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Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
Presentation of Swedbank's Q2 2013 Results from the Press Conference
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Presentation of Swedbank's Q2 2013 Results from the Press Conference

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Swedbanks delårsrapport för kvartal 2 130630

Swedbanks delårsrapport för kvartal 2 130630

Published in: Business, Economy & Finance
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  • 1. Swedbank’s second quarter 2013 results Michael Wolf, CEO Göran Bronner, CFO Håkan Berg, CRO
  • 2. Stable results continue • Stable NII – Stable deposit and lending margins – New lending mortgage margins 10-15bp below stock margins – Increased new mortgage lending market share • Solid asset quality 2 Retail SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y Net interest income 3 362 3 332 3 367 35 5 Net commissions 1 531 1 589 1 536 -53 5 Total income 5 352 5 377 5 312 -65 -40 Total expenses 2 411 2 406 2 398 -8 -13 Profit before impairments 2 941 2 971 2 914 -57 -27 Impairments 102 55 37 -18 -65 ROE, % 26.3 27.9 28.1 C/I ratio 0.45 0.45 0.45
  • 3. Continued improved market position • Improved NII – Increased volumes and margins • Stronger commission income – Higher corporate finance fees in Norway • Higher quality profit • Costs under control • Impairments – SEK 56m related to IT systems 3 Large Corporates & Institutions SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y Net interest income 750 783 851 68 101 Net commissions 396 419 523 104 127 Total income 1 601 1 814 1 926 112 325 Expenses excl variable staff costs 640 646 730 84 90 Variable staff costs 120 88 104 16 -16 Profit before impairments 841 1 080 1 092 12 251 Impairments 57 74 150 76 93 ROE, % 10.3 16.7 14.5 C/I ratio 0.47 0.40 0.43
  • 4. Focus on efficiency and risk adjusted returns • Stable NII – Intensified focus on repricing • Stronger commission income – Increased customer activity – Increased income from fund management • Continued recoveries • Latvia approved for euro 4 Baltic Banking SEKm Q2 12 Q1 13 Q2 13 ▲ Q/Q ▲ Y/Y Net interest income 868 742 763 21 -105 Net commissions 394 388 445 57 51 Total income 1 448 1 281 1 378 97 -70 Total expenses 594 586 593 7 -1 Profit before impairments 854 695 785 90 -69 Impairments -200 -66 -41 25 159 ROE, % 15.0 12.6 13.4 C/I ratio 0.41 0.46 0.43
  • 5. • Stable NII – Stable deposit margins – Lower margins new mortgage lending • Stronger commission income • NGL impacted by buy-backs and valuation effects • Stable expenses • Continued good asset quality • Increased Other impairments Stable earnings 5 Group results SEKm Q2 12 Q1 13 Q2 13 ▲Q/Q ▲Y/Y Net interest income 5 035 5 353 5 409 56 374 Net commission income 2 339 2 388 2 525 137 186 Net gains and losses 577 557 296 -261 -281 Total income 8 788 9 082 8 979 -103 191 Total expenses 4 171 4 043 4 126 83 -45 Profit before impairments 4 617 5 039 4 853 -186 236 Credit impairments -49 60 88 28 137 Other impairments 128 85 372 287 244 Tax 1 047 976 913 -63 -134 Profit from continuing ops. 3 491 3 918 3 480 -438 -11 ROE continuing operations, % 14.6 15.3 14.1 C/I ratio 0.47 0.45 0.46 CET 1 ratio, % (Basel 3) 15.1 16.4 17.2
  • 6. Excess capital building • IRB Advanced – On schedule • 13 – 15 % CET 1 ratio • Waiting for regulatory clarity – Resolution regime – CRD IV implementation – Leverage ratio/corporate risk weights? 6 Capital Changes B3 CET1 ratio Q1-Q2 15,4% 16,4% 0.1% 0.3% 0.2% 0.1% 0.1% 17.2% Q4 2012 Q1 2013 Profit (cont. operations) IAS 19 Other CET1 RWA Changes B3 effects Q2 2013
  • 7. Continued strong credit quality • Continued high asset quality in Sweden • Slower net recoveries in Baltic Banking 7 Credit impairments, SEKm Q2 12 Q1 13 Q2 13 Retail 102 55 37 Large Corporates & Institutions 53 74 94 Baltic Banking -204 -70 -43 Estonia -25 -54 -36 Latvia -197 4 18 Lithuania 18 -20 -25 Swedbank Group -49 60 88 * Russia and Ukraine reported as discontinued operations. 30,7 10,1 0 5 10 15 20 25 30 35 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Q2 13* SEKbn Impaired loans
  • 8. 2013 ICAAP – Swedbank Group resilience confirmed • In 2013 ICAAP, Swedbank’s CET 1 ratio strengthened throughout the scenario period, despite a scenario with a sharp contraction followed by an extended downturn with slow recovery. • The stress test in Swedish Riksbank’s latest stability report concludes that Swedbank is the only Swedish bank with a positive result in the scenario period. 8
  • 9. Swedbank’s second quarter 2013 results Q & A
  • 10. Appendix
  • 11. Loans past due 60 days – performance Q/Q 11 -250 -200 -150 -100 -50 0 50 Q212 Q312 Q412 Q113 Q213 Q212 Q312 Q412 Q113 Q213 Q212 Q312 Q412 Q113 Q213 EURm Estonia Latvia Lithuania
  • 12. Provisions – well provided for 12 Provision ratio, % Q2 13 Retail 70 LC&I 41 Baltic Banking 52 Group 54 * Russia and Ukraine reported as discontinued operations 11 915 10 951 9 934 7 077 4 429 4046 2 478 2 040 1 774 1 545 1 420 1399 65% 64% 65% 62% 57% 54% 0 5 000 10 000 15 000 20 000 25 000 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13* Q2 13* SEKm Individual provisions Portfolio provisions Provision ratio
  • 13. Corporate portfolio drives capital efficiency 13 Credit portfolio - Retail Segments excl. Swedbank Mortgage and Swedbank Finance Volume (SEKbn) Secured (%) Agriculture 6.0 81 Manufacturing 8.8 69 Public sector and utilities 4.4 93 Construction 4.5 81 Retail 9.0 86 Transportation 2.0 79 Shipping 0.1 95 Hotels and restaurants 3.2 88 Information & communication 1.0 46 Finance and insurance 1.7 65 Property management 51.2 97 Professional service 6.7 67 Other 5.5 72 Total 104.1 87 94 23 104 Total portfolio SEK 221bn Swedbank Mortgage AB Swedbank Finans AB Other
  • 14. 16 6 4 26 25 24 23 26 0 10 20 30 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 SEKbn Shipping and Offshore Offshore Tanker Other 14 Credit portfolio – Large Corporates & Institutions • Exposure to Shipping & Offshore sector was SEK 26bn plus unutilised commitments of SEK 8bn. – Portfolio duration 4-5y – Average fleet age 7y – Strong employment profiles 3.5% 12.5% Shipping and offshore 0 5 10 15 20 25 SEK EUR USD NOK JPY Shipping and offshore portfolio by currency Q2-13 Q1-13 0,5 7,1 1,6 4,2 1,3 2,1 0,5 2,4 0,5 2,1 0,8 1,1 2,1 0 2 4 6 8 Cruise Drilling & exploration Oil service Supply Accommodation Floating production Chemical Product Crude oil Gas (LNG/LPG) Dry bulk Container RORO Shipping and Offshore portfolio by subsegment Q2-13 Q1-13
  • 15. Agriculture 15 • Segmentation definitions – Corporate Agriculture: Businesses that derive their main income from Agricultural activities – Private Investments: Private individuals who own agricultural properties for living or investment purposes • Lending exposure to Agriculture SEK 63.8bn – Corporate Agriculture: (58%) • Agriculture 45% • Forestry 13% – Private Investments (42%) • Residential: 20% • Forestry: 22% Corporate: Agriculture 45% Corporate: Forestry 13% Private: Forestry 22% Private: Residential 20% Credit portfolio
  • 16. 0 200 400 600 800 1 000 1 200 1 400 Q2 2013 0 200 400 600 800 1 000 1 200 1 400 Q2 2013 Core balance sheet* structure 16 Liquidity and funding CEE lending Estonia Other corporate lending, Sweden & other Nordic countries Other private, Sweden Swedish mortgage loans Senior Covered bonds Deposits CET1 Suppl. cap Government guaranteed debt Assets Liabilities SEKbn SEKbn * Simplified balance sheet Q2 2013 Q2 2013
  • 17. 0 20 40 60 2013 2014 2015 2016 2017 2018 2019- Senior unsecured debt -10% 0% 10% 20% 30% 40% 50% 0% -5% -10% -15% -20% -25% -30% -35% -40% -45% -50% OC, Q213 Senior unsecured debt strategy 17 *Nominal amounts • Limited need given Swedbank’s balance sheet structure • Secure OC • Fund liquidity reserves Senior unsecured debt maturity profile SEKbn* Over-collateralisation House price drop House price sensitivity of the cover pool Liquidity and funding
  • 18. 0 20 40 60 80 100 120 Covered bonds Senior unsecured Lower funding needs • LCR 129% (Swedish FSA definition FFFS 2012:6) • NSFR 95% 18 Liquidity and funding Term funding issuance – completed and planned SEKbn* *Nominal amounts
  • 19. 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 Domestic CP ECP/CD USCP Yankee CD French CD Finnish CD Q4 12 Q1 13 Q2 13 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 Domestic CB Euro CB USD CB (144A) Other CB Senior unsecured FY 2012 Q1 13 Q2 13 Conservative funding plan 19 Long-term debt issued • Issued SEK 68bn of term-funding YTD of which SEK 29bn in Q2 • Term funding plan in 2013 of SEK 120bn, full-year maturities of SEK 86bn Liquidity and funding Outstanding short-term debtSEKm SEKm *Nominal amounts
  • 20. 0 50 100 150 200 2013 2014 2015 2016 2017 2018 2019- Government guaranteed debt Senior unsecured debt Covered bonds 20 Long-term funding maturity profile • FY 2013 maturities amount to nominal SEK 86bn, of which SEK 12bn remain 20 Long-term funding maturity profile Liquidity and funding SEKbn
  • 21. Liquidity reserve 21 1 95% of the securities in the liquidity reserve per Q2 2013 are rated AAA According to the template defined by the Swedish Bankers' Association 2 84% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers’ Association except from that they are held outside the Treasury department. 3 82% of the additional assets are rated AAA Liquidity and funding SEKm Cash and holdings in central banks 199 879 Deposits in other banks available overnight 351 Securities issued or guaranteed by sovereigns, central banks or multilateral development banks 31 058 Securities issued or guaranteed by municipalities or public sector entities 397 Covered bonds 54 981 - Issued by other institutions 54 981 - Own issued Securities issued by non-financial corporates Securities issued by financial corporates (excl. covered bonds) 2 405 Other Total1 289 071 Additional liquid assets, Group2, 3 30 726
  • 22. Prolonged survival horizon 22 Liquidity and funding SEKbn Days forward 0 50 100 150 200 250 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360
  • 23. 0 50 100 150 200 250 300 Assets Liabilities Assets held for sale Interest-bearing securities Lending to the public Loans to credit institutions Cash and balances with central banks Deposits and borrowings from the public Amounts owed to credit institutions Debt securities in issue Limited need for USD-funding 23 SEKbn • USD-funding need covered for more than 12 months • Issued USD 1bn of covered bonds (144a) and USD 1bn of senior (144a) YTD 2013 Liquidity and funding
  • 24. 0 50 100 150 200 250 300 350 400 Next 12-month term funding maturities CP / CDs and net interbank funding, SEKm 0 50 100 150 200 250 300 350 400 Additional pledgeable and/or liquid assets Liquidity reserve, securities Liquidity reserve, central bank deposits, SEKm Conservative liquidity levels • Short-term funding mainly a tool for cash management • More than 12 months pre-funded 24 SEKbn Liquidity and funding 1 As defined by the Swedish Bankers’ Association 1 1
  • 25. Asset encumbrance 25 Liquidity and funding Encumbered assets - distribution by type of liability (row) and asset (column) SEKm Government debt instruments Central banks and supranational debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total of w hich received collateral (off- balance) Central bank funding Intraday settlement 2 154 9 132 11 286 7 856 Repurchase agreements 1) 21 343 12 735 34 078 12 183 Derivative 2) 475 722 8 186 9 383 85 Covered bonds 3) 497 628 497 628 Retained covered bonds issued Other 4) 763 401 1 164 Total 23 972 22 589 763 497 628 8 587 553 539 20 124 Financial assets pledged for insurance policy holders 109 954 Unencumbered assets - additional assets available for secured funding SEKm Government debt instruments Central banks and supranational debt instruments Covered bonds Debt instruments issued by credit institutions Securities issued by corporate and other issuers ABS Mortgage loans Cash Total of w hich received collateral (off- balance) Securities 5, 6) 27 261 11 820 69 658 12 253 8 328 1 003 130 323 25 065 Cover pool over collateralisation 7) 227 036 227 036 Cover pool eligible assets 8) Total 27 261 11 820 69 658 12 253 8 328 1 003 227 036 0 357 359 25 065 1) Repoed securities. 2) Collateral posted under CSA agreements, gross (3-year, SEKm, High: 21 572, Low : 11 054, Average: 13 995). 3) Of w hich accrued interest of assets in the cover pool, SEK 2 133m as of 30 June 2013. 4) Collateral pledged in securities lending activities and w ith exchanges. 5) Reversed repos are included. 6) All type of securities, including securities non pledgeable at central banks, of w hich 80% are rated AAA, 1% are rated below A- and 8% are not rated. 7) Of w hich accrued interest of assets in the cover pool overcollateralisation, SEK 987m as of 30 June 2013. 8) Securities received as collateral in for example reversed repo transactions that; either have (encumbered) or have not (unencumbered), been used as collateral by Sw edbank.
  • 26. Swedish mortgage market • No securitisation (on balance sheet), no sub-prime market, no 3rd party origination, insignificant buy-to-let market • 70% home ownership1 • Rental market is regulated • Transparent credit information (credit information agency, www.uc.se) – Publicly available information regarding income, debt, payment track record etc • Consumer credit legislation requires affordability calculations including stress test of higher interest rate • Very limited debt forgiveness possibilities (full recourse) • Strong social security and generous unemployment benefit system 26 Swedish housing and mortgage market 1 Source: Boverket, 2011
  • 27. Real estate prices – Sweden 12 months development 27 Swedish housing and mortgage market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Jul/12 0% 4% 1% Aug/12 2% 4% 3% Sep/12 2% 5% 3% Oct/12 1% 6% 3% Nov/12 3% 7% 4% Dec/12 4% 7% 6% Jan/13 3% 7% 5% Feb/13 4% 7% 5% Mar/13 3% 7% 5% Apr/13 2% 8% 4% May/13 4% 8% 5% Jun/13 4% 10% 6% Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE
  • 28. Baltic countries 28 Real estate prices Source: Land book databaseSource: Swedbank, Estonian Land Board Source: Swedbank. State Enterprise Centre of Registers 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Tallinn Nr.of deals EUR/m2 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Riga Nr.of deals EUR/m2 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Vilnius Nr.of deals EUR/m2
  • 29. Mortgage loans, gross margin (3 months) 29 The gross margin covers: Cost of liquidity ~0.2% Administrative costs ~0.3% Credit impairments ~ 0.03% Tax (22 % on profit before tax) Net margin 0 1 2 3 4 5 6 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 % Gross margin Swedbank's funding cost Stibor 3 months Swedish Riksbank's repo rate

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