Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q1 2021 Earnings Presentation
30 slides from Swedbank Ab Class A's earnings presentation, 2021
Slide 1: First quarter results 2021
First quarter results 2021 © Swedbank Information class Public
Slide 2: Improved profitability in challenging times
”Improved profitability in challenging times” © Swedbank Information class Public 2
Slide 3: Group result: Income statement
Group result Income statement SEKm Q1 21 Q4 20 ▲% Net interest income 6 541 6 567 0% Net commission income 3 360 3 376 0% • Improved profitability, RoE of Net gains and losses 585 910 -36% 12.8% Other income 916 911 1% Total income 11 402 11 764 -3% • Cost Income ratio of 0.44 Total expenses 4 974 5
Slide 4: Challenges identified
Challenges identified Mortgage market Accessibility for customers © Swedbank Information class Public 4
Slide 5: Taking action
Taking action Mortgage Accessibility • More focus on larger cities • Futureproofing IT-platforms • Faster loan decisions ”24/7” • Investing in stability • Special offerings together • New services for easy with real estate firm access Fastighetsbyrån © Swedbank Information class Public 5
Slide 6: Lowering risk
- Historical shortcomings addressed - Investigations closing one by one Lowering risk - Strengthened AML processes and monitoring - Strong asset quality © Swedbank Information class Public 6
Slide 7: The financial life made easier
The financial life made easier • Customer access to bond market – ESG growing • Automated FX-services for SME:s • Digital customer access – easy onboarding of accounting services • Savings in Robur funds offered in Estonia, Latvia and Lithuania © Swedbank Information class Public 7
Slide 8: Income statement
Group result Income statement SEKm Q1 21 Q4 20 ▲QoQ Q1 20* ▲YoY Net interest income 6 541 6 567 -26 6 686 -145 • Improved profitability, RoE of 12.8% Net commission income 3 360 3 376 -16 3 223 137 – Core income lines were stable Net gains and losses 585 910 -325 -322 907 – Normalised NGL offset by
Slide 9: Loan and deposit volumes
Group result Loan and deposit volumes SEKm Loans, SEKbn Deposits, SEKbn +5 +43 * 1 616 5 6 1 621 1 131 27 1 174 16 -6 Q4 2020 Swedish Baltic Corporate Q1 2021 Q4 2020* Private Corporate* Q1 2021* mortgage banking excl. Baltic loans banking Of which FX +7 Of which FX +7 *Excluding Group functions and
Slide 10: Net interest income
Group result Net interest income SEKm 6 567 29 6 541 -27 -3 -25 • Stable NII – Lower average loan volumes – Excess liquidity placed with central banks largely offset by lower funding cost • FX (-23m) and day count effects (-57m) • FY deposit guarantee fee estimated to 3 000 Q4 2020 Volumes Margins T
Slide 11: Net commission income
Group result Net commission income SEKm 3 376 85 3 360 • Strong Asset Management income from -5 -96 positive stock market performance – Q4 included performance fee of SEK 60m • Cards & Payments seasonally lower and impacted by further restrictions due to the pandemic Q4 2020 Cards & Asset Corporate
Slide 12: Net gains and losses
Group result Net gains and losses SEKm 1 398 910 • Lower NGL as Q4 was boosted by positive 669 valuation effects, and favourable FX trading 585 • Good client trading activity continues Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2020 -322 211 585 179 138 2 55 CVA/DVA Bond Shares Client Other Total NGL invent
Slide 13: Other income
Group result Other income SEKm 975 911 916 867 374 • Higher income from associates offset by 645 408 lower net insurance and services to savings 122 banks 237 381 305 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Other Associates Net insurance 1200 1000 800 600 400 200 0 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1
Slide 14: Expenses
Group result Expenses SEKm AML investigations Underlying expenses 5 586 5 370 170 4 973 576 4 843 4 761 77 • Expenses in line with plan 43 63 – Seasonally lower QoQ 5 416 4 794 4 800 4 698 4 896 2 000 Q1 2020* Q2 2020 Q3 2020 Q4 2020 Q1 2021 3 500 3 000 2 500 2 000 1 500 1 000 500 0 Q1 2019 Q1 2020*
Slide 15: Credit impairments
Group result Credit impairments SEKm 246 220 • Continued strong asset quality • Exited exposures in Oil & Offshore, almost fully provisioned for 7 19 • Conservative view on the back of Covid-19 Swedish banking Baltic banking LC&I Group functions Group development – increased provisions in Baltic ban
Slide 16: IFRS 9 distribution
Group result IFRS 9 distribution SEKm 138 • Reduced credit impairments under IFRS9 194 • Counteracted by management adjustments 246 -169 • Individual assessment, mainly oil-related 283 -200 Macro- Expert Individual Rating and Other Credit economic portfolio assessment stage impairments forecast Q4 m
Slide 17: Offshore exposure
Group result Offshore exposure SEKbn 12.9 11.9 • Gross loans, SEK 7.3bn 11.3 3.7 3.9 9.8 • Credit impairment provisions of 4.6 7.3 SEK 2.4bn 4.5 2.4 • Total stage 3 loans of SEK 3.6bn 9.2 8.0 6.6 5.3 5.0 2.6 2.5 1.2 0.8 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Drilling Oil Supply Floating rigs servic
Slide 18: Common Equity Tier 1 capital (CET1)
Group result Common Equity Tier 1 capital (CET1) SEKbn 16.1% 16.4% 16.8% 17.5% 18.0% +560bps • Strong capitalisation 12.4% • CET1 capital buffer of around 560bps above requirements – target of 100-300bps • Remaining accrued dividend from 2019 & 2020 profits still deducted from CET1 Q1 2020 Q2 2020 Q
Slide 19: Strong growth in sight
’’ Strong growth in sight ’’ 2020 2021F 2022F Global* -3.3% 6.0% (5.5%) 4.4% (4.2%) Sweden** -2.8% 3.6% (3.0%) 3.6% (3.6%) Estonia** -2.9% 3.0% (3.1%) 5.0% (4.3%) Latvia** -3.6% 3.1% (2.8%) 5.5% (5.0%) Lithuania** -0.8% 3.0% (2.7%) 4.9% (4.2%) *IMF April 2021 forecast **Swedbank April 2021 forecast
Slide 20: Strategic Direction
Strategic Direction © Swedbank Information class Public 20
Slide 21: Appendix
Appendix © Swedbank Information class Public
Slide 22: Strong financial position to manage uncertainty
Strong financial position to manage uncertainty Balance sheet Earnings capacity (profit before impairments, SEKbn) • Liquidity coverage ratio, 154% 30 20 • Net stable funding ratio, 123% 10 • Liquidity reserve, SEK 646bn 0 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021** – Of which SEK 496bn (77
Slide 23: Major part of Swedbank's loan portfolio insignificantly impacted by Covid-19
Major part of Swedbank’s loan portfolio insignificantly impacted by Covid-19 Loans carrying amount, SEKbn Distribution by sub-sector sensitivity* Distribution by sub-sector loan volume and share in stage2 Insignificantly impacted Slightly impacted Moderately impacted Materially impacted 1% ▪ Conside
Slide 24: Property management – focus on well-known companies with solid finances
Property management – focus on well-known Property management companies with solid finances Residential property management Non-residential property management • Low risk portfolio1), supported by; • Mixed portfolio1) comprising: − Growing population − Office properties − High demand, and low supply
Slide 25: Sustainable value creation
Sustainable value creation Long-term sustainable equals long-term profitability KEY MESSAGES • Empower the many People to • Empower the many Businesses to create a better future by Empower our customers to make create a better future by supporting ▪ We empower the many supporting sustainable choices
Slide 26: Sustainability – Q1 accomplishments
Sustainability – Q1 accomplishments Swedbank recent commitments and recognitions Strengthened governance • Included in Dow Jones Sustainability Index • Swedbank Sustainability Committee was established to provide support for the (World and Europe) effective management and governance of the sustainab
Slide 27: Focus areas in 2021
Focus areas in 2021 A strategic direction on the basis of sustainability Focus on fundamentals – building robust sustainable finance compliance and strengthen sustainability governance and transparency A financially sound and sustainable Measure environmental and social impact and society performanc
Slide 28: Upcoming capital regulatory changes
Upcoming capital regulatory changes Capital 13.0% 17.2% ??% 1.8% 2.4% Highlights P2G + P2R P2R P2R Leverage • Swedish FSA banking package decided ratio Sep 2021 Sep 2021 Sep 2021 June 2021 – P2G – indicative level until Sep 2021 (SREP) – P2R introduced in Sep 2021 (SREP) 1 replacing Individual Pilla
Slide 29: Conservative funding position
Conservative funding position Liquidity and funding SEKbn Strong funding profile Liquidity reserve • LCR 154% (EU 2015/61) SEKbn Outstanding volumes 1 400 Q4 2020 Q1 2021 646 Level 1 assets • NSFR 123% (CRD2) 1 200 1 000 133 • Issued SEK 32bn of long-term 800 of which cash and balances 600 funding i
Slide 30: Real-estate price performance – Sweden
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 Apr 20 4% 2% 3% May 20 6% 2% 5% Jun 20 7% 3% 6% Jul 20 11% 4% 8% House price index, Sweden 2005=100 Aug 20 11% 4% 8% 350 Sep 20 11% 5% 9% Total 3