SEB — Annual Report 2016

Mar 7, 2017

2016

Annual Report

2016 in brief

Contents

This is SEB Chairman's statement	Cover 2
President's statement	3
Strategy Macro environment SEB creates value Strategy and business plan Overalltargets and outcome	4 4 8 10 12
Customers Customer segments Customer activities in 2016 New customer services Innovation benefits customers Customers expectresponsible services	14 15 16 18 20 21
Stakeholders SEB's employees Investing in communities Shareholders and the SEB share The investor perspective	22 22 25 26 28
REPORT OF THE DIRECTORS
Financialreview of the group Result and profitability Financial structure Divisions and business support Geographic markets	29 29 32 36 38
Risk, liquidity and capital management	40
Regulatory requirements	46
Corporate governance Board of Directors Group Executive Committee Remuneration report Internal control over financialreporting	48 50 56 60 62
Financial statements and notes SEB Group Skandinaviska Enskilda Banken Notes to the financial statements Five-year summary	63 64 69 74 152
Proposal forthe distribution of profit	154
Auditor's report	155
Definitions	159
Calendar and otherinformation	Cover

Important events Customers demanded hedging and risk managementservices throughout the year. Prospera'ssurvey ranked SEB as number 1 in customersatisfaction among Nordic tier 1 large corporations and Nordic tier 1 financial institutions. Asthe only Nordic bank, SEBwasincluded in the DowJones Sustainability Index. SEB increased corporate and property management lending and commitments by SEK 134bn. Operating expenses increased due to a goodwill impairment of SEK 5,334m. SEB paid SEK 1,362m in regulatory feesfor financialstability purposes. Subsequent to year-end 2016,Annika Falkengren, SEB's president and CEO, announced her decision to leave the bank.Her successor will be Johan

Key figures

Torgeby, currently division

head in SEB.

2016	2015
43,771	43,763
14,867	20,865
7.8	12.2
0.63	0.50
4.88	7.57
5.50	5.25
18.8	18.8
5.1	4.9
168	128

Who we are

Our commitment to create value for our customers is based on a tradition of entrepreneurship, international outlook and long-term perspective.As a bank we have an important role to play in the shift to a more sustainable world.

Our purpose

We believe that entrepreneurial minds and innovative companies are key to creating a better world. We are here to enable them to achieve their aspirations and succeed through good times and bad.

Our vision

To deliver world-class service to our customers.

16 years in the se 0 rvice of enterprise

Our strategic priorities

• Leading customer experience
• Maintaining resilience and flexibility
• Growing in areas ofstrength

1) Excluding items affecting comparability. 2) Compound Annual Growth Rate (CAGR).

Our financial targets

	Outcome 20161)	Outcome 20151)
Dividend payout ratio at 40 per cent or more of earnings pershare	75%2)	66%
Common Equity Tier 1 capital ratio of around 150 basis points over requirement	18.8%3)	18.8%
Return on equity competitivewith peers	11.3%4)	12.9%

1) Outcome excludesitems affecting comparability. See p. 30.

• 2) Outcome incl. items affecting comparabilityis113%.
  • Dividend proposal: SEK 5.50 pershare (5.25). 3) Regulatoryrequirement atyear-end 2016:16.9%.
  • 4) Outcome incl. items affecting comparabilityis 7.8%.

What we do

SEB plays an active partin the development ofthe societies in which the bank is operating by building strong customerrelationships.In Sweden and the Baltic countrieswe offerfinancial advice and awide range offinancial services.InDenmark, Finland, Norway and Germany,our operations have a strong focus on a full-service offering to corporate and institutional clients.

In meeting the requirements and expectations from customers, shareholders, employees and society at large...

SEB– the leading Nordic corporate bank

SEB

Nordic peers1)

Share of income 2016, %			SEB	Nordic peers
	Large corporates
	and institutions			42		27
		Life insurance (unit-linked)		10		4
		Asset management		10		10
	Retail banking			38		59

1) Income breakdown for Swedbank, SHB, Nordea, Danske Bank and DNB. Business units only(indicative).

Whom we serve

Customers always come first.Our committed and experienced 15,300 employees work as a team to serve our customers.

Large corporations

SEB's corporate customers in the Nordic region are among the largest in their respective industries. In Germany they range from large midcorporates to large multinationals.

2,300 large corporations

Small and mediumsized companies

In all, SEB serves approximately 400,000 small and mediumsized companies in Sweden and the Baltic countries. Of these,some 267,000 are home bank customers.

267,000 home bank customers

Financial institutions

SEB's institutional clients operate both in the Nordic countries and internationally.

700 financial institutions

Private individuals

SEB has approximately 4 million private individuals among its customers in Sweden and the Baltic countries. Of these some 1.4 million are home bank customers.

1.4 million home bank customers

SEB'sstrategy remainsthe same

» In an environment of uncertainty SEB stands strong and can support its customers. «

Our aim is to create long-term value for our customers and thus generate a sustainable and competitive return for our shareholders.

As a leading corporate bank, founded 160 years ago in the service of enterprise, we in SEB know how important it is to always take a long-term perspective in everything we do. Therefore, we safeguard a sound financial position with strong capital and liquidity buffers. We continuously work to instil the highest standards for corporate governance and business conduct.

We strongly believe in attracting people who are both guided and inspired by our values in their daily work. We continuously strive to adapt and develop our services in close partnership with our customers so that we can be proactive and meet their long-term needs. We are convinced that by doing so we can live up to our ambition to create long-term value for our customers and thereby overtime for you, our share holders.In 2016, total shareholderreturn reached 14 per cent.

My belief is that taking this long-term perspective is even more critical as the world, and thus the business environment, is becoming more complex. Overthe past

years we have seen increased uncertainty in terms of subdued growth and negative inter estrates, calls for protectionism, changing regulatory framework for banks, geopoliti cal tension and major political events having unexpected outcomes such as the EU referendum on Brexit in the UK. At the same time, the transformative technological shift is reshaping all businesses, disrupting whole or parts of existing business models and lowering costs.In this environment, SEB stands strong and can support its customers.

Annika Falkengren, our departing CEO, who has been at the helm of SEB for more than 11 years, has done a tremendous job together with the whole SEB team. She successfully navigated SEB through the global financial crisis and set a clear strategy forward which she and the team delivered on with a unique commitment. On behalf of the Board of Directors,I would like to express our deep appreciation of her work for close to 30 years for SEB.

SEB's direction going forward remains the same. Ourthree-year business plan includes continued growth in core areas of strength as well as a cleartransformation agenda in orderto capture the full oppor tunities of digitalisation. We maintain our

financial targets and long-term aspiration to reach a return on equity of 15 per cent.

SEB's succession planning has allowed the Board to identify and appoint Johan Torgeby as the bank's next President and CEO. Together with Johan, the management team and all employees, SEB is determined to deliverthe vision of world-class service and thus continue to build long-term share holder value.

Stockholm, February 2017

Marcus Wallenberg

Chairman of the Board

Worldclass service

» The whole SEB team will, step by step, continue to deliver on our vision. «

The year 2016 marked the start of a new business plan focused on growth and transformation.

Looking back at my tenure as the chief execu tive of this fantastic bank,I must say it has been an era of so many different – and all of them exceptional – economic phases. The first years were characterised by abundant liquidity,rapid credit growth and distorted risk-return rewards. By now we all know how it ended. The deep global financial crisis with the acute phase following the crash of Lehman Brothers in 2008, had immense effects not only forthe financial system, but also forthe real economy. Still today,real global growth is not firing on all cylinders, despite years of unconventional monetary policy with massive quantitative easing programmes and even negative inter estrates.

In SEB, we have always been guided by two principles: maintaining resilience and flexibility, and staying close to our cus tomers. Through a strong balance sheet and sufficient liquidity reserves, we can support our customers in good times and bad, while continuously developing services to make the customer experience even more con venient.

In the past year, the shifting market environ ment continued to impact customer behav iour. Customers' demand for advisory and risk management services remained. As business sentiment grew more positive towards the end of the year, event-driven large corporate credit demand rose and SEB participated in a number of public equity listings in the Nordic region. However, the low interestrate environment pushed many financial institutions to move further out on the risk curve and into less liquid investments. Both in Sweden and in the Baltic countries we supported domestically focused SMEs as they showed a growing willingness to invest.

The shifting demographic trends with increasingly ageing populations increase the needs forlong-term savings. Customers appreciated our holistic savings offering, which now also includes traditional life insurance. SEB has taken an industryleading approach as both private individuals and institutional clients have higher demands for sustainability-focused investments.

The banking industry, just like all indus tries, has had to revisit business models following digitalisation and the rapidly changing customer behaviours. Thus, 2016 marked the beginning of a three-year business plan for SEB reflecting our belief that going forward customer orientation and digitalisation will increase in importance. We are changing our ways of working and have invested in and launched new customerinterfaces in all segments, as well as a number of new services including remote advice.

I would like to take this opportunity to thank all employees and customers fortheir commitment to and trust in SEB all through these years.It has been lots of hard work, but most of all it has been more than eleven years of passion for SEB.I know that the whole great SEB team will – step by step – continue to deliver on our vision of world class service.

Stockholm, February 2017

Annika Falkengren President and Chief Executive Officer

Macro environment

Three major global trends are impacting banks' operating environment. Customer behaviour and expectations are changing with the digital transformation.Global growth,with low or negative interest rates and new regulatory requirements,remains uncertain.Demands on banks to take responsibility for a more sustainable world are higher.

Complexity in the macro environment

The global economy remained uncertain following a number of unexpected economic and political events during 2016. However, there were clear signs of economic turnaround.Initiatives forinfrastructure investments were taken. The increase in US interestrates may have been a starting point for a shift away from the very low or negative interestrates, eventually leading to discontinuing the central banks' massive quantitative easing programmes. The

record-high global debtremains to be managed for a long time, however.

The referendum in the United Kingdom resulting in the favour of Brexit as well as the presidential election in the United States contributed to increased uncertainty around international trade and political stability. A rapid increase in populist, nationalist and protectionist forces was also seen in 2016 in a number of countries.

Conflicts and uncertainty in many parts of the world have resulted in major waves of migration that are creating tension.

Rapid digital transformation

The rapid technical development is a new industrial revolution

Digitalisation is leading to new customer behaviours and new business models are rewriting the map for society, many industries and for private individuals – so too forthe financial sector.

Customers expect accessible and con venient services. Digitalisation provides ample opportunity to create new and easyto-use niche services for payments, savings and lending. One example is the highly successful mobile payment service, Swish, which is owned by the Swedish bank sector. The transformation is putting demands on faster development, simplified processes and increased automation in the banking sector and will, overtime,result in substan tial efficiency measures.

Flexible and agile companies which lack heavy infrastructure and are not burdened by the same rules and regulations as banks are entering the financial markets. These fintech companies also represent an oppor tunity forthe financial sector and there are many examples of partnerships building on traditional banks' infrastructure that lead to innovative and effective solutions forthe customers.

There is substantial underlying public trust in traditional universal banks and they offer customers comprehensive solutions and a total view of their financial situation. Building on this trust, SEB is striving to meet the increasing expectations of the customers.

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New regulations create uncertainty

The Basel Committee

The new financial regulations that continue to be developed are creating uncertainty about economic development, since no one today has assessed the total effect of all rules and regulations.

Standardised risk-weights may increase lending rates

The new, standardised risk-weight floorthat is currently being discussed by the Basel Committee poses a challenge to the Nordic banking system, which is successfully using individualrisk classifications to assess its capital needs.

Astandardised risk-weight floor according to the Basel Committee's recommendation removes the incentive to use sound risk principles, where low risk means lower interestrates forthe customer and high risk means higherinterestrates forthe customer. This would lead to a dramatic rise in capital needs in Nordic banks. This, in turn, would lead to higherrates for corporate lending, which in turn would have a directimpact on growth in the real economy.

In January 2017 the Basel Committee announced that it is postponing the publica tion of the risk-weight floorrules until further notice.In a longer perspective the uncertainty remains.

Proposed new financial tax

In the opinion of the Swedish government banks are insufficiently taxed because financial services are VAT-exempt. Therefore, a 15 per cent tax on wages and benefits thatrelate to the VAT-exempt financial services is proposed.In addition, the tax is proposed to be non-tax deductible.

If implemented, the tax would affect not only the financial sector but also companies thatrun treasury departments and the fintech sector.

According to calculations provided by the Swedish Bankers' Association as many as 16,000 jobs in Sweden would be threatened if these plans were in fact carried out, since jobs may be moved abroad in orderto lower staff costs.

The total estimated effect from the proposal under discussion on SEB is around SEK 700m per yearin additional costs.

Stabilising the financialsector

Regulatory requirements on banks in Sweden are among the strictest in the world. Recent Swedish regulations are designed to further stabilise the Swedish financial sector and further ensure banks' contribution to society.

Based on experiences from previous financial crises, national governments have established so-called resolution funds with the purpose to finance potential future support from the government to credit insti tutions.

Similarly, deposit guarantees provide protection forretail depositors in case of bank default.

Financial contributions

In Sweden, banks contribute to the resolution fund for stability purposes and to the national deposit guarantee scheme.

In 2016, SEB's totalregulatory fees were SEK 1.4bn.In 2017, when the fullresolution fee is charged, the bank expects the fees to amount to SEK 2.1bn, the absolute main part of which are paid in Sweden.

Risk of unfair competition

Interest on subordinated debt that quali fies as additional tier 1 capital and tier 2 capital is no longer deductible for income tax purposes. The reason is that such debt is considered to be part of banks' capital base and therefore should be treated as capital fortax purposes.

Since this would be a tax on Swedish banks only there is a risk of unfair competition in relation to international financial institutions.

The additional tax on SEB is estimated to around SEK 360m in 2017 and SEK 300m in 2018 and thereafter.

Shift to a more sustainable world

The role of business in the shift to a more sustainable world was manifested for the first time in 2015 when the UN 17 global sustainable development goals were signed and the global and legally binding climate agreement was adopted at the COP21 meeting in Paris.

The business sector contributes to the work with the 17 global sustainable development goals that have been set by the UN. The goals span a wide range, from poverty eradi cation to promotion of health, prosperity and economic growth. For each goal there are specific targets to be achieved overthe next 15 years. To reach these targets, all parties must do their part, governments, business and industry as well as civil society. SEB was one of the 400 companies which signed a global petition in support of the climate agreement and the bank has revised its position on climate change with a clear ambition to be involved and contribute to limiting global warming to well below 2 degrees Celsius.

The financial sector has a key role to play in channelling investment capital to infrastructure and fossil-free energy systems.In doing so companies are not only helping to address the climate threat – they also have better prospects for sustainable growth and thus betterreturns.

See also SEB's Sustainability Report 2016.

Sustainable development goals

Demographic

challenges

Most countries are facing significant demographic challenges posed by ageing populations.

The dependency burden forthe actively working portion of the population is growing, which strains social security systems. There is a growing realisation that individuals themselves need to take greaterresponsibility fortheir financial security through savings and insurance solutions.In this area the financial sector can make a contribution by providing easily accessible advice and long-term investment services.

Stakeholder dialogue

Financialmarkets are atthe coreof creating economic andsocial value inamodern society.Herebanksplay akey role.

SEB maintains an active dialogue not only with customers and employees but also with other stakeholders such as share holders, suppliers, government agencies, legislators and representatives of the local communities in places where SEB operates.In this dialogue, SEB has identified the issues that are most important for stakeholders as well as forthe bank. They

are in agreement and are in line with the bank's strategic direction on the base of risk management, financial strength and resilience.

Mutual issues are:

• providing fulfilling customer experience and good service
• maintaining high standards of business ethics and IT security
• contributing to a society characterised by innovation and resource efficiency.

SEB creates value

Customer centricity, long-term perspectives and financial strength form the foundation for meeting the expectations of customers, employees and society at large. Ultimately, this creates value for the shareholders.

Meeting stakeholders' expectations via SEB's management of its business

1.6 million corporate and private customers

The customers' needs are at the core of the bank's business. Customers' high expectations on service and quality advice as well as sustainable solutions drive the bank's business development and offerings.

Shareholders

276,000 shareholders

The capital provided by SEB's shareholders is a prerequisite for conducting the bank's business. The shareholders expect a competitive and sustainable return on their capital. Many of the major owners have a long-term perspective on their engagement in the bank.

Long-term strategy

SEB'sstrategy is built on developing deep customer relationships with a longterm perspective.See p. 11.

Customer-oriented offering

Proactive quality advice and a holistic offering are provided at the customers' convenience, based on customer insights. See p. 18.

Secure and functional IT

The IT structure promotesstability in the daily operation and agile development of digital products and services.See p. 36 and p. 16 in SEB's Sustainability Report 2016.

Employees

15,300 employees

SEB's employees build and deepen customerrela tionships. Their commitment, skills and quality of their daily work are key success factors forthe bank's business and future development.

Society

Society at large

Banks play an integralrole in society and are vital for creating economic growth and social value. With this comes an expectation that the bank takes greatresponsibility for how it acts, to enable society to continue to develop in a sustainable way.

For customers

By providing proactive advice and a wide range of financial services, SEB supports its customers' long-term aspirations and adds value in all phases of life of individuals and development stages of companies and institutions.

See p. 14.

For shareholders

Dividends and potential increases in market value overtime contribute to shareholders' financial security and enable new investments. SEB's competitiveness is increased and long-term risks are reduced through the integration of environmental, social and governance aspects. See p. 26.

For employees

The employees take part in, and value, the opportunities forlearning and further development that are integrated in SEB's business. Employees also participate in the many partnerships that SEB supports to help communities develop and prosper.See p. 22.

For society at large

SEB intermediates financial solutions, provides payment services and manages risks which promote economic growth and prosperity. SEB pays taxes and fees according to localrules where it operates. SEB takes responsibility as a provider of financing and as an asset manager and works proactively with environ mental, social and governance issues.See p. 21 and 25.

creates both social and financial value

Distribution of financial value SEK 57bn for 2016

Financial strength

Financialstrength givesthe resilience and flexibility required to serve customers over the long term.See p. 29.

Solid corporate governance

Corporate governance is based on clear allocation of responsibility, a well developed structure for internal control and ownership involvement.See p. 48.

Sound risk culture

To meet customers' needs SEB assumes and managesrisks. These are mitigated by prudence, risk awareness and expertise throughout the organisation.See p. 40.

Worldclass service

SEB's long-term vision reflects a future in which customer orientation and digitalisation increase in importance. In this environment,the bank's ambition is to be the undisputed leading Nordic corporate and institutional bank and the top universal bank in Sweden and the Baltic countries.

SEB'slongterm strategic priorities

Leading customer experience

Develop long-term relations based on trust so that customers feel that the services and advice offered are insightful about their needs, are accessible on their terms and that SEB shares knowledge and acts proactively in their best interest.

Resilience and flexibility

Maintain resilience and flexibility in order to adapt operations to the prevailing market conditions. Resilience is based upon capital and liquidity strength. Cost efficiency provides room for new investments.

Growth in areas of strength

Focus on profitable organic growth in areas of strength: universal banking in Sweden and the Baltic countries and corporate banking in home markets outside Sweden.

The threeyear business plan (2016–2018)

Growth in areas ofstrength

Accelerated growth in Sweden

Further strengthen the bank's position across all customer segments in Sweden. Provide a widerrange of services and increasingly use customer data to pro actively offer new services to customers.

Nordic and German large corporations and institutions

Expand the corporate and institutional customer business in the Nordic countries and Germany with focus on the fullservice offering and digital portals while selectively attract targeted UK corporate customers.

Savings offering to private individuals and corporate customers

Create growth by offering customers convenient and advisory-based solutions including bancassurance to caterfor customers' need forlong-term savings.

Transformation focus areas

World-class service

Focus on customerjourneys in orderto create a leading customer experience based on a personalised and convenient full-service offering where customers can choose where and in what mannerthey want to be served.

Digitalisation

Develop customised advisory tools and interfaces based on individual customer needs and behaviourin various channels. This includes transforming the first line of service to digital solutions and portals.

SEB also digitalises and automates internal processes in orderto improve efficiency.

Competences

Ensure a gradual competence shift broad ening the role for client executives and also developing capabilities in service design and data analytics. SEB will continue to invest in attracting talents with the right values and providing development oppor tunities to existing employees.

Aim to be a role model in sustainability

The financial sector's importance for, and indirect impact on, sustainability issues is widely recognized. SEB wants to be a role model in sustainable development in the financial industry with focus on:

• promoting climate-friendly and resourceefficient solutions,
• working with sustainable investment and financing with positive impact,
• supporting entrepreneurship which creates new jobs and supports economic development, and
• reducing the bank's own direct environ mental impact.

Overall targets and outcome

Customer experience and satisfaction

Variousinternal and external metrics are used tomeasure customersatisfaction. Customers' willingnessto recommend SEB is one of the keymeasures of the bank's progress.

1) According to Prospera

Small companies in Sweden

Private individuals in Sweden

Target

Leading position in selected customer segments.

Outcome

Customersatisfaction improved in all four segments. Nordiclarge corporationsranked SEB as no.2 in 2016 versus no.3 in 2015. In 2016, the ranking by Nordic financial institutionsimproved to no 1, fromno. 5 in 2015.

Going forward

SEB will workto improve overallcustomer satisfaction further through proactive advice and convenientcustomer interfaces.

SwedishQuality Index

According to the Swedish QualityIndex measurement ofcustomersatisfaction, trust in the banking industry dropped significantly among both private and businesscustomers. SEB wasrelatively unaffected when itcame to private customers and decreasedmuch less than industry average regarding business customers.

Shareholders

Financial targets

Through the resilience and flexibilitythatcome froma strong capital base, good accessto funding, high credit ratings and cost efficiency, SEB can create shareholder value in varyingmarketconditions. The Board of Directorssetsthree financial targets which interact in contributing to financialstrength.

Common equity Tier 1 capital ratio Per cent

0 5 10

bility, return on equity was11.3 percent.

20163) 2015 2)

Target

on equity. Outcome

20141) (13.1) 15.3

Return on equity Per cent

(11.3) 7.8 (12.9) 12.2

1) Including items affecting comparability15.3 (excluding:13.1) 2) Including items affecting comparability12.2 (excluding:12.9) 3) Including items affecting comparability 7.8 (excluding:11.3)

SEB strivesto generate a competitive return on equity. Thismeans that the bankin the long termaspiresto achieve a 15 percent return

Return on equity was 7.8 percent. Excluding items affecting compara-

SEB's estimate of the current Common Equity Tier1capital requirement fromthe Swedish Financial Supervisory Authority, according to Basel III (CET1), is16.9 percent.

Target

SEB shallmaintain a CET1capital ratio that is around 15o basis points higher than the regulatoryrequirement, which currently wouldmean around 18.4 percent.

Outcome

The Common Equity Tier1capital ratio was18.8 percent atyear-end.

Dividend payout ratio Per cent

1) Including items affecting comparability 54 (excluding: 63) 2) Including items affecting comparability 69 (excluding: 66) 3) Including items affecting comparability113 (excluding: 75)

Target

40 percent ormore of earnings pershare. SEB strivesforlong-term dividend growth. The size ofthe dividend takesinto account SEB's financial position,the prevailing economicsituation, earnings,regulatoryrequirements and opportunitiesfor growth.

Outcome

The proposed dividend correspondsto 113 percent of earnings per share. Excluding items affecting comparability, the proposed dividend correspondsto 75 percent of earnings pershare.

12 SEB Annual Report ²⁰¹⁶

Employees

Motivation and engagement

SEB's annual employee survey, Insight,measures employee engagement, efficiency and trust. It alsomeasures employees' willingnessto recommend SEB as a place to work.

Employees Index Willingnessto recommend SEB as a place towork

1) Financialsector average

Performance excellence Index

Target

SEB'starget isto be themost attractive employer in the financialsector. Progressis measured bythe employee surveyInsight.

Outcome

In the 2016 survey, the results were clearly higher than the average for the financial sector. The outcome improved in terms of performance excellence, but decreased somewhat – froma high level – in terms of employee engagement and employees' willingnessto recommend SEB as a place to work.

Going forward

SEB willstrive for enhanced employee engagement especiallyin the bank's vision, values and business plan.

Society

Reputation

SEBmonitorsthe results of the TNS Reputation Index, which measuresthe bank'sreputation among consumers and business owners.

Sustainability

SEB wantsto be a rolemodel within sustainabilityin the financial industry. One indicator is whether the bankmeetsthe criteria for inclusion in sustainability indexes. SEB also hasthe ambition to lower its CO2 impact.

71 73

Average1)

1) Corporate reputation among the general public, according to TNS Reputation Index(weighted in the Balticcountries).

FTSE4Good ECPI

Dow Jones

Target

To be included in at least five selected sustainability indexes.

Bank.

Outcome

SEB has been included in STOXX, Ethibel, FTSE-4Good and ECPI forseveral years. In 2016, SEB was also included in the Dow Jones sustainabilityindex and therebythe target wasmet.

Going forward SEB targets being comfortablyincluded in the indexes above.

57 57

54

2) SHB, SEB, Swedbank, Nordea, Danske

As of 2015, a new baseline formeasuring the CO2 emissions, where additional SEB units are included, was established. As a consequence, the target expressed in tonnes waschanged. For details, refer to SEB's Sustainability Report 2016.

Target

Reduce the gap to no.1in the industry and in the long termhave the strongest reputation among industry peers.

Outcome

Long-termpositive trend in Sweden. The gap to no.1is decreasing. In the Balticcountries, scores are abovemarket average but the trend isslightly negative. SEB ranks as no.3 in Estonia and no. 2 in Latvia and Lithuania.

Going forward

SEB will pursue itslong-termcommitment to business ethics and publictrust.

Target

Reduce CO2 emissions by 20 percent between 2015 and 2020.

Outcome

The CO2 emissions were reduced by 4 percent one year into the target period.

Going forward SEB willcontinue to

focus on reducing the CO2 emissions.

Customers and customerservices

In a rapidly changing world, innovation and transformation are key for SEB — new services, solutions and meeting places are developed in close cooperation with customers in order to offer world-class service.

Customer segments

SEB serves some 2,300 large corporations in a wide range of industries and in most cases with an international focus.In the Nordic countries these corporations are among the largest in their respective industries, while in Germany and the United Kingdom the customers range from the large mid-corp segment to multi national corporations.

Strategy

• Aim to make SEB a preferred partner by offering a comprehen sive range of financial services and advice for all aspects of a company's operations, using the bank's broad expertise and depth of industry knowledge.
• Expand business with the existing customer base in the Nordic countries and Germany, building on long-term personalrela tionships.
• Focus on convenient digital customer portals and process efficiency in addition to cost and capital efficiency.
• Grow the number of corporate customers in the UnitedKingdom.

Small and mediumsized companies Private individuals

SEB serves some 400,000 small and medium-sized companies in Sweden and the Baltic countries. Of these 168,000 are home bank customers in Sweden and 99,000 in the Baltic countries. There are approximately 500 mid-corp and public sector customers in Sweden, many with international operations. The public sector includes government agencies, state-owned companies and municipalities.

Strategy

• Develop SEB's offering based on the bank's strong position among large corporations in the Nordic region. Offer small and medium- sized companies convenient services and proactive advice, based on a deep insight of their entire situation, including the needs of both the employees and the owners.
• Serve smaller businesses with the help of packaged services and increased accessibility through digital interfaces.

Large corporations Financial institutions

SEB serves some 700 financial institutions, consisting of pension and asset managers, hedge funds, insurance companies and other banks, active in the Nordic countries and internationally.

Strategy

• Meet the financial institutions' needs by a specialised customer key account organisation where the bank's offerings are combined with a depth of expertise in the operations of the institutional clients.
• Focus on convenient digital client portals and process efficiency in addition to cost and capital efficiency.
• Offer a comprehensive range of services to customers in the Nordic countries and Germany and offer Nordic products globally.

In all, SEB has approximately four million private customers in Sweden and the Baltic countries. Of these 485,000 are home bank customers in Sweden and 904,000 in the Baltic countries. For private customers with sizeable capital and a need for more qualified advice, SEB offers a comprehensive range of private banking services. SEB has approximately 25,000 private banking customers.

Strategy

• Meet customers' full needs for financial advice and services during all phases of life.
• Strive to make it easy for customers to manage their personal finances and plan forthe future. Proactivity and accessibility are key in providing convenient services.
• Provide options forlong-term savings since ageing populations are putting pressure on the public welfare system which means that individuals need to take greaterresponsibility for their financial security.

Meet our customers

Teo Ottola Konecranes Read more on p. 17.

Katre Kõvask Südameapteek Read more on p. 19.

Anders Parrow Read more on p. 20.

Customer activitiesin 2016

In the uncertain environment, both large corporate customers and institutions maintained a wait-andsee approach, but the need for risk management services was high. Small and medium-sized companies were more positive. On the private side, customers increasingly used digital services for their financial needs.

Large corporations

Tentative, but more activity towardsthe end of the year

In the beginning of the year, characterised by macroeconomic uncertainty, large corporate customers were cautious. There was higher demand forlending towards the end of the year, driven by a number of corporate events.In addition, SEB played an instrumentalrole as adviser and arrangerin forinstance the listing of Arcus in Norway and DNA in Finland. Private equity inves tors were increasingly active. Customers

requested advisory and risk management services in the volatile market environment throughout the year.In the United Kingdom, new customers chose SEB forits Nordic relationship bank profile.

Customer satisfaction

SEB was ranked no. 1 among tier 1 large corporations in the Nordic region in Prospera's customer satisfaction survey.

Financial institutions

Activity driven by low interest rates and volatile markets

Uncertainty regarding the impact of banking regulations as well the direction of central bank policies characterised a good part of 2016. Activity among financial insti tutions was generally low but increased towards the end of the year.In times of market turbulence, especially around the Brexitreferendum and the presidential election in the United States, markets were volatile and risk management activity high. The low interestrate environment prompted

many financial institutions to take on more risk by investing in less liquid assets.

Institutional investors grew increasingly interested in sustainability focused investments.

Customer satisfaction

SEB was ranked no. 1 by tier 1 financial insti tutions in the Nordic region in Prospera's customer satisfaction survey.

Small and mediumsized companies

Positive development in both Sweden and the Baltic countries

Swedish small and medium-sized companies were less affected by the global uncer tainty. The anticipated investments in infrastructure in Sweden created a positive momentum. Around 9,000 new companies chose to become home bank customers in SEB. Their need for financing and savings services grew and SEB's digital services were increasingly utilised.

Digital services

The business banking app,the internet bank,the Swish app for payment services for companies and e-invoice are all examples of digital initiatives that were appreciated by the small and medium-sized customers.

Active Baltic customers

Development was also positive in the Baltic countries, where companies have been adept at countering the effects of the Russian sanctions. Customer were more positive and their financing needs increased in all three countries.

Meet one of our large corporate customers

» SEB acts with agility, little bureaucracy and has a proactive approach. «

Teo Ottola CFO Konecranes

Finland's Konecranes, a worldleading manufacturer in the lifting business,serves customersin manufacturing and process industries,shipyards, ports and terminals.

In January, the company finalised the acquisition of Terex's material handling and portsolutionssegment, a deal which in one stroke nearly doubled revenue, complemented the product offering and expanded the installed base of cranessignificantly. SEB played a key role in developing the financing solution.

"SEB has been a strategic partnersince our inception in the mid1990s. We have a long and extensive relationship characterised by mutual trust. SEB's contacts are easy to deal with, they act with agility and little bureaucracy and have a proactive approach",says Teo Ottola, Chief Financial Officer.

Digitalservices and greater need for longterm savings

With the changing demographics, private individuals' awareness of long-term savings and risk insurance solutions increased. Customers took advantage of SEB's improved offerin the long-term savings area, with unit-linked and traditional life insurance options and also appreciated the possibility to use digital pension analysis services.

The stock market's performance was reflected in customers' behaviours. Towards the end of the year customers increasingly chose to invest in equity and allocation funds.

Private individuals increased their digital presence and mobile interactions were four times as high as the internet banking inter actions in Sweden.

Household mortgages

Households in Sweden continued to invest in new homes in a real estate market where the housing shortage and low interestrates significantly pushed up prices.

The new strict amortisation requirements that were implemented in Sweden in 2016 had a limited effect on SEB's customers since the bank has had similarinternalrules in place for some time.

Baltic region

In the Baltic countries, there were moderately positive economic signs driven by private consumption and activity increased among private customers. Their demand for both loans and savings products increased.

Youngsters appreciated SEB's educational seminars on personal finance.

Private individuals Support to entrepreneurs in all phases from start-up to growth

In SEB, supporting entrepreneurship and new business start-ups goes without saying.In Sweden, SEBhas established collaborations along the entire entrepreneur spectrum,from new to established companies See p. 25.

SEB operates the Innovation Forum – a meeting place where promising cutting-edge companies with ties to educational and research institutions have an opportunity to gain access to potential investors among SEB's customers. The eventis highly appreciated and has led to concrete investments for about half ofthe participants.

In the Baltic countries, SEB arranges seminars where corporate customers get information and an opportunity to inter act, with the aim to help each other realise their growth ambitions through the power ofinnovation.

New customer services

With customer needs in focus and with the bank's vision to provide world-class service, SEB is taking a number of initiatives to improve customer experience.

During 2016, SEB capitalised on the poten tial of digital technology and developed and launched new services aimed at all customer segments.

This work is being conducted at a fast pace, with many small deliveries that are developed in close collaboration with customers. Some solutions are developed by SEB, while others rely on partnerships with other service providers.

Customer satisfaction pilot

To putthe customer experience front and centre, SEB is having seven branch offices test what happens ifthe operations are solely evaluated on customer satisfaction without monitoring financial key ratios. The pilotis showing promising results and the staff is finding new ways to provide the best possi ble customer service.

The bank for entrepreneurs

Through the 2017 launch of Greenhouse, a broader service offering, SEB will take the next step toward being a stronger business partnerfor growth companies.

The new offering is based on in-depth interviews with high-growth enterprises about challenges and problems in their day-to-day operations. To meet their needs, SEB offers its entire pallet of expertise – from mergers and acquisi tions (M&A) to investment banking and corporate and family law.In cooperation with external partners SEB also offers services relating to staffing and contrac tual matters as well as auditing, legal counsel, consulting and advisers.

In the Baltic countries SEBis conduct ing jointinnovation initiatives with customers. This strengthens the partnerships with entrepreneurs.

World-class custody functionality

In 2016, SEB's first customers gained access to the bank's new global custody account services platform that has been developed in partnership with the inves tor services company Brown Brothers Harriman (BBH). The new platform offers improved solutions for managing customers' mutual funds, collateral, corporate events, cash management, currency trading and more.

SEB handles the customerrelation ship and interface, while BBH provides the technical platform and takes responsibility for certain administrative processes. Through this partnership SEB gains access to cutting-edge technology while retaining responsibility forthe customerrelationship.

Virtual trainee in customer service

The virtual trainee Aida has begun working at SEB's customer service. For a while now she has been answering questions, assisting customers with simple banking matters and she has learnt to speak Swedish. Her "recruitment" is one of many tests SEB is doing to develop the customer experience and offer more efficient banking services with the help of artificial intelligence.

Aida is at the cutting edge of technology.In contrast to so-called chatbots, Aida can learn to understand, conduct a dialogue and perform tasks just like a human.

SEB is the first bank in Europe to use this type of artificial intelligence in its customer service operations.

Meet one of our medium-sized corporate customers

» I appreciate SEB' openness to entrepreneurship and innovation. «

Katre Kõvask CEO Südameapteek

With seven new pharmacies,sales growing nearly three timesfaster than the market and almost doubled earnings(EBITDA), Katre Kõvask, CEO of the Estonian pharmacy chain Südameapteek, can look back on a good year.

An open, flexible and close relationship with the company's financial partner SEB is an important part of the continued expansion.

"Bank relationsis about building a partnership, working together and pulling in the same direction. It is based on both parties being open and transparent. I appreciate the opennessto promote entrepreneurship and innovation that the bank standsfor",she says.

The branch office evolves

The personalrelation with customers is important and SEB will always have branch offices. However, in a world where banking transactions are increasingly digital, what will the future branch office look like and what services will be provided? Part of the answer can be found at a new type of branch office located in Stockholm, as well as at the innovation centres for small and medium sized companies that SEB has established in the Baltic countries.

Initiatives like these are a way of develop ing meeting places in close cooperation with customers. With the help of customer feedback, SEB strives to design new types of open and inviting meeting places.

First in pensions market with digital advisory meetings

SEB was the first playerin the Swedish occupational pensions market to offer customers a fully digital advisory meeting. The process is initiated with customers completing a web-based form with the information needed to conduct an analysis of their current status. During the web based advisory meeting, where the two parties share screens, customers can see how the outcome would be affected by various decisions and can set goals for their financial security. The customers can then sign their choices digitally.

This digitalised process allows SEB to offer personal advice remotely no matter where the customeris located. This has increased the bank's accessibility while streamlining its advisory work.

New convenient interface for large corporate customers

SEB has upgraded its cash management functionality so that customers get a better view of not only theirtotal cash balances – in SEB and other banks– but also of their most advanced global liquidity solutions. Accessibility has been improved so that customers can monitor and act on their accounts also via mobile devices.

Innovation benefits customers

Promoting internal innovation

SEB encourages a culture for change and innovation. One such initiative is SEB's Innovation Lab, where employees present theirideas live to a jury consisting of senior managers.If approved, the employee can develop and prototype the idea during a set period of time.

Several ideas have already come to fruition, such as SEB's virtual open houses, which are offered in colla boration with the realtor Husman & Hagberg. Another example is a significantly streamlined process for welcoming new customers using digital tools.

Digital processes improve customer experience and free up resources

To gain the full potential of the technological development and, based on a customer perspective, create new, automated flows, it is often necessary to rethink processes from scratch. SEB has identified a number of key processes in which the entire chain from customertransaction to IT system is being redesigned.

Customers buying a home is one example. SEB has launched its first, concrete step in this area in the form of a new digital function that helps customers determine which home they can afford. Another example is the annual creditreviews of corporate business in which the potential savings may be as high as three to four man-weeks of work per year per customer.

Investing in innovative solutions

SEB invests in high-tech companies with innovative solutions that could be relevant forthe bank and its customers.

In 2016 SEB invested in the fintech company Tink, which has developed an app that helps users get a better overview of theirincome and expenses.Its functionality is being integrated into SEB's mobile app. SEB also invested in Coinify, a company with a platform for blockchain payments, and in the company Now Interact, which uses artificial intelligence and machine learning to predict customer behaviour. Another example is Leasify, a company with a digital solution forleasing arrangements aimed at companies.

The potential of blockchain

Blockchain technology, which was originally developed forthe Bitcoin cryptocurrency, is believed to have major potential in streamlining payment flows by removing the need forintermediaries. SEB is participating in several blockchain initiatives.In addition to its investment in Coinify, the bank is working with the fintech company Ripple to use its block chain solution for payments.

Meet one of our private customers

» A bank thatI can trust is a great asset. «

Anders Parrow

The love of boats and birds has been a theme throughout hislife. A few years ago his decision – at 89 years of age – to buy a new sailboat,specially designed forsolo trips, caught media attention. 54 years ago, the same boat interest made Anders Parrow a customer of SEB and he has been faithful to the bank ever since.

Anderslikesto visit the bank and meet with his adviser, but also appreciatesthe internet bank and the mobile bank app. "I can't imagine banking without them", he says. Andersregularly takes part of SEB's market analysis asinput to his portfolio management.

Customers expect responsible services

The financial sector has a large indirect influence on the long-term sustainable development. Stakeholders have high expectations in this area and SEB has raised its ambition and aims to be a role model within sustainability.

Green financing

The climate challenge requires majorinvestments in energy supply, the transport sector and sustainable urban development. SEB contributes by assisting customers with financing of green investments in infrastructure and renewable energy, including hydro power, wind power and solar energy.

SEB participated in the creation of the world's first green bond, which was issued by the World Bank in 2008. Since then, the global market for green bonds has gained momentum and grown sharply.In 2016, green bonds were issued to a value of almost USD 95 billion – capital that has thus been channelled to quality assured green projects. SEB was the fourth largest arranger/ underwriter globally, with a market share of 4.4 per cent of this volume.

SEB applies policies that limit lending to companies in sectors such as fossil fuels,

SEB's position statements and sector policies

• Read more about SEB's policies at sebgroup.com/about-seb/who-we-are
• SEB reportsitssustainabilitywork in accordancewithGRIG4. Forfurther information,see sebgroup.com

Microfinancing

SEB was the first bank in Sweden to launch microfinance funds directed at institutional investors. The aim is to offer an attractive investment opportunity with a distinct social character. The fund assets create a ripple effect when borrowers invest or use other business services. This way jobs are created leading to growth in developing countries.

The bank's four microfinance funds have a combined value of more than SEK 4 billion, which reaches more than 17 million entrepreneurs in developing countries via microfinance institutions.

mining and metals. SEB does not provide new financing of coal mining and coal powerplants. The bank's sector policies and position statements form a valuable base in dialogues with corporate customers and help increase awareness about sustainability aspects in various decisions.

Responsible investments

Customers increasingly expect that SEB will manage their assets in a responsible manner. For a number of years the bank has made a concerted effort to take sustainability into account in all investment processes, based on the conviction that this leads to betterinvestments and higherreturns for customers. At year-end SEB managed assets at a total of SEK 584 billion (517) in accor dance with the Principles of Responsible Investments (PRI).

SEB excludes investments in particular sectors and areas, such as controversial weapons and nuclear arms, as well as in companies that derive more than 20 per cent

of their sales from coal production. On the other hand, SEB is also working to a greater extent with positive selection where portfolio managers prioritise companies that work according to sustainable principles.

In 2016 SEB entered into a new partnership with Hermes Investment Management, creating an opportunity to increase the number of sustainability dialogues with companies outside the Nordic region.

Measurement of the carbon footprint of funds has been expanded and now includes most of the bank's equity funds.

Dow Jones sustainability index

SEB has high ambitions in its sustainability work and aims to be a role model in the financial industry in this area. A sign that the efforts are paying off was that in 2016 SEB met the strict criteria forinclusion and was – as the only bank in the Nordic coun tries – accepted as part of the Dow Jones sustainability index.

Strategy Value creation

In a changing world, SEB is impacted by the rapid pace of technological development, evolving customer behaviours, and expectations on future employees. The bank's role in society is becoming increasingly important for SEB's attraction as an employer.

22 SEB Annual Report ²⁰¹⁶

For the second year in a row, 3,000 employees gathered in Stockholm to be involved and inspired by the initiativestaken to reach SEB'slongterm vision. The meeting was broadcast to local eventsin 20 countries.

Committed employees with a service mindset, who collaborate and who want to develop new competences, is a key success factor.

SEB's Insight employee survey for 2016 confirms that there is strong support for the bank's vision and strong commitment among employees to participate and change. Employee engagement scores remained high in 2016 – clearly higherthan for peer companies – as did the scores for performance excellence, which increased forthe fourth consecutive year.

Focus ofimprovement measures is to more clearly take the customer-first perspec tive,furtherimprove internal collaboration, and to simplify processes.

Activities in orderto develop these areas have included workshops focusing on clari fying the connection between employees' own values and the bank's. Employees have gained opportunities to reflect on, and formulate, their own values, and thereafter align them to the bank's joint values.

Managing change and new ways of working

The employees' and the organisation's ability to collaborate and manage change are crucial forthe future.In SEB this is done in an environment characterised by involve ment and innovation.

As anexample, SEBisdevelopingnew ways of working built on an iterative approach in the design of services. This means cross functional teams mapping customerjourneys, based on customer needs and feedback loops, before prototypes of new solutions are launched to the customers. The new agile ways of working are aimed at drawing full benefit of digitalisation and providing an even better customer experience.

The agile ways of working have also been adopted in SEB's IT operations. Develop ment and deliveries are being conducted in small steps ratherthan in large projects over a longer period of time.

In 2016, individually adapted agile train ing courses were held for more than 2,000 employees, a strategic initiative to create favourable conditions to quickly and successfully adapt ways of working to the changing needs.

Planning for future competences

The digital transformation drives the need to plan forfuture competences in the long term. SEB is working throughout the bank to analyse and identify needs based on selected parameters. Competence needs are included as an integral part of the business planning.

Areas in which needs are clearly rising include digital design, data analysis and IT. The bank has broadened its recruitment to search forthese skills via new channels and arenas, not only among individuals with a background in finance and business admin istration. Employees'roles will be expanded in orderto be able to meet customer needs for comprehensive service.In many cases this requires employees to work in new ways.

Leadership

SEB has a long tradition of identifying and developing leaders at an early stage. Constant changes in the business environ ment are putting ever-growing demands on managers, who must inspire, serve as role models and establish conditions so that employees and teams can develop the business in the best way possible.

During the year, Grow2Lead was devel oped, a digital portal for employees inter ested in a future role as a leader. The portal provides inspiration and development opportunities, and can help employees decide if a managerrole is a suitable career path.

Employee statistics

	2016	2015	2014
Number of
employees, average	16,260	16,599 16,742
Sweden	8,222		8,320 8,352
Other Nordic countries	1,369	1,404	1,411
Baltic countries	5,125	5,118	5,100
Number of employees at year­end	16,087	16,432 16,767
Average number of full­time equivalents	15,279	15,605 15,714
Employee turnover, %	10.7	9.0	8,9
Sick leave, % (in Sweden)	3.0	2.8	2.4
Female managers, %	46	44	43
Insight
Employee engagement	77	79	75
Performance excellence	81	80	78

For existing managers, the bank has global programmes that offer opportunities to develop theirleadership qualities both as individuals and as team members.

A controversial tax

Forthe financial sectorin Sweden, a 15 per cent tax based on gross wages is being considered forimplementation in 2018. The total estimated financial effect on SEB of the proposal under discussion is around SEK 700m per year. According to a report from the Swedish Bankers' Association, as many as 16,000 jobs would be threatened if these plans were in fact carried out.

Anders Lundström – Leader of the year 2016

»My goal isto build highperforming teamsthat deliver stellar results. Thisrequiressatisfied and motivated employees. There isthus no conflict between employee satisfaction and results – they are symbiotic.

I want my leadership to be characterised by simplicity, clarity and communication. At the same time, I want to be transparent and share my insights on the total picture. In doing so, most decisions will be natural for employees. «

Anders Lundström, manager within asset advisory services, was named Leader of the Year ("Åretsledartröja") by the Financial Sector Union in SEB.

Learning opportunities

At SEB, continuous learning is a vital prerequisite forthe ability to adapt to new circumstances. The bank offers a wide array of training courses and, via a portal, employees can get an overview of the entire offering – including training that is specific for SEB as well as training offered by exter nal providers – including methods and effective tools to facilitate learning.In all, more than 600 courses are offered.

Increasing diversity

SEB is convinced that diversity and inclu sion among its people help the bank achieve greater success overtime.

All employees are to be offered equal opportunities to develop individually, regardless of their gender, ethnicity, age, sexual orientation orfaith. SEB strives to achieve an even gender balance at every level within the organisation and to increase the share of employees with an international background.

The bank is working actively, both in terms of structures and processes and in specific initiatives, to increase the number of women in higher operative positions and in seniorleaderroles.

In 2016, 46 per cent (44) of SEB's manag ers were women. Among senior executives this share was 31 per cent (27).

Health and work environment

Ensuring employee longevity is becoming increasingly important in pace with an ageing population and the possibility of a higherretirement age. SEB is working long term and preventively to offer a safe and sound workplace in an effort to ensure employee well-being and a sound work/life balance.

The focus of the bank's work environ ment initiatives is on stress, workloads and risk identification.In Sweden, in 2016, the bank increased its support to managers with employees on sick leave. They are offered telephone support from nurses at company health services and rehabilitation special ists who are experienced in assessing suitable paths for a rapid recovery and return to work.In Sweden, the SEB sick-leave remains low, at 3 per cent, compared with otherindustries and the financial sector.

During 2016, SEB introduced a global

Customers first

We put our customers' needs first, always seeking to understand how to deliver real value.

Collaboration

We achieve more working together.

SEB's core values

Simplicity

We strive to simplify what is complex.

SEB's core values

SEB's core values serve as the foundation forthe bank's ways of working and culture, and in combination with the bank's vision – to deliver world-class service to our customers – they serve to motivate and inspire employees, managers and the organisation as a whole. These values are described in SEB's Code of Conduct, which provides guidance on ethical matters for all employees.Read the Code of Conduct atsebgroup.com

health index based on questions in the Insight employee survey. This is the first global tool for measuring work environ ment and health at both the divisional and country levels.

In 2017, SEB's new offices will be inaugu rated at Arenastaden outside Stockholm, where 4,500 employees will be gathered.In designing the workplace, strong focus was put on enabling a positive work environ ment with modern and functional work spaces, large common areas, projectrooms and quiet areas, an extensive fitness facility, and healthy food in own restaurants.

Commitment

We are personally dedicated to the success of our customers and are accountable for our actions.

Investing in communities

SEB plays an active role in the communities in which the bank operates by promoting entrepreneurship and enterprise as well as supporting young people.

SEB shares the conviction that business and industry have a key role to play in meeting the global sustainable development goals that were adopted by the UN's 193 member states in 2015. The most important contributions come from the bank's core businesses, where green financing, sustainable investment and combating financial crime are included. But SEB is also actively involved in community matters through its many partnerships for entrepreneurship and youth initiatives.

Volunteers raising young people's knowledge of economics

SEB partners with organisations that work to include youths in social development by raising their knowledge of personal finance. In the three Baltic countries, forthe past few years SEB has been participating in nationwide campaigns to increase financial liter acy among young people.In 2016 volun teers from SEB visited more than 230 schools in an effort to give children funda mental skills in personal finance and economic planning.

In Sweden, too, the bank is working actively to increase understanding of economics among young people. Within the frame work of SEB's partnership with Mentor Sweden, teams of employees participate in the professional mentor programme, consisting of a series of three workshops at which the bank gives young people advice on day-to-day finances, explains business norms and provides advice on how to apply forjobs.In 2016 eight such programmes were carried out at schools in Sweden's major metropolitan areas. Volunteers from SEB also serve as coaches and jury members in the Dream Challenge initiative, where young people get help on formulating a plan fortheir dream careers.

Summer camp for future entrepreneurs

SEB works with organisations that are dedicated to spurring interest and inspiration among youths as well as newly arrived immigrants in entrepreneurship and enter prise. These include Junior Achievement, Prince Daniel's Fellowship, SIME Next, Enterprise Agency and the International Entrepreneur Association in Sweden.

In 2016 the bank became involved in a newly started summer camp forteenaged aspiring entrepreneurs.In cooperation with SIME Next, some 20 youths were offered spots at the camp for one week of intense drilling in digital entrepreneurship.

Social entrepreneurs gain insight into doing business

In 2016, a partnership was started with Inkludera Invest, an umbrella organisation for social entrepreneurs. The common denominatorforthese is that they work without a profit motive to create a better world. However, they can still benefit greatly from tools such as business plans, budgets, and earnings analyses to develop their operations.

Together with Inkludera Invest, SEB arranged a basic course in business administration and invited social entrepreneurs to share insights around the conditions for doing business.

Shareholders and the SEB share

In 2016, the value of the SEB Class A share increased by 7 per cent, to SEK 95.55, while the FTSE European Banks Index dropped by 6 per cent. Earnings per share amounted to SEK 4.88 (7.57). The Board proposes a dividend of SEK 5.50 per share for 2016 (5.25).

Share capital

SEB's share capital amounts to SEK 21,942m, distributed on 2,194.2 million shares. Each Class A share entitles to one vote and each Class C share to 1/10 of a vote.

Stock exchange trading

The SEB shares are listed on Nasdaq Stockholm, but are also traded on other exchanges, such as BATS, CXE, Boat and Turquoise. The share is also included in the Dow Jones Sustainability Index and the FTSE4Good Index, which facilitate investments in companies with globally recognised levels of corporate responsibility.

In 2016, the value of the SEB Class A share increased by 6.7 per cent, while the OMX Stockholm 30 Index (OMXS30) was up by 5 per cent and the FTSE European Banks Index dropped by 6 per cent. Total turnoverin SEB shares in 2016 amounted to SEK 307bn (312), of which 134bn (142) on Nasdaq Stockholm. Market capitalisation by year-end was SEK 210bn (196).

Dividend policy

SEB strives to achieve long-term dividend growth without negatively impacting the group's targeted capitalratios. The annual dividend per share shall correspond to 40 per cent or more of earnings per share. Each year's dividend is assessed in the light of prevailing economic conditions and the group's earnings, growth possibilities,regulatory requirements and capital position.

Dividend

The Board of Directors proposes to the Annual General Meeting a dividend of SEK 5.50 (5.25) per Class A and Class C share respectively for 2016, which corresponds to a 113 per cent (69) dividend payoutratio. Excluding items affecting comparability, the dividend payoutratio was 75 per cent. The proposed record date forthe divi-

dend is 30 March 2017.If the Annual General Meeting resolves in accordance with the proposal, the share will be traded ex-dividend on 29 March 2017 and dividend payments will be disbursed on 4 April 2017.

Distribution of shares by size of holding

Size of holding	No. ofshares	Per cent	No. of shareholders
1 – 500	32,640,262	1.5	174,544
501 – 1,000	33,155,893	1.5	43,306
1,001 – 5,000	105,308,326	4.8	47,648
5,001 – 10,000	44,517,729	2.0	6,257
10,001 – 20,000	34,571,898	1.6	2,468
20,001 – 50,000	36,513,844	1.7	1,177
50,001 – 100,000	24,975,535	1.1	350
100,001 – 500,000	88,076,342	4.0	383
500,001 – 1,000,000	53,070,831	2.4	71
1,000,001 –	1,741,341,142	79.4	146
	2,194,171,802	100.0	276,350

Source: Euroclear and Holdings

Number of outstanding shares, 31 December 2016

	Class A share	Class C share	Total no. ofshares
Total number of issued shares	2, 170 ,019 ,294	24,152,508	2,194,171,802
Hedge for long-term incentive programmes 1)	–25,177,693	–	–25,177,693
Repurchased own shares 2)	0	0	0
Totalnumber ofoutstanding shares	2,144,841,601	24 ,152,508	2,168,994,109

1) Utilization of authorization fromthe Annual GeneralMeeting 2016 to acquire own sharesfor the 2010–2016 long-termequity programmes.

2) 2016 AGM decision, no repurchasesmade.

Data per share

	2016	2015	2014	2013	2012
Basic earnings, SEK	4.88	7.57	8.79	6.74	5.31
Diluted earnings, SEK	4.85	7.53	8.73	6.69	5.29
Shareholders' equity, SEK	65.00	65.11	61.47	56.33	49.92
Net worth, SEK	73.00	72.09	68.13	62.10	56.33
Cash flow, SEK	19.02	1.28	–61.98	–19.66	–8.92
Dividend per A and C share, SEK	5.501)	5.25	4.75	4.00	2.75
Year-end share price , SEK 2)
Class A share	95.55	89.40	99.55	84.80	55.25
Class C share	95.20	88.85	97.65	79.90	53.40
Highest price paid , SEK 2)
Class A share	99.75	111.50	100.60	85.10	57.95
Class C share	101.10	112.50	99.10	80.30	54.30
Lowest price paid , SEK 2)
Class A share	67.75	83.45	82.25	55.70	38.87
Class C share	70.35	83.75	77.45	53.20	38.74
Dividend as a percentage of earnings(payout ratio), %	112.8	69.4	54.0	59.3	51.8
Dividend yield, %	5.8	5.9	4.8	4.7	5.0
P/E (share price at year-end/ earnings)	19.6	11.8	11.3	12.6	10.4
Number of outstanding shares, million
average	2,177.6		2,191.2 2,186.8 2,190.8		2,191.5
at year-end	2,169.0	2,193.3	2,188.7		2,179.8 2,192.0

1) As proposed bythe Board of Directors.

2)Source: Nasdaq Stockholm.

The largest shareholders 31 Dec. 2016
	No. ofshares	Of which Class C shares	Share of capital. %	Share of votes %
				2016	2015
Investor AB	456,198,927	4,000,372	20.8	20.8	20.8
Alecta	154,682,500		7.0	7.1	6.4
Trygg Foundation	130,673,802		6.0	6.0	6.0
Swedbank Robur Funds	92,736,980		4.2	4.3	3.6
AMF	83,905,317		3.8	3.9	3.2
SEB Funds	38,691,740		1.8	1.8	1.6
BlackRock	38,059,331	547,461	1.7	1.7	1.4
Fourth Swedish National Pension Fund	27,141,394		1.2	1.2	1.1
Vanguard	26,915,196		1.2	1.2	1.0
SEB own shareholding1)	25,177,693		1.1	1.2	0
Nordea Funds	22,149,174		1.0	1.0	1.2
XACT Funds	22,007,860		1.0	1.0	1.0
Didner & Gerge Funds	19,228,514		0.9	0.9	0.8
AFA Insurance	17,268,554		0.8	0.8	0.8
First Swedish National Pension Fund	16,422,705		0.7	0.8	1.0

1) See table Number of outstanding shares on p. 26.

Source: Euroclear and Holdings

Changes in share capital

			Change in	Accumulated	Share
			number of	number of	capital
Year	Transaction	SEK	shares	issued shares	SEK m
1972				5,430,900	543
1975	Rightsissue 1:5	125	1,086,180	6,517,080	652
1976	Rightsissue 1:6	140	1,086,180	7,603,260	760
1977	Split 2:1		7,603,260	15,206,520	760
1981	Rightsissue 1B:10	110	1,520,652	16,727,172	837
1982	Bonusissue 1A:5		3,345,434	20,072,606	1,004
1983	Rightsissue 1A:5	160	4,014,521	24,087,127	1,204
1984	Split 5:1		96,348,508	120,435,635	1,204
1986	Rightsissue 1A:15 1)	90	8,029,042	128,464,677	1,284
1989	Bonusissue 9A+1C:10		128,464,677	256,929,354	2,569
1990	Directed issue 2)	88:42	6,530,310	263,459,664	2,635
1993	Rightsissue 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	RightsIssue 1:5 3)	35	116,311,618	704,557,680	7,046
	2005 Reduction of the
	share capital		–17,401,049	687,156,631	6,872
	2009 Rightsissue 11:5		10 1,507,015,171	2,194,171,802	21,942

1) The recorded share capital as of 31 December1986 was SEK 1,204m.

since the proceedsfromthe rightsissue were not paid in full until early1987.

2) The issue was directed at themember banks of Scandinavian Banking Partners.

3) Subscribed and paid shares were not registered asshare capital in the balance sheet until the rightsissue had been registered (which took place in January 2000).

Through splitsin 1977 (2:1) and 1984 (5:1), the nominal value of the shares was changed fromSEK 100 to SEK 10.

Market capitalisation

SEK m	2016	2015	2014	2013	2012
Year-end market capitalisation 1)	209,645	196,146	218,384	185,947	121,183
Volume of sharestraded	133,790	142,188	113,566	94,738	85,776

1) Based on the Nasdaq Stockholmshare price of SEK 95.55

Shareholder structure Per cent

Percentage holdings of equity on 31 Dec. 2016

Themajority of the bank's approximately 276,000 shareholders are private individuals with small holdings. The ten largestshareholders account for 49 percent ofcapital and votes. Source: Euroclear and Holdings

The investor perspective

Overthe years SEB has capitalised on its long standing strong position as the leading corporate bank in the Nordic region and the bank's financial strength. Overthe last five years, the share price of the SEB Class A share increased by 73 per cent.

Long-term perspective

SEB has been a corporate bank since its establishment by A. O. Wallenberg in 1856. To this day the Wallenberg family is deeply engaged in the bank's current and future operations via the main ownerInvestor.

There is a clear connection between the macroeconomic develop ment, customer activity and the development of the bank's earnings.In addition, SEB's strategic initiatives for growth in areas of strength – corporate business, all customer segments in Sweden and the long-term savings offering – have a major bearing on the future result and therefore the market value of the share.

An investorin SEB believes in a positive economic development in the bank's home markets – the Nordic and Baltic countries and Germany – and in the bank's ability to capitalise on this development overtime while managing any negative development in an effective manner.

Return on investment

The return on an investment in SEB is not only contributable to the share price but also to the dividend. SEB's Board of Directors has proposed to the Annual General Meeting that SEK 5.50, 113 per cent of earnings per share, shall be distributed for 2016. The dividend payoutratio, excluding items affecting comparability, was 75 per cent.

The dividend yield, i.e. the dividend in relation to the share price at year-end 2016, was 5.8 per cent (5.9) based on the proposed dividend.

Total shareholderreturn (TSR) – i.e. share price development and reinvested dividends per share – was 14 per cent for 2016 (–6). The average TSR forthe Nordic peer group in 2016 was 21 per cent (3). In the last three years, TSR forthe SEB share was 5 per cent on average.

Beta value and volatility

The beta value of SEB's share price in 2016 was 1.17. The measure shows how the share price of a specific share changes in relation to the stock market as a whole, in this case compared to OMXS30. A beta value of 1.00 indicates that the share price development is the same as the market.

The volatility of SEB's share price was 30 per cent for 2016. The corresponding value forthe Nordic peer group was 28 per cent. The measure shows the daily change in share price compared with its average for a given time period. Overthe past three years, the average volatility of the SEB share was 24 per cent, which is at the same level as the Nordic peer group.

Earnings and dividend per share

A dividend of SEK 5.50 pershare is proposed for 2016, corresponding to a payout ratio of113 percent.

Financial review of the group

High demand for risk management services and advice, high asset quality, more active small and medium-sized corporate customers and, towards the end of the year, a pick-up in corporate transactions were positive contributors to the result. The uncertain macroeconomic development and the negative interest rates were however counteracting factors. Net profit, excluding items affecting comparability, decreased by 9 per cent. SEB's financial position is strong and a dividend of SEK 5.50 per share is proposed.

Important events and trendsin 2016

First quarter

• SEB implemented a new customer-oriented organisation. The reallocation of goodwill that followed led to a non-tax deductible impairment of SEK 5,334m.

• The Swedish central bank lowered the repo rate to –0.5 per cent, and ECB's Euro refinancing interestrate was set at zero per cent.

• Second quarter The result ofthe British EU-referendum was unexpectedly that the UK will leave theEU.This increased uncertainty and had a temporary high impact on financial markets.

• SEB's Baltic holdings in Visa Europe were sold.

Third quarter

• As the only Nordic bank, SEB met the requirements and was included in the Dow Jones Sustainability index.

Fourth quarter

• The unexpected outcome of the US presidential election increased uncertainty with a temporary high financial markets impact.

• Large corporate customers grew more active as business senti ment improved.

• Full year The unconventional monetary policy with negative interestrates and quantitative easing affected customer activity.

• Corporate and institutional customers' demand for hedging and risk management products was high throughout the year.
• Baltic economies proved resilient to Russian sanctions and both private and corporate customers were more active.

Result and profitability

Operating profit amounted to SEK 14,867m (20,865). Net profit (after tax) amounted to SEK 10,618m (16,581).

Excluding items affecting comparability (see box p. 30), operating profit amounted to SEK 20,296m (21,767), a decrease of 7 per cent. Net profit, excluding items affecting comparability, decreased by 9 per cent to SEK 15,970m (17,483).

Operating income

Total operating income amounted to SEK 43,771m (43,763).

Net interest income amounted to SEK 18,738m (18,938). The Swedish repo rate was –0,5 per cent and ECB's Euro refinancing rate was zero forthe better part of the year which affected net interest income negatively.

Customer-driven net interest income increased by SEK 1,855m to SEK 20,464m year-on-year. Lending-related net interest income increased by SEK 1,586m, due to margins and volumes to an equal degree. Net interest income from deposits increased by SEK 267m primarily from deposit margins.

Net interest income from other activities (funding, etc.) was negative at SEK –1,726m, a decrease of SEK 2,055m compared to 2015. An item affecting comparability occurred in 2015 (see box p. 30). Year-on-year, the lowerinterestrate levels led to a reduction of net interest income by approximately SEK 900m. Regulatory fees consisted of fees to stability funds, SEK 16m (590), to deposit guarantee schemes, SEK 390m (429), as well as resolution fund fees in the amount of SEK 956m (182).

Net fee and commission income decreased to SEK 16,628m (18,345). The stock market was slow although there was a pick-up towards the end of the year. The gross custody and mutual funds fee income decreased by SEK 1,243m compared to 2015, of which performance and transaction fees decreased by SEK 436m to SEK 275m (711). Forliquidity strategy purposes and in line with the new regulatory framework forliquidity, stock lending activities were reduced, leading to significantly lowerrelated fee income. Card fees decreased by an estimated SEK 480m due to the regulatory cap on interchange fees. Net commissions relating to the life insurance business amounted to SEK 1,039m (1,154).

Net financial income increased to SEK 7,056m (5,478). Customers were actively seeking risk management services throughout the turbulent year, primarily in foreign exchange but also in fixed income and equities. Net financial income relating to the traditional life insurance operations in Sweden and Denmark increased by SEK 425m year-on-yearto SEK 1,919m. There was a net negative valuation adjustment from counterparty risk (CVA) and own credit risk in derivatives (DVA) as well as own creditrisk forissued bonds at fair value through profit and loss (OCA), amounting to SEK –219m in total.In 2015, this item was SEK 603m,resulting in a negative change of SEK822m year-on-year. Valuation of the liquidity management portfolios had a positive effect. Net financial income 2015 included an item which affected comparability (see box below).

Net otherincome amounted to SEK 1,349m (1,002) reflecting a combination ofrealised capital gains and unrealised valuation and hedge accounting effects and an item affecting comparability was included in 2016 (see box below).

Operating expenses

Total operating expenses amounted to SEK 27,761m (21,802). Excluding two items affecting comparability (see box below), operating expenses amounted to SEK 21,812m in line with 2015 and below the cost cap of SEK 22bn.

Overthe past seven years, SEB's cost cap was lowered step by step from SEK 24bn. With the change in reporting of net insurance income (see box below), the cost cap was adjusted to SEK 22bn, from SEK 22.5bn in the business plan. The cost cap has been extended through 2018.

Net credit losses

Netcredit losses amounted to SEK993m (883).Asset quality remained robust and the overall creditloss level was 7 basis points (6).

Income tax expense

Total income tax amounted to SEK 4,249m (4,284). The effective tax rate forthe year was 28.5 per cent. Excluding items affecting comparability (see box below), the effective tax rate was 21 per cent. This was in line with SEB's expected tax rate. See note 3 and 15 for furtherinformation on tax.

Profitability

Return on equity amounted to 7.8 per cent (12.2). Return on equity excluding items affecting comparability was 11.3 per cent (12.9).

Items affecting comparability and restatement of financial information

As of 1 January 2016, SEB implemented a new customer-oriented organisation, which led to an impairment of goodwill in the amount of SEK 5,334m. The impairment was of a technical nature since it was a function of evaluating the goodwill at a business unit and geographical level,ratherthan at the divisional level.

Restructuring activities in the Baltic and German businesses and a write-down (derecognition) of intangible IT assets no longerin use resulted in an operating expense of SEK 615m with a positive tax effect of SEK 101m.

Visa Inc. has acquired Visa Europe. SEB was a member of Visa Europe through several direct and indirect memberships.In the second quarter, the closing of the transaction of SEB's Visa memberships in the Baltic countries resulted in

a realisation of the fair value as a gain in the amount SEK 520m, with a tax expense of SEK 24m.

In 2015, SEB's withholding tax refund application dating back to 2006–2008 was denied by the Swiss Supreme Court. The effects were a decrease of net financial income in the amount of SEK 820m and an interest expense of SEK 82m.

As of 1 January 2016,the income statementline item netlife insurance income was reallocated to netfee and commission income, net financial income and net otherincome.In line with market practice,the deferred acquisition costs within the life business are now part of netfee and commission income and are no longerreported as operating expenses. Comparable figures for 2014and 2015 are restated and those for 2012 and 2013 recalcu lated pro forma.

Other comprehensive income

Othercomprehensive income amounted to SEK –946m (2,219). The netrevaluation of the defined benefit pension plans had a negative effect of SEK –1,875m (4,178). The change was a net of the increase in the pension liability – from lower discountrates – and an increase in the value of the plan assets.

The net effect from the valuation of balance sheet items that may subsequently be reclassified to the income statement was positive in the amount of SEK 929m (–1,959).

The Visa transaction

Visa Inc. has acquired Visa Europe (a membership-owned organisation) with the purpose of creating a single global Visa company. The transaction was approved by the European Commission in 2016.It consisted of a combination of consideration in cash and shares. SEB was a member of Visa Europe through several direct and indirect memberships.

The closing of the transaction of SEB's Visa memberships in the Baltic countries resulted in a gain (an item affecting comparability) of SEK 520m recognised in net otherincome.

In Sweden, where SEB is an indirect member via Visa Sweden, the holdings are classified as available-for-sale financial assets. The fair value is booked in other comprehensive income. Once the distribution between the Swedish indirect members is finalised and the transaction closes, it will be reclassified to net otherincome.

Subsequent events

On 16 January 2017, Annika Falkengren's resignation from SEB after 11 years as President and CEO was announced.

On 8 February 2017, it was announced that Johan Torgeby, currently co-head of the division Large Corporates & Financial Institutions, will be her successorfrom 29 March 2017.

On 1 February 2017, it was announced that Peter Dahlgren, Head of division Life & Investment Management, would leave SEB to pursue a position outside the bank. Nils Liljeberg, Head of sales Life & Pension (Sweden), has been appointed acting new Head of business area Life. Peter Branner continues in his position as Head of business area Investment Management.

Key figures

	2016	2015	2014	2013	2012
Return on equity, %	7.80	12.24	15.25	13.11	11.06
Return on total assets, %	0.37	0.57	0.71	0.58	0.48
Return on risk exposure amount, %	1.80	2.71	3.23	2.38
Basic earnings pershare, SEK	4.88	7.57	8.79	6.74	5.31
Weighted average number ofshares , millions 1)	2,178	2,191	2,187	2,191	2,191
Diluted earnings pershare, SEK	4.85	7.53	8.73	6.69	5.29
Weighted average number of diluted shares , millions 2)	2,188	2,203	2,202	2,207	2,199
Credit losslevel, %	0.07	0.06	0.09	0.09	0.08
Total reserve ratio individually assessed impaired loans, %	68.8	68.3	62.2	86.9	74.4
Net level of impaired loans, %	0.21	0.20	0.29	0.17	0.28
Grosslevel of impaired loans, %	0.33	0.35	0.49	0.35	0.58
Liquidity Coverage Ratio (LCR) , % 3)	168	128	115	129
Own funds requirement, Basel III
Risk exposure amount, SEK m	609,958	570,840	616,531	598,324
Expressed as own fundsrequirement, SEK m	48,797	45,667	49,322	47,866
Common Equity Tier 1 capital ratio, %	18.8	18.8	16.3	15.0
Tier 1 capital ratio, %	21.2	21.3	19.5	17.1
Total capital ratio, %	24.8	23.8	22.2	18.1
Leverage ratio, %	5.1	4.9	4.8	4.2
Number of full­time equivalents 4)	15,279	15,605	15,714	15,870	16,925
Assets under custody, SEK bn	6,859	7,196	6,763	5,958	5,191
Assets under management, SEK bn	1,781	1,700	1,708	1,475	1,328

1) The number of issued shares was 2,194,171,802. SEB owned 850,426 Class A shares for the equity-based programmes at year-end 2015. During 2016 SEB has

purchased 29,840,725 shares and 5,513,458 shares have been sold. Thus, at 31 December 2016 SEB owned 25,177,693 Class A shares with a market value of SEK 2,406m.

2) Calculated dilution based on the estimated economic value of the long-term equity-based programmes.

3) According to Swedish FSA regulations for respective period.

4) Average for the year.

A five-year summary of the group and the parent bank's income statements and balance sheets is available on p. 152.

Definitions are available on p. 159.

Financialstructure

Total assets at 31 December 2016 were SEK 2,621bn, an increase by SEK 125bn year-on-year (2,496).

Loan portfolio

Loans to the public amounted to SEK 1,453bn, an increase of SEK 100bn year-on-year (1,353). Excluding repos and debt securities, loans to the public increased by SEK 99bn. There was growth in all main segments in the Nordic and Baltic regions.

SEB's total credit portfolio, which includes both on-and off balance sheet items, amounted to SEK 2,143bn (2,065). During the yeartotal household loans and commitments increased by SEK 21bn. The combined corporate and property management loans and commitments increased by SEK 134bn. See p. 41 and note 17.

Interest-bearing securities

SEB's credit exposure in the bond portfolio (interest-bearing securities and credit derivatives and futures) amounted to SEK 168bn (229). See note 17a.

Derivatives

The fair value of the derivative contracts are booked as assets and liabilities on the balance sheet. They amounted to SEK 212bn and SEK 175bn respectively.

The mix and volumes of derivatives reflect the demand for derivatives of the bank's customers for management of their financialrisk. The bank is a market makerfor derivatives and also uses derivatives forthe purpose of protecting the cash flows and fair value of its financial assets and liabilities from forinstance interestrate fluc tuations See note 42.

Insurance assets and liabilities

Financial assets within the insurance operations amounted to SEK 404bn (367). Out of this, financial assets where policyholders carry the risk (mostly unit-linked insurance), amounted to SEK 296bn (272) and other assets (mostly traditional and risk insurance) amounted to an additional SEK 108bn (95).

Liabilities in the insurance operations amounted to SEK 404bn (371). Out of this, SEK 297bn (272) was related to financial commitments forinvestment contracts (mostly unit-linked insurance), while SEK 107bn (99) was related to insurance contracts (mostly traditional and risk insurance).Insurance liabilities are mainly covered by financial assets but also by non-financial assets such as investment properties. The value of investment properties amounted to SEK 7bn (7).

Tangible and intangible assets

The major part of the tangible assets consists ofreal estate properties at a total amount of SEK 7.9bn (8.4).

Intangible assets totalled SEK11.4bn (17.1), of which 42 per cent represented goodwill. Goodwill items are subjectto a yearly impairmenttest.In SEB's reorganisation during 2016, goodwill was reallocated to the appropriate cash-generating units. The result was an impairment of goodwill in the amount of SEK5,334m, an item affecting comparability (see box p. 30). Deferred acquisition costs in insurance operations amounted to SEK4.0bn (4.2).

Deposits, borrowings and issued securities

The financing of the group consists of deposits from the public (households, corporates, etc.), borrowings from Swedish, German and other financial institutions and issuance of money market instruments, bonds, covered bonds and subordinated debt. See p. 43 and note 17f forinformation on liquidity management.

Balance sheet structure 31 December 2016

Rating

Moody's rating of SEB's long-term senior unsecured debt is based on SEB's asset quality, earnings stability and diversification as well as increased efficiency.

S&P's rating of SEB's long-term senior unsecured debt is based on the bank's strong capital and earnings development which may offset the effect of heightened economic risks in Sweden as perceived by S&P.

Fitch's rating of SEB's long-term senior unsecured debt improved from A+ to AA– in 2016 based on SEB's long-term strategy, earnings stability and diversification.

Moody's Outlook stable		Standard & Poor's Outlook stable		Fitch Outlook stable
Short	Long	Short	Long	Short	Long
P–1	Aaa	A–1+	AAA	F1+	AAA
P–2	Aa1	A–1	AA+	F1	AA+
P–3	Aa2	A–2	AA	F2	AA
	Aa3	A–3	AA–	F3	AA–
	A1		A+		A+

Deposits and borrowings from the public amounted to SEK 962bn (884). Household deposits increased by SEK 15bn while corporate deposits increased by SEK 63bn during the year.

Issued securities with short and long maturities amounted to SEK 669bn (639). During the year SEK 87bn in long-term funding matured (79). The bank was able to use its favourable position from a creditrisk point of view to raise new funding at an amount of SEK 145bn.Issued subordinated debt amounted to SEK 41bn (31).

Total equity

Total equity atthe opening of 2016 amounted to SEK143bn.In accordance with a resolution oftheAnnual General Meeting in 2016, SEK11.5bn of equity was used forthe dividend (10.4). Net profit amounted to SEK10.6bn and other comprehensive income amoun ted to SEK–946m.At year-end 2016,total equity amounted to SEK141bn.

Dividend

The Board of Directors proposes to theAnnual General Meeting a dividend of SEK5.50 per ClassAand Class C share respectively (5.25), which corresponds to a 113 per cent payoutratio (69). Excluding items affecting comparability (see box p. 30),the payout ratio was 75 per cent. The total proposed dividend amounts to SEK11.9bn (11.5), calculated on the total number ofissued shares as per 31 December 2016, excluding repurchased shares.

Assets under management and custody

At year-end, assets under management amounted to SEK 1,781bn (1,700). The net inflow of volumes was SEK 77bn. The increase in value was SEK 4bn. Assets under custody amounted to SEK 6,859bn (7,196).

Assets under management			SEK bn
	2016	2015	2014
Start of period	1 ,700	1 ,708	1 ,475
Inflow	255	280	304
Outflow	–178	–220	–212
Acquisition/disposal net	0	–75	0
Change in value	4	7	141
End of period	1 ,781	1 ,700	1 ,708

Ahead of 2017

In 2017, the bank will continue its work in accordance with the strategic direction and the business plan. This means increasing income through growth in core areas of strength, developing more digital tools and services and expanding employee skills, while at the same time keeping costs below SEK 22bn.

The macroeconomic developmentremains uncertain even though the outlook is somewhat more positive. Deflation risks are less prominent. However, large global economic imbalances remain and the potentialreduction of liquidity support to financial markets from central banks world-wide may create direct and indirect effects that are difficult to assess. There are signs that the Swedish central bank may not further cut interestrates and may even introduce a raise in late 2017. The unexpected outcome of the British EU referendum and the US presidential election were factors that added to the uncertainty.

In SEB, credit, market, liquidity,IT and operational as well as insurance risks affect the business. SEB'srisk composition and risk management are described on p. 40-45 and in note 17, 19 and 20.

New legislation in Sweden implies that interest on subordinated debt that qualifies as tier 1 capital and tier 2 capital will not be deductible forincome tax purposes. The estimated effect from the change is an increase in tax expenses by approximately SEK 360m in 2017 and SEK 300m in 2018 and per year onwards, all else

equal. SEB has no plans to call any of the outstanding subordi nated tier 1 capital transactions due to this tax reason and cannot contractually call the outstanding subordinated tier 2 capital transactions forthe same reason.

Furthermore, a tax based on salary expense in the financial sector was implemented in Norway as of the start of 2017 and a similartax is being proposed forimplementation in Sweden in 2018. The total estimated effect on SEB would be around SEK700m per year.

Totalregulatory fees are expected to exceed SEK2bn in 2017. The main reason is that the single resolution fund fee in Sweden doubled to 9 basis points.

The new accounting standard IFRS 9 - FinancialInstruments introduces a new impairment model based on expected loss instead of the incurred loss model applicable today. SEB's assessment is that the new rules are likely to increase loan loss provi sions and decrease equity at transition 1 January 2018 and that volatility in the credit loss line item in the income statement will increase. To date it is unclear how regulators will treat the interac tion of the accounting loan loss provisions and the regulatory capital concept of expected loss. The European Commission has proposed that incremental provisions underIFRS 9 should be phased in over a five-year period.

SEB'sresult is derived from customer needs

Customers' financial needs is the source of SEB's business volumes and result. The general relationships between customer-driven business volumes on- and off-balance sheet, the income statement and external factors are outlined below.

The macroeconomic situation is of great importance for customer behaviour and, together with the bank's own actions, it is a major factorimpacting the business and the result.

In times of positive economic development both businesses and private individuals are more likely to invest and consume. This may lead to increased lending, more payments, a higher number of corporate transactions, etcetera, all of which affect net interest and net commission income positively.

In an unfavourable part of the business cycle, customers may be more restrictive and growth in business and transaction volumes may level out while credit losses may increase. On the other hand customers hedge theirrisks in uncertain and volatile times which may increase net financial income.

SEB's totalresult is less volatile overtime than each line item in the income statement stand-alone. Forinstance net fee commission income tends to increase when financial income decreases and vice versa.

Income statement, simplified SEK m 2016 Net interest income 18,738 Net fee and commission income 16,628 Net financial income 7,056 Net other income 1,349 Total operating income 43,771 Total operating expenses –27,761 Credit losses and other –1,143 Income tax expense –4,249 Net profit 10,618 A B C D 2 3 4 5

Business volumes on the balance sheet	SEK m
------------------------------------------------------	-------

Assets		2016
1	Central banks	217,808
2	Loans to other creditinstitutions	50,527
3	ofwhich Debtsecurities	382
4	Loans to the public	1,453,019
5	ofwhich Debtsecurities	14,724
6	Debtsecurities	122,192
7	Equity instruments	40,324
8	Derivatives	212,355
9	Insurance assets	410,155
	Financial assets atfair value	785,026
10	Debtsecurities	32,698
11	Equity instruments	3,049
	Available-for-sale financial assets	35,747
	Other assets	78,519
	Total assets	2,620,646

	Liabilities and equity	2016
12	Central banks	54,393
13	Deposits from creditinstitutions	65,471
14	Deposits and borrowings from the public	962,028
15	Liabilities to policyholders	403,831
16	Commercial papers/Certificates of deposit	126,480
17	Long­term debt	542,400
	Debt securities issued	668,880
1) 18	Debt instruments	9,549
1) 19	Equity instruments	10,072
20	Derivatives and other	193,875
	Financial liabilities atfair value	213,496
	Otherliabilities	70,852
21	Subordinated debt	40,719
	Total equity	140,976
	Total liabilities and equity	2,620,646

Business volumes outside the balance sheet (examples) in accordance with accounting principles

22	Assets under management	Customersinvest in for instance mutual funds, SEK bn	1,781
22	Assets under custody	The bank safekeepssecurities and collects dividends and interest on customers' behalf, SEK bn	6,859
22	Commitments	Customers are providedwith preapproved credits, SEK bn	655
22	Guarantees	The bank assists customerswith credit risk management, SEK bn	120

22	Payments and cash management	Customers make payments and manage account balances.
22	Card transactions	Customers make card payments.
22	Securities transactions	Customers use the bank as an intermediary in securitiestransactions,for instance equities.
22	Corporate transactions	Corporate customersseek advice and assistance for various corporate transactions,such as acquisitions, IPOs etc.

1) Short position – a negative itemin the inventory held forcustomer trades.

Customer business volumes and income

	Net interest income A	Net fee and commission income B	Net financial income C	Net other income D
	Net interest income isthe difference between income from lending and expenses associated with deposits and borrowings. Interest margins differ in various markets, mainly due to varying maturities and risk. Margins and business volumes have a major bearing.	Net fee and commission income increases with growing transaction volumes. Fund­related commissions increasewith higher market values.	Both the market value and realised gains and losses on transactions with securities, currencies and derivatives are part of the result. The trend in the financial markets plays a major role.	Itemsin net other income occur sporadically with no clear link to macroeconomic factors.
Loans	Customer loans generate interest income over the life of the transac tion. Up­front fees on new loans are treated asinterest income. 1 2 4	SEB participatesin, or leads,syndi cations of loansleading to net fee and commission income or expenses. 4
instruments Debt	SEB maintains an inventory of debt instruments – interest­bearing securities and bonds – for customer trades and liquidity management. They accrue interest over life. 6 10 18 1) 3 5		SEB holds debt instrumentsfor customer trading and liquidity management. The customer trading activity as well asthe market value of the inventory affect net financial income. 6 18 1)	Salesfrom the bank'sinventory of debt instruments held for liquidity management or investment affect thisitem. 3 5 10
Instruments Equity		Brokerage fees occur in equity trading. 22	SEB holds equity instrumentsfor customer trading and is a counter part in equity swaps. The customer trading, the market value and divi 7 19 1) dends affect thisitem.	Salesfrom the bank's equity hold ings and dividends affect the item. 11
Derivatives	Interest rate derivativesthat are used by SEB to reduce volatility in the result (hedge) accrue interest over life. 8 20	In certain cases, SEB charges and submitsfees when trading in derivatives. 8 20	SEB is a counterparty for customers wishing to manage risk (for instance foreign exchange and interest rate risk) using derivative instruments. Both customer trades and the market value of the holdings affect financial income. 8 20	The market value of derivativesthat SEB usesfor hedging. 8 20
and borrowings Deposits	Customer deposits generate interest expense. 12 13 14	Certain bank accounts generate fee income. 14
and savings Insurance		SEB providessavingsin unit­linked insurance, deposit insurance and similar products where the customer bearsthe risk. Invested volumes generate fee income. In addition, distribution generatesfee expenses. 9 15 22	SEB providessavingsin traditional pension with a certain guaranteed return,sickness and health insur ance and related services. The item depends on the invested volumes as well asthe outcome of insurance claims. 9 15
and debt securities subordinated Issued	SEB's operations are funded by long and short­term interest­bearing securities, all of which generate interest expense. 16 17 21	Index­linked bonds generating fee income are provided for the purpose of customer investment. 16 17	The market value including the credit risk in SEB'sissued index linked bonds affectsthe item. 17	Early redemption by SEB of its debt instruments affectsthisitem. 16 17 21
volumes sheet the outside balance Business		Various customerservices are provided which generate both fee and commission income and expense. Most fees are fixed and transaction based;some are market value based. 22

1) Short position – a negative itemin the inventory held forcustomer trades.

Divisions and businesssupport

Large Corporates & Financial Institutions

Corporate &

Private

Baltic

Life

Business

&

Investment

Customers

Co-heads: Joachim Alpen and Johan Torgeby

Co-heads:

Head: Riho Unt

Peter Dahlgren 2)

Mats Torstendahl and Christoffer Malmer

Head:

Head: Martin Johansson

Division Business offering 2016 events

The division serves 2,300 large corporate customers and 700 financial institutions and offers advisory-driven commercial and investment banking services in the Nordic region, Germany and through an extensive interna tional presence. Customer-driven trading, liquidity management, financing, capital markets, custody services and asset management sales are part of the offering.

The division serves some 1.7 million private customers and 216,000 companies in Sweden with full banking and advisory services through mobile, online and telephone services as well as from 137 branch offices. The division issues cards in the Nordic countries under SEB's own brand as well as for Eurocard and Diners Club, and offers leading private banking services to high net worth individuals.

The division provides bank products and advisory services in Estonia, Latvia and Lithuania to around 1.8 million private customers and 138,000 companies through mobile solutions, online as well as from the network of 82 branch offices. SEB's Baltic real estate holding companies are also part of the division.

ings and advisory services, forinstance a remote advisory service with an end-to-end process and digital signing, new payment options for SEB credit card in Estonia, launch of contactless cards in Latvia and Lithuania and smart mobile point-of-sale in Lithuania.

SEB continued to invest in better customer offer-

Large corporate customers were more active towards the end of the year as business sentiment grew more positive. SEB's new custody platform,Investor World, was launched providing institutional clients with state-of-the-art functionality. SEB initiated a partnership with the fintech company Ripple to enable customers to make real-time payments. A pilot for payments between the SEB branches in New

The small and medium-sized customers' credit demand increased. SEB's digital offering to corporate customers was top-ranked by Finansbarometern. The development of a digital offering to private customers was accelerated. SEB entered into a partnership with the fintech company Tink, launched a youth app to customers below the age of 18 and a digital mortgage calculator. SEB also launched a new branch

York and Stockholm is underway.

office concept.

The division provides insurance and pension solutions for corporations, private individuals and institutions primarily in the Nordic and Baltic regions. With the return of traditional life insurance in Sweden the offer covers a broad range of products. The responsibility of the division includes the management of funds and otherinvestment portfolios, where one important aspect is SEB's development in the sustainability area.

Efforts to improve the digital services continued and SEB can now offer a completely digitalised customer meeting. Ownership dialogues out side the Nordic countries strengthened. SEB was top-ranked forits equity and fixed income management in PRI's (Principles for Responsible Investments) annualrating of sustainable investments.

Unit Function

Business Support is a cross-divisional function with the responsibility to support business opera tions with proactive IT development and execution of back-office services as well as to ensure stable daily operations of the IT systems – all carried out with focus on cost efficiency.

The IT development is done step-by-step, taking small initiatives and using agile ways of working.In this way fast delivery and outcome in line with customer and business needs are ensured. Reliable daily services are provided to SEB's customers, by ensuring that digital channels are

running without disruption and payments are processed correctly.

1) Appointed as President and CEO as of 29March 2017. 2) Left SEB in spring 2017.

Operating income and profit (SEK bn) Comments on the result Divisions'relative share of:

Large Corporates & Financial Institutions

Corporate & Private Customers

IT investments and automation Comments

Operating profit decreased to SEK 9,133m. Net interest income increased after measures taken to counteract the negative interestrates. Net fee and commission income was lower mainly as a conse quence of fewer event-driven transactions and a limitation of stock lending activities. Net financial income increased due to higher demand forrisk management products. Operating expenses, excluding items affecting comparability decreased (see box on p. 30).

Operating profit increased marginally to SEK 7,348m. Customers were fairly optimistic. Net interest income increased after measures were taken to counteract the negative interest rates. Net fee and commission income decreased partly due to the regulatory cap on interchange fees on cards and net financial income was down. Operating expenses increased marginally while credit losses decreased.

Operating profit increased to SEK 1,451m. Net interest income grew due to increased volumes. Net fee and commission income was higher as a result of increased customer activity while net financial income decreased. Operating expenses increased partly due to an item affecting comparability (see box on p. 30) and credit losses were down. The Baltic economic growth was stable.

Operating profit increased to SEK 3,157m. Net fee and commission income was lowerin a negative stock market development. Net financial income increased due to betterinvestmentresults and improved risk result in the Swedish and Danish life insurance business. Operating expenses decreased.

Cost efficient transactions and improved customer experiences are being achieved by continuous organisation efficiencies and through the use of new technology.

An increasing share of the bank's transactions are being automated. SEB makes substantial investments each yearin IT development.

Geographic markets

Market Activities 2016

Sweden Annika Falkengren President and CEO Universal banking

Estonia Allan Parik Countrymanager Universal banking

Latvia Ieva Tetere Countrymanager Universal banking

Lithuania Raimondas Kvedaras Countrymanager Universal banking

Norway WilliamPaus Countrymanager Corporate banking

Finland MarcusNystén Countrymanager Corporate banking

Germany JohanAndersson Countrymanager Corporate banking

Other markets The international

network Corporate banking The market was characterised by the negative interestrate environ ment and subdued large corporate customer activity. Small and medium-sized companies were more active and the willingness to invest in infrastructure and residential homes increased. SEB focused on customer experience and improved digital solutions for corporate and private customers.

SEB experienced increased household demand for mortgages and a steady inflow of new customers. The corporate customers were cautious due to the macro environment. SEB focused on improving digital solutions as well as advice to small and medium-sized companies. SEB is the second largest bank in Estonia.

Household sentiment was positive while business' and entrepreneurs' demand forinvestments was modest.In SEB, the year was a turning point after several years of decline as regards loan volumes. A new core banking platform with new customerinterfaces was developed. SEB is the second largest bank in Latvia.

Despite the uncertain market environment, customer activity and business volumes grew. SEB focused on strengthening the digital presence, providing accessibility of financial services and customer solutions via different sales channels. SEB is the biggest bank in Lithuania.

Improved business climate led to an increased demand for financing and several corporate transactions were closed during the year. SEB was ranked number 2 forlarge corporates and number 3 for finan cial institutions in Prospera's customer survey.Investment management attracted new foreign inflows of funds.

Customer activity was high which lead to an all-time high result. SEB was active in several largertransactions mainly within infra structure and renewable energy. Activity within the bond market was high and SEB's market position strengthened. SEB was ranked number 2 forlarge corporates and number 3 for financial institu tions in Prospera's customer survey.

In the subdued macroeconomic environment, the market was characterised by risk aversion but several event-driven transactions among large corporate customers were made, and especially advisory and financing services were sought after by local customers.

Excess liquidity, negative policy rates and a strong economy have made the heterogeneous German banking market even more competitive in 2016. SEB is well positioned as an internationally oriented corporate bank and the conversion from subsidiary to branch will enhance simplicity and improve profitability.

Political uncertainty and economic slowdown in many international markets meant somewhat lower activity. SEB supported customers' international activities and offered international institutions access to the Nordic capital markets. The product offering strengthened and the number of customers grew.

1) Excluding items affecting comparability 2) Excluding centralised treasury operations

Marketshares and customer contacts

Market shares
			Total market,
Per cent	2016	2015	SEK bn, 2016
Lending to the public
Sweden	14.4	14.3	5,589
lending to households	13.2	13.7	3,516
lending to companies	16.4	15.4	2,072
Estonia 1)	23.4	23.9	153
Latvia1)	16.7	16.8	147
Lithuania1)	29.3	29.3	174
Deposits from the public
Sweden	15.7	15.6	2,574
depositsfrom households	11.6	11.4	1,654
depositsfrom companies	23.6	23.4	920
Estonia1)	22.9	21.1	144
Latvia1)	10.2	9.1	214
Lithuania1)	27.9	28.1	167
Equity trading
Stockholm	6.0	7.0	7,720
Oslo	3.1	3.7	2,223
Helsinki	2.5	3.5	2,297
Copenhagen	2.9	4.2	3,327
SEK-denominated
corporate bonds	16.7	18.9	97
Mutual funds, total volumes 2)
Sweden	11.9	12.2	3,568
Finland	3.0	3.7	1,014
Unit-linked insurance, premium income
Sweden	16.8	16.4	60
Life insurance, premium income
Sweden	8.7	7.7	191
Denmark	N/A	10.0

1) Excl. financial institutions & leasing. Estonia and Latvia per November 2016, Lithuania per September 2016.

2) Excluding third-partyfunds.

Sources: Statistics Sweden, Bank of Estonia, Financial and Capital Market Commission in Latvia, Association of Lithuanian Banks, Swedish Insurance Federation, Nasdaq etc.

Total household savings – savings accounts,mutual funds, traditional and unit-linked insurance and bonds but excluding directly owned equities – in Sweden amounted to SEK 7,649bn as of 30 September 2016.

Customer contacts

	2016	2015	2014
Number ofsyndicated loansin Nordic countries	73	65	77
Number of equity capital market transactionsin the Nordic region	24	19	19
Number of Nordic mergers and acquisitions	24	17	32
International private banking branches	12	12	13

	2016	2015	2014
Number of Swish payments via SEB's app (million)	18	8	2
Online bank, number of visits(million)	174	158	173
Mobile bank, number ofsessions(million)	216	165	95
Telephone bank, number of calls(million)	4.4	4.3	4.2
Number of life insurance intermediaries and brokers	2,500	2,550	2,600
Number of branch offices	219	252	277
Number of ATMs 1)	2,757	2,640	3,034

1) whereof1,900 jointly owned bymajor Nordic banks

Risk, liquidity and capital management

SEB safeguards a strong financial position so that customers' and other stakeholders' requirements can be met. Risk, liquidity and capital management involves assuming risk to create customer value while maintaining resilience in all potential circumstances.

Holistic management

The areas of performance and pricing as well as management of risk, capital and liquidity are closely interconnected and form an integral part of the bank's strategic and long-term financial and operational business plans.

Creating sustainable value is directly dependent upon the bank's ability to assess, monitor and price risks while maintaining suffi cient capital and liquidity to meet unforeseen events. To maximise customer and shareholder value, the financial consequences of business decisions are evaluated and SEB proactively manages opera tions based on three main aspects:

• 1. growth, mix and risk of business volumes
• 1. capital and liquidity requirements driven by the business
• 1. profitability.

The Board of Directors decides the bank's long-term strategic direc tion, financial targets and overallrisk tolerance. Targets are set and reviewed on a regular basis to manage and optimise resources.In its overarching risk tolerance statements, the Board conveys the direc tion and level ofrisk, funding structure, necessary liquidity buffers and capital targets.

In its position as a leading universal bank, SEB's main risk is creditrisk, which arises in lending and commitments to customers. Other materialrisks include liquidity, market, operational (includ ing IT and information security), business, pension and insurance

Risk tolerance statements in brief

SEB shall:

• • maintain satisfactory capital strength in orderto sustain aggregated risks, and guarantee the bank's long-term survival and its position as a financial counterparty, while operating safely within regulatory requirements and meeting rating targets.
• • have a robust credit culture based on long-term relation ships, knowledge about the customers and focus on their repayment ability. This will lead to a high quality credit portfolio.
• • have a soundly structured liquidity position, a balanced wholesale funding dependence and sufficient liquid reserves to meet potential net outflows in a stressed scenario.
• • strive to mitigate operational risks in all business activities and maintain the bank's reputation.
• • achieve low earnings volatility by generating revenues based on customer-driven business.

risk.In orderto coverthese risks SEB holds a capital buffer and liquidity reserves in case of unforeseen events.

SEB's President is responsible for optimising the risk profile within the risk tolerance levels and capital adequacy targets set by the Board as well as the overall management of SEB's risks. SEB strives to continuously identify and manage potential future risks through stress tests and scenario analysis in order to secure financial stability.

Risk review 2016

In 2016, SEB continued to demonstrate its resilience in a protracted market environment with stable credit volume growth, continued high asset quality and low credit losses, a stable liquidity position and robust capital adequacy.

SEB's capital strength and asset quality was confirmed in the comprehensive stress test conducted by the European Banking Authority (EBA) in 2016.In the EBA adverse stress scenario, SEB had one of the lowest credit loss levels and was one of two banks in Sweden thatremained above regulatory capitalrequirements. The IMF, the Swedish FSA and the Swedish Central Bank also performed stress tests during the year which confirmed the strength of the Swedish banking system.

The financial markets were volatile during the year, driven by the sustained uncertainty around global economic growth prospects and the geopolitical development, low oil prices and continued low interestrate policies and quantitative easing actions by central banks. The unexpected outcomes of the Brexitreferendum and the US presidential election created short-term turmoil in the markets and the long-term consequences remain unclear.Interestrates were furtherlowered, and the challenges posed by negative interestrates remained in several markets where SEB operates.

Stable credit portfolio growth

Despite the uncertainty, credit demand was stable in most of SEB's key markets. SEB's credit portfolio grew by 7 per cent to SEK 2,143bn (2,065), driven by growth in the corporate and property management sectors. The corporate portfolio amounted to SEK 1,029bn (936) at year-end and consists mainly of large Nordic and German customers in a wide range of industries, the largest being manufacturing. This is 48 per cent of the total credit portfolio, which makes SEB unique among its peers. SEB's exposure to small and medium-sized companies is mainly in Sweden and amounts to 11 per cent of the bank's corporate portfolio. Exposure to this segment was unchanged during the year.

Continued investments in residential housing in Sweden contributed to SEB's credit volume growth in the multi-family housing

Credit portfolio, development by sector SEK bn

sector and housing associations, which constitutes almost half of SEB's property management portfolio of SEK 348bn (307). The remainder of the portfolio is commercialreal estate companies, consisting mainly of strong customers with sound financing struc tures in the Nordic region and Germany.

The Baltic economies developed favourably as a result of growing exports, investments and private consumption. SEB's Baltic portfolio grew forthe second consecutive year as the activity among corporate and private customers continued to increase, particularly in Estonia and Lithuania. At year-end, the portfolio amounted to SEK 148bn (134).

Swedish household mortgage lending remains in focus

Home prices in Sweden continued to rise in 2016, driven by low inter estrates and an imbalance between supply and demand. On 1 June 2016,the Swedish governmentimplemented a new amortisation requirementfor new household mortgage loans with a loan-to value (LTV) above 50 per centin an effortto slow the rapidly increas ing household debt. This had a slightly decelerating effect on the growth rate of home prices and lending during the second half ofthe year. SEB's Swedish household mortgage lending portfoliogrew by 3 per centin 2016, which was below the market growth of 8 per cent.

SEB maintains a long-term perspective also in its household mortgage lending, with particularfocus on repayment ability and amortisation requirement. This includes a threshold for debt-to income of 500 per cent and a home affordability analysis with significantly higherinterestrates.In 2016, 98 per cent of all new loans with an LTV above 50 per cent contained an amortisation plan.

The portfolio, which amounts to SEK 461bn (443), is of high asset quality with good repayment ability among customers, low histori cal credit losses and low LTV ratios. Property values are continu ously assessed and monitored.

Increased focus on climate-related risks

Climate changes are increasingly impacting the state of the world, and there is a growing need for better understanding and transparency of climate-related risks in the financial sector. This is not only about internalrisk management, but also increas ingly required by customers and regulators.

One consequence of taking actions to reduce climate risks is the so-called carbon risk, orthe risk of "stranded" assets, in the transition to net zero greenhouse gas emissions.In 2016, SEB decided to reduce the coal exposure in its managed funds by taking a stricter approach to investing in companies involved in thermal coal extraction and by increasing its active ownership role through dialogues with energy-related companies. For several years, SEB applies a number of sector policies that limit lending to companies in certain sectors, such as fossil fuels, mining and metals. SEB does not provide new financing of coal mining and coal power plants.

High asset quality

Asset quality forthe aggregate credit portfolio remained high and the credit loss level continued to be low at 7 basis points (6). Nonperforming loans amounted to SEK 7.6bn (8), corresponding to 0.5 per cent of total lending. Non-performing loans in the Baltic portfolio continued to decline and amounted to SEK 2.8bn (3.8), or 2.3 per cent of total lending, at year-end.

Although oil prices recovered somewhat during the year, the struc tural challenges remain in the oil, gas and offshore industries. The elevated risk in the sector has resulted in some risk class deteriora tion of SEB's related portfolio and the bank works closely with its customers in the sector. SEB is mainly exposed to larger customers operating in the North Sea region.

Low market risk in volatile markets

SEB's marketrisk level was relatively low throughout the year, despite high customer activity and volatility in the financial markets. The risk in the customer-driven trading is measured as Value-at-Risk (VaR) which on average amounted to SEK112m (117) in 2016. This means that, on average, the bank is not expected to lose more than this amount during a period of ten trading days, with 99 per cent probability. The main risk drivers were significantly lower Swedish and euro interestrates and volatile credit spreads. The marketrisk in the banking book decreased gradually during the year, mainly due to improved hedging of the mortgage portfolio.

Swedish traditional occupational pension re-opened

SEB's life insurance business consists mainly of unit-linked products, where the marketrisk remains with the customer.In 2016, unit-linked products represented 69 per cent of total premium income. SEB's traditional occupational pension policies in Sweden, which have been closed for new sales since 2007, were re-opened during the year with good results. SEB also offers traditional life insurance business in Denmark.In the traditional life insurance portfolios, buffers consisting of assets less guaranteed benefits serve as protection against insurance risk for SEB. The buffers,

Three lines of defence againstrisk

See p. 58 for a description of the Chief Risk Officer and the risk,compliance and internal audit functions and organisation.

which are calculated for each investment portfolio,remained at satisfactory levels throughout the year.

Solvency II, the new regulatory framework forinsurance companies in the EU, took effect from 1 January 2016. The aim is to create a harmonised regulatory framework for governance, internal control and capitalrequirements across Europe.

Low losses from operational incidents

Operationalrisks are inherent in all businesses. SEB has an opera tionalrisk management framework and strives to continuously improve governance and risk practices to mitigate existing and emerging risks.Important processes and tools include a New Product Approval Process, business continuity management,risk and control self-assessments forthe purpose of identifying and reducing large risks as well as system authority management. Regular employee training and education is provided in key areas such as information security, fraud prevention, anti-money laundering and know-your-customer procedures.

SEB also has a formalised whistleblower procedure that encourages employees to report unethical orillegal conduct. This struc tured approach has resulted in a decreased number of incidents and operational losses as well as increased risk awareness among employees in recent years.

In 2016, the methodology forrisk and control self-assessment was updated with particularfocus on significant processes, legal, IT and rogue trading risks. Net losses from operational incidents amounted to SEK 263m (291). Benchmarking against members of the Operational Risk Data eXchange Association (ORX) shows that SEB's operational losses are below peer average.

A strong risk culture based on business acumen and professional conduct

In an industry built on trust, SEB's reputation and appropriate conduct are essential for sustainable, long-term customer service and satisfaction as well as for profitability.Internationally,regulators have taken extensive actions to penalise banks' misconduct, particularly in relation to violating customers' interests and consumer protection. SEB's reputation is built on strong customer relationships where the customers' interests always come first. From a risk management perspective, SEB's Code of Conduct and core values, mandatory training and discussion workshops on ethical and value-related dilemmas aim to strengthen awareness of the importance of conduct.

IT risk and cyber security management critical to digitalisation agenda

As a growing amount of banking services are offered and conducted online, system availability and cybersecurity are criticalfor continued customertrust. SEB provides services 24/7 through its internet bank,telephone bank and mobile applications, and is committed to providing the highest possible accessibility.

Cyberthreats continue to evolve as attacks become more technically sophisticated and the attack surface expands with the progress of digitalisation. SEB's approach to meeting these threats is to prioritise technical protection and also to raise awareness among employees and customers. Further,the regulatory framework for personal data protection and openness of sharing information are becoming stricter. SEB is closely following developments and is continuously adjusting to existing and upcoming requirements.In 2016, SEB's governance frameworks and controls forinformation and cyber security were further strengthened and integrated into the risk management structure.

A sound liquidity and funding strategy

Access to liquidity and funding markets is vital in all circumstances. SEB's liquidity and funding strategy is managed from three perspectives: (1) by optimising the liquidity structure of the balance sheet to ensure that less liquid assets are matched with stable funding, (2) by monitoring wholesale funding dependence, and (3) by ensuring that the bank has sufficient liquidity to withstand a severely stressed scenario.

In 2016, SEB saw continued strong market demand forits new issues of short- and long-term funding. SEB's liquidity reserve, as defined by the Swedish Bankers' Association, amounted to SEK 427bn (352) at year-end. The size and composition of the liquidity reserve is regularly analysed and assessed against estimated needs.

Update on coming regulatory requirements affecting capital

Severalregulatory initiatives are currently under consideration that could have an impact on the composition and level of SEB's

capital base going forward. 1 As part of the EU Commission's proposal in November 2016 to amend capitalrules, a minimum requirement forthe leverage ratio (a non risk-based ratio between Tier 1 capital and assets) was set to 3 per cent to be applied from 2021. SEB's leverage ratio was 5.1 per cent at year-end (4.9). The Commission also included a proposal for adoption of the framework for Fundamental Review of the Trading Book, covering measuring and reporting marketrisk, to be applied from 2021.

2 A new accounting standard,IFRS 9, will be imple mented as of 1 January 2018, in which loan loss provi sions will move from an 'incurred loss' concept to 'expected loss'. SEB's assessment is that the expected credit loss model is likely to increase loan loss provi sions and decrease equity at transition and that volatil ity in the credit loss line item in the income statement will increase with the new rules. The EU Commission has proposed that the capital effect of the incremental provisions underIFRS 9 should be phased in over a five-

year period. 3 The EU's Bank Recovery and Resolution directive was implemented into Swedish law in February 2016.It sets the crisis management procedure forfailing banks in terms of capital, bailing-in or selling assets, and using resolution funds.It also covers the bail-in tool and introduces a minimum requirements for own fund and eligible liabilities (MREL). A proposed Swedish MREL framework was presented in April 2016, by the Swedish National Debt Office (Riksgälden), which included a potential future requirement for subordination of debt that may be bailed-in. SEB is actively participating in

discussions on this issue. 4 To address the issue of variability ofrisk exposure amounts among banks, the Basel Committee has proposed to introduce capital floors and greaterrestric tions on creditrisk modelling parameters and assumptions as well as revisions to the standardised approach for operationalrisk. SEB is actively participating in discussions on this issue and promotes the internal ratings-based models.

Development ofrisk exposure amount (REA) SEK bn

The Core Gap Ratio, which is SEB's internal measure of how well long-term lending is matched by long-term funding, was 114 per cent (111) , which is well within the bank's risk tolerance of a sound liquidity structure. SEB manages its liquidity position in line with the upcoming regulatory Net Stable Funding Ratio (NSFR) requirement of 100 per cent, which is now anticipated to be effective as of 2021.

The Swedish FSA's Liquidity Coverage Ratio (LCR) measures to what extent SEB's liquid assets are sufficient to cover short-term cash outflows in a stressed scenario. The ratio amounted to 168 per cent in aggregate (128), and 305 (230) and 272 (226) for US dollars and euros,respectively. This is in compliance with the Swedish FSA's minimum requirement of 100 per cent.

Capital adequacy exceeds requirements

Despite strong risk management and risk culture, unexpected losses can occurin banking. SEB's capital management shall ensure thatthe bank has sufficient capitalto absorb such unexpected losses.The Board of Directors sets SEB's capitaltargettaking into consideration financial stability requirements by the regulators, debtinvestors, business counterparties,the internal view of capital need and a debt rating ambition.This needs to be balanced with the shareholders' required rate ofreturn.

The Swedish FSA's requirement forthe Common Equity Tier 1 (CET1) capitalratio consists of Pillar 1, which is a general minimum requirement for all institutions, and Pillar 2, which is a specific requirement based on an individual assessment of SEB's risk, liquidity and capital position made in the Supervisory Review and Evaluation Process. SEB estimates the Swedish FSA's CET1 capitalrequire ment to 16.9 per cent as of year-end 2016.

The Board's capital target is to maintain a CET1 capital ratio of around 150 basis points above the Swedish FSA's requirement in order to maintain a buffer against potential variability in the capital position deriving from, in particular, changes in foreign exchange rates and interest rate risk in the defined pension obligations. This means that the CET1 capital ratio target currently is 18.4 per cent.

The CET 1 capital base increased to SEK114.4bn (107.5) while the risk exposure amount (REA) increased to SEK610bn (571), mainly due to increased credit volumes and currency effects.

In 2016, the Swedish FSA introduced certain restrictions and floors to the internal models for corporations, which are expected to increase the risk weights once they are finalised. These floors have been considered in the estimate of SEB's capitalrequirement. The capitalrequirements for Swedish banks are currently significantly higherthan EU minimum levels and the Swedish banks are well capitalised compared with banks elsewhere in Europe, both from a risk-weighted and non risk-weighted perspective.

At year-end SEB's CET1 capitalratio amounted to 18.8 percent (18.8), which is well in line with regulatory requirements and the Board's target.

SEB'srisk profile in short

Risk type	The risk is identified, measured and managed	The risk is controlled with internal limits	The risk issubject to regulatory capital requirements	Risk description
Credit risk				SEB has a well­balanced credit portfolio, with main focus on corporations and the
Risk of loss due to the failure of an obligor to fulfil its obligationstowards SEB. The definition comprisesloans, counterparty risk, country risk and settlement risk. Concentration risk is also considered.				Nordic region. Over the past ten years, which includesthe latest financial crisis, SEB's credit losses have averaged 0.18 per cent of total lending. All lending shall be based on the customer's cash flow and repayment ability and the bank shall have good insight into the customers' business and financial position on an ongoing basis.
Market risk				Market risk arisesin the banking book when assets do not fully match the funding
Market risk isthe risk of lossesin on­ and off­balance sheet positions arising from adverse movementsin market prices. Market risk can arise from changes in interest rates, foreign exchange rates, creditspreads, commodity and equity prices, implied volatilities, inflation and market liquidity.				maturities and sourcessince customers demand various maturity dates and currencies. Market risk also arisesin the trading book as SEB facilitates customers' financial trans actions. In general, market risk tolerance in SEB islow. Thisis confirmed by the fact that there were only nine loss­making daysin 2016.
Liquidity risk				The primary sources of funding are customer deposits, which to a large extent are
Risk that SEB is unable to refinance its existing assets or is unable to meet demand for additional liquidity. It also entailsthe risk that the bank isforced to borrow at unfavourable rates or to sell assets at a lossin order to meet its payment commitments.				stable, and wholesale funding. SEB has a diversified funding base – short­ and long term programsin multiple capital marketsin multiple currencies – to ensure that payment obligations are met asthey fall due. Variousrisk management tools, including stresstests, ensure that liquid assets are sufficient.
Operational risk				Operational risks are an inherent part of all business. It is neither possible nor cost
Risk of lossresulting from inadequate or failed internal processes and systems, human errors or external events. Operational risk includeslegal and compli ance risks as well asIT and information security risks.				efficient to eliminate all operational risks. Therefore,smaller losses are a normal part of SEB's operations. SEB continuously worksto minimise operational losses and, in partic ular, to avoid larger lossincidents. Benchmarking against members of ORX showsthat SEB'slosslevel has historically been below the ORX average.
Insurance risk				SEB'sinsurance business consists mainly of unit­linked insurance, where the market risk
All risksrelated to SEB'sinsurance operations, mainly market risk, underwriting risk and operational risk. Underwriting risk pertainsto the risk of loss or of negative changesin the value of insurance liabilities(technical provisions) due to inadequate pricing and/or provisioning assumptions.				is borne by the customer. SEB also offerstraditional life insurance products with guaran teed returns as well assickness and health insurance solutions, where key risks are market risk and underwriting risk. Market risk arisesin the management of traditional investment assets and from the interest rate sensitivity of the liabilities. Market risk and underwriting risk are closely monitored and managed through traditional analysis of assets and liabilities as well as actuarial analysis.
Pension risk				In its defined benefit plans, SEB bearsthe risk of deviationsin projected plan payments
Risk of a mismatch between employee pension liabilities and designated assets. It isrelated in nature to underwriting risk and contains an element of market risk.				due to changesin expected lifetime and future salary increases. SEB also bearsthe market risk from the plan'sinvestments and the discount rate for the liabilities. Above all, the defined benefit plans are mainly sensitive to interest rate changes and equity prices. These risks are mitigated by prudent risk management procedures. The Swedish defined benefit plan is closed for new participants.
Business risk				Business,strategic and reputational risks are inherent in doing business. Digitalisation
Risk of lower revenues due to reduced volumes, price pressure or competition. The definition includes venture decision risk, i.e., risksrelated to large under takingssuch as acquisitions, large IT projects, reorganisations, outsourcing, etc. Related risksinclude strategic and reputational risks.				in the banking industry is accelerating, and new types of competitors are emerging. The extensive new regulatory framework for banking and financial institutionsissignifi cantly impacting the industry. Sustainability plays an increasingly important part of a company'sreputation. SEB continuously worksto mitigate business,strategic and repu tational risksin many ways, for example, with strategic businessreviews, proactive cost management, an agile step­by­step IT development approach, an ambitioussustain ability agenda and an active dialogue on regulatory matters.

Read more aboutrisk, liquidity and capital management and risk development in notes 17, 19 and 20. More detailed information is available in the Capital Adequacy and Risk Management Report on www.sebgroup.com.

Regulatory requirements

The streamof new regulatory requirements continues, although the volume of new EUlegislation has subsided somewhat. While the overall impact ofregulations on banks' activities is large,the overall effect on the real economy has not yet been assessed.

Main areas and aims of regulation

Ensure that the financial system can withstand economic shocks and disturbances and prevent that the failure of one financial institution leadsto a systemic collapse.

Promote efficient price setting and execution in financial markets, and prevent market manipulation through enhanced transparency and improved risk mitigation.

Ensure fair treatment of customers and increase their financial literacy through relevant and correct information. This entailsrequirementsin terms of marketing and packaging of financialservices and investment advice services.

Implementation of new regulations

SEB continuously monitors regulatory developments at the global, European and national levels. This work is conducted through own activities and through contacts with Swedish and foreign regulators and legislators as well as via Swedish and international industry organisations, such as the Swedish Bankers' Association,

the Swedish Securities Dealers Association and the Institute ofInternational Finance.

In 2016, the bank worked with more than 20 majorregulatory projects at an estimated cost of more than SEK 300m.In addition, the bank implements technicalrequire ments and guidelines from the three European supervisory authorities for banking, insurance and securities markets.

New regulatory requirements being implemented 2016–2018

2016 2017 2018 Large Medium Financial stability Impact on SEB operations Market conduct Consumer protection MCD –Mortgage Credit IDD – Insurance Distribution PAD – Payment Accounts SEPA – Single Euro Payments Area SFTR – Securities Financing Transactions VINN and KRITA – Reporting of loans and securities BCBS 239/FFFS 2014:1 Risk management IFRS 9 – Accounting for financial instruments IFRS 15 – Revenue Recognition Additional capital requirements to finalise the Basel III package IFRS 16 – Accounting for leasing GDPR – General Data Protection PSD 2 – Payment Services MiFID 2 /MiFIR – Markets in Financial Instruments CSDR – Central Securities Depositories AML 4 – Anti-Money Laundering PRIIPS – Packaged Retail and Insurance-Based Investment Products

Three important areas

More than 20 major regulatory projects were in progress at SEB during the year, aimed at making the bank compliant with new rules and regulations. Three important areas are described here.

1 Financial stability

Capital requirements

In 2016 the Basel Committee worked intensively to reach an agreement on how capitalrequire ments for banks'risks should be revised in order to take into account issues identified during the financial crisis. The Committee works to establish greatertransparency and harmonisation. Increased harmonisation howeverrestricts banks' use of internal models in the calculation of risk-weighted assets and would therefore lead to less differentiation in terms of banks' cost for providing loans with high risk compared with

loans with low risk. The challenge is to find a reasonable balance which does not stimulate improperrisk-taking orincorrect pricing ofrisks.

The regulations under discussion also address the final design of the leverage ratio and extra capitalrequirements for systemically important institutions.

SEB is well positioned with a strong capital adequacy. However, it is important that Swedish banks operate underthe same conditions as their European competitors.

2 Market conduct

Counteract money laundering and financing of terrorism

The purpose of the EU's Fourth Money Launder ing Directive – AML 4– is to update existing rules to conform to international standards as deter mined by the Financial Action Task Force. The directive sets increased requirements on banks to be knowledgeable about their customers and to manage risks linked to politically exposed persons (PEPs). One important change is the requirement for a risk-based approach to counter act money laundering and financing of terrorism.

SEB is implementing AML 4 in three work streams. The first aims at increasing the bank's knowledge of its customers, such as who the majority shareholders in a company are.

3 Consumer protection

Mortgage lending

A household mortgage is a major component of many people's personal finances. The function and stability ofthe mortgage marketis also impor tant to the economy at large.

TheEU Mortgage Credit Directive aims to strengthen consumer protection and to create a more efficient and competitive mortgage market by setting higherrequirements for creditors. The ambition is to strengthen the position of consumers and reduce lock-in tendencies to one creditor. The new rules entail, among otherthings, clearerinfor mation to customers, greatertransparency on how interestrates are determined, and a buyers'

The second work stream entails improving SEB's risk assessment processes, with the aim to prevent money laundering and financing of terrorism more effectively. Finally, in the third stream inter nal control documents are revised.

The bank continuously screens transactions and behaviours.If a transaction raises suspicion about money laundering, SEB will launch an investigation.If suspicion remains, the bank will report it as a suspicious transaction to the financial intelligence unit of the Swedish police.In recent years, SEB has reported some 400 such cases per year.

remorse grace period when taking out a mortgage.

To meet the new requirements, a new frame work has been established for household mortgage advice, including a requirement that all SEB mortgage advisers have a special Swedsec licence. A more comprehensive fact sheet for customers has also been produced, providing clearinformation about the interest charged and how future interestrate changes would affect the amount that the customer pays. Also SEB's customers are offered time to reflect on a binding mortgage offer, allowing them to compare the offer with other banks.

Corporate governance

Report of the Directors Corporate Governance

Report of the Directors Corporate Governance

»The work of the Board during the year was shaped by the rapid technological and regulatory development in the financial sector. The opportunities and challenges they imply in relation to SEB's long-term vision were analysed and discussed. The Board carefully monitored and evaluated the subdued macroeconomic situation and the emerging geopoliticalrisks. Otherimportant issues were succession planning,IT security, code of conduct and sustainability. «

Marcus Wallenberg Chairman of the Board

To maintain the important societal function as a bank it is of paramount importance for SEB that all stakeholders have great confidence in the bank's operations. Proper business conduct and professionalism are crucial as is maintaining a sound risk culture.

The importance of corporate governance

Corporate governance isthe system through which companies are directed and controlled.

To maintain trust among customers, employees, shareholders and other stakeholders and prevent conflicts of interest,roles and responsibilities are clearly defined for shareholders, directors, management and other stakeholders.

SEB's work with corporate governance is focused on ensuring smooth and effective operations with high standards, sound risk management and internal control.

Rules and regulations

As a Swedish public limited liability financial institution with securities quoted on Nasdaq Stockholm, SEB is subject to numerous rules. The external framework for SEB's corporate governance includes the following rules and guidelines:

• the Companies Act
• the Annual Accounts Act
• the Nasdaq Stockholm Issuer Rules
• the Swedish Corporate Governance Code
• the Banking and Financing Business Act
• the rulesandguidelines issuedbytheSwedishFinancialSupervisory Authorityandotherauthorities.Seep.46.

In addition, SEB applies an internal framework, which among other things includes the Articles of Association, adopted by the General Meeting of Shareholders. Policies and instructions that have been drawn up to define the division ofresponsibility within the group are important tools forthe Board and the President and Chief Execu tive Officer (the President) in their governing and controlling roles. Such policies and instructions include, among others:

• the Rules of Procedure forthe Board and the Instructions forthe BoardCommittees
• the Instructions forthe President and the Group's Activities
• the Group's CreditInstruction and Risk Policy
• the Instruction for Handling of Conflicts ofInterest
• the Instruction for Procedures Against Money Laundering and Financing of Terrorism
• the Code of ConductAvailable on SEB's website
• the Remuneration Policy
• the Corporate Sustainability PolicyAvailable on SEB's website
• the Policies on Assessment of Suitability of Directors, members of the Group Executive Committee (GEC) and other key function holders.

SEB's ethical and sustainability endeavours are an integral part of the business, and the Board increasingly discusses these issues. SEB's Code of Conduct describes and lays out SEB's values, ethics and standards of business conduct and provides guidance on how to live by these values. Policies and guidelines for sustainability and various group-wide position statements and industry sector policies addressing environmental, social and governance issues are also of vital importance in this context.

The Corporate Governance Report has been prepared in accor dance with the Annual Accounts Act and the Swedish Corporate Governance Code (the Code). SEB strives to follow the Code where appropriate and has no deviations to report for 2016.More infor mation aboutcorporate governance at SEB is available on SEB's website.

Shareholders and general meetings of shareholders

The shareholders' influence is exercised at general meetings of shareholders by, among other things, electing members of the Board and the bank's auditor.

SEB has approximately 276,000 shareholders. Around 175,000 of them own less than 500 shares, while 146 hold more than 1,000,000 shares, accounting for 79 per cent of the capital and votes. SEB's share capital consists of two classes of shares – A shares and C shares. Each Class A share carries one vote and each Class C share carries one-tenth of a vote.SEB'slargestshareholders and the shareholderstructure as per 31 December 2016 are shown in the table and graph on p. 27.

The Annual General Meeting (AGM) of shareholders is held in Stockholm. All shareholders listed in the shareholderregister who have duly notified their attendance have the right to participate at the AGM and to vote forthe full number of their shares. Share holders who cannot attend may appoint a representative. The AGM is held in Swedish. The 2016 AGM was held on 22 March. A total of 1,223 persons,representing 1,748 shareholders, were in attendance at the AGM.The minutesfrom the AGM are available on SEB's website.

An electronic system fortelevoters, was used at the AGM. The main resolutions made at the AGM were:

• approval of the dividend of SEK 5.25 per share
• increase of the number of directors to 13
• re-election of all current eleven directors and election of two new directors
• re-election of Marcus Wallenberg as Chairman of the Board
• re-election of PricewaterhouseCoopers as auditor
• adoption of guidelines forremuneration forthe President and the other members of the GEC
• approval of two long-term equity programmes
• issuance of a mandate to the Board concerning the acquisition and sale of own shares for SEB's securities business, forthe longterm equity programmes and for capital management purposes
• issuance of a mandate to the Board to resolve on the issuance of convertibles.

Nomination Committee

The tasks of the Nomination Committee include developing proposalsfor the Chairman and directors of the Board as well asfor the auditor.

As the starting point forits work, the Nomination Committee is tasked with assessing the degree to which the Board meets the demands that will be placed on the Board as a result of the bank's operations, organisation and future direction. Among otherthings, the Board's size and composition is reviewed in terms of industry experience and expertise as well as diversity, for example gender, age and geographic origin. The Nomination Committee adheres to the Policy on Diversity and Assessment of Suitability of Directors, adopted by the Board. The Nomination Committee makes recom mendations regarding directors' fees, allocated among the board members, and fees for committee work. The Nomination Committee also proposes auditor and auditor's fee.

Pursuant to a decision by the AGM, the Nomination Committee is to be composed of the Chairman of the Board along with representatives of the bank's fourlargest shareholders that are interested in appointing a member. One of the independent directors shall be appointed as an additional member of the committee. The composi tion of the Nomination Committee meets the requirements laid out in the Code. The Nomination Committee has access to relevant information about SEB's operations and financial and strategic position provided by the Chairman of the Board and the additional

Nomination committee for the 2017 AGM

Member	Representing	Votes,% 31 Aug. 2016
Petra Hedengran, Chairman	Investor	20.8
Magnus Billing	Alecta	7.4
Lars Heikensten	Trygg­Stiftelsen	6.0
Lars­Åke Bokenberger	AMF	4.0
Marcus Wallenberg	SEB,Chairman of the Board
		38.2

Urban Jansson, additional member, appointed by the Board. Peder Hasslev represented AMF in the Nomination Committee between 12 September and 18 November 2016,when hewasreplaced by LarsÅke Bokenberger.

Swedbank Robur Fonder, which isthe bank'sfourth largestshareholder, has declined to appoint amember of the Nomination Committee.

Board of Directors

	Marcus Wallenberg	Urban Jansson	Jesper Ovesen	Johan H. Andresen
	Position Chairman since 2005	Deputy Chairman since 2013	Deputy Chairman since 2014	Director
	Committee l RCC l ACC l RemCo	l RCC	l RCC
Year elected 2002		1996	2004	2011
	Born 1956	1945	1957	1961
	Education B.Sc. (Foreign Service)	Higher bank degree (SEB)	B.Sc. (Econ.) and MBA	B.A. (Government and Policy Studies) and MBA
	Other assignments Chairman of Saab and FAM. Vice Chairman of Investor.Director of AstraZeneca Plc., Temasek Holdings Ltd and the Knut and Alice Wallenberg Foundation.	Chairman of EAB and 365 id.Director of Lindéngruppen.	Director of Sunrise Communication Group AG (Switzerland), Lundbeck A/S (Denmark) and ConvaTec Group Plc. (UK).	Owner and Chairman of Ferd AS. Chairman of Council on Ethicsfor the Government Pension Fund Global (Norway).Director of SWIX Sport AS (Norway),NMI–Norwegian Microfinance Initiative and Junior Achievement Europe.
	Background Citibank inNewYork,DeutscheBank in Germany,SGWarburgCo in London and Citicorp inHongKong,SEBandStora FeldmühleinGermany.ExecutiveVice President ofInvestor andCEOofInvestor. Several assignments asChairman and Director oflarge public companies.	SEB in various management positions. President and CEO of HNJ Intressenter (formersubsidiary of the Incentive Group). Executive Vice President of the Incentive Group. President and CEO of Ratos. Several assignments as Chairman and Director of large public companies.	Price Waterhouse. Vice President and later CEO of Baltica Bank A/S. Vice President and Head of Finance of Novo Nordisk A/S. CEO of Kirkbi Group. CFO of Den Danske Bank A/S, LEGO Holding A/S and TDC A/S. Several directorships.	International Paper Co. Partner of Ferd AS. CEO of Ferd AS.
Nationality Swedish		Swedish	Danish	Norwegian
Own and closely related persons'shareholdings	753,584 Class A shares and 720 Class C shares	56,840 Class A shares	25,000 Class A shares	100,000 Class A shares
Independent in relation to bank/majorshareholders	Yes/No	Yes/Yes	Yes/Yes	Yes/Yes
Attendance at Board/ Committee meetings	9 of 9 / 34 of 35	10 of 10 / 20 of 21	9 of 10 / 21 of 21	10 of 10
Remuneration, Board meetings, SEK	2,800,000	860,000	860,000	660,000
Remuneration,Committee meetings,SEK	720,000	510,000	325,000	–

l Chairman l Deputy Chairman l Member

member. The Nomination Committee also reviews the evaluations of the Board and the Chairman of the Board.

An important principle is that the size and composition of the Board should be such as to serve the bank in the best possible way.It is therefore crucial that the directors have requisite experience and competence about the financial and other sectors as well as interna tional experience and a contact network that meet the demands that arise from the bank's current position and future orientation. The Nomination Committee also discusses succession matters with particular emphasis on continuity and long-term perspective in ensuring the Board's competence and composition.

The Nomination Committee forthe 2017 AGM was appointed in the autumn of 2016. No special fee has been paid to the members of the Nomination Committee.The Nomination Committee's propo sals and a statementsupporting its nomination of directors are available on SEB's website.

Board of Directors

The Board has overall responsibility for the organisation, management and operations of the group.

TheBoard has adoptedRules ofProcedure thatregulate theBoard's role and ways of working as well as special instructions fortheBoard's committees.TheBoard has the following duties, among others:

• deciding on the nature, direction and strategy of the business as well as the framework and objectives of the business activities
• regularly following up and evaluating the operations in relation to the objectives and guidelines established by the Board
• ensuring that the business is organised in such a way that the accounting, treasury management and the risks inherent in the business as well as financial conditions in all otherrespects are controlled in a satisfactory mannerin accordance with external and internalrules
• deciding on major acquisitions and divestments as well as other majorinvestments

1) In 2017 Annika Falkengren resigned fromSEB. 2) In hercapacity as President.

• appointment or dismissal of the President, the Chief Risk Officer (CRO), the members of the GEC and the Head of Group Internal Audit, as well as setting the remuneration forthese individuals.

The Chairman of the Board organises and directs the work of the Board and ensures among otherthings that the directors on a regular basis receive information and education on changes in rules concerning the activities of SEB and on responsibilities of directors of a listed financial company. Educational and specialisation seminars are held each year, and new directors are offered seminars with information on and discussions about the group's various opera tions, including information about the control functions.

The directors are elected by the shareholders at the AGM for a one-yearterm. Since the 2016 AGM the Board has consisted of thirteen AGM-elected directors, without deputies, and of two directors and two deputies who serve as employee representatives. In order for a quorum to exist at a Board meeting, more than half of the directors must be present. The President is the only AGM-elected director employed by the bank. The Nomination Committee has assessed the directors' independence in relation to the bank and

the bank's management as well as in relation to shareholders controlling 10 per cent or more of the shares or votes and has found that the composition of the Board meets the requirements of the Code.

The work of the Board follows a yearly plan.In 2016, ten board meetings were held. The President attends all board meetings except those dealing with matters in which the President has an interest that may be in conflict with the interests of the bank, such as when the President's work is evaluated. Other members of management participate wheneverrequired.

Board of Directors(continued)

	Birgitta Kantola	Tomas Nicolin	Sven Nyman	Helena Saxon
Position Director		Director	Director	Director
Committee l ACC		l RCC		l ACC
Year elected 2010		2009	2013	2016
	Born 1948	1954	1959	1970
	Education LLM and Econ.Dr.H.C.	B.Sc. (Econ.) and M.Sc. (Management)	B.Sc. (Business and Econ.)	M.Sc. (Business and Econ.)
Other assignments Director of Nobina.		Chairman of Centre for Justice.Director of Nordstjernan,Nobel Foundation, Axel and Margaret Ax:son Johnson's Foundation, Research Institute of Industrial Economics and Sällskapet Vänner till Pauvres Honteux. Member of the Investment Committee of Niam Property Fund.	Chairman of RAM Rational Asset Management.Director of RAM ONE, Consilio International,Nobel Foundation's Investment Committee, Stockholm School of Economics, Stockholm School of Economics Association and of Axel and Margaret Ax:son Johnson's Foundation.	CFO at Investor.Director of Swedish Orphan Biovitrum.
	Background Broad experience in banking and finance, e.g .Nordic Investment Bank (Executive Vice President and Head of Finance). Vice President and CFO of International Finance Corporation (World Bank Group) (USA).Deputy General Manager of Ålandsbanken (Finland).	Broad experience in the financialsector as CEO of Alecta, Third National Swedish Pension Fund and E.Öhman J:or Fondkommission as well as a leading position in Handelsbanken. Several directorships.	Broad experience from the financial business field. Managerial positions within Investor. CEO and founder of Lancelot Asset Management and Arbitech (USA). Several directorships.	Financial analyst at Goldman Sachs and Investor, CFO at Syncron International and Hallvarsson and Halvarsson. Investment Manager at Investor.
Nationality Finnish		Swedish	Swedish	Swedish
Own and closely related persons'shareholdings	33,000 Class A shares	66,000 Class A shares	10,440 Class A shares and 10,200 Class C shares	5,000 Class A shares
Independent in relation to bank/majorshareholders	Yes/Yes	Yes/Yes	Yes/Yes	Yes/No
Attendance at Board/ Committee meetings	10 of 10 / 7 of 7	10 of 10 / 21 of 21	10 of 10 / 3 of 3	7 of 7 / 5 of 6
Remuneration, Board meetings, SEK	660,000	660,000	660,000	660,000
Remuneration,Committee meetings,SEK	387,500	325,000	–	200,000

l Chairman l Deputy Chairman l Member

Directors' fees SEB's ²⁰¹⁶ AGM set total fees of SEK 13,710,000 forthe members of the Board and decided how these fees are to be distributed among the Board and its committees. Directors' fees are paid on a running basis during the mandate period.

Following a recommendation by the Nomination Committee, the Board has adopted a policy thatrecommends that board members use 25 per cent of the director's fee to purchase and hold SEB shares up to an amount corresponding to one year's fee.

Board committees

The Board's overallresponsibility cannot be delegated. However, the Board has established committees to handle certain defined issues and to prepare such issues for decision by the Board. At present, there are three committees: the Risk and Capital Committee (RCC), the Audit and Compliance Committee (ACC), and the Remuneration and Human Resources Committee (RemCo). These committees report to the Board on a regular basis. An important principle is that as many board members as possible shall participate in committee work, also as chairs. The Chairman of the Board serves as deputy chair of the three committees. Neitherthe Presi dent nor any other officer of the bank is a member of the committees.

Sara Öhrvall	Anna-Karin Glimström	Håkan Westerberg	Annika Isenborg	Charlotta Lindholm
Director	Director, appointed by the employees.	Director, appointed by the employees.	Deputy Director, appointed by the employees.	Deputy Director, appointed by the employees.
l RemCo
2016	2016	1) 2015	2) 2016	2015
1971	1962	1968	1967	1959
M.Sc. (Econ.)	University studiesin mathematics, statistics and law.	Engineering logistics.	University studiesin working environment.	LLB
Director of Investor, Bonnier News, Bonnier Books and Bisnode.	Chairman of Financial Sector Union of SEB group and Financial Sector Union Western section in SEB, Director EB­SB Fastigheter and EB­SB Holding.	Chairman of the Association of University Graduates at SEB.	First deputy Chairman of Financial Sector Union of SEB group and Financial Sector Union Regional Club group operations of SEB.	Vice Chairman of the Association of University Graduates at SEB. Director of the Foundation of Alma Detthows.
Product development manager, niche cars, at Volvo Cars, Senior Vice President Research and Development unit at Bonnier, Founder of the consultancy network MindMill Network and CEO at Differ Brand Agency.	Office manager and various other positionsin SEB. Variousspecialist and leader roles within Trygg Hansa.Director of SEB's Profit Sharing Foundation.	Sales manager at Trygg­Hansa in the property insurance business. SEB in various positionsin systems management and IT development, currently Systems Management Advisor.	Employed at Fixed Income, group operations.Director of SEB's Profit Sharing Foundation and Result Premium Foundation.	Various client responsibility positionsin several divisions and subsidiariesin the SEB group. Presently client executive at Private Banking, Foundations.
Swedish	Swedish	Swedish	Swedish	Swedish
0 shares	0 shares	3,569 Class A shares	0 shares	5,001 Class A shares
Yes/No	–	–	–	–
7 of 7 / 5 of 5	8 of 8	10 of 10	7 of 8	10 of 10
660,000	–	–	–	–
195,000	–	–	–	–

1) Deputy Director 2011–2014 2) Deputy Director 2014

Appointed bythe employees:

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

SEB uses an annual self-assessment method, which among other things includes a questionnaire, followed by discussions within the Board. Through this process the activities and work methods of the Board, the Chairman of the Board and the respective committees are evaluated. Among the issues examined are:

• the extent to which the individual board members take an active part in discussions by the Board and its committees
• whether board members contribute independent opinions
• whetherthe meeting atmosphere facilitates open discussions.

The outcome of the evaluation was presented to and discussed by the Board and the Nomination Committee. The evaluation process and its outcome contribute to furtherimprovement of the Board's work and help the Nomination Committee to evaluate the size and composition of the Board.

The Chairman of the Board formally evaluates each individual director's work once a year. Marcus Wallenberg did not partici pate in the evaluation of the Chairman's work, which was directed by Urban Jansson, one of the Deputy Chairmen.

The Board evaluates the work of the President and the GEC on a continuous basis, without participation by the President or any other member of the GEC.

On the Board's agenda in 2016

February

• Annual accounts, including proposal on dividend
• AGM notification and AGM proposals
• Balance sheet, capital and dividend policy
• Risk position, asset quality, credit portfolio, liquidity situation
• Internal and external audit as well as compliance
• Macroeconomic review
• 2015 Annual Report

March

• AGM
• Statutory meeting
• CEO evaluation
• Remuneration matters
• Group talent review and succession planning

April

• Quarterly report
• Risk position, asset quality, credit portfolio, liquidity situation
• Internal capital and liquidity review
• Annual review of risk policies and instructions
• IT and digitalisation review
• Negative interest rate impact review
• Branding and image position
• Businessreview of payments
• Businessreview small and mediumsized companies
• Sustainability matters

June

• IT business and digitalisation update
• Sustainability matters
• Macroeconomic discussion relating to Brexit

July

• Macroeconomic update relating to Brexit
• Quarterly report
• Risk position, asset quality, credit portfolio, liquidity situation
• Review of employee survey (Insight) 2016

September

• Risk seminar
• Businessreview Corporate & Private Customers division

October

• Macroeconomic review
• Quarterly report
• Risk position, asset quality, credit portfolio, liquidity situation
• EU Recovery and Resolution plan

December

• Business plan, financial plans, forecasts
• Annual review of policies and instructions
• SEB's Code of Conduct
• Board evaluation
• US Resolution plan

Contact the Board of Directors:

Skandinaviska Enskilda Banken AB (publ), Board Secretariat, SE106 40 Stockholm, Sweden (sebboardsecretariat@seb.se)

Risk and Capital Committee

» Important areas addressed in 2016 include evaluation of, and adaption to, the new capitalrequirements currently being implemented. Standardised risk weights and liquidity levels are capitalrequirement areas that have attracted particularfocus. The RCC has also continued to monitorthe bank's credit portfolio and risk tolerance, development of the home mortgage market, important macroeconomic aspects and theirimpact on the euro, and the impact of negative interestrates.«

Risk and Capital Committee

The RCC supports the Board in ensuring that SEB is organised and managed in such a way that allrisks inherent in the group's business are controlled in accordance with the Board's risk tolerance state ment as well as with external and internalrules. The RCC also moni tors the group's capital situation on a continuous basis.

The RCC sets the principles and parameters for measuring and allocating risk and capital within the group and oversees risk management systems and the risk tolerance and strategy forthe near and long term. The RCC prepares a recommendation forthe appointment and dismissal of the CRO.It also decides on individual credit matters of majorimportance or of importance as to principles and assists the RemCo in providing a risk- and capital-based view on the remuneration system. The RCC held 21 meetings in 2016.

The group's Chief Financial Officer (CFO) has overallresponsibil ity forinforming and submitting proposals to the RCC on matters related to capital and funding. The CRO has the same overall responsibility regarding risk and credit matters. The President, the CFO and the CRO regularly participate in the meetings.The CRO function is described on p. 58.Information on risk, liquidity and capital management is provided on p. 40.

RCC members

Urban Jansson (Chairman), Marcus Wallenberg (Deputy Chair man), Jesper Ovesen and Tomas Nicolin.

The RCC's work in 2016:

• monitored the implementation of internalrules including the credit policy and instruction
• monitored risk development, among otherthings with focus on long-term stability of the Swedish home mortgage market
• monitored the macroeconomic development including Brexit
• prepared matters concerning market and liquidity risk limits
• reviewed significant changes in the credit portfolio and of the credit process
• reviewed models and methods forrisk measurement
• discussed adaptation to new capitalrequirements
• reviewed the overall capital and liquidity strategy and position including internal capital and liquidity assessment
• prepared matters concerning the group's capital goals and capital management, such as the dividend
• reviewed reports from internal audit and compliance
• held strategic discussions on holistic financial and balance sheet management
• discussed negative interestrate implications.

Birgitta Kantola Chairman of ACC

» The financial crisis has led to an ever more challenging regulatory environment. Forthe ACC in 2016 it meant furtherintensified monitoring of the quality of the ongoing financialreporting and internal controls. Tighten ing taxation of financial transactions surfaced as an area of concern in many countries, which required special attention. Otherimportant issues forthe ACC were IT security including access controls and new market abuse regulation. Many compliance matters from previous years continued to require the ACC's attention.«

Audit and Compliance Committee

The ACC supports the Board in its work with quality assurance of the bank's financialreporting and internal control overthe financial reporting and reporting to supervisors. When required, the ACC also prepares, for decision by the Board, a recommendation forthe appointment or dismissal of the Head of Group Internal Audit. The Committee maintains regular contact with the bank's external and internal auditors and discusses the co-ordination of their activities. The Committee also ensures that any remarks and observations from the auditors are addressed, and evaluates the external auditors' work and independence.

In addition, the President's proposal for appointment or dismissal of the Head of Group Compliance is subject to the Committee's approval.

The ACC held seven meetings in 2016. The CFO, the external auditors, the Head of Group Internal Audit and the Head of Group Compliance submit matters and reports forthe Committee's consideration. The President, the CFO and the CRO regularly participate in the meetings.The Report on Internal Control over Financial Reporting can be found on p.62.

ACC members

Birgitta Kantola (Chairman), Marcus Wallenberg (Deputy Chair man), Winnie Fok and Helena Saxon.

The ACC's work in 2016:

• reviewed the annual accounts and interim reports as well as auditreports
• managed accounting aspects relating to the reorganisation in the beginning of the year
• monitored the group's internal audit
• monitored compliance issues
• monitored internal control over financialreporting
• monitored internal control over supervisory reporting
• monitored services, otherthan auditing services, procured from the external auditors
• drafted a recommendation to the Nomination Committee for election of the external auditor by the AGM
• adopted an annual audit plan forthe Internal Audit function, co-ordinated with the external audit plan
• approved the annual Group Compliance plan
• held discussions with representatives of the external auditors on several occasions, without the President or any other member of the bank's management being present.

Audit and Compliance Committee Remuneration and Human Resources Committee

Signhild Arnegård Hansen Chairman of RemCo

» Digitalisation and the general development ofthe business environment are putting new demands on future leaders and creating an increased need for specialist knowledge within different fields.Acriticaltask fortheRemCo continues to be to develop stable remuneration systems and good remuneration practices that will ensure the bank's ability to attractthe right competence both now and in the future. In 2016,theRemCo addressed remuneration matters, succession planning,the group talentreview and other human resources issues. «

Remuneration and Human Resources Committee

The RemCo prepares, for decision by the Board, appointments of the President and the members of the GEC. The Committee devel ops, monitors and evaluates SEB's remuneration system and remuneration practice, incentive programmes,risk adjustment of deferred variable pay and how the guidelines established by the AGM forremuneration of the President and the members of the GEC are applied. An independent auditor's review report on the adher ence of SEB's remuneration system to the Remuneration Policy is presented to the Committee annually.

The RemCo reviews, in consultation with the RCC, SEB's Remuneration Policy and ensures that the bank's incentive structure takes into account the risks and the cost of capital and liquidity. The analysis is among otherthings based on the risk analysis performed jointly by Group Risk, Group Compliance and Group HR.

In addition, the Committee oversees the group's pension obligations and, together with the RCC, all measures taken to secure the overall pension obligations of the group, including developments in the bank's pension foundations. The RemCo held eight meetings in 2016.

The President, together with the Head of Group HR, makes presentations to the Committee on matters in which there are no conflicts of interest.The Remuneration Reportcan be found on p. 60.

RemCo members

Signhild Arnegård Hansen (Chairman), Marcus Wallenberg (Deputy Chairman) and Sara Öhrvall.

The RemCo's work in 2016:

• reviewed the Remuneration Policy including the definition of categories of staff who have a material impact on SEB's risk profile
• proposed remuneration guidelines forthe President and members of the GEC
• developed long-term equity programmes
• proposed remuneration of the President and members of the GEC in accordance with the guidelines adopted by the AGM
• proposed remuneration of the Head of Group Internal Audit, the CRO and the Head of Group Compliance in accordance with the Remuneration Policy
• monitored remuneration principles, variable remuneration programmes and pension obligations
• followed up the annual group talentreview
• reviewed and discussed adaptations and implementation ofregulations affecting the bank's remuneration structure.

Group Executive Committee

Annika Falkengren Magnus Carlsson Jeanette Almberg Joachim Alpen

Position President and CEO since 2005.

19,664 Class A shares, 11,451 share rights and 34,105 conditionalshare rights.

Co­head of the Large Corporates & Financial Institutions division since 2016
5,933 Class A shares, 109,712 share

rights, 51,725 conditionalshare rights and 6,325 deferral rights.

358,895ClassAshares,121,884share rights and 359,620 conditionalshare

Viveka Hirdman-Ryrberg Martin Johansson Christoffer Malmer David Teare

62,761 Class A shares, 21,937 share rights and 60,219 conditionalshare

1) In 2017 Annika Falkengren resigned from SEB.

rights.

Position Head of Group Communicationssince 2009. Chairman of the Corporate Sustainability Committee.

54,998 Class A shares, 31,415 share rights and 198,181 conditionalshare

44,237 Class A shares, 50,686 share rights and 147,389 conditionalshare

rights.

Head of Business Supportsince 2011 Cohead of the Corporate & Private Customers division since 2016

GEC membersince 2009		2009	2014	2011
SEB employee since 1990		2005	2011	2006
	Born 1963	1962	1975	1963
	Education B.Sc. and Lic.Sc. (Econ.)	B.Sc. (Econ.)	B.A. (International business)	B. Comm.
Nationality Swedish		Swedish	Swedish	British
Own and closely related	62,761 Class A shares, 21,937 share rights and 60,219 conditionalshare	44,237 Class A shares, 50,686 share rights and 147,389 conditionalshare	59,142 Class A shares, 48,021 conditionalshare rights and 4,497

conditionalshare rights and 4,497 deferral rights.

Chief Risk Officersince 2016

2011
2006
1963
B. Comm.
British

54,675 ClassAshares,30,217 share rights and 99,103 conditionalshare rights.

SEB's organisation

Own and closely related persons'shareholdings

Own and closely related persons'shareholdings

Executive Vice President, Chief Financial Officersince 2008

Swedish	Swedish	Swedish	Danish	Swedish
B.Sc. (Econ.)		B.Sc. (Econ.)	B.Sc. (Econ.)	M.Sc. (Econ.)
1961	1972	1957	1963	1976
2008	2008	1980	1997	2008
2008	2014	2009	2011	2015

60,968 Class A shares, 62,873 share rights and 181,391 conditionalshare rights.

Jan Erik Back Peter Dahlgren Johan Andersson Peter Høltermand Rasmus Järborg

Head ofthe Life&Investment Management division since 2016. 2)

58,751 Class A shares, 25,156 share rights and 77,622 conditionalshare rights.

49,824 Class A shares, 22 Class C shares and 725 conditionalshare

Johan Torgeby Mats Torstendahl Marcus Nystén William Paus Riho Unt

Additionalmembers

Country Manager SEB Germany

since 2016

rights.

Co­head of the Large Corporates & Financial Institutions division since 2016.3)	Executive Vice President, Co­head of the Corporate & Private Customers division since 2016	Country Manager SEB Finland since 2010	Country Manager SEB Norway since 2010	Head of the Baltic division since 2016
2014	2009	2014	2011	2016
2009	2009	1998	1992	2001
1974	1961	1960	1967	1978
B.Sc. (Econ.)	M.Sc. (Engineering Physics)	M.Sc. (Econ.)	M.Sc. (Econ.)	MBA,MA(PublicAdministration)
Swedish	Swedish	Finnish	Norwegian	Estonian
5,390 Class A shares, 53,292 share rights,48,799 conditionalshare rights and 4,497 deferral rights.	104,218 Class A shares, 63,357 share rights and 179,127 conditionalshare rights.	102,354 Class A shares, 4,497 deferral rights and 35,784 conditional phantom shares.	33,310 Class A shares, 4,779 deferral rights and 30,545 conditional phantom shares.	43,485ClassAshares,3,866share rights and21,519conditionalshare rights.

25,239 Class A shares, 725 conditionalshare rights, 4,497 deferral rights and 51,246 conditional phantom shares.

Country Manager SEB Denmark

since 2002

Chief Strategy Officersince 2015
5,419ClassAshares,22,095 share rights and44,966 conditionalshare rights.

Head of the Baltic division since 2016
43,485ClassAshares,3,866share

rights and21,519conditionalshare rights.

2) In 2017 Peter Dahlgren resigned fromSEB. 3) Johan Torgeby will become President and CEO of SEB starting 29 March 2017.

The President

The Board has adopted an instruction forthe President's duties and role.The President, who is also the ChiefExecutive Officer, is responsible for administrating the bank's business and risk in accordance with the strategy, directives, policies and instructions established by theBoard. The Presidentreports to the Board and submits at each board meeting a report on, among otherthings,the performance of the business in relation to decisions made by the Board.

The President appoints the Heads of Divisions, the Head of Business Support and Heads of the various staff and support functions thatreport directly to the President.

The President's committees

The President has three main committees at her disposal forthe purpose of managing the operations:

The Group Executive Committee (GEC)

To safeguard the interests of the group as a whole, the President

consults with the GEC on matters of majorimportance or of impor tance as to principles. The GEC deals with, among otherthings, matters of common concern to several divisions, strategic issues, business plans as well as financial forecasts and reports. The GEC held 24 meetings in 2016.

The Asset and Liability Committee (ALCO) The ALCO, chaired by the President and with the CFO as deputy chair, is a group-wide decision-making, monitoring and consultative body. The ALCO, which held eleven meetings in 2016, handles the following matters, among others:

• financial stability, particularly in the new regulatory framework
• strategic capital and liquidity issues, including internal capital allocation and principles forinternal pricing
• structural issues and issues related to the bank's balance sheet and business volumes
• financing of wholly-owned subsidiaries
• the balance sheet and funding strategy forthe SEB group.

On the GEC agenda in 2016

• Macroeconomic updates, among otherthings relating to Brexit
• Review and discussions regarding effects of negative interestrates • Discussions regarding new regulations, such MiFID II and
• PSD II– consequences and actions • Annual accounts and quarterly reports
• AGM preparations
• Reviews of the bank's various businesses and home markets
• Follow up on current Business Plan 2016-2018 and discussions on new Business Plan
• Discussion on capitalrequirements, asset quality and risk
• Review and discussions ofIT, including investments and security
• Review and discussions of the digitalisation work including development and launch of enhanced customerfunctionality (such as Investor World, the youth app, payment solutions) as well as internal automation initiatives

The Group Risk Committee (GRC)

The GRC, chaired by the President and with the CRO as deputy chair, is a group-wide, decision-making committee that addresses all types ofrisk at group level in orderto evaluate portfolios, products and customers from a comprehensive risk perspective. The GRC held 63 meetings in 2016.

The GRC is tasked with:

• making important credit decisions
• ensuring that allrisks inherent in the group's activities are identi fied, defined, measured, monitored and controlled in accordance with internal and externalrules
• supporting the President in ensuring that decisions regarding the group's long-term risk tolerance are followed in the business organisation
• ensuring that the Board's guidelines forrisk management and risk control are implemented and that the necessary rules and policies forrisk-taking in the group are maintained and enforced.

Divisions and business areas

The Board regulates the activities of the group through an instruc tion concerning the group's operations and has laid down rules establishing how the group's divisions, including the international activities conducted through branches and subsidiaries, are to be governed and organised.

SEB's business is organised in four divisions. Each division is responsible forthe subsidiaries designated to the division. The Head or Co-heads of Division have overallresponsibility forthe activities in the business areas and appoint, after consultation with the Presi dent, heads of the business units within the division.

A Country Manageris appointed in the respective countries where SEB operates. The Country Manager co-ordinates the group's business locally and reports to a specially designated member of the GEC.

Business support and staff functions

Business Support is a cross-divisional function established to lever age economies of scale in processes and IT. Business Support covers such areas as transaction processing, development, maintenance and operation ofIT systems, and management of SEB's IT portfolio.

SEB's staff functions have globalresponsibility and support the organisation.

• Discussions regarding strategic investments and co-operation with fintech and digitalisation companies such as Tink and CoinifySeep. 20.
• Discussions regarding customer satisfaction, branding and image position as well as Customerinsight work
• Review of SEB's revised Code of Conduct
• Employee Insight survey 2016 discussions of survey result and actions
• Sustainability including new goals in respect of carbon emissions and electricity use as well as credit granting policies
• Handling of customer complaints
• Internal Audit and Compliance
• Annualreview of policies and instructions

Sustainability aspects

Special committees may be formed to deal with specific matters when needed. Forinstance, an operational steering committee has been assigned by the President to decide on principles for, and to monitor, the bank's sustainability work. The committee is chaired by the Head of Group Communications, who is a member of the Group Executive Committee.It is supported by the bank's Sustainability function, which co-ordinates the overall sustainability agenda. Responsibility for ensuring that sustainability activities are carried out lies with the heads of business areas and group functions.

The CRO function

The CRO function is independentfrom the business and is responsi ble foridentifying, measuring, analysing and controlling SEB's risks.

The Chief Risk Officer (CRO) is appointed by the Board and reports to the President. The CRO keeps the Board, the RCC, the ACC, the GEC, the ALCO and the GRC regularly informed about risk matters.

The CRO has global functionalresponsibility, and the activities of the CRO are governed by and set out in an instruction adopted by the Board. The CRO function is organised in two units: Group Risk and Group Credits.

Group Risk handles the group's risks.It aggregates and analyses risk data across risk types and the group's credit portfolios, handles models forrisk weighting as well as general matters surrounding risk governance and risk disclosure.

GroupCredits is responsible for managing the credit approval process,for certain individual credit decisions and for monitoring compliance with policies set by theRCCand theBoard.Its activities are regulated by the group'sCreditInstruction, adopted by theBoard. The chairs ofthe respective divisional credit committees have the rightto veto credit decisions. Material exceptions to the group's CreditPolicy must be escalated to a higherlevel in the decisionmaking hierarchy.

The Head of Group Risk and the Group Credit Officer are appointed by the President, upon recommendation by the CRO, and report to the CRO. Forfurtherinformation aboutrisk, liquidity and capital management.Seep. 40 and notes 17, 19 and 20.

Group Compliance

The Compliance function in the SEB group (Compliance) is independent from the business organisation. The tasks of Compliance are to inform, control and follow up on compliance matters. The Compliance function also advises the business and management, thereby securing that SEB's business is carried out in compliance with regulatory requirements, and promote trust from customers, shareholders and the financial markets.

Special areas ofresponsibility are:

• consumer protection
• market conduct
• prevention of money laundering and financing of terrorism
• regulatory systems and controls.

The Head of Group Compliance, who is appointed by the President after approval by theACC,reports regularly on compliance matters to the President,the GEC and theACC, and annually to theRCC and the Board. Based on an analysis ofthe group's risks in this area,the President adopts, after approval by theACC, an annual compliance plan. The Instruction for Compliance is adopted by the Board.

Group Internal Audit

Group Internal Audit is a group-wide assurance and control function commissioned by the Board to independently evaluate the group's activities. The Head of Group Internal Audit is appointed by the Board.

The main task of Group Internal Audit is to evaluate and give assurance to the Board and President that governance,risk management and internal controls are adequate and effective. The work is performed with a risk-based approach in accordance with the methodology developed by the Institute ofInternal Auditors.

Each yearthe ACC adopts a plan forthe work ofInternal Audit. The Head ofInternal Auditreports the findings of completed audits, actions taken and the status of previously reported findings quarterly to the ACC and also provides reports to the RCC and the Board.

The President and GEC are regularly informed about internal audit matters. Group Internal Audit's work is evaluated in a quality assessment, at least every fifth year, by an independent party.

Group Internal Audit co-ordinates its work covering the bank's financialreporting with the bank's external auditors. The bank's external auditors rely to some extent on the work of Group Internal Audit in its assignment to review the group's financialreporting. This requires that the external auditors evaluate Group Internal Audit's work. The conclusion of this evaluation is reported to the ACC and Group Internal Audit.

Peter Nyllinge

Born 1966; Auditor of SEB, Partner in charge as of 2012. Authorised Public Accountant, President of PwC Sweden. Other major assignments: Electrolux and Fagerhult. Previous major assignments: Ericsson, Securitas and Assa Abloy

Information about the auditor

According to SEB's Articles of Association, the bank shall have at least one and not more than two auditors with at most an equal number of deputies. A registered accounting firm may be appointed auditor.

PricewaterhouseCoopers AB has been the bank's auditor since 2000 and was re-elected in 2016 forthe period up to and including the 2017 AGM. The partnerin charge, as from the 2012 AGM, is Peter Nyllinge, Authorised Public Accountant.

The fees charged by the auditors forthe auditing of 2015 and 2016 financial years and for other assignments invoiced during these periods are shown in the table below.

Fees to the auditors
	2016	2015
Audit assignment	27	26
Audit­related services	16	20
Tax advisory	11	20
Other	4	5
1) Total	58	71

1) Of which PricewaterhouseCoopers SEK 55m(69).

Remuneration report

SEB aims to attract and retain committed and competent employees who contribute to the bank's long-term success. Employee remuneration should encourage high performance, sound and responsible behaviour based on SEB values, and risk-taking that is aligned with the level ofrisk tolerance set by the Board of Directors. It should promote the employees' long-term commitment to creat ing sustainable value for customers and shareholders.

The totalremuneration reflects the complexity,responsibility and leadership skills required in each position as well as the performance of the individual employee. Performance is evaluated on the basis of financial and non-financial goals, with SEB's values as a starting point.

Remuneration policy

The principles for determining, applying and following up remuner ation at SEB are laid out in SEB's Remuneration Policy, which is revised annually. The Board's Remuneration and Human Resources Committee (RemCo) drafts a proposed,revised version for adoption by the Board. The policy aims to ensure thatremuneration is aligned with the bank's strategy, goals, values and long-term inter ests, and that conflicts of interest are avoided. The policy also reflects Swedish and internationalrules and regulations.

The Performance and Development Discussion (PDD) process applied by the bank, with transparent and individual goals as well as individual evaluation, is used as a foundation for setting employee remuneration.

In consultation with the Risk and Capital Committee (RCC), RemCo reviews SEB's Remuneration Policy and verifies that the remuneration structure takes into account the bank's risks as well as its liquidity and cost of capital. This review is based on, among otherthings, a risk analysis performed jointly by Group Risk, Group Compliance and Group HR.Forinformation on RemCo,see p. 55.

The Remuneration Policy lays out the principles foridentifying employees in positions with a material impact on the group's risk profile (Identified Staff), for whom specific remuneration rules have been laid out.In 2016, a total of 1,167 positions at SEB were categorised as Identified Staff. Finally, the policy defines employees who can impact the risk profiles of mutual funds as well as employees who provide investment advice or have a material impact on the services and products offered.

Remuneration structure

SEB's remuneration structure consists of base pay, equity-based remuneration (in the form of collective profit-sharing and equitybased programmes), and pensions and other benefits.

Base pay, which is the main remuneration component, shall be competitive and commensurate with the employee's experience, responsibility and long-term performance.It shall also be in line with industry peers in the respective geographical markets in which SEB operates.

Equity-based remuneration is a means to attract and retain staff with key competences.It is also an incentive for employees to become shareholders of SEB, which creates a long-term commitment that is aligned with the shareholders' interests. Regulatory requirements for financial institutions require that variable remuneration shall consist largely of equity or equityrelated instruments.

Less than ten per cent of employees are eligible forindividual cash-based variable remuneration (Short-Term Incentive–STI), only in operations where itis common market practice, such as in investment banking. STIis used only when it entails low or no resid ualrisk for SEB. For employees who receive variable remuneration above a certain level, a portion ofthis remuneration must be deferred. In 2016, STI accounted for 3 per cent (2) of SEB's total staffcosts.In orderto build long-term commitment, SEBhas overthe past several year proactively decreased STIremuneration in favour oflong-term equity programmes.

Employees in control functions are compensated in a mannerthat is independent of the business areas that they oversee, is commensurate with their key role in the organisation, and is based on objec tives that are aligned with theirfunctions.

Remuneration models

All variable remuneration is based on SEB's risk-adjusted performance. The variable remuneration models are adapted to applicable rules governing, among otherthings, the maximum level in relation to the employee's base pay, the deferred portion ofremuneration, and the right to reduce and withhold deferred remuneration that has not yet been paid out. ForIdentified Staff, variable remuneration may not exceed 100 per cent of their base pay.

The variable remuneration models are based on financial and non-financial key ratios at the group and business unit levels as well as an annual evaluation of performance and behaviours at an individual level. Non-financial goals include development of customer satisfaction, compliance and sustainability. At the individual level, compliance with rules and policies forrisk-taking in the group, SEB's Code of Conduct, and demands on the business areas' internal controls are key parameters.

All Employee Programmes (AEP)

	20161)	2015 2)
Number of participants	15,000	15,000
Outcome in relation to maximum amount, %	56	85
Shares allotted, thousands	2,666	3,511
Market value per 31 Dec. 2016, SEKm	255	314

Payoutyear:1) 2020 2) 2019

Share Deferral Programmes (SDP)

	2016	2015
Number of participants	1,374	1,329
Shares allotted, thousands	5,611	4,321
Market value per 31 Dec. 2016, SEKm	536	379

Ownership transferred to the individual after 3 or 5 years.

Remuneration in SEB in 2016 SEK thousands

	Base pay	Cash­based variable compensation	Expensed amount equity­based programmes	Benefits	Total	Pensions
President and CEO, Annika Falkengren	11,500		6,343	1,425	19,268	5,000
1) Other members of the GEC	48,855		21,997	1,650	72,502	15,347
Total	60,355	0	28,340	3,075	91,770	20,347
SEB excluding GEC	8,045,057	683,978	674,016	91,304	9,494,355	1,347,352
SEB Total	8,105,412	683,978	702,356	94,379	9,586,125	1,367,699

1) The number and composition differsomewhat during the year but on average elevenmembers are included.

During the year the President and CEO has excercised rightsto a value of SEK 6,398,251.

The corresponding value for the GEC excluding the President is SEK 8,181,695.

Payment of the deferred portion of variable remuneration normally requires that the employee remains employed by SEB during the first three years of the programme, after which an additional period of up to three-years ofrestricted right of disposal applies. The remuneration may be forfeited if the results on which it is based are not sustainable and/orthe individual has been found responsible for actions that are incompatible with internalrules and regulations.

Long-term equity programmes 2016

SEB's long-term equity programmes are evaluated on a continuous basis throughout the year by RemCo, which also monitors the employees' participation in the programmes. SEB conducts a dialogue with institutional investors on the structure and content of the programmes. The 2016 Annual General Meeting (AGM) resolved in favour of two separate programmes forthe year – a profit-sharing programme (All Employee Programme – AEP) and a Share Deferral Programme (SDP).

The SEBAll Employee Programme 2016 is a profit-sharing programme for all employees in most of the countries where SEB operates. Half of the outcome is paid in cash, and the other half is deferred forthree years. The deferred amount is paid out in SEB Class A shares to employees in Sweden and in cash, adjusted forthe totalreturn on the Class A share, to employees outside of Sweden. The AEP targets are set in SEB's business plan and consist of the financial goals return on equity and cost development, and of the non-financial goal for customer satisfaction.

The SEB Share Deferral Programme 2016 is a programme for members of the Group Executive Committee (GEC), certain other senior managers and a number of other key employees, up to 2,000 in total. The participants are granted an individually determined number of conditional share rights based on the fulfilment of predetermined group, business unit and individual targets outlined in SEB's business plan.In addition to the AEP targets, the Share Deferral Programme is based on parameters such as compliance, employee commitment, SEB's sustainability and risk management.

For members of the GEC the initial allotment may not exceed 100 per cent of base pay. For senior managers, ownership of 50 per cent of the share rights is transferred to the participant after a three-year qualification period, and 50 per cent after five years. For other participants, ownership of the share rights is transferred afterthree years. After each respective qualification period there is an additional holding period of one year after which the share rights may be exercised during a period of three years. For participants outside of Sweden, the final outcome may be paid out in cash adjusted forthe total share holderreturn for SEB's Class A shares (so called phantom shares).

In both the AEP and the Share Deferral Programme there is a possi bility ofrisk adjustment for both current and future risks. The final outcome can therefore be reduced partially or completely afterwards in accordance with currentregulations, among otherthings taking the bank's earnings and the capital and liquidity required forthe business operations into account.Forfurtherinformation about the programmes,see note 9 and the corporate governance pages onwww. sebgroup.com

Remuneration to the President and members of the Group Executive Committee (GEC)

SEB's Board of Directors decides on the remuneration forthe Presi dent and other members of the GEC based on a recommendation by RemCo. Theirremuneration shall be in line with the guidelines set by the AGM.

Totalremuneration forthe members ofthe GECis based on the three main components base pay, long-term equity-based remuneration (Share Deferral Programme), and pensions and other benefits.No cash-based variable remuneration is paid, and the members ofthe GEC are not eligible fortheAEP.The pension plans forthe members ofthe GECare defined contribution solutions, with the exception of a defined benefit component provided under a collective agreement.The pension plans are in line with the SEBgroup's Pension Policy.

Fortermination of employmentinitiated by the bank, a maximum of 12 months' severance pay is payable, afterthe notice period. SEBhas the rightto deductincome earned from other employmentfrom any severance pay.Detailed information about executives'remuneration is provided in note 9c.

RemCo evaluates the guidelines for salary and other benefits paid to the President and other GEC members on a continuous basis throughout the year. To perform this evaluation, RemCo obtains information from the Head of Group Human Resources, Head of Group Internal Audit and the external auditors, and with respect to GEC members, also from the President.

In addition, comparative studies are made yearly with relevant sectors and markets. The result of such studies is a significant factor in setting the total level ofremuneration for members of the GEC. This internal and external information facilitates RemCo in its work on ensuring thatremuneration at SEB is aligned with the market and is competitive. Priorto the 2016 AGM the bank's external auditorissued a statement to the Board assuring that SEB has adhered to the guidelines for salary and otherremuneration forthe President and other GEC members set by the 2015 AGM.The statementcan be found on the AGM pages on www.sebgroup.com.

Internal control over financial reporting

Internal Control over Financial Reporting (ICFR) is an established process designed to provide reasonable assurance regarding reliability of financialreporting and reduce the risk of misstatement. ICFR is based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and is conducted by SEB in a yearly cycle as described below.

1 Perform risk assessment

In orderto identify and understand the risks in the financialreporting process, assessments are performed at the SEB group and legal entity levels. These risk assessments are used to determine which legal entities, processes and systems are to be covered by the ICFR process in the coming year.

2Identify risks and expected controls

Expertise within the business and finance functions continuously validate that the most significantrisks pertaining to the processes are identified, and that the controls in place appropriately mitigate the risks.In this step it is important to evaluate if the controls are effective, if new risks have been identified and if there is a need for new controls that mitigate the risks more efficiently. The controls are continuously communicated to involved parties within the bank, to set expectations and responsibilities. The framework consists of group-wide controls as well as process and IT controls, for example validation of the valuation of financial instruments, accountreconciliations and controls of system access.

3Plan

Every year a plan is prepared based on the risk assessments and expected controls. The plan clarifies who at SEB is responsible for evaluating the respective controls within each legal entity, what type of evaluation should be conducted and how the result is to be reported. The plan is co-ordinated with the audit plans of internal and external audit.

4Evaluate controls

The controls are evaluated on a continuous basis throughout the year by control owners through self-assessments. Risk indicators are also reported.In this way the bank's weaknesses can be identified and compensating controls and improvements can be initiated. Furthermore, quarterly reporting is done by all CFOs to gain an assurance of the reported figures for each legal entity, to identify any material financialreporting risks, and to comment on material deviations compared to earlier quarters.

5Report

The results from the evaluations of the controls are analysed to assess the risk for misstatements in the financial reporting. The ICFR monitoring report is communicated to the SEB group CFO in connection with the quarterly external financial reporting. The results are also reported to the Audit and Compliance Committee (ACC) once a year. The report describes the residual risk, including a description of identified control gaps, how well these controls are compensated for by other controls, and how the work with gap remediation activities is progressing. The group level ICFR report contributes to transparency in the SEB organisation and enables prioritisation of improvement activities based on the residual risk.

In addition to this process,Internal Audit independently tests the ICFR process in accordance with a plan adopted by the ACC.

The work with internal control over financialreporting

In 2016, significant improvements were made in the following main areas within the ICFR framework:

• monitoring of internal control for supervisory reporting through a new framework,Internal Control over Supervisory Reporting (ICSR)
• management of operationalrisk in significant processes according to requirements from the Swedish Financial Supervisory Authority.

Financialstatements – Contents

Note		Page
	The SEB Group
	Income Statement	64
	Statement of comprehensive income	65
	Balance sheetstatement	66
	Statement of changesin equity	67
	Cash flow statement	68
	Skandinaviska Enskilda Banken
	Income Statement	69
	Statement of comprehensive income	70
	Balance sheetstatement	71
	Statement of changesin equity	72
	Cash flow statement	73
	Notesto the financialstatements
	Corporate information	74
1	Accounting policies	74
2	Operating segments	82
3	Geographical information	83
4	Net interest income	84
5	Net fee and commission income	85
6	Net financial income	86
7	Net other income	86
8	Administrative expenses	87
9	Staff costs	88
9a	Remuneration	88
9b	Pensions	91
9c	Remuneration to the Board and the Group Executive Committee	94
9d	Share­based payments	95
9e	Number of employees	97
10	Other expenses	97
11	Depreciation, amortisation and impairment of tangible and intangible assets	98
12	Gainslesslossestangible and intangible assets	98
13	Net credit losses	98
14	Appropriations	99
15	Taxes	99
16	Earnings pershare	101
17	Risk disclosures	101
17a	Credit risk	101
17b	Market risk	106

Note		Page
17c	Operational risk	108
17d	Businessrisk	109
17e	Insurance risk	109
17f	Liquidity risk	109
18	Cash and cash equivalents	115
19	Loans	115
20	Capital adequacy	120
21	Fair value measurement of assets and liabilities	123
22	Financial assets at fair value through profit or loss	128
23	Available­for­sale financial assets	129
24	Investmentsin associates	129
25	Sharesin subsidiaries	130
26	Interest in unconsolidated structured entities	131
27	Related parties	132
28	Tangible and intangible assets	133
29	Other assets	136
30	Liabilitiesto policyholders	136
31	Financial liabilities at fair value through profit or loss	137
32	Other liabilities	137
33	Provisions	138
34	Subordinated liabilities	138
35	Untaxed reserves	139
36	Pledged assets	139
37	Obligations	140
38	Current and non­current assets and liabilities	141
39	Financial assets and liabilities by class	142
40	Financial assets and liabilitiessubject to offsetting or netting arrangements	144
41	Debtsecurities by issuers	145
42	Derivative instruments	146
43	Future minimum lease paymentsfor operational leases	148
44	Finance leases	148
45	Assets and liabilities distributed by main currencies	149
46	Life insurance operations	150
47	Assetsin unit­linked operations	151
48	Assets held forsale	151
	Five­yearsummary
	The SEB Group	152
	Skandinaviska Enskilda Banken	153

Income Statement

SEB Group

SEK m	Note	2016	2015	Change, %
Interest income		35,202	37,726	–7
Interest expense		–16,464	–18,788	–12
Net interest income	4	18,738	18,938	–1
Fee and commission income		22,500	24,340	–8
Fee and commission expense		–5,872	–5,995	–2
Net fee and commission income	5	16,628	18,345	–9
Net financial income	6	7,056	5,478	29
Dividends		170	169	1
Profit and lossfrom investmentsin associates		218	66
Gainslesslossesfrom investmentsecurities		891	553	61
Other operating income		70	214	–67
Net other income	7	1,349	1,002	35
Total operating income		43,771	43,763	0
Staff costs	9	–14,562	–14,436	1
Other expenses	10	–6,703	–6,355	5
Depreciation, amortisation and impairment of tangible and intangible assets	11	–6,496	–1,011
Total operating expenses		–27,761	–21,802	27
Profit before creditlosses		16,010	21,961	–27
Gainslesslossesfrom tangible and intangible assets	12	–150	–213	–30
Net credit losses	13	–993	–883	12
Operating profit		14,867	20,865	–29
Income tax expense	15	–4,249	–4,284	–1
NET PROFIT		10,618	16,581	–36
Attributable to minority interests
Attributable to shareholders		10,618	16,581	–36
Basic earnings pershare, SEK	16	4.88	7.57
Diluted earnings pershare, SEK	16	4.85	7.53

Statement of comprehensive income

SEB Group

SEK m	2016	2015	Change, %
NET PROFIT	10,618	16,581	–36
Itemsthat may be reclassified subsequently to profit or loss:
Valuation gains(losses) during the year	968	–963
Income tax on valuation gains(losses) during the year	–84	215
Transferred to profit or lossfor the year1) Income tax on transfersto profit or lossfor the year	103 3	13 16	–81
Available-for-sale financial assets	990	–719
Valuation gains(losses) during the year	–1,064	–971
Income tax on valuation gains(losses) during the year	234	214	9
Transferred to profit or lossfor the year2)	24	116	–79
Income tax on transfersto profit or lossfor the year	–5	–26	–81
Cash flow hedges	–811	–667	22
Translation of foreign operations	327	–239
Taxes on translation effects	423	–334
Translation offoreign operations	750	–573
Itemsthat will not be reclassified to profit or loss:
Remeasurement of pension obligations, including specialsalary tax	–3,624	3,687
Valuation gains(losses) on plan assets during the year	1,183	1,713	–31
Deferred tax on pensions	566	–1,222
Defined benefit plans	–1,875	4,178
OTHER COMPREHENSIVE INCOME	–946	2,219
TOTAL COMPREHENSIVE INCOME	9,672	18,800	–49
1) Other income.
2) Net interest income.
Attributable to minority interests
Attributable to shareholders	9,672	18,800	–49

The method used to hedge currency risksrelated to foreign operations creates a tax expense (tax income) in the parent company. Fair value changes on the hedging instrumentsimpact the taxable result contrary to the currency revaluation of the foreign operations. In the Group thistax effect isreported in Other comprehensive income.

Balance sheetstatement

SEB Group

31 December, SEK m	Note	2016	2015	Change, %
Cash and cash balances at central banks	18	151,078	101,429	49
Other lending to central banks		66,730	32,222	107
Loansto credit institutions	18, 19	50,527	58,542	–14
Loansto the public	19	1,453,019	1,353,386	7
Securities held for trading		162,516	239,906	–32
Derivatives held for trading		198,271	199,085	0
Derivatives held for hedging		14,084	16,466	–14
Financial assets – designated at fair value through profit or loss		410,155	371,488	10
Financial assets at fair value through profit or loss	22	785,026	826,945	–5
Fair value changes of hedged itemsin a portfolio hedge		111	104	7
Available­for­sale financial assets	23	35,747	37,331	–4
Investment accounted for using the equity method		268	260	3
Other investmentsin associates		970	958	1
Investmentsin subsidiaries and associates	24, 25	1,238	1,218	2
Intangible assets		11,405	17,069	–33
Property and equipment		908	825	10
Investment properties		7,845	8,309	–6
Tangible and intangible assets	28	20,158	26,203	–23
Current tax assets		5,978	6,966	–14
Deferred tax assets		1,329	1,516	–12
Tax assets	15	7,307	8,482	–14
Trade and client receivables		7,635	13,124	–42
Other financial assets		29,239	22,363	31
Other non-financial assets		12,244	13,814	–11
Other assets	29	49,118	49,301	0
Non­current assets classified as held forsale	48	587	801	–27
TOTALASSETS		2,620,646	2,495,964	5
Depositsfrom central banks and credit institutions		119,864	118,506	1
Deposits and borrowing from the public		962,028	883,785	9
Liabilitiesto policyholders – investment contracts		296,618	271,995	9
Liabilitiesto policyholders – insurance contracts		107,213	98,714	9
Liabilitiesto policyholders	30	403,831	370,709	9
Debtsecuritiesissued		668,880	639,444	5
Liabilities held for trading		38,845	40,746	–5
Derivatives held for trading		173,348	188,062	–8
Derivatives held for hedging		1,303	1,977	–34
Financial liabilities at fair value through profit or loss	31	213,496	230,785	–7
Fair value changes of hedged itemsin a portfolio hedge		1,537	1,608	–4
Current tax liabilities		2,184	2,082	5
Deferred tax liabilities		8,474	9,468	–10
Tax liabilities	15	10,658	11,550	–8
Trade and client payables		8,926	11,496	–22
Other financial liabilities		30,609	29,138	5
Other non-financial liabilities		16,889	22,900	–26
Other liabilities	32	56,424	63,534	–11
Provisions	33	2,233	1,873	19
Subordinated liabilities	34	40,719	31,372	30
Total liabilities		2,479,670	2,353,166	5
Minority interests
Share capital		21,942	21,942	0
Other reserves		5,439	6,385	–15
Retained earnings		113,595	114,471	–1
Shareholders' equity		140,976	142,798	–1
Total equity		140,976	142,798	–1
TOTAL LIABILITIES ANDEQUITY		2,620,646	2,495,964	5

Statement of changesin equity

SEB Group

SEKm	Otherreserves
2016	Share capital 3)	Available for-sale financial assets	Cash flow hedges	Translation of foreign operations	Defined benefit plans	Retained earnings	Total Shareholders' equity	Minority interests	Total Equity4)
Opening balance Change in valuation of insurance contracts	21,942	648	3,210	–1,943	4,470	114,471 –440	142,798 –440	0	142,798 –440
Adjusted opening balance	21,942	648	3,210	–1,943	4,470	114,031	142,358	0	142,358
Net profit Other comprehensive income (net of tax)		990	–811	750	–1,875	10,618	10,618 –946		10,618 –946
Total comprehensive income		990	–811	750	–1,875	10,618	9,672	0	9,672
Dividend to shareholders 1) Equity­based programmes2) Change in holding of own shares						–11,504 433 17	–11,504 433 17		–11,504 433 17
CLOSING BALANCE	21,942	1,638	2,399	–1,193	2,595	113,595	140,976	0	140,976
2015
Opening balance Net profit	21,942	1,367	3,877	–1,370	292	108,435 16,581	134,543 16,581	33	134,576 16,581
Other comprehensive income (net of tax)		–719	–667	–573	4,178		2,219		2,219
Total comprehensive income		–719	–667	–573	4,178	16,581	18,800	0	18,800
Dissolvement of minority interest Dividend to shareholders 1) Equity­based programmes2) Change in holding of own shares						–10,400 –164 19	–10,400 –164 19	–33	–33 –10,400 –164 19

1) Dividend paid in 2016 for 2015was SEK 5.25 (4.75) per Class A share and SEK 5.25 (4.75) per Class C share. Proposed dividend for 2016 is SEK 5.50. Further information can be found in the chapter Shareholders and the SEB share on page 26–28. Dividend to shareholdersisreported excluding dividend on own shares.

CLOSING BALANCE 21,942 648 3,210 –1,943 4,470 114,471 142,798 0 142,798

2) The item includes changesin nominal amounts of equity swaps used for hedging of longterm incentive programmesin 2015. As of 31 December 2014 SEB owned 5.5 million Class A sharesfor the longterm incentive programmes. In 2015 8.0 million Class A shareswere been sold asstock optionswere exercised. During 2015, SEB also repurchased 3.4 million Class A shares. As of 31 December 2015 SEB owned 0.9 million Class A shareswith a market value of SEK 76m. Another 5.5 million Class A shareswere been sold during 2016 asstock optionswere exercised. During 2016, SEB repurchased 29.8 million Class A shares. As of 31 December 2016 SEB owned 25.2 million Class A shareswith a market value of SEK 2,406m.

3) 2,170,019,294 Class A shares(2,170,019,294); 24,152,508 Class C shares(24,152,508).

4) Information about capital requirements can be found in Note 20 Capital adequacy.

Cash flowstatement

SEB Group

SEK m	2016	2015	Change, %
Interest received	35,507	38,652	–8
Interest paid	–17,515	–20,007	–12
Commission received	22,500	22,340	1
Commission paid	–5,872	–5,463	7
Net received from financial transactions	–7,621	13,218
Other income	74	2,826	–97
Paid expenses	–21,464	–20,682	4
Taxes paid	–3,159	–3,309	–5
Cash flow from the profit and loss statement	2,450	27,575	–91
Increase (–)/decrease (+) in portfolios	62,438	75,834	–18
Increase (+)/decrease (–) in issued short­term securities	30,524	–49,679
Increase (–)/decrease (+) in lending to credit institutions and central banks	–31,024	16,967
Increase (–)/decrease (+) in lending to the public	–104,145	–2,664
Increase (+)/decrease (–) in liabilitiesto credit institutions	1,361	3,408	–60
Increase (+)/decrease (–) in deposits and borrowingsfrom the public	78,243	–59,128
Increase (–)/decrease (+) in insurance portfolios	329	52
Change in other assets	3,281	8,645	–62
Change in other liabilities	–866	–8
Cash flow from operating activities	42,591	21,002	103
Sales ofshares and bonds	1,075	1,180	–9
Sales of intangible and tangible fixed assets	110	84	31
Dividendsreceived	170	169	1
Investments/divestmentsin shares and bonds	–52	161
Investmentsin intangible and tangible assets	–451	–691	–35
Cash flow from investing activities	852	903	–6
Issue ofsecurities and newborrowings	243,292	275,501	–12
Repayment ofsecurities	–233,986	–284,203	–18
Dividend paid	–11,504	–10,400	11
Cash flow from financing activities	–2,198	–19,102	–88
NET CHANGE INCASHANDCASHEQUIVALENTS	41,245	2,803
Cash and cash equivalents at beginning of year	110,770	105,848	5
Exchange rate differences on cash and cash equivalents	6,300	2,119	197
Net increase in cash and cash equivalents	41,245	2,803
CASHANDCASHEQUIVALENTS AT ENDOF PERIOD1)	158,315	110,770	43

1) Cash and cash equivalents are disclosed in note 18.

Income Statement

In accordancewith the Swedish Financial Supervisory Authority regulations

Skandinaviska Enskilda Banken

SEK m	Note	2016	2015	Change, %
Interest income	4	29,022	30,092	–4
Leasing income	4	5,443	5,439	0
Interest expense	4	–15,223	–16,043	–5
Dividends		6,581	8,028	–18
Fee and commission income	5	11,648	12,258	–5
Fee and commission expense	5	–2,805	–3,058	–8
Net financial income	6	4,642	3,428	35
Other income	7	817	1,137	–28
Total operating income		40,125	41,281	–3
Administrative expenses	8	–15,039	–13,458	12
Depreciation, amortisation and impairment of tangible and intangible assets	11	–5,775	–5,447	6
Total operating expenses		–20,814	–18,905	10
Profit before creditlosses		19,311	22,376	–14
Net credit losses	13	–789	–520	52
Impairment of financial assets1)		–3,841	–775
Operating profit		14,681	21,081	–30
Appropriations	14	2,437	781
Income tax expense	15	–2,877	–3,679	–22
Other taxes	15	137	–138
NET PROFIT		14,378	18,045	–20

1) As a result of impairment test in SEB Group, impairment ofsharesin subsidiaries has affected the parent company inQ1 2016 with an amount of SEK 2,687m.

Statement of comprehensive income

In accordance with the Swedish Financial Supervisory Authority regulations

Skandinaviska Enskilda Banken

SEK m	2016	2015	Change, %
NET PROFIT	14,378	18,045	–20
Itemsthat may be reclassified subsequently to profit or loss: Valuation gains(losses) during the year Income tax on valuation gains(losses) during the year Transferred to profit or lossfor the year1) Income tax on transfersto profit or lossfor the year	982 –85 299 –66	–798 176 256 –57	17 16
Available-for-sale financial assets	1,130	–423
Valuation gains(losses) during the year Income tax on valuation gains(losses) during the year Transferred to profit or lossfor the year2) Income tax on transfersto profit or lossfor the year	–1,064 234 24 –5	–969 213 116 –25	10 10 –79 –80
Cash flow hedges	–811	–665	22
Translation of foreign operations Taxes on translation effects	25	–41
Translation offoreign operations	25	–41
OTHER COMPREHENSIVE INCOME	344	–1,129
TOTAL COMPREHENSIVE INCOME	14,722	16,916	–13

1) Other income.

2) Net interest income.

The method used to hedge currency risksrelated to foreign operations creates a tax expense (tax income) in the parent company. Fair value changes on the hedging instrumentsimpact the taxable result contrary to the currency revaluation of the foreign operations. In the Group thistax effect isreported in Other comprehensive income.

Balance sheetstatement

Skandinaviska Enskilda Banken

31 December, SEK m	Note	2016	2015	Change, %
Cash and cash balances at central banks	18	70,671	55,712	27
Loansto credit institutions	18, 19	287,059	166,267	73
Loansto the public	19	1,172,095	1,080,438	8
Securities held for trading		162,335	234,106	–31
Derivatives held for trading		147,124	165,964	–11
Derivatives held for hedging		12,649	15,042	–16
Other financial assets at fair value through profit and loss		87	209	–58
Financial assets at fair value through profit and loss	22	322,195	415,321	–22
Available­for­sale financial assets	23	12,063	12,985	–7
Investmentsin associates	24	1,025	1,001	2
Sharesin subsidiaries	25	50,611	52,398	–3
Intangible assets		2,023	2,424	–17
Property and equipment		35,163	38,153	–8
Tangible and intangible assets	28	37,186	40,577	–8
Current tax assets		2,990	1,643	82
Tax assets		2,990	1,643	82
Trade and client receivables		7,234	12,871	–44
Other financial assets		29,177	22,132	32
Other non-financial assets		7,538	5,260	43
Other assets	29	43,949	40,263	9
TOTALASSETS		1,999,844	1,866,605	7
Depositsfrom central banks and credit institutions		168,852	134,816	25
Deposits and borrowing from the public		782,584	690,301	13
Debtsecuritiesissued		664,186	632,403	5
Liabilities held for trading		38,845	40,487	–4
Derivatives held for trading		132,861	160,619	–17
Derivatives held for hedging		972	1,685	–42
Financial liabilities at fair value through profit and loss	31	172,678	202,791	–15
Current tax liabilities		855	835	2
Deferred tax liabilities		677	906	–25
Tax liabilities		1,532	1,741	–12
Trade and client payables		7,945	11,011	–28
Other financial liabilities		29,922	28,044	7
Other non-financial liabilities Other liabilities	32	8,211 46,078	12,736 51,791	–36 –11
Provisions	33	80	144	–44
Subordinated liabilities	34	40,719	31,372	30
Total liabilities		1,876,709	1,745,359	8
Untaxed reserves	35	21,761	23,466	–7
Share capital		21,942	21,942	0
Restricted reserves		12,701	12,260	4
Other reserves		3,571	3,227	11
Retained earnings		48,782	42,306	15
Net profit		14,378	18,045	–20
Total equity		101,374	97,780	4
TOTAL LIABILITIES,UNTAXEDRESERVES ANDTOTAL EQUITY		1,999,844	1,866,605	7

Statement of changesin equity

Skandinaviska Enskilda Banken

SEKm		4) Restricted equity Non-restricted equity
2016	Share capital 3)	Restricted reserves	Available-for-sale financial assets	Cash flow hedges	Translation of foreign operations	Retained earnings	Total Equity
Opening balance Net profit Other comprehensive income (net of tax)	21,942	12,260	328 1,130	3,211 –811	–312 25	60,351 14,378	97,780 14,378 344
Total comprehensive income			1,130	–811	25	14,378	14,722
Dividend to shareholders1) Equity­based programmes 2) Change in holding of own shares Other changes		441				–11,504 342 34 –441	–11,504 342 34
CLOSING BALANCE	21,942	12,701	1,458	2,400	–287	63,160	101,374
2015
Opening balance Net profit Other comprehensive income (net of tax)	21,942	12,260	751 –423	3,876 –665	–271 –41	52,905 18,045	91,463 18,045 –1,129
Total comprehensive income			–423	–665	–41	18,045	16,916
Dividend to shareholders1) Equity­based programmes 2) Change in holding of own shares						–10,400 –218 19	–10,400 –218 19
CLOSING BALANCE	21,942	12,260	328	3,211	–312	60,351	97,780

1) Dividend paid in 2016 for 2015was SEK 5.25 (4.75) per Class A share and SEK 5.25 (4.75) per Class C share. Proposed dividend for 2016 is SEK 5.50. Further information can be found in the chapter Shareholders and the SEB share on page 26–28. Dividend to shareholdersisreported excluding dividend on own shares.

2) The item includes changesin nominal amounts of equity swaps used for hedging of longterm incentive programmesin 2015. As of 31 December 2014 SEB owned 5.5 million Class A sharesfor the longterm incentive programmes. In 2015 8.0 million Class A shareswere been sold asstock optionswere exercised. During 2015, SEB also repurchased 3.4 million Class A shares. As of 31 December 2015 SEB owned 0.9 million Class A shareswith a market value of SEK 76m. Another 5.5 million Class A shares were been sold during 2016 asstock options were exercised. During 2016, SEB repurchased 29.8 million Class A shares. As of 31 December 2016 SEB owned 25.2 million Class A shareswith a market value of SEK 2,406m.

3) 2,170,019,294 Class A shares(2,170,019,294); 24,152,508 Class C shares(24,152,508).

4) The opening balance is equivalent to Distributable items according to Regulation (EU) No 575/2013 (CRR).

Cash flowstatement

Skandinaviska Enskilda Banken

SEK m	2016	2015	Change, %
Interest received	29,464	31,831	–7
Interest paid	–11,028	–16,607	–34
Commission received	11,884	12,878	–8
Commission paid	–3,064	–3,649	–16
Net received from financial transactions	–7,811	11,194
Other income	–3,634	–1,104
Paid expenses	–14,050	–12,399	13
Taxes paid	–3,531	–1,684	110
Cash flow from the profit and loss statement	–1,770	20,460
Increase (–)/decrease (+) in trading portfolios	74,866	47,842	56
Increase (+)/decrease (–) in issued short­term securities	32,852	–49,371
Increase (–)/decrease (+) in lending to credit institutions	–122,367	45,016
Increase (–)/decrease (+) in lending to the public	–93,180	–28,990
Increase (+)/decrease (–) in liabilitiesto credit institutions	34,094	–9,847
Increase (+)/decrease (–) in deposits and borrowingsfrom the public	92,301	–15,991
Change in other assets	–5,987	12,808
Change in other liabilities	–5,924	2,074
Cash flow from operating activities	4,885	24,001	–80
Dividendsreceived	6,581	8,028	–18
Investments/divestmentsin shares and bonds	2,079	773	169
Investmentsin intangible and tangible assets	–742	–810	–9
Cash flow from investment activities	7,918	7,991	–1
Issue ofsecurities and newborrowings	239,266	283,182	–16
Repayment ofsecurities	–229,959	–291,813	–21
Dividend paid	–11,504	–10,400	11
Cash flow from financing activities	–2,197	–19,031	–88
NETCHANGE INCASHANDCASHEQUIVALENTS	10,606	12,961	–18
Cash and cash equivalents at beginning of year	77,493	60,745	28
Exchange rate differences on cash and cash equivalents	3,833	3,787	1
Net increase in cash and cash equivalents	10,606	12,961	–18
CASHANDCASHEQUIVALENTS AT ENDOF PERIOD1)	91,932	77,493	19

1) Cash and cash equivalents are disclosed in note 18.

Notesto the financialstatements

SEKm, unless otherwise stated.

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.) isthe parent company of the Group. The parent company is a Swedish limited liability company with itsregistered office in Stockholm, Sweden.

The parent company isincluded in the Large Cap segment of the NASDAQ Stockholm stock exchange.

The consolidated accountsfor the financial year 2016 were approved for publication by the Board of Directors on 21 February and will be presented for adoption at the 2017 Annual General Meeting.

Exchange rates used for converting main currencies in the Group Consolidation

		Profit and loss account		Balance sheet
	2016	2015	Change, %	2016	2015	Change, %
DKK	1.272	1.254	1	1.286	1.232	4
EUR	9.470	9.356	1	9.558	9.195	4
NOK	1.020	1.047	–3	1.051	0.955	10
USD	8.561	8.433	2	9.054	8.416	8

1 Accounting policies

Significant accounting policiesfor the Group

STATEMENT OF COMPLIANCE

The Group's consolidated accounts have been prepared in accordance with the International Financial Reporting Standards(IFRS) and interpretations of these standards as adopted by the EU. The accounting also followsthe Annual Accounts Act for Credit Institutions and Securities Companies(1995:1559) and the regulation and general guidelinesissued by the Swedish Financial Supervisory Authority, Annual Reportsin Credit Institutions and Securities Companies(FFFS 2008:25). In addition to thisthe Supplementary Accounting Rulesfor Groups RFR 1 and the additional UFR statementsissued by the Swedish Financial Reporting Board have been applied.

BASIS OF PREPARATION

The consolidated accounts are based on amortised cost, except for the fair value measurement of availableforsale financial assets, financial assets and liabilities measured at fair value through profit or lossincluding derivatives and investment properties measured at fair value. The carrying amount of financial assets and liabilitiessubject to hedge accounting at fair value has been adjusted for changesin fair value attributable to the hedged risk. The financialstatements are presented in million Swedish kronor (SEK m) unlessindicated otherwise.

CONSOLIDATION

Subsidiaries

The consolidated accounts combine the financialstatements of the parent company and itssubsidiaries. Subsidiaries are companies, over which the Group has control. The Group controls an entity when it is exposed to, or hasrightsto, variable returns from itsinvolvement and hasthe ability to use its power to affect the amount of the returns. Control is deemed to exist when the parent company holds, directly or indirectly, more than 50 per cent of the voting rights, unlessthere is evidence that another investor hasthe practical ability to unilaterally direct the relevant activities of the entity. Companiesin which the parent company or itssubsidiaries hold more than 50 per cent of the votes, but are unable to exercise control due to contractual or legal reasons, are not included in the consolidated accounts. The Group also assessesif control exists when it holdslessthan 50 per cent of the voting rights.

This may arise if the Group has contractual arrangements with other vote holders. The size and dispersion of holdings of other vote holders may also indicate that the Group hasthe practical ability to direct the relevant activities of the investee.

When voting rights are not relevant in deciding who has power over an entity, such asinterestsin some funds orspecial purpose entities(SPE), all facts and circumstances are considered in determining if the Group controlsthe entity. In the assessment whether to consolidate SPEs and any entities where there is not immediately clear where control rests, an analysisis made to identify which party has power over the activities which most affectsthe returns of the entity and if that party issignificantly exposed or have significant rightsto the returnsfrom that entity.

The financialstatements of the parent company and the consolidated subsidiariesrefer to the same period and have been drawn up according to the accounting policies applicable to the Group. A subsidiary isincluded in the consolidated accountsfrom the time of acquisition, being the date when the parent company gains control over the subsidiary. The subsidiary isincluded in the consolidated accounts until the date when control over the company ceasesto exist.

The consolidated accounts are prepared in accordance with the acquisition method. The acquisition value is measured asthe fair value of the assets given, equity instrumentsissued and liabilitiesincurred 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 consideration transferred for the acquisition over the fair value of the Group'sshare of the identifiable acquired net assetsisrecorded as goodwill. If the consideration transferred islessthan the fair value of the net assets of the acquired subsidiary, the difference isrecognised directly against profit or loss.

Goodwill is allocated between the cashgenerating units or groups of units which are expected to generate cash flows. The cashgenerating unitsto which goodwill is allocated correspond to the lowest level within the Group in which goodwill is monitored for internal management purposes.

Intragroup transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. The minority interest of the profit in subsidiariesisincluded in the reported profit in the consolidated income statement, while the minority share of net assetsisincluded in equity.

Associated companies

The consolidated accounts also include associated companiesthat are companies in which the Group hassignificant influence, but not control. Significant influence meansthat 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 generally deemed to exist if the Group, directly or indirectly, holds between 20 and 50 per cent of the voting rights of an entity.

According to the main principle, associated companies are consolidated in accordance with the equity method. This meansthat the holding isinitially reported at its acquisition cost. Associated companies are subsequently carried at a value that correspondsto the Group'sshare of the net assets. However, the Group has chosen to designate investmentsin associates held by the Group's venture capital organisation at fair value through profit or loss on the basisthat these are managed and evaluated based on fair value.

ASSETS HELD FOR SALE

Assets(or disposal groups) are classified as held forsale at the time when a noncurrent asset or group of assets(disposal group) are available for immediate sale in its present condition and itssale is deemed to be highly probable. At the time of the classification, a valuation of the asset or disposal group is made at the lower of its carrying amount and fair value, less coststo sell. Any subsequent impairment losses or revaluations are recognised directly in profit or loss. No gains are recognised in excess of accumulated impairment losses of the asset recognised previously. From the time of classification, no depreciation is made for property and equipment or intangible assets originating from assets held forsale. Assets and liabilities held forsale are reported separately in the balance sheet until they are sold.

SEGMENT REPORTING

An operating segment isidentified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resourcesto the segments and to assesstheir performance. The business divisions are identified asseparate operating segments. Business Support, Group Staff, Group Treasury and Group wide items are included in the segment Other. In the context of defining the segmentsthe President and Chief Executive Officer (CEO) isthe Group's chief operating decision maker.

FOREIGN CURRENCY TRANSLATION

Foreign currency transactions are translated into the appropriate functional currency using the exchange rates prevailing at the dates of the transactions. On subsequent balance sheet dates monetary itemsin foreign currency are translated using the closing rate. Nonmonetary items, which are measured in terms of historical cost in foreign currency, are translated using the exchange rate on the date of the transaction. Nonmonetary 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 nonmonetary 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 differencesfrom nonmonetary items, classified as availableforsale financial assets, are recognised in other comprehensive income. Exchange rate differencesreferring to monetary items comprising part of a net investment in a foreign operation are reported in other comprehensive income.

The income statements and balance sheets of Group entities, with a functional currency other than the Group's presentation currency, are translated to SEK in the consolidated accounts. Assets and liabilitiesin foreign Group entities are translated at the closing rate and income and expensesin the income statement are translated at the average exchange rate for the year. The exchange rate differences are recognised as a separate component of other comprehensive income.

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

FINANCIAL ASSETS AND LIABILITIES Financial assets

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 profit or loss. Financial assets are derecognised when the rightsto receive cash flows have expired or the Group hastransferred substantially all risks and rewards. Transfers of financial assets with retention of all orsubstantially all risks and rewardsinclude for example repurchase transactions and securitieslending transactions.

The Group classifiesits financial assetsin the following categories: financial instruments at fair value through profit or loss; loans and receivables and availableforsale financial assets.

Financial assets are recognised on the balance sheet on the trade date, with exception of loans and receivables, which are recognised on the settlement date.

Financial assets at fair value through profit and loss

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 shortterm 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 contractsincluding one or more embedded derivatives, investmentsthat are managed and evaluated on a fair value basis and situationsin which such designation reduces measurement inconsistencies. The nature of the financial assets which have been designated at fair value through profit or loss and the criteria forsuch designation are described in the relevant notesto the financialstatements.

Gains and losses arising from changesin fair value are reported in the income statement on an ongoing basis under the item Net financial income.

Loans and receivables

Loans and receivables are nonderivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised cost using the effective interest method. The balance sheet items Cash balances with central banks, Loansto credit institutions and Loansto the public are included in this category.

Available-for-sale financial assets

Availableforsale financial assets are nonderivative financial assetsthat are designated as availableforsale and are not classified into any of the other categories described above. Availableforsale financial assets are measured at fair value. Gains and losses arising from changesin fair value are reported in other comprehensive income and accumulated in equity. In the case ofsale or impairment of an availableforsale financial asset, the accumulated gains or losses previously reported in equity are recognised in profit or loss. Interest on interestbearing availableforsale financial assetsisrecognised in profit or loss, applying the effective interest method. Dividends on equity instruments, classified as availableforsale, are also recognised in profit or loss.

Investmentsin 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. Investmentsin equity instruments without a quoted market price in an active market andwhose fair value cannot be reliably measured are measured at cost.

Reclassification

In rare circumstances nonderivative trading financial assetsthat are no longer held for the purpose ofselling it in the near term may be reclassified out of the held for trading category. Financial assets held in the availableforsale category may be reclassified to loans and receivables or heldtomaturity if SEB hasthe 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 isreclassified at the reclassification date.

Reclassifications are made at fair value as of the reclassification date. The fair

value becomesthe new carrying amount. Effective interest ratesfor financial assets reclassified to loans and receivables are determined at the reclassification date. Increasesin estimates of cash flows of reclassified financial assets adjust effective interest rates prospectively, whereas decreasesin the estimated cash flows are charged to the profit or loss.

Financial liabilities

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.

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

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are either classified as held for trading or designated asfair 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 asfor financial assets. Liabilitiesto policyholders and some Debtsecurities are included in this category. Financial liabilities held for trading are primarily short positionsin interestbearing securities, equities and derivatives not designated as hedging instruments.

Gains and losses arising from changesin fair value are reported in the income statement on an ongoing basis under the item Net financial income.

Other financial liabilities

The category other financial liabilities primarily include the Group'sshortterm and longterm borrowings. After initial recognition other financial liabilities are measured at amortised cost, using the effective interest method. The balance sheet items Depositsfrom credit institutions, Deposits and borrowingsfrom the public and Debtsecurities are included in this category.

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

Fair value is defined asthe price that would be received to sell an asset or paid to transfer a liability in an orderly market between market participants at the measurement date.

The fair value of financial instruments quoted in an active market is based on quoted market prices. If the asset or liability measured at fair value has a bid price and an ask price, the price within the bidask spread that is most representative of fair value in the circumstancesis used.

The fair value of financial instrumentsthat are not quoted in an active market is determined by applying various valuation techniques with maximum use of observable inputs. The valuation techniques used are for example discounted cash flows, option pricing models, valuations with reference to recent transactionsin the same instrument and valuations with reference to other financial instrumentsthat are substantially the same. When valuing financial liabilities at fair value own credit standing isreflected.

Any differences between the transaction price and the fair value calculated using a valuation technique with unobservable inputs, the Day 1 profit, is amortised over the life of the transaction. Day 1 profit isthen recognised in profit or loss either when realised through settlement or when inputs used to calculate fair value are based on observable prices or rates.

Fair value is generally measured for individual financial instruments. In addition portfolio adjustments are made to cover market risks and the credit risk of each of the counterparties on groups of financial assets and liabilities on the basis of the net exposure to these risks. When assets and liabilities have offsetting market risks midmarket prices are used for establishing fair value of the risk positionsthat offset each other. To reflect counterparty risk and own credit risk in OTC derivatives, adjustments are made based on the net exposure towards each counterpart.

Embedded derivatives

Some combined contracts contain both a derivative and a nonderivative component. In such cases, the derivative component istermed an embedded derivative. Where the economic characteristics and risks of the embedded derivatives are not closely related to those of the host contract, and the host contract itself is not carried at fair value through profit or loss, the embedded derivative is bifurcated and reported at fair value with gains and losses being recognised in the income statement.

Certain combined instruments are classified as financial assets or financial liabilities at fair value through profit or loss according to the fair value option. The designation impliesthat the entire combined instrument is measured at fair value through profit and loss.

Hedge accounting

Derivatives are used to hedge interest rate, exchange rate and equity exposures. Where derivatives are held for risk management purposes and when transactions meet the required criteria, the Group appliesfair value hedge accounting, cash flow hedge accounting or hedging of a net investment in a foreign operation as appropriate to the risks being hedged. The Group documents and designates at inception the relationship between the hedged item and the hedging instrument as well as the risk objective and hedge strategy. The Group also documentsits assessment, both at inception and on an ongoing basis, whether the derivatives used are both prospectively, and retrospectively highly effective in offsetting the hedged risk. As part of the prospective test the Group also assesses and documentsthat the likelihood of forecasted transactionsto take place is highly probable.More information regarding hedge accounting can be found in note 7 Net other income.

Hedge accounting is applied when derivatives are used to reduce riskssuch as interest rate risks and currency risksin financial instruments. Furthermore, hedge accounting can be applied to liabilities hedging currency risk in net investmentsin subsidiaries. The Group applies different hedge accounting models depending on the purpose of the hedge:

• Hedges of fair value of recognised assets or liabilities(fair value hedge)
• Hedges of the fair value of the interest rate risk of a portfolio (portfolio hedge) – Hedges of highly probable future cash flows attributable to recognised assets or
• liabilities(cash flow hedge)
• Hedges of a net investment in a foreign operation (net investment hedge).

The Group discontinues hedge accounting when:

• The derivative has ceased to be highly effective as a hedging instrument;
• The derivative expires, issold, terminated, or exercised;
  • The hedged item matures, issold or repaid; or
  • The forecast transaction is no longer deemed highly probable.

Fair value hedge

Fair value hedges are used to protect the Group against undesirable exposuresto changesin the market prices of recognised assets or liabilities. Changesin fair value of derivativesthat qualify and are designated as hedging instruments are recorded in the income statement, togetherwith changesin the fair value of the hedged asset or liability that are attributable to the hedged risk as Net other income.

Where the Group hedgesthe 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 liabilitiesin the balance sheet.

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 variationsin 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 isrecognised in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument isrecognised in profit or loss as Net other income.

Gains or losses on hedging instrumentsthat have been accumulated in equity are recognised in profit or lossin the same period asinterest income and interest expense from the hedged asset or liability.

When cash flow hedges are discontinued but future cash flowsstill are expected to occur, accumulated gains or lossesfrom the hedging instrument will remain as a separate item in equity until the hedged future cash flows occur. Accumulated gains or losses are subsequently reported in profit or lossin Net interest income in the same period in which the previously hedged interest flows are recognised in profit or loss.

Net investment hedge

Hedge of a net investment is applied to protect the Group from translation differences due to net investmentsin foreign subsidiaries. Foreign currency loans constitute the major portion of hedging instrumentsin these transactions. The translation differences arising on the hedging instruments are recognised in other comprehensive income and accumulated in equity astranslation of foreign operations, to the extent the hedge is effective. Any ineffective part isrecognised as Net financial income. When a foreign operation is partially disposed of orsold, exchange differences accumulated in equity are recognised in the income statement as part of the gain or loss on the sale.

INTEREST INCOME AND INTEREST EXPENSE

The effective interest method is applied to recognise interest income and interest expensesin profit or lossfor financial assets and financial liabilities measured at amortised cost.

The effective interest 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 isthe rate that discounts estimated future cash payments or receiptsthrough the expected life of the financial instrument to the net carrying amount of the financial instrument. When calculating future payments, all paymentsincluded 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 the effective interest rate includesfees and points to be received and paid that are an integral part of the effective interest rate.

Once a financial asset or a group ofsimilar financial assets has been written down as a result of an impairment loss, interest income issubsequently recognised applying the rate of interest used to discount the future cash flowsfor the purpose of measuring the impairment loss.

COMMISSIONS AND FEES

Commission income and income in the form of fees on financial instruments are accounted for in differentways, 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 allocated over the expected tenor of the instrument applying the effective interest method and presented in Net interest income.

Commission income and feesfrom asset management and advisory services are reported in accordance with the economic substance of each agreement. This income isrecognised during the period in which the service is provided. Commission and feesfrom negotiating a transaction for a third party,such as arrangement of acquisitions or purchase orsale of a business, isrecognised on completion of the transaction. Performancebased fees are reported when the income can be reliably calculated.

Feesfrom loan syndicationsinwhich SEB acts as arranger are reported asincome feewhen the syndication is completed and the Group hasretained no part of the loan or retained a part of the loan at the same effective interest rate as other participants.

DIVIDEND INCOME

Dividends are recognised when the entity'sright to receive payment is established.

REPURCHASE AGREEMENTS

Securities may be lent orsold subject to a commitment to repurchase them (a 'repo') at a fixed price and at a predetermined date. Such securities are retained on the balance sheet and in addition included separately as collateral pledged for own liabilitieswhen cash consideration isreceived. Depending on the counterparty, payment received isrecognised under Deposits by credit institutions or as Deposits and borrowing from the public.

Similarly, where the Group borrows or purchasessecuritiessubject to a commitment to resell them (a 'reverse repo'), the securities are not included in the balance sheet. Payments made are recognised as Loansto credit institutions or as Loansto the public.

The difference between sale and repurchase price is accrued over the life of the agreements using the effective interest method.

SECURITIES BORROWING AND LENDING

Securities borrowing and lending transactions are entered into on a collateralised basis. Fair values ofsecuritiesreceived or delivered are monitored on a daily basis to require or provide additional collateral. Cash collateral delivered is derecognised from the balance sheet and a corresponding receivable isrecognised. Cash collateral received isrecognised in the balance sheet and a corresponding obligation to return it, isrecognised. Securitieslent remain on the balance sheet and are in addition 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 securitiesis booked as a liability. Securitiesreceived in a borrowing or lending transaction are disclosed as offbalance sheet items.

IMPAIRMENT OF FINANCIAL ASSETS

All financial assets, except those classified at fair value through profit or loss, are tested for impairment.

At each balance sheet date the Group assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. A financial asset or a group of financial assets are 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 a group of financial assetsthat can be reliably measured.

Examples of objective evidence that one or more events have occurred which may affect estimated future cash flowsinclude:

• significant financial difficulty of the issuer or obligor,
• concession granted to the borrower as a consequence of financial difficulty, 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 lossisreported as a write off, if it is deemed impossible to collect the contractual amountsthat 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 isrecorded in an allowance account. Assoon asthe noncollectible 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 isreversed if the estimated recovery value exceeds the carrying amount.

Assessment of impairment

Individual assessment of impairment

Loss eventsindicating objective evidence of impairment of individually assessed assets arewhen scheduled payments are past due by more than 90 days, or if the counterparty is expected to be in default or any other combination of eventsthat are deemed so negative that therewill be a probable payment default in the foreseeable future. The debt instrument isimpaired if the cash flowsincluding the value of the collateral does not cover outstanding exposure.

Collective assessment of impairment when assets are not individually impaired Assets assessed for impairment on an individual basis and found not impaired are included in a collective assessed, of incurred but not identified, impairment. The collective assessment of incurred but not identified credit lossesis based on the SEB counterpart rating scale.

Loans assessed on a portfolio basis

Loans with limited value and similar risk, homogenous groups, are assessed for impairment on a portfolio basis. In assessing collective impairment the Group uses statistical models based on the probability of default and the amount of loss incurred, considering collaterals and recovery rates. The outcome is adjusted for management'sjudgement asto whether current economic and credit conditions are such that the actual losses are likely to be greater or lessthan suggested by the models. Default rates and lossrates are regularly benchmarked against actual outcomesto ensure that they remain appropriate.

Recognition of impairment loss on assets carried at amortised cost

An impairment of an individually assessed financial asset in the category loans and receivables 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 asthe 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 restructured 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 flowsrelating to shortterm receivables are not discounted if the effect of the discounting isimmaterial. The entire outstanding amount of each loan for which a specific provision has been established isincluded in impaired loans, i.e. including the portion covered by collateral.

Recognition of impairment loss on Available-for-sale financial assets

When there is a decline in the fair value and there is objective evidence of impairment in an availableforsale financial instrument, the accumulated lossshall be reclassified from equity to profit or loss. Equity instruments are considered impaired when a significant or prolonged decline in the fair value has occurred. The amount of the accumulated lossthat istransferred from equity and recognised in profit or lossis 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 asthe 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 interestbearing instruments classified as availableforsale are reversed via profit or lossif the increase in fair value can be objectively attributed to an event taking place subsequent to the writedown. Impairment lossesfor equity instruments classified as availableforsale are not reversed through profit or lossfollowing an increase in fair value but are recognised in other comprehensive income.

Restructured loans

Portfolio assessed loansthat would have been considered past due more than 60 daysif they were not restructured.

SEIZED ASSETS

Seized assets are assetstaken over to protect a claim. SEB may refrain from a loan receivable and instead seize the asset thatserved as collateral for the loan. Seized assets may consist of financial assets, properties and other tangible assets. Seized asset are recognised on the same line item in the balance sheet assimilar assets that have been acquired otherwise. Seized financial assets are categorised as Availableforsale financial assets. At inception seized assets are measured at fair value. The fair value at initial recognition becomesthe acquisition value. Subsequently seized assets are measured according to type of asset with the exception of impairment on tangible seized assetsthat isreported as Gainslesslossesfrom tangible and intangible assetsrather than as Depreciation, amortisation and impairment of tangible and intangible assets. The purpose isto better reflect the similar character of impairment of assetsthat are taken over to protect claims on counterparties and credit losses.

TANGIBLE ASSETS

Tangible assets, with the exception of investment properties held in insurance operations, are measured at 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 buildingsis 50 years. The depreciation period for other tangible fixed assetsis between 3 and 8 years.

Tangible fixed assets are tested for impairment whenever there is an indication of impairment.

LEASING

A finance lease is a lease that transfers, from the lessor to the lessee,substantially all risks and rewardsincidental to the ownership of an asset. In the Group, essentially all leasing contractsin which the Group isthe lessor are classified as finance leases. Finance leases are reported aslending, which impliesthat the leasing income isreported within net interest income.

INVESTMENT PROPERTIES

Investmentsin properties held in order to receive rental income and/or for capital appreciation are reported asinvestment properties. The recognition and measurement ofsuch 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 ofspecified assets, including the investment propertiesthemselves, are accounted for using the fair value model. Holdings of investment propertiesin the banking operations are measured at depreciated cost.

INTANGIBLE ASSETS

Intangible assets are identifiable, nonmonetary assets without physicalsubstance. For an intangible asset to be recognised an entity must be able to demonstrate control of the intangible asset, which impliesthat the entity hasthe 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, i.e. all intangible assets except goodwill, are amortised on a straight line basis over their useful lives and tested for impairment annually and whenever events or changesin circumstancesindicate that the carrying amount may not be recoverable. Customer lists are amortised over 20 years and internally generated intangible assets,such assoftware development, are amortised over a period of between 3 and 8 years.

Intangible assets with indefinite useful lives, i.e. goodwill, are not amortised but tested for impairment annually and whenever there is an indication that the intangible asset may be impaired. Asregards goodwill, an impairment lossisrecognised in profit or loss whenever the carrying amount, with respect to a cashgenerating unit or a group of cashgenerating unitsto which the goodwill is attributed, exceedsthe 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 isindication of a reduction in the value of the asset. An impairment lossisrecognised if the carrying amount exceedsthe recoverable amount of the asset.

PROVISIONS

Provisions are recognised for present obligations arising as consequences of past events where it is more likely than not that a transfer of economic benefit will be necessary to settle the obligation, and it can be reliably estimated. Provisions are determined by discounting the expected future cash flows at pretax rate that reflects current market assessments of the time value of money and, where appropriate, the risksspecific to the liability.

Provisions are made for undrawn loan commitments and similar facilitiesif it is probable that the facility will be drawn by a debtor in financial difficulties.

Provisions are evaluated at each balance sheet date and are adjusted as necessary.

FINANCIAL GUARANTEES

Financial guarantees are contractsthat require the Group to make specified paymentsto reimburse the holder for a lossit incurs because a specified debtor failsto make paymentwhen due in accordance with the terms of a debt instrument. Financial guarantee liabilities are initially recognised at their fair value, which most often equalsthe premium received. The initial fair value is amortised over the life of the financial guarantee. The guarantee liability issubsequently carried at the higher of this amortised amount and the best estimate of the expenditure required to settle any financial obligation arising as a result of the guarantee at the balance sheet date. Provisions and changesin provisions are recognised in the income statement as Net credit losses. The contractual amounts according to financial guarantees are not recognised in the balance sheet but disclosed as offbalance sheet items.

EMPLOYEE BENEFITS

Pensions

There are both defined contribution and defined benefit pension plans within the Group, of which most have plan assets. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will get on retirement depending on factorssuch as age, years ofservice and compensation. A defined contribution plan is a pension plan where the Group pays a contribution to separate entities 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 or through insurance solutions.

The defined benefit obligation is calculated quarterly by independent actuaries using the Projected Unit Credit Method. The assumptions upon which the calculations are based are found in note 9b addressing Staff costs.

All changesin the net defined benefit liability (asset) are recognised asthey occur, asfollows: (i)service cost and net interest in the income statement; and (ii) remeasurements of both defined benefit obligations and plan assetsin other comprehensive income.

Pension costsfor defined contribution pension plans are recognised as an expense during the period the employees carry out the service to which the payment relates.

Share-based payments

The Group operates a number ofsharebased incentive programmes, under which it awards SEB equity instrumentsto its employees. Equitysettled sharebased incentive programmes entitle employeesto receive SEB equity instruments. Cashsettled sharebased incentive programmes entitle employeesto receive cash based on the price or value of equity instruments of SEB. Fair value of these rightsis determined by using appropriate valuation models, taking into account the terms and conditions of the award and the Group's estimate of the number of rightsthat will eventually vest, which isreassessed at each reporting date. Socialsecurity costs are accounted for over the vesting period and the provision forsocialsecurity costsis reassessed on each reporting date to ensure that the provision is based on the rights' fair value at the reporting date.

The cost of equitysettled sharebased incentive programmesis measured by reference to the fair value of equity instruments on the date they are granted and recognised as an expense on a straightline basis over the vesting period with a corresponding increase in equity. The vesting period isthe period that the employees have to remain in service in SEB in order for their rightsto vest. For cashsettled sharebased incentive programmes, the services acquired and liability incurred are measured at the fair value of the liability and recognised as an expense over the vesting period, during which the employeesrenderservice. Untilsettlement, the fair value of the liability isremeasured, with changesin fair value recognised in the income statement.

TAXES

The Group'stax for the period consists of current and deferred tax. Current tax assets and liabilitiesfor the current and prior periods are measured at the amount expected to be paid to or from tax authorities using the tax rates and tax lawsthat have been enacted orsubstantively enacted at the balance sheet date. Current tax is calculated based on the taxable resultsfor the period. Deferred tax arises due to temporary differences between the tax bases of assets and liabilities and their carrying amounts.

Current tax and deferred tax are generally recognised in profit or loss. However, tax that relatesto itemsrecognised in other comprehensive income is also reported directly in other comprehensive income. Examples ofsuch items are changesin the fair value of availableforsale financial assets and gains or losses on hedging instrumentsin 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 22 per cent (22 per cent) in Sweden and at each respective country'stax rate for foreign companies.

INSURANCE AND INVESTMENT CONTRACTS

Insurance contracts are contracts under which the Group acceptssignificant 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 instrumentsthat do not meet the definition of an insurance contract, asthey do not transfersignificant insurance risk from the policyholder to the Group.

Insurance contracts

Insurance contracts are classified asshortterm (nonlife) or longterm (life). Shortterm insurance comprise sickness, disability, healthcare, and rehabilitation insurance. Longterm insurance comprises mainly traditional life insurance within the Danish subsidiary, SEB Pension. In the Group accountsshortterm and longterm insurance are presented aggregated asInsurance contracts. Some 95 per cent of the insurance liability isrelated to longterm insurance contracts.

Measurement of short-term insurance contracts (non-life)

The provision for unearned premiumsisintended to cover the anticipated cost of claims and operating expenses arising during the remaining policy period of the insurance contractsin force. The provision for unearned premiumsis 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 premiumsisstrengthenedwith a provision for unexpired risks.

For anticipated future claimsthat have been incurred but not yet paid, provision for claims outstanding isrecognised. The provision isintended to cover the anticipated future payment of all claimsincurred, including claimsincurred but not reported (IBNR provisions). This provision should also cover all costsfor claimssettlement. The provision for claims outstanding is not discounted, with the exception of provisionsforsickness annuities, which are discounted using standard actuarial methods.

Measurement of long-term insurance contracts (life)

For longterm life insurance contracts, a liability for contractual benefitsthat are expected to be incurred in the future isrecorded when the premiums are recognised. The liability equalsthe sum of the discounted value of expected benefit payments and future administration expenses, less any outstanding future contractual premium payments. Liabilitiesfor longterm life insurance are discounted using standard actuarial methods.

Liability adequacy test

Swedish actuarial proceduresinvolve performing liability adequacy tests on insurance liabilities. Thisisto ensure that the carrying amount of the liabilitiesissufficient in the light of estimated future cash flows. The carrying amount of a liability isthe value of the liability itself less any related intangible asset or asset for deferred acquisition costs. The current best estimates of future contractual cash flows, aswell 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 isimmediately recognised in profit or loss.

Revenue recognition

Premiumsfor insurance contracts are recognised asrevenue when they are paid by the policyholders. For contracts where insurance risk premiumsreceived during a period are intended to cover insurance claims arising in that period those premiums are recognised asrevenue proportionally during the period of coverage.

Recognition of expenses

Costsfor insurance contracts are recognised as an expense when incurred, with the exception of commissions and other variable acquisition coststhat 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 asthe related revenue is recognised. The asset istested 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 nonincremental acquisition costs or maintenance costs, are recognised in the accounting period in which they arise. Insurance compensation isrecorded as an expense when incurred.

Reinsurance

Contracts with reinsurers, whereby compensation for lossesisreceived by the Group, are classified as ceded reinsurance. For ceded reinsurance, the benefitsto which the Group is entitled under the terms of the reinsurance contract are reported asthe reinsurers'share of insurance provisions. Amountsrecoverable from reinsurers 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 unitlinked insurance is classified asinvestment contracts. No significant insurance risk istransferred from the policyholder to the Group. A minor part of the Group's unit linked insurance business, the portion referring to the Danish insurance subsidiary, is classified asinsurance 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 designated at fair value through profit or loss(fair value option). The choice to use the fair value option has been made for the purpose of eliminating the measurement inconsistency that would occur if different basesfor measurement would have been used for assets and liabilities. The fair value of the unit linked financial liabilitiesis determined using the fair value of the financial assetslinked to the financial liabilities attributed to the policyholder on the balance sheet date. However, if the liability issubject to a surrender option, the fair value of the financial liability is never lessthan the amount payable on surrender.

Revenue recognition

Amountsreceived from and paid to policyholders are reported in the balance sheet as deposits or withdrawals. Fees charged for managing investment contracts are recognised asrevenue. The revenue for these managementservicesis 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 asthe related revenue isrecognised. The asset istested 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)

Some traditional pension saving contractsinclude a discretionary participation feature. Thisfeature entitlesthe policyholder to receive, as a supplement to guaranteed benefits, additional benefits or bonuses. All contractsthat include a discretionary participation feature are reported asinsurance contracts. The amounts referring to the guaranteed element and to the discretionary participation feature are reported asliabilitiesto policyholders.

CHANGES IN ACCOUNTING POLICIES IMPLEMENTED 2016

The following changes have been implemented in 2016:

IFRS 10 Consolidated Financial Statements and IAS 28 Investments in associates and Joint Ventures together with IFRS 12 Disclosure of Interests in Other Entities have been amended with clarificationsto the accounting for interestsin investment entities and applying the consolidation exemption.

IAS 27 Separate Financial Statements have been amended regarding the equity method in separate financialstatements.

IFRS 11Joint Arrangements have been amended regarding accounting for acquisitions of interestsin joint operations.

IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets have been clarified regarding acceptable methods of depreciation and amortisation.

IAS 1 Presentation of Financial Statements has been amended with clarifications of, for example, materiality and disclosure requirements.

Annual Improvements 2012–2014 Cycle has narrowly amended several IFRS standards.

These changes have not had a material impact on the financialstatements of the Group or on capital adequacy and large exposures.

IFRS 4 Insurance Contracts allows nonuniform accounting policiesfor insurance contracts. A change in accounting policiesfor calculating insurance liabilitiesin Denmark was made as of 1 January 2016 to be aligned with Solvency II principles.

The reorganisation as of 1 January 2016 amended the reportable segments of the Group and goodwill wasreallocated to business unit and geographical level rather than the divisional level in accordance with IFRS 8 Operating Segments and IAS 36 Impairment of Assets.

FUTURE ACCOUNTING DEVELOPMENTS

Consideration will be given in the future to the implications, if any, of the following new and revised standards and interpretations, if adopted by the EU.

IFRS 9 Financial Instruments – IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement. The standard includes a revised model for classification and measurement of financial instruments, a new impairment model based on expected loss and an amended approach for general hedge accounting. The standard is endorsed by the EU. SEB will not early adopt the standard. However, SEB is evaluating the option allowing the presentation of fair value movements of own credit risk from issued debt instruments designated at fair value in other

comprehensive income prior to adopting IFRS 9 in full 2018.

Within SEB an IFRS 9 Implementation Programme has been set up for implementation of IFRS 9. The Programme isjointly sponsored by the Chief Financial Officer and the Chief Risk Officer. A Steering Committee comprising senior representatives from Group Risk, Group Finance, IT and the Divisions has been established.

The new approach for classification and measurement of financial assetsfocuses on the business model with respect to how financial assets are managed and whether contractual cash flowsrepresent only nominal amounts and interest. IFRS 9 requirements on the classification and measurement of financial liabilities remain largely unchanged compared to IAS 39. However, where issued debt instruments are designated at fair value, the changesin the fair value attributable to own credit risk will be recognised in other comprehensive income (OCI) and not in profit or loss asrequired by IAS 39. Following an initial assessment of contractual cash flows and business model, SEB expectsthat the measurement basis of the majority of the Group's financial assets will be unchanged on application of IFRS 9.

IFRS 9 introduces an expected credit loss(ECL) model with a threestage approach based on changesin the credit risk. A 12month ECL, Stage 1, appliesto all items, unlessthere is a significant increase in credit risk since initial recognition. For items where there is a significant increase in credit risk (Stage 2) or in default (Stage 3), lifetime ECL applies. The assessment of credit risk, and the estimation of expected credit loss, are required to be unbiased and probabilityweighted, and should incorporate all available information which isrelevant to the assessment, including information about past events, current conditions and reasonable and supportable forecasts of future events and economic conditions at the reporting date. The IFRS 9 impairment model will be applicable to all financial assets at amortised cost, financial assets at fair value through other comprehensive income and offbalance sheet itemssuch asloan commitments and financial guarantees.

SEB'sIFRS 9 methodology for ECL measurement will leverage off existing internal ratingbased Basel models. The design of the IFRS 9 models entails adjusting from the regulatory oneyearloss horizon and throughthecycle modelling to lifetime loss horizon and pointintime modelling. SEB plansto use internally developed macroeconomic forecasts asthe basisfor the forwardlooking information incorporated in the ECL measurement.

SEB's assessment isthat the expected credit loss model islikely to increase loan loss allowances at transition, compared to the current incurred loss model. To date it is unclear how regulators will treat the interaction of the accounting loan loss allowance and the regulatory capital concept of expected loss. Under current regulation, any deficit between regulatory expected loss and IAS 39 loan loss allowance is deducted from CET1 capital, while any surplusis added back to Tier 2 capital. The European Commission has proposed that incremental provisions under IFRS 9 should be phased in over a five year period.

For general hedge accounting, IFRS 9 introduces a model more aligned with risk managementstrategies and objectives. SEB is evaluating the accounting policy choice in IFRS 9, whether to continue with the IAS 39 hedge accounting or to implement IFRS 9.

IFRS 15 Revenue from contracts with customers – IFRS 15 replaces all present revenue standards and related interpretationsincluding IAS 11 Construction Contracts and IAS 18 Revenue but does not apply to financial instruments, insurance contracts or leasing contracts. IFRS 15 establishesthe principlesfor reporting information about the nature, amount, timing and uncertainty of revenue and cash flows from contract with customers. The standard introduces a fivestep revenue recognition model. IFRS 15 is endorsed by EU and should be applied from 1 January 2018, earlier application is permitted. SEB will not early adopt the standard.

SEB is currently evaluating the nature and impact of the change to the financial statements of the Group. SEB hasidentified that the treatment of contract costsfor investment contracts within Life will change. According to the new more specific requirements a smaller part of deferred acquisition costs will be recognised as an asset. SEB is currently assessing the quantitative impact. The change will affect the financialstatements of the Group at transition, but not the capital adequacy and large exposures.

IFRS 16 LeasesreplacesIAS 17 Leases and related interpretations and was published in January 2016. The mostsignificant effect of the new requirementsisthat a lessee will recognise a lease asset (rightofuse asset) and a financial liability, representing mainly the present value of leased premises, in the balance sheet. In the income statement, the straightline operating lease expense will be replaced by a depreciation charge for the lease asset and an interest expense on the financial liability. Currently the lessees' operating leases are not recorded in the balance sheet. SEB is currently evaluating the impact of the change to the financialstatements of the Group. The Standard should be applied from 1 January 2019 and is not endorsed by EU.

IAS 12 Income Taxes has been amended regarding recognition of deferred tax assetsfor unrealised losses. IAS 7 Statements of Cash flows have been amended within the disclosure initiative. These amendmentsshould be applied from 1 January 2017 and have not been endorsed by EU. The changes will not have a material effect on the financialstatements of the Group or on capital adequacy and large exposures

IFRS 2 Share-based Payment have been amended regarding classification and measurement ofsharebased payment transactions. IFRS 4 Insurance Contracts has been amended regarding applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts. These amendmentsshould be applied from 1 January 2018 and have not been endorsed by EU. The changes will not have a material effect on the financialstatements of the Group or on capital adequacy and large exposures.

Significant accounting policies of the parent company

Skandinaviska Enskilda Banken (SEB) AB is a public limited liability company with corporate number 5020329081 and with registered office in Stockholm, Sweden.

The financialstatements of SEB AB are prepared in accordance with the Annual Accounts Act for Credit Institutions and Securities Companies(1995:1559), the regulation and general guidelinesissued by the Swedish Financial Supervisory Authority, Annual Reportsin Credit Institutions and Securities Companies(FFFS 2008:25) and statementsfrom the Swedish Financial Reporting Board, RFR 2 and the additional UFR statements.

In accordance with the Financial Supervisory Authority'sregulation, the parent company appliesstatutory IFRS. This meansthat the International Financial Reporting Standards(IFRS) and interpretations of these standards as adopted by the EU have been applied to the extent that is possible within the framework of Swedish legislation and considering the close tie between financial reporting and taxation. 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.

CHANGED ACCOUNTING POLICIES

The changed Group accounting policies also appliesto the parent company. The Swedish Annual Accounts Act for Credit Institutions and Securities Companies and the regulations and general guidelinesissued by the Swedish Financial Supervisory Authority have been updated with effective date 1 January 2016. The main changes relatesto alignment to IFRS regarding presentation and disclosures of contingent liabilities. Further a restricted reserve within equity has been implemented for intangible assetsrelated to internally generated development expenses. In all other material aspectsthe accounting policies, basisfor preparation and presentation for the parent company are unchanged in comparisonwith the annual report for 2015.

PRESENTATION FORMAT

The presentation format for the balance sheet and the profit and loss account according to the Annual Accounts Act for Credit Institutions and Securities Companiesis not in conformity with IFRS. Credit institutions and securities companies applying IFRS as adopted by the EU in their consolidated financialstatements have the option to deviate from the presentation format for the balance sheet asstipulated by law, but may not deviate from the stipulated profit and loss account.

HOLDINGS IN SUBSIDIARIES AND ASSOCIATED COMPANIES

Shares and participating interestsin subsidiaries and associated companies are measured at cost. Dividends on sharesin subsidiaries and associated companies are recognised asincome in profit or loss. Merger ofsubsidiariesthrough absorption are accounted for at consolidated values. The merger effect isreported in equity.

LEASING

Leasing contracts which are classified as finance leasesin the consolidated accounts are accounted for as operating leasesin the parent company.

PENSIONS

The parent company does not apply the provisions of IAS 19 concerning accounting for defined benefit plans. Instead, pension costs are calculated on an actuarial basis in the parent company in accordancewith the provisions of the Act on Safeguarding Pension Obligations and the Swedish Financial Supervisory Authority'sregulations. In Sweden, actuarial pension commitments are guaranteed by a pension foundation. The recognised net cost of pensionsis calculated as pensions paid and pension

premiumsless any compensation from the pension foundation. The net pension cost for the year isreported under Staff costsin the parent company's profit and loss account. Excess amounts as a result of the value of the plan assets exceeding the estimated pension obligations are not recognised as an asset in the parent company's balance sheet. Deficits are recognised as a liability.

GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with IAS 38, goodwill is not amortised in the consolidated financial statements. In the parent company financialstatements goodwill is amortised as any other intangible asset on a straight line basis.

TAXES

In the parent company, untaxed reserves are recognised as a separate item in the balance sheet. Untaxed reserves comprise accelerated depreciation under tax regulations, including the deferred tax component. In the consolidated financial statements, untaxed reserves are reported in retained earnings and deferred tax liability.

GROUP CONTRIBUTIONS

The net of Group contributionsreceived and paid isreported in the parent company as appropriations.

Critical judgementsin applying the accounting policies

Applying the Group's accounting policiesrequiresin some casesthe use of estimates and assumptionsthat have a material impact on the amountsreported in the financialstatements. The estimates are based on expert judgements and assumptionsthat management believes are true and fair. The management continuously evaluatesthese judgements and estimates. The mostsignificant assumptions and estimates are associated with the areas described below:

CONSOLIDATION OF MUTUAL LIFE INSURANCE COMPANIES AND 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, asthe judgement of the Group isthat it does not have control of the entity. Control isseen to imply the power to govern the financial and operating policies of an entity in order to affect the amount of itsreturnsfrom the entity. Life insurance entities operated as mutual life insurance companies cannot pay dividends which is why the Group deemsthat it cannot obtain benefits. In Gamla Livförsäkrings AB SEB Trygg Liv there are specific policiesspecifying the composition of the board, which impliesthat the SEB Group is not able to govern the financial and operating policies of the entity.

In the assessment whether to consolidate funds an assessment is made whether the Group is considered to be an agent or a principal. The Group is considered a principal, and hence controlsthe fund, when it isthe fund manager, cannot be removed without cause, hassignificant right to returnsfrom the fund by holding units and earning fee income and hasthe practical ability to influence itsreturn by using its power. Funds managed by the Group in which entities within the Group owns more than 20 per cent are analysed further for consolidation.

The policyholdersin SEB's unitlinked company choose to invest in a variety of funds. The insurance company providing unitlinked productsinvestsin 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 customersfor whom it acts as investment manager. Due to the legislation regarding fund operations, SEB considersthat it does not have the power to govern the financial and operating policies of such investment fundsto obtain benefits. This appliesirrespective of whether the funds held on behalf of customers are greater or lessthan 50 per cent 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 these funds which it managesshould not be consolidated. However, the shares that the Group holdsin such funds on behalf of its customers are recognised in the balance sheet.

FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

The objective of the fair value measurement isto arrive at the price at which an orderly transaction would take place between market participants at the measurement date under current market conditions. The best evidence of fair value is a quoted price for the instrument being measured in an actively traded market. Where the market for a financial instrument is not active, fair value is calculated using an established valuation technique. These valuation techniquesinvolve a degree of estimation, the extent of which depends on the instrument's complexity and the availability of marketbased data. When valuing financial liabilities at fair value own creditstanding isreflected. Given the uncertainty and subjective nature of valuing financial instruments at fair value, it is possible that the outcomesin the next financial year could differ from the assumptions used.

Forsome of the Group's financial assets and liabilities, especially for certain derivatives, quoted prices are not available, and valuation models are used to estimate fair value. As part of the fair value measurement, valuation adjustments are made when valuing derivative financial instruments, to incorporate counterparty and own credit risk. The methodologiesfor estimating valuation adjustments are continuously revised as a result of changing market practicesin response to regulatory and accounting policy changes, aswell as general market developments.

The Group has an established control environment for the determination of fair values of financial instrumentsthat includes a review, independently from the business, of valuation models and prices. If the validation principles are not adhered to, the Head of Group Finance shall be informed. Exceptions with material and principal importance require approval from the Valuation Committee and the SEB ASC (Accounting Standards Committee).

For disclosure purposes, fair values are classified in a fair value hierarchy according to the level of observability of the inputs, see note 21 Fair value measurement.

IMPAIRMENT TESTING OF FINANCIAL ASSETS AND GOODWILL Financial assets

When calculating loan impairment allowances on both individually assessed and collectively assessed loans critical judgements and estimates are applied. Assessing financial assetsindividually for impairment requiresjudgement to establish the counterparty'srepayment capacity and the realisable value of any collateral. The most important aspect when testing a group of financial assets collectively for impairment isto identify the eventsthat indicate incurred losses. In assessing collective impairment the Group usesstatistical models based on the probability of default and the amount of lossincurred, considering collaterals and recovery rates. The outcome is adjusted for management'sjudgement asto whether current economic and credit conditions are such that the actual losses are likely to be greater or lessthan suggested by the models. Default rates and lossrates are regularly benchmarked against actual outcomesto ensure that they remain appropriate.

Adjusting modelsfor collective impairment testing to current marketsituation also require a high degree of expert judgement to ensure a reliable estimate. The assessment and assumptions are regularly reviewed by the credit organisation of the Group.

Goodwill

Judgement isinvolved in determining the cashgenerating units. The annual impairment test of goodwill is based on the value in usewith forecasted cash flowsfor five years. The cash flows beyond five years are determined based on sustainable growth.

The estimation of future cash flows and the calculation of the rate used to discount those cash flowsinvolves a number of judgmental areas: the preparation of cash flowforecastsfor periodsthat are beyond the normal requirements of management reporting and the assessment of the discount rate appropriate to the business. Note 28 describe tangible and intangible assets in more detail.

CALCULATION OF INSURANCE LIABILITIES

Calculation of the Group'sinsurance liabilitiesis based on a number of estimations and assumptions, both financial and actuarial,such asinterest rates, mortality, health, expenses, inflation and taxes. One of the important financial assumptionsis the interest rate used for discounting future cash flows.

Assumption on interest ratesis based on regulationsfrom each local Financial Supervisory Authority (FSA). All other assumptions are based on internally acquired experience.

FAIR VALUE OF INVESTMENT PROPERTY

Investment propertiesin the insurance operations are fair valued with the assistance of external expertise. The valuation method applied meansthat 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 assessmentsthat the market can be expected to make under current market conditions. The yield requirement is based on local analysis of comparable property purchases.

VALUATION OF DEFERRED TAX ASSETS

Deferred tax assetsthat are relying on future profitability can be recognised only to the extent they can be offset against future taxable income and the valuation of deferred tax assetsisinfluenced by management's assessment of SEB'sfuture profitability, future taxable profits and future reversals of existing taxable temporary differences. The expected outcome of uncertain tax positionsis determined asthe single most likely outcome.

PROVISIONS

Judgement isinvolved in determining whether a present obligation exists, and i n estimating the probability, timing and amount of any outflows. Provisionsfor claims in civil lawsuits and regulatory matterstypically require a higher degree of judgement than other types of provisions.

ACTUARIAL CALCULATIONS OF DEFINED BENEFIT PLANS

The calculation of the Group's expense and obligationsfor defined benefit plansis based on actuarial, demographic and financial assumptionsthat have a significant impact on the recognised amounts. One of the important financial assumptionsis the interest rate used for discounting future cash flows. The estimation of the discount rate issubject to uncertainty around whether corporate bond markets are deep enough, of high quality and also in connection to the extrapolation of yield curvesto relevant maturities. The discount rate is based on high quality corporate bondsin a deep market, in Sweden covered bonds. The covered bondsin Sweden are at least AAArated and the maturity isin line with the estimated maturity of obligationsfor post employment benefits. The discount rate for the defined benefit obligation isrevised quarterly and other assumptions are revised each year or when a significant change has occurred.

Note 9b describing staff costs contain a list of the most critical assumptions used when calculating the defined benefit obligation.

2 Operating segments

Group business segments
Income statement, 2016	Large Corporates &Financial	Corporate &Private		Life& Investment			Total
	Institutions	Customers	Baltic	Management	Other1)	Eliminations
Interest income	12,640	10,378	2,509	–3	14,730	–5,052	35,202
Interest expense	–4,333	–1,396	–364	–57	–15,378	5,064	–16,464
Net interest income	8,307	8,982	2,145	–60	–648	12	18,738
Fee and commission income	11,722	7,117	1,671	7,641	125	–5,776	22,500
Fee and commission expense	–5,627	–1,703	–500	–3,582	–90	5,630	–5,872
Net fee and commission income	6,095	5,414	1,171	4,059	35	–146	16,628
Net financial income	4,187	394	218	1,764	332	161	7,056
Net other income	389	55	–23	–17	957	–12	1,349
Total operating income	18,978	14,845	3,511	5,746	676	15	43,771
ofwhich internally generated	–1,138	7,545	–5	–2,231	–4,186	15
Staff costs	–4,062	–3,339	–755	–1,560	–4,895	49	–14,562
Other expenses	–5,080	–3,713	–1,027	–984	4,165	–64	–6,703
Depreciation, amortisation and impairment
of tangible and intangible assets	–140	–69	–66	–45	–6,176		–6,496
Total operating expenses	–9,282	–7,121	–1,848	–2,589	–6,906	–15	–27,761
Gainslesslosses on disposals of tangible and intangible assets			–156		6		–150
Net credit losses	–563	–376	–56		2		–993
OPERATING PROFIT	9,133	7,348	1,451	3,157	–6,222		14,867
Business equity, SEK bn	62.4	37.3	7.9	11.6
Return on business equity,%	11.3	15.2	16.2	23.5
Risk exposure amount, SEK bn	375	117	67	4	47		610
Lending to the public 2) , SEK bn	546	710	117		2		1,375
Depositsfrom the public 2) , SEK bn	404	372	106		79		961
2015
Interest income	14,530	10,044	2,596		22,448	–11,892	37,726
Interest expense	–6,577	–1,691	–591	–43	–21,751	11,865	–18,788
Net interest income	7,953	8,353	2,005	–43	697	–27	18,938
Fee and commission income	15,539	7,479	1,644	2,617	132	–3,071	24,340
Fee and commission expense	–8,750	–1,679	–529	1,983	–84	3,064	–5,995
Net fee and commission income	6,789	5,800	1,115	4,600	48	–7	18,345
Net financial income	3,987	522	241	1,339	–624	13	5,478
Net other income	528	67	29	85	296	–3	1,002
Total operating income	19,257	14,742	3,390	5,981	417	–24	43,763
ofwhich internally generated	–1,376	8,506	–76	–1,748	–5,282	–24

Staff costs Other expenses Depreciation, amortisation and impairment of tangible and intangible assets	–3,860 –5,008 –109	–3,418 –3,463 –134	–729 –967 –69	–1,669 –1,144 –58	–4,809 4,252 –641	49 –25	–14,436 –6,355 –1,011
Total operating expenses	–8,977	–7,015	–1,765	–2,871	–1,198	24	–21,802
Gainslesslosses on disposals of tangible and intangible assets Net credit losses	1 –299	–459	–216 –128		2 3		–213 –883
OPERATING PROFIT	9,982	7,268	1,281	3,110	–776		20,865
Business equity, SEK bn Return on business equity,%	66.4 11.6	38.1 14.7	7.9 14.4	8.7 30.3
Risk exposure amount, SEK bn Lending to the public 2) , SEK bn Depositsfrom the public 2) , SEK bn	350 501 357	106 669 346	64 104 94	6 1	45 2 79		571 1,276 877

1) Profit and lossfrom associated companies accounted for under the equity method are recognised inNet other income at an amount of SEK 19m (28). The aggregated investments are SEK 229m (223). 2) Excluding repos and debtsecurities.

Balance sheet, 2016

Assets Liabilities Investments	1,315,760 1,235,317 46	808,608 761,015 145	150,496 141,797 164	492,705 479,199 1,162	1,222,051 1,231,316 726	–1,368,974 –1,368,974	2,620,646 2,479,670 2,243
2015
Assets Liabilities Investments	1,216,889 1,139,526 149	771,060 725,765 28	132,615 124,790 103	449,593 438,963 1,356	1,017,312 1,015,627 804	–1,091,505 –1,091,505	2,495,964 2,353,166 2,440

Note 2 continued Operating segments

Parent company business segments

2016	Large Corporates &Financial Institutions	Corporate &Private Customers	Baltic	Life& Investment Management	Other	Eliminations	Total
Grossincome 1) Assets Investments	25,089 1,074,815 41	13,645 734,433 62	16 1,452	241 231	29,088 1,011,986 649	–9,926 –823,073	58,153 1,999,844 752
2015
Grossincome 1) Assets Investments	23,777 1,000,272 131	13,271 699,328 27	14 1,319	3,739 2,284	32,772 794,546 661	–13,191 –631,144 2	60,382 1,866,605 821

Business segment

The Businesssegments are presented on a management reporting basis. The different divisions assist different groups of customers. The customers' demands decide the type of productsthat are offered. Large Corporates & Financial Institutions offers wholesale and investment banking servicesto large corporations and institutions. Corporate & Private Customers offers products mainly to retail customers (private customers and small and mediumsized corporates). Division Baltic offers

products mainly to retail customers(private customers and small and mediumsized corporates) and private banking servicesin the Baltic countries. Life & Investment Management performs asset management and private banking activities and Life offerslife,sickness and healthcare and pension insurance and perform asset management. Other consists of businesssupport units, treasury and staff units. Eliminations of internal transactions between the businesssegments are reported separately.

Gross income by productfor external customers

	Group		Parent company
	2016	2015	2016	2015
Core banking	33,920	36,227	22,691	24,189
Capital market	13,678	11,889	11,199	8,903
Asset management	7,580	8,784	2,114	2,579
Life insurance and pension	3,572	3,046
Other	7,357	8,600	22,149	24,711
TOTAL	66,107	68,546	58,153	60,382

Core banking consists of loan, leasing, card and payment related products. Capital market consists of trading and issues on financial markets. Asset management consists of advisory, custody and fund management. Life insurance and pension consists of unitlinked and traditional life insurance products. Other consists of income from treasury operations and other activities.

3 Geographical information

Group by country
			2016					2015
	Gross Income1)	Operating profit 2)	Income tax expense 3)	Assets	Investments	Gross Income1)	Operating profit 2)	Income tax expense 3)	Assets	Investments
Sweden	41,662	4,916	–1,845	2,138,812	1,488	44,458	11,682	–2,344	1,967,473	1,415
Norway	5,178	2,366	–622	115,284	26	5,531	2,126	–539	100,024	79
Denmark	3,467	2,142	–417	324,547	299	3,309	1,423	–477	342,779	382
Finland	2,110	1,043	–217	80,469	10	2,335	1,081	–221	73,695	6
Estonia6)	1,680	916	–47	50,405	58	1,531	727	–20	43,702	52
Latvia	1,349	468	–57	33,738	48	1,194	256	–45	32,116	56
Lithuania	2,212	831	–58	71,098	76	2,067	495	–95	62,406	92
Germany 4) 6)	3,312	507	–420	34,454	3	4,345	1,255	–112	44,095	6
Poland	165	31	–14	5,305	2	164	24	–17	4,899	1
Ukraine	58	7	–4	700		68	13	–6	311
China	407	98	–18	23,045	3	435	149	–28	11,693
Great Britain	1,799	727	–196	70,291	5	1,748	714	–156	56,936	103
Ireland	567	171	–29	66,154	139	583	185	–22	60,325	183
Luxembourg	2,644	322	–39	73,747	6	3,319	369	–81	27,949	5
Russia	313	26	–15	3,950	2	304	12	–15	2,856	2
Singapore	573	94	–23	27,488	1	585	131	–25	19,213
United States	1,603	55	–310	109,109		1,093	319	–107	83,959
Other countries5) 6)	3,098	147	82	209,357	77	2,995	–96	26	208,290	58
Group eliminations	–6,090			–817,307		–7,518			–646,757
TOTAL	66,107	14,867	–4,249	2,620,646	2,243	68,546	20,865	–4,284	2,495,964	2,440

1) Grossincome in the Group is defined asthe sum of Interest income, Fee and commission income, Net financial income, Net life insurance income and Net other income according to IFRS. The basisfor the income allocation is SEB's presence in each country,with the exception ofwhen the local companies/ branchesserve assales offices and receive commission payments and the transaction is booked in the central unit.

3) For more information about tax see note 15.

4) Excluding treasury operations.

5) Cayman Island, Hong Kong, Netherlands, Switzerland and treasury operationsin Germany.

6) In Estonia no income tax is paid unless profit is distributed as dividend. In Germany, tax losses carry forward, not previously recognised, have been utilised both in 2015 and 2016.On Cayman Island, the parent company isrepresented by a branch office and therefore tax is payable in Sweden.

²⁾ Before tax.

Note 3 continued Geographical information

		Parent company by country

	2016			2015
	Gross Income 1)	Assets	Investments	Gross Income1)	Assets	Investments
Sweden	46,702	1,754,444	696	50,160	1,575,142	634
Norway	3,402	55,616	26	3,226	66,763	79
Denmark	1,979	76,074	3	1,586	106,365
Finland	1,168	9,888	9	1,301	26,714	4
Other countries	4,902	103,822	18	4,109	91,621	104
TOTAL	58,153	1,999,844	752	60,382	1,866,605	821

1) Grossincome in the parent company is defined asthe sum of Interest income, Leasing income, Dividends, Fee and commission income, Net Financial income and Other income according to SFSA accounting regulations. The basisfor the income allocation is SEB's presence in each country, with the exception of when the local companies/ branchesserve assales offices and receive commission payments and the transaction is booked in the central unit.

Transfer pricing

The internal transfer pricing objective in the SEB Group isto measure net interest income, to transfer interest rate risk and liquidity and to manage liquidity. The internal price is based on SEB's actual or implied marketbased cost of fundsfor a specific interest and liquidity term. Transactions between Businesssegments are conducted at arm'slength.

4 Net interest income

	Group			Parent company
2016	Average balance	Interest	Interestrate	Average balance	Interest	Interestrate
Loansto credit institutions and central banks Loansto the public Interest earning securities1)	408,155 1,430,412 221,880	1,233 25,360 1,916	0.30% 1.77% 0.86%	619,500 1,040,096 211,324	1,349 18,694 1,731	0.22% 1.80% 0.82%
Total interest earnings assets	2,060,447	28,509	1.38%	1,870,920	21,774	1.16%
Derivatives and other assets	773,214	6,693		410,818	7,248
Total assets	2,833,661	35,202		2,281,738	29,022
Depositsfrom credit institutions Deposits and borrowing from the public Debtsecuritiesissued 2) Subordinated liabilities	186,347 1,071,015 719,551 34,270	–372 –3,760 –10,799 –1,463	–0.20% –0.35% –1.50% –4.27%	280,008 926,570 675,678 33,796	–838 –1,880 –10,859 –1,463	–0.30% –0.20% –1.61% –4.33%
Total interest bearing liabilities	2,011,183	–16,394	–0.82%	1,916,052	–15,040	–0.78%
Derivatives and other liabilities Equity	686,312 136,166	–70		272,383 93,303	–183
Total liabilities and equity	2,833,661	–16,464		2,281,738	–15,223
Netinterestincome		18,738			13,799
Net yield on interest earning assets			0.91%			0.74%
1) of which, measured at fair value 2) ofwhich, measured at fair value		1,641 –664			1,735 –705

Note 4 continued Net interest income

	Group			Parent company
2015	Average balance	Interest	Interest rate	Average balance	Interest	Interest rate
Loansto credit institutions and central banks Loansto the public Interest earning securities1)	402,886 1,376,765 282,174	1,285 26,808 2,927	0.32% 1.95% 1.04%	608,397 1,022,141 174,146	1,558 19,563 2,417	0.26% 1.91% 1.39%
Total interest earnings assets	2,061,825	31,020	1.50%	1,804,684	23,538	1.30%
Derivatives and other assets	853,535	6,706		538,283	6,554
Total assets	2,915,360	37,726		2,342,967	30,092
Depositsfrom credit institutions Deposits and borrowing from the public Debtsecuritiesissued 2) Subordinated liabilities	184,494 1,082,106 736,754 34,417	–395 –4,219 –11,633 –1,556	–0.21% –0.39% –1.58% –4.52%	285,388 922,888 507,781 33,322	–728 –1,932 –11,367 –1,556	–0.26% –0.21% –2.24% –4.67%
Total interest bearing liabilities	2,037,771	–17,803	–0.87%	1,749,379	–15,583	–0.89%
Derivatives and other liabilities Equity	742,117 135,472	–985		503,915 89,673	–460
Total liabilities and equity	2,915,360	–18,788		2,342,967	–16,043
Netinterestincome		18,938			14,049
Net yield on interest earning assets			0.92%			0.78%
1) of which, measured at fair value 2) of which, measured at fair value		2,442 –569			2,346 –406

In the table above Loans and Deposits are presented excluding debtsecurities. This is different from the Income statement and Balance sheet in which the classification is done based on accounting category.

Netinterestincome

	Parent company
	2016	2015
Interest income	29,023	30,092
Income from leases 1)	5,443	5,439
Interest expense	–15,223	–16,043
Depreciation of leased equipment 1)	–4,704	–4,598
TOTAL	14,539	14,890

1) In the Group Net income from leasesis classified asinterest income. In the parent company depreciation of leased equipment isreported as Depreciation, amortisation and impairment of tangible and intangible assets.

5 Net fee and commission income

	Group		Parent company
	2016	2015	2016	2015
Issue ofsecurities Secondary market Custody and mutual funds	484 2,878 7,264	602 2,970 8,507	838 1,670 3,391	1,020 2,025 3,923
Securities commissions	10,626	12,079	5,899	6,968
Payments Card fees	1,677 3,526	1,634 3,887	1,334 392	1,270 266
Payment commissions	5,203	5,521	1,726	1,536
Life insurance commissions	1,653	1,686
Advisory Lending Deposits Guarantees Derivatives Other	316 2,527 221 527 475 952	232 2,445 200 529 380 1,268	282 2,065 59 353 530 734	213 2,042 64 367 377 691
Other commissions	5,018	5,054	4,023	3,754
Fee and commission income	22,500	24,340	11,648	12,258
Securities commissions Payment commissions Life insurance commissions Other commissions	–2,248 –1,940 –614 –1,070	–2,620 –2,086 –532 –757	–1,378 –604 –823	–1,519 –542 –997
Fee and commission expense	–5,872	–5,995	–2,805	–3,058
Securities commissions, net Payment commissions, net Life insurance commissions, net Other commissions, net	8,378 3,263 1,039 3,948	9,459 3,435 1,154 4,297	4,521 1,122 3,200	5,449 994 2,757
TOTAL	16,628	18,345	8,843	9,200

6 Net financial income

	Group		Parent company
	2016	2015	2016	2015
Gains(losses) on financial assets and liabilities held for trading, net Gains(losses) on financial assets and liabilities designated at fair value	6,026	3,939	5,425	3,167
through profit and loss, net	–857	179	–783	261
Other life insurance income, net	1,919	1,360
Impairments of available­for­sale financial assets	–32
TOTAL	7,056	5,478	4,642	3,428
Gains (losses) on financial assets and liabilities held fortrading, net
Equity instruments and related derivatives	1,149	–29	1,165	–223
Debtsecurities and related derivatives	1,109	–25	1,017	–27
Currency related	3,699	3,831	3,186	3,263
Other	69	162	57	154
TOTAL	6,026	3,939	5,425	3,167

Gains(losses) on financial assets and liabilities held for trading are presented on different rows based on type of underlying financial instrument. Changesin the treasury result are due to changesin interest rates and creditspreads. The net effect from trading operationsisfairly stable over time, butshows volatility

between rows. There were effectsfrom structured products offered to the public in the amounts of approximately SEK 555m (215) in equity related derivatives and a corresponding effect in debtsecurities of SEK –180m (–180).

Gains (losses) on financial assets and liabilities designated atfair value through profit and loss, net

	Group		Parent company
	2016	2015	2016	2015
Equity instruments and related derivatives Debtsecurities and related derivatives	24 –881	–112 291	–783	261
TOTAL	–857	179	–783	261

Valuation changes arising from counterparty creditrisk and own credit standing

Derivatives – counterparty risk	–190	60	13	101
Derivatives – own creditstanding	21	129	–189	101
Issued securities designated at fair value through profit or loss – own creditstanding	–50	414	–50	371
TOTAL	–219	603	–226	573

7 Net other income

	Group		Parent company
	2016	2015	2016	2015
Dividends1)	170	169
Investmentsin associates	218	66
Gainslesslossesfrom investmentsecurities	930	862	217	361
Gainslesslossesfrom tangible assets 2)			14	28
Gainslesslossesfrom divestment ofsharesin subsidiaries3)	–39	–309
Other income	70	214	586	748
TOTAL	1,349	1,002	817	1,137

1) Reported separately in the Income Statement for parent company.

2) See note 12 for the Group.

3) Includesthe sale of SEB Asset Management AG 2015.

Dividends

Available­for­sale investments Investmentsin associates Dividendsfrom subsidiaries	170	169	51 70 6,460	56 8 7,964
TOTAL	170	169	6,581	8,028

Note 7 continued Net other income

Gains less losses from investment securities

	Group		Parent company
	2016	2015	2016	2015
Available­for­sale financial assets – Equity instruments	668	530	178	448
Available­for­sale financial assets – Debtsecurities	529	653
Loans			40
Gains	1,197	1,183	218	448
Available­for­sale financial assets – Equity instruments	–131	–13
Available­for­sale financial assets – Debtsecurities	–14	–140
Loans	–122	–168	–1	–87
Losses	–267	–321	–1	–87
TOTAL	930	862	217	361
Otherincome
Fair value adjustment in hedge accounting	–260	–211	–323	–346
Operating result from non­life insurance,run off	158	69
Other income	172	356	909	1 094
TOTAL	70	214	586	748
Fair value adjustmentin hedge accounting
Fair value changes of the hedged items attributable to the hedged risk	298	–31	316	1,870
Fair value changes of the hedging derivatives	–650	–335	–658	–2,227
Fair value hedges	–352	–366	–342	–357
Fair value changes of the hedging derivatives	13	11	13	11
Cash-flow hedges – ineffectiveness	13	11	13	11
Fair value changes of the hedged items	261	223	135	–50
Fair value changes of the hedging derivatives	–182	–79	–129	50
Fair value portfolio hedge ofinterestrate risk – ineffectiveness	79	144	6
TOTAL	–260	–211	–323	–346

Fair value hedges and portfolio hedges

The Group hedges a portion of its existing interest rate risk in financial assets, payments and financial liabilities with fixed interest rates against changesin fair value due to changesin the interest rates. For this purpose the Group usesinterest rate swaps, crosscurrency interest rate swaps and in some situations also options. The hedges are executed either item by item or grouped by maturity.

Cash flow hedges

The Group usesinterest rate swapsto hedge future cash flowsfrom deposits and lending with floating interest rates. Interest flowsfrom deposits and lending with floating interest rates are expected to be amortised to profit or loss during the period 2017 to 2037.

Net investment hedges

The Group hedgesthe currency translation risk of net investmentsin foreign operationsthrough currency borrowings and currency forwards. Borrowing in foreign currency at an amount of SEK 39,001m (38,839) and currency forwards at an amount of SEK 2,507m (3,043) were designated as hedges of net investmentsin foreign operations. Ineffectivenessin the hedges has been reported in Net financial income (note 6).

8 Administrative expenses

	Group		Parent company
	2016	2015	2016	2015
Staff costs	–14,562	–14,436	–10,466	–8,999
Other expenses	–6,703	–6,355	–4,573	–4,459
TOTAL	–21,265	–20,791	–15,039	–13,458

9 Staff costs

	Group		Parent company
	2016	2015	2016	2015
Base salary	–8,105	–8,368	–5,402	–5,544
Cash­based variable compensation	–684	–660	–541	–324
Long­term equity­based compensation	–702	–662	–637	–342
Salaries and other compensations	–9,491	–9,690	–6,580	–6,210
Social charges	–2,638	–2,546	–1,955	–1,768
Defined benefit retirement plans 1)	–313	–606	–686
Defined contribution retirement plans 1)	–1,055	–766	–766	–525
Benefits and redundancies 2)	–584	–321	–160	–160
Education and otherstaff related costs	–481	–507	–319	–336
TOTAL	–14,562	–14,436	–10,466	–8,999

1) Pension costsin the Group are accounted for according to IAS 19 Employee benefits. Pension costsin Skandinaviska Enskilda Banken are calculated in accordancewith the Act on Safeguarding Pensions Obligations and the Swedish Financial Supervisory Authority'sregulations. Nonrecurring costs of SEK 0m (169) for early retirement have been charged to the pension funds of the Bank. 2) Includes costsfor redundancies of SEK 490m (211) for the Group and SEK 113m (112) for the parent company.

9a Remuneration

Presented in note 9a isthe statement of remuneration for the Consolidated situation and significant units within the Group according to Regulation on prudential requirementsfor credit institutions and investment firms. In the SEB Group 1,167 (1,193)

positions are defined asIdentified Staff. SEB has chosen to include the remuneration also in the insurance operationsthat are not part of the Financial group of undertakings but part of the SEB Group.

Remuneration by division

		Group			Parent company
	Fixed1)		Variable 1)		Fixed 1)		Variable 1)
2016	Remuneration	FTEs Remuneration		FTEs	Remuneration	FTEs		FTEs
Large Corporates& Financial Institutions	–2,658	2,134	–688	2,009	–1,990	1,689	–625	1,620
Corporate & Private Customers	–2,353	3,667	–192	3,647	–1,665	2,920	–152	2,920
Baltic	–502	2,565	–64	2,565
Life & Investment Management	–1,115	1,468	–108	1,432
Other 2)	–3,429	5,445	–334	4,663	–3,359	4,147	–401	3,517
TOTAL	–10,057	15,279	–1,386	14,316	–7,014	8,756	–1,178	8,057
whereof collective variable pay 3)			–573	14,316
2015
Large Corporates & Financial Institutions	–2,778	2,293	–572	2,150	–1,965	1,709	–405	1,642
Corporate & Private Customers	–2,516	3,796	–138	3,682	–1,579	2,992	–102	2,965
Baltic	–498	2,678	–49	2,599
Life & Investment Management	–1,184	1,554	–136	1,477
Other 2)	–3,086	5,284	–427	4,768	–2,684	4,110	–159	3,677
TOTAL	–10,062	15,605	–1,322	14,676	–6,228	8,811	–666	8,284
whereof collective variable pay 3)			–599	14,676

		SEB AG, Germany			SEB Pank AS, Estonia
	Fixed 1)		Variable1)		Fixed 1)		Variable1)
2016	Remuneration	FTEs	Remuneration	FTEs	Remuneration	FTEs	Remuneration	FTEs
Large Corporates& Financial Institutions	–509	323	–46	303
Baltic					–150	741	–18	734
Other4)	–378	250	–15	199	–79	308	–16	284
TOTAL	–887	573	–61	502	–229	1,049	–34	1,018
2015
Large Corporates& Financial Institutions	–462	381	–43	355
Baltic					–148	767	–15	758
Life & Investment Management	–84	84	–16	78
Other4)	–282	287	–16	237	–76	305	–8	290
TOTAL	–828	752	–75	670	–224	1,072	–23	1,048

Note 9a continued Remuneration

		SEB Banka AS, Latvia		SEB bankas AB, Lithuania
	Fixed 1)		Variable1)		Fixed 1)		Variable1)
2016	Remuneration	FTEs	Remuneration	FTEs	Remuneration	FTEs	Remuneration	FTEs
Baltic	–132	691	–16	679	–193	1,085	–27	1, 076
Other4)	–60	260	–9	234	–78	366	–12	328
TOTAL	–192	951	–25	913	–271	1,451	–39	1,404
2015
Baltic	–119	704	–11	690	–194	1,154	–16	1,142
Other4)	–50	258	–5	240	–75	365	–9	343
TOTAL	–169	962	–16	930	–269	1,519	–25	1,485

1) Variable pay is defined asshortterm cashbased remuneration and longterm equitybased remuneration. All other remuneration isreported as fixed remuneration and includes: base pay, pensions, severance pay, fees and benefitssuch as e.g. company car and domestic services, in accordancewith FFFS 2016:25. The reported remuneration does not include social charges. 2) Including Life & Investment Management and Baltic in the parent company.

3) Share Savings Programme and collective shortterm and longterm remuneration. Collective shortterm and longterm remuneration compared to expected outcome isreported inOther.

4) Including Life & Investment Management in Baltic countries. In Lithuania also Large Corporates & Financial Institutions are included.

Remuneration by category

	Group							Parent company
		Remuneration		FTEs				Remuneration		FTEs
2016	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total
Fixed remuneration 1)	–1,173	–8,884	–10,057	1,080	14,199	15,279	–988	–6,026	–7,014	788	7,968	8,756
Variable pay 1)	–373	–1,013	–1,386	788	13,528	14,316	–313	–865	–1,178	487	7,570	8,057
whereof:
Short­term cash­based	–167	–517	–684				–121	–420	–541
Long­term equity­based 2)	–206	–496	–702				–192	–445	–637
Deferred variable pay 3)	–219	–495					–192	–445	–637
Accrued and paid remuneration 4)	–1,619	–9,897					–1,251	–6,998	–8,249
Severance pay 5)			–498			741			–122			130
Agreed not yet paid
severance pay			–436			266			–96			105
Highestsingle amount			–7						–3

2015
Fixed remuneration 1)	–1,263	–8,799	–10,062	1,063	14,542	15,605	–994	–5,234	–6,228	808	8,003	8,811
Variable pay 1)	–376	–946	–1,322	616	14,060	14,676	–313	–353	–666	481	7,803	8,284
whereof:
Short­term cash­based	–166	–494	–660				–131	–193	–324
Long­term equity­based 2)	–210	–452	–662				–182	–160	–342
Deferred variable pay 3)	–225	–452	–677				–182	–160	–342
Accrued and paid remuneration 4)	–1,711	–9,745	–11,456				–1,366	–5,586	–6,952
Severance pay 5)			–215			592			–117			146
Agreed not yet paid
severance pay			–146			238			–80			106
Highestsingle amount			–5						–5

	SEB AG, Germany					SEB Pank AS, Estonia
		Remuneration			FTEs			Remuneration			FTEs
2016	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total
Fixed remuneration 1)	–90	–797	–887	71	502	573	–12	–217	–229	15	1,034	1,049
Variable pay 1)	–18	–43	–61	37	465	502	–1	–33	–34	6	1,012	1,018
whereof:
Short­term cash­based	–9	–13	–22					–16	–16
Long­term equity­based 2)	–9	–30	–39				–1	–17	–18
Deferred variable pay 3)	–9	–30	–39				–1	–17	–18
Accrued and paid remuneration 4)	–112	–840	–952				–13	–250	–263
Severance pay 5)			–307			114			–3			42
2015
Fixed remuneration 1)	–121	–707	–828	100	652	752	–13	–211	–224	19	1,053	1,072
Variable pay 1)	–21	–54	–75	51	619	670	–1	–22	–23	7	1,041	1,048
whereof:
Short­term cash­based	–11	–38	–49					–13	–13
Long­term equity­based 2)	–10	–16	–26				–1	–9	–10
Deferred variable pay 3)	–10	–16	–26				–1	–9	–10
Accrued and paid remuneration 4)	–146	–761	–907				–14	–233	–247
Severance pay 5)			–42			23			–1			31

Note 9a continued Remuneration

	SEB Banka AS, Latvia				SEB bankas AB, Lithuania
		Remuneration FTEs				Remuneration			FTEs
2016	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total	Identified Staff6)	Other employees	Total
Fixed remuneration 1)	–16	–176	–192	29	922	951	–17	–254	–271	23	1,428	1,451
Variable pay 1)	–2	–23	–25	13	900	913	–3	–36	–39	12	1,392	1,404
whereof:
Short­term cash­based		–11	–11					–17	–17
Long­term equity­based 2)	–2	–12	–14				–3	–19	–22
Deferred variable pay 3)	–2	–12	–14				–3	–19	–22
Accrued and paid remuneration 4)	–18	–199	–217				–20	–290	–310
Severance pay 5)			–2			53			–15			306
2015
Fixed remuneration 1)	–13	–156	–169	29	933	962	–18	–251	–269	26	1,493	1,519
Variable pay 1)	–1	–15	–16	10	920	930	–2	–23	–25	11	1,474	1,485
whereof:
Short­term cash­based		–9	–9					–15	–15
Long­term equity­based 2)	–1	–6	–7				–2	–8	–10
Deferred variable pay 3)	–1	–6	–7				–2	–8	–10
Accrued and paid remuneration 4)	–14	–171	–185				–20	–274	–294
Severance pay 5)									–13			302

1) Variable pay is defined asshortterm cashbased remuneration and longterm equitybased remuneration. All other remuneration isreported as fixed remuneration and includes: base pay, pensions, severance pay, fees and benefitssuch as e.g. company car and domestic services, in accordance with FFFS 2016:25. The reported remuneration does not include social charges.

2) Longterm equity based remuneration encompassesfour different programmes; a Share Savings Programme and All Employee Programme and also a Share Matching Programme and a Share Deferral Programme for a selected group of key employees.

3) The deferred variable pay islocked the first year. Shortterm cashbased remuneration can thereafter be paid pro rata over three or five years after a possible risk adjustment. Longterm equitybased programmes are locked for a minimum of three years.

4) In Accrued and paid remuneration amounts paidwithin the first quarter after the accrual isincluded. Deferred variable pay has been subject to risk adjustment.

5) The amount also includessignon.

6) Employeeswith material impact on SEB'srisk profile, in accordance with FFFS 2016:25.

Loans to Executives

	Group		Parent company
	2016	2015	2016	2015
Managing Directors and Deputy Managing Directors 1) Boards ofDirectors 2)	94 407	124 400	20 120	25 130
TOTAL	501	524	140	155

1) Comprises current President and Deputy President in the Parent company and Managing Directors and Deputy Managing Directorsin subsidiaries. Total number of executiveswas 53 (64) of which 12 (18) female.

2) Comprises current Board members and theirsubstitutesin the Parent company and subsidiaries. Total number of personswas 181 (177) of which 55 (50) female.

Pension commitments to Executives

Pension disbursements made	136	130	64	54
Change in commitments	56	41	20	22
Commitments at year­end	1,871	1,651	848	762

The above commitments are covered by the Bank's pensionsfunds or through Bankowned endowment assurance schemes. They include active and retired

Presidents and vice Presidentsin the parent company and Managing directors and Deputy Managing directorsin subsidiaries, in total 118 persons(115).

9b Pensions

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 benefit plan in Sweden is closed to new employees and a defined contribution plan was established during 2013. The defined contribution plans follow the local regulations in each country. Multiemployer defined benefit plans exist for employees in some parts of the Group. These plans are accounted for as defined contribution plans since sufficient information of SEB's share of the liability/asset and cost is not available.

Defined benefit plans

The major defined benefit plans exist in Sweden and Germany and cover most employees in these countries. Independent actuarial calculations according to the Projected Unit Credit Method (PUCM) are performed quarterly 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. In case of a deficit in the pension obligation according to local rules SEB is obliged to meet this with contribution to the foundation or insure a deficit. The asset allocation is determined to meet the various risks in the pension obligations and is decided by the board/trustees in the pension foundations. The assets are booked at market value. The pension and interest costs are presented in Staff costs.

Defined contribution plans

Defined contribution plans exist both in Sweden and abroad. In Sweden a smaller part of the closed collective retirement agreement is defined contribution based.Over a certain salary level the employees could also choose to leave the defined benefit plan and replace it by a defined contribution plan. The current plan for new employeesis fully contribution based. Most other countries have defined contribution plans except for the Baltic countries where the company to a limited extent contributesto the employeesretirement. The defined contribution plans are not recognised in the balance sheet but accounted for as an expense among Staff costs.

DEFINEDBENEFIT PLANS INSEB GROUP

		2016			2015
Net amountrecognised in the Balance sheet	Sweden 1)	Foreign 1)	Group1)	Sweden 1)	Foreign 1)	Group 1)
Defined benefit obligation at the beginning of the year	19,693	5,366	25,059	22,480	6,210	28,690
Curtailment, acquisitions and reclassification					–153	–153
Service costs	442	38	480	570	48	618
Interest costs	606	127	733	515	116	631
Benefits paid	–691	–277	–968	–686	–258	–944
Exchange differences		153	153		–96	–96
Remeasurements of pension obligation	3,237	387	3,624	–3,186	–501	–3,687
Defined benefit obligation atthe end ofthe year	23,287	5,794	29,081	19,693	5,366	25,059
Fair value of plan assets at the beginning of the year	25,252	4,982	30,234	23,683	5,271	28,954
Curtailment, acquisitions and reclassification		37	37		–1	–1
Calculated interest on plan assets	783	118	901	545	98	643
Benefits paid/contributions		–277	–277	–670	–256	–926
Exchange differences		199	199		–148	–148
Valuation gains(losses) on plan assets	1,166	17	1,183	1,694	18	1,712
Fair value of plan assets atthe end ofthe year	27,201	5,076	32,277	25,252	4,982	30,234
Change in the net assets or netliabilities
Defined benefit obligation at the beginning of the year	5,559	–384	5,175	1,203	–939	264
Curtailment, acquisitions and reclassification		37	37		152	152
Total expense in staff costs	–265	–47	–312	–540	–66	–606
Pension paid	691	277	968	686	258	944
Benefits paid/contributions		–277	–277	–670	–256	–926
Exchange differences		46	46		–52	–52
Remeasurements	–2,071	–370	–2,441	4,880	519	5,399
NETAMOUNT RECOGNISEDINTHE BALANCE SHEET	3,914	–718	3,196	5,559	–384	5,175

1) The net defined benefit obligation isrecognised in the balance sheet either as an asset or liability depending on the situation for each legal entity.

In 2016 a contribution of SEK 38m (45) was paid to the German pension foundation. Contribution to the foundations can not be ruled out in 2017 due to uncertainty in interest rate levels.

Note 9b continued Pensions

Principal actuarial assumptions used

	2016		2015
	Sweden	Foreign	Sweden	Foreign
Discount rate	2.4%	1.7%	3.1%	2.4%
Inflation rate	1.5%	1.8%	1.5%	1.8%
Expected rate ofsalary increase	3.5%	2.5%	3.5%	3.0%
Expected rate of increase in the income basis amount	3.0%		3.0%

The discount rate is based set on highquality corporate bondsin a deep market, in Sweden covered bonds which are at least AArated. An extrapolation of the maturity of the covered bondsis made based on government bonds and checked against swaps. This extrapolated maturity isin line with the estimated maturity of obligationsfor post employment benefits. Life expectancy assumptionsin Sweden for 2016 are established by the Actuarial Research Board (FTN) and are based on DUS14 for whitecollar workers. 2015 the Swedish life expectancy assumptions followed the insurance supervisory authority (FFFS 2007:31) regulations which are based on DUS06 for the entire population. In Germany the Heubeck Sterbetafeln is used. Weighted average duration for the obligation is 24 yearsin Sweden and 14 yearsin Germany

A decrease of the discount rate for Sweden of 0.5 per cent would imply an increase of the Swedish pension obligation by SEK 2,404m while the same change in the inflation assumption for Sweden would have the opposite effect and decrease

the obligation by SEK 1,753m. An increase of the discount rate by same ratio would reduce the obligation with SEK 2,077m and an increased inflation rate of 0.5 per cent gives an increased obligation of SEK 2,043m. A decrease in assumption for expected salary increase in Sweden of 0.5 per cent would have a positive effect on the obligation by SEK 314m an increase would have a negative effect of SEK 373m.

The obligation in Germany would increase with SEK 432m if the discount rate wasreduced by 0.5 per cent. An increase by the same percentage would decrease the obligation by SEK 384m. If the inflation assumption for Germany increases by 0.25 per cent the pension obligation would increase by SEK 73m and corresponding decrease would be SEK 70m at a lower inflation assumption. A change in expected salary increasesin Germany by 0.25 per cent would with a higher rate give an increase of the obligation with SEK 92m and with a lower rate reduce the obligation with SEK 111m.

Allocation of plan assets

	2016		2015
	Sweden	Foreign	Group	Sweden	Foreign	Group
Cash and cash equivalents	873	50	923	423	90	513
Equity instruments with a quoted market price in an active market	15,239		15,239	15,031	833	15,864
Equity instruments not listed in an active market	6,520	887	7,407	4,763		4,763
Debt instrumentswith a quoted market price in an active market		630	630
Debt instruments not listed in an active market	2,355	3,509	5,864	2,904	4,059	6,963
Properties	2,214		2,214	2,131		2,131
TOTAL	27,201	5,076	32,277	25,252	4,982	30,234

The pension plan assetsinclude SEB shares with a fair value of SEK 1,199m (1,013). Buildingsin Sweden are occupied by SEB.

Amounts recognised in Income statement

	2016			2015
	Sweden	Foreign	Group	Sweden	Foreign	Group
Service costs	–442	–38	–480	–570	–48	–618
Interest costs	–606	–127	–733	–515	–116	–631
Calculated interest on plan assets	783	118	901	545	98	643
INCLUDEDINSTAFF COSTS	–265	–47	–312	–540	–66	–606

Amounts recognised inOther comprehensive income

Remeasurements of pension obligation	–3,237	–387	–3,624	3,186	501	3,687
where of experience adjustments	262	178	440	–1	106	105
where of due to changesin financial assumptions	–2,672	–565	–3,237	3,187	395	3,582
where of due to changesin demographic assumptions	–827		–827
Valuation gains(losses) on plan assets	1,166	17	1,183	1,694	18	1,712
Deferred tax pensions	456	110	566	–1,073	–148	–1,221
INCLUDEDINOTHER COMPREHENSIVE INCOME	–1,615	–260	–1,875	3,807	371	4,178

DEFINEDCONTRIBUTIONPLANS INSEB GROUP

	2016			2015
Net amountrecognised in Income statement	Sweden	Foreign	Group	Sweden	Foreign	Group
Expense in Staff costsincluding specialsalary tax	–812	–243	–1,055	–512	–254	–766

Note 9b continued Pensions

DEFINEDBENEFIT PLANS INSKANDINAVISKA ENSKILDA BANKEN

		Parent company
Net amountrecognised in the Balance sheet	2016	2015
Defined benefit obligation at the beginning of the year	22,699	18,859
Imputed pensions premium	330	357
Interest costs and other changes	902	3,984
Early retirement	172	169
Pension disbursements	–686	–670
DEFINEDBENEFITOBLIGATIONAT THE ENDOF THE YEAR	23,417	22,699
Fair value of plan assets at the beginning of the year	24,368	22,899
Return on assets	1,881	2,142
Benefits paid		–673
FAIR VALUEOF PLANASSETS AT THE ENDOF THE YEAR	26,249	24,368

The above defined benefit obligation is calculated according to Tryggandelagen. Skandinaviska Enskilda Banken consequently adoptsthe discount rate set by the Swedish FSA before yearend. The obligation isfully covered by assetsin the pension foundation and is not included in the balance sheet.

The assetsin the foundation are mainly equity related SEK 20,998m (19,036) and to a smaller extent interest earning SEK 3,115m (2,793). The assetsinclude SEB shares at a market value of SEK 1,157m (975) and buildings occupied by the company valued at SEK 2,136m (2,131). The return on assets was 8 per cent (9) before pension compensation.

Amounts recognised in Income statement

	Parent company
	2016	2015
Pension disbursements Compensation from pension foundations	–686	–670 673
TOTAL	–686	3
Principal actuarial assumptions used, %
Grossinterest rate Interest rate after tax	0.7% 0.6%	0.8% 0.7%

The actuarial calculations are based on salaries and pensions on the balance sheet date.

DEFINEDCONTRIBUTIONPLANS INSKANDINAVISKA ENSKILDA BANKEN

	Parent company
Net amountrecognised in Income statement	2016	2015
Expense in Staff costsincluding specialsalary tax	–766	–525

Pension foundations

	Pension commitments		Market value of asset
	2016	2015	2016	2015
SEB­Stiftelsen, Skandinaviska Enskilda Bankens Pensionsstiftelse SEB Kort AB:s Pensionsstiftelse	23,417 916	22,699 871	26,249 952	24,368 884
TOTAL	24,333	23,570	27,201	25,252

9c Remuneration to the Board and the Group Executive Committee

Guidelines for remuneration

The guidelinesfor remuneration to the President and the other members of the Group Executive Committee (GEC) were prepared by the Board of Directors and its Remuneration and Human Resources Committee and approved by the Annual General Meeting 2016.

The remuneration structure for the President and the other members of the GEC isin accordance with the remuneration policy for the Bank. The remuneration is based upon three main components; base pay, equitybased remuneration and

pensions. Other benefits may also be included,such as company car and domestic services.

For more information, see page 60–61.

Specially regulated staff

The President and all other members of the GEC are considered employees who have a material impact on SEB'srisk profile according to the Swedish Financial Supervisory Authority regulations(FFFS 2016:25).

Remuneration to the Board1) , SEK

2016	Base pay	Directors' fee	Benefits2)	Total
Chairman of the Board,MarcusWallenberg		3,520,000		3,520,000
Other members of the Board 3)		10,190,000		10,190,000
President and CEO,Annika Falkengren	11,500,000		1,425,479	12,925,479
TOTAL	11,500,000	13,710,000	1,425,479	26,635,479
2015
Chairman of the Board,MarcusWallenberg		3,465,000		3,465,000
Other members of the Board 3)		8,525,000		8,525,000
President and CEO,Annika Falkengren	10,500,000		1,262,267	11,762,267
TOTAL	10,500,000	11,990,000	1,262,267	23,752,267

1) The number of Board members decided by the AGM in 2016 isthirtheen (eleven).

2) Includes benefits as domestic services and company car.

3) Directors' fee to the Board members on individual level is presented on page 50–53.

Remuneration to the GEC, SEK 1)

	Base pay	Benefits	Total
2016	48,854,904	1,649,688	50,504,592
2015	33,306,041	1,260,287	34,566,328

1) GEC excluding the President and CEO. The members partly differ between the years but on average eleven (eight) members are included. At the end of the year the number of memberswere eleven (eleven). Additional members are not included.

Long-term equity programmes

Under the Share Deferral Programme members of the GEC may be granted an individual number of conditional share rights based on the fulfilment of predetermined Group, business unit and individual target levels as outlined in SEB's business plan. The targets are set on an annual basis as a mix of the financial targets Return on Equity/Return on Business Equity and cost development and the nonfinancial target customer satisfaction among others. For GEC the initial allotment may not exceed 100 per cent of the base pay.

Ownership of 50 per cent of the share rights are transferred to the participant after a qualification period of three years and 50 per cent after a qualification period of five years. After each respective qualification period there is an additional holding period of one year after which the share rights can be excercised during a period of three years. Each share right carries the right to receive one Class A share in the Bank. A requirement for vesting is normally that the participant remains with SEB during the first three years. A further requirement for vesting is that the participant holds shares in SEB equal to a predetermined amount, for GEC equivalent to one year salary net of taxes, acquired no later than on a prorata basis during the initial three year vesting period.

GEC is not participating in the SMP 2012–2014 nor the All Employee Programme (AEP) except for outstanding rights earned before being member of GEC.

Long-term equity programmes (expensed amounts for ongoing programmes), SEK

2016	Share matching	Share deferral	Total
President and CEO,Annika Falkengren Other members of the GEC 1)	1,524,005	6,342,656 20,472,638	6,342,656 21,996,643
TOTAL	1,524,005	26,815,294	28,339,299
2015
President and CEO,Annika Falkengren		5,791,905	5,791,905
Other members of the GEC 1)	551,466	14,508,343	15,059,809
TOTAL	551,466	20,300,248	20,851,714

1) GEC excluding the President and CEO. The members partly differ between the years but in average eleven (eight) members are included. At the end of the year the number of members were eleven (eleven). Additional members are not included.

Some of the GEC members have received rightsin the AEP programme and participated in the Share Savings Programme before being member of the GEC. The corresponding calculated costs and number of outstanding rights/shares are not included in the tables.

Note 9c continued Remuneration to the Board and the Group Executive Committee

Number outstanding by 2016-12-31

	Number outstanding
	President and CEO Annika Falkengren	Other members of the GEC	Total	First day of exercise	Performance criteria
2012: Share matching rights		73,159	73,159	20142)	final vesting 100%1)
2013: Share matching rights		115,001	115,001	20152)	final vesting 92%
2014: Share matching rights		15,319	15,319	2016 2)	vesting level 27%
2012: Conditionalshare rights	147,101	325,078	472,179	2016;20183)	–
2013: Conditionalshare rights	96,661	262,907	359,568	2017;20193)	–
2014: Conditionalshare rights	75,503	193,557	269,060	2018;20203)	–
2015: Conditionalshare rights	67,036	237,536	304,572	2019;20213)	–
2016: Conditionalshare rights	89,780	375,577	465,357	2020;20223)	–

1) Share Matching Programme 2012 vested in 2015with 100% matching,since the programme had reached its cap. The outcome after adjustment related to the cap was 92%. 2) Assoon as practically possible following the end of the performance period.

3) The qualification period ends after three or five yearsrespectively and are followed by a additional holding period of one year, after which there is an exercise period of three years.

During the year the President and CEO has excercised rightsto a value of SEK 6,398,251 (6,327,622). The corresponding value for the GEC excluding the President is SEK 8,181,695 (5,271,357).

Pension and severance pay

The pension agreement of the President is contributionbased and inviolable. The pension contribution is a fixed amount. Termination of employment by the Bank issubject to a maximum 18month period

of notice and entitlesto a severance pay of 6 months'salary.

Asregards pension benefits and severance pay the following is applicable to the members of the GEC excluding the President. The pension plans are inviolable and defined contributionbased except for a portion in the collective agreement.

Termination of employment by the Bank issubject to a maximum 12month period of notice and entitlesto a severance pay of 12 months'salary.

Pension costs (service costs, interest costs and defined contribution premiums), SEK

	President and CEO, Annika Falkengren	Other members of the GEC 1)	Total
2016	5,000,000	15,347,119	20,347,119
2015	5,000,000	13,556,900	18,556,900

1) GEC excluding the President and CEO. The members partly differ between the years but on average eleven (eight) members are included. At the end of the year the number of memberswere eleven (eleven). Additional members are not included.

For information about related parties see note 27.

9d Sharebased payments

Long-term equity-based programmes
2016	All employee programme	Share deferral programme	Share matching programme1)	Share savings programme	Performance shares
Outstanding at the beginning of the year	7,807,319	8,614,625	3,044,974	2,120,938	2,135,647
Granted 2)	3,136,319	6,148,319	3,122,508		133,626
Forfeited 3)	–541,269	–451,853	–25,963		–1,773
Exercised 4)	–260,354	–264,494	–3,183,722	–2,120,270	–978,067
Expired				–668	–15,414
OUTSTANDINGAT THE ENDOF THE YEAR	10,142,015	14,046,597	2,957,797		1,274,019
ofwhich exercisable		433,324	2,642,985		1,274,019

2015
Outstanding at the beginning of the year	4,485,839	4,484,102	2,811,500	4,077,914	3,200,069
Granted 2)	3,698,872	4,538,945	5,843,614		137,718
Forfeited 3)	–261,945	–387,528	–7,212
Exercised 4)	–115,447	–20,894	–5,602,928	–1,956,945	–1,194,874
Expired				–31	–7,266
OUTSTANDINGAT THE ENDOF THE YEAR	7,807,319	8,614,625	3,044,974	2,120,938	2,135,647
ofwhich exercisable			1,875,248		2,135,647

1) Numbersinclude investments done by participants, as well as allocated matching share rights.

2) Including compensation for dividend.

3) Weighted average exercise price forfeited SMP, SDP SEK 0.00 (0.00).

4) Weighted average exercise price exercised SMP, SDP SEK 0.00 (0.00) and PSP SEK 10.00 (10.00). Weighted average share price for PSP, SMP and SDP at exercise SEK 80.85 (104.88).

Note 9d continued Sharebased payments

Total Long-term equity-based programmes

	Original no of holders 3)	No of issued (maximum outcome)	No of outstanding 20164)	No of outstanding 20154)	A-share per option/share	Exercise price	Validity	First date of exercise
2009: Performance shares	344	5,493,837		207,892	1	10	2009–2016	20121)
2010: Performance shares	698	18,900,000	1,274,019	1,927,755	1	10	2010–2017	20131)
2009: Share savings programme	5,600	2,326,652		3,677	1		2009–2014	2013­02­18
2010: Share savings programme	5,200	2,285,536		7,444	1		2010–2015	2014­02­11
2011: Share savings programme	5,050	1,888,248		981,551	1		2011–2016	2015­02­16
2012: Share savings programme	4,770	1,274,947		1,128,266	1		2012–2017	2016­02­12
2012: Share matching programme	432	7,024,168	1,545,814	1,875,248	4		2012–2019	20152)
2013: Share matching programme	213	3,485,088	1,097,171	849,433	4		2013–2020	20162)
2014: Share matching programme	96	1,300,288	314,812	320,293	4		2014–2021	20172)
2012: Share deferral programme – equity settled	86	1,199,504	1,019,822	1,095,470	1		2012–2021	2015/20173)
2013: Share deferral programme – equity settled	263	1,361,861	1,457,480	1,387,754	1		2013–2022	2016/20183)
2014: Share deferral programme – equity settled	622	1,909,849	1,912,528	1,889,398	1		2014–2023	2017/20193)
2015: Share deferral programme – equity settled	816	2,603,843	2,546,169	2,540,609	1		2015–2024	2018/20203)
2015: Share deferral programme – cash settled	513	1,717,150	1,674,045	1,701,394			2015–2021	2018/20203)
2016: Share deferral programme – equity settled	874	3,593,155	3,494,730		1		2016–2025	2019/20213)
2016: Share deferral programme – cash settled	500	2,017,622	1,941,823				2016–2022	2019/20213)
2013: All employee programme – equity settled	8,347	1,255,838	1,171,517	1,202,698	1		2013–2016	2017
2013: All employee programme – cash settled	5,358	532,184	435,600	482,096			2013–2016	2017
2014: All employee programme – equity settled	8,709	1,786,471	1,684,487	1,730,683	1		2014–2017	2018
2014: All employee programme – cash settled	5,216	964,436	824,822	881,020			2014–2017	2018
2015: All employee programme – equity settled	8,319	2,290,359	2,221,704	2,290,359	1		2015–2018	2019
2015: All employee programme – cash settled	6,745	1,220,463	1,138,059	1,220,463			2015–2018	2019
2016: All employee programme – equity settled	8,209	1,731,922	1,731,922		1		2016–2019	2020
2016: All employee programme – cash settled	6,517	933,905	933,905				2016–2019	2020
TOTAL		69,097,326	28,420,429	23,723,503

1) Assoon as practically possible following the end of the performance period, the establishing of the final outcome and registration of the final number of Performance sharesin Equate plus. 2) Assoon as practically possible following the end of the performance period, the establishing of the outcome of number of Matching Shares and the allocation of the Ashares and, if applicable,

the Matching Shares.

3) Assoon as possible following the end of the performance period the outcome is established . For the equitysettled programmesthe ownership of the performance sharesistransferred upon registration, but the shares are withheld for one additional year. Cashsettled programmes are paid out in connectionwith the following payroll run.

4) In total approximately 10 900 individuals(10,800) participated in any of the programmes, All Employee Programme excluded.

5) Including additional deferral rightsfor dividend compensation.

Long-term equity-based programmes

The Annual General meeting 2016 decided on two Longterm equity based programmes, one Share Deferral Programme and one All Employee Programme.

The first Share Deferral Programme wasintroduced in 2012 for the Group Executive Committee and certain other executive managers and key employees with critical competences. The participants are granted an individual number of conditional share rights based on predetermined Group, division/business unit and individual target levels, both financial (Return on Equity/Return on Business Equity and cost development) and nonfinancial (customersatisfaction),set on an annual basis.

For GEC members and othersenior executives 50 per cent of the share rights ownership istransferred to the participant after a qualification period of three years and 50 per cent after a qualification period of five years. For other participantsthe qualification period isthree years. The requirement for vesting isthat the participant remains with SEB during the first three years and that the participant holds sharesin SEB equal to a predetermined amount, acquired no later than on a prorata basis during the initial three year period. After each respective qualification period there is an additional holding period of one year after which the share rights can be exercised during a period of three years. Each share right carriesthe right to receive one Class Ashare in the Bank. In most countries outside Sweden the paritcipants receivesso called phantom sharesthat givesthe right to receive cash adjusted for totalshareholder return in the SEB Ashare at the end of the holding period.

The holders are compensated for dividendsto the shareholders during the duration of the Programme. Thus, the number ofshare rights will be recalculated, after the Annual General Meeting each year, taking the dividend into account. The share rights are notsecuritiesthat can be sold, pledged or transferred to others. However, an estimated value pershare right has been calculated for 2016 to SEK 67 (79) (based upon an average closing price of one SEB Class Ashare at the time of grant).

In 2013 an All Employee Programme wasintroduced for most employees, where 50 per cent of the outcome is paid in cash and 50 per cent is deferred for three years and paid in SEB Ashares. Deferrals will normally only be obtained under the condition that the employee remains with SEB. In Sweden the deferred part is paid out in SEB Ashares, adjusted for dividends. In all other countriesthe deferred part is paid out in cash adjusted for totalshareholder return in the SEB Ashare. Outcome is capped at a maximum amount, which was adjusted in 2016, for each geography and is based on the fulfilment of predetermined Group targets outlined in SEB's business plan, both financial (Return on Equity and cost development) and nonfinancial (customersatisfaction). The outcome in 2016 year's programme was 56 per cent (85) of the maximum amount. In Sweden the maximum amount is SEK 75,000 from 2016 and previously it was SEK 55,000.

Previously alloted programmes

From 2005 to 2010 the programmes were based on performance shares. They all have a maximum term ofseven years, a vesting period of three years and an exercise period of four years. The number of allotted performance sharesthat can be exercised depends on the development of two predetermined performance criteria of equal importance. All programmes are vested and the exercise period for the 2010 years programme endsin 2017.

Between 2008 and 2012 a Share Savings Programme for all employeesin selected countries has been run. In the Share Savings Programmesthe participants saved a maximum of five per cent of their gross base salary during a twelve months period. For the savings amount, Class Ashares were purchased at currentstock exchange rate four times a year following the publication of the Bank'sinterim reports. If the shares are retained by the employee for three years and the employee remains with SEB, the employee receives one Class Ashare for each retained share. All programmes are vested and the exercise period for the 2012 years programme endsin 2017.

Between 2009 and 2014 a ShareMatching Programme for a number ofselected senior executives and other key employees has been run. The programmes are based on performance, have a vesting period of three years and are settledwith SEB Class Ashares. All programmesrequire own investment in Class Ashares. The investment amount is predetermined and capped for each participant. After three years, ifstill employed, the participant receives one Class Ashare for each invested share and a conditional number of performance based matching sharesfor each invested share. From 2012 the settlement isin the form ofshare rightswith an exercise period of four years. The 2013 programme was closed in 2016 with 92 per cent matching.

In the 2014 years programme the number of performance based matching shares depend on the development of two predetermined performance criteria; measured astotalshareholder return (TSR) in relation to the marketsrequired return based on the interest of Swedish government 10 year bondsi.e. longterm risk free interest rate (LTIR), two thirds, and the totalshareholder return in relation to SEB's competitors, one third. The current expected vesting in 2014 year's programme is approximately 27 per cent. Maximum outcome for the participantsisthree performance based matching shares. The outcome is also subject to risk adjustment.

The holders are compensated for dividendsto the shareholders during the exercise period. Thus, the number ofshare rights will be recalculated, after the Annual General Meeting each year during the exercise period, taking the dividend into account.

Matching rights are notsecuritiesthat can be sold, pledged or transferred to

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another party. However, an estimated value per matching right has been calculated for 2014 to SEK 65 and for the performance based matching rightsto SEK 39. Other inputsto the options pricing model are; exercise price SEK 0; volatility 46 (based on historical values); expected dividend approximately 4 per cent; risk free interest rate 1.13 and expected early exercise of 3 per cent. In the value of the option the expected outcome of the performance criteria described above are taken into account.

The programme issubject to a cap, if the share price at the time of vesting has more than doubled the number of matching shares and performance based matching sharesthat are transferred to a participant will be reduced proportionately so that the value correspondsto the doubled share price capped value. Further details of the outstanding programmes are found in the table above.

9e Number of employees

Average number of employees	Group			Parent company
2016	Men	Women	Total	Men	Women	Total
Sweden	4,046	4,175	8,221	3,542	3,568	7,110
Norway	259	167	426	206	97	303
Denmark	379	261	640	166	70	236
Finland	154	148	302	109	94	203
Estonia	305	928	1,233
Latvia	413	1,102	1,515	131	239	370
Lithuania	727	1,650	2,377	278	405	683
Germany	359	258	617	2		2
Poland	17	38	55	14	30	44
Ukraine	22	40	62
China	12	33	45	12	33	45
Great Britain	93	49	142	94	49	143
Ireland	55	64	119
Luxembourg	123	106	229
Russia	24	67	91
Singapore	36	66	102	31	58	89
United States	33	20	53	24	18	42
Other countries1)	17	14	31	14	9	23
TOTAL	7,074	9,186	16,260	4,623	4,670	9,293
2015
Sweden	4,104	4,216	8,320	3,627	3,630	7,257
Norway	261	170	431	207	98	305
Denmark	385	272	657	169	67	236
Finland	160	156	316	112	99	211
Estonia	310	947	1,257
Latvia	402	1,117	1,519	115	216	331
Lithuania	705	1,637	2,342	233	356	589
Germany	447	342	789	3	1	4
Poland	21	47	68	14	29	43
Ukraine	24	42	66
China	14	30	44	14	30	44
Great Britain	103	55	158	102	56	158
Ireland	52	60	112
Luxembourg	121	111	232
Russia	25	67	92
Singapore	37	68	105	32	61	93
United States	36	19	55	26	17	43

1) Brazil and Hong Kong.

Number of hours worked in parent company 15,276,311 (15,208,572).

10 Other expenses

	Group		Parent company
	2016	2015	2016	2015
Costsfor premises 1)	–1,636	–1,572	–1,133	–1,108
Data costs	–2,992	–2,756	–1,962	–1,746
Stationery	–60	–78	–42	–46
Travel and entertainment	–387	–414	–278	–292
Postage	–120	–149	–43	–123
Consultants	–637	–687	–440	–494
Marketing	–339	–371	–161	–196
Information services	–549	–533	–470	–474
Other operating costs 2)	17	205	–44	20
TOTAL	–6,703	–6,355	–4,573	–4,459
1) Of which rental costs	–1,228	–1,146	–895	–861

Other countries1) 21 15 36 15 11 26 TOTAL 7,228 9,371 16,599 4,669 4,671 9,340

2) Net after deduction for capitalised costs,see also note 29.

Note 10 continued Other expenses

Fees and expense allowances to appointed auditors and audit firms 1)

	Group		Parent company
	2016	2015	2016	2015
Audit assignment	–26	–26	–10	–10
Audit related services	–16	–20	–2	–3
Tax advisory	–10	–19	–8	–13
Otherservices	–3	–4	–3	–4
PricewaterhouseCoopers	–55	–69	–23	–30
Audit assignment	–1
Tax advisory	–1	–1
Otherservices	–1	–1
Other audit firms	–3	–2
TOTAL	–58	–71	–23	–30

1) The parent company includesthe foreign branches.

Audit assignment is defined asthe audit of annual financialstatements, the administration of the Board of Directors and the President, other tasksresting upon the auditor as well as consulting and other assistance, which have been initiated by the findingsin performing audit work or implementation ofsuch tasks. The audit related servicesinclude quarterly reviews, regulatory reporting and servicesin

connection with issuing of certificates and opinions. Tax advisory include general expatriate services and other tax services work. Otherservicesinclude consultation on financial accounting,servicesrelated to mergers and acquisitions activities, operational effectiveness and assessments of internal control.

11 Depreciation, amortisation and impairment of tangible and intangible assets

	Group		Parent company
	2016	2015	2016	2015
Depreciation of tangible assets	–271	–410	–106	–165
Depreciation of equipment leased to clients1)			–4,704	–4,598
Amortisation of intangible assets	–489	–559	–410	–600
Impairment of tangible assets	–3	–1
Impairment of intangible assets		–17
Impairment of goodwill	–5,334		–200
Retirement and disposal of intangible assets	–399	–24	–355	–84
TOTAL	–6,496	–1,011	–5,775	–5,447

1) In the Group Net income from leasesis classified asinterest income. In the parent company depreciation of leased equipment isreported as Depreciation, amortisation and impairment of tangible and intangible assets.

12 Gains less losses tangible and intangible assets

	Group
	2016	2015
Properties	94	77
Other tangible assets	16	7
Gains	110	84
Properties	–254	–295
Other tangible assets	–6	–2
Losses	–260	–297
TOTAL	–150	–213

13 Net credit losses

	Group		Parent company
	2016	2015	2016	2015
Provisions:
Net collective provisionsfor individually assessed loans	–218	74	–202	–165
Net collective provisionsfor portfolio assessed loans	260	362	14
Specific provisions	–734	–1,058	–407	–481
Reversal ofspecific provisions no longer required	338	507	102	362
Net provisionsfor contingent liabilities	43	3	21
Net provisions	–311	–112	–472	–284
Write-offs:
Totalwrite­offs	–1,480	–2,256	–471	–1,031
Reversal ofspecific provisions utilized forwrite­offs	584	1,301	60	723
Write­offs not previously provided for	–896	–955	–411	–308
Recovered from previouswrite­offs	214	184	94	72
Net write-offs	–682	–771	–317	–236
TOTAL	–993	–883	–789	–520

14 Appropriations

	Parent company
	2016	2015
Compensation from pension funds, pension disbursements Pension disbursements		673 –670
Pension compensation		3
Group contribution Accelerated tax depreciation	732 1,705	1,141 –363
Appropriations	2,437	778
TOTAL	2,437	781

15 Taxes

	Group		Parent company
Major components oftax expense	2016	2015	2016	2015
Current tax Deferred tax	–4,052 –161	–3,997 –176	–2,877	–3,679
Tax for current year Current tax for previous years	–4,213 –36	–4,173 –111	–2,877 137	–3,679 –138
INCOME TAX EXPENSE	–4,249	–4,284	–2,740	–3,817

Relationship between tax expenses and accounting profit

Net profit	10,618	16,581	14,378	18,045
Income tax expense	4,249	4,284	2,740	3,817
Accounting profit before tax	14,867	20,865	17,118	21,862
Current tax at Swedish statutory rate of 22.0 per cent	–3,271	–4,590	–3,766	–4,810
Tax effect relating to other tax ratesin other jurisdictions	246	83
Tax effect relating to not tax deductible expenses	–1,422	–727	–990	–782
Tax effect relating to non taxable income	464	797	1,879	1,913
Tax effect relating to a previously recognised tax loss,
tax credit or temporary difference	476	55
Tax effect relating to a previously unrecognised tax loss,
tax credit or temporary difference	–545	385
Currenttax	–4,052	–3,997	–2,877	–3,679
Tax effect relating to origin and reversal of tax losses,
tax credits and temporary differences	–475	–56
Tax effect relating to changesin tax rates or
the imposition of newtaxes		4
Tax effect relating to a previously unrecognised tax loss,
tax credit or temporary difference	314	–138
Tax effect relating to impairment or reversal of previous
impairments of a deferred tax asset		14
Deferred tax	–161	–176
Currenttax for previous years	–36	–111	137	–138
INCOME TAX EXPENSE 1)	–4,249	–4,284	–2,740	–3,817

1) Total income tax expense was SEK 4,249m (4,284). The effective tax rate for the year was 28.5 per cent (20.5). Excluding the itemsthat affect comparability, the effective tax ratewas 21 per cent. Thiswas in linewith SEB's expected tax rate.

Deferred tax income and expense recognised in income statement

Accelerated tax depreciation	300	–88
Pension plan assets, net	–163	145
Tax losses carry forwards	–322	–73
Other temporary differences	24	–95
TOTAL	–161	–111

Deferred tax assets and liabilities,where the change is not reported as a change in deferred tax, amount to SEK 125m (7) and is explained by a currency translation effect.

Note 15 continued Taxes

Currenttax assets
	Group		Parent company
	2016	2015	2016	2015
Other	5,976	6,966	2,990	1,643
Recognised in profit and loss	5,976	6,966	2,990	1,643
Other	2
Recognised in Shareholders' equity	2
TOTAL	5,978	6,966	2,990	1,643
Deferred tax assets

Tax losses carry forwards 208 530 Pension plan assets, net 1 –16 Other temporary differences1) 271 436 Recognised in profit and loss 480 950 Pension plan assets, net 853 730 Unrealised lossesin availableforsale financial assets –4 –164 Recognised in Shareholders' equity 849 566 TOTAL 1,329 1,516

1) Temporary differences are differences between the carrying amount of an asset or liability in the balance sheet and itstax base.

Taxable temporary differences give rise to deferred tax assets and liabilities.

Deferred tax assets on tax losses carried forward relates mainly to the Baltic countries and are based on SEB's assessment of future earningsin respective entity. Tax losses carried forward in the SEB Group for which the tax assets are not recognised in the balance sheet amount to SEK 4,537m (3,545) gross. These are not

recognised due to the uncertainty in the possibility to use them. Thisincludeslosses where the amount can only be used for trade tax. The potential tax asset not recognised is SEK 920m (626).

All losses carried forward are without time limit.

Currenttax liabilities

	Group		Parent company
	2016	2015	2016	2015
Other	2,184	2,082	694	584
Recognised in profit and loss	2,184	2,082	694	584
Group contributions			161	251
Recognised in Shareholders' equity			161	251
TOTAL	2,184	2,082	855	835

Deferred tax liabilities

Accelerated tax depreciation Unrealised profitsin financial assets at fair value Pension plan assets and obligations, net Other temporary differences 1)	6,525 23 –32 293	6,825 30 –212 350
Recognised in profit and loss	6,809	6,993
Pension plan assets and obligations, net Unrealised profitsin cash flowhedges Unrealised profitsin available­for­sale financial assets	44 1,526 95	1,446 905 124	677	906
Recognised in Shareholders' equity	1,665	2,475	677	906
TOTAL	8,474	9,468	677	906

1) Temporary differences are differences between the carrying amount of an asset or liability in the balance sheet and itstax 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 isrecognised related to possible future tax costs on dividendsfrom Estonia. The tax rate applicable to dividendsis 20 per cent (20).

16 Earnings per share

	Group
	2016	2015
Net profit attributable to shareholders, SEKm Weighted average number ofshares,millions Basic earnings pershare, SEK	10,618 2,178 4.88	16,581 2,191 7.57
Net profit attributable to shareholders, SEKm Weighted average number of diluted shares,millions Diluted earnings pershare, SEK	10,618 2,188 4.85	16,581 2,203 7.53
Dilution1)
Weighted average number ofshares,millions Adjustment for dilutedweighted average number of	2,178	2,191
additional Class A­shares,millions Weighted average number of diluted shares,millions	10 2,188	12 2,203

1) Calculated dilution based on the estimated economic value of the longterm incentive programmes.

17 Risk disclosures

SEB's profitability is directly dependent upon its ability to evaluate, manage and price the risks encountered, while maintaining an adequate capitalisation and liquidity to meet unforeseen events. Risk and capitalrelated issues are identified, monitored and managed at an early stage in order to secure the Group's financial stability. Risk and capital management is an integral part of the longterm strategic

17 a Credit risk

Definition

Credit risk isthe risk of loss due to the failure of an obligor to fulfil its obligations towards SEB. The definition also comprises counterparty risk derived from the trading operations, country risk and settlement risk. Credit concentration risk is also considered.

The predominant risk in SEB is credit risk,which arisesthrough the lending activities and commitmentsto customers, including corporates, financial institutions, public sector entities and private individuals. In addition to the credit portfolio, SEB's credit exposure consists of debt instruments and repos.

Risk management

Credit policy and approval process

The main principle in SEB's credit policy isthat all lending is based on credit analysis and is proportionate to the customer's cash flow and ability to repay. The customer shall be known by the bank and the purpose of the loan shall be fully understood.

A credit approval is based on an evaluation of the customer's creditworthiness and type of credit. Relevant factorsinclude the customer's current and anticipated financial position and protection provided by covenants and collateral. A credit approval takesthe proposed transaction into account as well asthe customer'stotal businesswith the bank. The process differs depending on the type of customer (e.g., retail, corporate or institutional), risk level, and size and type of transaction. Independent and professional credit analysisis particularly important for large corporate customers. For households and small businesses, the credit approval is often based on creditscoring systems. Every credit decision ofsignificance requires approval from an independent credit officer.

Credit decisionmaking is based on a hierarchicalstructure,with the Group Risk Committee being the highest credit granting body,subject to limited exceptions. Below the Group Risk Committee are Divisional Credit Committees and, in turn, local credit committees depending on the location of the customer, with small approval authoritiesfor certain specified bank officers. The approval mandatesfor each level are set on a risk adjusted basis using both quantitative and qualitative criteria.

SEB's credit policiesreflect the Group's approach to sustainability as described in the Corporate Sustainability Policy, the Environmental Policy and the Credit Policy on Corporate Sustainability. Position statements on climate change, child labour and accessto fresh water as well as a number of industry sector policiesshall be considered in the credit granting process and are also used in customer dialogues.

Limits and monitoring

To manage the credit risk for individual customers or customer groups, a limit is established that reflectsthe maximum exposure that SEB is willing to accept. Limits are also established for total exposure in countriesin certain risk classes, certain customersegments and forsettlement risksin the trading operations.

SEB continuously reviewsthe quality of its credit exposures. All total limits and risk classes are reviewed at least annually by a credit approval body (a credit committee

planning and business planning processes.

Further information about SEB'srisk, liquidity and capital management is available on pages 40–45, notes19–20 and in SEB'sreport under Pillar 3: Capital Adequacy and RiskManagement Report (available on www.sebgroup.com).

consisting of at least two bank officers as authorised by the Group's Credit Instruction, adopted by the Board). Weak or impaired exposures are subject to more frequent reviews. The objective isto identify at an early stage credit exposures with an elevated risk of loss and towork together with the customer towards a solution that enablesthe customer to meet its financial obligations and SEB to avoid or reduce credit losses.

Loans where the contractual terms have been amended in favour of the customer due to financial difficulties are referred to asforborne loans. Forbearance measures range from amortisation holidays(the most common measure) to refinancing with new terms and debt forgiveness. Changesin contractual terms may be so significant that the loan can also be considered impaired. A relevant credit approval body shall approve the forbearance measures as well asthe classification of the loan as being forborne or not.

In its core markets, SEB maintainslocal workout teamsthat are engaged in problem exposures. These are supported by a global workout function with overall responsibility for managing problem exposures.

Impairment provisioning process

Provisions are made for probable credit losses on individually assessed loans and for portfolio assessed loans. Loansto corporate, real estate and institutional counterparties are primarily individually assessed and specific provisions are made for identified impaired loans(individually assessed impaired loans).

Loansthat have not been deemed to be impaired on an individual basis andwhich have similar credit risk characteristics are grouped together and assessed collectively for impairment. Valuations of loansto private individuals and small businesses are to a large extent made on a portfolio basis(portfolio assessed loans). For a further description of the different categories of impaired loans, refer to note 1 and note 19.

Risk mitigation

SEB reducesrisk in its credit portfolio through a number of credit risk mitigation techiques. The method used depends on itssuitability for the product and the customer in question, itslegal enforceability, and on SEB's experience and capacity to manage and control the particular technique. The most important credit risk mitigation techniques are collateral pledges, guarantees and netting agreements. The most common types of pledges are real estate, floating charges and financialsecurities. In the trading operations, daily margin arrangements are frequently used to mitigate net open counterparty exposures at any point in time. For large corporate customers, credit risk is often mitigated by the use of covenants.

Credit portfolio analysis and stress tests

The risk organisation regularly reviews and assessesthe aggregate credit portfolio based on industry, geography, risk class, product type,size and other parameters. Risk concentrationsin geographic and industry sectors as well asin large single names are thoroughly analysed, both in respect of direct and indirect exposures and

in the form of collateral, guarantees and credit derivatives. As of yearend, the 20 largest corporate exposures(including property management) corresponded to 86 per cent of the capital base (87).

Stresstests of the credit portfolio, including reverse stresstests, are performed regularly as a part of SEB's annual internal capital adequacy assessment process. Specific analyses and stresstests of certain sectors orsubportfolios are performed asrequired.

Risk measurement

Credit risk is measured for all exposures, both in the banking book and the trading book. An internal ratingsbased (IRB) risk classification system approved by the regulator is used for the majority of the bank's portfolios and reflects the risk of default on payment obligations. SEB received approval for a significant amendment of its risk classification system for the nonretail portfolio in the parent company at the end of 2015 and in SEB AG in 2016. The approval for SEB's Baltic subsidiaries is still pending.

The risk classification system contains specific rating tools and PD (probability of default) scales for significant nonretail segments, including large corporates, property management and SMEs. The segments are measured on a scale of 1–16, while the SME portfolios are measured on a scale of 1–12. Defaulted counterparties are given the highest risk class, and the three risk classes prior to default are defined as "watch list". For each risk class scale, SEB makes individual oneyear, throughthecycle probability of default estimates, which are based on up to more than 20 years of internal data, and external data.The risk distribution of SEB's non-retail credit portfolio (excluding households) is shown on page 104.

For private individuals and small businesses, SEB uses credit scoring systems to estimate PD for the customer. To achieve greater accuracy, SEB uses different credit scoring models for different regions and product segments, as both data accessibility and customer characteristics normally vary by country and product. PD for the household portfolio is estimated at 0.49 per cent through the cycle.

The risk distribution of the household portfolio is shown on page 104. The exposure weighted PD of the total credit portfolio decreased to 0.55 per cent at yearend (0.58).

Counterparty risk in derivative contracts

SEB entersinto derivatives contracts primarily to support customersin the management of their financial exposures. SEB also uses derivativesto protect cash flows and fair values of financial assets and liabilitiesin its own book from market fluctuations.

Counterparty risk in derivative contractsisthe risk of a counterparty not living up to its contractual obligations where SEB has a claim on the counterparty. The claim on the counterparty correspondsto a net positive exposure in favour of SEB. Since the market value of a derivative fluctuates during the term to maturity, the uncertainty of future market conditions must be taken into account. The potential future exposure (PFE) is calculated by applying an addon to current market value. The addon is generated either through simulation (internal model method) or by applying a standard addon which isset by a fixed value depending on product type and time to maturity which reflects potential market movementsfor the specific contract (standardised method).

Counterparty risk in derivative contractsisreduced through the use of closeout netting agreements, where all positive and negative market values under an agreement can be netted at the counterparty level, and through collateral arrangements.

SEB'ssimulationbased approach for calculating potential future exposure (internal model method) is approved by the Swedish FSA for external capital reporting of counterparty credit risk of repos, interest rate derivatives and FX derivativesin the parent company.

Counterparty risk in derivative contracts also affectsthe profit and lossthrough credit/debit valuation adjustments(CVA/DVA) reflecting the credit risk associated with derivative positions. These adjustments depend on market risk factorssuch as interest rate, foreign exchange rates and creditspreads. There is also an external capital requirement for credit valuation adjustments under Basel III.

Credit exposure by industry

Total credit exposure comprisesthe Group's credit portfolio (loans, leasing agreements, contingent liabilities and counterparty risks arising from derivative contracts), repos and debt instruments. Exposures are presented before reserves. Interest rate and foreign exchange derivatives and repos are calculated using the internal model method. Other derivatives are reported after netting of market

values but before collateral arrangements and include standardised addonsfor potential future exposure. Debt instruments comprise all interestbearing instruments at nominal amounts, considering credit derivatives and futures. Debt instrumentsin the Life and Investment Management division are excluded.

	Loans			Contingent liabilities		Derivative instruments1)	Total
Group	2016	2015	2016	2015	2016	2015	2016	2015
Banks	50,475	50,369	25,284	17,417	31,025	100,667	106,784	168,453
Finance and insurance	65,282	57,838	39,056	33,271	28,715	37,179	133,053	128,288
Wholesale and retail	56,622	48,792	34,733	31,143	1,618	981	92,973	80,916
Transportation	26,961	28,038	19,913	19,332	2,226	5,021	49,100	52,391
Shipping	55,619	50,889	14,322	17,875	2,377	2,504	72,318	71,268
Business and household services	114,020	85,011	88,171	75,889	4,366	4,387	206,557	165,287
Construction	12,646	10,797	20,497	15,400	950	692	34,093	26,889
Manufacturing	87,152	87,143	148,604	138,909	15,390	13,756	251,146	239,808
Agriculture,forestry and fishing	13,208	11,580	2,213	1,827	407	285	15,828	13,692
Mining, oil and gas extraction	26,608	22,248	24,554	24,941	3,221	2,686	54,383	49,875
Electricity, gas andwatersupply	39,734	41,857	40,643	30,039	5,186	5,863	85,563	77,759
Other	26,357	24,072	7,171	5,783	734	355	34,262	30,210
Corporates	524,209	468,265	439,877	394,409	65,190	73,709	1,029,276	936,383
Commercial real estate management	157,838	142,023	20,160	15,098	7,120	6,509	185,118	163,630
Residential real estate management	92,199	80,981	9,147	7,125	7,986	5,638	109,332	93,744
Housing co­operative associations, Sweden	50,119	45,864	3,505	4,022	6	15	53,630	49,901
Property Management	300,156	268,868	32,812	26,245	15,112	12,162	348,080	307,275
Public Administration	30,089	40,069	24,418	31,642	7,790	5,299	62,297	77,010
Household mortgage	482,531	466,682	30,859	25,820			513,390	492,502
Other	41,331	41,236	41,897	41,616	63	36	83,291	82,888
Households	523,862	507,918	72,756	67,436	63	36	596,681	575,390
Credit portfolio	1,428,791	1,335,489	595,147	537,149	119,180	191,873	2,143,118	2,064,511
Repos							386	1,367
Debtinstruments							167,969	228,612
TOTAL							2,311,473	2,294,490

1) The figures are not fully comparable between years due to the implementation of the internal model method for interest and foreign exchange derivativesin the parent company.

Credit portfolio by industry and geography

Total credit portfolio comprisesthe Group'sloans, leasing agreements, contingent liabilities and counterparty risks arising from derivative contracts. Exposures are presented before reserves. Interest rate and foreign exchange derivatives and repos are

1)

calculated using the internal model method.Other derivatives are reported after netting of market values but before collateral arrangements and include standardised addonsfor potential future exposure.

Group, 2016	Sweden	Denmark	Norway	Finland	Estonia	Latvia	Lithuania	Germany	Other	Total
Banks	69,802	2,701	2,869	2,798	310	98	350	11,748	16,108	106,784
Finance and insurance	83,451	968	3,513	1,676	568	11	398	23,937	18,531	133,053
Wholesale and retail	43,811	9,380	1,665	784	5,807	2,771	11,986	9,199	7,570	92,973
Transportation	26,768	1,770	2,839	1,669	1,085	2,720	2,818	9,219	212	49,100
Shipping	61,597	1,285	1,059	163	244	179	1		7,790	72,318
Business and household services	144,116	3,754	6,857	801	2,146	2,692	3,129	39,790	3,272	206,557
Construction	22,319	852	1,579	614	994	788	1,523	3,231	2,193	34,093
Manufacturing	168,255	7,507	4,533	8,620	3,562	2,452	4,889	35,387	15,941	251,146
Agriculture,forestry and fishing	9,636	186	5	55	1,801	2,403	1,629	91	22	15,828
Mining, oil and gas extraction	46,480	5	5,711	402	1,163	59	129	1	433	54,383
Electricity, gas andwatersupply	43,164	845	1,063	10,046	2,447	1,222	6,635	19,325	816	85,563
Other	27,166	979	1,318	886	211	158	187	3,273	84	34,262
Corporates	676,763	27,531	30,142	25,716	20,028	15,455	33,324	143,453	56,864	1,029,276
Commercial real estate management	128,736	141	2,274	1,775	7,445	4,294	8,695	31,756	2	185,118
Residential real estate management Housing co­operative associations, Sweden	103,397 53,608		49			280	5	5,601	22	109,332 53,630
Property Management	285,741	141	2,323	1,775	7,445	4,574	8,700	37,357	24	348,080
Public Administration	26,870	11	698	1,340	3,753	629	895	28,098	3	62,297
Household mortgage Other	461,221 42,880	4,547	2,186 23,111	1,993	18,000 3,133	7,039 2,392	19,881 2,445	16	5,063 2,774	513,390 83,291
Households	504,101	4,547	25,297	1,993	21,133	9,431	22,326	16	7,837	596,681

2015

Banks	72,019	51,151	7,801	2,659	233	226	933	18,885	14,546	168,453
Finance and insurance	80,221	1,553	3,314	1,575	310	12	250	19,783	21,270	128,288
Wholesale and retail	38,989	5,506	1,395	1,021	4,846	2,394	10,851	9,217	6,697	80,916
Transportation	32,546	611	2,981	1,716	1,134	1,598	2,382	9,310	113	52,391
Shipping	59,264	1,640	1,332	372	257	126	126	45	8,106	71,268
Business and household services	114,950	1,124	5,041	578	2,342	2,434	2,502	33,634	2,682	165,287
Construction	16,124	423	1,161	788	1,086	740	1,093	3,563	1,911	26,889
Manufacturing	161,363	3,979	3,846	9,962	3,872	2,091	4,862	34,762	15,071	239,808
Agriculture,forestry and fishing	8,645	66	5	57	1,666	2,023	1,120	87	23	13,692
Mining, oil and gas extraction	42,084	15	5,862	229	1,284	114	27		260	49,875
Electricity, gas andwatersupply	41,689	276	586	9,674	2,484	1,487	4,581	16,043	939	77,759
Other	24,005	802	1,290	634	181	166	160	690	2,282	30,210
Corporates	619,880	15,995	26,813	26,606	19,462	13,185	27,954	127,134	59,354	936,383
Commercial real estate management	110,204	101	1,673	1,298	6,049	3,940	7,933	32,430	2	163,630
Residential real estate management	86,139		8			358	6	7,233		93,744
Housing co­operative associations, Sweden	49,901									49,901
Property Management	246,244	101	1,681	1,298	6,049	4,298	7,939	39,663	2	307,275
Public Administration	22,140	9	418	1,319	3,731	728	1,107	46,877	681	77,010
Household mortgage	442,960		4,270		15,893	6,606	17,673		5,100	492,502
Other	44,866	4,376	21,093	1,949	2,960	2,315	2,277	34	3,018	82,888
Households	487,826	4,376	25,363	1,949	18,853	8,921	19,950	34	8,118	575,390
TOTAL	1,448,109	71,632	62,076	33,831	48,328	27,358	57,883	232,593	82,701	2,064,511

1) The geographical distribution is based on where the loan is booked. Amounts before provisionsfor credit losses.

Credit portfolio by risk class 1)

Group, 2016				Total, excluding households	Households
Category	PD Range	S&P/Moody's 2)	Banks	Corporates	Property Management	Public Admin.	Total	PD Range
Investment grade	0 < 0.01% 0.01 < 0.03%	AAA/Aaa AA/Aa	5.7% 46.3%	0.7% 12.1%	0.0% 3.5%	25.9% 60.9%	1.9% 14.5%	0 < 0.2%	66.1%
	0.03 < 0.12% 0.12 < 0.46%	A/A BBB/Baa	31.3% 9.7%	27.4% 36.8%	18.4% 51.5%	10.3% 2.4%	25.0% 36.8%	0.2 < 0.4% 0.4 < 0.6%	15.9% 0.3%
	0.46 < 1.74% 1.74 < 7%	BB/Ba B/B	3.5% 1.9%	18.0% 3.3%	24.2% 1.6%	0.1% 0.4%	17.6% 2.7%	0.6 < 1% 1 < 5%	10.8% 4.4%
Watch list	7 < 9% 9 < 22% 22 < 100%	B/B CCC/Caa C/C	0.2% 1.2% 0.1%	0.7% 0.5% 0.0%	0.1% 0.3% 0.0%	0.0% 0.0% 0.0%	0.5% 0.5% 0.0%	5 < 10% 10 < 30% 30 < 50%	1.0% 0.7% 0.3%
Default	100%	D	0.0%	0.5%	0.4%	0.0%	0.4%	50 < 100%	0.5%
TOTAL			100%	100%	100%	100%	100%	TOTAL	100%

2015

0 < 0.01%	AAA/Aaa	3.5%	0.4%	0.0%	19.2%	1.7%
								66.8%
								15.5%
								0.2%
0.46 < 1.74%	BB/Ba	0.9%	18.2%	16.4%	0.0%	15.1%	0.6 < 1%	10.1%
								4.8%
7 < 9%	B/B	0.0%	0.0%	0.0%	0.0%	0.0%	5 < 10%	1.0%
9 < 22%	CCC/Caa	0.6%	0.6%	0.6%	0.7%		10 < 30%	0.7%
22 < 100%	C/C	0.2%	0.1%	0.1%	0.0%	0.1%	30 < 50%	0.3%
100%	D	0.0%	0.6%	0.9%	0.0%	0.6%	50 < 100%	0.6%
		100%	100%	100%	100%	100%	TOTAL	100%
	0.01 < 0.03% 0.03 < 0.12% 0.12 < 0.46% 1.74 < 7%	AA/Aa A/A BBB/Baa B/B	43.1% 19.6% 31.2% 0.9%	13.0% 24.0% 39.5% 3.6%	4.5% 16.9% 58.4% 2.2%	71.3% 6.3% 2.3% 0.2%	17.4% 21.1% 40.5% 2.9% 0.6%	0 < 0.2% 0.2 < 0.4% 0.4 < 0.6% 1 < 5%

1) Compilation is based on credit portfolio including repos. Household exposure based on internal ratings based (IRB) reported exposure in the event of a default (EAD – exposure at default). 2) Estimated link between internal PDs and external ratings based on comparison of historical default outcomes.

Credit portfolio protected by guarantees, credit derivatives and collaterals1)

		Group			Parent company
2016	Credit portfolio	Protection via guarantees and credit derivatives	Protection via pledged collaterals	Of which, financial collaterals	Credit portfolio	Protection via guarantees and credit derivatives	Protection via pledged collaterals	Of which, financial collaterals
Banks Corporates and Property Management Public Administration Households	106,784 1,377,356 62,297 596,681	3,582 50,102 30,601 2,600	9,415 475,067 611 501,279	7,793 30,360 611 2,891	92,923 1,080,970 27,273 486,000	1,434 47,719 24,291	7,461 398,257 7 448,234	6,585 28,090 7
TOTAL	2,143,118	86,885	986,372	41,655	1,687,166	73,444	853,959	34,682
2015
Banks Corporates and Property Management Public Administration Households	168,453 1,243,658 77,010 575,390	4,020 44,252 35,413 2,673	15,259 429,992 849 479,627	13,376 29,013 849 2,612	105,849 970,221 22,957 470,152	1,766 42,934 29,482	13,877 357,491 228 433,047	12,559 26,738 228 33
TOTAL	2,064,511	86,358	925,727	45,850	1,569,179	74,182	804,643	39,558

1) Only risk mitigation arrangements eligible in capital adequacy reporting are represented in the tables above.

Loan portfolio by industry and geography 1)

The loan portfolio comprises the Group's loans and leasing agreements.

2016	Sweden	Denmark	Norway	Finland	Estonia	Latvia	Lithuania	Germany	Other	Total
Banks	29,647	271	414	425	260	82	285	7,447	11,644	50,475
Finance and insurance	45,506	339	1,006	204	252	10	194	9,344	8,427	65,282
Wholesale and retail	26,393	7,878	1,026	664	3,795	1,577	7,729	2,154	5,406	56,622
Transportation	13,331	649	2,052	1,499	778	1,668	2,330	4,590	64	26,961
Shipping	48,359	7	519	163	240	173	1		6,157	55,619
Business and household services	85,926	930	3,032	279	1,927	2,242	2,453	16,615	616	114,020
Construction	10,963	233	170	17	380	167	522	187	7	12,646
Manufacturing	55,434	2,729	861	3,698	2,330	1,823	3,150	7,487	9,640	87,152
Agriculture,forestry and fishing	8,097	15		53	1,683	2,054	1,304		2	13,208
Mining, oil and gas extraction	25,146	5	86	402	676	48	51		194	26,608
Electricity, gas andwatersupply	20,655	24	1	8,236	1,329	827	4,112	4,420	130	39,734
Other	21,006	937	579	591	188	137	161	2,734	24	26,357
Corporates	360,816	13,746	9,332	15,806	13,578	10,726	22,007	47,531	30,667	524,209
Commercial real estate management	106,902	11	1,345	451	6,868	4,148	7,893	30,220		157,838
Residential real estate management	86,746		41			276	5	5,131		92,199
Housing co­operative associations, Sweden	50,097								22	50,119
Property Management	243,745	11	1,386	451	6,868	4,424	7,898	35,351	22	300,156
Public Administration	7,573	11	85	1,123	1,058	393	641	19,205		30,089
Household mortgage	431,245		2,186		17,596	6,944	19,497		5,063	482,531
Other	23,545	2,407	5,907	1,044	2,578	1,835	1,855	15	2,145	41,331
Households	454,790	2,407	8,093	1,044	20,174	8,779	21,352	15	7,208	523,862
TOTAL	1,096,571	16,446	19,310	18,849	41,938	24,404	52,183	109,549	49,541	1,428,791
Reverse repos Debt instrumentsreclassified										64,438 15,106
Reserves										–4,789
TOTAL LENDING										1,503,546

2015

Banks	20,883	3,107	278	463	179	211	869	13,392	10,987	50,369
Finance and insurance	41,576	41	791	58	149	10	66	6,397	8,750	57,838
Wholesale and retail	24,200	4,654	981	374	2,689	1,458	7,065	2,510	4,861	48,792
Transportation	16,548	415	2,091	1,310	828	1,473	1,918	3,397	58	28,038
Shipping	43,216	288	683	372	255	123	125	45	5,782	50,889
Business and household services	64,418	871	845	154	2,095	2,197	1,374	12,457	600	85,011
Construction	8,707	287	104	6	455	190	398	647	3	10,797
Manufacturing	55,291	3,061	802	3,205	2,531	1,525	3,093	8,377	9,258	87,143
Agriculture,forestry and fishing	7,209	11		37	1,584	1,832	904		3	11,580
Mining, oil and gas extraction	21,099	15	100	229	686	92	27			22,248
Electricity, gas andwatersupply	22,833	35	5	7,571	1,426	897	3,831	5,051	208	41,857
Other	19,660	769	444	471	163	153	145	583	1,684	24,072
Corporates	324,757	10,447	6,846	13,787	12,861	9,950	18,946	39,464	31,207	468,265
Commercial real estate management	93,945	6	932	358	5,755	3,850	7,184	29,993		142,023
Residential real estate management	73,738		2			313	6	6,922		80,981
Housing co­operative associations, Sweden	45,864									45,864
Property Management	213,547	6	934	358	5,755	4,163	7,190	36,915		268,868
Public Administration	5,346	9	81	1,111	1,205	354	789	30,493	681	40,069
Household mortgage	418,420		3,559		15,683	6,578	17,343		5,099	466,682
Other	24,977	2,354	4,798	993	2,402	1,714	1,717	34	2,247	41,236
Households	443,397	2,354	8,357	993	18,085	8,292	19,060	34	7,346	507,918
TOTAL	1,007,930	15,923	16,496	16,712	38,085	22,970	46,854	120,298	50,221	1,335,489
Reverse repos Debt instrumentsreclassified Reserves										60,316 21,001 –4,878
TOTAL LENDING										1,411,928

1) The geographical distribution is based onwhere the loan is booked.

Debtinstruments

At yearend 2016, SEB's credit exposure in the bond portfolio amounted to SEK 168bn (229). The exposure comprises all interestbearing instruments at nominal amounts including certain credit derivatives and futures.

Distribution by geography

	Central&local governments		Corporates		Covered bonds		Asset-backed securities		Financials		Total
	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015
Germany	23.8%	20.9%	0.1%	0.1%	0.1%	0.4%	3.6%	0.0%	2.7%	0.1%	30.3%	21.5%
Sweden	10.3%	25.4%	0.7%	0.3%	16.0%	20.0%	0.0%	0.0%	0.2%	0.4%	27.2%	46.1%
Denmark	2.7%	0.2%	0.1%	0.2%	9.5%	9.7%	0.0%	0.0%	0.7%	0.3%	13.0%	10.4%
Norway	3.4%	3.6%	0.1%	0.3%	3.1%	0.0%	0.0%	0.6%	0.9%	0.0%	7.5%	4.5%
US	7.1%	2.0%	0.0%	0.3%	0.0%	0.0%	0.2%	0.0%	0.0%	0.0%	7.3%	2.3%
Luxembourg	3.3%	2.1%	0.0%	0.0%	0.0%	0.0%	0.0%	2.4%	0.0%	0.0%	3.3%	4.5%
Finland	2.8%	0.7%	0.0%	0.1%	0.0%	1.5%	0.0%	0.0%	0.1%	0.7%	2.9%	3.0%
Netherlands	0.8%	0.5%	0.0%	0.1%	0.5%	0.3%	0.1%	0.1%	0.3%	0.3%	1.7%	1.3%
Spain	0.0%	0.0%	0.0%	0.0%	0.0%	0.6%	0.4%	0.4%	0.1%	0.1%	0.5%	1.1%
Ireland	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.1%	0.1%	0.0%	0.0%	0.1%	0.1%
Italy	0.1%	0.1%	0.0%	0.0%	0.0%	0.0%	0.0%	0.1%	0.0%	0.0%	0.1%	0.2%
Portugal	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.1%	0.1%	0.0%	0.0%	0.1%	0.1%
Greece	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Europe, other	4.2%	2.6%	0.2%	0.9%	0.0%	0.0%	0.3%	0.5%	0.2%	0.1%	4.9%	4.1%
Rest ofworld	1.1%	0.8%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	1.1%	0.8%
TOTAL	59.6%	58.9%	1.2%	2.3%	29.2%	32.5%	4.8%	4.3%	5.2%	2.0%	100.0%	100.0%
Distribution by rating
AAA	38.6%	46.9%	0.1%	0.2%	28.3%	31.7%	3.4%	2.9%	2.6%	0.6%	73.0%	82.3%
AA	11.4%	6.7%	0.0%	0.0%	0.5%	0.3%	0.1%	0.2%	1.0%	0.1%	13.0%	7.3%
A	2.7%	2.1%	0.1%	0.3%	0.0%	0.5%	0.7%	0.7%	0.2%	0.5%	3.7%	4.1%
BBB	0.0%	0.1%	0.4%	0.5%	0.0%	0.0%	0.4%	0.3%	0.1%	0.1%	0.9%	1.0%
BB/B	0.0%	0.0%	0.0%	0.1%	0.0%	0.0%	0.2%	0.2%	0.0%	0.0%	0.2%	0.3%
CCC/CC	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
No issue rating 1)	6.9%	3.1%	0.6%	1.2%	0.4%	0.0%	0.0%	0.0%	1.3%	0.7%	9.2%	5.0%
TOTAL	59.6%	58.9%	1.2%	2.3%	29.2%	32.5%	4.8%	4.3%	5.2%	2.0%	100.0%	100.0%

1) Mainly German local governments(Bundesländer).

17 b Market risk

Definition

Market risk isthe risk of lossesin on and offbalance sheet positions arising from adverse movementsin market prices. Market risk can arise from changesin interest rates, foreign exchange rates, creditspreads, commodity and equity prices, implied volatilities, inflation and market liquidity. A clear distinction is made between market risksrelated to trading activity, i.e., trading book risks, and structural market and net interest income risks, i.e., banking book risks. Whereasthe trading book is under a daily marktomarket regime, positionsin the banking book are typically held at amortised cost.

Risk management

Market risksin the trading book arise from SEB's customerdriven trading activity and in the liquidity portfolio. The trading activity is carried out by the Large Corporates & Financial Institutions division in its capacity as market maker in international foreign exchange, equity and debt capital markets. The liquidity portfolio, which is managed by the treasury function, is part of SEB'sliquidity reserve and consists of investmentsin pledgeable and highly liquid bonds.

Market risk in the banking book arises as a result of balance sheet mismatchesin currencies, interest terms and interest rate periods. The treasury function has overall responsibility for managing these risks, which are consolidated centrally.

Market risk also arisesin the bank'straditional insurance operations and the defined benefit plansfor employees as a result of mismatches between the market value of assets and liabilities. Market risksin the pension obligations and the life insurance business are not included in the market risk figures below. Refer to note 17 e for information on market risk in the life insurance business.

The Board of Directors defines how much market risk is acceptable by setting the overall market risk tolerance, risk limits and general instructions. The market risk tolerance and limits are defined for the trading book, banking book and defined benefit plans. The trading book risks are managed at the different trading locations within a comprehensive set of limitsin VaR,sensitivities,stoploss and stresstests. The Group Risk Committee delegatesthe market risk mandate to the divisions and the treasury function, which in turn further allocate the limitsinternally.

The risk organisation measures, follows up and reportsthe market risk taken by the various units within the Group on a daily basis. The risk organisation also independently verifiesthe valuation of positions held at fair value and calculatesthe capital buffer for prudent valuation. The risk control function is present in the trading rooms and monitorslimit compliance and market prices at closing as well as valuation standards and the introduction of new products. Market risks are reported at least on a monthly basisto the Group Risk Committee and the Board's Risk and Capital Committee.

SEB is exposed to the following marketrisk types:

Risk type	Defined as the risk of loss orreduced income due to	Source
Interest rate risk	Changesin interest rates	Inherent in all banking business
Creditspread risk	A change in the creditworthiness of an issuer of, for instance, a bond or a credit derivative	Primarily present in the bank's bond holdings
Foreign exchange risk	Variationsin the exchange rates	Foreign exchange trading and the bank's operationsin various markets
Equity price risk	Variationsin equity prices	Market making and customer activity in equities and equity derivatives
Commodity price risk	Variationsin commodity prices	Customer­driven activitiesin commodities
Volatility risk	Changesin implied volatility	Market making and customer activity of options across all asset classes
Inflation	Change in inflation	Bond holdings, value of assets on balance sheet
Market liquidity	Bid­ask spread widenings	Sale of assets or closing of positions
Credit value adjustment 1)	Variationsin the counterparty credit risk based on the expected future exposure	OTC derivative contracts
1) Credit value adjustment isfundamentally credit risk, but the exposure is calculated using market risk drivers(interest rate, currency, etc.).

Note 17 b continued Market risk

Risk measurement

When assessing market risk exposure, SEB uses measuresthat capture losses under normal market conditions as well as measuresthat focus on extreme marketsituations. Market risks under normal market circumstances are measured using Value at Risk (VaR) as well asspecific measuresthat are relevant for the varioustypes of risk. These measures are complemented by stresstests and scenario analyses, in which potential losses under extreme market conditions are estimated. Since no measurement method can cover all risks at all times,several approaches are used, and the results are assessed based on judgment and experience.

Value at Risk and Stressed Value at Risk

VaR expressesthe maximum potential lossthat could arise during a certain time period with a given degree of probability. SEB uses a historicalsimulation VaR model with a tenday time horizon and 99 per cent confidence interval to measure, limit and report VaR. The model aggregates market risk exposure for all risk types and covers a wide range of risk factorsin all asset classes. SEB also uses a stressed VaR measure, where VaR is calculated for the current portfolio using market data from a historic, turbulent time period covering the Lehman Brothers' default. The VaR model is validated using backtesting analysis.

A limitation of SEB's VaR model isthat it uses historical data to estimate potential market changes. Assuch it may not predict all outcomes, especially in a rapidly changing market. Also, VaR does not take into account any actionsto reduce risk as the model assumesthat the portfolio is unchanged.

SEB's VaR and stressed VaR models have been approved by the Swedish FSA for calculation of regulatory capital requirementsfor all the general market risksin the bank'strading book in the parent bank and the subsidiary Skandinaviska Enskilda Banken S.A. in Luxembourg.

Value at Risk

	2016		31Dec	Average	Average
Trading Book (99%,ten days)	Min	Max	2016	2016	2015
Interest rate risk	37	120	61	72	95
Creditspread risk	54	44	61	63	66
Foreign exchange rate risk	6	78	9	32	34
Equity price risk	11	56	40	26	29
Commoditiesrisk	9	60	27	22	17
Volatilitiesrisk	10	34	12	17	34
Diversification			–118	–121	–158
TOTAL	83	182	92	111	117
Banking Book (99%,ten days)
Interest rate risk	127	336	127	232	189
Creditspread risk	14	82	51	60	97
Foreign exchange rate risk		10	6		1
Equity price risk	29	98	29	58	28
Volatilitiesrisk
Diversification			–53	–110	–98
TOTAL	153	320	160	240	217

Stress tests and scenario analysis

Scenario analysis and stresstests are a key part of the risk management framework, complementing the VaR measure. In particular, they test the portfolios using scenarios other than those available in the VaR simulation window, and cover longer time horizons. SEB stressesits portfolios by applying extreme movementsin market factors which have been observed in the past (historicalscenarios) as well as extreme movementsthat could potentially happen in the future (hypothetical or forwardlooking scenarios). Reverse stresstests are also used for the total trading portfolio as well asfor individual divisions and business units, to identify scenarios thatwould lead to a given significant loss, for instance, the breach of a stoploss limit. Thistype of analysis provides management with a view on the potential impact that large market movesin individual risk factors, as well as broader marketscenarios, could have on a portfolio. The risk tolerance framework includeslimits on differentstresstestscenarios.

Specific risk measures

VaR and stresstests are complemented by specific risk measuresincluding Delta 1% for interest risk, and single and aggregated FX for currency risk.

In addition, all unitsthat handle risk for financial instruments valued at market are limited by a stoplosslimit. The stoplosslimit indicatesthe maximum loss a unit can incur before mitigating actions are taken.

CVA/DVA sensitivities

The credit and debit valuation adjustments(CVA/DVA) are sensitive to market movements, in particular to movementsin interest rates, creditspreads and foreign exchange rates.

In order to monitor thissensitivity, SEB stressesthese asset classes on a regular basis and calculatesthe impact on the valuation adjustments. Thisis done by comparing the original CVA/DVA numbers with the stressed CVA/DVA numbers where the current rates and creditspreads have been moved up 100 basis points and where SEK has appreciated 5 per cent to all other currencies compared with the current level.

2016	CVA	DVA	Total
Interest rates + 100bp	180	75	255
Creditspreads + 100bp	–928	384	–544
SEK + 5%	–22	6	–16
2015
Interest rates + 100bp	169	85	254
Creditspreads + 100bp	–798	392	–406

SEK + 5% 11 11

Note 17 b continued Market risk

Interestrate risk

Interest rate risk refersto the risk that the value of the Group's assets, liabilities and interestrelated derivatives will be negatively affected by changesin interest rates or other relevant risk factors.

The majority of the Group'sinterest rate risks are structural and arise within the banking operations when there is a mismatch between the interest fixing periods

of assets and liabilities, including derivatives.

The table below showsthe sensitivity to a +100 bp change in the interest rates on the banking and trading book by currency and in different buckets of maturity. Thisis calculated asthe value change for a shift of 1 bp and then scaled up to reflect a 100 bp move.

Interestrate sensitivity in trading book pertime buckets

2016	< 3 months	3–12 months	1–2 years	2–5 years	>5 years	Total
EUR	11	–27	–38	164	165	275
SEK	23	3	–386	286	172	98
USD	–112	–39	16	–17	–53	–205
Other	–2	–112	128	–94	–71	–151
TOTAL	–80	–175	–280	339	213	17
2015
EUR	–20	255	38	–11	–1	261
SEK	–118	179	–22	97	–65	71
USD	–41	–43	–11	17	3	–75
Other	14	–158	–196	10	112	–218
TOTAL	–165	233	–191	113	49	39

Interestrate sensitivity in banking book pertime buckets*

2016	< 3 months	3–12 months	1–2 years	2–5 years	>5 years	Total
EUR	30	–348	191	–382	–3	–512
SEK	–249	–722	–74	–524	–239	–1,808
USD	80	99	163	25	13	380
Other	–26	–57	–13	–44	–5	–145
TOTAL	–165	–1 028	267	–925	–234	–2,085
2015
EUR	–56	–222	–181	–224	267	–416
SEK	–665	–172	–399	–505	–143	–1,884
USD	209	1	11	32	134	387
Other	–58	–12	–5	–28	–7	–110
TOTAL	–570	–405	–574	–725	251	–2,023

* by currency SEKm/100 bp

17 c Operational risk

Definition

Operational risk isthe risk of lossresulting from inadequate or failed internal processes, people and systems(e.g., breakdown of IT systems, mistakes, fraud, other deficienciesin internal control) or from external events(natural disasters, external crime, etc.). The definition includes compliance, legal and financial reporting, information security,security and venture execution risk, but excludesstrategic and reputational risk.

Risk management

Operational risk isinherent in all of SEB's operations and the responsibility to manage operational risksrests with all managersthroughout the bank. SEB aimsto maintain a sound risk culture with low operational risk and losslevel through an effective internal control environment by ensuring a structured and consistent usage of risk mitigating tools and processes.

All new or changed products, processes and/orsystems as well asreorganisations are evaluated in a groupcommon New Product Approval Process(NPAP). The aim isto identify potential operational risks and ensure that proactive measures are taken to protect SEB from entering into unintended risktaking that cannot be immediately managed by the organisation.

All business units with significant risk embedded in their operationsshall regularly complete Risk and Control SelfAssessments(RCSA) according to a groupwide methodology. The assessments are designed to identify and mitigate significant operational risks embedded in SEB's various business and support processes. There is comprehensive participation by each business unit throughout the organisation. The RCSA framework is used to analyse SEB's operational risk profile and help achieve operational excellence and high performance.

SEB ensuresthat the organisation is prepared to respond to and operate throughout a period of major disruption by identifying critical activities and maintaining updated and tested business continuity plansin a groupwide system for this purpose.

All employees are required to escalate and register riskrelated events or incidentsso that risks can be properly identified, assessed, monitored, mitigated and reported. SEB uses a groupwide IT application to capture risk events and other operational risk data for analysis.

SEB conductsregular training and education in key areas, including information security, fraud prevention, antimoney laundering, knowyourcustomer procedures and SEB's Code of Business Conduct. SEB also has a formal whistleblower procedure that encourages employeesto report improprieties and unethical or illegal conduct.

Cybercrime and other organised crime continuesto develop and SEB works continuosly to improve processes and controls.

The risk organisation isresponsible for measuring and reporting SEB's operational risks. Significant incidents and the risk level, both on Group and divisional/ site level, is analysed and reported monthly to the Group Executive Committee, the Group Risk Committee and the Board's Risk and Capital Committee as well as local/divisional management. The total lossesfrom operational incidentsin 2016 amounted to SEK 263m (291).

Risk measurement

SEB usesthe Advanced Measurement Approach (AMA) to calculate the regulatory capital requirement for operational risk.

17 d Business risk

Definition

Businessrisk isthe risk of lower revenues due to reduced volumes, price pressure or competition. Businessrisk includes venture decision risk (related to undertakings such as acquisitions, large IT projects, transformations, outsourcing, etc.). Strategic risk is close in nature to businessrisk, but focuses on largescale orstructural risk factors. Reputational risk isthe risk arising from negative perception of SEB or the industry in general.

17 e Insurance risk

Definition

Insurance risk in SEB consists of all risk related to the Group'sinsurance operations. SEB'slife insurance operations consist of unitlinked insurance and traditional life insurance. The main risksinclude market risk, underwriting risk and operational risk.

Market risk in the insurance businessisthe risk for losses on traditional life insurance policies with guaranteed benefits due to changesin fair value of assets and liabilities. Such changesin fair value can be caused by changesin interest rates, credit spreads, equity prices, property values, exchange rates and implied volatilities.

Underwriting risk pertainsto the risk of loss or of negative changesin the value of insurance liabilities(technical provisions) due to inadequate pricing and/or provisioning assumptions. It includesfactorssuch as average mortality, longevity, disability/morbidity (including risksthat result from fluctuation in the timing and amount of claim settlements), catastrophe risk (e.g., extreme or irregular events), expense risk and lapse risk (i.e., policyholder behaviour risk).

Risk management and measurement

In unitlinked insurance, the market risk is borne by the policyholder, while the underwriting risk islimited. However, there is an indirect exposure to market risk through the policyholders´ investments,since a significant part of the future income stream of the life insurance businessis based on assets under management. Market risk in the traditional life insurance products with guaranteed returnsis mitigated through standard market risk hedging schemes and monitored through asset/liability management (ALM) risk measures and stresstests. Thisissupplemented by market risk toolssuch as VaR and scenario analysis.

Underwriting risks are controlled through the use of actuarial analysis and stress tests of the existing insurance portfolio. Mortality and disability/morbidity risks are reinsured for large individual claims or forseveral claims attributable to the same

Risk management

Business,strategic and reputational risks are inherent in doing business. Digitisation of the banking industry is accelerating and new types of competitors are emerging. The extensive new regulatory framework for banking and financial institutionsissignificantly impacting the industry. Corporate sustainability plays an increasingly important part of a company'sreputation. SEB continuously worksto mitigate business,strategic and reputational risksin many ways, for example, with regularstrategic businessreviews, proactive cost management, an agile stepbystep IT development approach, an ambitious corporate sustainability agenda and active dialogues on regulatory matters.

event. Underwriting risk parameters are validated annually. Policyholders within certain traditional life insurance products are free to move their policiesfrom SEB. The utilisation of this option has been very lowhistorically. Nevertheless, to safeguard against unplanned cash outflowsthe bank maintainssufficient liquid investments. Furthermore, continuous cash flowanalysisis conducted to mitigate thisrisk.

In the traditional products, the difference between asset values and the guaranteed obligations constitutes a buffer which isintended to cover SEB'srisk. In the unitlinked business, the profitability for existing and newbusinessis closely monitored, and lookthrough of fundsisimplemented to the extent possible for better calculation of capital requirements under the Solvency regime.

The risk organisation isresponsible for measuring and controlling the risks inherent in SEB'slife insurance operations. Measurement and monitoring of ALM risk measures, VaR,scenario analysis and stresstests are performed on a regular basisfor each insurance company. The risk organisation also forms part of the independent risk management function in the respective insurance companiesfrom a Solvency II perspective. Key risks are reported to the Group Risk Committee, the Board's Risk and Capital Committee and to the boards of each insurance company.

Solvency II, the newregulatory framework for insurance companiesin the EU, became operational from 1 January 2016. The purpose of Solvency II isto create a harmonised regulatory framework with respect to governance, internal control and capital requirements across Europe. Stresstests conducted during the first year of Solvency IIshow that SEB'slife companies are financially strong and resilient to differentstresses. Solvency II calculations are performed at least monthly and the required reporting issubmitted to the financialsupervisor in each relevant country on a quarterly basis. Solvency figures are closely monitored over time and the outcome has been in line with expectations.

17 f Liquidity risk

Definition

Liquidity risk isthe risk that the Group is unable to refinance its existing assets or is unable to meet the demand for additional liquidity. Liquidity risk also entailsthe risk that the Group isforced to borrow at unfavourable rates or isforced to sell assets at a lossin order to meet its payment commitments.

Liquidity management and risk measurement

The Board of Directors has established a comprehensive framework for managing the bank'sliquidity requirementsin the short and longterm. The aim of SEB's liquidity risk management isto ensure that the Group has a controlled liquidity risk situation, with adequate volumes of liquid assetsin all relevant currenciesto meet itsliquidity requirementsin all foreseeable circumstances, without incurring substantial cost.

The liquidity risk is managed through the limitsset by the Board which are further allocated by the Group Risk Committee. Liquidity limits are set for the Group, branches and specific legal entities, as well asfor exposuresin certain currencies. The treasury function hasthe overall responsibility for liquidity management and funding,supported by local treasury centresin the Group's major markets. The risk function regularly measures and reportslimit utilisation based on different market conditions and liquidity stressteststo the Group Risk Committee and the Board's Risk and Capital Committee.

Liquidity management and the structuring of the balance sheet from a liquidity point of view are built on three basic perspectives: (i) the structural liquidity perspective, in which stable funding is put in relation to illiquid assets; (ii) the bank's tolerance forshortterm stressin the form of a shutdown of the wholesale and

interbank funding markets(wholesale funding dependence); and, (iii) the bank's tolerance to a severe stressscenario where, in addition to a shutdown of the funding market, the bank experiences a severe outflow of deposits.

Structural liquidity risk

In order to maintain a sound structural liquidity position, the structure of the liability side should be based on the composition of assets. The more longterm lending and other illiquid assets, the more stable funding isrequired. In SEB, thisis measured as the Core Gap ratio, which is conceptually equivalent to the Basel Committee's Net Stable Funding Ratio (NSFR), i.e., a ratio between stable funding (over 1 year maturity) and illiquid assets(over 1 year maturity). The difference between the internal Core Gap ratio and the external NSFR isthat the Core Gap ratio is calculated and parameterised on a more detailed level, based on internalstatisticsresulting in different weightings of available stable funding and required stable funding.

Wholesale funding dependence

Oneway of measuring tolerance for deteriorating market conditionsisto assessthe time that SEB'sliquid assetswould last if thewholesale and interbank funding marketswere closed. This measure, the maturing funding ratio, capturesthe bank'sliquid assetsin relation to wholesale funding and net interbank borrowingsthat come to maturity over the coming months, or asthe number of monthsitwould take to deplete the liquid assetsin a scenariowhere all maturing funding must be repaid from liquid assets. Wholesale funding dependence is also measured asthe loan to deposit ratio, excluding repos and reclassified debtsecurities.

Stressed survival horizon

Severe stress can be modelled by combining assumptions of a wholesale funding marketshutdown with assumptions of deposit outflows and drawdowns on commitments, etc. The outcome is captured by the regulatory defined Liquidity Coverage Ratio (LCR) where, in a stressed scenario, modelled net outflows during a 30day period are related to the amount of total liquid assets. SEB also measures the time it would take for the liquid assetsto be depleted in a severely stressed scenario, expressed asthe stressed survival horizon. In addition, SEB monitors various rating agencies'survival metrics.

Internal liquidity adequacy assessment process

Liquidity risk is not primarily mitigated by capital. However, there are strong links between a bank's capital and liquidity position. Hence, an internal liquidity adequacy assessment process(ILAAP) complementsthe ICAAP. The ILAAP is designed to identify potential gaps against SEB'slongterm desired level of liquidity adequacy, taking into account that effective liquidity management is a continuous process.

Liquidity reserve 1)

	2016					2015
	SEK	EUR	USD	Other	Total	SEK	EUR	USD	Other	Total
Cash and holdingsin central banks	61,808	83,837	55,755	16,409	217,809	25,136	53,378	46,678	8,459	133,651
Depositsin other banks available overnight	242	1,377	2,536	3,601	7,756	1,143	2,997	3,963	5,392	13,495
Securitiesissued or guaranteed by sovereigns,
central banks or multilateral development banks	3,465	35,387	18,902	11,091	68,845		28,193	6,962	2,560	37,715
Securitiesissued or guaranteed by municipalities
or other public sector entities	5,307	3,347	7,411	171	16,236	6,687	18,937	8,650	194	34,468
Covered bondsissued by other institutions	52,419	1,274	193	49,731	103,617	53,974	4,874	69	64,372	123,289
Covered bondsissued by SEB	2,212				2,212	1,576	190			1,766
Securitiesissued by non­financial corporations		5,276			5,276	51	4,883	458	2	5,394
Securitiesissued by financial corporations
(not including covered bonds)		2,923	2,559		5,482		1,142	1,003		2,145
TOTAL	125,453	133,421	87,356	81,003	427,233	88,567	114,594	67,783	80,979	351,923

1) The liquidity reserve is presented in accordance with the template defined by the Swedish Bankers' Association. Assetsincluded in the liquidity reserve should comply with the following: Assetsshall be under the control of the Treasury function in the bank, not be encumbered and be pledgeable with central banks. Furthermore, bondsshall have a maximum riskweight of 20% under the standardised approach to credit risk of the Basel II framework and a lowest rating of Aa2/AA–. Assets are disclosed using market values.

Liquidity risk management measures

	2016	2015
Core Gap ratio1)	114%	111%
Loan to deposit ratio	143%	146%
Liquidity Coverage Ratio (defined by the Swedish FSA)	168%	128%

1) Core Gap ratio representsthe parent company, SEB AG (Germany), SEB Pank AS (Estonia), SEB Banka AS (Latvia) and SEB bankas AB (Lithuania).

Contractual maturities

The following tables present cash flows by remaining contractual maturities at the balance sheet date and appliesthe earliest date on which the Group can be required to pay regardless of probability assumptions. The cash flows are not discounted.

Derivatives are reported at fair value. Offbalance sheet itemssuch asloan commitments are reported as when the obligation matures.

Group, 2016

Balance sheet (contractual maturity dates)	Payable on demand		< 3 months1) 3–12 months	1–5 years	>5 years	Not distributed	Insurance2)	Subtotal	Discount effect	Total
Cash and cash balances with central banks Loans to central banks Loans to creditinstitutions ofwhich eligible debtsecurities ofwhich other debtsecurities	151,078 24 5,898	66,366 29,142	289 7,001 380	6,949	993	118	314	151,078 66,679 50,415 380	51 112 2	151,078 66,730 50,527 382
ofwhich repos General governments Households Corporates	476 793 44,124	795 1,428 62,012 161,309	7,385 167,270 148,752	19,763 258,432 375,423	4,164 40,261 101,650	1 182 3,211	117	912 33,217 528,950 834,469	2 1,613 20,227 34,543	914 34,830 549,177 869,012
Loans to the public ofwhich eligible debtsecurities ofwhich other debtsecurities ofwhich repos Debtsecurities ofwhich eligible debtsecurities ofwhich other debtsecurities Equity instruments Derivatives Financial assets – policyholders bearing the risk	45,393	224,749 7 63,242 18,041 5,296 12,008 41,208	323,407 7 16,605 8,267 8,328 24,972	653,618 9,614 214 109,411 46,779 62,577 50,328	146,075 2,697 1,562 13,876 9,534 4,323 39,429	3,394 43,436	76,955 43,805 32,587 30,737 56,418 295,908	1,396,636 12,311 1,790 63,242 234,888 113,681 119,823 74,173 212,355 295,908	56,383 385 106 282 3,449 1,710 1,739	1,453,019 12,696 1,896 63,524 238,337 115,391 121,562 74,173 212,355 295,908
Financial assets atfair value		59,249	41,577	159,739	53,305	43,436	460,018	817,324	3,449	820,773
Other ofwhich other financial assets	44	37,883 36,717	390 14	1,575 44	178 52	32,079 3	6,341 126	78,490 36,956	29 29	78,519 36,985
Total assets ofwhich accrued interest loans ofwhich accrued interest debt	202,437	417,389	372,664	821,881	200,551	79,027 2,093	466,673	2,560,622 2,093	60,024	2,620,646 2,093
securities						1,516		1,516		1,516
Deposits from central banks and creditinstitutions ofwhich repos	25,058	61,155 737	20,449	2,180	2,234		8,892 118	119,968 855	–104	119,864 855
General governments Households Corporates	26,590 239,979 536,292	2,884 29,446 64,501	1,676 6,214 9,111	438 1,135 23,609	4,255 2 16,749			35,843 276,776 650,262	–113 –52 –688	35,730 276,724 649,574
Deposits and borrowings from the public ofwhich deposits ofwhich borrowing ofwhich repos Liabilities to policyholders Certificates Covered bonds Other bonds3)	802,861 369,042 47	96,831 69,732 1,067 740 61,960 1,366 8,519	17,001 6,271 9 62,700 44,857 21,004	25,182 2,815 13 2,826 257,656 181,004	21,006 9,253 159 36,727 13,141		296,618	962,881 457,113 1,248 740 296,618 127,533 340,606 223,668	–853 –324 –5 –1 –1,058 –13,621 –8,248	962,028 456,789 1,243 739 296,618 126,475 326,985 215,420
Debt securities issued	47	71,845	128,561	441,486	49,868			691,807	–22,927	668,880
Debtsecurities Equity instruments Derivatives Other liabilities		155 41,687 1,338	53 21,073 1,656	6,270 41,146 16,378	3,661 24,203	10,071	46,542	10,139 10,071 174,651 19,372	–590 –147	9,549 10,071 174,651 19,225
Financial liabilities atfair value Other ofwhich other financial liabilities Subordinated liabilities Equity	97	43,180 41,826 38,768 510	22,782 259 54	63,794 598 282	27,864 2,128 1,240 52,231	10,071 20,735 2 140,976	46,542 112,459 76	214,233 178,102 40,422 52,741 140,976	–737 –37 –37 –12,022	213,496 178,065 40,385 40,719 140,976
Total Liabilities and Equity ofwhich accrued interest deposits and borrowing ofwhich accrued interest issued securities	828,063	315,347	189,052	533,240	155,331	171,782 1,971 4,772	464,511	2,657,326 1,971 4,772	–36,680	2,620,646 1,971 4,772
Off balance sheetitems
Loan commitments	12,715	116,411	38,625	228,258	23,420			419,429		419,429
Acceptances and other financial facilities Operating lease commitments	109	49,228 286	26,064 441	15,771 912	20,436 44	39		111,538 1,792		111,538 1,792
Total liabilities, equity and off-balance sheetitems	840,887	481,272	254,182	778,181	199,231	171,821	464,511	3,190,085	–36,680	3,153,405

Group, 2015
Balance sheet (contractual maturity dates)	Payable on demand	< 3 months	1) 3–12 months	1–5 years	>5 years	Not distributed	Insurance2)	Subtotal	Discount effect	Total
Cash and cash balances with central banks Loans to central banks Loans to creditinstitutions ofwhich eligible debtsecurities ofwhich other debtsecurities ofwhich repos General governments Households Corporates	101,429 20 10,095 95 5,129 721 41,159	32,053 28,038 1,046 1,754 3,796 67,434 159,950	123 8,014 1,281 11,093 143,604 142,936	7,746 357 17,953 261,702 311,085	1,328 7,022 35,434 87,999		3,188	101,429 32,196 58,409 1,403 1,376 1,754 44,993 508,895 743,129	26 133 12 10 1 2,211 21,447 32,711	101,429 32,222 58,542 1,415 1,386 1,755 47,204 530,342 775,840
Loans to the public ofwhich eligible debtsecurities ofwhich other debtsecurities ofwhich repos Debtsecurities ofwhich eligible debtsecurities ofwhich other debtsecurities Equity instruments Derivatives Financial assets – policyholders bearing the risk	47,009	231,180 432 7 58,274 59,852 49,495 9,366 45,396	297,633 1,368 196 1 21,240 4,432 16,800 20,982	590,740 5,663 717 111,647 30,189 81,319 59,919	130,455 5,736 2,965 14,343 6,544 7,757 51,504	82,058	67,452 38,992 27,879 16,149 37,750 271,613	1,297,017 13,199 3,885 58,275 274,534 129,652 143,121 98,207 215,551 271,613	56,369 612 253 285 4,408 1,480 2,928	1,353,386 13,811 4,138 58,560 278,942 131,132 146,049 98,207 215,551 271,613
Financial assets atfair value Other ofwhich other financial assets		105,248 36,637 35,336	42,222 74 10	171,566 1,551 73	65,847 136 19	82,058 26,867 10	392,964 20,778 113	859,905 86,043 35,561	4,408 29 29	864,313 86,072 35,590
Total assets ofwhich accrued interest loans ofwhich accrued interest debt securities	158,553	433,156	348,066	771,603	197,766	108,925 1,895 2,011	416,930	2,434,999 1,895 2,011	60,965	2,495,964 1,895 2,011
Deposits from central banks and creditinstitutions ofwhich repos General governments Households Corporates	30,419 17,456 217,057 452,066	54,186 1,569 5,197 34,859 83,953	27,979 1,953 8,175 11,799	2,303 189 1,499 28,136	2,641 4,736 4 17,777		1,103 877	118,631 2,446 29,531 261,594 593,731	–125 –1 –139 –72 –860	118,506 2,445 29,392 261,522 592,871
Deposits and borrowings from the public ofwhich deposits ofwhich borrowing ofwhich repos Liabilities to policyholders Certificates Covered bonds Other bonds3)	686,579 303,497	124,009 87,287 7,501 7,171 113,283 12,536 10,975	21,927 9,666 1 30,709 48,196 18,287	29,824 2,817 20 2,869 226,149 130,654	22,517 9,664 185 168 50,382 17,278	45	271,995	884,856 412,931 7,707 7,171 271,995 147,074 337,263 177,194	–1,071 –397 –12 –7 –931 –14,216 –6,940	883,785 412,534 7,695 7,164 271,995 146,143 323,047 170,254
Issued securities Debtsecurities Equity instruments Derivatives Other liabilities		136,794 128 47,062 15,757	97,192 111 19,572 1,640	359,672 5,720 51,197	67,828 5,222 36,781	45 12,927	35,427	661,531 11,181 12,927 190,039 17,397	–22,087 –739 –20	639,444 10,442 12,927 190,039 17,377
Financial liabilities atfair value Other ofwhich other financial liabilities Subordinated liabilities Equity		62,947 43,096 39,383 802	21,323 297 94	56,917 740 481	42,003 1,964 1,140 40,256	12,927 25,836 2 142,798	35,427 105,387 87	231,544 177,320 41,187 41,058 142,798	–759 –41 –41 –9,686	230,785 177,279 41,146 31,372 142,798
Total Liabilities and Equity ofwhich accrued interest deposits and borrowing ofwhich accrued interest issued securities	716,998	421,834	168,718	449,456	177,209	181,606 2,330 7,256	413,912	2,529,733 2,330 7,256	–33,769	2,495,964 2,330 7,256
Off balance sheetitems
Loan commitments Acceptances and other financial facilities Operating lease commitments		227,039 53,591 250	25,062 30,407 863	201,840 13,851 843	29,235 21,484 156			483,176 119,333 2,112		483,176 119,333 2,112
Total liabilities, equity and off-balance sheetitems	716,998	702,714	225,050	665,990	228,084	181,606	413,912	3,134,354	–33,769	3,100,585

1) Includesitems available overnight.

2) The cash flowsfrom insurance assets are monitored on a regular basisin order to be sufficient to meet the cash flowsfrom the insurance liabilities at all times.

3) 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 30,992m (34,774), as at fair value through profit or loss,since they contain embedded derivatives. The corresponding amountsfor the parent company are SEK 28,940m (32,315). This choice implies that the entire hybrid contract is measured at fair value through profit or loss. Fair value for those financial instrumentsis calculated using a valuation technique, exclusively based on quoted market prices. The Group's contractual liability is SEK 28,871m (32,356) and for the parent company SEK 27,111m (30,199). The accumulated impact from reflecting the Group's own creditstanding in the fair value measurement amountsto SEK 230m (177), ofwhich SEK –53m (–417) relatesto 2016. The corresponding amount for the parent company is SEK 148m (98), of which SEK –50m (–371) relatesto 2016.

Parent company, 2016

Balance sheet (contractual maturity dates)	Payable on demand		< 3 months1) 3–12 months	1–5 years	>5 years	Not distributed	Subtotal	Discount effect	Total
Cash and cash balances with central banks	70,805						70,805	–134	70,671
Loans to creditinstitutions ofwhich other debtsecurities	21,453	173,899	34,792	57,157	205		287,506	–447	287,059
ofwhich repos		1,237					1,237	–1	1,236
General governments	192	491	1,402	7,175	176		9,436	–354	9,082
Households	749	48,479	167,027	262,740	12,472		491,467	–15,195	476,272
Corporates	46,693	146,375	126,379	320,381	71,977		711,805	–25,064	686,741
Loans to the public	47,634	195,345	294,808	590,296	84,625		1,212,708	–40,613	1,172,095
ofwhich eligible debtsecurities				6,992			6,992	–302	6,690
ofwhich other debtsecurities				229	1,872		2,101	–220	1,881
ofwhich repos		63,809					63,809	–286	63,523
Debtsecurities		14,232	12,378	95,325	12,287		134,222	–2,901	131,321
ofwhich eligible debtsecurities		2,835	3,939	27,282	7,400		41,456	–1,057	40,399
ofwhich other debtsecurities		10,733	8,439	67,986	4,887		92,045	–1,784	90,261
Equity instruments						93,775	93,775		93,775
Derivatives		41,897	25,173	54,028	38,675		159,773		159,773
Financial assets atfair value		56,129	37,551	149,353	50,962	93,775	387,770	–2,901	384,869
Other		36,507	77	267	585	47,714	85,150		85,150
ofwhich other financial assets		36,507	77	267	585		37,436		37,436
Total assets	139,892	461,880	367,228	797,073	136,377	141,489	2,043,939	–44,095	1,999,844
ofwhich accrued interest loans						1,627	1,627		1,627
ofwhich accrued interest debtsecurities						793	793		793
Deposits by creditinstitutions ofwhich repos	63,648	62,763 738	27,022	13,539	2,326		169,298 738	–446 –1	168,852 737
General governments	21,110	109	338	229	2,179		23,965	–75	23,890
Households	195,909	12,432	1,674	420			210,435	–408	210,027
Corporates	481,242	54,574	4,450	2,549	6,971		549,786	–1,119	548,667
Deposits and borrowings
from the public	698,261	67,115	6,462	3,198	9,150		784,186	–1,602	782,584
ofwhich deposits	698,261	66,048	6,462	3,198	9,150		783,119	–1,601	781,518
ofwhich borrowing		1,066					1,066	–1	1,065
ofwhich repos		739					739		739
Certificates		61,939	62,704	2,825			127,468	–1,104	126,364
Covered bonds		1,366	44,878	255,635	36,682		338,561	–14,123	324,438
Other bonds1)		8,417	20,942	181,042	11,413		221,814	–8,430	213,384
Issued securities		71,722	128,524	439,502	48,095		687,843	–23,657	664,186
Debtsecurities		178	29	6,037	3,305		9,549		9,549
Equity instruments						10,072	10,072		10,072
Derivatives		42,400	21,163	45,391	24,879		133,833		133,833
Other liabilities		1,313	1,675	16,236			19,224		19,224
Financial liabilities atfair value		43,891	22,867	67,664	28,184	10,072	172,678		172,678
Other		37,845	22			9,823	47,690		47,690
ofwhich other financial liabilities Subordinated liabilities		37,845 510	22		54,143		37,867 54,653	–13,934	37,867 40,719
Untaxed reserves						21,761	21,761		21,761
Equity						101,374	101,374		101,374
Total Liabilities and Equity	761,909	283,846	184,897	523,903	141,898	143,030	2,039,483	–39,639	1,999,844
ofwhich accrued interest deposits and borrowing						1,223	1,223		1,223
ofwhich accrued interest issued securities						4,768	4,768		4,768
Off balance sheetitems
Loan commitments		43,549	33,522	189,699	19,467		286,237		286,237
Acceptances and other financial facilities		38,577	16,968	8,398	10,470		74,413		74,413
Total liabilities, equity and off-balance sheetitems	761,909	365,972	235,387	722,000	171,835	143,030	2,400,133	–39,639	2,360,494

Parent company, 2015

Balance sheet	Payable on					Not		Discount	Total
(contractual maturity dates)	demand	< 3 months	1) 3–12 months	1–5 years	>5 years	distributed	Subtotal	effect
Cash and cash balances with central banks Loans to creditinstitutions	55,857 22,065	65,167	26,608	52,805	116		55,857 166,761	–145 –494	55,712 166,267
									1,386
ofwhich other debtsecurities ofwhich repos	95	1,439	1,294				1,389 1,439	–3 –1	1,438
General governments	177	905	2,389	4,981	2,691		11,143	–589	10,554
Households	674	53,743	144,060	269,468	10,738		478,683	–15,929	462,754
Corporates	42,342	142,443	113,298	265,689	66,491		630,263	–23,133	607,130
Loans to the public	43,193	197,091	259,747	540,138	79,920		1,120,089	–39,651	1,080,438
ofwhich eligible debtsecurities			1,399	4,336	2,608		8,343	–527	7,816
ofwhich other debtsecurities			194	757	3,628		4,579	–468	4,111
ofwhich repos		58,836					58,836	–281	58,555
Debtsecurities		57,770	20,157	97,449	11,813		187,189	–4,955	182,234
ofwhich eligible debtsecurities		47,836	3,415	19,823	5,101		76,175	–1,383	74,792
ofwhich other debtsecurities		8,952	16,743	77,626	6,712		110,033	–3,570	106,463
Equity instruments						117,464	117,464		117,464
Derivatives		45,894	21,024	59,850	54,238		181,006		181,006
Financial assets atfair value		103,664	41,181	157,299	66,051	117,464	485,659	–4,955	480,704
Other		35,049	278	469	208	47,480	83,484		83,484
ofwhich other financial assets		35,049	278	469	208		36,004		36,004
Total assets	121,115	400,971	327,814	750,711	146,295	164,944	1,911,850	–45,245	1,866,605
ofwhich accrued interest loans						1,482	1,482		1,482
ofwhich accrued interest debtsecurities						1,161	1,161		1,161
Deposits by creditinstitutions	34,253	55,666	30,024	10,180	5,032		135,155	–339	134,816
ofwhich repos		1,569					1,569	–1	1,568
General governments	7,097	487	951	83	2,455		11,073	–53	11,020
Households	177,306	19,896	3,136	507			200,845	–389	200,456
Corporates	392,036	72,649	5,449	2,580	7,095		479,809	–984	478,825
Deposits and borrowings from
the public	576,439	93,032	9,536	3,170	9,550		691,727	–1,426	690,301
ofwhich deposits	576,439	85,537	9,536	3,170	9,550		684,232	–1,423	682,809
ofwhich borrowing		7,496					7,496	–4	7,492
ofwhich repos		7,168					7,168	–4	7,164
Certificates		113,437	30,718	2,871	175		147,201	–1,315	145,886
Covered bonds Other bonds2)		12,102 10,919	46,977 18,155	227,281 132,395	52,235 15,871		338,595 177,340	–19,885 –9,533	318,710 167,807
Issued securities		136,458	95,850	362,547	68,281		663,136	–30,733	632,403
Debtsecurities		127	109	5,340	4,703		10,279		10,279
Equity instruments Derivatives		49,096	19,694	52,404	41,110	12,831	12,831 162,304		12,831 162,304
Other liabilities		15,742	1,635				17,377		17,377
Financial liabilities atfair value		64,965	21,438	57,744	45,813	12,831	202,791		202,791
Other		39,028	17	9		14,622	53,676		53,676
ofwhich other financial liabilities Subordinated liabilities		39,028 802	17	9	41,317		39,054 42,119	–10,747	39,054 31,372
Untaxed reserves						23,466	23,466		23,466
Equity						97,780	97,780		97,780
Total Liabilities and Equity	610,692	389,951	156,865	433,650	169,993	148,699	1,909,850	–43,245	1,866,605
ofwhich accrued interest deposits and borrowing						1,205	1,205		1,205
ofwhich accrued interest issued securities						5,837	5,837		5,837
Off balance sheetitems
Loan commitments		140,699	20,687	163,462	26,072		350,920		350,920
Acceptances and other financial facilities		43,353	19,425	9,256	14,274		86,308		86,308
Total liabilities, equity and off-balance sheetitems	610,692	574,003	196,977	606,368	210,339	148,699	2,347,078	–43,245	2,303,833

1) Includesitems available overnight.

2) 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 30,992m (34,774), as at fair value through profit or loss,since they contain embedded derivatives. The corresponding amountsfor the parent company are SEK 28,940m (32,315). This choice implies that the entire hybrid contract is measured at fair value through profit or loss. Fair value for those financial instrumentsis calculated using a valuation technique, exclusively based on quoted market prices. The Group's contractual liability is SEK 28,871m (32,356) and for the parent company SEK 27,111m (30,199). The accumulated impact from reflecting the Group's own creditstanding in the fair value measurement amountsto SEK 230m (177), ofwhich SEK –53m (–417) relatesto 2016. The corresponding amount for the parent company is SEK 148m (98), of which SEK –50m (–371) relatesto 2016.

	Group		Parent company
Average remaining maturity (years)	2016	2015	2016	2015
Loansto credit institutions	0.78	0.78	0.81	1.27
Loansto the public	2.72	2.65	2.36	2.35
Depositsfrom credit institutions	0.41	0.48	0.83	1.05
Depositsfrom the public	0.24	0.29	1.32	1.12
Borrowing from the public	1.39	0.36	0.13	0.13
Certificates	0.43	0.29	0.43	0.29
Covered bonds	3.38	3.52	3.37	3.52
Other bonds	3.04	3.20	2.99	3.13

18 Cash and cash equivalents

	Group		Parent company
	2016	2015	2016	2015
Cash	1,957	2,075	156	168
Cash balances at central banks	149,121	99,354	70,515	55,544
Other demand deposits 1)	7,237	9,341	21,261	21,781
TOTAL	158,315	110,770	91,932	77,493

1) Balance receivables on demand with credit institutions.

19 Loans

	Group		Parent company
	2016	2015	2016	2015
Loansto credit institutions 1) Loansto the public 1)	50,527 1,453,019	58,542 1,353,386	287,059 1,172,095	166,267 1,080,438
TOTAL	1,503,546	1,411,928	1,459,154	1,246,705

1) Including debt instruments classified as Loans.

Loans
Performing loans	1,500,692	1,408,779	1,457,416	1,245,585
Individually assessed impaired loans	5,037	4,900	3,228	2,060
Portfolio assessed loans, past due > 60 days	2,597	2,922	720	805
Portfolio assessed loans,restructured	9	205
Non­performing loans	7,643	8,027	3,948	2,865
Loans priorto reserves	1,508,335	1,416,806	1,461,364	1,248,450
Specific reservesfor individually assessed loans	–1,928	–2,044	–1,044	–775
Collective reservesfor individually assessed loans	–1,539	–1,304	–908	–698
Collective reservesfor portfolio assessed loans	–1,322	–1,530	–258	–272
Reserves	–4,789	–4,878	–2,210	–1,745
TOTAL	1,503,546	1,411,928	1,459,154	1,246,705
Specific and collective reserves	–4,789	–4,878	–2,210	–1,745
Contingent liabilitiesreserves	–44	–81		–22
TOTAL RESERVES	–4,833	–4,959	–2,210	–1,767
Grosslevel of impaired loans	0.33%	0.35%	0.22%	0.17%
Net level of impaired loans	0.21%	0.20%	0.15%	0.10%
Specific reserve ratio for individually assessed impaired loans	38.3%	41.7%	32.3%	37.6%
Total reserve ratio for individually assessed impaired loans	68.8%	68.3%	60.5%	71.5%
Reserve ratio for collectively assessed loans			35.8%	33.8%
	50.7%	48.9%
NPL coverage ratio NPL per cent of lending	63.2% 0.5%	61.8% 0.6%	56.0% 0.3%	61.7% 0.2%

Loans by category of borrower

Group, 2016	Credit institutions	Corporates	Property Management	Public Administration	Households	Total
Performing loans	50,527	567,810	299,617	34,835	547,903	1,500,692
Individually assessed impaired loans Portfolio assessed loans, past due > 60 days Portfolio assessed loans,restructured		3,812 163	1,066		159 2,434 9	5,037 2,597 9
Non­performing loans		3,975	1,066		2,602	7,643
Loans priorto reserves	50,527	571,785	300,683	34,835	550,505	1,508,335
Specific reservesfor individually assessed impaired loans Collective reservesfor individually assessed loans Collective reservesfor portfolio assessed loans		–1,391 –1,446 –91	–441 –86	–5	–96 –2 –1,231	–1,928 –1,539 –1,322
Reserves		–2,928	–527	–5	–1,329	–4,789
TOTAL	50,527	568,857	300,156	34,830	549,176	1,503,546
2015
Performing loans	58,548	506,221	267,997	47,211	528,802	1,408,779
Individually assessed impaired loans Portfolio assessed loans, past due > 60 days Portfolio assessed loans,restructured Non­performing loans	1 1	3,065 229 3,294	1,657 1,657		177 2,693 205 3,075	4,900 2,922 205 8,027
Loans priorto reserves	58,549	509,515	269,654	47,211	531,877	1,416,806
Specific reservesfor individually assessed impaired loans Collective reservesfor individually assessed loans	–7	–1,243 –1,192	–696 –90	–8	–105 –7	–2,044 –1,304

Collective reservesfor portfolio assessed loans		–107			–1,423	–1,530
Reserves	–7	–2,542	–786	–8	–1,535	–4,878
TOTAL	58,542	506,973	268,868	47,203	530,342	1,411,928

Parent company, 2016	Credit institutions	Corporates	Property Management	Public Administration	Households	Total
Performing loans	286,936	440,508	245,092	9,086	475,794	1,457,416
Individually assessed impaired loans Portfolio assessed loans, past due > 60 days Non­performing loans	123 123	2,856 2,856	187 187		62 720 782	3,228 720 3,948
Loans priorto reserves	287,059	443,364	245,279	9,086	476,576	1,461,364
Specific reservesfor individually assessed impaired loans Collective reservesfor individually assessed loans Collective reservesfor portfolio assessed loans		–880 –904	–118	–4	–46 –258	–1,044 –908 –258
Reserves		–1,784	–118	–4	–304	–2,210
TOTAL	287,059	441,580	245,161	9,082	476,272	1,459,154
2015
Performing loans	166,137	403,552	203,127	10,562	462,207	1,245,585
Individually assessed impaired loans Portfolio assessed loans, past due > 60 days Non­performing loans	137 137	1,715 1,715	153 153		55 805 860	2,060 805 2,865
Loans priorto reserves	166,274	405,267	203,280	10,562	463,067	1,248,450
Specific reservesfor individually assessed impaired loans Collective reservesfor individually assessed loans Collective reservesfor portfolio assessed loans	–7	–612 –682	–122 –5	–4	–41 –272	–775 –698 –272
Reserves	–7	–1,294	–127	–4	–313	–1,745
TOTAL	166,267	403,973	203,153	10,558	462,754	1,246,705

Loans by geographicalregion1)

Group, 2016	The Nordic region	Germany	The Baltic region	Other	Total
Performing loans	1,218,235	113,641	115,771	53,045	1,500,692
Individually assessed impaired loans Portfolio assessed loans, past due > 60 days Portfolio assessed loans,restructured	2,967 1,310	463	1,469 1,287 9	138	5,037 2,597 9
Non­performing loans	4,277	463	2,765	138	7,643
Loans priorto reserves	1,222,512	114,104	118,536	53,183	1,508,335
Specific reservesfor individually assessed impaired loans Collective reservesfor individually assessed loans Collective reservesfor portfolio assessed loans	–985 –1,108 –535	–158 –69	–748 –236 –787	–37 –126	–1,928 –1,539 –1,322
Reserves	–2,628	–227	–1,771	–163	–4,789
TOTAL	1,219,884	113,877	116,765	53,020	1,503,546
2015

Performing loans	1,126,933	126,751	104,654	50,441	1,408,779
Individually assessed impaired loans	1,849	910	2,067	74	4,900
Portfolio assessed loans, past due > 60 days Portfolio assessed loans,restructured	1,414		1,508 205		2,922 205
Non­performing loans	3,263	910	3,780	74	8,027
Loans priorto reserves	1,130,196	127,661	108,434	50,515	1,416,806
Specific reservesfor individually assessed impaired loans	–696	–357	–963	–28	–2,044
Collective reservesfor individually assessed loans	–923	–73	–199	–109	–1,304
Collective reservesfor portfolio assessed loans	–554		–976		–1,530
Reserves	–2,173	–430	–2,138	–137	–4,878
TOTAL	1,128,023	127,231	106,296	50,378	1,411,928

Parent company, 2016	The Nordic region	Germany	The Baltic region	Other	Total
Performing loans	1,413,794			43,622	1,457,416
Individually assessed impaired loans	2,967			261	3,228
Portfolio assessed loans, past due > 60 days	720				720
Non­performing loans	3,687			261	3,948
Loans priorto reserves	1,417,481			43,883	1,461,364
Specific reservesfor individually assessed impaired loans	–932			–112	–1,044
Collective reservesfor individually assessed loans	–783			–125	–908
Collective reservesfor portfolio assessed loans	–258				–258
Reserves	–1,973			–237	–2,210
TOTAL	1,415,508			43,646	1,459,154
2015
Performing loans	1,205,329			40,256	1,245,585
Individually assessed impaired loans	1,849			211	2,060
Portfolio assessed loans, past due > 60 days	805				805
Non­performing loans	2,654			211	2,865
Loans priorto reserves	1,207,983			40,467	1,248,450
Specific reservesfor individually assessed impaired loans	–663			–112	–775
Collective reservesfor individually assessed loans	–589			–109	–698
Collective reservesfor portfolio assessed loans	–272				–272
Reserves	–1,524			–221	–1,745
TOTAL	1,206,459			40,246	1,246,705

1) The geographical distribution is based onwhere loans are booked.

Past due loans that are notimpaired

	Group		Parent company
2016	Corporates	Households	Other	Total	Corporates	Households	Other	Total
< 30 days 31 – 60 days >60 days1)	3,967 836 517	1,609 671 286	21 11	5,597 1,518 803	2,981 726 213	341 414 41	1	3,323 1,140 254
TOTAL	5,320	2,566	32	7,918	3,920	796	1	4,717
2015
< 30 days 31 – 60 days >60 days1)	3,071 463 411	1,764 744 94	24 1 1	4,859 1,208 506	1,602 184 227	345 367 13	8	1,955 551 240
TOTAL	3,945	2,602	26	6,573	2,013	725	8	2,746

1) Excluding portfolio assessed loans past due more than 60 dayswhich are included in previoustable.

Reserves, Group

	Loans to credit institutions		Loans to the public		Total
Specific loan loss reserves 1)	2016	2015	2016	2015	2016	2015
Opening balance	0	–1	–2,044	–2,833	–2,044	–2,834
Reversalsfor utilisation		1	584	1,300	584	1,301
Provisions			–734	–1,058	–734	–1,058
Reversals			338	507	338	507
Exchange rate differences			–72	40	–72	40
Closing balance	0	0	–1,928	–2,044	–1,928	–2,044
1) Specific reservesfor individually appraised loans.
Collective loan loss reserves 2)
Opening balance	–7	–7	–2,827	–3,316	–2,834	–3,323
Net provisions	7		35	436	42	436
Exchange rate differences		0	–69	53	–69	53
Closing balance	0	–7	–2,861	–2,827	–2,861	–2,834
2) Collective reservesfor individually appraised loans, reservesfor loans assessed on a portfolio basis and country risk reserves.
Contingentliabilities reserves
Opening balance			–81	–87	–81	–87
Net provisions			43	3	43	3
Reversal for utilisation			0	5	0	5
Exchange rate differences			–6	–2	–6	–2
Closing balance			–44	–81	–44	–81
TOTAL	0	–7	–4,833	–4,952	–4,833	–4,959

Loans to credit institutions Loans to the public Total Specific loan loss reserves 1) 2016 2016 2016 2015 2015 2015 Opening balance 0 –2 –775 –1,384 –775 –1,386 Reversalsfor utilisation 2 60 695 60 697 Provisions –407 –431 –407 –431 Reversals 102 360 102 360 Exchange rate differences –24 –15 –24 –15 Closing balance 0 0 –1,044 –775 –1,044 –775 1) Specific reservesfor individually appraised loans. Collective loan loss reserves 2) Opening balance –8 –7 –962 –785 –970 –792 Net provisions 7 –195 –165 –188 –165 Exchange rate differences 1 –1 –9 –12 –8 –13 Closing balance 0 –8 –1,166 –962 –1 166 –970 2) Collective reservesfor individually appraised loans, reservesfor loans assessed on a portfolio basis and country risk reserves. Contingentliabilities reserves Opening balance –22 0 –22 0 Net provisions 22 –22 22 –22 Closing balance 0 –22 0 –22 TOTAL 0 –8 –2,210 –1,759 –2 210 –1,767	Reserves, parent company

Forborne loans

	Group		Parent company
	2016	2015	2016	2015
Total forborne loans ofwhich performing 1)	11,990 6,327	11,980 5,096	6,927 3,883	5,399 2,031

1) According to EBA definition.

20 Capital adequacy

Capital management

SEB takes varioustypes of risksin line with the bank'sstrategy and business plan. In order to sustain these risks and guarantee SEB'slongterm survival, the bank must maintain satisfactory capitalstrength. At the same time, SEB must balance the tradeoff between financial reward and overall risk tolerance. In particular, SEB's capital management balancesthe following dimensions:

• 1. regulatory: the minimum capital levels, and the supervisory expectation that banks operate safely above this minimum level, established by the EU directives through Swedish law on capital adequacy,
• 1. accessto debt investors: the capitalisation level required to support a certain rating level in order to reach a debt investor base necessary for conducting SEB's business activities,
• 1. accessto financial products: the capital level required by corporate clients and other counterpartiesto facilitate the bank's activity in the capital markets, including derivatives and foreign exchange, and
• 1. optimal return on equity: the balance between the shareholders' expected return on capital and riskstaken.

To meet expectations ofshareholders,supervisors and market participants, SEB's capitalisation is based on an assessment of all risksincurred in SEB's business, and forwardlooking, aligned with long and shortterm business plans and with expected macroeconomic developments. Furthermore, the capitalisation isstresstested to identify the potential effect of adverse changesto SEB's financialsituation.

Internal capital adequacy assessment process

The internal capital adequacy assessment process(ICAAP) encompasses SEB's internal views on material risks and their development as well asrisk measurement models, risk governance and risk mitigants. It islinked to overall business planning and establishes a strategy for maintaining appropriate capital levels. Together with continuous monitoring and reporting of the capital adequacy to the Board, this ensuresthat the relationship between shareholders' equity, economic capital, regulatory and ratingbased requirements are managed so that the bank'ssurvival is not jeopardised. Thus, the ICAAP isintegrated with SEB's business planning, internal governance framework and internal controlsystems.

SEB's capital plan coversthe strategic planning horizon and projects economic and legal capital requirements, as well as available capital resources and relevant ratios. It isforwardlooking, taking into account current and planned business volumes as well asstrategic initiatives. The capital plan isstresstested to potential downturnsin the macroeconomic environment, to strategic risk factorsidentified in the business planning, and to other relevantscenarios. The capital plan is established annually, and updated as needs arise during the year.

Economic capital constitutes an important part of capital adequacy assessment. It is an internal measurement of risk,similar to the rulesfor capital adequacy in that many of the underlying risk components are the same. The economic capital calculation is based on a confidence level of 99.97 per cent, which is equivalent to the capital requirement for a very high rating. The economic capital or internally assessed capital requirement for SEB Group including insurance risk amounted to SEK 63bn (59).

SEB employs an internal capital allocation framework for measuring return on risk, named business equity. It issimilar to regulatory capital modelsincluding Pillar 2 requirements and is calibrated with SEB's capital targets.

The regulatory supervisors annually assess SEB and itsICAAP in accordance with the parameters of the Supervisory Review and Evaluation Process(SREP). The assessment covers SEB's capital adequacy, risk measurement models and risk governance, among other things, and in the SREP 2016 it was concluded that SEB issufficiently capitalised and adequately measures and managesrisks.

Regulatory requirements

The requirements have evolved in the last few years, both in terms of which risks that are covered and in terms of the capital base components. The regulatory capital requirements are split in to Pillar 1 (general minimum requirementsfor all institutions) and Pillar 2 (requirements based on an individual assessment of each institution).

Pillar 1 requirementsfor CET1 is expressed as a REA ratio requirement and consists of the following components:

• i) a legal minimum requirement of 4.5 per cent,
• ii) a capital conservation buffer of 2.5 per cent,
• iii) a systemic risk buffer of 3.0 per cent, and
• iv) countercyclical buffers applied by the regulatorsin Sweden and Norway, together amounting to around 0.7 per cent for SEB. With effect from March 2017 the countercyclical buffer on Swedish exposures will be increased to 2 per cent.

The total Pillar 1 CET1 capital requirement for SEB is at present 10.7 per cent.

As opposed to Pillar 1, the Pillar 2 requirementsfor CET1 are not calculated as a percentage of the total REA. As a result, the Pillar 2 requirements, expressed as capital ratio requirements(except the systemic risk requirement), are likely to vary in relation to REA over time. The Pillar 2 requirements consist of the following components:

• v) specific own fundsrequirement forsystemic risk ("Systemic risk requirement") expressed as a pure CET1 ratio requirement of 2.0 per cent;
• vi) risk weight floor for Swedish residential mortgages. The requirement correspondsto a capital requirement on the difference between REA using a 25 per cent risk weight on residential mortgage loans and actual Pillar 1 REA for these loans(where the risk weight for SEB is around 5 per cent, based on internal models), and
• vii) otherspecific risks. The risks currently identified by the Swedish FSA that apply to all Swedish banks are a) credit concentration risks, b) interest rate risk in the banking book, c) pension risk, d)sovereign credit risk and e) risksrelated to corporate exposure. In addition to this, SEBspecific requirementsfor other risks can be added as part of the SREP.

Together with the Pillar 2 CET1 capital requirements SEB'stotal CET1 capital requirements currently amountsto 16.9 per cent.

Ratio requirement(explicit orimplicit)

Pillar 1	CET1	AT1	Tier 2	Total
Minimum requirement	4.5%	1.5%	2.0%	8.0%
Capital conservation buffer	2.5%			2.5%
Systemic risk buffer	3.0%			3.0%
Subtotal	10.0%	1.5%	2.0%	13.5%
Countercyclical buffer	0.7%			0.7%
TOTAL	10.7%	1.5%	2.0%	14.2%
Pillar 2	CET1	AT1	Tier 2	Total
Systemic risk requirement	2.0%			2.0%
Mortgage floor	1.9%	0.2%	0.3%	2.4%
Credit concentration risk	0.4%	0.0%	0.1%	0.5%
Interest rate risk in the banking book	0.4%	0.1%	0.1%	0.6%
Pension risk	0.6%	0.1%	0.1%	0.8%
Sovereign risk	0.1%	0.0%	0.0%	0.1%
Corporate exposures – PD scale	0.4%	0.1%	0.1%	0.6%
Corporate exposures – maturity floor	0.4%	0.0%	0.0%	0.4%
TOTAL	6.2%	0.5%	0.7%	7.4%
Totalrequirement	16.9%	2.0%	2.7%	21.6%

Note 20 continued Capital adequacy

Capital adequacy analysis

Consolidated situation		Parent company
2016	2015	2016	2015
114,419 129,157 151,491	107,535 121,391 135,782	97,144 111,882 134,384	91,951 105,806 119,472
609,959 48,797 18.8% 21.2% 24.8%	570,840 45,667 18.8% 21.3% 23.8%	515,826 41,266 18.8% 21.7% 26.1%	478,376 38,270 19.2% 22.1% 25.0%
3.10	2.97	3.26	3.12
10.7% 2.5% 3.0% 0.7%	10.5% 2.5% 3.0% 0.5%	7.9% 2.5% 0.9%	7.6% 2.5% 0.6%
14.3%	14.3%	14.3%	14.7%
86,884 151,814 1.75	79,123 135,478 1.71	69,864 134,158 1.92	63,167 119,322 1.89
2,549,149 2,120,587 428,562	2,463,479 2,094,445 369,034
	5.1%	4.9%

1) CET1 ratio less minimum capital requirement of 4.5 per cent excluding buffers. In addition to the CET1 requirementsthere is a total capital requirement of an additional 3.5 per cent.

Own funds

	Consolidated situation		Parent company
	2016	2015	2016	2015
Shareholders' equity	21,942	21,942	21,942	21,942
Retained earnings	65,190	53,458	52,443	42,648
Accumulated other comprehensive income and other reserves	43,226	50,817	31,485	34,055
Independently reviewed profit for the year Minority interests	10,618	16,581	12,477	17,439
1)
Total equity according to balance sheet	140,976	142,798	118,347	116,084
Deductionsrelated to the consolidated situation and other foreseeable charges	–14,303	–14,808	–11,929	–11,515
Common Equity Tier 1 capital before regulatory adjustments2)	126,673	127,990	106,418	104,569
Additional value adjustments	–1,169	–937	–1,136	–866
Intangible assets	–6,835	–11,942	–5,381	–8,145
Deferred tax assetsthat rely on future profitability	–208	–501
Fair value reservesrelated to gains or losses on cash flowhedges	–2,400	–3,210	–2,400	–3,210
Negative amountsresulting from the calculation of expected loss amounts	–381	–571
Gains or losses on liabilities valued at fair value resulting from changesin
own creditstanding Defined­benefit pension fund assets	–115 –920	–145 –2,927	–131	–175
Direct and indirect holdings of own CET1 instruments	–191	–179	–191	–179
Securitisation positionswith 1.250% riskweight	–35	–43	–35	–43
Totalregulatory adjustments to Common Equity Tier 1	–12,254	–20,455	–9,274	–12,618
Common Equity Tier 1 capital	114,419	107,535	97,144	91,951
Additional Tier I instruments	9,959	9,258	9,959	9,258
Grandfathered additional Tier 1 instruments	4,779	4,598	4,779	4,597
Tier 1 capital	129,157	121,391	111,882	105,806
Tier 2 instruments	24,851	16,091	24,850	16,091
Net provisioning amount for IRB­reported exposures	58	875	227	150
Holdings of Tier 2 instrumentsin financialsector entities	–2,575	–2,575	–2,575	–2,575
Tier 2 capital	22,334	14,391	22,502	13,666
TOTAL	151,491	135,782	134,384	119,472

1) For parent bank Total equity includes Untaxed reserves net of tax.

2) The Common Equity Tier 1 capital is presented on a consolidated basis, and differsfrom total equity according to IFRS. The insurance business contribution to equity is excluded and there is a dividend deduction calculated according to Regulation (EU) No 575/2013 (CRR).

Note 20 continued Capital adequacy

Risk exposure amount

	Consolidated situation			Parent company
		2016		2015	2016			2015
	Risk		Risk		Risk		Risk
Creditrisk IRB approach	exposure amount	Own funds requirement1)	exposure amount	Own funds requirement1)	exposure amount	Own funds requirement1)	exposure amount	Own funds requirement1)
Exposuresto institutions	26,254	2,100	22,701	1,816	23,868	1,909	19,566	1,565
Exposuresto corporates	335,413	26,833	307,618	24,609	226,254	18,100	202,710	16,217
Retail exposures	55,617	4,449	53,163	4,253	30,660	2,453	30,533	2,443
ofwhich secured by immovable property	34,079	2,726	32,784	2,623	25,622	2,050	24,394	1,952
ofwhich qualifying revolving retail exposures			248	20
ofwhich retail SME	4,723	378	3,255	260
ofwhich other retail exposures Securitisation positions	16,815 3,066	1,345 246	16,876 4,114	1,350 329	5,038 2,984	403 239	6,139 3,975	491 318
Total IRB approach	420,350	33,628	387,596	31,007	283,766	22,701	256,784	20,543
Creditrisk standardised approach Exposuresto central governments or central banks	1,801	144	1,425	114	333	27	537	43
Exposuresto regional governments or local authorities	51	4	51	4
Exposuresto public sector entities	29	2	5
Exposuresto institutions	1,316	105	1,062	85	50,231	4,018	39,884	3,191
Exposuresto corporates	16,422	1,314	15,568	1,245	7,428	594	7,994	640
Retail exposures	16,186	1,295	14,821	1,186	12,135	971	10,914	873
Exposuressecured bymortgages on immovable property	3,803	304	4,159	333	2,081	166	2,391	191
Exposuresin default	384	31	520	42	304	24	442	35
Exposures associatedwith particularly high risk	1,477	118	1,823	146	1,477	118	1,823	146
Securitisation positions	216	17	208	17
Exposuresin the form of collective investment undertakings(CIU)	66	5	56	4
Equity exposures	2,119	170	2,182	175	40,807	3,264	40,962	3,277
Other items	8,880	711	6,364	509	6,390	511	3,824	306
Total standardised approach	52,750	4,220	48,244	3,860	121,186	9,693	108,771	8,702
Marketrisk
Trading book exposureswhere internal models
are applied	30,042	2,403	34,233	2,739	29,994	2,399	34,216	2,737
Trading book exposures applying standardised
approaches	9,398	752	11,608	929	8,884	711	11,160	893
Foreign exchange rate risk	3,773	302	4,778	382	3,756	301	4,749	380
Total marketrisk	43,213	3,457	50,619	4,050	42,634	3,411	50,125	4,010
Other own funds requirements
Operational risk advanced measurement approach	47,901	3,832	47,804	3,824	33,696	2,697	32,685	2,615
Settlement risk	0	0	1		1	0	1
Credit value adjustment	7,818	625	6,910	553	6,534	523	5,780	462
Investment in insurance business	16,633	1,331	15,525	1,242	16,633	1,331	15,525	1,242
Other exposures	6,547	524	5,243	419
Additional risk exposure amount 2)	14,747	1,180	8,898	712	11,376	910	8,705	696
Total other own funds requirements	93,646	7,492	84,381	6,750	68,240	5,461	62,696	5,015
TOTAL	609,959	48,797	570,840	45,667	515,826	41,266	478,376	38,270

1) Own fund requirement is 8 per cent of risk exposure amount according to Regulation (EU) No 575/2013 (CRR).

2) Regulation (EU) No 575/2013 (CRR) Article 3.

Average risk-weight

	Consolidated situation		Parent company
	2016	2015	2016	2015
Exposuresto institutions	25.1%	24.4%	22.5%	23.5%
Exposuresto corporates	31.4%	32.3%	26.6%	27.2%
Retail exposures	9.9%	9.8%	6.6%	6.8%
ofwhich secured by immovable property	6.9%	6.9%	5.7%	5.6%
ofwhich qualifying revolving retail exposures		42.4%
ofwhich retail SME	73.4%	62.9%
ofwhich other retail exposures	28.0%	28.4%	29.2%	32.2%
Securitisation positions	50.6%	46.5%	58.6%	55.5%

The consolidated SEB Group must also comply with capital requirements concerning combined banking and insurance groups, i.e. financial conglomerates. The combined capital requirement for the SEB financial conglomerate was SEK 82.5bn while

the own funds amounted to 195.1bn. In these total figures, SEB Life and Pension Holding AB has contributed with Solvency II figuresfrom September 30, 2016.

21 Fair value measurement of assets and liabilities

2016	Group					Parent company
	Quoted prices in active markets	Valuation technique using observable	Valuation technique using non-observable		Quoted prices in active markets	Valuation technique using observable	Valuation technique using non-observable
Assets	(Level 1)	inputs (Level 2)	inputs (Level 3)	Total	(Level 1)	inputs (Level 2)	inputs (Level 3)	Total
Financial assets – policyholders
bearing the risk	275,894	15,589	4,425	295,908
Equity instruments at fair value
through profit and loss	49,978	11,445	9,701	71,124	35,373	4,782	256	40,411
Debtsecurities at fair value
through profit and loss	86,584	117,276	1,779	205,639	25,347	96,665		122,012
Derivatives – Interest related	1,212	112,133	6,680	120,025	1,211	84,128	832	86,171
Derivatives – Equity related	192	4,790	7	4,989	192	3,536	6	3,734
Derivatives – Currency related	1,076	63,980		65,056	97	63,047		63,144
Derivatives – Credit related		918		918		918		918
Derivatives – Commoditiesrelated		5,805		5,805		5,805		5,805
Derivatives –Other related	113	241	1,454	1,808
Derivatives – Hedge accounting		13,754		13,754
Equity instruments available­for­sale	172	1,770	611	2,553	100	1,735	432	2,267
Debtsecurities available­for­sale	16,310	16,388		32,698	6,461	2,848		9,309
Non­current assets classified as held forsale		587		587
Investment in associates 1)	181		789	970	182		753	935
Investment properties			7,401	7,401
TOTAL	431,712	364,676	32,847	829,235	68,963	263,464	2,279	334,706
Liabilities
Liabilitiesto policyholders
– investment contracts	276,666	15,542	4,410	296,618
Equity instruments at fair value
through profit and loss	9,798	2	271	10,071	9,798	2	271	10,071
Debtsecurities at fair value
through profit and loss	7,027	2,522		9,549	7,027	2,521		9,548
Derivatives – Interest related	1,375	93,804	1,774	96,953	1,375	60,451	941	62,767
Derivatives – Equity related	91	1,919		2,010	91	1,764		1,855
Derivatives – Currency related	1,229	63,192		64,421	75	61,339		61,414
Derivatives – Credit related		1,352		1,352		1,352		1,352
Derivatives – Commoditiesrelated		6,445		6,445		6,445		6,445
Derivatives –Other related	113	192	1,862	2,167
Derivatives – Hedge accounting		1,303		1,303
Other financial liabilities		19,225		19,225		19,225		19,225
Debtsecurities at fair value
through profit and loss2)		30,992		30,992		28,940		28,940
TOTAL	296,299	236,490	8,317	541,106	18,366	182,039	1,212	201,617

2015			Group		Parent company
Assets	Quoted prices in active markets (Level 1)	Valuation technique using observable inputs (Level 2)	Valuation technique using non-observable inputs (Level 3)	Total	Quoted prices in active markets (Level 1)	Valuation technique using observable inputs (Level 2)	Valuation technique using non-observable inputs (Level 3)	Total
Financial assets under pooled schemes
and unit­linked investment contracts	255,175	13,831	2,607	271,613
Equity instruments at fair value
through profit and loss	75,226	10,290	10,286	95,802	58,243	4,394	298	62,935
Debtsecurities at fair value
through profit and loss	114,903	127,872	1,204	243,979	62,321	109,059		171,380
Derivatives – Interest related	1,037	110,843	10,383	122,263	1,359	178,728	903	180,990
Derivatives – Equity related	391	5,556	91	6,038			15	15
Derivatives – Currency related	482	59,371		59,853
Derivatives – Credit related		1,199		1,199
Derivatives – Commoditiesrelated		9,207		9,207
Derivatives –Other related	151	159	755	1,065
Derivatives – Hedge accounting		15,926		15,926
Equity instruments available­for­sale	128	1,179	648	1,955	67	1,153	507	1,727
Debtsecurities available­for­sale	17,886	17,076		34,962	6,324	4,530		10,854
Non­current assets classified as held forsale		801		801
Investment in associates 1)	211	4	743	958	211		712	923
Investment properties			7,169	7,169
TOTAL	465,590	373,314	33,886	872,790	128,525	297,864	2,435	428,824
Liabilities
Liabilitiesto policyholders
– investment contracts	255,581	13,812	2,602	271,995
Equity instruments at fair value
through profit and loss	12,445	37	445	12,927	12,349	37	445	12,831
Debtsecurities at fair value
through profit and loss	7,025	3,417		10,442	6,862	3,417		10,279
Derivatives – Interest related	1,150	100,669	10,159	111,978	1,452	160,039	813	162,304
Derivatives – Equity related	184	4,938		5,122
Derivatives – Currency related	1,049	57,088		58,137
Derivatives – Credit related		1,630		1,630
Derivatives – Commoditiesrelated		10,023		10,023
Derivatives –Other related	151	105	1,242	1,498
Derivatives – Hedge accounting		1,650		1,650
Other financial liabilities		17,377		17,377		17,377		17,377
Debtsecurities at fair value
through profit and loss2)		34,774		34,774		32,315		32,315
TOTAL	277,585	245,520	14,448	537,553	20,663	213,185	1,258	235,106

1) Venture capital activities designated at fair value through profit and loss.

2) Equity index link bonds designated at fair value through profit and loss.

Fair value measurement

The objective of the fair value measurement isto arrive at the price at which an orderly transaction would take place between market participants at the measurement date under current market conditions.

The Group has an established control environment forthe determination of fair values of financial instrumentsthatincludes a review, independent from the business, of valuation models and prices. If the validation principles are not adhered to, theHead of Group Finance shall be informed. Exceptions of material and principal importance require approval from the GRMC (Group Risk Measurement Committee) and the ASC (Accounting Standards Committee).

In orderto arrive at the fair value of a financial instrument SEB uses different methods; quoted pricesin active markets, valuation techniquesincorporating observable data and valuation techniques based on internal models. For disclosure purposes, financial instruments carried at fair value are classified in a fair value hierarchy according to the level of market observability of the inputs. Risk Control classifies and continuously reviewsthe classification of financial instrumentsin the fair value hierarchy. The valuation processisthe same for financial instrumentsin all levels.

An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. The objective is to arrive at a price atwhich a transactionwithout modification or repackagingwould occur in the principal market for the instrument to which SEB hasimmediate access.

Fair value is generally measured forindividual financial instruments, in addition portfolio adjustments are made to coverthe creditrisk. To reflect counterparty risk and own creditrisk inOTC derivatives, adjustments are made based on the net exposure towards each counterpart. These adjustments are calculated on a counterparty level based on estimates of exposure at default, probability of default and recovery rates. Probability of default and recovery rate information is generally sourced from the CDS markets. For counterpartieswhere thisinformation is not available, or considered unreliable due to the nature of the exposure, alternative approaches are taken where the the probability of default is based on generic credit indicesforspecific industry and/or rating. The impact from these adjustments are shown inNote 6 and Note 17f.

When valuing financial liabilities at fair value own creditstanding isreflected. Fair values of financial assets and liabilities by class can be found in note 39.

In order to arrive at the fair value of investment properties a market participant's ability to generate economic benefit by using the asset in its highest and best use are taken into account. The highest and best use takesinto account the use of the asset that is physically possible, legally permissible and financially feasible. The current use of the investment propertiesin SEB isin accordance with the highest and best use. The valuation of investment propertiesis described in the accounting policiesin note 1. The valuation of the investment propertiesis performed semiannually, they are presented and approved by the board in each real estate company. The valuation principles used in all entities are in accordance with regulations provided by the local Financial Supervisory Authorities(FSA) which isin accordance with international valuation principles and in accordance with IFRS.

Level 1: Quoted market prices

Valuationsin Level 1 are determined by reference to unadjusted quoted market pricesfor identical instrumentsin active markets where the quoted prices are readily available and the pricesrepresent actual and regularly occurring market transactions on an arm'slength basis.

Examples of Level 1 financial instruments are listed equity securities, debtsecurities, and exchangetraded derivatives. Instrumentstraded in an active market for which one or more market participants provide a binding price quotation on the balance sheet date are also examples of Level 1 financial instruments.

Level 2: Valuation techniques with observable inputs

In Level 2 valuation techniques, allsignificant inputsto the valuation models are observable either directly or indirectly. Level 2 valuation techniquesinclude using discounted cash flows, option pricing models, recent transactions and the price of another instrument that issubstantially the same.

Examples of observable inputs are foreign currency exchange rates, binding securities price quotations, market interest rates(Stibor, Libor, etc.), volatilities implied from observable option pricesfor the same term and actual transactions with one or more external counterparts executed by SEB. An input can transfer from being observable to being unobservable during the holding period due to e.g. illiquidity of the instrument.

Examples of Level 2 financial instruments are most OTC derivativessuch as options and interest rate swaps based on the Liborswap rate or a foreigndenominated yield curve. Other examples are instrumentsfor which SEB recently entered into transactions with third parties and instrumentsfor which SEB interpolates between observable variables.

Level 3: Valuation techniques with significant unobservable inputs

Level 3 valuation techniquesincorporate significant inputsthat are unobservable. These techniques are generally based on extrapolating from observable inputsfor similar instruments, analysing historical data or other analytical techniques. Examples of Level 3 financial instruments are more complex OTC derivatives, long dated optionsfor which the volatility is extrapolated or derivativesthat depend on an unobservable correlation. Other examples are instrumentsfor which there is currently no active market or binding quotes,such as unlisted equity instruments and Private Equity holdings.

If the fair value of financial instrumentsincludes more than one unobservable input, the unobservable inputs are aggregated in order to determine the classification of the entire instrument. The level in the fair value hierarchy within which a financial instrument is classified is determined on the basis of the lowest level of input that issignificant to the fair value in its entirety.

Significant transfers and reclassifications between levels

Transfers between levels may occur when there are indicationsthat market conditions have changed, e.g. a change in liquidity. The Valuation/Pricing committe of each relevant division decides on materialshifts between levels. The decrease in all levelsis mainly due to an decrease in business volumes.

At the end ofQ2 2016 Derivative liabilities(European Swaptions), within the insurance holdings, at the amount of SEK 5.3bn have been transferred from Level 3 into Level 2. The availability of market data motivatesthe transfer.

Changes in level 3

Group, 2016		Gain/loss	Gain/loss in Other com				Transfers	Transfers		Exchange
Assets	Opening	in Income	prehensive			Settle	into	out of	Reclassi	rate
	balance	statement 1) 2)	income4)	Purchases	Sales	ments	Level 3	Level 3 3)	fication	differences	Total
Financial assets – policyholders
bearing the risk	2,607	–51		3,868	–2,128					129	4,425
Equity instruments at fair value
through profit and loss	10,286	224		1,631	–2,799			–46		405	9,701
Debtsecurities at fair value through
profit and loss	1,204	–130		871	–199			–8		41	1,779
Derivatives – Interest related	10,383	–4,292		231	–36	14				380	6,680
Derivatives – Equity related	90	–9		1				–74		–1	7
Derivatives – Other related	756	732			–73					39	1,454
Equity instruments available­for­sale	648	–190	318	81	–217			–52		23	611
Investment in associates	743	120		123	–188					–9	789
Investment properties	7,169	204		3	–287					312	7,401
TOTAL	33,886	–3,392	318	6,809	–5,927	14		–180		1,319	32,847

Liabilities

Liabilitiesto policyholders
– investment contracts	2,602	–51	3,854	–2,124			129	4,410
Equity instruments at fair value
through profit and loss	445	90	–267				3	271
Derivatives – Interest related	10,159	–3,388	41		41	–5,299	220	1,774
Derivatives –Other related	1,242	541	84	–65			60	1,862
TOTAL	14,448	–2,808	3,712	–2,189	41	–5,299	412	8,317

Group, 2015			Gain/loss in
Assets	Opening balance	Gain/loss in Income statement 1) 2)	Other com prehensive income4)	Purchases	Sales	Settle ments	Transfers into Level 3	Transfers out of Level 3 3)	Reclassi fication	Exchange rate differences	Total
Financial assets – policyholders
bearing the risk	2,067	38		2,100	–1,606		81			–73	2,607
Equity instruments at fair value
through profit and loss	10,948	–302		2,451	–2,510					–301	10,286
Debtsecurities at fair value
through profit and loss	1,198	117		641	–723					–29	1,204
Derivatives – Interest related	9,971	598		769	–618	–32				–305	10,383
Derivatives – Equity related		–88		178							90
Derivatives – Other related		756									756
Equity instruments available­for­sale	638	62	–156	69	–217		12		247	–7	648
Investment in associates	1,049	51		91	–332			–117		1	743
Investment properties	7,497	170		64	–339					–223	7,169
TOTAL	33,368	1,402	–156	6,363	–6,345	–32	93	–117	247	–937	33,886
Liabilities
Liabilitiesto policyholders
– investment contracts	2,056	38		2,094	–1,596		81			–71	2,602

TOTAL	12,191	1,388	2,934	–1,780	19	81	–385	14,448
Derivatives –Other related		1,247	17	–22				1,242
Derivatives – Interest related	9,660	13	937	–162	19		–308	10,159
through profit and loss	475	90	–114				–6	445
Equity instruments at fair value
– investment contracts	2,056	38	2,094	–1,596		81	–71	2,602

1) Fair value gains and lossesrecognised in the income statement are included in Net financial income and Net other income.

2) Gains/lossesrecognised in the income statement relating to instruments held as of 31 December are SEK –321m (746).

3) Issued structured notes have been moved from level 3 to level 2 due to a more granular approach to fair value hierarchy classification and since the unobservable input is not a significant part of the value of these instrument.

4) Fair value gains and lossesrecognised in other comprehensive income are included as available forsale.

Changes in level 3

Parent company, 2016 Assets	Opening balance	Gain/loss in Income 1) 2) statement	Gain/loss in Other comprehen sive income	Purchases	Sales	Settle ments	Transfers into Level 3	Transfers out of 3) Level 3	Reclassi fication	Exchange rate differences	Total
Equity instruments at fair value through profit and loss Derivatives – Interest related Derivatives – Equity related Equity instruments available­for­sale Investment in associates	298 903 15 507 712	96 –72 –9 –1 114	3	29 122	–148 –23 –71 –185	15	–52			10 9 17 –10	256 832 6 432 753
TOTAL	2,435	128	3	151	–427	15	–52			26	2,279
Liabilities
Equity instruments at fair value through profit and loss Derivatives – Interest related	445 813	90 87		–267 –8		41				3 8	271 941
TOTAL	1,258	177		–275		41				11	1,212

Parent company, 2015 Assets	Opening balance	Gain/loss in Income statement 1) 2)	Gain/loss in Other comprehen sive income	Purchases	Sales	Settle ments	Transfers into Level 3	Transfers out of Level 3 3)	Reclassi fication	Exchange rate differences	Total
Equity instruments at fair value
through profit and loss	467	67			–228					–8	298
Derivatives – Interest related	1,143	–117			–84	–32				–7	903
Derivatives – Equity related				15							15
Equity instruments available­for­sale	634	62	–158	69	–217		12		109	–4	507
Investment in associates	853	51		88	–169		–113			2	712
TOTAL	3,097	63	–158	172	–698	–32	–101		109	–17	2,435
Liabilities
Equity instruments at fair value
through profit and loss	475	90		–114						–6	445
Derivatives – Interest related	983	–98		–84		19				–7	813
TOTAL	1,458	–8		–198		19				–13	1,258

1) Fair value gains and lossesrecognised in the income statement are included in Net financial income and Net other income.

2) Gains/lossesrecognised in the income statement relating to instruments held as of 31 December are SEK –322m (–15).

3) Issued structured notes have been moved from level 3 to level 2 due to a more granular approach of fair value hierarchy classification and the unobservable input not being a significant part of the value of these instrument.

Sensitivity of Level 3 financial instruments to unobservable inputs

The table below illustratesthe potential profit or lossimpact of the relative uncertainty in the fair value of assets and liabilitiesthat for their valuation are dependent on unobservable inputs. The sensitivity to unobservable inputsis assessed by altering the assumptionsto the valuation techniques, illustrated below by changesin indexlinked swap spreads, implied volatilities, creditspreads or comparator multiples. It is unlikely that all unobservable inputs would be simultaneously at the extremes of their ranges of reasonably possible alternatives. At the end of Q1 2016, basisfor calculating sensitivitiesfor Interest Rate Swaptions, within Insurance Holdings – Financial instruments, have changed from stressing the market value to stressing the implied volatility. The largest open market risk within Level 3 financial instrumentsisfound within the insurance business.

	2016				2015
Group	Assets	Liabilities	Net	Sensitivity	Assets	Liabilities	Net	Sensitivity
Derivative instruments AFV 1) 2) 4)	780	–940	–160	49	919	–813	106	97
Equity instruments AFV 3)	256	–271	–15		298	–445	–147
Equity instruments AFS 3) 6)	432		432	78	507		507	91
Investmentsin associates 3)	753		753	151	712		712	142
Insurance holdings – Financial instruments 5) 7)	18,477	–2,695	15,782	1,807	21,415	–10,595	10,820	1,539
Insurance holdings – Investment properties 6) 7)	7,401		7,401	740	7,169		7,169	717

1) Sensitivity from a shift of inflation linked swap spreads by 16 basis points(5) and implied volatilities by 5 percentage points(5).

2) Sensitivity from a shift ofswap spreads by 5 basis points(5) .

3) Valuation is estimated in a range of reasonable outcomes. Sensitivity analysisis based on 20 per cent (20)shift in market values.

4) Shift in implied volatility down by 10 percentage points(10).

5) Sensitivity analysisis based on a shift in private equity of 20 per cent (20),structured credits 10 per cent (10) and derivative market values of 10 per cent (10).

6) Sensitivity from a shift of investment properties/real estate funds market values of 10 per cent (10).

7) The sensitivity shows changesin the value of the insurance holdingswhich do not at all times affect the P/L of the Group since any surplusin the traditional life portfolios are consumed first.

22 Financial assets at fair value through profit or loss

	Group		Parent company
	2016	2015	2016	2015
Securities held for trading Derivatives held for trading	162,516 198,271	239,906 199,085	162,335 147,124	234,106 165,964
Held fortrading	360,787	438,991	309,459	400,070
Financial assets – policyholders bearing the risk Financial assets under insurance contracts Other financial assets at fair value	295,908 107,667 6,580	271,613 95,506 4,369	87	209
Designated atfair value through profit orloss	410,155	371,488	87	209
Derivatives held for hedging	14,084	16,466	12,649	15,042
TOTAL	785,026	826,945	322,195	415,321

The category Financial assets at fair value through profit and loss comprises 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 isrecognised through profit and loss.

Securities held fortrading

Equity instruments	40,324	67,538	40,323	62,726
Eligible debtsecurities1)	33,991	68,732	33,811	68,315
Other debtsecurities1)	87,653	102,805	87,653	102,239
Accrued interest	548	831	548	826
TOTAL	162,516	239,906	162,335	234,106

1) See note 41 for issuers.

Derivatives held fortrading

Positive replacement values of interest­related derivatives	119,694	121,724	73,523	93,492
Positive replacement values of currency­related derivatives	65,056	59,852	63,144	57,308
Positive replacement values of equity­related derivatives	4,990	6,037	3,734	4,758
Positive replacement values of other derivatives	8,531	11,472	6,723	10,406
TOTAL	198,271	199,085	147,124	165,964

Insurance assets atfair value

Equity instruments	30,712	28,054
Eligible debtsecurities1)	43,805	38,992
Other debtsecurities1)	32,587	27,879
Accrued interest	563	581
TOTAL	107,667	95,506

1) See note 41 for issuers.

Other financial assets atfair value

Equity instruments Eligible debtsecurities1) Other debtsecurities1)	88 6,169 301	209 3,850 292	87	209
Accrued interest	22	18
TOTAL	6,580	4,369	87	209

1) See note 41 for issuers.

Derivatives held for hedging

Fair value hedges	8,777	9,530	8,763	9,492
Cash flowhedges	3,884	5,550	3,884	5,550
Portfolio hedgesfor interest rate risk	1,423	1,386	2
TOTAL	14,084	16,466	12,649	15,042

To eliminate to the extent possible 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. Thisimpliesthat changesin fair value on those investment assets(preferably

funds), where the policyholders 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.

23 Availableforsale financial assets

	Group		Parent company
	2016	2015	2016	2015
Equity instruments at cost	496	413	487	404
Equity instruments at fair value	2,507	1,916	2,256	1,714
Eligible debtsecurities1)	31,426	19,558	6,588	6,477
Other debtsecurities1)	1,021	15,073	2,608	4,224
Seized shares	46	39	11	13
Accrued interest	251	332	113	153
TOTAL	35,747	37,331	12,063	12,985

1) See note 41 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.

24 Investments in associates

	Group		Parent company
	2016	2015	2016	2015
Strategic investments Venture capital holdings	229 970	223 958	90 935	78 923
TOTAL	1,199	1,181	1,025	1,001

Strategic investments	Assets 1)	Liabilities 1)	Revenues 1)	Profit or loss1)	Book value	Ownership, %
Bankomat AB, Stockholm	4,341	4,075	809	20	66	20
Bankomatcentralen AB, Stockholm	1				0	28
BDB Bankernas Depå AB, Stockholm	2,035	1,978	85	7	0	20
BGC Holding AB, Stockholm	428	112	789	51	4	33
Getswish AB, Stockholm	92	53	22	–2	19	20
UC AB, Stockholm	274	117	642	63	1	28
Parent company holdings					90
Holdings of subsidiaries					12
Group adjustments					127
GROUPHOLDINGS					229

1) Retrieved from respective Annual report 2015.

	2016	2015
Venture capital holdings	Book value	Ownership, %	Book value	Ownership, %
Actiwave, Linköping	4	42	31	37
Airsonett AB,Ängelholm	95	34	80	32
Apica AB, Stockholm	41	20	36	20
Avaj International Holding AB, Stockholm	60	18	39	18
Avidicare Holding AB (former AORIAB Holding AB),Ängelholm	17	38	13	36
Capres A/S,Copenhagen	15	40	35	40
Coinify ApS,Herlev	7	9	0	0
Diakrit International Ltd,Hong Kong	0	0	46	40
Donya Labs AB, Linköping	118	22	16	22
Exitram AB, Stockholm	0	0	0	44
Fält Communications AB,Umeå	64	46	42	46
InDex Pharmaceuticals AB, Stockholm	0	0	73	35
InDex Pharmaceuticals Holding AB, Stockholm	90	23	0	0
Innometrics AB, Stockholm	0	0	24	26
Leasify AB, Stockholm	10	17	0	0
Neoventa Holding AB,Gothenburg	0	0	0	24
Nomad Holdings Ltd,Newcastle	45	22	98	22
NowInteract Nordic AB, Stockholm	15	10	0	0
NuEvolution AB, Stockholm	146	24	152	24
OssDsign AB,Uppsala	25	20	25	20
Prodacapo AB,Örnsköldsvik	4	22	7	22
Scandinova Systems AB,Uppsala	48	29	48	29
Scibase AB, Stockholm	0	0	0	0
Scibase Holding AB, Stockholm	36	23	58	23
Senion AB, Linköping	15	27	15	27
Signal Processing Devices Sweden AB, Linköping	0	0	34	48
TSS Holding AB, Stockholm	80	43	51	43
Parent company holdings	935		923
Holdings of subsidiaries	35		35
GROUPHOLDINGS	970		958

Information about the corporate registration numbers and numbers ofshares of the associatesis available upon request.

Note 24 continued Investmentsin associates

Strategic investmentsin associatesin the Group are accounted for using the equity method.

Investmentsin associates held by the venture capital organisation of the Group have, in accordance with IAS 28, been designated as at fair value through profit and loss. Therefore, these holdings are accounted for in accordance with IAS 39.

Some entities, in which the Bank has an ownership of lessthan 20 per cent, has been classified asinvestmentsin associates. The reason isthat the Bank isrepresented in the board of directors and participatesin 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 basisin accordance with documented risk management and investmentstrategies.

Fair valuesfor investmentslisted 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 instrumentsthat issubstantially the same, and valuation with reference to observable market transactionsin the same financial instrument.

25 Shares in subsidiaries

	Group		Parent company
	2016	2015	2016	2015
Swedish subsidiaries Foreign subsidiaries 1)	39	37	14,128 36,483	16,148 36,250
TOTAL	39	37	50,611	52,398
of which holdings in credit institutions			33,384	32,768

		2016				2015
Swedish subsidiaries	Country	Book value	Dividend	Ownership, %	Book value	Dividend	Ownership, %
Aktiv Placering AB, Stockholm	Sweden	38		100	38		100
Enskilda Kapitalförvaltning SEB AB, Stockholm	Sweden	0		100	0		100
Försäkringsaktiebolaget Skandinaviska Enskilda Captive, Stockholm	Sweden	100		100	100		100
Parkeringshuset Lasarettet HGB KB, Stockholm	Sweden	0		99	0		99
Repono Holding AB, Stockholm	Sweden	3,227		100	5,406		100
SEB Förvaltnings AB, Stockholm	Sweden	5		100	5		100
SEB Internal Supplier AB, Stockholm	Sweden	12		100	12		100
SEB Investment Management AB, Stockholm	Sweden	523		100	763		100
SEB Kort Bank AB, Stockholm	Sweden	2,260	769	100	2,260	3,759	100
SEB Life and Pension Holding AB, Stockholm	Sweden	6,424	2,800	100	6,425	1,000	100
SEB Portföljförvaltning AB, Stockholm	Sweden	1,115		100	1,115		100
SEB Strategic Investments AB, Stockholm	Sweden	424		100	24	1,175	100
Skandinaviska Kreditaktiebolaget, Stockholm	Sweden	0		100	0		100
TOTAL		14,128	3,569		16,148	5,934
Foreign subsidiaries
Baltectus B.V.,Amsterdam	Netherland	252		100	538		100
Domena Property Sp. Z o.o.,Warsaw	Poland	120		100	119		100
Key Asset Management (UK) Limited, London	Great Britain	0		0	0		100
Möller Bilfinans AS,Oslo	Norway	0	4	0	0	11	0
Postep Property Sp. Z o.o.,Warsaw	Poland	51		100	50		100
SEB AG, Frankfurt am Main	Germany	19,313	832	100	19,420	918	100
SEB Asset Management America Inc, Stamford	USA	0		0	0		100
SEB Asset Management S.A., Luxembourg	Luxembourg	0	74	0	5	101	100
SEB Bank JSC, St Petersburg	Russia	458		100	457		100
SEB Banka,AS,Riga	Latvia	1,586	604	100	1,455	216	100
SEB bankas,AB,Vilnius	Lithuania	6,239	819	100	6,027	607	100
SEB Corporate Bank,PJSC,Kiev	Ukraine	138		100	138		100
SEB do Brasil Representacões LTDA, Sao Paulo	Brazil	0		100	0		100
SEB Fondbolag Finland Ab,Helsinki	Finland	18		100	18		100
SEB Fund Services S.A., Luxembourg	Luxembourg	97		100	94		100
SEB Hong Kong Trade Services Ltd,Hong Kong	China	0		100	0		100
SEB Kapitalförvaltning Finland Ab,Helsinki	Finland	248		100	500		100
SEB LeasingOy,Helsinki	Finland	4,124	177	100	3,915		100
SEB Njord AS,Oslo	Norway	0		100	0		100
SEB Pank,AS,Tallinn	Estonia	2,014	186	100	1,700	93	100
SEB SecuritiesInc,NewYork	USA	48		100	42		100
Skandinaviska Enskilda Banken S.A., Luxembourg	Luxembourg	1,376	195	100	1,311	84	100
Skandinaviska Enskilda Ltd, London	Great Britain	401		100	461		100
TOTAL		36,483	2,891		36,250	2,030

Information about the corporate registration numbers and numbers ofshares of the subsidiariesis available upon request.

1) Some dormantsubsidiariesin the Group are consolidated using the equity method.

Significant restrictions on the ability to use assets and settle liabilities of the Group

Skandinaviska Enskilda Banken AB Publ can obtain distributions of capital, use assets and settle liabilities of members of the Group within the limitation ofsome regulatory,statutory and contractual restrictions. These restrictions are:

Regulatory requirements

Regulated subsidiaries are subject to prudential regulatory capital requirementsin the countriesin which they are regulated. These subsidiaries are required to maintain a certain level of own fundsin relation to their exposures, restricting their ability to distribute cash or other assetsto the parent company. To meet these requirementsthe subsidiaries hold capital instruments and other forms ofsubordinated liabilities.

Statutory requirements

Subsidiaries are required to have a certain level ofsolvency and are restricted to make distributions of capital and profitsleading to a solvency below that level.

Contractual requirements

The Group pledgessome of its financial assets as collateral for financing and liquidity purposes. Encumbered assets can't be transferred within the Group. Such assets are described further in the note Pledged assets, contingent liabilities and commitments.

26 Interest in unconsolidated structured entities

	Group			Parent company
Assets , 2016	Special purpose	Asset		Special purpose	Asset
	entities	management 1)	Total	entities	management 1)	Total
Loansto the public	8,939	12	8,951	7,440	12	7,452
Financial assets at fair value through profit and loss	1,950	263,815	265,765	1,950	94	2,044
ofwhich:securities held for trading	1,946	88	2,034	1,946	88	2,034
ofwhich: derivatives	4	7	11	4	7	11
Available­for­sale financial assets	127	1,292	1,419	127	1,226	1,353
TOTAL	11,016	265,119	276,135	9,517	1,333	10,850
Liabilities
Deposits and borrowingsfrom the public	218	887	1,105	93	887	980
Financial liabilities at fair value through profit or loss	1	63	64	1	63	64
ofwhich: derivatives	1	63	64	1	63	64
TOTAL	219	950	1,169	94	950	1,044
Off balance sheet exposures	312		312	193		193
The Group's maximum exposure to loss	11,328	24,113	35,441	9,710	1,333	11,043
1) Investmentsin SEB­ and non­SEB managed funds
Assets, 2015
Loansto the public	8,869	20	8,889	7,329	20	7,349
Financial assets at fair value through profit and loss	4,008	245,179	249,187	4,008	97	4,105
ofwhich:securities held for trading	4,002	82	4,084	4,002	83	4,085
ofwhich: derivatives Available­for­sale financial assets	6 153	14 1,313	20 1,466	6 153	14 1,257	20 1,410
TOTAL	13,030	246,512	259,542	11,490	1,374	12,864
Liabilities
Deposits and borrowingsfrom the public	374	71	445	73	71	144
Financial liabilities at fair value through profit or loss		36	36		36	36
ofwhich: derivatives		36	36		36	36
TOTAL	374	107	481	73	107	180
Off balance sheet exposures	623		623	380		380
The Group's maximum exposure to loss	13,653	19,418	33,071	11,870	1,374	13,244

1) Investmentsin SEB and nonSEB managed funds

Interestsin unconsolidated structured entitiesrefersto cases when the Group has interestsin structured entities which it does not control. A structured entity is an entity that is designed so that voting orsimilar rights are not the dominant factor in deciding who controlsthe entity,such as when any voting rightsrelate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.

The Group entersinto transactions with structured entitiesin the normal cause of businessfor variousreasons. Depending on the type ofstructured entity the purpose isto support customer transactions, to engage in specific investment opportunities and to facilitate the startup of certain entities.

The Group hasinterestsin the following types ofstructured entities:

Interests in funds

The Group establishes and managesfundsto provide customers with investment opportunities, SEB is considered to be the sponsor of those funds. Total assets under management represent the size of a fund. Total assets under management of funds managed by SEB are SEK 531bn (543). The total assets of NonSEB managed funds are not publically available and not considered meaningful for understanding related risks, and have therefore not been presented. In some casesthe Group facilitatesthe startup of funds by holding units and it may hold unitsin funds managed by the Group or by a third party for investment purposes within the life business. The funds managed by the Group generate income in the form of management fees and performance fees based on the assets under management. The income from asset management is presented in note 5. The maximum exposure to lossislimited

to the carrying amount of units held by the Group. This amount does not reflect the probable loss.

Interests in other structured entities

The Group has had a role in establishing structured entitiesto support customer transactions. The purpose of these entitiesisto provide alternative funding and liquidity improvement to the sellers and investment opportunitiesto investors by purchasing assets and obtain funding for the purchases with the assets as collateral. The Group providessenior revolving credit facilities and administrative servicesto the entities and earn fee and interest income on market based conditions.

The Group holdsthe mostsenior investmentsin debt instrumentsissued by banks, through securitisation vehicles(SPV) whose purpose isto provide alternative funding to the issuers and investment opportunitiesto investors. The SPVs purchase pools of asset from the originating banks balance sheet, e.g. credit card loans, residential mortgage loans, loansto small and medium sized enterprises and fund these purchases by issuing debtsecurities with the assets as collateral. The securities have multiple tranches ofsubordination.

The maximum exposure to lossregarding investmentsin otherstructured entitiesislimited to the carrying amount of the investments and may occur only after losses by creditors with junior exposures. The maximum exposure to loss does not reflect the probability of loss and hedging or collateral arrangements are not considered. The total assetsfor these entities are not considered meaningful information for the purpose of understanding the related risks and therefore have not been presented.

27 Related parties

	Group
	Associated companies		Key management		Other related parties
2016	Assets/ Liabilities	Interest	Assets/ Liabilities	Interest	Assets/ Liabilities	Interest
Loansto the public	101	13	219	3	62	1
Notional amount of derivatives	12				911
Deposits and borrowingsfrom the public	226		131		1,251
Off balance sheet items	1

2015

Loansto the public	796	21	212	3	75	4
Notional amount of derivatives	12				322
Deposits and borrowingsfrom the public	336		79		569

	Parent company
	Associated companies		Group companies
2016	Assets/ Liabilities	Interest	Assets/ Liabilities	Interest
Loansto credit institutions Loansto the public Interest­bearing securities Positive replacement values of derivatives Other assets	1	7	173,291 15,281 2,616 10,984 16,853	412 62 53
TOTAL	1	7	219,025	527
Depositsfrom credit institutions Deposits and borrowingsfrom the public Issued securities Negative replacement values of derivatives Other liabilities	4		66,849 11,040 21 12,393 165	–433 –18
TOTAL	4		90,468	–451
2015
Loansto credit institutions Loansto the public Interest­bearing securities Positive replacement values of derivatives Other assets	692	28	90,620 20,003 2,613 10,890 16,173	551 112 56
TOTAL	692	28	140,299	719
Depositsfrom credit institutions Deposits and borrowingsfrom the public Issued securities Negative replacement values of derivatives Other liabilities	4		26,574 12,171 19 14,976 362	–568 –34 –7
TOTAL	4		54,102	–609

Key management above refersto the Board of Directors and the Group Executive Committee. Entities with significant influence orsignificantly influenced by key management in the Group, and postemployment benefit plans are presented as other related parties. Investor AB and the pension foundation SEBstiftelsen are within this category as well as close family membersto key management. In addition the Group hasinsurance administration and asset management agreements with Gamla Livförsäkringsbolaget SEB Trygg Liv based on conditions on the market. SEB hasreceived SEK 129m (125) under the insurance administration agreement and SEK 361m (329) under the asset management agreement. For more information on Gamla Livförsäkringsbolaget SEB Trygg Liv,see note 46.

The parent company is a related party to itssubsidiaries and associates. See note 24 Investmentsin associates and note 25 Sharesin subsidiariesfor disclosures of investments.

28 Tangible and intangible assets

	Group		Parent company
	2016	2015	2016	2015
Goodwill	4,760	10,003		243
Deferred acquisition costs	4,044	4,249
Internally developed IT­systems	1,925	1,995	1,755	1,834
Other intangible assets	676	822	268	347
Intangible assets 1)	11,405	17,069	2,023	2,424
Equipment	853	771	492	408
Equipment leased to clients 2)			34,669	37,743
Propertiesfor own operations	55	54	2	2
Property and equipment	908	825	35,163	38,153
Investment propertiesrecognised at cost	31	38
Investment propertiesrecognised at fair value	7,401	7,169
Propertiestaken over for protection of claims	413	1,102
Investment properties	7,845	8,309
TOTAL	20,158	26,203	37,186	40,577

1) Goodwill has an indefinite useful life. All other intangible assets have a definite useful life. Amortisation methods are described in note 1.

2) Equipment leased to clients are recognised as financial leases and presented asloansin the Group. See note 44.

Intangible assets

	Group				Parent company
2016	Goodwill	Deferred acquisition costs	Internally developed IT-systems	Other intangible assets	Total	Goodwill	Internally developed IT-systems	Other intangible assets	Total
Opening balance Additionsfrom acquisitions and capitalisations Reclassifications	10,003	12,163 859 –394	3,700 567	3,839 86 –5	29,705 1,512 –399	1,444	3,478 507	820 55	5,742 562
Retirements and disposals Exchange rate differences	–5,334 91	–6 73	–363 7	–170 95	–5,873 266	–67	–320 3	–127 1	–514 4
Acquisition value	4,760	12,695	3,911	3,845	25,211	1,377	3,668	749	5,794
Opening balance Current year's amortisations Current year'simpairments Reclassifications		–7,914 –943 234	–1,705 –354 2	–3,017 –135 –3	–12,636 –1,432 233	–1,201 –43 –200	–1,644 –340	–473 –27	–3,318 –410 –200
Retirements and disposals Exchange rate differences		6 –34	70 1	65 –79	141 –112	67	71	20 –1	158 –1
Accumulated depreciations		–8,651	–1,986	–3,169	–13,806	–1,377	–1,913	–481	–3,771
TOTAL	4,760	4,044	1,925	676	11,405	0	1,755	268	2,023
2015
Opening balance Additionsfrom acquisitions and capitalisations Reclassifications	10,287	11,189 1,027	3,044 618 41	3,838 103 176	28,358 1,748 217	1,444	3,094 577	759 89	5,297 666
Retirements and disposals Exchange rate differences	–187 –97	–53	–9 6	–188 –90	–384 –234		–202 9	–28	–230 9
Acquisition value	10,003	12,163	3,700	3,839	29,705	1,444	3,478	820	5,742
Opening balance Current year's amortisations Current year'simpairments Reclassifications		–6,958 –981	–1,308 –365 –33	–2,858 –194 –17 –180	–11,124 –1,540 –17 –213	–1,030 –171	–1,308 –362	–428 –66	–2,766 –428 –171
Retirements and disposals Exchange rate differences		25	1	147 85	147 111		26	3 18	29 18
Accumulated depreciations		–7,914	–1,705	–3,017	–12,636	–1,201	–1,644	–473	–3,318
TOTAL	10,003	4,249	1,995	822	17,069	243	1,834	347	2,424

Note 28 continued Tangible and intangible assets

Event triggering reallocation of goodwill

In conjunction with SEB´sreorganisation as of 1 January 2016 goodwill has been reallocated to appropriate Cash Generating Units(CGUs). The CGU structure for impairment testing purposes before the reorganisation wasto a large extent aligned with operating segments, except for Card and Life. The new customer centric organisation will be fundamental for management in steering and measuring the business going forward. Management´sfocus on different customersegments will increase and therefore the change of CGU to be aligned with the business unit (BU) combined with geography to reflect the importance ofsteering and measuring the new customer centric organisation.

Principle for allocation of goodwill

The newand more customer centric organisation leadsto that the former Wealth division isintegrated into the current customeroriented divisions and the supporting division Life & Investment Management. The reorganisation triggersthe reallocation of goodwill. The guiding principle for the allocation of goodwill has been to identify the original acquisition from where the goodwill derives and match thatwith the newCGU (BU and geography). The appropriate CGUs have been deemed to be the CGUs at the time of the acquisitions made between 1996 and 2008. In total 104 CGUs have been identified and goodwill has been allocated to 14 as presented in the table below. Until yearend 2015 therewere six CGUs presented in the table below. The CGUs equalled the operating segmentswith the exception of Card and Life.

Group business segment	CGUs	Old allocation 2015
Merchant Banking	Merchant Banking	1,020
Retail Banking	Retail Sweden	929
	Card	826
Wealth Management	Wealth Management	4,595
Life	Life Sweden	2,334
	Life Denmark	299
TOTAL		10,003

CGUs	Acquisition year	New allocation 2016	Exchange rate differences	Impairment 2016	Closing balance 2016	Remaining book value 2)
Equities & Corp, Sweden & Norway1)	2000	879		–879		645
Transaction Services Poland	2008	141		–141		373
Internet/Telephone Sweden	1997	929		–929
Retail Norway	2005	406		–406
Card, Norway & Denmark1)	2002/2004	826	87		913
Life Sweden	1996/1997	2,334	9		2,343
Life Denmark	2004	299	–5	–294		3,056
Investment Management Sweden	1997/1998	3,117		–1,613	1,504	1,919
Investment Management, Finland & Denmark1)	1997/2002	340		–340		9
Investment Management, UK & BVI 1)	2008	732		–732
TOTAL		10,003	91	–5,334	4,760

1) In the table some of the 14 CGU:s are presented together due to that the acquisitions are related. The Equities and Corporate businessin Sweden and Norwaywere acquired in a linked transaction and the Investment Management activitiesin UK and BVI aswell. Card in Norway and Sweden isrelated to the Eurocard business and Investment Management in Finland and Denmark representsthe same type of business and the amounts are minor.

2) Internally assessed remaining book value of CGU's only when impairment has occured.

Impairment test in the first quarter

CGUs with no future cash flow

For four of the new CGUsthat had an original goodwill allocated there is no future cash flow due to changesin strategy for Internet/Telephone bank in Sweden, Retail Norway and Investment Management based in UK and British Virgin Islands and therefore the goodwill isimpaired.

Result of impairment test

Impairment test resultsin six units where the goodwill isfully impaired and one unit where it is partially impaired. Three units have goodwill with no need of impairment. The impairment isreported as Depreciation, amortisation and impairment of tangible and intangible assets within Other in the income statement.

Estimates and assumptions used: future cash flows

The impairment test on goodwill is based on value in use and builds on the business plan for 2016–2018 and projected cash flowsfor 2019–2020. The long term growth in all geographiesis based on expectations on inflation 1.5 per cent. The allocated capital is derived from the Group'sinternal capital allocation model that has been aligned with the regulatory capital requirementsincluding the management buffer. The cash flowsin the business plan starts with the assumptionsfrom the most recent Nordic outlook published at the commencement of this business plan process. In addition to the assumptions financial effectsfrom specific actions according to SEB'slong term strategy are added. Projectionsfor 2019–2020 includesregulatory uncertaintieslike assumed increase in capital needs derived from the Basel III regulation.

Estimates and assumptions used: Cost of Equity (CoE) – discount rate

The associated risk in each specific business unit and geography has been reflected in the respective CoE for each CGU. Investment Management´s discount rate is higher, 11.5 per cent than the SEB Group´s average due to regulatory uncertainty related to limitationsto retrocessions, possible further margin squeeze and the current negative interest environment that can create squeezed asset prices and volatility. For Life Denmark discount rate is higher, 11.5 per cent, than the SEB Group´s average due to the distribution model might be more dependent on own channels and uncertainty related to limitationsin retrocessions. The base discount rate used in the impairment test at the end of 2015 is unchanged at 9.5 per cent posttax for SEB Group and is determined based on information from externalsources.

Yearly impairment test in the fourth quarter

Result of impairment test

The yearly impairment test for 2016 was performed in the fourth quarter covering the four remaining CGUs with allocated goodwill. The impairment test did not result in any indication of impairment.

Estimates and assumptions used: future cash flows

Thistest is based on the business plan for 2017–2019, including changed assumptions compared to the preceding business plan for the concerned CGUs, and projected cash flowsfor 2020–2021. The longterm growth is based on expectations on inflation 1.5 per cent. The allocated capital is derived from the Group'sinternal capital allocation model that has been aligned with the regulatory capital requirementsincluding the management buffer. Certain regulatory uncertaintiesincluded in previousimpairment test has been eliminated since potential impact from these will not occur within the projection period. The cash flowsin the business plan starts with the assumptionsfrom the most recent Nordic outlook published at the commencement of this business plan process. The main assumptions are; GDP growth in Sweden from 2.8 per cent to 2.2 per cent over three years and other Nordic countries excluding Sweden from 1.5 per cent to 2.0 per cent; inflation in Sweden from 1.2 per cent to 2.2 per cent and in Other Nordic countriesfrom 1.6 per cent to 1.7 per cent. The repo rate in Sweden is assumed to be 0.25 per cent end of 2018.

Estimates and assumptions used: Cost of Equity (CoE) – discount rate The discount rate used is 9.0 per cent posttax for SEB Group and is determined based on information from externalsources and applied on all CGUs except Investment Management. The higher discount rate for Investment Management, 11.0 per cent, is applied due to remaining uncertainty as described for in the impairment test in the first quarter.

Sensitivities

An increase of one percentage of the discount rate (CoE), a decrease of the average growth rates by one percentage point for earnings before amortisations during the projection period and a decrease of one percentage point of the long term growth was applied in the sensitivity analysis. The sensitivity analysis carried out did not result in any indication of impairment.

Note 28 continued Tangible and intangible assets

Property and equipment

	Group			Parent company
2016	Equipment	Properties for own operations	Total	Equipment	Equipment leased to clients 1 )	Properties for own operations	Total
Opening balance Additionsfrom acquisitions and capitalisations Reclassifications Retirements and disposals	3,105 297 –52 –189	97 8 1 –8	3,202 305 –51 –197	1,888 190 –28	50,388 5,437 –7,121	2	52,278 5,627 –7,149
Exchange rate differences	87	8	95	24			24
Acquisition value	3,248	106	3,354	2,074	48,704	2	50,780
Opening balance Current year's depreciations Current year'simpairments Reclassifications	–2,334 –261 –1 91	–43 –5 –2	–2,377 –266 –3 91	–1,480 –106	–12,645 –4,704		–14,125 –4,810
Retirements and disposals Exchange rate differences	180 –70	8 –9	188 –79	26 –22	2,822 492		2,848 470
Accumulated depreciations	–2,395	–51	–2,446	–1,582	–14,035		–15,617
TOTAL	853	55	908	492	34,669	2	35,163
2015
Opening balance Additionsfrom acquisitions and capitalisations Reclassifications Retirements and disposals	3,316 244 77 –531	120 10 –17 –2	3,436 254 60 –533	1,934 156 –252	50,761 5,960 –6,333	2	52,697 6,116 –6,585
Exchange rate differences	–1	–14	–15	50			50
Acquisition value Opening balance Current year's depreciations Current year'simpairments Reclassifications	3,105 –2,554 –393 –1 25	97 –52 –10 8	3,202 –2,606 –403 –1 33	1,888 –1,597 –165	50,388 –12,160 –4,598	2	52,278 –13,757 –4,763
Retirements and disposals Exchange rate differences	517 72	2 9	519 81	252 30	4,463 –350		4,715 –320
Accumulated depreciations	–2,334	–43	–2,377	–1,480	–12,645		–14,125
TOTAL	771	54	825	408	37,743	2	38,153

1) Equipment leased to clients are recognised as financial leases and presented asloansin the Group. See note 44.

Investment properties, Group

	2016			2015
	Investment properties at cost	Investment properties at fair value	Properties taken over for protection of claims	Total	Investment properties at cost	Investment properties at fair value	Properties taken over for protection of claims	Total
Opening balance	43	7,169	1,248	8,460	35	7,497	2,024	9,556
Additionsfrom acquisitions and capitalisations	5	73	52	130	27	326	85	438
Reclassifications			–494	–494	1		–616	–615
Retirements and disposals	–13	–236	–343	–592	–18	–332	–171	–521
Exchange rate differences	2	312	36	350	–2	–223	–74	–299
Acquisition value	37	7,318	499	7,854	43	7,268	1,248	8,559
Opening balance	–5		–146	–151	–5		–91	–96
Current year's depreciations	–1		–4	–5	–1		–6	–7
Current year'simpairments			–127	–127			–148	–148
Reclassifications			174	174			89	89
Retirements and disposals			23	23	1		5	6
Exchange rate differences			–6	–6			5	5
Accumulated depreciations	–6		–86	–92	–5		–146	–151
Fair value changes		83		83		–99		–99
TOTAL	31	7,401	413	7,845	38	7,169	1,102	8,309

Note 28 continued Tangible and intangible assets

Net operating earnings from investment properties

	Group
	2016	2015
External income	556	548
Operating costs 1)	–170	–182
TOTAL	386	366

1) Direct operating expenses arising from investment property that did not generate rental income amountsto SEK 12m (12).

Net operating earnings from properties taken overfor protection of claims

External income	54	49
Operating costs	–88	–83
TOTAL	–34	–34

SEB may in specific cases acquire assets used as collateral when the loan isin default and the customer can no longer meet its obligationstowards SEB. Properties are held and managed during a period with the intention to divest the assets when deemed appropriate.

29 Other assets

	Group		Parent company
	2016	2015	2016	2015
Trade and client receivables	7,635	13,124	7,234	12,871
Margin collateral paid	29,177	22,132	29,177	22,132
Other assets	12,306	14,045	7,538	5,260
TOTAL	49,118	49,301	43,949	40,263

Trade and clientreceivables

	Group		Parent company
	2016	2015	2016	2015
Trade receivables	1,773	1,370	1,678	1,262
Client receivables	5,862	11,754	5,556	11,609
TOTAL	7,635	13,124	7,234	12,871
Other assets
Pension plan assets, net	3,914	5,558
Reinsurersshare of insurance provisions	539	499
Accrued interest income	62	66
Other accrued income	1,654	1,477	1,448	1,408
Prepaid expenses	635	485
Other	5,502	5,960	6,090	3,852
TOTAL	12,306	14,045	7,538	5,260

30 Liabilities to policyholders

	Group
	2016	2015
Liabilitiesto policyholders – investment contracts	296,618	271,995
Liabilitiesto policyholders – insurance contracts	107,213	98,714
TOTAL	403,831	370,709
Liabilities to policyholders – investment contracts*
Opening balance	271,995	259,275
Reclassification from/to insurance contracts	1,316	–114
Change in investment contract provisions 1)	14,987	15,340
Exchange rate differences	8,320	–2,506

TOTAL 296,618 271,995

1) The net of premiumsreceived during the year, return on investment fundsless paymentsto the policyholders and deduction of fees and policyholders' tax. *Insurance provisionswhere the policyholders are carrying the risk. The liabilities and the underlying assets are designated at fair value through profit or loss (fair value option).

Liabilities to policyholders – insurance contracts

Opening balance	98,714	105,079
Transfer of portfoliosthrough divestments	355
Reclassification to/from investment contracts	–1,316	114
Change in collective bonus provisions		–578
Change in other insurance contract provisions 1)	5,622	–3,138
Exchange rate differences	3,838	–2,763
TOTAL	107,213	98,714

1) The net of premiumsreceived during the year, allocated return on investment fundsless paymentsto the policyholders and deduction of fees and policyholders' tax.

31 Financial liabilities at fair value through profit or loss

	Group		Parent company
	2016	2015	2016	2015
Liabilities held for trading Derivatives held for trading	38,845 173,348	40,746 188,062	38,845 132,861	40,487 160,619
Held fortrading	212,193	228,808	171,706	201,106
Derivatives held for hedging	1,303	1,977	972	1,685
Designated atfair value through profit orloss	1,303	1,977	972	1,685
TOTAL	213,496	230,785	172,678	202,791
Liabilities held fortrading
Short positionsin equity instruments	10,072	12,927	10,072	12,831
Short positionsin debtsecurities	9,527	10,419	9,527	10,262
Other financial liabilities	19,224	17,377	19,224	17,377
Accrued interest	22	23	22	17
TOTAL	38,845	40,746	38,845	40,487
Derivatives held fortrading
Negative replacement values of interest­related derivatives Negative replacement values of currency­related derivatives	96,955 64,420	111,651 58,137	61,795 61,415	87,718 56,475
Negative replacement values of equity­related derivatives	2,010	5,123	1,855	4,773
Negative replacement values of other derivatives	9,963	13,151	7,796	11,653
TOTAL	173,348	188,062	132,861	160,619
Derivatives held for hedging
Fair value hedges	12	475	12	475
Cash flowhedges	957	1,210	957	1,210
Portfolio hedgesfor interest rate risk	334	292	3
TOTAL	1,303	1,977	972	1,685
32 Other liabilities
	Group		Parent company
	2016	2015	2016	2015
Trade and client payables	8,926	11,496	7,945	11,011
Margin collateral received	29,922	28,044	29,922	28,044
Other liabilities	17,576	23,994	8,211	12,736
TOTAL	56,424	63,534	46,078	51,791
Trade and client payables
Trade payables	1,882	1,684	1,703	1,361
Client payables	7,044	9,812	6,242	9,650
TOTAL	8,926	11,496	7,945	11,011
Otherliabilities
Accrued interest expense Other accrued expense	4 3,986	2 3,595	2,623	2,357
Prepaid income	1,477	1,673
Other	12,109	18,724	5,588	10,379
TOTAL	17,576	23,994	8,211	12,736

33 Provisions

	Group		Parent company
	2016	2015	2016	2015
Other restructuring and redundancy reserves	642	515	35	42
Reserve for off­balance sheet items	44	81	0	22
Pensions(note 9b) 1)	718	384
Other provisions	829	893	45	80
TOTAL	2,233	1,873	80	144
1) Part of the net (asset) amount recognised in balance sheet amounting to SEK 3,196m (5,175) in note 9b.
Otherrestructuring and redundancy reserves
Opening balance	515	588	42	50
Additions	308	45
Amounts used	–186	–101	–9	–8
Unused amountsreversed	–19	–2
Other movements	3	1
Exchange differences	21	–16	2
TOTAL	642	515	35	42
The main part of the reserve will cover redundancy coststo be used within five years.
Reserve for off-balance-sheetitems
Opening balance	81	87	22
Additions	24	62	19	22
Amounts used	–34	–5	–34
Unused amountsreversed	–33	–33	–7
Other movements	4	–26
Exchange differences	2	–4
TOTAL	44	81	0	22

Other provisions

Opening balance	893	1,198	80	123
Additions	53	67		–43
Amounts used	–91	–60	–35
Unused amountsreversed	–33	–305
Other movements		5
Exchange differences	7	–12
TOTAL	829	893	45	80

Other provision mainly consists of costsfor reorganisation within the Group to be used within three years and unsettled claims covering all operating segments; among othersin the divested German retail businessto be settled within three years and tax returns within Life U.K. branch under decommission.

34 Subordinated liabilities

	Group		Parent company
	2016	2015	2016	2015
Debenture loans	24,851	16,092	24,851	16,092
Debenture loans, perpetual	14,738	13,855	14,738	13,855
Debenture loans, hedged positions	625	960	625	960
Accrued interest	505	465	505	465
TOTAL	40,719	31,372	40,719	31,372

Debenture loans

		Original nom.		Rate of
	Currency	amount	Book value	interest, %
2012/2022	EUR	750	7,169	4.000
2014/2026	EUR	1,000	9,558	2.500
2016/2028	EUR	850	8,124	1.380
TOTAL			24,851

Debenture loans, perpetual

		Original nom.		Rate of
	Currency	amount	Book value	interest, %
2007	EUR	500	4,779	7.092
2014	USD	1,100	9,959	5.750
TOTAL			14,738

35 Untaxed reserves 1)

	Parent company
	2016	2015
Depreciation in excess of plan on office equipment/leased assets Other untaxed reserves	21,755 6	23,460 6
TOTAL	21,761	23,466

1) In the balance sheet of the Group untaxed reserves are reclassified partly as deferred tax liability and partly asrestricted equity.

Parent company

	Excess depreciation	Other untaxed reserves	Total
Opening balance Appropriations	23,097 363	6	23,103 363
Closing balance 2015	23,460	6	23,466
Reversals	–1,705		–1,705
CLOSING BALANCE 2016	21,755	6	21,761

36 Pledged assets

	Group		Parent company
	2016	2015	2016	2015
Pledged assets and comparable securitiesfor own liabilities	478,998	496,825	392,227	399,047
Pledged assetsfor own liabilitiesto insurance policyholders	403,831	370,709
Other pledged assets and comparable securities	154,518	146,521	152,317	135,864
TOTAL	1,037,347	1,014,055	544,544	534,911
Pledged assets and comparable securities for own liabilities*
Repos	3,901	8,733	3,783	8,733
Assets collateralised for issued mortgage covered bonds	335,094	339,652	318,412	319,392
Assets collateralised for issued public covered bonds	11,491	14,999
Other collateral	128,512	133,441	70,032	70,922
ofwhich group internal			18,723	10,080
TOTAL	478,998	496,825	392,227	399,047
* Transfersthat do not qualify for derecognition.
Pledged assets for own liabilities to insurance policyholders
Assets pledged for insurance contracts	107,213	98,714
Assets pledged for investment contracts1)	296,618	271,995
TOTAL	403,831	370,709
1) Sharesin funds.
Other pledged assets and comparable collateral
Bonds1)	80,718	73,781	80,718	73,782
Securitieslending	61,498	63,528	59,297	52,870
Other	12,302	9,212	12,302	9,212
TOTAL	154,518	146,521	152,317	135,864
1) Pledged but unencumbered bonds.

Transferred financial assets entirely recognized1)

	Transferred assets				Associated liabilities				Associated collateralreceived 2)
Group, 2016	Securities lending	Repurchase agreements	Other3)	Total	Securities lending	Repurchase agreements	Other3)	Total	Securities lending
Equity instruments Debtsecurities	9,029 6,769	1,283	4,495 1,258	13,524 9,310	864 410	1,101	4,050 806	4,914 2,317	7,668 5,986
Financial assets held fortrading	15,798	1,283	5,753	22,834	1,274	1,101	4,856	7,231	13,654
Debtsecurities		118		118		118		118
Financial assets designated atfair value through profit orloss		118		118		118		118

2015
Equity instruments	17,719		13,968	31,687	1,852		13,667	15,519	15,249
Debtsecurities	12,396	7,588	949	20,933	625	7,090		7,715	11,099
Financial assets held fortrading	30,115	7,588	14,917	52,620	2,477	7,090	13,667	23,234	26,348

Note 36 continued Pledged assets

	Transferred assets				Associated liabilities				Associated collateral received 2)
Parent company, 2016	Securities lending	Repurchase agreements	Other3)	Total	Securities lending	Repurchase agreements	Other3)	Total	Securities lending
Equity instruments	9,258		4,451	13,709	1,078		3,992	5,070	7,400
Debtsecurities	6,734	1,283	1,217	9,234	316	1,101	810	2,227	5,849
Financial assets held fortrading	15,992	1,283	5,668	22,943	1,394	1,101	4,802	7,297	13,249
2015
Equity instruments	14,232		13,520	27,752	2,182		13,220	15,402	11,288
Debtsecurities	11,230	7,588	901	19,719	171	7,090		7,261	10,439
Financial assets held fortrading	25,462	7,588	14,421	47,471	2,353	7,090	13,220	22,663	21,727

1) Carrying amount and fair value are the same.

2) Other than cash collateral.

3) Assets provided as collateral for derivativestrading, clearing etc.

Pledged assets

Assets are transferred forrepurchase agreements and securitieslending agreements. The counterpart hasthe right to sell or repledge the assets.Other transferred assets refer to assets provided as collateral for derivativestrading, clearing etc.,where the title to the instrument has been transferred to the counterparty. The assets continue to be recognised on SEB's balance sheetsince SEB isstill exposed to changesin the fair value of the assets. The carrying value and fair value of the assetstransferred as collateral for liabilities or contingent liabilities are shown in the table above.

SEB issues covered bondssecured by mortgage loans pledged assecurity according to the local legislation. The pledged securities are mainly residential mortgagesin single family homes, tenant owned homes or other residential apartment buildings. The loantovalue ratio does not exceed 75 per cent. In the event of SEB'sinsolvency, the holders of the covered bonds have priority to the assetsregistered as collateral.

Obtained collateral

SEB obtains collateral under reverse repurchase agreements and securities borrowing agreements. Under the terms ofstandard financial market agreements SEB has the right to sell or repledge the collateral,subject to returning equivalentsecurities on settlement of the transactions.

More information about the accounting of repurchase agreements and securities lending can be found in the accounting principles.

37 Obligations

	Group		Parent company
	2016	2015	2016	2015
Contingent liabilities Commitments	120,231 655,350	109,297 609,872	97,642 468,953	87,798 434,656
TOTAL	775,581	719,169	566,595	522,454
Contingentliabilities1)
Own acceptances	1,318	746	1,274	701
Financial guarantees given2) ofwhich group internal	25,203	43,739	26,035 8,831	18,494 6,986
Other guarantees given	93,710	64,812	70,333	68,603
ofwhich group internal			2,220	2,170
Guarantees given	118,913	108,551	96,368	87,097
TOTAL	120,231	109,297	97,642	87,798

1) Pledged assetsfor own or third party obligations

2) SEB does not regularly securitise its assets and has no outstanding own issues. For liquidity facilities and other facilitiesto conduitssee note 27.

Other contingent liabilities

The parent company has undertaken to the Monetary Authority of Singapore to ensure that itssubsidiary in Luxembourg's branch in Singapore is able to fulfil its commitments.

Legal proceedings

Within the ordinary course of business SEB is engaged in variouslegal proceedings, both in Sweden and in other jurisdictions. SEB does not expect these current legal proceedingsto have a significant adverse effect on the financial position of the Group.

The parent company hasissued a deposit guarantee for SEB AG in Germany to the Bundesverband deutscher Banken e.V.

	Group		Parent company
Commitments1)	2016	2015	2016	2015
Granted undrawn credit facilities	347,273	319,045	275,157	237,292
ofwhich group internal			250	791
Unutilised part of overdraft facilities	143,041	135,809	78,077	70,039
ofwhich group internal			8,495	9,362
Repledged collaterals	120,486	125,314	102,933	102,190
ofwhich group internal			20,473	17,226
Other commitments given	44,550	29,704	12,786	25,135
Other commitments	655,350	609,872	468,953	434,656
TOTAL	655,350	609,872	468,953	434,656

1) Pledged assetsfor own or third party obligations

Discretionary managed assets

Discretionary managed assetsin the parent company amounted to SEK 528 bn (446).

38 Current and noncurrent assets and liabilities

Group		2016
Assets	Current assets	Non-current assets	Total	Current assets	Non-current assets	Total
Cash and cash balanceswith central banks	151,078		151,078	101,429		101,429
Other lending to central banks	66,730		66,730	32,222		32,222
Loansto credit institutions	42,080	8,447	50,527	46,188	12,354	58,542
Loansto the public	598,919	854,100	1,453,019	581,376	772,010	1,353,386
Securities held for trading	162,516		162,516	239,906		239,906
Derivatives held for trading	198,271		198,271	199,085		199,085
Derivatives held for hedging	14,084		14,084	16,466		16,466
Financial assets – designated at fair value through profit or loss	410,155		410,155	371,488		371,488
Financial assets at fair value through profit and loss	785,026		785,026	826,945		826,945
Fair value changes of hedged itemsin a portfolio hedge	111		111	104		104
Available­for­sale financial assets	35,747		35,747	37,331		37,331
Investment accounted for using the equity method		268	268		260	260
Other investmentsin associates		970	970		958	958
Investmentsin subsidiaries and associates		1,238	1,238		1,218	1,218
Intangible assets	1,432	9,973	11,405	1,540	15,529	17,069
Property and equipment	271	637	908	410	415	825
Investment properties	7,845		7,845	8,309		8,309
Tangible and intangible assets	9,548	10,610	20,158	10,259	15,944	26,203
Current tax assets	5,978		5,978	6,966		6,966
Deferred tax assets		1,329	1,329		1,516	1,516
Tax assets	5,978	1,329	7,307	6,966	1,516	8,482
Trade and client receivables	7,635		7,635	13,124		13,124
Other financial assets	29,239		29,239	22,363		22,363
Other non-financial assets	12,244		12,244	13,814		13,814
Other assets	49,118		49,118	49,301		49,301
Non­current assets classified as held forsale	587		587	801		801
TOTAL	1,744,922	875,724	2,620,646	1,692,922	803,042	2,495,964

		2016			2015
Liabilities	Current liabilities	Non-current liabilities	Total	Current liabilities	Non-current liabilities	Total
Depositsfrom central banks and credit institutions	106,600	13,264	119,864	112,509	5,997	118,506
Deposits and borrowing from the public	916,562	45,466	962,028	832,331	51,454	883,785
Liabilitiesto policyholders – investment contracts	16,719	279,899	296,618	9,100	262,895	271,995
Liabilitiesto policyholders – insurance contracts	8,403	98,810	107,213	10,100	88,614	98,714
Pooled schemes and liabilitiesto policyholders	25,122	378,709	403,831	19,200	351,509	370,709
Debtsecuritiesissued	198,709	470,171	668,880	232,310	407,134	639,444
Liabilities held for trading	38,845		38,845	40,746		40,746
Derivatives held for trading	173,348		173,348	188,062		188,062
Derivatives held for hedging	1,303		1,303	1,977		1,977
Financial liabilities at fair value through profit and loss	213,496		213,496	230,785		230,785
Fair value changes of hedged itemsin portfolio hedge	1,537		1,537	1,608		1,608
Current tax liabilities	2,184		2,184	2,082		2,082
Deferred tax liabilities		8,474	8,474		9,468	9,468
Tax liabilities	2,184	8,474	10,658	2,082	9,468	11,550
Trade and client payables	8,926		8,926	11,496		11,496
Other financial liabilities	30,609		30,609	29,138		29,138
Other non-financial liabilities	16,889		16,889	22,900		22,900
Other liabilities	56,424		56,424	63,534		63,534
Provisions		2,233	2,233		1,873	1,873
Subordinated liabilities	505	40,214	40,719	793	30,579	31,372
TOTAL	1,521,139	958,531	2,479,670	1,495,152	858,014	2,353,166

Assets and liabilities are classified as current assets and current liabilities when they are cash or cash equivalents, are hold for trading purposes, are expected to be sold,

settled or consumed in normal business, and are expected to be realised within twelve months. All other assets and liabilities are classified as noncurrent.

39 Financial assets and liabilities by class

Group	Book value				Fair value
Assets, 2016	Held for trading	Designated at fair value through p/l / Hedge instruments	Available for-sale	Loans and receivables	Total	Quoted prices in active markets (Level 1)	Valuation technique using observable inputs (Level 2)	Valuation technique using non-observable inputs (Level 3)	Total
Loans Equity instruments Debtsecurities Derivative instruments Financial assets – policyholders bearing the risk	40,324 122,192 198,271	30,800 83,447 14,084 295,908	3,049 32,698	1,704,291 15,106	1,704,291 74,173 253,443 212,355 295,908	49,975 50,254 102,894 2,593 275,894	533 13,215 147,427 201,621 15,589	1,665,293 10,704 3,332 8,141 4,425	1,715,801 74,173 253,653 212,355 295,908
Other Financial assets	360,787	111 424,350	35,747	38,831 1,758,228	38,942 2,579,112	1,957 483,567	378,385	36,985 1,728,880	38,942 2,590,832
Other assets(non­financial) TOTAL	360,787	424,350	35,747	1,758,228	41,534 2,620,646
2015
Loans Equity instruments Debtsecurities Derivative instruments Financial assets – policyholders bearing the risk Other	67,538 172,368 199,085	28,264 71,611 16,466 271,613 104	2,368 34,963	1,522,503 21,001 37,562	1,522,503 98,170 299,943 215,551 271,613 37,666	42,955 75,354 134,826 2,061 255,175 2,075	290 11,469 159,177 202,261 13,831	1,485,907 11,347 6,103 11,229 2,607 35,591	1,529,152 98,170 300,106 215,551 271,613 37,666
Financial assets	438,991	388,058	37,331	1,581,066	2,445,446	512,446	387,028	1,552,784	2,452,258
Other assets(non­financial)					50,518
TOTAL	438,991	388,058	37,331	1,581,066	2,495,964

			Book value	Fair value
Liabilities, 2016	Held for trading	Designated at fair value through p/l / Hedge instruments	Other financial liabilitie	Total	Quoted prices in active markets (Level 1)	Valuation technique using observable inputs (Level 2)	Valuation technique using non-observable inputs (Level 3)	Total
Deposits			1,045,056	1,045,056	30,491	325	1,016,048	1,046,864
Equity instruments	10,071			10,071	9,798	2	271	10,071
Debtsecurities	9,549	30,992	715,443	755,984	7,074	727,440	34,099	768,613
Derivative instruments	173,348	1,303		174,651	2,808	168,207	3,636	174,651
Liabilitiesto policyholders
– investment contracts		296,618		296,618	276,666	15,542	4,410	296,618
Other	19,225	1,537	39,535	60,297	10	19,244	41,043	60,297
Financial liabilities	212,193	330,450	1,800,034	2,342,677	326,847	930,760	1,099,507	2,357,114
Other liabilities(non­financial) Total equity				136,993 140,976
TOTAL	212,193	330,450	1,800,034	2,620,646

2015

Deposits			957,599	957,599	26,908	182	930,805	957,895
Equity instruments	12,927			12,927	12,445	37	445	12,927
Debtsecurities	10,442	34,774	680,734	725,950	7,071	693,674	44,625	745,370
Derivative instruments	188,062	1,977		190,039	2,534	176,104	11,401	190,039
Liabilitiesto policyholders
– investment contracts		271,995		271,995	255,581	13,812	2,602	271,995
Other	17,377	1,608	40,634	59,619	408	17,413	41,798	59,619
Financial liabilities	228,808	310,354	1,678,967	2,218,129	304,947	901,222	1,031,676	2,237,845
Other liabilities(non­financial)				135,037
Total equity				142,798
TOTAL	228,808	310,354	1,678,967	2,495,964

Note 39 continued Financial assets and liabilities by class

Parent company	Book value
	Held for	Designated at fair value through p/l / Hedge	Available	Loans and
Assets, 2016	trading	instruments	for-sale	receivables	Total
Loans				1,520,966	1,520,966
Equity instruments	40,323	87	53,365		93,775
Debtsecurities	122,012		9,309	8,703	140,024
Derivative instruments	147,124	12,649			159,773
Other				37,592	37,592
Financial assets	309,459	12,736	62,674	1,567,261	1,952,130
Other assets(non­financial)					47,714
TOTAL	309,459	12,736	62,674	1,567,261	1,999,844

2015
Loans				1,288,753	1,288,753
Equity instruments	62,726	209	54,529		117,464
Debtsecurities	171,380		10,702	13,496	195,578
Derivative instruments	165,964	15,042			181,006
Other				36,324	36,324
Financial assets	400,070	15,251	65,231	1,338,573	1,819,125
Other assets(non­financial)					47,480
TOTAL	400,070	15,251	65,231	1,338,573	1,866,605

	Book value
Liabilities, 2016	Held for trading	Designated at fair value through p/l / Hedge instruments	Other financial liabilities	Total
Deposits Equity instruments	10,072		951,436	951,436 10,072
Debtsecurities Derivative instruments Other	28,773 132,861	972	704,905 37,867	733,678 133,833 37,867
Financial liabilities	171,706	972	1,694,208	1,866,886
Other liabilities(non­financial) Total equity				9,823 123,135
TOTAL	171,706	972	1,694,208	1,999,844
2015
Deposits Equity instruments	12,831		825,117	825,117 12,831
Debtsecurities Derivative instruments	27,656 160,619	1,685	663,775	691,431 162,304
Other Financial liabilities	201,106	1,685	39,055 1,527,947	39,055 1,730,738
Other liabilities(non­financial) Total equity				14,621 121,246
TOTAL	201,106	1,685	1,527,947	1,866,605

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. Loans are further specified in note 17a and 19.

Equity instruments 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 17f and 41.

Derivative instruments includes options, futures,swaps and other derived products held for trading and hedging purposes. These are further specified in notes 22, 31 and 42.

Investment contracts include 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 46.

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 46.

Other includes other financial assets and liabilities recognised in accordance with IAS 39, i.e. Trade and client receivables/payables and Withheld/paid margins ofsafety.

40 Financial assets and liabilities subject to offsetting or netting arrangements

	Financial assets and liabilities subject to offsetting or netting arrangements
				Related arrangements		Otherinstruments
Group, 2016	Gross amounts	Offset	Net amounts in balance sheet	Master netting arrangements	Collaterals received/ pledged	Net amounts	in balance sheet not subject to netting arrangements	Total in balance sheet
Derivatives Reversed repo receivables Securities borrowing Client receivables	215,367 99,828 25,265 43	–4,447 –35,332 –42	210,920 64,496 25,265 1	–123,698 –682 –7,616	–34,841 –63,612 –17,649	52,381 202 1	1,435 1 5,525 5,861	212,355 64,497 30,790 5,862
ASSETS	340,503	–39,821	300,682	–131,996	–116,102	52,584	12,822	313,504
Derivatives Repo payables Securitieslending Client payables	176,773 36,926 25,155 42	–4,447 –35,332 –42	172,326 1,594 25,155	–123,698 –682 –7,616	–31,547 –795 –8,765	17,081 117 8,774	2,325 6 7,044	174,651 1,594 25,161 7,044
LIABILITIES	238,896	–39,821	199,075	–131,996	–41,107	25,972	9,375	208,450
2015
Derivatives Reversed repo receivables Securities borrowing Client receivables	219,186 71,161 22,582 335	–4,514 –10,850 –75 –333	214,672 60,311 22,507 2	–133,854 –4,604 –5,976	–33,135 –55,468 –16,531	47,683 239 2	879 5 5,984 11,752	215,551 60,316 28,491 11,754
ASSETS	313,264	–15,772	297,492	–144,434	–105,134	47,924	18,620	316,112
Derivatives Repo payables Securitieslending Client payables	192,675 20,459 17,538 333	–4,514 –10,850 –75 –333	188,161 9,609 17,463	–133,854 –4,604 –5,976	–49,311 –4,128 –11,260	4,996 877 227	1,878 6 9,812	190,039 9,609 17,469 9,812
LIABILITIES	231,005	–15,772	215,233	–144,434	–64,699	6,100	11,696	226,929

	Financial assets and liabilities subject to offsetting or netting arrangements
				Related arrangements			Otherinstruments
Parent company, 2016	Gross amounts	Offset	Net amounts in balance sheet	Master netting arrangements	Collaterals received/ pledged	Net amounts	in balance sheet not subject to netting arrangements	Total in balance sheet
Derivatives Reversed repo receivables Securities borrowing Client receivables	159,773 100,150 24,396 42	–35,332 –42	159,773 64,818 24,396	–80,887 –682 –7,616	–19,811 –63,612 –11,642	59,075 524 5,138	5,423 5,556	159,773 64,818 29,819 5,556
ASSETS	284,361	–35,374	248,987	–89,185	–95,065	64,737	10,979	259,966
Derivatives Repo payables Securitieslending Client payables	133,833 36,808 14,431 42	–35,332 –42	133,833 1,476 14,431	–80,887 –682 –7,616	–43,422 –4,128 –9,051	9,524 –3,334 –2,236	6,242	133,833 1,476 14,431 6,242
LIABILITIES	185,114	–35,374	149,740	–89,185	–56,601	3,954	6,242	155,982

2015
Derivatives Reversed repo receivables	181,006 70,844	–10,850	181,006 59,994	–103,579 –4,604	–23,757 –55,058	53,670 332		181,006 59,994
Securities borrowing Client receivables	11,308 333	–333	11,308	–5,976	–5,332		22,103 11,609	33,411 11,609
ASSETS	263,491	–11,183	252,308	–114,159	–84,147	54,002	33,712	286,020
Derivatives Repo payables Securitieslending Client payables	162,304 19,582 15,027 333	–10,850 –333	162,304 8,732 15,027	–103,579 –4,604 –5,976	–43,422 –4,128 –9,051	15,303	9,650	162,304 8,732 15,027 9,650
LIABILITIES	197,246	–11,183	186,063	–114,159	–56,601	15,303	9,650	195,713

The table shows financial assets and liabilitiesthat are presented net in the balance sheet or with potential rightsto offset associated with enforceable master netting arrangements orsimilar arrangements, together with related collateral.

Financial assets and liabilitiessubject to enforceable master netting arrangements orsimilar arrangementsthat are not presented net in the balance sheet are arrangementsthat are usually enforceable in the case of bankruptcy or default but not in the ordinary course of business or arrangements where SEB does not have the intention to settle the instrumentssimultaneously.

Financial assets and liabilities are presented net in the balance sheet when SEB haslegally enforceable rightsto setoff, in the ordinary cause of business and in the case of bankruptcy, and intendsto settle on a net basis or to realize the assets and settle the liabilitiessimultaneously. Repos with central counterparty clearing housesthat SEB has agreements with and client receivables and client payables are examples of instrumentsthat are presented net in the balance sheet.

Assets and liabilitiesthat are notsubject to offsetting or netting arrangements, i.e those that are only subject to collateral agreements, are presented as Other instrumentsin balance sheet notsubject to netting arrangements.

41 Debt securities by issuers

Eligible debt securities*
Group, 2016	Swedish Government	Swedish municipalities	Other Swedish issuers – non financial companies	Other Swedish issuers – other financial companies	Foreign Government	Other foreign issuers	Total
Loansto credit institutions Loansto the public Securities held for trading Insurance assets at fair value Financial assets at fair value through profit or loss Available­for­sale financial assets	10,088 1,437 299	4,528 453		3,285	6,690 19,374 7,635 5,340 27,437	382 6,006 1 30,995 829 3,690	382 12,696 33,991 43,805 6,169 31,426
TOTAL	11,824	4,981		3,285	66,476	41,903	128,469
2015
Loansto credit institutions Loansto the public Securities held for trading Insurance assets at fair value Financial assets at fair value through profit or loss Available­for­sale financial assets	8,832 1,385 99	5,374 517	1	2,974	8,248 54,382 4,859 3,850 17,596	1,415 5,563 144 29,256 1,863	1,415 13,811 68,732 38,992 3,850 19,558
TOTAL	10,316	5,891	1	2,974	88,935	38,241	146,358
Parent company, 2016
Loansto the public Securities held for trading Available­for­sale financial assets	10,088	4,528			6,690 19,195 6,588		6,690 33,811 6,588
TOTAL	10,088	4,528			32,473		47,089
2015
Loansto the public Securities held for trading Available­for­sale financial assets	8,832	5,374		41,002	7,816 13,107 6,477		7,816 68,315 6,477
TOTAL	8,832	5,374		41,002	27,400		82,608
* Accrued interest excluded.

Eligible papers are considered as such if they, according to national legislation, are accepted by the Central bank in the country in which SEB is located.

Other debt securities*

Group, 2016	Swedish Government and municipalities	Swedish mortgage institutions	Other Swedish issuers – non financial companies	Other Swedish issuers – other financial companies	Foreign Government	Other foreign issuers	Total
Loansto the public Securities held for trading Insurance assets at fair value Financial assets at fair value through profit or loss Available­for­sale financial assets	306	26,683	1,368 1,094	5,525 1,132	7 2,168 301 1,021	1,896 54,070 27,887	1,896 87,653 32,587 301 1,021
TOTAL	306	26,683	2,462	6,657	3,497	83,853	123,458
2015
Loansto credit institutions Loansto the public Securities held for trading Insurance assets at fair value Financial assets at fair value through profit or loss Available­for­sale financial assets	339 217	40,071 34	191 3,030 1,037	7,790 1,203	569 1,640 292 11,821	1,386 3,947 51,345 23,626 3,035	1,386 4,138 102,805 27,879 292 15,073
TOTAL	556	40,105	4,258	8,993	14,322	83,339	151,573
Parent company, 2016
Loansto the public Securities held for trading Available­for­sale financial assets		26,683	1,293	5,600		1,881 54,077 2,608	1,881 87,653 2,608
TOTAL		26,683	1,293	5,600		58,566	92,142
2015
Loansto credit institutions Loansto the public Securities held for trading Available­for­sale financial assets		40,071	191 3,030	7,789		1,386 3,920 51,349 4,224	1,386 4,111 102,239 4,224
TOTAL		40,071	3,221	7,789		60,879	111,960

* Accrued interest excluded.

42 Derivative instruments

	Group		Parent company
	2016	2015	2016	2015
Interest­related	133,778	138,190	86,172	108,534
Currency­related	65,056	59,852	63,144	57,308
Equity­related	4,990	6,037	3,734	4,758
Other	8,531	11,472	6,723	10,406
Positive replacement values	212,355	215,551	159,773	181,006
Interest­related	98,258	113,628	62,767	89,403
Currency­related	64,420	58,137	61,415	56,475
Equity­related	2,010	5,123	1,855	4,773
Other	9,963	13,151	7,796	11,653
Negative replacement values	174,651	190,039	133,833	162,304

	Positive replacement values		Negative replacement values
Group, 2016	Nom. amount	Book value	Nom. amount	Book value
Options	574,200	32,326	1,004,430	25,284
Futures	2,648,672	1,211	2,466,844	2,170
Swaps	3,848,336	100,241	2,735,011	70,804
Interest-related	7,071,208	133,778	6,206,285	98,258
ofwhich, cleared	259,062	16	178,790	9
Options	163,012	4,461	140,597	4,534
Futures	459,163	15,694	388,388	10,389
Swaps	1,533,842	44,901	1,647,949	49,497
Currency-related ofwhich, cleared	2,156,017	65,056 2	2,176,934	64,420 34
Options	31,059	2,415	19,841	780
Futures	5	17	2	35
Swaps	691,265	2,558	40,115	1,195
Equity-related	722,329	4,990	59,958	2,010
ofwhich, cleared	5	203	95	123
Options	47,860	2,017	40,998	2,315
Futures	35,653	3,896	19,309	4,218
Swaps	6,139	2,618	33,719	3,430
Other	89,652	8,531	94,026	9,963
ofwhich, cleared	30,670	3,159	6,571	3,330
TOTAL	10,039,206	212,355	8,537,203	174,651
ofwhich, cleared	289,737	3,380	185,456	3,496

2015
Options	481,062	20,357	655,165	21,674
Futures	1,467,441	1,036	4,650,862	1,150
Swaps	3,438,368	116,797	3,197,944	90,804
Interest-related	5,386,871	138,190	8,503,971	113,628
ofwhich, cleared	1,467,033	1,045	4,650,787	1,150
Options	193,854	5,839	168,689	4,585
Futures	389,474	14,841	480,267	10,819
Swaps	1,630,730	39,172	1,563,932	42,733
Currency-related	2,214,058	59,852	2,212,888	58,137
ofwhich, cleared		2		24
Options	29,889	3,603	28,128	1,528
Futures	3,022	14	1,495	23
Swaps	92,927	2,420	94,972	3,572
Equity-related	125,838	6,037	124,595	5,123
ofwhich, cleared	3,130	635	1,654	269
Options	54,401	2,851	57,336	2,895
Futures	39,887	6,506	25,952	7,280
Swaps	16,974	2,115	37,762	2,976
Other	111,262	11,472	121,050	13,151
ofwhich, cleared	29,774	735	7,329	3,543
TOTAL	7,838,029	215,551	10,962,504	190,039
ofwhich, cleared	1,499,937	2,417	4,659,770	4,986

Note 42 continued Derivative instruments

	Positive replacement values		Negative replacement values
Parent company, 2016	Nom. amount	Book value	Nom. amount	Book value
Options	96,395	4,106	87,081	4,302
Futures	2,648,610	1,212	2,452,956	1,375
Swaps	3,251,815	80,854	2,718,139	57,090
Interest-related ofwhich, cleared	5,996,820 259,000	86,172	5,258,176 178,500	62,767
Options	147,641	2,991	123,246	2,977
Futures	336,700	13,097	261,143	9,901
Swaps	1,608,724	47,056	1,786,265	48,537
Currency-related ofwhich, cleared	2,093,065	63,144	2,170,654	61,415
Options	31,059	2,378	19,808	756
Futures		17		35
Swaps	667,259	1,339	32,271	1,064
Equity-related ofwhich, cleared	698,318	3,734	52,079 15	1,855
Options	33,201	1,905	66,174	2,203
Futures	35,642	3,896	19,298	4,217
Swaps	13,395	922	117	1,376
Other ofwhich, cleared	82,238 29,209	6,723	85,589 5,111	7,796
TOTAL ofwhich, cleared	8,870,441 288,209	159,773	7,566,498 183,626	133,833
2015
Options	96,923	4,046	86,809	4,140
Futures	1,467,272	1,035	4,650,470	1,150
Swaps	3,395,516	103,453	3,294,071	84,113
Interest-related	4,959,711	108,534	8,031,350	89,403
ofwhich, cleared	1,466,794	1,035	4,650,470	1,150
Options	194,702	4,544	165,845	3,838
Futures	440,758	12,071	475,683	10,342
Swaps	1,857,531	40,693	1,751,853	42,295
Currency-related ofwhich, cleared	2,492,991	57,308 2	2,393,381	56,475 24
Options	30,149	2,876	28,430	1,325
Futures		14		19
Swaps	76,952	1,868	87,901	3,429
Equity-related ofwhich, cleared	107,101	4,758 206	116,331	4,773 180
Options	51,945	2,701	54,867	2,745
Futures	39,870	6,504	25,935	7,279
Swaps	15,442	1,201	26,930	1,629
Other ofwhich, cleared	107,257 27,287	10,406 584	107,732 4,843	11,653 3,392
TOTAL	7,667,060	181,006	10,648,794	162,304
ofwhich, cleared	1,494,081	1,827	4,655,313	4,746

43 Future minimum lease payments for operational leases*

	Group		Parent company
	2016	2015	2016	2015
Year 2016		1,218		821
Year 2017	1,274	1,259	885	912
Year 2018	1,048	1,232	721	936
Year 2019	791	715	549	445
Year 2020	683	644	465	387
Year 2021 and later 1)	5,439	4,855	4,914	4,150
TOTAL	9,235	9,923	7,534	7,651

* Leasesfor premises and other operational leases.

1) In 2014 SEB signed a longterm rental agreement for newpremisesin Stockholm replacing several agreements expiring shortly.

44 Finance leases*

	Group
	2016	2015
Book value	61,039	62,097
Grossinvestment	65,924	67,126
Present value of minimum lease payment receivables	60,074	60,153
Unearned finance income	4,668	4,881
The unguaranteed residual value	463	431
Reserve for impaired uncollectable minimum lease payments	–199	–187

* Financial leaseswhere SEB isthe lessor.

	Group 2016			Group 2015
	Book value	Gross investment	Present value	Book value	Gross investment	Present value
Remaining maturity
– maximum 1 year	6,240	6,983	6,740	7,162	7,968	7,153
– more than 1 year but maximum 5 years	27,666	28,830	27,151	25,528	26,481	25,273
– more than 5 years	27,133	30,111	26,183	29,407	32,677	27,727
TOTAL	61,039	65,924	60,074	62,097	67,126	60,153

The leased assets mainly comprise transport vehicles, machinery and facilities. The largest lease engagement amountsto SEK 7.5 billion (7.9).

45 Assets and liabilities distributed by main currencies

Group, 2016	SEK	EUR	USD	GBP	DKK	NOK	Other	Total
Cash and cash balances and loansto central banks	61,808	83,837	55,755	126	5,595	124	10,563	217,808
Loansto credit institutions	1,410	13,101	26,444	2,565	1,572	557	4,878	50,527
Loansto the public Other financial assets	842,883 396,970	318,592 210,719	134,739 101,198	18,311 10,483	54,365 105,136	62,143 23,214	21,986 10,038	1,453,019 857,758
Other assets	19,983	9,333	975	598	9,558	451	636	41,534
TOTALASSETS	1,323,054	635,582	319,111	32,083	176,226	86,489	48,101	2,620,646
Depositsfrom central banks	304	21,323	26,398	2,301	0	0	4,066	54,392
Depositsfrom credit institutions Deposits and borrowing from the public	18,265 483,722	23,594 249,599	6,969 143,092	134 26,381	10,313 15,839	2,663 27,388	3,534 16,007	65,472 962,028
Other financial liabilities	563,111	355,529	259,103	23,351	46,240	9,030	4,421	1,260,785
Other liabilities	27,976	8,863	2,411	1,058	93,783	1,680	1,222	136,993
Total equity	140,976							140,976
TOTAL LIABILITIES ANDEQUITY	1,234,354	658,908	437,973	53,225	166,175	40,761	29,250	2,620,646
2015
Cash and cash balances and loansto central banks	25,135	53,378	46,678	145	3	6,703	1,609	133,651 58,542
Loansto credit institutions Loansto the public	4,464 776,912	21,928 302,968	21,441 121,115	2,798 18,924	4,163 70,616	394 43,636	3,354 19,215	1,353,386
Other financial assets	444,596	211,477	86,389	21,924	102,974	17,502	15,005	899,867
Other assets	26,801	12,029	754	360	9,909	249	416	50,518
TOTALASSETS	1,277,908	601,780	276,377	44,151	187,665	68,484	39,599	2,495,964
Depositsfrom central banks Depositsfrom credit institutions	880 14,512	1,534 15,387	49,347 11,892	1,254 440	942 8,877	3,532 5,630	783 3,496	58,272 60,234
Deposits and borrowing from the public	448,094	257,489	105,192	20,726	15,520	24,116	12,648	883,785
Other financial liabilities	566,395	331,523	223,726	32,250	48,239	10,540	3,165	1,215,838
Other liabilities	34,172	3,529	4,749	1,841	87,845	1,194	1,707	135,037
Total equity	142,798							142,798
TOTAL LIABILITIES ANDEQUITY	1,206,851	609,462	394,906	56,511	161,423	45,012	21,799	2,495,964
Parent company, 2016	SEK	EUR	USD	GBP	DKK	NOK	Other	Total
Cash and cash balanceswith central banks	154	3,505	55,659		1,656	65	9,632	70,671
Loansto credit institutions	74,309	156,123	30,507	4,938	8,308	5,260	7,614	287,059
Loansto the public	802,335	103,325	126,832	13,018	53,500	54,893	18,192	1,172,095
Other financial assets Other assets	175,607 18,312	112,558 21,193	66,908 1,391	8,326 1,848	27,588 1,509	23,073 3,036	8,245 425	422,305 47,714
TOTALASSETS	1,070,717	396,704	281,297	28,130	92,561	86,327	44,108	1,999,844
Depositsfrom central banks	304	21,153	26,377	2,301			4,065	54,200
Depositsfrom credit institutions	33,038	47,667	14,693	1,041	10,297	4,453	3,463	114,652
Deposits and borrowing from the public	475,728	95,457	131,139	24,710	16,228	25,648	13,674	782,584
Other financial liabilities Other liabilities	368,972 4,071	245,943 247	253,462 1,929	20,842 870	13,751 453	8,992 1,100	3,488 1,153	915,450 9,823
Shareholders' equity and untaxed reserves	123,135							123,135
TOTAL LIABILITIES ANDEQUITY	1,005,248	410,467	427,600	49,764	40,729	40,193	25,843	1,999,844
2015
Cash and cash balanceswith central banks	171	7,688	46,594			3	1,256	55,712
Loansto credit institutions Loansto the public	32,290 735,993	94,102 95,456	17,465 113,708	1,615 13,106	4,707 69,754	11,530 36,476	4,558 15,945	166,267 1,080,438
Other financial assets	241,826	125,893	59,786	19,333	37,933	17,425	14,512	516,708
Other assets	20,460	19,959	898	1,771	1,166	2,918	308	47,480
TOTALASSETS	1,030,740	343,098	238,451	35,825	113,560	68,352	36,579	1,866,605
Depositsfrom central banks	879	1,521	49,346	1,254	942	3,532	784	58,258
Depositsfrom credit institutions	19,871	25,365	12,941	541	8,051	6,703	3,086	76,558
Deposits and borrowing from the public Other financial liabilities	439,284 386,022	86,280 235,157	94,163 220,115	19,197 31,017	17,673 20,335	22,692 10,286	11,012 2,689	690,301 905,621
Other liabilities	4,589	3,734	1,752	442	1,352	1,302	1,450	14,621
Shareholders' equity and untaxed reserves	121,246							121,246
TOTAL LIABILITIES ANDEQUITY	971,891	352,057	378,317	52,451	48,353	44,515	19,021	1,866,605

46 Life insurance operations

	Group
INCOME STATEMENT	2016	2015
Premium income, net	9,268	7,244
Income investment contracts
– Own feesincluding risk gain/loss – Commissionsfrom fund companies	1,499 1,735	1,556 1,811
	3,234	3,367
Net investment income	6,704	1,876
Other operating income	473	516
Total income, gross	19,679	13,003
Claims paid, net	–8,949	–11,228
Change in insurance contract provisions	–5,534	3,170
Total income, net	5,196	4,945
Ofwhich from other units within the SEB group	1,521	1,645
Expensesfor acquisition of investment and insurance contracts
– Acquisition costs	–1,670	–1,765
– Change in deferred acquisition costs	–84	46
	–1,754	–1,719
Administrative expenses	–1,052	–1,028
Total expenses	–2,806	–2,747
OPERATING PROFIT	2,390	2,198

CHANGE INSURPLUS VALUES INDIVISIONLIFE

Present value of newsales 1)	1,208	950
Return on existing policies	1,781	1,655
Realised surplus value in existing policies	–2,915	–2,907
Actual outcome compared to assumptions 2)	371	402
Change in surplus values from ongoing business, gross	445	100
Capitalisation of acquisition costs	–859	–1,027
Amortisation of capitalised acquisition costs	943	981
Change in deferred front end fees	–45	16
Change in surplus values from ongoing business, net 3)	484	70
Financial effects due to short­term market fluctuations 4)	531	42
Change in assumptions 5)	202	571
TOTAL CHANGE INSURPLUS VALUES 6)	1,217	683

Calculations ofsurplus value in the life insurance operations are based on assumptions of the future development of existing insurance contracts and a riskadjusted discount rate. The most important assumptions(Swedish unitlinked – which represent 65 per cent (71) of the totalsurplus value).

Discount rate	7.0%	7.0%
Surrender of endowment insurance contracts: contractssigned within 1 year/ 1–4 years/ 5 years/ 6 years/thereafter	2%/ 6%/ 20%/ 15%/ 10%	1%/7%/22%/18%/11%
Lapse rate of regular premiums, unit­linked	8.1%	8.2%
Growth in fund units, gross before fees and taxes	5.0%	5.0%
Inflation CPI/Inflation expenses	2% / 3%	2% / 3%
Expected return on solvency margin	3%	3%
Right to transfer policy, unit­linked	3.0%	3.2%
Mortality	The Group's experience	The Group's experience

1) Sales defined as newcontracts and extra premiumsin existing contracts.

2) The actual outcome of previously signed contractsis compared with previous assumptions and deviations are calculated. Important components are the duration of contracts and cancellations.

3) Acquisition costs are capitalised and amortised according to plan. Certain front end fees are also recorded on the balance sheet and recognized asrevenue in the income statement during several years. The reported change in surplus valuesis adjusted by the net effect of changesin deferred acquisition costs and front end fees during the period.

4) Assumed investment return (growth in fund values) is 5.0 per cent gross before fees and taxes. Actual returnsresultsin positive or negative financial effects.

5) Effect of changesin assumptionssuch asfrequency ofsurrenders, transfers out and assumed expenses.

6) The calculated surplus value is not included in the SEB Group's consolidated accounts. The surplus value is net of capitalised acquisition costs and deferred front end fees.

Note 46 continued Life insurance operations

SUMMARISEDFINANCIAL INFORMATIONFOR GAMLA LIVFÖRSÄKRINGSBOLAGET SEB TRYGG LIV*

Income statement, condensed	2016	2015
Life insurance technical result	8,384	7,511
Other costs and appropriations		95
Taxes	–210	–501
NET RESULT	8,174	7,105

Balance sheet, condensed

Total assets	179,769	177,100
TOTALASSETS	179,769	177,100
Total liabilities Consolidation fund / equity Untaxed reserves	87,666 91,919 184	87,481 89,435 184
TOTAL LIABILITIES ANDEQUITY	179,769	177,100

* SEB owns allshares of Gamla Livförsäkringsbolaget SEB Trygg Liv except for a golden share owned by TryggStiftelsen. Gamla Livförsäkringsbolaget SEB Trygg Liv is not consolidated assubsidiary of the Group,since the ownership of SEB in Gamla Livförsäkringsbolaget SEB Trygg Liv does not result in control. Current year figures are unaudited.

47 Assets in unitlinked operations

Within the unitlinked business SEB holds, for its customers' account, a share of more than 50 per cent in 23 (29) funds, where SEB isthe investment manager.

The total value of those funds amounted to SEK 104,003m (100,879) of which SEB, for its customers' account, holds SEK 74,944m (70,777).

48 Assets held for sale

	Group
	2016	2015
Other assets	587	801
TOTALASSETSHELDFOR SALE	587	801

The Baltic division has a divestment plan for investment properties. Through the continuation of the plan, additional properties were reclassified as assets held for sale until the derecognition at concluded sales agreement. The impairment loss recognised in association with the reclassifications amounted to SEK 200m (174).

The SEB Group

Income Statement

SEK m	2016	20151)	20141)	20131)	20121)
Net interest income	18,738	18,938	19,943	18,827	17,635
Net fee and commission income	16,628	18,345	17,547	15,835	14,602
Net financial income	7,056	5,478	4,473	5,581	6,309
Net other income	1,349	1,002	4,534	840	–341
Total operating income	43,771	43,763	46,497	41,083	38,205
Staff costs	–14,562	–14,436	–13,760	–14,029	–14,596
Other expenses	–6,703	–6,355	–6,815	–6,720	–6,663
Depreciation, amortisation and impairment
of tangible and intangible assets	–6,496	–1,011	–1,129	–1,068	–1,775
Total operating expenses	–27,761	–21,802	–21,704	–21,817	–23,034
Gainslesslosses on disposals of tangible and intangible assets	–150	–213	–121	16	1
Net credit losses	–993	–883	–1,324	–1,155	–937
Operating profit	14,867	20,865	23,348	18,127	14,235
Income tax expense	–4,249	–4,284	–4,129	–3,338	–2,093
Net profitfrom continuing operations	10,618	16,581	19,219	14,789	12,142
Discontinued operations				–11	–488
NET PROFIT	10,618	16,581	19,219	14,778	11,654
Attributable to minority interests			1	7	22
Attributable to equity holders	10,618	16,581	19,218	14,771	11,632

1) Comparable figuresfor 2014 and 2015 restated and comparable figuresfor 2012 and 2013 recalculated pro forma in linewith changed reporting of life insurance business.

Balance sheetstatement

SEK m	2016	2015	2014	2013	2012
Cash and cash balances and loansto central banks	217,808	133,651	119,915	183,611	209,163
Loansto credit institutions	50,527	58,542	90,945	102,623	126,023
Loansto the public	1,453,019	1,353,386	1,355,680	1,302,568	1,236,088
Other financial assets	857,758	899,867	1,024,466	845,788	831,512
Other assets	41,534	50,518	50,240	50,244	50,670
TOTALASSETS	2,620,646	2,495,964	2,641,246	2,484,834	2,453,456
Depositsfrom central banks and credit institutions	119,864	118,506	115,186	176,191	170,656
Deposits and borrowing from the public	962,028	883,785	943,114	849,475	862,260
Other financial liabilities	1,260,785	1,215,838	1,303,584	1,204,991	1,173,414
Other liabilities	136,993	135,037	144,786	131,363	137,613
Total equity	140,976	142,798	134,576	122,814	109,513
TOTAL LIABILITIES ANDEQUITY	2,620,646	2,495,964	2,641,246	2,484,834	2,453,456

Key figures

	2016	2015	2014	2013	2012
Return on equity,%	7.80	12.24	15.25	13.11	11.06
Basic earnings pershare, SEK	4.88	7.57	8.79	6.74	5.31
Cost/Income ratio	0.63	0.50	0.47	0.54	0.61
Credit losslevel,%	0.07	0.06	0.09	0.09	0.08
Total reserve ratio for individually impaired loans,%	68.8	68.3	62.2	86.9	74.4
Grosslevel of impaired loans,%	0.33	0.35	0.49	0.35	0.58
Common Equity Tier 1 capital ratio1) ,%	18.8	18.8	16.3	15.0
Tier 1 capital ratio1) ,%	21.2	21.3	19.5	17.1
Total capital ratio1) ,%	24.8	23.8	22.2	18.1

1) Basel III.

Skandinaviska Enskilda Banken

Income Statement

SEK m	2016	2015	2014	2013	2012
Net interest income	19,242	19,488	19,783	18,872	17,478
Net fee and commission income	8,843	9,200	9,235	8,283	7,439
Net financial income	4,642	3,428	2,121	3,547	4,046
Other income	7,398	9,165	5,089	6,838	2,374
Total operating income	40,125	41,281	36,228	37,540	31,337
Administrative expenses	–15,039	–13,458	–13,909	–14,062	–15,077
Depreciation, amortisation and impairment
of tangible and intangible assets	–5,775	–5,447	–5,157	–5,024	–5,446
Total operating costs	–20,814	–18,905	–19,066	–19,086	–20,523
Profit before creditlosses	19,311	22,376	17,162	18,454	10,814
Net credit losses	–789	–520	–1,065	–451	–385
Impairment of financial assets	–3,841	–775	–2,721	–1,691	–1,114
Operating profit	14,681	21,081	13,376	16,312	9,315
Appropriationsincluding pension compensation	2,437	781	966	3,432	–3,175
Taxes	–2,740	–3,817	–2,053	–2,805	–1,375
NET PROFIT	14,378	18,045	12,289	16,939	4,765

Balance sheetstatement

SEK m	2016	2015	2014	2013	2012
Cash and cash balanceswith central banks	70,671	55,712	59,170	135,309	165,994
Loansto credit institutions	287,059	166,267	194,285	183,312	200,189
Loansto the public	1,172,095	1,080,438	1,056,807	1,013,188	937,734
Other financial assets	422,305	516,708	623,920	523,970	551,544
Other assets	47,714	47,480	51,960	48,379	53,592
TOTALASSETS	1,999,844	1,866,605	1,986,142	1,904,158	1,909,053
Depositsfrom central banks and credit institutions	168,852	134,816	144,776	210,237	199,711
Deposits and borrowing from the public	782,584	690,301	706,452	611,234	637,721
Other financial liabilities	915,450	905,621	1,002,762	958,231	951,307
Other liabilities	9,823	14,621	17,587	17,006	20,638
Shareholders' equity and untaxed reserves	123,135	121,246	114,565	107,450	99,676
TOTAL LIABILITIES,UNTAXEDRESERVES ANDSHAREHOLDERS' EQUITY	1,999,844	1,866,605	1,986,142	1,904,158	1,909,053

Key figures

	2016	2015	2014	2013	2012
Return on equity,%	12.6	16.5	11.8	17.7	5.2
Cost/Income ratio	0.52	0.46	0.53	0.51	0.65
Credit losslevel,%	0.06	0.04	0.09	0.04	0.03
Grosslevel of impaired loans,%	0.22	0.17	0.31	0.08	0.09
Common Equity Tier 1 capital ratio1) ,%	18.8	19.2	16.2	16.3
Tier 1 capital ratio1) ,%	21.7	22.1	20.0	18.9
Total capital ratio1) ,%	26.1	25.0	23.1	20.0

1) Basel III.

Proposal for the distribution of profit

Standing atthe disposal oftheAnnual General Meeting in accor dance with the balance sheet of Skandinaviska Enskilda BankenAB:

Total	66,731,708,458 1)
Net profit forthe year	14,377,501,699
Retained earnings	48,782,509,686
Otherreserves	3,571,697,073
	SEK

1) The Parent Company's equity would have been SEK 16,203m lowerif assets and liabilities had not been measured at fair value in accordance with Chapter 4, Section 14 of the Swedish Annual Accounts Act.

It is the assessment of the Board of Directors that the proposed dividend is justifiable considering the demands which are imposed by the nature, scope, and risks associated with the business and the size of the Parent company's and the Group's equity and need for consolidation, liquidity and financial position in general.

The Board of Directors and the President declare that the consoli dated financial statements have been prepared in accordance with IFRS as adopted by the EU and give a relevant and faithfulrepresentation of the Group's financial position and results of operations.

The Board proposes that,following approval ofthe balance sheet of Skandinaviska Enskilda BankenAB forthe financial year 2016,the Annual General Meeting should distribute the earnings as follows:

Total	66,731,708,458
– retained earnings	54,663,763,547
To be carried forward to:
– SEK 5.50 per Series C share	132,838,794
– SEK 5.50 per Series A share	11,935,106,117
Dividend to shareholders:	SEK

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 Report of the Directors forthe Group and the Parent company provides a fairreview of the development of the Group's and the Parent company's operations, financial position and results of operations and describes materialrisks and uncertainties facing the Parent company and companies included in the Group.

Stockholm 21 February 2017 Helena Saxon Director Sara Öhrvall Director Anna-Karin Glimström Director Appointed by the employees Håkan Westerberg Director Appointed by the employees Winnie Fok Director Birgitta Kantola Director Tomas Nicolin Director Sven Nyman Director Johan H. Andresen Director Signhild Arnegård Hansen Director Samir Brikho Director Urban Jansson Deputy chairman Jesper Ovesen Deputy chairman Marcus Wallenberg Chairman

Annika Falkengren President and Chief Executive Officer Director

154 SEB Annual Report ²⁰¹⁶

Auditor'sreport

To the annual general meeting of the shareholders of Skandinaviska Enskilda Banken AB (publ), Corporate Identity Number 502032-9081

Report on the annual accounts and consolidated accounts

Opinions We have audited the annual accounts and consolidated accounts of Skandinaviska Enskilda Banken AB (SEB) forthe year 2016. The annual accounts and consolidated accounts of the company are included on pages 29–154 in this document.

In our opinion, the annual accounts and consolidated accounts have been prepared in accordance with the Annual Accounts Act for CreditInstitutions and Securities Companies and present fairly, in all materialrespects, the financial position of the parent company as of 31 December 2016 and its financial performance and cash flow forthe yearthen ended in accordance with the Annual Accounts Act for CreditInstitutions and Securities Companies. The consolidated accounts have been prepared in accordance with the Annual Accounts Act for CreditInstitutions and Securities Companies and present fairly, in all materialrespects, the financial position of the group as of 31 December 2016 and their financial performance and cash flow forthe yearthen ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act for CreditInstitutions and Securities Companies. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. A Corporate Governance Report has been prepared. The information provided in this Corporate Governance Report and in the statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. The information in the Corporate Governance Report is in accordance with the stipulations of the Annual Accounts Act for CreditInstitutions and Securities Companies.

We therefore recommend that the general meeting of sharehold ers adopts the income statement and balance sheet forthe parent company and the group.

Basis for opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Ourresponsibilities underthose standards are further described in the Auditor's Responsibilities section. We are indepen dent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethicalresponsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Our audit approach

We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial state ments.In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of

internal controls, including among other matters consideration of whetherthere was evidence of bias thatrepresented a risk of material misstatement due to fraud.

We tailored the scope of our audit in orderto perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates.

The SEB group has centralized service centers, systems and processes and has a centralized finance function forits Swedish entities and branches in the Nordic countries and the UK. We have organized the audit work by having our central audit team to carry out the testing of all centralized systems and processes and the local audit teams to carry out additional testing based on ourinstruc tions.

Full scope audit is performed at entities with high significance and risk to the group. The audit is carried out in accordance with International Standards on Audit and local auditrequirements. The procedures applied generally include an assessment and testing of controls over key business processes, analytical procedures of individual account balances, tests of accounting records through inspection, observation or confirmation, and obtaining corrobo rating evidential matterin response to inquiries.

For some entities, even though not considered to have high significance orrisk, it is required from a group audit perspective to obtain assurance on certain accounting areas.In these cases, local audit teams are instructed to perform certain procedures and report back to us. The procedures applied generally include a detailed analytical review,reconciliation to underlying sub-ledgers, substantive testing for specific processes, areas and accounts, discussion with managementregarding accounting, tax and internal control as well as follow-ups on known issues from previous periods.

As part of our audit we place reliance on internal controls forthe applications/systems and related platforms that support SEB's accounting and financialreporting. Therefore, we perform audit procedures to determine that systems and processes are designed, maintained, operated and kept secure in such a way as to provide assurance that the risk of erroris minimized. The audit procedures include walk-throughs of processes and evaluation of design and test of effectiveness of controls. Substantive testing has also been performed. Where possible we have relied on management's own evaluation activities and audits performed by SEB Internal Audit.

Our audit is carried out continuously during the year with special attention at each quarter end.In connection with the SEB group's issuance of interim reports, we report our observations to the Audit Committee of the Board of Directors and issue interim review reports. At the end of the year, we also report our main observations to the full Board of Directors.

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually orin the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality forthe consolidated financial statements as a whole as set out in the table below. These, together with qualitative consider ations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in the aggregate on the financial statements as a whole.

Key audit matters

Key audit matters of the audit are those matters that, in our professional judgement, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the Key audit matter

Impairment of loans to customers

Accounting forimpairment of loans to customers require subjective judgement over both timing ofrecognition of impairment and the size of any such impairment.

SEB makes provisions forincurred credit losses on individually assessed loans and for portfolio assessed loans. Loans to corpo rate,real estate and institutional counterparties are primarily individually assessed and specific provisions are made foridentified impaired loans (individually assessed impaired loans). Loans that have not been deemed to be impaired on an individual basis and which have similar creditrisk characteristics are grouped together and assessed collectively forimpairment. Valuations of loans to private individuals and small businesses are to a large extent made on a portfolio basis (portfolio assessed loans). Referto the Annual Report Note 17a – Creditrisk and Note 19 – Loans.

Valuation of financial instruments held at fair value

The valuation of financial instruments held at fair value was an area of audit focus due to their significance in presenting both financial position and performance.

Determining fair value of financial instruments is inherently complex as many instruments are complex and as risks and market prices are ever changing. For some instruments there is also limited availability of observable prices orrates. Because of these factors, the valuation of some instruments involves significant management judgement.

The majority of SEB's assets and liabilities measured at fair value are held for client facilitation, liquidity or hedging purposes. Between 97-98% of the positions are fair valued based on observable prices orrates traded in active markets. The remaining 2-3% of the positions are valued based on models and are mainly venture capital holdings and certain derivatives held for hedging purposes.

Referto the Annual Report Note 21 – Fair value measurement of assets and liabilities, Note 22 –Financial assets at fair value through profit orloss, Note 23 – Available-for-sale financial assets, Note 24 – Investmentsin associates and Note 31 – Financial liabilities at fair value through profit and loss.

Our audit included a combination of testing of internalcontrols over financialreporting and substantive testing. The testing of internal controlsincluded proceduresrelating to the governance structure, segregation of duties and key controlsin the lending processes. Substantive testingwas made of a sample of provisioning models used, largercredits and higherrisk portfolios.In 2016, we had a special focus on loansto customersin the oil, gas and offshore as well asshipping industries. We also reviewed SEB's back testing ofcollective provisions.

Based on our work, we had no material observationsforthe overall audit on the level of loan loss provisions as at 31 December 2016.

In our audit, we assessed the design and tested the operating effectiveness of key controlssupporting the identification, measurement and oversight of valuation risk of financial instruments.

In addition to test appropriate segregation of duties, we examined SEB'sindependent price verification process, model validation and approval processes,controls over data feeds and valuation inputs as well as SEB's governance and reporting processes and controls. We paid particular attention to controlsrelating to complex instruments.

For valuations dependent on unobservable inputs or which involved a higher degree of judgement for otherreasons, we used our valuation specialiststo evaluate the assumptions, methodologies and models used by SEB. We performed independent valuations of a sample of positions.

Based on our work, we had no material observationsforthe overall audit on the valuation of financial instruments held at market value as at 31 December 2016.

Key audit matter How our audit addressed the Key audit matter

Provision for uncertain tax positions

SEB is subject to taxation in many jurisdictions and, in many cases, the final tax treatment is uncertain and not determined untilresolved with the relevant tax authority. Consequently, SEB make judgements about the probability and amount of tax liabilities which are subject to assessments by tax authorities and poten tially associated with legal processes.

Additionally, tax legislation is under significant and rapid change which when becoming effective affect both current period tax costs and the valuation of tax assets.

Referto the Annualreport Note 15 – Taxes and Note 32 – Other liabilities.

In our audit of tax costs and valuation of tax assets and liabilities, we have tested internalcontrols and performed substantive testing. The testing of internalcontrolsincluded proceduresrelating to the gover nance structure,segregation of duties and key controlsin the tax process.

In the substantive testing we have used ourtax specialiststo examine potential implications of ongoing tax audits and legal processes. We have followed correspondence with tax authorities and opinions SEB received from its external legal advisers. We have also independently examined the mattersin dispute and the provisions made by SEB.

Based on our work, we had no material observationsforthe overall audit on the level of provisionsfor uncertain tax positions as at 31 December 2016.

Impairment of goodwill

SEB has as of 1 January 2016 reorganised into customer segments. Afterthe reorganisation, goodwill is monitored on the level of business unit per geography (previously divisions).

The allocation of goodwill from divisions to business units per geography (the new cash-generating units, CGUs) has been based on the original acquisitions where the goodwill was originated.

Impairment tests have been performed forthe goodwill in the new CGUs,respectively. The definition of new CGUs and realloca tion of goodwill as well as subsequent impairment tests have involved significant management judgement.

Referto the Annual Report Note 28 – Tangible and Intangible Assets and the Annual Report's Report of the Directors.

Other Information than the annual accounts and consolidated accounts

This document also contains otherinformation than the annual accounts and consolidated accounts which is found on pages 1-28. The Board of Directors and the President are responsible forthis otherinformation.

Our opinion on the annual accounts and consolidated accounts does not coverthis otherinformation and we do not express any form of assurance conclusion regarding this otherinformation.

In connection with our audit of the annual accounts and consoli-

Our audit of the goodwill impairment hasincluded the following proce dures:

• • Review ofcompliance with IFRS forthe new structure of CGUs
• • Review ofcompliance with IFRS forthe method used forrealloca tion of goodwill from old to new CGUs
• • Reconciliation of book value per CGU to general ledger
• • Reconciliation of projections used for 2016-2018 to the business plan for SEB approved by the Board of Directors.

Based on our work, we had no material observationsforthe overall audit on SEB'simpairment of goodwill.

dated accounts, ourresponsibility is to read the information identified above and consider whetherthe information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge other wise obtained in the audit and assess whetherthe information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this otherinforma tion, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the President

The Board of Directors and the President are responsible forthe preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act for CreditInstitutions and Securities Companies and, concerning the consolidated accounts, in accordance with Interna tional Financial Reporting Standards as adopted by the EU and the Annual Accounts Act for CreditInstitutions and Securities Compa nies. The Board of Directors and the President are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the President are responsible forthe assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the President intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among otherthings oversee the company's financialreporting process.

Auditor's responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually orin the aggre gate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

A further description of ourresponsibility forthe audit of the annual accounts and consolidated accounts is available on Revisorsnämnden's website: www.revisorsinspektionen.se/rn/show document/documents/rev_dok/revisors_ansvar.pdf. This descrip tion is part of the auditor´s report.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the President of Skandinaviska Enskilda Banken AB forthe year 2016 and the proposed appropriations of the company's profit orloss.

We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statu tory administration report and that the members of the Board of Directors and the President be discharged from liability forthe financial year.

Basis for Opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Ourresponsibilities underthose standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethicalresponsibilities in accor dance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the President

The Board of Directors is responsible forthe proposal for appropria tions of the company's profit orloss. At the proposal of a dividend, this includes an assessment of whetherthe dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible forthe company's organisation and the administration of the company's affairs. This includes among otherthings continuous assessment of the company's and the group's financial situation and ensuring that the company's organisation is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The President shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfil the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors orthe President in any materialrespect:

• has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
• in any other way has acted in contravention of the Companies Act, the Banking and Financing Business Act, the Annual Accounts Act for CreditInstitutions and Securities Companies orthe Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit orloss, and thereby our opinion about this, is to assess with reasonable degree of assurance whetherthe proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, orthat the proposed appropriations of the company's profit orloss are not in accordance with the Companies Act.

A further description of ourresponsibility forthe audit of the administration is available on Revisorsnämnden's website: www. revisorsinspektionen.se/rn/showdocument/documents/rev_dok/ revisors_ansvar.pdf. This description is part of the auditor´s report.

Stockholm 21 February 2017 PricewaterhouseCoopers AB

Peter Nyllinge Authorised Public Accountant Partnerin charge

Definitions

Alternative Performance Measures

Return on equity

Net profit attributable to shareholders in relation to average 1) shareholders' equity.

Return on equity excluding items affecting comparability

Net profit attributable to shareholders, excluding items effecting comparability and theirrelated tax effect, in relation toaverage 1) shareholders' equity.

Return on business equity

Operating profit by division,reduced by a standard tax rate, in relation to the divisions' average 1) business equity.

Return on total assets Net profit attributable to shareholders, in relation to average 1) total assets.

Return on risk exposure amount Net profit attributable to shareholders in relation to average 1) risk exposure amount.

Cost/income ratio

Total operating expenses in relation to total operating income.

Cost/income ratio excluding items affecting comparability

Total operating expenses excluding items affecting comparability in relation to total operating income excluding items affecting comparability.

Basic earnings per share

Net profit attributable to shareholders in relation to the weighted average 2) number of shares outstanding.

1) Average year to date,calculated onmonth-end figures. 2) Average,calculated on a daily basis.

Diluted earnings per share Net profit attributable to shareholders in relation to the weighted average 2) diluted number of shares. The calculated dilution is based on the estimated economic value of the long-term incentive programmes.

Net worth per share Shareholders' equity plus the equity portion of any surplus values in the holdings of interest-bearing securities and the surplus value in life insurance operations in relation to the number of shares outstanding.

Equity per share Shareholders' equity divided by the number of shares outstanding.

Credit loss level

Net credit losses as a percentage of the opening balance of loans to the public, loans to credit institutions and loan guarantees less specific, collective and off balance sheet reserves.

Gross level of impaired loans Individually assessed impaired loans, gross, as a percentage of loans to the public and loans to credit institutions before reduction ofreserves.

Net level of impaired loans Individually assessed impaired loans, net (less specific reserves), as a percentage of net loans to the public and loans to credit institutions less specific reserves and collective reserves.

Specific reserve ratio for individually assessed impaired loans Specific reserves as ^a percentage of individu-

ally assessed impaired loans.

Total reserve ratio for individually

assessed impaired loans Totalreserves (specific reserves and collective reserves forindividually assessed impaired loans) as a percentage of individually assessed impaired loans.

Reserve ratio for portfolio assessed loans Collective reserves for portfolio assessed

loans as a percentage of portfolio assessed loans past due more than 60 days orrestruc tured.

Non-performing loans (NPL)

SEB's term forloans that are eitherimpaired or not performing according to the loan contract.Includes individually assessed impaired loans, portfolio assessed loans, past due >60 days and restructured portfolio assessed loans (based on IFRS concessions).

NPL coverage ratio

Totalreserves (specific, collective and off balance sheetreserves) as a percentage of non-performing loans.

NPL per cent of lending

Non-performing loans as a percentage of loans to the public and loans to credit insti tutions before reduction ofreserves.

Items affecting comparability To facilitate the comparison of SEB's operating profit; items that management considers reduce comparability, are identified and separately described, e.g. impairment of goodwill,restructuring and net profit from divestments.

Alternative PerformanceMeasures, APMs, are financialmeasures of historical or future financial performance, financial position, orcash flows, other than those defined in the applicable financial reporting framework(IFRS) or in the EU Capital Requirements Regulation and Directive CRR/CRD IV. APMs are used by SEB when relevant to assess and describe the performance of SEB and provide additional relevant information and toolsto enable a view on SEB's performance. APMs on basic earnings pershare, diluted earnings pershare, net worth pershare, equity pershare, return on equity, return on total assets and return on risk exposure amount provide relevant information on the performance in relation to different investmentmeasurements. The cost/income ratio providesinformation on SEB'scost efficiency. APMs related to lending provide information on provisionsin relation to credit risk. All thesemeasuresmay not be comparable to similarlytitledmeasures used by othercompanies.

See sebgroup.com/irforthe document entitled Alternative Performance Measures which includesinformation on the calculation of alternative performance measures.

Definitions

According to the EU Capital Requirements Regulation no 575/2013 (CRR)

Risk exposure amount Total assets and off balance sheet items, risk-weighted in accordance with capital adequacy regulations for creditrisk and marketrisk. The operationalrisks are measured and added as risk exposure amount. Risk exposure amounts are only defined forthe consolidated situation, excluding insurance entities and exposures deducted from own funds.

Common Equity Tier 1 capital

Shareholders' equity excluding proposed dividend, deferred tax assets, intangible assets and certain otherregulatory adjustments defined in EU Regulation no 575/2013 (CRR).

Tier 1 capital

Common Equity Tier 1 capital plus qualifying forms of subordinated loans, so-called additional tier 1 instruments.

Tier 2 capital

Mainly subordinated loans not qualifying as Tier 1 capital contribution.

Own funds The sum of Tier ¹ and Tier ² capital.

Common Equity Tier 1 capital ratio

Common Equity Tier 1 capital as a percent age ofrisk exposure amount.

Tier 1 capital ratio

Tier 1 capital as a percentage ofrisk exposure amount.

Total capital ratio

Total own funds as a percentage ofrisk exposure amount.

Leverage ratio

Tier 1 capital as a percentage of total assets including off balance sheet items with conversion factors according to the standardised approach.

Liquidity Coverage Ratio (LCR)

High-quality liquid assets in relation to the estimated net cash outflows overthe next 30 calendar days.

Calendar

• 2016 Annual Accounts Publication 1 February 2017 Annual Report Publication on SEB's homepage 7 March 2017 Annual General Meeting 28 March 2017 Interim report January–March 27 April 2017 Interim report January–June 14 July 2017 Interim report January–September 25 October 2017 2017 Annual Accounts Publication 31 January 2018
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CORPORATE WEBSITE Financial information, publications and other information regarding SEB is available atsebgroup.com

Financial information and publications

ANNUAL REPORT Information on SEB's business,strategy, risk management and corporate governance. Detailed information on SEB's financial position and results.

ANNUAL REVIEW An abbreviated version of the Annual Report.

"We have supported our customers all through ayear marked by uncertainty. Business sentiment and customer

INTERIMREPORTS ANDFACT BOOKS Quarterly reports on SEB's financial performance. Detailed information on SEB's financial position and resultsin fact books.

CAPITAL ADEQUACY ANDRISK MANAGEMENT REPORT (PILLAR3) Disclosure on capital adequacy and risk managementin accordance with regulatory requirements.

SUSTAINABILITY REPORT Annual report on SEB's performance and future ambitions within Responsible Business, People and Community as well as Environment.

SUSTAINABILITY FACT BOOK AND GRI INDEX The Global Reporting Initiative (GRI) Index and key non-financial data for the same areas asin the Sustainability Report.

New shareholders are automatically offered a subscription of the Annual Report orthe Annual Review. Order printed copies of the Annual Report and the Annual Review at www.sebgroup.com/ir Subscribe to a digital version of the interim reports and the fact book (pdf) at www.sebgroup.com/press

Customer and market opinions – SEB's most important rankings

SEB's performancewithin different areasisregularly evaluated and ranked by numerous companies and financial magazines.

Area	2016	2015	2014	2013	2012	Organisation / publication etc.
1) Best Nordic bank for large corporations	2	2	1	2	1	Prospera
2) Best Nordic bank for financial institutions	1	4	3	2	7	Prospera
Best Corporate bank in Sweden	1	1	1	2	1	Prospera
Best private bank in Sweden	1	1	1	1		Euromoney
SME bank of the year in Sweden				1	1	Privata affärer
Best Stockbroker in the Nordic region	3	2	1	1	1	Prospera
Best Corporate Finance house, Nordic region 3)	5	4	4	3	N/A	Prospera
Best Corporate Bank in the Baltic region	4)	5)	1	6)	1	The Banker

1) Survey of Nordiclarge corporations. 2) Survey of Nordic financial institutions. 3) Global investment banks are included asfrom2013. 4) Best bankin Estonia. 5) Best bankin Estonia and Lithuania. 6) Best bankin Estonia and Latvia.

Annual General Meeting

The Annual General Meeting will be held on Tuesday 28 March 2017 at 1 pm (CET) at Stockholm Concert Hall, Hötorget.

A notice convening the Annual General Meeting, including an agenda, is available on www.sebgroup.com

Shareholders who wish to attend the Annual General Meeting shall atthe latest on Wednesday 22 March 2017:

• be registered in the shareholders'register kept by Euroclear SwedenAB, and
• notify the bank in either of the following ways:
  • by telephone 0771 23 18 18 (+46 771 23 18 18 from outside Sweden) between 9 am and 4.30 pm (CET) or
  • via the internet on www.sebgroup.com or
  • in writing to the following address: Skandinaviska Enskilda Banken AB, AGM, Box 7832, SE-103 98 Stockholm, Sweden.

Dividend

The Board proposes a dividend of SEK 5.50 per share for 2016.

Thursday 30 March 2017, is proposed as record date forthe dividend payments.If the Annual General Meeting resolves in accordance with the proposal, the share will be traded ex-dividend on Wednesday 29 March 2017 and dividend payments are expected to be distributed by Euroclear Sweden AB on Tuesday 4 April 2017.

Head office

Postal address: SEB, SE-106 40 Stockholm Visiting address: Kungsträdgårdsgatan 8, Stockholm Telephone: +46 771 62 10 00 +46 8 22 19 00 (management)

Contacts

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

Jonas Söderberg Head ofInvestor Relations Telephone: +4687638319 E-mail: jonas.soderberg@seb.se Viveka Hirdman-Ryrberg Head of Group Communications Telephone: +46 8 763 85 77 E-mail: viveka.hirdman-ryrberg@seb.se

Malin Schenkenberg FinancialInformation Officer Telephone: +46 8 763 95 31 E-mail: malin.schenkenberg@seb.se

Skandinaviska Enskilda Banken AB's corporate registration number: 502032-9081

Production:SEB and IntellectaCorporatePhotos:GettyShutterstock,Hans-ErikNygren,Joachim Lundgren and othersPrinting:ElandersSEGR0125

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