Swedbank s second quarter 2015 results Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO) Swedbank

Transcription

1 Swedbank s second quarter 215 results Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO) Swedbank

2 Swedish Banking Strong result in low interest rate environment SEKm Q2 15 Q1 15 QoQ Net interest income Net commission income Other income Total income Total expenses Profit before impairments Credit impairments Ratios Q2 15 Q1 15 Lower deposit margins Higher mortgage margins Loan and deposit volume growth Stable commission income Good cost development Lower staff cost ROE, % C/I ratio Volumes, SEKbn Q2 15 Q1 15 QoQ Loans Deposits

3 Baltic Banking Stable result SEKm Q2 15 Q1 15 QoQ Net interest income Net commission income Other income Total income Total expenses Profit before impairments Credit impairments Tax Loan volume growth Strong commission income Cards and payments Solid asset quality Extra dividend from Estonia triggers increased tax cost Net profit Ratios Q2 15 Q1 15 ROE, % (excl. one-off tax) C/I ratio.4.41 Volumes, SEKbn Q2 15 Q1 15 QoQ Loans Deposits

4 Large Corporates & Institutions Stable result SEKm Q2 15 Q1 15 QoQ Net interest income Net commission income Net gains and losses Other income Total income Total expenses Stable NII Lower deposit margins Volatile markets Good asset quality Profit before impairments Credit impairments Ratios Q2 15 Q1 15 ROE, % (excl. one-off tax) C/I ratio Volumes, SEKbn Q2 15 Q1 15 QoQ Loans Deposits

5 Group results Stable result in low interest rate environment SEKm Q2 15 Q1 15 QoQ Net interest income Net commission income Net gains and losses Other income Total income Stable NII Good cost development Strong asset quality Negative one-off tax effects Total expenses Profit before impairments Credit impairments Other impairments Tax Net profit Ratios Q2 15 Q1 15 ROE, % ROE, % (excl. one-off tax) Cost/income ratio CET1 capital ratio, %

6 Capital Positive REA impact from market movements SEKbn 43 Risk exposure amount REA net decrease of SEK 15.6bn Interest rates and FX fluctuations impact positively VaR model approval to manage negative interest rate Q1 215 Exposure change Rating migration (PD) LGD changes Other credit risk CVA risk Market risk Operational risk Q2 215 Increase Decrease 6

7 Capital Strong capitalisation no excess capital CET1 capital ratio, % 22.4% 2.5% 19.6% CET1 capital positively impacted IAS 19 (SEK 3.4bn) REA net decrease of SEK 15.6bn Continued regulatory uncertainty Q1 215 Q2 215 CET1 capital ratio requirement 7

8 Liquidity and funding Increased long-term funding activity SEKbn Quarterly long-term funding issuance Other Senior unsecured debt Covered bonds Average 214 Q115 Q215 Taking advantage of favourable funding markets Extending maturity profile Credit rating upgrades Extension of maturity profile Number of months Covered bond funding Senior unsecured debt Total capital market funding 2 Q414 Q115 Q215 8

9 Asset quality Strong asset quality Credit impairments, SEKm Q2 15 Q1 15 QoQ Swedish Banking Baltic Banking Large Corporates & Institutions Swedbank Group Ratios Q2 15 Q1 15 Credit impairment ratio, %..2 Share of impaired loans, gross % Total provision ratio for impaired loans, % % Credit impairment ratio -.4 Q21 Q41 Q211 Q411 Q212 Q412 Q213 Q413 Q214 Q414 Q215 9

10 Q&A Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)

11 Appendix 11

12 This is Swedbank Swedbank a low-risk bank with strong capital base Low risk a Board of Directors strategic priority ensures access to funding markets and low funding costs Retail profile and four home markets a key feature 86% of total loans originated in Sweden - Swedish mortgages account for 62% of total loans 9% of total loans are collateralised (76% real estate and 14% other collateral) Strong capital position Board of Directors decision to maintain a buffer above prevailing SFSA capital requirements to have operational flexibility current buffer 28bp Conservative funding and liquidity position survival horizon longer than 12 months assuming closed funding markets, NSFR 11% and LCR 136% Baltic operations self-funded Loan-to-Deposit ratio < 1% % Liquidity & capital % H1 215 NSFR LCR CET1 capital ratio, Basel 3 (RHS) 25 %.2 Credit impairment ratio Q21 Q41 Q211 Q411 Q212 Q412 Q213 Q413 Q214 Q414 Q215 Source: Swedbank 3 Jun

13 This is Swedbank 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 is first line of defence supporting low risk profile and strong capital position SEKm 7 Profit before impairment Q1 1 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Source: Swedbank 3 Jun

14 This is Swedbank Swedbank market leading cost efficiency Best in-class cost efficiency an executive management strategic priority Strong dedication from executive management on cost and change management Integrated in corporate culture Focus on straight-through-processing Evolving household banking model digitalisation trend Retail profile a key feature Four home markets Sweden, Estonia, Latvia and Lithuania reducing complexity Largest private and SME customer base High degree of digitalisation in home markets SEKm 2 Total expenses Acquistion of Sparbanken Öresund.6.55 C/I ratio Ambition 216 Source: Swedbank 3 Jun H

15 Asset quality Shipping and Offshore Total lending of SEK 29.5bn (3bn, Q1) Market activity slowed down in Q2 compared to Q1 15 and Q4 14 Decreased origination Individual client action plans in place Clients now adapting to the lower oil price by cutting costs, postponing orders and setting up new financial structures SEKm Shipping and Offshore Loans net, SEKm Negatively impacted by lower oil prices Source: Swedbank 3 Jun

16 Liquidity and funding Conservative funding position LCR 136% (Swedish FSA definition FFFS 212:6) NSFR 11% (Basel committee) Issued SEK 133bn of term funding YTD 215 Increased funding need to support loan growth Term funding issuance completed and planned Prefunded for more than 12 months SEKbn nominal amounts Covered bonds Senior unsecured debt SEKbn 3 25 Survival horizon Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Source: Swedbank 3 Jun Days forward 16

17 Liquidity and funding Long-term funding maturity profile Benchmark transactions YTD 215 USD 75m, Perp. NC5 (22), AT1, 5.5% - equity conversion USD 1bn 144a Senior, 5Y (22), T+77bp (+ USD 4m 3Y (218) T+65bp) EUR 1bn CB, 7Y (222), Fixed MS-5bp GBP 5m CB, 3Y (218 FRN, 3m L+2bp GBP 3m Senior, 4Y (219), Fixed G+8bp SEK 3bn, Senior 5Y (22), Fixed/FRN, 3m Stibor + 5bp USD 1bn, RegS. CB 5Y (22), Fixed, 3m $L + 37bp EUR 75m Senior 7Y (222), Fixed, MS+45bp Long-term funding maturity profile, by funding source Long-term funding maturity profile, by currency SEKbn SEKbn Senior unsecured debt Covered bonds Other CHF USD EUR 5 5 SEK Source: Swedbank 3 Jun

18 Swedish housing and mortgage market Real estate prices Sweden 12 months development Single-family homes 1 Tenant-owner rights 2 Combined 3 12M Δ 12M Δ 12M Δ Jul/14 9% 14% 11% Aug/14 9% 14% 11% Sep/14 9% 15% 11% Oct/14 8% 15% 11% Nov/14 13% 15% 14% Dec/14 15% 15% 15% Jan/15 11% 15% 12% Feb/15 12% 17% 14% Mar/15 13% 19% 15% Apr/15 13% 2% 16% House price index, Sweden 3 25=1 Single-family homes May/15 13% 18% 15% 12 Jun/15 12% 19% 14% Source: Valuegard (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE 18

19 Real estate prices Baltic countries EUR/m 2 /No. of transactions 1 8 Tallinn Jun-5 Dec-5 Jun-6 Dec-6 Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 EUR/m 2 /No. of transactions 1 8 Riga Jun-5 Dec-5 Jun-6 Dec-6 Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 No. of transactions EUR/m2 EUR/m 2 /No. of transactions 1 8 Vilnius Jun-5 Dec-5 Jun-6 Dec-6 Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 No. of transactions EUR/m2 No. of transactions EUR/m2 Source: Swedbank 3 Jun