Swedbank Q1 2006
Transcript of Swedbank Q1 2006
Swedbank Q1 2006Jan Lidén,
President and CEO
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Group results Q1SEK M Q1 2006 Q1 2005 Change, %Net interest income 3,777 3,939 – 4Net commissions 2,098 1,530 37Net gains and losses on financial items at fair value 260 377 – 31Other income 408 428 – 5Total income 6,543 6,274 4Staff costs – 1,812 – 1,697 7Profit-based staff costs – 292 – 183 60Other expenses – 1,546 – 1,453 6 Total expenses – 3,650 – 3,333 10Profit before loan losses 2,893 2,941 – 2Loan losses – 50 – 99 – 49Operating profit 2,843 2,842 0Tax & minorities – 573 – 754 – 24Profit for the period (attributable) 2,270 2,088 9
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Net Interest Income –items affecting comparabilitySEK M
• Changes Q1 2006, – IFRS accrual of Baltic loan commissions -75– Accrual of Baltic loan book revaluation -96
• Q1 2005 (if restated)– KIAB -39– EnterCard -71
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Net interest income 2,752 822 185 8Net commissions 1,040 352 326 382Other income 332 185 287 30Total income 4,124 – 5% 1,359 32% 798 51% 420 23%Staff costs – 998 – 352 – 290 – 73 Other expenses – 1,154 – 299 – 160 – 80 Total expenses – 2,152 – 8% – 651 39% – 450 61% – 153 2%Profit before loan losses 1,972 708 348 267Loan losses 6 – 57 4Operating profit 1,978 2% 651 25% 352 41% 267 39%Allocated equity 26,621 7,654 3,619 1,670Return on equity % 21.4 31.2 24.4 46.0
Changes refer to comparison with Q1 2005
Business area results Q1Asset
Swedish Baltic Swedbank Mgmt. &SEK M Banking Banking Markets Insurance
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SEK M Q1 2006 Q1 2005 Change, %Net interest income 2,752 3,163 – 13 Net commissions 1,040 881 18Other income 332 284 17Total income 4,124 4,328 – 5Staff costs – 998 – 1,041 – 4Other expenses – 1,154 – 1,297 – 11Total expenses – 2,152 – 2,338 – 8 Profit before loan losses 1,972 1,990 – 1Loan losses 6 – 60Operating profit 1,978 1,930 2Allocated equity 26,621 24,501Return on equity % 21.4 22.7Total assets SEK bn 775 729
Swedish Banking results Q1
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Swedish market sharesChange in percentage points
10%
31%
-8%Asset Management
+1%54%Individual Pension Savings*
-2%23%Equity linked bonds
+7%
+5%
19%
28%
Corporate loans
Private mortgages
Q1 06Market share
+8%Retail deposits
Changeyoy
New selling, March, 2006
Q1 05Market share
18%
23%
53%
25%
12%
23%
*As of December 31, 2005
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Swedish mortgage margin pressure
7 bps
0.60
0.70
0.80
0.90
1.00
1.10
1.20
Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006
7 bps
* Spintab investment margins (See Spintab Q1 2006)** Spintab new contractual margins (total front book)
***
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Swedish volume growth(SEK billion)
0
50
100
150
200
250
300
350
400
Q1 2006Q4 2005Q3 2005Q2 2005Q1 2005
Growth yoy
Deposits 5%
Fund management+31%
Lending to private individuals +10%
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SEK M Q1 2006 Q1 2005 Change, %Net interest income 822 652 26Net commissions 352 234 50Other income 185 142 30Total income 1,359 1,028 32Staff costs – 352 – 255 38 Other expenses – 299 – 213 40Total expenses – 651 – 468 39 Profit before loan losses 708 560 26Loan losses – 57 – 41 39 Operating profit 651 519 25Allocated equity 7,654 6,268Return on equity % 31.2 30.8Total assets SEK bn 143 94
Baltic Banking (Operations) results Q1
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Baltic Banking growth Q1
Deposits
Lending
-22%-26121Russia
38%6691,749Lithuania
1,170
2,329
5,368
31.03.05
42%2,244Baltic
49%578Latvia
44%1,027Estonia
yoy%
yoychange
EUR inmillions
264
1,683
1,507
2,973
6,418
31.03.05
63%4,046Baltic
62%1,037Lithuania
99%263Russia
85%1,286Latvia
49%1,450Estonia
yoy%yoychange
EUR inmillions
95
2,418
1,748
3,356
7,612
31.03.06
527
2,721
2,793
4,424
10,464
31.03.06
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Baltic market shares
23%+1%25%
+5%36%*+2%54%*
+2%+2%13%*+1%51%*Corporate deposits
+4%
Changeyoy
39%
Market share
LithuaniaLatviaEstonia
29%*
Market share
63%*
Market share
-Retail deposits
Changeyoy
Changeyoy
0%0%51%Lending
44%Pension II
22%Corporate deposits
Changeyoy
Market share
LithuaniaLatviaEstoniaMarket share
Market share
-1%-1%Retail deposits
Changeyoy
Changeyoy
Stock March 2006
-1%
* As of February, 2006
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Lending
3.15%2.81%
3.22%
2.58%
2.06%1.96%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
Estonia Latvia Lithuania
Deposits
1.11%
0.84%
1.74%
1.53%
1.15%
0.93%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
Estonia Latvia Lithuania
Baltic Banking margins
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Baltic Banking profit growthOperating profit (SEK M)
0
100
200
300
400
500
600
700
Q12006
Q42005
Q32005
Q22005
Q12005
Q42004
Q32004
Q22004
Q12004
Q42003
Q32003
Q22003
Q12003
Q42002
Q32002
Q22002
Q12002
+ 25% yoy
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Profit growth in the four Baltic business units and in Swedish BankingQ1, 2006 vs. Q1, 2005, SEK M
319
195
115
9
2,245
Estonia Latvia Lithuania Russia Swedish Banking incl Asset Management
12%-73%35%85%28%
Operating profit and profit growth yoy
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Group net commissions
SEK M Q1 2006 Q1 2005 Change, %Payment processing 602 587 3Lending commissions 129 89 45Brokerage 301 111Asset management 914 702 30Insurance commissions 118 96 23Other commissions 34 – 55Total commissions, net 2,098 1,530
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SEK M Q1 2006 Q1 2005 Change
Financial instruments classifiedas trading and derivatives 238 246 – 8Prepayment fees, loans and receivables 22 27 – 5Exchange rates effects 0 104 – 104Total 260 377 – 117
Group net profit on financial items at fair value
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SEK M Q1 2006 Q1 2005 SEK M %Group 3,650 3,333 317 10 Staff costs 2,104 1,880 224 12Adminstrative expenses 1,391 1,317 74 5Depreciation/amortization 155 136 19 14
Staff costs 2,104 1,880 224 12Of which
Baltic Banking 351 255 96 38First Securities 125 125
Change
Group expenses
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Baltic Banking expenses
5000
5500
6000
6500
7000
7500
8000
Q12006
Q42005
Q32005
Q22005
Q12005
Q42004
Q32004
Employees + 19% yoy(Cost/employee +16%)
80
90
100
110
120
130
140
150
160
170
180
Q12006
Q42005
Q32005
Q22005
Q12005
Q42004
Q32004
Expenses +39% yoyand staff costs +38%
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Tier 1 ratio
target6.5%6.7%
0%1%2%3%4%5%6%7%8%9%
2000
2001
2002
2003
2004
Q1-200
5Q2-2
005
Q3-200
5Q4-2
005
Q1-200
6
- 0.2% points yoy
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Key figures
Q1 2006 Q1 2005Return on equity, % 16.6 18.5Earnings per share, SEK 4.41 4.07Equity per share, SEK 108.66 90.31C/I ratio before loan losses 0.56 0.53Loan loss ratio, net % 0.02 0.05Share of doubtful claims, % 0.09 0.18Provision ratio for doubtful claims, % 188 151Capital adequacy ratio, % 9.7 10.5Primary capital ratio, % 6.5 6.7
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Recent developments
• AGM decided change of name
• Mikael Inglander appointed CFO and Bengt-Erik Lindgren appointed Head of Stockholm Region, as of May 1, 2006
• Office in Shanghai being upgraded to branch
• St Petersburg opened on March 24, 2006
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Calendar of events 2006
• Q2 – August 10th
• Capital Markets Day – September 6th (in Stockholm)
• Q3 – October 26th
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Thank you!