executive summary 2008 q2
TRANSCRIPT
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Per-Arne Blomquist
ExecutiveSummary
2008
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Highlights Q2 2008
Income regained strength – second best quarter ever– High business activity– Limited portfolio losses
Strong capitalisation and liquidity
Higher costs due to continued investments and sales activities
Increased credit losses in Estonia
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Key figuresSEB Group
3.83.7
4.6
3.5
2.4
Q2-07 Q3-07 Q4-07 Q1-08 Q2-08
4.6*
Q2 Jan-Jun2008 2008
Operating income 10,403 19,205Of which:
Net interest income 4,421 8,644Net fee and commissions 3,909 7,710Net financial income 1,161 1,000
Operating expenses 6,445 12,472Operating profit 3,507 5,917
Return on Equity, % 15.2 12.4Cost / income ratio 0.62 0.65Credit loss level, % 0.17 0.15
Core capital ratio, % Basel II 8.64 8.64
4.44.24.43.93.9
Q2 -07 Q3 -07 Q4 -07 Q1 -08 Q2 -08
Operating profitSEKbn
Net Interest IncomeSEKbn
* Including sales of Baltic properties of SEK 785m
4
11%89%
High business activity – Merchant Banking
0
1,000
2,000
TCM exclCPM
CorporateBanking
GTS
Q2 07 Q1 08 Q2 08
Merchant Banking: Operating IncomeSEKm
Portfolio valuations, SEKm
Q2 08
Held for trading (MTM over income)
Available for sale
(MTM over equity)
Accumulatedsince
Q2 08 Q3 07
Income -66 -2,707Equity -56 -2,384Total -122 -5,091
Portfolios
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High business activity – long-term savings
12.010.7 9.7
12.0 13.3 11.9
Q1-07 Q2 Q3 Q4 Q1-08 Q2
4.95.8
3.52.62.9
4.1
Q12007
Q2 Q3 Q4 Q12008
Q2
Swedish mutual funds: net inflowsJan-Jun, SEKbn
-7.2 -8.5
-3.0
-13.3
3.8
Robur SHB Nordea SEB Others
Life – Total salesSEKbn
Private Banking – Net salesSEKbn
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High business activity – Retail Sweden
Cash management customers (thousands)
50
60
70
80
90
2005 2006 2007 2008
Retail Sweden, SME segment
Incomegrowth
173 176 183 189 196 201 207
Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
Retail Sweden household mortgagesLending, SEK billions
Growth rates
+3.5% +2.3% +3.6% +3.1% +3.9% +2.3%
+6%
+ 5,200
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Risk-weighted assets (Basel I)Q1 2007 - Q2 2008, SEKbn
0
100
200
300
400
500
600
Merchant Banking Retail Banking
+26%+13%
Volume growth supported by strong capital
Core capital ratiosPer cent
6
7
8
9
10
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Basel II Basel I
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Net liquidity position across maturities30 June, SEKbn
-50
0
50
100
150
200
250
1 week
2 weeks
4 weeks
2 months
3 months
4 months
5 months
6 months
9 months
12 months
SEB is match-funded approx.
one year
Examples of transactions:April: Euro covered bond at spread of 17 bps
May/June: Euro floating rate notes at spread of 48 bps
SEK 113bn in long-term funding raised in H1 2008
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*
*
Cost development
Cost management program 2007 - 2009
SEK -748m SEK 1.5 – 2.0bn
2007 2009
Achieved Target
2008 2010
~4% total cost growth due to acquisitions, pensions and One IT Roadmap
SEK 202m in efficiency gains achieved in H1
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Cost dynamicsH1 2008, 2007 & 2006
2008 2007 2006SEK m Chg yoy SEK m Chg yoy SEK m Chg yoy
Jan-Jun % % %
Total cost base reported 12,472 6.70% 23,194 2.90% 22,537 1.80%
Reported cost increase 786
Acquisitions (KAM, Factorial, PetroE) -108 0.90% 0.10% 0.10%Cost increase excl acquisitions 678 5.80% 2.80% 1.70%
One IT Roadmap -222 1.90%
Pensions -170 1.50%Cost increase excl acquisitions, OITR, Pensions 286 2.40% 2.80% 1.70%
Baltic cost increase -210 1.80% 1.80% 0.80%Cost increase excl above & Baltics 76 0.70% 1.00% 0.80%
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Baltic countries: economic slowdown accelerates
-5
0
5
10
15
2002 2003 2004 2005 2006 2007 2008 (f) 2009 (f)
Estonia Latvia Lithuania
Annual GDP growthPer cent
SEB’s credit exposure
424141514950
Dec '07 Mar '08 Jun '08 Dec '07 Mar '08 Jun '08 Dec '07 Mar '08 Jun '08
Corporate Property Management Households Public Administration BanksEstonia Latvia Lithuania
Growth rates in local currency+17% +18% +30%
2007 2007 2007+2%
Q2 08+3%
Q2 08 Q1 08Q1 08 Q1 08 Q2 08+4% 0% -1% +3%
SEKbn76 79 83
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0.0%
0.5%1.0%
1.5%
2.0%
Jun Dec Jun Dec Jun
Estonia Latvia
60 days past due in SEB’s portfolioPer cent
200820072006
Non-Baltic89%
Lithuania5%
Latvia3%
Estonia3%
Credit losses increase in Estonia
050
100150200250
Estonia Latvia Lithuania SEB Groupexcl. Baltics
Group credit exposureTotal exposure = SEK 1,631bn
Net credit losses Q1 2007 - Q2 2008, SEKm
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SEB in Germany
-244 -226
-22
60136
74134
H1 05 H2 H1 06 H2 H1 07 H2 H1 08
Retail Germany: Operating profitSEKm
Distribution of Operating profitJan – Jun 2008
9 %
91 %
807
189
843
H1 07 H2 H1 08
SEB in Germany: Operating profitSEKm
Retail
Other business
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Looking ahead
● Strong capital and liquidity● Top line growth● Continued investments● Cost efficiency
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