Swedbank Ab Class A · OMXSTO:SWED_A

Swedbank Ab Class A — Q2 2019 Earnings Presentation

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

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

    Swedbank’s second quarter results 2019 Anders Karlsson (acting CEO), Helo Meigas (CRO), Gregori Karamouzis (Head of IR) © Swedbank Information class Public

  2. Slide 2: Strong Q2 result

    Strong Q2 result Total income, SEKbn ▪ Higher net interest income 12 TOTAL ▪ Strong commission income INCOME SEK 11.4bn 8 4 0 ▪ Higher customer activity supported NGL Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 and Other income Total expenses, SEKbn 6 TOTAL ▪ Higher expenses due to EXPENSES SEK 4.8bn 4

  3. Slide 3: Updated financial targets

    Updated financial targets • Dividend policy of 50% • Management capital buffer of 100-300bps • ROE of at least 15% • FY 2019 underlying cost of SEK 18bn © Swedbank Information class Q2 2019 Public 3

  4. Slide 4: Focus areas

    Focus areas • Increased customer value • Develop the bank • Manage the ongoing investigations © Swedbank Information class Q2 2019 Public 4

  5. Slide 5: Higher net interest income

    Group result Higher net interest income NII, SEKm • Continued loan volume growth 6 421 34 23 39 207 6 607 • Lower lending margins 65 -182 • Lower resolution fund fee for 2019 • Positive impact from FX and one more day in the quarter • Group Treasury benefited from Q1 2019 Loan volumes Margins Resolu

  6. Slide 6: Stronger net commission income

    Group result Stronger net commission income NCI, SEKm • Seasonally higher income in cards 80 31 3 202 • Asset management income 51 3 070 -30 supported by positive market development and net inflows • One more day in the quarter Q1 2019 Cards & Asset Securities Other Q2 2019 Payments management Incre

  7. Slide 7: Good customer activity

    Group result Good customer activity NGL, SEKm 1 186 • Normal trading activity after extraordinarily strong Q1 635 768 • Visa and Asiakastieto share price 488 430 appreciation Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Other Income, SEKm • Higher net insurance income 1 584 Other income UC, one-off • Sta

  8. Slide 8: Dividend policy changed to further strengthen capital position

    Capital Dividend policy changed to further strengthen capital position CET1 capital ratio, % • Dividend policy changed to 50% 16.4% 16.3% 15.9% 16.1% • Management capital buffer of 14.6% 100-300bps • CET1 capital increased by SEK 1.4bn – Positive effect from net profit of Q3 2018 Q4 2018 Q1 2019 Q2

  9. Slide 9: Increased Risk Exposure Amount (REA)

    Capital Increased Risk Exposure Amount (REA) REA, SEKbn • REA increased by SEK 1.7bn – Lending increased REA by SEK 656.4 0.7 2.1 658.1 8.3bn -1.0 -0.1 – Positive rating migration and asset valuation decreased REA by SEK 7.7bn – Mortgage risk-weight floor increased REA by SEK 2.1bn Q1 2019 Credit ri

  10. Slide 10: Strong result

    Group result Strong result SEKm Q2 19 Q1 19 ▲QoQ • Continued loan volume growth Net interest income 6 607 6 421 186 • Higher card usage Net commission income 3 202 3 070 132 Net gains and losses 768 1 186 -418 • Positive asset under management Other income 839 685 154 development Total income 11 416

  11. Slide 11: Solid asset quality

    Group Solid asset quality Credit impairments, SEKm Q2 19 Q1 19 ▲QoQ • Resilient asset quality in all Swedish Banking -24 141 -165 business segments Baltic Banking 25 -29 54 Large Corporates & Institutions 106 107 -1 Swedbank Group 109 218 -109 Ratios Q2 19 Q1 19 Credit impairment ratio, % 0.03 0.05

  12. Slide 12: Appendix

    Appendix © Swedbank Information class Public

  13. Slide 13: Continued volume growth

    Continued volume growth Loans Deposits +21bn +9bn** +5bn +8bn +8bn +11bn -2bn Swedish Baltic Banking Corporate excl. Private Corporate private loans* Baltic Banking Of which FX +3 Of which FX +1 Of which FX +3 * Private mortgage loans, private other and tenant-owner associations **excl. Group functi

  14. Slide 14: 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

  15. Slide 15: 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

  16. Slide 16: 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 14 • Executive management strongly focused on cost and change management 12 – Integrated in corporate culture 10

  17. Slide 17: 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 Improved savings and pension offering 7 Corporate self-service and ca

  18. Slide 18: Sustainability in our DNA - Q2 accomplishments

    Sustainability in our DNA - Q2 accomplishments New product launches for customers Swedbank’s own green bonds are making a difference Swedbank to invest in Sweden's largest solar cell plant • Will deliver c.10 000 MWh per annum and cover 30% of the total electricity consumption of Swedbank’s Swedish

  19. Slide 19: 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, % 800 112 NSFR (LHS) LCR (RHS) 180 • Solid liquidity buffer – prefunded for 700 170 600 110 160 more than 12 months (survival

  20. Slide 20: Swedbank has a low-risk real estate portfolio

    Swedbank has a low-risk real estate portfolio Swedbank real estate exposures Real estate lending, net loans in Sweden, SEKbn1) • Swedbank pursued a low-risk strategy by 1 139  Construction SEK 17bn tightening origination standards, and 17  SEK 7bn residential property development2) 140 prioritisin

  21. Slide 21: Residential property developers - well-known customers

    Residential property developers - well-known Swedbank real estate exposures customers • Tenant-owner associations project loans – the risk is highly mitigated • Total loan portfolio of SEK 15bn, mainly to the larger listed construction firms, with which Swedbank has long-term relations − Approximate

  22. Slide 22: 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 Jun 18 -2% -7% -4% Jul 18 -3% -7% -5% Aug 18 -3% -7% -5% Sep 18 -3% -5% -4% Oct 18 -1% -3% -1% House price index, Sweden 2005=100 Nov 18 2% -1% 1

Swedbank — Q2 2019 Earnings Presentation on 6ix