Swedbank Ab Class A · OMXSTO:SWED_A
Swedbank Ab Class A — Q3 2015 Earnings Presentation
19 slides from Swedbank Ab Class A's earnings presentation, 2015
Slide 1: Swedbank's third quarter 2015 results
Swedbank’s third quarter 2015 results Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO) © Swedbank
Slide 2: Swedish Banking: Successful customer migration – southern region
Swedish Banking Successful customer migration – southern region SEKm Q3 15 Q2 15 ▲ QoQ • Customer migration completed Net interest income 3 404 3 281 123 – 100 000 new customers Net commission income 1 717 1 916 -199 Other income 452 471 -19 • Lower deposit margins Total income 5 573 5 668 -95 Total
Slide 3: Baltic Banking: Market leader
Baltic Banking Market leader SEKm Q3 15 Q2 15 ▲ QoQ • Loan volume growth Net interest income 900 865 35 Net commission income 511 524 -13 • Solid asset quality Other income 155 147 8 Total income 1 566 1 536 30 • Acquisition of retail portfolios - Total expenses 605 611 -6 around 127 000 new custome
Slide 4: Large Corporates & Institutions: Weaker result
Large Corporates & Institutions Weaker result SEKm Q3 15 Q2 15 ▲ QoQ • Lower NGL Net interest income 865 862 3 – Lower activity Net commission income 509 491 18 – Widening credit spreads Net gains and losses 315 576 -261 Other income 33 39 -6 • Stable NII Total income 1 722 1 968 -246 – Lower deposi
Slide 5: Group results: Good cost control – increased investment needs
Group results Good cost control – increased investment needs SEKm Q3 15 Q2 15 ▲QoQ • Stable NII Net interest income 5 811 5 704 107 Net commission income − Mortgage volume growth 2 736 2 842 -106 Net gains and losses 4 82 -78 − Mixed margins Other income 683 687 -4 Total income 9 234 9 315 -81 • Low
Slide 6: Capital: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital CET1 capital ratio, % • CET1 capital ratio improved − CET1 capital increase − REA decrease • SREP result in line with expectations • Continued regulatory uncertainty * Swedbank’s estimate based on SFSA’s announced capital requirements, including full
Slide 7: Liquidity and funding: Increased long-term funding activity
Liquidity and funding Increased long-term funding activity Quarterly long-term funding issuance • Funding per Q3 2015, SEK 188bn 80 70 60 • NSFR at 104 per cent 50 SEKbn 40 Other Senior unsecured debt 30 Covered bonds 20 10 0 Average Q115 Q215 Q315 2014 106 Net Stable Funding Ratio 104 Per cent 102
Slide 8: Asset quality: Strong asset quality
Asset quality Strong asset quality Credit impairments, SEKm Q3 15 Q2 15 ▲QoQ % Credit impairment ratio Swedish Banking 35 48 -13 0.20 Baltic Banking -2 -49 47 0.10 Large Corporates & 0.00 97 7 90 Institutions Swedbank Group 130 6 124 -0.10 -0.20 -0.30 -0.40 Ratios Q3 15 Q2 15 Q310 Q111 Q311 Q112 Q31
Slide 9: Q&A
Q&A Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
Slide 10: Appendix
Appendix Swedbank @ 10
Slide 11: Swedbank – a low-risk bank with strong capital base
This is Swedbank Swedbank – a low-risk bank with strong capital base • Low risk – a Board of Directors’ strategic priority – ensures access to funding markets and low funding costs • Retail profile and four home markets a key feature – 86% of total loans originated in Sweden - Swedish mortgages acco
Slide 12: Swedbank – strong and stable earnings capacity
This is Swedbank Swedbank – strong and stable earnings 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 13: Swedbank – market leading cost efficiency
This is Swedbank Swedbank – market leading cost efficiency • Best in-class cost efficiency – an executive management strategic priority • Strong dedication from executive management on cost and change management − Integrated in corporate culture − Focus on straight-through-processing − Evolving hous
Slide 14: Capital: Reduced REA
Capital Reduced REA SEKbn Risk exposure amount • REA net decrease of SEK 2.6bn − Lower market risk 415 413 411 − FX fluctuations impact negatively 409 406.8 -3.3 407 0.2 4.5 -1.9 0.0 405 1.0 404.2 -3.1 403 401 399 397 395 Q2 2015 Exposure Rating LGD Other credit CVA risk Market risk Operational Q3 2
Slide 15: Asset quality: Shipping and Offshore
Asset quality Shipping and Offshore • Lending totalled SEK 28.3bn Shipping and Offshore Loans net, SEKm – Market activity slowed down compared SEKm 9 000 to Q1 15 and Q4 14 8 000 7 000 – Decreased origination 6 000 5 000 • Individual client action plans in place 4 000 3 000 2 000 • Clients now adapt
Slide 16: Liquidity and funding: Conservative funding position
Liquidity and funding Conservative funding position • LCR 135% (Swedish FSA definition FFFS 2012:6) • NSFR 104% (Basel committee) • Issued SEK 188bn of term funding YTD 2015 • Increased funding need to support loan growth Term funding issuance – completed and planned Prefunded for more than 12 month
Slide 17: Long-term funding maturity profile
Liquidity and funding Long-term funding maturity profile Benchmark transactions YTD 2015 ● USD 750m, Perp. NC5 (2020), AT1, 5.50% - equity conversion ● SEK 3bn, Senior 5Y (2020), Fixed/FRN, 3m Stibor + 50bp ● USD 1bn 144a Senior, 5Y (2020), T+77bp (+ USD 400m 3Y (2018) T+65bp) ● USD 1bn, RegS. CB 5Y
Slide 18: Real estate prices – Sweden 12 months development
Swedish housing and mortgage market Real estate prices – Sweden 12 months development Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Oct 14 8% 15% 11% Nov 14 13% 15% 14% Dec 14 15% 15% 15% Jan 15 11% 15% 12% Feb 15 12% 17% 14% Mar 15 13% 19% 15% House price index, Sweden3 220
Slide 19: Baltic real estate prices
1 000 1 200 1 400 1 600 1 800 0 1 000 1 200 1 400 1 600 1 800 0 200 400 600 800 200 400 600 800 Jun-05 Jun-05 Dec-05 Dec-05 Jun-06 Jun-06 Dec-06 Dec-06 Jun-07 Jun-07 EUR/m2 /No. of transactions EUR/m2 /No. of transactions Dec-07 Dec-07 Source: Swedbank 30 Jun 2015 Jun-08 Jun-08 Dec-08 Dec-08 Real es