Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2010 Earnings Presentation
23 slides from Swedbank Ab Class A's earnings presentation, Jul 22, 2010
Slide 1: Swedbank's second quarter 2010 results
Swedbank’s S db k’ second d quarter t 2010 results lt 22 July 2010 Michael Wolf, CEO Erkki Raasuke, CFO Gö Göran B Bronner, CRO
Slide 2: Continued progress
Continued progress p g • Net profit of SEK 1.6bn • Improved credit quality • Term funding YTD higher than full year maturities • Strengthened capitalisation to 12.7 per cent Core Tier 1 approvall tto buy b b back k Ti Tier 2 b bonds d 2
Slide 3: Business achievements – highlights
Business achievements – highlights g g • Higher mortgage new sales market shares in Sweden • Increased corporate activity • Continued strong deposit trend • Retail’s tailored service concept well received • Deleveraging in the Baltic countries levelling off 3
Slide 4: Q2 performance
Result by business area Q2 performance SEKm Profit before impairments 2 000 Retail Q1 10 Solid credit quality, higher customer activity 1 000 Q2 10 Large Corporates & Institutions 0 Good credit quality, repricing continues, slower trading -1 000 Baltic Banking -2 000 Improving asset quality, stabili
Slide 5: Net interest income: pressure decreasing
Net interest income Pressure decreasing g SEKm 5 000 Retail LCI Baltic Banking Russia Group Treasury 4 500 & Ukraine and Other 4 023 4 000 3 799 62 -89 89 -34 41 -204 3 500 3 000 2 500 2 000 1 500 1 000 500 NII Q1 10 NII Q2 10 0 5
Slide 6: Net commission income: commissions back to pre-crisis levels
Net commission income Commissions back to p pre-crisis levels Net commission income by source Q2 SEKm • Positive trend from Q1 2009 Asset management Payment processing • Market leader in cards and payments Lending & guarantee Brokerage • Growth driven by Asset Management Corporate finance Other Net
Slide 7: Net gains/losses on financial items, fair value
Net gains/losses on financial items, fair value Larger g gains g supported pp by y valuation effects • Lower trading results in Fixed Income • Funding related valuation effects in Group Treasury SEKm Q2 10 Q1 10 Q2 09 Retail 40 32 29 L Large C Corporates t & IInstitutions tit ti 309 441 900 Baltic B
Slide 8: Term funding ahead of plan
Liquidity & Capital management Term funding g ahead of plan p • YTD, SEK 150bn in term funding of Outstanding wholesale funding (nom SEKbn ) which around SEK 50bn during the Total long- 456 second d quarter t term, non- 459 guaranteed 397 • SEK 60bn in remaining term funding Total long- 173 maturiti
Slide 9: Income statement
Second quarter 2010 results Income statement SEKm Q2 2010 Q1 2010 Change Net interest income 3 799 4 023 -224 Net commission income 2 395 2 282 113 Net gains/losses on financial items, fair value 809 647 162 Other income 753 715 68 Non recurring items 16 0 16 Total income 7 772 7 667 105 Staff costs
Slide 10: Asset quality: Q2 development
Asset quality Q2 development p • No impact of European sovereign debt crises • Further stabilisation/improvement in the Baltic countries • Continued improved risk profiles on both the asset and liability side • Swedbank’s S db k’ resilience ili vastly tl iimproved d – ICAAP – Internal I t l stress t
Slide 11: Volumes – signs of stabilisation
Asset quality Volumes – signs g of stabilisation • Sweden – same pattern with better corporate demand • CEE exposure not a restriction SEKbn 1 000 959 952 955 Private 900 Corporate 800 700 555 559 566 600 500 290% 400 210% 194% 179% 109% of equity 300 251 200 404 393 389 97 188 173 163 84 79 77 99 1
Slide 12: Impaired loans – small increase
Asset quality Impaired p loans – small increase • Up SEK 2.4bn in Q2 Impaired loans as SEKm % of gross lending 45 000 42 719 40 132 40 328 9 789 Ukraine 64% 40 000 2 391 35 770 4 362 196 35 000 29 657 6 113 2 557 Russia 21% 30 000 7 688 Lithuania 18% 25 000 9 736 19 921 13 916 20 000 Latvia 27% 15 0
Slide 13: Credit impairments significantly reduced
Asset quality Credit impairments p significantly g y reduced • Sweden very low levels SEKm 8 000 • Smallll recoveries S i iin R Russia i and d 7 000 6 672 Ukraine 6 121 6 000 • Baltic countries 5 003 5 000 – Few new problems – Property prices stabilising/increasing 4 000 – Insolvency and debt restru
Slide 14: Provisions
Asset quality Provisions • Stability in portfolio provisions SEKm 30 000 65 9% 65.9% 63.5% % Provision ratios Q2 10 64.8% 25 000 4 104 Retail 88% 4 684 62.9% 5 135 Large Corporates 101% 20 000 63.3% 6 922 B lti B Baltic Banking ki 59% Russia 59% 15 000 8 914 Ukraine 68% 21 889 23 028 10 000 20 882 G
Slide 15: Appendix
Appendix Swedbank@ 16
Slide 16: Balance sheet
Balance sheet Swedbank Group SEKm Jun 10 Dec 09 % Loans to credit institutions 204 327 92 131 122% Loans to the public 1 239 104 1 290 667 -4% Interest-bearing securities 215 569 170 615 26% Fund shares for which customers bear the investment risk 85 181 78 194 9% Shares and participating interests
Slide 17: Long-term funding
Liquidity & Funding Long-term g funding g • SEK 60bn in remaining term funding maturities to roll or replace in 2010 • Continued focus on covered bonds YTD SEK 129bn issued bonds, • YTD issued SEK 21bn in senior Swedbank, long-term maturity profile unsecured funding g (including Swedbank Mortgage) S
Slide 18: Funding under the Swedish guarantee programme
Liquidity & Funding Funding g under the Swedish guarantee g programme p g (total outstanding as per 30 June, nom SEK 173bn) • Swedbank exited guarantee Currency distribution programme as per 30 April 2010 EUR 41% • Outstanding guaranteed funding USD 30% decreased during the second quarter SEK 23% by
Slide 19: Cover pool and new issuance of covered bonds YTD 2010
Cover p pool and new issuance of covered bonds YTD 2010 • YTD three euro covered bonds in primary Total pool size SEK 618bn market Average loan size SEK 401 082 – Euro MTN CB 3Y,3Y ms+39bp Number of loans outstanding 1 504 480 EUR 1bn, issued Jan 2010 Types of loans – Euro MTN CB 7Y, ms+57bp – Resid
Slide 20: Swedbank Mortgage, 30 Jun 2010, total loan portfolio
Swedbank Mortgage, 30 Jun 2010, total loan portfolio SEK 681bn • 100% lending – Swedish properties • 90% residential lending • Average LTV of 45% (loan level) 61% (property level). Cover pool 43% / 57% • 79% of the total lending g book within a loan-to-value ratio below 50% SEKbn 90 80 Lending distr
Slide 21: Foreign exchange positions
Earnings capacity Foreign g exchange g positions p as of 30 June 2010 SEKm EEK LVL LTL UAH RUB Structural position -34 34 331 -293 293 -15 15 935 68 58 Net assets 17 493 6 315 4 572 1 018 1 184 Equity hedge 0 - 6 315 -4 574 0 0 Goodwill 10 581 0 0 0 0 Total position - 6 257 -293 -15 937 1 086 1 242
Slide 22: Repossessed assets
Asset quality Repossessed p assets SEKm 2 500 2 000 1 500 1 000 500 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Real Estate Residential Real Estate Commercial Passenger & Commercial Transport Shares Other 23
Slide 23: Real estate prices stabilised
Real estate p prices stabilised Market situation Riga 1 762 • Slight fluctuations in average price 1 800 1 800 1 500 1 500 influenced by the small transaction No off transactions 1 200 1 200 EUR/m2 volumes 900 614 900 E 600 600 300 300 0 0 Q4'06 Q2'07 Q4'07 Q2'08 Q4'08 Q2'09 Q4'09 Q2'10 No of deals