Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2024 Earnings Presentation
25 slides from Swedbank Ab Class A's earnings presentation, 2024
Slide 1: Second quarter results 2024
Second quarter results 2024
Slide 2: Falling inflation, positive outlook for 2025, interest rates high for longer
Sweden Estonia Latvia Lithuania ● Falling inflation 2.7% 2.8% 2.8% 2.8% ● Positive outlook for 2025 1.4% 1.8% 0.1% ● Interest rates will be high for longer -0.2% -0.3% -0.3% -0.5% -3.0% 2023 2024F 2025F Sweden Estonia Latvia Lithuania Riksbank ECB (deposit rate) FED (upper bound) 25% 7.5% 20% 15% 5.
Slide 3: Net profit SEK 8.6bn
▲ ● Net profit SEK 8.6bn Net interest income 12 165 12 599 -3% Net commission income 4 169 3 976 +5% ● Cost/Income ratio 0.35 Net gains and losses 911 682 +34% ● Return on equity Other income 991 831 +19% 17.5 per cent Total income 18 237 18 087 +1% Total expenses 6 465 6 185 +5% ● EPS after dilutio
Slide 4: Solid credit quality and strong liquidity position
● Solid credit quality ● Credit recoveries ● Strong liquidity position ● CET1 capital buffer 5 percentage points ● Economic Crime Prevention © Swedbank 4
Slide 5: Four business priorities
● Four business priorities ● Cloud-based communication platform ● Savings platform © Swedbank 5
Slide 6: Mortgage markets, savings, Premium and Private Banking
● Swedish mortgage market – Increased demand for loan commitments – Still low volumes ● Baltic mortgage market – Stable demand ● Savings – Increased deposits – Educational foundation in Latvia ● Premium and Private Banking – 7 per cent increase of newly connected customers in Private Banking © Swedb
Slide 7: Loans and new partnership in Finland with Aktia
● Loans – Increased market activity in Sweden – Market leading in corporate lending in Lithuania ● New partnership in Finland with Aktia © Swedbank 7
Slide 8: Partnership with eAgronom, financial health, Swedbank Försäkring
● Enhanced partnership with eAgronom ● Focus on financial health ● Swedbank Försäkring market leading in unit-linked life insurance © Swedbank 8
Slide 9: Lending volumes development
QoQ +0.4% QoQ +0.5% SEKbn SEKbn 1 523 1 7 1 531 +13 8 5 1 804 1 799 1 791 -5 Q1 2024 Private Corporate Q2 2024 QoQ +2.0% SEKbn 266 2 3 272 Q1 2024 Sweden1) Baltic Banking Q2 excl. FX FX Q2 2024 Q1 2024 Private Corporate Q2 2024 1) Sweden including: Swedish Banking, Premium and Private Banking, and C
Slide 10: Deposit volumes development
QoQ +1.3% QoQ +1.3% SEKbn SEKbn 862 12 873 -1 +22 1 266 11 11 1 288 1 282 -6 Q1 2024 Private Corporate Q2 2024 QoQ +2.8% SEKbn 386 7 4 397 Q1 2024 Sweden Baltic Group Q2 excl. FX FX Q2 2024 Q1 2024 Private Corporate Q2 2024 Banking functions 1) Sweden including: Swedish Banking, Premium and Private
Slide 11: Net interest income
QoQ -3.4% SEKm ● Higher average lending and deposit volumes ● Lower net interest margin 12 599 22 45 90 12 165 – Lower market rates -591 – Deposit outflows last quarter -524 – Increased wholesale funding Business driven NII Q1 2024 Lending Deposit Margins & FX & Other Q2 2024 volume volumes Treasury
Slide 12: Net commission income
QoQ +4.9% SEKm ● Asset management impacted by higher average stock +194 market performance 122 12 4 169 ● Cards seasonally higher 97 3 976 -38 Q1 2024 Cards & Asset Securities & Other Q2 2024 Payments Management Corporate Finance © Swedbank 12
Slide 13: Net gains and losses
SEKm ● Strong FX and Fixed income sales and trading 30 169 911 -23 ● Positive revaluation from 46 funding related swaps 689 Client trading Bond inventories Funding Liquidity Other Total NGL (Treasury) portfolio © Swedbank 13
Slide 14: Other income
QoQ +19.3% SEKm ● Strong underlying Net insurance income +160 – Offsetting revaluations in Baltic Banking 75 991 61 831 25 ● Income from partly owned companies were higher Q1 2024 Net insurance Associates Other Q2 2024 © Swedbank 14
Slide 15: Expenses
QoQ +4.5% SEKm ● FY 2024 according to plan Underlying expenses C/I ratio – YTD FX SEK 100m 0.35 0.34 0.34 ● Salary increases in Baltic Banking 0.31 0.30 6 411 6 465 6 185 ● IT maintenance 5 717 5 562 ● Latvian education foundation SEK 70m Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 © Swedbank 15
Slide 16: Credit impairments
SEKm ● YTD Credit impairment ratio -1 bps 79 282 ● Remaining post model adjustment buffer of -43 SEK 946m 103 -253 -320 -289 -137 Macro Rating & Post model Individual 1) Net Portfolio sale Other Total credit scenarios stage adjustments assessment repayments impairments migrations and Balances 1) Pro
Slide 17: Managing balance sheets
● Managing balance sheets Q1 2024 disclosures, per cent 10% − Divestments of properties 8.4% 8.3% 7.8% 8.0% 8% 7.0% 7.2% 7.4% − Restructurings 6.9% 6% − Capital injections − Bond buy-backs 4% Q1 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 − Cancelled dividends − CAPEX reductions Q1 2024 disclosures
Slide 18: CET1 capital ratio of 20.1 per cent
● CET1 capital ratio of 20.1 per cent ~500bps ● 100-300bps capital buffer 0.0% 0.3% 20.1% buffer target range remains 19.3% 0.5% 15.1% Q1 2024 Profit after Credit risk Other Q2 2024 CET1 capital anticipated requirement dividend © Swedbank 18
Slide 19: Risk exposure amount decreased by SEK 11bn
SEKbn ● REA decreased by SEK 11bn ● Large corporate PD model fully implemented, increase REA by 14.7 859.3 SEK 6bn mitigated by Article 3 847.9 - 10.0 release - 15.1 - 1.1 ● Portfolio move from retail to corporate, decrease REA by net SEK 10bn Q1 2024 Credit risk Article 3 Article 458 Market & Q2 20
Slide 20: Return on equity, cost to income, capital position
● Return on equity 17.5 per cent ● Cost to income ratio 0.35 ● Credit recoveries ● Strong capital position © Swedbank 20
Slide 21: Appendix
Appendix
Slide 22: Private mortgage loans: loan-to-value and past dues
Q2 2024, private mortgage loans, SEKbn 20 20 16 16 96% of portfolio below 70% LTV ● Average loan-to-value of 12 12 58 per cent 8 8 4 4 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 LTV per cent 2004-Q2 2024, per cent and SEKm of private mortg
Slide 23: Commercial real estate exposure
● Focus on strong cash flows Q2 2024, per cent Q2 2024, SEK 243bn in total and collateral ● Continuous dialogue with customers 79 11% ● Average LTV SEK 102 310bn 79% 10% − Property management, 20 53 per cent 38 • Non-residential, 52 per cent Sweden Residential • Residential, 53 per cent Baltics Comm
Slide 24: Liquidity coverage and funding ratios
175% Liquidity Coverage Ratio Q2 2024, SEKbn Q2 2024, SEKbn 7 8 102 51 124% 3 Net Stable Funding Ratio 322 344 253 215 >2Y Survival horizon Cash and balances with central banks SEK EUR USD OTHER Sovereigns, central banks or multilateral development banks1 Municipalities or public service entities Ex
Slide 25: Swedbank
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