Swedbank s second quarter 2013 results. Michael Wolf, CEO Göran Bronner, CFO Håkan Berg, CRO

Transcription

1 Swedbank s second quarter 213 results Michael Wolf, CEO Göran Bronner, CFO Håkan Berg, CRO

2 Retail Stable results continue SEKm Q2 12 Q1 13 Q2 13 Q/Q Y/Y Net interest income Net commissions Total income Total expenses Profit before impairments Impairments Stable NII Stable deposit and lending margins New lending mortgage margins 1-15bp below stock margins Increased new mortgage lending market share Solid asset quality ROE, % C/I ratio

3 Large Corporates & Institutions Continued improved market position SEKm Q2 12 Q1 13 Q2 13 Q/Q Y/Y Net interest income Net commissions Total income Expenses excl variable staff costs Variable staff costs Profit before impairments Impairments ROE, % C/I ratio Improved NII Increased volumes and margins Stronger commission income Higher corporate finance fees in Norway Higher quality profit Costs under control Impairments SEK 56m related to IT systems 3

4 Baltic Banking Focus on efficiency and risk adjusted returns SEKm Q2 12 Q1 13 Q2 13 Q/Q Y/Y Net interest income Net commissions Total income Total expenses Profit before impairments Impairments ROE, % C/I ratio Stable NII Intensified focus on repricing Stronger commission income Increased customer activity Increased income from fund management Continued recoveries Latvia approved for euro 4

5 Group results Stable earnings SEKm Q2 12 Q1 13 Q2 13 Q/Q Y/Y Net interest income Net commission income Net gains and losses Total income Total expenses Profit before impairments Credit impairments Other impairments Tax Profit from continuing ops ROE continuing operations, % C/I ratio CET 1 ratio, % (Basel 3) Stable NII Stable deposit margins Lower margins new mortgage lending Stronger commission income NGL impacted by buy-backs and valuation effects Stable expenses Continued good asset quality Increased Other impairments 5

6 Capital Excess capital building 15,4% Changes B3 CET1 ratio Q1-Q2.2%.1%.1%.1% 17.2%.3% 16,4% IRB Advanced On schedule % CET 1 ratio Waiting for regulatory clarity Resolution regime CRD IV implementation Q4 212 Q1 213 Profit (cont. operations) IAS 19 Other CET1 RWA Changes B3 effects Q2 213 Leverage ratio/corporate risk weights? 6

7 Continued strong credit quality Credit impairments, SEKm Q2 12 Q1 13 Q2 13 Retail Large Corporates & Institutions Baltic Banking Estonia Latvia Continued high asset quality in Sweden Slower net recoveries in Baltic Banking Lithuania Swedbank Group SEKbn 35 3,7 3 Impaired loans ,1 5 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Q2 13* * Russia and Ukraine reported as discontinued operations. 7

8 213 ICAAP Swedbank Group resilience confirmed In 213 ICAAP, Swedbank s CET 1 ratio strengthened throughout the scenario period, despite a scenario with a sharp contraction followed by an extended downturn with slow recovery. The stress test in Swedish Riksbank s latest stability report concludes that Swedbank is the only Swedish bank with a positive result in the scenario period. 8

9 Swedbank s second quarter 213 results Q & A

10 Appendix

11 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Loans past due 6 days performance Q/Q EURm 5 Estonia Latvia Lithuania

12 Provisions well provided for SEKm 25 Provision ratio, % Q Retail 7 LC&I % 64% 65% % % 54% Baltic Banking 52 Group Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Q2 13* Individual provisions Portfolio provisions Provision ratio * Russia and Ukraine reported as discontinued operations 12

13 Credit portfolio - Retail Corporate portfolio drives capital efficiency Total portfolio SEK 221bn Swedbank Mortgage AB Swedbank Finans AB Other Segments excl. Swedbank Mortgage and Swedbank Finance Volume (SEKbn) Secured (%) Agriculture Manufacturing Public sector and utilities Construction Retail Transportation Shipping.1 95 Hotels and restaurants Information & communication Finance and insurance Property management Professional service Other Total

14 Credit portfolio Large Corporates & Institutions Shipping and offshore Exposure to Shipping & Offshore sector was SEK 26bn plus unutilised commitments of SEK 8bn. Portfolio duration 4-5y Average fleet age 7y Strong employment profiles SEKbn Shipping and Offshore 3.5% % Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Offshore Tanker Other Shipping and Offshore portfolio by subsegment Shipping and offshore portfolio by currency RORO 2,1 Container Dry bulk Gas (LNG/LPG) Crude oil Product Chemical Floating production Accommodation Supply Oil service Drilling & exploration Cruise 1,1,8 2,1 Q2-13,5 2,4 Q1-13,5 2,1 1,3 4,2 1,6 7,1, JPY NOK USD EUR SEK Q2-13 Q

15 Credit portfolio Agriculture Private: Residential 2% Corporate: Agriculture 45% Segmentation definitions Corporate Agriculture: Businesses that derive their main income from Agricultural activities Private Investments: Private individuals who own agricultural properties for living or investment purposes Private: Forestry 22% Corporate: Forestry 13% Lending exposure to Agriculture SEK 63.8bn Corporate Agriculture: (58%) Agriculture 45% Forestry 13% Private Investments (42%) Residential: 2% Forestry: 22% 15

16 Liquidity and funding Core balance sheet* structure SEKbn Assets Estonia SEKbn Liabilities Suppl. cap CET1 Government guaranteed debt Senior CEE lending 1 Other corporate lending, Sweden & other Nordic countries 1 Deposits 8 Other private, Sweden Swedish mortgage loans 4 Covered bonds 2 2 Q2 213 Q2 213 * Simplified balance sheet 16

17 Over-collateralisation Liquidity and funding Senior unsecured debt strategy Limited need given Swedbank s balance sheet structure Secure OC Fund liquidity reserves Senior unsecured debt maturity profile House price sensitivity of the cover pool SEKbn* 6 Senior unsecured debt 5% 4% OC, Q % 2% 2 1% % *Nominal amounts -1% % -5% -1% -15% -2% -25% -3% -35% -4% -45% -5% House price drop 17

18 Liquidity and funding Lower funding needs LCR 129% (Swedish FSA definition FFFS 212:6) NSFR 95% Term funding issuance completed and planned SEKbn* Covered bonds Senior unsecured *Nominal amounts 18

19 Liquidity and funding Conservative funding plan Issued SEK 68bn of term-funding YTD of which SEK 29bn in Q2 Term funding plan in 213 of SEK 12bn, full-year maturities of SEK 86bn SEKm 7 Long-term debt issued SEKm 8 Outstanding short-term debt FY 212 Q1 13 Q Q4 12 Q1 13 Q Domestic CB Euro CB USD CB (144A) Other CB Senior unsecured Domestic CP ECP/CD USCP Yankee CD French CD Finnish CD *Nominal amounts 19

20 Liquidity and funding Long-term funding maturity profile FY 213 maturities amount to nominal SEK 86bn, of which SEK 12bn remain Long-term funding maturity profile SEKbn 2 15 Government guaranteed debt Senior unsecured debt Covered bonds

21 Liquidity and funding Liquidity reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks Deposits in other banks available overnight 351 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks Securities issued or guaranteed by municipalities or public sector entities 397 Covered bonds Issued by other institutions Own issued Securities issued by non-financial corporates Securities issued by financial corporates (excl. covered bonds) 2 45 Other Total Additional liquid assets, Group 2, % of the securities in the liquidity reserve per Q2 213 are rated AAA 2 84% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers Association except from that they are held outside the Treasury department. 3 82% of the additional assets are rated AAA 21

22 Liquidity and funding Prolonged survival horizon SEKbn Days forward 22

23 Liquidity and funding Limited need for USD-funding USD-funding need covered for more than 12 months Issued USD 1bn of covered bonds (144a) and USD 1bn of senior (144a) YTD 213 SEKbn 3 Assets held for sale 25 Interest-bearing securities 2 Lending to the public Loans to credit institutions Cash and balances with central banks Deposits and borrowings from the public Amounts owed to credit institutions Debt securities in issue Assets Liabilities 23

24 Liquidity and funding Conservative liquidity levels Short-term funding mainly a tool for cash management More than 12 months pre-funded SEKbn Additional pledgeable and/or liquid assets 3 25 Liquidity reserve, securities Liquidity reserve, central bank deposits, SEKm Next 12-month term funding maturities CP / CDs and net interbank funding, SEKm 1 As defined by the Swedish Bankers Association 24

25 Liquidity and funding Asset encumbrance Encumbered assets - distribution by type of liability (row ) and asset (column) Government Central banks and supranational Debt instruments issued by Securities issued by debt debt Covered credit corporate and SEKm instruments instruments bonds institutions other issuers ABS Mortgage loans Cash Total of w hich received collateral (offbalance) Central bank funding Intraday settlement Repurchase agreements 1) Derivative 2) Covered bonds 3) Retained covered bonds issued Other 4) Total Financial assets pledged for insurance policy holders Unencumbered assets - additional assets available for secured funding Central banks and SEKm Government debt instruments supranational debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total of w hich received collateral (offbalance) Securities 5, 6) Cover pool over collateralisation 7) Cover pool eligible assets 8) Total ) Repoed securities. 2) Collateral posted under CSA agreements, gross (3-year, SEKm, High: , Low : 11 54, Average: ). 3) Of w hich accrued interest of assets in the cover pool, SEK 2 133m as of 3 June ) Collateral pledged in securities lending activities and w ith exchanges. 5) Reversed repos are included. 6) All type of securities, including securities non pledgeable at central banks, of w hich 8% are rated AAA, 1% are rated below A- and 8% are not rated. 7) Of w hich accrued interest of assets in the cover pool overcollateralisation, SEK 987m as of 3 June ) Securities received as collateral in for example reversed repo transactions that; either have (encumbered) or have not (unencumbered), been used as collateral by Sw edbank. 25

26 Swedish housing and mortgage market Swedish mortgage market No securitisation (on balance sheet), no sub-prime market, no 3 rd party origination, insignificant buy-to-let market 7% home ownership 1 Rental market is regulated Transparent credit information (credit information agency, Publicly available information regarding income, debt, payment track record etc Consumer credit legislation requires affordability calculations including stress test of higher interest rate Very limited debt forgiveness possibilities (full recourse) Strong social security and generous unemployment benefit system 1 Source: Boverket,

27 Swedish housing and mortgage market Real estate prices Sweden 12 months development Single-family homes 1 Tenant-owner rights 2 Combined 3 12M Δ 12M Δ 12M Δ Jul/12 % 4% 1% Aug/12 2% 4% 3% Sep/12 2% 5% 3% Oct/12 1% 6% 3% Nov/12 3% 7% 4% Dec/12 4% 7% 6% Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5% Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 1% 6% Source: Valuegard (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE 27

28 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Real estate prices Baltic countries Tallinn Riga 2 2 Nr.of deals EUR/m2 Nr.of deals EUR/m2 Source: Swedbank, Estonian Land Board 1 8 Vilnius Source: Land book database Nr.of deals EUR/m2 Source: Swedbank. State Enterprise Centre of Registers 28

29 Mortgage loans, gross margin (3 months) % Net margin 3 2 The gross margin covers: Cost of liquidity ~.2% Administrative costs ~.3% Credit impairments ~.3% Tax (22 % on profit before tax) Gross margin Swedbank's funding cost Stibor 3 months Swedish Riksbank's repo rate 29