Swedbank s third quarter 2017 results

Transcription

1 Swedbank s third quarter 217 results Birgitte Bonnesen (CEO), Anders Karlsson (CFO), Helo Meigas (CRO)

2 Swedish Banking Good loan volume growth SEKm Q3 17 Q2 17 QoQ Net interest income Net commission income Other income Total income Total expenses Profit before impairments Credit impairments Ratios Q3 17 Q2 17 ROE, % C/I ratio Net interest income Continued mortgage loan volume growth and stable back-book margins Strong deposit volume growth Net commission income PayEx consolidated in September Higher customer card activity while brokerage and lending & guarantees were weaker Solid asset quality Volumes, SEKbn Q3 17 Q2 17 QoQ Loans Deposits

3 Baltic Banking Continued solid performance SEKm Q3 17 Q2 17 QoQ Net interest income Net commission income Other income Total income Total expenses Profit before impairments Credit impairments Tax Ratios Q3 17 Q2 17 ROE, % C/I ratio Net interest income Loan volume growth in all three countries Stable margins Stable net commission income Negative FX effects Strong asset quality Higher tax expense due to increased dividend policy in Estonia Volumes, SEKbn Q3 17 Q2 17 QoQ Loans Deposits

4 Large Corporates & Institutions Resilient result SEKm Q3 17 Q2 17 QoQ Net interest income Net commission income Net gains and losses Other income Total income Total expenses Profit before impairments Credit impairments Stable net interest income Net commission income seasonally weaker Slower trading mitigated by FX effects Lower provisions for oil related exposures Ratios Q3 17 Q2 17 ROE, % C/I ratio Volumes, SEKbn Q3 17 Q2 17 QoQ Loans Deposits

5 Group results Stable result SEKm Q3 17 Q2 17 QoQ Net interest income Net commission income Net gains and losses Other income Total income Total expenses Profit before impairments Credit impairments Other impairments Tax Net profit Ratios Q3 17 Q2 17 ROE, % C/I ratio CET1 capital ratio, % Loan volume growth strengthened net interest income Seasonally weaker net commission income Weaker net gains and losses due to lower market volatility PayEx consolidated Total expenses FY 217 expected at around SEK 16.1bn One-off impairment CET1 capital ratio negatively impacted by 37bps Solid asset quality Tax regime changes in the Baltics 5

6 Capital Strong capitalisation no excess capital 25.% 24.2% 24.6% 23.9% 21.6% CET1 capital decreased by SEK.1bn Positive effect from net profit of SEK.9bn excl. dividend Q4 216 Q1 217 Q2 217 Q3 217 CET1 capital ratio requirement Negative effect from PayEx consolidation of SEK 1.1bn REA increased by SEK 12.8bn Buffer of around 23bps 6

7 Capital Increased REA SEKbn 425 Exposure change increased, primarily due to loan volume growth Further model adjustments in corporate portfolio relating to default frequency PayEx consolidation increases REA Q2 217 Exposure change Rating migration (PD) LGD changes Increase Other credit risk Decrease Other risk Operational risk Q

8 Group Solid asset quality Credit impairments, SEKm Q3 17 Q2 17 QoQ Swedish Banking Baltic Banking Large Corporates & Institutions Swedbank Group Credit impairments in line with expectations Ratios Q3 17 Q2 17 Credit impairment ratio, %.6.1 Share of impaired loans, gross % Total provision ratio for impaired loans, %

9 Q&A

10 Appendix

11 Swedbank low-risk bank with strong capital base Low risk a Board of Directors strategic priority ensures access to funding markets and low funding cost Retail profile and four home markets a key feature 86% of total loans originated in Sweden - Swedish mortgages account for 5% of total loans 9% of total loans are collateralised (78% real estate and 12% other collateral) Strong capital position Board of Directors decision to maintain a buffer above prevailing SFSA capital requirements to have operational flexibility current buffer around 26bp Conservative funding and liquidity position survival horizon longer than 12 months assuming closed funding marketsmarkets, NSFR 11% and LCR 128% Baltic operations self-funded loan-to-deposit ratio < 1% Liquidity & capital, % This is Swedbank NSFR LCR CET1 capital ratio, CRDIV (RHS) Q3 17 Credit impairment ratio, % -1 Q3 12 Q3 13 Q3 14 Q3 15 Q3 16 Q

12 Swedbank strong and stable earnings capacity Four home markets Sweden, Estonia, Latvia and Lithuania Strong and stable economies Market-leading position in all home markets Largest customer base in all home markets Retail profile ensures stable earnings with low volatility High cost efficiency a strategic priority ensures good profitability Stable earnings support a low risk profile and a strong capital position This is Swedbank Profit before impairments, SEKbn Profit before impairments One-off related to Visa 4 2 Q3 12 Q3 13 Q3 13 Q3 15 Q3 16 Q

13 Swedbank market leader in cost efficiency This is Swedbank Best-in-class cost efficiency an executive management strategic priority Executive management strongly focused on cost and change management Integrated in corporate culture Focus on straight-through-processing Evolving household banking model digitisation trend Retail profile a key feature Four home markets Sweden, Estonia, Latvia and Lithuania reduce complexity Largest private and SME customer base High degree of digitisation in home markets Total expenses, SEK m Acquistion of Sparbanken Öresund Target 17 C/I ratio, % YTD

14 Swedbank enlarges its green footprint Strategy Robur s sustainability funds recognised Green Bond Framework established Nordic Swan Ecolabel Nordic Swan Ecolabel. Five of Swedbank Robur's sustainability funds have met the stringent requirements that apply when the Nordic Ecolabel makes its entry into the fund market. The Nordic Ecolabel makes it easy to find and choose funds that encourage companies to develop in a sustainable direction. Swedbank s Green Bond Framework is compliant with the Green Bond Principles. The proceeds of each Swedbank Green Bond will be used to (re)finance loans and investments that promote the transition to low-carbon, climate resilient and sustainable economies and provide clear environmental benefits. Eligible Green Assets Renewable Energy Energy Efficiency Sustainable Management of Living Natural Resources Pollution Prevention and Control Sustainable Development Goal SDG7 and SDG13 SDG7, SDG11 and SDG13 SDG15 SDG6 and SDG11 Clean Transportation SDG9 and SDG11, SDG13 Industry winner and improved sustainability scoring Sustainable Brand Index Dow Jones Sustainability index Sustainable Brand Index B2B 217 Industry winner Swedbank gradually increases the scoring in DJSI Continued activity in Green bond transactions SEK 15m Due 22 October 217 SEK 3m Due 221 August 217 SEK 2m Due 22 August 217 Issuer: Vasakronan Issue date: 5 October 217 Use of Proceeds: Financing projects with environmental benefits Certification: Cicero Role: Sole Arranger Issuer: Fabege Issue date: 22 August 217 Use of Proceeds: Financing of green buildings Certification: Sustainalytics Role: Sole Arranger Issuer: Vasakronan Issue date: 22 August 217 Use of Proceeds: Financing projects with environmental benefits Certification: Cicero Role: Sole Arranger 14

15 Swedbank creates value Strategy Return on Equity >15% target 15.4% YTD Common Equity Tier 1 ratio One of the highest among European banks 23.9% Dividend per share 75% payout ratio for 5 th year in a row SEK 13.2 Source: Swedbank Fact book 3Q

16 Oil sector still under pressure Asset quality Loan portfolio negatively impacted by lower oil price, SEK 14.3bn 1.% of total loans gross Derivatives exposures of SEK 1.2bn (incl. collateral) Lower provisions* of SEK 51m in Q3 SEKbn LC&I Shipping & Offshore, loans gross, SEK 24bn % of the portfolio is negatively impacted by lower oil price SEKbn 14 Oil-related, exposure by risk grade, SEKbn Def * Total provisions of SEK 1 358m for the whole Shipping and Offshore sector with a provision ratio (for impaired loans) of 3%. 16

17 Conservative funding position LCR 145% (Swedish FSA definition FFFS 212:6) Liquidity and funding NSFR 19% (Basel committee) Issued SEK 161bn of term funding YTD Q3 217 Plan to issue around SEK 2bn in 217 SEKbn Term funding issuance completed and planned SEKbn Prefunded for more than 12 months 1 Covered bonds Senior unsecured debt 7 9 Planned, covered bonds Planned, senior unsecured debt 8 6 Survival horizon Days forward 17

18 Long-term funding maturity profile Liquidity and funding Long-term funding maturity profile, by funding source SEKbn Senior unsecured debt Covered bonds 2 Long-term funding maturity profile, by currency SEKbn Other GBP USD EUR SEK

19 Real estate price performance Sweden, 12 month Swedish housing and mortgage market Single-family homes 1 Tenant-owner rights 2 Combined 3 12M Δ 12M Δ 12M Δ Sep 16 9% 6% 8% Nov 16 9% 7% 8% Dec 16 9% 8% 9% Jan 17 9% 8% 9% Feb 17 9% 8% 9% Mar 17 9% 8% 9% Apr 17 8% 8% 8% May 17 8% 9% 9% Jun 17 9% 1% 1% Jul 17 1% 9% 9% Aug 17 1% 8% 9% Sep 17 8% 4% 7% House price index, Sweden 3 25= Source: Valuegard (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE (apartments), 3 HOXSWE 19