SEB Resultatpresentation 2009, Annika Falkengren, Ceo

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SEB Resultatpresentation 2009, Annika Falkengren, Ceo

  1. 1. Annika Falkengren President & CEO Results 2009 1
  2. 2. Highlights Q1 2009 Operating profit (SEKbn)  Strong underlying business 4.2 4.6 3.7 4.6 2.4 3.5 2.5 4.0 1.8  SEK 4.8bn before provisions for credit losses and impairment charges Q1 Q1 Q1 07 Q2 Q3 Q4 08 Q2 Q3 Q4 09 5  Stable cost development 4 3  Doubled collective provisions in 2 the Baltic countries 1 0  Full goodwill write-off in Ukraine -1 -2  Strong capital position after -3 successful rights issue Profit before gains and credit losses Credit losses Goodwill impairment  Participation in Swedish Funding Guarantee Programme 2
  3. 3. Continued high operating income ● Strong net interest income ● Lower commission income ● Robust net financial income; M-t-M valuation losses of SEK 0.4bn ● Re-bounce of life insurance income ● FX translation effects SEK +0.7bn Q1 09 vs. Q1 08 Operating income SEK bn Income Excluding one-offs and portfolio losses 12 8 4 0 Q1 07 Q2 Q3 Q4 Q1 08 Q2 Q3 Q4 Q1 09 3
  4. 4. Income well diversified Net financial income Net interest income Net fee and -15% +112% +40% (excl MTM portfolios) commission income SEKm and change Q1 08 Q4 08 Q1 09 Q1 09 vs. Q1 08 Total NII +12% 1,680 growth 1 952 1 393 -25% Volume 551 1 111 1 345 -20% Growth -35% 930 569 Margin 648 517 462 20 Development 142 1,110 Other Advisory Value Base Other FX Capital markets, and based services equities, brokerage portfolios, etc. 4
  5. 5. Lower interest rates boost Net interest income Net interest income +40% Big impact from falling short-term interest rates +12% Drop in quarterly average overnight interest rates Total NII SEK EUR USD 1,680 growth -25% Volume -2.8% -2.8% -3.2% 551 Growth Margin 20 Development Q1 09 vs Q1 08 Q1 09 vs Q4 08 Portfolios etc +1,529 +759 Book equity -419 -378 Other 1,110 Net 1,110 392 5
  6. 6. Income well diversified Net financial income Net interest income Net fee and -15% +112% +40% (excl MTM portfolios) commission income SEKm and change Q1 08 Q4 08 Q1 09 Q1 09 vs. Q1 08 Total NII +12% 1,680 growth 1 952 1 393 -25% Volume 551 1 111 1 345 -20% Growth -35% 930 569 Margin 648 517 462 20 Development 142 1,110 Other Advisory Value Base Other FX Capital markets, and based services equities, brokerage portfolios, etc. 6
  7. 7. Underlying costs levels under control Cost management program 2007 – 2009 500 net FTE Achieved by Q1 2009 Target by Q4 2009 reduction 2009 * SEK 1,304m SEK 1,500 – 2,000m 230 FTEs by Q1 Unchanged operating expenses on comparable basis SEKm Change Q1 2009 vs. Q1 2008 “Business related” “Market related” 594 388 Q1 2008 Q1 2009 240 195 68 6,027 7,244 6,067 6,650 -275 Cost Inflation, Redundancies Pensions FX translation Goodwill efficiency acquisitions impairment etc. 7
  8. 8. Merchant Banking strengthening its position Nordic target market GTS Corporate Banking TCM 100 Core SEKm banking 6,000 relation- ships % Large corporates 3,000 Nordics Large corporates Sweden 0 100 0 0 Perceived Q1 08 Q1 09 Q1 08 Q1 09 100 quality Profit before Income credit losses 2008 2009 NB. MTM portfolio losses SEK 0.4bn lower in Q1 09 8
  9. 9. Strengthened franchise in Merchant Banking Market shares, Nordic stock markets Supporting clients’ exports Trade finance portfolio volumes, indexed Jan – March, 2009, per cent 200 +77% SEB 180 9,5% Enskilda 160 140 SHB 5.7% 120 Morgan 100 Stanley 4.5% 80 60 Deutsche Bank 4.3% 40 20 Credit Suisse 4.2% 0 Q1-07 Q1-09 9
  10. 10. Merchant Banking – Investment portfolio Volume reduction partly offset by FX Mark-to-market loss 131 123 SEK m Q1 08 Q4 08 Q1 09 Volume FX Structured 101 -30 +22 63 credits P/L -872 -187 -454 62 50 Financial Equity -1,630 -585 -441 institutions 55 45 -2,502 -772 -895 38 Covered 13 13 16 bonds etc The unrealised valuation loss on 2008 reclassified securities in Q1 08 Q1 09 Q1 09 the quarter was SEK 3,075m. Reported FX adjusted* Rating status of Structured credits Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 100% 88.5% ● Rating actions on 31 80% out of 615 positions 60% during this quarter 40% ● No impaired assets 20% 2.7% 3.8% 3.0% 2.1% ● No level 3 assets 0% AAA AA/A BBB BB/B CCC/CC * Using FX rates as of 31 March 2008 10
  11. 11. Germany – potential and challenges Operating profit 2005-2008 Operating profit Q1 2009 (SEKm) (SEKm) 1 600 Q1 08 Q1 09 1 200 291 M +76% B 800 165 400 R Q1 08 Q1 09 0 E -212 T -400 A 38 I 2005 2006 2007 2008 L Treasury Customer Business ● Further steps to separate Retail from Merchant Banking and Asset Management have been formalised ● Attractive corporate growth segment for SEB ● Stable asset quality 11
  12. 12. Retail Banking income holding up Lending volumes in local currency Germany Lithuania Latvia % change, Q1 2009 vs Q1 2008 Estonia Card Sweden SEK m 5,000 9% Since year- end -5% Swedish Retail +9% 5% Swedish 2,000 Retail +20% -3 % Q1 08 Q1 09 Q1 08 Q1 09 -3 % -5% Profit before Income credit losses -1,000 Sweden Estonia Latvia Lithuania Germany 12
  13. 13. Swedish Retail – High customer interaction SEK 5.7bn Q1 08 – Q1 09 SEK 18.5bn in deposits in mortgage 1,425,000 lending individual 10,000 new SEK 1.4bn customer in SME lending SME customers offerings Deposits Mortgages Outstanding volume, SEK bn Margin, % Outstanding volume, SEK bn Margin, % 200 2.0% 300 1.5% 175 1.8% 250 1.3% 150 1.5% 200 1.0% 125 1.3% 100 1.0% 150 0.8% 75 0.8% 100 0.5% 50 0.5% 50 0.3% 25 0.3% 0 0.0% 0 0.0% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 04 05 06 07 08 09 04 05 06 07 08 09 13
  14. 14. SEB in Sweden – Positive volume development Corporate lending * Mortgage lending Deposits from public Sweden, SEK bn Sweden, SEK bn Sweden, SEK bn 357 364 380 396 339 323 331 339 332 348 343 350 310 310 294 295 317 312 218 221 224 227 199 204 179 186 192 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 07 07 07 07 08 08 08 08 09 07 07 07 07 08 08 08 08 09 07 07 07 07 08 08 08 08 09 + SEK + SEK + SEK 84bn 23bn 25bn Net Sales Life Wealth management 12 months SEK 29bn SEK 40bn Sweden: * Excluding reclassified bonds 14
  15. 15. A successful rights issue Key themes Trading performance since announcement 150% ●SEK 15,070m added 140% ●Strong primary take-up – 130% 98.6% 28.0% 120% ●Secondary rights Strong Outperformance Indexed Price 110% oversubscription 0.9% 100% ●Broad Institutional Support (1.8%) 90% (12.4%) ●Very significant retail 80% participation 70% ●Strong liquidity in shares and 60% rights 4- 10- 16- 22- 28- 6- 12- 18- 24- 30- Feb Feb Feb Feb Feb Mar Mar Mar Mar Mar SEB Euro Stoxx Banks Nordic Banks Composite OMX Source: Bloomberg as of 30-Mar-2009 Note: Nordic Banks Composite consists of Swedbank, Nordea, Danske Bank, DNB Nor and SHB 15
  16. 16. Strong capital situation Capital ratios, Basel II without floors Risk-weighted assets SEK bn Per cent Core Tier 1 ratio Tier 1 ratio 15% Q4 2008 818 12.0 Migration FX 10.2 20 12 10% Long-term Basel II Tier 1 target 12 8 5% Other Extended Required minimum Tier 1 in order to IRB roll- qualify for Swedish stabilisation outs 830 measures is 4% Q1 2009 0% 16
  17. 17. Buffering up for Baltic challenges Impaired loans, gross Provisions for Net Credit Losses % of credit exposure excl. banks % of Q1 2009, SEB Group SEK 2,386m Estonia Latvia Lithuania Q4 2008* Q1 2009* 4.0% Estonia 0,76 1,73 3.5% 3.0% Latvia 2,86 6,41 2.5% Lithuania 3,33 3,59 2.0% Baltics 2,59 3,70 1.5% 1.0% 0.5% 0.0% Baltic countries Dec '07 Mar '08 Jun '08 Sep '08 Dec '08 Mar '09 71% Provisioning to build-up reserves SEK m Specific Collective 1,200 1,000 29% 800 600 400 200 Nordics, 0 -200 Germany, etc. *Annualised figures Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 17
  18. 18. Conservative provisioning policy Gross level of Impaired loans Individually assessed, per cent of lending Group Baltics 2.9 2.0 0.9 0.8 0.7 0.4 Q1 08 Q4 08 Q1 09 Reserve ratios* % Q1 08 Q4 08 Q1 09 Group 76.9% 68.5% 71.6% Baltics 139.9% 59.6% 69.3% • excluding homogeneous groups 18
  19. 19. Sharp economic deterioration in Ukraine  Dramatically changed economic environment since acquisition in 2004 and 2007  No expansion plan  Full goodwill write-off SEK 594m GDP forecast Initial and revised GDP forecast 12 8 4 0 Lending SEK 2.7bn 2005 2006 2007 2008 2009 Customers 105,000 -4 # of branches 100 -8 Employees 1,331 Q1 09 op profit SEK -153m -12 19
  20. 20. Merchant Banking – Private equity and Shipping/Offshore Shipping and Offshore Finance Private Equity (Acquisition Finance) Credit exposure, SEKbn Outstanding volumes, SEKbn 50 Equity & mezzanine FX effect Other 0.6bn* Senior debt 25.5 45 25.2 Ferries RoRo 40 FX effect 7.5bn* Cruise 20.2 35 18.6 Container 30 Bulk 25 LNG Gas Carrier 24,0 23,7 20 Car Carriers 18,1 17,4 15 Tanker 10 Cruise** Yard (Cruise) 5 Offshore 0 FY 2006 FY 2007 FY 2008 Q1 2009 FY 2006 FY 2007 FY 2008 Q1 2009 * Effect of weaker Swedish krona * * Guaranteed by Export Credit Agencies 20
  21. 21. Property management Commercial property sector SEK bn 9% SEK 44bn Lending SWEDEN 16% SEKbn 228 228 Offices 49% Commercial 3% Retail Multi-family Hotels Logistics/warehouse and other 186 Residential 23% 170 22% SEK 47bn 26% GERMANY 143 143 Offices 116 Retail 102 Hotels 17% Logistics/warehouse and other Residential 28% 7% Other 4 18% SEK 28bn 29% Germany 85 BALTICS 29 Offices 85 Retail 72 68 Sweden Warehouse & Industrial 52 Residential 25% Land plots Other 15% 2% 11% FY FY FY 'Mar Other Nordic amounts to SEK 16bn, Other SEK 8bn 2006 2007 2008 2009 * By obligor’s domicile 21
  22. 22. Stable asset quality outside CEE Level of Impaired Loans* Level of net credit losses* SEB Group Germany Germany Baltics Nordic Baltic Nordics SEB Group 4,00 3,0% 3,50 2,5% 3,00 2,0% 2,50 1,5% 2,00 1,50 1,0% 1,00 0,5% 0,50 0,0% 0,00 Dec Mar Jun SepDec Mar Jun SepDec Mar 2004 2005 2006 2007 2008 Mar '06 '07 '07 '07 '07 '08 '08 '08 '08 '09 '2009 * % of Credit Exposure excluding Banks *Annualised figures 22
  23. 23. Resilient income generation – first line of defence 12-month rolling earnings generation excluding one-off effects SEKm 50 Operating income 40 30 Profit before credit losses 20 and goodwill 10 Operating profit 0 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Profit before credit losses Merchant Retail Wealth Life 3,3 SEK bn SEK bn SEK bn SEK bn 1,6 1,3 1,0 0,5 0,5 0,2 0,3 Q1 2008 Q1 2009 Q1 2008 Q1 2009 Q1 2008 Q1 2009 Q1 2008 Q1 2009 23
  24. 24. Support revenue generation – focus on core clients – key competitive advantages Prompt addressing of problem credits Maintain adequate buffer of capital and reserves 24
  25. 25. 25

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