Year-end report 2006 – Strongest year ever

• OPERATING INCOME SEK 931 (518) MILLION
• OPERATING EARNINGS SEK 350 (128) MILLION
• OPERATING MARGIN 38 (25) PERCENT
• EARNINGS AFTER TAX SEK 250 (94) MILLION
• EARNINGS PER SHARE AFTER DILUTION SEK 18.4 (9.7)
• ASSETS UNDER MANAGEMENT INCREASED BY SEK 24 BILLION DURING THE YEAR TO SEK 78 BILLION, OF WHICH NET INFLOW SEK 8.4 BILLION, CORRESPONDING TO ORGANIC GROWTH OF 15 PERCENT
• PROPOSED DIVIDEND SEK 12.00 (6.00) PER SHARE, AND A SPLIT 2:1

COMMENTS FROM CEO PATRIK ENBLAD

2006 was a strong year for HQ. Although the general climate was favourable, with a continued rise in the stock markets and a high level of turn¬over, this is only part of the explanation. HQ has continued to successfully explore, innovate and perform. In financial terms we are reporting our strongest figures ever and this is the case more or less across the board. The aggressive financial targets adopted by the board of directors in 2005 have been exceeded.
As a consequence of a strong conclusion to the year, assets under management increased by 44 percent and amounted at the end of the year to SEK 78 (54) billion. The net inflow was SEK 8.4 billion, which corresponds to organic growth of 15 percent. It should also be mentioned that HQ Fonder reported a net inflow of SEK 1.9 billion, which means that HQ Fonder was the fastest-growing company on the funds market in Sweden during 2006.
Despite the strong level of growth, the operating margin increased by 13 percentage points and amounted to 38 percent. This clearly demonstrates that HQ’s business model is scalable. In addition the average income on managed assets in HQ Private Banking increased by 9 basis points to 1.13 percent.
The direction of HQ Private Banking has therefore taken another step away from traditional private brokerage towards wealth management based on a more complete finance approach. In other words HQ has become a savings company. It is not only HQ Private Banking, including HQ Fonder, that has performed well. HQ Investment Banking has increased its income at the same pace as HQ Private Banking and, like in the preceding year, accounts for over one-third of income.
HQ is today a stronger company than only a year ago. This positive development would not have been possible unless HQ had had first-class personnel. Human resources are, and will remain, HQ’s most important resource.

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