Interim report Q August, 2007 Jan Lidén CEO and President

Transcription

1 Interim report Q August, 27 Jan Lidén CEO and President

2 Summary Q2 27 (Q1 27) Continued improved results: SEK 3,112m (2,91 in Q1 27) Earnings per share increased 7% compared with Q1 27 Net interest income was up for the fifth consecutive quarter For the first half year, earnings per share rose 19 percent Swedish Banking: SEK 1,484m (1,632) Continued strong volume growth in both lending and deposits Lending margins under pressure Higher costs partly driven by one-off investments Baltic Banking: SEK 1,18m (995) Yet another record result Good development across the board Continued slowdown of credit growth, although the overheating risks in the economies persist Swedbank Markets: SEK 236m (313) Continued positive business volume development Equities and corporate finance had a good quarter, while profits in fixed income decreased TAS-Kommerzbank acquisition completed July 9th. (2)

3 Strong position for profitability and growth Sweden Swedbank is the leading bank in Sweden. Profitability is high and stable and the bank is gaining market share in important segments such as retail mortgages and deposits.. Baltics The Baltic economies are experiencing strong economic growth that is expected to remain for many years. As the largest bank in the region, growing with the market ensures Swedbank an attractive earnings growth. Russia and Ukraine Swedbank has a small but growing presence in Russia and Ukraine. Long term, a significant share of Swedbank s growth will be generated in these markets. Stable base Growth and experience Future growth and profitability (3)

4 Profit trend, Group SEKm 3,2 3, 2,8 2,6 2,4 2,2 2, 1,8 Q1- Q2- Q3- Q4- Q1-7 Q2-7 Net profit (4)

5 Business volumes, savings SEKbn Growth Q2-7, SEKbn SEKbn Balance, June Deposits, Sweden 3 Deposits, Baltics AM funds, Group Deposits, Sweden Deposits, Baltics AM funds, Group (5)

6 Business volumes, lending 5 4 SEKbn Growth Q2-7, SEKbn SEKbn Balance, June 27 1, 1, Lending, Group Private, Sweden Corporate, Sweden 6 5 Private, Baltics Corporate, Baltics 4 2 Lending, Group 449 Private, Sweden 362 Corporate, Sweden 66 Private, Baltics 95 Corporate, Baltics (6)

7 Margins % Lending Q1- Q2- Q3- Q4- Q1-7 Q2-7 % Q1- Q2- Deposits Q3- Q4- Q1-7 Q2-7 Market interest rates increased substantially during the quarter. Margins expected to decrease during Q3 due to market rates falling back Lending margin in Baltic Banking increased by 5 bps during Q2 Estonia Lithuania Latvia Sweden Estonia Lithuania Latvia Sweden (7)

8 Swedish Banking 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 SEKm % Q1 Q2 Q3 Q4 Q1 7 Q2 7 Income Costs C/I-ratio Continued strong volume growth Lending margin pressure in all segments Higher asset management- and payment volumes boosts commission income Switch-over costs due to change in suppliers of cash handling and non-life insurance Staff costs affected by periodization effects Swedbank s market share of the households total net new savings increased to 17 percent during the first 6 months (16). (8)

9 Mutual funds improved product offering and third party distribution introduced Improved product offering Launch of Fund-supermarket on 12 June 2-25 funds from approx. 2 external fund managers will be offered at year end Improved internet based service with, such as web television and editorial material from private economy experts New distribution channels Three major Swedish internet players will distribute Robur funds. (9)

10 Baltic Banking 2,4 2,2 2, 1,8 1,6 1,4 1,2 1, SEKm % Q1 Q2 Q3 Q4 Q1 7 Q2 7 Income Costs C/I-ratio Another all time high quarter Earnings grew 19 percent to SEK 1,18m (995) Cost/income ratio was.4 Continued credit growth slow-down but overheating risk still persists Anti inflation plans implemented in Latvia Signs of soft landing in Estonia Good growth of savings volumes Staff increase to meet demand of personal service, partly temporarily summer staff Credit quality still very good. (1)

11 Decreasing Baltic lending growth 8, Hansabank, Estonia 7, 6, 5, 4, 3, 2, 1, 6% 5% 4% 3% 2% 1% % 6, Hansabank, Latvia 5, 4, 3, 2, 1, 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % (11) 5/Mar 5/Jun 5/Sep 5/Dec /Mar /Jun /Sep /Dec 7/Mar 7/Jun 5/Mar 5/Jun 5/Sep 5/Dec /Mar /Jun /Sep /Dec 7/Mar 7/Jun 5, Hansabank, Lithuania 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 7% 6% 5% 4% 3% 2% 1% % 2, Baltic Banking 18, 16, 14, 12, 1, 8, 6, 4, 2, 7% 6% 5% 4% 3% 2% 1% % 5/Mar 5/Jun 5/Sep 5/Dec /Mar /Jun /Sep /Dec 7/Mar 7/Jun 5/Mar 5/Jun 5/Sep 5/Dec /Mar /Jun /Sep /Dec 7/Mar 7/Jun Total lending, EURm YoY growth

12 Baltic Banking, market shares Estonia Latvia Lithuania Balance, % May, 27 Dec, 2 May, 27 Dec, 2 May, 27 Dec, 2 Deposits, households Mortgage lending, households Consumer/bank lending Deposits, SME/corporate Lending, corporate Pension II (12)

13 Swedbank Markets SEKm Q3 5 Q4 5 Q1 Q2 Q3 Q4 Q1 7 Q2 7 H1 H Continued good volume growth in both Sweden and Norway Positive development in structured products, equities, FX and corporate finance Weaker fixed income operations in Sweden and Norway compared with previous strong quarter Shanghai office upgraded to full-service branch Improved net profit for the first half year. Net profit, quarterly (left scale) Net profit, 6-months (right scale) (13)

14 TAS-Kommerzbank Acquisition of TAS-Kommerzbank was completed July 9th Will be consolidated as of July 1st Norway Sweden Finland New business area report as of Q3 27 Pro-forma numbers will be available ahead of Q3-report. Denmark Estonia Latvia Lithuania Russia Ukraine Q1 Q2 Q3 Q4 Q1 7 Q2 7 Number of employees 1,971 2,41 2,1 2,167 2,73 3,73 Number of branches Total lending, (SEKm) 3,847 4,639 5,215 5,557 6,454 7,812 Total deposits, (SEKm) 3,241 3,577 4,313 4,54 4,847 4,628 Total number of customers 59,137 66,383 79,16 14, , ,21 of which private 5,453 57,76 69,281 89,62 17, ,51 of which corporate 8,684 9,37 9,879 14,834 15,81 16,79 (14)

15 Russia Name change to OAO Swedbank (from OAO Hansabank) Audit by the Russian central bank during March and April Shortcomings in observance of local regulations Russian central bank has restricted the operations for three months until 6 September Swedbank has produced an action plan that is now being implemented Planned expansion of Russian retail operations delayed. (15)

16 Low risk in lending portfolio Group lending by collateral RWAs decrease under Basel II Other properties 15% Covenants, unsecured 8% Chattel mortgages 1% Personal guarantee 2% Municipalities and county councils 5% SEKbn Other collateral 9% Residential properties incl. condominiums 6% 1 RWAs according to old framwork, June 27 RWAs according to Basel II, June 27 Risk weight assets (16)

17 Group results Mikael Inglander CFO (17)

18 Income statement, Group Q2 27 Q1 27 % Q2 2 % SEKm Net interest income 4,591 4,51 2 4,29 14 Net commission income 2,552 2, ,353 8 Net gains/losses on financial items at fair value Other income Total income 8,226 7, ,578 9 Staff costs 2,16 1, , Profit-based staff costs Other expenses 1,699 1, ,699 Total expenses 4,124 3, ,92 6 Profit before loan losses 4,12 3, , Loan losses Operating profit 4, 3,87 5 3,792 5 Tax Profit for the period 3,144 2, ,854 1 Attributable to Swedbank's shareholders 3,112 2,91 7 2, (18)

19 Net interest income, by business area SEKm Q2 27 Q1 27 % Q2 2 % Swedish Banking 2,99 2,95 1 2,85 2 Baltic Banking Operations 1,496 1, Baltic Banking Investment Swedbank Markets Asset Management and Insurance Shared Services and New Operations Eliminations 6 8 Total net interest income 4,591 4,51 2 4,29 14 (19)

20 Net interest income Swedish Banking, change Q2 27 vs Q1 27 Q2 27 vs Q2 2 SEKm Net interest income Q1 27 2,95 Net interest income Q2 2 2,85 Changes: Higher lending volumes Decreased lending margins Difference in number of days/quarter, lending 19 Higher deposit volumes 2 97 Higher deposit margins Difference in number of days/quarter, deposits 1 Other changes Total change Net interest income Q2 27 2,99 2,99 (2)

21 Baltic Banking, change in net interest income Q2 27 vs Q1 27 Q2 27 vs Q2 2 SEKm Net interest income Q1 27 1,324 Net interest income Q Changes: Higher lending volumes Decreased lending margins 8 Increased lending margins 21 Difference in number of days/quarter, lending 11 FX-effects, lending 7 2 Higher deposit volumes 21 6 Higher deposit margins Difference in number of days/quarter, deposits 6 FX-effects, deposits 4 1 Other changes Total change Net interest income Q2 27 1,496 1,496 (21)

22 Net commission income, Group 1,3 1, Q1 2 Q2 2 Q3 2 Q4 2 Q1 27 Q2 27 (22) Asset management Payments Brokerage Lending Insurance Corporate finance Other SEKm

23 Expenses SEKm Q2 27 Q1 27 % Q2 2 % Swedish Banking 2,353 2,24 7 2,21 7 Baltic Banking Swedbank Markets Other business areas Total expenses 4,124 3, ,92 6 of which staff costs in: Swedish Banking 1,98 1,36 6 1,46 5 Baltic Banking Swedbank Markets (23)

24 Loan losses, Group SEKm % Credit quality still excellent on all markets Increase in reported loan losses, but from very low levels Q1-3 Q2-3 Q3-3 Q4-3 Q1-4 Q2-4 Q3-4 Q4-4 Q1-5 Q2-5 Q3-5 Q4-5 Q1- Q2- Q3- Q4- Q1-7 Q Impaired loans stable Group s low risk profile confirmed by Basel II, which indicates a reduction of RWAs of approx. 3 percent. Loan losses Loan loss level (24)

25 Credit quality, Baltic Banking 1,5% Impaired loans/loan portfolio (12-month old) 1,2%,9%,6%,3%,% 1,5% Q1 5 Q2 5 Q3 5 Q4 5 Q1 Q2 Q3 Q4 Q1 7 Q2 7 Est Lat Lit Loan loss level 1,%,5%,% -,5% Q1 5 Q2 5 Q3 5 Q4 5 Q1 Q2 Q3 Q4 Q1 7 Q2 7 Est Lat Lit Baltic Banking (25)

26 Business areas, summary Swedish Banking Baltic Banking Swedbank Markets Asset Mgmt H1-7 vs H1, SEKm H1-7 % H1-7 % H1-7 % H1-7 % Net interest income 5, , Net commission income 2, Other income Total income 8, , , , 2 Staff costs 2, , Other expenses 2, Total expenses 4, , , Profit before loan losses 4, , Loan losses Operating profit 4, , Net shareholders' profit 3, , Return on allocated equity, % (26)

27 Key figures Jan - Jun, 27 Jan - Jun, 2 Return on equity, % Earnings per share, SEK Equity per share, SEK C/I ratio before loan losses.5.53 Loan loss ratio, net, %.3.2 Share of impaired loans, %.8.9 Provision ratio for impaired loans, % Tier 1 capital ratio, % Capital adequacy ratio, % (27)

28 All business areas improved their results for the first six months 27 Continued increase of Group results, up 19 percent to SEK 6,22m (5,56 first 6 months 2) Group cost/income ratio amounted to.5 Strong development of business volumes Continued very good credit quality on all markets. (28)