Slide 1: Swedbank's second quarter 2018 results
Swedbank’s second quarter 2018 results Anders Karlsson (CFO), Helo Meigas (CRO) © Swedbank Information class Public
Slide 2: Group financial highlights
Group financial highlights 12 Total income, SEKbn Strong loan volume growth TOTAL Higher commission income from cards INCOME SEK 11.8bn 8 4 and asset management 0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 One-off capital gain of SEK 677m (UC) Total expenses, SEKbn 6 TOTAL In line with full yea
Slide 3: Stable net interest income
Group result Stable net interest income NII, SEKm • Strong loan volume growth 134 56 • Slightly lower margins 28 6 294 6 273 -48 -64 -127 • Higher resolution fund fee • One more day in the quarter • Positive FX effect • Less favorable USD funding market Q1 2018 Loan Margins Resolution Day count FX T
Slide 4: Strong net commission income
Group result Strong net commission income NCI, SEKm • Seasonally higher cards income 31 • Asset management income 65 3 236 110 -18 -33 supported by strong mutual fund 3 081 inflows and positive asset value development Q1 2018 Cards Asset Lending & Payments Other Q2 2018 management guarantees © Swedb
Slide 5: Sale of UC generated one-off capital gain
Group results Sale of UC generated one-off capital gain NGL, SEKm • Overall lower trading activity due to 567 635 political uncertainty 559 525 • Continued good client FX and 356 interest rate swap activity • Improved result in Group Treasury Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 due to FX swap va
Slide 6: Strong profitability supported by high customer activity
Group results Strong profitability supported by high customer activity SEKm Q2 18 Q1 18 ▲QoQ • Continued solid mortgage loan Net interest income 6 273 6 294 -21 volume growth Net commission income 155 3 236 3 081 • Corporate loan growth Net gains and losses 635 559 76 Other income 1 653 806 847 • Re
Slide 7: Solid volume growth
Solid volume growth +10bn Swedish mortgage loans +16bn +8bn Private Private +4 4 Loans Deposits Baltic Banking Corporate +4 4 +15bn +35bn Of which FX +3 3 +31bn* +15bn Corporate Corporate excl. Baltic Banking Property mgmt. +6 6 Of which FX +4 Prof. services +33 Finance and ins. +2 +2bn 2 Other +44
Slide 8: Strong profitability supported by high customer activity
Group results Strong profitability supported by high customer activity SEKm Q2 18 Q1 18 ▲QoQ • Continued solid mortgage loan Net interest income 6 273 6 294 -21 volume growth Net commission income 155 3 236 3 081 • Corporate loan growth Net gains and losses 635 559 76 Other income 1 653 806 847 • Re
Slide 9: Strong capitalisation – no excess capital
Capital Strong capitalisation – no excess capital CET1 capital ratio, % • CET1 capital increased by SEK 0.5bn 24.6% 23.9% 24.6% 24.8% 23.6% 21.7% – Positive effect from net profit of SEK 1.2bn excl. dividend – Negative effect from IAS19 of SEK 0.8bn • REA increased by SEK 23.7bn Q2 2017 Q3 2017 Q4 2
Slide 10: Increased Risk Exposure Amount (REA)
Capital Increased Risk Exposure Amount (REA) REA, SEKbn 1.3 0.1 3.0 434.5 • REA increased by SEK 23.7bn 19.3 410.8 – Loan volumes increased REA by 17.4bn – FX SEK 2.9bn Q1 2018 Credit risk Market risk CVA risk Other Q2 2018 © Swedbank Information class Q2 2018 Public 10
Slide 11: Solid asset quality
Group Solid asset quality Credit impairments, SEKm Q2 18 Q1 18 ▲QoQ • Resilient asset quality in all Swedish Banking 84 253 -169 Baltic Banking -87 -26 -61 business segments Large Corporates & Institutions -126 -100 -26 • Recoveries in Baltic Banking and Swedbank Group -135 127 -262 LC&I Ratios Q1 1
Slide 12: Appendix
Appendix © Swedbank Information class Public
Slide 13: Strong profitability supported by high customer activity
Group results Strong profitability supported by high customer activity SEKm Q2 18 Q1 18 ▲QoQ Q2 17 ▲YoY Net interest income 6 273 6 294 -21 6 090 183 Net commission income 3 236 3 081 155 3 050 186 Net gains and losses 635 559 76 567 68 Other income 1 653 806 847 686 967 Total income 11 797 10 740 1
Slide 14: Swedbank has a low-risk residential property portfolio
Swedish Swedbank has a low-risk residential property housing and mortgage portfolio market Real estate lending, net loans in Sweden, SEKbn1) 1 102 • Swedbank has pursued a low risk • Private mortgages: SEK 781bn, average strategy by tightening origination LTV 56% standards, and prioritising price an
Slide 15: Residential property developers - low exposure
Swedish Residential property developers - low exposure housing and mortgage market • Total loan portfolio of SEK 18bn, mainly to the larger listed construction firms, with which Swedbank has long-term relations – SEK 12bn of the loans are related to tenant-owner rights projects – SEK 6bn of the loan
Slide 16: 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) – Around 86%
Slide 17: 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 18: 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 Total expenses, SEKbn 20 Acquisition one-off • Executive management strongly focused on cost and change management 18 – Integrated in corporate culture 16 – Focus
Slide 19: Focus on sustainable business
Focus on sustainable business Improved sustainability scores Swedbank Robur launches unique SDG equity fund Swedbank Robur’s new sustainability equity fund, Global Impact, invests in companies Dow Jones that through their products, services and activities, contribute to reaching the UN’s SDGs. The f
Slide 20: Swedbank creates value
Swedbank creates value Strategy % SEK Return on Equity 30 14 >15% target 25 12 20 10 19.2% (17.2% excl. one-off) 8 15 Common Equity Tier 1 ratio 6 10 One of the highest among European banks 4 5 2 23.6% 0 0 2013 2014 2015 2016 2017 Q2 2018 Dividend per share Return on Equity (LHS) CET1 capital ratio
Slide 21: Conservative funding position
Conservative funding position Liquidity and funding • LCR 145% (EU 2015/61) • NSFR 110% (Basel committee) • Issued around SEK 83bn YTD Q2 2018 (in addition, SEK 3bn in Tier 2 private placements) • Plan to issue around SEK 145bn in 2018 Term funding issuance – completed and planned SEKbn Prefunded fo
Slide 22: 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 23: 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 Jul 17 10% 9% 9% Aug 17 10% 8% 9% Sep 17 8% 4% 7% Oct 17 4% 1% 3% Nov 17 1% -3% 0% House price index, Sweden 2005=100 Dec 17 0% -6% -2% 350 Total