Swedbank AB Annual Report 2009 Annual Report 2009 Anna Sundblad Johannes Rudbeck CONTACTS 52210011 Group Press Manager Head of Investor Relations Telephone: +46 8 585 921 07 Telephone: +46 8 585 933 22 E-mail: [email protected] E-mail: [email protected] Contents 1 Financial summary and important events 2009 2 This is Swedbank 4 President’s statement 8 Fundamental values 9 Strategies and priorities 14 Financial analysis Business areas: 2 1 Swedish Banking 2 5 Baltic Banking 2 9 International Banking 33 Swedbank Markets 3 6 Asset Management 3 8 Ektornet Employees 40 BOARD OF DIRECTORS’ REPORT DIRECTORS’ OF BOARD 42 Salaries and incentives 43 Sustainable development 45 The share and owners 48 The Group’s risks and risk control Financial statements and notes: 58 Income statement 59 Statement of comprehensive income 60 Balance sheet 61 Statement of cash flow 62 Statement of changes in equity 63 Notes Financial information 2010 124 Signatures of the Board of Directors and the President Q1 interim report 27 April 125 Auditors’ report Q2 interim report 22 July 126 Board of Directors Q3 interim report 21 October 128 Group Executive Committee 129 Corporate governance report Annual General Meeting 136 Market shares The Annual General Meeting 2010 will be held at 138 Five-year summary - Group Berwaldhallen, Stockholm, on Friday, 26 March. 140 Two-year summary - Business areas 145 Annual General Meeting 146 Definitions 148 Addresses Swedbank’s annual report is offered to all new shareholders and distributed to those who have actively chosen to receive it. The interim reports are not printed, but are available at www.swedbank.se/ir, where the annual report can also be ordered. While every care has been taken in the translation of this annual report, readers are reminded that the original annual report, signed by the Board of Directors, is in Swedish. Production: Intellecta Corporate • Photography: Carina Gran, Johnér bildbyrå • Print: Intellecta Infolog, Solna FINANCIAL SUMMARY AND IMPORTANT EVENTS 2009 Swedbank Annual Report 2009 1 Financial summary 2009 Important highlights 2009 The profit for the year was Michael Wolf took over as President and SEK –10 511m (10 887). Chief Executive Officer on 1 March. Additional changes were made in the Group Executive Earnings per share amounted to p. 19 SEK –10.66 (16.51). Committee during the year. The return on equity was –12.5 per cent (15.2). The Annual General Meeting elected four new members of the Board of Directors: Anders Igel, Pia Rudengren, Anders Sundström and Net interest income decreased by 4 per cent to p. 131 Karl-Henrik Sundström. SEK 20 765m (21 702). Net commission income decreased by 11 per cent to SEK 7 825m (8 830). New organisations to manage problem loans Net gains and losses on financial items (FR&R) were created during the year in the p. 11 increased by 18 per cent to SEK 2 770m (2 351). Baltic countries, Ukraine and Russia. During autumn 2009 Swedbank established the Expenses decreased by 1 per cent to company Ektornet AB to manage and add value p. 38 SEK 17 848m (18 085). to repossessed assets. Credit impairments amounted to Swedbank completed a rights issue of a net of SEK 24 641m (3 156). p. 45 SEK 15.1bn in autumn 2009. Business volumes – Lending to the public* decreased by Swedbank Robur acquired Banco Fonder AB, 5 per cent to SEK 1 192bn. with assets under management of approxi­­- p. 19 – Deposits from the public* rose by mately SEK 7bn. 4 per cent to SEK 497bn. Swedbank sold four branches to Sparbanken Nord, – Total assets under management increased by three branches to Sparbanken Dalsland, two branches 20 per cent to SEK 676bn. to Sparbanken Rekarne, one branch to Tidaholms p. 19 Sparbank and one branch to Sparbanken 1826. Risk-weighted assets decreased by 13 per cent to SEK 603bn. The Tier 1 capital ratio increased according Swedbank was named Business Bank of the Year to Basel 2 to 13.5 per cent (11.1). 2009 in the business magazine Affärsvärlden’s Financial Barometer survey. The Board of Directors proposes that no The magazine Global Finance named Swedbank dividend be paid for the financial year 2009 (0). “Best bank” in Lithuania and Estonia. Swedbank Robur was named the “Nordic region’s best fund management company” by Lipper for *Excluding National Debt Office and repos. the third consecutive year. Return on equity Profit for the year Dividend % SEKm SEK 25 12 000 10 9.00 20 8.25 8 000 8 7.50 15 4 000 10 6 5 0 4 0 –4 000 –5 –8 000 2 –10 0.00 0.00 –15 –12 000 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009* *Proposed dividend 2 Swedbank Annual Report 2009 THIS IS SWEDBANK This is Swedbank Swedbank is a bank for the many people, households and businesses, offering a wide range of financial products and services. In its four home markets – Sweden, Estonia, Latvia and Lithuania – Swedbank is the leading provider of services in many market segments. Swedbank places great emphasis on close relationships of trust and works conscientiously to help its customers achieve financial sustainability. Swedish Banking Baltic Banking, International Banking operations Operations Swedish Banking is Swedbank’s largest Baltic Banking offers a complete range of International Banking comprises opera- business area, offering a complete range financial products and services to private tions outside Swedbank’s home markets, of financial products and services to pri- and corporate customers in Estonia, primarily the banking operations in vate customers, corporates, organisa- Latvia and Lithuania through 226 Ukraine and Russia. In addition to Ukraine tions and municipalities through close to branches as well as the Telephone Bank and Russia, the business area includes the 400 branches as well as the Telephone and Internet Bank. Swedbank holds lead- branches in Denmark, Norway, the US Bank and Internet Bank in Sweden. Swed- ing positions in several key market seg- and China, as well as the representative bank’s products are also sold through the ments in its Baltic home markets. office in Japan. The branch network in cooperating savings banks which account Ukraine, comprising 156 branches, serves for another 275 branches. The subsidiary both private and corporate customers. in Luxembourg, with a representative The Nordic branches offer corporate cus- office in Spain, is included in the business tomers, mainly Swedish customers with area as well. Swedbank holds leading operations in the Nordic markets, a wide positions in several key market segments range of financial products and services. in Sweden, such as mortgages. Markets Sweden, Luxembourg and Spain Estonia, Latvia and Lithuania Ukraine, Russia, Norway, Denmark, Finland, US, China and Japan Volumes Lending SEK 952bn Deposits* SEK 356bn Lending SEK 171bn Deposits* SEK 103bn Lending SEK 50bn Deposits* SEK 11bn (of which (of which (of which (of which (of which (of which private SEK 556bn) private SEK 189bn) private SEK 81bn) private SEK 56bn) private SEK 9bn) private SEK 3bn) Income Income Profit for the year Income Profit for the year Income Profit for the year and profit SEK 18 986m SEK 6 096m SEK 7 551m SEK -9 406m SEK 2 430m SEK -8 449m Customers Private Corporate and orga- Private Corporate and orga- Private Corporate 4.1m nisations 400 000 5.3m nisations 249 000 143 000 20 000 Branches About 675 (including savings banks) 226 172 Share of Swedbank’s total lending 69% 12% 4% Share of Swedbank’s profit before impairments** 53% 22% 5% * Deposits and borrowings from the public excluding National Debt Office and repos. ** Based on above-mentioned business areas, i.e., excluding Shared Services and Group Staffs. THIS IS SWEDBANK Swedbank Annual Report 2009 3 36 p. Swedbank has over 9.5 million private customers and Key figures 2009 2008 more than 660 000 corporate and organisational cus- Return on equity, % –12.5 15.2 tomers served through close to 800 branches in 14 Tier 1 capital ratio (Basel 2), % 13.5 11.1 countries, principally the four home markets of Sweden, Tier 1 capital ratio (transitional rules), % 10.4 8.4 Estonia, Latvia and Lithuania. Swedbank is a full-service Core Tier 1 capital ratio (Basel 2), % 12.0 9.7 bank whose operations are concentrated in traditional Core Tier 1 capital ratio (transitional rules), % 9.2 7.4 Cost/income ratio 0.51 0.50 products and services for private customers as well as Credit impairment ratio, % 1.74 0.24 small and medium-sized businesses. Share of impaired loans, gross, % 2.85 0.74 Swedbank consists of six business areas supported by Profit for the year attributable to: Shared Services and Group Staffs. shareholders of Swedbank AB, SEKm –10 511 10 887 Risk-weighted assets (new rules), SEKbn 603 697 Total assets, SEKbn 1 795 1 812 Lending to the public, SEKbn* 1 192 1 251 Deposits from the public, SEKbn* 497 478 *Excluding National Debt Office and repos. Swedbank Markets Asset Management Ektornet Swedbank Markets has operations in Asset Management, which comprises the Officially established during the third equity, fixed income and currency trading, subsidiary Swedbank Robur Group, offers quarter 2009, Ektornet is an independent corporate finance as well as project, services in fund management, institutional subsidiary of Swedbank AB. The purpose export and acquisition financing. The and discretionary asset management in of its operations is to manage the Group’s products and services offered through all of Swedbank’s home markets. Custom- repossessed assets and develop them over Swedbank and the savings banks are ers include private customers as well as time in order to recover as much value as designed to meet most of the capital mar- institutions, foundations, municipalities, possible.