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Handelsbanken sells SPP to Storebrand PowerPoint PPT Presentation


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Handelsbanken sells SPP to Storebrand. The transaction. Handelsbanken. Included in the transaction. SPP Livförsäkring AB. SPP Fonder AB. Handelsbanken Liv. Handelsbanken Fonder AB. 50%. SPP Irland (3). Handelsbanken Varumärkes AB. Nordben.

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Handelsbanken sells SPP to Storebrand

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Handelsbanken sells spp to storebrand

Handelsbanken sells

SPP to Storebrand


The transaction

The transaction

Handelsbanken

Included in the transaction

SPP Livförsäkring AB

SPP Fonder AB

Handelsbanken Liv

Handelsbanken

Fonder AB

50%

SPP Irland (3)

Handelsbanken

Varumärkes AB

Nordben

  • SPP Livförsäkring AB and related subsidiaries are being sold for SEK 18.0bn in cash. The following companies are also included in the transaction

    • SPP Fonder

    • SPP Ireland(1)

    • Handelsbanken Varumärkes AB

    • 50% share of Nordben

  • Capital gain of approx. SEK 4.0(2) bn

  • During a transitional period, SPP's assets will continue to be managed by Handelsbanken

  • Handelsbanken’s mutual funds will be part of Storebrand's range

  • Storebrand has an exclusive right, within a two-year period, to acquire Handelsbanken Liv's occupational pensions portfolio

Handelsbanken

(1) Only occupational pensions – the remainder stays with Handelsbanken Liv

(2) Before any restructuring costs

(3) Handelsbanken Life & Pension’s name is being changed to SPP Irland


A good deal for all parties

A good deal for all parties

  • Access to a broader range of competitive and innovative solutions

  • Become customers of a Nordic occupational pensions company with a strong track record

  • Carefully selected purchaser

Customers

Employees

  • Will move to a group with an explicit focus on occupational pensions

  • Storebrand is one of the oldest life insurance companies in the Nordic region

  • Storebrand plans to invest in the Swedish operations

Storebrand

  • Will gain a strong position on the Swedish occupational pensions market

  • SPP is one of the leading insurance companies with a strong brand name and broad distribution

  • Gains new and unique expertise

Handelsbanken

  • An attractive offer

  • Frees up resources

  • The Group's complexity, risks and volatility in the financial results will decrease

Handelsbanken


Why handelsbanken is selling spp

Why Handelsbanken is selling SPP

  • SPP's products are sold via different channels than the Bank's branches

  • Handelsbanken Liv will continue to focus on long-term savings

Focus on core business

Increased value

  • An attractive offer- SEK 18.0 bn for SPP - values SPP at 14.5 times profits 06PF (2006 pro forma) (1)

  • Makes a capital gain of approx. SEK 4.0bn (1)

  • Positive impact on RoE and EPS compared with consensus estimates

Reduced risk exposure

  • Capital can be used for organic growth and buyback of shares

  • Tier 1 capital ratio rises by around 20bp before buybacks

  • Volatility in the Bank’s financial results reduced

A good deal

for all parties

  • Partnership with Storebrand benefits customers, employees and shareholders

  • Increased value for the shareholders

(1) Excluding Deferred capital contribution and hedge

(2) Profit before possible provisions

Handelsbanken


Why handelsbanken is selling spp1

Why Handelsbanken is selling SPP

Reduced financial risks in SPP

The right time

Reduced volatility in Handelsbanken's income statement

Change in deferred capital contribution incl. hedges, net

Handelsbanken


Why handelsbanken is selling spp2

Why Handelsbanken is selling SPP

Improved administration result (incl. SPP Fondförsäkring)

The right time

Growth in premium income and new premiums, SPP

Handelsbanken

* Excluding a major portfolio transfer of SEK 7.7bn.


Spp over a six year period cash flow summary

SPP over a six-year period – cash flow summary

+ 2.7

SEK bn

- 7.1

+ 0.7

Operations ~ + 1.5

18,0

- 15.3

- 7.8

- 2.6

Asset

Manage-ment

Total

excl.

subordinated loans

Sales

price

Tax

effects

Net

DCC

Capital-

isation

Yield

split

Other

operations

Acquisition

2001

Financed with Tier 2 capital

Handelsbanken


Handelsbanken liv a vital part of handelsbanken s customer offering

Handelsbanken Liv – a vital part of Handelsbanken’s customer offering

  • Handelsbanken Liv:

    • focuses on long-term savings

    • is fully integrated with the branch operations

    • is an important part of the Bank’s product range

      – insurance is necessary in order to offer a complete range of products

    • will in future be reported within the Asset Management business area

Handelsbanken


Lower volatility reduced risk

Lower volatility - reduced risk

  • Handelsbanken moves from traditional insurance to a higher proportion of unit-linked insurance

  • Life expectancy risks are reduced

  • Exposure to asymmetric market risks (yield split/DCC) is reduced

Share

Handelsbanken


Financial effects of the transaction

Financial effects of the transaction

  • Volatility substantially reduced following the sale of SPP

  • Earnings per share expected to increase from 2008 relative to consensus estimates

Profit

Capital

  • Capital can be used for organic growth and/or buyback of shares

  • Tier 1 capital ratio goes up by around 20bp before buyback of shares

Return on equity

  • Equity is re-invested in operations with higher return or returned to the shareholders

  • Return on equity is expected to increase from 2008 relative to consensus estimates

Handelsbanken


Appendix key figures pro forma

Appendix: Key figures, pro forma

Handelsbanken


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