Post on 10-Apr-2018
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an ng & nsurance on erence29 September 2010
Michael Wolf, CEO
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Progress continued throughout Q2
Net profit of SEK 1.6bn
Improved credit quality
Strengthened capitalisation to 12.7 per cent Core Tier 1
approva to uy ac er on s
2
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Recent business achievements
Higher mortgage new sales market shares in Sweden
Increased corporate activity
Retails tailored service concept well received
New in-principle framework agreement with Savings Banks
Association
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Result by business area
Q2 update Profit before impairments
RetailSolid credit quality, higher customer activity
1 000
2 000
Q1 10
Q2 10
Large Corporates & InstitutionsGood credit quality, repricing continues, slowertrading
-1 000
0
Baltic BankingImproving asset quality, stabilised NII, Estoniaback to rofit
-2 000
Retail LargeCorporates &
BalticBanking
Russia &Ukraine
AssetManagement
Ektornet
Russia & UkraineStabilising credit quality, continued restructuring
2 000
SEKm Operating result
Q1 10
n uss a
Asset ManagementStable earnin s
0
1 000Q2 10
EktornetRepossessed properties valued at SEK 1 010m, -2 000
-1 000
4
e a argeCorporates &
Institutions
a cBanking
uss aUkraine
sseManagement
orne
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Pressure decreasing
Net interest income
5 000
SEKm
4 0233 7994 000
4 500Retail LCI Baltic Banking Russia
& UkraineGroup Treasury
and Other
-34 41-
-2043 500
2 500
1 500
2 000
500
1 000
5
0
NII Q1 10 NII Q2 10
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Commissions back to re-crisis levels
Net commission income
Positive trend from Q1 2009
Market leader in cards and payments
Growth driven by Asset Management
Net commission income*
2 500
3 000
m
1 500
2 000
500
1 000
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
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* Excl non-recurring items
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Term funding ahead of lan
Liquidity & Capital management
YTD, SEK 150bn in term funding ofwhich around SEK 50bn during the
-
Outstanding wholesale funding(nom SEKbn )
secon quarter
SEK 60bn in remaining term funding
397
459
173Total long-
-term, non-guaranteed
YTD around SEK 95bn of central bankrepos and guaranteed funding has been
180
174
89Central bank
term,guaranteed*
redeemed Average maturity of wholesale funding
116
87
112Total short-term, non-
repos
(38 months for covered bonds)
97
28
0Total short-
term,***
guaranteed**
Q2 2010
* Issued with more than 12 months maturity, government fee of 83bp
** Including interbank deposits
***
Q1 2010
Q4 2009
7
ssue w ess an mon s ma ur y, governmen ee o p
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Asset ualit develo ment
Asset quality
No impact of European sovereign debt crises
Further stabilisation/improvement in the Baltic countries
and liability side
we an s res ence vast y mprove ICAAP
n erna s ress es s
Stress test of the Committee of European Banking Supervisors
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Asset quality
Credit im airments significantl reduced
Sweden very low levels8 000
SEKm
ma recover es n uss a anUkraine
6 672
6 121
6 000
7 000
Few new problems
Property prices stabilising/increasing
5 003
4 000
5 000
Insolvency and debt restructuring laws Positive trend likely to continue 2 210
3 000
963
1 000
-1 000
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
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Retail LCI Baltic Banking Russia & Ukraine Other
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Significant rogress made still work to be done
5Y CDS spreads
400
300
350
200
250
150
50
100
0
30/12/2005 30/06/2006 31/12/2006 30/06/2007 31/12/2007 30/06/2008 31/12/2008 30/06/2009 31/12/2009 30/06/2010
10
Source: Datastream and Reuters
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Will lending margin ressure decrease?
Swedbank has re-priced a larger part of liabilities compared to
Source: SEB Enskilda Equity Research
Nordic banks long term funding broken down by time of issuance (based on ~3,000 bonds)
Portion of pre-, post and mid-crisis funding matters
The two extremes: Swedbank has only 30%
pre-crisis funding and
50% mid crisis funding80%
100%
120%
Handelsbanken has 60%
pre-crisis funding and ony
around 20% mid-crisis
funding20%
40%
60%
Swedbank DnB NOR Nordea SEB Danske BankHandelsbanken
Pre-crisis Mid-crisis Post-crisis
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EQUITY RESEARCH 10
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Basel 3 im act on Swedbank ost Jul amendments*
NSFR is more or less in-line with proposed future minimum requirements,
Core Tier 1 capital expected to decrease less than 4%, and RWA expected
Swedbank has a leverage ratio with a substantial margin to the proposed
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*Preliminary calculations
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Summar
NII pressure decreasing
Improved risk profiles on both the asset and liability side
Resilience vastly improved
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New insolvenc law in Latvia
Legal protection proceedings Insolvency proceedingsof legal entities
Insolvency proceedingsof private persons
NOVELTIESNOVELTIES
LPP plan = business plan
Diminished possibility to use LPP in bad
faith, to delay time
Debtor should be able to make factually
Debtors property should be
enforced in 6 months
Simplified procedure to cancel
appointment of administrator, also
Debtors property should be enforced in 6 months
Simplified procedure to cancel appointment of administrator,
also with participation of secured creditors
Possibility to restructure obligations of our clients by reaching
a paymen s un er agreemen s
concluded with bank
Additional requirement to quality of the
LPP plan money flow, substantiation of
incomes etc.
w par c pa on o secure
creditors
Administrator by agreement with
bank is entitled to sell property
without auction, also the company
an agreemen a e c en w ma e concre e paymen s o e
bank. Other creditors will not be entitled to ask enforcement of
this pledge
Possibility to check agreements concluded by debtors 3 years
before proclamation of insolvency
SWEDBANKS VIEWSWEDBANKS VIEW
Positive
Improvement of speed and efficiency of
Positive
Improvement of speed and
Negative
Efficiency of proceedings depends on the court practice.
procee ngs e c ency o procee ngs men men s, w c are cruc a or we an :
If total liabilities exceed LVL 100th (EUR 142th), insolvency
procedure lasts 3.5 years
If total liabilities do not exceed LVL 100th (EUR 142th),
insolvency procedure lasts 2 years. Client has to repay theunsecure part o t e oan t at as rema ne a ter t e sa e o
collateral covering 30% of his/her official income, but not less
than LVL 60 (EUR 85) per month (i.e. 1/3 of min salary)
Neutral(in total)
e new aw prov es many pos t ve nove t es to t e ex st ng regu at on o nso vency procee ngs, ut ts e c ency w epen on mec an sm o
implementation. In total the law changes are not expected to change the trend in credit impairments.
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