Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q1 2013 Earnings Presentation
30 slides from Swedbank Ab Class A's earnings presentation, 2013
Slide 1: Swedbank's first quarter 2013 results
Swedbank’s first quarter 2013 results Michael Wolf, Wolf CEO Göran Bronner, CFO Håkan Berg, CRO
Slide 2: Customer requirements drive new ways of banking
Retail banking Customer requirements q drive new ways y of banking g • Focus on functionality and ease of use million Monthly logins Swedbank and Savings Banks 30 25 20 15 10 5 0 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Mobile bank Internet bank 2
Slide 3: Fast increase of digital usage
Swedbank and Savings Banks Fast increase of digital g usage g • Internet Bank, private and corporate (since March 1997) – Number of users: >3.5 million • Mobile Bank, private (since Dec 2009) – Number of users: >1.3 million • Mobile Bank Youth (since March 2013) – Number of users: 6 700 • Mobile Ban
Slide 4: Retail: Stable results
Retail Stable results SEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y • Stable NII Net interest income 3 371 3 353 3 332 -21 -39 Net commissions 1 538 1 554 1 589 35 51 • Solid asset quality Total income 5 346 5 255 5 377 122 31 T t l expenses Total 2 429 2 474 2 406 -68 68 -23 23 • New organisation Profit befor
Slide 5: Large Corporates & Institutions: Good return
Large Corporates & Institutions Good return SEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y • Stable NII Net interest income 728 795 783 -12 55 Net commissions 485 536 419 -117 -66 • Low activity in Corporate Total income 2 071 1 857 1 814 -43 -257 Finance Expenses pe ses e excl c variable a ab e 661 668 646 -22
Slide 6: Baltic Banking: Focus on costs
Baltic Banking Focus on costs SEKm Q1 12 Q4 12 Q1 13 ▲ Q/Q ▲ Y/Y • Stable NII in local currency Net interest income 910 760 742 -18 -168 Net commissions 386 366 388 22 2 • Increased customer activity Total income 1 468 1 289 1 281 -8 -187 T t l expenses Total 629 633 586 -47 47 43 -43 • Recoveries P
Slide 7: Group results: Robust earnings
Group results Robust earnings g SEKm Q1 12 Q4 12 Q1 13 ▲Q/Q ▲Y/Y • Stable NII Net interest income 4 895 5 346 5 353 7 458 – Repricing Net commission income 2 398 2 502 2 388 -114 -10 – Funding costs Net gains and losses 979 830 557 -273 -422 Total income 9 072 9 437 9 082 -355 10 – Lower deposit mar
Slide 8: Continued strengthening capital position
Capital situation Continued strengthening g g capital p position p Common Tier 1 capital ratio • 13-15% CET1 Basel 2* Basel 3 16.7 17.3 16.4 15 4 15.4 * As of 2012 incl. IAS 19 • CRD/CRR IV – less impact • IRB Advanced • Waiting for regulatory clarity 2007 2008 2009 2010 2011 2012 Q1 13 Changes in B
Slide 9: Strong credit quality
Strong g credit quality q y Credit impairments, SEKm Q1 12 Q4 12 Q1 13 • Continued high credit quality Retail 21 91 55 in Sweden Large Corporates & Institutions 17 162 74 Baltic Banking -134 -329 -70 • Slower net recoveries in E t i Estonia -78 78 -242 242 -54 54 B lti B Baltic Banking ki Latvia -21
Slide 10: Q&A
Swedbank’s first quarter 2013 results Q&A
Slide 11: Appendix
Appendix Swedbank@
Slide 12: Loans past due 60 days – performance Q/Q
Loans p past due 60 days y –p performance Q/Q EURm Estonia Latvia Lithuania 50 0 -50 -100 -150 -200 -250 Q1 12 2 Q2 12 2 Q3 12 2 Q4 12 2 Q1 13 3 Q1 12 2 Q2 12 2 Q3 12 2 Q4 12 2 Q1 13 3 Q1 12 2 Q2 12 2 Q3 12 2 Q4 12 2 Q1 13 3 12
Slide 13: Provisions – well provided for
Provisions – well p provided for SEKm 25 000 Provision ratios, % Q1 13 Retail 70 20 000 LC&I 76 65.0% 63.7% 65.2% Baltic Banking 52 61.9% 57.0% Group 57 15 000 2 478 2 040 11 915 1 774 10 000 10 951 9 934 1 545 7 077 5 000 1 420 4 429 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Individual provisions Portf olio
Slide 14: Corporate portfolio drives capital efficiency
Credit portfolio - Retail Corporate p portfolio p drives capital p efficiency y Total portfolio SEK 222bn Segments excl. Swedbank Volume Secured Mortgage and Swedbank Finance (SEKbn) (%) A i lt Agriculture 59 5.9 81 Manufacturing 9.7 74 Public sector and utilities 5.1 92 94 Construction 4.7 82 104 R
Slide 15: Shipping and Offshore
Credit portfolio – Large Corporates & Institutions Shipping pp g and Offshore SEKbn Shipping g and Offshore -3.0% -3.0% 30 • Exposure to Shipping & Offshore 24 26 25 24 23 sector was SEK 23.5bn plus 4 20 unutilised commitments of SEK 7.7bn 5 – Portfolio duration 4-5y 10 – Average g fleet ageg 7yy 15
Slide 16: Agriculture
Credit portfolio Agriculture g • Segmentation definitions – Corporate Agriculture: Businesses that derive their main income from Private: Residential agricultural activities 20% – Private Investments: Private individuals who g own agricultural p properties p for residential or investment purposes Ag
Slide 17: Core balance sheet structure
Liquidity and funding Core balance sheet* structure Assets Liabilities SEKbn SEKbn 1 400 1 400 Suppl. cap S CET1 Government guaranteed debt 1 200 1 200 Senior Estonia CEE lending 1 000 Other corporate 1 000 lending, Sweden & Deposits other Nordics 800 800 Oth private, Other i t Sweden S d 600 600 Sw
Slide 18: Senior unsecured debt strategy
Liquidity and funding Senior unsecured debt strategy gy • Limited need given Swedbank’s balance sheet structure • Secure OC • Fund liquidity reserves Senior unsecured debt maturity profile House price sensitivity of the cover pool SEKbn Senior unsecured debt 40% 60 30% OC, Q113 Ovver-collateralisatt
Slide 19: Lower funding needs
Liquidity and funding Lower funding g needs • LCR 139% (Swedish FSA definition FFFS 2012:6) • NSFR 93% • Expanded investor base Term funding issuance – completed and planned SEKb SEKbn Covered bonds Senior unsecured 120 100 80 60 40 20 0 Source: Swedbank, 31 March, 2013, nominal amounts 19
Slide 20: Conservative funding plan
Liquidity and funding Conservative funding g plan p • Issued SEK 40bn of term-funding in Q1 • Term funding plan in 2013 of SEK 120bn 120bn, full full-year year maturities of SEK 86bn SEKm Issued long-term debt SEKm Outstanding short-term debt 70 000 60 000 60 000 50 000 50 000 40 000 40 000 FY 2012
Slide 21: Long-term funding maturity profile
Liquidity and funding Long-term g funding g maturity ypprofile • FY 2013 maturities amount to nominal SEK 86bn, of which SEK 46bn for the remainder of 2013 Long-term funding maturity profile SEKbn 200 Government guaranteed debt Senior unsecured 150 debt Covered bonds 100 50 0 2013 2014 2015 2016 201
Slide 22: Limited need for USD-funding
Liquidity and funding Limited need for USD-funding g • USD-funding need covered for more than 12 months • Issued USD 1bn of covered bonds ((144a)) and USD 1bn of senior (144a) ( ) YTD 2013 SEKbn 300 Interest-bearing securities 250 Lending to the public 200 Loans to credit institutions 150 Cash and b
Slide 23: Liquidity reserve
Liquidity and funding Liquidity q y reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks 210 251 Deposits in other banks available overnight 1 290 Securities issued or guaranteed by sovereigns, central banks or multilateral development
Slide 24: Prolonged survival horizon
Liquidity and funding Prolonged g survival horizon SEKbn SEKbn 300 250 200 150 100 50 0 0 20 40 60 365 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 Days forw ard Days forward Source: Swedbank 31 March, 2013 24
Slide 25: Conservative liquidity levels
Liquidity and funding Conservative liquidity q y levels • Short-term funding mainly a tool for cash management • More than 12 months pre pre-funded funded SEKbn 400 400 350 350 Additional pledgeable 300 300 and/or liquid assets Next 12-month term 250 1250 ffunding maturities Liquidity reserve, 200 s
Slide 26: Asset encumbrance
Liquidity and funding Asset encumbrance Encum bered assets - distribution by type of liability (row ) and asset (colum n) Central banks Debt and instruments Securities Government supranational issued by issued by debt debt Covered credit corporate and Mortgage SEKm s u e s instruments s u e s instru
Slide 27: Swedish mortgage market
Swedish housing and mortgage market Swedish mortgage g g market • No securitisation (on balance sheet), no sub-prime market, no 3rd party origination, insignificant buy-to-let market • 70% home ownership1 • Rental market is regulated • Transparent credit information (credit information agency, www.u
Slide 28: Real estate prices – Sweden 12 months development
Swedish housing and mortgage market Real estate p prices – Sweden 12 months development p Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Apr/12 -2% 2% -1% May/12 -2% 3% -1% Jun/12 -1% 1% 4% 0% Jul/12 0% 4% 1% Aug/12 2% 4% 3% Sep/12 2% 5% 3% Oct/12 1% 6% 3% Nov/12 3% 7% 4% Dec/
Slide 29: Real estate prices – Baltic countries
0 200 400 600 800 1000 1200 1400 1600 1800 1 000 1 200 1 400 1 600 1 800 0 200 400 600 800 Ja an-05 J an-05 J ul-05 Jul-05 J Ja an-06 J an-06 J ul-06 Jul-06 J an-07 Ja J an-07 J ul-07 Jul-07 J Real estate prices Ja an-08 Source: Swedbank, Estonian Land Board J an-08 J ul-08 Nr.of deals Nr.of deals J
Slide 30: Mortgage loans, gross margin (3 months)
Mortgage g g loans, gross g margin g (3( months)) % 6 5 4 Net margin 3 The gross margin covers: Cost of liquidity ~0.2% 2 Administrative costs ~0.3% C dit impairments Credit i i t ~ 0.03% 0 03% Tax (22 % on profit before tax) 1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Gross margin Sw