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© Swedbank
Swedbank’s third quarter 2015 results
Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
Successful customer migration – southern region
2
Swedish Banking
Ratios Q3 15 Q2 15
ROE, % 19.0 18.9
C/I ratio 0.43 0.44
...
Market leader
• Loan volume growth
• Solid asset quality
• Acquisition of retail portfolios -
around 127 000 new customers...
Weaker result
• Lower NGL
– Lower activity
– Widening credit spreads
• Stable NII
– Lower deposit margins
– Loan volume gr...
Good cost control – increased investment needs
5
Group results
SEKm Q3 15 Q2 15 ▲QoQ
Net interest income 5 811 5 704 107
N...
Strong capitalisation – no excess capital
Capital
6
• CET1 capital ratio improved
− CET1 capital increase
− REA decrease
•...
92
94
96
98
100
102
104
106
2013 2014 Q3 2015
NSFR
0
10
20
30
40
50
60
70
80
Average
2014
Q115 Q215 Q315
Other
Senior unse...
Strong asset quality
8
Asset quality
Credit impairments, SEKm Q3 15 Q2 15 ▲QoQ
Swedish Banking 35 48 -13
Baltic Banking -2...
Q&A
Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
Appendix
10
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q313 Q115 Q315
0
5
10
15
20
25
0
20
40
60
8...
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Q3 10 Q3 11 Q3 12 Q3 13 Q3 13 Q3 15
Swedbank – strong and stable earnings capa...
0.30
0.35
0.40
0.45
0.50
0.55
0.60
2010 2011 2012 2013 2014 YTD 2015
12 000
14 000
16 000
18 000
20 000
2010 2011 2012 201...
4.5
0.2
-3.1
0.0
-3.3
-1.9
1.0
406.8
404.2
395
397
399
401
403
405
407
409
411
413
415
Q2 2015 Exposure
change
Rating
migr...
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Loans net, SEKm
Shipping and Offshore
• Lending totalled SEK 28.3b...
0
50
100
150
200
250
300
350
400
0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365
0
10
20
30
40
50
60...
0
50
100
150
200
2015 2016 2017 2018 2019 2020 2021-
Other
CHF
USD
EUR
SEK
0
50
100
150
200
2015 2016 2017 2018 2019 2020 ...
100
120
140
160
180
200
220
05 06 07 08 09 10 11 12 13 14 15
Single-family homes
Real estate prices – Sweden 12 months dev...
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-...
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Swedbank's third quarter 2015 results

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Swedbank's third quarter 2015 results

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Swedbank's third quarter 2015 results

  1. 1. © Swedbank Swedbank’s third quarter 2015 results Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
  2. 2. Successful customer migration – southern region 2 Swedish Banking Ratios Q3 15 Q2 15 ROE, % 19.0 18.9 C/I ratio 0.43 0.44 • Customer migration completed – 100 000 new customers • Lower deposit margins • Higher mortgage margins • Mortgage loan volume growth • Weaker income from asset management • Solid asset quality Volumes, SEKbn Q3 15 Q2 15 ▲ QoQ Loans 1 059 1 050 9 Deposits 431 428 3 SEKm Q3 15 Q2 15 ▲ QoQ Net interest income 3 404 3 281 123 Net commission income 1 717 1 916 -199 Other income 452 471 -19 Total income 5 573 5 668 -95 Total expenses 2 412 2 496 -84 Profit before impairments 3 161 3 172 -11 Credit impairments 35 48 -13
  3. 3. Market leader • Loan volume growth • Solid asset quality • Acquisition of retail portfolios - around 127 000 new customers 3 Baltic Banking Ratios Q3 15 Q2 15 ROE, % (excl. one-off tax in Q2) 16.2 16.6 C/I ratio 0.39 0.40 Volumes, SEKbn Q3 15 Q2 15 ▲ QoQ Loans 129 126 3 Deposits 144 138 6 SEKm Q3 15 Q2 15 ▲ QoQ Net interest income 900 865 35 Net commission income 511 524 -13 Other income 155 147 8 Total income 1 566 1 536 30 Total expenses 605 611 -6 Profit before impairments 961 925 36 Credit impairments -2 -49 47 Tax 132 1 064 -932 Net profit 825 -91 916
  4. 4. Weaker result • Lower NGL – Lower activity – Widening credit spreads • Stable NII – Lower deposit margins – Loan volume growth from Q2 • Solid asset quality 4 Large Corporates & Institutions Ratios Q3 15 Q2 15 ROE, % (excl. one-off tax in Q2) 13.3 15.6 C/I ratio 0.44 0.43 Volumes, SEKbn Q3 15 Q2 15 ▲ QoQ Loans 182 182 0 Deposits 103 106 -3 SEKm Q3 15 Q2 15 ▲ QoQ Net interest income 865 862 3 Net commission income 509 491 18 Net gains and losses 315 576 -261 Other income 33 39 -6 Total income 1 722 1 968 -246 Total expenses 766 842 -76 Profit before impairments 956 1 126 -170 Credit impairments 97 7 90
  5. 5. Good cost control – increased investment needs 5 Group results SEKm Q3 15 Q2 15 ▲QoQ Net interest income 5 811 5 704 107 Net commission income 2 736 2 842 -106 Net gains and losses 4 82 -78 Other income 683 687 -4 Total income 9 234 9 315 -81 Total expenses 3 879 4 047 -168 Profit before impairments 5 355 5 268 87 Credit impairments 130 6 124 Other impairments 270 22 248 Tax 1 012 1 538 -526 Net profit 3 928 3 666 262 • Stable NII − Mortgage volume growth − Mixed margins • Lower assets under management • Lower NGL − Lower activity − Widening credit spreads • Good cost development • Strong asset quality Ratios Q3 15 Q2 15 ROE, % 13.5 13.4 Cost/income ratio 0.42 0.43 CET1 capital ratio, % 23.0 22.4
  6. 6. Strong capitalisation – no excess capital Capital 6 • CET1 capital ratio improved − CET1 capital increase − REA decrease • SREP result in line with expectations • Continued regulatory uncertainty CET1 capital ratio, % * Swedbank’s estimate based on SFSA’s announced capital requirements, including fully implemented buffers and Pillar 2 requirements
  7. 7. 92 94 96 98 100 102 104 106 2013 2014 Q3 2015 NSFR 0 10 20 30 40 50 60 70 80 Average 2014 Q115 Q215 Q315 Other Senior unsecured debt Covered bonds Increased long-term funding activity • Funding per Q3 2015, SEK 188bn • NSFR at 104 per cent 7 Liquidity and funding Net Stable Funding Ratio Quarterly long-term funding issuance SEKbnPercent
  8. 8. Strong asset quality 8 Asset quality Credit impairments, SEKm Q3 15 Q2 15 ▲QoQ Swedish Banking 35 48 -13 Baltic Banking -2 -49 47 Large Corporates & Institutions 97 7 90 Swedbank Group 130 6 124 Ratios Q3 15 Q2 15 Credit impairment ratio, % 0.04 0.00 Share of impaired loans, gross % 0.35 0.36 Total provision ratio for impaired loans, % 58 55 Credit impairment ratio% -0.40 -0.30 -0.20 -0.10 0.00 0.10 0.20 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q313 Q115 Q315
  9. 9. Q&A Michael Wolf (CEO), Göran Bronner (CFO), Anders Karlsson (CRO)
  10. 10. Appendix 10
  11. 11. -0.40 -0.30 -0.20 -0.10 0.00 0.10 0.20 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q313 Q115 Q315 0 5 10 15 20 25 0 20 40 60 80 100 120 140 160 2011 2012 2013 2014 Q3 2015 NSFR LCR CET1 capital ratio, Basel 3 (RHS) Swedbank – a low-risk bank with strong capital base 11 • Low risk – a Board of Directors’ strategic priority – ensures access to funding markets and low funding costs • Retail profile and four home markets a key feature – 86% of total loans originated in Sweden - Swedish mortgages account for 62% of total loans – 90% of total loans are collateralised (76% real estate and 14% other collateral) • Strong capital position – Board of Directors’ decision to maintain a buffer above prevailing SFSA capital requirements to have operational flexibility – current buffer 340bp • Conservative funding and liquidity position – survival horizon longer than 12 months assuming closed funding markets, NSFR 104% and LCR 135% • Baltic operations self-funded – Loan-to-Deposit ratio < 100% % This is Swedbank Liquidity & capital % Source: Swedbank 30 Sep 2015 Credit impairment ratio%
  12. 12. 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 Q3 10 Q3 11 Q3 12 Q3 13 Q3 13 Q3 15 Swedbank – strong and stable earnings capacity 12 • Four home markets – Sweden, Estonia, Latvia and Lithuania – Strong and stable economies – Market leading position in all home markets – Largest customer base in all home markets • Retail profile ensures stable earnings with low volatility • High cost efficiency – a strategic priority – ensures good profitability • Stable earnings is first line of defence supporting low risk profile and strong capital position SEKm This is Swedbank Source: Swedbank 30 Sep 2015 Profit before impairment
  13. 13. 0.30 0.35 0.40 0.45 0.50 0.55 0.60 2010 2011 2012 2013 2014 YTD 2015 12 000 14 000 16 000 18 000 20 000 2010 2011 2012 2013 2014 Ambition 2016 Acquistion of Sparbanken Öresund Swedbank – market leading cost efficiency 13 • Best in-class cost efficiency – an executive management strategic priority • Strong dedication from executive management on cost and change management − Integrated in corporate culture − Focus on straight-through-processing − Evolving household banking model – digitalisation trend • Retail profile a key feature − Four home markets – Sweden, Estonia, Latvia and Lithuania – reducing complexity − Largest private and SME customer base − High degree of digitalisation in home markets SEKm Total expenses This is Swedbank Source: Swedbank 30 Sep 2015 C/I ratio
  14. 14. 4.5 0.2 -3.1 0.0 -3.3 -1.9 1.0 406.8 404.2 395 397 399 401 403 405 407 409 411 413 415 Q2 2015 Exposure change Rating migration (PD) LGD changes Other credit risk CVA risk Market risk Operational risk Q3 2015 Increase Decrease Reduced REA Capital 14 • REA net decrease of SEK 2.6bn − Lower market risk − FX fluctuations impact negatively Risk exposure amount SEKbn
  15. 15. 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 Loans net, SEKm Shipping and Offshore • Lending totalled SEK 28.3bn – Market activity slowed down compared to Q1 15 and Q4 14 – Decreased origination • Individual client action plans in place • Clients now adapting to the lower oil price by cutting costs, postponing orders and setting up new financial structures 15 Asset quality Shipping and Offshore Negatively impacted by lower oil prices Source: Swedbank 30 Sep 2015 SEKm
  16. 16. 0 50 100 150 200 250 300 350 400 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365 0 10 20 30 40 50 60 70 80 90 100 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Covered bonds Senior unsecured debt Conservative funding position • LCR 135% (Swedish FSA definition FFFS 2012:6) • NSFR 104% (Basel committee) • Issued SEK 188bn of term funding YTD 2015 • Increased funding need to support loan growth 16 Liquidity and funding Term funding issuance – completed and planned SEKbn Source: Swedbank 30 Sep 2015 SEKbn Days forward Prefunded for more than 12 months Survival horizon nominal amounts
  17. 17. 0 50 100 150 200 2015 2016 2017 2018 2019 2020 2021- Other CHF USD EUR SEK 0 50 100 150 200 2015 2016 2017 2018 2019 2020 2021- Senior unsecured debt Covered bonds 17 Long-term funding maturity profile Long-term funding maturity profile, by funding source Source: Swedbank 30 Sep 2015 Liquidity and funding SEKbn SEKbn Long-term funding maturity profile, by currency Benchmark transactions YTD 2015 ● USD 750m, Perp. NC5 (2020), AT1, 5.50% - equity conversion ● USD 1bn 144a Senior, 5Y (2020), T+77bp (+ USD 400m 3Y (2018) T+65bp) ● EUR 1bn CB, 7Y (2022), Fixed MS-5bp ● GBP 500m CB, 3Y (2018 FRN, 3m £L+20bp ● GBP 300m Senior, 4Y (2019), Fixed G+80bp ● SEK 3bn, Senior 5Y (2020), Fixed/FRN, 3m Stibor + 50bp ● USD 1bn, RegS. CB 5Y (2020), Fixed, 3m $L + 37bp ● EUR 750m Senior 7Y (2022), Fixed, MS+45bp
  18. 18. 100 120 140 160 180 200 220 05 06 07 08 09 10 11 12 13 14 15 Single-family homes Real estate prices – Sweden 12 months development 18 Swedish housing and mortgage market Single-family homes1 Tenant-owner rights2 Combined3 12M Δ 12M Δ 12M Δ Oct 14 8% 15% 11% Nov 14 13% 15% 14% Dec 14 15% 15% 15% Jan 15 11% 15% 12% Feb 15 12% 17% 14% Mar 15 13% 19% 15% Apr 15 13% 20% 16% May 15 13% 18% 15% Jun 15 12% 19% 14% Jul 15 14% 18% 15% Aug 15 13% 19% 15% Sep 15 14% 20% 16% Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE House price index, Sweden3 2005=100
  19. 19. 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Vilnius No. of transactions EUR/m2 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Riga No. of transactions EUR/m2 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Tallinn No. of transactions EUR/m2 Baltic countries Real estate prices 19 EUR/m2 /No. of transactions EUR/m2 /No. of transactions EUR/m2 /No. of transactions Source: Swedbank 30 Jun 2015

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