Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — FY2007 Earnings Presentation
32 slides from Swedbank Ab Class A's earnings presentation, Feb 14, 2008
Slide 1: Year-end report 2007
Year-end report 2007 14 February 2008 Jan Lidén President and CEO
Slide 2: 2007 – A successful and eventful year
2007 – A successful and eventful year • Profit attributable to shareholders increased 10% to SEK 12bn – Net interest income increase by 20% – Net commission income increased by 11% • Swedish Banking show a stable result, low risks and high return on equity • Record result in Baltic Banking with bala
Slide 3: Q4 2007 – Good development and strong results
Q4 2007 – Good development and strong results • Good volume development in Sweden – Stable margins on new lending • Continued strong results in Baltic banking – Economic slowdown align with expectations • Strong finish of the year for Swedbank Markets – Success in fixed income trading and structured
Slide 4: Solid profit development
Solid profit development SEKm SEKm 17,000 17,000 15,000 15,000 13,000 13,000 11,000 11,000 9,000 9,000 7,000 7,000 5,000 5,000 3,000 3,000 1,000 1,000 -1,000 -1,000 2000 2001 2002 2003 2004 2005 2006 2007 Profit before loan losses Capital gains EnterCard and KIAB Loan losses, net* Operating profit (
Slide 5: Strong position for profitability and growth
Strong position for profitability and growth Sweden Baltics Ukraine and Russia 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 Ukraine and stable and the bank is growth that is expect
Slide 6: Minor direct effects from the credit turmoil
Minor direct effects from the credit turmoil Q4 Q3 Valuation- and accounting effects, SEK M 2007 2007 Swedbank Markets – 40 – 60 Group Treasury, liquidity portfolio –5 – 68 Group Treasury, intra-group lending 20 – 90 Swedbank Mortgage 66 – 129 (6)
Slide 7: Business volumes
Business volumes Savings Lending SEKbn SEKbn 500 1,200 1,103 398 401 1,000 919 400 334 289 800 300 600 475 200 425 390 400 333 102 100 84 200 24 31 53 77 74 100 13 19 34 61 0 0 Deposits, Deposits, AM funds, AM funds, Structured Lending, Private, Corporate, Private, Corporate, Other Sweden Baltics Sw
Slide 8: Credit quality, group
Credit quality, group % 0.64 0.56 0.48 0.40 0.32 0.24 0.16 0.08 0.00 -0.08 2000 2001 2002 2003 2004 2005 2006 2007 Loan loss ratio, net Share of impaired loans Share of provisions (8)
Slide 9: Margins
Margins % Lending Deposits % 6.0 6.0 5.0 5.0 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 0.0 0.0 Q3- Q4- Q1- Q2- Q3- Q4- Q3- Q4- Q1- Q2- Q3- Q4- 06 06 07 07 07 07 06 06 07 07 07 07 Estonia Latvia Estonia Latvia Lithuania Sweden Lithuania Sweden (9)
Slide 10: Swedish Banking
Swedish Banking • Continued stable earnings and high profitability SEKm % • Strong corporate lending during Q4 5,000 0.7 – Total lending increased by 4% vs. Q3 and 14% 4,500 during the full year 0.6 4,000 • Continued good deposit trend 3,500 0.5 – Deposits increased by 3% vs. Q3 and 15% during 3,000
Slide 11: Baltic Banking Operations
Baltic Banking Operations • Continued high profitability SEKm % • Net interest income increased 7% vs. Q3 2,400 0.5 2,200 • Lending growth in 2007 was 33%, the gradual 2,000 0.4 slowdown is expected to continue 1,800 1,600 • Weak trading income due to market turmoil 1,400 0.3 • Costs affected by 1,2
Slide 12: Credit quality, Baltic Banking
Credit quality, Baltic Banking 2.0% Share of impaired loans (12 month old portfolio) 1.5% 1.0% 0.5% 0.0% 2002 2003 2004 2005 2006 2007 Estonia Latvia Lithuania Baltics Group 2.0% Loan loss ratio, net (average portfolio) 1.2% 0.4% -0.4% 2002 2003 2004 2005 2006 2007 -1.2% -2.0% (12) Estonia Latvia Li
Slide 13: Decreasing Baltic lending growth
Decreasing Baltic lending growth 8,000 Hansabank, Estonia 60% 7,000 Hansabank, Latvia 100% 90% 7,000 6,000 50% 80% 6,000 5,000 70% 40% 5,000 60% 4,000 4,000 30% 50% 3,000 40% 3,000 20% 30% 2,000 2,000 20% 10% 1,000 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
Slide 14: Baltic macro development
Baltic macro development • Economic slowdown in Estonia continues: GDP growth slows from ~7% in 2007 to ~5% in 2008; the bottom of the cycle is expected to be in Q2 2008 • In Latvia growth slows from ~10.5% to 6% in 2008, the bottom of the cycle is expected to be in H2 of 2008 • Slowdown in Lithuani
Slide 15: Swedbank Markets
Swedbank Markets SEKm • Good end to the year despite the capital 500 market turmoil 450 400 • Strong results in, above all, fixed income and 350 FX trading, structured investment products 300 and corporate finance fees First Securities 250 • Minor valuation effects due to market turmoil, 200 SEK - 4
Slide 16: International Banking
International Banking SEKm • Continued strong lending growth in Ukrainian 100 Banking, + 112% to SEK 11bn in 2007 75 • Loan loss ratio, net in Ukrainian Banking 50 decreased after adjusting calculation method 25 to Swedbank Group’s principles 0 • Annual lending growth in Russian Banking -25 was 50%
Slide 17: Group results
Group results Mikael Inglander CFO (17)
Slide 18: Income statement, group
Income statement, group Q4 Q3 Q4 SEKm 2007 2007 % 2006 % Net interest income 5,259 4,806 9 4,303 22 Net commission income 2,536 2,503 1 2,309 10 Net gains/losses on financial items at fair value 386 196 97 908 – 57 Other income 693 526 32 392 77 Total income 8,874 8,031 10 7,912 12 Staff costs 2,111
Slide 19: Net interest income Q4-07 (Q3-07)
4,600 4,800 5,000 5,200 5,400 Net interest SEKm income 4,806 Q3-07 Swedish 1 Banking Baltic Banking Operations 101 Baltic Banking - 10 Investment International 12 Banking Swedbank 359 Markets Net interest income Q4-07 (Q3-07) Shared Services and - 10 other Net interest income 5,259 Q4-07 (19)
Slide 20: Net interest income Swedish Banking, change
Net interest income Swedish Banking, change Q4 2007 Q4 2007 SEKm vs Q3 2007 vs Q4 2006 Net interest income Q3 2007 2,926 Net interest income Q4 2006 2,943 Changes: Higher lending volumes 46 215 Decreased lending margins – 81 – 306 Higher deposit volumes 43 122 Higher deposit margins 52 142 Other cha
Slide 21: Baltic Banking, change in net interest income
Baltic Banking, change in net interest income Q4 2007 Q4 2007 SEKm vs Q3 2007 vs Q4 2006 Net interest income Q3 2007 1,487 Net interest income Q4 2006 1,126 Changes: Higher lending volumes 61 273 Higher lending margins 14 Decreased lending margins -10 FX-effects, lending 4 12 Higher deposit volumes
Slide 22: Net commission income, Group
Net commission income, Group SEKm 5,000 4,000 3,000 2,000 1,000 0 management Insurance Payments Lending Brokerage Other Corporate finance Asset 2007 2006 (22)
Slide 23: Expenses
Expenses Q4 Q3 Q4 SEKm 2007 2007 % 2006 % Swedish Banking 2,279 2,208 3 2,327 –2 Baltic Banking 1,062 864 23 811 31 International Banking 272 279 –3 126 Of which Ukrainian Banking 163 134 22 Swedbank Markets 560 416 35 535 5 Other business areas 353 365 –3 298 18 Total expenses 4,526 4,132 10 4,097
Slide 24: Business areas
Business areas Swedish Baltic Internat. Swedbank Asset Banking Banking Banking Markets Mgmt 2007 vs 2006, SEKm 2007 % 2007 % 2007 % 2007 % 2007 % Net interest income 11,701 5,667 986 1,343 83 Net commission income 4,504 1,854 196 1,441 1,868 Other income 1,473 1,252 97 773 232 Total income 17,678 4
Slide 25: Key figures
Key figures Jan - Dec, Jan - Dec, 2007 2006 Return on equity, % 18.9 19.3 Earnings per share, SEK 23.28 21.11 Equity per share, SEK 131.96 116.37 C/I ratio before loan losses 0.51 0.52 Loan loss ratio, net, % 0.07 – 0.02 Share of impaired loans, % 0.13 0.07 Dividend, SEK* 9.00 8.25 Tier 1 capital ra
Slide 26: Tier-1 ratio, Group
Tier-1 ratio, Group % % 10 10 • Tier 1 ratio amounted to 8.5% 9 9 • Tier 1 ratio, according to transition 8 8 principles, was 6.2% 7 7 6 6 • As of January 1, 2008, tier 1 ratio 5 5 according to transition principles, 4 4 increased by 31 bps due to the gradual 3 3 implementation of Basel 2 regulation
Slide 27: 2007 – A successful and eventful year
2007 – A successful and eventful year • Profit attributable to shareholders increased 10% to SEK 12bn – Net interest income increase by 20% – Net commission income increased by 11% • Swedish Banking show a stable result, low risks and high return on equity • Record result in Baltic Banking with bala
Slide 28: Capital Markets Day 2008
Capital Markets Day 2008 • 5 March, Kiev • Prel. schedule, registration, accommodation, flights etc.: swedbank.com/cmd (28)
Slide 29: Appendix
Swedbank @ Appendix ~~ (29)
Slide 30: Credit quality, group
Credit quality, group % % 225 0.32 200 0.28 175 0.24 150 0.20 125 0.16 100 0.12 75 0.08 50 0.04 25 0.00 0 -0.04 1999 2000 2001 2002 2003 2004 2005 2006 2007 Share of impaired loans (right scale) Provision ratio, total (left scale) Provision ratio, individual (left scale) Loan loss ratio (right scale
Slide 31: Group lending by sectors – Baltic Banking
Group lending by sectors – Baltic Banking Portfolio, December 2007 Portfolio growth, Q4 07 Individuals 8,282 42% 452 39% Real-estate 82 7% 3,012 15% mgmt Retail & 111 10% 1,736 9% Wholesale Industry 1,692 8% 42 4% Transport 1,111 6% 34 3% Construction 546 3% 0 0% Other 2,786 14% 231 20% 0 2,000 4,00
Slide 32: Exposure FAQ
Exposure FAQ • No direct US Sub-Prime exposure – Minimal indirect exposure through investments of EUR 57m in bonds issued by US mortgage institutions who, in their turn, have exposures towards US sub-prime • Total exposure towards structured credits is minimal – No commitments towards conduits or SI