Interim Report January-June 2000

Interim Report January-June 2000 DELIVERING STRONG INCOME DEVELOPMENT, IMPROVED EFFICIENCY AND GROWTH Total result* increased by 83 per cent to SEK 6,346 M (SEK 3,473 M), while return on equity*rose to 22.3 per cent (16.0 per cent) and earnings per share* to SEK 6.47 (SEK 3.97). Effects of restructuring and efficiency measures now visible: * Branch office closures in Sweden completed and income growth is strong * Restructuring of BfG ahead of plan - negotiations with the unions completed * Concentration of Merchant Banking´s international network activities giving lower costs * Reduced capital employment by different outsourcing and securitisation measures * Divestment of SEB´s shares in Svensk Exportkredit - increasing income by SEK 500 M Growth in Europe and e-banking continues: * The total number of e-banking customers now approximately 620,000 * Strong influx of e-banking customers in Germany * Launch in Denmark of SEB e-banking well received * Filing for approval to acquire about 30 per cent of the shares in the Polish bank BOS January January Change -June -June per 2000 1999 cent Group's total result*, SEK 6,346 3,473 83 M Return on equity*, % 22.3 16.0 Return on equity*, 12 18.6 10.9 months moving average, % Earnings per share*, SEK 6:47 3:97 63 Group's operating result, 5,429 2,757 97 SEK M One-off items, Mkr 1,597 754 Net commission income, SEK 6,939 3,815 82 M Assets under management, 918 549 67 SEK billion Assets under custody, SEK 2,570 1,904 35 billion * The Group's total result comprises operating results, change in surplus value in the life insurance operations and compensation from pension funds. As of the first quarter of 2000, SEB is following the Swedish Financial Supervisory Authority's guidelines and recommendations that become effective in 2001 and is presenting a profit and loss account in which results from the banking and insurance operations are reported separately. In addition, SEB is presenting an operational profit and loss account. CEO´s COMMENT "The transformation process of SEB is now showing results. The increased profits are partly due to income increases in our growth areas but also to improved capital- and cost efficiency measures taken in most areas", says Lars H. Thunell, President and Group Chief Executive. "The positive income increases from the first quarter continued in the second quarter, in spite of the negative development on the stock markets. The division of the Group into four main areas, with different strategies, has involved stronger focus in each group with a number of efficiency measures carried out that is beginning to be reflected in the figures. Within Nordic Banking focus has been on cost- and capital efficiency. A great number of different efficiency measures has been carried out that is mirrored in lower cost levels, reduced risk and shrinking capital allocated. I find it specifically interesting to note that this has been accomplished while activity level has been high and income in most areas has been growing rapidly. Within Asset Management & Life focus has continued to be on growth - but more profitable. Assets under management have grown by 68 per cent, based on the general growth of savings. It is also pleasing to see the strong inflow of new customers to our Private Banking activities. Change in surplus value in the life insurance operations remained at the same level as last year due to the development on the stock market in the second quarter. In BfG the priorities since the takeover have been cost- and capital efficiency as well as growth within e-banking and asset management. The extensive restructuring program has now resulted in increased cost savings targets. We will thereby arrive at 15 per cent return on equity in 2004, i.e. one year ahead of plan. An agreement has been made with BfG´s Workers´ council that- together with sales and closures of subsidiaries - makes it possible to decrease the number of employees by 800. It is satisfactory to note that this has been accomplished in parallel with a strong influx of e-banking customers. Also in our investment bank arm, Enskilda Securities, the reshaping program that was initiated last year has resulted in a strong profit increase. Enskilda is now number one in Nordic investment banking. Within the e-banking activities the launch in Denmark has been well received and will be followed later this year by startup in the UK and launch of an Internet brokerage service in Germany. Our launches in these countries will follow the same pattern as Denmark, i. e. soft launches that we build gradually without too big marketing expenses. In the Baltic countries there has been a further reduction of branches and personnel, while the number of Internet users is increasing. And the former gap in our hold around the Baltic Sea will now be filled, as we finally had the opportunity to invest into a polish bank, BOS." "When I summarize the first half of 2000 I see a strong proof that SEB is on the right track with stable profitability in the Nordic Banking area, higher efficiency and reduced risk. SEB is well positioned to become the leading e-centric, customer-driven provider of financial services in Europe." ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: The full report The full report