Investor Presentation. Result presentation. January September 2010

Transcription

1 Investor Presentation Result presentation January September 2010

2 Highlights Income Seasonally slow quarter supported by diversified earnings Further improved asset quality Baltics back in black Profit SEB Baltic Underlying operating profit Underlying operating profit up 35 per cent SEK 3.6bn 2

3 Profit and loss trend Profit and loss development (SEK bn) Operating income Operating expenses Net credit losses -0.2 Operating profit (SEK bn) Q4-08 Q1-09 Q Q4-09 Q1-10 Q Note: Shaded areas refer to gain on buy-back of subordinated debt, acquisition goodwill write-offs and restructuring costs, respectively 3

4 Income statement 2010 Profit and loss (SEK m) -10 Q2-10 % Total operating income 8,882 9,224-4 Total operating expenses -5,476-5,907-7 Profit bef credit losses & restr. 3,406 3,317 3 Restructuring costs -755 Profit before credit losses 2,651 3, Net credit losses etc Operating profit 2,847 2,675 6 Operating income by type, vs. Q2 (SEK bn) % 9% 9% 8% 10% % Q Q Q Q Net interest Net fee and Net financial Net life insurance income commissions income income 4

5 Net interest and Net fee and commission income SEB Group, SEK m 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Net interest income Net fee and commissions 0 Q1-06 Q Q4-06 Q1-07 Q Q4-07 Q1-08 Q Q4-08 Q1-09 Q Q4-09 Q1-10 Q

6 Net interest income development NII (SEK bn) Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q NII by income type (SEK bn) * Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Lending Deposits Funding & other * of which SEK 0.1bn hedging German divestment 6

7 Net interest income analysis SEB Group, SEK m Jan-Sep 2010 vs. Jan-Sep vs. Q vs Jan-Sep ,714 Q , ,197 Lending margin 409 Lending margin 71 Lending margin 62 Lending volume -539 Lending volume -41 Lending volume -112 Deposit margin -1,351 Deposit margin 46 Deposit margin -234 Deposit volume -139 Deposit volume 8 Deposit volume -9 Funding & other -1,610 Funding & other 334 Funding & other 276 Jan-Sep , , ,180 7

8 Commission income development Fees & commissions (SEK bn) Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q Fees & commissions by income type (SEK bn, gross) Q1-08 Q1-09 Q1-10 Q1-08 New issues & advisory Q1-09 Q1-10 Q1-08 Secondary markets & advisory Q1-09 Q1-10 Custody & mutual funds Q1-08 Q1-09 Q1-10 Payments, cards, lending, deposits & guarantees 8

9 Cost development Operating expenses 1 (SEK bn) +1% 16,834 17,014 Number of FTEs 2 IT & Admin 17,655 17,331 16,986 17,059 17,133 Staff cost Jan-Sep 2009 Jan-Sep Q4 Q1-10 Q2 1) Excluding goodwill write-offs and restructuring costs 2) Continuing business 9

10 Divisional performance Operating profit -10 vs. Q2-10 (SEK m) 2,491 GTS 2,002 Corp TCM Cards Retail Merchant Banking Retail Banking Wealth Management Life Baltic Q RoBE YTD 22% 18% 20% 33% Neg. 10

11 Nordic corporate activity picking up Nordic Syndicated Corporate Loans Bookrunner (YTD) SEB Nordea 14.2% 22.2% Adviser and sole financing arranger on NOK 1bn merger Sole lender on ~SEK 1.6bn acq. facilities HL Display and Stofa Credit Agricole 12.9% DnB NOR Danske Markets Source: Dealogic 9.5% 11.9% Bookrunner and adviser on USD 2.1bn acq. of Intergraph Lead arranger and adviser on SEK 4.4bn acq. of Aleris 11

12 SEB well positioned in the Nordics Best bank in the Nordic & Baltic region for real estate products Best Danish equity research firm Refinancing of Nordic corporate loans (SEK bn) No.1 in securities lending Business bank of the year Sweden Norway Denmark Finland Source: Dealogic Swedish corporate lending growth vs. economic sentiment Corporate lending growth, y-o-y % - lagged by 12 months (LHS) Economic sentiment (RHS)

13 Trading & Capital Markets Diversified earnings, client driven activities FX Equities Capital Markets SD and Other TCM 8% 11% 7% 5% 6% 22% 15% 11% 8% 8% 3% 6% 12% 44% 44% 46% 59% 50% 45% 46% 26% 28% 33% 38% 41% 36% 44% 21% 19% 63% 3% 8% 30% 34% 6% 7% 6% 21% 34% 24% 22% 28% 22% 30% 30% 46% 34% 38% 41% 36% 4% 29% 29% 38% 4% 32% 28% 36% Q1-07 Q2 Q4 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 Low risk trading orientation Daily trading income negative out of 963 trading days. Average loss SEK 15m Dec- 06 Mar- 07 Jun- 07 Sep- 07 Dec- 07 Mar- 08 Jun- 08 Sep- 08 Dec- 08 Mar- 09 Jun- 09 Sep- 09 Dec- 09 Mar- 10 Jun- 10 Sep- 10 * Excluding Investment Portfolio 13

14 Focus on savings New savings account 1.96% from 23 November Leading in unit-linked Market shares (%) Lithuania Latvia Estonia Denmark Sweden % 50% 100% SEB rank #1 #2 #3 #3 #2 Rising net sales in WM Total net sales per quarter (SEK bn) Q SEB market share Competitors Institutional Clients Private Banking Notes: Unit-linked market shares as of Q2 2010; Sweden based on premium income unit-linked 12 months to June 2010; Denmark unit-linked insurance in competitive markets; Latvia latest information from Q

15 Development of credit portfolio SEK bn Asset Quality Credit exposure - on & off balance 0 Dec '06 Sep '07 Jun '08 Mar '09 Dec '09 Sep '10 Sector Sep/Jun Corporates -1.3% fx-adjusted 4.0% Households Prop Mgmt Banks Public Admin -1.0% -1.5% 3.0% -6.1% 485 SEB Group - Corporates Dec '06 Dec '07 Dec '08 Dec '09 Mar '10 Jun '10 Sep '10 "Nordic" - Larger Germany - Larger Baltic "Nordic" - Retail Other Total Dec '09 Jun '10 Sep '10 Corporates Property Management Households Public Administration Total non-banks Banks Total

16 Swedish asset quality Private SEB mortgage lending (SEK bn) Corporate SEB corporate lending (SEK bn) Q4-08 Q2-09 Q4-09 Q Stricter mortgage policy 7% interest rate stress test 85% first lien cap Stricter amortisation policy Q4-08 Q2-09 Q4-09 Q Turnaround in corporate sentiment Robust domestic market Strong export trend Credit commitments +10% /Q2 Loan-to-value Share of portfolio >85% 2% Impaired loans, basis points 51-85% 22% 0-50% 76% Q4-08 Q2-09 Q4-09 Q Swedish credit loss level at 3 bps 16

17 Q2 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 Q2 '10 '10 Q4 '08 Q1 '09 Q2 '09 '09 Q4 '09 Q1 '10 '10 Development of NPLs SEK bn Non-performing loans SEK bn Individually assessed Portfolio assessed 0.4% of lending 1.2% of lending SEB total non-performing loans/lending 1.8% 7.5% of lending 18.9% of lending 15.6% of lending Nordic Germany Estonia Latvia Lithuania Total SEB NPL coverage ratio 68% Baltic NPL coverage ratio 65%

18 Net credit loss development continues to improve Credit losses Baltic region (SEK bn) Credit losses* outside Baltic region (SEK bn) 154 bps YTD 7 bps YTD Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-0.3 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2 * Continuing operations 18

19 Development of net credit losses, % Nordic countries Baltic countries 5,43 0,04 0,04 0,05 0,18 0,17 0,05 0,27 0,13 0,43 1,28 1, Jan-Sep '10 Germany incl. discontinued operations Jan-Sep '10 SEB Group 0,92 0,19 0,14 0,1 0,09 0,22 0,10 0,11 0,08 0,11 0,30 0, Jan-Sep ' Jan-Sep '10 19

20 Conservative provisioning policy Baltics - Non-performing loan and reserve development SEK bn Portfolio assessed Individually assessed 20 Specific reserves Collective reserves NPL coverage ratios % 09 Q4 09 Q1 10 Q Group 72% 65% 70% 71% 68% Baltics 68% 61% 67% 68% 65% 20

21 Baltic asset quality Net credit losses, SEK m Q Non-performing and Reserves, SEK bn 20 June 2009 December 2009 Sep % NPL coverage ratio Estonia Latvia Lithuania NPL Reserves Write-offs Solid grip on problem portfolio end of extraordinary provisioning cycle Full establishment of Real Estate Holding companies Low inventory of repossessed leasing equipment Restructuring of troubled mortgages working well 21

22 Consistently improving asset quality Flow of new problem loans Watch list loans Past dues Non-performing loans Write-offs Positive development Watch list loans decreasing Past dues are decreasing Non-performing loans decreasing Only 10 per cent of all reserves for Baltic NPLs realised 22

23 Baltic credit loss dynamics Net credit loss dynamics, SEK bn Build-up of provisions Realizing losses ? 2,6 2, ,7 1,4 0,9 0,2 0,3 0,4 0,4 Q1-08 Q2 Q4 Q1-09 Q2 Q4 Q1-10 Q2-0,3 23

24 Reasons for the rapidly falling net credit losses Austerity measures Turnaround of macro-economic situation Determination, flexibility and fighting spirit Consumers holding up better than expected Export / transit business recovering fast on back important trading partners recovery Consumer confidence recovering in residential property First Euro accession in the Baltic area a morale booster SEB s proactive work-out and provisioning 24

25 A strong balance sheet structure Sep 2010 Total assets SEK 2,254bn Balance sheet structure Short-term and liquid assets Cash & Lending Financial Institutions Net other trading Net bond portfolio Deposits Financial Institutions Funding <1 year Short-term funding Household lending Funding, remaining maturity >1 year Banking book Other lending Deposits from the public Stable funding Equity Assets Equity & Liabilities 25

26 Deposits from the general public excluding repos Corporate deposits > +80% in six years MSEK 900, , , , , , , , ,000 Public sector Private sector excl German Retail Total deposits Corporate sector Total deposits excl German Retail Private sector 0 Q Q Q Q Q Q

27 Net liquidity position SEB s matched funding horizon Months Loans to deposit ratio 200% 200% 180% 180% 160% 160% 140% 140% 120% 120% 100% 100% 146% Loans to deposit ratio excl repos, %* 5 0 Q Q Q % 180% 160% 138% 140% 120% 100% *excl re-classified bonds and repos 2010 Note this is a cash flow based model where assets and liabilities are mapped to contractual maturities. SEB will manage more than 18 months without any new funding if the loans and liabilities mature without prolongation. Not ongoing business if funding is disturbed or lending increases. 27

28 Funding raised with original maturity > 1 year SEK bn Instrument Q Q Yankee CD Senior unsecured SEB AG Senior unsecured SEB AB Structured bonds Covered bonds SEB AG Covered bonds SEB AB Hybrid tier Total SEK 60bn 28

29 Long-term funding Maturity profile as per September 30, 2010 SEK bn 0 <1Y 1-2Y 2-3Y 3-4Y 4-5Y 5-7Y 7-10Y >10Y Subordinated Debt Covered Bonds non SEK, Swe Covered Bonds SEK, Swe Senior Unsecured Mortgage Pfandbriefe, Ger Public Pfandbriefe, Ger 29

30 Capital ratios and Basel III Capital adequacy without transitional floor Total capital ratio, % Tier I capital ratio, % Core Tier I Basel III Changes during summer reduces impact Estimated effect bps deduction from Core Tier 1 Liquidity and funding effects not strategic limitations SEK bn Dec 2009 Sep-10 Capital base RWA

31 Dividend development SEK m 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Total dividend Net profit DPS*, SEK Pay-out ratio 40% 38% 32% 33% 0% 172% Dividend policy: 40% of Net profit (EPS) over the business cycle *No. shares adjusted for rights issue 31

32 Strategic alignment of SEB s German business Retail banking business discontinued 173 branches 1 million customers ~2,000 employees Strategic rationale Completes strategic alignment Santander ideal partner Financial ratios will improve C/I: +4 units Core Tier 1: +50 bps ROE: +60bps Subject to regulatory approvals, expected closing around year-end

33 SEB Germany after divestment Financials are expected to improve significantly in the medium term Pro-forma effects on continuing business Cost/income ratio Actual Pro-forma Return on business equity Focus going forward Merchant Banking Asset Mgmt Targeting selected Mittelstand clients Build on strong real estate trackrecord and Merchant Banking to increase customer acquisition Actual Pro-forma 0% 10% Support functions Increased productivity, e.g. IT integration with SEB Group Pro-forma operating profit (SEK bn) Jan-Sep

34 Accounting consequences Q Q4 10 Q1 11 Q Event 12 July Closing of transaction Separation completed Accounting, Group Pro forma Discontinued operations Restructuring costs Gain/loss of transaction Separation phase Sale of services Accounting one-off effects, MEUR A Discontinued business - Transaction related -130 Discontinued business - Premium to equity +135 B Continued business - Restructuring -80 C Discontinued business - Hedge break-up -245 Key elements Financials 2010 will be negatively effected due to one-time effects in and Q4. The effects in will be booked as Other Expenses (EUR 80m) gross of tax and under Discontinued Operations (EUR 130m) net of tax. Discontinued operations will also include the result for German Retail net of tax. Estimated separation and closing of transaction by Q

35 Resilience and flexibility Continued Nordic expansion Positioned for increased market activity Tier 1 ratio Tier % Matched >18m Leverage 5.6% Total 73% Tier 1 Tier 1 Tier 1 funding ratio* reserve ratio * FDIC 35

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