Annika Falkengren. Merrill Lynch Banking & Insurance CEO Conference. London. 30 September President and CEO

Transcription

1 Annika Falkengren President and CEO Merrill Lynch Banking & Insurance CEO Conference London 3 September 29 1

2 The starting point: SEB has a strong competitive position A long-term relationship bank Strong income, focus on efficiency and balance sheet Robust liquidity and capital position Mitigating effects from the financial crises Current status with a stable and diversified credit portfolio Going forward Economic outlook and the new financial landscape 2

3 SEB A relationship bank Strong customer base Large companies 1,8 Financial institutions 7 SMEs Product excellence #1 Cash management globally #1 Scandinavian currencies globally #1Nordic stock broker #1Nordic and Baltic investment bank #1 Custody Nordics and Baltics #2 Nordic asset management #1 SME offering Sweden 4, Private individuals 5 million 3

4 A strong large corporate franchise Nordic target market Strong growth in core markets Core banking relationships % 1 Income Nordic top 5 (public companies) +79% Large corporates Nordics Large corporates Sweden +33% -1 Perceived quality* H1 8 H1 9 Sweden Other Nordic * Relative to peer group 4

5 Rightly positioned to leverage recovery of markets Mutual Funds Net Sales Sweden Cumulative Jan 25 Aug 29, including PPM SEK m 7, 6, 5, 4, 3, 2, 1, -1, -2, -3, Market shares Gross premium income, unit-linked insurance %, Q1 29 * Q2 29 ** Full year 28 SEB SHB Robur Nordea Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Sweden* Denmark** Estonia Latvia Lithuania SEB Market share 28 Competitors Assets under Management June 3, 29, SEK bn Nordea SEB Sw edbank Danske Bank DnB NOR Handelsbanken SEB Rank Source: Morgan Stanley 5

6 Growing franchise of Swedish Retail High customer interaction: 24h 7 365d ROE 19% Net credit loss level 12 bps 115 No of corporate customers Thousands Q1 27 Q2 Q3 Q4 Q1 28 Q2 Q3 Q4 Q1 29 Q2 6

7 The starting point: SEB has a strong competitive position A long-term relationship bank Strong income, focus on efficiency and balance sheet Robust liquidity and capital position Mitigating effects from the financial crises Current status with a stable and diversified credit portfolio Going forward Economic outlook and the new financial landscape 7

8 Stability from a diversified platform Share of pre-provision earnings* Jan Jun 29 Germany Baltic countries 14% 8% 26% Nordics Retail Banking 23% Wealth Management 4% 9% Life Sweden 52% 64% * Adjusted for goodwill impairments Geography Adjusted for Other and SEK 1,3bn capital gain on repurchased bond Divisions Adjusted for Other Merchant Banking 8

9 Resilient income generation 12-month rolling earnings generation excluding one-off effects SEK bn Q1-5 Q2 Q3 Q4 Q1-6 Q2 Q3 Q4 Q1-7 Q2 Q3 Q4 Q1-8 Operating income Profit before credit losses and goodwill Operating profit Q2 Q3 Q4 Q1-9 Q2 Diversified income generation SEK m 8, 7, 6, 5, 4, 3, 2, 1, Net interest income Non-interest income * Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q %* H1 29 vs. H1 28 * Income adjusted for capital gains 9

10 Efficiency and productivity Exploiting cost synergies from increased integration while developing continuous productivity enhancements through SEB Way FTE development SEB Group, thousands CEE Non-CEE Dec 6 Jun 8 Jun 9 Group Operations No. of transaction, millions Q1 7 Q2 Q3 Q4 Q1 8 Cost/transaction -6% y-o-y Q2 Q3 Q4 Q1 9 Q2 Efficiency and productivity gains offset inflation on a comparable basis Total cost base reported Excluding pensions, redundancies, CEE goodwill impairment and FX effect Q4 6 Q1 7 Q2 7 Q3 7 Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Rolling 12 m costs in Q2 29 up SEK.3bn or 6% vs. FY 26 1

11 Financial strategy Establish and maintain a strong capital and liquidity position Core capital SEK bn Long-term funding (>1 year) SEK bn Other Covered bonds Hybrid capital "Book equity" Dec 26 Jun 29 Core Tier 1 ratio 8.2% 11.3% H1 8 H2 8 H1 9 Q3 9 ~15 months matched funding 11

12 The starting point: SEB has a strong competitive position A long-term relationship bank Strong income, focus on efficiency and balance sheet Robust liquidity and capital position Mitigating effects from the financial crises Current status with a stable and diversified credit portfolio Going forward Economic outlook and the new financial landscape 12

13 The "perfect storm" scenario... From rights issue March 29 We prepared for the worst : Extreme stress scenario Scenario with simultaneous severe recessions with significant contraction in all SEB s geographic markets for 3 consecutive years Significant decline in preprovision earnings Significant increase in RWAs from risk class migration 13

14 ...has not materialised Sweden, other Nordics and Germany already turning the corner with stable asset quality Limited impact from risk migration; on the contrary RWA decline due to lower demand for lending and efficiency gains Flight to quality; SEB increased share of wallet among large corps and resilient life insurance operations 14

15 Estonia Latvia Lithuania EURbn EURbn EURbn 4 SEB s Baltic lending relative the market Per cent, Q2 25 Q2 29 4% 4 4% 4 SEB Lending total SEB Lending 4% 3 3% 3 3% 3 3% 2 2% 2 2% 2 2% 1 1% 1 1% 1 1% Q2 5 Q4 Q2 6 Q4 Q2 Q4 Q2 Q4 Q % Q2 Q4 Q2 5 6 Q4 Q2 Q4 Q2 Q4 Q % Q2 - Q4 Q2 5 6 Q4 Q2 Q4 Q2 Q4 Q % Excluding Leasing portfolio Source: Central Banks and SEB 15

16 The Baltics: problematic, but contained Actions Gradual tightening of credit and portfolio policies requirements since Q4 25 Accelerated collective provisions Substantial work-out resources Review of all loans > 1m completed Separate division Non performing loans % of lending 15% 1% 5% % Estonia Latvia Lithuania Lending (SEK bn) Provisioning to build-up Baltic reserves SEK m 2, 1,5 1, Portfolio assessed, past due > 6 days Individually assessed Specific Collective 65% collective provisions Full goodwill write-off in CEE 5 Q1-8 Q2-8 Q3-8 Q4-8 Q1-9 Q2-9 16

17 Stable and well diversified credit portfolio Credit portfolio Q2-9 SEK 1,86bn Norway 7% Sweden 48% Denmark 3% 85% Finland 3% Germany 24% Gross impaired loans* Q2-9 Distribution of SEK 16,69m within SEB Group Germany Baltic countries 5% Other 5% Estonia 3% Latvia 3% Lithuania 5% 1% 34% 49% Impaired loans*- change Q2-9 vs. Q4-8 SEK m Sweden Denmark Norway Finland Estonia Latvia Lithuania Germany Other Sweden 1% 7% Other , 1,5 2, 2,5 3, *Individually assessed 17

18 The starting point: SEB has a strong competitive position A long-term relationship bank Strong income, focus on efficiency and balance sheet Robust liquidity and capital position Mitigating effects from the financial crises Current status with a stable and diversified credit portfolio Going forward Economic outlook and the new financial landscape 18

19 Sweden Positioned for recovery Improved situation for manufacturing Low mortgage rates support consumption, debt service burden historically low GDP bounces back Riksbank starts to increase rates spring 21 Household debt service burden Percent of disposable income GDP growth Yearly growth, percent 8 OECD Sweden New export orders Manufacuring industry, net 8 Orders Expected orders Source: SEB Nordic Outlook, 1 Sept 29 19

20 Baltics Stabilisation on a low level A broader recovery in 211 First signs of improved economic sentiment GDP deficits leaves the negative territory Wage cuts continue Economic sentiment Index 14 Euro-zone Estonia Latvia Lithuania Current accounts Percent of GDP 5 Estonia Latvia Lithuania Source: SEB Nordic Outlook, 1 Sept 29 2

21 Multiple growth opportunities Merchant Banking Market penetration* Penetration to date Untapped potential Bank relationship a closer tie * indicative Recognised product excellence Leading Nordic asset manager and bancassurance business! 21

22 The big unknown: A new financial landscape Still limited visibility and no level playing field Capital requirements Liquidity regimes Regulatory environment Government ownership SEB has a strong balance sheet Tier % 15 months match funding Liquidity reserves >1% assets Loan/deposit ratio 154% Reserve ratio 72% 22

23 SEB well positioned to support our customers and seize growth opportunities on a selective basis Stabilising economy for 9 per cent of credit portfolio Full attention and actions on Baltic challenges 23

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