Swedbank Ab Class A · OMXSTO:SWED_A

Swedbank Ab Class A — Q3 2019 Earnings Presentation

23 slides from Swedbank Ab Class A's earnings presentation, 2019

  1. Slide 1: Swedbank's third quarter results 2019

    Swedbank’s third quarter results 2019 Jens Henriksson (CEO), Anders Karlsson (CFO) © Swedbank Information class Public

  2. Slide 2: AML Timeline

    AML Timeline 20 February 31 December 31 December SVT News UG 71/132 AML 132/132 AML initiatives to be initiatives to be completed completed Jan Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2007 2019 2020 2021 2022 2023 Internal investigation Around 30 billion Clifford Chance t

  3. Slide 3: AML Initiatives

    AML Initiatives Areas and number of initiatives FIU Reporting Risk Assessment • Internal functions: 1 10 Audit, Compliance, Monitoring Risk and “Grimstad” 35 Internal • SFSA and EFSA 32 Regulations investigations • Internal investigation Risk 8 3 Classification Training 43 Customer Due Diligence © S

  4. Slide 4: AML Initiatives – Status

    AML Initiatives Status Total Not yet Total Ongoing Ongoing Ongoing Completed started initiatives 20 50 30 3 29 132 © Swedbank Information class 4 Public

  5. Slide 5: GDP Outlook

    GDP Outlook 2019 2020 2021 IMF Global 3.0 % 3.4 % 3.6 % Swedbank Sweden 1.3 % 1.2 % 1.5 % Estonia 3.3 % 2.3 % 2.5 % Latvia 2.8 % 2.0 % 2.5 % Lithuania 3.7 % 2.0 % 2.5 % © Swedbank Information class 5 Public

  6. Slide 6: Stable development in core product areas

    Stable development in core product areas Total income, SEKbn ▪ Stable net interest income 12 TOTAL ▪ Strong net commission income INCOME SEK 11.2bn 8 4 ▪ Lower capital market activity and stable 0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 other income Total expenses, SEKbn 6 TOTAL ▪ Higher expenses du

  7. Slide 7: Stable net interest income

    Group result Stable net interest income NII, SEKm 6 608 14 38 • Continued loan volume growth 15 6 553 -27 -52 -44 • Lower deposit margins in the Baltics • Higher resolution fund and deposit guarantee fees • Positive impact from FX and one more day in the quarter Q2 2019 Loan volumes Margins Resoluti

  8. Slide 8: Strong Net commission income

    Group result Strong Net commission income NCI, SEKm • Seasonally higher income in cards 50 3 202 77 -11 3 297 • Asset management income supported -21 by positive market development and net inflows • One more day in the quarter Q2 2019 Cards & Asset Securities Other Q3 2019 Payments management Increa

  9. Slide 9: Lower capital market activity and stable Other income

    Group result Lower capital market activity and stable Other income NGL, SEKm • Seasonally lower credit trading 1 186 • Negative valuation effects in derivatives 768 • Lower combined positive effect from 488 Visa and Asiakastieto 430 457 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Other Income, SEKm • Hi

  10. Slide 10: Solid capital position

    Capital Solid capital position CET1 capital ratio, % • CET1 capital increased by SEK 1.2bn 16.3% 15.9% 16.1% 16.3% 15.1% – Positive effect from net profit of SEK 1.9bn excl. dividend – Negative IAS19 pension valuation effect of SEK 0.7bn • REA decreased by SEK 1.6bn Q4 2018 Q1 2019 Q2 2019 Q3 2019 C

  11. Slide 11: Decreased Risk Exposure Amount (REA)

    Capital Decreased Risk Exposure Amount (REA) REA, SEKbn • REA decreased by SEK 1.6bn – Lending increased REA – offset by 658.1 2.2 1.4 656.5 positive asset valuation -2.7 -2.5 – Market risk and CVA increased REA – Mortgage risk-weight floor increased REA Q2 2019 Credit risk Market risk and Swedish O

  12. Slide 12: Underlying expenses in line – higher extraordinary costs

    Underlying expenses in line – higher extraordinary costs FY 2019 expenses estimate of around SEK 19.8bn AML-related investigations One-offs • Increased legal & consultancy • Incurred in Q3: SEK 416m 0.50bn One-offs fees due to investigations ‒ SEK 256m VAT provision − SEK 585m incurred YTD, of 1.00b

  13. Slide 13: Solid asset quality

    Group Solid asset quality Credit impairments, SEKm Q3 19 Q2 19 ▲QoQ • Resilient asset quality in all Swedish Banking 27 -24 51 business segments Baltic Banking 10 25 -15 Large Corporates & Institutions 117 106 11 Swedbank Group 154 109 45 Ratios Q3 19 Q2 19 Credit impairment ratio, % 0.04 0.03 Share

  14. Slide 14: Higher expenses weigh on net profit

    Group result Higher expenses weigh on net profit SEKm Q3 19 Q2 19 ▲QoQ • Continued loan volume growth Net interest income 6 553 6 607 -54 • Strong net commission income Net commission income 3 297 3 202 95 Net gains and losses 457 768 -311 • Seasonally lower capital market Other income 919 839 80 ac

  15. Slide 15: Appendix

    Appendix © Swedbank Information class Public

  16. Slide 16: Continued volume growth

    Continued volume growth Loans Deposits +5bn +8bn** +4bn +6bn -5bn +4bn +4bn Swedish Baltic Banking Corporate excl. Private Corporate private loans* Baltic Banking Of which FX +3 Of which FX +2 Of which FX +3 All volumes above include the change regarding the savings bank Öland no longer being consol

  17. Slide 17: Swedbank – low-risk bank with strong capital

    Swedbank – low-risk bank with strong capital This is Swedbank base Liquidity & capital, % • Low risk – a Board of Directors strategic priority – ensures access to funding NSFR LCR CET1 ratio,(RHS) markets and low funding cost 200 30 • Retail profile and four home markets a key feature 25 150 20 – Ar

  18. Slide 18: Swedbank – strong and stable earnings

    Swedbank – strong and stable earnings This is Swedbank capacity • Four home markets – Sweden, Estonia, Latvia and Lithuania – Strong and stable economies – Market-leading position in all home markets – Largest customer base in all home markets Profit before impairments, SEKbn • Retail profile ensure

  19. Slide 19: Swedbank – market leader in cost efficiency

    Swedbank – market leader in cost efficiency This is Swedbank Total expenses, SEKbn • Best-in-class cost efficiency – an executive management strategic priority 18 Acquisition, one-off 16 • Executive management strongly focused on cost and change management 14 12 – Integrated in corporate culture 10

  20. Slide 20: Our major end-to-end strategic initiatives

    Our major “end-to-end” strategic initiatives that will transform the bank towards the Wanted Position 1 Offers based on customer data 2 Daily banking 3 Channel transformation 4 Digital commerce offering 5 Digital lending process 6 Financial health and advice 7 Corporate self-service and cash managem

  21. Slide 21: Sustainability in our DNA – Q3 accomplishments

    Sustainability in our DNA – Q3 accomplishments Enabling customers to make smart and sustainable choices Swedbank recent commitments and recognition Swedbank is one of the Founding Signatories of the Principles for Responsible Banking that aligns business strategy with the Paris Agreement and the rea

  22. Slide 22: Strong liquidity position

    Strong liquidity position Liquidity and funding Survival horizon Stable liquidity key ratios SEKbn more than 12 months Net Stable Funding Ratio and Liquidity coverage ratio, % 700 114 NSFR (LHS) LCR (RHS) 180 • Solid liquidity buffer – prefunded for 600 170 500 112 160 more than 12 months (survival

  23. Slide 23: 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 Oct 18 -1% -3% -1% Nov 18 2% -1% 1% Dec 18 2% 2% 2% Jan 19 0% 0% 0% Feb 19 1% 1% 1% House price index, Sweden 2005=100 Mar 19 1% 1% 1% 350 Total

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