Swedbank strengthens its presence in Skåne
Michael Wolf, CEO
Göran Bronner, CFO
Transaction highlights
• Consolidating Skåne’s banking landscape
• Swedbank strengthens its position in the growing Skåne region
– Acquires 100 per cent of Sparbanken Öresund
– Sells 8 of Sparbanken Öresund branches and acquires 1 branch from
Sparbanken Skåne
• Creation of the largest savings bank in Sweden: Sparbanken Skåne
– Merger of Färs & Frosta, Sparbanken 1826 and parts of Sparbanken
Öresund
– Sweden’s largest savings bank
– Swedbank will own 22 per cent of Sparbanken Skåne
2
Saving banks’ presence today
• Skåne – a dynamic region
– High population density;
1.3 million
– Malmö, Lund, Helsingborg
– Strong growth area with
direct connection to
Copenhagen
2 1
3
1 1
2 1
1
3
1 1
2 3
4
1
1
1 1
1
1
1
9
1
1
1
No of branches
Swedbank: 27
2 1
1
Sparbanken Öresund: 24
9
3
Sparbanken 1826: 20
Färs & Frosta: 18
1 2
2 2
5 4
1 1
1
1
1
1
1
2
2 1
3
Consolidated savings bank landscape
2 1
3
1 1
2 1
1
3
1 1
2 3
4
1
1
1 1
1
1
1
9
1
1
1
No of branches
Swedbank: 27 + 16 + 1 = 44
1 2
2 2
2 1
1
Färs & Frosta:
18 + 20 + 8 – 1 = 45
9
3
5 4
1 1
1
1
1
1
1
2
2 1
4
Business rationale
• Strengthens Swedbank in important growth region
• Significant financial upside for Swedbank and Sparbanken Skåne
– Cost synergies (overlapping operations)
– Capital synergies
• Swedbank bears transaction risk and integration risk
5
Significant financial upside
• Balance sheet impact
–
–
–
–
–
Purchase price for Sparbanken Öresund SEK 3bn
Sale price of eight branches to Sparbanken Skåne SEK 1.8bn
RWA increase SEK 16bn
CET1 capital ratio impact of negative 60bp
Initial upfront provisions of SEK 1.5bn
• 2014 P&L statement
– Income
– Costs
– Net profit
+ SEK 800m
+ SEK 650m
+ SEK 200m
6
Significant financial upside
• P&L statement 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
7
Next steps
• Regulatory approvals
– SFSA
– Competition authorities
• Other approvals
– Boards of the sellers – the relevant savings bank foundations
• Sparbankstiftelsen Öresund
• Sparbanksstiftelsen Gripen
• Deal expected to close in Q2 2014
• Sparbanken Öresund to be fully integrated in next 1-3 years
8
Appendix
9
Before and after
Today
Sparbanksstiftelsen
Gripen
Post transaction
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
Färs & Frosta +
Sparbanken 1826 +
8 Öresund branches
Sparbanken
Öresund
100%
Sparbanken 1826
10
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 relates to Cerdo Bankpartner
Includes micro corporates
Sparbanken Öresund is a distributor of SBAB mortgage loans. Volumes will gradually move to Swedbank’s balance sheet.
11
Swedbank strengthens its presence in Skåne
Q&A