Ubs Nordic Financials Sept 2009

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UBS Nordic Financial Services Conference Stockholm. 10 September 2009.

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Ubs Nordic Financials Sept 2009

  1. 1. Annika Falkengren President and CEO UBS Nordic Financial Services Conference Stockholm 10 September 2009 1
  2. 2. The starting point: SEB has a strong competitive position A long-term relationship bank How we got here: SEB’s strategy 2006 Multi-disciplined focused strategic direction to stay ahead of the curve Where we are going: thoughts in post-crisis financial landscape While regulatory clouds remain, structural long-term trends are still valid 2
  3. 3. SEB – A relationship bank Strong customer base Product excellence Large #1 Cash management globally companies #1 Scandinavian currencies globally 1,800 #1Nordic stock broker Financial #1Nordic and Baltic investment institutions bank #1 Custody Nordics and Baltics 700 #2 Nordic asset management SMEs #1 SME offering Sweden 400,000 Private individuals 5 million 3
  4. 4. Resilient income generation 12-month rolling earnings generation excluding one-off effects SEK bn 50 Operating income 40 30 Profit before credit losses and goodwill 20 10 Operating profit 0 Q1 - Q2 Q3 Q4 Q1- Q2 Q3 Q4 Q1 - Q2 Q3 Q4 Q1 - Q2 Q3 Q4 Q1 - Q2 05 06 07 08 09 Diversified income generation SEK m Net interest income Non-interest income * 8,000 7,000 6,000 +21%* 5,000 4,000 H1 2009 3,000 vs. H1 2008 2,000 1,000 0 Q1Q2Q3Q4 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Q1Q2 -05 -06 -07 -08 -09 *Income adjusted for capital gains 4
  5. 5. Long-term financial stability Liquidity profile 12 months matched funding Tier 1 capital Strong capital position ratio 13.1% Reserve ratio 72% 5
  6. 6. Proactive management in CEE Non performing loans Actions % of lending Portfolio assessed, past due > 60 days Gradual tightening of credit and Individually assessed 30% portfolio policies requirements since Q4 2005 20% 10% Accelerated collective 0% provisions Estonia Lending 45 Latvia 39 Lithuania 75 Ukraine 2 (SEK bn) Substantial work-out resources Provisioning to build-up Baltic reserves SEK m Specific Collective Review of all loans >€1m 2,000 completed 1,500 65% collective provisions Separate division 1,000 500 Full goodwill write-off 0 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 6
  7. 7. Stable asset quality outside CEE Distribution of credit provisions Level of Impaired Loans Distribution of SEK 5,953m within SEB Group 2.0% Outside 1.5% Germany CEE CEE 1.0% NPL 22% 0.5% 0.6% Nordics 78% 0.0% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun '06 '07 '08 '09 % of total exposure 3%* 3%* Shipping Limited exposure to Bulk and SMEs Bankruptcies increasing & Offshore Container sub-segments Sweden (from a low base) 1%* 7%* Acq. Well diversified with 95% Commercial Mainly related to large real Finance senior debt Real Estate* estate companies * Excluding Baltic exposures 7
  8. 8. The starting point: SEB has a strong competitive position A long-term relationship bank How we got here: SEB’s strategy 2006 Multi-disciplined focused strategic direction to stay ahead of the curve Where we are going: thoughts in post-crisis financial landscape While regulatory clouds remain, structural long-term trends are still valid 8
  9. 9. ed in itiat tegy arkets B stra tal M ber SE Capi ecem at in D D ay 2006 Strategic direction – exploit strong franchise in an attractive region Improve customer focus Integrate acquired businesses Roll-out operational excellence Strengthen the balance sheet for worse times 9
  10. 10. A strong large corporate franchise Nordic target market Strong growth in core markets 100 Income Nordic “top 50” Core (public companies) banking relation- ships +79% % Large corporates Nordics +33% Large corporates Sweden 0 -100 Perceived 0 quality* 100 H1 08 H1 09 2006 2008 2009 Sweden Other Nordic * Relative to peer group 10
  11. 11. Customer growth strategy cont. Grow revenues with existing customers through high interaction and increased share of wallet Private Banking – Net sales Life – Total sales SEK bn SEK bn 6 16 12 4 8 2 4 0 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2006 2007 2008 2009 2006 2007 2008 2009 No of corporate customers Number of cards – SEB Kort Thousands Millions 150 3.4 145 140 3.2 135 130 3.0 125 2.8 120 115 2.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2008 2009 2007 2008 2009 11
  12. 12. Efficiency and productivity Exploiting cost synergies from increased integration while developing continuous productivity enhancements through SEB Way FTE development Group Operations SEB Group, Thousands 21,6 No. of transaction, SEK millions Cost/transaction -6% y-o-y 20,4 12 19,3 10 8 6 CEE 4 2 Non-CEE 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Dec 06 Jun 08 Jun 09 07 08 09 Efficiency and productivity gains offset inflation on a comparable basis Total cost base reported Excluding pensions, redundancies, CEE goodwill impairment and FX effect 30 28 Rolling 12 m costs in Q2 26 2009 24 up SEK 0.3bn 22 or 6% vs. FY 2006 20 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 12
  13. 13. Financial strategy Establish and maintain a strong capital and liquidity position Core capital Long-term funding (>1 year) SEKbn SEKbn 103.2 Hybrid 13.9 117.3 capital 45.9 60.7 74.7 "Book 7.5 equity " +36.2 89.3 48.7 41.8 47.3 53.1 71.4 17.5 40.2 31.2 32.9 7.1 Dec 2006 Core Jun 2009 H1 08 H2 08 H1 09 Q3 09 8.2% capital 11.3% ratio >12 months matched funding 13
  14. 14. The starting point: SEB has a strong competitive position A long-term relationship bank How we got here: SEB’s strategy 2006 Multi-disciplined focused strategic direction to stay ahead of the curve Where we are going: thoughts in post-crisis financial landscape While regulatory clouds remain, structural long-term trends are still valid 14
  15. 15. The big unknown: A new financial landscape – Still limited visibility and no level playing field Capital requirements? Liquidity regimes? Regulatory environment? Government ownership? 15
  16. 16. Capturing structural growth trends Wholesale banking SEB is: Creating demand for: Exploiting being Advisory services, the #1 Nordic investment banking, new asset classes Merchant Bank Demographics Expanding the asset manage- Asset management, ment and life pension products insurance franchise Emerging markets Renewed long- Local financial term growth in services, int’l support the Baltic for our clients region 16
  17. 17. Wholesale banking going forward Restricted capital leads banks to a more selective choice of relationships + = Business Credits– tight Bank relationship – – selected clients conditions a closer tie 17
  18. 18. Rightly positioned to leverage recovery of savings markets Mutual Funds Net Sales Sweden Assets under Management Cumulative Jan 2005 – Jun 2009, including PPM June 30, 2009, SEK bn SEK m 1 478 Nordea 70 000 60 000 SEB SEB 1 267 50 000 SHB 40 000 Robur Sw edbank 743 30 000 Nordea 20 000 Danske Bank 617 10 000 0 -10 000 DnB NOR 595 -20 000 -30 000 Handelsbanken 224 Source: Morgan Stanley jan-05 jan-06 jan-07 Jan-08 jan-09 SEB Market share Competitors Market shares SEB Rank Gross premium Sweden* 26 1 income, unit-linked Denmark** 9 2 insurance %, Q1 2009 Estonia 14 3 Latvia 14 3 * Q2 2009 ** Full year 2008 Lithuania 28 1 18
  19. 19. Long-term potential in the Baltics remains 31 Dec 2008 Economic sentiment may have turned Index Estonia Latvia Lithuania Euro-zone 140 120 100 80 101 60 GDP/Capita 40 SEK thousand 343 20 0 Oct-95 Oct-97 Oct-99 Oct-01 Oct-03 Oct-05 Oct-07 Oct-09 Current account deficts have been restored 82 Lending/GDP Percent of GDP Estonia Lithuania Latvia Per cent 5 136 0 -5 -10 -15 -20 -25 Baltics -30 Sweden Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- Mar- 01 02 03 04 05 06 07 08 09 19
  20. 20. The tipping point is getting closer? Strong capitalisation Baltic credit losses Tier 1 capital ratio (Q2 2009, %) 13,1 12,6 12,2 11,2 9,6 11,3 Swed- SEB SHB Danske Nordea DnB bank Bank NOR Opportunities in core markets Nordics late into the cycle? Economic cycle 2005 2007 2009 2011 20
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