Carnegie Holding AB. Interim Report

Transcription

1 Carnegie Hlding AB (Frmerly ABCIB Hlding AB) Crp. reg. n , registered ffice Stckhlm Parent Cmpany f Carnegie Investment Bank AB (publ) And Carnegie Fnder AB Interim Reprt 1 January 31 March 2011

2 Interim reprt 1 January 31 March 2011 Carnegie has cntinued t strengthen its market psitin: Psitin remains strng in securities trading. Strng rder bk in transactin services. Increased number f discretinary mandates in Private Banking. Inflw t Carnegie s funds. Carnegie was tp ranked fr Private Banking in a survey cnducted by Eurmney. Financial data fr the grup: Revenue amunted t SEK 500 (557 1 ) millin. The decrease relates t terminated peratins and lw revenue in Investment Banking. Expenses befre credit reserves amunted t SEK 465 millin (504 1 ). Items affecting cmparability increased expenses by SEK 11 millin (0). Prfit befre credit reserves amunted t SEK 34 millin (54 1 ). Adjusted fr items affecting cmparability, prfit befre credit reserves amunted t SEK 45 millin (54 1 ). Prfit fr the perid amunted t SEK 24 millin (109 1 ). Carnegie has assets under management f apprximately SEK 110 billin. Strng financial psitin with equity amunting t SEK 2.5 billin, capital adequacy f 20 percent, and Tier I capital adequacy f 15 percent at the end f the quarter. President's cmments Carnegie stands stable in a hesitant market The early part f 2011 has been marked by dramatic events arund the wrld, with cnflicts in the Middle East and Nrth Africa, natural disasters in Japan, and cntinued ecnmic prblems fr a number f EU cuntries. These all impact n investr activity and investrs willingness t take risk, which als affects Carnegie. Carnegie s earnings are partly marked by the hesitant market situatin, with relatively lw revenue in crprate transactins, while Private Banking and Fnder are reprting stable revenue. Carnegie's revenues in Securities and Investment Banking have a strng crrelatin with the market fr equity capital markets transactins. The integratin f the autumn s acquisitins will cntinue thrughut the year, and at this pint synergies have nly partially been realised. Hwever, we can be pleased that Carnegie is standing stable in the market, with increasing shares f brkeragedriven trade and a gd pipeline in equity capital markets transactins and M&As. Our fund peratins cntinue t develp well, and we have expanded ur activity in terms f market cmmunicatin in rder t prfile ur actively managed funds. Private Banking has experienced a stable quarter, with an increased inflw f discretinary mandates. Carnegie was als tp ranked in a number f categries in private banking, accrding t a survey by Eurmney magazine at the start f the year. Carnegie has a unique platfrm as the leading independent investment bank in the Nrdic regin. We have strengthened ur psitin, and even thugh there is still plenty t be dne, there are many factrs that mean we can lk t the future with ptimism. Frans Lindelöw President and CEO 1) Pr frma 2010: Includes prfits frm HQ Bank and HQ Fnder. Frm page 4 and later, the cmparisn figures are nt pr frma. 2

3 Operative incme statement (SEKm) 2011 Pr frma Securities Investment Banking Private Banking Fnder Ttal incme Persnnel expenses Other expenses Expenses befre credit lsses Operating prfit befre credit lsses Credit reserves, net 4 71 Prfit/lss befre taxes Taxes Prfit/lss fr the perid Average number f emplyees Number f emplyees at year-end (FTE) Revenue Revenue fr the first quarter f 2011 amunted t SEK 500 millin (557 1 ). The decrease relates t Carnegie having terminated parts f the peratins frm HQ Bank, and t lwer revenue frm the Investment Banking business area. In the Securities business area, underlying revenue is up in relatin t the previus year, driven by higher brkerage revenue. Revenue in Investment Banking is lwer as a cnsequence f a weaker market fr equity capital markets transactins. Hwever, the level f underlying activity in this area is high, and Carnegie has a gd rder bk. Revenue frm these peratins is typically generated unevenly acrss the year. Private Banking and Fnder are bth demnstrating a stable trend, with an inflw f capital t the funds and t discretinary asset management. Expenses Expenses befre credit reserves fr the first quarter f 2011 amunted t SEK 465 millin (504 1 ). These expenses include items affecting cmparability f SEK 11 millin (0), which relate t csts assciated with restructuring. Adjusted fr items affecting cmparability, expenses befre credit reserves amunted t SEK 454 millin (504 1 ). Prfit Prfit befre credit reserves during the first quarter f 2011 amunted t SEK 34 millin (54 1 ). Restructuring csts affected prfit by SEK 11 millin (0). Adjusted fr the abve items, prfit befre credit reserves amunted t SEK 45 millin (54 1 ). Net prfit fr the perid was SEK 24 millin (109 1 ). 1) Pr frma 2010: Includes prfits frm HQ Bank and HQ Fnder. Frm page 4 and later, the cmparisn figures are nt pr frma. 3

4 Imprtant events during the first quarter f 2011 New fund names in Carnegie Fnder Carnegie Fnder, frmerly HQ Fnder, ffers a brad range f funds that have all used the prefix HQ in their name, such as the HQ Strategifnd fund. As a natural cnsequence f the cmpany name changing t Carnegie Fnder, the fund names have been changed s that Carnegie is instead used as the prefix, such as fr the Carnegie Strategifnd fund. During January 2011, mst Swedish-registered funds changed their name. Thse funds that are registered in Luxemburg will change their names later in Carnegie Fnder terminating ETF peratins Carnegie Fnder has decided t terminate its peratins in exchange-traded funds, als called ETFs. This means that Carnegie Fnder will nce again fcus entirely n its cre business f actively managed funds. Risks and uncertainties General infrmatin n risks and uncertainties The business activities f Carnegie expse the grup t market, credit, liquidity and peratinal risks. Market risk is defined as the risk f lss due t the effect f, fr example, changes in equity prices, interest rates, r currency exchange rates. Credit risk is defined as the risk f lss due t a cunterparty being unable t meet its bligatins. Credit risk mainly arises as a cnsequence f lans t clients using shares as cllateral. Liquidity risk is related t the need fr liquidity in the day-t-day peratins. Operatinal risk is the risk f lss resulting frm inadequate r failed prcesses and systems, alternatively human errr r external events. A mre detailed descriptin f the Carnegie grup s risk management is presented in the 2010 annual reprt fr Carnegie Hlding. Capital requirement and capital rati The tables belw present the capital requirement and capital rati accrding t the Swedish Financial Supervisry Authrity s directive FFFS 2007:5 regarding publicatin f infrmatin n capital adequacy. The capital rati is calculated as the rati between the capital base and capital requirement. The capital rati must nt fall belw 1 accrding t the legal requirement. At Carnegie Bank, which includes mst f the grup s perating activities, the capital rati n 31 March 2010 was 2.4, which crrespnds t capital adequacy f 19.2 percent. In the financial cmpanies grup, i.e. Carnegie Hlding, in which Carnegie Fnder is als included, the capital rati was 2.5, crrespnding t capital adequacy f 20.0 percent. A mre detailed descriptin f Carnegie s capital adequacy is prvided in the 2010 annual reprt, as well as n Carnegie s website at 4

5 Capital adequacy Carnegie Bank Grup Carnegie Hlding Grup 31 March 31 March (SEKm) Capital base Equity capital Deductins (intangible assets and deferred tax asset) Equity capital in the capital base Tier II capital (subrdinated dept) Ttal capital base Capital requirement Capital requirement fr credit risk, standardized methd Capital requirement fr equity and interest rate risk Capital requirement fr currency risk Capital requirement fr peratinal risk, base methd Ttal capital requirement Surplus capital Tier I capital qutient Capital qutient Tier 1 rati % Capital rati %

6 Investments The grup s investments in fixed assets amunted t SEK -5 millin (-6) during the perid. Summary f the parent cmpany Ttal revenue in the parent cmpany during the perid amunted t SEK 3 millin (3). Prfit befre tax during the perid amunted t SEK -8 millin (-1). N investments have been made in fixed assets during the perid (-). Liquidity, defined as cash and lending t credit institutins, amunted t SEK 5 millin (2) per 31 March 2011 fr the parent cmpany. Equity per 31 March 2011 amunted t SEK 2,229 millin (1,842). Liquidity The Carnegie grup's peratins invlve largely shrt-term bligatins that mature within tw mnths, which means that the bank des nt require financing with lng duratin. The grup's financing cnsists f equity, issued bnds and depsits frm the public. Equity and bnds make up 23 percent, depsits frm the public make up 40 percent, and ther liabilities make up 37 percent f ttal capital emplyed. Of ther liabilities, the majrity d nt attract interest. The Carnegie grup manages its liquidity in fur different liquidity reserves: Carnegie Investment Bank AB and the subsidiaries in Denmark, Luxemburg and Nrway. Each unit is self-financing and the liquidity reserves are managed individually. The liquidity reserve was SEK 2,943 millin per 31 March fr the Carnegie grup. The cmpsitin f the liquidity reserve was as fllws: Cash and cash equivalents: SEK 2,589m Gvernment securities: SEK 47m Secured bnds: SEK 307m T assure an adequate liquidity reserve the grup utilises liquidity risk tlerance levels that shuld ensure the bank always has an adequate liquidity reserve t survive perids f market turbulence. The liquidity reserve shuld always be greater than the anticipated utflw f cash during a perid f stress. The liquidity reserve may nly cnsist f balances with banks and assets that can be refinanced with the Swedish Riksbank. A maximum f 40 percent f the liquidity requirement may be derived frm the refinancing f securities (0 at end f perid). The liquidity reserve shuld make up at least 10 percent f ttal capital emplyed (20 percent at end f perid). 6

7 Cnslidated statements f cmprehensive incme Full year (SEKm) Cmmissin incme Cmmissin expenses Net cmmissin incme Interest incme Interest expenses Net interest incme Other dividend incme 0-0 Net prfit frm financial transactins Capital gain frm discntinued peratins Ttal perating incme Persnnel expenses Other administrative expenses Amrtisatin f intangible assets and depreciatin f tangible fixed assets Ttal perating expenses Prfit/lss befre credit lsses Credit lsses, net Prfit/lss befre tax Taxes Prfit/lss fr the perid Other cmprehensive incme: Translatin differenses, net after tax Ttal cmprehensive incme fr the perid

8 Cnslidated statements f financial psitin 31 March 31 March 31 December (SEKm) Assets Cash and bank depsits with central banks Negtiable gvernment securities Lans t credit institutins ) Lans t general public Bnds and ther interest-bearing securities Shares and participatins Derivative instruments Intangible assets Tangible fixed assets Current tax assets Deferred tax assets Trade and client receivables Other assets Prepaid expenses and accrued incme Ttal assets Liabilities and sharehlders' equity Liabilities t credit institutins Depsits and brrwing frm general public ) Securities issued Shrt psitins, shares Derivative instruments Current tax liabilities Deferred tax liabilities Trade and client payable Other liabilities Accrued expenses and prepaid incme Other prvisins Subrdinated debt Sharehlders' equity Ttal liabilities and sharehlders' equity ) Wheref SEK 487m in client funds 8

9 Cnslidated statements f changes in equity Full year (SEKm) Sharehlders' equity - pening balance Repayment f capital cntributin Sharehlders' cntributin Cmprehensive incme fr the year Sharehlders' equity - clsing balance Cnslidated statements f cash flws Full year (SEKm) Prfit befre tax Adjustments fr items nt affecting cash flw Paid tax Cash flws frm peratins befre changes in wrking capital Changes in wrking capital Cash flws frm peratins Acquisitin f subsidiaries Acquisitin f intangible and tangible fixed assets Cash flws frm investing activities Issue f capital Repayment f capital cntributin Issue f cnvertible debentures Cash flws frm financing activities Cash flws fr the perid Cash and cash equivalents at pening balance Exchangerate effects n cash and cash equivalents Cash and cash equivalents at clsing balance

10 Incme statement f Parent Cmpany Full year (SEKm) Net incme Other external expenses Persnnel expenses Operating prfit/lss Interest incme Interest expenses Result frm investments in subsidiaries Prfit/lss frm financial items Prfit/lss befre tax Taxes 0-0 Prfit/lss fr the perid Statement f cmprehensive incme Full year Prfit/lss fr the perid Other cmprehensive incme, net f tax Ttal cmprehensive incme fr the perid

11 Balance sheet f Parent Cmpany Full year (SEKm) Assets Shares and participatins in Grup cmpanies Deferred tax assets 0-0 Ttal financial nn-current assets Current receivables frm Grup cmpanies Other current receivables Prepaid expenses and accrued incme 0-0 Cash and bank Ttal current assets Ttal assets Liabilities and sharehlders' equity Sharehlders' equity Cnvertible debentures Other nn-current liabilities Trade accunt payables Current liabilities t Grup cmpanies Other current liabilities Accrued expenses and prepaid incme Pensin prvisins 1-1 Ttal liabilities and sharehlders' equity

12 The Carnegie grup T clarify the legal structure encmpassed by this financial reprt, a brief descriptin is prvided belw f the peratins within Carnegie. Carnegie Hlding Carnegie Hlding was frmed n 19 March 2009 in cnjunctin with the Altr and Bure acquisitin f Carnegie Investment Bank AB (publ) ( Carnegie Bank ). The hlding cmpany s peratins cnsist f directly r indirectly wning, managing, issuing guarantees and lans t the banking peratins and ther grup cmpanies assciated with financial peratins. All business peratins within Carnegie take place within Carnegie Bank and Carnegie Fnder AB (frmerly HQ Fnder Sverige AB). Carnegie Hlding is wned by Altr Fund III, the investment cmpany Bure Equity AB, Investment AB Öresund and emplyees f Carnegie. Carnegie Bank As f 3 September 2010, peratins previusly cnducted in HQ Bank AB were included in Carnegie Bank. HQ Bank AB was merged with Carnegie Bank n 30 September Carnegie Fnder Carnegie Hlding cnslidates Carnegie Fnder AB ( Carnegie Fnder ) as f 22 September Cmparisn figures Pages 2 and 3 present cmmentary n Carnegie Hlding's perating results fr the first quarter f 2011 cmpared with the first quarter f 2010 pr frma, that is t say including HQ Bank and HQ Fnder. Frm page 4 and subsequently, the cmparisn figures are nt pr frma. Carnegie Hlding 1) Carnegie Fnder Carnegie Bank 2) 1) Carnegie Hlding cnsists f the parent cmpany Carnegie Hlding AB and its subsidiaries. 2) Carnegie Bank cnsists f the parent cmpany Carnegie Investment Bank AB (publ) and its subsidiaries. 12

13 MISCELLANEOUS Accunting plicies This reprt was prepared in accrdance with IAS 34 Interim Financial Reprting, the Annual Accunts Act fr Credit Institutins and Securities Cmpanies (1995:1559) and the Swedish Financial Supervisry Authrity s regulatins (FFFS 2008:25). The parent cmpany s accunts were prepared accrding t the Annual Accunts Act and RFR 2 Accunting fr Legal Entities. The accunting plicies and calculatin methds applied in this reprt are the same as thse used in the 2010 annual reprt. Nte that runding may result in amunts in SEK millins nt agreeing when summed. Auditr s review reprt This reprt has nt been reviewed by the cmpany s auditrs. Certificatin The chief executive fficer hereby certifies that this interim reprt prvides a true and fair summary f the peratins, financial psitin and earnings f the parent cmpany and the grup and the significant risks and uncertainties faced by the parent cmpany and thse cmpanies that are included in the grup. Stckhlm, 26 April 2011 Frans Lindelöw Chief Executive Officer 13