Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2017 Earnings Presentation
18 slides from Swedbank Ab Class A's earnings presentation, June 2017
Slide 1: Swedbank's second quarter 2017 results
Swedbank’s second quarter 2017 results Birgitte Bonnesen (CEO), Anders Karlsson (CFO), Helo Meigas (CRO) © Swedbank Information class Public
Slide 2: Swedish Banking: Strong result
Swedish Banking Strong result SEKm Q2 17 Q1 17 ▲QoQ • Net interest income Net interest income 3 792 3 637 155 – Continued mortgage loan volume growth and Net commission income 1 881 1 757 124 stable margins Other income 442 1 069 -627 – Improved deposit margins and seasonal Total income 6 115 6 463
Slide 3: Baltic Banking: Solid result
Baltic Banking Solid result SEKm Q2 17 Q1 17 ▲QoQ • Positive FX effects Net interest income 1 044 1 001 43 • Net interest income Net commission income 561 527 34 Other income 209 190 19 – Mixed margins Total income 1 814 1 718 96 – Continued growth in private lending Total expenses 658 636 22 • Net
Slide 4: Large Corporates & Institutions: Improved result
Large Corporates & Institutions Improved result SEKm Q2 17 Q1 17 ▲QoQ • Net interest income Net interest income 892 823 69 – Improved deposit margins Net commission income 587 580 7 – Lower resolution fund fee Net gains and losses 515 452 63 Other income 21 28 -7 • Good customer activity supports To
Slide 5: Robust profitability and capital generation
Group results Robust profitability and capital generation SEKm Q2 17 Q1 17 ▲QoQ • Net interest income strengthened Net interest income 6 090 5 971 119 – Mortgage loan volume growth Net commission income 3 000 2 822 178 – Lower resolution fund fee Net gains and losses 567 486 81 Other income 736 1 37
Slide 6: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital • CET1 capital increased by SEK 0.7bn 25.0% 24.2% 24.6% 23.8% 22.0% − Positive effect from net profit of SEK 0.9bn excl. dividend − Negative pension liability valuation effect (IAS 19) of SEK 0.4bn • REA decreased by SEK 4bn Q3 2016 Q4 2016 Q1 2017 Q
Slide 7: Lower REA
Capital Lower REA SEKbn 420 418 7.5 • IRB-model implementation 416 – Sovereign exposures 414 – Acquired mortgages from Sparbanken 412 410.7 Öresund 410 -6.5 -0.6 408 1.5 • Positive PD migrations and collateral -3.0 406.7 406 valuations -2.9 404 402 400 Q1 2017 Exposure IRB IRB acquired Rating LGD Ot
Slide 8: Solid asset quality
Group Solid asset quality Credit impairments, SEKm Q2 17 Q1 17 ▲QoQ • Credit impairments in line with Swedish Banking 86 -3 89 expectations Baltic Banking 7 -66 73 – Additional provisions for oil related Large Corporates & Institutions 307 408 -101 exposures Swedbank Group 400 339 61 Ratios Q2 17 Q1
Slide 9: Q&A
Q&A © Swedbank Information class Public
Slide 10: Appendix
Appendix © Swedbank Information class Public
Slide 11: Swedbank – low-risk bank with strong capital
Swedbank – low-risk bank with strong capital This is Swedbank base • Low risk – a Board of Directors’ strategic priority – ensures access to funding markets and low funding cost • Retail profile and four home markets a key feature Liquidity & capital, % NSFR LCR CET1 capital ratio, CRDIV (RHS) – 86%
Slide 12: 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 • Retail profile ensures stable earnings with low volati
Slide 13: Swedbank – market leader in cost efficiency
Swedbank – market leader in cost efficiency This is Swedbank • Best-in-class cost efficiency – an executive management strategic priority • Executive management strongly focused on cost and change management Total expenses, SEK m − Integrated in corporate culture 20 000 Acquistion of Sparbanken Öres
Slide 14: Swedbank creates value
Swedbank creates value Strategy Return on Equity % SEK >15% target 30 14 25 12 15.6% 10 20 8 Common Equity Tier 1 ratio 15 One of the highest among European banks 6 10 4 5 2 24.6% 0 0 2012 2013 2014 2015 2016 Q1 2017 Q2 2017 Dividend per share 75% payout ratio for 5th year in a row Return on Equity
Slide 15: Oil sector under stress
Oil sector under stress Asset quality • Loan portfolio negatively impacted by lower oil price, SEK 14.9bn – 1.0% of total loans, gross – In addition, derivatives exposures of SEK 2.0bn (incl. collateral) • Provisions* of SEK 316m in Q2 * Total provisions of SEK 1 344m for the whole Shipping and Offs
Slide 16: Conservative funding position
Conservative funding position Liquidity and funding • LCR 128% (Swedish FSA definition FFFS 2012:6) • NSFR 110% (Basel committee) • Issued SEK 115bn of term funding YTD Q2 2017 • Plan to issue around SEK 200bn in 2017 Term funding issuance – completed and planned SEKbn Prefunded for more than 12 mon
Slide 17: Long-term funding maturity profile
Long-term funding maturity profile Liquidity and funding Long-term funding maturity profile, by funding source Long-term funding maturity profile, by currency SEKbn SEKbn Senior unsecured debt Covered bonds 200 200 150 150 Other GBP 100 100 USD EUR SEK 50 50 0 0 2017 2018 2019 2020 2021 2022 2023 20
Slide 18: Real estate price performance – Sweden
Swedish Real estate price performance – Sweden, housing and 12 month mortgage Single-family homes1 Tenant-owner rights2 Combined3 market 12M Δ 12M Δ 12M Δ Jul 16 10% 7% 8% Aug 16 9% 6% 8% Sep 16 9% 6% 8% Oct 16 8% 7% 7% House price index, Sweden3 260 2005=100 Nov 16 9% 7% 8% 240 Dec 16 9% 8% 9% 220