Slide 1: Swedbank's third quarter 2016 results
Swedbank’s third quarter 2016 results Birgitte Bonnesen (CEO), Anders Karlsson (CFO), Helo Meigas (CRO) © Swedbank
Slide 2: Swedish Banking: Strong result
Swedish Banking Strong result SEKm Q3 16 Q2 16 ▲ QoQ • Net interest income Net interest income 3 802 3 592 210 – Higher mortgage margins Net commission income 1 813 1 718 95 – Deposit margin pressure Other income 451 584 -133 – Loan and deposit volume growth Total income 6 066 5 894 172 Total expens
Slide 3: Baltic Banking: Increased customer activity
Baltic Banking Increased customer activity SEKm Q3 16 Q2 16 ▲ QoQ • Net interest income Net interest income 1 045 954 91 – Loan and deposit volume growth Net commission income 511 498 13 – Full income effect from acquired loan Other income 185 181 4 portfolio in Latvia and Lithuania Total income 1 7
Slide 4: Large Corporates & Institutions: Stable result
Large Corporates & Institutions Stable result SEKm Q3 16 Q2 16 ▲ QoQ • Stable net interest income Net interest income 833 827 6 Net commission income 535 610 -75 • Lower corporate finance activity Net gains and losses 590 545 45 Other income 18 21 -3 • Increased hedging activity Total income 1 976 2
Slide 5: Group results: Strong result
Group results Strong result SEKm Q3 16 Q2 16 ▲QoQ • Net interest income Net interest income 6 062 5 732 330 − Higher mortgage margins Net commission income 2 838 2 795 43 − Loan volume growth Net gains and losses 669 877 -208 Other income 696 2 466 -1 770 • Asset management and cards Total income 10
Slide 6: Expenses: Accelerating investments
Expenses Accelerating investments • Cost efficiency – continued key priority • Total expenses of SEK16.7bn for FY 2017 – Compensation to savings banks • Digital banking and customer data management initiatives • Acceleration of digitisation of the lending process • Investments into indirect and dire
Slide 7: Capital: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital CET1 capital ratio, % • CET1 capital increased by SEK 24.1% 23.7% 23.8% 1.1bn 23.0% 21.6% − Positive effect from net profit of SEK 1.6bn (excl. dividend) − Negative pension liability (IAS19) effect of SEK 0.6bn • REA decreased by SEK 9.7bn Q4 2015 Q1
Slide 8: Capital: Lower REA
Capital Lower REA Risk exposure amount • Exposure changes SEKbn – Higher mortgage and 420 5.5 corporate credit exposures 415 413.4 410 -3.8 – FX -4.5 -2.1 405 403.7 -4.8 • Acquired mortgage loan portfolio 400 of Sparbanken Öresund 395 390 • Positive PD migrations 385 380 • Increased collateral value
Slide 9: Asset quality: Solid asset quality
Asset quality Solid asset quality Credit impairments, SEKm Q3 16 Q2 16 ▲QoQ • Impairments to oil related exposures Swedish Banking 41 -35 76 Baltic Banking -28 50 -78 Large Corporates & 188 545 -357 Institutions Swedbank Group 201 538 -337 Ratios Q3 16 Q2 16 Credit impairment ratio, % 0.05 0.14 Shar
Slide 10: Q&A
Q&A Birgitte Bonnesen (CEO), Anders Karlsson (CFO), Helo Meigas (CRO)
Slide 11: Appendix
Appendix Swedbank @ a1
Slide 12: Swedbank – a low-risk bank with strong capital base
This is Swedbank Swedbank – a low-risk bank with strong capital base • Low risk – a Board of Directors’ strategic priority – ensures access to funding markets and low funding costs • Retail profile and four home markets a key feature – 86% of total loans originated in Sweden - Swedish mortgages acco
Slide 13: Swedbank – strong and stable earnings capacity
This is Swedbank Swedbank – strong and stable earnings 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 • Retail profile ensures stable earnings with low volati
Slide 14: Swedbank – market leader in cost efficiency
This is Swedbank Swedbank – market leader in cost efficiency • Best-in-class cost efficiency – an executive management strategic priority • Executive management strongly focused on cost and change management − Integrated in corporate culture − Focus on straight-through-processing − Evolving househol
Slide 15: Value creation
This is Swedbank Value creation % SEK 30 12 25 10 20 8 15 6 10 4 5 2 0 0 2011 2012 2013 2014 2015 Return on Equity (LH scale) CET1 capital ratio (LH scale) Dividend per share (RH scale) Source: Swedbank Year-end reports 15
Slide 16: Asset quality: Oil sector under stress
Asset quality Oil sector under stress • Loan portfolio negatively impacted 10 9 Shipping & Offshore, loans, SEK 30bn 2015-12-31 2016-09-30 by lower oil price, SEK 17.8bn* 8 7 59% of the portfolio is negatively 6 – 1.2% of the total loan book 5 impacted by lower oil price 4 – Derivative exposures of
Slide 17: Asset quality: Conservative PD assumptions
Asset quality Conservative PD assumptions • Five consecutive years with higher estimated losses compared to realised losses • Realised losses were higher than expected losses only during the Baltic crisis in 2009 Swedbank – Safety margins high in all exposure classes, PD % % Corporate % Retail mortg
Slide 18: Liquidity and funding: Conservative funding position
Liquidity and funding Conservative funding position • LCR 131% (Swedish FSA definition FFFS 2012:6) • NSFR 104% (Basel committee) • Issued SEK 116bn of term funding YTD Q3 2016 • Initial funding plan adjusted down to around SEK 140bn in 2016 Term funding issuance – completed Prefunded for more than
Slide 19: Long-term funding maturity profile
Liquidity and funding Long-term funding maturity profile Long-term funding maturity profile, by funding source Long-term funding maturity profile, by currency SEKbn SEKbn 200 Senior unsecured debt Covered bonds 200 150 150 Other GBP 100 100 USD EUR 50 50 SEK 0 0 2016 2017 2018 2019 2020 2021 2022- 2
Slide 20: Real estate price performance – Sweden, 12 month
Swedish housing and mortgage market Real estate price performance – Sweden, 12 month Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Oct 15 18% 19% 18% Nov 15 13% 18% 15% Dec 15 12% 17% 14% Jan 16 14% 16% 15% Feb 16 13% 14% 13% Mar 16 12% 12% 12% House price index, Sweden3 2005