SEB Resultatpresentation January September 2008

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SEB Resultatpresentation January September 2008

  1. 1. Annika Falkengren Result presentation Jan – Sep 2008 1
  2. 2. Extremely challenging markets Selected stock market indices Stibor Tomorrow Next % OMX NORDIC FTSE W.EUROPE BANKS MSCI World 7.0 130 6.5 120 110 6.0 100 5.5 90 5.0 80 4.5 70 4.0 60 3.5 50 3.0 40 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Swedish 3-month interbank spread vs. treasury Swedish 5-year mortgage bond spread vs. swap Bps % 250 120 100 200 80 150 60 40 100 20 50 0 0 -20 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 2
  3. 3. Highlights Q3 2008 Strong capital and liquidity SEK m Income 8,705 Resilient underlying business Expenses -5,970 – Robust customer franchise Operating result 2,010 – Strong volume growth Net result 1,514 – Strengthened market position RoE, % 8.0 Negative financial effects due to financial crisis C/I-ratio 0.69 Net credit loss level, % 0.27 Continued collective provisions in the Baltic countries 3
  4. 4. Key figures SEB Group Change Q3 Q2 Q3 SEK m 2008 2008 2007 Operating income 8,705 -16% -8% Operating expenses -5,970 -7% 7% Operating profit 2,010 -43% -46% Net profit 1,514 -46% -51% Return on Equity, % 8.0 -7.2 -9.3 Cost / income ratio 0.69 0.07 0.10 Credit loss level, % 0.27 0,10 0.19 Basel II Core capital ratio, % 8.1 -0.5 -0.2 Risk-weighted assets, SEK bn 937 66 140 4
  5. 5. Resilient underlying business SEK m Financial crisis impacts profit… …but underlying income generation is stable 5 000 10,000 4 000 8,000 3 000 6,000 2 000 4,000 1 000 2,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2007 2008 Other income** Lehman Brothers-related losses Net fee and commission income Portfolio losses Net interest income Reported operating profit* ** Net financial income, Net insurance income and Other income * Excluding sales of Baltic properties in Q4 2007 of SEK 785m 5
  6. 6. Net interest income Group, SEK m Lending to the public SEKbn Jan-Sep 08 +18% yoy 1,400 13,197 +14% 1,200 Total NII 1,000 11,623 800 11,911 600 +12% Customer 400 10,676 Q1 Q2Q3 Q4Q1 Q2 Q3Q4Q1 Q2Q3Q4 Q1 Q2Q3 driven* 2005 2006 2007 2008 Deposits from the public SEKbn Jan-Sep 08 +12% yoy 900 800 700 600 500 400 Q1 Q2Q3Q4Q1 Q2Q3 Q4Q1 Q2Q3Q4Q1 Q2Q3 2005 2006 2007 2008 Jan-Sep 07 Jan-Sep 08 * Volumes and margins on lending and deposits 6
  7. 7. Fee and commission income Gross development Jan-Sep 2008 vs. Jan-Sep 2007, SEK m Capital markets driven Non-capital Value driven – market driven performance driven +3% Securities -6% transaction 5,376 5,557 driven 5,402 5,091 Deal driven -14% 3,163 2,729 -35% 1,431 936 769 524 New issues & Secondary market Custody & mutual Payment, cards, Other advisory & derivatives funds structured lending, deposits, Jan-Sep 07 Jan-Sep 08 guarantees 7
  8. 8. Net financial income Group SEK m 1,000 500 + corp fin intäkter I 0 marknaden? -500 FX Equities Capital CPM Other incl. -1,000 Markets Treasury Q3 07 Q2 08 Q3 08 Merchant Banking Investment portfolio Structured SEK m Q1 08 Q2 08 Q3 08 SEK credits 12bn Financial P/L -872 -66 -348 SEK institutions SEK 63bn Equity -1,630 -56 -2,134 55bn Covered -2,502 -122 -2,482 bonds etc 8
  9. 9. Cost development Cost increase, +7% Cost management program 2007 – 2009 Jan – Sep 2008 vs. Jan – Sep 2007, SEK m Target Achieved 1,400 SEK -865m SEK 1.5 1,200 Other – 2.0bn 1,000 Baltics 800 * Acquisitions 600 Pension 400 cost One IT 200 Roadmap 2007 2008 2009 * 0 9
  10. 10. Asset quality Group credit exposure Impaired Loans Volumes % of Credit Portfolio* Total exposure = SEK 1,805bn 3% SEB Group Germany Nordic Baltic 2% 1.5% Nordics 1.4% 66% 1% 0.6% 0.2% 0% Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep '06 '06 '06 '06 '07 '07 '07 '07 '08 '08 '08 Germany Estonia 1.31 24% Latvia 0.96 Net Credit Losses, Lithuania 0.43 % of lending Baltics 0.85 1.00 Lithuania Germany Baltics 0.80 5% Estonia Nordics SEB Group Latvia 0.60 3% 2% 0.40 0.20 0.00 2006 2007 Q1 Q1-Q2 Q1-Q3 *Annualised figures 2008* 2008* 2008* 10
  11. 11. Status report – Baltic business Provisioning to build up reserves Impaired loans in SEB’s portfolio SEK m Per cent Specific Collective Estonia Latvia Lithuania 2.0% 350 250 1.5% 150 1.0% 50 0.5% -50 0.0% Q4-07 Q1-08 Q2-08 Q3-08 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Net credit losses Profit before credit losses etc. SEK m SEK m Estonia Latvia Lithuania Estonia Latvia Lithuania 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 0 0 2005 2006 2007 Jan-Sep 2005 2006 2007 Jan-Sep 2008 2008 11
  12. 12. Strong capitalisation enables growing customer business Tier 1 capital ratio Risk-weighted assets Per cent SEK bn Basel I Basel II 1200 15% Without transaction rules With transition rules 900 10% 600 300 6% Stability 5% package 4% Swedish FSA's 0 minimum rules Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2007 2007 2007 2008 2008 2008 0% september 2008 12
  13. 13. Structural liquidity position Balance sheet structure Net liquidity position across maturities SEK bn, 30 Sep 300 SEB is match- 250 funded approx. Short-term Liquid one year funding assets 200 150 100 Long- 50 term Lending funding, 0 deposits 1 week 2 weeks 4 weeks 2 months 3 months 4 months 5 months 6 months 9 months 12 months & Equity More than 12 months matched funding, i.e. based on no access to capital markets, no refinancing of debt to credit institutions, issued bonds or subordinated capital; and moderate reduction of Assets Equity & Liabilities business activities. 13
  14. 14. Global downturn, and… ● Strong capital and good liquidity ● Robust customer business ● Intensified advisory services … financial turmoil has turned a corner ● Lower absolute costs 14
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