Swedbank The leading Nordic

Swedbank
The leading Nordic-Baltic bank
Brief history of Swedbank
2
•
1820 the first savings bank was founded in Gothenburg
•
1915 the first agricultural cooperative bank was founded
•
1991 12 regional agricultural cooperative banks merged to form
Föreningsbanken
•
1992 there was a merger between 11 regional savings banks
•
1994 Föreningsbanken was listed on the Stockholm stock exchange
•
1995 Sparbanken Sverige IPO and stock listing
•
1997 FöreningsSparbanken formed through merger between Sparbanken
and Föreningsbanken
•
2005 Swedbank acquired 100% of Hansabank
Brief history of Hansabank
3
•
1991 Hansabank’s first branch established
•
1995 Hansabank started operations in Latvia
•
1996 Hansabank acquired 100% of Deutsche-Lettische Bank in Latvia
•
1996 Hansabank started operation in Lithuania
•
1997 Hansabank acquired a stake in Hoiupank
•
1999 Swedbank acquired more than 50% of Hansabank
•
2002 Hansabank started operation in Russia
•
2004 Hansabank acquired Kvest bank in Moscow
4
Mission,vision and values
Mission
By understanding and acting upon our customers’ needs, we can offer
them the best financial solutions and thereby help them to improve their
financial situation. In this way, we can continuously increase our
company’s value and serve as a positive force in society.
Vision
We want to be the leading financial institution in the Nordic and Baltic
region. By leading we mean having in each home market:
– the highest level of customer satisfaction,
– the best profitability,
– and the most attractive employer
Values
We believe that the Group’s healthy profits and increased international
recognition are the result of a performance-orientated culture, clear and
transparent communication, a willingness to change, and the strong
commitment of our employees.
5
A successful Group
Swedbank
Hansabank
•
Corporate Bank of the Year in
Sweden 2003 - 2005
•
Best bank in Estonia for 6
consecutive years
•
Sweden’s Best Bank for
Entrepreneurs for 3
consecutive years
•
Bank of the year in Lithuania
for the first time in 2005
•
Most highly respected
company in Latvia in 2005
•
Winner of the
Entrepreneurship Award
2005
•
Voted Sweden’s most
attractive financial employer
and top 8 overall
6
Swedbank Group today
Home markets, universal
banking
Sweden - FöreningsSparbanken
Estonia - Hansapank
Latvia - Hansabanka
Lithuania - Hansabankas
Collaboration/alliances
Norway - 19.5% ownership in
SpareBank 1 Gruppen
Finland - 1.1 % ownership in Aktia
Other markets, niche banking
Denmark - Swedbank branch
Finland - Swedbank branch
Norway - Swedbank branch, investment
banking through First Securities (51%)
Russia - Corporate banking and leasing in
Moscow, Kaliningrad and St Petersburg
US - Merchant/investment and corporate
banking in New York
Luxemburg - banking for affluent
Swedish expatriates
China - Rep. office in Shanghai
Japan - Rep. office in Tokyo
Spain - Rep. office in Marbella
7
Geographic Reach
March 2006
Sweden
Population
Employees
Private customers
Of which Internet customers
Corporate customers
Branches
ATM´s
Cards
9.0 M
8,850
4.1 M
2.0 M
250,000
475
857
3.3 M
Russia
Population
Employees
Branches*
Estonia
Population
Employees
Private customers
Of which Internet customers
Corporate customers
Branches
ATM´s
Cards
*St Petersburg, Moscow and Kaliningrad
1.3 M
2,656
1.1 M
0.7 M
76,000
94
554
1.0 M
Lithuania
Latvia
Population
Employees
Private customers
Of which Internet customers
Corporate customers
Branches
ATM´s
Cards
143 M
142
1
2.3 M
1,928
0.6 M
0.5 M
39,000
70
223
0.7 M
Population
Employees
Private customers
Of which Internet customers
Corporate customers
Branches
ATM´s
Cards
3.4 M
2.719
2.9 M
0.6 M
76,000
120
308
1.1 M
8
Swedbank’s customers
Households
Public sector
Group excluding
Baltic Banking 4.1 M customers
Group excluding
Baltic Banking 218 municipalities
Baltic Banking
Group excluding
Baltic Banking
22 county councils
4,7 M customers
Corporate customers
Group excluding
Baltic Banking
250,000
Baltic Banking
191,000
Large corporates
Nationwide organisations
Authorities
Swedbank
9
March 31, 2006
Profit for the period
Lending
Baltic
Banking
12%
Baltic
Banking
27%
Group excluding
Baltic Banking
73%
Branches
Customers, private
Baltic
Banking
53%
Group excluding
Baltic Banking
88%
Baltic
Banking
37%
Group excluding
Baltic Banking
47%
Group excluding
Baltic Banking
63%
10
GDP growth
%
10
Sweden
8
Estonia
6
Latvia
Lithuania
4
Russia
2
0
2005
2006E
2007E
11
Market position
12
Swedish banking market
Mortgage lending, total market
SBAB
11%
Bank lending, retail
Others
2%
Others
16%
Bank lending, corporate
Others
12%
FSB
16%
FSB
30%
SEB
12%
Danske
11%
Danske
15%
Nordea
17%
SHB
28%
Others
9%
SEB
12%
FSR
20%
SHB
13%
Nordea
9%
Fund management
FSB
26%
Others
22%
FSR
15%
Nordea
18%
FSR = Savings banks
Others
13%
FSB
27%
LF
4%
SEB
16%
Skandia
3%
SHB
26%
Deposits, corporate
Skandia
4%
SHB
16%
Nordea
16%
SEB
17%
SEB
6%
Skandia
5%
Deposits, retail
FSB
18%
SHB
14%
Nordea
14%
Market shares as of December 2005
FSB
16%
FSR
4%
SEB
24%
Nordea
22%
SHB
21%
Market position – Sweden
Mortgage loans
Equity linked bonds
Household deposits
Consumer credits
Mutual fund investments
Individual pension savings
Premium pension savings
Card clearance transactions
Internet bank
Telephone bank
Real estate brokerage
Strong
positions
in
Unit-linked insurance
Business deposits
Leasing
Stock brokerage
Corporate lending
13
14
Market shares – Swedish banking
March 31, 2006
%
35
30
25
20
15
10
5
0
Retail mortgages
Corporate
lending
* Market shares as of December 2005
Deposits
Fund
management*
Retail bonds
15
Baltic banking market
Estonia, deposits
Latvia, deposits
Others
9%
Sampo
9%
Uhis
pank
29%
Others
38%
Hansa
bank
19%
Estonia, lending
Parex
20%
Uni banka
13%
Latvia, lending
Others
23%
Others
14%
Sampo
9%
Hansa
bank
51%
Others
19%
Hansa
bank
30%
Snoro
Bankas
9%
Hansa
bank
53%
Rietumu
Bank
10%
Uhis
pank
26%
Lithuania, deposits
Nord/
LB
Lietuva
10%
Vilniaus
Bankas
32%
Lithuania, lending
Hansa
bank
25%
Others
19%
Hansa
bank
26%
Sampo
8%
Nordea
8%
Parex Bank
12%
Market shares as of December 2005
Nord/ LB
Latvia
9%
Uni banka
23%
Nord/LB
Lietuva
13%
Vilniaus
Bankas
34%
Market shares Baltic Banking
March 31, 2006
%
60
50
40
Estonia
30
Latvia
20
Lithuania
10
0
Total lending
Deposits
16
17
Business volumes
18
Lending
Swedbank excl repurchase agreements,
March 31, 2006, SEK 820 bn (716)
Real estate management
21% (21%)
Municipalities
2% (2%)
Businesses, excl.
real estate mgmt.
25% (24%)
Other, private individuals
1% (1%)
Figures in parantheses refer to March 31, 2005
Bank lending, private individuals
5% (6%)
Hansabank, private individuals
4% (3%)
Spintab, private individuals
42% (43%)
Savings and Investments
19
Swedbank
March 31, 2006, SEK 774 bn (640)
Pension & insurance,
8 % (7 %)
Retail bonds,
3 % (2 %)
Fund savings,
44 % (41 %)
Household deposits, SEK,
20 % (22 %)
Discretionary
management,
3 % (3 %)
Household deposits,
foreign currency,
4 % (3 %)
Other, foreign
currency,
7 % (8 %)
Other, SEK,
11 % (14 %)
Figures in parantheses refer to March 31 2005
20
Debit and credit cards
Q1, 2006 vs. Q1, 2005
• Number of card purchases in Sweden
+ 19 percent to 93 million
• Number of acquired card transactions
+ 23 percent to 142 million
• Number of debit cards in issue in Sweden
+ 6 percent to 3.2 million
• Number of debit cards in issue in Baltic
states
+ 19 percent to 2.8 million
• 690,000 credit cards issued in Sweden and
Norway through EnterCard*
* The operation started on July 1st, 2005.
50%
21
Strategy
22
Group strategy
Growth areas in
Sweden
- strengthen positions in
areas with high growth
- be the natural choice for
affluent customers and
medium-sized companies
Remain market leader in lending,
asset management and payments
- strengthen presence in large
cities and growth regions
23
Group strategy
Nordic/Baltic growth
- Retail banking in
Nordic/Baltic region
- Expand in selected
product areas
- Establish branch operations
in major Nordic cities
International expansion
1. Full service retail banking
– emerging markets neighbouring Nordic countries
– majority ownership
– acquisitions should be ROE accretive medium-term
2. Acquisition-led expansion within certain product areas
– economies of scale
– cross-border customer value
– additional distribution channels
3. Greenfield investments in metropolitan retail operations
4. In addition: “Follow your customer”
24
25
Delivering in line with the strategy
Acquisitions
Divestments
•
•
•
First Securities (May ’05) 51 % of shares;
(June ’02) 33.3% of shares;
1.1%; (Jul ’05) reduced holding from 19,8% to
Hansabank Group (Apr ’05)
9,6%; (Dec ’04) reduced 24,4% to 19,8%
acquired 100% of outstanding shares
•
•
•
FIH (Sep ’04)
sold 100% of outstanding shares
EnterCard (Sep ’03)
acquired 100% of shares
Kundinkasso AB (July ’05)
sold 100% of shares to Lindorff Sverige AB
Kvest Bank (Mar ’05)
Hansabank acquired 100% of shares
•
Aktia (Sep ’05) reduced holding from 9.6 to
•
SpareBank 1 Gruppen (June ’04)
reduced holding from 25 to 19.5%
Greenfield investments
•
Helsinki Branch (Oct ’05)
•
Copenhagen Branch (May ’05)
•
Erste Bank (June ’03)
disposed of 3.9% stake
Joint Ventures
•
EnterCard (June ’05)
J-V with Barclaycard International
Developing the Nordic business
• Extension of the branch network
(Copenhagen, Denmark and Helsinki, Finland)
• Strengthening investment and merchant banking
operations in Norway
• Capturing credit card market potential
26
27
Financial targets
28
Group financial objectives
•
The return on equity shall exceed the average of all other large, publicly
listed Nordic banks (SHB, SEB, Nordea, Danske Bank and DnB NOR)
and be at least 20 percent higher than the long-term risk-free rate of
interest plus a normal risk premium
•
The Group’s cost/income ratio shall not exceed 0.5
•
The primary capital ratio (tier 1) shall be 7 percent over
the long term
•
At least 40 percent of net profit shall be distributed to the shareholders
as dividend.
29
Swedbank ROE, compared to peers
30
%
24.6%
25
20.5%
20
20.1%
17.9%
15.9%
15
15.8%
16.6%
13.4%
11.0%
11.2%
10
5
0
2002
2003
Nordic peers*
2004
2005
Swedbank
* The peer group consists of SEB, Nordea, SHB, DnB NOR and Danske Bank.
Q1, 2006
30
Cost/income ratio
0,80
0,69
0,61
0,60
0,63
0,63
0,59
0,62
0,59
0,56 0,55
0,58 0,57
0,560,56
0,530,53
0,53
0,56
0,49
0,40
target
0,39
0,20
0,00
Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q101 01 02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06
31
Primary capital ratio
9%
8.2%
8%
7%
6.9%
7.1%
7.1%
7.2%
6.5%
6.5%
6%
5%
4%
3%
2%
1%
0%
2000
2001
2002
2003
2004
2005
Q1 06
Target
dividend
ratio
32
Dividend
SEK/Share
Dividend ratio, %
100
8
7
80
6
5
60
4
*
3
2
Target
40
20
1
0
0
1999
2000
2001
2002
Dividend per share
2003
2004
Dividend ratio
* Dividend ratio for the year excluding capital gain
2005
33
Financial highlights
Profit trend Swedbank Group
Total assets
SEK bn
Operating profit
SEK M
6000
1500
5250
1250
4500
1000
3750
3000
750
2250
500
1500
250
750
0
Q
10
2
Q
20
2
Q
30
2
Q
40
2
Q
10
3
Q
20
3
Q
30
3
Q
40
3
Q
10
4
Q
20
4
Q
30
4
Q
40
4
Q
10
5
Q
20
5
Q
30
5
Q
40
5
Q
10
6
0
Operating profit
Total assets
Operating profit according to IFRS as of Q1, 2004
34
35
Highlights Q1, 2006
Consolidating and raising key market shares
•
The share of new mortgage loans to private customers
in Sweden rose to 28 percent (23)
• For household deposits, the market share for new
savings in Sweden was 31 percent (23)
• The share of bank lending was 51 percent (52) in
Estonia, 25 percent (22) in Latvia and
23 percent (23) in Lithuania.
The figures in brackets refer to March 31 2005
36
Highlights Q1, 2006
Continued high growth in Baltic and Swedish
Banking
• Lending in Baltic Banking rose by 62 percent to
SEK 99 billion (61),while deposits rose by 47
percent to SEK 72 billion (49)
• Operating profit in Baltic Banking rose by 25
percent to SEK 651 M (519)
• In Swedish Banking, lending rose by 9 percent to
SEK 701 billion (645), while deposits rose by 5
percent to SEK 235 billion (224).
The figures in brackets refer to March 31 2005
Highlights Q1, 2006
37
Stable financial results
•
•
•
•
•
•
Profit for the year rose by 9 percent to SEK 2,270 M (2,088)
Earnings per share rose by 8 percent to SEK 4.41 (4.07)
The return on equity decreased to 16.6 percent (18.5)
The C/I ratio rose to 0.56 (0.53)
The primary capital ratio decreased to 6.5 (6.7)
Operating profit amounted to SEK 2,843 M (2,842)
The figures in brackets refer to March 31 2005
38
Group P&L
SEK M
Net interest income
Net commissions
Net gains and losses on financial
items at fair value
Other income
Q1 2006
3,777
2,098
Q1 2005
3,939
1,530
Change, %
–4
37
260
408
377
428
– 31
–5
6,543
6,274
4
Staff costs
Profit-based staff costs
Other expenses
– 1,812
– 292
– 1,546
– 1,697
– 183
– 1,453
7
60
6
Total expenses
– 3,650
– 3,333
10
2,893
2,941
–2
– 50
– 99
– 49
Operating profit
2,843
2,842
0
Tax
– 539
– 553
–3
Profit for the period
Attributable to shareholders of
FöreningsSparbanken AB
2,304
2,289
1
2,270
2,088
9
Total income
Profit before loan losses
Loan losses
39
Balance sheet
31 mars 2006
Assets, SEK
Liabilities and equity, SEK
Bank lending retail 81
Deposits retail 190
Bank lending corporate
and other 308
Mortgage lending retail
and corporate 479
Lending credit institutions 159
Interest bearing securities 90
Derivatives 27
Other assets 122
Deposits corporate and
other 159
Debt securities in issue
etc 537
Deposits credit institutions 128
Derivatives 26
Other liabilities 170
Equity 56
40
Shareholders
Shareholders, March 31 2006
Savings bank foundations
Savings banks
Robur Funds
Franklin-Templeton Funds
Handelsbanken/SPP Funds
Alecta
Swedbank profit-sharing funds
AMF Pension
4:th National Pension Fund
SEB Funds
Other international investors
Other Swedish institutions
Swedish general public
%
21.1
8.3
3.3
2.9
2.7
2.6
2.3
2.2
2.0
1.7
Distribution of shareholders
Savings bank foundations
21.1% (20.9%)
International
investors
24.5% (16.9%)
21.6
17.3
12.0
Savings banks
8.3% (8.2%)
Swedish
general public
12.0% (11.4%)
Swedish institutions
34.1% (42.6%)
•
Listed on the Stockholm stock exchange since June 1995
•
Quoted on list for the top-18 most traded shares
•
•
Number of shares amount to 530,310,943
Figures in parentheses refer to March 31 2005
41
Group structure
As of June 1, 2006
Board of Directors
Internal Audit
President and CEO
Group staff units
Swedish
Banking
Baltic
Banking
Retail and corporate
banking including asset
management:
Retail and corporate
banking including asset
management:
• North Region
• Mälardalen Region
• East Region
• West Region
• Öresund Region
• Customer Offerings and
Products
• Estonia
• Latvia
• Lithuania
• Savings Banks Cooperation
Corporate banking:
• Russia
Swedbank Markets
Investment and merchant
banking, customer
responsibility for financial
Institutions.
• Swedbank Markets,
Sweden
• First Securities, Norway
• Swedbank New York
• Swedbank Shanghai
Shared
Services
• IT services, Sweden
• IT operations, Sweden
• Common support
functions
Strategic and
International
Banking
• Swedbank Luxembourg
(banking for Swedish
expatriates)
• Swedbank Copenhagen
• Swedbank Helsinki
• Swedbank Oslo
• Swedbank Tokyo
42
Ratings
March 2006
S&P
Moodys
Fitch
Short
Long
Short
Long
BFSR*
Short
Long
A-1+
A-1
A-2
A-3
AAA
AA+
AA
AAA+
A
ABBB+
BBB
BBB-
P-1
P-2
P-3
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
A
B+
B
C+
C
D+
D
E+
E
F 1+
F1
F2
F3
AAA
AA+
AA
AA A+
A
ABBB+
BBB
BBB-
In October 2005 the ratings instiute Standard & Poor´s raised the outlook for FöreningsSparbanken´s
long-term rating to positive fram stable.
= FöreningsSparbanken AB
= Hansabank
= Spintab
* Bank Financial Strength Ratings