Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q4 2021 Earnings Presentation
26 slides from Swedbank Ab Class A's earnings presentation, 2022
Slide 1: Year-end result 2021
Slide 2: Q4 2021 highlights and income statement
SEKm Q4 21 Q3 21 ▲% Net interest income 6 554 6 590 -1% Net commission income 4 020 3 799 6% ● Net profit of SEK 4.8bn Net gains and losses 265 553 -52% Other income 910 927 -2% ● Earning per share, SEK 4.30 Total income 11 749 11 869 -1% ● Stable Net Interest Income Total expenses 5 842 5 042 16% P
Slide 3: Second best full year result for Swedbank
● Second best full year result for Full year Net profit, SEKbn Swedbank 21.2 20.9 19.5 19.4 19.7 ● Income (+3%) increased at faster pace 16.4 15.7 16.9 than cost (+1%) 14.3 12.9 ● Return on Equity increased to 13.2% ● Return on Equity target of 15% remains 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 4: Continued strong capital and liquidity position
Continued strong capital and liquidity position Dividend proposal to the AGM of SEK 11.25 per share for 2021 (including special dividend of SEK 2.00) Strong credit quality and low credit impairments Strengthened compliance and new Compliance Officer US investigations are ongoing 4
Slide 5: Sweden - Mortgage Market Share incl. Savings Banks
Sweden - Mortgage Market Share incl. Savings Banks % 18.5 18.8 18.2 10.3 Q1 2021 Q2 2021 Q3 2021 Q4 2021 © Swedbank Information class Restricted access Confidential 5
Slide 6: Digital self-service onboarding
Digital self-service onboarding + 50 000 customers Mobile first. Daily Banking errands in digital channels Omni-channel service gives high customer satisfaction. Pilot on occupational pension 6
Slide 7: Climate position and ESG recognition
● Climate position – business action to support Paris Agreement ● #1 in ESG bonds denominated in SEK ● Dow Jones Sustainability Index – 2nd year in a row 7 7
Slide 8: Sustainable Asset Management
Sustainable Asset Management Swedbank Robur AuM increased 20% and stands above SEK 2trn Continue to leverage our own distribution Green offering with high sustainability level Continued growth in Estonia Latvia and Lithuania 8
Slide 9: Estonia, Latvia and Lithuania
Estonia, Latvia and Lithuania A solid and long-term commitment Digital mortgage process for all customers Corporate business is an opportunity Continued strong brand trust 9
Slide 10: Loan and deposit growth by business area
Loan growth by business area, SEKbn Deposit growth by business area, SEKbn 8 1 676 3 1 679 9 6 26 1 653 1 258 3 1 261 21 1 227 -12 -4 +23bn +31bn Q3 2021 Swedish Baltic LC&I Q4 excl. FX FX Q4 2021 Q3 2021* Swedish Baltic LC&I Group Q4 Excl. FX Q4 2021* banking banking banking banking functions* FX *
Slide 11: Stable NII
● Stable NII NII distribution, SEKm 48 – Underlying NII, SEK -36m 6 590 0 6 554 -54 – Higher average loan volumes -30 – Lower lending margins -36 ● Other includes: – ECB liquidity facilities (+70m) Q3 2021 Volumes Margins Group Other Q4 2021 Treasury – One-off effect in leasing business (-60m) – Dep
Slide 12: Another record high Net Commission Income
● Another record high Net Commission NCI distribution by income source, SEKm Income 161 4 020 3 799 17 43 ● Cards income seasonally lower ● Market development supported Asset Management income ● Corporate advisory benefited from high ECM activity Q3 2021 Cards & Asset Corporate Q4 2021 Payments Mana
Slide 13: Low NGL
● Low NGL NGL distribution by type, SEKm 299 – Market volatility in Fixed Income impacted client trading negatively -44 265 -46 – Negative derivatives valuation effects in Treasury 56 Bond Client Funding Other Total NGL inventories trading* ● Fixed income trading weighed on full year NGL five years,
Slide 14: Stable Other Income
● Stable Other Income Distribution by quarter and type, SEKm Other Associates Net insurance 979 911 916 927 910 361 326 239 253 327 331 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 ● Diversified revenue sources have Other Income five years, SEKbn provided a steadily increasing annual 3.4 3.4 3.7 3.1 inco
Slide 15: Higher expenses in Q4
● Higher expenses in Q4 Total expenses by quarter, SEKm – Seasonality 5 842 – Increased number of staff, IT- expenses, 5 586 92 170 consultants and marketing 4 974 4 989 5 042 77 90 96 5 750 ● Underlying expenses for the full year in 5 416 4 897 4 899 4 946 line with cost cap – Underlying expenses a
Slide 16: Credit quality remains strong
Distribution by business area, SEKm ● Credit quality remains strong 68 ● Credit impairments in Swedish banking -17 ● Recoveries in Baltic banking and LC&I -67 ● Remaining exit portfolio within oil and -118 Swedish Balic LC&I Group Group offshore, SEK 3.5bn banking banking functions Distribution by q
Slide 17: IFRS9 distribution and expert adjustments
● Overall macro economic outlook IFRS9 distribution Q4, SEKm remains unchanged ● Lower expert adjustments due to: Decrease Increase Total 0 – Oil and off-shore exposures 107 divested and restructured ● Accumulated expert portfolio -40 -67 adjustment reserves of SEK 1.8bn -93 66 ● Rating and stage mi
Slide 18: Strong capitalisation
Target CET1 capital ratio distribution by quarter,% range of 17.5% 18.0% 18.5% 18.5% 18.3% +460bps ● Strong capitalisation 100-300bps 13.7% ● CET1 capital ratio buffer of around 460bps above requirements ● Dividend proposal; – Ordinary dividend of SEK 9.25 – Special dividend of SEK 2.00 Q4 2020 Q1 2
Slide 19: © Swedbank Information class Confidential
© Swedbank Information class Restricted access Confidential
Slide 20: The Strategic Direction is directional and guiding for our identity
The Strategic Direction is directional and guiding for our identity, aspirations, and overarching target position Our vision We empower the many = people and businesses Our purpose to create a better future Our customer promise A financially sound Ours and sustainable society »/ Together we make you
Slide 21: Climate commitments
● By 2050, Swedbank has committed to carbon neutrality and interim target setting ● By 2040, The aggregate fund capital managed by Swedbank Robur will be placed in carbon neutral investments ● By 2030, Reduce Swedbank’s direct greenhouse gas emission by 60% (base year 2019) ● By 2025, Reduce energy
Slide 22: Continued integration of sustainability aspects in operations
● Continued integration of sustainability aspects in ESG Data 2021 2020 operations and steering Sustainable financing 1 54 24 ● Strengthened and clarified Swedbank’s position on Issued green bonds 2 30 7 climate change, more restrictive on fossil fuel exposure ESG bonds arranged by Swedbank 3 48 37
Slide 23: Full year 2021 results
SEKm FY 2021 FY 2020 ▲YoY % Net interest income 26 257 26 853 -2% ● Income increased at faster pace than expenses Net commission income 14 853 12 770 16% Net gains and losses 2 048 2 655 -23% ● Record high NCI Other income 3 732 3 398 10% ● Underlying expenses according to cost cap Total income 46 8
Slide 24: Financial targets and five-year key ratios
ROE target of 15% Market leading cost efficiency 17.3 18.9 17.6 18.6 0.54 0.43 0.44 11.5 0.39 0.38 15.1 16.1 14.7 13.2 8.9 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Earnings per share, SEK Return on equity, % Cost to income ratio CET1 capital ratio buffer target of 100-300bps above requireme
Slide 25: Liquidity and funding
Liquidity and funding SEKbn Strong funding profile Liquidity reserve ● LCR 161% (EU 2015/61) 1 400 Outstanding volumes Q3 2021 Q4 2021 SEKbn 546 Level 1 assets ● NSFR 123% (CRD2) 1 200 1 000 186 ● Issued SEK 138bn of long-term 800 of which cash and balances funding in 2021 600 400 with central banks
Slide 26: Swedish housing and mortgage market
Swedish housing and mortgage market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jan 21 15% 6% 11% Feb 21 17% 6% 13% Mar 21 20% 8% 16% Apr 21 23% 12% 19% House price index, Sweden 2005=100 (Data as per August 2021) May 21 21% 12% 18% 350 Jun 21 20% 11% 17% Total 300 Tenant-o