Presentation Swedbank's First Quarter 2014 results
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© Swedbank Swedbank’s first quarter 2014 results Michael Wolf, CEO Göran Bronner, CFO Anders Karlsson, CRO
description
Presentation Swedbank's First Quarter 2014 results
Transcript of Presentation Swedbank's First Quarter 2014 results
© Swedbank
Swedbank’s first quarter 2014 results
Michael Wolf, CEO
Göran Bronner, CFO
Anders Karlsson, CRO
© Swedbank
Stronger market position in southern Sweden
• Acquisition of 100 per cent of Sparbanken
Öresund
• Creation of Sweden’s largest savings
bank Sparbanken Skåne
– Swedbank will own 22 per cent of
Sparbanken Skåne
• Significant financial upside for Swedbank
– Cost and capital synergies
• Awaiting approval from the Swedish FSA
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Market position
Swedbank: 27
Sparbanken Öresund: 16
Number of branches:
Sparbanken Skåne: 45
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Stable results
• Lower deposit margins
– Stibor
– Number of days effect
• Stable mortgage margins
• Good economic activity
supports fee income
• Solid asset quality
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Swedish Banking
SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y
Net interest income 3 314 3 448 3 331 - 134 -17
Net commissions 1 649 1 649 1 589 0 60
Total income 5 422 5 536 5 378 -114 44
Total expenses 2 443 2 526 2 399 -83 44
Profit before
impairments 2 979 3 010 2 979 -23 0
Credit impairments 31 140 55 -109 -24
ROE, % 28.3 27.7 28.1
C/I ratio 0.45 0.46 0.45
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Strong Return on Equity
• Strong client activity within
Debt Capital Markets and
Corporate finance
• Positive deposit volume trend
• Solid asset quality
• Planned cost increases
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Large Corporates & Institutions
SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y
Net interest income 867 889 783 -22 84
Net commissions 630 558 420 72 210
Net gains and losses 565 491 579 74 -14
Total income 2 099 1 986 1 813 113 286
Total expenses 834 881 733 -47 101
Profit before
impairments 1 265 1 105 1 080 160 185
Credit impairments -30 5 74 -35 -104
ROE, % 26.9 20.1 16.8
C/I ratio 0.40 0.44 0.40
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Solid performance
• Continued re-pricing
• Good underlying customer
activity
• Latvian EUR-entry
– Decreased risk
– Negative income impact
• Continued net recoveries
• Uncertain growth prospect due
to geopolitical situation in
Russia and Ukraine
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Baltic Banking
SEKm Q1 14 Q4 13 Q1 13 ▲ Q/Q ▲ Y/Y
Net interest income 874 844 742 30 132
Net commissions 429 454 388 -25 41
Total income 1 465 1 512 1 282 -47 183
Total expenses 607 664 589 -57 18
Profit before
impairments 858 848 693 10 165
Credit impairments -101 -177 -70 -76 -31
ROE, % 15.2 15.0 12.6
C/I ratio 0.41 0.44 0.46
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• Mixed margin development
- Lower deposit margins
- Stable mortgage margins
• Continued solid asset quality
• Risk position enables
competitive funding
• Continued customer and cost
focus
Stable quarter
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Group results
SEKm Q1 14 Q4 13 Q1 13 ▲Q/Q ▲Y/Y
Net interest income 5 483 5 626 5 353 -143 130
Net commission
income 2 693 2 699 2 388 -6 305
Net gains and losses 345 461 557 -116 -212
Total income 9 320 9 652 9 082 -332 238
Total expenses 4 226 4 484 4 043 -258 183
Profit before
impairments 5 094 5 168 5 039 -74 55
Credit impairments -100 -32 60 -68 -160
Other impairments 135 323 85 -188 50
Tax 1 074 1 212 976 -138 98
Profit from continuing
operations 3 985 3 665 3 918 320 67
ROE continuing
operations, % 14.6 13.6 15.3
Cost/income ratio 0.45 0.46 0.45
CET1 Capital ratio, % 18.3 18.3 16.4
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Strong asset quality
• Legacy impaired portfolios almost worked-out
• Ektornet – continued asset sales
• Russia and Ukraine exited – limited remaining exposures
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Asset quality
Credit impairments,
SEKm Q1 14 Q4 13 Q1 13
Swedish Banking 31 140 55
Large Corporates &
Institutions -30 5 74
Baltic Banking -101 -177 -70
Group Functions &
Other 0 0 1
Swedbank Group -100 -32 60
0
5
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25
30
35
40
45
Impaired loans, SEKbn
* Russia and Ukraine reported as discontinued operations.
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Swedbank’s first quarter 2014 results
Q & A
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Appendix
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Focus on customer activities
• Flat expenses target for 2014
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Expenses
Expenses 2012
Expenses 2013
Customer
related
cost
IT
development
Ektornet Group
functions
Efficiency
measures
Expenses
2013 Expenses
2014
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Other?
25% Risk weight floor onSwedish mortgages
15% Risk weight floor onSwedish mortgages
0-2.5% Countercyclical buffer
12% Minimum CET1 (Pillar 1)requirement (incl. SIFI-buffer andCapital conservation buffer)
Regulatory uncertainty – higher capital requirements
• Countercyclical buffer
• RW floor on mortgages
• Pillar 2
• Hard limits vs buffers
• Leverage ratio – corporate
risk weights
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Capital
16.5 - ? %
CET1 ratio
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Conservative provision ratio
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Asset quality
* Russia and Ukraine reported as discontinued operations
SEKm
10 9519 934
7 077
4 429 4 047 3 570 2 818 2 514
2 040
1 774
1 545
1 420 1 3981 325
1 256 1 238
64% 65%62%
57%54% 53% 54%
60%
0
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10 000
15 000
20 000
Q212 Q312 Q412 Q113* Q213* Q313* Q413* Q114*
Individual provisions Portfolio provisions Provision ratio
Provision ratio, % Q114
Swedish Banking 76
LC&I 196
Baltic Banking 51
Group 60
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Shipping and offshore
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24 23
26 25 26 25
0
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20
30
Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14
SEKbn Shipping and Offshore
Offshore Tanker Other
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Credit portfolio – Large Corporates & Institutions
• Lending exposure to Shipping & Offshore
sector of SEK 25.0bn - Portfolio duration 3.77 years (weighted on
commitments)
- Average fleet age 7 years
- Strong employment profiles
0.5
7.4
1.5
3.4
1.3
1.5
0.6
2.4
0.7
3.0
0.2
0.7
1.8
0 2 4 6 8 10
Cruise
Drilling & exploration
Oil service
Supply
Accommodation
Floating production
Chemical
Product
Crude oil
Gas (LNG/LPG)
Dry bulk
Container
RORO
Q1-14
Q4-13
0 5 10 15 20 25
SEK
EUR
USD
NOK
JPY
Q1-14
Q4-13
Shipping and Offshore Portfolio by currency,
SEKbn
Shipping and Offshore Portfolio by subsegment,
SEKbn
Source: Swedbank, Mar 31, 2014
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Covered bonds Senior unsecured
Lower funding needs
• LCR 144% (Swedish FSA definition FFFS 2012:6)
• NSFR 89% / 102% (Basel committee)
• Issued SEK 36bn of term-funding in Q1 2014
• FY 2014 funding plan of SEK 120bn
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Liquidity and funding
Term funding issuance – completed and planned
SEKbn
Source: Swedbank, Mar 31, 2014, nominal amounts
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0
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100
150
200
2014 2015 2016 2017 2018 2019 2020-
Governmentguaranteed debt
Senior unsecureddebt
Covered bonds
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Long-term funding maturity profile
• Funding plan of SEK 120bn to meet next 12 months’ nominal SEK 125bn maturities
Long-term funding maturity profile, by funding source
Source: Swedbank Mar 31, 2014
Liquidity and funding
SEKbn
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0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 365
Prefunded in excess of 12 months
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Liquidity and funding
SEKbn
Source: Swedbank Mar 31, 2014
Days forward
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Real estate prices – Sweden 12-month development
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Swedish housing and mortgage market
Single-family homes1 Tenant-owner rights2 Combined3
12M Δ
12M Δ
12M Δ
Jan/13 3% 7% 5%
Feb/13 4% 7% 5%
Mar/13 3% 7% 5%
Apr/13 2% 8% 4%
May/13 4% 8% 5%
Jun/13 4% 10% 6%
Jul/13 4% 9% 6%
Aug/13 5% 11% 7%
Sep/13 5% 11% 7%
Oct/13 6% 11% 8%
Nov/13 4% 13% 7%
Dec/13 4% 13% 7%
Source: Valuegard www.valuegard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE
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Tallinn
Nr.of deals EUR/m2
Baltic countries
Real estate prices
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EUR/m2 /Nr of deals
EUR/m2 /Nr of deals
EUR/m2 /Nr of deals
0
200
400
600
800
1 000
1 200
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1 600
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Nr.of deals EUR/m2
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Vilnius
Nr.of deals EUR/m2
