Q2 2014 Investor presentation

Transcription

Swedbank investor presentation
July 2014
Table of contents
1. Quarterly update
3
2. Capital
11
3. Asset quality
15
4. Liquidity and funding
21
5. Cover pool data
31
6. Swedish housing and mortgage market
37
7. Swedish economy
45
8. Appendix
49
2
1. Quarterly update
3
Quarterly update - Swedish Banking - excluding Sparbanken Öresund
Stable result
▲ Q/Q
▲ Y/Y
SEKm
Q2 14
Q1 14
Net interest income
3 314
3 314
Net commission income
1 771
1 649
121
283
Other income
604
459
146
206
Total income
5 689
5 422
267
418
Total expenses
2 491
2 443
48
144
Profit before
impairments
3 198
2 979
219
275
21
31
-10
-39
Credit impairments
ROE, %
30.5
28.3
C/I ratio
0.44
0.45
Volumes, SEKbn
Q2 14
Q1 14
-71
▲ Q/Q
•
Lower deposit margins
•
Mortgage margins
– Improved towards end of quarter
•
Volume growth both in private and SME
segments
•
Higher market activity supports
commission income
•
One-off income from Entercard
▲ Y/Y
Loans
970
949
21
51
Deposits
389
379
10
10
Source: Swedbank, Jun 30, 2014
4
Quarterly update - Sparbanken Öresund
Sparbanken Öresund impact in Q2
SEKm
Ordinary
business
One-offs
Total
Net interest income
48
48
18
18
Other income
13
461
474
Total income
79
461
540
Staff costs
47
393
440
Other expenses
39
222
261
Total expenses
86
615
701
Credit impairments
4
4
Tax expense
-2
-135
-137
Profit for the period
-9
-19
-28
Volumes, SEKbn
Loans
16
Deposits
12
5
Quarterly update - Swedish Banking – including Sparbanken Öresund
Stable result
SEKm
Q2 14
Q1 14
▲ Q/Q
▲ Y/Y
Net interest income
3 362
3 314
48
-23
1 790
1 649
141
301
Other income
1 077
459
618
679
Total income
6 229
5 422
807
957
Total expenses
3 192
2 443
749
844
Profit before
impairments
3 037
2 979
58
113
25
31
-6
-35
Credit impairments
ROE, %
29.7
28.3
C/I ratio
0.51
0.45
Volumes, SEKbn
Q2 14
Q1 14
▲ Q/Q
Sparbanken Öresund impact:
•
Total income SEK 540m
– Of which SEK 461m in one-off
bargain purchase (badwill)
•
Total expenses SEK 701m
– Of which SEK 615m in one-off
restructuring costs
▲ Y/Y
Loans
987
949
38
68
Deposits
401
379
20
23
6
Quarterly update - Large Corporates & Institutions
Good customer activity
Q2 14
Q1 14
▲ Q/Q
▲ Y/Y
Net interest income
846
867
-21
79
496
630
-134
184
Net gains and losses
575
565
10
58
1 945
2 099
-154
306
804
834
-30
69
1 141
1265
-124
237
21
-30
51
-177
ROE, %
23.1
26.9
C/I ratio
0.41
0.40
SEKm
Total income
Total expenses
Profit before
impairments
Credit impairments
Volumes, SEKbn
Q2 14
Loans
Deposits
Q1 14
▲ Q/Q
•
NII
– Loan volume growth
– Lower accrued fees
•
Continued high customer activity
– Corporate finance
– DCM
•
Good cost control
•
Risk awareness going forward
▲ Y/Y
157
152
5
6
98
99
-1
29
7
Quarterly update - Baltic Banking
Strong revenues
SEKm
Q2 14 Q1 14
▲ Q/Q
▲ Y/Y
Net interest income
894
874
20
263
522
429
93
118
1 596
1 465
131
401
Total expenses
621
607
14
45
Profit before
impairments
975
858
117
356
Credit impairments
-16
-101
85
-4
ROE, %
15.6
15.2
C/I ratio
0.39
0.41
Total income
Volumes, SEKbn
Q2 14
Q1 14
▲ Q/Q
•
No financial impact from the crisis in
Ukraine
•
Increased market activity
•
Good cost efficiency
▲ Y/Y
Loans
122
118
4
3
Deposits
122
117
5
12
8
Quarterly update - Group results – including Sparbanken Öresund
Strong result
SEKm
▲Q/Q ▲Y/Y
Q2 14
Q1 14
Net interest income
5 521
5 483
38
242
Net commission
income
2 813
2 693
120
593
773
345
428
265
Other income
1 348
799
549
614
Total income
10 455
9 320
1 135
1 714
Total expenses
4 919
4 226
693
976
Profit before
impairments
5 536
5 094
442
738
Credit impairments
30
-100
130
-218
Other impairments
70
135
-65
-252
Tax
1 063
1 074
-11
248
Profit from continuing
operations
4 369
3 980
389
955
ROE continuing
operations, %
16.6
14.6
Cost/income ratio
0.47
0.45
CET1 Capital ratio, %
20.9
18.3
Net gains and losses
•
Growth
•
Mixed margins
•
Strong commission income
•
One-offs
•
Meeting cost target
•
Integrating Sparbanken Öresund
9
Quarterly update - Asset quality
Strong asset quality
Credit impairments,
SEKm
Q2 14
Q1 14
Swedish Banking
25
31
Large Corporates &
Institutions
21
-30
-16
-101
0
0
30
-100
Baltic Banking
Group Functions & Other
Swedbank Group
•
Low risk position confirmed by Fitch
and S&P
10
2. Capital
11
Capital
Reduced REA following A-IRB approval
• REA decreased by SEK 42bn to SEK 406.7bn during the quarter
• A-IRB approval, Sparbanken Öresund acquisition and higher lending volumes
impacted the most
• No regulatory excess capital
Swedbank REA development
SEKbn
460
CET1 capital ratio
448.8
24%
440
22%
420
400
16.3
20%
4.7
12.3
0.1
0.7
0.2
406.7
18.3%
18%
- 0.3
- 1.4
- 1.6
20.9%
16%
380
14%
- 72.9
360
340
12%
Mar 2014
Advanced Sparbanken Exposure
IRB
Öresund and change
Sparbanken
Skåne*
Rating
migrations
LGD
Increase
FX credit
risk
Other credit
risk
CVA risk
Market risk Operational
risk
Jun 2014
10%
Q1 2014
Q2 2014
Decrease
* Including equity investment in Sparbanken Skåne, SEK 1.7bn
12
This is Swedbank - Capital
Capital regulation – Swedish finish
•
Swedish FSA presented its draft proposal in May 2014. Legislation is expected post
summer / early fall in 2014
Swedbank’s suggested minimum
CET1 capital ratio requirement
Swedbank’s suggested minimum
Total capital ratio requirement
24.5%
2.0%
19.3%
1.5%
Additional pillar 2
requirements.
2.9%
2.3%
15->25% RW-floor on
Swedish mortgages
3.1%
2.5%
Current (15%) RW-floor
on Swedish mortgages
2.0%
2.0%
Systemic risks in Pillar 2
Additional pillar 2
requirements.
15->25% RW-floor on
Swedish mortgages
Current (15%) RW-floor
on Swedish mortgages
Systemic risks in Pillar 2
1.0%
Countercyclical buffer
2.5%
1.0%
Countercyclical buffer
2.5%
3.0%
3.0%
Capital conservation
buffer
Systemic risk buffer
3.5%
Systemic risk buffer
4.5%
Minimum CET1 capital
ratio
Capital conservation
buffer
Min additional T1 and T2
capital
4.5%
Minimum CET1 capital
ratio
Source: Swedish FSA and Swedbank, May 2014
13
14
3. Asset quality
15
Asset quality
Asset portfolios – low risk
Sweden
The
total SEK 1,266bn
TheGroup,
Group
Hotels and restaurants, Retail
Shipping and offshore, Transportation
Manufacturing
7%
Latvian lending
Lithuanian lending
2%
3%
Other corporate lending
6%
Estonian lending
4%
35%
Private
65%
Corporate
Other property management
Residential properties
14%
Agriculture and forestry
Baltic Banking
Swedish household loans
(90% mortgages)
64%
49%
51%
Private
Corporate
Tenant owner associations
16
Asset quality – stress test
The Swedish FSA and Riksbank stress tests
•
Swedbank’s strong relative risk position confirmed
CET1 - The Swedish FSA stress test
CET1 - The Swedish Riksbank stress test*
%
20
%
18
20
16
18
14
16
12
Q114
10
2014
14
8
2015
12
Jun 2013
6
2016
10
Dec 2014
4
8
Dec 2015
2
6
Dec 2016
0
SHB
%
4
Nordea
SEB
Swedbank
Leverage ratio - The Swedish Riksbank stress test**
6
2
5
0
SHB
Nordea
SEB
Swedbank
4
Q114
2014
3
2015
2
*Main assumption; GDP decline and interest rates increase to stress for
1
higher credit losses
**Note that this relates to SNL Financial's definition of the leverage ratio,
which differs from the definition used by the Basel Committee.
0
Source: The SFSA’s Risk Report, Nov 14, 2013
2016
SHB
Nordea
SEB
Swedbank
Source: The Riksbank’s Financial Stability Report 2014:1, Jun 14, chart 4:13 and 4:15
17
Asset quality
Resilient Swedish asset portfolio
•
Total accumulated Swedish mortgage loan losses* since 1982 of SEK 7.4bn (size of
total loan book SEK 774bn)
– Main part incurred during the years of 1992 and 1993
– Around 20% in the private segment
Swedbank’s Swedish private loan loss ratios
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Q2
14
Private Credit Impairment, %
Of which, Swedbank mortgage Private, %
Source: Swedbank Jun 30 2014, *Swedbank Mortgage
18
Asset quality
Credit impairments – low risk
•
15 consecutive quarters with no net credit impairments
Credit impairment ratio, %
0.6
0.4
0.2
0.0
-0.2
-0.4
-0.6
19
20
4. Liquidity and funding
21
Liquidity and funding
Core balance sheet* structure
Assets
Liabilities
SEKbn
1 600
SEKbn
1 600
1 400
1 400
Lithuania
Latvia
Estonia
1 200
1 000
Suppl. cap
CET1
Senior
1 200
1 000
Other corporate
lending, Sweden &
other Nordic countries
800
Deposits
800
Other private, Sweden
600
600
Swedish
mortgage loans
400
400
Covered
bonds
200
200
0
0
Q2 2014
Q2 2014
Source: Swedbank Jun 30, 2014 * Simplified balance sheet
22
Covered bond strategy
Covered bond strategy
Swedish households’ financial assets
Sweden
SEK 300-375bn
SEKbn
100%
8 000
90%
7 000
80%
6 000
70%
EUR/USD
SEK 150-200bn
5 000
60%
50%
Other*
SEK 50-85bn
4 000
40%
3 000
30%
2 000
20%
1 000
10%
0%
<5Y
3-7Y
Maturity, years
>7Y
0
1980
1990
2000
2005
2010
2012
2013
Deposits and retail bonds (LHS)
Equities (LHS)
Pension savings and mutual funds
Other financial assets (LHS)
Total financial assets (RHS)
Source: Swedbank Jun 30, 2014
23
Senior unsecured debt strategy
Senior unsecured debt maturity profile
House price sensitivity of the cover pool
Senior unsecured debt
SEKbn*
70%
60
60%
Over-collateralisation
OC, Q214
40
20
50%
40%
30%
20%
10%
0%
0
2014
2015
2016
2017
2018
2019
2020-
0% -5% -10% -15% -20% -25% -30% -35% -40% -45% -50%
House price drop
Source: Swedbank Jun 30, 2014, *Nominal amounts
24
Lower funding needs
•
LCR 123% (Swedish FSA definition FFFS 2012:6)
•
NSFR 102% (Basel committee)
•
Issued SEK 69bn of term-funding in H1 2014, of which SEK 32bn in Q2.
•
FY 2014 funding plan of SEK 120bn
Term funding issuance – completed and planned
SEKbn
Covered bonds
Senior unsecured
100
90
80
70
60
50
40
30
20
10
0
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215
Source: Swedbank, Jun 30, 2014, nominal amounts
25
Liquidity reserve
According to the template defined by the Swedish Bankers' Association
SEKm
Cash and holdings in central banks
Deposits in other banks available overnight
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks
Securities issued or guaranteed by municipalities or public sector entities
Covered bonds
- Issued by other institutions
- Own issued
Securities issued by non-financial corporates
Securities issued by financial corporates (excl. covered bonds)
Other
1
Total
Additional liquid assets, Group2, 3
1
158 482
237
66 092
637
53 882
53 882
1 638
280 968
51 801
91% of the securities in the liquidity reserve per Q2 2014 are rated AAA (the rating requirement is AA-)
2
81% of the additional liquid assets fulfill the Liquidity Reserve definition by the Swedish Bankers’ Association except
from that they are held outside the Treasury department.
3 78% of the additional assets are rated AAA
Source: Swedbank Fact book, Jun 30, 2014
26
Prefunded in excess of 12 months
SEKbn
300
250
200
150
100
50
0
0
20
40
60
80 100 120 140 160 180 200 220 240 260 280 300 320 340 365
Days forward
1
As defined by the Swedish Bankers’ Association
27
Asset encumbrance
Encum bered assets - distribution by type of liability (row ) and asset (colum n)
Central banks
Debt
Securities
and
instruments
Government supranational
issued by
issued by
Covered
debt
debt
credit corporate and
SEKm
bonds institutions other issuers
instruments
instruments
Central bank funding
Intraday settlement
Repurchase agreements 1)
Derivative 2)
Covered bonds 3)
Other 4)
Total
7 852
21 875
1 240
1 547
ABS
Mortgage
loans
9 758
17 897
1 169
Cash
9 628
478 029
30 967
28 824
1 140
1 140
478 029
203
9 831
Financial assets pledged for insurance policy holders
1)
2)
3)
4)
5)
40 468
40 468
19 157
39 772
12 037
478 029
1 343
550 338
129 578
Unencum bered assets - additional assets available for secured funding
Central banks
Debt
Securities
and
instruments
Government supranational
issued by
issued by
Covered
debt
debt
credit corporate and
SEKm
bonds institutions other issuers
instruments
instruments
Securities 5, 6)
Cover pool over collateralisation 7)
Cover pool eligible assets
Total
Total
38 574
38 574
Repoed securities.
Collateral posted under CSA agreements, gross (3-year, SEKM,
High: 21 572, Low: 6 582, Average: 12 555).
Of which accrued interest of encumbered assets in the cover
pool, SEK 1 767m as of 30 Jun 2014.
Collateral pledged in securities lending activities and with
exchanges.
Reversed repos are included.
71 607
71 607
6)
7)
9 778
9 778
14 227
14 227
ABS
Mortgage
loans
642
642
Cash
Total
274 870
175 296
274 870
274 870
450 166
Total assets (BS) SEK 2 051 743
All type of securities, including securities non pledgeable at
central banks, of which 77% are rated AAA, 2% are rated
below A- and 8% are not rated.
Of which accrued interest of assets in the cover pool
overcollateralisation, SEK 1 027m as of 30 Jun 2014.
Source: Swedbank Facts Jun 30, 2014
28
This is Swedbank - Credit ratings
Rating strategy – same level as the best rated Nordic banks
•
On June 24, 2014 Fitch revised its outlook for Swedbank from ’stable’ to ’positive’. The change is a direct action
due to Swedbank’s strong asset quality, stable earnings and strong capitalisation.
•
On May 29, 2014 Moody's announced the rating action due to the implementation of BRRD and SRM. All in all
105 European banks were included and 82 of these had the rating outlook changed to negative. This mean that
most major banks in Europe now have negative outlooks due to diminishing support.
•
On April 29, 2014 S&P increased stand alone rating (SACP) to ’a’ from ’a-’ (increased assessment of ’capital and
earnings to ’strong’ from ’adequate’). No rating uplift due to simultaneously fall in support* to ’+1’ from ’+2’
(technicality in S&P’s rating methodology).
•
On April 29, 2014 S&P change outlook to ‘negative’ from ‘stable’ – driven by implementation of BRRD
government support - that support will diminish for all European banks going forward. This is part of an European
wide review of S&P’s support assumptions – outcome at the latest, year-end 2015.
S&P
Moody's
Fitch
Short
Long
Short
Long
Short
Long
Swedbank
A-1
A+
P-1
A1
F1
A+
Swedbank Mortgage
A-1
A+
P-1
A1
Covered bonds
AAA
Aaa
* SHB, Nordea and Swedbank +1, SEB +2
29
30
5. Cover pool data
31
Swedbank’s cover pool
Cover pool data1
Rating, S&P / Moody’s
Total pool size
Geographic distribution
Current OC-level
Weighted average seasoning 2
Average LTV 3, 4
– WA LTV on property level (Max LTV)
Non-performing loans 5
AAA / Aaa
SEK 750.1bn
Sweden 100%
57.5%
66 months
56%
None
Fixed /Floating interest loans 6
– Fixed
– Floating
35%
65%
Repayment structure 7
– Amortising
– Interest only
48%
52%
Average loan size
Number of loans outstanding
Number of borrowers
Number of properties
Dynamic pool
Swedbank is a labeled issuer of
the ECBC Covered Bond Label
Foundation
(www.coveredbondlabel.com )
SEK 480 395
1 561 410
1 120 516
744 356
Yes
As per Jun 30, 2014
Public sector loans not included
3 Index valuation as per Jun 30, 2014
4 Maximum LTV: Residential 75%, Commercial 60%, Forest and Agriculture 70%
5 Past due loans > 60 days are not eligible for the cover pool
6 Floating interest loans < 365 days
7 Property level of cover pool
1
2
Source: Swedbank Facts, Jun 30, 2014
32
Cover pool data
Type of loans
Geographical distribution, Sw eden, per cent
30 Jun
2014
Residentials
90.9%
North
6.6
of w hich Single-family housing
57.8%
Norrbotten county (BD)
1.4
of w hich Tenant ow ner rights
17.0%
Västerbotten county (AC)
2.4
of w hich Tenant ow ner association
10.6%
Västernorrland county (Y)
1.6
5.5%
Jämtland county (Z)
1.2
Public
1.3%
Middle (including Stockholm )
Commercial
0.4%
Dalarna county (W)
2.2
Forest & Agricultural
7.4%
Gävleborg county (X)
2.1
Värmland county (S)
2.2
Örebro county (T)
2.6
Västmanland county (U)
2.6
Uppsala county ( C)
4.0
of w hich Multi-family housing
100.0%
Södermanland county (D)
44.7
2.5
Stockholm county (including Stockholm) (AB)
26.5
South (including Göteborg and Malm ö)
48.7
Västra götaland county (Including Göteborg) (O)
17.5
Östergötland county (E)
4.1
Jönköping county (F)
3.6
Halland county (N)
3.8
Kronoberg county (G)
2.2
Kalmar county (H)
Skåne county (including Malmö) (M)
Blekinge county (K)
Gotland county (I)
3.2
12.1
1.6
0.6
100.0
Source: Swedbank, Facts, Jun 30, 2014
33
Cover pool loan-to-value distribution
•
Weighted average LTV 57%
LTV distribution per property1
LTV distribution by volume1, 2
30%
30%
25%
25%
20%
20%
15%
15%
10%
10%
5%
5%
0%
0%
00-10
10-20
20-30
30-40
40-50
50-60
60-70
70-75
00-10
10-20
20-30
30-40
40-50
50-60
60-70
70-75
1 Public loans of 1.3% of the cover pool are excluded as they are either guaranteed by a Swedish municipality or the government and have therefore no
LTV assigned to them. 2 LTV distribution as defined by the Association of Swedish Covered Bond Issuers (www.ascb.se)
34
Cover pool loan type and loan-to-value distribution
WA LTV per property type1
Percentage of the pool
Average LTV per loan type
120%
120%
100%
100%
80%
80%
60%
60%
40%
40%
20%
20%
0%
0%
Single-family Tenant owner Tenant owner Multi-family Commercial Forestry &
homes
rights
associations
housing
Agricultural
(apartments)
Total all
types1
Source: Swedbank, Jun 30, 2014 (1excluding public sector loans 1.3%)
35
Swedish covered bond legislation
Overview of the Swedish covered bond legislation

The Covered Bond Act entered into force on July 1, 2004 and is over-sighted by the Swedish FSA. Its main
characteristics are:

Dual recourse to the issuer and cover pool

Dynamic, regulated pool of assets, frequently monitored by the Swedish FSA via appointment of an
independent inspector

Regulated valuation of cover pool assets which remain on the balance sheet
The Covered Bond Act
Loan-to-value ratios and
other limitations

The cover pool may consist of certain mortgage credits, public credits and supplemental assets. There is no
requirement to segregate mortgage and public credits.

Maximum LTVs: Residential 75%, Agricultural 70%, Commercial 60%

Maximum 10% commercial loans and 20% supplemental assets in cover pool

Regular monitoring of the property values, revaluation of property prices in case of significant drop (generally
interpreted as 15% drop)

No mandatory over-collateralisation (OC)

Regional constraint on collateral assets (Mortgage - EEA, Public - OECD)

The cover pool value shall always exceed the aggregate value of claims (including derivatives)

A sound balance in terms of FX, interest rates and maturities must be achieved. It is deemed to exist when
the present value of the cover pool at all times exceed the present value of liabilities (including derivatives),
even on a stressed basis. Present value cover must hold even after 1% upward and downward shift in the
yield curve and a 10% change in the currency

Non-performing assets in the cover pool which are more than 60 days overdue must be disregarded for the
purposes of the matching tests

Holders of covered bonds and relevant derivative counterparties benefit from a priority claim over the cover
pool should the institution be declared bankrupt and rank pari passu ahead of unsecured creditors and all
other creditors of the institution in respect of assets in the cover pool

The registered assets in the cover pool, the covered bonds and any relevant derivative contracts are required
to be maintained as a unit and kept segregated from other assets and liabilities of the bankruptcy estate of
the institution. The administrators-in-bankruptcy are then required to procure the continued timely service of
payments due under the covered bonds and any relevant derivative contracts
Matching requirements
Benefit of a priority right
over the cover pool
Administration in event of
bankruptcy
Source: www.ascb.se
36
6. Swedish housing and mortgage market
37
Swedish housing and mortgage market
Swedish mortgage market
•
No securitisation (on balance sheet), no sub-prime market, no 3rd party origination, restricted buyto-let market
•
70% home ownership1
•
Rental market is regulated
•
Transparent credit information (credit information agency, www.uc.se)
– Publicly available information regarding income, debt, payment track record etc
•
Consumer credit legislation requires affordability calculations including stress test of higher interest
rate
•
Very limited debt forgiveness possibilities (full recourse)
•
Strong social security and generous unemployment benefit system
1 Source:
Boverket, 2011
38
Abated credit growth
Household borrowing growth
•
LTV cap of 85%
•
Amortisation
•
Risk-weight floor of up to 25% on
mortgage loans
•
Capital and liquidity requirements
Annual percentage change
%
14
12
10
8
6
4
2
0
02
03
04
05
06
07
08
09
10
11
12
13
14
Source: Swedbank, Statistics Sweden, data as per May 2014
39
Shortage of housing…
Housing completions in Sweden
Apartment buildings
Single-family dwellings
70 000
60 000
50 000
40 000
30 000
20 000
Number of homes / persons, thousands
Number of apartments
80 000
Population- and housing growth
1 200
Acc increase in housing
completions
1 000
800
600
400
200
10 000
0
0
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13
90
92
94
96
98
00
02
04
06
08
10
12
Source: Sweden statistics and Swedbank, May 2014
40
…Limits economic growth
Stockholm County, index 2005=100
Number of employed
Housing stock
115
110
105
100
95
90
05
06
07
08
09
10
11
12
Source: Statistics Sweden
41
Affordability withstands higher indebtedness
%
700
Swedish household financial assets and liabilities to
disposable income
600
500
•
Low interest rate environment
•
Disposable income
•
Wealth
•
Amortisation – savings
•
Tax
400
300
200
100
0
71
74
77
80
83
86
89
92
95
Total assets excl. collective insurance
98
01
04
Real assets (housing)
07
10
13
Debt
Household liabilities of disposable income*
250
200
Sweden unadjusted
150
Sweden adjusted
100
50
0
Sweden
Denmark
Finland
Norway
Germany
UK
France
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Swedish Riksbank’s Financial Stability report 2013:2 and Eurostat
Netherlands
*Adjusted for differences in social security (paid through tax or post tax) when looking at
disposable income
42
Savings
Household saving rates % of disposable income
15
10
Sweden
5
Germany
Norway
0
United States
Finland
Denmark
-5
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014F
2015F
-10
Source: OECD Economic Outlook 95, table 23, May 2014
43
Upward pressure on house prices
Sweden, total
Total
Stockholm
Tenant owner rights (apartments)
Single-family houses
250
250
200
200
150
150
100
100
50
50
0
0
05
06
07
08
09
10
11
12
13
14
05
06
07
08
09
10
11
12
13
14
Malmoe
Gothenburg
250
250
200
200
150
150
100
100
50
50
0
0
05
06
07
08
09
10
11
12
13
14
05
06
07
08
09
10
11
12
13
14
Source: Valueguard Index (2005=100), Jun 30, 2014
44
7. Swedish economy
45
Swedish economy
Continued strong fiscal position
•
Kingdom of Sweden rated Aaa/AAA/AAA
•
Unemployment 8.0% (May 14 Y/Y)
•
GDP growth 1.9% (Q1 14 Y/Y)
•
Debt to GDP 36% (forecast 2014)
•
CPI/CPIF -0.2% / 0.4% (Apr 14 Y/Y)
Source: Statistics Sweden and National Debt Office
General government gross public debt
as a percentage of nominal GDP*
100
80
UK
France
60
Euro area
Germany
Finland
40
Denmark
Sweden
20
0
2000
2003
2006
2009
2012
2015F
* Maastricht definition
Source: OECD Economic outlook 95 table 61, May 2014
46
Swedish economy
Exports – key factor for growth
12
Exports and imports trend per month, SEKm*
Current account balance as % of GDP
Current prices
120 000
10
Germany
8
Denmark
6
Sweden
100 000
80 000
Italy
4
Finland
2
60 000
Import
France
0
United States
United Kingdom
-2
40 000
Data up to and including
May 2014
20 000
Canada
-4
Export
0
-6
04
05
06
07
08
09
10
11
12
13
14
2007 2008 2009 2010 2011 2012 2013 2014F 2015F
Export of important goods*
Top 10 export countries, May 2014, %*
12
100%
9%
10
90%
10%
80%
60%
8
11%
Energy
13%
Minerals
70%
Forest
50%
Chemical
40%
43%
30%
Engineering
4
2
Other
0
20%
10%
6
13%
0%
Source: OECD – Economic outlook 95, table 51, May, 2014
Source: *Statistics Sweden, Jun, 2014
47
Swedish economy
Unemployment
•
Unemployment ratio of 8.0% of total workforce (age 15-74years)
–
•
Of which 16% of the foreign born workforce adults and 6% of the domestic born workforce adults
Youth unemployment ratio of 25.7% of workforce (age 15-24years)
–
Of which 44% of the foreign born workforce youths and 22% of the domestic born workforce youths
Able-bodied adults and workforce, age 15-24 years
Able-bodied adults and workforce, age 15-74 years
1 400
100%
7 000
8.0%
19%
6 000
71%
65%
5 000
13%
4 000
3 000
6%
Foreign*
Sweden*
81%
58%
2 000
6%
11%
0
Able-bodied
adults
Workforce
Employed
100%
1 200
25.2%
14%
1 000
800
52%
Foreign*
600
6%
86%
54%
Unemployed
39%
Sweden*
7%
400
23%
1 000
Number of people, thousands
Number of people, thousands
8 000
13%
46%
41%
200
4%
35%
0
Able-bodied
adults
Workforce
Employed
Unemployed
* Place of birth
Source: Statistics Sweden, data as per May 2014
48
Appendix
49
This is Swedbank
The Bank for the many people, households and businesses
Sweden
Population
Private customers
Corporate customers
Organisations
Branches
ATMs
Cards
Employees
Estonia
Population
Private customers
Corporate customers
Branches
ATMs
Cards
Employees
9.5m
4.1m
269 000
66 000
320
*
3.9m
8 645
1.3m
1.0m
127 000
50
469
1.1m
2 290
~86%*
~10%*
* Share of loanbook
Latvia
Population
Private customers
Corporate customers
Branches
ATMs
Cards
Employees
2.0m
1.0m
85 000
54
418
1.0m
1 541
Lithuania
Population
Private customers
Corporate customers
Branches
ATMs
Cards
Employees
3.0m
2.0m
88 000
70
476
1.8m
1 859
Source: Swedbank Jun, 2014 * ATMs are handled in Bankomat AB (www.bankomat.se)
50
Financial performance – Income
Income distribution Q2 2014
Geographic distribution
Business area distribution
Treasury,
Trading and
Capital Markets
7%
Asset
Management
11%
Lending and
deposits
58%
Payment,
Cards
8%
Share of P&L of
associates
4%
Insurance
2%
Other
10%
Lithuania
4%
Latvia 4%
Other 7%
Estonia 6%
Sweden
78%
51
This is Swedbank
Market leading retail franchise in all home markets
•
Largest retail bank and fund manager in Sweden
%
60
Market shares, Deposits
Market shares, Lending
%
May 2014
May 2014
60
Deposits Private
50
Deposits Corporate
Mortgage lending
50
Corporate lending
40
40
2
3
30
30
1
1
1
20
20
2
3
10
10
0
0
Sweden
Estonia
Latvia
Lithuania
Sweden
Estonia
Latvia
Lithuania
Source: Source Sweden: Statistics Sweden (SCB)
Source Estonia: Estonian Central Bank
Sources Latvia: Association of Commercial Banks of Latvia (ACBL) & The Financial and Capital Market Commission (FCMC), 2as per Sep 2013, 3as per Feb 2014
Source Lithuania: Association of Lithuanian Banks (LBA), 1as per Mar 2014
52
This is Swedbank
Sweden – the dominating home market
•
Total lending to the public amounts to SEK 1 266bn (as per Q2 2014), out of which
around 86% is originated in Sweden
•
Estonia makes up 46% of total lending in the Baltics
Lending distributed by countries (Q2 2014)
Sweden
Estonia
86.3%
SEK 1 093bn
4.4%
Swedish Mortgage loans (private+corp)
Latvia
2.3%
Other corporate (incl. LC&I, Sweden)
Lithuania
2.9%
Other*
4.0%
0
200
400
600
800
1000
1200
* Denmark, Norway, Finland and NY Branch
53
This is Swedbank – Baltic banking
Baltic market fundamentals
•
Legal and institutional framework
•
Fiscal position
•
Market concentration
•
Absence of “irrational” players
•
Sophisticated product penetration
•
Swedbank retail and deposit incumbent
•
GDP / capita less than half of Sweden’s
•
Risk mitigators
Estonia
Latvia
Lithuania
– Loan-to-deposit restriction
– Group governance model
Source: Swedbank
54
Sparbanken Öresund
Long-term financial impact from Sparbanken Öresund
• P&L impact 2016-2017
– Estimated net profit contribution of SEK 350-450m
– Incremental RoE to reach group target 2016
• Long term
– Estimated net profit contribution of at least SEK 500m
– Incremental RoE >25 per cent
55
Sparbanken Öresund
Sparbanken Öresund – ownership structure
Before transaction
Sparbanksstiftelsen
Gripen
Today
Sparbanksstiftelsen
Öresund
22%
78%
Sparbanken
Öresund
Swedbank
Sparbanksstiftelsen
1826
Sparbanksstiftelsen
Färs & Frosta
Sparbanksstiftelsen
Öresund
Sparbanksstiftelsen
Färs & Frosta
30%
Swedbank
70%
26%
22%
26%
100%
26%
Färs & Frosta
Sparbanksstiftelsen
1826
Sparbanken Skåne
+ 8 Spb Öresund
branches
Sparbanken
Öresund
100%
Sparbanken 1826
56
Sparbanken Öresund
Sparbanken Öresund - Facts
Swedbank Skåne (1
Split up of Sparbanken Öresund
Sparbanken
Öresund
Swedbank
Sparbanken
Skåne
Current
Proforma
Increase
%
559
447(2
112
410
857(2
109
24
16
8
27
43
59
204 700
108 300
96 400
482 000
590 300
22
15 700
8 300
7 400
38 000
46 300
22
189 000
100 000
89 000
444 000
544 000
23
Lending, SEKbn
25
16
9
14
30
114
Mortgages, SEKbn (4
33
17
16
56
73
30
Deposits, SEKbn
24
12
12
34
46
35
Other (AUM, etc), SEKbn
20
10
10
34
44
29
Employees
Branches
Customers
o/w Corporate (3
o/w Private
1)
2)
3)
4)
In addition, one branch in Lomma will be sold to Swedbank by Sparbanken Skåne
Of which 61 relate to Cerdo Bankpartner
Includes micro corporates
Sparbanken Öresund is a distributor of SBAB mortgage loans. Volumes will gradually move to Swedbank’s balance sheet.
57
Asset quality
Conservative provision ratio
SEKm
20 000
64%
65%
62%
60%
57%
54%
53%
56%
54%
Provision ratio, %
Q2 14
Swedish Banking
LC&I
Baltic Banking
Group
62
119
50
56
15 000
2 040
1 774
10 000
1 545
5 000
10 951
1 420
9 934
1 398
7 077
4 429
4 047
1 325
1 256
1 238
1 211
3 570
2 818
2 514
2 343
Q313*
Q413*
Q114*
Q214*
0
Q212
Q312
Q412
Individual provisions
Q113*
Q213*
Portfolio provisions
Provision ratio
Source: Swedbank, Jun 30, 2014 * Russia and Ukraine reported as discontinued operations
58
Credit portfolio – Large Corporates & Institutions
Shipping and offshore
•
Lending exposure to Shipping & Offshore sector of
SEK 26.0bn
- Portfolio duration 3.77 years (weighted on
commitments)
- Average fleet age 7 years
- Strong employment profiles
Shipping and Offshore
SEKbn
30
26
23
26
25
25
26
4
20
5
10
16
0
Q1-13
Shipping and Offshore Portfolio by subsegment,
SEKbn
RORO
Container
Dry bulk
Gas (LNG/LPG)
Crude oil
Product
Chemical
Floating production
Accommodation
Supply
Oil service
Drilling & exploration
Cruise
Q2-14
Shipping and Offshore Portfolio by currency,
SEKbn
1.8
0.7
0.2
Q2-13 Q3-13 Q4-13 Q1-14
Offshore
Tanker
Other
Q2-14
3.0
JPY
Q1-14
Q2-14
Q1-14
0.7
NOK
2.4
0.6
USD
1.5
1.3
EUR
3.4
1.5
7.4
SEK
0.5
0
2
4
6
8
10
0
5
10
15
20
25
59
Asset quality - Credit portfolio - Retail
Corporate portfolio drives capital efficiency
Total portfolio, SEK 252bn
Segments excl Swedbank
Volume
Mortgage and Swedbank Finance SEK bn Secured, %
Agriculture, forestry, fishing
7
81%
Manufacturing
9
69%
Public sector and utilities
4
92%
Construction
5
87%
Retail
10
83%
Transportation
2
81%
Shipping
0
45%
Hotels and restaurants
3
89%
Information and communication
1
50%
Finance and insurance
2
59%
Property management
67
98%
Professional services
8
59%
Other corporate lending
7
57%
Total
125
87%
60
Swedbank’s domestic covered bonds
•
Benchmark system established in early 1990s
•
Tap issuance enhances liquidity and reduces execution risk
− Continuous daily issuance
− Buy-backs against issuance of longer tenors
− Total issue size often peak at SEK 40-60bn
•
Market making at pre-set bid/offer spreads
SEKbn
2009-12-31
2010-12-31
2011-12-31
2012-12-31
2013-12-31
2014-03-31
2014-06-30
60
50
40
30
20
10
0
Mar 15
Sep 15
Jun 16
Mar 17
Dec 17
Sep 18
Jun 19
May 20
SPI 182
SPI 183
SPI 184
SPI 185
SPI 186
SPI 187
SPI 188
SPI 180
61
Fundamental change of maturity profile
•
2007 – 64% of wholesale funding < 12 months, SEK 13bn in central bank deposits
•
Q2 2014 – 36% of wholesale funding < 12 months, SEK 158bn in central bank deposits
100%
SEK
673bn
SEK
793bn
2%
7%
Average maturity profile of outstanding market
funding
90%
80%
34%
Months
50
70%
45
57%
60%
5 years +
1-5 years
50%
35%
35
3-12 months 30
40%
0-3 months
30%
40
17%
25
20
15
20%
29%
10%
10
19%
5
0%
2007
Q2 2014
0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14
Total capital market funding
Covered bond funding
62
Long-term funding maturity profile
• Funding plan of SEK 120bn to meet next 12 months’ nominal SEK 101bn maturities
• All remaining government guaranteed debt (issued in 2009) matured in May 2014
Long-term funding maturity profile, by funding source Long-term funding maturity profile, by currency
SEKbn
SEKbn
200
200
Senior unsecured
debt
150
150
Other
Covered bonds
CHF
100
100
USD
EUR
50
50
0
0
2014
2015
2016
2017
2018
2019
2020-
SEK
2014
2015
2016
2017
2018
2019
2020-
63
Limited need for USD-funding
•
USD-funding need covered for more than 12 months
•
Issued USD 1bn of senior (144a) YTD 2014
SEKbn
350
Assets held for sale
300
Interest-bearing securities
250
Loans to the public
200
Loans to credit institutions
150
Cash and balances with
central banks
100
Deposits and borrowings
from the public
Amounts owed to credit
institutions
50
Debt securities in issue
0
Assets
Liabilities
64
Funding sources
Swedbank AB
Program
Long Term
Global MTN
Domestic MTN
USD Senior (144a / Reg.S)
100% owned
Limit
USD 40bn
SEK 60bn
USD 15bn
NSV (stand alone doc.)
Short Term
Domestic CP
European CP/CD
US CP
Yankee CD
Finnish CD
Swedbank Mortgage AB*
Program
Long Term
Domestic Benchmark CB
EMTN CB
USD Covered bonds (144a / Reg.S)
Domestic MTN CB
Norwegian Benchmark CB
Limit
Unlimited**
EUR 25bn
USD 15bn
SEK 150bn
Unlimited**
Registered CB (stand alone doc.)
SEK 80bn
EUR 6bn
USD 15bn
USD 10bn
EUR 4bn
Short Term
Domestic CP
SEK 50bn
* 100% guaranteed by parent company
- Irrevocable
- Unconditional
- Timely
** Limited by cover pool size
65
Real estate prices – Sweden 12 months development
Single-family homes1
12M Δ
Tenant-owner rights2
12M Δ
Combined3
12M Δ
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%
Jan/14
7%
13%
9%
Feb/14
7%
13%
9%
Mar/14
7%
13%
9%
Apr/14
8%
12%
9%
May/14
8%
12%
9%
Jun/14
8%
11%
9%
Source: Valuegard www.valueguard.se (Based on data from Mäklarstatistik), 1 HOXHOUSESWE, 2 HOXFLATSWE, 3 HOXSWE
66
Nr.of deals
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Nr.of deals
Jul-10
Jan-10
1 800
Jul-09
1 600
1 600
1 400
1 400
1 200
1 200
1 000
1 000
800
800
600
600
400
400
200
200
0
0
EUR/m2
Nr.of deals
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
1 800
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Tallinn
Jul-05
EUR/m2 /Nr of deals
Jan-05
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
1 800
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Real estate prices
Baltic countries
EUR/m2 /Nr of deals
Riga
EUR/m2
EUR/m2 /Nr of deals
Vilnius
1 600
1 400
1 200
1 000
800
600
400
200
0
EUR/m2
67
Appendix
Swedbank – contacts and financial calendar
Financial calendar
For further information, please contact:
Q3 Interim report
Helo Meigas, Head of Group Treasury
[email protected]
Q4 Year-end report 2014
+46 8 585 900 25
Gregori Karamouzis, Head of Investor Relations
[email protected]
21 Oct 2014
3 Feb 2015
Q1 Interim report
28 Apr 2015
Q2 Interim report
16 Jul 2015
+46 8 585 930 31
Bogdan Woronowicz, Debt Investor Relations
[email protected]
+46 8 585 922 53
Peter Stenborn, Debt Investor Relations
[email protected]
Contact debt investor relations:
+46 8 585 909 30
[email protected]
Ulf Jakobsson, Head of Funding
[email protected]
www.swedbank.com/investor-relations/debt-investor
+46 8 700 90 61
Kimmy Samuelsson, Head of Long-Term Funding
[email protected]
Postal address:
+46 8 700 97 89
Joakim Henriks, Money Markets and Short-Term Funding
[email protected]
Visitors:
Swedbank Group Treasury
Landsvägen 40,
SE-105 34 Stockholm, Sweden
Sundbyberg
+46 8 700 90 62
68
Disclaimer
Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations
and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from
any expected future results or performance, express or implied, by the forward looking statements. Factors that might cause
forward looking statements to differ materially from actual results include, among other things, regulatory and economic factors.
Swedbank AB assumes no responsibility to update any of the forward looking statements contained herein.
No representation or warranty, express or implied, is made or given by or on behalf of Swedbank AB or its directors, officers or
employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this
presentation. None of Swedbank AB or any of its directors, officers or employees nor any other person accepts any liability
whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection
therewith.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for, any securities of Swedbank AB, nor shall it or any part of it nor the fact of its distribution form the basis
of, or be relied on in connection with, any contract or investment decision.
69

Q2 2014 Investor presentation

Transcription

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