Baltics going forward

Transcription

1 Jan Erik Back CFO Baltics going forward November 25 20

2 SEB Baltic division background SEB Baltic division overview Universal banking services in all three countries Ranked No 1 by customers in Estonia and Latvia & No 3 in Lithuania No 1 by market share in Lithuania and No 2 in Estonia & Latvia 155 branches and ~3,000 FTEs in division and ~4,300 FTEs in geography Total lending to public SEK 6bn SEB Baltic Organisation Estonia ~900 FTEs Estonia ~425 FTEs SEB Baltic division Latvia ~800 FTEs Lithuania ~1,250 FTEs Non Baltic division; MB products, Wealth, Life, IT, Staff, Operations & Treasury, Latvia ~350 FTEs Lithuania ~575 FTEs Q3- Op.prof SEK 514m C/I 0.65 Q3- Op.prof SEK 651m C/I

3 Turnaround of the macro-situation 15 Gross domestic product Year-on-year percentage change Exports Year-on-year percentage change Estonia Lithuania Latvia -20 Source: Reuters EcoWin Estonia Latvia Lithuania -40 Source: Reuters EcoWin Real effective exchange rates Index 0 = Baltic economies bottomed out in H Export rebound continues Improved competitiveness Estonia Lithuania Latvia Source: BIS 3

4 The end of the beginning of the loss cycle Net credit loss dynamics, SEK bn Build-up of provisions Realizing losses ? Q1-08 Q2 Q3 Q4 Q1-09 Q2 Q3 Q4 Q1- Q2 Q3 4

5 Reasons for the rapidly falling net credit losses Austerity measures Turnaround of macro-economic situation Determination, flexibility and fighting spirit Consumers holding up better than expected Export / transit business recovering fast on back important trading partners recovery Consumer confidence recovering in residential property First Euro accession in the Baltic area a morale booster SEB s proactive work-out and provisioning 5

6 Consistently improving asset quality Flow of new problem loans Positive development Watch list loans Past dues Non-performing loans Write-offs Watch list loans decreasing Past dues are decreasing Non-performing loans decreasing Only per cent of all reserves for Baltic NPLs realised 6

7 Proactive Baltic work-out process Leasing Real estate Holding Companies Residential mortgages Total lending SEK 12bn Multiple distribution channels Sales > inflow Total lending SEK 23bn Established valuation methodology Real estate expertise Total lending SEK 43bn Constructive dialogue with customers ~260 staff are dealing with work-outs in the Group full-time and knowledge built up in local organisation for the future 7

8 SEB s Real estate holding companies Property repossession achievements YTD Q3-20 Investment property development Property distribution SEKm SEB's Real estate holding companies Total as of Sep 20 = SEK 293 m Lithuania Estonia Latvia Investment property as of Sep 20 Lithuania Estonia Latvia % 25% 43% 01/ 02/ 03/ 04/ 05/ 06/ 07/ 08/ 09/ 8

9 The Baltic -Point plan increasing the focus on the Back on the road part Secure the area 1 Risk management Financial planning tool 2 Distressed assets 3 Credit skills TCM academy Model upgrade Integration Target marketing Business culture Moving towards Customer excellence TCM academy Packages private Back on the road 7 8 Restore C/I Customer excellence Service academy 9 Customer loyalty The best employer 9

10 Lessons learnt Right decision to scale back lending at first indication of overheating Important to become a Relationship bank instead of Product bank Paramount to have social awareness, have strengthened the SEB brand going forward Proactive local work with troubled customers successful The point plan and full management attention crucial for future earnings generation Staff is our biggest assets and will be the differentiator going forward!

11 Baltic recovery gains momentum Current state Long term potential Export-led economic recovery Consumer confidence returning Cross selling on existing clients -point plan Attracting new clients Strong franchise - customers, employees, solutions & brand Regional GDP growth of 4-5% 11

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