Svenska Handelsbanken AB (publ)

Good morning and welcome everyone to the Handelsbanken presentation of the year-end report 2022. We're going to begin by listening to Carina Åkerström, President and CEO. This is a live broadcast presentation and you'll find the link on Handelsbanken.com under Investor Relations.

In English, you can find the presentation simultaneously translated if you choose English in the menu. After presentation...

After the presentation, we're going to have a brief break, and then we'll have an open Q&A session in English. So following the press conference. And welcome, Carina Åkerström. You have the floor. Thank you very much, Louise. And once again, good morning, everyone, and a warm welcome to this presentation of the Handelsbanken results for the Q4 quarter and for the full year 2022. Beginning with an overall summary for 2022, I'd say briefly that the bank is performing well. The interest rate situation has an impact, but in particular, the bank is performing well because we have a high level of activity. Our existing customers and new customers are basically doing more business with us, and this is partly also explained by the fact that we have excellent volume development throughout the year. Income, our up for the full year and for the quarter. New record levels. We reached the highest levels we have seen so far. Net fees and commission keeping up quite well. We've seen a real drop in the stock exchange, as you know, but in spite of this, we continue to gradually gain important market shares in the ever-important savings market. We're investing more. I'm going to get back in the To this, in the digital meeting with our customers, improved availability, but in spite of costs being up, with expenses being up, we see that the CI ratio continues to improve. Our credit losses remain at a low level, and I'd like to also say that all in all, Our results reflect a bank with stable finances and satisfied customers. Let's have a look at the figures for the full year 2022. We see a CI ratio which continues to improve. It's mounted to 42%, which is the lowest level that we've seen for decades, in fact. We have a 12.5% return on equity. Income grew by 13%, and the large driver is, of course, a strong net interest income. However, that in turn is driven by a high level of activity, and we also have excellent lending, a well-balanced lending. Our customers are doing more business with us. That fee and commission income is down somewhat, but it's holding its ground and we remain at high levels in spite of the stock exchange situation. The underlying expenses are up by 3%. This increase can be explained in its entirety. for the past two years of the digital development and business development efforts. Other expenses, if you exclude our development expenses, are up only marginally, and you need to bear in mind at the same time that we are in a period of rapidly increasing inflation rates, and credit losses, as I mentioned, remain at a very low level. So to sum up the full year operating profit-wise, we're up by 17%, when we also adjust for the implementation of the $1.3 billion of a risk tax which is now part of our results. Let's have a look at the performance for Q4. The positive results development was kept up throughout the fourth quarter as well. CAE ratio amounts to 41.8 and ROE return on equity amount to 13.2%. Income is up by 9%. It's the net interest income which continues to contribute to that fact. And it is, of course, driven by positive impact of the rising market interest rates. The net fee and commission income is quite unchanged. Expenses are up. I'm going to get back to that point. But in addition to the traditional customary seasonal effects that we see in this quarter, we have some non-recurring items as well that contributes to expending it. But all in all, expenses are increasing according to plan as we intended it would have. Full focus on digital development, as I mentioned. The credit losses remain at a low level for the quarter, and if we sum up the performance for Q4, we have an underlying operating profit, which is up by 5%. If we gaze back and have a look at the past three years, we've outlined very clearly what we set out to do, we have done precisely what we intended to do, and we see now that income is up, costs and expenses are under control, and we have a CAI ratio which is moving in the right direction. It is continually improving. As I mentioned by way of introduction, Our customers have maintained a high level of activity. We've had more business with existing customers and good business with new customers. And we can see that this is the case for all our home markets. All in all, lending is up by 7% in the bank in total. And if we look at the corporate side lending, which is the right side on this slide, it is up by over 11% for the year. In Sweden, the bank was the largest player during the year, covering as much as 26% of net lending to corporates in Sweden, and it is a well-diversified lending to companies, both property-related lending and non-property-related lending. Looking at households, over the past few years we've seen stable growth in our home markets, however, Considering the market development from the summer onwards, this has slowed down. So we still have, I would say, a reasonably stable development. What we do see, not just in Sweden, but in some of our other home markets as well, is that our customers are paying back in extra installments a lot more, paying back on their mortgages more so than before they're using existing savings. And this has something of a dampening effect on the volume increase on both markets. deposits and mortgages. Let's have a look at the net interest income for the full year. It's up by 21% NAI, and it's also gratifying to see, and I keep getting back to this, that this is of course a balance between a volume growth, so lending, and also given the current interest rate situation, we see an impact from that component as well. Let's then have a look at our net fee and commission income. Once again, over the past three years, we've seen excellent development in fees and commissions. In the bank, as you know, we have a large share from our excellent savings-related business and wealth management. It is impacted, of course, by the fact that the market is looking the way it is. Markets are dropping somewhat. It has an impact on our income when it comes to the fund-related business. fees and commissions, but it is still standing its ground. And what we also see in fees and commissions to counteract this is that payment-related fees are up. And we've seen that over the past three years.