0
Abu Dhabi Roadshow
18 March 2008
Mikael Inglander
CFO
(2)
Latvia
Total population: 2.3m
Employees: 2,501
Private customers: 0.8m
Corp. customers: 53,000
Branches: 77
Typical ma...
(3)
Strong position for profitability and growth
Ukraine and RussiaBalticsSweden
Stable base
Growth and
experience
Future ...
(4)
Swedbank, group overview
52%
32%
2%
8% 8%
-2%-10%
0%
10%
20%
30%
40%
50%
60%
Swedish
Banking
Baltic
Banking
Internatio...
(5)
2007 – A successful and eventful year
• Profit attributable to shareholders increased 10% to SEK 12bn
– Net interest i...
(6)
Q4 2007 – Good development and strong results
• Good volume development in Sweden
– Stable margins on new lending
• Co...
(7)
Solid profit development
*Loan losses, net = write-offs + provisions – recoveries + change in property taken over
-1,0...
(8)
Minor direct effects from the credit turmoil
Valuation- and accounting effects, SEK M
Q4
2007
Q3
2007
Swedbank Markets...
(9)
Business volumes
84
13 24
334
102
19
31
289
398 401
0
100
200
300
400
500
Deposits,
Sweden
Deposits,
Baltics
AM funds,...
(10)
Credit quality, group
2000
2001
2002
2003
2004
2005
2006
2007
-0.08
0.00
0.08
0.16
0.24
0.32
0.40
0.48
0.56
0.64
Loan...
(11)
Margins
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Q3-
06
Q4-
06
Q1-
07
Q2-
07
Q3-
07
Q4-
07
Estonia Latvia
Lithuania Sweden
% Lendi...
(12)
Swedish Banking
• Continued stable earnings and high profitability
• Strong corporate lending during Q4
– Total lendi...
(13)
Baltic Banking Operations
• Continued high profitability
• Net interest income increased 7% vs. Q3
• Lending growth i...
(14)
Credit quality, Baltic Banking
Loan loss ratio, net (average portfolio)
-2.0%
-1.2%
-0.4%
0.4%
1.2%
2.0%
2002 2003 20...
(15)
Decreasing Baltic lending growth
0%
10%
20%
30%
40%
50%
60%
07/Dec
07/Sep
07/Jun
07/Mar
06/Dec
06/Sep
06/Jun
06/Mar
0...
(16)
Baltic macro development
Real GDP growth
0%
2%
4%
6%
8%
10%
12%
2005 2006 2007F 2008F 2009F
Est Lat Lit
CPI growth
0%...
(17)
Swedbank Markets
• Good end to the year despite the capital
market turmoil
• Strong results in, above all, fixed inco...
(18)
International Banking
• Continued strong lending growth in Ukrainian
Banking, + 112% to SEK 11bn in 2007
• Loan loss ...
(19)
Income statement, group
SEKm
Q4
2007
Q3
2007 %
Q4
2006 %
Net interest income 5,259 4,806 9 4,303 22
Net commission in...
(20)
Net interest income Q4-07 (Q3-07)
4,806
5,259
- 10
359
12
- 10
101
1
4,600
4,800
5,000
5,200
5,400
Netinterest
income...
(21)
Net interest income Swedish Banking, change
SEKm
Q4 2007
vs Q3 2007
Q4 2007
vs Q4 2006
Net interest income Q3 2007 2,...
(22)
Baltic Banking, change in net interest income
SEKm
Q4 2007
vs Q3 2007
Q4 2007
vs Q4 2006
Net interest income Q3 2007 ...
(23)
Net commission income, Group
0
1,000
2,000
3,000
4,000
5,000
Asset
management
Payments
Brokerage
Lending
Insurance
Co...
(24)
Expenses
SEKm
Q4
2007
Q3
2007 %
Q4
2006 %
Swedish Banking 2,279 2,208 3 2,327 – 2
Baltic Banking 1,062 864 23 811 31
...
(25)
Business areas
2007 vs 2006, SEKm 2007 % 2007 % 2007 % 2007 % 2007 %
Net interest income 11,701 5,667 986 1,343 83
Ne...
(26)
Key figures
Jan - Dec,
2007
Jan - Dec,
2006
Return on equity, % 18.9 19.3
Earnings per share, SEK 23.28 21.11
Equity ...
(27)
Tier-1 ratio, Group
• Tier 1 ratio amounted to 8.5%
• Tier 1 ratio, according to transition
principles, was 6.2%
• As...
(28)
2007 – A successful and eventful year
• Profit attributable to shareholders increased 10% to SEK 12bn
– Net interest ...
(29)
Appendix
(30)
Group lending by sectors – Baltic Banking
Portfolio, December 2007 Portfolio growth, Q4 07
546
1,111
1,692
1,736
3,01...
(31)
Exposure FAQ
• No direct US Sub-Prime exposure
– Minimal indirect exposure through investments of EUR 57m in bonds is...
Additional questions?
Johannes Rudbeck
Investor relations
johannes.rudbeck@swedbank.se
+46858593322
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Roadshow, Abu Dhabi

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Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.

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Transcript of "Roadshow, Abu Dhabi"

  1. 1. Abu Dhabi Roadshow 18 March 2008 Mikael Inglander CFO
  2. 2. (2) Latvia Total population: 2.3m Employees: 2,501 Private customers: 0.8m Corp. customers: 53,000 Branches: 77 Typical market share: 30% The leading bank in four small countries Sweden Total population: 9.2m Employees: 8,750 Private customers: 4.1m Corp. customers: 275,000 Organisations: 120,000 Branches: 459 Typical market share: 25% Lithuania Total population: 3.5m Employees: 3,384 Private customers: 3.0m Corp. customers: 78,000 Branches: 128 Typical market share: 30% Estonia Total population: 1.3m Employees: 3,227 Private customers: 1.2m Corp. customers: 88,000 Branches: 94 Typical market share: 50% • Supporting markets: Denmark, Finland, Norway, Russia, Ukraine, USA, Luxemburg, China, Japan and Spain 80% 6% 5% 5% 4% Sweden Estonia Latvia Lithuania Others Share of group lending • Potential home markets: Russia and Ukraine
  3. 3. (3) Strong position for profitability and growth Ukraine and RussiaBalticsSweden Stable base Growth and experience Future growth and profitability Swedbank is the leading bank in Sweden. Profitability is high and stable and the bank is consolidating its market shares in important segments in both the private and corporate sectors. Swedbank has a small but growing presence in Ukraine and Russia. In the long term, a significant share of Swedbank’s growth will be generated in these markets. The Baltic economies are experiencing strong economic growth that is expected to remain for many years. As the largest bank in the region, growing with the market ensures attractive earnings growth. Share of profit 2007: 66% Share of lending 2007: 80% Share of profit 2007: 2% Share of lending 2007: 2% Share of profit 2007: 32% Share of lending 2007: 16%
  4. 4. (4) Swedbank, group overview 52% 32% 2% 8% 8% -2%-10% 0% 10% 20% 30% 40% 50% 60% Swedish Banking Baltic Banking International Banking Swedbank Markets Asset Management & Insurance Shared Services & Group Staffs Share of Group net profit 2007
  5. 5. (5) 2007 – A successful and eventful year • Profit attributable to shareholders increased 10% to SEK 12bn – Net interest income increase by 20% – Net commission income increased by 11% • Swedish Banking show a stable result, low risks and high return on equity • Record result in Baltic Banking with balanced risks • Swedbank Markets’ results on same level as last year’s all time high A successful year despite global credit turmoil and Baltic slowdown
  6. 6. (6) Q4 2007 – Good development and strong results • Good volume development in Sweden – Stable margins on new lending • Continued strong results in Baltic banking – Economic slowdown align with expectations • Strong finish of the year for Swedbank Markets – Success in fixed income trading and structured investment products in Sweden and corporate finance in Norway • Swedbank Ukraine continues to develop well Profit increased 7% compared with Q4 2006
  7. 7. (7) Solid profit development *Loan losses, net = write-offs + provisions – recoveries + change in property taken over -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000 17,000 2000 2001 2002 2003 2004 2005 2006 2007 -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000 17,000 Profit before loan losses Capital gains EnterCard and KIAB Loan losses, net* Operating profit (excl. capital gains) SEKm SEKm
  8. 8. (8) Minor direct effects from the credit turmoil Valuation- and accounting effects, SEK M Q4 2007 Q3 2007 Swedbank Markets – 40 – 60 Group Treasury, liquidity portfolio – 5 – 68 Group Treasury, intra-group lending 20 – 90 Swedbank Mortgage 66 – 129
  9. 9. (9) Business volumes 84 13 24 334 102 19 31 289 398 401 0 100 200 300 400 500 Deposits, Sweden Deposits, Baltics AM funds, Sweden AM funds, Baltics Structured products, bonds Dec, 2006 Dec, 2007 SEKbn Savings 919 425 333 53 74 34 77 100 61 390 475 1,103 0 200 400 600 800 1,000 1,200 Lending, Group Private, Sweden Corporate, Sweden Private, Baltics Corporate, Baltics Other Dec, 2006 Dec, 2007 SEKbn Lending
  10. 10. (10) Credit quality, group 2000 2001 2002 2003 2004 2005 2006 2007 -0.08 0.00 0.08 0.16 0.24 0.32 0.40 0.48 0.56 0.64 Loan loss ratio, net Share of impaired loans Share of provisions %
  11. 11. (11) Margins 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Q3- 06 Q4- 06 Q1- 07 Q2- 07 Q3- 07 Q4- 07 Estonia Latvia Lithuania Sweden % Lending 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Q3- 06 Q4- 06 Q1- 07 Q2- 07 Q3- 07 Q4- 07 Estonia Latvia Lithuania Sweden Deposits %
  12. 12. (12) Swedish Banking • Continued stable earnings and high profitability • Strong corporate lending during Q4 – Total lending increased by 4% vs. Q3 and 14% during the full year • Continued good deposit trend – Deposits increased by 3% vs. Q3 and 15% during the full year • Share of new savings from households increased to 18% (17% in Dec 06) • Rise in funding costs are gradually, but with certain delay, passed on through higher lending rates • Minor valuation effects as a consequence of the turmoil on the credit market • Covered bonds as from Q2 2008 • In agreement to sell 8 branches to savings banks • Swedish economy still relatively strong. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Income Costs C/I-ratio SEKm %
  13. 13. (13) Baltic Banking Operations • Continued high profitability • Net interest income increased 7% vs. Q3 • Lending growth in 2007 was 33%, the gradual slowdown is expected to continue • Weak trading income due to market turmoil • Costs affected by – Annual wage increases in Latvia and Lithuania, hits P&L as of October every year – Investments in operational excellence project for increased productivity – High marketing costs.0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 0.0 0.1 0.2 0.3 0.4 0.5 Income Costs C/I-ratio SEKm %
  14. 14. (14) Credit quality, Baltic Banking Loan loss ratio, net (average portfolio) -2.0% -1.2% -0.4% 0.4% 1.2% 2.0% 2002 2003 2004 2005 2006 2007 Estonia Latvia Lithuania Group Share of impaired loans (12 month old portfolio) 0.0% 0.5% 1.0% 1.5% 2.0% 2002 2003 2004 2005 2006 2007 Estonia Latvia Lithuania Baltics Group
  15. 15. (15) Decreasing Baltic lending growth 0% 10% 20% 30% 40% 50% 60% 07/Dec 07/Sep 07/Jun 07/Mar 06/Dec 06/Sep 06/Jun 06/Mar 05/Dec 05/Sep 05/Jun 05/Mar 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Hansabank, Estonia 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 07/Dec 07/Sep 07/Jun 07/Mar 06/Dec 06/Sep 06/Jun 06/Mar 05/Dec 05/Sep 05/Jun 05/Mar 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Hansabank, Latvia 0% 10% 20% 30% 40% 50% 60% 70% 07/Dec 07/Sep 07/Jun 07/Mar 06/Dec 06/Sep 06/Jun 06/Mar 05/Dec 05/Sep 05/Jun 05/Mar 0 1,000 2,000 3,000 4,000 5,000 6,000 Hansabank, Lithuania 0% 10% 20% 30% 40% 50% 60% 70% 07/Dec 07/Sep 07/Jun 07/Mar 06/Dec 06/Sep 06/Jun 06/Mar 05/Dec 05/Sep 05/Jun 05/Mar 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Baltic Banking 0 % 1 0 0 000000000000 0 1 0 , Total lending, EURm YoYgrowth
  16. 16. (16) Baltic macro development Real GDP growth 0% 2% 4% 6% 8% 10% 12% 2005 2006 2007F 2008F 2009F Est Lat Lit CPI growth 0% 2% 4% 6% 8% 10% 12% 2005 2006 2007 2008F 2009F Est Lat Lit • Economic slowdown in Estonia continues: GDP growth slows from ~7% in 2007 to ~5% in 2008; the bottom of the cycle is expected to be in Q2 2008 • In Latvia growth slows from ~10.5% to 6% in 2008, the bottom of the cycle is expected to be in H2 of 2008 • Slowdown in Lithuania started in Q4 2007: GDP growth will slow from 2007’s 8.7% to ~7.5% in 2008 • Weak domestic demand reduces imports and exports growth continues. Trade and current account deficits are falling. CPI will peak in Q1 2008. Long term GDP growth (6-7%) will be above EU average. Source: Hansabank Market
  17. 17. (17) Swedbank Markets • Good end to the year despite the capital market turmoil • Strong results in, above all, fixed income and FX trading, structured investment products and corporate finance fees First Securities • Minor valuation effects due to market turmoil, SEK - 40m • Continued market leader in corporate bonds, new issues in SEK • Sustained growth and market leading position in structured products, sales grew by 39% in 2007. 0 50 100 150 200 250 300 350 400 450 500 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Profit for the period attributable to shareholders of Swedbank SEKm
  18. 18. (18) International Banking • Continued strong lending growth in Ukrainian Banking, + 112% to SEK 11bn in 2007 • Loan loss ratio, net in Ukrainian Banking decreased after adjusting calculation method to Swedbank Group’s principles • Annual lending growth in Russian Banking was 50% to SEK 10bn • Following positive court rulings regarding VAT dispute in leasing operations, a reversal of SEK 60m was made in Russian Banking • Lending in Nordic branches more than doubled in 2007, reaching SEK 13bn. -100 -75 -50 -25 0 25 50 75 100 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 International Banking, profit for the period of which Russian Banking of which Ukrainian Banking Operations SEKm
  19. 19. (19) Income statement, group SEKm Q4 2007 Q3 2007 % Q4 2006 % Net interest income 5,259 4,806 9 4,303 22 Net commission income 2,536 2,503 1 2,309 10 Net gains/losses on financial items at fair value 386 196 97 908 – 57 Other income 693 526 32 392 77 Total income 8,874 8,031 10 7,912 12 Staff costs 2,111 2,075 2 1,878 12 Profit-based staff costs 522 337 55 302 73 Other expenses 1,893 1,720 10 1,917 – 1 Total expenses 4,526 4,132 10 4,097 10 Profit before loan losses 4,348 3,899 12 3,815 14 Loan losses 238 230 3 – 72 – 431 Operating profit 4,110 3,669 12 3,887 6 Tax 950 793 20 928 2 Profit for the period 3,160 2,876 10 2,959 7 Attributable to shareholders of Swedbank 3,108 2,866 8 2,913 7
  20. 20. (20) Net interest income Q4-07 (Q3-07) 4,806 5,259 - 10 359 12 - 10 101 1 4,600 4,800 5,000 5,200 5,400 Netinterest income Q3-07 Swedish Banking BalticBanking Operations BalticBanking Investment International Banking Swedbank Markets Shared Servicesand other Netinterest income Q4-07 SEKm
  21. 21. (21) Net interest income Swedish Banking, change SEKm Q4 2007 vs Q3 2007 Q4 2007 vs Q4 2006 Net interest income Q3 2007 2,926 Net interest income Q4 2006 2,943 Changes: Higher lending volumes 46 215 Decreased lending margins – 81 – 306 Higher deposit volumes 43 122 Higher deposit margins 52 142 Other changes – 59 – 189 Total change 1 – 16 Net interest income Q4 2007 2,927 2,927
  22. 22. (22) Baltic Banking, change in net interest income SEKm Q4 2007 vs Q3 2007 Q4 2007 vs Q4 2006 Net interest income Q3 2007 1,487 Net interest income Q4 2006 1,126 Changes: Higher lending volumes 61 273 Higher lending margins 14 Decreased lending margins -10 FX-effects, lending 4 12 Higher deposit volumes 2 56 Higher deposit margins 84 260 FX-effects, deposits 2 6 Other changes -66 -135 Total change 101 462 Net interest income Q4 2007 1,588 1,588
  23. 23. (23) Net commission income, Group 0 1,000 2,000 3,000 4,000 5,000 Asset management Payments Brokerage Lending Insurance Corporate finance Other 2007 2006 SEKm
  24. 24. (24) Expenses SEKm Q4 2007 Q3 2007 % Q4 2006 % Swedish Banking 2,279 2,208 3 2,327 – 2 Baltic Banking 1,062 864 23 811 31 International Banking 272 279 – 3 126 Of which Ukrainian Banking 163 134 22 Swedbank Markets 560 416 35 535 5 Other business areas 353 365 – 3 298 18 Total expenses 4,526 4,132 10 4,097 10 of which staff costs in: Swedish Banking 1,096 1,093 0 998 10 Baltic Banking 587 511 15 450 30 International Banking 155 134 16 49 Swedbank Markets 351 225 56 345 2
  25. 25. (25) Business areas 2007 vs 2006, SEKm 2007 % 2007 % 2007 % 2007 % 2007 % Net interest income 11,701 5,667 986 1,343 83 Net commission income 4,504 1,854 196 1,441 1,868 Other income 1,473 1,252 97 773 232 Total income 17,678 4 8,773 42 1,279 3,557 1 2,183 19 Staff costs 4,296 2,044 405 1,239 425 Other expenses 4,704 1,502 366 753 463 Total expenses 9,000 3 3,546 32 771 1,992 3 888 31 Profit before loan losses 8,678 5 5,227 50 508 1,565 0 1,295 13 Loan losses 71 450 170 0 0 Operating profit 8,607 -2 4,777 49 338 1,565 -1 1,295 13 Tax 2,413 455 70 427 320 Profit for the period 6,194 4,322 268 1,138 975 To Swedbank's shareholders 6,182 – 2 4,322 46 268 1,010 3 975 11 Return on allocated equity % 23.2 31.2 6.9 24.2 57.0 Asset Mgmt Internat. Banking Swedish Banking Baltic Banking Swedbank Markets
  26. 26. (26) Key figures Jan - Dec, 2007 Jan - Dec, 2006 Return on equity, % 18.9 19.3 Earnings per share, SEK 23.28 21.11 Equity per share, SEK 131.96 116.37 C/I ratio before loan losses 0.51 0.52 Loan loss ratio, net, % 0.07 – 0.02 Share of impaired loans, % 0.13 0.07 Dividend, SEK* 9.00 8.25 Tier 1 capital ratio, new principles, % 8.5 - Tier 1 capital ratio, transition principles, % 6.2 6.5 ** Capital adequacy ratio, new principles, % 12.7 9.8 ** *according to Board of Directors’ proposal **according to old principles
  27. 27. (27) Tier-1 ratio, Group • Tier 1 ratio amounted to 8.5% • Tier 1 ratio, according to transition principles, was 6.2% • As of January 1, 2008, tier 1 ratio according to transition principles, increased by 31 bps due to the gradual implementation of Basel 2 regulations. 0 1 2 3 4 5 6 7 8 9 10 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 0 1 2 3 4 5 6 7 8 9 10 Tier 1 ratio, Basel 2 Tier 1 ratio, transition rules Target Tier 1 ratio % %
  28. 28. (28) 2007 – A successful and eventful year • Profit attributable to shareholders increased 10% to SEK 12bn – Net interest income increase by 20% – Net commission income increased by 11% • Swedish Banking show a stable result, low risks and high return on equity • Record result in Baltic Banking with balanced risks • Swedbank Markets’ results on same level as last year’s all time high A successful year despite global credit turmoil and Baltic slowdown
  29. 29. (29) Appendix
  30. 30. (30) Group lending by sectors – Baltic Banking Portfolio, December 2007 Portfolio growth, Q4 07 546 1,111 1,692 1,736 3,012 8,282 2,786 0 2,000 4,000 6,000 8,000 Other Construction Transport Industry Retail & Wholesale Real-estate mgmt Individuals 0 34 42 111 82 452 231 0 250 500 42% % - share of portfolio and portfolio growth 3% 6% 8% 9% 15% 10% 7% 39% 14% 20% 4% 3% 0%
  31. 31. (31) Exposure FAQ • No direct US Sub-Prime exposure – Minimal indirect exposure through investments of EUR 57m in bonds issued by US mortgage institutions who, in their turn, have exposures towards US sub-prime • Total exposure towards structured credits is minimal – No commitments towards conduits or SIV’s of any kind – Negligible exposure towards CDO’s • Swedbank holds a very small CDO trading stock for client trades in CDO’s which we have issued ourselves with mainly large Cap’s as underlying risk • 80% of the tranches held are rated Aaa and 20% are rated A • Total holdings was EUR 27m at year end – Exposure towards Mortgage Backed Securities is appr. EUR 719m • European Aaa and mainly residential • Held for EUR liquidity purposes and client trading • Hedge fund exposure is appr. EUR 500m, all collateralized • Exposure towards private equity firms and their target companies is about EUR 1 380m in total – Nordic related LBO’s • In total, above mentioned exposures represent less than 1.6 % of total assets
  32. 32. Additional questions? Johannes Rudbeck Investor relations johannes.rudbeck@swedbank.se +46858593322
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