SEB Interim report Jan-Sept 2007
SEB's first nine months 2007 - operating profit SEK 12.4bn (11.4)
Operating profit for January-September 2007 increased by 9 per cent, to SEK
12,437m. Net profit rose by 12 per cent, to SEK 9,885m.
Operating income increased by 6 per cent due to higher revenues within all
divisions, while operating expenses rose by 2 per cent; underlying expenses were
up by 1 per cent. Overall customer business was strong.
The turbulent credit markets in the third quarter led to lower valuations of
fixed income securities, which negatively affected Net financial income.
Net credit losses remained low.
Return on equity was 19.0 per cent (19.9); earnings per share rose to SEK
14.62 (13.13).
SEB's third quarter - operating profit SEK 3.7bn (3.9)
Operating profit for the third quarter of 2007 was SEK 3,726m, 4 per cent
lower than in the third quarter of 2006 and 18 per cent down from the previous
quarter. The quarter was characterised by widening credit spreads across all
traded assets and lower fixed income activity. Business flows were high. Net
profit was SEK 3,101m. Return on equity was 17.3 per cent.
"Our diversified business mix and high customer activity have supported
profitability also during these turbulent times. The lower revenues in the fixed
income securities portfolios must be seen in the light of SEB's leading Nordic
wholesale banking position. SEB has maintained a sound liquidity profile and a
strong capital base."
Annika Falkengren
President's comment
The difficult conditions in the credit markets during the third quarter have
been a challenge for the banking industry. After a long period of abundant
liquidity, the risk reward correction was not unexpected, but the sharpness and
the extent of the correction came as a surprise.
Throughout the period SEB maintained a sound liquidity profile, a strong capital
base and the confidence of the capital markets. The main effect on SEB was the
widened credit spreads, causing deterioration in values of bond portfolios, and
lower customer activity in the fixed income area. SEB's stress testing shows
that credit defaults in the portfolios causing material losses are unlikely
given the current credit market circumstances. The controlled slowdown of credit
growth in the Baltic countries continued.
Despite these turbulent times, SEB's diversified business mix and
customer-centric organisation have proven resilient. The increase of operating
profit for the year is driven by a combination of solid income generation and
stable costs. The plan to deliver SEK 1.5-2.0bn in cost-efficiency gains over a
three-year period is on track.
The work to strengthen customer relations further through increased pro-activity
and more co-ordinated product offerings continues. High quality must be
recognised in everything we deliver to our customers. The number one position in
attracting new Swedish mutual fund flows and the leading Nordic custodian
position are evidence of these efforts yielding result. During the quarter, SEB
continued to receive acknowledgments for the quality of its wholesale business
and high customer rankings in the Baltic operations.
SEB's long-term strategy, the Road to Excellence, remains intact. SEB aims to be
recognised as the best bank in Northern Europe in terms of customer satisfaction
and financial performance.
The full report including tables and additional information can be downloaded
from the links below.
