0
Annika Falkengren
CEO




                          Lunch
                    presentation

                        Novemb...
Highlights Q3 2008
      Resilient underlying business; collective provisions in the Baltics
      Negative financial effe...
Key areas in focus
                                                                          3. Capitalisation
1. Underlyi...
… maybe 4 - Guarantee pricing in
the Swedish stability package

   Maximum scope: for each bank: its outstanding debt matu...
Resilient underlying business
Corporate credit exposure                                      Swedish mutual funds – Net in...
Asset quality
Group credit exposure             Impaired Loans Volumes
Total exposure = SEK 1,805bn      % of Credit Portf...
Baltic countries – Estonia
Credit exposure                          Lending market shares               SEB facts
SEK bn  ...
Baltic countries – Latvia
Credit exposure                         Lending market shares                  SEB facts
       ...
Baltic countries – Lithuania
Credit exposure                        Lending market shares                  SEB facts
     ...
Nordic capital ratios
Tier 1 capital ratio reported Q3 2008 (%)
                                                          ...
Reclassification of fixed income
portfolios in Q3 2008
                                                  After reclassific...
Business update


  Corporate lending growth continues – core clients, better structures and
  higher margins
  Household ...
Nordic Outlook
Key themes

•Global recession - worst situation in 60 years
•Sweden and the Nordic region import internatio...
Going forward



  ● Holistic balance sheet management

  ● Robust capital and good liquidity

  ● Resilient customer busi...
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SEB Investor Lunch Presentation Nov 2008

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Transcript of "SEB Investor Lunch Presentation Nov 2008"

  1. 1. Annika Falkengren CEO Lunch presentation November 27 2008
  2. 2. Highlights Q3 2008 Resilient underlying business; collective provisions in the Baltics Negative financial effects due to financial crisis Accelerated cost management due to economic downturn Financial crisis impacts profit… …but underlying income generation is stable 5,000 10,000 4,000 8,000 3,000 6,000 2,000 4,000 1,000 2,000 0 0 Q4 * Q1 Q1 Q2 Q3 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2007 2008 Lehman Brothers-related losses Other income** Portfolio losses Net fee and commission income Reported operating profit* Net interest income * Excluding sales of Baltic properties in Q4 2007 of SEK 785m ** Net financial income, Net insurance income and Other income and reclassification of portfolios 2
  3. 3. Key areas in focus 3. Capitalisation 1. Underlying business 2. Asset quality Risk-weighted assets Net Credit Losses Tier 1 capital ratio end of Q3 SEK bn % of lending 15% Basel I Basel II Germany Baltics 1 200 Without transition rules Nordics SEB Group Tier 1 With transition rules 1.00 Estonia 1.31 10.0% 900 Latvia 0.96 10% Lithuania 0.43 0.80 Baltics 0.85 Tier 1 0.60 8,2 % 600 6% Stability 0.40 5% package 300 4% Swedish 0.20 FSA's minimum rules 0.00 2006 2007 Q1 Q1- Q1- 0 0% 2008* Q2 Q3 Q1 Q3 Q1 Q3 2007 2008 *Annualised figures 3
  4. 4. … maybe 4 - Guarantee pricing in the Swedish stability package Maximum scope: for each bank: its outstanding debt maturing until April 30th, 2009; for the system: SEK 1,500bn Participating banks to pay a risk-based fee for the guarantee; Fee level: somewhere between today's funding costs in the market and the notional funding costs under normal market circumstances Allowed instruments: senior term debt with maturities between 3 months and 5 years, including covered bonds! Unsecured <1 year: 50bps Unsecured >1 year: 50bps+28bps (CDS) = 78bps (+25bps) Covered bonds: 25bps+ ~10bps (AAA-CDS) = ~35bps 4
  5. 5. Resilient underlying business Corporate credit exposure Swedish mutual funds – Net inflows Jan-Sep, SEK bn SEK m , Q4-06, Q2-07, Q4-07, Q2-Q3-08 5.9 500 450 -1.1 400 -7.3 350 -11.6 -17.0 300 Robur SHB Nordea SEB Others 250 200 Life – Total sales 150 SEK bn 100 13.3 12.0 12.0 11.9 50 10.7 10.7 9.7 0 s s er s s nt nt nt nt th lie lie ie lie O Cl rC lC rC ltic ai e ge rg t Ba Re ar La L h an cquot; is Q1-07 Q2 Q3 Q4 Q1-08 Q2 Q3 ed di m or er Sw quot;N G 5
  6. 6. Asset quality Group credit exposure Impaired Loans Volumes Total exposure = SEK 1,805bn % of Credit Portfolio 3% SEB Group Germany Nordic Baltic 2% Nordics 1.5% 1.4% 66% 1% 0.6% 0.2% 0% Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Germany '06 '06 '06 '06 '07 '07 '07 '07 '08 '08 '08 24% Baltics - Provisioning to build up reserves SEK m Specific Collective Lithuania 350 5% Estonia 250 Latvia 3% 2% 150 50 -50 Q4-07 Q1-08 Q2-08 Q3-08 6
  7. 7. Baltic countries – Estonia Credit exposure Lending market shares SEB facts SEK bn % of lending SEB 723,000 private customers Swedbank Sampo (no longer 70,000 corporate customers 52 published) 50 50% 41 ~1,550 FTEs (present) 20 19 60 branches 14 8 40% 8 8 22 22 17 SEB performance, SEK m 30% Dec '06 Dec '07 Sep '08 Pre-provision profit Operating profit 1,500 Banks 20% Public Administration Households 1,000 Property Management Corporate 10% 500 2006 2007 2008 YTD +38% +17% +1% 0% 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2005 2006 2007 9m Growth rate i LCY 05 06 07 08 2008 7
  8. 8. Baltic countries – Latvia Credit exposure Lending market shares SEB facts SEB SEK bn % of lending Swedbank 929,000 private customers DnB Nord Parex Banka 65,000 corporate customers 44 Sampo/Danske 41 Nordea 50% ~1,750 FTEs (present) 34 14 14 65 branches 10 6 5 40% 4 22 21 18 SEB performance, SEK m 30% Dec '06 Dec '07 Sep '08 Pre-provision profit Operating profit 1,500 Banks 20% Public Administration Households 1,000 Property Management Corporate 10% 500 2006 2007 2008 YTD +40% +18% +4% 0% 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2005 2006 2007 9m 05 06 07 08 Growth rate i LCY 2008 8
  9. 9. Baltic countries – Lithuania Credit exposure Lending market shares SEB facts SEB SEK bn % of lending Swedbank 992,000 private customers DnB Nord 89 Sampo/Danske 61,000 corporate customers 76 Nordea 50% 26 ~2,200 FTEs (present) 22 56 15 76 branches 13 13 40% 8 45 39 34 30% SEB performance, SEK m Dec '06 Dec '07 Sep '08 Pre-provision profit Operating profit 1,500 Banks 20% Public Administration Households 1,000 Property Management 10% Corporate 500 2006 2007 2008 YTD +47% +30% +13% 0% 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2005 2006 2007 9m 05 06 07 08 Growth rate i LCY 2008 9
  10. 10. Nordic capital ratios Tier 1 capital ratio reported Q3 2008 (%) Tier 1 ratio - Full Basel II Tier 1 ratio - Basel II transition rules 10.5 10.1 10.0 10.0 9.4 7.9 8.2 8.2 7.3 7.0 6.7 Swedbank Danske Bank SEB SHB DnB NOR Nordea Notes: 1 Swedbank: Including SEK 12.5bn capital rasing announced 27 October 2008 2 Danske: only reports tier 1 ratio under full Basel II 3 DnB NOR: RWA adjusted for life insurance impact (life insurance assets risk weighted under statutory disclosure) to allow comparison 10
  11. 11. Reclassification of fixed income portfolios in Q3 2008 After reclassification Financial effects in Q3 2008 Net financial income SEK +516m Q3 08 Operating profit SEK +516m 50 Net profit SEK +372m Total equity SEK +1,797m 39 RWA – Basel I: SEK +5.3bn 14 – Basel II: SEK -1.1bn 11 68 3 Core capital ratio and Total capital 1 ratio marginally affected ABS Financial Covered institutions bonds etc. Loans & Receivables Held for trading Available for sale (No MTM, impairment tests) (MTM over income) (MTM over equity) 11
  12. 12. Business update Corporate lending growth continues – core clients, better structures and higher margins Household mortgage lending decelerates Stable long-term savings SEB Equities continues to gain market shares and FX trading still strong Transaction numbers still on very high level Private individuals remain cautious and seek advise – creates opportunities Investment portfolio remains healthy – reclassification limits volatility impact 12
  13. 13. Nordic Outlook Key themes •Global recession - worst situation in 60 years •Sweden and the Nordic region import international recession •Baltic economies in for hard landing – but different degrees of recession •Central banks enter zero-rate territory •Global - partly synchronised, partly competing - stimuli from politicians Annual GDP growth Per cent 2007 2008 (f) 2009 (f) 2010 (f) 12 9 6 3 0 -3 -6 Sweden Nordics Estonia Latvia Lithuania 13
  14. 14. Going forward ● Holistic balance sheet management ● Robust capital and good liquidity ● Resilient customer business ● Cost management 14
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