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Handelsbanken sells SPP to Storebrand

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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  1. Handelsbanken sells SPP to Storebrand

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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.

  7. 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

  8. 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

  9. 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

  10. 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

  11. Appendix: Key figures, pro forma Handelsbanken

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