Netherlands Roadshow
23 May 2008
Mikael Inglander
CFO
(2)
Latvia
Total population: 2.3m
Employees: 2,653
Private customers: 0.8m
Corp. customers: 55,000
Branches: 73
Typical ma...
(3)
Strong position for profitability and growth
Ukraine and RussiaBalticsSweden
Stable base
Growth and
experience
Future ...
(4)
58%
32%
7% 6% 3%
-6%-10%
0%
10%
20%
30%
40%
50%
60%
70%
Swedish
Banking
Baltic
Banking
Swedbank
Markets
Asset
Manageme...
(5)
Core business is doing well – challenging financial markets
• Solid business development with
corporates and private c...
(6)
Business volumes
102
19
31
340
102
385
17
34
401
334
0
100
200
300
400
500
Deposits,
Sweden
Deposits,
Baltics
AM funds...
(7)
Margins
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
Estonia Latvia
Lithuania Sweden
% Lendin...
(8)
Credit quality, Group
0
1,000
2,000
3,000
4,000
5,000
6,000
03Sep
03Dec
04Mar
04Jun
04Sep
04Dec
05Mar
05Jun
05Sep
05De...
(9)
Credit quality, Baltic Banking
0.35%
-0.05%
0.23%
0.56%
0.21%
2007
0.39%
0.25%
0.54%
0.38%
Q1 08
-0.28%Group level pro...
(10)
Swedish Banking
• Continued solid volume growth
• Net interest income increased
by 2% compared with Q4 2007
• Lower e...
(11)
Baltic Banking Operations
• Profitability remained robust
• Lending growth continued to
decrease
• Net interest margi...
(12)
Baltic macro development
Real GDP growth
0%
2%
4%
6%
8%
10%
12%
14%
2005 2006 2007 2008F 2009F
Est Lat Lit
CPI growth...
(13)
International Banking
• Continued solid performance in
Ukraine
– Launch of the new brand initiated
– Expansion and re...
(14)
Swedbank Markets
• Fixed income and FX trading
continued to do well
• Equity trading was weaker due to
negative marke...
(15)
Accounting and valuation effects
Accounting and valuation effects, SEKm
Q1
2008
Q4
2007
Q3
2007
Swedbank Markets – 18...
(16)
Swedbank funding structure
Swedbank Treasury (excluding Mortgage)
• Large deposit base
• Liquidity reserves
• Net len...
(17)
Focus on funding
Funding costs have increased
• Higher price of risk
• Increased liquidity reserve
• Short-term adver...
(18)
Income statement, Group
SEKm
Q1
2008
Q4
2007 %
Q1
2007 %
Net interest income 5,241 5,259 – 0 4,501 16
Net commission ...
(19)
Net interest income Q1 08 (Q4 07)
5,259 5,241
55
-13
1 22
-215
132
4,600
4,800
5,000
5,200
5,400
Netinterest
income
Q...
(20)
Swedish Banking, change in net interest income
SEKm
Q1 2008
vs Q4 2007
Q1 2008
vs Q1 2007
Net interest income Q4 2007...
(21)
Baltic Banking, change in net interest income
SEKm
Q1 2008
vs Q4 2007
Q1 2008
vs Q1 2007
Net interest income Q4 2007 ...
(22)
Net commission income, Group
0
200
400
600
800
1,000
Asset
management
Payments
Brokerage
Lending
Insurance
Corporate
...
(23)
Loan losses Q1 08 (Q4 07)
-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 2...
(24)
Expenses
SEKm
Q1
2008
Q4
2007 %
Q1
2007 %
Swedish Banking 2,255 2,279 – 1 2,183 3
Baltic Banking 899 1,062 – 15 769 1...
(25)
Business areas
2008 vs 2007, SEKm 2008 % 2008 % 2008 % 2008 % 2008 %
Net interest income 2,982 1 1,575 30 369 289 – 2...
(26)
Key figures
Jan-Mar
2008
Jan-Mar
2007
Return on equity, % 16.8 18.9
Earnings per share, SEK 5.63 5.65
Equity per shar...
(27)
Core business is doing well – challenging financial markets
• Solid business development with
corporates and private ...
(28)
Appendix
(29)
Exposures
• No direct US subprime exposure
– Minimal indirect exposure through investments of EUR 48m in bonds issued...
(30)
Baltic Banking lending by sectors
593
1,076
1,780
1,800
2,933
8,370
3,185
0 2,000 4,000 6,000 8,000 10,000
Other
Cons...
Additional questions?
Johannes Rudbeck
Investor relations
johannes.rudbeck@swedbank.se
+46858593322
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Roadshow Netherlands

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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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Roadshow Netherlands

  1. 1. Netherlands Roadshow 23 May 2008 Mikael Inglander CFO
  2. 2. (2) Latvia Total population: 2.3m Employees: 2,653 Private customers: 0.8m Corp. customers: 55,000 Branches: 73 Typical market share: 30% The leading retail bank in four small countries Sweden Total population: 9.2m Employees: 8,656 Private customers: 4.1m Corp. customers: 277,000 Organisations: 117,000 Branches: 445 Typical market share: 25% Lithuania Total population: 3.4m Employees: 3,319 Private customers: 3.0m Corp. customers: 79,000 Branches: 126 Typical market share: 30% Estonia Total population: 1.3m Employees: 3,234 Private customers: 1.2m Corp. customers: 90,000 Branches: 91 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: 65% Share of lending 2007: 80% Share of profit 2007: 3% Share of lending 2007: 2% Share of profit 2007: 32% Share of lending 2007: 16%
  4. 4. (4) 58% 32% 7% 6% 3% -6%-10% 0% 10% 20% 30% 40% 50% 60% 70% Swedish Banking Baltic Banking Swedbank Markets Asset Management & Insurance International Banking Shared Services & Group Staffs Share of Group net profit, Q1 2008 Swedbank, group overview
  5. 5. (5) Core business is doing well – challenging financial markets • Solid business development with corporates and private customers • Development as expected in the Baltic states • Funding programmes continue to function well – conversion to covered bonds on 21 April • Credit quality remains good, credit losses and impaired loans are increasing from low levels • Lower commission income due to weaker equity markets and low corporate finance activity • Net gains and losses on financial items were adversely affected by unrealized valuation effects caused by the credit crunch
  6. 6. (6) Business volumes 102 19 31 340 102 385 17 34 401 334 0 100 200 300 400 500 Deposits, Sweden Deposits, Baltics AM funds, Sweden AM funds, Baltics Structured products, bonds Dec 2007 Mar 2008 SEKbn Savings 475 390 77 100 6178 104 68 1,103 1,131 484 397 0 200 400 600 800 1,000 1,200 Lending, Group Private, Sweden Corporate, Sweden Private, Baltics Corporate, Baltics Other Dec 2007 Mar 2008 SEKbn Lending
  7. 7. (7) Margins 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Estonia Latvia Lithuania Sweden % Lending 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Estonia Latvia Lithuania Sweden Deposits % Lower interest rates in Latvia and Lithuania adversely affected deposit margins. Increased funding costs have not yet been fully transferred to customers.
  8. 8. (8) Credit quality, Group 0 1,000 2,000 3,000 4,000 5,000 6,000 03Sep 03Dec 04Mar 04Jun 04Sep 04Dec 05Mar 05Jun 05Sep 05Dec 06Mar 06Jun 06Sep 06Dec 07Mar 07Jun 07Sep 07Dec 08Mar 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 Impaired loans Impaired loan provisions Share of impaired loans SEKm %
  9. 9. (9) Credit quality, Baltic Banking 0.35% -0.05% 0.23% 0.56% 0.21% 2007 0.39% 0.25% 0.54% 0.38% Q1 08 -0.28%Group level provision adjustment 0.28%Baltic Banking 0.13%Lithuania 0.78%Latvia 0.67%Estonia Q4 07 *Loan loss ratio, net = (changes in provisions + net write offs) / credit portfolio at the beginning of the year Loan loss ratio, net* Overdue ratio (more than 60 days)* 0.71% 0.75% 0.65% Q4 07 0.86% 0.92% 0.79% Q1 08 0.56%Baltic Banking 0.49%Private 0.58%Corporate Q2 07 *Overdue ratio (more than 60 days) = volume of loans more than 60 days overdue /12 month-old credit portfolio
  10. 10. (10) Swedish Banking • Continued solid volume growth • Net interest income increased by 2% compared with Q4 2007 • Lower equity related commission income • Continuous work to adjust the branch structure – sale of 8 branches to savings banks for SEK 440m 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Income Costs C/I-ratio C/I-ratioSEKm C/I-ratioSEKm
  11. 11. (11) Baltic Banking Operations • Profitability remained robust • Lending growth continued to decrease • Net interest margins declined due to decreasing local interest rates and higher funding costs • Net loan losses as expected • Cost focus – Operational excellence pilots indicate substantial potential – No new net staff recruitments 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 0.0 0.1 0.2 0.3 0.4 0.5 Income Costs C/I-ratio SEKm C/I-ratio
  12. 12. (12) Baltic macro development Real GDP growth 0% 2% 4% 6% 8% 10% 12% 14% 2005 2006 2007 2008F 2009F Est Lat Lit CPI growth 2% 4% 6% 8% 10% 12% 14% 16% 2005 2006 2007 2008F 2009F Est Lat Lit • Economic slowdown in Estonia continues: GDP growth will fall to about 3.5% in 2008, with a recovery to 5% growth in 2009. The bottom of the cycle is expected to be in summer 2008 • In Latvia growth will decline to about 4% in 2008 and to about 3.0% in 2009. The bottom of the cycle is expected to be in winter 2008/2009 • Slowdown in Lithuania will be modest: expected GDP growth of about 6.0% in 2008 and about 5.5% in 2009 • Export growth remains relatively strong, while weak domestic demand is reducing imports. 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 Markets
  13. 13. (13) International Banking • Continued solid performance in Ukraine – Launch of the new brand initiated – Expansion and restructuring of the branch network continues – New corporate offering • Cautious expansion in Russia – Raimo Valo new head of Russian operations • Cooperation with FDB/COOP regarding banking products in Denmark. 0 25 50 75 100 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 International Banking, profit for the period of which Russian Banking of which Ukrainian Banking Operations SEKm
  14. 14. (14) Swedbank Markets • Fixed income and FX trading continued to do well • Equity trading was weaker due to negative market sentiment • Market leader position in structured products was improved, in a weaker market • Weak quarter in Corporate Finance for First Securities • Result was negatively affected by unrealized valuation effects as a result of the credit crunch. 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 Q1 08 Profit for the period attributable to shareholders of Swedbank First Securities SEKm
  15. 15. (15) Accounting and valuation effects Accounting and valuation effects, SEKm Q1 2008 Q4 2007 Q3 2007 Swedbank Markets – 187 – 40 – 60 Group Treasury, intra-group lending – 253 20 – 90 Swedbank Mortgage – 22 66 – 129 Group Treasury, liquidity portfolio 69 – 5 – 68
  16. 16. (16) Swedbank funding structure Swedbank Treasury (excluding Mortgage) • Large deposit base • Liquidity reserves • Net lender in the interbank market • Liquidity limits – conservative view Swedbank Mortgage constitutes a larger part of Swedbank Group’s balance sheet compared with other financial institutions Distribution of net funding requirement Swedbank Mortgage Lending to the public: SEK 1,131bn Deposits 80% Equity 8% Funding 12% Equity 4% Funding 96% 50%50% Swedbank Group, excl. Swedbank Mortgage SEK 562bn Swedbank Mortgage SEK 569bn
  17. 17. (17) Focus on funding Funding costs have increased • Higher price of risk • Increased liquidity reserve • Short-term adverse effect on margins Covered bonds as of 21 April 2008 • AAA rating (S&P and Moody’s) ⇨ funding at lower cost • Facilitates access to a broader investor base – more stable liquidity • Provides substantially increased liquidity reserve.
  18. 18. (18) Income statement, Group SEKm Q1 2008 Q4 2007 % Q1 2007 % Net interest income 5,241 5,259 – 0 4,501 16 Net commission income 2,180 2,536 – 14 2,289 – 5 Net gains/losses on financial items at fair value 75 386 – 81 530 – 86 Other income 950 693 37 473 101 Total income 8,446 8,874 – 5 7,793 8 Staff costs 2,311 2,111 9 1,932 20 Profit-based staff costs 268 522 – 49 390 – 31 Other expenses 1,861 1,893 – 2 1,615 15 Total expenses 4,440 4,526 – 2 3,937 13 Profit before loan losses 4,006 4,348 – 8 3,856 4 Loan losses 288 238 21 49 488 Operating profit 3,718 4,110 – 10 3,807 – 2 Tax 805 950 – 15 851 – 5 Profit for the period 2,913 3,160 – 8 2,956 – 1 Attributable to shareholders of Swedbank 2,900 3,108 – 7 2,910 – 0
  19. 19. (19) Net interest income Q1 08 (Q4 07) 5,259 5,241 55 -13 1 22 -215 132 4,600 4,800 5,000 5,200 5,400 Netinterest income Q407 Swedish Banking BalticBanking Operations BalticBanking Investment International Banking Swedbank Markets Shared Servicesand other Netinterest income Q108 SEKm
  20. 20. (20) Swedish Banking, change in net interest income SEKm Q1 2008 vs Q4 2007 Q1 2008 vs Q1 2007 Net interest income Q4 2007 2,927 Net interest income Q1 2007 2,943 Changes: Higher lending volumes 55 234 Decreased lending margins – 116 – 403 Difference in number of days/quarter, lending – 18 18 Higher deposit volumes 24 122 Higher deposit margins 110 194 Difference in number of days/quarter, deposits – 13 13 Other changes 13 – 139 Total change 55 39 Net interest income Q1 2008 2,982 2,982
  21. 21. (21) Baltic Banking, change in net interest income SEKm Q1 2008 vs Q4 2007 Q1 2008 vs Q1 2007 Net interest income Q4 2007 1,588 Net interest income Q1 2007 1,215 Changes: Higher lending volumes 47 245 Higher lending margins 3 8 Difference in number of days/quarter, lending -11 11 FX-effects, lending 14 21 Higher deposit volumes 44 68 Higher deposit margins 85 Decreased deposit margins -148 Difference in number of days/quarter, deposits -6 6 FX-effects, deposits 10 11 Other changes 34 -95 Total change – 13 360 Net interest income Q1 2008 1,575 1,575
  22. 22. (22) Net commission income, Group 0 200 400 600 800 1,000 Asset management Payments Brokerage Lending Insurance Corporate finance Other Q1 2008 Q4 2007 SEKm
  23. 23. (23) Loan losses Q1 08 (Q4 07) -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 Resultat före kreditförluster Reavinster EnterCard, KIAB Kreditförluster, netto* Rörelseresultat (exkl. reavinster) mkr mkr -100 -50 0 50 100 150 200 250 300 350 Group, total Swedish Banking Baltic Banking Operations International Banking Swedbank Markets Shared Services and other Q4 2007 Q1 2008 mkr
  24. 24. (24) Expenses SEKm Q1 2008 Q4 2007 % Q1 2007 % Swedish Banking 2,255 2,279 – 1 2,183 3 Baltic Banking 899 1,062 – 15 769 17 International Banking 309 272 14 107 of which Ukrainian Banking 150 163 – 8 Swedbank Markets 456 560 – 19 517 – 12 Asset Management & Insurance 253 230 10 183 38 Other 268 123 178 51 Total expenses 4,440 4,526 – 2 3,937 13 of which staff costs in: Swedish Banking 1,099 1,096 0 1,023 7 Baltic Banking 522 587 – 11 451 16 International Banking 157 155 1 52 Swedbank Markets 258 351 – 26 345 – 25 Asset Management & Insurance 110 138 – 20 76 45
  25. 25. (25) Business areas 2008 vs 2007, SEKm 2008 % 2008 % 2008 % 2008 % 2008 % Net interest income 2,982 1 1,575 30 369 289 – 28 25 32 Net commission income 1,025 – 5 458 8 54 26 227 – 38 416 4 Other income 690 93 209 – 24 26 254 2 24 – 57 Total income 4,697 7 2,242 17 449 770 – 24 465 – 2 Staff costs 1,099 7 522 16 157 258 – 25 110 45 Other expenses 1,156 – 0 377 19 152 198 15 143 34 Total expenses 2,255 3 899 17 309 456 – 12 253 38 Profit before loan losses 2,442 11 1,343 17 140 65 314 – 36 212 – 27 Loan losses 95 173 62 26 ## 0 0 Operating profit 2,347 4 1,170 13 114 58 314 – 36 212 – 27 Tax 656 4 107 20 28 75 88 – 36 53 – 23 Profit for the period 1,691 4 1,063 12 86 54 226 – 37 159 – 28 Attributable to Swedbank's shareholders 1,688 4 1,063 12 86 54 216 – 31 159 – 28 Return on allocated equity, % 23.3 29.1 5.0 23.7 29.4 Asset Mgmt Int'l. Banking Swedish Banking Baltic Banking Swedbank Markets
  26. 26. (26) Key figures Jan-Mar 2008 Jan-Mar 2007 Return on equity, % 16.8 18.9 Earnings per share, SEK 5.63 5.65 Equity per share, SEK 136.43 122.84 C/I ratio before loan losses 0.53 0.51 Loan loss ratio, net, % 0.10 0.02 Share of impaired loans, % 0.16 0.07 Dividend, SEK 9.00* 8.25 Tier 1 capital ratio, new rules, % 8.2 8.0 Tier 1 capital ratio, transition rules, % 6.5 6.8 Capital adequacy ratio, new rules, % 11.7 11.8 * according to Board of Directors proposal
  27. 27. (27) Core business is doing well – challenging financial markets • Solid business development with corporates and private customers • Development as expected in the Baltic states • Funding programmes continue to function well – conversion to covered bonds on 21 April • Credit quality remains good, credit losses and impaired loans are increasing from low levels • Lower commission income due to weaker equity markets and low corporate finance activity • Net gains and losses on financial items were adversely affected by unrealized valuation effects caused by the credit crunch
  28. 28. (28) Appendix
  29. 29. (29) Exposures • No direct US subprime exposure – Minimal indirect exposure through investments of EUR 48m in bonds issued by US mortgage institutions. The bonds have about 5% exposure to US subprime • Total exposure to structured credits is minimal – No commitments as regards conduits or SIVs of any kind – Negligible exposure to CDOs • Swedbank holds a very small CDO trading stock for client trades in CDOs issued by Swedbank, with mainly large caps as underlying risk • Holdings totalled EUR 18m at end Q1 – Exposure to Mortgage Backed Securities was about EUR 714m • European Aaa and mainly residential • Held for EUR liquidity purposes and client trading • Hedge fund exposure was about EUR 500m, all collateralized • Exposure to private equity firms and their target companies was about EUR 1,350m in total – Nordic related LBOs • The above-mentioned exposures together represent less than 1.5% of total assets.
  30. 30. (30) Baltic Banking lending by sectors 593 1,076 1,780 1,800 2,933 8,370 3,185 0 2,000 4,000 6,000 8,000 10,000 Other Construction Transport Industry Retail & Wholesale Real-estate mgmt Individuals 47 -35 88 64 -79 268 -2 -250 0 250 500 750 Portfolio, March 2008 Portfolio growth, Q1 08 42% xx% - share of portfolio and portfolio growth 3% 5% 9% 9% 15% 10% -12% 41% 16% 0% 13% -5% 7% As of 2008, Bank of Estonia changed the official sector classification details. During the process of implementing the new classification, Hansabank switched to a different source system and reviewed the sector data in detail. This resulted in many reclassifications, particularly as regards the real estate management sector. The current classification better illustrates Baltic Banking’s exposure to the real estate sector. Real estate management portfolio growth prior to reclassification was EUR 145m in Q1 08.
  31. 31. Additional questions? Johannes Rudbeck Investor relations johannes.rudbeck@swedbank.se +46858593322
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