portfolio duration 4-5y 10 – Average fleet age 7y 16 – Strong employment profiles 0 Q4-12 Q1-13 Q2-13 Q3-13
Slide 16: Liquidity and funding: Lower funding needs
Liquidity and funding Lower funding needs • LCR 142% (Swedish FSA definition FFFS 2012:6) • NSFR 89% • Issued SEK 103bn of term-funding FY 2013 of which SEK 14bn in Q4 Term funding issuance – completed and planned SEKbn Covered bonds Senior unsecured 120 100 80 60 40 20 0 Source: Swedbank, Dec 31, 2
Slide 17: 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 103bn maturities Long-term funding maturity profile, by funding source SEKbn 200 Government guaranteed debt Senior unsecured 150 debt Covered bonds 100 50 0 2014 2015 2016 2017 20
Slide 18: Liquidity reserve
Liquidity and funding Liquidity reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks 59 382 Deposits in other banks available overnight 397 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks
Slide 19: Prefunded in excess of 12 months
Liquidity and funding Prefunded in excess of 12 months SEKbn 250 200 150 100 50 0 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 Days forward Source: Swedbank Dec 31, 2013 19
Slide 20: Asset encumbrance
Liquidity and funding Asset encumbrance Encum bered assets - distribution by type of liability (row ) and asset (colum n) Central banks Debt of w hich and instruments Securities received Government supranational issued by issued by collateral debt debt Covered credit corporate and Mortgage (off- SEK
Slide 21: Real estate prices – Sweden 12-month development
Swedish housing and mortgage market Real estate prices – Sweden 12-month development Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5% Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 10% 6% Jul/13 4% 9% 6% Aug/13 5% 11% 7% Sep/13 5% 11% 7
Slide 22: Real estate prices – Baltic countries
200 400 600 0 800 1 000 1 200 1 400 1 600 1 800 200 600 800 0 400 1 000 1 200 1 400 1 600 1 800 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 Jul-08 Jul-08 Real estate prices Nr.of deals Nr.of deals Jan-09 Ja