Slide 1: Interim report Q3, 2006 CEO/CFO presentation
Interim report Q3, 2006 CEO/CFO presentation 26 October
Slide 2: Jan Lidén, President and CEO
Jan Lidén, President and CEO 2
Slide 3: A strong quarter
A strong quarter • Swedish Banking, stable and profitable development - high level of activity and increased business volumes - increased market shares in several segments - net interest income rose - deposit margins improved • Baltic Banking reported record quarter - impressive volume growth - incr
Slide 4: Lending and savings, Group
Lending and savings, Group SEK bn Sep 30 Dec 31 Sep 30 Change, Change, Lending 2006 2005 2005 YTD, % Y/Y, % Total 891 796 766 12 16 Of which Swedbank excl. Baltic Banking 768 707 689 9 11 Of which Private mortgages, Sweden 368 340 330 8 12 Baltic Banking 123 89 77 38 60 Savings Total 803 729 705 10
Slide 5: Market shares, Sweden New sales
Market shares, Sweden New sales Shares of new sales Aug 31, 2006 Sep 30, 2005 Household deposits 27.0 25.2 Fund Management* – 0.5 15.6 Individual Pensions Saving** 59.5 55.7 Equity Linked Bonds 27.8 22.6 Corporate loans 29.1 10.2 Private mortages 31.0 24.0 * Refers to September 2006. ** Refers to Ju
Slide 6: Household mortgages, Sweden Market shares restored
Household mortgages, Sweden Market shares restored % % 35 35 • Increased sales: - metropolitan and other growth areas 30 30 - internet - distributors 25 25 • Tighter cooperation with Group real 20 20 estate broker 15 15 • Improved efficiency: - faster handling of loan applications 10 10 - decreased
Slide 7: Pension insurance, Robur Insurance, market shares Sweden
Pension insurance, Robur Insurance, market shares Sweden Occupational pensions, premiums paid Total premiums paid % % 10 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 2002 2003 2004 2005 2006- 2002 2003 2004 2005 2006- Jun Jun Source: The Swedish Insurance Federation 7
Slide 8: Baltic Banking Market Shares, %
Baltic Banking Market Shares, % Estonia Latvia Lithuania Balance Market Change Market Change Market Change Aug, 2006 Share yoy Share yoy Share yoy Household deposits 63.1 0.0 29.8 1.3 38.2 – 0.6 Corporate deposits 48.9 1.6 13.6 0.3 19.7 – 2.2 Lending 46.4 0.9 25.6 3.8 23.8 0.4 Pension II 52.6 0.7 43
Slide 9: Margins
Margins Lending Deposits % % 1.80 3.50 1.60 3.00 1.40 2.50 1.20 2.00 1.00 1.50 0.80 0.60 1.00 0.40 0.50 0.20 0.00 0.00 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Estonia Latvia Lithuania Sweden Estonia Latvia Lithuania Sweden 9
Slide 10: Swedish Banking, Cost/Income-ratio
Swedish Banking, Cost/Income-ratio SEK M 5,000 * ** 4,500 4,000 3,500 3,000 Cost/Income-ratio 0.49 2,500 2,000 1,500 1,000 500 0 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Income Expenses *Excluding EnterCard SEK 810 M **Excluding Kundinkasso KIAB AB SEK 1,421 M 10
Slide 11: Swedish Banking, net interest income
Swedish Banking, net interest income SEK M 3,400 3,200 3% 3,000 2,800 2,600 2,400 2,200 2,000 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 11
Slide 12: Baltic Banking, Cost/Income-ratio
Baltic Banking, Cost/Income-ratio SEK M 1,800 1,600 1,400 1,200 1,000 Cost/Income-ratio 0.41 800 600 400 200 0 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Income Expenses 12
Slide 13: Swedbank Markets, profit trend
Swedbank Markets, profit trend SEK M 600 500 400 300 200 100 0 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Operating profit Profit for the period attributable to the shareholders 13
Slide 14: Profit trend, Group
Profit trend, Group SEK M 3,500 3,000 *** 2,500 ** * 2,000 1,500 1,000 500 0 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Profit for the period attributable to shareholders, excluding larger capital gains: * FIH SEK 1,200 M ** EnterCard SEK 810 M *** Kundinkasso KIAB AB SEK 1,42
Slide 15: Financial objectives, Group
Financial objectives, Group Cost/Income-ratio 0.80 0.70 • Return on equity (higher than average of 0.60 Nordic peers*) 0.50 0.40 • Cost/Income-ratio (below 0.50) 0.30 0.20 • Primary capital ratio (>7% long term) 0.10 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 -02 -02 -02 -02 -03 -
Slide 16: Group financial overview
Group financial overview Mikael Inglander, CFO and Head of Group Staffs 16
Slide 17: Highlights, Q3-06 (Q2-06)
Highlights, Q3-06 (Q2-06) • Profit for the quarter increased by SEK 125 M or 4 percent to SEK 2,911 M (2,786) • Earnings per share, increased by 4 percent to SEK 5.65 (5.40) • Return on equity increased to 20.8 percent (20.2) • Cost/Income-ratio improved to 0.49 (0.51) • Primary capital ratio remain
Slide 18: Income statement, Group
Income statement, Group Change, Change, SEK M Q3 2006 Q2 2006 % Q3 2005 % Net interest income 3,895 3,783 3 3,860 1 Net commission income 2,109 2,353 – 10 1,910 10 Net gains and losses on financial items at fair value 757 1,032 – 27 789 –4 Other income 403 410 –2 1,839 – 78 Total income 7,164 7,578
Slide 19: Net interest income, Group
Net interest income, Group Change, Change, SEK M Q3 2006 Q2 2006 % Q3 2005 % Swedish Banking 2,948 2,850 3 3,107 –5 Baltic Banking Operations 1,032 920 12 785 31 Baltic Banking Investments – 104 – 113 8 – 74 – 41 Swedbank Markets 197 183 8 198 –1 Asset Management and Insurance 9 3 5 80 Shared Servic
Slide 20: Swedish Banking Change in net interest income
Swedish Banking Change in net interest income SEK M Q3-06 vs Q2-06 Q3-06 vs Q3-05 Increased lending volumes 64 224 Increased deposit volumes 24 61 Increased deposit margins 62 141 Decreased lending margins – 95 – 380 Sold operation (KIAB) – 44 Other 43 – 161 Total 98 – 159 20
Slide 21: Swedbank Mortgage, Investment margin
Swedbank Mortgage, Investment margin % 1.20 1.10 1.11 1.09 1.09 1.10 1.06 1.01 1.00 1.00 0.98 0.90 0.80 0.77 0.74 0.75 0.70 0.60 0.50 0.40 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 21
Slide 22: Baltic Banking Change in net interest income
Baltic Banking Change in net interest income SEK M Q3-06 vs Q2-06 Q3-06 vs Q2-05 Increased lending volumes 79 368 Increased deposit volumes 8 39 Increased deposit margins 62 101 Increased lending margins 11 Decreased lending margins – 156 Accrued loan fees IFRS – 88 Other – 48 – 17 Total 112 247 22
Slide 23: Eliminations
Eliminations SEK – 182 M change in SEK M eliminations Q3/Q2 300 200 100 0 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 -100 -200 -300 Net interest income Net gains and losses on financial items at fair value Net change 23
Slide 24: Net commission income, Group
Net commission income, Group Change, Change, SEK M Q3 2006 Q2 2006 % Q3 2005 % Payment processing 687 639 8 643 7 Lending 149 189 – 21 154 –3 Brokerage 168 294 – 43 190 – 12 Asset management 915 937 –2 820 12 Insurance 115 122 –6 108 6 Other 75 172 – 56 -5 Net commission income 2,109 2,353 – 10 1,91
Slide 25: Net gains and losses on items at fair value
Net gains and losses on items at fair value SEK M 1,200 1,000 800 Strategic holdings Elimination 600 Other 400 Baltic Banking 200 Swedbank Markets 0 -200 Q1 -05 Q2 -05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Strategic holding sold during Q3: Strategic holding still on board: Primary Capital Certificates (Grun
Slide 26: Expenses, Group
Expenses, Group Change, Change, SEK M Q3 2006 Q2 2006 % Q3 2005 % Swedish Banking – 2,068 – 2,195 –6 – 2,167 –5 Baltic Banking Operations – 698 – 816 – 14 – 545 28 Swedbank Markets – 436 – 558 – 22 – 389 12 Other – 288 – 333 – 14 – 263 10 Total – 3,490 – 3,902 – 11 – 3,364 4 26
Slide 27: Loan losses, Group
Loan losses, Group Loan losses Loan loss level, SEK M % 500 0.30 450 0.25 400 350 0.20 300 250 0.15 200 0.10 150 100 0.05 50 0 0.00 -50 Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 -0.05 -100 -150 -0.10 Loan losses Loan
Slide 28: Profit per business area
Profit per business area Q3, 2006 Swedish Baltic Swedbank Asset Mgmt. SEK M Banking Banking Markets & Insurance Net interest income 2,948 1,032 197 9 Net commission income 991 380 338 416 Other income 248 302 185 51 Total income 4,187 1,714 720 476 Staff costs – 1,001 – 385 – 268 – 76 Other expenses
Slide 29: A strong quarter
A strong quarter • Swedish Banking, stable and profitable development - high level of activity and increased business volumes - increased market shares in several important segments - net interest income rose - deposit margins improved • Baltic Banking reported record quarter - impressive volume gro
Slide 30: Welcome to Swedbank's Capital Markets Day in Stockholm
Welcome to Swedbank’s Capital Markets Day in Stockholm on 16 November www.swedbank.se/cmd 30
Slide 31: Slide 31