S E B expands into the Baltic countries

[REMOVED GRAPHICS] 18 November, 1998 PRESS RELEASE S E B expands into the Baltic countries - Acquires 32 per cent in Eesti Ühispank, Estonia - Acquires 36 per cent in Latvijas Unibanka, Latvia - Discussions ongoing with Vilniaus Bankas, Lithuania Skandinaviska Enskilda Banken has entered into co-operation agreements with Eesti Ühispank in Estonia and Latvijas Unibanka in Latvia - where the Bank´s combined investment amounts to SEK 800 M - and is in discussions with Vilniaus Bankas for a similar arrangement. These three banks have already a pan-Baltic co-operation agreement. The expansion into the Baltic area is in line with S E B:s strategy to develop the Group into the leading financial services institution in Northern Europe. The aim is to develop an increasingly close co-operation between S E B and each of the three banks involving the exchange of know-how, the development of products suitable for the Baltic markets and collaboration in Nordic-Baltic cross border business. Ühispank of Estonia In order to cement the partnership S E B will subscribe to a directed issue of 15 million shares in Ühispank at a price of EEK 40 per share. Under the agreement S E B will acquire a further 6 million existing shares, which, together with the directed issue, will give S E B an ownership of 32 per cent of capital and votes in Ühispank. As a consequence of the ownership in Ühispank, S E B will nominate two members to the Supervisory Council of Ühispank. S E B:s total investment in Ühispank amounts to SEK 499 M. In connection with S E B becoming a strategic investor in Ühispank, the International Finance Corporation (a member of the World Bank Group) is considering to subscribe to a convertible loan in Ühispank of USD 20 M. Furthermore, S E B has also entered into a shareholders' agreement with Swedfund Financial Markets AB. Swedfund currently holds 6.3 per cent of capital and votes in Ühispank. An extra shareholders' meeting in Ühispank will be held on 26 November, 1998 to approve the directed issue of shares to S E B and the directed convertible loan issue to IFC. Unibanka of Latvia S E B will also subscribe to a directed issue of 8.55 million shares in Unibanka at a price of LVL 1.33 per share and a seven year convertible subordinated loan of LVL 10 M. The issues will, after full conversion, give S E B an ownership of 36 per cent of capital and votes in Unibanka. As a consequence of the ownership, S E B will nominate two members to the Supervisory Council of Unibanka. The total investment in Unibanka amounts to SEK 302 M. In connection with the strategic partnership, S E B has also entered into a shareholders' agreement with Swedfund Financial Markets AB. Swedfund currently holds 10.1 per cent of capital and votes in Unibanka. The Supervisory Council of Unibanka is authorised to carry out the issue of shares. However, an extra shareholders' meeting in Unibanka will be held in the end of December, 1998 to approve the directed convertible loan issue to S E B. Vilniaus Bankas of Lithuania S E B is also in serious discussions with Vilniaus Bankas of Lithuania. The intentions are to form a strategic partnership between S E B and Vilniaus Bankas along the same lines as with Ühispank and Unibanka, with a co-operation agreement between the parties and a new issue of shares from Vilniaus Bankas directed to S E B. The discussions are in their final stages. Lars H Thunell, President and CEO of S E B: "These partnerships are in line with our strategy to develop S E B into the leading financial services institution in Northern Europe, which includes the Baltic countries. It will improve our possibilities to serve our Nordic clients already present in the Baltics. The banks that we are investing in are leading in their home markets, with strong market positions and good management. We are certain that the know-how, products and capital that we bring to the banks will be beneficial for both them and their shareholders. Considering the close ties between the economies of Sweden and the Baltic countries, the strategic partnerships between S E B and the Baltic banks offer an excellent base for synergy enabling the involved banks to offer the clients a new perspective in banking services." The acquisitions have marginal effects on S E B:s capital ratios and a marginally positive effect on earnings per share. The acquisition of shares are conditional upon the approval of the shareholders' meeting of Ühispank and for convertible loan to Unibanka of the shareholders of that bank, as well as receiving necessary regulatory approvals in Sweden, Estonia and Latvia. Facts about Ühispank Ühispank is a universal bank with 97 branch offices and 1,500 employees. In Estonia the Bank has 33 per cent of deposits and 32 per cent of lending. After the merger with Tallinna Pank in July 1998, Ühispank is the second largest bank in Estonia and is also the second largest bank in the Baltics with total assets of EEK 17.0 billion (SEK 10.2 billion) as at 30 September 1998. The Bank had a profit before tax for the first nine months of EEK 18.1 M (SEK 10.9 M). The total market capitalisation of Ühispank currently amounts to EEK 1.3 billion (SEK 760 M). Facts about Unibanka Unibanka is the principal Latvian corporate bank with growing presence in the retail market and 1,200 employees. Unibanka is the second largest bank in Latvia with total assets of LVL 335 M ( SEK 4,7 billion) as of 30 September, 1998. The main activities include corporate banking, retail banking, securities trading, investment banking, leasing, trade finance and foreign exchange trading. Unibanka has 70 branches. The market share for deposits amounts to 28 per cent and the share of lending amounts to 27 per cent. The profit before tax for the first nine months was LVL 2,5 M (SEK 36 M). The total market capitalisation of Unibanka currently amounts to LVL 25 M (SEK 350 M) Facts about Vilniaus Bankas Vilniaus Bankas is a leading privately owned bank with 18 branches and co- operation with the post in 100 branches. Core strength lies in corporate banking, but is now focusing on expanding its retail operations. Number of employees amounts to more than 900 and the assets to SEK 5,147 M. Net income for the first nine months of 1998 amounted to SEK 96 M. Market share for deposits amounts to 21 per cent and for lending 26 per cent For further information, please contact: Lars Gustafsson, Executive Vice President of S E B and Head of S E B Strategic Planning, 070-763 80 03 or Gunilla Wikman, Head of S E B Group Communications, +46-8-763 81 25. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/11/18/19981118BIT00010/bit0001.pdf http://www.bit.se/bitonline/1998/11/18/19981118BIT00010/bit0002.doc