SEB — Annual Report 2008

Feb 20, 2009

Annual Report 2008

• High customer activity in turbulent financial markets and deteriorating real economy
• Increased integration and efficiency
• High rankings and increased market shares in many areas
• Operating profit SEK 12,471m (17,018)
• Earnings per share SEK 14.66 (19.97)
• Return on equity 13.1 (19.3)

Contents

2008 in brief	1
Chairman's statement President's statement	2 3
SEB today	4
Markets, competition and customers	8
SEB's employees	14
Corporate responsibility	16
The SEB share	20
Report of the Directors Financial Review of the Group Result and profitability Financial structure Divisions Merchant Banking	22 22 25 28
Retail Banking	30
Wealth Management Life	32 34
Risk and Capital Management	36
Corporate Governance within SEB	52
Financial Statements SEB Group	61
Income statements Balance sheets Statement of changes in equity Cash flow statements Skandinaviska Enskilda Banken Income statements Balance sheets Statements of changes in equity Cash flow statements Notes to the financial statements Five-year summary Definitions Proposal for the distribution of profit Auditors' report	62 63 64 65 66 67 68 69 70 129 131 132 133
Board of Directors and Auditors	134
Group Executive Committee	136

Addresses

SEB's financial information is available on www.sebgroup.com

Financial information during 2009

Publication of annual accounts	5 February
Publication of Annual Report on the Internet	20 February
Annual General Meeting	6 March
Interim report January–March	6 May
Interim report January–June	20 July
Interim report January–September	21 October

For further information please contact:

Jan Erik Back Chief Financial Officer Telephone +46822 19 00 E-mail: janerik.back@seb.se

Ulf Grunnesjö Head of Investor Relations Telephone +4687638501 E-mail: ulf.grunnesjo@seb.se

Annika Halldin Senior Financial Information Officer Telephone +46 8 763 85 60 E-mail: annika.halldin@seb.se

2008 in brief

Result and proposed dividend

• Operating profi t decreased by 27 per cent, to seK 12,471m.
• Net profi t amounted to seK 10,050m, or seK 14.66 per share.
• The credit loss level was 0.30 per cent (0.11).
• Return on equity was 13.1 per cent.
• In conjunction with other capital measures, the board proposes no dividend for 2008 (seK 6.50 for 2007).

Key fi gures
	2008	2007
Return on equity, %	13.1	19.3
basic earnings per share, seK	14.66	19.97
Cost/income ratio	0.62	0.57
Credit loss level, %	0.30	0.11
Total capital ratio, %1)	10.62	11.04
Core capital ratio, %1)	8.36	8.63
Risk-weighted assets, seKbn 1)	986	842
Number of full time equivalents, average	21,291	19,506
Assets under management, seKbn	1,201	1,370
Total assets, seKbn	2,511	2,344

1) basel II (Legal reporting with transitional fl oor).

For further information on the seb share, please see page 20.

Capital measures to strengthen seb

The board of seb believes it to be prudent and in the best interest of all stakeholders to proactively strengthen seb's capital base. As a result, the board proposes to strenghten the capital base by seK 15bn and not to pay any dividend for the fi nancial year 2008. These measures will have a combined positive effect on the Group's capital base of seK 19.5bn and give seb a strong capital buffer to meet the impact of an uncertain economic environment.

The proposed capital measures should be seen in the light of today's turbulent markets. The capital measures will provide a comfortable buffer well above the board's increased long-term Tier 1 capital target ratio of 10 per cent, which is essential in the effort to maintain prudent capital management in the current market environment. Calculated on the accounts for 2008, the capital measures would increase seb's Tier I capital ratio to 12.1 per cent and total capital ratio to 14.6 per cent.

Our ability to manage today's challenges lays the basis for tomorrow's prosperity

Many dramatic headlines have been used to describe the financial turbulence, its possible causes and conceivable consequences. At some point in time, this crisis, as other economic crises before it, will subside and be replaced by a more normal and stable phase. When this eventually happens it is also likely that, the competitive landscape, the regulatory conditions and the business model in many areas will be fundamentally different.

Uncertainty and lack of trust in institutions and market participants are not only an effect of the financial crisis, but also to a high extent a cause of it. Not least when it comes to uncertainties regarding how banks and other financial institutions can persevere in times of challenges and hardship.

During the accelerated turbulence of 2008 SEB has continued to run a strong and profitable business. The Bank has worked close to its customers and benefited from the strengthening of the balance sheet, which took place during the years leading up to the turmoil. In spite of that, SEB experienced the same uncertainty, including a sharply lower share price, as most participants in the banking industry.

Restoring trust in the markets

Many international financial institutions have been hit by large losses, subject to restructuring or taken over by their governments. Others have received considerable shareholder or governmental capital injections and guarantees. These initiatives have started the process of restoring trust in capital markets, but have also raised the bar for what is considered a strong and safe capital base.

It is in the light of this development that the Board's proposed capital measures should be considered. The measures should primarily be seen as a precautionary step, aiming to enhance a capital base in excess of regulatory requirements by a comfortable margin. In the Board's view, the capital measures will substantially improve SEB's ability to resist even some extreme downturn scenarios. But it has also an effect on our ability to borrow at good terms and hence support our customers with sound credits.

Most of all, however, it is an important act of building trust and confidence in a nervous market. It is extremely important that all parties, including customers and governments, can rely on SEB as a bank to trust, even in the stormiest waters. It is also the best guarantee for continued long-term value creation for our shareholders.

A strong risk culture

The continuous monitoring of the Bank's liquidity and capital situation remains a top priority for the Board. In addition, the

The measures should primarily be seen as a precautionary step, aiming to enhance a capital base in excess of regulatory requirements by a comfortable margin.

development of the Bank's Risk Control and Compliance functions has continued to be central to the Board. These areas together constitute, in our opinion, the very core of sound banking, and their importance will be proven and tested in times like this.

Sound banking is also based on the professionalism of the Bank's staff and its management. Jointly, they have achieved good results during a difficult year. On behalf of the Board, I would like to thank the President, the Group Executive Committee and the SEB staff for their dedicated work to support our customers and build our bank for the future. We know for certain, that the financial landscape of tomorrow will be formed by those who are best equipped to face the challenges of today.

Stockholm in February 2009

Marcus Wallenberg Chairman of the board

Customer relationships key in new financial landscape

The past year was a year of unprecedented financial turbulence on a global scale, exacerbated by the downward spiral of faltering confidence that followed on the Lehman Brothers' default in September. In this extremely difficult environment, SEB maintained income growth and reached an operating result of SEK 12.5bn. The rapid development of events and increased uncertainty, has created substantial challenges for the organisation. I am proud of the commitment of SEB's staff and the way in which we have interacted with our customers during a trying year.

A new financial landscape

A year ago there were still expectations that the world economy would be more resilient to a downturn, triggered by the U.S. subprime default. However, during 2008 the interdependencies of the financial system, and towards the real economy, became evident. Hopes of a decoupling scenario were put down.

The functioning of global credit markets has been severely impaired, the supply of credit has been reduced, funding costs have increased and asset prices have fallen significantly. These factors have put significant strain on the banking sector. Several major international banks have been rescued, in some cases through government interventions, resulting in a crisis of confidence among market participants and customers.

Despite massive efforts from central banks and governments to remedy the effects, the global economic outlook has turned into a prolonged recessionary mode. We are entering uncharted territories, where the divergence of opinion among experts on where the world economy is heading is unusually broad.

Northern Europe, SEB's core market, has also been affected. GDP-growth in the Nordic countries has come to a halt. In the Baltic countries, the macro-economic outlook markedly worsened towards the end of the year. Latvia was granted support of EUR 7.5bn in an IMF led bail-out. Our view is that there will be a protracted period of declining GDP in Estonia, Latvia and Lithuania over the next few years.

Strong customer relations generated income growth

All through the turbulent year SEB's underlying business was robust. Business activity was high overall despite partly dysfunctional capital markets.

This was evident particularly within Merchant Banking. With its diverse business-mix Merchant Banking could balance a subdued year within corporate finance and fixed income with record high customer activity in areas such as foreign exchange and cash management.

Within Retail Banking, income held up well, especially in Sweden. However, due to the sharply deteriorated economic outlook, we continued to increase provisions for credit losses in the Baltic countries. We have also continued to proactively address asset quality through joint local and Group work-out teams.

In the long-term savings area business was affected by lower equity values, but activity remained high with net inflows into Wealth Management and higher premium income in the Life division compared to last year.

We are well prepared for a more challenging economic environment. In the next few years we will strenghten relationships even more with our exisiting customers.

Capital measures to further enhance necessary buffers

SEB entered this downturn as a more integrated bank with a diversified business mix. Maintaining a robust capital adequacy has been a principal priority for SEB.

In the new financial landscape, it will be even more important for a bank to be strong. The market standard for what is considered an adequate capitalisation has been reset. The proposed capital measures of SEK 19.5bn will give us the necessary buffer to cope with the severe downturn that lies ahead. The measures will further enhance SEB's ability to be a strong long-term business partner for our customers and counterparties.

A robust platform and business model

I am confident that we are well prepared for a more challenging economic environment.

We have a proven robust platform with a business mix based on long-term customer relationships and product excellence. Our strategy to reach leadership in terms of customer satisfaction and financial performance long-term remains. For the next few years it will imply increased efforts to enhance efficiency and to strengthen relationships even more with our existing customer base.

Stockholm in February 2009

Annika Falkengren President and Chief Executive Officer

A focused stategy in uncertain times

SEB provides financial services to corporate customers, institutions and private individuals. The long-term goal is to have the most satisfied customers and to be leading in terms of financial performance among its peers in Northern Europe. Key priorities include intensified activity with SEB's attractive customer base, offering an extensive range of top-rated services based on SEB's increased focus on productivity, quality and integration.

This is SEB

SEB is the leading bank for Nordic large companies and financial institutions. This reflects the Bank's core areas of strength, which are built upon long-term and solid relationships with large companies and financially active private individuals. Thus, SEB has a leading position within wholesale and investment banking as well as within private banking in the Nordic area. SEB is furthermore a leading Nordic unit-linked insurance company and card provider.

The Bank serves 2,500 large corporate and institutional customers, 400,000 small and medium-sized companies and more than five million private individuals. In Sweden, Estonia, Latvia, Lithuania and Germany SEB offers universal banking services. In Denmark, Finland and Norway SEB focuses on wholesale banking, investment banking and wealth management. Furthermore, SEB offers life insurance services in Sweden, Denmark and the Baltic countries. Through its international network in an additional ten countries, SEB has a strategic presence to support and service its large corporate and institutional customers.

At year-end 2008, SEB had some 660 branch offices: 172 in Sweden, 61 in Estonia, 63 in Latvia, 77 in Lithuania, 174 in Germany and 109 in Ukraine. More than half of SEB's approximately 21,000 employees are located outside Sweden.

SEB's business purpose

SEB provides financial services and manages financial risks and transactions in order to help its stakeholders to realise their full potential – customers achieving their objectives, shareholders earning a competitive return, employees performing with pride – and to make SEB a good corporate citizen of society.

SEB's vision and goals

SEB's long-term objective is to be the leading bank in Northern Europe in terms of financial performance and customer satisfaction within chosen segments. Leadership in financial performance is defined as achieving a higher return on equity compared to relevant Nordic and European peers over the business cycle, while attaining sustainable and profitable growth. It is SEB's target to achieve a AA rating.

The Board has decided on a new long-termTier I capital ratio target of 10 per cent for SEB, when the Basel II is fully implemented without transitional floors.

SEB's strategy

In order to reach its long-term targets, SEB has laid out a roadmap – "Road to Excellence". Key priorities include a strong commitment to reach superior productivity and quality, increased integration of SEB, intensified activity with its attractive customer base and focused growth within core areas of strength; primarily corporate and investment banking, wealth management and unit-linked insurance. SEB focuses on such segments, products and markets where it clearly can add value to its customers, such as capital markets and corporate advisory service, cash management, foreign exchange, private banking and alternative investment products. Retail Banking plays an important role through its wide distribution network.

Given the current economic downturn in SEB's home markets as well as internationally, the long-term strategy is complemented by a number of short-to-medium term priorities:

• Grow revenue with existing customers through high interaction and increased share of wallet.
• Continue to focus on cost efficiency-enhancing measures and savings in areas not directly related to customer interaction.
• Support customers' long-term financial needs while maintaining sound risk management.
• Take actions in order to maintain its strong capital and liquidity position.

Nevertheless, the long-term strategy continues to follow the Road to Excellence along its three major themes – operational excellence, customer satisfaction and balanced growth.

Operational excellence

One SEB

SEB continues to work with the integration of the Group in order to increase cross-selling and extract cost synergies through a more efficient use of common resources. This also includes creating a group-common IT infrastructure. An integrated organisation is crucial to enable SEB not only to increase productivity but also to leverage the knowledge and expertise throughout the Group for the benefit of the customers.

The co-operation and knowledge-sharing between divisions have improved since the introduction of the new organisation on 1 January 2007. For example, by using Merchant Banking's expertise from large companies, Retail Banking in Sweden can now offer an improved service to small and medium sized enterprises.

Financial targets and outcome

Net profi t growth seKbn 15 12 9 6 3 0

Target: sustainable profit growth

Risk Management

SEB has continuously developed its risk management practices and professionals. Risk management is proactive and forms an integral part of conducting business. Actions taken to further enhance risk management in 2008 include an increased matchfunding liquidity requirement and the raising, early in the year, of SEK 160 bn in long-term funds (see further pp 37). Measures to address asset quality also include reinforcement of experienced workout teams.

Cost Management

In 2007, SEB initiated a cost improvement programme to reduce costs by SEK 1.5–2.0bn, excluding incremental investments, during 2007–2009. Cost synergies have been achieved through the centralisation and consolidation of staff and support functions and through the guiding principle of "one function, one solution". With realised savings of more than SEK 1bn in 2007–2008, SEB is on track to achieve this target. The efforts to streamline processes and co-ordinate different functions continue in order to achieve scale advantages and improve best practice sharing, thus further enhancing cost effi ciency. SEB will reduce the number of full time equivalents (FTE) in Sweden by 5 per cent during 2009, corresponding to a net reduction of 500 employees.

SEB Way

SEB Way is a Group-wide programme, targeted to increase operational effi ciency by streamlining processes so that resources are freed-up and applied more productively to generate further business. Thus this is a fundamental change process in order to create a culture of continuous improvement, meeting increased quality demands from customers and productivity pressure in the banking industry. The programme is now utilised within all parts of the Group, with a proven track-record both for sales and support functions. For example, the number of transactions increased by 30 per cent - from 1.75 million payment transactions a month to over 2.6 million. At the same time SEB increased productivity (transaction per FTE) by 34 per cent, while keeping staff number unchanged.

By year-end 2008, more than 60 per cent of all of SEB's employees have been included in the overall diagnosis and the

freed-up time to date was equivalent to around 7 per cent, or 1,500 FTE's of the work force.

Increasing customer satisfaction

In order to realise its vision of being the leading bank in Northern Europe, SEB strives to improve service levels and increase activities with respect to customers. Customer offerings and customer acquisition are strengthened through joint product development in the divisions and better usage of best practice procedures throughout the Group.

In recent years SEB has strengthened its position in the segment for large and medium-sized corporations in Denmark, Finland, Norway and Germany. SEB has top customer rankings within for example cash management, currency trading, investment banking, custody and private banking, as shown in the ranking list on page 6. During 2008, large companies and institutions accounted for approximately 40 per cent of SEB's income.

SEB's small and medium-sized corporate customers, mainly in Sweden and the Baltic countries, can benefi t from the knowledge and competence that SEB has built up in co-operation with large companies and adapted to the needs of small companies. In Sweden, SEB was awarded best SME-bank. During 2008, small and medium-sized companies accounted for approximately 25 per cent of SEB's income.

In Sweden, SEB has a leading position and high rankings within private banking, mutual funds and unit-linked insurance. Within its retail business, SEB takes continuous steps to move closer to its goal of being leading in terms of customer satisfaction. In the Baltic countries, SEB ranks No. 2 in the retail segment. In Germany, SEB has received higher marks from the private customers than the market average over the last six years. During 2008, private individuals accounted for approximately 35 per cent of SEB's income, of which the Swedish business represented 10 per cent.

Balanced growth

SEB prioritises balanced growth across the business areas in order to increase resilience in times of uncertainty.

Merchant Banking sees further opportunities to expand its core franchise by selling additional products to existing customers and to increase its market share in its main markets outside Sweden, not least through intensifi ed activities aimed at medium-sized corporations and fi nancial institutions in the Nordic countries. This will be achieved by pursuing the division's proven strategy of providing internationally recognised high-quality products and value-added fi nancial solutions. Outside its main markets, Merchant Banking integrates the operations in the Baltic countries and makes selective investments in its operations outside its home markets, targeting primarily Nordic and German clients.

Retail Banking will strengthen its sales culture and enhance its customer offerings with attractive and accessible products. Each market has its own specifi c priorities. In Sweden, focus is on improving the overall customer experience and on further strengthening the position in customer segments such as mass affl uent and small and medium-sized enterprises. In Estonia, Latvia and Lithuania, the near- to medium-term focus is to ensure asset quality and continued long-term sustainable growth in light of the challenging macroeconomic development and to grow further

Customer satisfaction, Retail customers

Private customers and small and medium-sized corporate customers (sMe's) KNIX index

	SEB 2008	Market average	seb 2007	Market average
Sweden
Private	65	73	n/a	n/a
sMe	63	72	n/a	n/a
Estonia
Private	75	74	76	74
sMe	78	64	80	82
Latvia
Private	62	63	67	69
sMe	65	64	56	65
Lithuania
Private	56	54	66	62
sMe	59	64	61	64
Germany
Private	70	64	72	66

In sweden, seb ranks No 4 both within private and sMe-segment. In estonia, seb ranks No 1 both within private and sMe sector. In Latvia and Lithuania seb is No. 2 within the private customer segment and No.3 in the sMe market. In Germany, seb has received higher marks from private customers than the market average over the last six years.

The corresponding customer satisfaction survey results for large companies and institutions are not offi cial.

within the savings market. The work to identify potential credit losses at an early stage and when necessary engage work-out teams continues. Long-term focus is set on establishing market leadership to capture the attractive structural growth opportunities

seb's rankings

Area	Rank 2008	Rank 2007	Organisation / publication etc
best bank in sweden	1	1	euromoney, Global Finance Magazine
bank of the Year in estonia and Lithuania	1	1	The banker
best bank in Latvia	1	1	euromoney, Global Finance Magazine
best bank in Lithuania	1	1	Global Finance Magazine
best stockbroker in the Nordic region	1	1	Prospera
best cash management in the Nordic and baltic regions	1	1	euromoney
Overall Customer satisfaction regarding cash management, globally	1	1	euromoney
best Overall bank for Cash Management 2009 in the Nordic region	1	1	Global Finance Magazine
best real estate commercial bank in the Nordic and baltic regions	1	1	euromoney
best research house in the Nordic contries	1	1	extel survey, Thomson Reuters
best bank for risk management in the Nordic region	1	1	Global Finance Magazine
best in corporate fi nance in the Nordic region	biannual	1	Prospera
best M&A house in sweden and the baltic region	1	1	euromoney
best global commercial bank in real estate	3	3	euromoney
best equity house in the Nordic and baltic regions	1	1	euromoney
best trade bank in Northern europe and scandinavia	1		Trade Forfaiting
best trade fi nance bank in the Nordic region	1	1	Global Finance Magazine
best derivatives dealer in sweden	1	1	Risk Magazine
Custodian of the Year in the Nordic region	1	1	International Custody and Fund Administration
sub-custodian of the Year in the Nordic region	1	1	International Custody and Fund Administration
best asset manager in sweden	1	N/a	Thomson Reuter
Nordic asset management fi rm of the Year	1	1	Financial News
best private bank in sweden	1	3	euromoney
best agent bank in the Nordic region and eastern europe		1	Global Custodian
best equity research in the Nordic region	1	1	extel survey Thomson Reuters
FX-research, globally	N/a	1	FX Week/Reuters
sMe bank of the Year in sweden	1	N/a	Privata Affärer

in the region once the economies turn around. In Germany, focus continues to be on improved profitability. The Card business is focused on accelerating organic growth and product development whilst reducing unit cost per transaction.

Wealth Management strives to offer enhanced advisory services, a broader range of alternative and absolute return-focused products. The division aims to shorten time-to-market for new, value-added products as well as to improve investment management performance further. In Sweden, SEB has a strong market position and leading customer offerings both within private

banking and asset management. Building on this franchise and knowledge, the division continues to grow outside Sweden, primarily in the Nordic and Baltic countries and Germany.

Life's business concept is focused on unit-linked insurance. In Sweden and Denmark, the main growth opportunities are within the corporate pension and care areas. Maintaining quality leadership in Sweden and continuing the transition towards unit-linked solutions in Denmark are top priorities. Furthermore, the division is investing to establish a leading position in the emerging life insurance markets in the Baltic countries early on.

Underlying strong business

In spite of the fi nancial turbulence and the rapid deterioration of the real economy in the North european markets during 2008, seb consolidated its position within most areas. Activities were intensive, volumes increased and market shares and rankings were high.

The global credit crisis and rapid weakening of the real economy in SEB's core markets in Northern Europe during 2008 did of course take its toll, especially in the previously fast growing, overheated Baltic economies. However, within most areas SEB maintained a high activity level and the underlying business was strong. During the year, SEB gained approximately 125,000 new customers, of which 107,000 were private individuals and 17,000 corporate customers.

In the market for large corporations and fi nancial institutions SEB traditionally meets tough competition, not only from the large Nordic banks but also from international fi nancial groups. During 2008, however, many of those have withdrawn from the Nordic scene as a consequence of the fi nancial turmoil. The changed fi nancial landscape facilitated the return to more lender-oriented covenant structures and a more realigned risk-based policy, after years of liquidity-driven volume expansion in the fi nancial markets.

In the market for small and medium-sized companies, the competitors are mostly domestic or regional banks, like Swedbank in the Baltic countries and Nordea, Handelsbanken, Swedbank and Danske Bank in the Nordic region.

In the private market, local banks account for most of the competition, but various niche players are also competing for investors and depositors.

Sweden

The economic situation in Sweden, SEB's single largest market with approximately 1.9 million private and 200,000 corporate customers, deteriorated faster than expected in 2008. SEB's income dropped within equity-related markets, while volume development and sales were strong within foreign exchange, cash management, mutual funds and life insurance, for example. With SEK 8,344m in operating profi t, the Swedish market accounted for 65 per cent of the Group's profi t for 2008. SEB has approximately 8,400 employees in Sweden.

In Sweden, SEB occupies a leading position among large corporations and private banking customers, with substantial market shares of foreign exchange trading, equities trading, cash management, asset management, unit-linked insurance and cards, for example. For several years, SEB has been ranked the best foreign exchange bank in Swedish krona trading on a global basis. In 2008, SEB was once again the largest broker, not only on the Stockholm stock exchange but also on the Nordic exchanges

In the household market for deposit and lending SEB is No. 4 , while it is No. 2 in volume on the corporate market. During 2008, SEB's market share of deposits from the public increased to 20.7 per cent, while its share of lending was virtually unchanged at 14.9 per cent. SEB's market share of household lending (including mortgages) was 12.2 per cent (12.6).

since the Nordic banks differ in terms of business structure this is an approximate distribution of customer segments.

seb's commission income traditionally weighs heavier than that of other Nordic banks due to the Group's specialisation on advisory services and more transaction-intensive activities with large companies and demanding private customers. Operational risk

In the total Swedish household savings market (excluding directly owned shares), the Group was the largest player as per 30 September 2008, with a share of 14.8 per cent (14.6).

SEB has a strong market position within the asset management and private banking areas. In 2008, SEB's mutual funds had a net infl ow of SEK 6.5bn, while the total Swedish market experienced an outfl ow of SEK 17.5bn.

Within life insurance, SEB is the second largest player in Sweden , measured by premium income, with a market share of 12.5 per cent in 2008. As regards new sales of unit-linked insurance, SEB is No 1, with a market share of 24.4 per cent.

Other Nordic countries

In Denmark, Norway and Finland, SEB's operations are concentrated on the Group's core areas of strength: wholesale and investment banking as well as wealth management. SEB's position is also strong within unit-linked insurance in Denmark as well as within card operations in all Nordic countries. In total, SEB has more than 1.3 million customers in Denmark, Norway and Finland.

Denmark

In Denmark, SEB's customer offering comprises wholesale and

investment banking, life insurance, wealth management and cards (Eurocard, Diners Club and MasterCard). At year-end 2008, SEB Denmark had approximately 700 employees and more than 600,000 customers, accounting for SEK 556m, or 4 per cent of the Group's operating profi t for 2008.

Denmark was the fi rst country within EU to fall into recession as early as in the late 2007. The continued downturn during 2008 was largely related to lower domestic demand and the property market.

SEB holds a market leading position within corporate fi nance in Denmark and ranked among the three top players within all major equity and capital market products in 2008. The relationship-driven wholesale business, corporate banking and foreign exchange continued to broaden the penetration and improved the results accordingly. The securities trading areas also improved the client facilitation, however in total showed lower income due to negative mark-to-market evaluations on trading portfolios.

Within the wealth management area, SEB partly managed to balance the negative market impact on assets under management with net new sales. At year-end, SEB held SEK 162bn in assets under management , defending its position as one of the leading investment managers in the Danish market. In the spring of 2008,

Market shares of total savings, Sweden 1) Per cent

seb is number one on the swedish private savings market. 1) As per 30 september 2008.

Per cent	2008	2007	2006
Deposits from general public
Sweden	20.7	20.2	20.5
deposits from households	11.7	12.4	12.2
deposits from companies	27.8	26.1	25.8
Estonia	24.2	25.7	27.1
Latvia 1)	19.9	23.7	23.1
Lithuania	27.0	27.4	29.2
Lending to general public
Sweden	14.9	15.0	14.4
lending to households	12.2	12.6	12.5
lending to companies	16.9	16.8	16.0
Estonia	24.3	26.3	29.1
Latvia	14.4	15.5	18.3
Lithuania	30.1	31.3	34.4
Mutual funds, new business
Sweden	N/a 2)	70.3	26.1
Finland	N/a 2)	11.2	4.4
Mutual funds, total volumes 3)
Sweden	19.5	17.9	16.6
Finland	10.0	5.7	5.5
Estonia	22.2	21.5	22.2
Germany 4)	8.5	9.1	8.2
Unit-linked insurance, new business
Sweden	24.4	22.1	29.1
Life insurance, premium income
Sweden	12.5	12.8	16.5
Denmark	N/a	10.0	10.0
Equity trading
Stockholm	12.3	9.8	10.1
Oslo	8.1	8.5	7.6
Helsinki	4.4	4.3	3.5
Copenhagen	7.9	8.1	5.9

1) Resident deposit market only.

2) In 2008, total new business in mutual funds markets was negative.

3) Excluding third-party funds.

4) Real estate funds.

SEB's Danish Equity fund won the Morningstar Fund Award 2008 based on a five year performance.

SEB Pension is Denmark´s fourth-largest private pension company (second largest within the unit-linked segment), with 300,000 customers and assets of SEK 96bn. With corporate pension sales as the main growth area, representing approximately 80 per cent of total sales in 2008, SEB Pension continues to gain market share in this customer segment.

Norway

SEB in Norway offers wholesale and investment banking services, wealth management and cards (Eurocard, MasterCard and Diners Club). SEB has 550 employees and close to 600,000 customers in Norway. In 2008, Norway accounted for 9 per cent, or SEK 1,172m, of SEB's operating profit.

In spite of the global financial turmoil the various units of SEB managed well in relative terms. Merchant Banking's business increased its income compared with 2007, simultaneously attracting new customers and introducing additional financial solutions in the market. SEB maintained its position as one of the four highestranking banks for large and medium-sized corporations.

SEB also secured its position as the market leader within investment banking and was No. 1 on the Oslo Stock Exchange for the second consecutive year, with a market share of 8.1 per cent in 2008. For the third consecutive year SEB was ranked clear number one for private and institutional clients on the Norwegian market in Prospera's annual survey for 2008.

SEB's Card business kept its position as a leading provider in the corporate market.

Finland

SEB in Finland comprises Merchant Banking, card operations (Diners Club, Eurocard and MasterCard) and wealth management (via the subsidiary SEB Gyllenberg). Close to 350 employees serve more than 100,000 customers in total.

In 2008, SEB in Finland accounted for SEK 554m, or 4 per cent, of SEB's operating profit. In addition, business volumes from Finnish customers with SEB units in other countries experienced double digit growth and accounted for substantial volumes.

In Finland, Merchant Banking reported a very strong year both in business volume and operating profit. In 2008, the entity succeeded to take much better advantage of the strength of the entire Merchant Banking division than before in its relations with the large corporate clients in Finland.

Growth areas include Trading and Capital Markets, with a strong advisory culture, structured leasing business, Commercial Real Estate, cash management, custody services and investment banking.

SEB Gyllenberg has a top position in the institutional asset management market and is one of the leading providers of private banking services in Finland.

SEB's market share of the Finnish mutual fund market, where the subsidiary SEB Gyllenberg is one of the largest players, was 10 per cent in 2008.

The Card business are has successfully expanded its base. The total growth for private cards was 13 per cent. In 2008, Card launched Eurocard in Finland and Latvia with success.

Estonia, Latvia and Lithuania

SEB's operations in the Baltic countries include a network of around 200 branch offices, employing some 5,400 people servicing 2.8 million customers, of whom 190,000 are corporate customers. The universal banking offering includes retail banking, wholesale and investment banking, private banking, leasing, venture capital, life insurance and asset management.

During 2008 the economic situation in the Baltic countries

Leading equity broker Market shares, Nordic & Baltic stock exchanges, Jan–Dec 2008, per cent 10 8 6 4 2 0 SEB Enskilda SHB Danske Carnegie Bank Goldman Sachs Morgan Stanley

Market share, deposits, the Baltic countries Per cent

Already in the beginning of 2006, seb's lending policy became more cautious. As a consequence, the banks lending market shares have decreased in the three countries.

1) excluding loans to fi nancial institutions. 2) Resident deposits only.

deteriorated very fast. In Estonia and Latvia, negative GDP growth is a certainty and is expected to last during the next years. Also Lithuania is experiencing a gradual domestic slowdown. As a consequence, SEB has increased its provisions for credit losses in all three countries. The combined result for 2008 at SEK 1,417m corresponded to 11 per cent of SEB's total operating profi t.

SEB has increasingly paid more attention to higher value added services, not least within the savings area. SEB's market shares are generally high within these product areas.

Despite the economic downturn, SEB maintains its long-term commitment in the Baltic region.

Estonia

The economic slowdown in Estonia started in mid-2007, with a gradual price deterioration in the real estate sector. In the second quarter of 2008 the country slid into recession. The negative GDP growth is expected to continue in 2009.

SEB is the second largest bank in Estonia with a market share of lending of 24 per cent compared with 34 per cent at the end of 2005. In 2008, SEB in Estonia accounted for 2.9 per cent of the Group's total credit exposure.

In 2008, SEB successfully launched a packaged solution covering private individuals' daily needs. The offering attracted

more than 30,000 customers, of whom half were new to the Bank.

In terms of customer satisfaction, SEB was ranked No. 1 in the private as well as the corporate market according to KNIX, SEB's customer satisfaction survey.

Latvia

After three years of double-digit GDP growth, Latvia now experiences plummeting domestic demand. GDP is certain to be negative during the next years. Due to the global fi nancial turmoil and Latvia's large foreign debt, the country will face a tightened fi nancing situation.

Due to the economic decline and the specifi c problems in the local bank Parex, the Government of Latvia entered into discussions with the IMF and the European Union in order to secure long-term stability. The Latvian Government and Parliament have agreed on far-reaching economic reforms in line with these discussions. This should be viewed as positive and as a stabilising factor for the economy.

SEB is the second largest bank in Latvia. The continued controlled slowdown of credit growth has resulted in a decrease of SEB's market share for lending, to 14.4 per cent, compared with 22 per cent at the end of 2005. SEB's Latvian operations accounted for 2.6 per cent of the Group's total credit exposure in 2008. Operating income was virtually fl at, while costs and provisions increased substantially; the share of SEB's total operating profi t for the year was SEK 391m, or 3 per cent.

In 2008, SEB once again was awarded "Best bank" in Latvia by Euromoney. In terms of customer satisfaction, SEB was ranked No. 3 in the private market and No. 2 in the corporate market, according to KNIX. 2008 2007

Lithuania

The Lithuanian economy was still growing in the fi rst half of 2008. However, growth plummeted in the second half, mainly as a result of dampened domestic demand.

SEB is the largest bank in Lithuania and has a leading position among large corporations. SEB's market share for lending in Lithuania decreased in 2008. Credit exposure related to Lithuania now amounts to 5 per cent of SEB's total credit exposure. Operating income continued to grow, while provisions for lending losses increased; SEB in Lithuania accounted for SEK 717m or 6 per cent of the Group's operating profi t 2008.

SEB's has received a string of top rankings in 2007 and 2008, including "Best bank" by Global Finance Magazine, "Bank of the year" by The Banker and "Best consumer internet bank" by Global Finance Magazine. In terms of customer satisfaction, SEB was ranked No. 3 in the private market and No. 1 in the corporate market, according to KNIX.

Germany

In Germany, SEB has a nation-wide network of branch offi ces. The bank is focused on wholesale banking activities, commercial real estate fi nancing, asset management and retail banking (mainly private customers). SEB has approximately 3,400 employees and close to one million customers in Germany. SEB's operations in Germany accounted for SEK 754m, or 6 per cent, of the Group's operating profi t in 2008. Credit losses were lower than in 2007.

In September 2008, announced the organisational separation of Retail Banking from its other operations in Germany in order to create fl exibility to benefi t from the changing banking market.

The retail business operations were affected by lower customer activities, especially within the securities business, as result of

the financial crisis. Despite all turbulence, the co-operation with AXA insurance group developed successfully; insurance sales increased by 34 per cent between 2006 and 2008. Also mortgage sales and consumer loans developed favourably. SEB's customer satisfaction remained one of the highest in Germany, according to KNIX .

Merchant Banking in Germany continued to expand its business, especially in the area of structured finance, trade finance and large corporate customers. Trading & Capital Markets reported a significant increase. SEB's wholesale banking services in Germany were once again ranked at the very top, particularly for its cash management offering.

Despite the difficult and challenging market environment the Commercial Real Estate business remained stable. The business area once again asserted its strong position in the German commercial real estate market, remaining a strong and reliable partner for the clients.

Asset Management reported a solid result despite market turbulences. Investment funds recorded a net capital inflow of 119.3 million euro.

Poland, Ukraine and Russia

In Poland and Russia, SEB's operations are primarily supporting Nordic corporate customers, while SEB in Ukraine is also a local bank.

SEB's operations in Poland comprise a branch, a wholly-owned mutual fund company, SEB TFI, a leasing subsidiary and the factoring company GMAC Commercial Finance, acquired in 2008.

In 2008, SEB continued to integrate its two banks in Ukraine – SEB Bank and Factorial Bank acquired in 2007. In total, SEB serves approximately 15,000 corporate and 90,000 private customers throughout the country. In 2008 SEB opened 24 new branch offices in Ukraine, increasing the total number to 109 at year-end 2008.

SEB Bank in Russia (formerly PetroEnergoBank) has two branch offices in S:t Petersburg. The Group's other operations in Russia include a representative office in Moscow and a leasing company in St Petersburg.

Other international locations

SEB has operations at strategically important locations in such financial centres as London, New York, Singapore and Shanghai to serve corporate customers with international operations.

Nordic and German private customers living outside their home countries make use of these offices, too and are also served via private banking units in Luxembourg, Zurich and Marbella, for example.

At the beginning of 2008, SEB opened a representative office in New Delhi in order to support corporate customers in their business with India.

seb's distribution channels

SEB's ambition is to offer individual, active and rewarding relations whenever and wherever the customers so desire.

SEB's customers can stay in contact with SEB via some 660 branch offi ces, the Internet and personal telephone service. In Sweden, the call centre is able to assist customers in 22 different languages. Approximately 90 per cent of the number of customer contacts takes place via the Internet and telephone. Over the past three years, SEB's retail customer contacts have increased by 30–35 per cent, not only in the Bank's "remote" channels but also in the branch offi ce network. The branches are particularly important for advisory services.

During 2008, the number of card transactions with card issued by SEB amounted to 526 million, of which around 70 per cent in the Nordic region.

Large corporations and institutions are served internationally by 18 branches and representative offi ces – from New York and Sao Paolo to Shanghai and Singapore.

Approximately 1,250 persons – client executives and other sales teams – assist the large corporations and fi nancial institutions. In addition, approximately 750 product experts, analysts, traders etc have frequent interactions with the customers.

Private banking customers, mainly from the Nordic area, living outside their home countries are served via branches in twelve countries, for example Luxembourg, Spain and Switzerland.

Within the life insurance area, SEB co-operates with approximately 2,000 insurance intermediaries, brokers and agents in Sweden, Denmark and the Baltic countries. The own sales force counts some 350 persons, of which 150 in Sweden, 70 in Denmark and 120 in the Baltic countries. In Germany, SEB has an agreement with the insurance company AXA.

Number of users of the Bank's Internet services

Today, seb's Internet banks are used by approximately 3.2 million private customers and small companies in seven countries. In Denmark and Ukraine seb has approximately 3,000 internet customers in each country. Baltikum

In addition, the Group offers specialist services via the Internet such as foreign exchange and interest trading, mainly to large companies. Tyskland Danmark

Branch offi ces

since the end of the 1990s, seb has more than doubled its branch offi ce network, mainly through acquisitions in eastern europe. In 2008, 24 new branches were opened in Ukraine.

Automatic bank service machines

Automatic bank service machines include ATM's, machines for cash deposits, transfers, foreign exchange and recharging cards.

Personal telephone service

Calls and e-mails to seb's call centres

Calls e-mails

In sweden, Germany and the baltic countries, seb's customers are offered personal service, in sweden and estonia around the clock – and in sweden in 22 different languages. In addition to the 5.7 million phone calls, seb's call centres answered 635,000 e-mails in 2008.

Card transactions

In the last two years the number of card transactions have increased by 60 per cent to 526 million transactions.

A performance culture

SEB actively works to build a culture that measures and rewards performance, in order to reach the Bank's strategic goals. At SEB, performance is not only a matter of the results that are delivered but also of how results are achieved.

SEB aims to be the best employer in the nancial sector through attracting and developing skilled people, and setting clear and inspiring goals that are measured, followed up and rewarded. A passion for performance in product development, customer interaction and execution is a key prerequisite for reaching SEB's vision of being the leading bank in Northern Europe. How well SEB employees adhere to the Group's core values – Commitment, Continuity, Mutual Respect and Professionalism – is equally important.

Performance Management

In SEB, every leader makes sure that the strategic goals are broken down and communicated to the employees as individual targets that are clearly linked to SEB's business plan. The targets are followed up and evaluated through regular follow-up meetings with each employee, where individual feedback and coaching is given. This creates employee commitment and ability to deliver both short and long-term value.

Talent Management

The right people with the right competence, in the right place, are prerequisites for SEB's ability to achieve its business goals. SEB proactively works with attracting, recruiting, identifying and developing talented people. SEB shall be in the forefront, ahead of its competitors, when it comes to nding and making use of talents that in the long run will contribute to successful business results and customer satisfaction.

During 2008 SEB conducted a Global Talent Review, assessing a large number of employees and leaders at all levels within the Group. Talents are identi ed as people who have performed at a very high level and demonstrated a promising potential to go further. They constitute SEB's Global Talent Pool, which provides a good overview of the Group's leaders and their ability to take on

larger roles in different areas, allowing SEB to work actively with individual career plans. The solid Global Talent Review ensures that the right competence is available, re ecting SEB's needs as identi ed in the business plan. It also ensures that SEB invests in the right development activities.

Leadership & Competence Development

In order to build a performance-driven culture, developing leadership and competence is crucial. During the year, much work has been devoted to clarifying the demands and expectations that SEB has on its leaders. A total of SEK 245m (240) was invested in competence development. Almost all employees participated in some form of training and 1,700 leaders took part in the Group's various internal and external leadership programmes. Internal training comprises everything from professional competence courses to the Group's own leadership programmes, like the Wallenberg Institute and International Business Seminar. Besides developing leadership skills, the purpose of the leadership programmes is, to encourage net-working across the divisions and countries in order to leverage business opportunities and offer the best solutions to the Bank's customers.

Employees Geographical distribution, per cent Sweden 40 (39) The Baltic countries 26 (26) Germany 16 (16) Rest of Europe 10 (10) Rest of the Nordic countries 1) 7 (8) Rest of the world 1 (1) 1) Denmark, Norway and Finland.

	Employee turnover
	Heads average		Starters	Leavers			Retired
2003	19,411	643	3.3%	–1,069	–5.5%	–108	–0.6%
2004	19,108	784	4.1%	–789	–4.1%	–189	–1.0%
2005	19,862	2,029	10.2%	–1,183	–6.0%	–109	–0.5%
2006	20,692	2,249	10.9%	–2,012	–9.7%	–228	–1.1%
2007	21,523	3,124	14.5%		–2,275 –10.6%	–335	–1.6%
2008	22,310	3,463		15.5% –2,948 –13.2%		–152	–0.7%

SEB – an attractive employer

SEB's goal is to be the most attractive employer within the nancial sector. The Bank works actively to attract young professionals – young graduates with a couple of years' work experience. SEB reaches this target group by participating in employer fairs arranged by different universities and by positioning itself on various student and job sites.

In 2008 an employer branding survey showed that SEB was the preferred bank among young business and nance graduates in Sweden. Also within such other categories as IT, law, technology, graduate engineering and humanities SEB came up top on the list among the banks. Among all companies, SEB was ranked number six as the most attractive employer. In Lithuania SEB has been in the top three positions the last two years in the "The most attractive employer" survey, organised by an established research rm.

SEB continues to run its international trainee programme. The programme builds a broad platform for the 24 trainees graduating every year. In 2008, a Swedish leading business paper ranked the programme as one of the top trainee programmes in Sweden.

Performance in a long-term perspective

SEB constantly strives towards an open and honest dialogue on key issues. This is a matter of following up leadership, motivation and Group performance compared with the market benchmark.

Every second year, the employee survey Voice is carried out. The survey is a strategic tool to identify areas of improvement and to decide on appropriate actions. The latest survey, made in 2007, showed that competence, motivation and accountability were perceived as high by the Group's employees. Customer focus is a prioritised area within SEB and the employee survey showed that this is an area for further improvement. Next survey will be carried out in 2009.

Diversity is a success factor

Regardless of sex, nationality, ethnic origin, age, sexual inclination or faith, every SEB employee has the same opportunities to develop and make a career within the Group. According to the Group's diversity plan, the long-term goal is an equal distribution between men and women so that each sex shall be represented by at least 40 per cent at each level.

During 2008, 44 per cent (40) of the Group's managers were women. The share for group and customer service managers was 54 per cent (46), while it was 36 per cent (36) for department and branch of ce heads. At higher levels, the share of women was 25 per cent (25).

Short-term incentive (STI) compensation

In relation to staff costs (incl. social charges), per cent

Salaries and compensation

Also in terms of remuneration, SEB targets a pay for performance culture. The SEB Group's overall remuneration structure consists of the following components: base salary, short-term compensation, long-term incentive compensation to senior leaders and other key employees, pension and bene ts.

Each employee has a base salary depending on job complexity, experience, competence, work performance and individual responsibility. Most SEB employees are eligible for short-term incentive compensation, which is based upon achievement of pre-determined goals. In 2008, the total short-term incentive compensation, including social charges, accounted for 16 per cent (21) of the Group's total staff costs.

During the year, a share savings programme was launched to encourage the staff to become SEB shareholders, thus increasing employee commitment and strengthening the alignment between SEB's staff and shareholders. According to this scheme, each employee can save maximum 5 per cent of his/her annual gross salary to buy shares for the corresponding amount. After three years, employees will receive one share for each share purchased for the saved amount. 7,000, or 33 per cent of the SEB Group's staff, have started saving under this programme.

During 2008 approximately 500 senior of cers and other key employees were granted long-term incentive compensation in the form of so-called performance shares. The purpose of this form of compensation is to stimulate senior leaders and other key staff to increased efforts by aligning their interests and perspectives with those of the shareholders. (See further on page 60 and Note 9 for information about SEB's long-term incentive compensation programme.)

A trusted partner and corporate citizen

As a major provider of credit, payment systems and other fi nancial services, SEB plays an important role in society. Corporate responsibility efforts are increasingly integrated in the Group's day-to-day business.

SEB's core values – Commitment, Continuity, Mutual Respect and Professionalism – form the basis for the Group's approach to corporate responsibility. To be considered a good corporate citizen is part of SEB's mission statement.

The Corporate Responsibility committee, comprising members from each division and key support functions, steers corporate responsibility efforts and reports to the Group Executive Committee.

SEB has since 2007 implemented internationally agreed principles for corporate responsibility accounting and measurement and reports its results in accordance with the GRI G3 Guidelines. Priority areas include the establishment of a governance structure for corporate responsibility that can be externally audited, and de ning the targets for corporate responsibility improvements.

SEB's ambition is to meet the foremost international standards within corporate responsibility. Reducing the Group's carbon footprint is a major priority, through further reductions in energy consumption, increased use of renewable sources and improved processes.

SEB's role in society

As a leading bank in the Nordic and Baltic countries, SEB plays an important role for the development of enterprises, the fostering of trade and the functioning of nancial systems in these countries. SEB is a universal bank that provides a wide range of nancial

services to corporate customers, institutions and households, with leading positions in areas including corporate and private lending, equities trading, asset management and investment banking.

The Group has a particularly strong position as a facilitator of international trade, providing among others cash management services to the majority of the largest Nordic companies and operating one of the world's largest foreign exchange desks.

Responsibilities and impact

SEB is fully committed to the view that organisations must take responsibility for the long-term impact of their activities on its various stakeholders.

The Group's foremost responsibility is to assist its customers – 400,000 corporate and institutional clients and ve million private customers – in reaching their business objectives and nancial goals. Building and maintaining strong customer relationships requires a long-term approach, a genuine understanding of customer needs and constant work to maintain and improve customer satisfaction. In its role as a provider of nancing and as investment manager, the Group's indirect sustainability impact is important.

Responsibility for SEB also entails being an employer that provides equal opportunities for professional development and family-work life balance, and which actively encourages ethnic diversity. The goal is to be the most attractive employer in the

Corporate Responsibility at SEB – Commitments and Priorities

Commitment to ethics

Priorities:

• Emphasising core values (Commitment, Continuity, Mutual Respect, Professionalism).
• Ensuring a strong compliance framework.
• Integrating ethics in management training.

Commitment to customers

Priorities:

• Achieving and maintaining top rank in customer satisfaction.
• Providing products and solutions adapted to our customers different needs.

Commitment to employees

Priorities:

• Having the most motivated employees in relation to our peer group.
• Achieving diversity in our workforce.
• Providing our employees with opportunities for career development, learning and work-life balance.

Commitment to shareholders

Priorities:

• Leading our peer group in terms of fi nancial performance.
• Maintaining our position as a leader in governance reporting.

Commitment to the environment

Priorities:

• Ensuring compliance of SEB's environmental standards in all parts of our operations.
• Engaging with our suppliers on environmental issues.
• Developing new products that live up to the environmental preferences of our customers.
• Reducing SEB's carbon footprint.

Commitment to society

Priorities:

• Contributing to economic development in the societies where we operate.
• Engaging in projects to support entrepreneurship.
• Promoting fi nancial and economic understanding.

nancial sector. Further information on SEB's employees is found on pp 14–15 and Note 9.

Providing a competitive return to shareholders and addressing the challenges posed by climate change are other important aspects of the Group's corporate responsibility efforts. Not least, it is important that SEB ful ls its role as an active corporate citizen.

SEB closely monitors its direct impact on sustainability and further progress was made in 2008. The Group's total energy consumption in buildings was reduced by 14 per cent, while air travel decreased and train travel increased, the latter by 40 per cent. Indicators related to human resources also improved, as shown by the reduced sick leave rate and the improved health index. The share of female managers rose to 44 per cent.

The Group's indirect impact is addressed in a number of ways, and involves adherence to internal policies and guidelines as well as international standards and principles for sustainability. For example, SEB is a member of the United Nations Global Compact and supports the OECD guidelines for Multinational Enterprises. As signatory to the UN Global Compact, SEB has made a commitment to human rights, anti-corruption and sustainable development, and is required to communicate its progress in corporate responsibility on a yearly basis.

Achievements 2008

• SEB published its rst comprehensive Corporate Responsibility Report, in compliance with GRI G3 Guidelines.
• SEB adopted the United Nations Principles for Responsible Investments (PRI) within the category Investment Manager. The Group views this commitment as an important step in contributing to the United Nations efforts to promote good corporate citizenship and to build a more stable, sustainable and inclusive global economy. The adoption of PRI means additional emphasis on environmental, social, and corporate governance issues in the Group's ownership policies and practices.
• SEB assisted the World Bank in issuing its rst Green Bond (see box).

Code of Business Conduct

SEB believes that high ethical standards are of fundamental importance to sustainable banking.

The Group's ethical standards are expressed in its Code of Business Conduct, which has been adopted by the Board of Directors. The Code is a guideline that expresses the values that drive SEB's behaviour and how the Group conducts its business. All employees at SEB are expected to live by these values and each individual is personally accountable for acting ethically.

The Code, which has been developed through participation by employees from across the Group, aims to achieve the following main objectives:

• to describe to employees the responsibilities that come with employment at SEB;
• to describe SEB's standards of business conduct;
• to guide employees on how to resolve potentially dif cult situations;
• to set out procedures for reporting issues relating to the Code.

The Code is available in eleven languages and has also been developed into a customised e-learning tool. It can be found on www.sebgroup.com.

SEB arranges fi rst Green Bond for the World Bank

In 2008, the World Bank issued its fi rst Green Bond to raise funds for "green" projects, i.e. projects that seek to mitigate climate change or help affected people adapt to it. With SEB as the sole lead manager, the bond issue has raised SEK 2.7 billion from several key Scandinavian institutional investors as well as the United Nations Joint Staff Pension Fund. The bonds are denominated in Swedish kronor (SEK) with a maturity of six years.

The Green Bond offering is the fi rst time that the World Bank has offered bonds to raise funds targeted to a specifi c World Bank program. The bond issue is one example of the kind of innovation the World Bank is trying to encourage within its "Strategic Framework for Development and Climate Change", launched in 2008 to help stimulate and coordinate public- and private-sector activity in this area.

Responsibility in lending

As a major provider of nancing to corporate clients, the Group is continuously required to recognize sustainability aspects in lending. Environmental criteria have been included in the Group's credit policy since 1997. In 2004, the perspective was broadened to include other aspects of corporate responsibility such as human rights, international labour standards and reputational risk. A special section of the credit policy emphasizes SEB's social responsibility, beyond issues such as con dence in the customer, the credit purpose and environmental matters.

SEB was the rst Nordic bank to adopt the Equator Principles (EP) on project nancing, a framework for the nancial industry to manage social and environmental issues in project nancing. All SEB employees involved in transactions with existing or potential EP implications have the training and understanding required to apply the Principles. SEB's project nance activities above the EP threshold amounted to 5 transactions in 2008.

Responsibility in investments

As an investment manager, SEB seeks to promote sound principles for corporate governance and corporate responsibility. The Group has adopted the United Nations Principles for Responsible Investments (PRI) within the category Investment Manager.

The Group's view is that a well thought-out corporate responsibility strategy builds long-term competitiveness and enhances a company's ability to deliver attractive investment returns. The Group expects each company in which SEB holds ownership stakes to abide by local law and international conventions and agreements, placing particular emphasis on the following international principles:

• The United Nations Universal Declaration of Human Rights.
• The International Labour Organization's Fundamental Conventions.
• The OECD guidelines for Multinational Enterprises.
• The United Nations Code of Global Compact.

If SEB discovers that a company may have violated these principles, this can potentially lead to a sale of the investment stake.

Ethical funds

SEB offers a broad range of asset management products that apply ethical or social responsibility investment criterias. These products have been designed to meet a variety of concerns and responsible investment preferences among SEB's customers. Three categories of ethical funds are currently offered: funds that exclude companies according to negative screening criteria (such as weapons and gambling), funds that apply the Global Ethical Standard screening criteria (excludes companies that have violated international standards for human rights and corruption, for example) and funds that only invest in companies that are leaders in corporate responsibility (positive screening). In total, SEB manages SEK 3.3bn in ethical funds and SEK 2.8bn in institutional portfolios with an ethical pro le.

Commitment to shareholders

SEB's overriding goal is to create long-term shareholder value, whilst also meeting the expectations of other stakeholders. Key to achieving this objective is a strong focus on nancial performance and risk management/internal control, combined with excellence in corporate governance and reporting. The Group's risk management processes and internal audit, compliance and risk control functions are presented in the sections on Corporate Governance on pp 52 – 60 and Risk and Capital Management on pp 36 – 51.

Providing accurate and timely information to SEB's shareholders and the investor community at large is important. All press releases, nancial reports, presentations and other relevant information are published on the Group's website. Extensive investor communication is performed at investor road-shows, in one-on-one meetings and through participation in nancial market conferences. The Group's communication policy, which is reviewed annually, is based on the disclosure rules of the OMX Nordic Exchange and other relevant rules and recommendations.

Environmental impact

SEB strives to reduce the negative impact its operations may have on the environment. This applies to the direct impact of the Group's daily business activities as well as to the indirect effects of lending and asset management operations. SEB is a signatory of the International Chamber of Commerce Business Charter for Sustainable Development since 1996 and supports the United Nations Environment Programme Finance Initiative.

Equator Principles: social responsibility in project fi nancing

The highly specialized fi eld of project fi nance plays an important role in fi nancing development throughout the world. Typically, project fi nancing is used for large, complex and expensive installations such as power plants, refi neries, waste treatment plants and transportation infrastructure. The lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure.

To ensure that the projects SEB fi nances are developed in a socially responsible manner and refl ect sound environmental management practices, the Group has adopted the Equator Principles (EP), a voluntary set of fi nancial industry guidelines to determine, assess and manage environmental and social risks in project fi nancing. Approximately 70 fi nancial institutions from nearly 30 countries have signed the principles. As of 2008, all of the Group's project fi nancings reported under EP had been undertaken in OECD countries.

For more information about corporate responsibility at SEB, please consult the Corporate Responsibility Report at www.sebgroup.com

Direct impact

SEB's environmental management system is governed by an Environmental Policy adopted by the President and CEO. Heads of all divisional and business areas are responsible for day-to-day implementation of the Policy. The SEB Corporate Responsibility Committee oversees the work. This includes quarterly reporting and analysis of a range of environmental performance indicators. The Group's key performance indicators are presented on p. 19.

Indirect impact

SEB strives to increase awareness of the indirect effects and responsibilities that the Group's credit-granting activities have on the environment and on sustainable development. Assessment of environmental risks, and its potential impact on a customer's creditworthiness, is integrated into the Group's Credit Policy. Broader sustainability aspects also in uence the credit decision, such as possible negative environmental and social impact.

However, SEB's potential indirect impact on environmental sustainability is larger on the positive side – as a provider of nancial solutions for environmentally-friendly development and investments – than on the negative. The Green Car Loan, which offers attractive credit nancing for environmentally friendly cars, and a range of responsible investment funds, can illustrate SEB's ambition to offer products speci cally tailored for sustainable investment.

Social commitment

SEB is dedicated to making a positive contribution to local communities. The Group is engaged in a number of selected social partnership activities, in addition to its contributions to programs such as the United Nations Global Compact mentioned above.

Two types of projects are supported. The rst group include projects that are tightly linked to SEB's business and whose purpose is to build and strengthen relationships with present and potential customers. These projects mainly focus on entrepreneurship. Examples include SEB's support for the Founders Alliance and Entrepreneur of the Year award in Sweden and the Business Plan Tournament in Lithuania.

The second group is geared to the key themes of youth, education, gender equality, ethnic diversity, sports and culture. Examples include the Mentor program in Sweden, Lithuania and Germany and the SEB Next Generation program in partnership with the Swedish Tennis Federation. The latter is an effort to support young tennis talents and is the largest Swedish youth tennis program ever launched.

SEB's nancial support for social projects amounted to SEK 18.3m in 2008. In addition, SEB employees are actively involved in many of the projects, sharing their experience and knowledge.

Promoting economic understanding and fi nancial awareness As a large nancial institution, it is natural for SEB to share its expertise to enhance economic understanding and promote nancial awareness. The Group's economists and strategists actively participate in the economic policy debate and regularly appear in the media; other Group specialists provide advice and analysis to assist entrepreneurs wishing to set up a business and help households make informed decisions. As part of SEB's efforts to inform customers and the general public on economic issues, the Group produces macroeconomic and nancial reviews that are widely distributed and frequently referred to by media.

In support of children's rights and youth advancement

SEB expands Mentor project

Since 1997, SEB has co-operated with Mentor Sweden, a non-profi t foundation engaged in anti-violence and drug-prevention activities among youth. The organization, which was founded in 1994, is active in Sweden, Germany, the UK and the US, and several other countries.

Mentor focuses on the role of adults in youth formation and advancement. The organization's programmes enables participating youths to meet with adult role models in a variety of situations. The co-operation provides SEB employees with an opportunity for both personal development and for making a social contribution.

Mentor offers three principal programmes:

• The Mentorship Programme creates pairs of high school students and active adults, who meet twice a month for a period of one year. The pairs meet individually and are given a number of assignments to work with during the year. In 2008, 28 SEB employees were mentors, a considerable increase from 2007.
• The Parental Programme is designed to give parents the tools they need in order to develop and support their children prior to and throughout their teens, focusing on communications and dealing with confl icts, among others. SEB offers all its employees to take part in the course, which runs over 10 weeks and fi ve sessions. 200 SEB employees participated during 2008.
• During 2008, SEB in Sweden and Mentor developed a new programme, Mentor Motivator, focused on increasing the motivation for higher education. This programme involves having youths and adults meet at the workplace on three occasions, with the specifi c purpose of solving a work-related task. A pilot project engaging a

group of SEB employees was performed in late 2008, with a view to expand the programme during 2009. The knowledge about the fi nancial industry increased among the participating students and gave them a broader understanding of life after school.

In Lithuania, the Group's Mentor support was expanded with both the Mentoring Programme and Parenting Programme. 20 SEB employees participated in the Mentoring Programme. In addition, the SEB President & CEO was engaged as a speaker at a seminar about motivation and goals in life at a school in Stockholm.

To date, the Mentorship Programme has given 350 young people in Sweden and Lithuania support by a mentor from SEB.

Promotion of UNICEF campaigns to SEB customers

To use the Internet as a fund-raising tool is increasingly important to UNICEF's global aid contribution in support of exposed children and youths. As an affi liate to UNICEF, SEB promotes UNICEF's campaigns via the Group's Swedish retail customer service on the Internet.

Over the past three years, the collaboration has helped to generate SEK 1.4m for the world organization. This makes SEB's site the highest revenue-generating affi liated web site of Swedish UNICEF.

In 2008, more than SEK 0.5m in donations were generated through the web site. The largest donations were made in respect of UNICEF's campaigns for children and families in Burma.

SEB also made donations directly to UNICEF in the form of Schoolin-a-Box kits. A School-in-a-Box kit supports a classroom of 80 students in any setting.

	2008	2007	2006
Human resources related indicators
Sick leave rate, share of ordinary working hours	3.5%	3.9%	4.2%
Health index, share of staff with >5 days sick leave in past 12 months	54.8%	57.0%	59.2%
Diversity index, share of female managers	44.0%	40.1%	38.3%
Number of full-time equivalents (FTE)	21,291	19,506	19,597
Environmentally certifi ed cars, share of company car fl eet	22.0%	13.0%	10.0%
Total paper consumption
Graphic paper (kg)	805,360	609,796	697,201
Supplies paper (kg)	887,811	842,956	872,849
Total (kg)	1,693,171	1,452,752	1,570,050
- where of environmentally labelled (kg)	1,058,798	589,317	623,124
Real estate-related indicators
Total energy consumption in buildings, MWh	98,437	114,569	128,840
CO2 emissions from buildings, kg	21,490,586	n/a	n/a
Waste consumption, kg	2,150,108	1,908,699	1,460,075
- whereof recycled, kg	729,344	869,482	662,080
Total water consumption in buildings, m3	196,925	n/a	n/a
Facilities, number of m2	360,472	324,726	339,178
Travel-related indicators
Air travel, km	51,527,157	54,490,216	45,148,074
Train travel, km	4,338,610	3,089,600	2,169,130
CO2 emissions from travel, kg	7,584,796	8,020,960	7,042,942
Social commitments
Financial support of social projects, SEKm	18.3	18.2	18.0

The SEB share development in 2008

In 2008 the SEB Class A share dropped by 63 per cent. Earnings per share were SEK 14.66 (19.97). The Board proposes no dividend for 2008 (SEK 6.50 in 2007).

Share capital

The SEB share is listed on the Nasdaq OMX Stockholm Stock Exchange. The share capital amounts to SEK 6,872m, distributed on 687.2 million shares. The Class A share entitles to one vote and the Class C share to 1/10 of a vote.

Stock Exchange trading

2008 was the weakest year to date on the Nasdaq OMX Stockholm Stock Exchange and the Swedish OMX General Index went down by 42 per cent. The value of the SEB share decreased by 63 per cent, while the European Banking Index fell by 64 per cent. During the year, the total turnover in SEB shares amounted to SEK 190bn. SEB thus remained one of the most traded companies on the Stockholm Stock Exchange. Market capitalisation by year-end was SEK 41.6bn.

Dividend policy

The size of the dividend in SEB is determined by the economic environment as well as the nancial position and growth potential of the Group. SEB strives to achieve a long-term growth based upon the capital base for the nancial group of undertakings. SEB has traditionally had the objective that the annual dividend per share shall, over a business cycle, correspond to around 40 per cent of earnings per share.

SEB maintains this long-term dividend policy, although future dividends will be assessed in the light of prevailing economic conditions and the Bank's earnings and capital position.

To facilitate foreign ownership the Class C share was introduced at the end of the 1980s. The trading volumes of the Class C share are very limited and the number of Class C shares only constitutes 3.5 per cent of the share capital of the Bank. Due to this, the prerequisites for creating only one class of shares, thus giving the Class C shares the same rights as the Class A shares, have been examined. The examination has shown that there are signi cant practical dif culties to implement such a structure.

According to the Swedish Companies Act, a proposal that the Class C shares should carry the same rights as the Class A shares requires that the proposal is supported by shareholders representing at least 2/3 of the votes cast and shares represented at a General Meeting of Shareholders as well as by 9/10 of the Class A shares represented at the General Meeting. Furthermore, approval from a majority of all Class A shareholders is required. The reason for this is that a resolution to this effect would lead to a certain dilution for the Class A shareholders. Since the number of shareholders in SEB is large, obtaining such approval would be a drawnout and complicated procedure.

SEB share

Data per share	2008	2007	2006	2005	2004
Basic earnings, SEK	14.66	19.97	18.72	12.58	10.83
Diluted earnings, SEK	14.65	19.88	18.53	12.47	10.82
Shareholders' equity, SEK	121.96	111.97	98.98	84.84	77.31
Adjusted shareholders' equity	134.10	127.24	112.66	96.44	85.66
Net worth, SEK	135.00	127.44	115.90	102.19	89.50
Cash fl ow, SEK	–28.97	177.15	6.32	21.07	4.95
Dividend per A and C share, SEK	0.00	6.50	6.00	4.75	4.35
Year-end market price
per Class A share, SEK	60.75	165.50	217.50	163.50	128.50
per Class C share, SEK	55.00	154.00	209.00	158.00	124.50
Highest price paid during the year
per Class A share, SEK	171.00	250.50	220.00	165.50	131.00
per Class C share, SEK	159.50	240.00	212.50	159.50	126.50
Lowest price paid during
the year
per Class A share, SEK	51.00	156.50	152.50	122.50	99.50
per Class C share, SEK	51.00	147.00	145.50	118.00	92.50
Dividend as a percentage of
result for the year, %	0.00	32.6	32.0	37.8	40.2
Yield, %	0.00	3.9	2.8	2.9	3.4
P/E	4.1	8.3	11.6	13.0	11.9
Number of issued shares, million
average	684.8	682.0	673.3	667.8	679.8
at year-end	685.0	683.5	678.3	668.8	668.5

Distribution of shares by size of holding

	No. of		No. of
Size of holding	shares	Per cent	shareholders
1 – 500	35,954,112	5.2	233,338
501 – 1,000	18,800,773	2.7	25,369
1,001 – 2000	18,404,405	2.7	12,828
2,001 – 5,000	21,203,936	3.1	6,802
5,001 – 10,000	11,720,197	1.7	1,640
10,001 – 20,000	8,456,798	1.2	601
20,001 – 50,000	11,110,797	1.6	359
50,001 – 100,000	11,188,818	1.6	153
100,001 –	550,316,795	80.1	311
	687,156,631	100.0	281,401

Source: VPC / SiS Ägarservice.

Basic and diluted earnings

Share capital, December 31, 2008

	687,156,631	665,419,374	100	100
C	24,152,508	2,415,251	3.5	0.4
A	663,004,123	663,004,123	96.5	99.6
Share series	Number of shares	Number of votes	capital	Percentage of votes

Each Series A-share entitles to one vote and each Series C-share to 1/10 of a vote.

The SEB share on the Stockholm Stock Exchange

	2008	2007	2006	2005	2004
Year-end market capitalisation, SEKm	41,606	113,447	149,251	115,026	90,382
Volume of shares traded, SEKm	190,011	252,303	162,707	104,372	86,293

Change in share capital

Skandinaviska Enskilda Banken's share capital has changed

as follows since the Bank was started in 1972:

					Share
			Change in no.	Accumulated	capital
Year	Transaction	SEK	of shares	no. of shares	SEKm
1972				5,430,900	543
1975	Rights issue 1:5	125	1,086,180	6,517,080	652
1976	Rights issue 1:6	140	1,086,180	7,603,260	760
1977	Split 2:1		7,603,260	15,206,520	760
1981	Rights issue 1B:10	110	1,520,652	16,727,172	837
1982	Bonus issue 1A:5		3,345,434	20,072,606	1,004
1983	Rights issue 1A:5	160	4,014,521	24,087,127	1,204
1984	Split 5:1		96,348,508	120,435,635	1,204
1986	Rights issue 1A:15	90	8,029,042	128,464,677	1,2841)
1989	Bonus issue 9A+1C:10		128,464,677	256,929,354	2,569
1990	Directed issue2)	88.42	6,530,310	263,459,664	2,635
1993	Rights issue 1:1	20	263,459,664	526,919,328	5,269
1994	Conversion		59,001	526,978,329	5,270
1997	Non-cash issue	91.30	61,267,733	588,246,062	5,882
1999	Rights Issue3)	35	116,311,618	704,557,680	7,046
2005	Reduction of
	the share capital		–17,401,049	687,156,631	6,872

1) The recorded share capital at 31 December, 1986 was still SEK 1,204m, since the proceeds from the rights issue were not paid in full until early 1987.

2) The issue was directed at the member-banks of Scandinavian Banking Partners. Through splits in 1977 (2:1) and 1984 (5:1), the nominal value of the shares has been changed from SEK 100 to SEK 10.

3) According to the instructions of the Financial Supervisory Authority, subscribed shares that have been paid will not be registered as share capital in the balance sheet until the rights issue has been registered (which took place in January, 2000).

Report of the directors

Financial review of the Group

SEB's underlying performance remained strong throughout 2008, with intense customer activities, higher business volumes and increased market shares. Operating income improved by 2 per cent and the operating pro t was the third largest to date.

SEB's 2008 result was negatively affected by the extreme disruption in the global nancial markets and the sharp deterioration of the real economy in the second half of the year. The worsened economic conditions in the countries where SEB operates led to increased provisions for credit losses, especially in the Baltic countries. Net nancial income decreased due to lower income from capital market-related debt instruments, including a loss of SEK 0.5bn in connection with the bankruptcy of Lehman Holdings, Inc. Overall lower activities on the capital markets and falling values on equities led to a decrease in net commission income.

2008 was a year of few organisational changes:

• In January 2008, the acquisition of the KAM Group (Key Asset Management) was nalised.
• In the summer of 2008, SEB acquired GMAC Commercial Finance, the largest independent factoring company in Poland. During 2008 SEB's 24.8 per cent share of NSCD (VPC) and 41.5 per cent share of PKK (Pankade Kaardikeskus) were divested.
• During the autumn of 2008 SEB initiated an organisational change in its German operations. Retail Banking is separated from Merchant Banking within the legal entity SEB AG, thereby creating exibility and better opportunities for bene ting from the changing German banking market.

Result and profi tability

SEB's operating pro t for 2008 amounted to SEK 12,471m (17,018), a decrease of 27 per cent compared with 2007. Net pro t decreased by 26 per cent, to SEK 10,050m (13,642).

Income

Total operating income increased to SEK 41,140m (40,440). A weaker Swedish krona affected income positively by SEK 509m.

Net interest income improved by 17 per cent, to SEK 18,710m (15,998). Higher volumes contributed SEK 1,699m, or 60 per cent, of the increase; average deposit volumes grew by 9 per cent and

	Per cent1)	SEKm
Sweden	65	8,344
Norway	9	1,172
Denmark	4	556
Finland	4	554
Germany	6	754
Estonia	3	309
Latvia	3	391
Lithuania	6	717
1) Excluding other and eliminations.

average lending volumes to the public by 11 per cent compared with 2007. The net effect of lending and deposit margins was an increase in net interest income by SEK 217m. Falling interest rates during the last quarter of the year impacted deposit margins negatively, while lending margins increased. Customer-driven net interest income grew by 13 per cent compared with 2007. The lower short-term rates at the end of the year, higher resets of coupons on the bond investment portfolio and higher net interest on equity contributed positively to net interest income, by SEK 796m.

Net fee and commission income decreased by 11 per cent, to SEK 15,254m (17,051), mostly due to declining income from advisory services and securities transactions both within the retail and institutional business. Payment-related income increased. Performance fees related to the asset management business increased to SEK 655m (555).

Net nancial income decreased to SEK 2,970m (3,239), due to lower income from capital market-related debt instruments, including a SEK 540m loss in connection with the bankruptcy of Lehman Brothers. Valuation losses on the xed-income investment portfolio amounted to SEK 1,069m (1,769). Net nancial income from SEB's foreign exchange business grew by 43 per cent, to SEK 3,086m, due to high customer activity.

Net life insurance income decreased by 19 per cent, to SEK 2,375m (2,933). Positive sales growth could not compensate for decreased unit-linked values and provision for guarantees for Nya Liv. The provision is mainly market value-related and recoverable, if future investment returns are adequate to meet guaranteed bonus levels over time. A complete description of Life's operations, including changes in surplus values, is found in " Additional information" on www.sebgroup.com.

Net other income rose to SEK 1,831m (1,219) due to a capital gain of SEK 780m from the sale of NSCD (VPC), bringing the total 'one off' capital gain to SEK 839m (110) including the sale of PKK.

Expenses

Total operating expenses amounted to SEK 25,407m (23,194). On a comparable basis operating expenses were up by 2 per cent, i.e. excluding the net increased effects from redundancy costs , at SEK 768m, pension provisions, SEK 374m, investments in One IT Roadmap, SEK 318m, and acquisitions, SEK 246m. If also the SEK 293m negative effect from the weaker Swedish krona is considered, operating expenses were at compared with 2007. The costef ciency gains during 2008 amounted to SEK 483m, resulting in an accumulated gain of SEK 1,029m from the start of the costmanagement programme in 2007.

Income statement on quarterly basis – SEB Group

2008:4	2008:3	2008:2	2008:1	2007:4
5,513	4,553	4,421	4,223	4,375
3,790	3,754	3,909	3,801	4,129
1,723	247	1,161	–161	420
516	504	642	713	766
1,172	163	270	226	345
12,714	9,221	10,403	8,802	10,035
–4,597	–3,752	–3,993	–3,899	–3,787
–1,968	–1,820	–2,098	–1,756	–1,782
–400	–398	–354	–372	–359
–6,965	–5,970	–6,445	–6,027	–5,928
2		1	3	787
–1,723	–725	–452	–368	–313
4,028	2,526	3,507	2,410	4,581
–519	–641	–699	–562	–824
3,507	1,886	2,809	1,848	3,757
1	4	3	1	5
3,506	1,882	2,806	1,847	3,752
5.12	2.75	4.10	2.70	5.49

Key fi gures

	2008	2007	2006	2005	2004
Return on equity, %	13.1	19.3	20.8	15.8	14.7
Return on total assets, %	0.42	0.63	0.64	0.48	0.51
Return on risk-weighted assets, %	1.13	1.68	1.71	1.31	1.32
Basic earnings per share, SEK	14.66	19.97	18.72	12.58	10.83
Diluted earnings per share, SEK	14.65	19.88	18.53	12.47	10.82
Cost/income ratio	0.62	0.57	0.58	0.65	0.65
Credit loss level, %	0.30	0.11	0.08	0.11	0.10
Reserve ratio for impaired loans, %	66.3	76.1	75.1	77.7	72.2
Level of doubtful loans, %	0.35	0.18	0.22	0.22	0.31
Total capital ratio, incl net profi t, % 1)	10.62	11.04	11.47	10.83	10.29
Tier I capital ratio, incl net profi t, % 1)	8.36	8.63	8.19	7.53	7.76
Risk-weighted assets, SEKbn 1)	986	842	741	705	570
Number of full time equivalents, average	21,291	19,506	19,672	18,948	17,772
Number of e-banking customers, thousands	3,190	2,911	2,597	2,299	1,953
Assets under custody, SEKbn	3,891	5,314	5,234	4,194	2,583
Assets under management, SEKbn	1,201	1,370	1,262	1,118	886

Staff costs rose by 9 per cent, to SEK 16,241m (14,921). This was mainly due to salary adjustments, an increased number of employees and higher pension costs arising from falling return on plan assets and changed actuarial assumptions regarding longevity. Redundancy costs during the year amounted to SEK 1,050m (281), of which SEK 600m for the net reduction of 500 full time equivalents (FTE) in 2009. The costs of SEK 71m for the long-term incentive programmes in 2007 turned into a gain of SEK 67m for 2008. Short-term incentive remuneration (including social bene t charges) was reduced by 30 per cent, to SEK 2,235m (3,172). The average number of FTE's increased by 1,785 to 21,291 (19,506), of whom more than 1,000 following acquisitions consolidated during 2008.

Other expenses increased by 10 per cent, to SEK 7,642m (6,919),

mostly due to higher IT costs including investments in One IT Roadmap and ef ciency projects as well as costs for premises, following the divestment of SEB's of ce premises in the Baltic countries at the end of 2007.

Credit losses

The Group's net credit losses, including changes in the value of assets taken over – in reality to a high degree provisions rather than write-offs – amounted to SEK 3,268m (1,016). The credit loss level rose to 0.30 per cent (0.11)

Provisions for credit losses in the Baltic countries rose to SEK 1,775m (354) as SEB continued to increase the collective reserves in Estonia, Latvia and Lithuania. The net credit loss level in the Baltic countries was 1.28 per cent (0.43).

Cost-management programme, accumulated SEK 1,029m 2008 vs. 2007, SEKm 2008

The cost-efficiency gains during 2008 amounted to SEK 483m. On a comparable basis – i.e. excluding the net effects from redundancy costs, pension provisions, investment in "One IT Roadmap" and acquisitions – total expenses increased by 2 per cent.

The cost-efficiency gain since the programme started in 2007 was 1,029m.

Provisions in Merchant Banking were SEK 904m (326), including the provision for Lehman Brothers' bankruptcy ling of SEK 137m. Provisions in the Card business increased to SEK 401m (134). Net life ins Net nancial in

Impaired loans increased during the year and amounted to SEK 13,911m (8,391), corresponding to a level of impaired loans of net 0.35 per cent and gross 0.84 per cent. The total reserve ratio was 66 per cent (76). The level of impaired loans in the Baltic countries was net 1.33 per cent and gross 3.05 per cent. Net Fee com Net interest

Tax costs

Total tax amounted to SEK 2,421 (3,376). The relatively low total tax rate of 19.4 per cent was due to tax free capital gains and onetime effects following the reduced Swedish corporate tax rate, to 26.3 per cent from 28.0 per cent.

Financial structure

The balance sheet totaled SEK 2,511bn (2,344) as per 31 December 2008. Net of currency effects of SEK 209bn, the balance sheet decreased to SEK 2,302bn. Lending to the public increased by 21 per cent and deposits from the by public by 12 per cent.

Reclassifi cation disclosure, fi xed-income securities portfolios

Effective as of 1 July 2008, SEB decided to reclassify fi nancial assets in the Held-for-Trading and Available-for-Sale categories as Loans and Receivables. Assets held for trading, no longer held for the purpose of selling in the near term, were reclassifi ed based on the Group's view that the deterioration of the world's fi nancial markets during the third quarter of 2008 represented the rare circumstance required for such a reclassifi cation. The Group had the intention and ability to hold reclassifi ed available for sale assets for the foreseeable future or until maturity.

The carrying amount of the reclassifi ed assets, excluding accrued coupon interest, was SEK 95bn upon reclassifi cation on 1 July and SEK 99bn as of 30 September. As of 31 December, the carrying amount was SEK 107bn. The changes in carrying amount between July and December are mainly due to currency effects.

The fair value of the reclassifi ed assets, excluding accrued coupon interest, was SEK 95bn upon reclassifi cation on 1 July and SEK 100bn on 31 December. Reclassifi cation was not permitted during 2007.

The effects of the asset transfers, based on the fair values of the reclassifi ed assets as of 1 July, are presented in the table below.

Reclassifi cation values

SEKm	Loans and receivables	Available for sale	Held for trading
Structured credits	49,029	–43,412	–5,617
Financial institutions	40,458	–35,333	–5,125
Covered bonds, other	5,758	–4,087	–1,671
	95,245	–82,832	–12,413

The Group's estimate of the principal amounts (undiscounted cash fl ows) expected to be recovered from the reclassifi ed fi nancial assets is presented in the table below. The expected cash fl ows are to a large extent foreign currency-denominated, principally in euros (EUR 6bn) and US-dollar (USD 3.6bn). In addition to the principal amounts, SEB expects all interest payments to be paid in full. Of the SEK 95bn in fi nancial assets reclassifi ed as of July 1, SEK 89bn had fl oating rate and SEK 6bn had fi xed rate coupons. The effective interest rate spreads

Assets

The most important asset item on the balance sheet consists of loans to the public, which rose to SEK 1,297bn (1,067) during the year. Loans to credit institutions increased to SEK 266bn (263).

Total credit exposure, including contingent liabilities and derivatives contracts, was SEK 1,934bn (1,552) (see further pp. 38–43 in the Risk and Capital Management section and Note 44).

Financial assets within insurance operations are classi ed as nancial assets at fair value. Investment contracts, where the insurance policyholders carry the risk (unit-linked insurance), amounted to SEK 114.4bn (135.9). Insurance contracts (traditional insurance operations) amounted to SEK 94.8bn (88.0).

Fixed-income securities portfolios

On 31 December 2008, SEB held total net positions in xed-income securities of SEK 355bn (331) for investment, treasury and client trading purposes. Holdings consist mainly of covered bonds, bonds issued by nancial institutions and asset-backed securities.

The market value of the trading securities of the SEB Group, classi ed as nancial assets at fair value, was SEK 161.6bn (348.9). These portfolios mainly consist of liquid and pledgeable securities in SEK, EUR, USD and other major currencies. The change during 2008 was affected by the reclassi cation of Held-for-Trading securities of SEK 15bn and Available- for-Sale securities of SEK 92bn to Loans and Receivables.

for fl oating rate fi nancial assets were between 0.25 and 1.90 per cent above interbank offered rates (based on the fair value of the reclassifi ed instruments). The effective interest rates on fi xed-coupon reclassifi ed fi nancial assets were between 3.0 and 6.0 per cent.

Expected cash fl ows

SEKm	<1 year	1– 2 years	2–5 years	>5 years
Structured credits	3,628	3,789	12,330	32,027
Financial institutions		4,913	32,331	4,463
Covered bonds, other		40	4,110	1,724

The table below shows the Group's recognition of gains, losses, income and expenses in the income statement in respect of the reclassifi ed fi nancial assets. The interest income is gross and excludes portfolio funding costs. The effect from foreign exchange does not take into account the off-setting effect from fi nancing the portfolio.

Profi t or loss effect

	2008	2008	2007
SEKm	After reclassifi cation	Before reclassifi cation
Net interest income	1,959	1,811	3,900
Fair value change		–800	–1,344
Foreign exchange	13,699	8,176	837
Impairment	–	–	–

The accumulated fair value loss that the Group, upon reclassifi cation, had recognised in the revaluation reserve in equity on Available-for-Sale assets amounted to SEK 1,967m.

If the Group had not reclassifi ed fi nancial assets during the year, fair value losses amounting to SEK 1,623m would have been recognised in profi t or loss, of which SEK 460m in the third quarter and SEK 1,163m in the fourth quarter. SEK 5,252m would have been recognised in the revaluation reserve in equity, of which SEK 1,499m in the third quarter and SEK 3,753m in the fourth quarter.

The SEK 133bn investment portfolio of Merchant Banking remained negatively affected by the dislocations in the credit markets. The valuation losses in 2008 amounted to SEK 3,976m (2,467), of which SEK 1,069m (1,769) was taken over income and SEK 2,907m (698) was taken over equity. SEK 2,530m (1,682) of the mark-to-market loss referred to holdings in asset-backed securities and SEK 1,446m (785) to other nancial instruments, mainly bonds issued by nancial institutions. See further box on page 25 and the Risk and Capital Management section on pp 36-51.

Derivatives

At year-end 2008, the notional amount of the Group's derivatives contracts totalled SEK 9,007bn (7,145). The volumes are primarily driven by offering clients derivatives products for management of their nancial exposures. The Group manages the resulting positions by entering offsetting contracts in the market place. As a consequence, the mix of derivatives as detailed in Note 45 largely re ects the demand of the Group's customer base. The customer and market making transactions form part of the trading book and are valued at market on a continuous basis.

The Group also uses derivatives for the purpose of protecting the cash- ows and fair value of its nancial assets and liabilities from interest rate uctuations. Also these contracts are accounted for at market value.

The major portion of the Group's derivatives engagements is related to contracts with short maturity, which are dominated by interest- and currency-related forwards. A minor portion consists of exchange-traded derivatives contracts, where pro ts and losses are continuously settled on a cash basis.

Positive market values imply a counterparty risk; to re ect also future uncertainty in market conditions, a credit risk equivalent is calculated. Depending upon the type of contract, currency and remaining maturity, an add-on to the current market price is calculated. The credit risk equivalent values are included in the Group's overall credit exposure.

Close-out netting agreements (giving the ability to offset positive market values against negative market values) are disregarded in accounting, but form a very important part of the Group's credit risk mitigation strategy. In order to reduce the counterparty exposure in event of default, SEB strives to enter into close-out netting agreements as well as collateral agreements with all major derivatives counterparties. The counterparties are mainly Swedish and international banks of very high quality. On a net basis, the total credit risk equivalent at year-end was SEK 130.4bn (74.6). Further details on exposures by industry are found in Note 44.

Intangible fi xed assets, including goodwill

At year-end 2008 intangible assets totalled SEK 19.4bn (16.9), the majority consisting of goodwill.

The most important goodwill items were related to the following: The acquisition of the Trygg-Hansa group in 1997 (SEK 5.7bn), the Group's investments in banking activities in the Baltic countries (SEK 2.3bn), Ukraine (SEK 0.5bn) and Russia (SEK 0.1bn) and investments in the credit card business in Norway and Denmark, SEK (1.2bn). Goodwill items are not amortised, but are subject to a yearly impairment test.

Deferred acquisition costs in insurance operations amounted to SEK 3.4bn (3.0).

Further information is found in Note 27.

Deposits and borrowing

The nancing of the Group consists of deposits from the public (households, companies etc.), loans from Swedish, German and other nancial institutions and issues of money market instruments, covered bonds, other types of bonds and subordinated debt.

Deposits and borrowing from the public increased by SEK 91bn, to SEK 841bn (750). Deposits by credit institutions increased by SEK 8bn, to SEK429bn (421).

Liabilities in insurance operations

At year end, liabilities in insurance operations amounted to SEK 211.1bn (225.9). Out of this, SEK 115,1bn (135.9) was related to investment contracts (unit-linked insurance) and SEK 96.0bn (90.0bn) to insurance contracts (traditional insurance).

Total equity

Total equity at the opening of 2008 amounted to SEK 76.7bn. In accordance with a resolution of the Annual General Meeting in April 2008, SEK 4,451m (4,079) of this was used for dividend purposes including dividend on repurchased shares. At year-end 2008, total equity amounted to SEK 83.7bn.

Capital adequacy

The SEB Group is a nancial group that comprises banking, nance, securities and insurance companies. The capital adequacy rules apply to each individual Group company that has a licence to carry on banking, nance or securities operations as well as to the consolidated nancial group of undertakings. Similarly, Group companies that carry on insurance operations have to comply with capital solvency requirements.

The consolidated SEB Group should also comply with capital requirements concerning combined banking and insurance groups (" nancial conglomerates").

Composition of capital base

The capital base of the nancial group of undertakings was SEK 104.7bn (93.0) at year-end 2008. Tier I capital amounted to SEK 82.5bn (72.7).

Tier I capital consists of total equity plus minority interests, after deduction for intangible assets (mainly acquisition goodwill), deferred tax claims and the dividend proposed by the Board. Adjustments should be made where capital adequacy regulation differs from how the balance sheet is prepared, speci cally as concerns hedge accounting and surplus values in Available-for-Sale portfolios. Certain subordinated debt issues can be included as core capital contribution, within regulatory-de ned limits. SEB could include SEK 12.4bn (10.9) of such debt in the Tier I capital.

In addition to Tier I capital, the capital base may include subordinated debt up to maximum 100 per cent of Tier I capital.

Investments in insurance companies made before 20 July 2006 (such as the acquisition of the Trygg-Hansa group in 1997 and the acquisition of Codan Pension in 2004, totalling SEK 10.6bn) are deducted from the capital base. A further deduction of SEK 0.2bn for investments in other companies outside the nancial group of undertakings was made in equal parts from Tier I and Tier II capital.

Provisions and value adjustments for credit exposures reported by SEB according to the Basel II Internal Rating Based approach fall short of expected losses on these exposures, and the difference of SEK 2.3bn is deducted in equal parts from Tier I and Tier II capital. A corresponding excess would, up to a certain limit, be added to the Tier II capital.

A deduction from the capital base of SEK 0.9bn (0.8) is also made for pension surplus values, except for such indemni cation as prescribed in the Swedish Act on safeguarding of pension undertakings.

Capital position

As per 31 December 2008, Basel II risk-weighted assets (RWA) amounted to SEK 818bn, which would represent a Tier I capital ratio of 10.1 per cent and a total capital ratio of 12.8 per cent.

Adjusted for the supervisory transitional rules during the rst Basel II years, SEB reported RWA of SEK 986bn (842), a Tier I capital ratio of 8.4 per cent (8.6) and a total capital ratio of 10.6 per cent (11.0). The lowering in 2008 of Basel II implementation oors (from 95 to 90 per cent of previous requirements) is re ected in these ratios.

RWA calculated according to the previous (Basel I) regulation would give capital ratios of 7.3 and 9.3 per cent, respectively. Riskweighted assets (Basel I) have grown by 26 per cent, or SEK 235bn. Currency effects contributed SEK 80bn.

The combined capital requirements for the SEB nancial conglomerate were SEK 88,3bn (75.9), while the capital resources amounted to SEK 117.3bn (104.4).

Further information about capital adequacy and capital base is found in the Risk and Capital Management section on pages 36–51 and in Note 49.

New capital target

The Board has decided on a new Tier I capital ratio target of 10 per cent for SEB, when the Basel II framework is fully implemented without transitional oors.

Rating

In December 2008, Moody's changed its outlook from stable to negative, but reaf rmed SEB's long-term Aa2 rating in February. In February 2009, Fitch Ratings af rmed its A+ rating for SEB, with maintained stable outlook. Standard & Poor's lowered its long-term rating for SEB to A, but with a stable outlook. DBRS rates SEB's long-term rating at AA (low) with a stable outlook.

The table shows the current ratings of SEB (February 2009).

Rating Moody's Outlook Negative (Feb. 2009) Standard & Poor's Outlook Stable (Feb. 2009) Fitch Outlook Stable (Feb. 2009) DBRS Outlook Stable (Feb. 2009) Short Long Short Long Short Long Short Long P–1 Aaa A–1+ AAA F1+ AAA R–1 (high) AAA P–2 Aa1 A–1 AA+ F1 AA+ R–1 (middle) AA (high) P–3 Aa2 A–2 AA F2 AA R–1 (low) AA Aa3 A–3 AA– F3 AA– R–2 (high) AA (low) A1 A+ A+ R–2 (middle) ^A A2 ^{A A} R–2 (low) BBB A3 A– A– R–3 BB Baa1 BBB+ BBB+ R–4 B Baa2 BBB BBB R–5 CCC CC C Baa3 BBB– BBB– D D

Dividend

The size of SEB's dividend is determined by the economic environment as well as the nancial position and growth possibilities of the Group. SEB strives to achieve long-term growth based on a capital base for the nancial group of undertakings supporting a core capital ratio of minimum 10 per cent, without transition rules. Over a business cycle, the dividend per share shall correspond to around 40 per cent of earnings per share.

In order to further improve SEB's capital position the Board proposes that no dividend shall be paid for 2008. The proposal should be seen together with the proposed capital measures as announced on 5 February, 2009. For 2007 the total dividend amounted to SEK 4,451m or 33 per cent of earnings per share.

Merchant Banking

The Merchant Banking division has overall responsibility for servicing large and medium-sized companies, fi nancial institutions, banks, and commercial real estate clients. It operates in 17 countries.

Merchant Banking offers its clients integrated investment and corporate banking solutions, including the investment banking activities under the brand name SEB Enskilda. Merchant Banking's main areas of activity include:

• Lending and debt capital markets
• Trading in equities, currencies, fi xed income, derivatives and futures
• Advisory services, brokerage, research and trading strategies within equity, fi xed income and foreign exchange markets
• Prime brokerage and securities related fi nancing solutions
• Export, project and trade fi nance
• Corporate fi nance
• Acquisition fi nance
• Venture capital
• Cash management, liquidity management and payment services.
• Custody and fund services
• Leasing and factoring products
• Management of the SEB Group's liquidity portfolio.

Merchant Banking is continuously strengthening its presence and widening its range of products in SEB's markets outside Sweden, primarily Norway, Denmark, Finland, Germany, Poland and the Baltic countries.

2008 2007 Percentage of SEB's total income 41 37 Percentage of SEB's operating profi t 67 40 Percentage of SEB's staff 13 13

Profi t and loss account

			Change
SEKm	2008	2007	per cent
Net interest income	7,414	5,610	32
Net fee and commission income	5,248	5,945	–12
Net fi nancial income	3,625	2,613	39
Net other income	541	839	–36
Total operating income	16,828	15,007	12
Staff costs	–3,890	–4,246	–8
Other expenses	–3,594	–3,489	3
Depreciation of assets	–95	–85	12
Total operating expenses	–7,579	–7,820	–3
Profi t before credit losses etc	9,249	7,187	29
Gains less losses on assets	5	2	150
Net credit losses 1)	–904	–326	177
Operating profi t	8,350	6,863	22
Cost/Income ratio	0.45	0.52
Business equity, SEKbn	27.0	26.4
Return on equity, %	22.3	18.7
Number of full time equivalents, average	2,721	2,566

1) Including change in value of seized assets

Income and operating profi t the highest to date

Merchant Banking recorded its highest to date operating pro t and highest ever income during 2008. Despite tumultuous nancial markets and challenging economic conditions, clients remained active. Together with market share gains and weakened competitors, this supported strong income generation, increasing 12 per cent from 2007, to SEK 16.8bn.

Revenues were particularly strong in the second half of the year, driven by nancing activities, high FX revenues and improved xed income performance. Lower investment banking activity reduced income at Nordic sites, where Merchant Banking's franchise is more focused on these activities; nevertheless, double digit growth in corporate banking activities was recorded in each of these markets.

Costs were 3 per cent lower than 2007 and declined considerably in the second half.

Credit loss provisions rose, albeit from a very low level. Average risk classes in the credit portfolios improved during the year and asset quality remained good. This re ects increased nancing in support of strong counterparts. However, the weaker economic outlook justi es a continued conservative approach to loss provisioning.

Operating pro t increased by 22 per cent, to SEK 8,350m.

Reclassifi cation of the investment portfolio

In line with revised accounting guidelines, the division re-classi ed a number of holdings in the xed income investment portfolio. As a result,valuation losses were lower in the latter half of the year amounting to SEK –131m, compared to SEK –938m during the rst six months (see further page 25).

Strong business volumes and customer demand Trading and Capital Markets

Within Trading and Capital Markets, all major business units performed well. Volumes within equities and commissions were down, although declines were less than for the market as a whole as SEB Enskilda increased its Nordic market share to 9.2 per cent (7.5). FX units performed particularly well, with highly active customers and favourable conditions for market making.

Corporate Banking

Corporate banking pro ts decreased, as the volume and revenue growth in lending not fully offset lower advisory and acquisition nance income. Growth in interest income in this area primarily re ects increased bilateral nancing of core blue chip corporate clients. This shift from capital markets nancing to bank nancing for many highly rated large corporates was also re ected in the development of the average counterparty rating, which improved during 2008 despite the challenging market environment. Reduced activities of international banks within SEB's main markets ensured strong demand and more appropriate pricing of credit as well as a normalisation of the risk-reward relationship for credits.

Global Transaction Services

Pro ts were stable within Global Transaction Services. Further in ow of new customers, particularly subsidiaries of existing cash management clients offset negative effects from lower asset valuations. At year-end, assets under custody were SEK 3,891bn (5,314).

Operating income

Geographical distribution 2008, per cent

Sweden	65	(49)
Germany	17	(15)
Norway	11	(14)
Denmark	2	(6)
Finland	5	(5)
Rest of the world	0	(11)

Opportunities to strengthen core franchise

The 2008 nancial crisis has altered the complexion of the competitive landscape in Merchant Banking's core markets, at least for the medium term. A number of competitors have disappeared and others have reduced activities in the region. With cutting edge products and proven commitment to serving customers, even in the most challenging of markets, the division is well placed to increase its activities with the region's leading companies and nancial institutions as a stable and credible partner.

Financial development

Operating profit and return on equity

Trading and Capital Markets, Income distribution

Retail Banking

The Retail Banking division serves fi ve million private customers and 400,000 small and medium-sized corporate customers in Sweden, Germany and the Baltic countries. Customers have access to SEB's complete range of fi nancial services through close to 550 branch offi ces, telephone and e-banking services.

The business areas are

• Sweden with a network of 172 branch offi ces servicing 1.7 million customers, of whom 1 million use internet services and 143,000 are small and medium-sized companies.
• Estonia with a network of 61 branch offi ces servicing 800,000 customers, of whom 540,000 use internet services and 71,000 are small and medium-sized companies.
• Latvia with a network of 63 branch offi ces servicing 900,000 customers, of whom 480,000 use internet services and 66,000 are small and medium-sized companies.
• Lithuania with a network of 77 branch offi ces servicing 1 million customers, of whom 800,000 use internet services and 63,000 are small and medium-sized companies.
• Germany with a network of 174 branch offi ces servicing 1 million customers, of whom 360,000 use internet services and 23,000 are small and medium-sized companies.
• Card with 3,3 million charge, credit, debit and co-branded cards. The business area operates in Sweden, Denmark, Norway and Finland and includes trade marks like Eurocard and Diners Club. Card also has acquiring agreements with more than 200,000 retailers.

	2008	2007
Percentage of SEB's total income	41	41
Percentage of SEB's operating profi t	34	35
Percentage of SEB's staff	43	45

Profi t and loss account

SEKm	2008	2007	Change per cent
Net interest income	10,750	9,698	11
Net fee and commission income	5,641	6,219	–9
Net fi nancial income	397	482	–18
Net other income	244	159	53
Total operating income	17,032	16,558	3
Staff costs	–4,632	–4,235	9
Other expenses	–5,449	–5,286	3
Depreciation of assets	–311	–318	–2
Total operating expenses	–10,392	–9,839	6
Profi t before credit losses etc	6,640	6,719	–1
Gains less losses on assets	2	4	–50
Net credit losses1)	–2,380	–715
Operating profi t	4,262	6,008	–29
Cost/Income ratio	0.61	0.59
Business equity, SEKbn	25.3	24.8
Return on equity, %	12.7	18.8
Number of full time equivalents, average	9,084	8,802

1) Including change in value of seized assets

Profi t before losses in line with 2007

Net interest income developed strongly and increased gradually quarter by quarter. Deposit and lending volumes increased throughout the year, to some extent as a result of exchange rate changes. Net fee and commission income recovered slightly in the fourth quarter, but decreased by 9 per cent on a twelve months basis. Full year result before losses was in line with 2007.

Deteriorated economic conditions resulted in increased provisioning for credit losses, particularly in the Baltic countries. The development accelerated as the economic slowdown sharpened during the fourth quarter.

Higher volumes and 10,000 new SME customers in Sweden

In Sweden, net interest income grew by 15 per cent. This development was supported both by higher deposits and by higher lending volumes. Mortgage loans to Swedish households, which account for approximately 40 per cent of the division's total lending volume, increased by 8 per cent during the year. Unlike other lending, where growth slowed during the year, growth in mortgage loans corresponds well to that in previous years. Following a gradual decline in recent years, margins on Swedish mortgage loans stabilised in 2008.

The position within Swedish households total savings (excluding directly owned shares) was strengthened further. According to SEB's Savings Barometer SEB is now the largest player amongst Swedish banks.

The improved offer to small and medium-sized companies, exempli ed by concepts such as Enkla Firman, continued to generate growth. During 2008 SEB attracted more than 10,000 new corporate cash management clients.

Costs increased by 5 per cent during 2008, affected by higher pension costs.

Worsened conditions in the Baltic countries

For Estonia, Latvia and Lithuania the global economic slowdown combined with local imbalances led to increasingly challenging market conditions. As seen also in most other markets, this development gained momentum in the fourth quarter, resulting in signi cantly increased provisions for credit losses. As a consequence of its more conservative lending, SEB's market share has decreased consistently since 2005, particularly within corporate lending. Annual credit growth, measured in local currencies, was –2, +5 and +8 per cent in Estonia, Latvia and Lithuania, respectively. These growth rates decreased during the year, especially in Lithuania. Deposit volumes remained stable in Estonia and Latvia during the fourth quarter, while deposits decreased slightly in Lithuania. Within the area of long-term savings SEB has strong local positions and although the share of lending has decreased, market shares in life insurance and investment funds remain very strong.

Costs increased during the year as a result of currency effects, rental cost increases following the divestment of real estate and cost in ation. In relation to the full year, the rate of cost increase was signi cantly lower in the last quarter. The number of full time equivalents was reduced by more than 100 during the fourth quarter.

Low profi tability in Germany

In Germany, securities-related income continued to be affected by lower market activity. Despite increased sales of consumer lending,

Number of small and medium-sized companies in Sweden Thousands (cash management customers)

Number of affl uent clients in Sweden Thousands (Clients served by financial advisors)

mortgages and insurance as well as growing net interest income pro tability deteriorated further. Credit losses in 2008 were lower than in 2007.

Card's profi t affected by increased credit losses

The Card business area reported a continued income growth of 8 per cent compared with 2007. Pro t was affected by increased credit losses, including frauds, and decreased by 15 per cent. The cost/income ratio improved during the year.

Lending volume by business area

2008, mortgages and other lending, per cent of total

Growth in credit exposure in the Baltic countries Local currency, per cent

Wealth Management

The Wealth Management division has two business areas:

• Institutional Clients which provides asset management services to institutions, foundations and life insurance companies and is responsible for the investment management, marketing and sales of SEB's mutual funds.
• Private Banking which serves the higher end of the private individual segment with wealth management services and advisory services.

The division offers a full spectrum of asset management and advisory services and its product range includes equity and fi xed income, private equity, real estate and hedge fund management. Wealth Management has around 1,100 employees and manages approximately SEK 1,150bn of assets. Wealth Management has offi ces in the Nordic and Baltic countries, Luxembourg, Germany, the United Kingdom, Singapore, Switzerland, Poland, France and Spain. The division distributes its services mainly through its institutional client sales force, SEB's retail network, its own private banking units and through third party distributors.

	2008	2007
Percentage of SEB's total income	11	13
Percentage of SEB's operating profi t	16	15
Percentage of SEB's staff	5	6

Profi t and loss account

SEKm	2008	2007	Change per cent
Net interest income	891	843	6
Net fee and commission income	3,681	4,077	–10
Net fi nancial income	67	79	–15
Net other income	48	86	–44
Total operating income	4,687	5,085	–8
Staff costs	–1,427	–1,340	6
Other expenses	–1 132	–1 040	9
Depreciation of assets	–100	–60	67
Total operating expenses	–2,659	–2,440	9
Profi t before credit losses etc	2,028	2,645	–23
Gains less losses on assets		–1	–100
Net credit losses 1)	–17	–7	143
Operating profi t	2,011	2,637	–24
Cost/Income ratio	0.57	0.48
Business equity, SEKbn	6.6	5.5
Return on equity, %	21.9	34.5
Number of full time equivalents, average	1,133	1,074

1) Including change in value of seized assets

Operating profi t negatively affected by lower asset values

The division's operating income dropped by 8 per cent compared with last year, re ecting the sharp fall of global stock markets by some 40 per cent. High net sales, increased net interest income and performance fees balanced lower net fee and commission income due to falling asset values and lower brokerage fees. Performance and transaction fees for 2008 amounted to SEK 655m (555).

Operating expenses during the year increased by 9 per cent, of which 6 per cent was related to the acquisition of Key Asset Management. Excluding this acquisition, costs increased by 3 per cent due to the expansion of Private Banking and Institutional Sales as well as alternative investment product development. Operating pro t decreased by 24 per cent, to SEK 2,011m.

Increased market share of the Swedish mutual fund market

Net sales were substantial considering the market turbulence, and amounted to SEK 33bn (55). This partly offset the impact of declining equity markets on assets under management, which decreased by 11 per cent, to SEK 1,142bn, from year-end 2007.

SEB continued to capture volumes on the Swedish mutual fund market. Total net sales amounted to SEK 6.5bn (14) for the year on a market experiencing total net out ows of SEK –17.5bn (+19). Alternative investments alone attracted net sales totaling SEK 8.6bn (6.7). During the year investment appetite shifted from equities to alternative investments and xed income. SEB recorded the largest net sales of all players in the Swedish mutual fund market during 2008 and kept its No. 1 position and increased its market share further.

Strong net sales within both Private Banking and Institutional Clients

Private Banking generated net sales of SEK 19bn (13) despite the adverse market conditions. This was a result of high sales activity and close co-operation with the Retail Banking division, thereby gaining market share.

Institutional Clients generated net sales of SEK 17bn (46) and showed strong positive sales in Sweden, and out ows in some other markets due to clients shifting their investment strategy. The business area has gained market shares in its core markets, such as the Swedish mutual fund market and institutional clients.

Investment performance deteriorated in 2008 due to the severe market turmoil and was unsatisfactory, with 34 per cent (49) of the portfolios and 33 per cent (54) of assets under management ahead of their respective benchmarks.

Wealth Management continued to implement SEB Way throughout the division and intensi ed the programme during the year, focusing on improved sales e.g. within Private Banking.

Opportunities to further strengthen market position

The strengthened market position from the previous year within both Private Banking and Institutional Clients will provide a solid base. The division plans to further improve its product range including absolute return products, launch a new holistic customer offering in Private Banking, strengthen its sales efforts towards large institutions and develop customer solutions together with its clients.

Assets under management

Per country – the Wealth Management division Per cent of total (SEK 1,142bn)

Sweden	58	(63)
Denmark	14	(13)
Germany	14	(11)
Finland	8	(9)
Other 1)	6	(4)

1) Norway, Luxembourg, the Baltic countries and other smaller markets.

SEB share of net sales on Swedish mutual fund market

Mutual funds per product type

Per cent of total (SEK 444m)

Total amount SEK 33bn in 2008

Life

The Life division is responsible for all of SEB's life insurance operations and is one of the leading Nordic life insurance groups. It consists of the business areas:

• SEB Trygg Liv (Sweden).
• SEB Pension (Denmark).
• SEB Life & Pension International.

The operations comprise insurance products within the area of investments and social security for private individuals and companies. The division has 1.8 million customers and is active in Sweden, Denmark, Finland, Ireland, Luxembourg, Estonia, Latvia, Lithuania and Ukraine.

The main part of the traditional life insurance operations in Sweden is conducted through the mutually operated insurance company Gamla Livförsäkringsaktiebolaget SEB Trygg Liv and therefore not consolidated with SEB Trygg Liv's result. Gamla Liv is closed for new business. The traditional insurance business conducted in Nya Livförsäkringsaktiebolaget SEB Trygg Liv (Nya Liv) was merged with the unit-linked company Fondförsäkringsaktiebolaget SEB Trygg Liv in 2007. After the merger, the result of this business – with respect to investment income and insurance risk – is still allocated to the policyhol-ders. However, SEB Trygg Liv guarantees the contractual benefits to the policyholders in this business.

	2008	2007
Percentage of SEB 's total income	8	10
Percentage of SEB 's operating profit	9	11
Percentage of SEB 's staff	6	6

Profit and loss account

SEKm	2008	2007	Change per cent
Net interest income	–36	–28	29
Net life insurance income	3,296	3,958	–17
Total operating income	3,260	3,930	–17
Staff costs	–1 105	–1 050	5
Other expenses	–523	–530	–1
Depreciation of assets	–569	–548	4
Total operating expenses	–2,197	–2,128	3
Operating profit	1,063	1,802	–41
Change in surplus values, net	989	1,273	–22
Business result	2,052	3,075	–33
Change in assumptions	–139	53
Financial effects of short-term
market fluctuations	–3 826	–62
Total result	–1,913	3,066	–162
Cost/Income ratio	0.67	0.54
Business equity, SEKbn	7.5	7.5
Return on equity, %
based on operating profit	12.5	21.1
based on business result	24.1	36.1
Number of full time equivalents, average	1,233	1,201

Lower operating profit mainly due to falling asset values

The Life division's operating profit for 2008 decreased by 41 per cent compared with last year. Unit-linked income dropped, mainly as a result of falling equity values and customers' increased risk awareness. Customers increasingly reallocated from equity exposures to fixed income alternatives. The traditional insurance portfolios in Denmark and Sweden have also been negatively affected by the deteriorating value of equities and fixed income investments. Falling long-term interest rates during the second half of the year affected the insurance liabilities negatively. The market value-related effects mainly represented unrealised losses, recoverable in a more normal market or, in the case of bonds, if held to maturity. The result for risk products, such as sickness insurance and care products, were higher than last year.

Operating expenses increased due to higher sales and investments in new markets. The number of staff remained stable during the past year, except for additions in the Baltic countries and Ukraine. A reduction of staff was made during the fourth quarter.

Guarantee provision in the Nya Liv portfolio

A provision of SEK 353m has been made to cover potential future guarantees related to the traditional life portfolio transferred from Nya Liv in 2007. The provision is mainly market value-related and recoverable if future investment returns are adequate to meet guaranteed bonus levels over time.

Increased sales

Unit-linked insurance remains the major product group, representing 75 per cent (80) of total sales. The share of sales of corporate pension decreased to 69 per cent (72) as a result of strong growth in the demand for Portfolio Bond and endowment policies in Sweden.

Total sales, weighted volume, rose by 10 per cent compared

Volumes
	2008	2007
Sales volume (weighted), SEKm
Traditional life and sickness/health insurance	12,185	8,923
Unit-linked insurance	36,638	35,416
Total	48,823	44,339
Premium income, SEKm
Traditional life and sickness/health insurance	8,789	8,129
Unit-linked insurance	20,139	18,241
Total	28,928	26,370
Assets under management (net assets), SEKbn
Traditional life and sickness/health insurance	239.3	272.2
Unit-linked insurance	115.1	136.2
Total	354.4	408.4

with last year. The share of regular premium contracts remained stable around 80 per cent. Price pressure continues to be an issue in the corporate markets in Sweden and Denmark, which combined with a higher volume of investment related products had a negative effect on margins. The sales margin dropped to 18.6 per cent compared with 23.7 per cent in 2007.

In Sweden, sales increased by 8 per cent. In Denmark, sales rose by 10 per cent while premium income increased by 9 per cent. Sales in the Baltic countries were 20 per cent lower than last year, while sales of the Portfolio Bond product in Sweden through SEB Life & Pension International increased by 68 per cent.

Total premium income increased by 10 per cent, to SEK 28.9bn compared with SEK 26.4bn in 2007. The total value of unit-linked funds decreased by 15 per cent, to SEK 115bn compared with SEK 136bn at year-end 2007. Total assets under management (net assets) decreased by 13 per cent, to SEK 354bn.

SEB Trygg Liv, Sweden

The operating profit of SEB Trygg Liv, including central functions, declined by SEK 604m, to SEK 510m. The main reasons were the decline in unit-linked income and the provisions related to Nya Liv. The expenses were virtually unchanged.

SEB Pension, Denmark

Operating profit of SEB Pension increased by SEK 12m, to SEK 484m. The improvement was mainly due to a strong return in the investment portfolio for own account. The expenses were positively affected by some one-off items during the fourth quarter.

SEB Life & Pension International

Operating profit of International declined by SEK 147m to SEK 69m. The decrease was mainly income-related with negative valuation effects in investment assets of some SEK 90m in the Baltic insurance companies. Operating expenses increased by 21 per cent.

Traditional insurance in Sweden

Traditional insurance business is run by Gamla Livförsäkringsaktiebolaget SEB Trygg Liv ("Gamla Liv"). The entity is operated according to mutual principles and is not consolidated in SEB Trygg Liv's result. Gamla Liv is closed for new business.

Unit-linked insurance in Sweden, new business Per cent

Source: The Swedish Insurance Federation statistics.

Sales margin
SEKm	2008	2007
Sales volume weighted (regular + single/10)	3,858	3,689
Present value of new sales (7.5 % discount rate 2008, 8.0 % 2007)	1,598	1,775
Sales expenses	–879	–901
Profit from new business	719	874
Sales margin	18.6%	23.7%

Gamla Livförsäkringsaktiebolaget SEB Trygg Liv Traditional life insurance in Sweden

	2008	2007
Assets under management, net assets, SEKm	141,512	181,183
Result for the period, SEKm	–53,344	8,356
Premium income, SEKm	1,884	2,121
Collective consolidation ratio 1)
retrospective reserve, %	89	114
Bonus rate, average,%	5.1	10.9
Solvency ratio 2) , %	148	230
Capital base, SEKm	45,556	95,044
Required solvency margin, SEKm	3,987	3,573
Solvency quota 3	11.4	26.6
Total return, %	–15.8	2.7
Share of equities/equity exposure, %	31	43
Share of fixed income, %	48	42
Share of hedgefunds, %	7	3
Share of real estate, %	14	12

1) The collective consolidation ratio shows the company's assets in relation to its commitments to policyholders. The commitments include both guaranteed and non-guaranteed values.

2) The company's net assets (including equity and subordinated debts) in relation to the guaranteed commitments in the form of technical provisions.

3) Quota capital base / required solvency margin.

Risk and Capital Management

Comprehensive risk management is fundamental to the long-term profi tability and stability of the SEB Group. Properly executed, it reduces earnings volatility and creates a solid platform for development of shareholder value.

Risk management objectives

Managing risk is a core activity in a bank. In providing its customers with nancial solutions and products SEB assumes various risks, mainly credit risk. Risk is closely related to business activities and business development and, therefore, to customer needs.

SEB's pro tability is directly dependent upon its ability to evaluate, manage and price the risks encountered, while maintaining an adequate capitalization to meet unforeseen events. To secure the Group's nancial stability, risk and capital-related issues are identi ed, monitored and managed at an early stage. They also form an integral part of the long-term strategic planning and operational business planning processes performed throughout the Group.

The Group applies a modern framework for its risk management, having long since established independent risk control, credit analysis and credit approval functions. Board supervision, an explicit decision-making structure, a high level of risk aware-

SEB Risk Management and Control

Risk defi nitions

• Risk The possibility of a negative deviation from an expected fi nancial outcome.
• Risk management All activities related to risk-taking, risk mitigation, risk analysis, risk control and follow-up.
• Risk controI Identifi cation, measurement, monitoring, stress testing, analysis, reporting and follow-up.

ness among staff, common de nitions and principles, controlled risk-taking within established limits and a high degree of transparency in external disclosures are the cornerstones of SEB's risk and capital management.

The Board of Directors has the ultimate responsibility for risk organisation and internal control.

The President & CEO is responsible for managing the risks of the Bank in accordance with the policies and intentions of the Board.

The primary responsibility for the practical application of the Board's intent regarding risk management and risk control lies with the Group Asset & Liability Committee and the Group Credit Committee, both chaired by the President & CEO.

Divisions and support functions are responsible for day-to-day risk management. Divisional risk organisations support business areas and business units in their risk management.

Independent risk and credit organisation and control functions advise divisions and perform control.

Internal Audit is directly subordinated to the Board. The main responsibility is to evaluate risk management, control and governance processes.

Risks at SEB

• Credit risk Risk of loss due to an obligor's inability to fulfi l its obligations towards SEB.
• Market risk Risk of loss or reduced future income due to price changes in fi nancial markets.
• Liquidity risk The risk that the Group cannot fi nance existing assets or meet its payment obligations, or can only do this at high cost.
• Operational risk Risk of loss due to external events or internal factors.
• Insurance risk Risk of loss or higher costs in life insurance operations.
• Business risk Risk of lower revenues due to reduced volumes, price pressure or competition.
• Political risk Risk of loss caused by changes in a country's political structure or policies, or events related to political instability.

For overall risk quantifi cation purposes SEB's Economic Capital framework establishes a uniform measure, as further described below.

Risk policy and mandate

The Board of Directors has the ultimate responsibility for the risk organisation and for the maintenance of satisfactory internal control. The Board establishes the overall risk and capital policies and monitors the development of risk exposure. The Board's Risk and Capital Committee works to ensure that all risks inherent in the Group's activities are identi ed, de ned, measured, monitored and controlled in accordance with external and internal rules. The Board's risk policies are supplemented by instructions issued by the Group Risk Control function. Speci c risk mandates are established by the Board and further allocated by board committees and executive management committees.

The President and CEO has the overall responsibility for managing SEB's risks, in accordance with the policies and intentions of the Board. The President and CEO shall ensure that the organisation and administration of SEB are appropriate and that activities undertaken are in compliance with law. In particular, the President and CEO shall present any essential risk information regarding SEB to the Board, including the utilisation of limits.

The primary responsibility for ensuring that the Board's intent regarding risk management and risk control is practically applied in SEB lies with the Group Asset and Liability Committee and the Group Credit Committee. Both committees are chaired by the President and CEO. These committees shall adopt risk policies which in further detail describe how such implementation is to be carried out, as well as management, control and follow-up. The Group Credit Committee is the highest credit-granting body within SEB. However, certain matters are reserved for the Risk and Capital Committee of the Board of Directors. The Group Asset and Liability Committee deals with issues related to the overall risk level of the Group and its various divisions, and decides on risk limits and risk-measuring methods and capital management, among other matters.

Group Risk Control is the unit responsible for monitoring the Group's risks, primarily credit risk, market risk, operational risk and liquidity risk. It is a function that is deeply embedded in, yet independent from, business operations at the divisional level.

Responsibility for day-to-day risk management within the

Group rests with the divisions, Group Treasury and support functions, as outlined in the relevant policies and instructions, including the responsibility to take necessary actions to address risk problems. Each of these have dedicated risk organisations or, in the case of certain support functions, a dedicated risk manager.

Group Treasury is responsible for analysis and management of SEB's balance sheet, including the management of structural market risk and liquidity risk as well as the funding of balance sheet assets. For further information about the Group's risk organisation and its responsibilities, see the Corporate Governance section on pp 52–59.

Risk management 2008

2008 was a year of continued exceptional turbulence on the nancial markets, culminating in the third and fourth quarters with the aftermaths of the Lehman Brothers default. Following the actions taken by governments and central banks around the world, the situation in the nancial markets appeared to begin to stabilise towards the end of the year. However, risk levels remain elevated and the normal functioning of capital markets has not resumed. Moreover, the nancial crisis has instigated a rapidly evolving and globally synchronised economic downturn of proportions not encountered for many decades. The economic outlook for 2009 is highly uncertain.

The stress on the nancial markets reached extreme levels on several occasions during 2008 and many markets were affected by a drying-up of liquidity. The year was also characterized by a loss of market con dence in bank disclosures and in previously established capitalisation benchmarks. Credit spreads rose significantly towards the end of the year, as illustrated below.

In this challenging climate, SEB maintained a stable nancial position, supported by its actions to raise SEK 160 billion in longterm funds, including SEK 100 billion in covered bonds and the remainder in unsecured senior debt, and a net in ow of SEK 90 billion in deposits and borrowings from the public. Throughout the year, SEB maintained good access to the capital markets for its short-term nancing needs, while the market for long-term nancing was severely disrupted following the Lehman Brothers default in mid-September. During the rst three quarters, the Group maintained a match funding requirement with respect to net cash in ows and out ows of 12 months. Due to the standstill in long-term funding markets, the matching was 6–8 months by year-end.

SEB took a number of steps to proactively address the increased credit risk in its markets, with a particular focus on the

Credit spreads for 5-year senior debt, European fi nancials

Baltic markets. This included the establishment of a management forum that focuses exclusively on work-out and/or restructuring matters, and Special Credits Management, a new function with Group-wide responsibility for managing problem credits. The Group decided to set up speci c entities in the Baltic countries charged with work-out of distressed assets.

By year-end, the deteriorating economic climate had not materially impacted impaired loan levels in the Group's Nordic operations, while impaired loan levels rose signi cantly in the Baltic countries because of the macroeconomic slowdown.

The sharp decline in prices on xed-income securities reduced the value of SEB's holdings and led to signi cant mark-to-market losses during 2008. With effect from the third quarter, a substantial part of the Group's investment portfolio was reclassi ed, to better re ect the long-term holding horizon and to avoid shortterm mark-to-market volatility in income and equity. The effects on the Group's pro t and loss account and equity are treated in the Financial Review section on pp 25–26. Portfolio information is found on page 45. SEB expects to ultimately be able to recover the mark-to-market losses.

Several measures were taken to strengthen the Group's Market Risk Control unit. The number and seniority of staff was increased and a global head was recruited. Group-wide market risk control work was increasingly standardised and centralised, in order to enhance measurement and management of market risks in the more volatile environment.

To a large degree, SEB uses internally developed risk models to determine capital requirements under Basel II regulatory requirements. Drawing on the modelling platform established for Sweden and Germany in 2007, SEB in 2008, as the rst bank in both Latvia and Lithuania, received approval for IRB reporting of the non-retail and retail portfolios.

SEB also became the rst Nordic bank approved for using the Advanced Measurement Approach for determining the capital requirement for operational risk.

Credit risk

Defi nition

Credit risk is the risk of loss due to the failure of an obligor to ful l its obligations towards SEB. The de nition also encompasses counterparty risk in the trading operations, country risk and settlement risk. Credit risk refers to all claims and potential claims on companies, banks, public institutions and private individuals.

The credit portfolio consists of all loans, leasing agreements, contingent liabilities such as credit commitments, letters of credit, guarantees and counterparty risks arising in derivatives contracts, but excluding the Group's xed income portfolio and repos. The credit portfolio, which is presented before provisions for credit losses, amounted to SEK 1,934 bn (1,552).

Credit policy

The overriding principle of SEB's credit granting is that all lending is based on credit analysis and is proportionate to the customer's repayment capacity. The customer shall be known to the Group in order for both the customer's character and repayment capacity to be evaluated. Depending on the creditworthiness of the customer,

Credit portfolio – geographical distribution

Share of total (SEK 1,934bn)

1) Geographical distribution by SEB operations (chart).

2) Geographical distribution according to obligor's country of domicile.

SEKbn	2008	2007	2006
Banks	285.6	247.6	168.7
Corporates	781.7	570.6	484.1
Nordic countries	502.3	373.8	316.6
Germany	120.3	71.9	65.2
Baltic countries	94.5	82.8	68.7
Other	64.5	42.1	33.5
Property Management	262.3	212.1	191.7
Nordic countries	126.1	99.8	85.7
Germany	103.7	86.6	85.7
Baltic countries	31.7	25.7	20.3
Other	0.8	0.1	0.0
Public Administration	118.9	87.6	96.6
Households	485.7	434.0	374.3
Nordic countries	309.0	288.4	251.6
Germany	104.4	87.2	82.4
Baltic countries	67.5	54.6	37.4
Other	4.8	3.8	2.8
Total credit portfolio	1,934.2	1,551.8	1,315.3

The credit portfolio consists of all loans, leasing agreements, contingent liabilities such as credit commitments, letters of credit, guarantees, and counterparty risks arising in derivatives and foreign exchange contracts, but excluding the Group's fi xed income portfolio and repos. The exposure is presented before provisions for credit losses.

The geographical distribution is based on SEB's operations.

as well as the nature and complexity of the transaction, collateral and netting agreements can be used to a varying extent.

Credit approval process

Credit approval is based on an evaluation of the customer's creditworthiness and the type of credit proposed. Relevant factors

include the current and future projected nancial position of the customer, as well as the protection provided by covenants, collateral etc. The credit approval gives consideration both to the transaction proposed and to the customer's total engagement.

The approval process differs depending on the type of customer (for instance, retail, corporate or institution), the assessed risk level of the customer, and the size and type of transaction.

Independent and professional credit analysis is particularly important for large corporate customers. The Merchant Banking division has a credit analysis function that provides independent analysis and credit opinions to the divisions' business units as well as to the credit committees.

Credit risk classifi cation – non-retail customers

SEB has an internal risk classi cation system for banks, corporate customers and public entities re ecting the risk of default on payment obligations. There are 16 risk classes, with 1 representing the lowest default risk and 16 representing the highest default risk. Risk classes 1–7 are considered "investment grade", while 13–16 are classi ed as "watch list".

Risk classes are used as important parameters in the credit policies and the credit approval process (including decisions on credit limits), and for monitoring, managing and reporting the credit portfolio. The risk classi cation system is based on credit analysis, covering business and nancial risk. Financial ratios and peer group comparison are used in the risk assessment.

Credit risk classifi cation – retail customers

For private individuals and small enterprises, SEB applies a credit scoring system to assess risk. The scoring system is primarily based on payment behavior.

Limits and monitoring

In order to manage the credit risk on each individual customer or customer group, a total limit is established, re ecting the maximum exposure that SEB currently is willing to accept on the customer. Limits are also established for total exposure on countries in certain risk classes and for settlement risks in trading operations.

All total limits and risk classes are subject to a minimum of one review annually by a credit approval authority (a credit committee or bank of cer as authorized by the SEB Group Credit Instruction, adopted by the Board). High-risk exposures (risk classes 13–16) are subject to more frequent reviews. The objective is to identify, at an early stage, credit exposures with increased risk for loss, and

to work together with the customer towards a constructive solution that enables SEB to reduce or avoid credit losses.

In its home markets, SEB maintains permanent national workout teams engaged in problem exposures. As a response to the deteriorating economic climate, SEB decided in late 2007 that the national work-out organisations should be supplemented by a new Group function, Special Credits Management, with global responsibility for managing problem exposures. This function was operational by early 2008.

Credit risk mitigation

SEB reduces risk in its credit portfolio through the use of a number of credit risk mitigation techniques. The particular technique chosen is selected based on its suitability for the product and customer in question, its legal enforceability and on the organisation's experience and capacity to manage and control the particular technique. The most important credit risk mitigation techniques are pledges, guarantees and netting agreements. The most common types of pledges are real estate mortgages and nancial securities. In the trading operations, daily margin arrangements are frequently used to mitigate the net open counterparty exposure at any point in time.

For large corporate customers, credit risk is commonly mitigated through the use of covenants.

Counterparty risk in derivatives contracts

SEB enters into derivatives contracts primarily to offer clients

Credit portfolio by risk class			Total, excluding households						Households 2)
Category	Risk class	PD Range	Moody's / S&P1)	Banks	Corporates	Property Management	Public Administration	Total	PD Range	Household mortgages
Investment grade	1–4	0–0.08%	Aaa to A3 / AAA to A-	92.5%	20.3%	13.5%	94.8%	39.4%	0–0.2%	43.8%
	5–7	0.08–0.32%	Baa / BBB	4.4%	26.0%	20.4%	4.3%	18.9%	0.2–0.4% 0.4–0.6%	30.7% 7.5%
Ongoing business	8–10 11–12	0.32–1.61% 1.61–5.16%	Ba / BB B1,B2 / B+,B	2.1% 0.5%	45.3% 5.6%	55.8% 5.2%	0.8% 0.1%	35.0% 4.1%	0.6–1.0% 1.0–5.0% 5.0–10.0%	6.0% 8.9% 1.6%
Watch list	13–16	5.16–100%	B3 to C / B- to D	0.4%	2.9%	5.1%	0.0%	2.5%	10.0–30.0% 30.0–50.0%	0.9% 0.3%
Total				100.0%	100.0%	100.0%	100.0%	100.0%	50.0–100.0%	0.3%
									Total	100.0%
1) Approximate relation to rating agency scales.									2) In Sweden

products for management of their nancial exposures, and then manages the resulting positions by entering offsetting contracts in the market place. The Group also uses derivatives for the purpose of protecting the cash- ows and fair value of nancial assets and liabilities on its own book from interest rate uctuations.

In order to reduce the exposure towards single derivatives counterparties, close-out netting agreements are used with a large majority of the counterparties. This allows SEB to net positive and negative replacements values in the event of default of the counterparty. For nancial counterparties, collateral management arrangements are comprehensively applied in order to further mitigate the counterparty risk. Information on SEB's derivatives instruments is found in Note 45.

Credit portfolio monitoring

The aggregate credit portfolio is reviewed regularly and assessed based on industry, geography, risk class, product type, size and other parameters. In addition, speci c analyses and stress tests are made when market developments require a more careful examination of certain sectors.

The credit portfolio is analysed for risk concentrations in geographical and industry sectors and on large single names, both in respect of direct exposures and indirect exposure through issuers of collateral, guarantees and credit derivatives.

Impaired loans

Impairment provisions are made for probable credit losses on individual loans or groups of loans.

Individually appraised loans

A speci c provision should be made for the probable credit loss on an identi ed impaired loan. A loan is classi ed as impaired if there is objective evidence that one or several loss events have occurred and if the effects of those events impact estimated future cash ows (for instance, if the customer is in signi cant nancial dif culty or defaults on the payment of interest or principal). Loans are not classi ed as impaired if the value of the collateral covers principal and interest with a satisfactory margin.

All customers with loans that the Bank considers impaired belong to risk class 16. The impairment affects all the customer's loans in the Bank, unless speci c circumstances call for a different evaluation. One example would be speci cally pledged collateral covering both principal and interest.

A collective provision or reserve is made on loans that have not been deemed to be impaired on an individual basis, that is, impairments which are incurred but not yet identi ed (IBNI). Loans with similar credit risk characteristics are grouped together and assessed collectively for impairment. SEB's internal risk classi cation system constitutes one of the components forming the basis for determining the total amount of the collective provision. Collective provisions represent an interim step, pending the identi cation of speci c losses on individual loans. 2008 2007

Loans appraised on a portfolio basis

Valuations of loans to private individuals and small enterprises are in certain cases made on a portfolio basis. Different models are then applied to different loan categories, where the individual loans are of limited value and share similar risk characteristics. Examples of such categories are credit card exposures, retail mortgage loans and consumer loans. The collective provisions for portfolio appraised loans are based on historical lending loss experience and on an assessment of probable lending loss for the group of loans in question. 2008 2007

Share of credit portfolio excluding banks, per cent

Credit portfolio development

By year-end, SEB's credit portfolio amounted to SEK 1,934 bn (1,552). The growth was primarily attributable to the corporate sectors in the Nordic countries and in Germany. Currency effects increased SEB's credit exposure by approximately SEK 130 bn.

The Group's corporate credit portfolio grew to SEK 782 bn (571), primarily driven by growth in credit volumes to Nordic clients. Exposures were distributed on a wide range of industry sectors, the largest being manufacturing and business & household services.

Exposure in the property management category was SEK 262 bn (213), of which SEK 93 bn was attributed to multi-family property. The growth in credit volumes was primarily related to Nordic clients. Property lending also increased in Germany, however this was principally explained by currency effects.

The weighted average risk class for the Group, excluding households and banks, improved during 2008, from a weighted average of 6.95 in 2007 to 6.81 in 2008. The improvement was driven by an increased lending to core clients with solid ratings, which outweighed a moderate deterioration of risk classes in the existing portfolio.

Credit portfolio by industry and geography 1)

2008

SEKbn	Sweden	Denmark	Norway	Finland	Estonia	Latvia	Lithuania	Germany	Other	Total
Banks	174.9	10.9	10.7	2.6	0.2	1.1	0.6	68.1	16.5	285.6
Corporates	391.4	18.6	58.7	33.6	22.8	25.3	46.4	120.3	64.6	781.7
Finance and insurance	55.9	2.1	1.5	1.7	0.2	1.2	0.5	16.0	14.1	93.2
Wholesale and retail	32.8	1.4	1.6	0.5	5.2	7.2	14.2	17.1	6.7	86.7
Transportation	21.9	1.9	3.5	0.6	2.0	2.8	6.7	3.0	0.4	42.8
Shipping	10.7	2.3	10.6	0.1	1.1	0.3	0.4	0.0	12.7	38.2
Agriculture, forestry and fi shing	3.9	0.4	0.0	0.0	1.5	2.7	0.9	0.2	0.1	9.7
Mining	6.6	1.1	10.4	0.2	0.0	0.1	0.1	0.7	0.8	20.0
Electricity, gas, water supply	21.2	1.4	2.9	10.3	2.2	1.4	2.8	6.0	0.6	48.8
Business & household services	81.5	1.4	13.1	3.3	3.0	2.4	4.4	36.1	3.4	148.6
Construction	8.4	0.1	0.7	0.5	2.0	2.9	3.3	4.1	0.4	22.4
Manufacturing	117.6	5.4	10.7	16.1	5.2	3.7	12.4	31.8	18.0	220.9
Other	30.9	1.1	3.7	0.3	0.4	0.6	0.7	5.3	7.4	50.4
Property Management	105.0	0.3	11.9	8.9	8.5	7.1	16.1	103.7	0.8	262.3
Commercial	46.6	0.3	11.9	8.9	8.5	4.6	16.1	71.7	0.8	169.4
Multi-family	58.4	0.0	0.0	0.0	0.0	2.5	0.0	32.0	0.0	93.0
Public Administration	31.7	0.1	0.3	0.4	2.4	0.4	3.2	78.9	1.5	118.9
Households	269.1	6.9	31.2	1.7	22.7	15.9	28.9	104.4	4.8	485.7
Household mortgages	230.3	0.0	3.7	0.0	18.3	11.7	25.5	79.4	1.8	370.6
Other	38.8	6.9	27.5	1.7	4.4	4.3	3.4	25.0	3.0	115.0
Credit portfolio	972.1	36.8	112.9	47.2	56.6	49.8	95.2	475.4	88.3	1,934.2

1) The geographical distribution is based on SEB's operations.

Impaired loans gross by industry and geography 1)

2008
SEKm	Sweden	Denmark	Norway	Finland	Estonia	Latvia	Lithuania	Germany	Other	Total
Banks	320							6		326
Corporates	710	189	245	10	493	571	1,521	1,451	246	5,436
Finance and insurance				5				33		38
Wholesale and retail	327				87	19	223	421		1,077
Transportation	6				33	12	93	14		159
Shipping	11				1					11
Agriculture, forestry and fi shing	1				4	53	3	5		66
Mining										0
Electricity, gas, water supply						45		13		58
Business & household services	30	143			15	35	662	133		1,018
Construction	3				38	84	49	157		331
Manufacturing	151				209	154	411	458	209	1,591
Other	181	45	245	5	106	169	80	218	37	1,087
Property Management	110				305	151	855	3,462	10	4,894
Commercial	16				305	139	855	2,848	10	4,174
Multi-family	94					12		614		720
Public Administration										0
Households	448	249	115	55	488	624	490	787		3,255
Household mortgages	15		27		435	419	362	651		1,909
Other	433	249	88	55	53	205	128	136		1,346
Total	1,588	438	360	65	1,286	1,346	2,867	5,706	256	13,911

1) The geographical distribution is based on SEB's operations.

SEB's risk classi cation system is based on an assessment of the default risk through-the-cycle, in order to promote a long-term view in risk classi cations. Observed default frequencies show that SEB risk classes historically have demonstrated differentiated patterns for default, with higher risk classes displaying higher default ratios than lower risk classes.

SEB exposure in the Baltic countries

Background

Estonia, Latvia and Lithuania have formed part of SEB's home markets since the late 1990s. SEB has a strategic and long-term commitment to the region.

SEB entered the Baltic markets through acquisitions of minority stakes in three local banks in Estonia, Latvia and Lithuania towards the end of the 1990s. By year-end 2000, these banks were whollyowned. SEB's Baltic operations constitute business areas within the Group's divisional structure, but mainly reside in the Retail Banking operations. They all operate under Group policies and instructions.

Aggregated operating pro ts during 2001-2008, including credit losses, amounted to SEK 13.1 bn.

Credit portfolio

By year-end 2008, SEB's credit exposure to the Baltic countries amounted to SEK 201.6 bn (169.0). The increase in credit exposure was partly explained by currency effects; annual credit growth measured in local currencies decreased by 2 per cent in Estonia while it increased by 5 and 8 per cent, respectively, in Latvia and Lithuania. These gures compare with annual growth rates in 2007 of 17 per cent in Estonia, 18 per cent in Latvia and 30 per cent in Lithuania.

Lithuania accounts for 47 per cent of the Group's credit exposure in the Baltic countries, while Estonia and Latvia accounts for 28 and 25 per cent, respectively. The majority of the portfolio, 63 per cent, relates to corporate clients, including property management, while households account for 33 per cent.

As outlined in the table on page 43, the majority of the Group's lending in the Baltic countries is denominated in foreign currencies. The distribution does not materially deviate from the overall market situation in these countries.

2008
SEKm	Estonia	Latvia	Lithuania	Total
Credit portfolio
Banks	194	1,102	579	1,875
Corporates	22,828	25,257	46,432	94,517
Property Management	8,522	7,093	16,132	31,747
Public Administration	2,365	364	3,192	5,922
Households	22,705	15,938	28,877	67,520
Total credit portfolio	56,614	49,755	95,213	201,581
Impaired loans, gross
Banks	0	0	0	0
Corporates	493	571	1,522	2,586
Property Management	305	151	855	1,312
Public Administration	0	0	0	0
Households	488	624	490	1,602
Total	1,287	1,346	2,867	5,499
Reserves
Specifi c reserves	380	174	791	1,345
Collective reserves	546	603	612	1,761
Off balance reserves	0	0	0	0
Total	926	776	1,404	3,105
Reserve ratio for
impaired loans	71.9%	57.7%	49.0%	56.5%

Credit portfolio, impaired loans and reserves

Proactive risk management

In preparation for a possible overheating of the Baltic economies, SEB tightened its credit policy and began a controlled slowdown of credit growth in 2006. The process has continued during 2008. Increased restrictions on granting new credits and more stringent requirements for repayment capacity, particularly for eurodenominated loans, has been implemented. As a result, SEB has gradually reduced its market share, particularily in Estonia and Latvia. Market shares in Estonia dropped from 31 to 24 percent and in Latvia from 23 to 15 percent between early 2006 and late 2008.

SEB has reinforced its efforts to manage the effects of the economic downturn in the Baltic economies. In early 2008, the local work-out teams in Estonia, Latvia and Lithuania were supplemented by a new Group function, established to lead and coordinate the Group's management of weak counterparties and distressed debts. The Group also decided to set up speci c entities in the Baltic countries charged with work-out of distressed assets.

Individual country approach

All the Group's activities to mitigate credit losses are performed on a country-by-country and case-by-case basis, in collaboration between Group and local work-out teams. Actions undertaken are based on the Group's collective know-how and experiences from work-out situations, particularly with regard to the Group's experiences in handling the Swedish banking crisis in the early 1990s and senior Swedish staff is closely involved.

Credit portfolio, the Baltic countries

SEKbn	Loans	Contingent liabilities	Derivatives instruments	Total
Banks	1.8	0.0	0.1	1.9
Corporates	72.1	21.9	0.5	94.5
Property Management	29.7	1.9	0.2	31.8
Public Administration	5.1	0.9	0.0	6.0
Households	63.7	3.9	0.0	67.5
Total	172.4	28.6	0.8	201.6

SEB's Baltic lending relative to the market 1)

Level of net credit losses Per cent of lending Germany Baltics Nordics & other SEB Group 2006 2007 2008 1.5 1.2 0.9 0.6 0.3

Currency profi le in the Baltic loan portfolios 2008

Per cent	Estonia	Latvia	Lithuania
Corporates, incl. Property Mgmt.
EUR	69	83	64
Local currency	29	15	32
USD	2	2	4
Households
EUR	79	85	63
Local currency	21	13	37
USD / Other	0	2	0

Quantifi cation of credit risk

The SEB methodology for credit risk quantifi cation is based on the economic capital framework. It is aligned with the Basel II framework for credit risk and addresses the following components:

Probability of default (PD)

For each risk class, SEB makes one-year, through the cycle, PD estimates using ten years' internal history of defaults. The estimates are aligned against the scales of international rating agencies and their published default frequencies. For private individuals and small enterprises, a scoring method is used to assign loans to pools of similar transaction type and sharing similar likelihood of default. Conservatively adjusted historical default data are then used to make the PD estimates for each pool.

Statistical analysis confi rm that SEB risk classes historically have demonstrated differentiated patterns for default, e.g. higher risk classes have had higher default ratios than lower risk classes.

Size of exposure in the event of a default (EAD)

Exposure is measured in nominal terms (e.g. in the case of loans, bonds and leasing contracts), as a percentage of committed amounts (credit lines, letters of credit, guarantees and other off-balance-sheet exposures) and through current market values plus an amount for possibly increased exposure in the future, net of any eligible collateral (in the case of derivative contracts, repos and securities lending).

Loss given default (LGD)

Evaluation of potential loss on an outstanding claim in case of default, considering collateral provided etc. Evaluations are based upon internal and external historical experience and the specifi c details of each relevant transaction. The LGD estimates are set conservatively, to refl ect the conditions in a severe economic downturn.

Portfolio model

The components above (PD, EAD and LGD) are combined and used in a portfolio model, taking into account industry and geographic diversifi cation as well as large-name concentrations, when the credit risks are aggregated.

Market risk

Defi nition

Market risk is the risk of loss or reduction of future net income following changes in interest rates, foreign exchange rates, equity prices and commodity prices, including price risk in connection with the sale of assets or closing of positions.

A particular distinction is made between trading activity related market risks, i.e. trading book risks, and structural market risks and net interest income risks, i.e. banking book risks.

Market risks in the trading book arise from the Group's customer-driven trading activity, where SEB acts as a market maker for trading in the international foreign exchange, equity and capital markets. The risks reside primarily within Merchant Banking and are managed at the different trading locations within a comprehensive set of risk limits.

Market risks in the Group's banking book arise because of mismatches in currencies, interest rate terms and periods on the balance sheet. Group Treasury has the overall responsibility for managing these risks, which are consolidated centrally through the internal funds transfer pricing system.

Risk mandate

The level of market risk that the Group accepts is de ned by the Board. The Group Asset and Liability Committee allocates the market risk mandate set by the Board to each division which, in turn, further allocates the limits obtained among its business units. The use of limits ensures timely reporting and proper management of loss positions and risk exposures.

Market risk control

The Market Risk Control unit is responsible for controlling SEB's market risks. Measurement, monitoring and management reporting is done on a daily basis on a Group, divisional and business unit level. The unit is also charged with ensuring independence in the valuation process of traded positions. The daily control framework relies on statistical models, such as Value-at-Risk, as well as more traditional risk measures such as nominal exposures and sensitivity measures. Key market and liquidity risks are reported at least monthly to the Asset and Liability Committee and the Risk and Capital Committee of the Board.

Risk measurement

When assessing market risk exposures it is important to distinguish among measures that seek to estimate losses under normal market conditions and those that focus on extreme market situations. The latter class of tools consists of stress tests and scenario analysis.

The Board has decided upon four major risk measures to quantify and limit the Group's total market risk exposure under normal market conditions: Value-at-Risk; Delta 1 per cent; Single and Aggregated FX. These are further described below. Any risk measure has strengths and weaknesses, but this can be mitigated through combining them with each other.

Value-at-Risk (VaR)

To measure and limit the Group's aggregated risk level across market risk types, SEB uses a Value at Risk (VaR) approach based on an internally developed model. This statistical method expresses the maximum potential loss that can arise with a certain degree of probability during a certain period of time. The Group has chosen a probability level of 99 per cent and a ten-day period for reporting VaR in the trading book and for reporting and monitoring VaR in the banking book. In the day-to-day risk management of trading positions, SEB follows up limits with a 1-day time

Value-at-Risk, Trading book

SEKm	Min	Max	31 Dec 2008	Average 2008	Average 2007
Interest rate risk	57	282	203	145	64
Currency risk	4	165	132	34	21
Equity risk	18	230	41	75	75
Diversifi cation	0	0	–111	–103	–68
Total	69	332	265	151	92

Value-at-Risk, Banking book

			31 Dec	Average	Average
SEKm	Min	Max	2008	2008	2007
Interest rate risk	189	592	592	323	251
Currency risk	1	109	109	24	25
Equity risk	1	137	53	54	47
Diversifi cation			–146	–83	–63
Total	174	608	608	318	260

Value-at-Risk 2008

SEKm (VaR vs. theoretical profit and loss, 99% confidence interval and 1 day holding period)

horizon. Due to its larger size, the banking book carries most of SEB's VaR. Since 2001, SEB holds a supervisory approval to use its internal VaR model for calculating capital requirements for the majority of the general market risks in the Bank's trading book.

Back testing of the VaR model is done on a daily basis, to control and assure its accuracy and to verify that losses have not exceeded the VaR level signi cantly more than 1 per cent of the trading days. During the market turmoil in 2007 and 2008, the Group found that its VaR model, on average, underestimated the 99th percentile by 23 per cent looking at historical data. As a consequence, a 23 per cent add-on has been introduced (and supervisory approval was provided in May 2008). The graph on page 44 shows VaR compared to theoretical pro t and loss.

VaR for the trading book was affected by the turbulence in the nancial markets, which caused high volatility throughout the year. Even though the Group reduced trading book exposures, average trading VaR during 2008 was 65 per cent higher than in 2007 Banking book VaR was also affected by the higher market volatility, and rose by 22 per cent compared to 2007. VaR for the banking book is calculated using unweighted market data, and thus shows a more protracted reaction to changes in volatility.

SEB fi xed-income securities portfolios

For investment, treasury and client trading purposes, SEB maintains portfolios of fi xed income securities, mainly government bonds, covered bonds, bonds issued by fi nancial institutions and asset-backed securities. The total net position of the Group's bond portfolios was SEK 355 bn by year-end. Portfolios held for client-derived trading and treasury purposes amounted to SEK 222 bn.

SEK 133 bn was related to the Group's investment portfolio. The purpose of this portfolio is to have a liquidity reserve of highly rated fi xed income products, pledgeable with central banks. The portfolio comprises structured credits, fi xed income securities issued by fi nancial institutions and covered bonds.

Accounting for the investment portfolio assets are dependent upon the type of exposure and the intended holding period. The assets are classifi ed as Available-for-Sale (Mark-to-market losses/gains affect equity), Held-for-Trading (MTM losses/gains affect income) or Loans & Receivables.

The widening of credit spreads in 2007 and 2008, a refl ection of reduced market liquidity and the increased risk for issuer default as perceived by global credit markets, negatively affected SEB's investment portfolio assets (see page 25 for further information).

A large part of the losses is related to the Group's structured credits portfolio, a diversifi ed portfolio of asset-backed securities including residential mortgage-backed securities, collateralised loan obligations and collateralised mortgage obligations.

By year-end, this portfolio included 655 positions, with an average remaining maturity of approximately 3.5 years. 93.0 percent of the portfolio was AAA/Aaa-rated; 1.7 per cent had a sub-investment grade rating. There are no 'level 3' assets.

Following reclassifi cation in 2008, the majority of the Group's investment portfolio has been classifi ed as Loans & Receivables, refl ecting the Group's intention to hold these assets for the foreseeable future or until maturity. The reclassifi cation also serves to avoid short-term MTM volatility in income and equity. The Held-for-Trading and Available-for-Sale holdings decreased to SEK 8bn (72) and SEK 24bn (60), respectively, while securities classifi ed as Loans and Receivables increased to SEK 101bn (0).

SEB views a default in the investment portfolio holdings as unlikely

Sensitivity and position measures

As supplemental analytical tools, the Group uses sensitivity and position measures. Sensitivity measures such as gamma, vega and rho are used to handle the risk posed by non-linear instruments. In certain cases, these measures are combined with stress tests for large price shifts and volatility changes in the underlying price process.

Stress tests and scenario analysis

Scenario analyses and stress tests are conducted on a regular basis as a complement to the above described risk measurements. This type of analysis provides management with a view on the potential impact that large market moves in individual risk factors, as well as broader market scenarios, could have on a portfolio and thus attempt to estimate the size of potential losses due to the stress events. Both historical and hypothetical scenarios are used to estimate potential losses.

Interest rate risk

Interest rate risk is the risk of loss or reduction of future net income following changes in interest rates, including price risk in

and ultimately expects to recover the MTM losses. By year-end, all of the assets were performing as regards amortisations and interest payments.

Fixed-income securities portfolios

2008, SEK 355bn

Structured credits portfolio

Asset distribution (SEK 68bn), per cent

Geographical distribution, per cent

US	35	Spain	7
Pan-Europe	22	Denmark	6
UK	16	Italy	5
Netherlands	7	Other	2

connection with the sale of assets or closing of positions. To measure and limit interest rate risk SEB uses the VaR method, supplemented with the methods described below.

Delta 1 per cent

The Interest Rate Risk measure of Delta 1 per cent is calculated for all interest rate based products and is de ned as the change in market value arising from an adverse one percentage unit parallel shift in all interest rates in each currency.

Net interest income (NII)

The NII risk depends on the overall business pro le, especially mismatches between interest-bearing assets and liabilities in terms of volumes and repricing periods. The NII is also exposed to a so called " oor" risk. Asymmetries in pricing of products, create a margin squeeze in times of low interest rates, making it relevant to analyse both up- and downward changes. SEB monitors NII risk but it is not assigned a speci c limit in terms o market risk exposure. Further information is found in Note 43, which shows repricing periods for SEB's assets and liabilities.

Credit spread risk

Credit spread risk is the risk that the value of an investment will change due to moves in credit spreads. As opposed to credit risk, which is valid for all credit exposures, only assets that are markedto-market are exposed to credit spread risk. This risk materialised for SEB during 2008 (see box "SEB bond portfolios" on p 45). For capital adequacy reporting, the credit spread risk is reported as market risk, but it is classi ed as part of credit risk in SEB's economic capital framework.

Foreign exchange risk

Foreign exchange risk arises both through the Bank's foreign exchange trading in international market places and because the Group's activities are carried out in various currencies. While foreign exchange trading positions are measured and managed within the overall VaR framework, the Group measures and manages the structural foreign exchange risk inherent in the structure of the balance sheet and earnings separately. The largest structural foreign exchange risk is related to the Group's subsidiaries in the Baltic countries.

Single and Aggregated FX

As a complement to VaR, foreign exchange risk is also measured by Single and Aggregated FX. Single FX represents the single largest net position, short or long, in non-SEK currencies. Aggregated FX is arrived at by calculating the sum of all short non-SEK positions and the sum of all long non-SEK positions. Aggregated FX is the largest of these two absolute values.

Equity price risk

Equity price risk arises within market making and trading in equities and related instruments. VaR is the most important risk and limit measurement for equity risks. In addition, equity risk measurements de ned by the Swedish capital adequacy rules are used both for limits and follow-up.

Commodity risk

For instruments and derivatives with commodities as the underlying asset there is an inherent risk for changes in commodity prices. During 2008, SEB's exposure to commodity risk was limited, as the Group's business offering did not include directional trading.

Liquidity risks

Defi nition

Liquidity risk is the risk that the Group, over a speci c time horizon, is unable to re nance its existing assets or is unable to meet the demand for additional liquidity. Liquidity risk also entails the risk that the Group is forced to borrow at unfavourable rates or is forced to sell assets at a loss in order to meet its payment commitments.

Liquidity risk management and reporting

The purpose of SEB's liquidity management is to ensure that the Group has a controlled liquidity risk situation, with adequate cash or cash-equivalents in all relevant currencies to timely meet its liquidity requirements in all foreseeable circumstances without incurring substantial additional cost. The liquidity risk-taking is governed by limits established by the Board and further allocated by the Group Asset and Liability Committee (ALCO). Liquidity limits are set for both the Group and speci c legal entities as well as for exposures in certain de ned currencies.

SEB maintains suf cient liquidity to meet current payment obligations, while keeping contingency reserves to meet any market disruptions.

SEB has adopted a comprehensive framework for the management of short- and long-term liquidity requirements. Liquidity is managed centrally by Group Treasury, supported by local treasury centres in the Group's major markets. Market Risk Control regularly measures and reports limit utilisation as well as stress tests to ALCO and the Risk and Capital Committee of the Board.

The Group reduces liquidity risk through diversi cation of funding sources in instruments, currencies and by tapping different geographical markets. Deposits from households and corporate customers constitute the most important funding source of the Group.

Liquidity risk measurement

Liquidity risk is measured using a range of customised measurement tools, as no single method comprehensively can quantify this type of risk. The methods applied by SEB include short-term pledging capacity, analysis of future cash ows, scenario analyses and balance sheet key ratios.

Liquidity gaps are identi ed by calculating cumulative net cash ows arising from the assets, liabilities and off-balance sheet

Funding structure, SEB Group, December 2008 Per cent (SEK 1,787bn)

positions of the Group in various time bands through one year. This requires certain assumptions to be made regarding the maturity of some products, such as demand deposits and mortgages, and their projected behaviour over time or upon contractual maturity. The quality of the liquidity reserve (see below) is analysed in order to assess its potential to be used as collateral, providing secured funding in stressed conditions.

Beyond one year, a core gap ratio is measured. The ratio measures the extent to which the Group is funding illiquid assets with stable long-term funds. The stable liabilities (including equity) should always be above 70 per cent of illiquid assets; the average level during the year was 108 per cent. As of year-end, the level was 102 per cent.

Stress testing is conducted on a regular basis to identify sources of potential liquidity strain and to ensure that current exposures remain within the established liquidity risk tolerance. The tests estimate the liquidity risk in various scenarios, including both Group-speci c and general market crises.

Liquidity reserve requirement

The liquidity reserve, consisting of securities that can be used as collateral for loans or repurchase transactions and thus transformed into liquid funds with immediate effect, forms an important part of the Group's volume of liquid assets. The size of the liquidity reserve indicates to what extent the Group has a stable volume of unencumbered, high-quality liquid assets held as insurance against a range of liquidity stress scenarios. The liquidity reserve should always be equivalent to at least 5 per cent of total assets.

2008 liquidity situation

Drawing on its diversi ed funding network, SEB maintained its ability to nance its on-going business, in spite of the turbulence in funding markets during 2008. The Group had good access to the short-term capital markets throughout the year, while the market for long-term nancing was severely disrupted from the end of the third quarter. The Group's funding position bene tted from the raising of SEK 160 bn in long-term funds, including SEK 100 bn in covered bonds and the remainder in unsecured senior debt, and a net in ow of SEK 90 bn in deposits and borrowings from the public. By year-end, the deposits to loans ratio was 65 per cent. The pool of unutilized eligible assets in SEB's liquidity reserve that could be pledged with central banks was SEK 123 bn by year-end.

Operational risk

Defi nition

Operational risk is the risk of loss due to internal factors (breakdown of IT systems, mistakes, fraud, non-compliance with external and internal rules, other de ciencies in internal controls) or external events (e.g. natural disasters, external crime, etc)

New product approval process

During 2008, SEB strengthened the framework for examining and approving the introduction of new and/or amended products, systems and processes. All control and support functions, together with the relevant business division, participate in the assessment processes. The purpose is to ensure that approval is made in a systematic way, to secure a sound operational risk environment.

Advanced Measurement Approach

During 2008, the Group received supervisory approval to use the Advanced Measurement Approach (AMA) to calculate regulatory capital for operational risk. The approval is an acknowledgement of the Group's experience and expertise in operational risk management, including incident reporting, operational loss reporting, capital modelling, and quality assessment of processes. The model is also used to calculate economic capital for operational risk, albeit on a higher con dence level and with the inclusion of loss events relevant for life insurance operations.

Capital for operational risk is quanti ed with a Loss Distribution approach, using internal data and external statistics about actual operational losses in the global nancial sector. The calculation of expected losses takes into account the Group's internal loss statistics while unexpected losses are calculated based on statistics of external losses over a certain threshold.

The Group's AMA-derived capital requirement for operational risk is not affected by any insurance agreement to reduce or transfer the impact of operational risk losses.

Operational risk – incidents registered and analysed

All staff required to register incidents

SEB uses an IT-based infrastructure for management of operational risk, security and compliance. All staff shall register risk-related issues and management at all levels shall identify, assess, monitor and mitigate risks. This facilitates management of operational risk exposures.

Insurance risk

Defi nitions

Life insurance surplus value risk is the risk that estimated surplus values cannot be realised, due to slower than expected asset growth, cancellations or unfavourable price/ cost development. The surplus value risk level is closely associated with the aggregate savings volume.

Furthermore, life insurance operations are exposed to the risk of shifts in mortality rates. Lower rates lead to more long-term pension commitments, whereas higher rates result in higher death claims. Guaranteed-bene t life insurance portfolios give rise to a mismatch risk between assets and insurance liabilities.

Life insurance liability risk is the risk that growth in assets held to secure future payments is insuf cient to meet policyholder claims. The insurance liability risk is negligible in unit-linked portfolios, while it is more pronounced in SEB Pension's operations.

Business profi le

Within life operations SEB's sales focus is on unit-linked, which represented approximately 75 per cent of total sales in 2008. This means that the market risk stays with the policyholder. There are, however, certain elements of risk in economical terms for the Bank as regards future surplus values elimination. The value contribution from life insurance operations is analysed in terms of surplus values (see Note 51) – i.e. the present value of future net income on previously written insurance.

Components of life insurance surplus value risk in SEB

Insurance risk mitigation

Surplus values and nancial risks that are regularly reported by the division form the basis of risk measurement. Life insurance risks are controlled with the help of actuarial analysis and stress tests of the existing insurance portfolio. Mortality and morbidity risks are reinsured against large individual claims or against several claims caused by the same event. The risks in guaranteedbene t products are mitigated through standard market-risk techniques and monitored through scenario analyses.

The Group also operates, on a run-off basis, a reinsurance non-life business with a limited risk to SEB's shareholders.

During 2008, a provision of SEK 353m was made to cover potential future guarantees related to the traditional life portfolio which was transferred from Nya Liv in 2007. The provision is mainly market value-related and recoverable if future investment returns are adequate to meet guaranteed bonus levels over time.

The Swedish FSA uses a "Traf c Light System", focusing on the mismatch risk between assets and liabilities. A similar system has been in use in Denmark for several years, thus affecting SEB's Danish operations. These systems constitute supervisory tools to identify those insurance companies for which a closer analysis of assets versus liabilities is needed. None of SEB's Swedish and Danish companies has been identi ed for such analysis, according to the supervisory de ned measures for life insurance companies.

Business and strategic risk

Defi nition

Business risk is the risk of lower revenues due to reduced volumes, price pressure or competition. SEB measures business risk as the variability in income and cost that is not directly attributable to other types of risk. Quanti cation of business risk is based on an assessment of the volatility in operating pro t, net of credit losses and trading result.

Business risk also includes reputational risk, the risk that revenues drop due to external rumours about either SEB or the industry in general. A speci c case of business risk is venture risk, related to undertakings such as acquisitions, large IT projects etc.

Strategic risk is close in nature to business risk, but focuses on large-scale structural risk factors. SEB de nes strategic risk as the risk of loss due to adverse business decisions, improper implementation of decisions, or lack of responsiveness to political, regulatory and industry changes.

Capital management

The Group's capital management seeks to balance shareholders' demand for return with the nancial stability requirements of regulators, debt investors, business counterparties and other market participants, including rating agencies.

The Group's capitalisation shall be risk-based and built on an assessment of all risks incurred in the Group's business, forwardlooking and aligned with short- and long-term business plans as well as with expected macroeconomic developments.

Capital governance

The Group's capital policy de nes how capital management should support the business goals. The capital policy, which also sets out the dividend policy and the rating targets of the Group, is established by the Board of Directors.

The Board establishes the Capital Policy, based on recommendations from the Group Asset and Liability Committee and the Risk and Capital Committee of the Board. The policy is reviewed yearly.

The Chief Financial Of cer is responsible for the process to assess capital requirements in relation to the Group's risk pro le, and for proposing a strategy for maintaining the capital levels. This process, the Internal Capital Adequacy Assessment Process (ICAAP), is integrated with the Group's business planning and is part of the internal governance framework and its internal control systems.

Together with continuous monitoring and reporting of the capital adequacy to the Board this ensures that the relationships between shareholders' equity, economic capital, regulatory and rating-based requirements are managed in such a way that SEB does not jeopardise the pro tability of the business and the nancial strength of the Group.

Capital management

Capital is managed centrally, meeting also local requirements as regards statutory and internal capital. The Group's capital policy de nes how capital management should support the business goals. Shareholders' return requirements shall be balanced against the capital requirements of the regulators, the expectations of debt investors and other counterparties as regards SEB's rating, and the economic capital that represents the total risk of the Group. The phased implementation of Basel II, with Basel I based RWA (Risk-Weighted Assets) oors during 2007–2009, necessitates monitoring, targeting and reporting capital ratios according to both regulatory frameworks. As a matter of practice, SEB may buy back outstanding issues of subordinated debt, including call options utilization, to optimize the capital structure.

Distribution of loan portfolios by Basel II method

Share of Group exposure, per cent

Basel II rollout

Basel II capital adequacy rules were implemented in Sweden on 1 February 2007. During 2007, the Group used a mixed approach for reporting, whereby SEB AB, SEB AG and SEB Gyllenberg reported according to Basel II, while Basel I reporting was used for the remainder of the Group. From 2008, all the Group's reporting follows Basel II.

SEB has received regulatory approval to apply the Internal Ratings Based (IRB) approach for approximately 80 per cent of its credit portfolio (based on exposure volume). The Group reports according to IRB Advanced for virtually all retail mortgage portfolios and to IRB Foundation for most corporate and inter-bank portfolios. A number of retail portfolios are in the process of IRB

SEKm	2008	2007
Credit risk IRB reported capital requirements
Institutions	4,472	4,506
Corporates	37,158	21,420
Securitisation positions	572	174
Retail mortgages	4,627	3,409
Other exposure classes	559
Total for credit risk, IRB approach	47,388	29,509
Other Basel II reported capital requirements
Credit risk, Standardised approach	11,610	6,227
Operational risk, Basic Indicator approach		3,723
Operational risk, Advanced Measurement approach	3,080
Foreign exchange rate risk	570	580
Trading book risk	2,775	4,010
Total, reporting according to Basel II	65,423	44,049
Reporting according to Basel I
Credit risk		14,859
Foreign exchange rate risk		0
Trading book risk		41
Total, reporting according to Basel I		14,900
Summary
Credit risk	58,998	50,595
Operational risk	3,080	3,723
Market risk	3,345	4,631
Total	65,423	58,949
Adjustment for fl ooring rules
Additional requirement for transitional fl oor	13,460	8,409

Capital adequacy
SEKm	2008	2007
Capital resources
Tier I capital	82,463	72,702
Capital base	104,723	92,973
Without transitional fl oor (Basel II)
Capital requirement	65,423	58,949
Expressed as Risk-weighted assets	817,788	736,864
Tier I capital ratio	10.1	9.9%
Total capital ratio	12.8	12.6%
Capital adequacy quotient (capital base/
capital requirement)	1.60	1.58
With transitional fl oor (Basel II) – as legally reported
Transition fl oor applied	90%	95%
Capital requirement	78,883	67,358
Expressed as Risk-weighted assets	986,034	841,974
Tier I capital ratio	8.4%	8.6%
Total capital ratio	10.6%	11.0%
Capital adequacy quotient (capital base/
capital requirement)	1.33	1.38
With risk weighting according to Basel I
Capital requirement	90,164	71,398
Expressed as Risk-weighted assets	1,127,054	892,473
Tier I capital ratio	7.3%	8.1%
Total capital ratio	9.3%	10.4%
Capital adequacy quotient (capital base/
capital requirement)	1.16	1.30

implementation. The Group's ultimate target is to be approved for IRB Advanced for all portfolios, except for exposures to public entities and a small number of insigni cant portfolios. For these exposures, the Standardised approach will be used.

Following supervisory approval, the Group reports operational risk according to the Advanced Measurement Approach from the second quarter of 2008. For market risk, the Group has been approved to use its internal VaR model for calculating capital requirements for general market risks in the parent company since 2001.

Dividends

The size of the dividend in SEB is determined by the economic environment as well as the nancial position and growth potential of the Group. SEB has traditionally had the objective that the annual dividend per share shall, over a business cycle, correspond to around 40 per cent of earnings per share. Total capital ratio Core capital ratio

Capitalisation targets

SEB's capitalisation targets in relation to capital management are set for two principal purposes: 1) to ensure that the Group's capital strength is suf cient to uphold the decided business strategy, maintaining capital ratios above the minimum levels established by the regulators even in less favourable economic circumstances, and 2) to ensure that the capital strength is suf cient to protect senior debt holders, given the Group's chosen risk appetite (AA rating target).

SEB's long-term Tier I capital ratio target is 10 per cent, based on the Basel II framework applied without transition rules.

Capital requirements – Basel II framework

The regulatory capital requirement with transitional oor was SEK 78.9 bn (67.4), based on RWA of SEK 986.0 bn (842.0). Currency effects accounted for SEK 72 bn of the RWA increase. Information regarding the calculation of SEB's RWA and regulatory capital requirements is found in the "Capital Adequacy and Risk Management Report (pillar 3 )" on www.sebgroup.com.

Capital base

The Group's Tier I capital amounted to SEK 82.5 bn (72.7) at yearend 2008, with a reported Tier I capital ratio of 8.4 per cent (8.6). The total capital base was SEK 104.7 bn (93.0), with a reported total capital ratio of 10.6 per cent (11.0).

Economic Capital

For internal capital assessment and performance evaluation, SEB uses an Economic Capital framework based on a Capital at Risk (CAR) model. This internal framework bears strong similarities to the regulatory framework for capital adequacy, Basel II, in that many of the underlying risk drivers are the same. The calculation of Economic Capital is based on a con dence level of 99.97 per cent, representative of an AA-rating.

At the end of 2008, the internal capital requirement for the Group, calculated as Economic Capital, was SEK 76.6 bn (66.6), with credit risk and insurance risk being the largest risk components

Capital base – summary
SEKm	2008	2007
Equity	83,729	76,719
Deduction for dividends	0	–4,442
Goodwill in banking operations	–7,305	–6,079
IRB excess/shortfall	–1,133	–235
Deductions for non-banking operations	–2,954	–3,056
Other adjustments	–2,245	–1,112
Tier I capital contribution	12,371	10,907
Tier I capital	82,463	72,702
Tier II debt	33,731	31,512
IRB excess/shortfall	–1,133	–235
Deductions for non-banking operations	–10,696	–10,673
Other adjustments	358	–333
Capital base	104,723	92,973

Economic Capital, by risk type
2008	2007	2006
63,500	55,300	42,300
4,800	2,800	3,000
17,900	15,100	14,800
8,100	6,000	3,500
8,600	8,800	7,100
–26,300	–21,400	–17,900
76,600	66,600	52,800

(insurance surplus values are included in the Group's overall loss absorption capacity and are therefore included in the calculation of economic capital). Due to diversi cation effects when risks are aggregated across divisions, the capital requirement is considerably lower than if the divisions had been independent legal units.

Allocation of capital to divisions is also based on the Economic Capital framework. Pro tability is measured by relating reported result to allocated capital, which makes it possible to benchmark the risk-adjusted return of the Group and its divisions.

Stress testing

SEB views the macroeconomic environment as the major driver of risk to the Group's earnings and nancial stability. To arrive at an appropriate and comprehensive assessment of the Group's nancial strength, both the expected development of the economy as well as stressed scenarios representing more severe conditions must be taken into consideration. Stress scenario testing is used to assess an extra safety margin over and above the formal capital model requirements – covering e.g. the potential of a sharp decline in the macroeconomic environment.

Using recession scenarios and contrasting them with the base scenario underlying the established nancial plan, the stress testing framework projects the risk level in the Group in relation to available capital resources. In the stressed scenarios projected earnings for future years are lowered, credit losses are augmented

(both for outright defaults and for increased collective provisions), and average risk weights in credit portfolios are increased due to risk class migration. The testing framework uses historical experience and internal statistics to quantify the level of stress that the base scenario should be exposed to.

The Group typically works with stress test scenarios designed to be a one in 10 year event and a one in 50 year event. In a one in 10 year event, equity prices remain unchanged for three consecutive years. Industrial productivity decreases in years one and two, followed by a modest increase in year three. A one in 50 year event sees equity prices falling by 20–25 percent annually for three years. Industrial productivity decreases by 5, 2.5 and 2 per cent annually, for three years.

Performing stress tests constitutes an important part of SEB's capital assessment process over the long-term planning horizon. Available and required capital numbers are computed, contingent on the stressed environment, for each year in the scenarios. This makes it possible to assess the Group's nancial strength under even worse conditions than assumed in the nancial plans.

SEB risk taxonomy

Corporate Governance within SEB

Swedish Code of Corporate Governance

SEB follows the Swedish Code of Corporate Governance (Bolagsstyrningskoden). No deviations were made from the provisions of the Code during 2008.

The Corporate Governance Report has not been reviewed by the auditors.

Clear distribution of responsibilities

The ability to maintain confi dence among customers, shareholders and other stakeholders is of vital importance for SEB. An essential factor in this context is a clear and effective structure for responsibility distribution and governance, thus avoiding e.g. confl icts of interest. SEB attaches great importance to the creation of clearly defi ned roles for offi cers and decision-making bodies within credit-granting, corporate fi nance activities, asset management and insurance operations, for example.

The structure of responsibility distribution and governance comprises:

• Annual General Meeting (AGM).
• Board of Directors.
• President/Chief Executive Offi cer.
• Divisions, business areas and business units.
• Staff and Support functions.
• Internal Audit, Compliance and Risk Control.

The Board of Directors and the President perform their governing and controlling roles through several policies and instructions, the purpose of which is to clearly defi ne the distribution of responsibility. The Group's Credit Instruction, Instruction for handling of Confl icts of Interest, Ethics Policy, Risk Policy, Instruction for procedures against Money Laundering and Financing of

Terrorism, Code of Business Conduct and the Corporate Responsibility Policy are of special importance.

Annual General Meeting

Shareholders' infl uence is exercised at the Annual General Meeting (AGM), which is the highest decision-making body of the Bank. All shareholders, registered in the Shareholders' Register and having notifi ed their attendance properly, have the right to participate in the Meeting and to vote for the full number of their respective shares. A shareholder who cannot participate in the Meeting can be represented by proxy.

Amongst other things the AGM decides on changes in the Articles of Association and on the allocation of the Bank's profi t, appoints Board members, decides on the discharge from liability for the Board members and the President, decides on remuneration for the Board and approves the principles for remuneration to the President and Group Executive Committee.

SEB's major shareholders and shareholder structure as per 31 December, 2008, appear from the tables on page 53.

Nomination Committee

According to a decision of the 2008 AGM, the members of the Nomination Committee for the 2009 AGM were appointed during the autumn of 2008. Four of the Bank's major shareholders have appointed one representative each who, together with the Chairman of the Board, forms the Nomination Committee. These four representatives are: Petra Hedengran, appointed by Investor, Chairman of the Nomination Committee, Hans Mertzig, appointed by Trygg Foundation, Staffan Grefbäck, appointed byAlecta and Maj-Charlotte Wallin, appointed by AFA Försäkring. The composition of the Nomination Committee was announced on 24 September 2008.

seb's activities are managed, controlled and followed up in accordance with policies and instructions established by the board and the President (CeO).

The largest shareholders 1)
			Per cent of
December 31, 2008	No. of shares	Of which series C shares	number of all shares	votes
Investor Ab	142,527,895	2,725,000	20.7	21.1
Trygg Foundation	65,677,962		9.6	9.9
Alecta	36,148,611	733,611	5.3	5.4
swedbank/Robur Funds	26,151,625		3.8	3.9
AFA Insurance	18,758,325	875,560	2.7	2.7
seb Funds	13,137,692		1.9	2.0
Fourth swedish National
Pension Fund	12,728,700		1.9	1.9
AMF Pension	11,000,000		1.6	1.7
Wallenberg foundations	10,330,389	5,871,173	1.5	0.8
sHb Funds	9,476,321		1.4	1.4
skandia Life Insurance	8,892,926	3,452,219	1.3	0.9
Nordea Funds	8,184,736		1.2	1.2
Capital Group Funds	7,560,000		1.1	1.1
second swedish National Pension Fund	7,263,531		1.1	1.1
First swedish National Pension Fund	6,427,046		0.9	1.0
Foreign shareholders	127,867,255	1,132,651	18.6	19.1

1) excluding seb as shareholder through repurchased shares to hedge seb's long-term incentive programme and for capital management.

source: VPC/sIs Ägarservice.

The task of the committee is to prepare proposals for Chairman of the AGM, for the number of Board members, for remuneration to the Board of Directors and the auditors, for Board members and Chairman of the Board, for the distribution of the remu neration between the Board members, as well as for committee work and for decision on a Nomination Committee for the AGM 2010, to be presented at the AGM for decision.

The size and composition of the Board of Directors should be such as to serve the Bank in the best possible way. This means that the Directors' broad experience from, and knowledge about, the fi nancial and other sectors, their international experience and strong network of contacts should meet the demands that the Bank's position and future orientation call for. The result of the internal evaluation of the Board of Directors and its members forms part of the material used by the Nomination Committee. If necessary, the Nomination Committee will use external advisors.

Since the 2008 AGM the Nomination Committee has held four meetings and been in contact between the meetings. The proposals from the Nomination Committeee and comments to the proposal on Board members are found on the website of the Bank and an account for the way in which the Nomination Committee has performed its work will be presented at the 2009 AGM. No special compensation has been paid to the members of the Nomination Committee.

Board of Directors

The Board members are appointed by the shareholders at the AGM for a term of offi ce of one year, until the next AGM. In accordance with the Swedish Code of Corporate Governance, the Chairman of the Board was also appointed by the 2008 AGM for a term of offi ce until the end of the next AGM.

During 2008, the Board of Directors has consisted of ten members, without any deputies, elected by the AGM and of two members and two deputies appointed by the employees. In order for the Board to form a quorum, more than half of the members must be

are private individuals with small holdings. source: VPC/sIs Ägarservice

Ownership concentration

Largest owners' share of capital and votes, per cent

present. The President is the only Board member elected by the AGM who is equally an employee of the Bank. All other Board members elected by the AGM are considered to be independent in relation to the Bank and its Management. With the exception of Marcus Wallenberg and Jacob Wallenberg, who are not considered to be independent in relation to the shareholder Investor AB, all Board members are considered to be independent in relation to major owners. Independent Board members are defi ned as those who have no essential connections with the Bank, its Management or major shareholders (holding 10 per cent or more of the shares or votes) besides being Board members. The composition of the Board of Directors as from the 2008 AGM appears from the table on page 54 and information on the members is found on pages 134–135.

The Board of Directors has adopted Rules of Procedure that regulate the role and working forms of the Board as well as special instructions for the committees of the Board. The Board has the overall responsibility for the activities carried out within the Bank and the Group and thus decides on the nature, direction, strategy and framework of the activities and sets the objectives for the activities. The Board regularly follows up and evaluates the operations in relation to the objectives and guidelines established by the Board. Furthermore, the Board has the responsibility to ensure that the activities are organised in such a way that the accounts, management of funds and fi nancial conditions in all other respects are controlled in a satisfactory manner and that the risks inherent in the activities are identifi ed, defi ned, measured, monitored and controlled in accordance with external and internal rules, including the Articles of Association of the Bank.

Board of Directors as from the 2008 Annual General Meeting

Name	elected	Position	Risk and Capital Committee	Audit and Compliance Committee	Remuneration and HR Committee	Total remuneration, seK	Presence board Meetings	Presence Committee Meetings
Marcus Wallenberg	2002	Chairman				2,750,000	100%	100%
Tuve Johannesson	1997	Deputy Chairman				795,000	93%	100%
Jacob Wallenberg	1997	Deputy Chairman				600,000	93%	%
Penny Hughes	2000	Director				887,500	100%	100%
Urban Jansson	1996	Director				1,010,000	100%	100%
Hans-Joachim Körber	2000	Director				500,000	87%	%
Christine Novakovic	2008	Director				695,000	85%	100%
Jesper Ovesen	2004	Director				825,000	100%	94%
Carl Wilhelm Ros	1999	Director				887,500	93%	100%
Annika Falkengren	2006	Director, President and CeO				–	100%	100%
Göran Lilja	2006	Director appointed by the employees				–	100%	%
Cecilia Mårtensson	2008	Director appointed by the employees				–	62%	%
Göran Arrius	2002	Deputy Director appointed by the employees				–	93%	%
Ulf Jensen	1997	Deputy Director appointed by the employees				–	87%	%
						8,950,000

The Board appoints and dismisses the President and his/her Deputy as well as the Executive Vice Presidents, the Group Credit Offi cer, the members of the Group Executive Committee and the Head of Group Internal Audit.

The Chairman of the Board organises and manages the work of the Board by convening Board meetings, deciding on the agenda and preparing the matters to be discussed at the meetings, after consulting the President, among other things.

The Board members receive regular information about and, if necessary, training in changes in rules concerning the activities of the Bank and listed company directors' responsibilities, among other things. They are regularly offered the opportunity of discussing with the Chairman of the Board, the President and the Secretary to the Board of Directors.

The President takes part in all Board meetings, except in matters where the President has an interest that may confl ict with the interest of the Bank such as those during which the work of the President is evaluated. Other members of the executive management of the Bank participate whenever required for purposes of informing the Board or upon request by the Board or the President. During 2008, the Board has held discussions without the President or any other member of the executive management of the Bank being present. The General Legal Counsel of the Bank and the Group is the Secretary to the Board of Directors.

The work of the Board follows a yearly plan. During 2008, 15 Board meetings were held. External audit representatives were present at two of these meetings. The decisions of the Board are made after open and constructive discussions. Essential matters dealt with during the year included the following:

• Strategic direction of Group activities (nature and scope).
• Overall long-term goals for the activities.
• Policies and instructions, including an annual review and revision.
• Business plans, fi nancial plans and forecasts.
• The instability on the fi nancial markets.
• Group risk position, including development of credit portfolio and liquidity situation.

• Capital and fi nancing issues, including risk limits.

• Thorough penetration of business and market segments including the Baltic countries.

• Major investments and business acquisitions/divestments.
• Short and long-term incentives, succession planning and top management review process.
• Interim reports and annual report.
• Internal operational and cost-effi ciency processes.
• IT structure and strategy.
• Evaluation of the Bank's internal control functioning.
• Follow-up of external and internal audit activities and Group compliance activities.
• Evaluation of the work of the Board of Directors, the President and the Group Executive Committee.

The overall responsibility of the Board cannot be delegated. However, the Board has established committees, pursuant to the Board's instructions, to handle certain defi ned issues and to prepare such issues for decision by the Board of Directors. At present, there are three committees within the Board of Directors: the Risk and Capital Committee, the Audit and Compliance Committee and the Remuneration and Human Resources Committee. Minutes are kept of each committee meeting and communicated to the other Board members promptly after the meetings. The committees report regularly to the Board of Directors. Committee members are appointed for a period of one year at a time. It is an important principle that as many Board members as possible shall participate in the committee work, also as committee chairmen. Although the Chairman of the Board is a member of all three committees, he is not chairing any of them. Neither the President nor any other offi cer of the Bank is a member of the Audit and Compliance Committee or the Remuneration and Human Resources Committee. The President is a member of the Risk and Capital Committee. The work of the Board committees is regulated through instructions adopted by the Board. Apart from the committee work, no work distribution is applied by the Board.

Risk and Capital Committee

The Risk and Capital Committee of the Board shall support the Board in establishing and reviewing the Bank's organisation so that it is managed in such a way that all risks inherent in the Group's activities are identified, defined, measured, monitored and controlled in accordance with external and internal rules. The Committee decides the principles and parameters for measuring and allocating risk and capital within the Group. The Committee reviews and makes proposals for Group policies and strategies, such as Risk Policy and risk strategy, Credit Policy, Capital Policy, Liquidity and Pledge Policy as well as Trading and Investment Policy, for decision by the Board, and monitors that these policies are implemented and follows up the development of the risks of the Group. The Committee prepares the Board decisions concerning limits for market and liquidity risks.

As far as credit matters are concerned, the Committee adopts credit policies and instructions that supplement the Credit Policy and Credit Instruction of the Group and makes decisions on individual credit matters (matters of major importance or of importance as to principles). In addition, the Committee reviews on a regular basis both significant developments in the credit portfolio and the credit process within the Bank and the Group. It furthermore examines matters relating to operational risk, market and liquidity risk and insurance risk.

As far as capital matters are concerned, the Committee regularly reviews essential changes in the overall capital and liquidity situation and the capital adequacy situation of the Group, including the implementation of Basel II. The Committee prepares changes in the Group's capital goals and asset management matters, for decision by the Board, such as dividend level and the setup and utilisation of repurchase programmes of own shares. The Committee consists of four members, including the President, and forms a quorum whenever a minimum of three members are present, including the Chairman or Deputy Chairman of the Committee. During 2008 the Committee had the following members: Urban Jansson, Chairman, Marcus Wallenberg, Deputy Chairman, Jesper Ovesen and Annika Falkengren. The Group's Chief Financial Officer has the overall responsibility for presentations of capital matters to the Committee, the Group Credit Officer for credit matters and the Head of Group Risk Control for risk control matters. The Committee has held 19 meetings during the year.

Audit and Compliance Committee

The Audit and Compliance Committee of the Board supports the work of the Board in terms of quality control of the Bank's financial reports and internal control over the financial reporting. When required the Committeee also prepares, for decision by the Board, a proposal for the appointment or dismissal of the Head of Group Internal Audit. The Committee maintains regular contact with the external and internal auditors of the Bank and discusses the co-ordination of the external and internal audit. During 2008, the Committee has met with representatives of the external auditors on several occasions, without the President or any other member of the executive management of the Bank being present. The Committee deals with the accounts and interim reports as well as with audit reports, including any changes in the accounting rules. It ensures that any remarks and observations from the auditors are attended to. The Committee furthermore decides on guidelines for which services other than auditing services that may be procured by the Bank and the Group from the external auditors. It assesses the external auditors' work and independence and prepares proposals for new auditors prior to the AGM's election of auditor. The Committee establishes an annual audit plan for the internal audit function co-ordinated with the external audit plan.

The Committee furthermore approves the President's propos-

al for the appointment and dismissal of the Head of Group Compliance and the compliance plan. The internal audit and compliance activities are monitored on a continuous basis.

The Committee consists of three members, none of whom are employed by the Group. The committee forms a quorum whenever a minimum of two members are present, including the Chairman or Deputy Chairman of the Committee. During 2008, the Audit and Compliance Committee had the following members: Carl Wilhelm Ros, Chairman, Marcus Wallenberg, Deputy Chairman and Christine Novakovic (Steven Kaempfer until the 2008 AGM). The Head of Group Internal Audit and the Head of Group Compliance are the presenters of reports in the Committee. The Audit and Compliance Committee has held five meetings during the year. The external auditors attended all of these meetings.

Remuneration and Human Resources Committee

The Remuneration and Human Resources Committee of the Board prepares, for decision by the AGM and the Board, respectively, a proposal for remuneration principles applicable to the President and the members of the Group Executive Committee as well as a proposal for remuneration to the President and the Head of Group Internal Audit. The Committee decides on issues concerning remuneration to the members of the Group Executive Committee according to the principles established by the AGM. The Committee furthermore prepares matters regarding incentive programmes and pension plans, monitors the pension commitments of the Group and monitors, together with the Risk and Capital Committee of the Board, all measures taken to secure the pension commitments of the Group including the development of the Bank's pension foundations. It furthermore discusses personnel matters of strategic importance, such as succession planning for strategically important positions and other management supply issues.

The Committee consists of three members, none of whom are employed by the Group. The Committee forms a quorum whenever a minimum of two members are present, including the Chairman or Deputy Chairman of the Committee. During 2008, the Committee had the following members: Penny Hughes, Chairman, Marcus Wallenberg, Deputy Chairman and Tuve Johannesson. The President presents proposals, reports and information to the Committee, together with the Head of Group Human Resources & Organisational Development, with respect to matters where there are no conflicts with the interests of the Bank. The Remuneration and Human Resources Committee has held nine meetings during 2008.

Evaluation of the Board of Directors, the President and the Group Executive Committee

SEB applies an annual self-assessment method, which among other things includes a questionnaire, followed by discussions within the Board. Through this process the activities and working methods of the Board, the Chairman of the Board and each respective committee are evaluated. Among the issues examined are the following: how to improve the work of the Board further, whether or not each individual Board member takes an active part in the discussions of the Board and the committees; whether they contribute independent opinions and whether the meeting atmosphere facilitates open discussions. The outcome of the evaluation has been presented to, and discussed by, the Board and the Nomination Committee.

The Chairman of the Board evaluates each individual member's work, formally once a year. Marcus Wallenberg did not participate in the evaluation of the Chairman's work, which evaluation was conducted by Tuve Johannesson.

The Board evaluates the work of the President and the Group

Executive Committee on a continuous basis, without attendance by the President or any other member of the Group Executive Committee.

The President and Chief Executive Offi cer

The Board of Directors has adopted an instruction for the President's and Chief Executive Offi cer's work and role. The President is responsible for the day-to-day management of the Group's activities in accordance with the guidelines and established policies and instructions of the Board. The President reports to the Board of Directors and submits a separate CEO report on among other things the development of the business in relation to resolutions taken by the Board at each Board meeting.

The President appoints the Chief Financial Offi cer of the Group, the Heads of divisions, the Head of Business Support and Group Staff, the Head of HR & Organisational Development and the Head of Group Strategy & Business Planning. The President further appoints Head of Group Compliance, Head of Group Risk Control, Head of Group IT, Heads of branches and Heads of the individual staff and support functions. The Chief Financial Offi cer of the Group is appointed in consultation with the Chairman of the Board and the Head of Group Compliance in consultation with the Audit and Compliance Committee of the Board.

President and Chief Executive Offi cer is Annika Falkengren. More information about the President is found on page 136. Deputy President and Chief Executive Offi cer is Bo Magnusson.

The President has three different committees at her disposal for the purpose of managing the operations: the Group Executive Committee, the Group Credit Committee (page 57) and the Asset and Liability Committee (page 57).

In order to protect the interests of the whole Group, the President consults with the Group Executive Committee (GEC), its IT-Committee and its New Product Approval Committee (NPAC) on matters of major importance or of importance as to principles. The GEC deals with, among other things, matters of common concern to several divisions, strategic issues, business plans, fi nancial forecasts and reports. The GEC has held 25 meetings during 2008. During 2008, Annika Falkengren, Jan Erik Back (from 15 August), Per-Arne Blomquist (up to 14 August), Fredrik Boheman, Magnus Carlsson, Ingrid Engström, Hans Larsson, Bo Magnusson and Anders Mossberg were members of the Group Executive Committee. As from 1 January also Mats Torstendahl is a member of the GEC.

There is a special forum for information exchange at Group level, the Management Advisory Group (MAG), which consists of senior offi cers representing the whole Group. The members of MAG are appointed by the President in consultation with the GEC.

Divisions, business areas and business units

The Board of Directors has regulated the activities of the Group in an instruction concerning the Group's operations and established how the divisions of the Group, including the international activities through branches and subsidiaries, shall be managed and organised.

SEB's activities are organised in four divisions:

• Merchant Banking, with Magnus Carlsson as Head, for SEB's relations with large and medium-sized companies, fi nancial institutions and real estate companies,
• Retail Banking, for SEB's retail operations and card activities, with Bo Magnusson as Head up to 31 December 2008 and Mats Torstendahl as from 1 January 2009
• Wealth Management, with Fredrik Boheman as Head, for SEB's mutual fund and asset management activities and private banking and
• Life, with Anders Mossberg as Head, for SEB's life insurance activities.

All Heads of division are members of the Group Executive Committee.

Each division's operations are divided into business areas which, in turn, are divided into business units. The Head of division has the overall responsibility for the activities of the division and appoints, after consultations with the President, heads of business areas within the division and of those subsidiaries for which the division is responsible. Within each division there is a management group, which includes the Head of division and a number of heads of business areas and subsidiaries pertaining to the division. There are also management groups within the business areas and business units.

A Country Manager has been appointed for the co-ordination of activities within some of those countries outside Sweden in which several divisions carry out activities, such as Denmark, Norway and Finland. The Country Manager reports to a member of the Group Executive Committee, specially appointed for the purpose.

Staff and support functions

SEB's staff and support functions are divided into three cross-divisional support functions in order to streamline operations and front offi ce support: Group Operations, Group IT and Group Staff. SEB has a number of staff and support functions such as

CEO Office, Finance, Treasury, Human Resources & Organisational Development, Marketing & Communication, Legal, Security and Procurement & Real Estate. In general the staff functions within SEB have a global functional accountability and own and manage the SEB Group's common instructions and policies, processes and procedures for the purpose of proactively supporting the President, the Group Executive Committee, managers and staff as well as all business units of the Group.

SEB's organisation appears from the chart on page 56.

Risk organisation and responsibility

The Board of Directors has the ultimate responsibility for the risk organisation of the Group and for the maintenance of satisfactory internal control. The Risk and Capital Committee of the Board shall support the Board in this work, e.g. by reviewing the Group's risk, capital and liquidity policies for yearly updates. The Board receives a report on the development of the Group's exposure with respect to risks at least once per quarter.

The President and CEO has the overall responsibility for managing SEB's risks in accordance with the policies and intentions of the Board. The President and CEO shall ensure that the organisation and administration of SEB are appropriate and that activities undertaken are in compliance with law. In particular, the President and CEO shall particular present any essential risk information regarding SEB to the Board, including the utilisation of limits.

The primary responsibility for ensuring that the Board's intent regarding risk management and risk control is practically applied in SEB lies with the Group Asset and Liability Committee and the Group Credit Committee. The Group Asset and Liability Committee, chaired by the President and CEO, deals with issues relating to the overall risk level of the Group and the various divisions and decides on, among other things, risk limits, risk-measuring methods and capital allocation. Within the framework of the Group Capital Policy and the Group Risk Policy of the Board of Directors, the Group Asset and Liability Committee has established policy documents for the responsibility and management of the risk types of the Group and for the relationship between risk and capital. The Group Asset and Liability Committee held ten meetings during 2008.

The Group Credit Committee (GCC) is the highest credit-granting body of the Bank, with the exception of a few matters that are reserved for the Risk and Capital Committee of the Board of Directors. GCC is furthermore responsible for reviewing the credit-granting rules on a regular basis and for presenting proposals for changes to the Risk and Capital Committee of the Board, if necessary. The President is the chairman of the Committee and the Group Credit Officer is its deputy chairman. GCC held 61 meetings during 2008.

The credit organisation is independent from the business activities. Group Credits is responsible for the administration and management of the credit approval process and for important individual credit decisions and furthermore for analysis and followup of the composition of the credit portfolio as well as for the adherence to policies established by the Risk and Capital Committee and the Board of Directors. Its activities are regulated in the Group's Credit Instruction, adopted by the Board of Directors.

The Group Credit Officer is appointed by the Board and reports to the President. The Group Credit Officer presents credit matters to the Risk and Capital Committee of the Board. The Board receives information on the composition of the credit portfolio, including large exposures and credit losses, at least once a quarter. The chairman of each credit committee has the right to veto credit decisions. The credit organisation is kept separate from the business

units and handles credit matters exclusively. Significant exceptions to the credit policy of the Group must be referred to a higher level in the decision-making hierarchy.

Responsibility for day-to-day risk management in the Group rests with the divisions (and similarly with Group Treasury). Thus, each division and Head of division is responsible for ensuring that the risks are managed and controlled in a satisfactory way on a daily basis, within established Group guidelines. It is a fundamental principle that all control functions shall be independent of the business operations.

Internal audit, compliance and risk control

The Group has three control functions, which are independent from the business operations: Internal Audit, Compliance and Risk Control.

Group Internal Audit is an independent group-wide function, directly subordinated to the Board of Directors. The main responsibility of Group Internal Audit is to provide reliable and objective assurance to the Board and the President over the effectiveness of controls, risk management and governance processes, mitigating current and evolving high risks and in so doing enhancing the control culture within the Group. The Head of Group Internal Audit reports regularly to the Audit and Compliance Committee of the Board and keeps the President and the Group Executive Committee regularly informed. The Audit and Compliance Committee adopts an annual plan for the work of Internal Audit.

A new Group Compliance organisation (Group Compliance) was launched in January 2008, with considerably more resources. The Group Compliance function is fully independent from the business operations, although it serves as a support function for the business operations. It is also separated from the legal functions of the Group. Compliance shall act proactively for Compliance quality in the Group through information, advice, control and followup within the Compliance areas, thereby supporting business and management. Areas of responsibility are Customer Protection, Market Conduct, Prevention of Money Laundering and Financing of Terrorism and Regulatory Systems and Control. Duties of the Compliance function are risk management, monitoring, reporting, development of internal rules within the compliance area, investigation of incidents, advising, training and communication as well as relations with regulators. The task of the Head of Group Compliance is to assist the Board and the President on compliance matters and to co-ordinate the handling of such matters within the Group. The Head of Group Compliance reports regularly to the President and the Group Executive Committee and informs the Audit and Compliance Committee of the Board about compliance issues. Following a Group-wide Compliance Risk Assessment and approval from the Audit and Compliance Committee, the President adopts an annual Compliance Plan.

The Group's risk control function (Group Risk Control) carries out the Group risk control and monitors the risks of the Group, primarily credit risk, market risk, insurance risk, operational risk and liquidity risk (see further on pp 36–51). Group Risk Control is segregated from the business units. Thus, although the Head of Group Risk Control is appointed by the President, he reports to the Group Credit Officer. The Group's ALCO is regularly informed. The Head of Group Risk Control is the presenter of reports on risk control matters in the Risk and Capital Committee of the Board.

The Board of Directors has adopted instructions for the internal audit and compliance activities of the Group. The President has adopted an instruction for the Group Risk Control activities.

Information about the auditor

According to its Articles of Association, the Bank shall have at least one and not more than two auditors with at the most an equal number of deputies. A registered accounting fi rm may be appointed auditor. The auditors are, under Swedish law, appointed for a period of four years.

PricewaterhouseCoopers AB has been the Bank's auditor since 2000 and was re-elected in 2008 for the period up to and including the 2012 AGM. Chief responsible has been Peter Clemedtson, Authorised Public Accountant, as from the 2006 AGM. Peter Clemedtson has auditing assignments also in the following major companies: Electrolux and Ericsson.

The fees charged by the auditors for the auditing of the Bank's annual accounts for the fi nancial year ending 31 December 2008 and for 2007, respectively, and for other assignments invoiced during said periods appear from the table set out below:

Fees to the auditors
seKm	2008	2007
Audit assignments	62	48
Other assignments	52	19
Total	114	67

Board of Directors´ Report on Internal Control over the Financial Reporting for 2008

The Board of Directors´ report on Internal Control over Financial Reporting for the year 2008 has been prepared in accordance with the Swedish Code of Corporate Governance. This report is part of the Corporate Governance Report and describes how the internal control over fi nancial reporting is organised within SEB. The report has not been reviewed by the company's auditors.

Internal control over fi nancial reporting is defi ned as the process, affected by the Board, management and other personnel, designed to provide reasonable assurance regarding the reliability of fi nancial reporting. The work with internal control over fi nancial reporting in SEB is based upon the framework issued by the Committee of Sponsoring Organizations (COSO). The COSO framework is the most commonly used framework and is structured around fi ve internal control components further described below; Control Environment, Risk Assessment, Control Activities, Information & Communications and Monitoring. The framework also consists of three internal control areas; Operations, Financial Reporting and Compliance. This report covers the Financial Reporting area only.

Control environment

The control environment establishes the foundation for internal control by shaping the culture and values that guide how SEB operates. This component includes management's operating style and the ethical values of the organisation, but also how authority and responsibility are communicated and documented in governing documents such as internal policies and instructions.

The Board of Directors and the CEO of SEB have adopted Group-wide SEB internal rules (policies and instructions) to be implemented by each organisational unit. The CEO has, supported by the Board, decided on the SEB Code of Business Conduct. These governing documents form the basic framework for the control environment within SEB.

Examples of specifi c parts of the control environment framework essential for the internal control of fi nancial reporting are:

• Instruction for the Audit and Compliance Committee of the Board of Directors.
• Instruction for the Chief Financial Offi cer, Group Treasury, Group Finance, the Accounting Standard Committee and the Tax Committee.
• SEB Group Operational Risk policy.
• SEB Group Accounting Principles.

Risk assessment

SEB´s risk assessment regarding fi nancial reporting, meaning the identifi cation and valuation of the most signifi cant risks concerning fi nancial reporting, is performed annually. The assessment is focused on business and process complexity, the related transaction values and level of systme support. The assessment is documented and forms the basis for measures to improve the internal control as well as direct follow-up routines.

At board level, it is the Audit and Compliance Committee who is responsible for quality assurance of the fi nancial reporting. To ensure that all risks for material fi nancial reporting misstatements are identifi ed and managed properly, the Committee maintains regular contact with responsible managers within SEB and also with the internal and external auditors.

Control activities

The signifi cant risks regarding fi nancial reporting, identifi ed in the risk assessment, are managed through a control structure which in accordance with the COSO framework is divided into three different control categories:

• Entity wide controls.
• Transaction level controls.
• General IT controls.

Entity wide controls: The main purpose of entity-wide controls is to establish the expectations of the organisation's control environment and to monitor that these expectations are fulfi lled. Examples of entity-wide controls within SEB directly related to the internal control of fi nancial reporting are; Questionnaires & Assertions, Policy Compliance Checklist, New Product Approval Committee and Business Performance Reviews.

Transaction level controls: Transaction level controls are implemented at process level and include a range of activities such as authorisations, reconciliations, reviews etc.

General IT controls: General IT controls include controls over the information technology (IT) environment, computer operations, access to programmes and data, programme development and programme changes. SEB is continuously working with these controls to ensure adequate system access rights and suffi cient segregation of duties.

Information and communication

General internal control awareness in SEB has been addressed during the year through a group wide e-learning programme about operational risk. The internal control awareness regarding fi nancial reporting and specifi c process and control training is being rolled out continuously to concerned parties.

SEB´s CFO reports the status of the work related to Internal Control over Financial Reporting to the Audit & Compliance Committee quarterly.

Monitoring

Monitoring activities to ensure the effectiveness of Internal Control of Financial Reporting is conducted by the Board of Directors, the President and the Group Executive Committee each month. The Board receives monthly financial reports and the financial situation of the Group is presented and discussed at each Board meeting.

SEB follows up compliance with policies, guidelines and manuals on a continuous basis as well as the effectiveness of the control structure and the accuracy of the financial reporting. In addition, Group Risk Control, Group Compliance and Internal Audit are continuously engaged in follow-up routines. The Group Internal Audit function reviews the internal control over the financial reporting according to a plan established by the Audit and Compliance Committee. The result of Internal Audit's reviews as well as all measures taken and their current status are regularly reported to the Audit and Compliance Committee.

Remuneration to the Board of Directors, the President and other members of the Group Executive Committee

The Board of Directors

SEB's 2008 AGM fixed a total remuneration amount of SEK 8,950,000 for the members of the Board to be distributed as follows: SEK 2,750,000 to the Chairman of the Board, SEK 4,200,000 to the other Directors elected by the AGM who are not employed in the Bank to be distributed as follows: SEK 600,000 each to the Vice Chairmen and SEK 500,000 to the other Directors, and SEK 2,000,000 for committee work to be distributed as follows:

Risk and Capital Committee: Chairman SEK 510,000, other member SEK 325,000, Audit and Compliance Committee: Chairman SEK 387,500, other member SEK 195,000 and Remuneration and Human Resources Committee: Chairman SEK 387,500, other member SEK 195,000. No fee for Committee work is distributed either to the Chairman of the Board or the employees of the Bank. Information on each director's assignment on Board committees and the distribution of the directors' remuneration for 2008 appears from the table on page 54. The remuneration is paid out on a running basis during the mandate period.

Following a recommendation by SEB's Nomination Committee, the Board of Directors has adopted a Share Ownership Policy for the Board. The policy recommendation is that each Board member shall use 25 per cent net after tax of the annual remuneration (excluding remuneration for committee work) distributed to said Board member to acquire shares in SEB.

Following an initiative from the Board of Directors, the Nomination Committee will propose the 2009 Annual General Meeting a reduction of their base remuneration by 25 per cent. The remuneration for Committee work is proposed unchanged.

The President and the Group Executive Committee

SEB's Board of Directors has prepared proposals as to principles for the salary and other remuneration to the President and the Group Executive Committee, which were approved by the 2008 AGM. According to these principles, the Board has decided on the actual remuneration to the President following a proposal from the Remuneration and Human Resources Committee. The remuneration of the President has been benchmarked against the Swedish and international market. The Remuneration and Human Resources Committee has decided on the remuneration of the other members of the Group Executive Committee according to the principles established by the 2008 AGM. To the 2008 AGM the external auditors gave a report that the Board and the President during 2007 have complied with the principles for compensation to members of senior management as adopted by the 2007 AGM.

The general principle for the remuneration structure for the President and other members of the Group Executive Committee has during 2008 been the same as for the Bank as a whole, i.e. based upon four main components: base salary, short-term incentive compensation, long-term incentive compensation and pension. In addition, other benefits such as company car may be offered.

The short-term incentive compensation is based on the achievement of certain predetermined goals, individual and general, qualitative and quantitative, agreed in writing with the individual. The short-term incentive compensation is set for one year at a time. Operating result, costs and customer satisfaction are examples of objectives used. Short-term incentive compensation is maximized to a certain percentage of the base salary.

The Board of Directors proposes that new principles for salaries and other remuneration to the President and the Group Executive Committee shall be approved by the 2009 AGM. The principles are proposed to be based on three components; base salary, long-term incentive compensation and pension as well as other benefits such as company car.

Long-term incentive programmes shall be share-based and, except for all-employee programmes, performance-based. The purpose of a mix of long-term incentive compensation programmes is to create a commitment to SEB, strengthen the overall perspective on SEB, offer the participants an opportunity to take part in SEB's long-term success and value creation and to create an incentive for the employees to become shareholders of SEB as well as to create possibilities to attract and retain senior officers and other key employees. SEB's first long-term incentive programme was introduced in 1999, after which additional programmes have been launched for the years 2000–2008. From 1999 to 2004, the long-term incentive programmes were launched in the form of employee stock option programmes. For the years 2005–2007, performance shares were used. Information about these programmes has been provided in the annual reports for these years and at the AGMs since 2002. The 2008 AGM resolved on three different programmes for 2008; one Share Savings Programme, one Performance Share Programme and one Share Matching Programme.

The pension plan is defined as benefit-based or contributionbased and shall be inviolable. SEB aims at increasing the defined contribution-based element. The size of the pensionable salary is capped. At termination of employment by the Bank, severance pay of between 12 and 24 months' salary will be paid. The Bank has the right to make deductions from such severance pay of any cash payments that the executive may receive from another employer or through his/her own business.

The president has unilateraly decided to renounce her pay-out of any short-term incentive compensation for 2008.

The base salaries, the incentive compensation and other benefits of the President and the members of the Group Executive Committee during 2008 as well as the scope of SEB's long-term incentive programmes are specified in Note 9.

Long-term Incentive Programmes 2008

The proposed share-based long-term incentive programmes for 2008 approved by the Annual General Meeting of the same year consisted of three different programmes with different aims and partly overlapping target groups:

• a Share Savings Programme for all employees
• a Performance Share Programme for senior officers and other key employees and
• a Share Matching Programme for a small number of selected key employees.

All three Programmes are share-based and require that the participants remain with SEB for a specifi ed time. The Performance Share Programme and the Share Matching Programme are also based on performance.

However, the Board has decided not to implement the 2008 Share Matching Programme as the performance criteria for this programme were set prior to the major dislocations in the fi nancial markets. The programme would not fulfi l its purpose if executed.

Share Savings Programme

The Share Savings Programme concerns all employees of the Group Programme and is designed to support "One SEB" and create a long-term commitment to SEB.

The employees have been offered to purchase Class A-shares for an amount corresponding to fi ve per cent of their gross base salary and for the amount, at current stock exchange rate. Purchases are made during four periods, following the publication of the Bank's quarterly reports. If the shares are retained by the employee for three years from the investment date and the participant remains with SEB during this time, the Bank will give the employee one SEB share (Class A-share) for each retained share.

Performance criteria for the 2008 programme

To reach full outcome of the performance shares under the Programme, profi t must increase during the three years and the total shareholder return must develop better than for seb's competitors.

The measures have been chosen in order to balance between absolute and relative performance.

• Absolute performance in terms of annual increase in earnings per share. The measure annual increase in earnings per share implies a fi nal outcome of performance shares if the increase in real terms reaches 2 per cent for the 2006 and 2007 programmes and in nominal terms 4 per cent for the 2008 programme. The outcome is then set at 10 per cent of the maximum allotment. Maximum outcome (i.e. 50 per cent of total maximum allotment) is achieved if the annual increase in real terms reaches 10 per cent for the 2006 and 2007 programmes and in nominal terms 12 per cent or more for the 2008 programme. The measure is transparent and easy to follow in seb's quarterly reports.
• Relative performance in terms of total shareholder return (the seb share price development including dividends) compared to seb's competitors. If the total shareholder return equals the development

Calculated Performance Criteria Outcome December 31, 2008 TSR = Total shareholder Return – seb vs. Comparator Index (Annualised)

The Programme is proposed to comprise an obligation for the Bank to deliver a maximum of 1,864,000 such shares. One third of SEB's employees joined the Programme in 2008.

Performance Share Programme

This Programme is based on performance shares with the aim to retain and attract senior offi cers and other key employees, to create a long-term commitment to SEB, to strengthen the overall perspective on SEB and to create an incentive for the participants to become shareholders in SEB.

A performance share under the Programme is a conditional right to acquire one Class A-share in the Bank at a future date. The outcome of the Programme, i.e. the number of allotted performance shares that can be fi nally utilised, is dependent on how certain pre-determined performance criteria are fulfi lled. The performance criteria are measured during an initial three-year period. A further requirement is that the participant remains within SEB. The Programme has a duration of seven years including the performance period and comprises a maximum of 1,500,000 performance shares allotted to approx. 480 senior offi cers and other key employees.

in a weighted banking Index, the outcome is 10 per cent of the maximum allotment. Above that level, the number of performance shares that can be utilised increases until a ceiling of 8 percentage points average per annum above the banking Index is reached. At that level the maximum outcome according to the total shareholder return measure is reached (i.e. 50 per cent of total maximum allotment). The measure motivates the participant to build long term shareholder value as the number of performance shares that can be fi nally utilised is dependent on the total shareholder return developing equally or better than that of other banks. Thus this is an incentive to outperform the competitors.

If one of the performance criteria is completely fulfi lled, only half of the total number of performance shares can be utilised. For full utilisation both performance criteria have to be completely fulfi lled. based on the chosen two performance criteria and statistics, the expected outcome for the Programme is approximately 40 per cent.

EPS growth = Infl ation adjusted growth in earnings Per share
Outperformance vs target/index	TsR (annualised)	% of TsR condition	ePs growth p.a.	% of ePs condition	Total vesting	Dilution
Criteria for full allocation	Index +8%		EPS growth1)
2006 programme	Index –2.9 %	0 %	7.6 %	76 %	38 %	0.07 %
2007 programme	Index –7.1 %	0 %	Negative	0 %	0 %	0.00 %
2008 programme	Index –5.6 %	0 %	Negative	0 %	0 %	0.00 %

1) 2006 – 2007 programme 10 % p.a. 2008 programme 12 % p.a.

Financial statements – Contents

SEB Group

	Income statements	62
	Balance sheets	63
	Statements of changes in equity	64
	Cash flow statements	65
	Skandinaviska Enskilda Banken
	Income statements	66
	Balance sheets	67
	Statements of changes in equity	68
	Cash flow statements	69
	Notes to the financial statements
	Corporate information	70
1 A	ccounting policies	70
2	Segment reporting	77
	Notes to the income statements
3 N	et interest income	79
4 N	et fee and commission income	79
5 N	et financial income	80
6 N	et life insurance income	80
7 N	et other income	81
8 A	dministrative expenses	82
9	Staff costs	82
	9a Salaries and other remunerations per category	82
	9b Retirement benefit obligations	84
	9c Compensation to the top management
	and the Group Executive Committee	86
	9d Share-based payments	87
	9e Sick leave rate	88
9f N	umber of employees	89
	10 Other expenses	90
	11 Depreciation, amortisation and impairments of tangible and intangible assets	90
	12 Gains less losses from tangible and intangible assets	90
	13 Net credit losses incl. changes in value of seized assets	91
	14 Appropriations	91
	15 Income tax expense	92
	16 Earnings per share	92

Notes to the balance sheets

17 Risk disclosure	93
18 Fair value measurement of
financial assets and liabilities	95
19 Cash and cash balances with central banks	95
20 Loans to credit institutions	95
21 Loans to the public	96
22 Financial assets at fair value	96
23 Available-for-sale financial assets	97
24 Held-to-maturity investments	97
25 Investments in associates	98
26 Shares in subsidiaries	99
27 Tangible and intangible assets	100
28 Other assets	103
29 Deposits by credit institutions	103
30 Deposits and borrowing from the public	104
31 Liabilities to policyholders	104
32 Debt securities	105
33 Financial liabilities at fair value	105
34 Other liabilities	106
35 Provisions	106
36 Subordinated liabilities	107
37 Untaxed reserves	108

Additional information

	38 Memorandum items	108
	39 Current and non-current assets and liabilities	109
	40 Financial assets and liabilities by class	110
	41 Debt instruments by maturities	112
	42 Debt instruments by issuers	113
	43 Repricing periods	114
	44 Loans and loan loss provisions	115
	45 Derivative instruments	119
	46 Fair value information	121
	47 Related party disclosures	122
	48 Future minimum lease payments for operational leases	122
	49 Capital adequacy	123
	50 Assets and liabilities distributed by main currencies	125
	51 Income statements – Life insurance operations	127
	52 Assets in unit-link operations	128
	53 Assets held for sale	128
	54 Subsequent events	128

Five-year summary

The SEB Group	129
Skandinaviska Enskilda Banken	130

Income statements

SEB Group

SEK m Note 2008 2007 Change, % Interest income 97,281 86,035 13 Interest expense –78,571 –70,037 12 Net interest income 3 18,710 15,998 17 Fee and commission income 19,877 21,400 –7 Fee and commission expense –4,623 –4,349 6 Net fee and commission income 4 15,254 17,051 –11 Gains (losses) on financial assets and liabilities held for trading, net 3,665 3,256 13 Gains (losses) on financial assets and liabilities designated at fair value, net –221 –17 Impairments on available-for-sale financial assets –474 Net financial income 5 2,970 3,239 –8 Premium income, net 7,126 5,961 20 Income investment contracts 983 1,067 –8 Investment income net –2,519 981 Other insurance income 397 471 –16 Net insurance expenses –3,612 –5,547 –35 Net life insurance income 6 2,375 2,933 –19 Dividends 122 79 54 Profit and loss from investments in associates 77 128 –40 Gains less losses from investment securities 1,236 653 89 Other operating income 396 359 10 Net other income 7 1,831 1,219 50 Total operating income 41,140 40,440 2 Staff costs 9 –16,241 –14,921 9 Other expenses 10 –7,642 –6,919 10 Depreciation, amortisation and impairments of tangible and intangible assets 11 –1,524 –1,354 13 Total operating expenses –25,407 –23,194 10 Gains less losses from tangible and intangible assets 12 6 788 –99 Net credit losses incl. changes in value of seized assets 13 –3,268 –1,016 Operating profit 12,471 17,018 –27 Income tax expense 15 –2,421 –3,376 –28 Net profit 10,050 13,642 –26 Attributable to minority interests 9 24 –63 Attributable to equity holders 10,041 13,618 –26 Net profit 10,050 13,642 –26 Basic earnings per share, SEK 16 14.66 19.97 Diluted earnings per share, SEK 16 14.65 19.88

Balance sheets

SEB Group

31, December, SEK m	Note	2008	2007	Change, %
Cash and cash balances with central banks	19	44,852	96,871	–54
Loans to credit institutions	20	266,363	263,012	1
Loans to the public	21	1,296,777	1,067,341	21
Securities held for trading		161,596	348,888	–54
Derivatives held for trading		248,426	85,395	191
Derivatives used for hedging		11,155	2,777
Fair value changes of hedged items in a portfolio hedge		3,503	–641
Financial assets – policyholders bearing the risk		114,425	135,485	–16
Other financial assets designated at fair value		96,349	89,319	8
Financial assets at fair value	22	635,454	661,223	–4
Available-for-sale financial assets	23	163,115	170,137	–4
Held-to-maturity investments	24	1,997	1,798	11
Assets held for sale	53	852
Investments in associates	25	1,129	1,257	–10
Intangible assets		19,395	16,894	15
Property and equipment		2,626	2,564	2
Investment properties		7,490	5,239	43
Tangible and intagible assets	27	29,511	24,697	19
Current tax assets		3,998	3,766	6
Deferred tax assets		2,836	845
Trade and client receivables		13,402	25,377	–47
Other assets Other assets	28	50,416 70,652	28,138 58,126	79 22
Total assets		2,510,702	2,344,462	7
Deposits by credit institutions	29	429,425	421,348	2
Deposits and borrowing from the public	30	841,034	750,481	12
Liabilities to policyholders – investment contracts		115,110	135,937	–15
Liabilities to policyholders – insurance contracts		95,960	89,979	7
Liabilities to policyholders	31	211,070	225,916	–7
Debt securities	32	525,219	510,564	3
Trading derivatives		231,341	79,211	192
Derivatives used for hedging		8,168	2,169
Trading liabilities		54,411	135,421	–60
Fair value changes of hedged items in portfolio hedge		1,613	–411
Financial liabilities at fair value	33	295,533	216,390	37
Current tax liabilities		1,148	1,101	4
Deferred tax liabilities		9,810	9,403	4
Trade and client payables		9,498	33,940	–72
Other liabilities		51,109	53,075	–4
Other liabilities	34	71,565	97,519	–27
Provisions	35	1,897	1,536	24
Subordinated liabilities	36	51,230	43,989	16
Total liabilities		2,426,973	2,267,743	7
Minority interests		192	191	1
Revaluation reserves		–1,295	–278
Share capital		6,872	6,872
Other reserves		32,857	29,757	10
Retained earnings		45,103	40,177	12
Shareholders' equity		83,537	76,528	9
Total equity		83,729	76,719	9
Total liabilities and equity		2,510,702	2,344,462	7

Statements of changes in equity

SEB Group

31, December, SEK m	2008	2007	Change, %
Minority interests	192	191	1
Shareholders' equity	83,537	76,528	9
Total equity	83,729	76,719	9
Shareholders' equity
Reserve for cash flow hedges	1,767	160
Reserve for available-for-sale financial assets	–3,062	–438
Revaluation reserves	–1,295	–278
Share capital (663,004,123 Series A shares; 24,152,508 Series C shares)	6,872	6,872
Fund for cancelled shares	174	174
Equity fund	5	71	–93
Translation difference	–225	–377	–40
Other restricted reserves	32,903	29,889	10
Equity, restricted	39,729	36,629	8
Swap hedging of employee stock option programme	–371	–398	–7
Eliminations of repurchased shares for employee stock option programme	–1,926	–2,109	–9
Profit brought forward	37,359	29,066	29
Net profit attibutable to equity holders	10,041	13,618	–26
Equity, non-restricted	45,103	40,177	12
Total	83,537	76,528	9

Changes in equity

2008	Minority interests	Reserve for cash flow hedges	Reserve for afs financial assets	Share capital	Restricted reserves	Retained earnings	Total
Opening balance	191	160	–438	6,872	29,757	40,177	76,719
Change in market value		1,623	–2,573				–950
Recognised in income statement		–16	–51				–67
Translation difference					151		151
Net income recognised directly in equity		1,607	–2,624		151		–866
Net profit	9					10,041	10,050
Total recognised income	9	1,607	–2,624		151	10,041	9,184
Dividend to shareholders1)						–4,451	–4,451
Swap hedging of employee stock option programme						27	27
Eliminations of repurchased shares for employee stock option programme2)						183	183
Other changes	–8				2,949	–874	2,067
Closing balance	192	1,767	–3,062	6,872	32,857	45,103	83,729
2007
Opening balance	130	380	392	6,872	30,203	29,290	67,267
Change in market value		–206	–614				–820
Recognised in income statement		–14	–216				–230
Translation difference					98		98
Net income recognised directly in equity		–220	–830		98		–952
Net profit	24					13,618	13,642
Total recognised income	24	–220	–830		98	13,618	12,690
Dividend to shareholders1)						–4,079	–4,079
Swap hedging of employee stock option programme						–428	–428
Eliminations of repurchased shares for employee stock option programme2)						897	897
Other changes	37				–544	879	372
Closing balance	191	160	–438	6,872	29,757	40,177	76,719

1) Dividend per A-share SEK 0.00 (6.50) and per C-share SEK 0.00 (6.50). Further information can be found in The SEB share on page 20–21.

2) SEB has repurchased 19.4 million Series A shares for the long-term incentive programmes as decided at the Annual General Meetings in 2002, 2003 and 2004. The acquisition cost for these shares is deducted from shareholders' equity. In 2005 1.0 million shares were transferred from the capital structure programme to the incentive programmes and in 2006 3.1 million shares were sold in accordance with a decision at the AGM. As stock options have been exercised during 2005, 2006, 2007 13.7 million shares have been sold and another 1.5 million shares in 2008. Thus, as of 31 December 2008 SEB owned 2.2 million Class A-shares with a market value of SEK 133m.

Cash flow statements

SEB Group

SEK m	2008	2007	Change, %
Interest received	98,300	83,430	18
Interest paid	–77,218	–66,407	16
Commission received	19,877	21,400	–7
Commission paid	–4,623	–4,349	6
Net received from financial transactions	2,483	3,337	–26
Other income	4,187	6,770	–38
Paid expenses	–28,380	–22,921	24
Taxes paid	–2,421	–3,370	–28
Cash flow from the profit and loss statement	12,205	17,890	–32
Increase (–)/decrease (+) in trading portfolios	–12,646	–32,503	–61
Increase (+)/decrease (–) in issued short-term securities	13,276	72,454	–82
Increase (–)/decrease (+) in lending to credit institutions	38,890	–45,995	–185
Increase (–)/decrease (+) in lending to the public	–162,529	–116,298	40
Increase (+)/decrease (–) in liabilities to credit institutions	9,208	52,274	–82
Increase (+)/decrease (–) in deposits and borrowings from the public	87,815	104,715	–16
Increase (–)/decrease (+) in insurance portfolios	234	22,302	–99
Change in other balance sheet items	–2,894	10,348	–128
Cash flow from operating activities	–16,441	85,187	–119
Sales of shares and bonds	1,236	224
Sales of intangible and tangible fixed assets	6	1,431	–100
Dividends	122	57	114
Investments in subsidiaries2)	–1,040	–657	58
Investments in shares and bonds	–534	–375	42
Investments in intangible and tangible assets	–5,840	–3,030	93
Cash flow from investing activities	–6,050	–2,350	157
Issue of securities and new borrowings	107,349	128,791	–17
Repayment of securities	–100,230	–86,315	16
Dividend paid	–4,466	–4,079	9
Cash flow from financing activities	2,653	38,397	–93
Net increase in cash and cash equivalents	–19,838	121,234	–116
Cash and cash equivalents at beginning of year	194,985	73,751	164
Net increase in cash and cash equivalents	–19,838	121,234	–116
Cash and cash equivalents at end of period1)	175,147	194,985	–10

1) Cash and cash equivalents at end of period is defined as Cash and cash balances with central banks (note 19) and Loans to credit institutions – payable on demand (note 20).

2) Investments in subsidiaries
Cash		102
Loans from customers	1,749	1,352
Other assets	353	248
Due to customers	–1,754	–1,439
Other liabilities	–155	–84
Goodwill	847	580
Total purchase consideration paid	1,040	759
Cost of acquisition	–1,040	–759
Less cash acquired		102
Cash flow outflow on acquisition	–1,040	–657

Income statements

In accordance with the Swedish Financial Supervisory Authority regulations

Skandinaviska Enskilda Banken

SEK m	Note	2008	2007	Change, %
Interest income	3	59,786	43,913	36
Leasing income	3	6,372	6,154	4
Interest expense	3	–52,987	–38,464	38
Dividends	7	2,715	3,925	–31
Fee and commission income	4	7,473	8,455	–12
Fee and commission expense	4	–1,479	–1,331	11
Net financial income	5	3,236	2,490	30
Other income	7	2,934	658
Total operating income		28,050	25,800	9
Administrative expenses	8	–13,738	–12,589	9
Depreciation, amortisation and impairments of tangible and intangible assets	11	–4,820	–4,847	–1
Total operating expenses		–18,558	–17,436	6
Profit before credit losses		9,492	8,364	13
Net credit losses	13	–773	–24
Impairment of financial assets	7	–121	–106	14
Operating profit		8,598	8,234	4
Appropriations	14	–1,683	–158
Tax for the year	15	–4	–546	–99
Other taxes	15	1,304	–45
Net profit		8,215	7,485	10

Balance sheets

Skandinaviska Enskilda Banken

31, December, SEK m	Note	2008	2007	Change, %
Cash and cash balances with central banks	19	10,670	1,758
Loans and receivables to credit institutions	20	349,073	357,482	–2
Loans and receivables to the public	21	768,737	637,138	21
Securities held for trading		131,253	285,036	–54
Derivatives held for trading		242,882	80,966	200
Derivatives used for hedging		12,576	1,871
Other financial assets designated at fair value		91	112	–19
Financial assets at fair value	22	386,802	367,985	5
Available-for-sale financial assets	23	26,897	62,085	–57
Held-to-maturity investments	24	3,263	3,348	–3
Investments in associates	25	1,011	1,063	–5
Shares in subsidiaries	26	60,063	51,936	16
Intangible assets		1,335	892	50
Property and equipment		40,077	34,605	16
Tangible and intagible assets	27	41,412	35,497	17
Current tax assets		1,072	1,813	–41
Deferred tax assets		1,338
Trade and client receivables		12,317	23,625	–48
Other assets		45,845	15,589	194
Other assets	28	60,572	41,027	48
Total assets		1,708,500	1,559,319	10
Deposits by credit institutions	29	410,105	367,699	12
Deposits and borrowing from the public	30	453,697	412,499	10
Debt securities	32	394,246	408,002	–3
Trading derivatives		225,829	78,408	188
Derivatives used for hedging		4,254	1,666	155
Trading liabilities		49,429	121,687	–59
Financial liabilities at fair value	33	279,512	201,761	39
Current tax liabilities		94	46	104
Trade and client payables		8,001	32,369	–75
Other liabilities		47,562	34,678	37
Other liabilities	34	55,657	67,093	–17
Provisions	35	789	271	191
Subordinated liabilities	36	50,199	43,046	17
Total liabilities		1,644,205	1,500,371	10
Untaxed reserves	37	21,136	19,016	11
Revaluation reserves		–848	–218
Share capital		6,872	6,872
Other reserves		12,260	12,260
Retained earnings		24,875	21,018	18
Shareholders' equity		43,159	39,932	8
Total liabilities, untaxed reserves and shareholders' equity		1,708,500	1,559,319	10

SEB annual report 2008 67

Statements of changes in equity

Skandinaviska Enskilda Banken

31, December, SEK m	2008	2007	Change, %
Reserve for cash flow hedges	1,737	190
Reserve for available-for-sale financial assets	–2,585	–408
Revaluation reserves	–848	–218
Share capital (663,004,123 Series A shares; 24,152,508 Series C shares)	6,872	6,872
Reserve fund and other restricted reserves	12,086	12,086
Fund for cancelled shares	174	174
Equity, restricted	19,132	19,132
Group contributions	694	1,119	–38
Tax on Group contributions	–194	–313	–38
Swap hedging of employee stock option programme	–371	–398	–7
Eliminations of repurchased shares for employee stock option programme	–1,926	–2,109	–9
Translation differencies	–268	–71
Profit brought forward	18,725	15,305	22
Net profit for the year	8,215	7,485	10
Equity, non-restricted	24,875	21,018	18
Total	43,159	39,932	8

Changes in equity

2008	Reserve for cash flow hedges	Reserve for afs financial assets	Share capital	Restricted reserves	Retained earnings	Total
Opening balance	190	–408	6,872	12,260	21,018	39,932
Change in market value	1,563	–2,242				–679
Recognised in income statement	–16	65				49
Translation difference					–195	–195
Net income recognised directly in equity	1,547	–2,177			–195	–825
Net profit					8,215	8,215
Total recognised income	1,547	–2,177			8,020	7,390
Dividend to shareholders1)					–4,451	–4,451
Group contributions net after tax2)					500	500
Swap hedging of employee stock option programme					27	27
Eliminations of repurchased shares for employee stock option programme3)					183	183
Other changes					–422	–422
Closing balance	1,737	–2,585	6,872	12,260	24,875	43,159
2007
Opening balance	367	212	6,872	12,804	15,558	35,813
Change in market value	–163	–653				–816
Recognised in income statement	–14	33				19
Translation difference					–36	–36
Net income recognised directly in equity	–177	–620			–36	–833
Net profit					7,485	7,485
Total recognised income	–177	–620			7,449	6,652
Effect of merger of SEB BoLån and SEB Finans					399	399
Dividend to shareholders1)					–4,079	–4,079
Group contributions net after tax2)					806	806
Swap hedging of employee stock option programme					–428	–428
Eliminations of repurchased shares for employee stock option programme3)					897	897
Other changes				–544	416	–128
Closing balance	190	–408	6,872	12,260	21,018	39,932

1) Dividend per A-share SEK 0.00 (6.50) and per C-share SEK 0.00 (6.50). Further information can be found in The SEB share on page 20–21.

2) Group contributions are reported in the parent company directly under Shareholders' equity.

3) SEB has repurchased 19.4 million Series A shares for the long-term incentive programmes as decided at the Annual General Meetings in 2002, 2003 and 2004. The acquisition cost for these shares is deducted from shareholders' equity. In 2005 1.0 million shares were transferred from the capital structure programme to the incentive programmes and in 2006 3.1 million shares were sold in accordance with a decision at the AGM. As stock options have been exercised during 2005, 2006, 2007 13.7 million shares have been sold and another 1.5 million shares in 2008. Thus, as of 31 December 2008 SEB owned 2.2 million Class A-shares with a market value of SEK 133m.

Cash flow statements

Skandinaviska Enskilda Banken

SEK m	2008	2007	Change, %
Interest received	66,599	56,602	18
Interest paid	–53,129	–43,397	22
Commission received	7,414	8,285	–11
Commission paid	–1,162	–1,538	–24
Net received from financial transactions	–2,647	2,451
Other income	1,887	2,411	–22
Paid expenses	–11,387	–12,568	–9
Taxes paid	–356	–2,401	–85
Cash flow from the profit and loss statement	7,219	9,845	–27
Increase (–)/decrease (+) in trading portfolios	13,209	2,338
Increase (+)/decrease (–) in issued short-term securities	–31,863	84,144	–138
Increase (–)/decrease (+) in lending to credit institutions	42,460	–87,515	–149
Increase (–)/decrease (+) in lending to the public	–72,892	–56,939	28
Increase (+)/decrease (–) in liabilities to credit institutions	42,893	35,327	21
Increase (+)/decrease (–) in deposits and borrowings from the public	41,382	23,373	77
Change in other balance sheet items	–53,432	6,627
Cash flow from operating activities	–11,024	17,200	–164
Sales of shares and bonds		221	–100
Dividends and Group contributions	3,391	5,018	–32
Investments in subsidiaries/Merger of subsidiaries	–1,648	3,264	–150
Investments/divestments in shares and bonds	85	472	–82
Investments in intangible and tangible assets	–10,709	–24,946	–57
Cash flow from investment activities	–8,881	–15,971	–44
Issue of securities and new borrowings	106,626	68,425	56
Repayment of securities	–81,895	–15,007
Dividend paid	–4,452	–4,078	9
Cash flow from financing activities	20,279	49,340	–59
Net increase in cash and cash equivalents	374	50,569	–99
Cash and cash equivalents at beginning of year	139,767	89,198	57
Net increase in cash and cash equivalents	374	50,569	–99
Cash and cash equivalents at end of period1)	140,141	139,767

1) Cash and cash equivalents at end of period is defined as Cash and cash balances with central banks (note 19) and Loans to credit institutions – payable on demand (note 20).

Notes to the financial statements

Currency codes

BRL	Brazilian reales	EUR	Euro	ISK	Icelandic kronor	NOK	Norwegian kroner	THB	Thai baht
CHF	Swiss francs	GBP	British pounds	JPY	Japanese yen	PLN	Polish zloty	USD	U.S. dollars
DKK	Danish kroner	HKD	Hong Kong dollar	LTL	Lithuanian litas	SEK	Swedish kronor
EEK	Estonian kroon	INR	Indian rupees	LVL	Latvian lats	SGD	Singapore dollars

Corporate information

The SEB Group provides corporate, retail, investment and private banking services. The Group also provides asset management and life insurance services.

Skandinaviska Enskilda Banken AB (publ.) is the parent company of the Group. The parent company is a Swedish limited liability company with its registered offices in Stockholm, Sweden.

The parent company is included in the Large Cap segment of the Stockholm Stock Exchange.

The consolidated accounts for the financial year 2008 were approved for publications by the Board of Directors on 18 February and will be presented for adoption at the 2009 Annual General Meeting.

SEK m, unless otherwise stated.

1 Accounting policies

Significant accounting policies for the Group

Basis of presentation

The Group's consolidated accounts have been prepared in accordance with the International Financial Reporting Standards IFRS/IAS endorsed by the European Commission. In addition, provided in the Act (1995:1559) on annual accounts of credit institutions and securities companies (AACS), the accounting regulations of the Financial Supervisory Board ("FSA 2008:25") and Recommendation RFR 2.1 of the Swedish Financial Reporting Board (SFRB), have been applied.

The consolidated accounts are based on amortised cost, except for the fair value valuation of available-for-sale financial assets, financial assets and liabilities valued at fair value through profit or loss including derivatives.

The following new standards, amendments and interpretations are mandatory for accounting periods beginning on or after 1 January 2008

IAS 39 "Financial instruments: Recognition and measurement", amendment on reclassification of financial assets permits reclassification of certain financial assets out of the held for trading and the available for sale categories under certain circumstances. The amendment to IFRS 7 "Financial Instruments: Disclosures" introduces related disclosure requirements for such reclassified assets. The amendments which the Group has adopted are prospectively effective from 1 July 2008.

IFRIC 11 "Group and treasury share transactions" (effective for annual periods beginning after 1 March 2007). IFRIC 11 provides guidance whether share-based payments involving treasury shares or involving group entities should be treated as equity-settled or cash-settled share-based payment transactions in the standalone accounts of the parent and group entities. This interpretation does not have an impact on the Group's financial statements.

IFRIC 14 "IAS 19 – the limit on a defined benefit asset, minimum funding requirements and their interaction" (effective January 2008). IFRIC 14 provides guidance on assessing the limit in IAS 19 on the amount of the surplus that can be recognised as an asset. It also explains how the pension asset or liability may be affected by a minimum funding requirement. The interpretation is not expected to have any impact on the Group accounts.

Interpretation effective 2008 but not relevant to the Group

IFRIC 12 "Service concession" (effective January 2008). Applies to contractual arrangements whereby a private entity participates in the development, financing, operation and maintenance of infrastructure for public sector services. IFRIC 12 is not relevant to the Group's operations.

Standards, amendments and interpretations not yet effective and have not been early adopted by the Group

IAS 1 (Amendment) "Presentation of financial statements" (effective January 2009). The changes apply particularly to the presentation and names of the financial

statements. Consequently the Group's financial statements will change by the introduction of this standard.

IAS 23 (Amendment) "Borrowing costs" (effective 1 January 2009). The amendment requires capitalisation of borrowing costs for qualifying assets and will be applied to significant investments.

IAS 27 (Amendment) "Consolidated and separate financial statements" (effective for annual periods beginning after July 2009 but still subject to endorsement by the European Union). The amendment states that total comprehensive income shall be attributed to non-controlling interests (minority) even if it results in the non-controlling interest having a deficit balance. Changes in the parent's ownership interest that do not result in the loss of control shall be reported in equity. If the parent company loses control the remaining interest shall be recorded at fair value on the date of the transaction. The amendment will influence future transactions only.

IAS 32 (Amendment) "Financial instruments: Presentation"-puttable financial Instruments and obligations arising on liquidation. The amendment specifies the conditions for determining whether a puttable financial Instrument is an equity instrument or a financial liability. The amendment is not expected to have an impact on the Group.

IFRS 2 (Amendment) "Share-based payments – vesting conditions and cancellations" (effective January 2009 but still subject to endorsement by the European Union). The amendment effects the definition of vesting conditions and introduces a new concept of "non-vesting" conditions. The standard states that non-vesting conditions should be taken into account in the estimate of the fair value of the equity instrument. The amendment has no material impact on the Group.

IFRS 3 (Amendment) "Business combinations" (effective for annual periods beginning after July 2009 but still subject to endorsement by the European Union). The amendment will change how future business combinations are accounted for in respect of transaction costs, possible contingent considerations and business combinations achieved in stages. The standard will not have an impact on previous business combinations but will be applied by the Group to business combinations for which acquisition date is on or after 1 January 2010.

IFRS 8 "Operating segments" (effective and will be applied by the Group from 1 January 2009). IFRS 8 replaces IAS 14 and aligns segment reporting with the US standard SFAS 131. The standard requires a management approach where segments are presented according to internal reporting. The standard is not expected to have a material impact on the Group's segment reporting. IFRIC 13 "Customer loyalty program" (effective for annual periods beginning after 1 July 2008) clarifies that when goods or services are sold together with a customer loyalty incentive the consideration received is to be allocated between the components using fair values. IFRIC 13 will not have a material effect on the Group's financial statements

IFRIC 16 "Hedges of net investments in a Foreign Operation" The interpretation provides guidance on how to identify the foreign currency risk that qualify as a hedged item in the hedge of a net investment in a foreign operation. The interpretation also provides guidance on how to determine the amount to be reclassified from equity to profit or loss for both hedge instrument and hedged item when the parent disposes of the foreign operation.

Standard and interpretation issued that are neither effective nor relevant to the Group

IFRIC 15 "Real estate sales" (effective January 2009) stipulates when revenue should be recognised from the construction of real estate. This interpretation has no impact on the Group's financial statements.

Consolidation

The consolidated accounts comprise the parent company and its subsidiaries including Special Purpose Entities ("SPE"). Subsidiaries are companies, over which the parent company has control and consequently the power to govern the financial and operating policies of the subsidiary so as to obtain benefits from its activities. Such influence is deemed to exist when, amongst other circumstances, the parent company holds, directly or indirectly, more than 50 per cent of the voting power of an entity. For SPE's, consolidation also takes place if the parent company or subsidiary does not have more than 50 percent of the votes but bears the economic risks and receives the economic benefits in another manner. Companies in which the parent company or its subsidiary hold more than 50 percent of the votes, but are unable to exercise control due to contractual and legal reasons, are not included in the consolidated accounts.

The financial statements of the parent company and the consolidated subsidiaries refer to the same period and have been drawn up according to the accounting policies applicable to the Group. A subsidiary is included in the consolidated accounts from the time of acquisition, being the date when the parent company gains control over the subsidiary. The subsidiary is included in the consolidated accounts until the date when control over the company ceases to exist.

The consolidated accounts are prepared in accordance with the acquisition method. The cost of an acquisition, including directly attributable costs, is measured as the fair value of:

• the assets provided as compensation
• any equity instruments issued
• liabilities incurred or assumed

The identifiable assets acquired and the liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on acquisition date, irrespective of any minority interest. The excess of the cost of the acquisition over the fair value of the Group's share of the identifiable acquired net assets is recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the acquired subsidiary, the difference is recognised directly against profit or loss.

Goodwill is allocated between the cash-generating units or groups of units which are expected to gain benefits from an acquisition through synergies. The cash-generating units to which goodwill is allocated correspond to the lowest level within the Group in which goodwill is monitored for internal management purposes. These units may not be larger than the equivalent of one segment, that is, one business segment or one geographical segment, as determined in the segment reporting of the Group.

The useful life of each individual intangible asset is determined though the useful life of goodwill is indefinite. For information regarding amortisation and impairment, see further comments under intangible assets.

Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. The minority share of the results in subsidiaries is included in the reported results in the consolidated profit and loss account, while the minority share of net assets is included in equity.

The consolidated accounts also include associated companies, which are companies over which the Group has a significant influence. Significant influence means that the Group can participate in the financial and operating policy decisions of the company, whilst not determining or controlling such financial and operating policies. A significant influence is deemed to exist if the Group, directly or indirectly, holds between 20 and 50 per cent of the voting rights of an entity. A company in which the Group holds fewer than 20 percent of voting rights can also be classified as an associated company if the Group is represented in the Board of Directors and participates in work related to the company's strategic issues and issues affecting guidelines.

According to the main principle, associated companies are consolidated in accordance with the equity method. However, the Group has chosen to designate investments in associates held by the Group's venture capital organisation at fair value through profit or loss.

The equity method implies that participations in associated companies are

initially reported at acquisition cost. The carrying amount of the participations is thereafter adjusted to the Group's share of the change in the value of the net assets of the associated companies. The Group's share of the results of the associated companies is included in profit or loss.

Dilution of gains and losses in associates are recognised in the income statement.

Segment reporting

A segment is a business segment or a geographical segment. A business segment is a distinguishable component, in terms of accounting, of an entity engaged in providing an individual product or service or a group of related products or services, and that is subject to risks and returns differing from those of other business segments. A geographical segment from a reporting point of view is a distinguishable component of an entity engaged in providing products or services in a particular economic environment and that is subject to risks and returns differing from those applicable to other economic environments. The Group has defined business segments as primary segments and geographical segments as secondary segments.

Foreign currency translation

The consolidated financial statements are presented in Swedish kronor (SEK), which is the presentation currency of the Group.

When a foreign currency transaction is initially recognised, the amount is translated into the functional currency at the spot exchange rate on the date of the transaction. On subsequent balance sheet dates monetary items in foreign currency are translated using the closing rate. Non-monetary items, which are measured in terms of historical cost in foreign currency, are translated using the exchange rate on the date of the transaction. Non-monetary items, which are measured at fair value in a foreign currency, are translated applying the exchange rate on the date on which the fair value is determined.

Gains and losses arising as a result of exchange rate differences on settlement or translation of monetary items are recognised in profit or loss. Translation differences on non-monetary items, classified as financial assets or financial liabilities at fair value through profit or loss, are included in the change in fair value of those items. Translation differences from non-monetary items, classified as available for sale financial assets, are recognised directly in equity.

The income statements and balance sheets of Group entities, with a functional currency other than the Group's presentation currency, are translated to Swedish kronor (SEK) in the consolidated accounts. Assets and liabilities in foreign Group entities are translated at closing rate and income and expenses in the income statement are translated at the average exchange rate for the year. Resulting exchange rate differences are recognised as a separate component of equity.

Hedge accounting is applied to net investments in foreign subsidiaries. Foreign currency loans constitute the major portion of hedging instruments in these hedging transactions. The translation differences arising when the hedging instruments are translated to the presentation currency are also recognised as translation differences in equity. When a foreign operation is partially disposed of or sold, exchange differences recorded in equity are recognised in the income statement as part of the gain or loss on the sale.

Goodwill arising in conjunction with acquisitions of foreign Group entities, as well as adjustments to the fair value of assets and liabilities made in conjunction with acquisitions is included in assets and liabilities in the foreign entity in question and is translated to the presentation currency at closing rate.

Financial assets

Classification

• Financial assets are classified in the following four categories at initial recognition:
• Financial assets at fair value through profit or loss
• Loans and receivables
• Held-to-maturity investments
• Available-for-sale financial assets

Financial assets at fair value through profit or loss consist of financial assets classified as held for trading and financial assets which, upon initial recognition, have been designated at fair value through profit or loss (Fair Value Option). Financial assets are classified as held for trading if they are held with the intention to be sold in the short-term and for the purpose of generating profits. Derivatives are classified as held for trading unless designated as hedging instruments.

The Fair Value Option can be applied to contracts including one or more embedded derivatives, investments that are managed and evaluated on a fair value basis and situations in which such designation reduces measurement inconsistencies. The nature of the financial assets and financial liabilities which have been designated at fair value through profit or loss and the criteria for such designation are described in the relevant notes to the financial statements. Loans and receivables are non-derivative financial assets with fixed or deter-

minable payments that are not quoted in an active market. Held-to-maturity investments are non-derivative financial assets designated with the intention and ability to hold until maturity. This category consists of financial assets with fixed or determinable payments and fixed maturity. Equity instruments cannot be classified as held to maturity as their life is indefinite.

Financial assets are designated in the available for sale category when intended to be held for an indefinite time and may be sold in response to specific needs for liquidity or anticipation of changes in equity price or those financial assets that have not been classified as financial assets measured at fair value through profit or loss, as loans and receivables or as investments held to maturity.

Reclassification

Non-derivative trading financial assets no longer held for the purpose of selling it in the near term may be reclassified out of the fair value through profit or loss category in rare circumstances. Financial assets held in the available for sale category may be reclassified to loans and receivables or held to maturity if SEB has the intention and ability to hold the financial asset for the foreseeable future or until maturity. The reclassified assets must meet the definition of the category to which it is reclassified at the reclassification date. The prerequisite to reclassify to held to maturity is changed intent and ability to hold to maturity.

Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new amortised cost. Effective interest rates for financial assets reclassified to loans and receivables and held to maturity categories are determined at the reclassification date. Increases in estimates of cash flows of reclassified financial assets adjust effective interest rates prospectively, whereas decreases in the estimated cash flows are charged to the profit or loss.

Measurement

Financial assets are recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument and are measured at fair value on initial recognition. Transaction costs are included in the fair value on initial recognition except for financial assets designated at fair value through profit or loss where transaction costs are expensed in the profit and loss statement. Financial assets are derecognised when the rights to receive cash flows have expired or the Group has transferred substantially all risks and rewards. Transfers of financial assets with retention of all or substantially all risks and rewards include for example repurchase transactions and securities lending transactions.

Trade date accounting is applied to financial assets classified in the categories, financial assets at fair value through profit or loss and available for sale financial assets. Settlement date accounting is applied to the other categories of financial assets.

The valuation of financial assets after initial recognition is governed by their classification.

Financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in fair value are reported in the income statement on an ongoing basis under the item Net income from financial transactions. Loans and receivables and held-to-maturity investments are measured at

amortised cost using the effective interest rate method.

Available for sale financial assets are measured at fair value. Gains and losses arising from changes in fair value are reported directly in the fair value revaluation reserve in equity until the financial asset is sold or impaired. In the case of sale or impairment of an available for sale financial asset, the accumulated gains or losses previously reported in equity are recognised in profit or loss. Interest on interest-bearing available for sale financial assets is recognised in profit or loss, applying the effective interest rate method. Foreign exchange gains or losses on monetary items classified as available for sale is recognised in the income statement. Dividends on equity instruments, classified as available for sale, are also recognised in profit or loss.

Investments in equity instruments without a quoted market price in an active market are measured, if possible, at fair value on the basis of a recognised valuation method. Investments in equity instruments without a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost.

Financial liabilities

Classification

Financial liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss
• Other financial liabilities.

Financial liabilities at fair value through profit or loss are either classified as held for trading or designated as fair value through profit or loss on initial recognition (Fair Value Option). The criteria for classification of financial liabilities under the Fair Value Option are the same as for financial assets.

Financial liabilities held for trading are primarily short positions in interestbearing securities and equities and negative replacement value of derivatives.

The category other financial liabilities primarily include the Group's short-term and long-term borrowings.

Financial liabilities are derecognised when extinguished, that is, when the obligation is discharged, cancelled or expired.

Measurement

Financial liabilities are measured at fair value on initial recognition. In the case of financial liabilities measured at fair value through profit or loss, transaction costs directly attributable to the acquisition or the issuance of the financial liability are recognised in profit or loss. For other financial liabilities direct transaction cost are recognised as a deduction from the fair value.

After initial recognition, financial liabilities measured at fair value through profit or loss, are measured and reported in a manner equivalent to the measurement and reporting of financial assets measured at fair value through profit or loss. Other financial liabilities are, after initial recognition, measured on an ongoing basis at amortised cost, using the effective interest rate method.

Offsetting financial transactions

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legal right to offset transactions and an intention to settle net or realise the asset and settle the liability simultaneously.

Fair value measurement

The fair value of financial instruments quoted in an active market, for example quoted derivatives, financial assets and financial liabilities held for trading, and available for sale financial assets, is based on quoted market prices. The current bid price is used for financial assets and the current offer price for financial liabilities considering offsetting positions.

The fair value of financial instruments that are not quoted in an active market is determined by applying various valuation techniques with maximum use of observable market inputs. The valuation techniques used are discounted cash flows, option pricing models, valuations with reference to recent transactions in the same instrument and valuations with reference to other financial instruments that are substantially the same.

The difference between the transaction price and the fair value of the instrument calculated using a valuation technique is amortised over the life of the transaction, unless the calculation of the fair value is entirely based on observable market data. If the valuation is entirely based on market data a day 1 gain is recognised in profit or loss.

Derivative financial instruments

Derivatives are initially recognised at fair value on trade date and subsequently measured at fair value. Derivatives are recognised as assets when replacement value is positive and as liabilities when replacement value is negative.

Embedded derivatives

Embedded derivatives are separated from the host contract and accounted for as derivatives. Embedded derivatives are not separated when their economic characteristics and risks are closely related to those of the host contract or the host contract is carried at fair value.

Certain combined instruments, i.e. contracts that contain one or more embedded derivatives, are classified as financial asset or financial liability at fair value through profit or loss. The designation implies that the entire combined instrument is valued at fair value and that changes in fair value are recognised on an ongoing basis in profit or loss.

Hedge accounting

Hedge accounting is applied to derivatives used to reduce risks such as interest rate risks and currency risks in financial instruments and net investments in subsidiaries. The Group documents and designates at inception the relationship between hedged item and hedging instrument as well as the risk objective and hedge strategy. The Group also documents its assessment both at inception and on an ongoing basis whether prospectively the derivatives used are expected to be, and are highly effective when assessed retrospectively, in offsetting changes in fair values or cash flows of hedged item. The Group also assesses and documents that the likelihood of forecasted transactions to take place is highly probable.

The Group designates derivatives as either:

• hedges of the fair value of recognised assets or liabilities of firm commitments (fair value hedge)
• hedges of the fair value of the interest risk of a portfolio (macro hedging)
• hedges of highly probable future cash flows attributable to recognised assets or liabilities or a forecasted transaction (cash flow hedge)
• hedges of a net investment in a foreign operation (net investment hedge).

Fair value hedge

Fair value hedge is the hedging of exposure to changes in the fair value of an asset or a liability, or an identifiable component of such asset or liability, which is attributable to a certain risk that could affect the profit or loss. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement together with changes in the fair value of the hedged item that are attributable to the hedged risk.

Where the Group hedges the fair value of interest rate exposure in a portfolio including financial assets or financial liabilities, so called portfolio hedging of interest rate risk, the gains or losses attributable to the hedged item are reported as a separate item under assets or as a separate item under liabilities in the balance sheet. The group applies the EU carve out version of IAS 39 for portfolio hedges of both assets and liabilities.

Fair value hedges are discontinued in the following situations:

• The hedging instrument expires or is sold, terminated or exercised
• The hedging relationship no longer meets the criteria for hedge accounting
• The hedging relationship is discontinued.

When hedge relationships are discontinued, any adjustment to the carrying amount of the hedged item is amortised to profit or loss over the period to maturity of the hedged item.

Cash flow hedge

Cash flow hedging is applied for the hedging of exposure to variations in future interest payments on assets or liabilities with variable interest rates. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly against equity. The ineffective portion of the gain or loss on the hedging instrument is recognised in profit or loss.

Gains or losses on hedging instruments reported directly against equity are recognised in profit or loss in the same period as interest income and interest expense from the hedged asset or liability.

Cash flow hedges are discontinued in the same situations as listed above regarding the termination of fair value hedges. When cash flow hedges are discontinued but future cash-flows still are expected to occur, accumulated gains or losses from the hedging instrument will remain as a separate item in equity. Accumulated gains or losses are subsequently reported in profit or loss in the same period in which the previously hedged interest flows are recognised in profit or loss.

Net investment hedge

The hedging of a net investment in a foreign operation refers to the hedge of equity in a foreign subsidiary against foreign exchange fluctuations. This type of hedge is accounted for similarly to cash flow hedges. Gains or losses on the hedging instrument attributable to the effective portion of the hedge are recognised in equity whilst the ineffective portion is recognised directly in profit or loss. Gains or losses accumulated in equity are included in profit or loss at the disposal of the foreign operation.

Interest income and interest expenses

The effective interest rate method is applied to recognise interest income and interest expenses in profit or loss for financial assets and financial liabilities measured at amortised cost.

The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating interest income and interest expenses. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument. When calculating future payments, all payments included in the terms and conditions of the contracts, such as advance payments, are taken into consideration. However, future credit losses are not taken into account. The calculation of effective interest rate includes fees and points to be received and paid that are an integral part of the effective interest rate, transaction costs and other premiums and discounts.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is subsequently recognised applying the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

Commission income and fees

Commission income and income in the form of fees on financial instruments are accounted for differently, depending upon the financial instrument from which the income is derived. When commission income and fees are included in the calculation of the effective interest rate of a financial instrument measured at amortised cost, such interest and fees are usually allocated over the expected tenor of the instrument applying the effective interest rate method.

Commission income and fees from asset management and advisory services are reported in accordance with the economic substance of each agreement. This income is usually recognised during the period in which the service is provided. Commission and fees from negotiating a transaction for a third party, such as arrangement of acquisitions or purchase or sale of a business, is recognised on completion of the transaction. Performance-based fees are reported when the income can be reliably calculated.

Fees from loan syndications in which SEB acts as arranger are reported as income when the syndication is completed and the Group has retained no part of the loan or retained a part at the same effective interest rate as other participants.

Dividend income

Dividends are recognised when the entity's right to receive payment is established.

Repurchase agreements

Repurchase agreements are generally treated as collateralised financing transactions. Market values of the securities received or delivered are monitored on a daily basis to require or deliver additional collateral. In repurchase transactions,

the asset continues to be reported on the selling party's balance sheet and the payment received is reported as a deposit or borrowing. The sold instrument is reported as pledged assets. The buying party reports the payment as an outstanding loan to the selling party. The difference in amounts between the spot and the forward payments is allocated as interest over the life of the instrument.

Securities borrowing and lending

Securities borrowing and lending transactions are entered into on a collateralised basis. Fair values of securities received or delivered are monitored on a daily basis to require or provide additional collateral. Cash collateral delivered is derecognised with a corresponding receivable and cash collateral received is recognised with a corresponding obligation to return it. Securities lent remain on the balance sheet and are reported as pledged assets. Borrowed securities are not recognised as assets. When borrowed securities are sold (short position), an amount corresponding to the fair value of the securities is entered as a liability. Securities received in a borrowing or lending transaction are disclosed as off-balance sheet items.

Impairment of financial assets

All financial assets, except those classified at fair value through profit or loss, are tested for impairment.

On each balance sheet date the Group assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events occurring after the initial recognition of the asset, and if that loss event will have an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably measured.

Examples of objective evidence that one or more events have occurred which may affect estimated future cash flows include:

• significant financial difficulty pertaining the issuer or obligor,
• concession granted to the borrower as a consequence of financial difficulty, the nature of which normally would not have been granted to the borrower,
• a breach of contract, such as a default or delinquency in the payment of interest or principal,
• the probability that the borrower will go bankrupt or undergo some other kind of financial reconstruction
• deterioration in the value of collateral and
• a significant or prolonged decline in the fair value of an equity instrument below its cost.

An impairment loss is reported as a write off, if it is deemed impossible to collect the contractual amounts due that have not been paid and/or are expected to remain unpaid, or if it is deemed impossible to recover the acquisition cost by selling any collateral provided. In other cases, a specific provision is recorded in an allowance account. As soon as the non-collectible amount can be determined and the asset is written off, the amount reported in the allowance account is dissolved. Similarly, the provision in the allowance account is reversed if the estimated recovery value exceeds the carrying amount.

Appraisal of impairment

Individual appraisal of impairment

The following events are applied to establish objective evidence of impairment of individually appraised assets. Material breach of contract occurs when scheduled payments are past due by 60 days or more. The debt instrument is impaired if the cash flow or liquidity projections including the value of the collateral do not cover outstanding exposure. Quoted debt instruments are in addition subject to appraisal for impairment if there is a significant decline in fair value or rating to establish that no change is expected in cash flows. Equity instruments are considered impaired when a significant or prolonged decline in the fair value is recognised.

Collective appraisal of impairment when assets are not individually impaired Assets appraised for impairment on an individual basis and found not impaired are included in an incurred but not identified collective appraisal. The collective appraisal of incurred but not identified credit losses is based on the SEB counterpart rating scale.

Homogeneous group appraisal for impairment

Financial assets with limited value and similar risk, homogeneous groups, are appraised for impairment on a portfolio basis. The appraisal of homogeneous groups are based on historical lending losses and an assessment of factors, based on an expert judgement, which could have an impact on the level of losses.

Recognition of impairment loss on assets carried at amortised cost

An impairment of a financial asset in the category loans and receivables or in the category held to maturity investments carried at amortised cost is calculated on the basis of the original effective interest rate of the financial instrument. The amount of the impairment is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows (recoverable amount). If the terms of an asset are renegotiated or otherwise modified due to financial difficulties on behalf of the borrower or issuer, impairment is

measured using the original effective interest rate before modification of the terms and conditions. Cash flows relating to short-term receivables are not discounted if the effect of the discounting is immaterial. The entire, outstanding amount of each loan for which a specific provision has been established is included in impaired loans, i.e. including the portion covered by collateral.

Impairment loss on Available for sale financial assets

When a decline in the fair value is recognised and there is objective evidence of impairment in an available for sale financial instrument, the accumulated loss shall be reclassified from equity (other comprehensive income) to profit or loss. The amount of the accumulated loss that is transferred from equity and recognised in profit or loss is equal to the difference between the acquisition cost and the current fair value, with a deduction of any impairment losses on that financial asset which had been previously recognised in profit or loss.

The incurred impairment of unquoted equities, measured at acquisition cost, is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for similar equities.

Impairment losses on bonds or other interest-bearing instruments classified as available-for-sale are reversed via profit or loss if the increase in fair value can be objectively attributed to an event taking place subsequent to the write down. Impairment losses for equity instruments classified as available for sale are not reversed through profit or loss following an increase in fair value but recognised in equity.

Renegotiated loans

Renegotiated loans are no longer considered to be past due unless the loan is past due according to the renegotiated terms.

Seized assets

Seized assets are seized as part of an impairment procedure to compensate for losses in an asset. Seized asset are valued at fair value at inception and the intention is to dispose of the asset at the earliest convenience.

Tangible fixed assets

Tangible fixed assets, with the exception of investment properties held in insurance operations, are reported at historical cost and are depreciated according to plan on a straight line basis over the estimated useful life of the asset. The maximum depreciation period for buildings is 50 years. The depreciation period for other tangible fixed assets is between 3 and 5 years.

Tangible fixed assets are tested for impairment whenever there is indication of impairment.

Leasing

Leasing contracts are specified as finance or operating leases.

A finance lease is a lease that transfers, from the lessor to the lessee, substantially the entire risks and rewards incidental to the ownership of an asset. Operational leasing contracts are those leases which are not regarded as finance leases. In the Group, essentially all leasing contracts in which the Group is the lessor are classified as finance leases. Finance leases are reported as lending, which implies that the leasing income is reported as interest income.

Investment properties

Investments in properties held in order to receive rental income and/or for capital appreciation are reported as investment properties. The recognition and measurement of such properties differs, depending upon the entity owning the property. Investment properties held in the insurance operations, used to match liabilities providing a yield directly associated with the fair values of specified assets, including the investment properties themselves, are accounted for using the fair value model. Holdings of investment properties in the banking operations are valued at depreciated cost.

Intangible assets

Intangible assets are identifiable, non-monetary assets without physical substance. For an intangible asset to be recognised an entity must be able to demonstrate control of the intangible asset, which implies that the entity has the ability to ensure that the future economic benefits flowing from the underlying resource will accrue to the company. Intangible assets, other than goodwill, are only recognised in the balance sheet if it is probable that the future economic benefits attributable to the asset will accrue to the Group and if the acquisition cost of the asset can be measured in a reliable manner.

Intangible assets are measured initially at acquisition cost, and thereafter at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite useful lives are amortised on a straight line basis over their useful lives and tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Customer lists are amortised over 20 years and internally generated intangible assets, such as software development, are amortised over a period of between 3 and 5 years.

Intangible assets with indefinite useful lives, such as goodwill, are not amortised but tested for impairment annually and whenever there is an indication that the intangible asset may be impaired. As regards goodwill, an impairment loss is recognised in profit or loss whenever the carrying amount, with respect to a

cash-generating unit or a group of cash-generating units to which the goodwill is attributed, exceeds the recoverable amount. Impairment losses attributable to goodwill are not reversed, regardless of whether the cause of the impairment has ceased to exist.

The recoverable amount of an intangible asset is determined if there is indication of a reduction in the value of the asset. An impairment loss is recognised if the carrying amount exceeds the recoverable amount of the asset.

Provisions

A provision is established when the Group has a present obligation as a result of past events. Conditions for the establishment of a provision are that the amount can be estimated in a reliable manner and that it is more likely than not that an outflow of resources will be required to settle the obligation. Provisions are evaluated at each balance sheet date and are adjusted as necessary.

Provisions are valued at the present value of the amount expected to be required in order to settle the obligation. The applied discount rate before tax reflects the current market assessment of the time-dependent value of the funds or the risks to which the provision refers. The increase of the provision over the course of time is recorded as an interest expense.

Employee benefits

Pension obligations

Depending upon local conditions, there are both defined benefit and defined contribution pension plans within the Group. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will get on retirement depending on factors as age, years of service and compensation. A defined contribution pension is a pension plan where the Group pays a contribution to a separate entity and has no further obligation once the contribution is paid.

The pension commitments of the Group with respect to defined benefit plans are covered by the pension funds of the Group, through insurance solutions or through provisions in the balance sheet. Pensions are recognised and measured in accordance with IAS 19, Employee Benefits. Defined benefit pension plans are calculated at present value according to the actuarial method called the Projected Unit Credit Method. The assumptions upon which the calculations are based are found in the note addressing staff costs. Actuarial gains and losses are recognised in profit or loss to the extent they exceed the greatest of 10 per cent of pension commitments and plan assets at the beginning of the reporting period. Amounts outside this corridor are reported in profit or loss over the employees' expected average remaining working lives. Pension commitments and any special plan assets are consolidated on a net basis per unit in the balance sheet.

Pension costs for defined contribution pension plans are carried as an expense on a continuous basis in line with the pension rights earned by the individual concerned.

Share-based payments

Group company employees receive compensation through share-based incentive programmes. The compensation consists of employee stock options (equity instruments), entitling the holder to subscribe for shares in the parent company at a future date and at a predetermined price.

The total value of issued stock options is amortised over the vesting period. The vesting period is comprised of the period from the date on which the options are issued until the stipulated vesting conditions are satisfied. The total value of issued stock options equals the fair value per option, multiplied by the number of options that are expected to become exercisable, taking the vesting conditions into consideration. The allocation of this amount implies that profit and loss are impacted at the same time as the corresponding increase in equity is recognised. At each balance sheet date an assessment is made to determine if the vesting conditions will be fulfilled and the extent to which they will be fulfilled. If the conclusion of this assessment is that a lower number of options are expected to be vested during the vesting period, then the previously expensed amounts are reversed through profit or loss. This implies that in cases in which the vesting conditions are not fulfilled, no costs will be reported in profit or loss, seen over the entire vesting period.

The employee stock option programme are hedged through the repurchase of own equity instruments (treasury shares) or through contracts to buy own equity instruments (total return swaps). However, hedge accounting is not applied, as it is deemed that such hedges do not qualify for hedge accounting under IAS 39.

Treasury shares are eliminated against equity. No gains or losses on the sale of treasury shares are recognised in profit or loss but are, instead, recognised as changes in equity.

Total return swap contracts entered into with third parties represent an obligation for the parent company to purchase its own equity instruments (own shares) at a predetermined price. Consequently, the swap contracts are classified as equity instruments. Contracts with an obligation to purchase own equity instruments give rise to a financial liability for the present value of the redemption amount, and an amount equivalent to this liability is reported as a decrease in equity.

Interest paid under the swap contracts is recognised in profit or loss and dividends received are regarded as dividends on own shares and are recognised in equity.

Taxes

The Group's tax for the period consists of current and deferred tax. Current tax

Current tax and deferred tax are generally recognised in profit or loss. However, tax that relates to items recognised directly in equity is also reported directly in equity. Examples of such items are changes in the fair value of available-for-sale financial assets and gains or losses on hedging instruments in cash flow hedges.

Deferred tax assets are recognised in the balance sheet to the extent that it is probable that future taxable profits will be available against which they can be utilized. The Group's deferred tax assets and tax liabilities have been calculated at the tax rate of 26,3 per cent in Sweden and at each respective country's tax rate for foreign companies.

Insurance and investment contracts

Insurance contracts are contracts under which the Group accepts significant insurance risk – defined as a transfer of an absolute risk of minimum 5 percent of the underlying value – from the policyholder by agreeing to compensate the policyholder or other beneficiaries on the occurrence of a defined insured event. Investment contracts are financial instruments that do not meet the definition of an insurance contract, as they do not transfer significant insurance risk from the policyholder to the Group.

Insurance contracts

Insurance contracts are classified as Short-term (non-life) or Long-term (life). Short-term insurance comprise sickness, disability, health-care, and rehabilitation insurance. Long-term insurance comprise mainly traditional life insurance within the Danish subsidiary, SEB Pension. In the Group accounts Short-term and Long-term insurance are presented aggregated as Insurance contracts. Some 95 per cent of the insurance liability is related to Long-term insurance contracts.

Measurement of Short-term insurance contracts (non-life)

The provision for unearned premiums is intended to cover the anticipated cost of claims and operating expenses arising during the remaining policy period of the insurance contracts in force. The provision for unearned premiums is usually strictly proportional over the period of the insurance contracts. If premiums are judged to be insufficient to cover the anticipated cost for claims and operating expenses, the provision for unearned premiums is strengthened with a provision for unexpired risks.

For anticipated future claims that have been incurred but not yet paid, provision for claims outstanding is recognised. The provision is intended to cover the anticipated future payment of all claims incurred, including claims incurred but not reported (IBNR provisions). This provision should also cover all costs for claims settlement. The provision for claims outstanding is not discounted, with the exception of provisions for sickness annuities, which are discounted using standard actuarial methods.

Measurement of Long-term insurance contracts (life)

For long-term life insurance contracts, a liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised. The liability equals the sum of the discounted value of expected benefit payments and future administration expenses, less any outstanding future contractual premium payments. Liabilities for long-term life insurance are discounted using standard actuarial methods.

Liability adequacy test

Swedish actuarial procedures involve performing liability adequacy tests on insurance liabilities. This is to ensure that the carrying amount of the liabilities is sufficient in the light of estimated future cash flows. The carrying amount of a liability is the value of the liability less any related intangible asset or asset for deferred acquisition costs. In performing these tests the current best estimates of future contractual cash flows, as well as claims handling and administration costs, are used in performing these liability adequacy tests. These cash flows are discounted and compared to the carrying amount of the liability. Any deficit is immediately reported in profit or loss.

Revenue recognition

Premiums for insurance contracts are recognised as revenue when they are paid by the policyholders. For contracts where insurance risk premiums received during a period are intended to cover insurance claims arising in that period those premiums are recognised as revenue proportionally during the period of coverage.

Recognition of expenses

Costs for insurance contracts are recognised as an expense when incurred, with the exception of commissions and other variable acquisition costs that vary with and are directly related to securing new contracts and the renewal of existing contracts. These costs are capitalised as deferred acquisition costs. These costs are mainly incremental acquisition costs paid to sales personnel, brokers and other distribution channels. Deferred acquisition costs are amortised as the related revenue is recognised. The asset is tested for impairment every accounting period, ensuring that the economic future benefits expected to arise from the contracts exceed its face amount. All other costs, such as non-incremental acquisition costs or maintenance costs, are recognised in the accounting period in which they arise. Insurance compensation is recorded as an expense when incurred.

Reinsurance

Contracts with re-insurers, whereby compensation for losses is received by the Group, are classified as ceded reinsurance. For ceded reinsurance, the benefits to which the Group is entitled under the terms of the reinsurance contract are reported as the re-insurers' share of insurance provisions. Amounts recoverable from re-insurers are measured consistently with the amounts associated with the reinsurance contracts and in accordance with the terms of each reinsurance contract.

Investment contracts

The majority of the Group's unit linked insurance is classified as investment contracts. No significant insurance risk is transferred from the policyholder to the Group. A minor part of the Group's unit linked insurance business, the portion referring to the Lithuanian insurance subsidiary, is classified as insurance contracts.

Measurement

Investment contracts are financial commitments whose fair value is dependent on the fair value of the underlying financial assets. The underlying assets and related liabilities are measured at fair value through profit or loss. The fair value of the unit linked financial liabilities is determined using the fair value of the financial assets linked the financial liabilities attributed to the policyholder on the balance sheet date. However, if the liability is subject to a surrender option, the fair value of the financial liability is never less than the amount payable on surrender.

Revenue recognition

Amounts received from and paid to policyholders are reported in the balance sheet as deposits or withdrawals. Fees charged for managing investment contracts are recognised as revenue. The revenue for these management services is evenly distributed over the tenor of the contracts.

Recognition of expenses

Variable expenses directly attributable to securing a new investment contract are deferred. These costs are primarily variable acquisition costs paid to sales personnel, brokers and other distribution channels. Deferred acquisition costs are reported in profit or loss as the related revenue is recognised. The asset is tested for impairment during each accounting period to ensure that the future economic benefits expected to arise from the contract exceed the carrying amount of the asset. All other costs, such as fixed acquisition costs or ongoing administration costs, are recognised in the accounting period in which they arise.

Contracts with discretionary participation features (DPF)

Traditional saving contracts include a discretionary participation feature. This feature entitles the policyholder to receive, as a supplement to guaranteed benefits, additional benefits or bonuses. All contracts that include a discretionary participation feature are reported as insurance contracts The amounts referring to the guaranteed element and to the discretionary participation feature are reported as liabilities to policyholders.

SIGNIFICANT ACCOUNTING POLICIES OF THE PARENT COMPANY

The annual report of the parent company has been prepared in accordance with the Act (1995:1559) on annual accounts of credit institutions and securities companies ("AACS"), the accounting regulations of the Financial Supervisory Board ("FSA 2008:25") and recommendation RFR 2.1 of the Swedish Financial Reporting Board (SFRB).

The parent company applies "IFRS as restricted by the law", which means that international accounting standards are applied to the extent permitted under Swedish accounting legislation. As the Swedish standards have not been fully adjusted to IFRS, the accounting principles of the parent company differ, in certain aspects, from the accounting principles applied by the SEB Group. The essential differences are described below.

Presentation format

The presentation format for the balance sheet and the profit and loss account according to the AACS are not in conformity with IFRS. Credit institutions and securities companies applying international accounting standards (IFRS/IAS) endorsed by the European Commission in their consolidated accounts are provided the option to deviate from the presentation format for the balance sheet as stipulated in AACS, but may not deviate from the AACS stipulated profit and loss account. The parent company has chosen to utilize this option, implying that the presentation format of the balance sheet is, in all material aspects, the same in both the Group and the parent company.

Definition of the Group

The AACS and IAS 27 have different definitions of a group. According to the AACS,

companies are not reported as parent companies and subsidiaries if there is no ownership interest. According to IAS 27, it is sufficient that there is controlling influence. In other words, no share in the ownership of the company is required. There is a definition in AACS which determines when a company is the parent company of a group and is; therefore, liable to prepare consolidated accounts, but it is IAS 27 which stipulates the companies to be included in the consolidated accounts. For SEB, this means that the consolidated accounts comprise a different group of companies than those constituting a group according to AACS.

Holdings in subsidiaries and associated companies

Participations in subsidiaries and associated companies shall be reported in accordance with the cost method. Dividends received are reported as income to the extent that they emanate from profits earned after the acquisition. Dividends in excess of such profits reduce the reported value of the participation. If the value of the participations is lower than their acquisition cost on balance sheet date, a write-down to the lower value will be made if such decrease in value is deemed permanent.

The parent company has chosen to apply hedge accounting to the foreign exchange risk in participations held in foreign subsidiaries and to the exchange risk in accrued profits in these subsidiaries. For this purpose hedging of the fair values is applied, which means that the value of the participations and the loans serving as hedge instruments are translated taking into consideration the hedged risk. Participations in subsidiaries subject to hedge accounting are, consequently, reported at a value differing from their acquisition cost.

Segment reporting

The parent company need not present segment information. However, information shall be disclosed regarding income per business area and geographical market.

Financial assets and financial liabilities designated at fair value through profit or loss (Fair Value Option)

It is only possible to designate financial assets and financial liabilities as measured at fair value through profit or loss in those cases permitted by AACS. Therefore, it is not possible for the parent company to fully apply the Fair Value Option. For example, it is not possible to designate liabilities as measured at fair value through profit or loss, except for those held for trading purposes or which constitute derivatives.

Leasing

According to RFR 2.1, leasing contracts which are classified as finance leases in the consolidated accounts may be accounted for as operating leases in legal entities. The parent company has chosen to utilize this option.

Pensions

The Act on safeguarding of pension commitments and the guidance from the FSA include regulations the application of which results in accounting treatment as regards defined benefit plans differing from the treatment stipulated in IAS 19. Compliance with the Act on safeguarding of pension commitments is a condition for fiscal deductibility. In view of this, RFR 2.1 states that it is not mandatory that the regulations in IAS 19 regarding defined benefit pension plans be applied in the legal entity. The parent company, whose obligations are covered by pension funds, has chosen to utilize this possibility. Imputed pension costs are, therefore, reported as personnel costs in the profit and loss account and reversed in appropriations. The parent company compensates itself for pensions paid from the pension funds, provided the financial position of the funds so permits. Paid pensions and compensation from the pension funds are recorded among appropriations.

Group contributions

Group contributions paid or received for the purpose of minimising the Group's taxes are reported in the parent company as a decrease/increase in non-restricted equity, after adjustment for estimated tax.

CRITICAL JUDGMENTS IN APPLYING THE GROUP'S ACCOUNTING POLICIES

Applying the Group's accounting policies require in some cases the use of estimates and assumptions that have a material impact on the amounts reported in the financial statements. The estimates are based on expert judgements and assumptions that management believes are true and fair. The most significant assumptions and estimates are associated with:

• the consolidation of mutual life insurance companies and unit-linked funds
• the fair value measurement of certain financial instruments
• the impairment testing of financial assets and goodwill
• the calculation of insurance liabilities
• the market valuation of real estate property
• the reporting of tax assets
• the actuarial calculations of pension liabilities

Consolidation of mututal life insurance companies and unit-linked funds

Within the life insurance operations of the SEB Group Gamla Livförsäkrings AB SEB Trygg Liv operates as a mutual life insurance company. The entity is not consolidated, as the judgment of the Group is that it does not have control of the entity. Control is seen to imply the power to govern the financial and operating policies of an entity in order to obtain benefits from its activities. Life insurance entities operated as mutual life insurance companies cannot pay dividends why the Group deems that it cannot obtain benefits. In Gamla Livförsäkrings AB SEB Trygg Liv there are specific policies specifying the composition of the board, which implies that the SEB Group is not able to govern the financial and operating policies of the entity.

The policyholders in SEB's unit-linked company choose to invest in a variety of funds. The insurance company providing unit-linked products invests in the funds chosen by the customers. By doing so SEB might, in some cases, hold more than 50 per cent of the funds, which it holds on behalf of the customers for whom it acts as investment manager. Due to the legislation regarding fund operations, SEB considers that it does not have the power to govern the financial and operating policies of such investment funds to obtain benefits. This applies irrespective of whether the funds held on behalf of customers are greater or less than 50 percent of a fund. It is the policyholders who carry the investment risk, not SEB. Consequently, the policyholders are entitled to all of the returns generated by the funds. SEB only charges fees, on market conditions, for managing the funds. SEB has come to the conclusion that the funds which it manages should not be consolidated. However, the shares that the Group holds in such funds on behalf of its customers are recognised in the balance sheet.

Fair value measurement of certain financial instruments

Financial assets and liabilities are primarily measured at fair value by utilising quoted prices on active markets. In the absence of quoted prices, generally accepted and well established valuation techniques based on maximum use of observable market information is used. Valuation techniques applied are discounted cash flows, third party indicative quotes, benchmarking to instrument with similar characteristics and option pricing models. Valuation techniques are subject to regular reviews by the group risk control organisation to ensure reliability.

Impairment testing of financial assets and goodwill

Financial assets

Testing financial assets individually for impairment requires judgement to establish the counterparty's repayment capacity and the realisable value of any collateral. The most important aspect when testing a group of financial assets collectively for impairment is to identify the events that indicate incurred losses. Adjusting models for collective impairment testing to current market situation also require a high degree of expert judgement to ensure a reliable estimate. The assessment and assumptions are regularly reviewed by the group credit organisation.

Goodwill

The annual impairment test of goodwill is based on the value in use with forecasted cash flows for five years. The cash flows beyond five years are determined based on historical performance and market trends for key assumptions such as growth, revenue and costs for cash generating units to which goodwill is allocated.

Calculation of insurance liabilities

Calculation of the Group's insurance liabilities is based on a number of assumptions such as interest rates, mortality, health, expenses, persistency, inflation and taxes.

Assumption on interest rates is based on regulations from each local Financial Supervisory Authority (FSA). All other assumptions are based on internally acquired experience.

Market valuation of real estate property

Real estate properties in the insurance operations have been fair valued with the assistance of external expertise. The valuation method applied means that the related expected cash flows are discounted to present value. The assumptions concerning expected cash flows are based on assumptions on future rents, vacancy levels, operating and maintenance costs, yield requirement and market interest. Assumptions are in line with the assessments that the market can be expected to make under current market conditions. The yield requirement is based on local analyses of comparable property purchases.

Reporting of tax assets

The expected outcome of uncertain tax positions is determined as the single most likely outcome.

Actuarial calculations of pension liabilities

Valuation of the Group's pension liabilities is based on actuarial, demographic and financial assumptions. Note 9b contains a list of the most critical assumptions used when calculating the provision.

2 Segment reporting

Business	segme	nts in SEB Group

Income statement, 2008	Merchant Banking	Retail Banking	Wealth Management	Life1)	Other incl. eliminations2)	Group
Interest income	67,684	46,440	4,011		–20,854	97,281
Interest expense	–60,270	–35,690	–3,120	–36	20,545	–78,571
Net interest income	7,414	10,750	891	–36	–309	18,710
Fee and commission income	6,573	8,137	5,264		–97	19,877
Fee and commission expense	–1,325	–2,496	–1,583		781	–4,623
Net fee and commission income	5,248	5,641	3,681		684	15,254
Net financial income	3,625	397	67		–1,119	2,970
Net life insurance income				3,296	–921	2,375
Net other income	541	244	48		998	1,831
Total operating income	16,828	17,032	4,687	3,260	–667	41,140
of which internally generated	–10,550	1,700	–67	1,005	7,912
Staff costs	–3,890	–4,632	–1,427	–1,105	–5,187	–16,241
Other expenses	–3,594	–5,449	–1,132	–523	3,056	–7,642
Depreciation, amortisation and impairments of
tangible and intangible assets	–95	–311	–100	–569	–449	–1,524
Total operating expenses	–7,579	–10,392	–2,659	–2,197	–2,580	–25,407
Gains less losses from tangible and intangible assets	5	2			–1	6
Net credit losses incl. changes in value of seized assets	–904	–2,380	–17		33	–3,268
Operating profit	8,350	4,262	2,011	1,063	–3,215	12,471
Income statement, 2007
Interest income	59,858	34,924	3,609		–12,356	86,035
Interest expense	–54,248	–25,226	–2,766	–28	12,231	–70,037
Net interest income	5,610	9,698	843	–28	–125	15,998
Fee and commission income	7,256	8,410	5,767		–33	21,400
Fee and commission expense	–1,311	–2,191	–1,690		843	–4,349
Net fee and commission income	5,945	6,219	4,077		810	17,051
Net financial income	2,613	482	79		65	3,239
Net life insurance income				3,958	–1,025	2,933
Net other income	839	159	86		135	1,219
Total operating income	15,007	16,558	5,085	3,930	–140	40,440
of which internally generated	–6,350	–2,027	–864	1,113	8,128
Staff costs	–4,246	–4,235	–1,340	–1,050	–4,050	–14,921
Other expenses	–3,489	–5,285	–1,040	–530	3,425	–6,919
Depreciation, amortisation and impairments of
tangible and intangible assets	–85	–318	–60	–548	–343	–1,354
Total operating expenses	–7,820	–9,838	–2,440	–2,128	–968	–23,194
Gains less losses from tangible and intangible assets Net credit losses incl. changes in value of seized assets	2 –326	4 –715	–1 –7		783 32	788 –1,016
Operating profit	6,863	6,009	2,637	1,802	–293	17,018
1) Business result in Life amounted to SEK 2,052m (3,075), of which change in surplus values was net SEK 989m (1,273).
2) Profit and losses from associated companies accounted for under the equity method are recognised in Net other income by SEK 77m (128). The aggregated investments are SEK 99m (424).

	Balance sheet, 2008-12-31

Assets Liabilities Investments	1,434,495 1,394,392 455	728,433 666,214 783	78,772 70,258 1,051	230,836 222,232 2,126	38,166 73,877 523	2,510,702 2,426,973 4,938
Balance sheet, 2007-12-31
Assets	1,381,938	725,782	86,938	244,497	–94,693	2,344,462
Liabilities	1,340,919	672,802	78,983	236,112	–61,073	2,267,743
Investments	364	539	62	1,042	841	2,848

Note 2 ctd. Segment reporting

Geographic al segme nts in SEB Group
	2008			2007
	Gross Income*	Assets	Investments	Gross Income*	Assets	Investments
Sweden	75,927	1,686,933	1,257	65,900	1,512,209	1,164
Norway	11,757	149,637	33	10,474	145,624	28
Denmark	11,151	206,720	1,392	10,209	280,562	478
Finland	3,077	27,289	15	2,782	20,815	24
Estonia	3,694	57,311	34	3,336	52,023	61
Latvia	3,488	50,796	58	3,124	47,356	92
Lithuania	5,523	91,718	357	4,308	77,220	151
Germany	28,206	651,615	252	25,801	575,581	227
Other countries	12,540	257,999	1,538	22,948	369,283	623
Group eliminations	–31,028	–669,316	2	–34,056	–736,211
Total	124,335	2,510,702	4,938	114,826	2,344,462	2,848

*Gross income in the Group is defined as the sum of Interest income, Fee and commission income, Net financial income, Net life insurance income and net other income according to IFRS.

Business segments in Parent company

2008	Merchant Banking	Retail Banking	Wealth Management	Life	Other incl. eliminations	Parent company
Gross income*	31,196	5,346	1,373	94	44,507	82,516
Assets	776,790	156,186	19,658	493	755,373	1,708,500
Investments	297	59	6		201	563
2007
Gross income*	32,162	10,608	1,723	106	20,996	65,595
Assets	970,143	314,625	11,056	2	263,493	1,559,319
Investments	141	73	14		58	286

Geographical segments in Parent company

	2008			2007
	Gross Income*	Assets	Investments	Gross Income*	Assets	Investments
Sweden	65,218	1,522,815	431	43,360	1,248,095	286
Norway	4,618	77,926		3,796	61,879
Denmark	5,449	71,799		5,147	167,731
Finland	1,348	3,357		946	3,692
Other countries	5,883	32,603	132	12,346	77,922
Total	82,516	1,708,500	563	65,595	1,559,319	286

*Gross income in the parent company is defined as the sum of Interest income, Leasing income, Dividends, Fee and commission income, Net Financial income and Other income according to SFSA accounting regulations.

Primary segment – Business segment

The Business segments are presented on a management reporting basis. The different divisions assist different groups of customers. The customers' demands decide the type of products that are offered. Merchant Banking offers wholesale and investment banking services to large corporations, institutions and real estate companies. Retail Banking offers products mainly to retail customers (private customers and small corporates). Wealth Management performs asset management and private banking activities and Life offers life, care and pension insurance. Some supportfunctions have been moved from the divisions to Group Operations and Group Staff, 2007 years figures have been restated accordingly.

Secondary segment – Geographical segment

The split is based on the location of the entity.

Transfer pricing

The internal transfer pricing objective in the SEB Group is to measure net interest income, to transfer interest risk and to manage liquidity. The internal price is set according to the market price, which is the price paid at the interbank market for a specific interest and liquidity term. The business units do not pay or receive any margins on funds transferred to and from the Treasury unit. Transactions between Business segments are conducted at arm's length.

3 Net interest income

		Group		Parent company
	2008	2007	2008	20073)
Loans to credit institutions	11,873	10,865	14,329	4,963
Loans to the public	64,612	53,770	33,940	25,521
Interest-bearing securities1)	18,706	18,127	11,408	11,686
Other interest income	2,090	3,273	109	1,743
Interest income2)	97,281	86,035	59,786	43,913
Deposits by credit institutions	–19,485	–17,287	–17,470	–5,174
Deposits and borrowing from the public	–31,292	–26,760	–13,618	–9,639
Interest-bearing securities	–21,593	–20,668	–16,602	–19,289
Subordinated liabilities	–2,336	–2,075	–2,280	–2,011
Other interest costs	–3,865	–3,247	–3,017	–2,351
Interest expense	–78,571	–70,037	–52,987	–38,464
Total	18,710	15,998	6,799	5,449
1) Of which, measured at fair value.	18,706	18,007	11,094	11,427
2) Including interest on impaired loans.	101	107

3) In the parent company a productnetting was made 2007 between loans and deposits to credit institutions.

Net income from leases1)

Income from leases	6,372	6,154
Depreciation of leased equipment	–4,604	–4,735
Total	1,768	1,419

1) In the Group Net income from leases is reclassified to interest income. In the parent company depreciation of leased equipment is reported as Depreciation, amortisation and impairment of tangible and intangible assets.

Net interest income
Interest income	59,786	43,913
Income from leases	6,372	6,154
Interest expense	–52,987	–38,464
Depreciation of leased equipment	–4,604	–4,735
Total	8,567	6,868

4 Net fee and commission income

		Group		Parent company
	2008	2007	2008	2007
Issue of securities	172	335	959	1,192
Secondary market	2,769	3,751	608	1,141
Custody and mutual funds	7,022	7,165	2,369	2,454
Securities commissions	9,963	11,251	3,936	4,787
Payments	1,844	1,808	1,134	1,116
Card fees	4,300	4,093	173	163
Payment commissions	6,144	5,901	1,307	1,279
Lending	1,004	1,055	678	718
Deposits	98	89	68	67
Advisory	1,118	1,473	297	378
Guarantees	301	264	171	152
Derivatives	601	363	516	305
Other	648	1,004	500	769
Other commissions	3,770	4,248	2,230	2,389
Fee and commission income	19,877	21,400	7,473	8,455
Securities commissions	–970	–902	–267	–260
Payment commissions	–2,450	–2,373	–526	–520
Other commissions	–1,203	–1,074	–686	–551
Fee and commission expense	–4,623	–4,349	–1,479	–1,331
Total	15,254	17,051	5,994	7,124

5 Net financial income

		Group		Parent company
	2008	2007	2008	2007
Gains (losses) on financial assets and liabilities
held for trading, net	3,665	3,256	3,236	2,490
Gains (losses) on financial assets and liabilities
designated at fair value, net	–221	–17
Impairments on available-for-sale financial assets	–474
Total	2,970	3,239	3,236	2,490
Gains (losses) on financial assets and liabilities held for trading, net
Equity instruments and related derivatives	1,483	569	1,002	587
Debt instruments and related derivatives	–936	–100	–176	–104
Currency related	3,106	2,787	2,410	2,007
Other financial instruments	12
Total1)	3,665	3,256	3,236	2,490
Gains (losses) on financial assets and liabilities designated at fair value, net
Equity instruments and related derivatives	–68	–49
Debt instruments and related derivatives	–123	–1
Currency related	–30	33
Total	–221	–17

1) Includes ineffectiveness for net investment hedges in foreign operations of SEK –85m (0).

Fair value changes in financial assets and financial liabilities within the unit linked insurance business, designated as at fair value through profit or loss offset each other in full.

6 Net life insurance income

		Group
	2008	2007
Premium income, net	7,126	5,961
Income investment contracts	983	1,067
Investment income net	–2,519	981
Other insurance income	397	471
Net insurance expenses	–3,612	–5,547
Total	2,375	2,933
Investment income, net
Direct yield1)	4,230	4,427
Change in value on investments at fair value, net	–7,069	–2,813
Foreign exchange gains (losses)	39	–419
	–2,800	1,195
Expenses for asset management services	–119	–108
Policyholders tax	400	–106
Total	–2,519	981

1) Net interest income, dividends received and operating surplus from properties.

Net insurance expenses

Total	–3,612	–5,547
Change in insurance contract provisions	5,718	2,371
Claims paid, net	–9,330	–7,918

7 Net other income

		Group		Parent company
	2008	2007	2008	2007
Dividends	122	79	2,715	3,925
Impairment of financial assets			–121	–106
Investments in associates	77	128
Gains less losses from investment securities	1,236	653	2,004	377
Gains less losses from tangible assets1)			6	–939
Other income	396	359	924	1,220
Total	1,831	1,219	2,934	658
1) See note 13 for the Group.
Dividends
Available-for-sale investments	122	79	18	26
Investments in associates				57
Shares in subsidiaries			2,697	3,842
Total	122	79	2,715	3,925
Impairment of financial assets
Impairments			–121	–106
Total			–121	–106
Investments in associates1)
NCSD Holding (former VPC)	60	89
BGC Holding	13	26
Other	4	13
Total	77	128
1) Recognised through the equity method.
Gains less losses from investment securities
Available for sale financial assets – Equity instruments	1,232	638	2,004	377
Available for sale financial assets – Debt instruments	85	791
Loans	9	1
Capital gains	1,326	1,430	2,004	377
Available for sale financial assets – Equity instruments	–18	–45
Available for sale financial assets – Debt instuments	–55	–641
Loans	–17	–91
Capital losses	–90	–777
Total	1,236	653	2,004	377
Other income
Fair value adjustment in hedge accounting	–46	–132	–87	–26
Operating result from non-life insurance, run off	–12	–12
Other income	454	503	1,011	1,246
Total	396	359	924	1,220
Fair value adjustment in hedge accounting
Fair value changes of the hedged items attributable to the hedged risk	–5,374	–1,363	–4,519	–854
Fair value changes of the hedging derivatives	4,831	907	4,417	842
Fair value hedges – ineffective portion	–543	–456	–102	–12
Fair value changes of the hedging derivatives	15	–14	15	–14
Cash-flow hedges – ineffective portion	15	–14	15	–14
Fair value changes of the hedged items	2,404	–691
Fair value changes of the hedging derivatives	–1,922	1,029
Fair value portfolio hedge of interest rate risk – ineffective portion	482	338
Total	–46	–132	–87	–26

Note 7 ctd. Net other income

Fair value hedges and fair value portfolio hedges

The Group hedges a proportion of its existing interest rate risk, in financial assets payments and financial liabilities with fixed interest rates, against changes in fair value due to changes in the interest rates. For this purpose the Group uses interest rate swaps, cross-currency interest rate swaps and in some situations also options. The hedges are done either on an item by item or grouped by maturity basis.

Cash flow hedges

The Group uses interest rate swaps to hedge future cash flows from deposits and lending with floating interest rates. Interest flows from deposits and lending with

floating interest rates are expected to be amortised in profit or loss during the period 2009 to 2037.

Net investment hedges

The Group hedges the currency translation risk of net investments in foreign operations through currency borrowings and currency forwards. Borrowing in foreign currency to an amount of SEK 55,899m (53,260) and currency forwards to an amount of SEK 4,486m (349) was designated as hedges of net investments in foreign operations. Ineffectiveness has been recognised with SEK –85m reported in Net financial income (note 5).

8 Administrative expenses

		Group		Parent company
	2008	2007	2008	2007
Staff costs	–16,241	–14,921	–9,274	–8,611
Other expenses	–7,642	–6,919	–4,464	–3,978
Total	–23,883	–21,840	–13,738	–12,589

9 Staff costs

	Group			Parent company
	2008	2007	2008	2007
Salaries and remuneration	–11,088	–10,808	–5,653	–5,576
Payroll overhead	–2,618	–2,615	–1,785	–1,646
Employee stock option programme	67	–71	67	–71
Payroll related costs	–13,639	–13,494	–7,371	–7,293
Imputed pension costs			–434	–362
Pension premiums paid			–441	–447
Benefit retirement plans	–7	369
Contribution retirement plans	–732	–733
Pension related costs1)	–739	–364	–875	–809
Other staff costs2)	–1,863	–1,063	–1,028	–509
Total	–16,241	–14,921	–9,274	–8,611

1) Pension costs in the Group are accounted for according to IAS 19, Employee benefits. Pension costs in Skandinaviska Enskilda Banken have been calculated in accordance with the directives of the Financial Supervisory Authority, implying an actuarial calculation of imputed pension costs. Non-recurring costs of SEK 213m (393) for early retirement have been charged to the pension funds of the Bank.

2) Includes costs for redundancies with SEK 1,050m (281) for the Group and SEK 778m (115) for the parent company.

9a Salaries and other remunerations per category

		Group			Parent company
2008	Executives1)	Other	Total	Executives1)	Other	Total
Sweden	–32	–4,839	–4,871	–18	–4,172	–4,190
Norway	–24	–749	–773		–247	–247
Denmark	–14	–669	–683		–203	–203
Finland	–34	–303	–337		–198	–198
Estonia	–20	–272	–292
Latvia	–11	–280	–291		–25	–25
Lithuania	–34	–356	–390		–3	–3
Germany	–277	–1,984	–2,261		–93	–93
Poland	–4	–50	–54		–22	–22
Ukraine	–12	–87	–99
China		–6	–6		–6	–6
Great Britain	–3	–515	–518		–487	–487
France		–13	–13		–13	–13
Ireland	–2	–14	–16
Luxembourg	–2	–209	–211
Russia	–3	–25	–28
Singapore		–118	–118		–110	–110
United States	–9	–105	–114		–56	–56
Other2)		–13	–13
Total	–481	–10,607	–11,088	–18	–5,635	–5,653

Note 9a ctd. Salaries and other remunerations per category

		Group			Parent company
2007	Executives1)	Other	Total	Executives1)	Other	Total
Sweden	–34	–5,038	–5,072	–19	–4,300	–4,319
Norway	–33	–827	–860		–190	–190
Denmark	–14	–756	–770		–321	–321
Finland	–24	–257	–281		–158	–158
Estonia	–7	–273	–280
Latvia	–13	–244	–257		–19	–19
Lithuania	–30	–311	–341
Germany	–267	–1,842	–2,109		–98	–98
Poland	–6	–27	–33		–15	–15
Ukraine	–3	–26	–29
China		–5	–5		–5	–5
Great Britain		–337	–337		–337	–337
France		–11	–11		–11	–11
Ireland	–2	–10	–12
Luxembourg	–12	–182	–194
Russia	–3	–21	–24
Singapore		–58	–58		–50	–50
United States	–11	–113	–124		–53	–53
Other2)		–11	–11
Total	–459	–10,349	–10,808	–19	–5,557	–5,576

1) Comprises current Board members and their substitutes in the parent company and subsidiaries, President and Deputy President in parent company and Managing Directors and Deputy Managing Directors in subsidiaries. Total number of Presidents, Managing Directors and Deputy Presidents and Managing Directors was 96 (101) of which 14 (19) female. Total number of Board members and their substitutes was 241 (207) of which 55 (47) female. These Board members do not, with the exception of the Board members elected at the AGM in the parent company, receive board remuneration.

2) Switzerland, British Virgin Island and Brazil.

Loans to Executives

	Group			Parent company
	2008	2007	2008	2007
Managing Directors and Deputy Managing Directors1)	153	134	18	2
Boards of Directors2)	251	208	34	47
Total	404	342	52	49

1) Comprises current President in the parent company and Managing Directors and Deputy Managing Directors in subsidiaries. Total number of executives was 96 (101) of which female 14 (19). 2) Comprises current Board members and their substitutes in the parent company and subsidiaries. Total number of persons was 241 (207) of which female 55 (47).

Pension commitments to Executives

		Group		Parent company
	2008	2007	2008	2007
Pension disbursements made	83	53	36	16
Change in commitments	52	58	11	7
Commitments at year-end	1,608	1,678	728	775

The above commitments are covered by the Bank's pension funds or through Bank-owned endowment assurance schemes. Includes active and retired Presidents and Deputy Presidents in the parent company and Managing Directors and Deputy Managing Directors in subsidiaries, in total 110 (115) persons.

9b Retirement benefit obligations

Defi ned benefi t plans in SEB Group
Net amount recognised		2008		2007
in the Balance sheet	Sweden1)	Foreign1)	Group1)	Sweden1)	Foreign1)	Group1)
Defined benefit obligation at
the beginning of the year	16,479	4,760	21,239	14,312	5,016	19,328
Acquisitions and reclassification		–43	–43		–55	–55
Service costs	454	93	547	347	99	446
Interest costs	604	255	859	523	222	745
Benefits paid	–805	–285	–1,090	–779	–242	–1,021
Exchange differences		764	764		228	228
Unrecognised actuarial gains/losses	91	–186	–95	2,076	–508	1,568
Defined benefit obligation
at the end of the year	16,823	5,358	22,181	16,479	4,760	21,239
Fair value of plan assets
at the beginning of the year	16,991	4,528	21,519	17,579	4,472	22,051
Acquisitions and reclassification					–77	–77
Calculated return on plan assets	1,275	265	1,540	1,317	260	1,577
Benefits paid/contributions	–691	–253	–944	–782	–216	–998
Exchange differences		731	731		205	205
Unrecognised actuarial gains/losses	–4,511	–688	–5,199	–1,123	–116	–1,239
Fair value of plan assets
at the end of the year	13,064	4,583	17,647	16,991	4,528	21,519
Funded status	–3,759	–775	–4,534	512	–232	280
Unrecognised actuarial gains/losses
on liabilities	5,941	160	6,101	5,989	348	6,337
Unrecognised actuarial gains/losses
on assets	2,349	690	3,039	–2,162	2	–2,160
Exchange differences		69	69		11	11
Net amount recognised in the Balance sheet	4,531	144	4,675	4,339	129	4,468
of which recognised as assets	4,486	217	4,703	4,373	192	4,565
of which recognised as liabilities	–45	73	28	34	63	97
Movements in the net assets or net liabilities
Defined benefit obligation
at the beginning of the year	4,339	129	4,468	3,896	192	4,088
Acquisitions and reclassification		43	43		–24	–24
Total expense as below	78	–85	–7	446	–77	369
Pension paid	805	285	1,090	779	242	1,021
Pension compensation	–691	–253	–944	–782	–216	–998
Exchange differences		25	25		12	12
Amounts recognised in Balance sheet	4,531	144	4,675	4,339	129	4,468

The actual return on plan assets was SEK –3,928m (175) in Sweden and SEK –297m (113) in foreign plans. The allocation of total plan assets in Sweden is 78 per cent (78) shares and 22 (22) interest-bearing, in foreign plans 14 (24) shares and 86 (76) interest-bearing.

The pension plan assets include SEB shares with a fair value of SEK 417m (903) and buildings occupied by the company with a value of SEK 792m (792).

Amounts recognised in the Profit and loss
Service costs	–454	–93	–547	–347	–99	–446
Interest costs	–604	–255	–859	–523	–222	–745
Return on plan assets	1,275	265	1,540	1,317	260	1,577
Actuarial gains/losses	–139	–2	–141	–1	–16	–17
Total included in staff costs	78	–85	–7	446	–77	369
Principal actuarial assumptions used, %
Discount rate	3.8%	6.0%		3.8%	5.5%
Inflation rate	2.0%	2.0%		2.0%	2.0%
Expected rate of salary increase	3.5%	3.0%		3.5%	3.0%
Expected rate of increase
in the income basis amount	3.0%			3.0%
Expected rate of return on plan assets	7.5%	5.0%		7.5%	6.0%

1) Defined benefit obligations and plan assets are disclosed gross in the table. There exist no legal right to offset obligations and assets between entities in the group but in the balance sheet the net amount is recognised for each entity either as an asset or liability.

Defined contribution plans in SEB Group

Net amount recognised		2008			2007
in the Profit and loss	Sweden	Foreign	Group	Sweden	Foreign	Group
Expense in Staff costs	–463	–269	–732	–487	–246	–733

Note 9b ctd. Retirement benefit obligations

DEFINED BENEFIT PLAN S IN SKANDINAVISKA ENSKILDA BANKEN
		Parent company
Net amount recognised in the Balance sheet	2008	2007
Defined benefit obligation at the beginning of the year	11,877	11,204
Imputed pensions costs	434	362
Interest costs and other changes	–47	700
Early retirement	213	393
Pension disbursements	–803	–782
Defined benefit obligation at the end of the year	11,674	11,877
Fair value of plan assets at the beginning of the year	16,732	17,343
Return in pension foundations	–3,136	171
Benefits paid	–803	–782
Fair value of plan assets at the end of the year	12,793	16,732

The above defined benefit obligation is calculated according to Tryggandelagen. The obligation is fully covered by assets in pension foundations and is not included in the balance sheet.

The assets in the foundations are mainly equity related SEK 9,955m (13,125) and to a smaller extent interest related SEK 2,838m (2,593). The assets include SEB shares of SEK 408m (890) and buildings occupied by the company of SEK 792m (792). The return on assets was –19 per cent (11) before pension compensation.

Amounts recognised in the Profit and loss

Imputed pension costs	–434	–362
Total included in staff costs	–434	–362
Recovery of imputed pension costs	434	362
Pension disbursements	–803	–782
Compensation from pension foundations	803	782
Total included in appropriations	434	362
Net pension costs for defined benefit plans	0	0
Principal actuarial assumptions used, %
Gross interest rate	4.2%	3.5%
Interest rate after tax	3.6%	3.0%

The actuarial calculations are based on salaries and pensions on the balance sheet date.

DEFINED CONTRIBUTION PLANS IN SKANDINAVISKA ENSKILDA BANKEN

		Parent company
Net amount recognised in the Profit and loss	2008	2007
Expense in Staff costs	–441	–447

Pension foundations

		Pension commitments		Market value of asset
	2008	2007	2008	2007
SEB-Stiftelsen, Skandinaviska Enskilda Bankens Pensionsstiftelse	11,674	11,877	12,793	16,732
SEB Kort AB:s Pensionsstiftelse	271	260	271	260
Total	11,945	12,137	13,064	16,992

SEB Kort AB:s Pensionstiftelse merged its assets with SEB-Stiftelsen, Skandinaviska Enskilda Bankens Pensionstiftelse during 2007 but kept its dedicated share of the assets.

Retirement benefit obligations

The Group has established pension schemes in the countries where business is performed. There are both defined benefit plans and defined contribution plans. The major pension schemes are final salary defined benefit plans and are funded. The defined contribution plans follow the local regulations in each country.

Defined benefit plans

The major defined benefit plans exist in Sweden and Germany and covers substantially all employees in these countries. Independent actuarial calculations according to the Projected Credit Unit Method (PUCM) are performed each year as per 31 December to decide the value of the defined benefit obligation. The benefits covered include retirement benefits, disability, death and survivor pensions according to the respective countries collective agreements.

The plan assets are kept separate in specific pension foundations.

Defined contribution plans

Defined contribution plans exist both in Sweden and abroad. In Sweden a smaller part of the retirement collective agreement is defined contribution plans. Over a certain salary level the employees can also choose to leave the defined benefit plan and replace it by a defined contribution plan. Most other countries have full defined contribution plans except for the Baltic countries where the company to a limited extent contribute to the employees retirement. The defined contribution plans are accounted for as an expense among Staff costs.

The assets are market valued each year at the same date as the obligation. The asset allocation is determined to meet the various risk in the pension obligations and are decided by the board/trustees in the pension foundations. The pension costs and the return on plan assets are accounted for among Staff costs.

9c Compensation to the top management and the Group Executive Committee

Compensation to the top mangement, SEK

2008	Base salary	Variable salaries1) Remunerations2)	Benefits and other3)	Total
Chairman of the Board, Marcus Wallenberg		2,750,000		2,750,000
Other members of the Board		6,200,000		6,200,000
President and CEO, Annika Falkengren1)	7,000,000		1,341,351	8,341,351
Total	7,000,000	8,950,000	1,341,351	17,291,351

Total	7,000,000	4,000,000	8,070,000	1,106,016	20,176,016
President and CEO, Annika Falkengren	7,000,000	4,000,000		1,106,016	12,106,016
Other members of the Board			5,470,000		5,470,000
Chairman of the Board, Marcus Wallenberg			2,600,000		2,600,000
2007

1) The President has unilateraly decided to renounce her pay-out of any short-term incentive compensation for 2008.

2) As decided at AGM.

3) Includes benefits for homeservice, company car and vacation compensation.

The principles for compensation of the President and the other members of the Group Executive Committee were prepared by the Board and the Remuneration and Human Resources Committee of the Board and approved by the Annual General Meeting 2008. For more information, see page 59–60.

Short-term Incentive

Short-term incentives for the Group Executive Committee are based on Group and divisional financial criteria, such as operating result, costs and other varying quantitative criteria. In addition to that there are individual qualitative criteria measured discretionary. All short-term incentives to the Group Executive Committee members are maximised to a percentage of base salary.

Long-term Incentive programme

From 1999 to 2004, employee stock options have been used as the vehicle for SEB's long-term incentive programmes. For 2005, the Annual General Meeting decided on a programme with a new performance based structure in the form of performance shares. For more information, see note 9d.

Performance shares and employee stock options cannot be sold nor pledged, which means that they do not have any market value. However, the calculated value for the 2008 programme at the time of the allotment was SEK 55 per performance share. The calculated value for allotted performance shares to the President is SEK 2,750,000 (3,499,942), 1,375,000 to the deputy President and to the GEC excluding the President and her deputy SEK 6,541,315 (10,800,052). The allotted performance shares that can be exercised will depend on the development of two predetermined performance criteria of equal importance, the real increase in

earnings per share, 50 per cent, and the total shareholder return compared to SEB´s competitors, 50 per cent.

Pension and severance pay

Under the pension agreement of the President, Mrs Falkengren, pension is payable from the age of 60. The pension plan is defined benefit-based and inviolable. Pension is paid at the rate of 65 per cent of the pensionable income. Pensionable income consists of base salary plus 50 per cent of the average variable salary during the last three years, however limited to a maximum amount. Termination of employment by the Bank is subject to a 12-month period of notice and entitles to a severance pay of 12 months' salary.

As regards pension benefits and severance pay the following is applicable to the members of the Group Executive Committee excluding the President. The pension plans are inviolable and defined benefit-based except for three that are defined contribution-based. Pension is payable from the age of 60 at the rate of maximum 70 per cent of pensionable income up to the age of 65 and at maximum 65 per cent thereafter. Pensionable income for defined benefit plans consists of base salary plus 50 per cent of the average variable salary during the last three years. Defined contribution-based pensionable income consists of base salary.

Termination of employment by the Bank is subject to a maximum 12-month period of notice and entitles to a severance pay of maximum 24 months' salary. The Bank has the right to make deductions from such severance pay of any cash payments that the Executive may receive from another employer or through his/ her own business.

Note 9c ctd. Compensation to the top management and the Group Executive Committee

Compensation to the Group Executive Committee, SEK1)
		Variable
2008	Base salary	salaries	Benefits	Total
Deputy President and CEO, Bo Magnusson2)	2,525,139	800,000	204,834	3,529,973
Other members of the Group Executive Committee	21,417,793	5,450,000	1,402,423	28,270,216
Total	23,942,932	6,250,000	1,607,257	31,800,189
2007
Other members of the Group Executive Committee	24,322,542	11,812,813	1,456,857	37,592,212
Total	24,322,542	11,812,813	1,456,857	37,592,212

1) Group Executive Committee excluding the President and CEO and Deputy President and CEO. The persons partly differ between the years but in average seven (seven) persons are included. 2) Bo Magnusson was appointed Deputy President and CEO in May 2008.

Pension costs (service costs and interest costs)

	President and CEO, Annika Falkengren	Deputy President and CEO, Bo Magnusson2)	GEC1)	Total
2008	7,367,039	1,810,196	12,535,958	21,713,193
2007	6,608,517		14,058,447	20,666,964

1) Group Executive Committee excluding the President and CEO and Deputy President and CEO. The persons partly differ between the years but in average seven (seven) persons are included. 2) Bo Magnusson was appointed Deputy President and CEO in May 2008.

Outstanding number of Employee stock options/Performance shares to the President and the Group Executive Committee

		2008			2007
	President and CEO	Deputy President and CEO	GEC1)	Total	President and CEO	GEC1)	Total
2001: Employee stock options					79,412	91,177	170,589
2002: Employee stock options	191,177		98,544	289,721	191,177	127,661	318,838
2003: Employee stock options	132,353		143,794	276,147	132,353	172,911	305,264
2005: Performance shares	458		59,581	60,039	62,000	107,200	169,200
2006: Performance shares	43,846		109,177	153,023	43,846	134,562	178,408
2007: Performance shares	40,697		106,396	147,093	40,697	125,582	166,279
2008: Performance shares	50,000	25,000	118,933	193,933
Total	458,531	25,000	636,425	1,119,956	549,485	759,093	1,308,578

1) Group Executive Committee excluding the President and CEO and Deputy President and CEO. The persons partly differ between the years but in average seven (seven) persons are included.

Related party disclosures*

		Group
Loans to conditions on the market	2008	2007
Top management and the Group Executive Committee	60,937,605	84,806,739
Other related parties	8,752,920	8,600,000
Total	69,690,525	93,406,739

* For information about related parties such as Group companies and Associated companies see note 47.

9d Share-based payments

	2008		2007
Long-term incentive programmes	Performance shares	Employee stock options	Performance shares	Employee stock options
Outstanding at the beginning of the year	4,133,205	4,682,772	3,117,679	12,819,189
Granted	1,459,283		1,264,040
Forfeited	–738,485	–103,7661)	–248,514	–120,6751)
Exercised	–383,770	–1,231,9222)		–8,015,7422)
Outstanding at the end of the year	4,470,233	3,347,084	4,133,205	4,682,772
of which exercisable	593,981	3,347,084		4,682,772

1) Weighted average exercise price SEK 21.37 (45.30).

2) Weighted average exercise price SEK 89.08 (113.70) and weighted average share price at exercise SEK 149.89 (221.30).

Note 9d ctd. Share-based payments

Total Long-term incentive programmes

Total		31,794,154	7,817,317	8,815,977
2008: Performance shares	482	1,459,283	1,453,533		1	10	2008–2015	20111)
2007: Performance shares	509	1,264,040	1,150,305	1,215,807	1	10	2007–2014	20101)
2006: Performance shares	513	1,477,327	1,272,414	1,360,636	1	10	2006–2013	20091)
2005: Performance shares	537	1,789,100	593,981	1,556,762	1	10	2005–2012	08-02-14
2004: Employee stock options	799	6,200,000			1	120	2004–2011	07-04-02
2003: Employee stock options	792	6,200,000	1,771,196	1,911,213	1	81.3	2003–2010	06-02-27
2002: Employee stock options	1,029	6,790,613	1,575,888	1,725,769	1	106.2	2002–2009	05-03-07
2001: Employee stock options	874	6,613,791		1,045,790	1	118	2001–2008	04-03-05
	Original no of holders2)	No of issued	No of outstanding 2008	No of outstanding 2007	A-share per option/share	Exercise price	Validity	First date of exercise

1) The fifth banking day falling after the Annual accounts for the financial year 2008, 2009, 2010 and 2011 respectively are made public.

2) In total 1,800 individuals have participated in all programmes.

Long-term incentive programmes

The first long-term incentive programme was installed in 1999 in the form of an employee stock option programme. Further employee stock option programmes have been issued for 2000–2004. All programmes have a maximum term of seven years, a vesting period of three years and an exercise period of four years, and are settled with SEB Class A-shares. The 2001 programme matured in 2008.

The long-term Incentive programmes issued during 2005–2008 have a new structure compared with the programmes from 1999–2004. These programmes are based on performance shares. The maximum term, vesting and exercise periods are the same but the allotted performance shares that can be exercised will depend on the development of two predetermined performance criteria of equal importance, the real increase in earnings per share and the total shareholder return compared to SEB's competitors. The expected vesting is approximately 40 per cent at time of grant of the preliminary allotted performance shares. During the exercise period and unless the performance shares have been exercised, the performance share holder is compensated for the dividend decided by the Annual General Meeting ("AGM"), by recalculating the number of Class A-shares that the performance share holder is entitled to. Performance shares are not securities that can be sold, pledged or transferred to another party. However, an estimated value per performance share has been calculated for 2008 to SEK 55 (86) (based upon an average closing price of one SEB Series A share during the period 7 February – 20 February, 2008, SEK 147.00 (233.20)) which is also an approximation of the closing price at grant. Other inputs to the options pricing model are; exercise price SEK 10 (10); volatility 26 (31) (based on historical values); expected dividend approximately 2.95 (2.6) per cent; risk free interest rate 3.68 (3.81) and expected early exercise of 3 (3) per cent. In the value of the option the expected outcome of earnings per share and total shareholders return compared to SEB's competitors are taken into account. Since earnings per share is a non-market condition, changes to the expected outcome under the vesting period, if any, influence the costs

accounted for under that period. Further details of the outstanding programmes are found in the table above.

The 2005 programme vested in 2008 with a final outcome of 62 per cent i.e. 62 per cent of the initially allotted performance shares can be exercised.

At the AGM 2008 two further programmes were decided, a share savings programme for all employees and a share matching programme for a small number of selected top performers.

In the share savings programme the participants can save a maximum of five per cent of their gross base salary during a twelve months period. For the savings amount, Class A- shares are purchased at current stock exchange rate four times a year following the publication of the Bank's quarterly reports. If the shares are retained by the employee for three years and the employee remains with SEB, SEB will give the employee one Class A-share for each retained share free of charge. The first purchase was performed after the publication of the annual accounts in February 2009. Ten countries are included in the 2008 programme.

The share matching programme is based on performance, has a vesting period of three years and is settled with SEB Class A-shares. The programme contains a mandatory deferral for three years of 25 per cent of the outcome of the shortterm incentive compensation. The deferred amounts are allocated to a deferral incentive pool and a determined number of deferral rights is registered for each participant in the pool. One deferral right corresponds to the value of one SEB Class A-share at the time for allocation. Three years from allocation the participant receives one SEB Class A-share for each deferral right and not more than four matching shares. The number of matching shares will depend on the development of one predetermined performance criterion measured as average annual nominal increase in earnings per share. The expected vesting is approximately 37 per cent. In 2008 there are no participants in this programme. Deferral rights are not securities that can be sold, pledged or transferred to another party.

9e Sick leave rate

Sick leave rate by gender and age group in parent company, %
		Long-term sick leave			Total sick leave
2008	Men	Women	Total	Men	Women	Total
–29 years	0.1	0.8	0.5	1.7	3.3	2.5
30–49 years	0.6	2.4	1.5	1.8	4.3	3.1
50–years	1.2	4.4	2.9	2.6	6.8	4.7
Total	0.7	2.8	1.8	2.0	4.9	3.5
2007
–29 years	0.2	1.4	0.9	1.8	3.8	2.9
30–49 years	0.7	2.7	1.7	1.9	4.6	3.3
50–years	1.6	5.3	3.5	3.1	7.5	5.3
Total	0.9	3.4	2.2	2.2	5.4	3.9

9f Number of employees

Average number of full time equivalents
		Group
Division/supportfunction	2008	2007	2008	2007
Merchant Banking	2,721	2,566	1,632	1,457
Retail Banking	9,084	8,802	2,762	2,735
Wealth Management	1,133	1,074	457	420
Life	1,233	1,201	4	4
New Markets	1,534	458	1	3
Group Operations	1,917	1,850	1,304	1,215
Group IT	1,958	1,850	1,402	1,331
Group Staff and Group Treasury	1,711	1,705	859	806
Total	21,291	19,506	8,421	7,971
Number of hours worked			14,590,444	13,917,681

Average number of employees
		Group			Parent company
2008	Men	Women	Total	Men	Women	Total
Sweden	4,186	4,698	8,884	3,661	4,037	7,698
Norway	304	260	564	103	62	165
Denmark	424	349	773	133	81	214
Finland	160	183	343	90	88	178
Estonia	384	1,395	1,779
Latvia	436	1,341	1,777	43	102	145
Lithuania	627	1,581	2,208	9	28	37
Germany	1,818	1,805	3,623	93	15	108
Poland	46	38	84	18	16	34
Ukraine	450	985	1,435
China	8	10	18	8	10	18
Great Britain	124	72	196	124	72	196
France	3	17	20	3	17	20
Ireland	8	18	26
Luxembourg	110	116	226
Russia	53	122	175
Singapore	38	54	92	31	53	84
United States	42	19	61
Other1)	18	9	27	2		2
Total	9,239	13,072	22,311	4,318	4,581	8,899
2007
Sweden	4,168	4,781	8,949	3,579	4,054	7,633
Norway	290	279	569	91	55	146
Denmark	426	367	793	125	75	200
Finland	153	174	327	80	75	155
Estonia	387	1,369	1,756
Latvia	447	1,309	1,756	38	76	114
Lithuania	554	1,375	1,929
Germany	1,853	1,830	3,683	108	19	127
Poland	38	22	60	16	13	29
Ukraine	308	596	904
China	8	8	16	8	8	16
Great Britain	125	79	204	124	78	202
France	4	17	21	3	16	19
Ireland	7	14	21
Luxembourg	105	110	215
Russia	45	116	161	1		1
Singapore	35	52	87	28	50	78
United States	42	18	60
Other1)	9	3	12	2		2
Total	9,004	12,519	21,523	4,203	4,519	8,722

1) Switzerland, British Virgin Island and Brazil.

10 Other expenses

	Group			Parent company
	2008	2007	2008	2007
Costs for premises1)	–1,880	–1,532	–883	–740
Data costs	–2,866	–2,321	–1,447	–1,234
Stationery	–194	–183	–78	–52
Travel and entertainment	–527	–526	–302	–292
Postage	–250	–256	–227	–248
Consultants	–995	–797	–696	–477
Marketing	–720	–783	–285	–259
Information services	–388	–362	–286	–264
Other operating costs2)	178	–159	–260	–412
Total	–7,642	–6,919	–4,464	–3,978
1) Of which rental costs. 2) Net after deduction for capitalised costs, see also note 27.	–1,339	–1,026	–655	–490

Fees and expense allowances to appointed auditors and audit firms 1) 2)

PricewaterhouseCoopers	–60	–46	–10	–9
Other audit firms	–2	–2		–1
Audit assignments	–62	–48	–10	–10
PricewaterhouseCoopers	–49	–18	–15	–6
Other audit firms	–3	–1
Other assignments	–52	–19	–15	–6
Total	–114	–67	–25	–16

1) The audit has been performed in a mutual process with the internal audit team of SEB. The cost for internal audit is SEK 127m (117).

2) The parent company includes the foreign branches.

11 Depreciation, amortisation and impairments of tangible and intangible assets

	Group			Parent company
	2008	2007	2008	2007
Depreciation tangible assets	–641	–628	–4,703	–4,819
Amortisation intangible assets	–351	–223	–117	–28
Amortisation of deferred acquisition costs	–519	–494
Impairment tangible assets	–13	–9
Total	–1,524	–1,354	–4,820	–4,847

Office equipment is depreciated according to plan, which specifies that personal computers and similar equipment are depreciated over three years and other office equipment over five years. Properties are depreciated according to plan.

12 Gains less losses from tangible and intangible assets

	Group			Parent company
	2008	2007	2008	2007
Properties1)	2	791		3
Other tangible assets	62	5	6	3
Capital gains	64	796	6	6
Other tangible assets	–58	–8		–945
Capital losses	–58	–8		–945
Total	6	788	6	–939

1) Includes gain of SEK 785m on sale of properties in the Baltics in 2007.

13 Net credit losses incl. changes in value of seized assets

		Group		Parent company
	2008	2007	2008	2007
Net credit losses	–3,231	–1,021	–773	–24
Change in value of seized assets	–37	5
Total	–3,268	–1,016	–773	–24
Net credit losses (Impairments)
Provisions:
Net collective provisions	–1,303	–390	–393	38
Specific provisions	–1,718	–653	–347	–51
Reversal of specific provisions no longer required	336	405	39	25
Net provisions for contingent liabilities	–56	8
Net provisions	–2,741	–630	–701	12
Write-offs:
Total write-offs	–1,428	–1,395	–192	–160
Reversal of specific provisions utilized for write-offs	699	711	70	53
Write-offs not previously provided for	–729	–684	–122	–107
Recovered from previous write-offs	239	293	50	71
Net write-offs	–490	–391	–72	–36
Total	–3,231	–1,021	–773	–24
Change in value of seized assets
Properties taken over	–1
Other assets taken over	–6	5
Realised change in value	–7	5
Properties taken over	–24	4
Other assets taken over	–6	–4
Unrealised change in value	–30
Total	–37	5

14 Appropriations

		Parent company
	2008	2007
Recovery of imputed pension premiums	434	362
Compensation from pension funds, pension disbursements	803	782
Pension disbursements	–803	–782
Pension compensation	434	362
Appropriations to/utilisation of untaxed reserves
Accelerated tax depreciation	–2,117	–520
Appropriations	–2,117	–520
Total	–1,683	–158

15 Income tax expense

		Group		Parent company
Major components of tax expense	2008	2007	2008	2007
Current tax	–2,907	–2,491	–4	–755
Deferred tax	500	–804	1,338	209
Tax for current year	–2,407	–3,295	1,334	–546
Current tax for previous years	–14	–81	–34	–45
Income tax expense	–2,421	–3,376	1,300	–591

Relationship between tax expenses and accounting profit

Net profit	10,050	13,642	8,215	7,485
Income tax expense	2,421	3,376	–1,300	591
Accounting profit before tax	12,471	17,018	6,915	8,076
Current tax at Swedish statutory rate of 28 per cent	–3,492	–4,765	–1,936	–2,261
Tax effect relating to other tax rates in other jurisdictions	91	196
Tax effect relating to not tax deductible expenses	–614	–474	–155	–285
Tax effect relating to non taxable income	1,131	1,593	2,087	1,791
Tax effect relating to a previously recognised tax loss,
tax credit or temporary difference	–76	830
Tax effect relating to a previously unrecognised tax loss, tax credit or temporary difference	53	129
Current tax	–2,907	–2,491	–4	–755
Tax effect relating to origin and reversal of tax losses, tax credits and temporary differences	76	–830	1,424	209
Tax effect relating to changes in tax rates or
the imposition of new taxes	357	–161	–86
Tax effect relating to a previously unrecognised tax loss, tax credit or temporary difference	68	224
Tax effect relating to impairment or reversal of previous
impairments of a deferred tax asset	–1	–37
Deferred tax	500	–804	1,338	209
Current tax for previous years	–14	–81	–34	–45
Income tax expense	–2,421	–3,376	1,300	–591

In Sweden the income tax rate was reduced from 28 per cent to 26.3 per cent. The decision was taken in the fourth quarter with efffect from January 2009. In Germany the tax rate was reduced in beginning of 2008 from approximately 40 per cent to approximately 32 per cent.

Deferred tax income and expense recognised in income statement

Accelerated tax depreciation	–534	–351
Pension plan assets, net	143	–146
Tax losses carry forwards	1,472	68	1,338
Other temporary differences	–581	–375		209
Total	500	–804	1,338	209

Deferred tax assets and liabilites where the change during 2008 is not reported as change in deferred tax amounts to SEK 1,293m and is explained by deferred tax related to divestures SEK 261m, deferred tax for life insurance investments SEK 880m, and currency translatation effect of SEK 152m.

16 Earnings per share

	Group
	2008	2007
Net profit attributable to equity holders, SEK m	10,041	13,618
Weighted average number of shares, millions	685	682
Basic earnings per share, SEK	14.66	19.97
Net profit attributable to equity holders, SEK m	10,041	13,618
Weighted average number of diluted shares, millions	685	685
Diluted earnings per share, SEK	14.65	19.88

17 Risk disclosure

Disclosures about credit risk, market risk, insurance risk, operational risk, business and strategic risk together with liquidity risk and financing and the management of those risks are found under the section Risk and Capital Management (page 36–51) of the Report of the directors), which also forms part of the financial statements. The Group manages the liquidity risk and financing based on the possibility of a negative deviation from an expected financial outcome.

17a Liquidity risk

Liquidity risk is defined as the risk for a loss or substantially higher costs than calculated due to inability of the Group to meet its payment commitments on time.

The table below presents cash flows by remaining contractual maturities at the balance sheet date and applies the earliest date which the Group can be required to pay regardless of probability assumptions. The amounts disclosed in maturities are un-discounted cash flows. Trading positions, excluding derivative fair values

based on discounted cash flows, are reported within < 3 months, though contractual maturity may extend over longer periods, which reflects the short-term nature of the trading activities. Off-balance sheet items such as loan commitments are reported within < 3 months to reflect the on demand character of the instruments. The following liabilities recognized on the balance sheet are excluded as the bank does not consider them to be contractual; provisions, deferred tax and liabilities to employees for share-based incentive programmes. Derivative contracts that settle on a gross basis are part of the Group's liquidity management and the table below include separately the gross cash flows from those contracts.

The Group's derivatives that will be settled on a gross basis include: – Foreign exchange derivatives: currency forward deals, currency swaps and – Interest rate derivatives: cross currency interest rate swaps.

Group's cash liquidity 2008

Financial liabilities (contractual maturity dates)	< 3 months	3 < 12 months	1 < 5 years	5 years <	Total
Deposits by credit institutions	329,204	46,529	55,023	5,648	436,404
Deposits and borrowing from the public	613,082	61,112	49,717	134,688	858,599
Liabilities to policyholders – investment contracts	25,924	4,230	19,407	65,549	115,110
Debt securities	148,035	91,207	313,556	11,512	564,310
Trading liabilities	54,411				54,411
Trade and client payables	9,424	50	24		9,498
Subordinated liabilities	5,336	40	11,786	46,446	63,608
Total	1,185,416	203,168	449,513	263,843	2,101,940
Other liabilities (non-financial)	130,678	1,843	3,158	10,085	145,764
Off-balance sheet items
Loan commitments	152,960	4,867	5,752	6,763	170,342
Acceptances and other financial facilitites	8,400	2,636	1,404	8,184	20,624
Operating lease commitments	291	1,051	441	313	2,096
Total	161,651	8,554	7,597	15,260	193,062
Total liabilities and off-balance sheet items	1,477,745	213,565	460,268	289,188	2,440,766
Total financial assets (contractual maturity dates)1)	1,417,768	147,620	485,285	466,118	2,516,791
Derivatives
Currency-related	799,777	40,685	38,325	12,665	891,452
Interest-related	36,474	12,975	37,510	22,191	109,150
Total derivative outflows	836,251	53,660	75,835	34,856	1,000,602
Total derivative inflows	838,117	59,956	76,250	41,112	1,015,435
Group's cash liquidity 2007
Financial liabilities (contractual maturity dates)	< 3 months	3 < 12 months	1 < 5 years	5 years <	Total
Deposits by credit institutions	379,588	16,778	7,466	17,516	421,348
Deposits and borrowing from the public	638,359	30,897	24,929	56,296	750,481
Liabilities to policyholders – investment contracts				135,937	135,937
Debt securities	136,173	166,214	200,781	7,396	510,564
Trading liabilities	135,421				135,421
Trade and client payables	33,940				33,940
Subordinated liabilities Total	288 1,323,769	213,889	1,273 234,449	42,428 259,573	43,989 2,031,680
Other liabilities (non-financial)	5,567	1,101		89,979	96,647
Off-balance sheet items
Loan commitments	295,590				295,590
Acceptances and other financial facilitites	66,984				66,984
Operating lease commitments		1,261	3,584	2,067	6,912
Total	362,574	1,261	3,584	2,067	369,486
Total liabilities and off-balance sheet items	1,691,910	216,251	238,033	351,619	2,497,813
Total financial assets (contractual maturity dates)1)	1,042,451	139,317	404,026	560,684	2,146,478
Derivatives
Currency-related	696,561	174,008	34,215	113	904,897
Interest-related	18,895	32,405	92,645	14,545	158,490
Total derivative outflows	715,456	206,413	126,860	14,658	1,063,387
Total derivative inflows	715,007	206,057	125,249	14,558	1,060,871

Note 17 ctd. Risk disclosure

Parent company's cash liquidity 2008
Financial liabilities (contractual maturity dates)	< 3 months	3 < 12 months	1 < 5 years	5 years <	Total
Deposits by credit institutions	384,970	25,835	2,216	94	413,115
Deposits and borrowing from the public	429,555	10,375	3,951	12,905	456,786
Debt securities	136,321	65,253	212,640	6,814	421,028
Trading liabilities	49,429				49,429
Trade and client payables	8,001				8,001
Subordinated liabilities	5,205		10,919	46,337	62,461
Total	1,013,481	101,463	229,726	66,150	1,410,820
Other liabilities (non-financial)	40,284	9	7	1	40,301
Off-balance sheet items
Loan commitments	146,230				146,230
Acceptances and other financial facilitites	6,684				6,684
Operating lease commitments
Total	152,914				152,914
Total liabilities and off-balance sheet items	1,206,679	101,472	229,733	66,151	1,604,035
Total financial assets (contractual maturity dates)1)	1,068,897	68,897	195,149	124,872	1,457,815
Derivatives
Currency-related	750,607	8,518	29,905	12,719	801,749
Interest-related	36,474	12,433	37,325	18,953	105,185
Total derivative outflows	787,081	20,951	67,230	31,672	906,934
Total derivative inflows	784,234	22,898	65,858	37,548	910,538
Parent company's cash liquidity 2007
Financial liabilities (contractual maturity dates)	< 3 months	3 < 12 months	1 < 5 years	5 years <	Total
Deposits by credit institutions	344,805	18,483	902	3,509	367,699
Deposits and borrowing from the public	384,956	6,777	2,709	18,057	412,499
Debt securities	129,144	152,881	123,235	2,742	408,002
Trading liabilities	121,687				121,687
Trade and client payables	32,369				32,369
Subordinated liabilities	300		1,273	41,473	43,046
Total	1,013,261	178,141	128,119	65,781	1,385,302
Other liabilities (non-financial)	128	46			174
Off-balance sheet items
Loan commitments	186,479				186,479
Acceptances and other financial facilitites Operating lease commitments	50,909	535	1,516	1,693	50,909 3,744
Total	237,388	535	1,516	1,693	241,132
Total liabilities and off-balance sheet items	1,250,777	178,722	129,635	67,474	1,626,608
Total financial assets (contractual maturity dates)1)	785,606	74,700	350,309	80,875	1,291,490
Derivatives
Currency-related	624,825	113,641	22,373	108	760,947
Interest-related	12,840	30,412	91,899	12,840	147,991
Total derivative outflows	637,665	144,053	114,272	12,948	908,938
Total derivative inflows	637,148	144,065	112,389	13,129	906,731

1) Financial assets available to meet liabilities and outstanding commitments include cash, central banks balances, eligible debt instruments and loans and advances to banks and customers. Trading assets are reported within < 3 months, though contractual maturity may extend over longer periods, and insurance contracts as 5 years < reflecting the nature of trading and insurance activities.

18 Fair value measurement of financial assets and liabilities

	Group		Parent company
Financial assets at fair value	2008	2007	2008	2007
Financial assets at fair value1)	521,029	525,738	386,802	367,985
Available-for-sale financial assets	163,115	170,137	26,897	62,085
Investments in associates2)	1,030	833	986	815
Total	685,174	696,708	414,685	430,885
Financial liabilities at fair value
Financial lialibilities at fair value	295,533	216,390	279,512	201,761
Debt securities3)	28,527	26,512	20,447	20,145
Total	324,060	242,902	299,959	221,906

1) Policyholders bearing the risk excluded from financial assets at fair value.

2) Venture capital activities designated at fair value through profit and loss. 3) Index linked bonds designated at fair value through profit and loss.

Fair value measurement – assets

Quoted market prices	166,166	114,965	30,098	72,563
Valuation techniques – market observable input	518,352	581,393	382,945	358,021
Equities carried at cost	656	350	1,642	301
Total	685,174	696,708	414,685	430,885
Fair value measurement – liabilities
Quoted market prices	30,604	53,270	17,294	51,366
Valuation techniques – market observable input	293,456	189,632	282,665	170,540
Total	324,060	242,902	299,959	221,906

Quoted market prices

For financial instruments traded in active markets fair values are based on quoted market prices or dealer price quotations.

Valuation techniques with market observable input

Valuation techniques are used to estimate fair values incorporating discounted cash flows, option pricing models, valuations with reference to recent transactions in the same instrument and valuations with reference to other financial instruments that are substantially the same.

Fixed income securities portfolios: As a consequense of increased credit spreads in the fixed income securities portfolio and the subsequent decrease in market activity the Group has identified additional external sources for market quotes and continued to fair value the portfolio using market observable input. To a limited extent reference instruments with substantially the same underlying risk and structure are used to estimate fair value. The valuation technique together with the judgement involved in evaluating and reviewing third party quotes and establishing reference instruments are developed to ensure that the fair values recognised on the balance sheet and the changes in fair values recorded in the income statement and in equity reflect the underlying economics. Credit spread risk is the risk that the credit spread premium embedded in the price of a security changes and thus impacts the price of the instrument independently of changes in the so called risk free interest rate. The fixed income securities portfolio has an inherent credit spread sensitivity of SEK 2.6m (25.6) that will affect the operating profit and SEK 9.8m (13.3) that will affect equity if the credit spreads change one basis point 0.01%. The fixed income portfolio reclassified to loans has an inherent credit spread sensitivity of SEK 26.0m.

Derivatives: SEB uses widely recognised valuation techniques demonstrated to provide reliable fair values of financial derivative instruments, such as forwards, options and swaps, with use of market observable inputs.

Valuation techniques with non-market observable input

The Group has no assets nor liabilities where the bank applies a valuation technique without incorporating market input.

19 Cash and cash balances with central banks

		Group		Parent company
	2008	2007	2008	2007
Cash	5,300	5,020	1,331	1,550
Balances with foreign central banks	39,552	91,851	9,339	208
Total	44,852	96,871	10,670	1,758

20 Loans to credit institutions

1) See note 41 for maturity and note 42 for issuers.

	Group			Parent company
	2008	2007	2008	2007
Remaining maturity
– payable on demand	130,295	98,114	129,471	138,009
– maximum 3 months	62,513	130,843	42,372	103,601
– more than 3 months but maximum 1 year	7,711	11,246	58,530	9,825
– more than 1 year but maximum 5 years	13,662	11,836	69,769	93,709
– more than 5 years	8,588	9,619	4,569	10,564
Accrued interest	908	1,354	1,676	1,774
Loans	223,677	263,012	306,387	357,482
Other debt instruments1)	42,427		42,427
Accrued interest	259		259
Debt instruments	42,686		42,686
Total	266,363	263,012	349,073	357,482
of which repos	42,201	97,213	32,847	82,249
Average remaining maturity for Loans (years)	0.63	0.58	0.97	1.14

21 Loans to the public

		Group		Parent company
	2008	2007	2008	2007
Remaining maturity
– payable on demand	158,386	133,161	99,321	111,480
– maximum 3 months	168,575	191,477	108,564	139,903
– more than 3 months but maximum 1 year	141,935	111,056	98,935	63,062
– more than 1 year but maximum 5 years	444,164	345,684	320,707	256,600
– more than 5 years	313,547	280,951	78,012	62,531
Accrued interest	4,664	5,012	3,238	3,562
Loans	1,231,271	1,067,341	708,777	637,138
Eligible debt instruments1)	5,410
Other debt instruments1)	59,508		59,508
Accrued interest	588		452
Debt instruments	65,506		59,960
Total	1,296,777	1,067,341	768,737	637,138
of which repos	60,246	130,363	57,078	120,744
Average remaining maturity for Loans (years)	3.71	3.71	2.56	2.28

1) See note 41 for maturity and note 42 for issuers.

Financial leases

Book value	84,669	73,104
Gross investment	101,875	89,151
Present value of minimum lease payment receivables	81,167	74,075
Unearned finance income	17,869	16,047
Reserve for impaired uncollectable minimum lease payments	–618	–50

		Group 2008			Group 2007
	Book value	Gross investment	Present value	Book value	Gross investment	Present value
Remaining maturity
– maximum 1 year	11,189	13,739	11,000	5,668	5,342	5,903
– more than 1 year but maximum 5 years	36,531	43,079	35,741	35,274	43,861	38,153
– more than 5 years	36,949	45,057	34,495	32,162	39,948	30,019
Total	84,669	101,875	81,236	73,104	89,151	74,075

The largest lease engagement amounts to SEK 5.3 billion (5.4).

22 Financial assets at fair value

	Group		Parent company
	2008	2007	2008	2007
Securities held for trading	161,596	348,888	131,253	285,036
Derivatives held for trading	248,426	85,395	242,882	80,966
Derivatives used for hedging	11,155	2,777	12,576	1,871
Fair value changes of hedged items in a portfolio hedge	3,503	–641
Financial assets – policyholders bearing the risk	114,425	135,485
Insurance assets designated at fair value	94,818	88,020
Other financial assets designated at fair value	1,531	1,299	91	112
Financial assets at fair value	635,454	661,223	386,802	367,985

The category Financial assets at fair value comprises of financial instruments either classified as held for trading or financial assets designated to this category upon initial recognition. These financial assets are recognised at fair value and the value change is recognised through profit and loss.

The Group has reclassified interest-bearing securities from securiries held for trading to loans. See further page 25 in the Report of the directors, which also forms part of the financial statements.

Securities held for trading
Equity instruments	33,949	55,843	26,084	43,472
Eligible debt instruments1)	42,832	84,888	19,387	33,641
Other debt instruments1)	82,509	205,002	83,868	205,538
Accrued interest	2,306	3,155	1,914	2,385
Total	161,596	348,888	131,253	285,036

1) See note 41 for maturity and note 42 for issuers.

Note 22 ctd. Financial assets at fair value

		Group		Parent company
Derivatives held for trading	2008	2007	2008	2007
Positive replacement values of interest-related derivatives	122,066	41,259	122,839	39,302
Positive replacement values of currency-related derivatives	114,373	30,085	108,258	29,189
Positive replacement values of equity-related derivatives	3,247	10,722	3,087	9,329
Positive replacement values of other derivatives	8,740	3,329	8,698	3,146
Total	248,426	85,395	242,882	80,966
Derivatives used for hedging
Fair value hedges	4,091	1,036	6,197	947
Cash flow hedges	6,379	893	6,379	924
Portfolio hedges for interest rate risk	685	848
Total	11,155	2,777	12,576	1,871
Insurance assets designated at fair value
Equity instruments	17,331	20,889
Other debt instruments1)	76,341	66,315
Accrued interest	1,146	816
Total	94,818	88,020
1) See note 41 for maturity and note 42 for issuers.
Other financial assets designated at fair value
Equity instruments	1,062	997	91	112
Eligible debt instruments1)	24	20
Other debt instruments1)	445	282
Total	1,531	1,299	91	112

1) See note 41 for maturity and note 42 for issuers.

To significantly eliminate inconsistency in measurement and accounting the Group has chosen to designate financial assets and financial liabilities, which the unit linked insurance business give rise to, at fair value through profit or loss. This implies that changes in fair value on those investment assets (preferably funds), where the policyholder bear the risk and the corresponding liabilities, are recognised in profit or loss. Fair value on those assets and liabilities are set by quoted market price in an active market. The fair values on those liabilities, designated at fair value to profit or loss, have not been affected by changes in credit risk. See also note 31.

23 Available-for-sale financial assets

	Group		Parent company
	2008	2007	2008	2007
Equity instruments at cost	656	289	655	289
Equity instruments at fair value	1,405	1,484	862	853
Eligible debt instruments1)	126,217	113,230	674	7,780
Other debt instruments1)	32,917	53,732	24,324	52,779
Seized shares	50	39	11	13
Accrued interest	1,870	1,363	371	371
Total	163,115	170,137	26,897	62,085

1) See note 41 for maturity and note 42 for issuers.

Equity instruments measured at cost do not have a quoted market price in an active market. Further, it has not been possible to reliably measure the fair values of those equity instruments. Most of these investments are held for strategic reasons and are not intended to be sold in the near future.

The Group has reclassified interest-bearing securities from securiries held for trading to loans. See further page 25 in the Report of the directors, which also forms part of the financial statements.

24 Held-to-maturity investments

	Group		Parent company
	2008	2007	2008	2007
Eligible debt instruments1)		1
Other debt instruments1)	1,958	1,770	3,237	3,322
Accrued interest	39	27	26	26
Total	1,997	1,798	3,263	3,348

1) See note 41 for maturity and note 42 for issuers.

25 Investments in associates

		Group				Parent company
		2008	2007		2008	2007
Strategic investments		99	424		25	248
Venture capital holdings		1,030	833		986	815
Total		1,129	1,257		1,011	1,063
Strategic investments	Assets1)	Liabilities1)	Revenues1)	Profit or loss1)	Book value	Ownership, %
Bankomatcentralen AB, Stockholm	1				0	22
Bankpension AB, Stockholm	30	3	11	1	10	40
BDB Bankernas Depå AB, Stockholm	1,107	1,093	4	–10	7	20
BGC Holding AB, Stockholm	290	137	836	53	4	33
Föreningen Bankhälsan i Stockholm, Stockholm	9	8	39		4	33
Privatgirot AB, Stockholm	45	27	126	2	0	24
Upplysningscentralen UC AB, Stockholm	153	78	356	17	0	27
Parent company holdings					25
Holdings of subsidiaries					10
Group adjustments					64
Group holdings					99

1) Retrieved from respective Annual report 2007.

		2008		2007
Venture capital holdings	Book value	Ownership, %	Book value	Ownership, %
3nine AB, Stockholm	20	27	20	27
Airsonett AB, Ängelholm	22	20	15	16
Ascade Holding AB, Stockholm	58	43	51	42
Askembla Growth Fund KB, Stockholm	136	25	140	25
Capres A/S, Copenhagen	35	23	26	23
Cobolt AB, Stockholm	37	40	37	40
Crossroad Loyalty Solutions AB, Gothenburg	13	30	13	30
Datainnovation i Lund AB, Lund	26	43	23	42
Emers Holdings AB, Huddinge			40	23
Exdex Förvaltning AB, Stockholm (former InDex Diagnostics AB)			13	25
Exitram AB, Stockholm	23	44
Fält Communications AB, Umeå	25	47	23	46
InDex Pharmaceuticals AB, Stockholm	52	49	15	45
KMW Energi AB, Norrtälje	37	37	28	27
Matrix AB, Stockholm			21	48
Neoventa Holding AB, Gothenburg	59	30	51	30
Nomad Holdings Ltd, Newcastle	36	13
NuEvolution A/S, Copenhagen	49	47	29	40
PhaseIn AB, Stockholm	64	44	44	43
Prodacapo AB, Örnsköldsvik	6	16	16	16
ProstaLund AB, Lund			32	30
Quickcool AB, Lund	8	18	5	9
Sanos Bioscience A/S, Herlev	48	30	41	30
Scandinova Systems AB, Uppsala	22	29	22	29
Scibase AB, Stockholm	40	28	40	28
ShoZu Ltd, Abingdon	39	17
Signal Processing Devices Sweden AB, Linköping	29	43	16	34
Tail-f Systems AB, Stockholm	32	43	27	39
Time Care AB, Stockholm	24	43	23	42
Xylophane AB, Gothenburg	15	23
Zealcore Embedded Solutions, Västerås			4	16
Zinwave Holdings Limited, Cambridge	31	29
Parent company holdings	986		815
Group adjustments	44		18
Group holdings	1,030		833

Information about the corporate registration numbers and numbers of shares of the associates is available upon request.

Strategic investments in associates are in the Group accounted for using the equity method.

Investments in associates held by the venture capital organisation of the Group have in accordance with IAS 28 been designated as at fair value through profit or loss. Therefore, are these holdings accounted for under IAS 39.

Some entities where the bank has an ownership of less than 20 per cent, has been classified as investments in associates. The reason is that the bank is represented in the board of directors and participating in the policy making processes of those entities.

All financial assets within the Group's venture capital business are managed and its performance is evaluated on a fair value basis in accordance with documented risk management and investment strategies.

Fair values for investments listed in an active market are based on quoted market prices. If the market for a financial instrument is not active, fair value is established by using valuation techniques based on discounted cash flow analysis, valuation with reference to financial instruments that is substantially the same, and valuation with reference to observable market transactions in the same financial instrument.

26 Shares in subsidiaries

						Parent company
					2008	2007
Swedish subsidiaries					15,801	15,670
Foreign subsidiaries					44,262	36,266
Total					60,063	51,936
of which holdings in credit institutions					44,008	37,167
		2008			2007
Swedish subsidiaries	Book value	Dividend	Ownership, %	Book value	Dividend	Ownership, %
Aktiv Placering AB, Stockholm Enskilda Kapitalförvaltning SEB AB, Stockholm	38 0		100 100	38 0		100
Försäkringsaktiebolaget Skandinaviska Enskilda Captive, Stockholm	100		100	100		100
Key Asset Management (Sverige) AB, Stockholm	1		100
Parkeringshuset Lasarettet HGB KB, Stockholm	0		99	0		99
PM Leasing AB, Stockholm				0		100
Repono Holding AB, Stockholm	5,406		100	5,406		100
SEB AB, Stockholm	6,076	1,775	100	6,076	1,050	100
SEB Baltic Holding AB, Stockholm		13		13		100
SEB Fonder AB, Stockholm	642		100	642		100
SEB Fondinvest AB, Stockholm	69		100
SEB Förvaltnings AB, Stockholm	5		100	5		100
SEB Internal Supplier AB, Stockholm	12		100	12		100
SEB Investment Management AB, Stockholm	51		100
SEB Kort AB, Stockholm	2,260	–24	100	2,260	787	100
SEB Portföljförvaltning AB, Stockholm SEB Strategic Investments AB, Stockholm	1,115 24	125	100 100	1,115 1	60	100 100
Skandic Projektor AB, Stockholm	1		100	1		100
Skandinaviska Kreditaktiebolaget, Stockholm	0		100	0		100
Team SEB AB, Stockholm	1		100	1		100
Total	15,801	1,889		15,670	1,897
Foreign subsidiaries
Interscan Servicos de Consultoria Ltda., São Paulo Key Asset Management (Switzerland) SARL , Geneve	0 0		100 100	0		100
Key Asset Management (UK) Limited, London	573		100
Key Asset Management Norge ASA, Oslo	1		100
Key Capital Management Inc., Tortola	378		100
Möller Bilfinans AS, Oslo	50		51	57		51
Njord AS, Oslo	0		100	0		100
OJSB Factorial Bank, Kharkiv	785		98	760		98
OJSC SEB Bank, Kiev	318		100	318		100
SEB AG, Frankfurt am Main	23,524		100	20,007	425	100
SEB Asset Management America Inc., Stamford	29		100	20		100
SEB Asset Management Fondmæglerselskab A/S, Copenhagen					115
SEB Asset Management Norge AS, Oslo	17		100	12		100
SEB Asset Management S.A., Luxembourg SEB Bank JSC, St Petersburg (former PetroEnergobank)	6 178	–12	100 100	5 123	52	100 100
SEB Banka, AS, Riga	699		100	697		100
SEB bankas, AB, Vilnius1)	3,056		100	2,003		100
SEB Enskilda ASA, Oslo	704	206	100	687	447	100
SEB Enskilda Inc., New York	35	70	100	13		100
SEB Ensklida Corporate Finance Oy Ab, Helsinki	5		65	5		65
SEB Fund Services S.A., Luxembourg	111		100	49		100
SEB Gyllenberg Asset Management Ab, Helsinki (former SEB Gyllenberg Ab)	595	133	100	514	84	100
SEB Gyllenberg Fondbolag Ab, Helsinki	21	23	100	18		100
SEB Gyllenberg Private Bank Ab, Helsinki	76		100	66		100
SEB Hong Kong Trade Services Ltd., Hong Kong	0		100	0		100
SEB IT Partner Estonia OÜ, Tallinn	0		65	0		65
SEB Leasing Oy, Helsinki	4,723		100	4,019		100
SEB Leasing, CJSC, St Petersburg	71		100
SEB NET S.L., Barcelona SEB Pank, AS, Tallinn	0 2,407		100 100	0 1,540		100 100
SEB Privatbanken ASA, Oslo2)	1,296		100	1,383	70	100
SEB TFI SA (Towarzystwo Funduszy Inwestycyjnych), Warsaw2)	39	24	100	36	58	100
Skandinaviska Enskilda Banken A/S, Copenhagen	2,351	317	100	1,913	94	100
Skandinaviska Enskilda Banken Corporation, New York	138		100	113		100
Skandinaviska Enskilda Banken S.A., Luxembourg	1,599	19	100	1,299	160	100
Skandinaviska Enskilda Ltd., London	477	28	100	609	64	100
Total	44,262	808		36,266	1,569

Information about the corporate registration numbers and numbers of shares of the subsidiaries is available upon request.

1) In 2006 SEB initiated a compulsory redemption process for the remaining shares.

2) Antecipated dividend for 2007 updated with received dividend.

27 Tangible and intangible assets

	Group			Parent company
	2008	2007	2008	2007
Goodwill	13,692	12,419	523	523
Deferred acquisition costs	3,351	3,027
Other Intangible assets	2,352	1,448	812	369
Intangible assets	19,395	16,894	1,335	892
Office, IT and other tangible assets	1,383	1,398	254	278
Equipment leased to clients1)			39,821	34,325
Properties for own operations	1,137	1,143	2	2
Properties taken over for protection of claims	106	23
Property and equipment	2,626	2,564	40,077	34,605
Investment properties recognised at cost	218	201
Investment properties recognised at fair value
through profit and loss	7,272	5,038
Investment properties	7,490	5,239
Total	29,511	24,697	41,412	35,497

1) Equipment leased to clients are recognised as financial leases and presented as loans in the Group.

Goodwill
Opening balance	12,419	11,668	523	523
Acquisitions during the year	971	538
Reclassifications		–55
Sales during the year	–179
Exchange rate differences	481	268
Total	13,692	12,419	523	523
Deferred acquisition costs
Opening balance	3,027	2,845
Capitalisation of acquisition costs	807	683
Amortisation of acquisition costs	–519	–494
Reclassifications		–15
Exchange rate differences	36	8
Total	3,351	3,027

Goodwill and intangible assets with indefinite lives

Cash generating units with significant carrying amounts of goodwill and intangible assets with indefinite lives are SEB Kort and Merchant Banking. In SEB Kort the value of goodwill amounts to SEK 1,187m (1,202) and intangible assets with indefinite lives to SEK 139m (120). The goodwill in Merchant Banking originates from the acquisition of Enskilda Securities, SEK 844m (865). Goodwill in connection with the Trygg Hansa acquisition, SEK 5,721m (5,721), generates cash flows in Retail Banking Sweden, SEB Asset Management Sweden and SEB Trygg Liv Sweden. The goodwill has been allocated to these units for impairment testing. The carrying amounts of goodwill for Retail Banking Sweden is SEK 775m, SEB Asset Management Sweden SEK 2,769m and SEB Trygg Liv Sweden SEK 2,021m.

The impairment tests for the entities specified above have been based on their value in use with forecasted cash flows for a period of five years. The cash flows are determined based on historical performance and market trends for key assumptions such as growth and cost/income ratio. The growth rates used after five years are principally the expected long-term inflation rate adjusted for industry specific expectations, SEB Kort 2 per cent and Enskilda Securities 4.5 per

cent and for the Trygg Hansa goodwill 3.5 per cent in average. The discount rate used for SEB Kort is 9 per cent, Enskilda Securites 8.5 per cent and the Trygg Hansa goodwill 10 per cent. The assumptions here specified are for impairment test purposes only. A sensitivity analysis where the discount rate and growth rate, respectively, were changed with one percentage point did not result in calculated recoverable amounts below the carrying amounts for any of the above mentioned goodwill.

Acquisitions 2008

During 2008 two minor acquisitions were made, Key Asset Management, Great Britain and Commercial Finance, Poland. The total purchase price was SEK 990m, goodwill amounts to SEK 798m and intangible assets SEK 161m.

Acquisitions 2007

During 2007 one minor acquisition was made, Factorial Bank, Ukraine. The purchase price was SEK 759m and goodwill was SEK 531m.

Note 27 ctd. Tangible and intangible assets

		Group		Parent company
Other intangible assets	2008	2007	2008	2007
Opening balance	3,546	2,906	503	217
Acquisitions during the year	1,227	561	563	286
Group adjustment		14
Reclassifications		–5
Sales during the year	–131	–45
Exchange rate differences	428	115
Acquisition value	5,070	3,546	1,066	503
Opening balance	–2,098	–1,847	–134	–106
Current year's depreciations	–351	–223	–106	–28
Current year's impairments	–10		–11
Group adjustment		–2
Reclassifications		5
Accumulated depreciations on current year's sales	28	43
Exchange rate differences	–287	–74	–3
Accumulated depreciations	–2,718	–2,098	–254	–134
Total	2,352	1,448	812	369
Office, IT and other tangible assets
Opening balance	7,367	7,116	2,643	2,467
Acquisitions during the year	508	591	75	179
Group acquisitions/Merger	8	48		17
Reclassifications Sales during the year	2 –159	–4 –540
Exchange rate differences	569	156		–20
Acquisition value	8,295	7,367	2,718	2,643
Opening balance	–5,969	–5,705	–2,365	–2,265
Current year's depreciations	–576	–577	–99	–85
Current year's impairments	–1	–1
Group acquisitions/Merger	–5	–18		–15
Reclassifications		3
Accumulated depreciations on current year's sales	133	464
Exchange rate differences	–494	–135
Accumulated depreciations	–6,912	–5,969	–2,464	–2,365
Total	1,383	1,398	254	278
Equipment leased to clients1)
Opening balance			46,101	16,459
Acquisitions during the year			12,189	8,967
Merger of SEB Finans				28,354
Sales during the year			–7,813	–7,679
Acquisition value			50,477	46,101
Opening balance			–11,776	–1,907
Current year's depreciations			–4,604	–4,734
Merger of SEB Finans				–9,661
Accumulated depreciations on current year's sales			5,724	4,526
Accumulated depreciations			–10,656	–11,776
Total			39,821	34,325

1) Equipment leased to clients is depreciated in annuities, based on a conservatively estimated residual value at the end of the contract period. For leased equipment that cannot be sold in a functioning market, the scheduled residual value is zero at the end of the contract period. Any surplus resulting from the sale of leased equipment is reported under Other income.

Note 27 ctd. Tangible and intangible assets

		Group	Parent company
Properties for own operations	2008	2007	2008	2007
Opening balance	1,653	1,248	3	10
Acquisitions during the year	57	115
Appreciations during the year	42	79
Group adjustment		225
Reclassifications	75
Sales during the year Exchange rate differences	–141 46	–40 26		–7
Acquisition value	1,732	1,653	3	3
Opening balance	–510	–443	–1	–1
Current year's depreciations	–48	–35
Current year's impairments Group adjustment		–10 –8
Reclassifications	–16	–5
Accumulated depreciations on current year's sales	35	10
Exchange rate differences	–56	–19
Accumulated depreciations	–595	–510	–1	–1
Total	1,137	1,143	2	2
Tax value, real properties	2	2	2	2
of which, buildings	1	1	1	1
Tax value refers only to properties in Sweden.
Properties taken over for protection of claims
Opening balance	23	86
Acquisitions during the year	82	4
Sales during the year	–12	–69
Exchange rate differences	13	2
Total	106	23
Net operating earnings from properties taken over for protection of claims
External income	3	3
Operating costs		–2
Total	3	1
Investment properties recognised at cost
Opening balance	401	871
Acquisitions during the year	4	2
Reclassifications		–4
Sales during the year Exchange rate differences	63	–497 29
Acquisition value	468	401
Opening balance	–200	–242
Current year's depreciations	–17	–16
Reclassifications		1
Accumulated depreciations on current year's sales Exchange rate differences	–33	67 –10
Accumulated depreciations	–250	–200
Total	218	201
Investment properties recognised at fair value through profit and loss
Opening balance	5,038	4,411
Acquisitions during the year	1,266	354
Current year's impairments	–2
Reclassifications		3
Revaluation at fair value		97
Sales during the year		–36
Exchange rate differences	970	209
Total	7,272	5,038
Net operating earnings from investment properties
External income	344	317
Operating costs1)	–114	–97
Total	230	220

1) Direct operating expenses arising from investment property that did not generate rental income amounts to SEK 10m (5).

28 Other assets

	Group		Parent company
	2008	2007	2008	2007
Current tax assets	3,998	3,766	1,072	1,813
Deferred tax assets	2,836	845	1,338
Trade and client receivables	13,402	25,377	12,317	23,625
Other assets	50,416	28,138	45,845	15,589
Other assets	70,652	58,126	60,572	41,027

Current tax assets

Other	3,998	3,766	1,072	1,813
Recognised in profit and loss	3,998	3,766	1,072	1,813
Total	3,998	3,766	1,072	1,813

Deferred tax assets

2,836	845	1,338
–45	179
–45	179
2,881	666	1,338
797	54
2,084	612	1,338

1) Temporary differences are differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Taxable temporary differences give rise to deferred tax assets and liabilities.

Tax losses carried forward in the SEB Group for which the tax asset are not recognized in the balance sheet amounts gross to SEK 5,422m (4,895). These are not recognized due to the uncertainty of possibility to use them. This includes losses where the amount only can be used for trade tax. The potential tax asset not recognized is SEK 1,120 m (993).

Trade and client receivables

Trade receivables	498	535
Client receivables	12,904	24,842	12,317	23,625
Total	13,402	25,377	12,317	23,625
Other assets
Pension plan assets, net	4,703	4,565
Reinsurers share of insurance provisions	535	565
Accrued interest income	48	104
Other accrued income	1,025	1,722	1,659	1,771
Prepaid expenses	604	592
Other1)	43,501	20,590	44,186	13,818
Total	50,416	28,138	45,845	15,589

1) Including margin of safety for security loans of SEK 30.361m (3.223).

29 Deposits by credit institutions

	Group		Parent company
	2008	2007	2008	2007
Remaining maturity
– payable on demand	143,224	114,001	161,754	103,644
– maximum 3 months	216,714	262,593	184,423	238,867
– more than 3 months but maximum 1 year	46,534	16,778	45,220	18,483
– more than 1 year but maximum 5 years	6,688	7,466	12,918	902
– more than 5 years	14,402	17,516	3,983	3,509
Accrued interest	1,863	2,994	1,807	2,294
Total	429,425	421,348	410,105	367,699
of which repos	23,575	70,988	23,573	68,371
Average remaining maturity (years)	0.52	0.58	0.32	0.22

30 Deposits and borrowing from the public

	Group		Parent company
	2008	2007	2008	2007
Deposits	730,295	647,075	406,100	318,171
Borrowing	107,086	100,737	46,513	93,060
Accrued interest	3,653	2,669	1,084	1,268
Total	841,034	750,481	453,697	412,499
Deposits1)
Remaining maturity
– payable on demand	440,527	410,695	406,100	318,171
– maximum 3 months	169,887	147,447
– more than 3 months but maximum 1 year	53,700	25,375
– more than 1 year but maximum 5 years	21,234	21,330
– more than 5 years	44,947	42,228
Total	730,295	647,075	406,100	318,171
1) Only account balances covered by the Deposit Guarantee are reported as deposits. The amount refers to the total account balance without considering the limitation in terms of amount that is applicable to the Deposit Guarantee and fee bases.
Average remaining maturity (years)	0.78	0.80
Borrowing

Remaining maturity
– payable on demand	21,919	28,812	7,215	15,859
– maximum 3 months	57,815	48,736	26,476	49,658
– more than 3 months but maximum 1 year	9,921	5,522	1,753	6,777
– more than 1 year but maximum 5 years	4,511	3,599	519	2,709
– more than 5 years	12,920	14,068	10,550	18,057
Total	107,086	100,737	46,513	93,060
of which repos	36,304	38,680	15,437	36,076
Average remaining maturity (years)	1.46	1.60	2.40	2.14

31 Liabilities to policyholders

	Group
	2008	2007
Liabilities to policyholders – investment contracts1)	115,110	135,937
Liabilities to policyholders – insurance contracts	95,960	89,979
Total	211,070	225,916

1) Designated at fair value through profit and loss.

Liabilities to policyholders – investment contracts*

Total	115,110	135,937
Exchange rate differences	1,154	554
Change in investment contract provisions1)	–21,924	13,343
Reclassification to/from insurance contracts	–57	1,913
Opening balance	135,937	120,127

1) The net of premiums received during the year, return on investment funds less

payments to the policyholders and deduction of fees and policyholders tax. * Insurance provisions where the policyholders are carrying the risk.

Liabilities to policyholders – insurance contracts

Total	95,960	89,979
Exchange rate differences	11,547	3,516
Change in other insurance contract provisions1)	1,716	–2,364
Change in collective bonus provisions	–7,339	–326
Reclassification from/to investment contracts	57	–1,913
Transfer of portfolios through acquisitions/divestments		7,474
Opening balance	89,979	83,592

1) The net of premiums received during the year, allocated guaranteed interest less

payments to the policyholders and deduction of fees and policyholders tax.

32 Debt securities

Bond loans

		Group		Parent company
	2008	2007	2008	2007
Bond loans	367,357	301,414	239,245	200,880
Other issued securities	149,418	202,085	149,355	201,950
Accrued interest	8,444	7,065	5,646	5,172
Total	525,219	510,564	394,246	408,002

The Group issues equity index linked bonds, which contains both a liability and an equity component. The Group has chosen to designate issued equity index linked bonds, with fair values amounting to SEK 28,527m (26,512), as at fair value through profit or loss, since they contain embedded derivatives. The corresponding amounts for the parent company are SEK 20,629m (20,145). This choice implies that the entire hybrid contract is measured at fair value in profit

or loss. Fair value for those financial instruments is calculated using a valuation technique, exclusively based on quoted market prices. Fair value on these financial liabilities has not been affected by changes in credit risk. This has been concluded by evaluating the bank's rating which has been stable. The Group's contractual liability is SEK 29,261m (24,863) and for the parent company SEK 21,092m (18,729).

Remaining maturity
– maximum 1 year	82,637	100,230	46,811	81,895
– more than 1 years but maximum 5 years	276,046	194,643	187,294	117,097
– more than 5 years but maximum 10 years	4,253	6,035	2,492	1,342
– more than 10 years	4,421	506	2,648	546
Total	367,357	301,414	239,245	200,880
Average remaining maturity (years)	2.67	2.38	2.69	2.00
Other issued securities
Remaining maturity
– payable on demand	4,749	4,416	4,442	4,483
– maximum 3 months	117,397	124,692	117,397	124,661
– more than 3 months but maximum 1 year	27,271	65,984	27,516	65,814
– more than 1 year but maximum 5 years	1	6,138		6,138
– more than 5 years		855		854
Total	149,418	202,085	149,355	201,950
Average remaining maturity (years)	0.21	0.41	0.21	0.41

33 Financial liabilities at fair value

	Group		Parent company
	2008	2007	2008	2007
Trading derivatives	231,341	79,211	225,829	78,408
Derivatives used for hedging	8,168	2,169	4,254	1,666
Trading liabilities	54,411	135,421	49,429	121,687
Fair value changes of hedged items in portfolio hedge	1,613	–411
Total	295,533	216,390	279,512	201,761

Financial liabilities designated at fair value through profit or loss is specified in note 31 and 32.

Trading derivatives
Negative replacement values of interest-related derivatives	115,462	39,359	117,514	38,343
Negative replacement values of currency-related derivatives	112,195	34,382	105,470	32,926
Negative replacement values of equity-related derivatives	2,858	5,390	2,088	7,061
Negative replacement values of other derivatives	826	80	757	78
Total	231,341	79,211	225,829	78,408
Derivatives used for hedging
Fair value hedges	733	952	805	950
Cash flow hedges	3,447	716	3,449	716
Portfolio hedges for interest rate risk	3,988	501
Total	8,168	2,169	4,254	1,666
Trading liabilities
Short positions in equity instruments	15,387	18,845	15,387	18,461
Short positions in debt instruments	38,571	116,346	33,589	103,003
Accrued interest	453	230	453	223
Total	54,411	135,421	49,429	121,687

34 Other liabilities

	Group			Parent company
	2008	2007	2008	2007
Current tax liabilities	1,148	1,101	94	46
Deferred tax liabilities	9,810	9,403
Trade and client payables	9,498	33,940	8,001	32,369
Other liabilities	51,109	53,075	47,562	34,678
Total	71,565	97,519	55,657	67,093
Current tax liabilities
Other	1,148	1,101	145	–267
Recognised in profit and loss	1,148	1,101	145	–267
Group contributions			194
Other			–245	313
Recognised in Shareholders' equity			–51	313
Total	1,148	1,101	94	46
Deferred tax liabilities
Accelerated tax depreciation	7,715	7,182
Unrealised profits in financial assets at fair value	130	82
Pension plan assets, net	1,150	1,257
Other temporary differences	674	726
Recognised in profit and loss	9,669	9,247
Unrealised profits in cash flow hedges	45	46
Unrealised profits in available-for-sale financial assets	96	110
Recognised in Shareholders' equity	141	156
Total	9,810	9,403

Temporary differences are differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Taxable temporary differences give rise to deferred tax assets and liabilities.

In Estonia no income tax is paid unless profit is distributed as dividend. No deferred tax liability is recognised related to possible future tax costs on dividends from Estonia. Tax rate applicable to dividends are 21 per cent (21).

Trade and client payables

Trade payables	464	330
Client payables	9,034	33,610	8,001	32,369
Total	9,498	33,940	8,001	32,369
Other liabilities
Accrued interest expense	51	124
Other accrued expense	4,535	5,443	2,330	128
Prepaid income	1,722	1,942
Other	44,801	45,566	45,232	34,550
Total	51,109	53,075	47,562	34,678

35 Provisions

	Group		Parent company
	2008	2007	2008	2007
Restructuring reserve	793	132	600	4
Reserve for off-balance-sheet items	251	209		3
Pensions and other post retirement benefit obligations (note 9b)	28	97
Other provisions	825	1,098	189	264
Total	1,897	1,536	789	271
Restructuring reserve
Opening balance	132	143	4	7
Additions	640		600
Amounts used	–3	–17	–4	–3
Exchange differences	24	6
Total	793	132	600	4

The restructuring reserve mainly regards redundancy in Sweden for a net decrease of 500 employees and is expected to be used within one to two years.

Note 35 ctd. Provisions

	Group			Parent company
Reserve for off-balance-sheet items	2008	2007	2008	2007
Opening balance	209	215	3	4
Additions	67	4
Amounts used	–63	–16	–3	–1
Exchange differences	38	6
Total	251	209	0	3

The reserve for off-balance sheet items is mainly referring to the German market and its corporate sector. A minor part is expected to be used during 2009 while the remaining part has a substantially longer life.

Other provisions
Opening balance	1 098	1,650	264	405
Additions	23	14
Amounts used	–358	–483	–75	–141
Unused amounts reversed		–87
Exchange differences	62	4
Total	825	1,098	189	264

The other provisions consists of three main parts, unutilised premises in connection with the integration of SEB's different business units in the Nordic countries, Germany and U.K. expected to be used in 5 years, unsettled claims in the U.K. market to be settled within 7 years and provisions linked to property funds and guarantees given in Germany for less than 5 years.

36 Subordinated liabilities

		Parent company
	2008	2007	2008	2007
Debenture loans	21,640	18,763	20,666	17,808
Debenture loans, perpetual	26,792	25,166	26,792	25,166
Debenture loans, hedged positions	2,388	–228	2,388	–228
Accrued interest	410	288	353	300
Total	51,230	43,989	50,199	43,046

Debenture loans

		Original nom.		Rate of
	Currency	amount	Book value	interest, %
1994/2009	USD	200	1,531	6.875
2003/2015	EUR	500	5,483	4.125
2004/2014	EUR	750	8,187	1)
2006/2017	EUR	500	5,465	1)
Total parent company			20,666
Debenture loans issued by SEB AG			887
Debenture loans issued by other subsidiaries			87
Total Group			21,640
Debenture loans, perpetual
1995	JPY	10,000	857	4.400
1997	JPY	15,000	1,286	5.000
1997	USD	150	860	7.500
2000	USD	100	15	1)
2004	USD	500	3,866	4.958
2005	USD	600	4,640	1)
2005	GBP	500	5,600	5.000
2006	GBP	375	4,200	5.500
2007	EUR	500	5,468	7.092

Total 26,792

1) FRN, Floating Rate Note.

37 Untaxed reserves1)

		Parent company
	2008	2007
Excess depreciation of office equipment/leased assets	21,131	19,012
Other untaxed reserves	5	4
Total	21,136	19,016

1) In the balance sheet of the Group untaxed reserves are reclassified partly as deferred tax liability and partly as restricted equity.

Parent company

	Excess depreciation	Other untaxed reserves	Total
Opening balance	12,085	4	12,089
Appropriations	520		520
Merger of SEB Finans	6,410		6,410
Exchange rate differencies	–3		–3
Closing balance 2007	19,012	4	19,016
Appropriations	2,117		2,117
Exchange rate differencies	2	1	3
Closing balance 2008	21,131	5	21,136

38 Memorandum items

		Group	Parent company
	2008	2007	2008	2007
Collateral and comparable security pledged for own liabilities	375,227	308,342	242,395	146,563
Other pledged assets and comparable collateral	152,142	207,363	37,737	73,510
Contingent liabilities	86,675	66,984	62,260	50,909
Commitments	416,533	394,128	261,252	259,024

Collateral and comparable security pledged for own liabilities*

Lending1)	70	66	47	66
Bonds	237,851	121,286	202,697	68,301
Repos	39,651	95,234	39,651	78,196
Assets in insurance business	97,655	91,756
Total	375,227	308,342	242,395	146,563

1) Of which SEK 47m (66) refers to the parent company's pledging of promissory notes for the benefit of the Swedish Export Credit Corporation.

* Transfers that do not qualify for derecognition.

Other pledged assets and comparable collateral

Shares in insurance premium funds	114,405	134,818
Securities loans lending	37,737	72,545	37,737	73,510
Total	152,142	207,363	37,737	73,510
Contingent liabilities
Guarantee commitments, credits	12,309	7,188	8,314	4,602
Guarantee commitments, other	61,334	48,694	46,434	38,346
Own acceptances	836	799	823	776
Total	74,479	56,681	55,571	43,724
Approved, but unutilised letters of credit	12,196	10,303	6,689	7,185
Total	86,675	66,984	62,260	50,909

Other contingent liabilities

The parent company has undertaken to the Monetary Authority of Singapore to ensure that its subsidiary in Luxembourg's branch in Singapore is able to fulfil its commitments.

The parent company has issued a deposit guarantee for SEB AG in Germany to the Bundesverband deutscher Banken e.V.

Commitments

Granted undrawn credit	191,899	165,467	146,405	121,259
Unutilised part of approved overdraft facilities	161,641	130,119	74,760	65,220
Securities loans borrowing	62,008	92,327	40,087	72,545
Other commmitments	985	6,215
Total	416,533	394,128	261,252	259,024

39 Current and non-current assets and liabilities

		2008			2007
		Non-current			Non-current
Group, Assets	Current assets	assets	Total	Current assets	assets	Total
Cash and cash balances with central banks	44,852		44,852	96,871		96,871
Loans to credit institutions	201,427	64,936	266,363	241,557	21,455	263,012
Loans to the public	473,560	823,217	1,296,777	440,706	626,635	1,067,341
Securities held for trading	76,579	85,017	161,596	97,083	251,805	348,888
Derivatives held for trading	248,426		248,426	85,395		85,395
Derivatives used for hedging	11,155		11,155	2,777		2,777
Fair value changes of hedged items in a portfolio hedge	3,503		3,503	–641		–641
Financial assets – policyholders bearing the risk	114,425		114,425	135,485		135,485
Other financial assets designated at fair value	24,071	72,278	96,349	24,860	64,459	89,319
Financial assets at fair value	478,159	157,295	635,454	344,959	316,264	661,223
Available-for-sale financial assets	32,448	130,667	163,115	25,989	144,148	170,137
Held-to-maturity investments	1,507	490	1,997	639	1,159	1,798
Assets held for sale	852		852
Investments in associates		1,129	1,129		1,257	1,257
Intangible assets	870	18,525	19,395	717	16,177	16,894
Property and equipment	641	1,985	2,626	612	1,952	2,564
Investment properties		7,490	7,490		5,239	5,239
Tangible and intagible assets	1,511	28,000	29,511	1,329	23,368	24,697
Current tax assets	3,998		3,998	3,766		3,766
Deferred tax assets		2,836	2,836		845	845
Trade and client receivables	13,402		13,402	25,377		25,377
Other assets	50,416		50,416	28,138		28,138
Other assets	67,816	2,836	70,652	57,281	845	58,126
Total	1,302,132	1,208,570	2,510,702	1,209,331	1,135,131	2,344,462

		2008			2007
		Non-current			Non-current
Liabilities	Current liabilities	liabilities	Total	Current liabilities	liabilities	Total
Deposits by credit institutions	408,335	21,090	429,425	396,366	24,982	421,348
Deposits and borrowing from the public	757,422	83,612	841,034	669,256	81,225	750,481
Liabilities to policyholders – investment contracts	7,137	107,973	115,110	11,419	124,518	135,937
Liabilities to policyholders – insurance contracts	11,831	84,129	95,960	8,548	81,431	89,979
Liabilities to policyholders	18,968	192,102	211,070	19,967	205,949	225,916
Debt securities	240,498	284,721	525,219	302,387	208,177	510,564
Trading derivatives	231,341		231,341	79,211		79,211
Derivatives used for hedging	8,168		8,168	2,169		2,169
Trading liabilities	54,411		54,411	135,421		135,421
Fair value changes of hedged items in portfolio hedge	1,613		1,613	–411		–411
Financial liabilities at fair value	295,533		295,533	216,390		216,390
Current tax liabilities	1,148		1,148	1,101		1,101
Deferred tax liabilities		9,810	9,810		9,403	9,403
Trade and client payables	9,498		9,498	33,940		33,940
Other liabilities	51,109		51,109	53,075		53,075
Other liabilities	61,755	9,810	71,565	88,116	9,403	97,519
Provisions		1,897	1,897		1,536	1,536
Subordinated liabilities	1,531	49,699	51,230		43,989	43,989
Total	1,784,042	642,931	2,426,973	1,692,482	575,261	2,267,743

40 Financial assets and liabilities by class

Group 2008
					Classes of financial assets and liabilities
Financial assets	Loans and deposits	Equity instruments	Debt instruments	Derivative instruments	Investment contracts	Insurance contracts	Other	Total
Cash and cash balances with central banks (note 19)							44,852	44,852
Loans to credit institutions (note 20)	223,677		42,686					266,363
Loans to the public (note 21)	1,231,271		65,506					1,296,777
Financial assets at fair value (note 22)1)		35,011	128,116	259,581	114,425		3,503	540,636
Available-for-sale financial assets (note 23)		2,111	161,004					163,115
Held-to-maturity financial assets (note 24)			1,997					1,997
Investments in associates (note 25)		1,129						1,129
Trade and client receivables (note 28)							13,402	13,402
Financial assets	1,454,948	38,251	399,309	259,581	114,425		61,757	2,328,271
Other assets (non-financial)						94,818	87,613	182,431
Total	1,454,948	38,251	399,309	259,581	114,425	94,818	149,370	2,510,702
Financial liabilities
Deposits by credit institutions (note 29)	429,425							429,425
Deposits and borrowing from the public (note 30)	841,034							841,034
Liabilities to policyholders (note 31)1)					115,110			115,110
Debt securities (note 32)			525,219					525,219
Financial liabilities at fair value (note 33)		15,387	39,024	239,509			1,613	295,533
Trade and client payables (note 34)							9,498	9,498
Subordinated liabilities (note 36)			51,230					51,230
Financial liabilities	1,270,459	15,387	615,473	239,509	115,110		11,111	2,267,049
Other liabilities (non-financial)						95,960	63,964	159,924
Total equity							83,729	83,729
Total	1,270,459	15,387	615,473	239,509	115,110	95,960	158,804	2,510,702

Group 2007

	Classes of financial assets and liabilities
	Loans and	Equity	Debt	Derivative	Investment	Insurance
Financial assets	deposits	instruments	instruments	instruments	contracts	contracts	Other	Total
Cash and cash balances with central banks (note 19)							96,871	96,871
Loans to credit institutions (note 20)	263,012							263,012
Loans to the public (note 21)	1,067,341							1,067,341
Financial assets at fair value (note 22)1)		56,840	293,347	88,172	135,485		–641	573,203
Available-for-sale financial assets (note 23)		1,812	168,325					170,137
Held-to-maturity financial assets (note 24)			1,798					1,798
Investments in associates (note 25)		1,257						1,257
Trade and client receivables (note 28)							25,377	25,377
Financial assets	1,330,353	59,909	463,470	88,172	135,485		121,607	2,198,996
Other assets						88,020	57,446	145,466
Total	1,330,353	59,909	463,470	88,172	135,485	88,020	179,053	2,344,462
Financial liabilities
Deposits by credit institutions (note 29)	421,348							421,348
Deposits and borrowing from the public (note 30)	750,481							750,481
Liabilities to policyholders (note 31)1)					135,937			135,937
Debt securities (note 32)			510,564					510,564
Financial liabilities at fair value (note 33)		18,845	116,576	81,380			–411	216,390
Trade and client payables (note 34)							33,940	33,940
Subordinated liabilities (note 36)			43,989					43,989
Financial liabilities	1,171,829	18,845	671,129	81,380	135,937		33,529	2,112,649
Other liabilities (non-financial)						89,979	65,115	155,094
Total equity							76,719	76,719

1) Insurance contracts are not classified as financial assets and liabilities. SEB has grouped its financial instruments by class taking into account the characteristics of the instruments:

Loans and deposits includes financial assets and liabilities with fixed or determinable payments that are not quoted in an active market. These are further specified in note 43 and 44.

Total 1,171,829 18,845 671,129 81,380 135,937 89,979 175,363 2,344,462

Equity intruments includes shares, rights issues and similar contractual rights of other entities.

Debt instruments includes contractual rights to receive or obligations to deliver cash on a predetermined date. These are further specified in note 41, 42 and 43. Derivative instruments includes options, futures, swaps and other derived products held for trading and hedging purposes. These are further specified in note 45. Investment contracts includes those assets and liabilities in the Life insurance operations where the policyholder is carrying the risk of the contractual agreement (is not qualified as an insurance contract under IFRS 4). The Life insurance operations are further specified in note 51.

Insurance contracts includes those assets and liabilities in the Life insurance operations where SEB is carrying the insurance risk of a contractual agreement (is qualified as an insurance contract under IFRS 4). The Life insurance operations are further specified in note 51.

Other includes other financial asset and liabilities recognised in accordance with IAS 39.

Note 40 ctd. Financial assets and liabilities by class

Parent company 2008
	Classes of financial assets and liabilities
Financial assets	Loans and deposits	Equity instrumens	Debt instruments	Derivative instruments	Other	Total
Cash and cash balances with central banks (note 19)					10,670	10,670
Loans to credit institutions (note 20)	306,387		42,686			349,073
Loans to the public (note 21)	708,777		59,960			768,737
Financial assets at fair value (note 22)		26,175	105,169	255,458		386,802
Available-for-sale financial assets (note 23)		1,528	25,369			26,897
Held-to-maturity financial assets (note 24)			3,263			3,263
Investments in associates (note 25)		1,011				1,011
Shares in subsidiaries (note 26)		60,063				60,063
Trade and client receivables (note 28)					12,317	12,317
Financial assets	1,015,164	88,777	236,447	255,458	22,987	1,618,833
Other assets (non-financial)					89,667	89,667
Total	1,015,164	88,777	236,447	255,458	112,654	1,708,500
Financial liabilities
Deposits by credit institutions (note 29)	410,105					410,105
Deposits and borrowing from the public (note 30)	453,697					453,697
Debt securities (note 32)			394,246			394,246
Financial liabilities at fair value (note 33)		15,387	34,042	230,083		279,512
Trade and client payables (note 34)					8,001	8,001
Subordinated liabilities (note 36)			50,199			50,199
Financial liabilities	863,802	15,387	478,487	230,083	8,001	1,595,760
Other liabilities (non-financial)					48,445	48,445
Total equity and untaxed reserves					64,295	64,295
Total	863,802	15,387	478,487	230,083	120,741	1,708,500

Parent company 2007

	Classes of financial assets and liabilities
	Loans and	Equity	Debt	Derivative
Financial assets	deposits	instruments	instruments	instruments	Other	Total
Cash and cash balances with central banks (note 19)					1,758	1,758
Loans to credit institutions (note 20)	357,482					357,482
Loans to the public (note 21)	637,138					637,138
Financial assets at fair value (note 22)		43,584	241,564	82,837		367,985
Available-for-sale financial assets (note 23)		1,155	60,930			62,085
Held-to-maturity financial assets (note 24)			3,348			3,348
Investments in associates (note 25)		1,063				1,063
Shares in subsidiaries (note 26)		51,936				51,936
Trade and client receivables (note 28)					23,625	23,625
Financial assets	994,620	97,738	305,842	82,837	25,383	1,506,420
Other assets					52,899	52,899
Total	994,620	97,738	305,842	82,837	78,282	1,559,319
Financial liabilities
Deposits by credit institutions (note 29)	367,699					367,699
Deposits and borrowing from the public (note 30)	412,499					412,499
Debt securities (note 32)			408,002			408,002
Financial liabilities at fair value (note 33)		18,461	103,226	80,074		201,761
Trade and client payables (note 34)					32,369	32,369
Subordinated liabilities (note 36)			43,046			43,046
Financial liabilities	780,198	18,461	554,274	80,074	32,369	1,465,376
Other liabilities (non-financial)					34,995	34,995
Total equity and untaxed reserves					58,948	58,948
Total	780,198	18,461	554,274	80,074	126,312	1,559,319

41 Debt instruments by maturities

Eligible debt instruments*
		1 < 3	3 months	1 < 5	5 < 10
Group 2008	< 1 month	months	< 1 year	years	years	10 years <	Total
Loans to the public (note 21)				4,761	649		5,410
Securities held for trading (note 22)	63	5,224	4,577	17,806	9,014	6,148	42,832
Other financial assets at fair value (note 22)			11	13			24
Available-for-sale financial assets (note 23)	2,973	2,510	10,668	71,396	31,131	7,539	126,217
Total	3,036	7,734	15,256	93,976	40,794	13,687	174,483
Group 2007
Securities held for trading (note 22)	3,808	1,332	13,303	35,119	15,477	15,849	84,888
Other financial assets at fair value (note 22)		20					20
Available-for-sale financial assets (note 23)	4,869	3,296	13,249	46,506	36,741	8,569	113,230
Held-to-maturity financial assets (note 24)		1					1
Total	8,677	4,649	26,552	81,625	52,218	24,418	198,139
Parent company 2008
Securities held for trading (note 22)	13	4,721	2,308	2,021	4,601	5 723	19,387
Available-for-sale financial assets (note 23)						674	674
Total	13	4,721	2,308	2,021	4,601	6,397	20,061
Parent company 2007
Securities held for trading (note 22)		740	9,613	8,962	4,636	9,690	33,641
Available-for-sale financial assets (note 23)					119	7,661	7,780
Total		740	9,613	8,962	4,755	17,351	41,421
Other debt instruments*
		1 < 3	3 months	1 < 5	5 < 10
Group 2008	< 1 month	months	< 1 year	years	years	10 years <	Total
Loans to credit institutions (note 20)	139			41,182	945	161	42,427
Loans to the public (note 21)				4,701	8,238	46,569	59,508
Securities held for trading (note 22)	225	11,358	18,877	45,070	3,584	3,395	82,509
Insurance assets (note 22) Other financial assets at fair value (note 22)	863 14	806 92	2,682 64	13,423 133	16,482 56	42,085 86	76,341 445
Available-for-sale financial assets (note 23)	6,771	1,122	4,423	4,695	3,111	12,795	32,917
Held-to-maturity financial assets (note 24)			1,468	385		105	1,958
Total	8,012	13,378	27,514	109,589	32,416	105,196	296,105
Group 2007
Securities held for trading (note 22)	1,358	9,190	9,094	74,572	18,648	92,140	205,002
Insurance assets (note 22)	32	461	1,593	8,382	49,329	6,518	66,315
Other financial assets at fair value (note 22)	2	10	40	160	18	52	282
Available-for-sale financial assets (note 23) Held-to-maturity financial assets (note 24)	634	254	512 612	26,935 1,068	5,810	19,587 90	53,732 1,770
Total	2,026	9,915	11,851	111,117	73,805	118,387	327,101
Parent company 2008
Loans to credit institutions (note 20)	139			41,182	945	161	42,427
Loans to the public (note 21)				4,701	8,238	46,569	59,508
Securities held for trading (note 22)	117	11,376	19,152	47,341	3,437	2,445	83,868
Available-for-sale financial assets (note 23)		1,044	3,731	2,852	3,902	12,795	24,324
Held-to-maturity financial assets (note 24)	91			253	2,789	104	3,237
Total	347	12,420	22,883	96,329	19,311	62,074	213,364
Parent company 2007
Securities held for trading (note 22)	701	9,019	8,978	76,880	18,521	91,439	205,538
Available-for-sale financial assets (note 23)	9		280	26,604	6,340	19,546	52,779
Held-to-maturity financial assets (note 24)	97			100	3,035	90	3,322
Total	807	9,019	9,258	103,584	27,896	111,075	261,639

* Accrued interest excluded.

42 Debt instruments by issuers

Eligible debt instruments*
Group 2008	Swedish State	Swedish municipalities	Other Swedish issuers – non financial companies	Foreign States	Other foreign issuers	Total
Loans to the public (note 21)				5,410		5,410
Securities held for trading (note 22)	15,010	294	2,628	24,864	36	42,832
Other financial assets at fair value (note 22)	24					24
Available-for-sale financial assets (note 23)	75		1,523	920	123,699	126,217
Total	15,109	294	4,151	31,194	123,735	174,483
Group 2007
Securities held for trading (note 22)	20,985	153		12,437	51,313	84,888
Other financial assets at fair value (note 22)					20	20
Available-for-sale financial assets (note 23)	50			13,426	99,754	113,230
Held-to-maturity financial assets (note 24)				1		1
Total	21,035	153		25,864	151,087	198,139
Parent company 2008
Securities held for trading (note 22)	15,010	294		3,473	610	19,387
Available-for-sale financial assets (note 23)					674	674
Total	15,010	294		3,473	1,284	20,061
Parent company 2007
Securities held for trading (note 22)		20,985	153	12,025	478	33,641
Available-for-sale financial assets (note 23)				7,581	199	7,780
Total		20,985	153	19,606	677	41,421

Other debt instruments*

Group 2008	Swedish State and municipalities	Swedish mortgage institutions	Other Swedish issuers – non financial companies	Other Swedish issuers – other financial companies	Foreign States	Other foreign issuers	Total
Loans to credit institutions (note 20)				1,516		40,911	42,427
Loans to the public (note 21)			469			59,039	59,508
Securities held for trading (note 22)	150	31,839	7,094	2,486	1,187	39,753	82,509
Insurance assets (note 22)	8,087	463	1,423	1,562	788	64,018	76,341
Other financial assets at fair value (note 22)					90	355	445
Available-for-sale financial assets (note 23)					2,656	30,261	32,917
Held-to-maturity financial assets (note 24)		902				1,056	1,958
Total	8,237	33,204	8,986	5,564	4,721	235,393	296,105
Group 2007
Securities held for trading (note 22)		25,085	6,176	788	2,173	170,780	205,002
Insurance assets (note 22)	9,096	995	929	932	5,578	48,785	66,315
Other financial assets at fair value (note 22)				25	142	115	282
Available-for-sale financial assets (note 23)			200	1,556	1,009	50,967	53,732
Held-to-maturity financial assets (note 24)		827	91			852	1,770
Total	9,096	26,907	7,396	3,301	8,902	271,499	327,101
Parent company 2008
Loans to credit institutions (note 20)				1,516		40,911	42,427
Loans to the public (note 21)			469			59,039	59,508
Securities held for trading (note 22)		31,840	6,989	2,486		42,553	83,868
Available-for-sale financial assets (note 23)						24,324	24,324
Held-to-maturity financial assets (note 24)			100			3,137	3,237
Total		31,840	7,558	4,002		169,964	213,364
Parent company 2007
Securities held for trading (note 22)		25,085	6,175	788		173,490	205,538
Available-for-sale financial assets (note 23)			200	1,464		51,115	52,779
Held-to-maturity financial assets (note 24)			100			3,222	3,322
Total		25,085	6,475	2,252		227,827	261,639

* Accrued interest excluded.

43 Repricing periods

Group 2008
		1 < 3	3 < 6	6 < 12	1 < 3	3 < 5
Assets	< 1 month	months	months	months	years	years	5 years <	Non rate	Insurance	Total
Loans to credit institutions	175,533	16,628	5,409	2,296	32,261	22,856	9,704	–96	1,772	266,363
Loans to the public	611,287	149,510	74,071	81,761	134,674	107,965	129,460	8,049		1,296,777
Financial assets	219,112	97,634	44,161	23,365	100,175	9,395	59,583	97,610	208,914	859,949
Other assets	924	95	87	183	3			68,577	17,744	87,613
Total	1,006,856	263,867	123,728	107,605	267,113	140,216	198,747	174,140	228,430	2,510,702
Liabilities and equity
Deposits by credit institutions	292,851	69,424	21,989	24,619	1,093	5,384	14,065			429,425
Deposits and borrowing
from the public	644,226	47,848	48,759	17,672	5,455	17,848	56,111	3,115		841,034
Issued securities	57,542	93,721	61,152	27,297	213,495	78,766	44,414	62		576,449
Other liabilities	128,343	3,272	5,790	8,189	41,503	21,120	59,760	98,443	213,645	580,065
Total equity	6,760	331		336				67,060	9,242	83,729
Total	1,129,722	214,596	137,690	78,113	261,546	123,118	174,350	168,680	222,887	2,510,702
Interest rate sensitive, net	–122,866	49,271	–13,962	29,492	5,567	17,098	24,397	5,460	5,543
Cumulative sensitive	–122,866	–73,595	–87,557	–58,065	–52,498	–35,400	–11,003	–5,543
Group 2007
		1 < 3	3 < 6	6 < 12	1 < 3	3 < 5
Assets	< 1 month	months	months	months	years	years	5 years <	Non rate	Insurance	Total
Loans to credit institutions	223,594	14,569	2,229	6,444	3,485	3,304	4,506	3,738	1,143	263,012
Loans to the public	542,449	160,272	75,905	39,267	95,829	65,324	89,598	–1,303		1,067,341
Financial assets	284,949	109,782	55,809	14,878	59,660	7,958	47,439	151,558	224,630	956,663
Other assets								41,623	15,823	57,446
Total	1,050,992	284,623	133,943	60,589	158,974	76,586	141,543	195,616	241,596	2,344,462
Liabilities and equity
Deposits by credit institutions	349,850	49,944	18,988	1,370	502	516	770	–592		421,348
Deposits and borrowing
from the public	608,373	45,416	15,121	11,222	12,714	7,474	47,492	2,669		750,481
Issued securities	129,041	138,201	59,089	21,484	127,711	56,712	14,911	7,404		554,553
Other liabilities	15,296	7,967	5,567	3,313	8,322	18,268	51,983	196,465	234,180	541,361
Total equity								76,719		76,719
Total	1,102,560	241,528	98,765	37,389	149,249	82,970	115,156	282,665	234,180	2,344,462
Interest rate sensitive, net	–51,568	43,095	35,178	23,200	9,725	–6,384	26,387	–87,049	7,416
Cumulative sensitive	–51,568	–8,473	26,705	49,905	59,630	53,246	79,633	–7,416

44 Loans and loan loss provisions

	Group				Parent company
	2008		2007		2008	2007
Loans to credit institutions1)	266,363		263,012		349,073	357,482
Loans to the public1)	1,296,777		1,067,341		768,737	637,138
Total	1,563,140		1,330,353		1,117,810	994,620
1) Including debt instruments classified as Loans.
Loans
Performing loans not impaired	1,558,448		1,328,351		1,117,558	994,469
Non-performing impaired loans	12,963		7,619		1,921	1,150
Performing impaired loans	948		772		32	41
Loans prior to reserves	1,572,359		1,336,742		1,119,511	995,660
Specific reserves Collective reserves	–5,022 –4,197		–3,787 –2,602		–903 –798	–645 –395
Reserves	–9,219		–6,389		–1,701	–1,040
Total	1,563,140		1,330,353		1,117,810	994,620
Loans by category of borrower
	Credit		Property	Public
Group 2008	institutions	Corporates	Management	­Administration	Households	Total
Performing loans not impaired	266,193	561,553	222,916	100,418	407,368	1,558,448
Non-performing impaired loans	320	5,166	4,235		3,242	12,963
Performing impaired loans	6	269	659		14	948
Loans prior to reserves	266,519	566,988	227,810	100,418	410,624	1,572,359
Specific reserves	–156	–2,698	–1,811		–357	–5,022
Collective reserves						–4,197
Reserves	–156	–2,698	–1,811		–357	–9,219
Total	266,363	564,290	225,999	100,418	410,267	1,563,140
Group 2007
Performing loans not impaired	262,998	443,338	182,164	73,754	366,097	1,328,351
Non-performing impaired loans	46	2,947	2,863		1,763	7,619
Performing impaired loans		289	320		163	772
Loans prior to reserves	263,044	446,574	185,347	73,754	368,023	1,336,742
Specific reserves	–32	–1,893	–1,471		–391	–3,787
Collective reserves						–2,602
Reserves	–32	–1,893	–1,471		–391	–6,389
Total	263,012	444,681	183,876	73,754	367,632	1,330,353
Parent company 2008
Performing loans not impaired	348,904	407,935	106,869	18,401	235,449	1,117,558
Non-performing impaired loans	320	1,054	231		316	1,921
Performing impaired loans		17	12		3	32
Loans prior to reserves	349,224	409,006	107,112	18,401	235,768	1,119,511
Specific reserves	–151	–577	–172		–3	–903
Collective reserves						–798
Reserves	–151	–577	–172		–3	–1,701
Total	349,073	408,429	106,940	18,401	235,765	1,117,810
Parent company 2007
Performing loans not impaired	357,482	324,328	84,581	9,605	218,473	994,469
Non-performing impaired loans	21	700	255		174	1,150
Performing impaired loans		10	28		3	41
Loans prior to reserves	357,503	325,038	84,864	9,605	218,650	995,660
Specific reserves	–21	–432	–189		–3	–645
Collective reserves						–395
Reserves	–21	–432	–189		–3	–1,040
Total	357,482	324,606	84,675	9,605	218,647	994,620

Note 44 ctd. Loans and loan loss provisions

Loans by geographical region1)
	The Nordic		The Baltic
Group 2008	region	Germany	region	Other	Total
Performing loans not impaired	971,314	373,608	172,368	41,158	1,558,448
Non-performing impaired loans	2,420	4,913	5,374	256	12,963
Performing impaired loans	31	792	125		948
Loans prior to reserves	973,765	379,313	177,867	41,414	1,572,359
Specific reserves	–852	–2,675	–1,345	–150	–5,022
Collective reserves					–4,197
Reserves	–852	–2,675	–1,345	–150	–9,219
Total	972,913	376,638	176,522	41,264	1,563,140
Group 2007
Performing loans not impaired	847,945	296,263	140,042	44,101	1,328,351
Non-performing impaired loans	1,397	5,050	959	213	7,619
Performing impaired loans	14	726	18	14	772
Loans prior to reserves	849,356	302,039	141,019	44,328	1,336,742
Specific reserves	–396	–2,780	–378	–233	–3,787
Collective reserves					–2,602
Reserves	–396	–2,780	–378	–233	–6,389
Total	848,960	299,259	140,641	44,095	1,330,353
Parent company 2008
Performing loans not impaired	1,067,270			50,288	1,117,558
Non-performing impaired loans	1,580			341	1,921
Performing impaired loans	31			1	32
Loans prior to reserves	1,068,881			50,630	1,119,511
Specific reserves	–719			–184	–903
Collective reserves					–798
Reserves	–719			–184	–1,701
Total	1,068,162			50,446	1,117,810
Parent company 2007
Performing loans not impaired	955,906			38,563	994,469
Non-performing impaired loans	818			332	1,150
Performing impaired loans	27			14	41
Loans prior to reserves	956,751			38,909	995,660
Specific reserves	–444			–201	–645
Collective reserves					–395
Reserves	–444			–201	–1,040
Total	956,307			38,708	994,620

1) Breakdown based on where the business is carried out.

Note 44 ctd. Loans and loan loss provisions

		Group		Parent company
Loans against collateral	2008	2007	2008	2007
Mortgage, real property	630,639	518,765	349,283	297,668
Securities and deposits	22,068	17,313	18,386	13,744
Public Administration	100,418	73,353	18,402	9,606
Banks	177,766	163,583	283,281	250,219
Unsecured loans	296,944	263,760	170,611	196,089
Other1)	133,886	72,392	86,977	33,043
Loans	1,361,721	1,109,166	926,940	800,369
Repos	102,446	227,576	89,925	195,291
Debt instruments classified as Loans	108,192		102,646
Reserves	–9,219	–6,389	–1,701	–1,040
Total	1,563,140	1,330,353	1,117,810	994,620
1) Including floating charges, factoring, leasing, guarantees etc.
Loans restructured current year
Book value of loans prior to restructuring	3	10	3	10
Book value of loans after restructuring	3	10	3	10
Loans reclassified current year
Book value of impaired loans which have regained normal status	370	136	19
Impaired loans
Non-performing impaired loans1)	12,963	7,619	1,921	1,150
Performing loans	948	772	32	41
Impaired loans gross	13,911	8,391	1,953	1,191
Specific reserves	–5,022	–3,787	–903	–645
of which reserves for non-performing loans	–4,679	–3,456	–875	–632
of which reserves for performing loans	–343	–331	–28	–13
Collective reserves	–4,197	–2,602	–798	–395
Impaired loans net	4,692	2,002	252	151
Reserves not included in the above:
Reserves for off-balance sheet items	–251	–209		–3
Total reserves	–9,470	–6,598	–1,701	–1,043
1) Loans past due by more than 60 days and with insufficient collateral.
Level of impaired loans	0.35%	0.18%	0.05%	0.03%
Reserve ratio for impaired loans	66.3	76.1	87.1	87.3
Non-performing loans not determined to be impaired (sufficient collateral)	353	237	353	237

Loans past due but not determined to be impaired amounted to SEK 13,203m (past due up to 30 days) and SEK 4,495m (between 31 and 60 days). These loans represented 1.13 per cent of the total lending volume.

Note 44 ctd. Loans and loan loss provisions

Provision and reversals of reserves
				Group			Parent company
Specific loan loss reserves1)			2008		2007		2008	2007
Opening balance			–3,787		–4,234		–645	–678
Reversals for utilisation			800		818		70	53
Provisions			–1,718		–653		–347	–51
Reversals			336		405		39	25
Exchange rate differences			–653		–123		–20	6
Closing balance			–5,022		–3,787		–903	–645
1) Specific reserves for individually appraised loans.
Collective loan loss reserves2)
Opening balance			–2,602		–2,170		–395	–422
Net provisions			–1,303		–390		–393	38
Exchange rate differences			–292		–42		–10	–11
Closing balance			–4,197		–2,602		–798	–395
2) Collective reserves for individually appraised loans, reserves for loans assessed on a portfolio basis and country risk reserves.
Contingent liabilities reserves
Opening balance			–209		–215		–3	–5
Net provisions			–56		8		3	2
Exchange rate differences			14		–2
Closing balance			–251		–209			–3
Total			–9,470		–6,598		–1,701	–1,043
Credit exposure by industry*
		Loans		Contingent liabilities		Derivative instruments1)		Total
Group	2008	2007	2008	2007	2008	2007	2008	2007
Banks	177,766	163,852	38,238	31,207	69,592	52,477	285,596	247,536
Finance and insurance	38,230	19,584	34,993	21,793	19,943	7,349	93,166	48,726
Wholesale and retail	54,951	43,995	30,815	26,311	933	263	86,699	70,569
Transportation	33,950	25,288	8,167	6,195	650	407	42,767	31,890
Shipping	27,829	14,184	9,559	7,237	824	122	38,212	21,543
Business and household services	94,199	69,074	48,050	45,771	6,373	2,130	148,622	116,975
Construction	12,337	10,097	9,740	9,567	315	30	22,392	19,694
Manufacturing	103,002	70,517	105,752	82,785	12,157	4,177	220,911	157,479
Agriculture, forestry and fishing	7,882	6,777	1,655	1,404	146	26	9,683	8,207
Mining and quarrying	9,966	4,837	8,295	5,243	1,701	391	19,962	10,471
Electricity, gas and water suppply	25,179	16,274	18,477	15,539	5,177	876	48,833	32,689
Other	37,554	39,033	11,654	11,125	1,223	2,136	50,431	52,294
Corporates	445,079	319,660	287,157	232,970	49,442	17,907	781,678	570,537
Commercial	143,303	115,655	22,454	20,470	3,617	719	169,375	136,844
Multi-family	84,507	71,610	6,320	3,184	2,136	378	92,962	75,172
Property Management	227,810	187,265	28,774	23,654	5,753	1,097	262,337	212,016
Public Administration	100,418	73,754	12,980	10,673	5,544	3,127	118,942	87,554
Household mortgage	349,885	310,301	20,763	20,189			370,648	330,490
Other	60,738	57,722	54,274	45,813	36	28	115,048	103,563

Households 410,623 368,023 75,037 66,002 36 28 485,696 434,053 Credit portfolio 1,361,696 1,112,554 442,186 364,506 130,367 74,636 1,934,249 1,551,696 Credit institutions 42,201 97,213 General public 60,245 130,363 Repos 102,446 227,576 Debt instruments 446,654 530,602

* Before provisions for credit losses.

45 Derivative instruments

	Group			Parent company
	2008	2007	2008	2007
Interest-related	133,221	44,162	135,415	41,173
Currency-related	114,373	30,320	108,258	29,189
Equity-related	3,247	10,544	3,087	9,329
Other	8,740	3,146	8,698	3,146
Positive closing values or nil value	259,581	88,172	255,458	82,837
Interest-related	123,630	41,528	121,768	40,009
Currency-related	112,195	34,382	105,470	32,926
Equity-related	2,858	5,390	2,088	7,061
Other	826	80	757	78
Negative closing values	239,509	81,380	230,083	80,074

	Positive closing values or nil value	Negative closing values
Group, 2008	Nom. amount	Book value	Nom. amount	Book value
Options	122,949	4,580	103,309	4,760
Futures	1,634,813	16,529	1,483,235	15,935
Swaps	3,375,754	112,112	3,395,567	102,935
Interest-related	5,133,516	133,221	4,982,111	123,630
of which, cleared	11,037	25	3,304	9
Options	175,588	4,373	178,114	4,419
Futures	385,795	18,779	381,687	15,741
Swaps	3,256,885	91,221	3,255,529	92,035
Currency-related	3,818,268	114,373	3,815,330	112,195
of which, cleared	29,150	3,135	30,933	2,506
Options	12,479	2,819	6,539	2,511
Futures	3,797	131	2,564	156
Swaps		297	11,387	191
Equity-related	16,276	3,247	20,490	2,858
of which, cleared	3,758	1,109	2,564	977
Options	1,699	32	1,798	59
Futures	266	10	266	10
Swaps	37,314	8,698	38,714	757
Other	39,279	8,740	40,778	826
of which, cleared	1,966	42	1,966	42
Total	9,007,339	259,581	8,858,709	239,509
of which, cleared	45,911	4,311	38,767	3,534
Group, 2007

Options	372,906	3,556	330,804	2,523
Futures	1,094,557	1,284	1,125,054	1,079
Swaps	2,186,047	39,322	2,190,038	37,926
Interest-related	3,653,510	44,162	3,645,896	41,528
of which, cleared	3,383	12	176	1
Options	162,692	1,234	165,173	935
Futures	272,095	3,681	286,519	4,322
Swaps	2,982,614	25,405	2,988,163	29,125
Currency-related	3,417,401	30,320	3,439,855	34,382
of which, cleared	14,486	260	14,100	226
Options	7,099	7,959	14,769	4,533
Futures	5,119	794		121
Swaps	17,286	1,791	17,286	736
Equity-related	29,504	10,544	32,055	5,390
of which, cleared	5,119	1,166		388
Options			2,849	2
Swaps	44,280	3,146	44,280	78
Other	44,280	3,146	47,129	80
Total	7,144,695	88,172	7,164,935	81,380
of which, cleared	22,988	1,438	14,276	615

Note 45 ctd. Derivative instruments

	Positive closing values or nil value		Negative closing values
Parent company 2008	Nom. amount	Book value	Nom. amount	Book value
Options	96,081	5,033	92,810	5,297
Futures	1,623,777	17,078	1,479,869	16,223
Swaps	3,208,935	113,304	3,207,514	100,248
Interest-related	4,928,793	135,415	4,780,193	121,768
Options	187,936	4,063	188,334	3,540
Futures	357,244	16,405	353,319	13,005
Swaps	3,341,814	87,790	3,343,694	88,925
Currency-related	3,886,994	108,258	3,885,347	105,470
Options		2,684		1,851
Futures		106		46
Swaps	11,446	297	11,446	191
Equity-related	11,446	3,087	11,446	2,088
of which, cleared		1,084		1,049
Swaps	37,423	8,698	38,823	757
Other	37,423	8,698	38,823	757
Total	8,864,656	255,458	8,715,809	230,083
of which, cleared		1,084		1,049

Parent company 2007

Options	357,293	3,000	317,808	4,026
Futures	1,088,485	1,148	1,121,992	1,071
Swaps	2,008,496	37,025	2,007,093	34,912
Interest-related	3,454,274	41,173	3,446,893	40,009
of which, cleared
Options	167,382	1,246	167,491	1,091
Futures	248,233	2,909	248,803	3,390
Swaps	3,045,820	25,034	3,049,559	28,445
Currency-related	3,461,435	29,189	3,465,853	32,926
of which, cleared
Options		7,511		6,203
Futures		130		121
Swaps	17,311	1,688	17,311	737
Equity-related	17,311	9,329	17,311	7,061
of which, cleared
Swaps	44,299	3,146	44,299	78
Other	44,299	3,146	44,299	78
of which, cleared
Total	6,977,319	82,837	6,974,356	80,074

of which, cleared

46 Fair value information

	Group 2008		Group 2007
	Book value	Fair value	Book value	Fair value
Cash and cash balances with central banks	44,852	44,852	96,871	96,871
Loans to credit institutions	266,363	267,222	263,012	262,368
Loans to the public	1,296,777	1,296,765	1,067,341	1,068,151
Securities held for trading	161,596	161,596	348,888	348,888
Derivatives held for trading	248,426	248,426	85,395	85,395
Derivatives used for hedging	11,155	11,155	2,777	2,777
Fair value changes of hedged items in a portfolio hedge	3,503	3,503	–641	–641
Financial assets – policyholders bearing the risk	114,425	114,425	135,485	135,485
Other financial assets designated at fair value	96,349	96,349	89,319	89,319
Financial assets at fair value	635,454	635,454	661,223	661,223
Available-for-sale financial assets	163,115	163,115	170,137	170,137
Held-to-maturity investments	1,997	1,997	1,798	1,823
Assets held for sale	852	852
Investments in associates	1,129	1,129	1,257	1,257
Intangible assets	19,395	19,395	16,894	16,894
Property and equipment	2,626	2,634	2,564	2,564
Investment properties	7,490	7,490	5,239	5,239
Tangible and intagible assets	29,511	29,519	24,697	24,697
Current tax assets	3,998	3,998	3,766	3,766
Deferred tax assets	2,836	2,836	845	845
Trade and client receivables	13,402	13,402	25,377	25,377
Other assets	50,416	50,416	28,138	28,138
Other assets	70,652	70,652	58,126	58,126
Total assets	2,510,702	2,511,557	2,344,462	2,344,653
Deposits by credit institutions	429,425	430,091	421,348	421,361
Deposits and borrowing from the public	841,034	841,290	750,481	751,411
Liabilities to policyholders – investment contracts	115,110	115,106	135,937	135,937
Liabilities to policyholders – insurance contracts	95,960	95,960	89,979	89,979
Liabilities to policyholders	211,070	211,066	225,916	225,916
Debt securities	525,219	527,742	510,564	507,342
Trading derivatives	231,341	231,341	79,211	79,211
Derivatives used for hedging	8,168	8,168	2,169	2,169
Trading liabilities	54,411	54,411	135,421	135,421
Fair value changes of hedged items in portfolio hedge	1,613	1,613	–411	–411
Financial liabilities at fair value	295,533	295,533	216,390	216,390
Current tax liabilities	1,148	1,148	1,101	1,101
Deferred tax liabilities	9,810	9,810	9,403	9,403
Trade and client payables	9,498	9,498	33,940	33,940
Other liabilities	51,109	51,109	53,075	53,075
Other liabilities	71,565	71,565	97,519	97,519
Provisions	1,897	1,897	1,536	1,536
Subordinated liabilities	51,230	40,264	43,989	43,819
Total liabilities	2,426,973	2,419,448	2,267,743	2,265,294

The above calculation comprises balance sheet items at fixed rates of interest during fixed periods. This means that all items subject to variable rates of interest, i.e. deposit/lending volumes for which interest terms are market-related, have not been recalculated; the nominal amount is considered to equal a fair value.

When calculating fair values for fixed-interest rate lending, future interest income is discounted with the help of a market interest curve, which has been adjusted for applicable margins on new lending. Correspondingly, fixed-interest rate-related deposits/lending are discounted with the help of the market interest curve, adjusted for relevant margins.

In addition to fixed-rate deposits/lending, adjustments have also been made for surplus values in properties and certain shareholdings.

One effect of this calculation method is that the fair values arrived at in times of falling margins on new lending will be higher than book values, while the opposite is true in times of rising margins. It should furthermore be noted that this calculation does not represent a market valuation of the Group as a company.

47 Related party disclosures*

		Group companies	Associated companies			Total
	Assets/		Assets/		Assets/
Parent company 2008	Liabilities	Interest	­Liabilities	Interest	­Liabilities	Interest
Loans to credit institutions	148,449	5,988			148,449	5,988
Loans to the public	58,075	2,286	9		58,084	2,286
Bonds and other interest-bearing securities	7,599	299			7,599	299
Other assets	25,023	26			25,023	26
Total	239,146	8,599	9		239,155	8,599
Deposits by credit institutions	85,036	–3,173			85,036	–3,173
Deposits and borrowings from the public	11,647	–350	122		11,769	–350
Issued securities	979	–27			979	–27
Other liabilities	20,362				20,362
Total	118,024	–3,550	122		118,146	–3,550

Parent company 2007

4,318			4,318
578	–4		578	–4
7,701	–402	36	7,737	–402
63,803	–2,788		63,803	–2,788
217,021	7,998	207	217,228	7,998
5,390	7		5,390	7
7,605	446		7,605	446
38,017	1,693	207	38,224	1,693
166,009	5,852		166,009	5,852

* For information about Top management, The Group Executive Committee and Other related parties see note 9c.

The parent company has sold four Strategic investments to SEB Stiftelsen, Skandinaviska Enskilda Bankens Pensionsstiftelse, in 2007 for SEK 224m and made a capital gain of SEK 21m.

The Group has administrative and capital management agreements with Gamla Livförsäkrings AB SEB Trygg Liv to conditions on the market.

48 Future minimum lease payments for operational leases*

	Group			Parent company
	2008	2007	2008	2007
Year 2008		1,261		535
Year 2009	1,659	1,090	564	444
Year 2010	1,399	930	438	358
Year 2011	979	782	357	357
Year 2012	835	669	327	372
Year 2013 and later	2,855	2,180	1,681	1,678
Total	7,727	6,912	3,367	3,744

* Leases for premises and other operational leases.

49 Capital adequacy

	Financial group of undertakings1)		Parent company
Calculation of capital base	2008	2007	2008	2007
Total equity according to balance sheet	83,729	76,719	43,159	39,932
Proposed dividend (excl repurchased shares)		–4,442		–4,442
Deductions for investments outside the financial group
of undertakings	–76	–81
Other deductions outside the financial group of undertakings 2)	–2,878	–2,975
Total equity in the capital adequacy	80,775	69,221	43,159	35,490
Untaxed reserves			15,577	13,692
Tier I capital contribution	12,371	10,907	10,005	8,562
Adjustment for hedge contracts	–1,395	237	–1,365	442
Net provisioning amount for IRB-reported credit exposures	–1,133	–235	–599	–476
Unrealised value changes on available-for-sale financial assets	3,062	572	2,585	258
Goodwill 3)	–7,305	–6,079	–524	–523
Other intangible assets	–2,090	–1,135	–812	–370
Deferred tax assets	–1,822	–786	–1,338
Tier I capital	82,463	72,702	66,688	57,075
Dated subordinated debt	21,552	18,670	20,665	17,808
Deduction for remaining maturity	–2,242	–1,414	–1,530	–1,018
Perpetual subordinated debt	14,421	14,256	16,787	16,601
Net provisioning amount for IRB-reported credit exposures	–1,133	–235	–599	–476
Unrealised gains on available-for-sale financial assets	1,221	451	1,022	140
Deduction for investments outside the financial group of
undertakings	–76	–81
Tier II capital	33,743	31,647	36,345	33,055
Deduction for investments in insurance companies 4)	–10,620	–10,592
Deduction for pension assets in excess of related liabilities	–863	–784
Capital base	104,723	92,973	103,033	90,130

Note 49 ctd. Capital adequacy

	Financial group of undertakings1)		Parent company
Calculation of capital requirements	2008	2007	2008	2007
Credit risk, IRB reported capital requirements
Institutions	4,472	4,506	2,776	2,936
Corporates	37,158	21,420	23,410	16,472
Securitisations	572	174	568	170
Retail mortgages	4,627	3,409	1,342	1,501
Other exposure classes	559
Total for credit risk, IRB approach	47,388	29,509	28,096	21,079
Other Basel II reported capital requirements
Credit risk, Standardised approach	11,610	6,227	21,229	16,897
Operational risk, Basic Indicator approach		3,723		2,358
Operational risk, Advanced Measurement approach	3,080		1,545
Foreign exchange rate risk	570	580	567	543
Trading book risks	2,775	4,010	2,538	3,721
Total, reporting according to Basel II	65,423	44,049	53,975	44,598
Reporting according to Basel I 5)
Credit risk		14,859
Foreign exchange rate risk
Trading book risks		41
Total, reporting according to Basel I		14,900
Summary
Credit risk	58,998	50,595	49,325	37,976
Operational risk	3,080	3,723	1,545	2,358
Market risk	3,345	4,631	3,105	4,264
Total before flooring rules	65,423	58,949	53,975	44,598
Adjustment for flooring rules
Additional requirement according to transitional flooring6)	13,460	8,409
Total reported capital requirements	78,883	67,358	53,975	44,598
Expressed as Risk weighted assets	986,034	841,974	674,683	557,471
Calculation of capital ratios
Tier I capital	82,463	72,702	66,688	57,075
Capital base	104,723	92,973	103,033	90,130
Total risk weighted amount for credit, market
and operational risks	986,034	841,974	674,683	557,471
Tier I capital ratio, %	8.36	8.63	9.88	10.24
Total capital ratio, %	10.62	11.04	15.27	16.17
Capital adequacy quotient (capital base/capital requirement)	1.33	1.38	1.91	2.02

1) The capital adequacy reporting comprises the financial group of undertakings which includes non-consolidated associated companies and excludes insurance companies.

2) The deduction from total equity in the consolidated balance sheet consists of retained earnings in subsidiaries outside the financial group of undertakings.

3) The goodwill that is included in the capital base differs from the amounts stated in the balance sheet due to the inclusion of companies in the capital adequacy calculation that are not consolidated in the Group's balance sheet.

4) Goodwill from acquisitions of insurance companies is included in the deduction for insurance investments.

5) In 2007 only Skandinaviska Enskilda Banken AB, SEB AG and SEB Gyllenberg Ab reported according to Basel II regulation. From 2008 the whole SEB Group reports according to Basel II. 6) Addition for transition rule according to the Swedish law (2006:1372) for implementation of the new capital requirement from Basel I to Basel II.

50 Assets and liabilities distributed by main currencies

		Group		Parent company
	2008	2007	2008	2007
SEK	95,228	74,863	97,509	80,116
EUR	73,946	89,097	160,924	169,024
USD	58,845	56,607	43,959	58,433
GBP	12,595	1,480	13,843	2,097
DKK	20,321	32,747	18,056	32,678
NOK	1,995	1,503	7,311	7,539
Other currencies	3,433	6,715	7,471	7,595
Loans to credit institutions	266,363	263,012	349,073	357,482
SEK	497,655	506,232	467,353	469,018
EUR	576,714	381,721	153,187	63,198
USD	94,259	42,755	82,380	35,756
GBP	14,074	10,614	11,485	8,393
DKK	19,601	30,218	24,377	29,297
NOK	36,081	41,543	21,600	24,597
Other currencies	58,393	54,258	8,355	6,879
Loans to the public	1,296,777	1,067,341	768,737	637,138
SEK	306,266	242,930	266,482	132,636
EUR	268,787	281,411	94,426	142,348
USD	41,111	70,952	39,550	70,713
GBP	3,688	26,455	2,972	27,016
DKK	118,565	165,195	28,875	91,527
NOK	50,136	36,597	59,075	39,037
Other currencies	13,142	10,875	9,643	8,523
Financial assets	801,695	834,415	501,023	511,800
SEK	40,889	25,688	46,430	37,610
EUR	44,816	87,008	26,573	7,016
USD	10,355	6,945	9,324	3,844
GBP	744	680	460	159
DKK	18,544	16,849	2,609	798
NOK	11,768	15,372	3,699	860
Other currencies	18,751	27,152	572	2,612
Other assets	145,867	179,694	89,667	52,899
Total assets	2,510,702	2,344,462	1,708,500	1,559,319
SEK	940,038	849,713	877,774	719,380
EUR	964,263	839,237	435,110	381,586
USD	204,570	177,259	175,213	168,746
GBP	31,101	39,229	28,760	37,665
DKK	177,031	245,009	73,917	154,300
NOK	99,980	95,015	91,685	72,033
Other currencies	93,719	99,000	26,041	25,609
Total assets	2,510,702	2,344,462	1,708,500	1,559,319

Note 50 ctd. Assets and liabilities distributed by main currencies

		Group		Parent company
Liabilities, provisions and shareholders' equity	2008	2007	2008	2007
SEK	72,119	84,572	79,889	92,510
EUR	124,924	126,792	97,031	62,184
USD	148,466	92,219	148,397	95,788
GBP	8,718	8,481	9,118	8,995
DKK	33,026	54,410	33,820	55,676
NOK Other currencies	24,249 17,923	31,824 23,050	24,815 17,035	33,084 19,462
Deposits by credit institutions	429,425	421,348	410,105	367,699
SEK	297,598	292,463	293,308	288,838
EUR	378,330	295,172	67,323	36,810
USD	63,214	49,925	55,957	41,616
GBP	11,110	13,684	10,237	12,639
DKK	11,202	16,119	7,086	10,379
NOK	19,327	26,310	13,407	17,243
Other currencies	60,253	56,808	6,379	4,974
Deposits and borrowing from the public	841,034	750,481	453,697	412,499
SEK	459,348	365,440	368,095	255,036
EUR	303,988	180,957	142,481	60,565
USD	104,709	209,008	103,472	208,745
GBP	7,909	19,449	1,907	3,841
DKK	106,544	143,119	19,191	76,577
NOK	39,661	28,381	40,070	28,845
Other currencies	9,663	6,516	6,543	8,523
Financial liabilities	1,031,822	952,870	681,759	642,132
SEK	15,957	24,393	9,023	6,646
EUR	17,687	28,772	17,539	6,384
USD	18,861	3,231	17,090	4,717
GBP	413	3,772	335	4,031
DKK	7,575	26,449	464	4,914
NOK	3,073	5,787	8	2,424
Other currencies	9,896	6,651	3,986	5,879
Other liabilities	73,462	99,055	48,445	34,995
EUR	26,290	22,180	25,352	21,364
USD	12,240	9,086	12,240	9,086
GBP	10,301	11,124	10,301	11,124
NOK	110	93	23
Other currencies	2,289	1,506	2,283	1,472
Subordinated liabilities	51,230	43,989	50,199	43,046
SEK	87,004	76,555	66,899	58,441
EUR	–2,509	–390	–1,992	8
USD	–2,309	47	–2,309	47
GBP	373		373
DKK	145	119	3
NOK	1,118	452	1,118	452
Other currencies	–93	–64	203
Shareholders' equity and untaxed reserves	83,729	76,719	64,295	58,948
Total liabilities and equity	2,510,702	2,344,462	1,708,500	1,559,319
SEK	932,026	843,423	817,214	701,471
EUR	848,710	653,483	347,734	187,315
USD	345,181	363,516	334,847	359,999
GBP	38,824	56,510	32,271	40,630
DKK	158,492	240,216	60,564	147,546
NOK	87,538	92,847	79,441	82,048
Other currencies	99,931	94,467	36,429	40,310
Total liabilities and equity	2,510,702	2,344,462	1,708,500	1,559,319

51 Income statements – Life insurance operations

		Group
	2008	2007
Premium income, net	7,126	5,961
Income investment contracts
Own fees including risk gain/loss	951	1,029
Commissions from fund companies	952	1,113
	1,903	2,142
Net investment income	–2,566	889
Other operating income	409	485
Total income, gross	6,872	9,477
Claims paid, net	–9,330	–7,918
Change in insurance contract provisions	5,718	2,371
Total income, net	3,260	3,930
Of which from other units within the SEB group	885	997
Expenses for acquisition of investment and insurance contracts
Acquisition costs	–1,504	–1,391
Change in deferred acquisition costs	288	190
	–1,216	–1,201
Administrative expenses	–957	–915
Other operating expenses	–24	–12
Total expenses	–2,197	–2,128
Operating profit	1,063	1,802

Change in surplus values in life insurance operations

Total change in surplus values6)	–2,976	1,264
Financial effects due to short-term market fluctuations5)	–3,826	–62
Change in assumptions4)	–139	53
Change in surplus values from ongoing business, net3)	989	1,273
Amortisation of capitalised acquisition costs	519	493
Capitalisation of acquisition costs	–807	–683
Change in surplus values from ongoing business, gross	1,277	1,463
Actual outcome compared to assumptions2)	–8	25
Realised surplus value in existing policies	–1,768	–1,662
Return on existing policies	1,465	1,327
Present value of new sales1)	1,588	1,773
Traditional insurance in SEB Pension Denmark is not included

The calculation of surplus values in life insurance operations is based upon assumptions concerning the future development of written insurance contracts and a risk-adjusted discount rate. The most important assumptions (Swedish customer base

– which represent 94 per cent of the surplus value):

	2008	2007
Discount rate	7.5%	8.0%
Surrender of endowment insurance contracts:
signed within 1 year / 2-4 years / 5 years / thereafter	1% / 10% / 20% / 11%	1% / 10% / 10% / 12%
Lapse rate of regular premiums, unit-linked	11%	10%
Growth in fund units	5.5%	6.0%
Inflation CPI / Inflation expenses	2% / 3%	2% / 3%
Expected return on solvency margin	4%	4%
Right to transfer policy, unit-linked	1%	1%
	According to the	According to the
Mortality	Group's experience	Group's experience

1) Sales defined as new contracts and extra premiums in existing contracts.

2) The reported actual outcome of contracts signed can be placed in relation to the operative assumptions that were made. Thus, the value of the deviations can be estimated. The most important components consist of extensions of contracts as well as cancellations. However, the actual income and administrative expenses are included in full in the operating result.

3) Deferred acquisition costs are capitalised in the accounts and amortised according to plan. The reported change in surplus values is therefore adjusted by the net result of the capitalisation and amortisation during the period.

4) During 2008 the major negative net effect was due to adjustments of the surrender rate and the lapse rate. The lower assumed growth in fund assets had a negative effect which was more than offset by a positive effect from a lower discount rate. In 2007 the major positive effect was caused by adjustments of the administrative costs per policy.

5) Assumed unit growth is 5.5 per cent gross (before fees and taxes). Actual growth results in positive or negative financial effects. 6) Calculated surplus values are not included in the SEB Group's consolidated accounts.

52 Assets in unit-link operations

Within the unit-linked business SEB holds, for its customer's account, a share of more than 50 per cent in 41 (34) funds, where it is the investment manager. The total value of those funds amounted to SEK 78,082m (83,368) of which SEB, for its customer's account, holds SEK 55,555m (59,695).

53 Assets held for sale
		Group
Balance sheet	2008	2007
Investment properties	846
Other	6
Total	852

The investment properties held for sale belongs to SEB AG in Germany and are planned to be sold mid-year 2009.

54 Subsequent events

The Board proposes to strengthen the capital base by SEK 15bn and not to pay any dividend for the financial year 2008. These measures will have a combined positive effect on the Group's capital base of SEK 19.5bn.

SEB has decided to reclassify Sek 52bn of its fixed-income securities as loans and receivables as of 1 January 2009. The reclassification includes SEK 3bn of assets held-for-trading and SEK 49bn of assets in the available-for-sale category.

The SEB Group

Profit and Loss accounts
SEK m	2008	2007	2006	2005	20041)
Net interest income	18,710	15,998	14,281	14,282	13,551
Net fee and commission income	15,254	17,051	16,146	13,559	11,704
Net financial income	2,970	3,239	4,036	3,392	2,176
Net life insurance income	2,375	2,933	2,661	2,352	1,401
Net other income	1,831	1,219	1,623	642	1,163
Total operating income	41,140	40,440	38,747	34,227	29,995
Staff costs	–16,241	–14,921	–14,363	–13,342	–11,579
Other expenses	–7,642	–6,919	–6,887	–7,574	–6,631
Depreciation, amortisastion and impairment	–1,524	–1,354	–1,287	–1,233	–1,175
Total operating expenses	–25,407	–23,194	–22,537	–22,149	–19,385
Gains less losses from tangible and intangible assets	6	788	70	59	100
Net credit losses	–3,268	–1,016	–718	–914	–701
Operating profit	12,471	17,018	15,562	11,223	10,009
Income tax expense	–2,421	–3,376	–2,939	–2,770	–2,662
Net profit from continued operations	10,050	13,642	12,623	8,453	7,347
Discontinued operations				–32	35
Net profit	10,050	13,642	12,623	8,421	7,382
Attributable to minority interests	9	24	18	20	17
Attributable to equity holders	10,041	13,618	12,605	8,401	7,365
Net profit	10,050	13,642	12,623	8,421	7,382

1) Restated to IFRS except for IAS 32 and IAS 39.

Balance sheets

SEK m	2008	2007	2006	2005	20041)
Loans to credit institutions	266,363	263,012	179,339	177,592	208,226
Loans to the public	1,296,777	1,067,341	946,643	901,261	783,355
Financial assets	765,131	868,643	672,369	665,335	532,401
Other assets	182,431	145,466	136,090	145,550	82,569
Total assets	2,510,702	2,344,462	1,934,441	1,889,738	1,606,551
Deposits by credit institutions	429,425	421,348	365,980	399,494	370,483
Deposits and borrowing from the public	841,034	750,481	641,758	570,001	516,513
Liabilities to policyholders	211,070	225,916	203,719	185,363	145,730
Financial liabilities	830,250	760,894	552,153	581,099	419,686
Other liabilities	63,964	65,115	60,115	52,782	71,572
Subordinated liabilities	51,230	43,989	43,449	44,203	30,804
Total equity	83,729	76,719	67,267	56,796	51,763
Total liabilities, provisions and shareholders' equity	2,510,702	2,344,462	1,934,441	1,889,738	1,606,551

1) Restated to IFRS except for IAS 32 and IAS 39.

Key ratios

SEK m	2008	2007	2006	2005	20041)
Return on equity, per cent	13.1	19.3	20.8	15.8	14.7
Basic earnings per share, SEK	14.66	19.97	18.72	12.58	10.83
Cost/Income ratio	0.62	0.57	0.58	0.65	0.65
Credit loss level, per cent	0.30	0.11	0.08	0.11	0.10
Level of impaired loans, per cent	0.35	0.18	0.22	0.22	0.31
Total capital ratio2), per cent	10.6	11.0	11.5	10.8	10.3
Tier I capital ratio2), per cent	8.4	8.6	8.2	7.5	7.8

1) Restated to IFRS except for IAS 32 and IAS 39.

2) 2008–2007 Basel II (with transitional rules), 2006–2004 Basel I.

Skandinaviska Enskilda Banken

Profit and Loss accounts

SEK m	2008	2007	2006	2005	20041)
Net interest income	13,171	11,603	4,711	4,885	5,047
Net commission income	5,994	7,124	7,163	5,081	4,813
Net result of financial transactions	3,236	2,490	3,515	2,558	1,778
Other income	5,649	4,583	3,515	2,884	2,235
Total operating income	28,050	25,800	18,904	15,408	13,873
Administrative expenses	–13,738	–12,589	–13,073	–10,854	–9,791
Depreciation and write-downs	–4,820	–4,847	–399	–336	–310
Total operating costs	–18,558	–17,436	–13,472	–11,190	–10,101
Profit before credit losses	9,492	8,364	5,432	4,218	3,772
Lending losses and changes in value	–773	–24	–134	–88	–42
Write-downs of financial fixed assets	–121	–106	–100	–220	–392
Operating profit	8,598	8,234	5,198	3,910	3,338
Appropriations including pension compensation	–1,683	–158	–345	–1,058	3,654
Taxes	1,300	–591	–691	–293	–1,978
Net profit for the year	8,215	7,485	4,162	2,559	5,014

1) Restated to IFRS except for IAS 32 and IAS 39.

Balance sheets

SEK m	2008	2007	2006	2005	20041)
Loans to credit institutions	349,073	357,482	361,615	331,451	290,448
Loans to the public	768,737	637,138	336,562	291,861	251,857
Financial assets	501,023	511,800	434,596	473,073	350,434
Other assets	89,667	52,899	39,276	35,438	53,466
Total assets	1,708,500	1,559,319	1,172,049	1,131,823	946,205
Deposits by credit institutions	410,105	367,699	334,116	345,510	290,247
Deposits and borrowing from the public	453,697	412,499	390,085	324,719	310,145
Financial liabilities	681,759	642,132	315,765	349,550	225,590
Other liabilities	48,445	34,995	41,481	26,756	51,774
Subordinated liabilities	50,199	43,046	42,700	43,049	29,296
Shareholders' equity and untaxed reserves	64,295	58,948	47,902	42,239	39,153
Total liabilities, provisions and shareholders' equity	1,708,500	1,559,319	1,172,049	1,131,823	946,205

1) Restated to IFRS except for IAS 32 and IAS 39.

Definitions

Return on equity

Net profi t attributable to equity holders for the year as a percentage of average shareholders equity, defi ned as the average of equity at the opening of the year and at the close of March, June, September and December, respectively, adjusted for dividends paid during the year, repurchase of own shares and rights issues.

Return on business equity

Operating profi t reduced by a standard tax per division, divided by allocated capital.

Return on total assets

Net profi t as a percentage of average assets, defi ned as the average of total assets at the opening of the year and at the close of March, June, September and December.

Return on risk-weighted assets

Net profi t as a percentage of average risk-weighted assets, defi ned as the average of risk-weighted assets at the opening of the year and at the close of March, June, September and December.

Cost/Income-ratio

Total operating expenses divided by total operating income.

Earnings per share

Net profi t for the year divided by the average number of shares.

Adjusted shareholders' equity per share

Shareholders' equity as per the balance sheet plus the equity portion of any surplus values in the holdings of interest-bearing securities and surplus value in life insurance operations divided by the number of shares at year-end.

Risk-weighted asset

The book value of the assets as per the balance sheet and the off balance-sheet commitments are valued in accordance with the capital adequacy rules.

Core capital ratio

Core capital as a percentage of the risk-weighted assets. Core capital consists of shareholders' equity, adjusted according to the capital adequacy rules.

Total capital ratio

The capital of the fi nancial group of undertakings adjusted according to the capital adequacy rules as a percentage of the risk- weighted assets. Total capital consists of core capital and supplementary capital minus holdings of shares in unconsolidated companies and proposed dividend as well as deferred tax and intangibles. Supplementary capital includes subordinated debenture loans plus reserves and capital contributions, after approval by the Financial Supervisory Authority. Supplemen tary capital must not exceed the amount of core capital.

Credit loss level

The credit loss level is defi ned as lending losses and value changes in assets taken over divided by lending to the general public and credit institutions (excluding banks), assets taken over and loan guarantees at the opening of the year.

Reserve ratio for impaired loans

Reserve for probable loan losses as a percentage of impaired loans, gross.

Level of impaired loans

Impaired loans (net) divided by loans to the general public and credit institutions (excluding banks) and equipment leased to clients (net).

All fi gures within brackets refer to 2007 unless otherwise stated. Percentage changes refer to comparisons with 2007 unless otherwise stated.

Exchange rates

	Profi t and loss account			balance sheet
	2008	2007	Change, %	2008	2007	Change, %
DKK	1.290	1.242	4	1.468	1.268	16
eeK	0.615	0.591	4	0.699	0.604	16
eUR	9.614	9.252	4	10.937	9.453	16
NOK	1.170	1.155	1	1.111	1.185	–6
LTL	2.785	2.680	4	3.168	2.737	16
LVL	13.682	13.217	4	15.455	13.559	14
seK	1.000	1.000	0	1.000	1.000	0

Proposal for the distribution of profit

Standing at the disposal of the Annual General Meeting in accordance with the balance sheet of Skandinaviska Enskilda Banken, SEK 24,875,727,831

The board proposes that, following approval of the balance sheet of Skandinaviska Enskilda Banken for the financial year 2008, the Annual General Meeting should distribute the abovementioned unappropriated funds as follows:

	SEKm
Retained profits	16,661,087,850	declare a dividend of	SEK
Result for the year	8,214,639,981	SEK 0.00 per Series A-share	0
		SEK 0.00 per Series C-share	0
Non-restricted equity	24,875,727,831	and bring forward to next year	24,875,727,831

The Board of Directors and the President declare that the consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU and give a true and fair view of the Group's financial position and results of operations. The financial statements of the Parent Company have been prepared in accordance with generally accepted accounting principles in Sweden and give a true and fair view of the Parent Company's financial position and results of operations.

The statutory Administration Report of the Group and the Parent Company provides a fair review of the development of the Group's and the Parent Company's operations, financial position and results of operations and describes material risks and uncertainties facing the Parent Company and the companies included in the Group.

Stockholm 18 February, 2009

Marcus Wallenberg Chairman

Tuve Johannesson Deputy chairman

Penny Hughes Director

Cecilia Mårtensson Director Appointed by the employees

Urban Jansson Director

Christine Novakovic Director

Jesper Ovesen Director

Jacob Wallenberg Deputy chairman

Hans-Joachim Körber Director

Carl Wilhelm Ros Director

Annika Falkengren President and Chief Executive officer Director

Göran Lilja Director Appointed by the employees

Auditors' report

To the annual meeting of the shareholders of Skandinaviska Enskilda Banken AB (publ); Corporate registration number 502032-9081

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the managing director of Skandinaviska Enskilda Banken AB (publ) for the year 2008. The company's annual accounts are included in the printed version of this document on pages 22– 51 and 61–132. The board of directors and the managing director are responsible for these accounts and the administration of the company as well as for the application of Annual Accounts Act for Credit Institutions and Securities Companies when preparing the annual accounts and the application of international financial reporting standards IFRSs as adopted by the EU and Annual Accounts Act for Credit Institutions and Securities Companies when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the managing director. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, Banking and Financing Business Act, Annual Accounts Act for Credit Institutions and Securities Companies or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with Annual Accounts Act for Credit Institutions and Securities Companies and give a true and fair view of the company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international financial reporting standards IFRSs as adopted by the EU and Annual Accounts Act for Credit Institutions and Securities Companies and give a true and fair view of the group's financial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Stockholm 18 February, 2009

PricewaterhouseCoopers AB

Peter Clemedtson Peter Nyllinge Authorised Public Accountant Authorised Public Accountant Partner in charge

Marcus Wallenberg 2) 5) 7) Born 1956; elected 2002, B. Sc. of Foreign Service. Chairman since 2005.

Other assignments: Chairman Saab and Electrolux. Honorary Chairman ICC (International Chamber of Commerce). Deputy Chairman Ericsson. Director AstraZeneca, Stora Enso, Temasek Holding Ltd and the Knut and Alice Wallenberg Foundation. Background: Marcus Wallenberg joined Investor in 1993 as Executive Vice President and was appointed President and Group Chief Executive 1999. Prior to that he worked at Stora Feldmühle in Germany for three years. Marcus Wallenberg began his career at Citibank in New York 1980, followed by various positions at Deutsche Bank in Germany, S G Warburg Co Ltd in London and Citicorp in Hong Kong. He joined SEB in 1985 and worked there until 1990.

Own and closely related persons' shareholding: 235,638 A-shares and 1,473 C-shares.

Independent in relation to the bank and management, non-independent in relation to major shareholders.

Tuve Johannesson 8)

Born 1943; elected 1997, B. Sc., MBA and Econ.Dr. H.C. Deputy Chairman since 2007. Other assignments: Chairman Ecolean International A/S, IBX Integrated Business Exchange AB and the Lund University School of Economics and Management Advisory Board. Director Incentive AB, Cardo AB and Meda AB. Industrial Advisor to EQT and JC Bamford Excavators Ltd. Background: Tuve Johannesson began his career at Tetra Pak in 1969 where he held various senior positions in South Africa, Australia and Sweden. In 1983 he was appointed Executive Vice President of Tetra Pak. He became President of VME, presently Volvo Construction Equipment, in

Marcus Wallenberg Tuve Johannesson Jacob Wallenberg Penny Hughes

Urban Jansson Dr Hans-Joachim Körber Christine Novakovic Jesper Ovesen

1. He then became President of Volvo Car Corporation in 1995 a position he held until 2000. Vice Chairman of the Board of Volvo Car Corporation 2000–2004. Own and closely related persons' shareholding: 42,700 A-shares.

Independent in relation to the bank and management, non-independent in relation

to major shareholders. Jacob Wallenberg

Born 1956; elected 1997, B. Sc. (Econ) and MBA.

Deputy Chairman since 2005 (Chairman 1998–2005)

Other assignments: Chairman Investor and Air Plus TV. Deputy Chairman Atlas Copco and SAS. Director ABB, the Knut and Alice Wallenberg Foundation, the CocaCola Company, the Nobel Foundation and Stockholm School of Economics. Background: Jacob Wallenberg joined SEB in London in 1984. Thereafter he held various positions in SEB in Singapore, Hong Kong and primarily in Sweden. In 1990 he joined Investor as Executive Vice President and in 1993 he rejoined SEB. In 1997 he was appointed President and Group Chief Executive of the SEB Group and in 1998 Chairman of the Board. Jacob Wallenberg began his banking career at JP Morgan in New York in 1981. Own and closely related persons' share-

holding: 133,960 A-shares and 2,640 C-shares.

Independent in relation to the bank and management, non-independent in relation to major shareholders (Chairman Investor).

Penny Hughes 6)

Born 1959; elected 2000, B. Sc (Chemistry) Other assignments: Director GAP Inc and Home Retail Group Plc. Background: Penny Hughes began her career at Procter & Gamble in 1980. In 1984 she joined Coca-Cola and was appointed President of Coca Cola UK Ltd

1. She left the company in 1994 and has since then held several directorships. Own and closely related persons' shareholding: 1,550 A-shares.

Independent in relation to the bank and management, independent in relation to major shareholders.

Urban Jansson 1)

Born 1945; elected 1996, Higher bank degree (Skandinaviska Enskilda Banken). Other assignments: Chairman EAB, JetPak Group, Global Health Partner, HMS Networks, Rezidor Hotel Group and OMX Nordic Exchange Stockholm AB Listing Committee. Director Addtech, W. Becker, Clas Ohlson, Ferd A/S and Höganäs. Background: Urban Jansson joined SEB in 1966 where he held various management positions between 1972 and 1984. In 1984 he joined HNJ Intressenter (former subsidiary of the Incentive Group) as President and CEO. In 1990 Urban Jansson was appointed Executive Vice President of the Incentive Group. In 1992 he was appointed President and Group Chief Executive of Ratos. He left the company in 1998 and has since then held several board directorships.

Own and closely related persons' shareholding: 13,000 A-shares.

Independent in relation to the bank and management, independent in relation to major shareholders.

Dr Hans-Joachim Körber

Born 1946; elected 2000; Ph.D. Other assignments: Director Air Berlin PLC, Bertelsmann AG, Esprit Holdings Ltd and Sysco Corporation.

Background: Hans-Joachim Körber joined Metro in 1985 and was appointed Member of the Management Board Metro AG in 1996 and President and Group Chief Executive in 1999. He resigned in October 2007. Körber began his career as Senior Controller at the Oetker Group in 1975.

Own and closely related persons' shareholding: 0

Independent in relation to the bank and management, independent in relation to major shareholders.

Christine Novakovic 9)

Born 1964; elected 2008; B. Sc. (Econ) Other assignments: Director Earth Council, Genèva and DEAG Deutsche Entertainment AG, Berlin

Background: Christine Novakovic began her career at Dresdner Bank in 1990. In 1992 she joined UBS AG in Germany and was appointed Head of Treasury and Chief of Staff. She has thereafter held leading positions in Citibank AG in Germany (Board of Managing Directors), Citibank in Hong Kong (Global Head of Warrants and Head of Corporate Finance Asia), Citibank Privatkunden AG in Germany (CEO and responsible for Consumer business in Germany) and in HypoVereinsbank AG in Germany (member of the Group Board of Directors, Konzernvorstand).

Own and closely related persons' shareholding: 0

Independent in relation to the bank and management, independent in relation to major shareholders.

Jesper Ovesen 3)

Born 1957, elected 2004, Bachelor of Commerce Degree (Econ) and MBA. Other assignments: Chief Financial Officer TDC A/S. Director FL Smidth & Co A/S. Background: 1 January 2008 Jesper Ovesen took office as CFO of TDC A/S coming from a position as Chief Executive Officer of the Kiirkbi Group which he assumed 1 January 2007. During 2003– 2006 he was CFO at LEGO Holding A/S. Prior to that, he held the position as CFO of Den Danske Bank during five years. Between 1994 and 1998 he joined Novo Nordisk as Vice President and Head of Finance. Jesper Ovesen began his career

Cecilia Mårtensson Göran Arrius Ulf Jensen

at Price Waterhouse where he worked between 1979 and 1989. Thereafter he joined Baltica Bank as Vice President, later on as Group Chief Executive. Own and closely related persons' shareholding: 1,405 A-shares.

Independent in relation to the bank and management, independent in relation to major shareholders.

Carl Wilhelm Ros 4)

Born 1941, elected 1999, M.Sc. (Pol. and Econ).

Other assignments: Director Anders Wilhelmsen & Co A/S, Bonnier, Camfil, INGKA (Ikea) Holding and Bisnode. Background: Carl Wilhelm Ros worked at Astra between 1967 and 1975. In 1975 he joined Alfa Laval where he was appointed Group Controller in 1978. 1985 he joined Ericsson as Senior Executive Vice President. He left the company 1999 and has since then held several directorships. Own and closely related persons' shareholding: 5,229 A-shares and 38 C-shares.

Independent in relation to the bank and management, independent in relation to major shareholders.

Annika Falkengren 3)

Born 1962; elected 2005 (effective as of 1 January 2006), SEB employee since 1987; B. Sc. (Econ).

President and Group Chief Executive as of 10 November 2005.

Other assignments: Director Securitas, Ruter Dam, IMD Foundation and the Mentor Foundation.

Background: Annika Falkengren started as an SEB trainee in 1987 and worked in Trading & Capital Markets 1988–2000. She was appointed Global Head of Fixed Income in 1995, Global Head of Trading in 1997, Head of Merchant Banking in 2000. In 2001 she became Head of the Corporate & Institutions division and Executive Vice President of SEB.

Carl Wilhelm Ros Annika Falkengren Göran Lilja

Own and closely related persons' shareholding: 114,920 A-shares, 323,530 employee stock options and an initial allotment of 107 817 performance shares. Non-independent in relation to the bank and management (President and Group Chief Executive SEB), independent in relation to major shareholders.

Directors appointed by the employees

Göran Lilja

Born 1963; appointed 2006, Higher bank degree.

Chairman Financial Sector Union of Sweden SEB Group. Chairman Regional Club Väst of the same union. Director of the European Works Council SEB Group in 2006. Background: Göran Lilja joined SEB in 1984 where he held various positions. Vice Chairman of Financial Sector Union of Sweden Group and Chairman Regional Club Väst of the same union 2006–2008. Elected Chairman in 2008. Own and closely related persons' shareholding: 644 A-shares.

Cecilia Mårtensson

Born 1971; appointed 2008 Education in economy and labour law, certificate in personnel strategies. Deputy Chairman Financial Sector Union of Sweden SEB Group. Chairman local Club Group Operations of the same union. Director Financial Sector Union of Sweden. Background: Cecilia Mårtensson joined SEB in 1990 and has been a union representative since 1995. In 2004 she was elected vice Chairman of Financial Sector Union of Sweden SEB Group; in 2007 she was elected Chairman of local Club Group Operations of the same union.

Own and closely related persons' shareholding: 1,000 A-shares, 120 C-shares.

Deputy Directors appointed by the employees

Göran Arrius

Born 1959; appointed 2002, Naval Officer. Chairman Association of University Graduates at SEB and JUSEK.

Background: Göran Arrius began his career as a Naval Officer. In 1988 he joined Trygg Hansa Liv and has since then held various positions in the life insurance business. Göran Arrius works today as Product Specialist for occupational pensions at SEB Trygg Liv.

Own and closely related persons' shareholding: 87

Ulf Jensen

Born 1950; appointed 1997 (1995), university studies economics and law. Deputy Chairman Financial Sector Union of Sweden SEB Group. Director Financial Sector Union of Sweden.

Background: Ulf Jensen joined SEB in 1977 where he held various positions. He was elected Chairman of Financial Sector Union of Sweden Stockholm City in 1989 and Financial Sector Union of Sweden SEB Group 1999–2007.

Own and closely related persons' shareholding: 0

• 1) Chairman of Risk and Capital Committee of the Board of Directors.
• 2) Deputy Chairman of Risk and Capital Committee of the Board of Directors. 3) Member of Risk and Capital Committee
• of the Board of Directors. 4) Chairman of Audit and Compliance Committee of the Board of Directors.
• 5) Deputy Chairman of Audit and Compliance Committee of the Board of Directors.
• 6) Chairman of Remuneration and HR Committee of the Board of Directors.
• 7) Deputy Chairman of Remuneration and HR Committee of the Board of Directors.
• 8) Member of Remuneration and HR Committee of the Board of Directors. 9) Member of the Audit and Compliance

Committee of the Board of Directors.

Auditors

Auditors elected by the Annual General Meeting

PricewaterhouseCoopers

Peter Clemedtson Born 1956; Signing auditor in SEB as of 2006. Authorised Public Accountant.

Peter Nyllinge

Born 1966; co-signing auditor in SEB as of 2006. Authorised Public Accountant.

Annika Falkengren

Ingrid Engström

Mats Torstendahl

Annika Falkengren

Born 1962; SEB employee since 1987; B. Sc. (Econ).

President and Group Chief Executive as of 10 November 2005.

Other assignments: Director Securitas, Ruter Dam, IMD Foundation and the Mentor Foundation.

Background: Started as SEB trainee 1987 and worked in Trading & Capital Markets 1988–2000. Appointed Global Head of Fixed Income in 1995, Global Head of Trading in 1997 and Head of Merchant Banking in 2000. Head of the Corporate & Institutions division and Executive Vice President 2001–2005.

Own and closely related persons' shareholding: 114,920 A-shares, 323,530 employee stock options and an initial allotment of 107,817 performance shares.

Jan Erik Back

Born 1961; SEB employee since August 2008; B. Sc. (Econ).

Executive Vice President, Chief Financial Officer since 15 August 2008. Background: Back started his career at Svenska Handelsbanken, where he held various positions within finance between 1986 and 1998. He then moved to the insurance company Skandia, where he, after four years within various positions, was appointed Chief Financial Officer. 2007–2008 Jan Erik Back was been First Senior Executive Vice President and CFO of Vattenfall.

Jan Erik Back

Own and closely related persons' shareholding: 5,915 A-shares, 0 employee stock options and an initial allotment of 8,400 performance shares.

Fredrik Boheman

Born 1956; SEB employee since 1985; M.A.

Executive Vice President, Head of Wealth Management since 1 January 2007. Other assignments: Director Teleopti. Background: Started as SEB trainee. SEB in Sao Paulo and Branch Manager in Hong Kong 1994–1998. Thereafter Head of Corporate Clients and Head of Trade and Project Finance. 2002–2006 in Germany, first as Head of Merchant Banking, thereafter as CEO of SEB AG. Head of Asset Management October 2006. Own and closely related persons' shareholding: 13,754 A-shares, 2 C-shares, 0 employee stock options and an initial allotment of 53,034 performance shares.

Magnus Carlsson

Born 1956; SEB employee since 1993; M. Sc.

Executive Vice President, Head of Merchant Banking since 2005.

Background: Bank of Nova Scotia in 1980–93, holding several leading positions in London. Head of Project & Structured Finance, SEB Merchant Banking in 1996, Head of Corporate Clients in 1999, later on Deputy Head of SEB Merchant Banking and Head of the SEB Merchant Banking division and Executive Vice President of SEB in 2005.

Own and closely related persons' shareholding: 8,844 A-shares, 12,250 employee stock options and an initial allotment of 77,310 performance shares.

Ingrid Engström

Born 1958; SEB employee since 2007; M. Psychology.

Executive Vice President, Head of Human Resources & Organisational Development since 26 March 2007.

Fredrik Boheman

Hans Larsson Bo Magnusson Anders Mossberg

Other assignments: Board member Teracom and Springtime. Background: President ComHem 1998– 2000, President and Chief Executive Officer KnowIT 2000–2003, and Executive Vice president Eniro with responsibility for Op-

erations, Purchase and Human Resources 2003–2007. Own and closely related persons' shareholding: 603 A-shares, 0 employee stock options and an initial allotment of 32,392

Hans Larsson

performance shares.

Born 1961; SEB employee since 1984; B. Sc. (Econ). Head of Group Strategy and Business Development as from January 2009.

Background: Started in SEB within Trading & Capital Markets, Head of Fixed Income 1986. TCM in New York 1988– 1992. Head of Debt Capital Markets from 1994. In 2002 appointed Deputy Global Head of Client Relationship Management. Head of SEB's Business Development and the CEO-office 2005–06 and Head of SEB Group Staff October 2006–December 2008.

Own and closely related persons' shareholding: 5,613 A-shares, 17 C-shares, 20,000 employee stock options and an initial allotment of 39,909 performance shares.

Bo Magnusson

Born 1962; SEB employee since 1982; Higher bank degree.

Deputy President and CEO as from July 2008 and Head of Group Staff and Business Support as from January 2009. Head of Retail Banking up to year-end 2008. Other assignments: Director Swedish Bankers' Association.

Background: Started his career at SEB Trading & Capital Markets, holding several leading positions as Head of Accounting and Controller within both Trading & Capital Markets, SEB Group Finance and Enskilda Securities. Chief Financial Officer of SEB

Magnus Carlsson

Merchant Banking in 1998, Head of Staff Functions in 2000. Later on Global Head of Cash Management & Securities Services in 2003 and Deputy Head of SEB Merchant Banking in 2005. Head of Nordic Retail & Private Banking 2005–2006 and Head of Retail Banking 2007–2008.

Own and closely related persons' shareholding: 6,844 A-shares, 25,000 employee stock options and an initial allotment of 63,447 performance shares.

Anders Mossberg

Born 1952; SEB employee since 1985. Executive Vice President, Head of the Life division since 2007.

Other assignments: Deputy Chairman Sveriges Försäkringsförbund. Background: Head of the bank's life insurance operations in 1990. Head of SEB Trygg Liv since 1997. 1998 Executive Vice President of SEB and Head of the Asset Management & Life division. 2001 General Manager and CEO SEB Trygg Liv. Anders Mossberg started his career at Skandia Försäkring AB in 1981. Own and closely related persons' shareholding: 7,804 A-shares, 185,088 employee stock options and an initial allotment of 76,907 performance shares.

Mats Torstendahl

Born 1961; SEB employee since 1 January 2009. M.Sc. (Engineering Physics). Executive Vice President, Head of Retail Banking since 1 January 2009. Background: Started his career at ABB in 1985. In 1987 he moved to Östgöta Enskilda Bank, where he was i.a. branch manager in Stockholm 1996–2000. Appointed Executive Vice President of Danske Bank in Sweden in 2001. Senior Executive Vice President, Danske Bank Sweden and member of Danske Bank Group Executive Committee since 2004.

Own and closely related persons' shareholding: 0 A-shares, 0 employee stock options and an initial allotment of 20,000 performance shares.

Addresses

Head Office

Group Executive Committee Postal Address: SE-106 40 Stockholm Visiting Address: Kungsträdgårdsgatan 8

Telephone: +46 771 62 10 00 +46 8 22 19 00 (management)

Divisions

Merchant Banking

Postal Address: SE-106 40 Stockholm Visiting Address: Kungsträdgårdsgatan 8 Telephone: +46 771 62 10 00

Retail Banking

Postal Address: SE-106 40 Stockholm Visiting Address: Sergels Torg 2 Telephone: +46 771 62 10 00

Wealth Management

Postal Address: SE-106 40 Stockholm Visiting Address: Sveavägen 8 Telephone: +46 771 62 10 00

Life

Postal Address: SE-106 40 Stockholm Visiting Address: Sergels Torg 2 Telephone: +46 771 62 10 00

corporate registration number: 502032-9081

Annual General Meeting

The Annual General Meeting will be held on Friday 6 March, 2009 at 3 p.m. (Swedish time) at Cirkus, Stockholm.

Notices convening the General Meeting including an agenda for the Meeting were published in the major Swedish daily newspapers and on www.sebgroup.com on Friday 6 February 2009.

Shareholders wishing to attend the Annual General Meeting shall

• both be registered in the shareholders' register kept by VPC (the Swedish Securities Register Centre) on Friday 27 February, 2009, at the latest
• and notify the Bank in writing under address Skandinaviska Enskilda Banken AB, AGM, Box 7832, SE-103 98 Stockholm, or by telephone 0771-23 18 18 between 9.00 a.m. and 4.30 p.m. in Sweden or, from abroad, at +46 771 23 18 18 or via Internet on the home page of the Bank, www.sebgroup.com, on Monday 2 March, 2009, at the latest.

Dividend

The Board proposes no dividend for 2008.