Slide 1: Interim report Q2 2007
Interim report Q2 2007 7 August, 2007 Jan Lidén CEO and President
Slide 2: Summary Q2 2007 (Q1 2007)
Summary Q2 2007 (Q1 2007) • Continued improved results: SEK 3,112m (2,910 in Q1 2007) – Earnings per share increased 7% compared with Q1 2007 – Net interest income was up for the fifth consecutive quarter – For the first half year, earnings per share rose 19 percent • Swedish Banking: SEK 1,484m (1,
Slide 3: Strong position for profitability and growth
Strong position for profitability and growth Sweden Baltics Russia and Ukraine Swedbank is the leading bank in The Baltic economies are Swedbank has a small but Sweden. Profitability is high and experiencing strong economic growing presence in Russia and stable and the bank is gaining growth that is
Slide 4: Profit trend, Group
Profit trend, Group SEKm 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Net profit (4)
Slide 5: Business volumes, savings
Business volumes, savings SEKbn Growth Q2-07, SEKbn SEKbn Balance, June 2007 25 500 446 20 400 313 15 300 10 200 16 93 5 9 100 3 0 0 Deposits, Deposits, AM funds, Deposits, Deposits, AM funds, Sweden Baltics Group Sweden Baltics Group (5)
Slide 6: Business volumes, lending
Business volumes, lending Growth Q2-07, SEKbn SEKbn Balance, June 2007 SEKbn 50 1,000 1,000 40 800 30 600 20 38 400 449 362 10 200 14 12 66 95 6 5 0 0 Lending, Private, Corporate, Private, Corporate, Lending, Private, Corporate, Private, Corporate, Group Sweden Sweden Baltics Baltics Group Sweden Sw
Slide 7: Margins
Margins % Lending Deposits % Market interest rates 4.5 4.5 increased 4.0 4.0 substantially during 3.5 3.5 the quarter. Margins 3.0 expected to decrease 3.0 during Q3 due to 2.5 2.5 market rates falling 2.0 2.0 back 1.5 1.5 1.0 1.0 Lending margin in 0.5 0.5 Baltic Banking increased by 5 bps 0.0 0.0 d
Slide 8: Swedish Banking
Swedish Banking SEKm % • Continued strong volume growth 4,500 0.7 4,000 • Lending margin pressure in all segments 0.6 3,500 • Higher asset management- and payment 0.5 3,000 volumes boosts commission income 2,500 0.4 • Switch-over costs due to change in 2,000 0.3 1,500 suppliers of cash handling and
Slide 9: Mutual funds – improved product offering and third party distribution introduced
Mutual funds – improved product offering and third party distribution introduced • Improved product offering – Launch of Fund-supermarket on 12 June – 200-250 funds from approx. 20 external fund managers will be offered at year end – Improved internet based service with, such as web television and e
Slide 10: Baltic Banking
Baltic Banking SEKm % • Another all time high quarter 2,400 0.6 – Earnings grew 19 percent to 2,200 SEK 1,180m (995) 2,000 0.5 1,800 – Cost/income ratio was 0.40 1,600 0.4 1,400 • Continued credit growth slow-down… 1,200 0.3 • … but overheating risk still persists 1,000 800 0.2 – Anti inflation plan
Slide 11: Decreasing Baltic lending growth
Decreasing Baltic lending growth 8,000 Hansabank, Estonia 60% 6,000 Hansabank, Latvia 100% 90% 7,000 5,000 50% 80% 6,000 4,000 70% 40% 5,000 60% 4,000 30% 3,000 50% 3,000 40% 20% 2,000 30% 2,000 1,000 20% 10% 1,000 10% 0 0% 0 0% 05/Jun 06/Jun 07/Jun 05/Jun 06/Jun 07/Jun 05/Mar 06/Mar 07/Mar 05/Mar 0
Slide 12: Baltic Banking, market shares
Baltic Banking, market shares Estonia Latvia Lithuania May, Dec, May, Dec, May, Dec, Balance, % 2007 2006 2007 2006 2007 2006 Deposits, households 62.1 62.3 28.5 29.5 39.6 38.6 Mortgage lending, households 48.9 49.2 28.8 29.8 29.2 29.8 Consumer/bank lending 56.8 59.0 21.9 18.7 32.4 32.2 Deposits, SM
Slide 13: Swedbank Markets
Swedbank Markets SEKm • Continued good volume growth in both 600 600 Sweden and Norway 550 550 500 500 • Positive development in structured 450 450 products, equities, FX and corporate 400 400 350 350 finance 300 300 250 250 • Weaker fixed income operations in 200 200 Sweden and Norway compared with
Slide 14: TAS-Kommerzbank
TAS-Kommerzbank • Acquisition of TAS-Kommerzbank was completed July 9th Sweden Finland – Will be consolidated as of July 1st Norway • New business area report as of Q3 2007 Estonia Russia – Pro-forma numbers will be available ahead Denmark Latvia Lithuania of Q3-report. Ukraine Q1 06 Q2 06 Q3 06 Q4
Slide 15: Russia
Russia • Name change to OAO Swedbank (from OAO Hansabank) • Audit by the Russian central bank during March and April – Shortcomings in observance of local regulations – Russian central bank has restricted the operations for three months until 6 September – Swedbank has produced an action plan that i
Slide 16: Low risk in lending portfolio
Low risk in lending portfolio Group lending by collateral RWAs decrease under Basel II SEKbn Covenants, Personal unsecured Municipalities 900 guarantee 8% and county 800 2% councils Chattel 5% 700 mortgages 600 1% 500 Other properties 400 15% 300 200 100 Other collateral 0 9% RWAs according to RWAs
Slide 17: Group results
Group results Mikael Inglander CFO (17)
Slide 18: Income statement, Group
Income statement, Group Q2 Q1 Q2 SEKm 2007 2007 % 2006 % Net interest income 4,591 4,501 2 4,029 14 Net commission income 2,552 2,289 11 2,353 8 Net gains/losses on financial items at fair value 579 530 9 786 – 26 Other income 504 473 7 410 23 Total income 8,226 7,793 6 7,578 9 Staff costs – 2,016 –
Slide 19: Net interest income, by business area
Net interest income, by business area Q2 Q1 Q2 SEKm 2007 2007 % 2006 % Swedish Banking 2,909 2,950 –1 2,850 2 Baltic Banking Operations 1,496 1,324 13 962 56 Baltic Banking Investment – 95 – 104 – 113 Swedbank Markets 295 399 – 26 358 – 18 Asset Management and Insurance 24 19 26 5 Shared Services an
Slide 20: Net interest income Swedish Banking, change
Net interest income Swedish Banking, change Q2 2007 Q2 2007 SEKm vs Q1 2007 vs Q2 2006 Net interest income Q1 2007 2,950 Net interest income Q2 2006 2,850 Changes: Higher lending volumes 63 226 Decreased lending margins – 106 – 313 Difference in number of days/quarter, lending 19 Higher deposit volu
Slide 21: Baltic Banking, change in net interest income
Baltic Banking, change in net interest income Q2 2007 Q2 2007 SEKm vs Q1 2007 vs Q2 2006 Net interest income Q1 2007 1,324 Net interest income Q2 2006 962 Changes: Higher lending volumes 78 337 Decreased lending margins –8 Increased lending margins 21 Difference in number of days/quarter, lending 11
Slide 22: Net commission income, Group
Net commission income, Group SEKm 1,300 1,100 900 Q1 2006 Q2 2006 700 Q3 2006 Q4 2006 500 Q1 2007 300 Q2 2007 100 -100 management Insurance Payments Brokerage Lending Other Corporate finance Asset (22)
Slide 23: Expenses
Expenses Q2 SEKm Q2 2007 Q1 2007 % 2006 % Swedish Banking – 2,353 – 2,204 7 – 2,201 7 Baltic Banking – 926 – 820 13 – 816 13 Swedbank Markets – 499 – 517 –3 – 546 –9 Other business areas – 346 – 396 – 13 – 339 2 Total expenses – 4,124 – 3,937 5 – 3,902 6 of which staff costs in: Swedish Banking – 1,
Slide 24: Loan losses, Group
Loan losses, Group SEKm % 500 0.25 • Credit quality still excellent on all 400 0.20 markets 300 0.15 • Increase in reported loan losses, 200 0.10 but from very low levels 100 0.05 • Impaired loans stable 0 0.00 • Group’s low risk profile confirmed -100 -0.05 by Basel II, which indicates a -200 -0.10
Slide 25: Credit quality, Baltic Banking
Credit quality, Baltic Banking Impaired loans/loan portfolio (12-month old) 1,5% 1,2% 0,9% 0,6% 0,3% 0,0% Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Est Lat Lit Loan loss level 1,5% 1,0% 0,5% 0,0% Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 -0,5% Est Lat Lit Baltic B
Slide 26: Business areas, summary
Business areas, summary Swedish Baltic Swedbank Asset Banking Banking Markets Mgmt H1-07 vs H1 06, SEKm H1-07 % H1-07 % H1-07 % H1-07 % Net interest income 5,859 5 2,820 55 694 215 43 Net commission income 2,239 6 917 26 745 – 8 910 15 Other income 741 628 443 107 Total income 8,839 5 4,365 51 1,882
Slide 27: Key figures
Key figures Jan - Jun, Jan - Jun, 2007 2006 Return on equity, % 19.5 18.5 Earnings per share, SEK 11.68 9.81 Equity per share, SEK 120.23 105.78 C/I ratio before loan losses 0.50 0.53 Loan loss ratio, net, % 0.03 – 0.02 Share of impaired loans, % 0.08 0.09 Provision ratio for impaired loans, % 185 1
Slide 28: All business areas improved their results for the first six months 2007
All business areas improved their results for the first six months 2007 • Continued increase of Group results, up 19 percent to SEK 6,022m (5,056 first 6 months 2006) • Group cost/income ratio amounted to 0.50 • Strong development of business volumes • Continued very good credit quality on all marke