Hansabank Kristina Siimar Chief Financial Officer 2 OVERVIEW AND - - PowerPoint PPT Presentation

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Hansabank Kristina Siimar Chief Financial Officer 2 OVERVIEW AND - - PowerPoint PPT Presentation

Nov 18, 2023 141 likes •369 views

Hansabank Kristina Siimar Chief Financial Officer 2 OVERVIEW AND STRATEGIES Hansabank in the Baltics Hansa in the Baltics Customers 1,100,000 Incl. Internet 388,000 Customers 3,750,000 Branches 95 Incl. Internet 647,000 ATMs 505

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Hansabank

Kristina Siimar

Chief Financial Officer

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Hansa in the Baltics

6,164 Employees 1,630,000 Cards 969 ATMs 309 Branches 647,000

  • Incl. Internet

3,750,000 Customers

OVERVIEW AND STRATEGIES

Hansabank in the Baltics

2,404 Employees 800,000 Cards 505 ATMs 95 Branches 388,000

  • Incl. Internet

1,100,000 Customers 1,217 Employees 330,000 Cards 197 ATMs 59 Branches 139,000

  • Incl. Internet

320,000 Customers 2,541 Employees 500,000 Cards 267 ATMs 155 Branches 120,000

  • Incl. Internet

2,330,000 Customers

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OVERVIEW OF THE REGION

Ratings

Moody’s Fitch S&P Estonia A1 A- A- Latvia A2 BBB BBB Lithuania Baa1 BBB- BBB Hansabank senior debt A2 A-

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GDP Infl.* CA/GDP 01 02F 03F 01 02F 03F 01 02F 03F Estonia 5.0 5.5 5.5 5.4 5.0 2.5

  • 6.2 -9.0 -9.5

Latvia 7.7 4.0 5.5 1.6 2.0 3.0

  • 9.7 -9.5 -9.0

Lithuania 5.9 5.0 5.5 1.0 1.0 2.5

  • 4.8 -5.5 -5.0

*as GDP deflator

OVERVIEW OF THE REGION

Macro highlights

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OVERVIEW OF THE REGION

Market size

(EUR bln)

Deposits Loans* GDP per cap. (eur) Estonia 2.8 2.8 6.1 4,960 Latvia 4.6 3.1 8.4 3,700 Lithuania 3.1 2.2 13.9 4,250 Baltics 10.5 8.1 28.4 Total population (mil) 7.4

* Including leasing

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Total Baltic market, 30.06.02, EUR in millions Deposits 10,800 Loans 8,500

Deposits

Others 43% SEB Group 25% Hansa- bank Group 32%

OVERVIEW AND STRATEGIES

Baltic market share, June 2002

Loans

Others 35% SEB Group 32% Hansa- bank Group 33%

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Who is our customer?

  • A universal bank in the Baltic countries
  • Primary focus on medium-sized companies and affluent private customers

What are our value propositions to the customers?

  • Key sustainable competitive advantage is the combination of easy access,

knowledge of our customer and the best quality of service

  • One-stop-shop strategy

How can we do this efficiently?

  • Best electronic channels, branches as advisory units
  • CRM tools enable to offer our customers the most suitable solutions
  • Common IT system
  • Knowledge management within the Group and with Swedbank

OVERVIEW AND STRATEGIES

Business philosophy

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  • Double the operating profit in 4 years
  • ROE at least 25%
  • Cost-income ratio below 50%
  • Net risk cost* below 0.8%

*net risk cost = (loan write-offs – recoveries) / average loan portfolio

OVERVIEW AND STRATEGIES

Medium-term financial targets

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FINANCIAL REVIEW

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38.2 29.4 26.1 27.6 28.6 27.4 22.4 24.9 26.8 36.6

10 20 30 40 50 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 EUR in millions Operating profit Net profit

21.2% 2.2% 20.1% 2.1% 19.2% 2.0% 24.7% 2.5% 27.5%

ROAE

3.1%

ROAA

FINANCIAL REVIEW

Operating profit and net profit

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Revenues

20 40 60 80 100 Q3 01 Q3 02 EUR in millions

Operating expenses

25 50 75 100 Q3 01 Q3 02 EUR in millions

  • 3%

+11%

FINANCIAL REVIEW

Revenues and expenses

Net Interest Margin 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%

Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02

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40% 45% 50% 55% 60% 65% 2001 Q1 02 Q2 02 Q3 02

Cost*-income ratio

Hansabank Nordic CEE 0% 1% 2% 3% 4% 5% 2001 Q1 02 Q2 02 Q3 02

Operating expenses* to assets

* Excluding goodwill amortisation, before provisions Source: financial reports

FINANCIAL REVIEW

Efficiency

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Distribution of Deposits by Region

annual.

(EUR in millions)

30.09.02

growth*

Estonia 1,615 15% Latvia 732 21% Lithuania 1,008 5% Total deposits 3,355 15% Distribution of Loans by Region

annual.

(EUR in millions)

30.09.02

growth*

Estonia 1,678 26% Latvia 679 35% Lithuania 637 25% Other 50 Gross lending 3,044 30%

FINANCIAL REVIEW

Loan and deposit growth by regions

* Local currency growth

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FINANCIAL REVIEW

Asset quality, 30.09.02

(EUR in millions)

Q3 Q2 Overdues* 40 42

Non-performing loans (NPL)**

14 15 NPL / total loans 0.5% 0.5% NPL coverage ratio 3.4 3.1 Net risk cost*** 0.0% 0.1%

* Overdue more than 30 days ** Overdue more than 60 days ***(write-offs – recoveries) / average portfolio

Net Risk Cost

1 2 3 4 5 6 7 8 9 10 Q4 01 Q1 02 Q2 02 Q3 02 EUR in millions Write-offs Recoveries

H-LTB

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GROWTH OPPORTUNITIES

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  • June 1996 – Deutsche Lettische bank (current Hansabanka)
  • July 1998 – Estonian Savings Bank (merged with Hansabank)
  • April 2000 – Ventspils UBB (merged with Hansabanka)
  • May 2001 – Lithuanian Savings Bank (merged with Hansabankas)
  • Second largest bank in Lithuania, largest retail bank
  • Deposits 1,012 mio EUR (09.2002)
  • Loans 400 mio EUR (09.2002)

GROWTH OPPORTUNITIES

Acquisition history

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Restructuring completed:

  • Number of branches decreased by 60% to 155, all branches on-line
  • Number of employees decreased by 30% to 2,372
  • Number of cards increased by 400% to 500,000
  • Over 30 days overdues have decreased from 10% to 0.1%
  • Loan growth in 9m 2002: 188 million LTL (22% annual growth rate)
  • incl . mortgages: 123 million LTL (118% annual growth rate)

GROWTH OPPORTUNITIES

Hansa-LTB restructuring (June 01 – September 02)

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  • I and III pillars already existing
  • II pillar started in July 2002
  • Compulsory to new entrants to the job market
  • Material effect on the Group’s results in 5 years

Targets for 2002:

  • 60% market share in II pillar assets
  • 50,000 Hansa Pension Fund clients

Actual result (Oct 02):

  • 53% market share in assets
  • 104,600 clients

GROWTH OPPORTUNITIES

Pension reform in Estonia

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GROWTH OPPORTUNITIES

Credit penetration

Mortgages to GDP

40% 12% 6% 3% 4% 55%

0% 10% 20% 30% 40% 50% 60% Est Lat Lit Pol SWE EU

Assets to GDP

72% 72% 32% 76% 230%

0% 50% 100% 150% 200% 250% Est Lat Lit Eastern Europe Euro

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I Basic products Transfers Cards Internet bank II Credit products Mortgages Consumer credit III Savings products Asset management Pension

315 90 45 110 50

50 100 150 200 250 300 350 400 450 in thousands Households Mortgages Credit cards Savings

GROWTH OPPORTUNITIES

Increase in household consumption

> 320 EUR per member > 160 EUR per member Issued by Hansabank Group

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  • Location of the Baltic countries has historically created

business contacts with Russia, 70% of the cargo flow through the Baltic ports is of Russian origin

  • Russian economic outlook is positive - WTO membership,

good relations with the US and EU, market economy status

  • Existing good contacts with Russian clients, good experience

in financing Russian transit business in the Baltics

  • Focus on financing the sectors, that are directly supporting

Russian export - railway and ports

  • Only asset based-financing, main focus is on big ticket leases

to selected Russian companies from transport sector

  • Portfolio is limited to 5% of the Group’s total credit portfolio

GROWTH OPPORTUNITIES

Hansa Leasing Russia

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PRIORITIES FOR 2003

  • To increase the loan portfolio in Latvia and Lithuania
  • To develop a group-wide knowledge sharing framework
  • To fully implement Pan-Baltic product development