Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q2 2015 Earnings Presentation
19 slides from Swedbank Ab Class A's earnings presentation, 2015
Slide 1: Swedbank's second quarter 2015 results
Swedbank’s second quarter 2015 results Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO) © Swedbank
Slide 2: Swedish Banking: Strong result in low interest rate environment
Swedish Banking Strong result in low interest rate environment SEKm Q2 15 Q1 15 ▲ QoQ • Lower deposit margins Net interest income 3 281 3 190 91 Net commission income 1 916 1 781 135 • Higher mortgage margins Other income 471 558 -87 Total income 5 668 5 529 139 • Loan and deposit volume growth Tota
Slide 3: Baltic Banking: Stable result
Baltic Banking Stable result SEKm Q2 15 Q1 15 ▲ QoQ • Loan volume growth Net interest income 865 831 34 Net commission income 524 469 55 • Strong commission income Other income 147 199 -52 – Cards and payments Total income 1 536 1 499 37 Total expenses 611 612 -1 • Solid asset quality Profit before
Slide 4: Large Corporates & Institutions: Stable result
Large Corporates & Institutions Stable result SEKm Q2 15 Q1 15 ▲ QoQ • Stable NII Net interest income 862 862 0 Net commission income 491 496 -5 • Lower deposit margins Net gains and losses 576 587 -11 Other income 39 35 4 • Volatile markets Total income 1 968 1 980 -12 • Good asset quality Total ex
Slide 5: Group results: Stable result in low interest rate environment
Group results Stable result in low interest rate environment SEKm Q2 15 Q1 15 ▲QoQ • Stable NII Net interest income 5 704 5 719 -15 Net commission income 2 842 2 744 98 • Good cost development Net gains and losses 82 320 -238 • Strong asset quality Other income 687 835 -148 Total income 9 315 9 618
Slide 6: Capital: Positive REA impact from market movements
Capital Positive REA impact from market movements Risk exposure amount • REA net decrease of SEK 15.6bn SEKbn − Interest rates and FX fluctuations 430 impact positively 425 422.3 − VaR model approval – to 420 manage negative interest rate -1.8 -3.7 415 -2.4 -2.2 410 -1.7 0.0 406.8 405 -3.7 400 Q1 20
Slide 7: Capital: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital CET1 capital ratio, % • CET1 capital positively impacted 22.4% − IAS 19 (SEK 3.4bn) 20.5% 19.6% • REA net decrease of SEK 15.6bn • Continued regulatory uncertainty Q1 2015 Q2 2015 CET1 capital ratio requirement 7
Slide 8: Liquidity and funding: Increased long-term funding activity
Liquidity and funding Increased long-term funding activity 80 Quarterly long-term funding issuance • Taking advantage of favourable funding 70 markets 60 50 • Extending maturity profile SEKbn Other 40 Senior unsecured debt 30 Covered bonds • Credit rating upgrades 20 10 0 Average 2014 Q115 Q215 38 E
Slide 9: Asset quality: Strong asset quality
Asset quality Strong asset quality Credit impairments, SEKm Q2 15 Q1 15 ▲QoQ Swedish Banking 48 52 -4 Baltic Banking -49 -9 -40 Large Corporates & 7 16 -9 Institutions Swedbank Group 6 59 -53 Ratios Q2 15 Q1 15 % Credit impairment ratio Credit impairment ratio, % 0.00 0.02 0.20 Share of impaired loa
Slide 10: Q&A
Q&A Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
Slide 11: Appendix
Appendix Swedbank @ 11
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 leading cost efficiency
This is Swedbank Swedbank – market leading cost efficiency • Best in-class cost efficiency – an executive management strategic priority • Strong dedication from executive management on cost and change management − Integrated in corporate culture − Focus on straight-through-processing − Evolving hous
Slide 15: Asset quality: Shipping and Offshore
Asset quality Shipping and Offshore • Total lending of SEK 29.5bn (30bn, Q1) Shipping and Offshore Loans net, SEKm – Market activity slowed down in Q2 SEKm 10 000 compared to Q1 15 and Q4 14 9 000 8 000 – Decreased origination 7 000 6 000 5 000 • Individual client action plans in place 4 000 3 000 2
Slide 16: Liquidity and funding: Conservative funding position
Liquidity and funding Conservative funding position • LCR 136% (Swedish FSA definition FFFS 2012:6) • NSFR 101% (Basel committee) • Issued SEK 133bn of term funding YTD 2015 • Increased funding need to support loan growth Term funding issuance – completed and planned Prefunded for more than 12 month
Slide 17: Long-term funding maturity profile
Liquidity and funding Long-term funding maturity profile Benchmark transactions YTD 2015 ● USD 750m, Perp. NC5 (2020), AT1, 5.50% - equity conversion ● GBP 300m Senior, 4Y (2019), Fixed G+80bp ● USD 1bn 144a Senior, 5Y (2020), T+77bp (+ USD 400m 3Y (2018) T+65bp) ● SEK 3bn, Senior 5Y (2020), Fixed/F
Slide 18: 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/14 9% 14% 11% Aug/14 9% 14% 11% Sep/14 9% 15% 11% Oct/14 8% 15% 11% Nov/14 13% 15% 14% Dec/14 15% 15% 15% House price index, Sweden3 220 200
Slide 19: Real estate prices – Baltic countries
1 000 1 200 1 400 1 600 1 800 0 1 000 1 200 1 400 1 600 1 800 0 200 400 600 800 200 400 600 800 Jun-05 Jun-05 Dec-05 Dec-05 Jun-06 Jun-06 Dec-06 Dec-06 Jun-07 Jun-07 EUR/m2 /No. of transactions EUR/m2 /No. of transactions Dec-07 Dec-07 Source: Swedbank 30 Jun 2015 Jun-08 Jun-08 Dec-08 Dec-08 Real es