Year-end report 2012

• Financial data for the Group
  • Operating income amounted to SEK 1,589m (1,734).
  • Expenses before variable remuneration etc* totalled SEK 1,461m (1,705).
  • Profit before variable remuneration etc* amounted to SEK 127m (29).
  • Items affecting comparability had a negative impact of SEK 141m (neg: 237) on earnings, which was primarily due to restructuring expenses. Before credit provisions, the company posted a loss of SEK 196m (loss: 268).
  • Carnegie has issued new shares in an amount of SEK 100m in order to ensure that the restructuring process continues at a fast pace and to strengthen the organisation while maintaining a strong capital base.
  • The Group has a strong financial position, with equity totalling SEK 2.0bn, a Core Tier 1 ratio of 13.1% and a Capital ratio of 19.6 % at year-end.
    
    
• Operations
• Carnegie reduced the cost base by more than SEK 250m on an annual basis.
• Thomas Ericsson appointed new President and CEO of Carnegie.
• Net inflows of SEK 4.1bn to Carnegie Funds.
• Carnegie carried out the highest number of equity capital market (ECM) transactions in the Nordic region 2012.
• Carnegie was named Private Bank of the Year by the publication Privata Affärer
• Peter Lagerlöf was named analyst of the year in Sweden.
• Karin Söderqvist Lindoff was appointed the new Head of Private Banking in Sweden.

*) Before variable remuneration, financing expenses and Group-wide amortisation of intangible assets.

Focus on growth in 2013

President and CEO Thomas Eriksson’s comments on earnings

Carnegie stands strong and displayed numerous successes during the year – we substantially reduced our expenses, noted considerable inflows to funds, reported strong earnings from our investment banking operations and received continued proofs of our strong market standing. We are also continuing to move forward our positions in the fixed-income area – in terms of both advisory services for companies aiming to issue bonds and of our specialised corporate bond funds – Carnegie Corporate Bond.

For 2012, the Group reported profit of SEK 127m before variable remuneration. Including variable remuneration, financing expenses and Group-related costs, Carnegie reported a loss of SEK 55m.

The Funds business area noted an very positive trend with assets under management increasing SEK 7bn based on net inflows of slightly more than SEK 4bn. Volumes in the Private banking area were stable but, due to lower customer activity and a decrease in net interest income, income decline year-on-year. During the year, Carnegie was recognised as the best Private Bank of the Year in Sweden. Within the structured products area, Carnegie substantially increased its market shares. Investment Banking reported strong earnings, primarily attributable to the successful new initiative in Denmark and the continued strong performance of Investment Banking in Sweden. Securities continued to be negatively impacted by low commission volume on Nordic exchanges.

During the year, we focused on reducing costs and adapting operations to the market conditions. Since the end of 2011, we have reduced costs at an annual rate corresponding to about SEK 250m and reduced staff numbers by 100 full-time positions. The new share issue implemented in 2012 shows that the owners are prepared to invest in Carnegie during the restructuring phase. Since 2010, Carnegie has reduced its cost base by more than SEK 400m. During 2013, additional effects will be realised from measures already implemented and we will continue to streamline operations on an on-going basis. The ambition is that costs, excluding variable remuneration, will clearly fall below SEK 1300m by the end of 2013.

At the same time, we expect a positive market development, based on a shift towards equities, which will have a positive impact on Carnegie. 2013 has started up positively and we forecast significantly increased profit in all business areas.

Carnegie has now entered a phase that is more growth-oriented than previously. In parallel with efforts to increase the efficiency of operations, we will during the forthcoming period invest for the future. We will strengthen offerings in all business areas, carry out selective recruitments and ensure that we deliver the highest possible customer value.

Thomas Eriksson

For further information, please contact:

Andreas Koch, Head of Communications, phone: 46 73 417 86 39, e-mail: andreas.koch@carnegie.se

Carnegie is a leading independent investment bank with Nordic focus. Carnegie provides value-added services in securities brokering, investment banking, private banking and asset management to institutions, corporations and private clients. Carnegie has approximately 700 employees in seven countries.