Swedbank s year-end 2013 results

Transcription

1 Swedbank s year-end 2013 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO Swedbank

2 Swedish Banking Stable results SEKm Q4 13 Q3 13 Q/Q Net interest income Net commissions Total income Total expenses Profit before impairments Credit impairments ROE, % Stable NII Loan growth Stable back-book mortgage margins Lower deposit margins Strong commission income Solid asset quality C/I ratio

3 Large Corporates & Institutions Good performance SEKm Q4 13 Q3 13 Q/Q Net interest income Net commissions Total income Total expenses Profit before impairments Improved NII Loan and deposit growth Better trading income Strong commission income Credit impairments ROE, % C/I ratio

4 Baltic Banking Continued improvement SEKm Q4 13 Q3 13 Q/Q Net interest income Net commissions Total income Total expenses Improved NII Continued re-pricing Deposit growth Strong commission income Profit before impairments Operational efficiency Credit impairments Continued recoveries ROE, % C/I ratio

5 Group results Improving revenue and increasing cost SEKm Q4 13 Q3 13 Q/Q Net interest income Net commission income Net gains and losses Total income Total expenses Profit before impairments Credit impairments Other impairments Tax Profit from continuing operations ROE continuing operations, % C/I ratio CET 1 ratio, % (Basel 3) Stable NII Volume growth Margins Strong commission income Improved NGL Trading Valuation effects Increased cost Provision for staff restructuring Variable pay General cost pressure Continued solid asset quality Ektornet 5

6 Expenses Focus on customer activities Flat expenses target for 2014 Customer related cost IT development Ektornet Group functions Efficiency measures Expenses Expenses

7 Capital Increased RWA Swedbank s RWA development Loan growth SEKbn , , Basel Positive rating migration Market risk Basel FX

8 Capital Regulatory uncertainty higher capital requirements ? % Other? 25% Risk weight floor on Swedish mortgages 15% Risk weight floor on Swedish mortgages 0-2.5% Countercyclical buffer 12% Minimum CET1 (Pillar 1) requirement (incl. SIFI-buffer and Capital conservation buffer) Countercyclical buffer RW floor on mortgages Pillar 2 Hard limits vs buffers Leverage ratio corporate risk weights CET1 ratio 8

9 Asset quality Continued strong asset quality Credit impairments, SEKm Q4 13 Q3 13 Q/Q Swedish Banking Large Corporates & Institutions Baltic Banking Estonia Latvia Continued solid asset quality in Sweden Net recoveries in Baltic Banking Ektornet Lithuania Group Functions & Other Swedbank Group

10 Swedbank s year-end 2013 results Q & A

11 Appendix

12 Swedish housing market Regulatory initiatives targeting the mortgage market Swedbank s equity doubled Total equity, SEKbn 2005 Q LTV cap of 85% Amortisation Risk-weight floor of up to 25% on mortgage loans Capital and liquidity requirements High minimum regulatory requirements (including SiFi buffer) Countercyclical buffer? Leverage ratio? Source: Swedbank 12

13 Number of housing units Number of homes / persons, thousands Swedish housing market Shortage of housing Housing completions Apartment buildings Single-family dwellings Population and housing growth Acc increase in population Acc increase in housing completions Source: Statistics Sweden and Swedbank 13

14 Asset quality Conservative provision ratio SEKm % 65% 62% 57% 54% 53% 54% Provision ratio, % Q413 Swedish Banking 73 LC&I 42 Baltic Banking 51 Group * * * Q212 Q312 Q412 Q113* Q213* Q313* Q413* Individual provisions Portfolio provisions Provision ratio * Russia and Ukraine reported as discontinued operations 14

15 Credit portfolio Large Corporates & Institutions Shipping and offshore Lending exposure to Shipping & Offshore sector of SEK 25.5 bn Portfolio duration 4-5y Average fleet age 7y Strong employment profiles Shipping and offshore portfolio by subsegment, SEKbn Shipping and Offshore SEKbn Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Offshore Tanker Other Shipping and offshore portfolio by currency, SEKbn RORO Container Dry bulk Gas (LNG/LPG) Crude oil Product Chemical Floating production Accommodation Supply Oil service Drilling & exploration Cruise Q4-13 Q JPY NOK USD EUR SEK Q4-13 Q

16 Liquidity and funding Lower funding needs LCR 142% (Swedish FSA definition FFFS 2012:6) NSFR 89% Issued SEK 103bn of term-funding FY 2013 of which SEK 14bn in Q4 Term funding issuance completed and planned SEKbn 120 Covered bonds Senior unsecured Source: Swedbank, Dec 31, 2013, nominal amounts 16

17 Liquidity and funding Long-term funding maturity profile Funding plan of SEK 120bn to meet next 12 months nominal SEK 103bn maturities Long-term funding maturity profile, by funding source SEKbn Government guaranteed debt Senior unsecured debt Covered bonds Source: Swedbank Dec 31,

18 Liquidity and funding Liquidity reserve According to the template defined by the Swedish Bankers' Association SEKm Cash and holdings in central banks Deposits in other banks available overnight 397 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks Securities issued or guaranteed by municipalities or public sector entities Covered bonds Issued by other institutions Own issued Securities issued by non-financial corporates Securities issued by financial corporates (excl. covered bonds) Other Total Additional liquid assets, Group 2, % of the securities in the liquidity reserve per Q are rated AAA 2 82% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers Association except for that they are held outside Group Treasury. 3 80% of the additional assets are rated AAA Source: Swedbank Fact book, Dec 31,

19 Liquidity and funding Prefunded in excess of 12 months SEKbn Days forward Source: Swedbank Dec 31,

20 Liquidity and funding Asset encumbrance Encumbered assets - distribution by type of liability (row ) and asset (column) Government Central banks and supranational Debt instruments issued by Securities issued by debt debt Covered credit corporate and SEKm instruments instruments bonds institutions other issuers ABS Mortgage loans Cash Total of w hich received collateral (offbalance) Central bank funding Intraday settlement Repurchase agreements 1) Derivative 2) Covered bonds 3) Other 4) Total Financial assets pledged for insurance policy holders Unencumbered assets - additional assets available for secured funding Central banks and SEKm Government debt instruments supranational debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total of w hich received collateral (offbalance) Securities 5, 6) Cover pool over collateralisation 7) Cover pool eligible assets 8) Total Total assets (Balance sheet): SEKm ) Repoed securities. 2) Collateral posted under CSA agreements, gross (3-year, SEKm, High: , Low: , Average: ). 3) Of which accrued interest of encumbered assets in the cover pool, SEKm as of 31 Dec ) Collateral pledged in securities lending activities and with exchanges. 5) Reversed repos are included. 6) All type of securities, including securities non pledgeable at central banks, of which 78% are rated AAA, 2% are rated below A- and 7% are not rated. 7) Of which accrued interest of assets in the cover pool overcollateralisation, SEKm 932 as of Dec ) Securities received as collateral in for example reversed repo transactions that: either have (encumbered) or have not (unencumbered), been used as collateral by Swedbank. Source: Swedbank Facts Dec

21 Swedish housing and mortgage market Real estate prices Sweden 12-month development Single-family homes 1 Tenant-owner rights 2 Combined 3 12M Δ 12M Δ 12M Δ Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5% Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 10% 6% Jul/13 4% 9% 6% Aug/13 5% 11% 7% Sep/13 5% 11% 7% Oct/13 6% 11% 8% Nov/13 4% 13% 7% Dec/13 4% 13% 7% Source: Valuegard (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE 21

22 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Real estate prices Baltic countries EUR/m2 /Nr of deals Tallinn EUR/m2 /Nr of deals Riga Nr.of deals EUR/m2 Nr.of deals EUR/m2 EUR/m2 /Nr of deals Vilnius Nr.of deals EUR/m2 22