Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q4 2017 Earnings Presentation
21 slides from Swedbank Ab Class A's earnings presentation, 2018
Slide 1: Swedbank year-end report 2017
Swedbank year-end report 2017 Birgitte Bonnesen (CEO), Anders Karlsson (CFO), Helo Meigas (CRO) © Swedbank Information class Public
Slide 2: Swedish Banking: Solid mortgage volume growth
Swedish Banking Solid mortgage volume growth SEKm Q4 17 Q3 17 ▲QoQ • Net interest income Net interest income 3 861 3 812 49 – Continued mortgage loan volume growth and Net commission income 1 952 1 859 93 stable back book margins Other income 625 443 182 Total income 6 438 6 114 324 • Net commission
Slide 3: Baltic Banking: Record high profitability
Baltic Banking Record high profitability SEKm Q4 17 Q3 17 ▲QoQ • Net interest income Net interest income 1 116 1 060 56 – Lending to households continues to grow Net commission income 711 565 146 – Stable margins Other income 226 218 8 Total income 2 053 1 843 210 – Firm deposit growth Total expense
Slide 4: Large Corporates & Institutions: Result reflected mixed market dynamics
Large Corporates & Institutions Result reflected mixed market dynamics SEKm Q4 17 Q3 17 ▲QoQ • Stable net interest income Net interest income 934 896 38 • Net commission income Net commission income 656 525 131 Net gains and losses 332 554 -222 – PayEx contributed positively Other income 42 32 10 –
Slide 5: Group results: Robust performance
Group results Robust performance SEKm Q4 17 Q3 17 ▲QoQ • Mortgage volume growth strengthened net Net interest income 6 326 6 208 118 interest income Net commission income 3 291 2 917 374 Net gains and losses 356 525 -169 • Stock market performance and full quarter Other income 1 003 768 235 PayEx in
Slide 6: Capital: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital 24.2% 24.6% 23.9% 24.6% • CET1 capital increased by SEK 0.4bn 21.9% – Positive effect from net profit of SEK 1.1bn excl. dividend – Negative effect from IAS19 of SEK 0.6bn • REA decreased by SEK 11.1bn • Buffer above minimum requirements of Q1 2017 Q
Slide 7: Capital: Lower REA
Capital Lower REA SEKbn 425 • REA decreased by SEK 11.1bn 419.5 – Received VISA-related proceeds 420 reduced REA 415 – Year-end effects reduced REA -7.3 410 -1.1 -0.7 408.4 -2.0 405 400 Q3 2017 Credit risk Market risk CVA Other Q4 2017 © Swedbank Information class Dec 2017 Public 7
Slide 8: Group results FY 2017: Strong result
Group results – FY 2017 Strong result • ROE of 15.1% - target achieved SEKm FY 2017 FY 2016 ▲YoY • Strong organic income generation Net interest income 24 595 22 850 1 745 – One-off tax-free gains: Net commission income 12 030 11 333 697 • SEK 2.1bn from VISA in 2016 Net gains and losses 1 934 2 2
Slide 9: Group: Solid asset quality
Group Solid asset quality Credit impairments, SEKm Q4 17 Q3 17 ▲QoQ • Resilient asset quality in all business Swedish Banking 264 66 198 segments Baltic Banking -12 -26 14 Large Corporates & Institutions 59 195 -136 • Lower-than-anticipated credit Swedbank Group 311 235 76 impairments for the full y
Slide 10: Swedbank has a low-risk real-estate lending portfolio
Asset quality Swedbank has a low-risk real-estate lending portfolio • Swedbank maintains a low risk profile and Real-estate lending, net loans in Sweden, SEKbn prioritises price and risk over volume growth 1 200 • Around 90% of the lending in lower risk 1 000 • Private mortgages: SEK 759bn residenti
Slide 11: Residential property developers - low exposure
Asset quality Residential property developers - low exposure • Total exposures of SEK 21bn, mainly to the larger listed construction firms, with which Swedbank has long-term relations – SEK 14bn of the exposures are related to tenant-owner rights projects • 88% of these projects will be finalised in
Slide 12: ROE target of 15% remains
ROE target of 15% remains • Additional investments to further accelerate our digitisation and automation efforts – Channel transformation – Digital payment solutions and e-commerce – Customer offerings – Automation • Investments will allow us to offset underlying cost inflation and over-time lead to
Slide 13: Appendix
Appendix © Swedbank Information class Public
Slide 14: Swedbank – low-risk bank with strong capital
Swedbank – low-risk bank with strong capital This is Swedbank base • Low risk – a Board of Directors’ strategic priority – ensures access to funding markets and low funding cost • Retail profile and four home markets a key feature Liquidity & capital, % NSFR LCR CET1 ratio, CRDIV (RHS) – 86% of tota
Slide 15: Swedbank – strong and stable earnings
Swedbank – strong and stable earnings This is Swedbank 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 16: Swedbank – market leader in cost efficiency
Swedbank – market leader in cost efficiency This is Swedbank • Best-in-class cost efficiency – an executive management strategic priority • Executive management strongly focused on cost and change management Total expenses, SEKm − Integrated in corporate culture 20 Acquisition of Sparbanken… − Focus
Slide 17: Focus on sustainable business
Focus on sustainable business Improved sustainability scores First green bond issued in October (5yr EUR 500m) Swedbank issued its first Green Bond Approximately 72% of the amount was Dow Jones Proceeds will allocated to investors with dedicated green • Finance sustainable real-estate funds. Sustain
Slide 18: Swedbank creates value
Swedbank creates value Strategy % SEK Return on equity 30 14 >15% target * 25 12 20 10 15.1% FY 2017 8 15 Common Equity Tier 1 ratio 6 10 One of the highest among European banks 4 5 2 24.6% 0 0 2012 2013 2014 2015 2016 2017 Dividend per share Return on equity (LHS) CET1 capital ratio (LHS) 75% payou
Slide 19: Conservative funding position
Conservative funding position Liquidity and funding • LCR 173% (Swedish FSA definition FFFS 2012:6) • NSFR 110% (Basel committee) • Issued SEK 181bn of term funding FY 2017 • Plan to issue around SEK 145bn in 2018 Term funding issuance – completed and planned SEKbn Prefunded for more than 12 months
Slide 20: Long-term funding maturity profile
Long-term funding maturity profile Liquidity and funding Long-term funding maturity profile, by funding source Long-term funding maturity profile, by currency SEKbn SEKbn Senior unsecured debt Covered bonds 200 200 150 150 Other GBP 100 100 USD EUR SEK 50 50 0 0 2018 2019 2020 2021 2022 2023 2024- 2
Slide 21: Real-estate price performance – Sweden, housing and mortgage market
Swedish Real-estate price performance – Sweden, housing and mortgage 12 month market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jan 17 9% 8% 9% Feb 17 9% 8% 9% Mar 17 9% 8% 9% Apr 17 8% 8% 8% May 17 8% 9% 9% 260 House price index, Sweden3 Jun 17 9% 10% 10% 2005=100 240 Jul