BoA Merrill Lynch Banking & Insurance CEO Conference London, 25 September 2012

Transcription

1 BoA Merrill Lynch Banking & Insurance CEO Conference London, 25 September 2012 Annika Falkengren President & CEO

2 The message from last year s conference Stability Sustainable growth Continuous improvement 2

3 is unchanged and the strategy remains firm Universal bank in Sweden and the Baltics Corporate bank in the Nordics and Germany Resilience and flexibility: Capital, liquidity and costs 3

4 Strategic actions to reduce income volatility Divestment of non-core businesses Reduced size of investment portfolios Secured funding and liquidity reserves Maintained high asset quality Growth in areas of strength Income volatility, Q Q (per cent) SEB Swedish peer average Last 16 quarters Last 12 quarters Last 8 quarters Last 4 quarters Source: Nordea Equity Research, June

5 are supportive of long-term growth Operating income, SEK bn Large Corporates & Institutions Private & SME Asset gathering % % % "precrisis" "postcrisis" "precrisis" "postcrisis" "precrisis" "postcrisis" pre-crisis is H1 2006; post-crisis is H

6 over a long period of time Lending to and deposits from corporates and households (SEK bn) 1,200 Financial crisis +150 Sov debt crisis Lending Deposits CAGR 6% CAGR 6% Excluding divested businesses 6

7 A balanced approach to cost management Efficiency measures Off-shoring of support functions Procurement Strict prioritization Investments Nordic and German expansion Hong Kong branch Swedish SMEs 7

8 Increased operating leverage Average quarterly income (SEK bn) Average quarterly expenses (SEK bn) Avg 2010 Avg 2011 Avg H Operating leverage Avg 2010 Avg 2011 Avg H Average quarterly profit before credit losses (SEK bn) Avg 2010 Avg 2011 Avg H

9 Following in our customers footprint SEB Group income growth since growth initiatives started in 2010 Total +7% Average quarterly income 2012 vs. end 2009 Nordics +15%* Income share 21% Sweden +13% Income share 56% US +66% Income share 1% UK +1% Income share 3% Baltics -16% Income share 9% Asia +34% Income share 1% Germany +9%* Income share 8% RoW +11% Income share 1% * Nordics reflect Merchant Banking s strategic expansion in Denmark, Finland and Norway, including other divisions the growth rate is 3 per cent. All numbers exclude divestments. 9

10 Large Corporates: Progress of Nordic expansion Perception in 2010 turned reality in : Customers intention to expand banking services over next 12 months (net) +11% +9% Operating profit growth (SEK bn) +20% 1.0 H H % +4% +22% +2% 0.4 SEB H H % 0.8 Source: Corporate Banking year-end 2010 Nordics H H (total country contribution to Group s SEK 7.7bn operating profit) 10

11 For the first time SEB named Best Bank for Large Corporates and Institutions in the Nordics 2011 Voice of the customer: SEB is the #1 wholesale bank in the Nordics Since launch 2010 SEB SEB Large cap clients: +254 SEB SEB Note: Country scores 2011 (right-hand graph). The result is based on 62 surveys across the Nordics. Source: Prospera Large Corporates & Institutions Surveys

12 Strengthening the customer franchise through acquisition of new clients and up-tiering of existing Expansion of customer base Operating expenses (annual run-rate) New clients Increase share of wallet More than 8 product clusters Income +33% since 2008 No. of customers +34% since 2008 SEK 80m 138 Yearly income No of high income clients ~60m 116 Total SEK 140m H1 12 Good return on the investment Increased market share in all markets Further potential when activity picks up Advisory driven approach key success factor to the increased product penetration Next phase is to up-tier the 254 new clients 12

13 SEB well positioned for lending and bond financing Disintermediation agnostic 54% 46% Bonds Loans 24% 76% 18% 82% 46% 54% (EUR 58bn) (EUR 62bn) (EUR 102bn) (EUR 43bn) Source: Dealogic on Nordic markets Nordic League Tables Corporate Bonds Jan Aug 2012 (USD bn) SEB Nordic Nordic Nordic Int l Nordic Nordic Int l Int l Int l 61 Issues 66 Issues 36 Issues 42 Issues 8 Issues 29 Issues 33 Issues 7 Issues 7 Issues 5 Issues Source: Bloomberg SEB % 1.875% Fixed Bond Joint Lead February September 2011/ /19 EUR 750m 500m 4.250% 5.000% Fixed Bond Joint Lead February 2011/ /19 EUR 750m 500m 4.250% 3.000% Fixed Bond Joint Lead February August 2012/ /20 EUR 750m 500m 4.250% 2.750% Fixed Bond Joint Lead February 2011/ /17 EUR 750m 350m 13

14 Swedish SMEs: Market share steadily increases with 1 per cent per annum Target 15 per cent Increased number of customers* 140, , ,000 80,000 60,000 40,000 20, Jun 2012 Note: Only active cash management corporate customers Standardised solutions Solutions, not products Directly covers 70 per cent of the customers need SME income (SEK bn) bn Tailored solutions Advisory International/FX More complex financing Insurance Occupational insurance (corporate paid) 14

15 Swedish SMEs: Step-change in customer satisfaction Last year: Market recognition 2012: SME Bank of the Year Based on survey of 1,000 micro-smes for the first time SME bank of the year 2008, 2009, 2011* Our concept The whole entrepreneur 2012: Business Bank of the Year SMEs with turnover >SEK 100m or >100 staff +10% SEB #3 #5 #1 #4 *No award was announced in

16 Retail Sweden: Continuous growth among private customers enhances franchise Growth private market Full-service customers (thousands) Mortgage market share 15.1% 15.5% +28, % 13.3% 13.5% Jun Jun 2012 >70% Source: SCB/Swedish statistics conversion to fullservice customers 16

17 Asset gathering: coordinated savings offering Full range of savings products through bancassurance model Household deposits (SEK bn) Jun 2012 Unit-linked AuM (SEK bn) Jun % CAGR +16% CAGR Private Banking AuM (SEK bn) Jun % CAGR 17

18 Resilience: Solid funding and liquidity situation Long-term funding activities (SEK bn) Issued Subordinated Debt Issued Senior Unsecured Issued Covered Bonds * YTD 12 Sep 2012 Matured Subordinated Debt Matured Senior Unsecured Matured Covered Bonds * YTD >100% of 2012 maturities refinanced Funding, remaining maturity >1 year Loan-to-deposit ratio excluding household Household mortgage lending ~100% Lending Deposits Unutilised capacity for from covered the bonds > SEK 100bn General Public Other Lending Liquid resources ~25% of balance sheet Equity Confirmed stable rating outlook by all agencies 18

19 Resilience: Higher Core Tier 1 ratio Basel 2.5 Core Tier 1 ratio (per cent) 15.3 Strong capital formation Basel III CET 1 ratio of 12.4 per cent incl. IAS 19 adjustment 8.7 Maintain buffer to minimum regulatory levels Capacity to issue additional tier 1 instrument Q2-08 Q4-08 Q2-09 Q4-09 Q2-10 Q4-10 Q2-11 Q4-11 Q

20 SEB is well capitalised across all metrics 30 June, % SEB Peer 1 Peer 2 Peer Core/common equity tier 1 ratios % 14% 12% 10% 8% 6% 4% 2% 0% Equity/Assets Basel I Basel II transition rules Basel II Basel III post IAS 19 Basel III post IAS 19, RWA mitigation and 15% mortgage risk weight floor Source: SEB Enskilda 20

21 Continued strong asset quality Distribution of lending portfolio and credit loss levels by geography SEB Group 0.07% Non-performing loans (SEK bn) 30 NPLs NPL/Lending (RHS) 3.00% Nordics 0.06% % 1.80% 1.20% Baltics 0.25% % Other Germany 0.03% 0 Q4-08 Q4-09 Q4-10 Q % Non-performing loans to lending outside the Baltic countries, June % 0.48% 0.12% 0.12% Nordic Commercial Real Estate Swedish Residential Mortgages Total Corporates SEB 21

22 The road map to further profit growth Key priorities Enhance customer satisfaction and increase share of wallet Use strategic window to expand franchise in: Nordic large corporates Selected German Mittelstand Retail Sweden Increased cost efficiency Maintain high asset quality Maintain strong balance sheet The Relationship bank in our part of the world 22