Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2013 Earnings Presentation
29 slides from Swedbank Ab Class A's earnings presentation, 2013
Slide 1: Swedbank's second quarter 2013 results
Swedbank’s second quarter 2013 results Michael Wolf, CEO Göran Bronner, CFO Håkan Berg, CRO
Slide 2: Retail: Stable results continue
Retail Stable results continue SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y • Stable NII Net interest income 3 362 3 332 3 367 35 5 – Stable deposit and lending margins Net commissions 1 531 1 589 1 536 -53 5 – New lending mortgage margins Total income 5 352 5 377 5 312 -65 -40 10-15bp below stock margins Tot
Slide 3: Large Corporates & Institutions: Continued improved market position
Large Corporates & Institutions Continued improved market position SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y • Improved NII Net interest income 750 783 851 68 101 – Increased volumes and margins Net commissions 396 419 523 104 127 Total income 1 601 1 814 1 926 112 325 • Stronger commission income Expenses
Slide 4: Baltic Banking: Focus on efficiency and risk adjusted returns
Baltic Banking Focus on efficiency and risk adjusted returns SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y • Stable NII Net interest income 868 742 763 21 -105 – Intensified focus on repricing Net commissions 394 388 445 57 51 Total income 1 448 1 281 1 378 97 -70 • Stronger commission income Total expenses 59
Slide 5: Group results: Stable earnings
Group results Stable earnings SEKm Q2 12 Q1 13 Q2 13 ▲Q/Q ▲Y/Y • Stable NII Net interest income 5 035 5 353 5 409 56 374 – Stable deposit margins Net commission income 2 339 2 388 2 525 137 186 – Lower margins new mortgage Net gains and losses 577 557 296 -261 -281 lending Total income 8 788 9 082 8
Slide 6: Capital: Excess capital building
Capital Excess capital building Changes B3 CET1 ratio Q1-Q2 • IRB Advanced 0.2% 0.1% 0.1% 0.1% 17.2% – On schedule 0.3% 16,4% 15,4% • 13 – 15 % CET 1 ratio • Waiting for regulatory clarity – Resolution regime – CRD IV implementation – Leverage ratio/corporate risk Q4 2012 Q1 2013 Profit IAS 19 Other
Slide 7: Continued strong credit quality
Continued strong credit quality Credit impairments, SEKm Q2 12 Q1 13 Q2 13 • Continued high asset quality Retail 102 55 37 in Sweden Large Corporates & Institutions 53 74 94 Baltic Banking -204 -70 -43 • Slower net recoveries in Estonia -25 -54 -36 Baltic Banking Latvia -197 4 18 Lithuania 18 -20 -2
Slide 8: 2013 ICAAP – Swedbank Group resilience confirmed
2013 ICAAP – Swedbank Group resilience confirmed • In 2013 ICAAP, Swedbank’s CET 1 ratio strengthened throughout the scenario period, despite a scenario with a sharp contraction followed by an extended downturn with slow recovery. • The stress test in Swedish Riksbank’s latest stability report concl
Slide 9: Q&A
Swedbank’s second quarter 2013 results Q&A
Slide 10: Appendix
Appendix Swedbank @
Slide 11: Loans past due 60 days – performance Q/Q
Loans past due 60 days – performance Q/Q EURm Estonia Latvia Lithuania 50 0 -50 -100 -150 -200 -250 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 11
Slide 12: Provisions – well provided for
Provisions – well provided for SEKm 25 000 Provision ratio, % Q2 13 Retail 70 20 000 LC&I 41 65% 64% 65% Baltic Banking 52 62% 57% 15 000 54% Group 54 2 478 2 040 11 915 1 774 10 000 10 951 9 934 1 545 7 077 5 000 1 420 1399 4 429 4046 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Q2 13* Individual provisions Po
Slide 13: Credit portfolio - Retail: Corporate portfolio drives capital efficiency
Credit portfolio - Retail Corporate portfolio drives capital efficiency Total portfolio SEK 221bn Segments excl. Swedbank Volume Secured Mortgage and Swedbank Finance (SEKbn) (%) Agriculture 6.0 81 Manufacturing 8.8 69 Public sector and utilities 4.4 93 94 104 Construction 4.5 81 Retail 9.0 86 Trans
Slide 14: Credit portfolio – Shipping and offshore
Credit portfolio – Large Corporates & Institutions Shipping and offshore SEKbn Shipping and Offshore 3.5% 12.5% 30 26 25 24 26 23 • Exposure to Shipping & Offshore sector was SEK 4 26bn plus unutilised commitments of SEK 8bn. 20 6 – Portfolio duration 4-5y – Average fleet age 7y 10 16 – Strong emplo
Slide 15: Credit portfolio – Agriculture
Credit portfolio Agriculture Private: • Segmentation definitions Residential – Corporate Agriculture: Businesses that 20% derive their main income from Agricultural activities – Private Investments: Private individuals Corporate: who own agricultural properties for living or Agriculture investment p
Slide 16: Core balance sheet structure
Liquidity and funding Core balance sheet* structure Assets Liabilities SEKbn SEKbn 1 400 1 400 Suppl. cap CET1 Government guaranteed debt 1 200 1 200 Senior Estonia CEE lending 1 000 Other corporate 1 000 lending, Sweden & Deposits other Nordic countries 800 800 Other private, Sweden 600 600 Swedish
Slide 17: Senior unsecured debt strategy
Liquidity and funding Senior unsecured debt strategy • 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 50% 60 40% Over-collateralisation OC, Q213
Slide 18: Lower funding needs
Liquidity and funding Lower funding needs • LCR 129% (Swedish FSA definition FFFS 2012:6) • NSFR 95% Term funding issuance – completed and planned SEKbn* Covered bonds Senior unsecured 120 100 80 60 40 20 0 *Nominal amounts 18
Slide 19: Conservative funding plan
Liquidity and funding Conservative funding plan • Issued SEK 68bn of term-funding YTD of which SEK 29bn in Q2 • Term funding plan in 2013 of SEK 120bn, full-year maturities of SEK 86bn SEKm Long-term debt issued SEKm Outstanding short-term debt 70 000 80 000 60 000 70 000 60 000 50 000 50 000 40 000
Slide 20: Long-term funding maturity profile
Liquidity and funding Long-term funding maturity profile • FY 2013 maturities amount to nominal SEK 86bn, of which SEK 12bn remain Long-term funding maturity profile SEKbn 200 Government guaranteed debt Senior unsecured 150 debt Covered bonds 100 50 0 2013 2014 2015 2016 2017 2018 2019- 20
Slide 21: Liquidity reserve
Liquidity and funding Liquidity reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks 199 879 Deposits in other banks available overnight 351 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks
Slide 22: Prolonged survival horizon
Liquidity and funding Prolonged survival horizon SEKbn 250 200 150 100 50 0 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 Days forward 22
Slide 23: Limited need for USD-funding
Liquidity and funding Limited need for USD-funding • 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 Assets held for sale 250 Interest-bearing securities 200 Lending to the public Loans to credit institutions 1
Slide 24: Conservative liquidity levels
Liquidity and funding Conservative liquidity levels • Short-term funding mainly a tool for cash management • More than 12 months pre-funded SEKbn 400 400 350 350 Additional pledgeable 300 300 and/or liquid assets 250 250 Liquidity reserve,1 securities Next 12-month term 200 200 funding maturities 15
Slide 25: Asset encumbrance
Liquidity and funding Asset encumbrance Encum bered assets - distribution by type of liability (row ) and asset (colum n) Central banks Debt of w hich and instruments Securities received Government supranational issued by issued by collateral debt debt Covered credit corporate and Mortgage (off- SEK
Slide 26: Swedish mortgage market
Swedish housing and mortgage market Swedish mortgage 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.uc.se
Slide 27: Real estate prices – Sweden 12 months development
Swedish housing and mortgage market Real estate prices – Sweden 12 months development Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ 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/12 4% 7% 6% Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5%
Slide 28: Real estate prices – Baltic countries
Real estate prices Baltic countries Tallinn Riga 1 800 1 800 1 600 1 600 1 400 1 400 1 200 1 200 1 000 1 000 800 800 600 600 400 400 200 200 0 0 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 J
Slide 29: Mortgage loans, gross margin (3 months)
Mortgage loans, gross margin (3 months) % 6 5 4 Net margin 3 The gross margin covers: Cost of liquidity ~0.2% 2 Administrative costs ~0.3% Credit impairments ~ 0.03% Tax (22 % on profit before tax) 1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Gross margin Swedbank's funding cost Stibor