Handelsbanken Nordic Large Cap Seminar 14 September Michael Wolf, CEO

Transcription

1 Handelsbanken Nordic Large Cap Seminar 14 September 2010 Michael Wolf, CEO

2 Progress continued throughout Q2 Net profit of SEK 1.6bn Improved credit quality Term funding YTD higher than full year maturities Strengthened capitalisation to 12.7 per cent Core Tier 1 approval lto buy back ktier 2b bonds 2

3 Business achievements highlights g in Q2 Higher mortgage new sales market shares in Sweden Increased corporate activity Continued strong deposit trend Retail s tailored service concept well received 3

4 Result by business area Q2 update SEKm Retail Solid credit quality, higher customer activity Large Corporates & Institutions 0 Good credit quality, repricing continues, slower trading Profit before impairments Q1 10 Q2 10 Baltic Banking Improving asset quality, stabilised NII, Estonia back to profit Retail Large Corporates & Institutions Baltic Banking Russia & Ukraine Asset Management Ektornet Russia & Ukraine Stabilising credit quality, continued restructuring in Russia SEKm Operating result Q1 10 Q2 10 Asset Management Stable earnings Ektornet Repossessed properties valued at SEK 1 010m, intake slower than the plan Retail Large Retail Large Baltic Russia & Asset Ektornet Corporates & Banking Ukraine Management Institutions 4

5 Net interest income Pressure decreasing SEKm Retail LCI Baltic Banking Russia & Ukraine Group Treasury and Other NII Q1 10 NII Q2 10 5

6 Net commission income Commissions back to pre-crisis levels Positive trend from Q Market leader in cards and payments Growth driven by Asset Management SEKm Net commission income* Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 * Excl non-recurring items 6

7 Liquidity & Capital management Term funding ahead of plan YTD, SEK 150bn in term funding of which around SEK 50bn during the second quarter SEK 60bn in remaining term funding maturities to roll or replace in 2010 YTD around SEK 95bn of central bank repos and guaranteed funding has been redeemed Total longterm, nonguaranteed Total longterm, guaranteed* Central bank repos Outstanding wholesale funding (nom SEKbn ) Average maturity of wholesale funding further extended to 25 months (38 months for covered bonds) Total shortterm, 112 non- 87 guaranteed** 97 Total shortterm, 0 28 Q guaranteed*** 61 Q Q * Issued with more than 12 months maturity, government fee of 83bp ** Including interbank deposits *** Issued with less than 12 months maturity, government fee of 50bp 7

8 Asset quality Q2 development No impact of European sovereign debt crises Further stabilisation/improvement in the Baltic countries Continued improved risk profiles on both the asset and liability side Swedbank s resilience vastly improved ICAAP Internal stress tests t Stress test of the Committee of European Banking Supervisors 8

9 Asset quality Credit impairments significantly reduced Sweden very low levels Small recoveries in Russia and Ukraine Baltic countries Few new problems Property prices stabilising/increasing Insolvency and debt restructuring laws SEKm Positive trend likely to continue Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Retail LCI Baltic Banking Russia & Ukraine Other 9

10 5Y CDS spreads Significant progress made still work to be done /12/ /06/ /12/ /06/ /12/ /06/ /12/ /06/ /12/ /06/2010 Swedbank SEB Handelsbanken Nordea Danske Bank DnB NOR Source: Datastream 10

11 Will lending margin pressure decrease? Swedbank has re-priced a larger part of liabilities compared to peers Source: SEB Enskilda Equity Research Portion of pre-, post and mid-crisis funding matters Nordic banks long term funding broken down by time of issuance (based on ~3,000 bonds) 120% 100% 80% 60% 40% 20% The two extremes: Swedbank has only 30% pre-crisis funding and 50% mid crisis funding Handelsbanken has 60% pre-crisis funding and ony around 20% mid-crisis funding 0% Sw edbank DnB NOR Nordea SEB Danske BankHandelsbanken Pre-crisis Mid-crisis Post-crisis EQUITY RESEARCH 10 11

12 Basel 3 impact on Swedbank post July amendments* NSFR is more or less in-line with proposed future minimum requirements, and LCR is well ahead of minimum requirements Core Tier 1 capital expected to decrease less than 4%, and RWA expected to increase less than 2% compared with Basel 2 Swedbank has a leverage ratio with a substantial margin to the proposed minimum level of 3% *Preliminary calculations 12

13 Summary NII pressure decreasing Improved risk profiles on both the asset and liability side Term funding ahead of plan Resilience vastly improved 13

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15 New insolvency law in Latvia Legal protection proceedings LPP plan = business plan Diminished possibility to use LPP in bad faith, to delay time Debtor should be able to make factually all payments under agreements concluded with bank Additional requirement to quality of the LPP plan money flow, substantiation of incomes etc. Easier to initiate LPP Insolvency proceedings of legal entities NOVELTIES Debtor s property should be enforced in 6 months Simplified procedure to cancel appointment of administrator, also with participation of secured creditors Administrator by agreement with bank is entitled to sell property without auction, also the company as a whole SWEDBANK S VIEW Insolvency proceedings of private persons Debtor s property should be enforced in 6 months Simplified procedure to cancel appointment of administrator, also with participation of secured creditors Possibility to restructure obligations of our clients by reaching an agreement that the client will make concrete payments to the bank. Other creditors will not be entitled to ask enforcement of this pledge Possibility to check agreements concluded by debtors 3 years before proclamation of insolvency Positive Improvement of speed and efficiency of proceedings Positive Improvement of speed and efficiency of proceedings Negative Efficiency of proceedings depends on the court practice. Amendments, which are crucial for Swedbank: If total liabilities exceed LVL 100th (EUR 142th), insolvency procedure lasts 3.5 years If total liabilities do not exceed LVL 100th (EUR 142th), insolvency procedure lasts 2 years. Client has to repay the unsecured part of the loan that t has remained after the sale of collateral covering 30% of his/her official income, but not less than LVL 60 (EUR 85) per month (i.e. 1/3 of min salary) Neutral (in total) The new law provides many positive novelties to the existing regulation of insolvency proceedings, but its efficiency i will depend d on mechanism of implementation. In total the law changes are not expected to change the trend in credit impairments. 15