Nomura Financial Services Conference London, 29 August Jan Erik Back, CFO

Transcription

1 Nomura Financial Services Conference London, 29 August 2012 Jan Erik Back, CFO

2 SEB s strategy remains firm Universal bank in Sweden and the Baltics Corporate bank in the Nordics, Germany and internationally Resilience and flexibility: Capital, liquidity and costs 2

3 SEB has actively reduced its earnings volatility Income volatility, Q Q (per cent) SEB Peer average Last 16 quarters Last 12 quarters Last 8 quarters Last 4 quarters Source: Nordea Equity Research, June 2012 Strategic actions to reduce income volatility Divestment of non-core businesses Reduced size of investment portfolios Secured funding and liquidity reserves Maintained high asset quality Growth in areas of strength 3

4 SEB s DNA Customer segments Size Income distribution 2011 ( per cent) Large Corporates Financial Institutions 2,000 customers 700 customers SEB Swedbank SHB SME 400k customers Nordea 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % Private 4m customers Large Corporates & Institutions Retail Life Wealth 4

5 For the first time SEB named Best Bank for Large Corporates and Institutions in the Nordics 2011 Voice of the customer: SEB is the #1 wholesale bank in the Nordics +20% SEB SEB SEB #2 #3 SEB SEB Note: Net change between 2010 and 2011 (left-hand graph). Country scores 2011 (right-hand graph) The result is based on 62 surveys across the Nordics. Source: Prospera Large Corporates & Institutions Surveys

6 Large corporate Nordic and German expansion Platform now in place Operating profit growth (SEK bn) +20% +29% H H H H % -1% H H H H Note: Germany excludes centralised Treasury operations and wind-down portfolio of real estate assets Expansion KPIs from start SEK 126bn new large cap clients new loans and commitments 6

7 Swedish SMEs: Market share steadily increases with 1 per cent per annum Increased number of customers* 140, , ,000 80,000 60,000 40,000 20, H Note: Active cash management corporate customers Standardised solutions Solutions, not products Directly covers 70 per cent of the customers need SME credit portfolio (SEK bn) Tailored solutions Advisory International/FX More complex financing Insurance +35bn H Occupational insurance (corporate paid) 7

8 Enhanced Retail franchise in Sweden continuous growth among private customers Growth private market Full service customers (thousands) Increased market shares Mortgage market share* , % 15.5% % 13.3% 13.5% H Q Household deposit market share* 11.6% 11.3% 11.6% 11.8% 12.0% Q Source: Swedish statistics 8

9 Swedish mortgage portfolio: Low LTVs and strict lending criteria Mortgage lending based on affordability Credit scoring and assessment 7% interest rate test and 60 years amortisation in cash flow calculation 85% regulatory first lien mortgage cap &minimum 15% of own equity required If LTV >75% requirement to amortise Max loan amount 5x total gross household income irrespective of LTV Sell first and buy later recommendation Low LTVs by regional and global standards Loan-to-value Share of portfolio >85% 2% 51-85% 18% 0-50% 80% Transparent interest rate discussion Individual pricing based on; Household disposable income Collateral Size of other assets Total mortgage amount vs. property value Funding cost transparent and updated daily Customer margin SEB s Liquidity cost Stibor 90 days Funding cost for 3 month fixed mortgage rate 9

10 Highlights Q Franchise and income growth Continued cost efficiency Balance sheet strengthened further 10

11 Profit and loss trend Profit and loss development Q Q (SEK bn) Q2-10 Q2-11 Q2-12 Q2-10 Q2-11 Q2-12 Q2-10 Q2-11 Q2-12 Operating income Operating expenses Net credit losses -0.3 Pre-provision profit and operating profit (SEK bn) Operating profit Pre-provision 4.2 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q

12 Net interest income development Net interest income Q Q (SEK bn) Q2-10 Q3 Q4 Q1-11 Q2 Q3 Q4 Q1-12 Q2 Net interest income by income type Q Q (SEK bn) Q2-10 Q2-11 Q2-12 Q2-10 Q2-11 Q2-12 Lending Deposits Q2-10 Q2-11 Q2-12 Funding & other 12

13 Lending and deposit volumes Corporates and households Jun 2012 (SEK bn) Customer centric strategy 1,500 1,200 Financial crisis +150 Sov debt crisis Supporting core customers in times of need Deposit patterns show flight to quality in turbulent times Lending (6.5% CAGR) Deposits (6.3% CAGR) 0 Dec- 00 Dec- 01 Dec- 02 Dec- 03 Dec- 04 Dec- 05 Dec- 06 Dec- 07 Dec- 08 Dec- 09 Dec- 10 Dec- 11 Excluding divested businesses 13

14 Net fee and commission income development Net fee and commissions Q Q (SEK bn) Q2-10 Q3 Q4 Q1-11 Q2 Q3 Q4 Q1-12 Q2 Gross fee and commissions by income type Q Q (SEK bn) Q2-10 Q2-11 Q2 Advisory, secondary markets and derivatives Q2-10 Q2-11 Q2 Custody and mutual funds Q2-10 Q2-11 Q2 Payments, cards, lending, deposits and guarantees 14

15 Net financial income development Net financial income Q Q (SEK bn) Excl. GIIPS de-risking Q2-10 Q3 Q4 Q1-11 Q2 Q3 Q4 Q1-12 Q2 Net financial income development (SEK bn) NFI Divisions NFI Treasury & Other GIIPS Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Drivers of net financial income Stability from customer-driven flows in divisions Limited impact from volatility on MTM liquidity portfolio Highest quality sovereign and covered bonds with full central bank eligibility 15

16 Operating leverage through cost efficiency Average quarterly income (SEK bn) Average quarterly expenses (SEK bn) Avg 2010 Avg 2011 Avg 2012 Operating leverage Avg 2010 Avg 2011 Avg 2012 Average quarterly profit before credit losses (SEK bn) Avg 2010 Avg 2011 Avg

17 Continued high asset quality Distribution of loan portfolio and credit losses Q Q (SEK bn) Nordics 73% Group credit loss level 0.07% Baltics 9% -0.3 Other 3% Germany 15% Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 NPLs by region Q Q (SEK bn) Nordics Germany Baltics Q2-10 Q2-11 Q2-12 Q2-10 Q2-11 Q2-12 Q2-10 Q2-11 Q

18 ~90 per cent of 2012 maturities re-financed Long-term funding activities (SEK bn) Senior unsecured and covered bonds (SEK bn) 140 Issued Covered Bonds Matured Covered Bonds Issued Senior Unsecured Matured Senior Unsecured Instrument 2011 H Maturing Senior unsecured SEB AB Covered bonds SEB AB Covered bonds SEB AG Total

19 Higher Core Tier 1 ratio through generated capital and efficient risk management Basel II Core Tier 1 ratio (%) 15.3 Illustrative 13.7 Regulatory target range ~ +2.1 RWA real estate model Higher quality Business volumes Generated capital ~ -0.5 Q2-08 Q4-08 Q2-09 Q4-09 Q2-10 Q4-10 Q2-11 Q4-11 Q

20 SEB is well capitalised across all metrics 30 June, 2012 SEB Nordea Swedbank SHB 18% 16% Core/common equity tier 1 ratios % 12% 10% 8% 6% 4% 2% 0% Equity/Assets Basel I Basel II transition rules Basel II Basel III post IAS 19 Basel III post IAS 19, RWA mitigation and 15% mortgage risk weight floor Source: SEBEnskilda 20

21 Still missing pieces in Swedish finish on regulation Capital Liquidity Common Equity Tier 1 Ratio > 10% by 2013 Liquidity Coverage Ratio > 100% by 2013 Common Equity Tier 1 Ratio > 12% by 2015 Countercyclical buffer 0-2.5% by 2013 [TBD] Mortgage risk-weights? [TBD] Net Stable Funding Ratio [TBD] > 100% by 2018/19 21

22 Recent economic development in Sweden Swedish economy so far rather resilient to the Euro crises Strong Q2 GDP development driven by retails sales, rebound to be expected in H2 But sub-par growth also 2013 Krona strengthening accelerated vs. EUR and USD EUR/SEK +10 per cent during the summer Limited impact so far, but more focus on long-term impact Swedish Central Bank repo rate in focus Two cuts anticipated before early -13 to stimulate growth House price worries abating Soft landing anticipated Swedish economic indicators GDP, YoY, per cent SEK/EUR Riksbanks repo rate House prices index

23 Outlook Slow pace of recovery to continue Flight to quality to benefit strong banks Need for continued resilience and flexibility 23

24 The Relationship bank in our part of the world 24