Post on 09-Apr-2018
8/7/2019 Swedbanks fourth quarter 2010 CEO presentation
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Swedbanks fourth quarter 2010 results8 February 2011
Michael Wolf, CEOErkki Raasuke, CFOGran Bronner, CRO
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Favourable rofit trend
Net profit of SEK 7.4bn for 2010
Core Tier 1 ratio of 13.94 per cent
-. ,SEK 4.80 per preference share
Net profit performance
2
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
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Priorities 2010
Summing u the ear
Customer satisfaction
Lower risk level
Liquidity and capitalisation
3
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Making rogress but still more to doPriorities 2010 Customer satisfaction
New service concepts in Retail yields result
Sector focus in LC&I
Baltic Banking implementing same customer approach asRetail in the branch network
Enhanced ca ital markets offerin to meet increased demands
4
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Significantl reduced riskPriorities 2010 Lower risk level
Continued reduced CEE lending7 500
Credit impairments, SEKm
Estonia joined the EMU
1 Jan 2011
6 500
Decreased RWA
Reduced need for senior fundin4 500
2 500
3 500
1 500
-500
500
8 9 9 9 9 1 0
1 0
1 0
1 0
5
Q 4
Q 1
Q 2
Q 3
Q 4
Q 1
Q 2
Q 3
Q 4
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Pre- rovision earnings starting to im rovePriorities 2010 Earnings
Net profit increased by7 000
Net interest income, SEKm
credit impairments
6 000
,
Expenses adopted to lower 5 000
3 000
2 000
* In Q4 NII in Baltic Banking was positively affected by about0
1 000
8 9 9 9 9 0 0 0 0
6
SEK 200m attributable to the reclassification of penalty fees
and late interest, previously recognised as other income. Q 4 0
Q
1 0
Q
2 0
Q
3 0
Q
4 0
Q
1 1
Q
2 1
Q
3 1
Q
4 1
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Strengthened funding ositionPriorities 2010 Liquidity and capitalisation
Average maturity of capitalSEKbnmar e un ng ex en eto 27 months
500Covered bonds
Central bank and
guaranteed funding
Left the state guaranteeprogramme in April
400
State guaranteed funding andcentral bank repos reduced to300
200
7
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
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New ca italisation target and dividend olic
Core Tier 1 capital ratio of at least 13 per cent until 2013
Long-term core Tier 1 capital ratio of at least 10 per cent
-
New dividend policy from 2011 50 er cent a -out ratio
8
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Growing NIINet interest income
Increasing interest rates in SEK
Restated Baltic Banking late payment feesRetail Baltic Russia Treasur
4 702
4 023 3 980
Banking
Ukraine
Other
253 91249
13 159
-59
4 527
733
2 752
( S E K m
)
9
-
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
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Strong commission incomeNet commission income
Strong syndicated lending fees
ow ro erage ees n
Corporate finance picking up
2 361 2 2822 395 2 310
Retail LC&I BalticBanking
Russia,Ukraine
Asset mgmt,Other
11394 -3 1 23 428
2 538
383
20
1 132
( S E K m
)
10
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10(Excluding non-recurring items)
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Lower gains with higher ualitNet gains/losses on financial items, fair value
Strong end of the year from LC&I
ance a on o epos n uss a
Treasury valuation effects turned to negative
RetailLC&I
BalticBanking
Russia,Ukraine
Treasury,Other
647
809
574 38
180 29
-71 315
K m
) 223 439-435
( S 74-96
-179
11
(Excluding non-recurring items)Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
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Ex enses seasonall higherExpenses
Accelerated IT development
expenses a
FR&R and Ektornet 2010 expenses SEK 714m
0.540.57 0.57 0.55 0.58
4 300 4 391 4 423 4 238
Retail LC&I a c
Banking
,
Ukraine
,
Other 123 152 73 9
211-5 582
4 590
877
697
2 223
( S E K m
)
12
Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
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SEK 265bn term funding issued in 2010Liquidity & Capital management
Issued & matured full year 2010 Full year 2011 maturities of nominalSEK 180bn (nominal SEKbn)
Of which SEK 80bn in guaranteedfunding
Of which SEK 86bn in covered bonds 020
40
Average maturity of wholesale funding,including short-term funding, 27 months38 months for covered bonds
-60
-40
-20
Maturit profile full ear 2011
-80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
(nominal SEKbn)
-20
0
-80
-60
-40
13
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Fourth quarter 2010 results
Income statementSEKm Q4 10 Q3 10 QoQ % Q4 09
Income 7 958 7 647 4% 7 982
Expenses 4 590 4 238 8% 4 300
Profit before impairments 3 368 3 409 -1% 3 682
Impairment of intangible assets 23
Impairment of tangible assets 406 30 352
Credit impairments - 483 120 5 003
Operating profit 3 445 3 236 6% -1 673
Tax expense 693 638 9% 115
Profit attributable to shareholders 2 750 2 591 6% -1 804
Return on equity, % 11.7 11.3 -8.3
- . . .
Loan-deposit ratio, % 222 233 240
Core Tier 1 capital ratio, %* 13.94 13.39 11.97
- *
14
. . .
* Basel 2
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Continued im rovementsAsset quality
All indicators in the right direction 60 days overdue Declining in all countries Watch list
ecrease y . n n Positive rating migration on nue e- everag ng n a c coun r es
Recoveries in CEE portfolio Further tightened lending criteria in Swedish mortgage market
15
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Credit im airments of SEK -483mAsset quality
Net recoveries in Baltic Bankingand Russia & Ukraine
6 000SEKm
Minor credit impairments in5 000
Write-down of tangible assets,3 000
2 210
963
2 000
120
0
1 000
-483-1 000Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
16
Retail LC&I Baltic Banking Russia & Ukraine Other
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Provisions work-out ortfolios slowl decliningAsset quality
30 000SEKm
,
Retail 99
LC&I 1065 1354 684 4 104
3 606
64.8% 65.9% . 63.9%
62.7%25 000
a c an ng
Russia 57
Ukraine 65
15 000
Group 6320 882 21 889 21 06818 494
3 311 3 9534 603
5 919
5 000
10 000
0Q4 2009 Q1 10 Q2 10 Q3 10 Q4 10
17
- , ,
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Euro ean eer com arison core Tier 1 ratiosCapital management
16%
Core Tier 1 ratios (Basel 2) European banks*
13.9
12.2 12.112%
14%
10.3
8%
10%
4%
6%
0%
2%
r r l t
U B
S w e
d b a n
S E
D e x
i
S H
N .
B .
O f G r e e c
D n
B N O
S t a n
C h a r
H S B
R B
N o r d e a
B a r c
l a y
D a n s
k e B a n
C r e
d i t S u
i s s
E F G E u r o
B a n
B a n
k o
f I r e
l a n
d
B N
P o p u
l a r
E s p a n
B N
L l o y
d
S o c
G e
S a n
t a n
d e
B a n c o
P a s
t o
B a n e s
t
B B V
U n
i C r e
d i t
I n t e s
M P
B a n c o
S a
b a
d e
l
M a r f
i
P i r a e u s
B a n
U B I B a n c
E r s
t e B a n
p o
l a r e
d i M i l a n
B C
A a r e a
l B a n
B a n
k I n t e
R a
i f f e i s e n
I n
B .
B .
P o
18
*Source: Deutsche Bank Research, Q4 10 estimates (Swedbank, SEB and Nordea actual Q4 figures)
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Assets significantl reduced risk level since Q4 08Capital management
Estonia joined the EMU, 1 Jan 20111 400(SEKbn)
RWA reduced from SEK 697bn to
SEK 541bn1 200
CEE lending-108
Reduced need for unsecuredfunding of about SEK 150bn
1 000
Other corporatelending, Sweden &
Estonia
+600
800
Other private,Sweden
-57
400 Swedishmortgage loans
200
19
0Q4 08 Q4 10
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Liabilities significantl reduced risk level since Q4 08Capital management
1 400(SEKbn)
efficient funding sources
1 200 Central banks +
Government guaranteed-182 second rights issue1 000
Senior unsecured
Covered bonds
-46
Liquidity buffer established600
800 +140
Limited, if any, need for
unsecured funding400
Deposits
200
Supplementary capitalCore Tier 1 ca ital+
20
0
Q4 08 Q4 10
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Ca italisation solid to meet risk rofile and uncertaintiesCapital management Core Tier 1
CT1-ratio to stay above13.0%
Excess capital ( SEK 4.9bn)13.9%
Perception
Unclear regulatory framework
Extra bufferdue to prevailing
circumstances(SEK 16.2bn)
Uncertain macro economicenvironmentRisk appetite
(ICAAP buffer,
10.0%
.
7.0% Long-term CT1-ratio of at least10 per cent
Regulatory requirement
CT1-ratio to stay aboveregulatory minimum in ICAAPstressed scenario.
21
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Excess ca ital no need to increase ca ital furtherCapital management
Large capital buffer in relation to current risk level
ncreas ng pro genera on
RWA growth expected to be moderate Continued focus on capital efficiency
22
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Pro osalCapital management
AGM to decide on buy-back programme to manage capitalisation
p o per cen o ou s an ng s ares nc . acqu s on o ownshares through the securities operations)
-
Full flexibility to chose between A and preference shares
23
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Priorities 2011
Customer focus
Growth in selective segments
Quality and effectiveness
Robust and low-risk balance sheet
24
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Welcome to Swedbanks Ca ital markets da23 February 2011
Registration at www.swedbank.com/ir
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Appendix
26
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Loan to de osit ratio im roved
SEKbn 2010 2009
-Retail - deposits 347 318 29
LC&I - loans 130 150 -20LC&I - deposits 74 69 5
BB - loans 130 170 -40
BB - deposits 93 103 -10
R&U - loans 13 18 -5R&U - deposits 3 7 -4
Group - loans 1 146 1 192 -46Group - deposits 517 497 20
27
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Business area erformance
Profit before im airments Q4 10 Q3 09 8Q development
Retail 2 126 1 881 245
Institutions 895 664 231
Baltic Banking 935 937 -2
Asset management 188 179 9
- - -
Other -660 -197 -463
Group 3 368 3 409 -41Q4 10Q1 09
28
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Im aired loans decreasing
Excl. FX effect down SEK 3bn in Q4
Underlying decreases in all business areas in Q4
4 362 196 2 391-4 088
35 770
40 132 40 32842 719
40 000
45 000
SEKm
Impaired loans as %
6 113
-
29 657
34 778
25 000
30 000
35 000
1 939
7 957 Ukraine 62%
Russia 22%
of gross lending
29 65715 000
20 000
11 259
6 529 Lithuania 17%
Latvia 26%
0
5 000
10 000
1 602770
4 722 Estonia 7.7%LC&I 0.25%Retail 0.18%
29
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q4 10
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Loans ast due 60 da s erformance Q/Q
200
250
EURm
100
150
-50
0
-150
-100
4
0 9
1
1 0
2
1 0
3
1 0
4
1 0
4
0 9
1
1 0
2
1 0
3
1 0
4
1 0
4
0 9
1
1 0
2
1 0
3
1 0
4
1 0
4
0 9
1
1 0
2
1 0
3
1 0
4
1 0
4
0 9
1
1 0
2
1 0
3
1 0
4
1 0
Estonia Latvia Lithuania RussiaUkraine
30
A l i
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Re ossessed assetsAsset qualtiy
4 000
SEKm
3 000
3 500
2 500
1 500
500
0Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Real Estate Residential Real Estate Commercial Passenger & Commercial Transport Shares Other
31
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Real estate ricesTallinn
16161 500
1 800
1 500
1 800 2 000 2 000
Riga*
813
669600
900
1 200
E U R / m 2
600
900
1 200
o o
f t r a n s a c
t i o n s
617
1 000
1 500
f t r a n s a c
t i o n s
1 000
1 500
E U R / m 2
0
300
Q4 06 Q2 07 Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 100
300
No of deals Average price
0
Q4 02 Q4 03 Q4 04 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10
N o . o
0
1 800 1 800Vilnius
Source: Swedbank, Estonian Land Boardource: we an
1 731
. ,
600
900
1 200
E U R / m 2
600
900
1 200
o f t r a n s a c
t i o n s
1 070
0
300
Q1.05 Q4.05 Q3.06 Q2.07 Q1.08 Q4.08 Q3.09 Q2.100
300 N
o o ea s verage pr ce
32
Source: Swedbank, State Enterprise Centre of Registers
Liquidity & funding
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Long-term fundingLiquidity & funding
Continued focus on covered bonds with full-year issuance of SEK 238bn
SEK 23bn in senior unsecured issuance
4 EUR-denominated covered bond benchmark deals, each in the size of EUR 1bn
1 EUR-denominated senior unsecured benchmark deal of EUR 1bn
1 1 1 1 1 1 1 1 1 2
1 2
1 2
1 2
1 3
1 3
1 3
1 3
1 4
1 4
1 4
1 4
1 5
1 5
1 5
1 5
Long-term funding maturity profile, SEKbn
-10
0 Q 1 2 0
Q 2 2 0
Q 3 2 0
Q 4 2 0
Q 1 2 0
Q 2 2 0
Q 3 2 0
Q 4 2 0
Q 1 2 0
Q 2 2 0
Q 3 2 0
Q 4 2 0
Q 1 2 0
Q 2 2 0
Q 3 2 0
Q 4 2 0
Q 1 2 0
Q 2 2 0
Q 3 2 0
Q 4 2 0
2 0 1 6 -
-40
-30
-20
-70
-60
-50
3333
-90
-
Other NON-SEK Covered Bonds SEK Covered Bonds
Liquidity & funding
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Remaining government guaranteed debtLiquidity & funding
Exited the programme on April 30, 2010
SEK 75bn of government guaranteed debt matured during 2010
Maturit rofile, SEKbn
-20
0 USD
SEKEURCHF
-60
-40 JPY
-
-80
3434
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