Nomura Financials Conference

Transcription

1 Jan Erik Back Chief Financial Officer SEB Nomura Financials Conference 1 September 20

2 SEB s home markets relatively less affected SEB retains resilience and flexibility Strategic priorities remain 2

3 European sovereigns SEB s home markets enjoy strong sovereign finances Sovereign debt, % of GDP Estonia Luxemburg Slovenia Lithuania Sweden Denmark Latvia Norway Finland Poland Spain Cyprus Netherland Malta Austria Hungary UK France Germany Portugal Ireland Belgium Italy Greece Deficit, % of GDP Norway Estonia Sweden Luxemburg Finland Denmark Germany Malta Belgium Hungary Italy Austria Cyprus Netherlands Slovenia France Lithuania Latvia Poland Portugal Spain UK Greece Ireland

4 GDP growth forecast SEB's home markets and Eurozone, in per cent Forecast for 20 Forecast for 2012 Forecast for 2013 Sweden In May 20 In Aug 20 Norway Denmark Finland Germany Estonia Latvia Lithuania Eurozone Source: Nordic Outlook August

5 Economic sentiment relatively firm SEB's Financial Officers Survey Business Climate Feb-07 Feb- Feb- Feb- Feb- Swedish corporate lending growth vs. economic sentiment Corporate lending growth, y-o-y % - lagged by 12 months (LHS) Economic sentiment (RHS) Source: Datastream, SEB Enskilda Source: SEB's Chief Financial Officers confidence survey, addressed to about 0 of the largest companies in Sweden (Aug 20) 5

6 Swedish banks less affected CDS spreads, bps 600 EU banks Danske Bank DnBNOR Handelsbanken Nordea Swedbank SEB Dec- 07 Jun- Dec- Jun- Dec- Jun- Dec- Jun- 6

7 Swedish TED-spreads still far below 20 levels Dec- 07 Jun- Dec- Jun- Dec- Jun- Dec- Jun- Graph shows spread between 3 month STIBOR and a 3 month Swedish treasury bill 7

8 Lending still growing Swedish lending growth (y-o-y) 20% 15% % 5% 0% -5% Non-financial Companies and Households Corporate lending -% Source: Statistic Sweden, as of July 20 Nordic corporate lending growth (y-o-y) Sweden Norway Denmark Finland 60% 50% 40% 30% 20% % 0% -% -20% -30% Source: Central banks, as of July 20 8

9 Swedish house market cooling off Mortgage lending growth (y-o-y) 20% 18% 16% 14% 12% % 8% 6% 4% 2% 0% Source: Statistic Sweden, as of July 20 House price development (y-o-y) Houses Sweden Houses Stockholm Houses Gothenburg Houses Malmoe Flats Sweden Flats Stockholm Flats Gothenburg Flats Malmoe 190 Flats Houses Source: Valueguard HOX Index 9

10 Conclusions On an absolute and relative basis, SEB operates in a region which continues to show strong performance The stress in the financial markets is markedly lower than in the rest of Europe The uncertainty on the future impact is nevertheless high

11 SEB s home markets relatively less affected SEB retains resilience and flexibility Strategic priorities remain

12 Highlights Operating profit Operating profit SEK 4.3bn Q1- Q2- Q3- Q4- Q1- Q2- Continued progress of corporate expansion plan Credit volume +91bn Balance sheet stronger than ever Core Tier % 12

13 Q2 financial wrap-up Profit and loss development Q2- Q2- (SEK bn) Q2- Q2- Q2- Operating income Operating expenses Net credit losses Operating profit (SEK bn) Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Highlights from results: Divisional pre-provision profit Q2 vs. Q1 +7% Group total income H1- vs. H1- +7% Customer-driven NII Q2 vs. Q1 +7% Negative result effects in Q2: NII: SEK 50m German hedge QoQ, SEK 70m investment portfolio, SEK 0m funding & liquidity NFI: SEK 200m portfolio valuations directly related to GIIPS exposures 13

14 NII dynamics Customer driven NII, SEK bn Funding and Other, SEK m Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2-0.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Lending Deposits Funding & other Sale GRB Customer driven NII shows positive trend while sale of German Retail materially impacted overall NII 14

15 Growth in corporate lending SEB Group, corporate credit portfolio (SEK bn) Nordic & Other Germany Baltics % YoY 0% YoY -2% YoY +12% YoY Dec ' Jun ' Dec ' Jun ' Lending Cont. liab's Derivatives Total Geography based on SEB's operations NB: Jun FX rates applied historically Changed dynamics Committed facilities +22 per cent in 20 Lending at a trough in the summer of 20, now +% YoY 15

16 Well-diversified revenue streams Total operating income split between Non-NII and NII SEK bn % 53% % 59% % 52%.9 42% 58%.8 51% 49% % 60% % 54% Net Interest Income Non Net Interest Income Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2-36% 64% 41% 59% 41% 59% % 53%.0 45% 55% % 56% % 56% Underlying market shares render stable and growing commission and net life income SEK bn Custody, mutual funds, net life, payments cards, lending New issues & advisory, secondary market and derivatives 0.0 Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2-16

17 SEB s financial position 20 vs H1 20 Core Tier 1* Matched funding Jun %.7% 12.8% 8.6% 26 months 17 months 18 months 7 months Leverage ratio (FDIC) 23x 18x 17x 16x Bond inv portfolio NPLs SEK 133bn SEK 15bn SEK 90bn SEK 29bn SEK 48bn SEK 24bn SEK 34bn SEK 22bn * Basel II without transitional floor; 20 pro forma for disposal of German retail 17

18 A strong capital situation Core Tier 1 ratio (%) Equity to assets/leverage ratio (%) Basel II 15% % 13% 8% % 6% US FDIC 9% 4% Equity to assets 7% 2% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Capital ratios well above European average support strong funding access 18

19 Extended match-funding in Q2 ahead of potential summer break-down SEB s matched funding horizon (number of months) SEK 78bn LT funding raised in H1 20 vs FY maturity of SEK 98bn Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Matched funding. Note this is a cash flow based model where assets and liabilities are mapped to contractual maturities. SEB will manage more than 2 years without any new funding if the loans and liabilities mature without prolongation. 19

20 Upgraded, smaller bond portfolio Key characteristics Bond portfolio has decreased by SEK 80bn since mid 20 Structural shift from unsecured financials and structured bonds into sovereign and covered bonds Investment portfolio reduced from SEK 126bn mid 20 to SEK 34bn in mid 20 Bond portfolio, SEK bn (incl. Treasury and Trading portfolios) GIIPS exposure limited to 5% - majority in Spanish covered bonds 0 Q2 Q2 Gov't and public sector Covered bonds Financials ABS Corporates 20

21 Active downsizing of bond exposure to GIIPS countries GIIPS Bond portfolio holdings, SEK bn Majority in Spanish covered bonds Bank bonds 2% ABS 28% Sovereign bonds % Covered bonds 59% Limited in relation to total Bond portfolio Other 95% GIIPS 5% Jun 20 Sep 20 Dec 20 Mar 20 Jun 20 Jul 20* * 8 July 21

22 Continued improvement of asset quality without reducing the reserve ratio too fast Level of impaired loans net (%) Reserve ratio individually assessed (%) Individually assessed, i.e. excl portfolio assessed loans Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 SEB s impaired loans peaked two years ago and have been falling since. SEB s reserve ratio at 65% remains the highest among peers. Reserve ratio is total reserves (specific & collective) in relation to total gross individually assessed impaired loans 22

23 SEB s home markets relatively less affected SEB retains resilience and flexibility Strategic priorities remain 23

24 Priorities for 20 Maintain flexibility & resilience Exploit core strengths Corporates in Nordics & Germany Universal bank in Sweden & Baltics 24

25 Great position for growth in areas of strength Prerequisites No ailing businesses Desired business mix in place One SEB business model Strong capital position Scalable platform Growth strategy Segment growth Geographic growth Core relationship growth Investments in Nordic & German wholesale franchise and SMEs and savings in Sweden 25

26 Large corporates Nordic and German expansion* continues Large cap clients: +136 Mandated lead arranger EUR 2,000m MLA/bookrunner EUR 750m Client executives: +94 Loans and commitments: +91bn Mandated lead arranger EUR 1,300m MLA/bookrunner EUR 2,000m Best Bank Best M&A House Best Cash Management House Top FX-provider Best supplier of Trading and Capital Markets Operations Best Sub-custodian Bank Best Supply Chain Finance Provider * Statistics since launch of expansion 1 Jan 20 26

27 SMEs and private customers Meeting customers advisory needs* Private SMEs No. SME customers** 120,000 0,000 80,000 60,000 40,000 20, Q2 20 ** Cash management SME customers Mutual fund sales Sweden*** SEB *** Cumulative incl PPM (Svensk Fondstatistik) +14bn +0.1% 5,000 +7bn private deposits 48% +17bn new lending volume market share gain per month new SME customers** fixed-rate mortgages Private Banking AuM inflow * Statistics for H

28 Outlook 20 Elevated short-term macroeconomic risks SEB maintains its strategic direction and growth plans are on track Balance sheet strength ensures SEB can continue to support customers 28