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SEB — Interim / Quarterly Report 2013
Apr 23, 2013
2966_rns_2013-04-23_c5b9d9ed-4a55-4dbd-9a95-e83ae1593005.pdf
Interim / Quarterly Report
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Interim Report January – March 2013
STOCKHOLM 23 APRIL 2013
" In the restrained business sentiment, we have continued to strengthen our market franchise in all of our core markets and attracted new customers."
Annika Falkengren
Overview - the first quarter 2013
Result
(compared to the first quarter 2012)
- Operating profit SEK 3.7bn (3.7)
- Operating income SEK 9.6bn (9.6). Operating expenses SEK 5.6bn (5.7).
- Net interest income SEK 4.5bn (4.2), net fee and commission income SEK 3.2bn (3.3) and net financial income SEK 1.0bn (1.4).
- Net credit provisions SEK 256m (206) corresponding to a credit loss level of 0.07 per cent.
- Net profit SEK 3.0bn (2.6).
- Return on equity 11.0 per cent (10.1) and earnings per share SEK 1.37 (1.19).
Volumes
- Lending to the public amounted to SEK 1,240bn, an increase of SEK 4bn and 39bn from year-end and one year ago, respectively.
- Deposits from the public amounted to SEK 921bn, up by SEK 59bn and SEK 138bn, from year-end and one year ago respectively.
Capital and funding
- The core Tier 1 capital ratio was 15.3 per cent and the Tier 1 capital ratio was 16.7 per cent. The Common Equity Tier 1 ratio (Basel III) according to best estimate was 13.4 per cent.
- The liquidity coverage ratio was 111 per cent.
- The core liquidity reserve amounted to SEK 410bn and the total liquid resources amounted to SEK 685bn.
11.2 11.1 11.3 10.1 9.9
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13
* Basel II with (lower) and without transitional floors (higher)
President's comment
The first quarter was marked by renewed uncertainty in the financial markets following the handling of the Cyprus bail-out, continued deleveraging, weak economic data from a large part of Europe, and increasing tension in Asia. This has impacted also the Nordic region. We still anticipate a long and bumpy road ahead before the world economy will return to a more normal growth trend.
A stable first quarter
SEB reported an operating profit of SEK 3.7bn in the first quarter, up 2 per cent compared to a year ago. In the restrained business sentiment, we have continued to attract new customers and strengthen our market franchise in all of our core markets.
Large corporates have been affected by the subdued economic climate. They have strong balance sheets, but operate in a restrained investment mode. This was reflected in Merchant Banking's result. Large corporate customers continue to tap the bond market and in the prevailing low interest environment financial institutions search yield across all asset classes. Equity capital markets activity was low.
The small and medium-sized corporates that are more directed towards the domestic Swedish economy have been more active. Lending to SMEs increased by 9 per cent compared to a year ago and we have attracted 3 400 new SME customers since year-end.
Among private individuals we have seen an increased demand for advisory services, not the least in the savings area. The reallocation towards more equity-based savings continued also this quarter. Within private banking, we attracted SEK 9bn in new net inflows. SEB's inclusion as a provider of occupational pension services (ITP) is an important step in the long-term savings markets. Our mortgage offering continues to be a means for attracting home banking customers in Sweden.
In our Baltic business we see slightly higher loan volumes in local currencies and household confidence being strengthened.
Compared to a year ago, SEB's overall lending increased by SEK 39bn and deposits by SEK 138bn.
High asset quality
SEB's asset quality remained strong. Non-performing loans fell to below one per cent of total lending, reflecting 13 quarters in a row with declining Baltic non-performing loans. The credit loss level outside the Baltic countries was 5 basis points.
Further balance sheet strength
The regulatory landscape is yet to be finalised on the international and EU level. The decision by the European Parliament on CRR/CRD IV forms an important step in this process that will affect the final implementation of the Swedish regulations on capital and liquidity. SEB's balance sheet is already compliant and continues to strengthen. The Basel III estimate of our Common Equity Tier 1 capital ratio amounted to 13.4 per cent, i.e. above the Swedish regulatory requirement of 12 per cent as of 2015 and above our capital target of 13 per cent. SEB's market access remained attractive and our funding spreads have tightened further.
Clear long-term direction of new business plan
Over the past years, SEB has invested in a platform for growth and built balance sheet resilience. As we communicated at the start of the year, the new plan focuses on broadening the business with new customers from the established platforms in the Nordic countries and Germany as well as continuing the expansion in the Swedish SME segment. Together with the higher customer satisfaction that we have recorded in all targeted segments this builds income growth also in the present business climate.
Our direction to be the relationship bank in our part of the world remains firm.
3 400 new SME customers
Q1 2013
Corporate lending grew by SEK 29bn
Year-on year
Credit loss level at 7 basis points
Q1 2013
The Group
Operating profit amounted to SEK 3,717m (3,650). The fourth quarter operating profit of SEK 2,839m included a one-time IT-related charge and a negative effect from a bond buy-back. Excluding these one-off effects operating profit in the previous quarter was SEK 3,994m.
Net profit from continuing operations was SEK 3,012m (2,857). Net profit (after tax), including the net result from discontinued operations, amounted to SEK 3,012m (2,611).
Operating income
Total operating income amounted to SEK 9,551m (9,589).
Net interest income increased to SEK 4,459m (4,181) and was unchanged from year-end.
| SEK m | Q1 | Q4 | Q1 |
|---|---|---|---|
| 2013 | 2012 | 2012 | |
| Customer driven NII | 4,067 | 4,060 | 3,902 |
| NII from other activities | 392 | 399 | 279 |
| Total | 4,459 | 4,459 | 4,181 |
The customer-driven net interest income was stable. Higher volumes offset the negative effect of lower short-term rates. Compared to the first quarter 2012, the customer-driven net interest income increased by SEK 165m. This was due to volume growth and stable net interest margins. Average volumes of loans to and deposits from the public grew by 4 and 8 per cent, respectively.
Net interest income from other activities increased by SEK 113m compared with the corresponding quarter 2012 and was stable from the previous quarter. Funding costs decreased as well as the yield in the liquidity portfolio. The contribution from the trading operations was SEK 89m lower than the first quarter 2012 and SEK 26m lower than the previous quarter.
Net fee and commission income was SEK 3,247m (3,264). Compared to the previous quarter the net fee and commission income decreased by 13 per cent. Activity levels among corporates were generally subdued and fees from both new lending arrangements and corporate finance activities fell. The market value of assets under management increased during the quarter which increased fee income, but performance fees were down from a normal seasonally high level in the fourth quarter of 2012.
Net financial income decreased by 31 per cent to SEK 954m (1,379) and was in line with the year-end level of SEK 982m. The contribution from the divisions remained stable at the SEK 1bn level, which has been the average level during the last number of years, while valuations of Treasury portfolios decreased. Positive mark-to-market valuations of the liquidity portfolio in the first quarter 2012 were instead negative in the first quarter 2013.
Net life insurance income amounted to SEK 882m (915). Compared to year-end, life insurance income improved by 6 per cent. Unit-linked income, which represents 57 per cent of total life insurance income and 87 per cent of sales,
decreased by 1 per cent. Income from traditional and risk insurance increased by 2 per cent.
Net other income amounted to SEK 9m (-150). There were realised losses on securities in the first quarter of 2012. In the previous quarter, the reported net other income amounted to a loss of SEK 349m, due to a one-time negative effect from a buy-back of covered bonds in the amount of SEK 402m.
Operating expenses
Total operating expenses amounted to SEK 5,588m (5,735). The reported fourth quarter operating expenses, at SEK 6,524m, included a one-time IT-related charge of SEK 753m. Excluding this item, the expenses were 3 per cent lower than the fourth quarter 2012.
Credit losses and provisions
Provisions for credit losses amounted to SEK 256m (206) corresponding to a credit loss level of 7 basis points. The provisions for credit losses for the Group, excluding the Baltic region, equaled a credit loss level of 5 basis points in the quarter. The provisions in the Baltic region increased and corresponded to a credit loss level of 39 basis points in the quarter.
Non-performing loans, which amounted to SEK 12.5bn, fell by 10 per cent in the quarter reflecting continued strong asset quality. Compared to one year ago they were 29 per cent lower. The decline in non-performing loans was driven by write-offs and the stronger Swedish krona.
Individually assessed impaired loans decreased by SEK 693m to SEK 7,308m during the quarter.
The Group's portfolio assessed loans past due >60 days decreased by SEK 587m during the quarter to SEK 4,802m.
Income tax expense
Total income tax expense was SEK 705m (793) which corresponded to an effective tax rate of 19 per cent, in line with the estimated effective tax rate of 20 per cent for the full year 2013.
Discontinued operations
The net result from discontinued operations was 0 (-246). A limited amount of closing work remains to finalise the separation of the divested German retail operations.
Pro forma income statement
(Excluding fourth quarter 2012 one-time character items)
| Q1 | Q4 | Full year | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Total operating income | 9,551 | 10,039 | 39,225 |
| Total operating expenses | -5,588 | -5,771 | -22,899 |
| Operating profit | 3,717 | 3,994 | 15,930 |
| Income tax expense | - 705 | - 985 | -3,480 |
| Net profit from continuing operations | 3,012 | 3,009 | 11,190 |
In the fourth quarter, financial effects of a one-time character affecting the reported result were published. They were a oneoff positive effect of SEK 1.1bn from the lowered Swedish corporate tax rate, a write-down of SEK 753m on parts of development of new IT infrastructure that will not be used and a negative effect on income of SEK 402m from buy-backs of covered bonds.
Business volumes
Total assets at the end of the quarter amounted to SEK 2,580bn (2,328bn). Loans to the public increased to SEK 1,240bn, an increase of SEK 39bn during the last 12 months and of SEK 4bn since year-end. Mortgage loans increased by SEK 34bn and corporate lending by SEK 29bn over the past 12 months. Other lending, such as repos and public administration decreased. Deposits from the public amounted to SEK 921bn, up by SEK 58bn and SEK 138bn, from year-end and one year ago respectively.
SEB's total credit portfolio increased to SEK 1,811bn (1,730). At year-end the credit portfolio amounted to SEK 1,777bn. Swedish household volumes increased by SEK 8bn during the first quarter. The combined corporate and property management portfolios grew by SEK 24bn in the same period.
At 31 March 2013, assets under management amounted to SEK 1,374bn (1,317). This was an increase from the year-end level of SEK 1,328bn. The net inflow of assets for the quarter was SEK 12bn and the market value increased by SEK 34bn. Assets under custody amounted to SEK 5,443bn (4,982).
Fixed-income securities
SEB's net position in fixed-income securities for investment, treasury and client facilitation purposes amounted to SEK 247bn (258). Four per cent of the total holdings, SEK 10.6bn, was GIIPS-related (12.6). GIIPS-related sovereign debt holdings amounted to SEK 0.3bn; these were all Italian. Spanish covered bonds amount to SEK 7.1bn, or 67 per cent of the GIIPS exposure.
Market risk
The trading business is customer flow-driven. This is confirmed by the fact that there were no loss-making days during the quarter. During the quarter, Value-at-Risk in the trading operations averaged SEK 155m. On average, the Group is not expected to lose more than this amount during a period of ten trading days, with 99 per cent probability.
Liquidity and long-term funding
SEB's loan-to-deposit ratio was 126 per cent (144), excluding repos and debt instruments. During the quarter, SEK 3bn of long-term funding matured and SEK 30bn was issued. 61 per cent of the new issuance was covered bonds.
The core liquidity reserve at the end of March 2013 amounted to SEK 410bn (321). The total liquid resources, including net trading assets and unutilised collateral in the cover pool, amounted to SEK 685bn (499). As of 1 January 2013, the Swedish Financial Supervisory Authority requires a Liquidity Coverage Ratio (LCR), according to rules adapted for Sweden, of 100 per cent in total and in EUR and USD, separately. At quarter-end, the LCR was 111 per cent and the USD and EUR LCRs were 166 and 103 per cent. Last year's information is not fully comparable due to the application of the adapted local rules.
Capital position
The core Tier 1 capital ratio increased to 15.3 per cent. The decrease in the Tier 1 capital ratios in 2013 is mainly a result from a change in the regulatory requirement to deduct the investments in insurance companies so that half is deducted from Tier 1 and half from Tier 2 capital rather than from the total capital base. SEB's reported capital ratios at year-end 2012 were negatively impacted by the transition effect from the implementation of the amendments to IAS 19 Employee benefits, an unrealised effect of SEK 7.9bn.
| Q1 | Q4 | Q1 | |
|---|---|---|---|
| 2013 | 2012 | 2012 | |
| Basel II | |||
| Core tier 1 capital ratio, % | 15.3 | 15.1 | 13.9 |
| Tier 1 capital ratio, % | 16.7 | 17.5 | 16.0 |
| RWA, SEK bn | 583 | 586 | 675 |
| Including supervisory transitional rules: | |||
| Core tier 1 capital ratio, % | 9.9 | 10.1 | 11.2 |
| Tier 1 capital ratio, % | 10.8 | 11.6 | 13.0 |
| RWA, SEK bn | 901 | 879 | 835 |
Basel III
Common Equity Tier 1 capital ratio, %* 13.4 13.1
* SEB's estimate based on current knowledge of future regulation
During 2013 SEB has continued to align the framework for capital allocation to the Basel III regulation. As a consequence, SEB allocated SEK 23bn more capital to the divisions from the central function in the first quarter 2013.
Rating
SEB's long-term senior unsecured ratings are 'A1' (stable outlook) 'A+' (negative outlook) and 'A+' (stable outlook) by Moody's, Standard & Poor's and Fitch, respectively. Fitch reaffirmed its ratings of SEB on 4 April 2013.
Risks and uncertainties
The macroeconomic environment is the major driver of risk to the Group's earnings and financial stability. In particular, it affects the asset quality and thereby the credit risk of the Group. The medium-term outlook for the global economy is characterised by uncertainty. The global policy measures to limit the risk of severe shocks to the economy have created more stability to the financial system. However, a prolonged period of weak economic growth cannot be ruled out.
SEB assumes credit, market, liquidity, operational and life insurance risks. The risk composition of the Group, as well as
the related risk management, are further described in SEB's Annual Report.
The Swedish tailoring and earlier implementation of the international Basel III regulatory framework in relation to capital, liquidity and funding standards could have long-term effects on asset and liability management and profitability of the banking sector. The final outcome of the Basel III framework and its implementation within the EU is not yet finalised.
Acquisition and sale of own shares
In accordance with the decision by the Annual General Meeting on 21 March 2013 to authorise the Board to decide on the acquisition and sale of own shares for SEB's long-term equity-based programmes, the Board decided that a maximum of 63.5 million shares of Class A may be acquired and sold. The transactions may take place at one or several occasions during the period until the Annual General Meeting in 2014.
For further information refer to www.sebgroup.com/ir.
Stockholm, 23 April 2013
The President declares that the Interim Accounts for January-March 2013 provide a fair overview of the Parent Company's and the Group's operations, their financial position and results and describe material risks and uncertainties facing the Parent Company and the Group.
Annika Falkengren
President and Chief Executive Officer
Press conference and webcasts
The press conference at 9.30 (CEST) on 23 April 2013 at Kungsträdgårdsgatan 8 with President and CEO Annika Falkengren can be followed live in Swedish on www.sebgroup.com/sv/ir. A simultaneous translation into English will be available on www.sebgroup.com/ir. A replay will also be available afterwards.
Access to telephone conference
The telephone conference at 13.00 (CEST) on 23 April 2013 with the President and CEO Annika Falkengren, the CFO Jan Erik Back and the Head of Investor Relations Ulf Grunnesjö, can be accessed by telephone, +44(0)20 7131 2799. Please quote conference id: 931046, not later than 10 minutes in advance. A replay of the conference call will be available on www.sebgroup.com/ir.
Subsequent events
The Savings area is a key growth area for SEB. In order to further strengthen cooperation between the distribution and production of SEB's offering in the savings area, the divisions Life and Wealth Management will be held together in a new division, Life & Wealth Management, headed by Anders Johnsson, who will also continue in his capacity as head of Wealth Management. Peter Dahlgren, who is currently head of Savings in Retail Banking, has been appointed the new head of Life. Life and Wealth Management will continue to be reported separately. Jan Stjernström, current head of Life, will assume the position as SEB's head of country in Singapore during the fall.
Further information is available from
Jan Erik Back, Chief Financial Officer Tel: +46 8 22 19 00 Ulf Grunnesjö, Head of Investor Relations Tel: +46 8 763 85 01, +46 70 763 85 01 Viveka Hirdman-Ryrberg, Head of Corporate Communications Tel: +46 8 763 85 77, +46 70 550 35 00
Skandinaviska Enskilda Banken AB (publ) SE-106 40 Stockholm, Sweden Telephone: +46 771 62 10 00 www.sebgroup.com Corporate organisation number: 502032-9081
Financial information calendar
| 15 July 2013 | Interim report Jan-Jun 2013 |
|---|---|
| 24 October 2013 | Interim report Jan-Sep 2013 |
| 5 February 2014 | Annual accounts 2013 |
Additional financial information is available in SEB's Fact Book which is published quarterly on www.sebgroup.com/ir.
Accounting policies
This Interim Report is presented in accordance with IAS 34 Interim Financial Reporting. 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 European Commission. The accounting follows the Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559) and the regulation and general guidelines issued by the Swedish Financial Supervisory Authority: Annual reports in credit institutions and securities companies (FFFS 2008:25). In addition, the Supplementary accounting rules for groups (RFR 1) from the Swedish Financial Reporting Board have been applied. The Parent company has prepared its accounts in accordance with Swedish Annual Act for Credit Institutions and Securities Companies, the Swedish Financial Supervisory Authority's regulations and general guidelines (FFFS 2008:25) on annual reports in credit institutions and securities companies and the supplementary accounting rules for legal entities (RFR 2) issued by the Swedish Financial Reporting Board.
As of the 2013 financial year, IFRS 13 Fair Value Measurement comes into effect for application in the EU. The standard contains joint principles for fair value measurement of most assets and liabilities at fair value, or for which information about fair value must be disclosed. The application of IFRS 13 does not affect the reported values for financial instruments to any significant degree.
In accordance with IAS 1 Presentation of Financial Statements the presentation of Comprehensive Income has been amended so that items that can be reclassified to profit or loss later are separated from the items that cannot. In addition to this, amendments in IFRS 7 Financial Instruments: Disclosures and the introduction of IFRS 13 require further disclosures about off-setting of financial instruments and financial instruments at fair value. In all other material aspects, the Group's and the Parent company's accounting policies, basis for calculations and presentations are unchanged in comparison with the 2012 Annual Report.
Review report
We have reviewed this report for the period 1 January 2013 to 31 March 2013 for Skandinaviska Enskilda Banken AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act for Credit institutions and Securities Companies. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act for Credit institutions and Securities Companies regarding the Group, and with the Swedish Annual Accounts Act for Credit institutions and Securities Companies, regarding the Parent Company.
Stockholm, 23 April 2013
PricewaterhouseCoopers AB
Authorised Public Accountant Authorised Public Accountant Partner in charge
Peter Nyllinge Magnus Svensson Henryson
The SEB Group
Income statement – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | 4 459 | 4 458 | 0 | 4 459 | 4 181 | 7 | 17 635 |
| Net fee and commission income | 3 247 | 3 715 | -13 | 3 247 | 3 264 | -1 | 13 620 |
| Net financial income | 954 | 982 | -3 | 954 | 1 379 | -31 | 4 579 |
| Net life insurance income | 882 | 831 | 6 | 882 | 915 | -4 | 3 428 |
| Net other income | 9 | - 349 | 9 | - 150 | - 439 | ||
| Total operating income | 9 551 | 9 637 | -1 | 9 551 | 9 589 | 0 | 38 823 |
| Staff costs | -3 556 | -3 672 | -3 | -3 556 | -3 618 | -2 | -14 596 |
| Other expenses | -1 581 | -1 628 | -3 | -1 581 | -1 653 | -4 | -6 444 |
| Depreciation, amortisation and impairment | |||||||
| of tangible and intangible assets | - 451 | -1 224 | -63 | - 451 | - 464 | -3 | -2 612 |
| Total operating expenses | -5 588 | -6 524 | -14 | -5 588 | -5 735 | -3 | -23 652 |
| Profit before credit losses | 3 963 | 3 113 | 27 | 3 963 | 3 854 | 3 | 15 171 |
| Gains less losses from disposals of tangible | |||||||
| and intangible assets | 10 | 2 | 10 | 2 | 1 | ||
| Net credit losses | - 256 | - 276 | -7 | - 256 | - 206 | 24 | - 937 |
| Operating profit | 3 717 | 2 839 | 31 | 3 717 | 3 650 | 2 | 14 235 |
| Income tax expense | - 705 | 401 | - 705 | - 793 | -11 | -2 093 | |
| Net profit from continuing operations | 3 012 | 3 240 | -7 | 3 012 | 2 857 | 5 | 12 142 |
| Discontinued operations | - 1 | -100 | - 246 -100 | - 488 | |||
| Net profit | 3 012 | 3 239 | -7 | 3 012 | 2 611 | 15 | 11 654 |
| Attributable to minority interests | 3 | 7 | -57 | 3 | 5 | -40 | 22 |
| Attributable to shareholders | 3 009 | 3 232 | -7 | 3 009 | 2 606 | 15 | 11 632 |
| Continuing operations | |||||||
| Basic earnings per share, SEK | 1.37 | 1.47 | 1.37 | 1.30 | 5.53 | ||
| Diluted earnings per share, SEK | 1.36 | 1.47 | 1.36 | 1.30 | 5.51 | ||
| Total operations | |||||||
| Basic earnings per share, SEK | 1.37 | 1.47 | 1.37 | 1.19 | 5.31 | ||
| Diluted earnings per share, SEK | 1.36 | 1.47 | 1.36 | 1.19 | 5.29 |
Statement of comprehensive income – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net profit | 3 012 | 3 239 | -7 | 3 012 | 2 611 | 15 | 11 654 |
| Items that may subsequently be reclassified to the income statement: | |||||||
| Available-for-sale financial assets | 477 | 541 | -12 | 477 | 425 | 12 | 1 276 |
| Cash flow hedges | - 548 | 152 | - 548 | - 587 | -7 | 581 | |
| Translation of foreign operations | - 643 | 411 | - 643 | - 140 | - 670 | ||
| Items that will not be reclassified to the income statement: | |||||||
| Defined benefit plans | 776 | -1 558 | -150 | 776 | 638 | 22 | -2 003 |
| Other comprehensive income (net of tax) | 62 | - 454 | - 114 | 62 | 336 | - 82 | - 816 |
| Total comprehensive income | 3 074 | 2 785 | 10 | 3 074 | 2 947 | 4 | 10 838 |
| Attributable to minority interests | - 1 | 7 | -114 | - 1 | 11 -109 | 22 | |
| Attributable to shareholders | 3 075 | 2 778 | 11 | 3 075 | 2 936 | 5 | 10 816 |
Key figures – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2012 | |
| Continuing operations | |||||
| Return on equity, continuing operations, % | 11.03 | 11.93 | 11.03 | 11.06 | 11.52 |
| Basic earnings per share, continuing operations, SEK | 1.37 | 1.47 | 1.37 | 1.30 | 5.53 |
| Diluted earnings per share, continuing operations, SEK | 1.36 | 1.47 | 1.36 | 1.30 | 5.51 |
| Cost/income ratio, continuing operations | 0.59 | 0.68 | 0.59 | 0.60 | 0.61 |
| Number of full time equivalents, continuing operations1) | 15 946 | 16 295 | 16 000 | 16 759 | 16 578 |
| Total operations | |||||
| Return on equity, % | 11.03 | 11.93 | 11.03 | 10.10 | 11.06 |
| Return on total assets, % | 0.48 | 0.53 | 0.48 | 0.44 | 0.48 |
| Return on risk-weighted assets, % | 1.37 | 1.49 | 1.37 | 1.25 | 1.36 |
| Basic earnings per share, SEK | 1.37 | 1.47 | 1.37 | 1.19 | 5.31 |
| Weighted average number of shares, millions2) | 2 192 | 2 192 | 2 192 | 2 189 | 2 191 |
| Diluted earnings per share, SEK | 1.36 | 1.47 | 1.36 | 1.19 | 5.29 |
| Weighted average number of diluted shares, millions3) | 2 210 | 2 202 | 2 210 | 2 196 | 2 199 |
| Net worth per share, SEK | 54.94 | 56.33 | 54.94 | 51.85 | 56.33 |
| Average shareholders' equity, SEK, billion | 109.1 | 108.5 | 109.1 | 103.1 | 105.2 |
| Credit loss level, % | 0.07 | 0.08 | 0.07 | 0.06 | 0.08 |
| Liquidity Coverage Ratio (LCR)4), % | 111 | 113 | 111 | 109 | 113 |
| Capital adequacy including transitional floor5) : |
|||||
| Risk-weighted assets, SEK billion | 901 | 879 | 901 | 835 | 879 |
| Core Tier 1 capital ratio, % | 9.88 | 10.05 | 9.88 | 11.24 | 10.05 |
| Tier 1 capital ratio, % | 10.82 | 11.65 | 10.82 | 12.96 | 11.65 |
| Total capital ratio, % | 11.20 | 11.47 | 11.20 | 12.35 | 11.47 |
| Capital adequacy without transitional floor (Basel II): | |||||
| Risk-weighted assets, SEK billion | 583 | 586 | 583 | 675 | 586 |
| Core Tier 1 capital ratio, % | 15.26 | 15.09 | 15.26 | 13.91 | 15.09 |
| Tier 1 capital ratio, % | 16.71 | 17.48 | 16.71 | 16.03 | 17.48 |
| Total capital ratio, % | 17.30 | 17.22 | 17.30 | 15.29 | 17.22 |
| Number of full time equivalents1) | 15 966 | 16 357 | 16 019 | 17 503 | 16 925 |
| Assets under custody, SEK billion | 5 443 | 5 191 | 5 443 | 4 982 | 5 191 |
| Assets under management, SEK billion | 1 374 | 1 328 | 1 374 | 1 317 | 1 328 |
| Discontinued operations | |||||
| Basic earnings per share, discontinued operations, SEK | 0.00 | 0.00 | 0.00 | -0.11 | -0.22 |
| Diluted earnings per share, discontinued operations, SEK | 0.00 | 0.00 | 0.00 | -0.11 | -0.22 |
1) Quarterly numbers are for last month of quarter. Accumulated numbers are average for the period.
2) The number of issued shares was 2,194,171,802. SEB owned 2,188,734 Class A shares for the employee stock option programme at year end 2012. During 2013 SEB has repurchased 9,800,000 shares and 1,225,832 shares have been sold as employee stock options have been exercised. Thus, as at 31 March 2013 SEB owned 10,762,902 Class A-shares with a market value of SEK 704m.
3) Calculated dilution based on the estimated economic value of the long-term incentive programmes.
4) According to Swedish FSA regulations for respective period.
5) 80 per cent of RWA in Basel I
In SEB's Fact Book, this table is available with nine quarters history.
Income statement on quarterly basis - SEB Group
| Q1 | Q4 | Q3 | Q2 | Q1 | |
|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 | 2012 | 2012 |
| Net interest income | 4 459 | 4 458 | 4 466 | 4 530 | 4 181 |
| Net fee and commission income | 3 247 | 3 715 | 3 192 | 3 449 | 3 264 |
| Net financial income | 954 | 982 | 1 091 | 1 127 | 1 379 |
| Net life insurance income | 882 | 831 | 861 | 821 | 915 |
| Net other income* | 9 | - 349 | 71 | - 11 | - 150 |
| Total operating income | 9 551 | 9 637 | 9 681 | 9 916 | 9 589 |
| Staff costs | -3 556 | -3 672 | -3 602 | -3 704 | -3 618 |
| Other expenses | -1 581 | -1 628 | -1 573 | -1 590 | -1 653 |
| Depreciation, amortisation and impairment of tangible | |||||
| and intangible assets** | - 451 | -1 224 | - 464 | - 460 | - 464 |
| Total operating expenses | -5 588 | -6 524 | -5 639 | -5 754 | -5 735 |
| Profit before credit losses | 3 963 | 3 113 | 4 042 | 4 162 | 3 854 |
| Gains less losses from disposals of tangible and | |||||
| intangible assets | 10 | 2 | 1 | - 4 | 2 |
| Net credit losses | - 256 | - 276 | - 186 | - 269 | - 206 |
| Operating profit | 3 717 | 2 839 | 3 857 | 3 889 | 3 650 |
| Income tax expense*** | - 705 | 401 | - 868 | - 833 | - 793 |
| Net profit from continuing operations | 3 012 | 3 240 | 2 989 | 3 056 | 2 857 |
| Discontinued operations | - 1 | - 155 | - 86 | - 246 | |
| Net profit | 3 012 | 3 239 | 2 834 | 2 970 | 2 611 |
| Attributable to minority interests | 3 | 7 | 4 | 6 | 5 |
| Attributable to shareholders | 3 009 | 3 232 | 2 830 | 2 964 | 2 606 |
| Continuing operations | |||||
| Basic earnings per share, SEK | 1.37 | 1.47 | 1.36 | 1.39 | 1.30 |
| Diluted earnings per share, SEK | 1.36 | 1.47 | 1.36 | 1.39 | 1.30 |
| Total operations | |||||
| Basic earnings per share, SEK | 1.37 | 1.47 | 1.29 | 1.35 | 1.19 |
| Diluted earnings per share, SEK | 1.36 | 1.47 | 1.29 | 1.35 | 1.19 |
* Repurchase of the Bank's covered bond porfolio has had a negative effect on Net other income of SEK 402m in Q4 2012. The negative amounts in Q1 2012 are mainly related to realised losses of securites classified as Available-for-Sale.
** As a result of the strategic review of the IT development portfolio, non-used parts of the portfolio have been derecognised as intangible assets. The cost, SEK 753m, arising from this has been recognised in Q4 2012.
*** The positive income tax expense in Q4 2012 is a result of the reduction of the Swedish corporate tax rate, which has had a one-off effect of SEK 1,1bn from revaluation of deferred tax assets and liabilities.
Income statement by Division – SEB Group
| Merchant | Retail | Wealth | Other incl | ||||
|---|---|---|---|---|---|---|---|
| Jan-Mar 2013, SEK m | Banking | Banking | Management | Life* | Baltic | eliminations | SEB Group |
| Net interest income | 1 731 | 1 829 | 157 | - 18 | 450 | 310 | 4 459 |
| Net fee and commission income | 1 032 | 969 | 821 | 231 | 194 | 3 247 | |
| Net financial income | 894 | 88 | 38 | 80 | - 146 | 954 | |
| Net life insurance income | 1 218 | - 336 | 882 | ||||
| Net other income | 1 | 12 | 2 | - 4 | - 2 | 9 | |
| Total operating income | 3 658 | 2 898 | 1 018 | 1 200 | 757 | 20 | 9 551 |
| Staff costs | - 915 | - 761 | - 317 | - 300 | - 155 | -1 108 | -3 556 |
| Other expenses | -1 095 | - 755 | - 301 | - 146 | - 240 | 956 | -1 581 |
| Depreciation, amortisation and impairment | |||||||
| of tangible and intangible assets | - 34 | - 19 | - 10 | - 231 | - 22 | - 135 | - 451 |
| Total operating expenses | -2 044 | -1 535 | - 628 | - 677 | - 417 | - 287 | -5 588 |
| Profit before credit losses | 1 614 | 1 363 | 390 | 523 | 340 | - 267 | 3 963 |
| Gains less losses from disposals of tangible | |||||||
| and intangible assets | 10 | 10 | |||||
| Net credit losses | - 25 | - 131 | 1 | - 98 | - 3 | - 256 | |
| Operating profit | 1 589 | 1 232 | 391 | 523 | 252 | - 270 | 3 717 |
SEB's markets
SEB offers universal financial advice and a wide range of financial services in Sweden and the Baltic countries. In Denmark, Finland, Norway and Germany, the bank's operations have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. In addition, SEB serves corporate and institutional customers through its international network.
Profit per country
| Distribution by country Jan - Mar | Operating profit | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total operating income | Total operating expenses | Operating profit | in local currency | |||||||||
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % |
| Sweden | 5 592 | 5 415 | 3 | -3 687 | -3 616 | 2 | 1 784 | 1 691 | 5 | 1 784 | 1 691 | 5 |
| Norway | 749 | 861 | - 13 | - 251 | - 351 | - 28 | 494 | 463 | 7 | 432 | 397 | 9 |
| Denmark | 789 | 749 | 5 | - 328 | - 360 | - 9 | 442 | 370 | 19 | 388 | 311 | 25 |
| Finland | 371 | 347 | 7 | - 147 | - 145 | 1 | 222 | 201 | 10 | 26 | 23 | 13 |
| Germany* | 653 | 751 | - 13 | - 425 | - 465 | - 9 | 222 | 287 | - 23 | 26 | 32 | - 19 |
| Estonia** | 271 | 310 | - 13 | - 129 | - 138 | - 7 | 170 | 204 | - 17 | 20 | 23 | - 13 |
| Latvia** | 232 | 272 | - 15 | - 121 | - 132 | - 8 | 29 | 84 | - 65 | 2 | 7 | - 71 |
| Lithuania** | 326 | 340 | - 4 | - 179 | - 216 | - 17 | 114 | 125 | - 9 | 46 | 49 | - 6 |
| Other countries and eliminations | 568 | 544 | 4 | - 321 | - 312 | 3 | 240 | 225 | 7 | |||
| Total | 9 551 | 9 589 | 0 | -5 588 | -5 735 | - 3 | 3 717 | 3 650 | 2 |
*Excluding centralised Treasury operations
**Profit before credit losses increased in Lithuania by 19 per cent and decreased in Estonia by 17 per cent and in Latvia by 21 per cent.
- Improved operating profit in all Nordic countries even in the slower economic environment
- Further strengthened corporate franchise in the Nordic countries and Germany
Comments on the first quarter
The operating profit in Sweden represented 48 per cent of the Group and increased by 5 per cent. Operating income increased by 3 per cent as the net interest income level was supported by strong corporate lending and deposit volume growth. The trading income was negatively affected by lower activity and volatility in the market. There was a continued focus on efficiency measures and the number of employees was reduced.
In Norway, operating profit increased by 9 per cent. After a relatively slow start of the year, a sustainable net interest and a strong March performance within Markets in Merchant Banking, increased income. Expenses decreased due to oneoff effects.
In Denmark, operating profit increased by 25 per cent. All business areas contributed to the strong development, in particular the Pension business as well as Markets and corporate banking activities in Merchant Banking. Total expenses decreased by 6 per cent in local currency.
In Finland, operating profit increased by 13 per cent. Client activity in Merchant Banking increased despite the slow macroeconomic environment. Wealth Management benefited from sales of structured products and operating profit improved significantly.
In Germany, operating profit decreased by 19 per cent year-on-year. In the year-on-year comparison Wealth Management was negatively affected by the decision to liquidate the ImmoInvest fund. The Merchant Banking result was slightly lower than the first quarter 2012 and considerably higher than the prior quarter driven by the strong Structured Finance performance. The corporate business continued to grow and attracted 13 new corporate customers.
In each of Estonia, Latvia and Lithuania both operating income and expenses were lower year-on-year. See also the information on the Baltic division.
Merchant Banking
The Merchant Banking division offers commercial and investment banking services to large corporate and institutional clients, mainly in the Nordic region and Germany. Customers are also served through an extensive international presence.
Income statement
| Q1 | Q4 | Jan- Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | 1 731 | 1 697 | 2 | 1 731 | 1 805 | - 4 | 6 966 |
| Net fee and commission income | 1 032 | 1 361 | - 24 | 1 032 | 1 150 | - 10 | 4 896 |
| Net financial income | 894 | 837 | 7 | 894 | 987 | - 9 | 3 683 |
| Net other income | 1 | - 16 | - 106 | 1 | 110 | - 99 | 292 |
| Total operating income | 3 658 | 3 879 | - 6 | 3 658 | 4 052 | - 10 | 15 837 |
| Staff costs | - 915 | - 997 | - 8 | - 915 | -1 018 | - 10 | -3 945 |
| Other expenses | -1 095 | -1 117 | - 2 | -1 095 | -1 125 | - 3 | -4 465 |
| Depreciation, amortisation and impairment of | |||||||
| tangible and intangible assets | - 34 | - 58 | - 41 | - 34 | - 41 | - 17 | - 182 |
| Total operating expenses | -2 044 | -2 172 | - 6 | -2 044 | -2 184 | - 6 | -8 592 |
| Profit before credit losses | 1 614 | 1 707 | - 5 | 1 614 | 1 868 | - 14 | 7 245 |
| Gains less losses from disposals of tangible and | |||||||
| intangible assets | - 6 | ||||||
| Net credit losses | - 25 | - 1 | - 25 | - 81 | - 69 | - 130 | |
| Operating profit | 1 589 | 1 706 | -7 | 1 589 | 1 787 | - 11 | 7 109 |
| Cost/Income ratio | 0,56 | 0,56 | 0,56 | 0,54 | 0,54 | ||
| Business equity, SEK bn | 48,5 | 36,3 | 48,5 | 36,6 | 36,7 | ||
| Return on business equity, % | 10,1 | 13,9 | 10,1 | 14,4 | 14,3 | ||
| Number of full time equivalents | 2 240 | 2 392 | 2 318 | 2 407 | 2 418 |
Nota bene: The higher capital allocation in 2013 reflects the alignment to the 12 per cent common equity Tier 1 requirement in the Basel III framework.
- Ranked #1 in Prospera's annual Nordic Corporate Banking survey
- Further improved asset quality
- Seasonally lower customer activity and operating profit decreased by 11 per cent year-on-year
Comments on the first quarter
Deleveraging and political uncertainty continued to characterise the economies in Europe during the quarter, and recovery is slow and sluggish. SEB continued to focus on strengthening the customer franchise. SEB attracted new clients in all targeted markets and was ranked # 1 in Prospera's annual Nordic Corporate Banking survey.
The customer franchise is characterised by corporate customers with solid balance sheets and low utilisation of credit facilities and financial institutions with a continuous search for yield across all asset classes. Mergers and acquisitions and equity capital market activities were low mainly due to seasonal fluctuations. Corporate lending volumes moved sideways while corporate customers continued to utilise SEB to tap the bond market to a higher degree.
Operating income for the first quarter decreased by 10 per cent compared with the same period 2012. Net fee and commission income decreased as a reflection of the lower customer activity levels. Compared to year-end net interest
income remained stable reflecting the stable credit exposure. Operating expenses decreased by 6 per cent compared with the first quarter 2012 as an effect of improved cost efficiency. Operating profit amounted to SEK 1,589m, representing a decrease of 11 per cent year-on-year. Asset quality remained strong and net credit losses consequently low.
The investments in the Nordic and German markets continued to enlarge the business with new customers but equally to continue to attract new clients. During the first quarter of 2013, 30 new customers were added.
An additional focus for the coming three years will be to capture the opportunities on the back of the disintermediation trend. Investments in new professionals will be made to build an even stronger local and regional bond market both in the primary as well as secondary market.
These growth initiatives have given, and will result in, a stronger local franchise and more visibility in landmark transactions.
Retail Banking
The Retail Banking division offers banking and advisory services to private individuals and small and medium-sized corporate customers in Sweden, as well as card services in the Nordic countries.
Income statement
| Q1 | Q4 | Jan- Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | 1 829 | 1 821 | 0 | 1 829 | 1 708 | 7 | 7 117 |
| Net fee and commission income | 969 | 957 | 1 | 969 | 886 | 9 | 3 648 |
| Net financial income | 88 | 86 | 2 | 88 | 78 | 13 | 339 |
| Net other income | 12 | 24 | - 50 | 12 | 13 | - 8 | 76 |
| Total operating income | 2 898 | 2 888 | 0 | 2 898 | 2 685 | 8 | 11 180 |
| Staff costs | - 761 | - 731 | 4 | - 761 | - 761 | 0 | -3 024 |
| Other expenses | - 755 | - 845 | - 11 | - 755 | - 812 | - 7 | -3 266 |
| Depreciation, amortisation and impairment of | |||||||
| tangible and intangible assets | - 19 | - 20 | - 5 | - 19 | - 20 | - 5 | - 85 |
| Total operating expenses | -1 535 | -1 596 | - 4 | -1 535 | -1 593 | - 4 | -6 375 |
| Profit before credit losses | 1 363 | 1 292 | 5 | 1 363 | 1 092 | 25 | 4 805 |
| Gains less losses from disposals of tangible and | |||||||
| intangible assets | |||||||
| Net credit losses | - 131 | - 119 | 10 | - 131 | - 102 | 28 | - 452 |
| Operating profit | 1 232 | 1 173 | 5 | 1 232 | 990 | 24 | 4 353 |
| Cost/Income ratio | 0,53 | 0,55 | 0,53 | 0,59 | 0,57 | ||
| Business equity, SEK bn | 20,3 | 14,2 | 20,3 | 14,9 | 14,4 | ||
| Return on business equity, % | 18,7 | 24,5 | 18,7 | 19,7 | 22,3 | ||
| Number of full time equivalents | 3 533 | 3 649 | 3 505 | 3 712 | 3 708 |
Nota bene: The higher capital allocation in 2013 reflects the alignment to the 12 per cent common equity Tier 1 requirement in the Basel III framework.
- Strengthened offering towards SME customers and corporate lending grew by SEK 13bn
- 4,100 new private home banking customers and 3,400 new corporate customers in the first quarter
- 24 per cent increase in operating profit
Comments on the first quarter
The result of Retail Banking for the first quarter was solid. A solid operating income of SEK 2,898m (2,685) and operating expenses of SEK 1,535m (1,593) led to an operating profit of SEK 1,232m, an increase of 24 per cent compared to the same period last year. Cost-efficiency measures intensified and the cost/income ratio for the quarter decreased to 0.53.
Mortgage volumes continued to increase as part of the strategy to attract home bank customers, reaching SEK 358bn (350). Margins were slightly up. An agreement was reached to offer mortgage loans to the members of the unions TCO and SACO. Customers generally sought more advisory services and private customers increased the use of smart phone applications.
Lending to SMEs increased by 9 per cent compared to the same period last year while deposit volumes decreased slightly. The offering towards small and medium-sized enterprises was strengthened with the launch of a smart phone application for smaller corporate customers. Improved customer relations resulted in 3 400 new active payment service customers.
The Card business continued to grow. Turnover increased by 4 per cent to SEK 74bn. Turnover growth and lower funding levels had a positive impact on total income. Net credit losses were reduced.
Wealth Management
The Wealth Management division offers a full spectrum of asset management and advisory services, including a Nordic private banking offering, to institutions and high net-worth individuals.
Income statement
| Q1 | Q4 | Jan- Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | 157 | 158 | - 1 | 157 | 170 | - 8 | 667 |
| Net fee and commission income | 821 | 926 | - 11 | 821 | 765 | 7 | 3 244 |
| Net financial income | 38 | 31 | 23 | 38 | 21 | 81 | 97 |
| Net other income | 2 | 3 | - 33 | 2 | 2 | 0 | 30 |
| Total operating income | 1 018 | 1 118 | - 9 | 1 018 | 958 | 6 | 4 038 |
| Staff costs | - 317 | - 331 | - 4 | - 317 | - 315 | 1 | -1 322 |
| Other expenses | - 301 | - 328 | - 8 | - 301 | - 355 | - 15 | -1 379 |
| Depreciation, amortisation and impairment of | |||||||
| tangible and intangible assets | - 10 | - 11 | - 9 | - 10 | - 11 | - 9 | - 43 |
| Total operating expenses | - 628 | - 670 | - 6 | - 628 | - 681 | - 8 | -2 744 |
| Profit before credit losses | 390 | 448 | - 13 | 390 | 277 | 41 | 1 294 |
| Gains less losses from disposals of tangible and | |||||||
| intangible assets | |||||||
| Net credit losses | 1 | - 6 | - 117 | 1 | 1 | 0 | - 5 |
| Operating profit | 391 | 442 | - 12 | 391 | 278 | 41 | 1 289 |
| Cost/Income ratio | 0,62 | 0,60 | 0,62 | 0,71 | 0,68 | ||
| Business equity, SEK bn | 8,4 | 5,8 | 8,4 | 6,2 | 6,0 | ||
| Return on business equity, % | 14,3 | 22,5 | 14,3 | 13,4 | 16,0 | ||
| Number of full time equivalents | 896 | 919 | 920 | 972 | 940 |
Nota bene: The higher capital allocation in 2013 reflects the alignment to the 12 per cent common equity Tier 1 requirement in the Basel III framework.
- Higher income as an effect of higher average asset values
- 250 new customers and SEK 9bn in net new inflows in Private Banking
- The Family Office concept now represented in Stockholm, Gothenburg and Malmö
Comments on the first quarter
Operating profit increased by 41 per cent compared with the same period last year because of higher performance fees and lower operating expenses. Performance fees increased by SEK 62m year-on-year to SEK 72m which was lower than the seasonally high fourth quarter level of SEK 177bn. Base commissions totaled SEK 654m (662). Cost efficiency measures reduced costs within the division.
Several new innovative products, developed in collaboration with institutional clients, are in the pipeline for launch during the year. The initial interest in these products has been very high among customers.
Customers confidence in Private Banking led to 251 new clients (290) as well as SEK 9bn (9) in new volumes during the quarter. To further strengthen the growing Private Banking business a new Family Office unit was established in Malmö. The Family Office concept, which provides services to high net-worth families, is now available in the three major cities in Sweden. Total assets under management amounted to SEK 1,290bn (1,226).
Life
The Life division offers life insurance products with a focus on unit-linked insurance for private individuals and corporate customers, mainly in Sweden, Denmark and the Baltic countries.
Income statement
| Q1 | Q4 | Jan- Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | - 18 | - 18 | 0 | - 18 | - 24 | - 25 | - 86 |
| Net life insurance income | 1 218 | 1 149 | 6 | 1 218 | 1 239 | - 2 | 4 707 |
| Total operating income | 1 200 | 1 131 | 6 | 1 200 | 1 215 | - 1 | 4 621 |
| Staff costs | - 300 | - 305 | - 2 | - 300 | - 308 | - 3 | -1 214 |
| Other expenses | - 146 | - 128 | 14 | - 146 | - 136 | 7 | - 537 |
| Depreciation, amortisation and impairment of | |||||||
| tangible and intangible assets | - 231 | - 209 | 11 | - 231 | - 229 | 1 | - 890 |
| Total operating expenses | - 677 | - 642 | 5 | - 677 | - 673 | 1 | -2 641 |
| Profit before credit losses | 523 | 489 | 7 | 523 | 542 | - 4 | 1 980 |
| Operating profit | 523 | 489 | 7 | 523 | 542 | - 4 | 1 980 |
| Cost/Income ratio | 0,56 | 0,57 | 0,56 | 0,55 | 0,57 | ||
| Business equity, SEK bn | 8,2 | 6,5 | 8,2 | 6,5 | 6,5 | ||
| Return on business equity, % | 22,1 | 26,2 | 22,1 | 29,0 | 26,5 | ||
| Number of full time equivalents | 1 333 | 1 338 | 1 333 | 1 309 | 1 320 |
Nota bene: The higher capital allocation in 2013 reflects the alignment to the 12 per cent common equity Tier 1 requirement in the Basel III framework.
- SEB renewed as supplier in the Swedish ITP occupational pension scheme
- Premium income grew by 14 per cent
- Solid result in line with last year
Comments on the first quarter
The development in SEB's main markets was stable during the first quarter. In Sweden SEB was chosen as a supplier in one of the largest collective occupational pension procurements, ITP, which is a sign of a strong product offering for the occupational pension market.
The integration of SEB Life International has been successful, sales improved significantly and new distribution agreements were reached.
Operating profit decreased by 4 per cent compared to last year. Unit-linked income, which represents 57 per cent of total income and 87 per cent of sales, decreased by 1 per cent. Income from traditional and risk insurance increased by 2 per cent. Expenses were virtually unchanged compared to last year.
In Sweden, SEB Trygg Liv continued to be one of the market leaders within unit-linked insurance. Recoveries of provisions in the traditional business were SEK 19m (24). Operating profit decreased primarily due to lower income in other traditional and risk insurance and also because of a decrease in other income. The total fund value increased by SEK 6bn to 144bn.
Operating profit in Denmark increased significantly. The improvement was due to an 8 per cent cost reduction as well as higher income. Income improved mainly from a strong risk result.
Operating profit for International decreased compared to last year which included a positive investment result in the Latvian traditional portfolios. The operating profit in the Irish companies was unchanged.
The premium income relating to new and existing policies amounted to SEK 8.1bn for the division which was 14 per cent higher than last year. The improvement is related to the strong development in the Danish and SEB Life International business. The weighted sales volume of new policies decreased by 4 per cent to SEK 10bn and reflected lower volumes in the Swedish market. The share of corporate paid policies decreased to 69 per cent (71).
The total fund value in unit-linked insurance increased by SEK 8bn to 212bn. The net inflow was SEK 1.5bn and the appreciation in value was SEK 6.5bn or 3 per cent. Total assets under management amounted to SEK 451bn.
Baltic
The Baltic division provides banking and advisory services to private individuals and small and medium-sized corporate customers in Estonia, Latvia and Lithuania. The Baltic real estate holding companies (RHC) are a part of the division. The full Baltic geographical segmentation, including other activities in the region, is reported in SEB's Fact Book.
Income statement
| Q1 | Q4 | Jan- Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net interest income | 450 | 461 | - 2 | 450 | 519 | - 13 | 1 970 |
| Net fee and commission income | 231 | 246 | - 6 | 231 | 210 | 10 | 919 |
| Net financial income | 80 | 99 | - 19 | 80 | 112 | - 29 | 423 |
| Net other income | - 4 | - 3 | 33 | - 4 | - 7 | - 43 | - 11 |
| Total operating income | 757 | 803 | - 6 | 757 | 834 | - 9 | 3 301 |
| Staff costs | - 155 | - 172 | - 10 | - 155 | - 172 | - 10 | - 681 |
| Other expenses | - 240 | - 319 | - 25 | - 240 | - 252 | - 5 | -1 080 |
| Depreciation, amortisation and impairment of | |||||||
| tangible and intangible assets | - 22 | - 183 | - 88 | - 22 | - 33 | - 33 | - 280 |
| Total operating expenses | - 417 | - 674 | - 38 | - 417 | - 457 | - 9 | -2 041 |
| Profit before credit losses | 340 | 129 | 164 | 340 | 377 | - 10 | 1 260 |
| Gains less losses from disposals of tangible and | |||||||
| intangible assets | 10 | 1 | 10 | 1 | 9 | ||
| Net credit losses | - 98 | - 149 | - 34 | - 98 | - 24 | - 351 | |
| Operating profit | 252 | - 19 | 252 | 354 | - 29 | 918 | |
| Cost/Income ratio | 0,55 | 0,84 | 0,55 | 0,55 | 0,62 | ||
| Business equity, SEK bn | 9,5 | 8,9 | 9,5 | 9,1 | 8,8 | ||
| Return on business equity, % | 9,5 | negative | 9,5 | 14,4 | 9,7 | ||
| Number of full time equivalents | 2 792 | 2 857 | 2 805 | 3 042 | 2 960 | ||
| Baltic Banking (excl RHC) | |||||||
| Operating profit | 267 | 12 | 267 | 377 | - 29 | 1 016 | |
| Cost/Income ratio | 0,53 | 0,80 | 0,53 | 0,53 | 0,59 | ||
| Business equity, SEK bn | 9,2 | 8,7 | 9,2 | 8,9 | 8,7 | ||
| Return on business equity, % | 10,4 | 0,5 | 10,4 | 15,7 | 10,9 |
Nota bene: The higher capital allocation in 2013 reflects the alignment to the 12 per cent common equity Tier 1 requirement in the Basel III framework.
- Loan volumes in local currencies grew slightly in the first quarter
- SEB was named Best Foreign Exchange Provider in Lithuania and Latvia
- Profit before credit losses decreased by 10 per cent year-on-year
Comments on the first quarter
The slow recovery in the Baltic countries continued. Weak external demand and a low capital spending appetite somewhat hampered growth, although exports were robust and household confidence strengthened.
The Baltic loan volumes which amounted to SEK 94bn grew slightly in the quarter when adjusted for a stronger Swedish krona. Corporate loans grew 4 per cent in Estonia, and 2 per cent in Latvia. Mortgage loans were flat in Estonia and decreased by 3 per cent in Latvia and by 1 per cent in Lithuania. Lending margins have remained relatively stable across the portfolio with slightly higher margins on new loans.
The total deposit volume, in the amount of SEK 66bn, was flat in local currency terms. Deposit margins continued to decline in each of the Baltic countries due to the low interest rate environment, which negatively impacted net interest
income. Net interest income declined by 10 per cent in local currencies compared to the corresponding period 2012.
Total operating expenses of SEK 417m (457) were 5 per cent lower than in the first quarter of 2012, when adjusted for currency effects. The operating profit of SEK 252m (354) included net credit losses of SEK 98m (24). Non-performing loans declined by 28 per cent, in SEK, year-on-year. The nonperforming loans coverage ratio was 61 per cent.
SEB continued to win awards for customer excellence. Global Finance magazine named SEB as the Best Foreign Exchange Provider in Lithuania and Latvia. In Estonia, a new paperless branch concept was piloted.
The real estate holding companies held assets at a total book value of SEK 2,246m (1,663). The operating loss was SEK 15m, SEK 8m lower than a year ago.
The SEB Group
Net interest income – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Interest income | 12 321 | 12 788 | - 4 | 12 321 | 14 012 | - 12 | 53 794 |
| Interest expense | -7 862 | -8 330 | - 6 | -7 862 | -9 831 | - 20 | -36 159 |
| Net interest income | 4 459 | 4 458 | 0 | 4 459 | 4 181 | 7 | 17 635 |
Net fee and commission income – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Issue of securities and advisory | 65 | 241 | - 73 | 65 | 171 | - 62 | 646 |
| Secondary market and derivatives | 495 | 480 | 3 | 495 | 492 | 1 | 1 940 |
| Custody and mutual funds | 1 657 | 1 838 | - 10 | 1 657 | 1 625 | 2 | 6 691 |
| Payments, cards, lending, deposits, | |||||||
| guarantees and other | 2 174 | 2 401 | - 9 | 2 174 | 2 166 | 0 | 9 059 |
| Whereof payments and card fees | 1 421 | 1 492 | - 5 | 1 421 | 1 436 | - 1 | 5 952 |
| Whereof lending | 454 | 608 | - 25 | 454 | 476 | - 5 | 2 047 |
| Fee and commission income | 4 391 | 4 960 | - 11 | 4 391 | 4 454 | - 1 | 18 336 |
| Fee and commission expense | -1 144 | -1 245 | - 8 | -1 144 | -1 190 | - 4 | -4 716 |
| Net fee and commission income | 3 247 | 3 715 | - 13 | 3 247 | 3 264 | - 1 | 13 620 |
Net financial income – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Equity instruments and related derivatives | - 40 | - 12 | - 40 | 416 | -110 | 518 | |
| Debt instruments and related derivatives | 297 | 137 | 117 | 297 | 76 | 972 | |
| Currency related | 721 | 885 | -19 | 721 | 881 | -18 | 3 163 |
| Other | - 24 | - 28 | -14 | - 24 | 6 | - 74 | |
| Net financial income | 954 | 982 | -3 | 954 | 1 379 | -31 | 4 579 |
The result within Net financial income is presented based on type of underlying financial instrument. Treasury related activities are volatile due to changes in interests and spreads. The net effect from trading operations is fairly stabile over time, although affected by seasonality, but shows volatility between lines.
Net credit losses – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Provisions: | |||||||
| Net collective provisions for individually | |||||||
| assessed loans | - 31 | 124 | - 31 | 39 | 104 | ||
| Net collective provisions for portfolio | |||||||
| assessed loans | 230 | - 37 | 230 | - 1 | - 148 | ||
| Specific provisions | - 193 | - 90 | 114 | - 193 | - 250 | -23 | - 532 |
| Reversal of specific provisions no longer required | 75 | 85 | -12 | 75 | 144 | -48 | 557 |
| Net provisions for off-balance sheet items | 6 | 6 | 17 | -65 | 23 | ||
| Net provisions | 87 | 82 | 6 | 87 | - 51 | 4 | |
| Write-offs: | |||||||
| Total write-offs | - 819 | -1 007 | -19 | - 819 | - 440 | 86 | -2 892 |
| Reversal of specific provisions utilized | |||||||
| for write-offs | 440 | 594 | -26 | 440 | 262 | 68 | 1 814 |
| Write-offs not previously provided for | - 379 | - 413 | -8 | - 379 | - 178 | 113 | -1 078 |
| Recovered from previous write-offs | 36 | 55 | -35 | 36 | 23 | 57 | 137 |
| Net write-offs | - 343 | - 358 | -4 | - 343 | - 155 | 121 | - 941 |
| Net credit losses | - 256 | - 276 | -7 | - 256 | - 206 | 24 | - 937 |
Balance sheet – SEB Group
| 31 March | 31 Dec | 31 March | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Cash and cash balances with central banks | 246 198 | 191 445 | 39 064 |
| Other lending to central banks | 7 956 | 17 718 | 126 816 |
| Loans to other credit institutions1) | 149 738 | 126 023 | 142 483 |
| Loans to the public | 1 240 488 | 1 236 088 | 1 201 106 |
| Financial assets at fair value * | 802 078 | 725 938 | 678 195 |
| Available-for-sale financial assets * | 49 054 | 50 599 | 59 345 |
| Held-to-maturity investments * | 81 | 82 | 281 |
| Assets held for sale | 1 826 | ||
| Investments in associates | 1 259 | 1 252 | 1 309 |
| Tangible and intangible assets | 28 186 | 28 494 | 29 536 |
| Other assets | 55 148 | 75 817 | 47 980 |
| Total assets | 2 580 186 | 2 453 456 | 2 327 941 |
| Deposits from central banks and credit institutions | 205 027 | 170 656 | 227 665 |
| Deposits and borrowing from the public | 920 603 | 862 260 | 782 861 |
| Liabilities to policyholders | 291 863 | 285 973 | 279 874 |
| Debt securities | 683 353 | 661 851 | 625 598 |
| Other financial liabilities at fair value | 264 741 | 237 001 | 207 139 |
| Liabilities held for sale | 1 803 | ||
| Other liabilities | 81 865 | 96 349 | 70 957 |
| Provisions | 3 212 | 5 572 | 5 603 |
| Subordinated liabilities | 23 478 | 24 281 | 24 669 |
| Total equity | 106 044 | 109 513 | 101 772 |
| Total liabilities and equity | 2 580 186 | 2 453 456 | 2 327 941 |
| * Of which bonds and other interest bearing securities including derivatives. | 486 402 | 460 423 | 438 695 |
1) Loans to credit institutions and liquidity placements with other direct participants in interbank fund transfer systems.
A more detailed balance sheet is included in the Fact Book.
Pledged assets, contingent liabilities and commitments – SEB Group
| 31 March | 31 Dec | 31 March | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Collateral pledged for own liabilities1) | 387 829 | 352 459 | 371 041 |
| Assets pledged for liabilities to insurance polichyholders | 291 863 | 288 721 | 279 874 |
| Collateral and comparable security pledged for own liabilities | 679 692 | 641 180 | 650 915 |
| Other pledged assets and comparable collateral2) | 161 389 | 135 372 | 104 608 |
| Contingent liabilities | 94 983 | 94 175 | 99 395 |
| Commitments | 435 780 | 407 423 | 401 079 |
1) Of which collateralised for covered bonds SEK 335,316m (320,859 / 316,710).
2) Securities' lending SEK 90,001m (66,674 / 50,060) and pledged but unencumbered bonds SEK 71,388m (68,698 / 54,548).
Statement of changes in equity – SEB Group
| Other reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Available for-sale |
Translation | Defined | Total Share | ||||||
| Share | Retained | financial | Cash flow | of foreign | benefit | holders' | Minority | Total | |
| SEK m | capital | earnings | assets | hedges | operations | plans | equity | interests | Equity |
| Jan-Mar 2013 | |||||||||
| Opening balance | 21 942 | 90 033 | 273 | 1 688 | -2 422 | -2 091 | 109 423 | 90 | 109 513 |
| Net profit | 3 009 | 3 009 | 3 | 3 012 | |||||
| Other comprehensive income (net of tax) Total comprehensive income |
3 009 | 477 477 |
-548 -548 |
-639 -639 |
776 776 |
66 3 075 |
-4 -1 |
62 3 074 |
|
| Dividend to shareholders | -6 004 | -6 004 | -6 004 | ||||||
| Employee share programme1) | -112 | -112 | -112 | ||||||
| Minority interests | |||||||||
| Change in holdings of own shares | -427 | -427 | -427 | ||||||
| Closing balance | 21 942 | 86 499 | 750 | 1 140 | -3 061 | -1 315 | 105 955 | 89 | 106 044 |
| Jan-Dec 2012 | |||||||||
| Opening balance | 21 942 | 82 272 | -1 003 | 1 107 | -1 752 | -88 | 102 478 | 261 | 102 739 |
| Net profit | 11 632 | 11 632 | 22 | 11 654 | |||||
| Other comprehensive income (net of tax) | 1 276 | 581 | -670 | -2 003 | -816 | -816 | |||
| Total comprehensive income | 11 632 | 1 276 | 581 | -670 | -2 003 | 10 816 | 22 | 10 838 | |
| Dividend to shareholders | -3 795 | -3 795 | -3 795 | ||||||
| Employee share programme1) | -113 | -113 | -113 | ||||||
| Minority interests | -193 | -193 | |||||||
| Change in holdings of own shares | 37 | 37 | 37 | ||||||
| Closing balance | 21 942 | 90 033 | 273 | 1 688 | -2 422 | -2 091 | 109 423 | 90 | 109 513 |
| Jan-Mar 2012 | |||||||||
| Opening balance | 21 942 | 82 272 | -1 003 | 1 107 | -1 752 | -88 | 102 478 | 261 | 102 739 |
| Net profit | 2 606 | 2 606 | 5 | 2 611 | |||||
| Other comprehensive income (net of tax) | 425 | -587 | -146 | 638 | 330 | 6 | 336 | ||
| Total comprehensive income | 2 606 | 425 | -587 | -146 | 638 | 2 936 | 11 | 2 947 | |
| Dividend to shareholders | -3 795 | -3 795 | -3 795 | ||||||
| Employee share programme1) | 15 | 15 | 15 | ||||||
| Minority interests | |||||||||
| Change in holdings of own shares | -134 | -134 | -134 | ||||||
| Closing balance | 21 942 | 80 964 | -578 | 520 | -1 898 | 550 | 101 500 | 272 | 101 772 |
Amounts under Other reserves may be reclassified in the future to the income statement under certain circumstances, e.g. if they are related to the sale of Available for sale financial assets, dissolved Cash flow hedges or Translation of foreign operations when SEB ceases to consolidate a foreign operation. Amounts related to Defined benefit plans will not be reclassified to the income statement.
1) The acquisition cost for the purchase of own shares is deducted from shareholders' equity. The item includes changes in nominal amounts of equity swaps used for hedging of stock option programmes.
| Jan-Mar | Jan-Dec | Jan-Mar | |
|---|---|---|---|
| Number of shares owned by SEB, million | 2013 | 2012 | 2012 |
| Opening balance | 2.2 | 2.3 | 2.3 |
| Shares repurchased for the long-term equity-based | |||
| programmes | 9.8 | 12.0 | 9.7 |
| Shares sold | -1.2 | -12.1 | -9.3 |
| Closing balance | 10.8 | 2.2 | 2.7 |
Market value of shares owned by SEB, SEKm 704 121 126
In accordance with the decision by the Annual General Meeting, SEB holds own shares of Class A for the long-term equity-based programmes. The transactions may take place at one or serveral occasions during the year.
Cash flow statement – SEB Group
| Jan - Mar | Full year | |||
|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2012 |
| Cash flow from operating activities | 43 761 | - 63 966 | - 168 | - 6 653 |
| Cash flow from investment activities | - 83 | - 809 | - 90 | - 1 278 |
| Cash flow from financing activities | - 6 871 | - 4 241 | 62 | - 4 682 |
| Net increase in cash and cash equivalents | 36 807 | - 69 016 | - 153 | - 12 613 |
| Cash and cash equivalents at the beginning of year | 257 292 | 276 853 | - 7 | 276 853 |
| Exchange rate differences on cash and cash equivalents | - 2 113 | - 4 109 | - 49 | - 6 948 |
| Net increase in cash and cash equivalents | 36 807 | - 69 016 | - 153 | - 12 613 |
| Cash and cash equivalents at the end of period1) | 291 986 | 203 728 | 43 | 257 292 |
1) Cash and cash equivalents at the end of period is defined as Cash and cash balances with central banks, Other lending to central banks and Loans to other credit institutions payable on demand.
Financial assets and liabilities – SEB Group
| 31 Mar 2013 | 31 Dec 2012 | |||
|---|---|---|---|---|
| Carrying | Carrying | |||
| SEK m | amount | Fair value | amount | Fair value |
| Loans | 1 597 737 | 1 607 042 | 1 519 759 | 1 539 032 |
| Equity instruments | 146 798 | 146 798 | 110 409 | 110 409 |
| Debt instruments | 340 968 | 340 942 | 340 894 | 340 326 |
| Derivative instruments | 195 769 | 195 769 | 169 679 | 169 679 |
| Financial assets - policyholders bearing the risk | 211 433 | 211 433 | 203 333 | 203 333 |
| Other | 36 805 | 36 805 | 58 712 | 58 712 |
| Financial assets | 2 529 510 | 2 538 789 | 2 402 786 | 2 421 491 |
| Deposits | 1 125 630 | 1 135 419 | 1 032 916 | 1 043 939 |
| Equity instruments | 41 008 | 41 008 | 34 161 | 34 161 |
| Debt instruments | 746 011 | 747 494 | 729 192 | 739 195 |
| Derivative instruments | 182 815 | 182 812 | 157 861 | 157 861 |
| Liabilities to policyholders - investment contracts | 204 002 | 204 002 | 195 620 | 195 620 |
| Other | 39 398 | 36 639 | 56 580 | 56 685 |
| Financial liabilities | 2 338 864 | 2 347 374 | 2 206 330 | 2 227 461 |
SEB has grouped its financial instruments by class taking into account the characteristics of the instruments. The fair value of each class of financial assets and liabilities are compared with its carrying amount. A description of the characteristics of the classes can be found in note 41 in the Annual Report 2012.
Assets and liabilities measured at fair value – SEB Group
| SEK m | 31 Mar 2013 | 31 Dec 2012 | ||||||
|---|---|---|---|---|---|---|---|---|
| Valuation technique |
Valuation technique |
Valuation technique |
Valuation technique |
|||||
| Assets | Quoted prices in active markets (Level 1) |
using observable inputs (Level 2) |
using non observable inputs (Level 3) |
Total | Quoted prices in active markets (Level 1) |
using observable inputs (Level 2) |
using non observable inputs (Level 3) |
Total |
| Financial assets | ||||||||
| - policyholders bearing the risk | 197 028 | 12 784 | 1 621 | 211 433 | 189 480 | 12 294 | 1 559 | 203 333 |
| Equity instruments | 106 932 | 26 870 | 12 457 | 146 259 | 79 970 | 21 563 | 8 667 | 110 200 |
| Debt instruments | 119 294 | 175 269 | 1 839 | 296 402 | 131 674 | 158 654 | 1 867 | 292 195 |
| Derivative instruments | 451 | 194 415 | 903 | 195 769 | 110 | 167 741 | 1 828 | 169 679 |
| Investment in associates1) | 1 078 | 1 078 | 1 073 | 1 073 | ||||
| Investment properties | 7 290 | 7 290 | 7 488 | 7 488 | ||||
| Total | 423 705 | 409 338 | 25 188 | 858 231 | 401 234 | 360 252 | 22 482 | 783 968 |
| Liabilities | ||||||||
| Liabilities to policyholders | ||||||||
| - investment contracts | 189 876 | 12 905 | 1 221 | 204 002 | 182 293 | 11 827 | 1 500 | 195 620 |
| Equity instruments | 39 114 | 1 783 | 111 | 41 008 | 32 532 | 1 629 | 34 161 | |
| Debt instruments | 32 145 | 7 053 | 39 198 | 35 403 | 7 657 | 43 060 | ||
| Derivative instruments | 630 | 180 272 | 1 911 | 182 813 | 501 | 154 716 | 2 644 | 157 861 |
| Other issued securities2) | 26 686 | 26 686 | 26 323 | 26 323 | ||||
| Total | 261 765 | 228 699 | 3 243 | 493 707 | 250 729 | 202 152 | 4 144 | 457 025 |
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.
Financial assets and liabilities carried at fair value are classified in a fair value hierarchy according to the level of observability of prices or inputs used in a valuation technique. As part of the fair value measurement credit value adjustments (CVA) are incorporated into the derivative valuations for OTC-derivatives on a portfolio basis. The valuation techniques and inputs used for the fair value measurement are described in detail in the Annual Report 2012.
Financial assets - policyholders bearing the risk, Investment properties and Liabilities to policyholders - investment contracts are included in the table which is a change compared to the Annual Report 2012.
Risk control has the overall responsibility for classifying assets and liabilities as being in level 1, 2 or 3. The valuation process is the same for financial instruments in all levels. Market Risk Control is responsible for validating the prices used for valuation of financial instruments. In case of disagreement, there is an escalation process in place, whereby the product area head or equivalent can submit an escalation to the relevant pricing / valuation committee. The Valuation committee covers topics such as valuation of illiquid instruments, model validation findings, analysis of changes in fair value measurements and shocks on level 3 assets. The chairman of the Valuation Committee is appointed by the Head of Market Risk Control and the committee has permanent members from Divisional risk management, Group Finance and Market Risk Control.
Fair value gains and losses recognised in the income statement are included in the Net financial income, Net life insurance income and Net other income.
Transfers between levels may occur when there are indications that market conditions have changed, e.g. a change in liquidity. There have been no significant transfers between level 1 and level 2 during the quarter. Changes in Level 3 financial instruments are mainly due to valuation effects and from purchases and sales of Equity, Debt and Derivative instruments. In addition there has been a reclassification in the amount of SEK 2.2bn of Equity instruments due to enhanced classification, from level 2 to level 3, within the insurance business.
Sensitivity of Level 3 assets and liabilities to unobservable inputs
The table below illustrates the potential Profit or Loss impact of the relative uncertainty in the fair value of assets and liabilities measured at fair value that for their valuation are dependent on unobservable inputs. The sensitivity to unobservable inputs is assessed by altering the assumptions to the valuation techniques, illustrated below by changes in index-linked swap spreads, implied volatilities, credit spreads or comparator multiples. It is unlikely that all unobservable inputs would be simultaneously at the extremes of their ranges of reasonably possible alternatives.
The largest open market risk within Level 3 assets and liabilities is found within the insurance business.There have been no significant changes of sensitivity during Q1 2013.
| 31 Mar 2013 | 31 Dec 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m | Assets | Liabilities | Net | Sensitivity | Assets | Liabilities | Net | Sensitivity | |
| Structured Derivatives - interest rate1) | 670 | -1 349 | -679 | 59 | 951 | -1 504 | -553 | 58 | |
| Capital Markets2) | -29 | -29 | 19 | 351 | -52 | 299 | 20 | ||
| CPM Portfolio3) | 125 | 125 | 14 | 139 | 139 | 15 | |||
| Venture Capital holding and similar holdings4) | 1 289 | 1 289 | 243 | 1 183 | 1 183 | 224 | |||
| Insurance holdings- Financial instruments5) | 12 471 | -530 | 11 941 | 1 689 | 9 867 | -105 | 9 762 | 1 501 | |
| Insurance holdings - Investment properties6) | 7 290 | 7 290 | 729 | 7 488 | 7 488 | 749 |
1) Shift of index-linked swap spreads by 5 basis points and implied volatilities by 5 percentage points would have a profit or loss impact of +/- SEK 59m.
2) A 5 basis points shift of swap spreads would have a profit or loss impact of +/- SEK 19m.
3) Shift of credit spreads by 100 basis points would have a profit or loss impact of +/- SEK 14m.
4) Valuation is estimated in a range of reasonable outcomes, where the potential profit or loss impact is shown in the sensitivity analysis. A shift in valuation parameters would in the lower range have an impact of SEK -243m.
5) A shift of private equity of 20 per cent, structured credit 10 per cent and derivative market values of 10 per cent would have a profit or loss impact of +/- SEK 1,689m.
6) A shift of investment properties fair values of 10 per cent would have a profit or loss impact of +/- SEK 729m.
| Financial assets and liabilities subject to offsetting or netting arrangements | Other | |||||||
|---|---|---|---|---|---|---|---|---|
| Related arrangements | instruments in balance sheet |
|||||||
| Net amounts | Collaterals | not subject to | ||||||
| in | Master netting | received/ | netting | Total in | ||||
| SEK m | Gross amounts | Offset | balance sheet | arrangements | pledged | Net amounts | arrangements | balance sheet |
| 31 Mar 2013 | ||||||||
| Derivatives | 187 810 | -11 032 | 176 778 | -131 080 | -28 465 | 17 233 | 18 990 | 195 768 |
| Reversed repo receivables | 87 653 | -8 818 | 78 835 | -4 186 | -74 469 | 180 | 32 161 | 110 996 |
| Securities borrowing | 62 474 | -4 005 | 58 469 | -16 770 | -39 604 | 2 095 | 4 559 | 63 028 |
| Client receivables | 15 244 | -15 244 | 14 246 | 14 246 | ||||
| Assets | 353 181 | -39 099 | 314 082 | -152 036 | -142 538 | 19 508 | 69 956 | 384 038 |
| Derivatives | 185 893 | -11 032 | 174 861 | -131 080 | -26 814 | 16 967 | 7 953 | 182 814 |
| Repo payables | 18 981 | -8 818 | 10 163 | -4 186 | -5 977 | 20 503 | 30 666 | |
| Securities lending | 39 068 | -4 005 | 35 063 | -16 770 | -17 205 | 1 088 | 10 553 | 45 616 |
| Client payables | 15 244 | -15 244 | 19 735 | 19 735 | ||||
| Liabilities | 259 186 | -39 099 | 220 087 | -152 036 | -49 996 | 18 055 | 58 744 | 278 831 |
| 31 Dec 2012 | ||||||||
| Derivatives | 167 184 | -12 459 | 154 725 | -103 738 | -43 882 | 7 105 | 14 954 | 169 679 |
| Reversed repo receivables | 91 422 | -5 926 | 85 496 | -9 370 | -75 682 | 444 | 21 028 | 106 524 |
| Securities borrowing | 39 637 | -3 905 | 35 732 | -834 | -32 018 | 2 880 | 9 426 | 45 158 |
| Client receivables | 7 576 | -7 576 | 34 889 | 34 889 | ||||
| Assets | 305 819 | -29 866 | 275 953 | -113 942 | -151 582 | 10 429 | 80 297 | 356 250 |
| Derivatives | 159 697 | -12 459 | 147 238 | -103 738 | -20 652 | 22 848 | 10 623 | 157 861 |
| Repo payables | 19 060 | -5 926 | 13 134 | -9 370 | -3 764 | 15 701 | 28 835 | |
| Securities lending | 28 362 | -3 905 | 24 457 | -834 | -22 271 | 1 352 | 8 937 | 33 394 |
| Client payables | 7 576 | -7 576 | 31 012 | 31 012 | ||||
| Liabilities | 214 695 | -29 866 | 184 829 | -113 942 | -46 687 | 24 200 | 66 273 | 251 102 |
| 31 Mar 2012 | ||||||||
| Derivatives | 151 380 | -12 554 | 138 826 | -75 201 | -38 994 | 24 631 | 3 303 | 142 129 |
| Reversed repo receivables | 80 545 | -4 642 | 75 903 | -10 523 | -65 039 | 341 | 26 638 | 102 541 |
| Securities borrowing | 74 133 | -15 013 | 59 120 | -6 124 | -50 512 | 2 484 | 59 120 | |
| Client receivables | 15 888 | -15 888 | 12 695 | 12 695 | ||||
| Assets | 321 946 | -48 097 | 273 849 | -91 848 | -154 545 | 27 456 | 42 636 | 316 485 |
| Derivatives | 141 757 | -12 554 | 129 203 | -75 201 | -42 088 | 11 914 | 1 090 | 130 293 |
| Repo payables | 30 059 | -4 642 | 25 417 | -10 523 | -14 894 | 23 332 | 48 749 | |
| Securities lending | 58 331 | -15 013 | 43 318 | -6 124 | -35 837 | 1 357 | 43 318 | |
| Client payables | 15 888 | -15 888 | 13 081 | 13 081 | ||||
| Liabilities | 246 035 | -48 097 | 197 938 | -91 848 | -92 819 | 13 271 | 37 503 | 235 441 |
Financial assets and liabilities subject to offsetting or netting arrangements – SEB Group
The table shows recognised financial assets and liabilities that are presented net in the statement of financial position or with potential rights to off-set associated with enforceable master netting arrangements or similar arrangements, together with related collateral. The Net amounts show the exposure in the case of normal business as well as in the events of default or bankruptcy.
Financial assets and liabilities are presented net in the statement of financial position when SEB has legally enforceable rights to set-off, in the ordinary cause of business and in the case of bankruptcy, and intends to settle on a net basis or to realize the assets and settle the liabilities simultaneously. Repos with central counterparty clearing houses that SEB has agreements with and client receivables and client payables are examples of instruments that are presented net in the statement of financial position.
Financial assets and liabilities subject to enforceable master netting arrangements or similar arrangements that are not presented net in the statement of financial position are arrangements that 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 instruments simultaneously.
Assets and liabilities that are not subject to offsetting or netting arrangements, i.e those that are only subject to collateral agreements, are presented as Other instruments in balance sheet.
Reclassified portfolios – SEB Group
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Reclassified | |||||||
| Opening balance | 29 342 | 30 813 | -5 | 29 342 | 42 169 | -30 | 42 169 |
| Amortisations | - 645 | - 828 | -22 | - 645 | - 721 | -11 | -2 862 |
| Securities sold | -1 806 | -1 611 | 12 | -1 806 | -5 335 | -66 | -8 656 |
| Accrued coupon | 37 | - 32 | 37 | 31 | 19 | 9 | |
| Exchange rate differences | - 735 | 1 000 | -174 | - 735 | - 811 | -9 | -1 318 |
| Closing balance* | 26 193 | 29 342 | - 11 | 26 193 | 35 333 | -26 | 29 342 |
| * Market value | 25 604 | 28 423 | -10 | 25 604 | 33 748 | -24 | 28 423 |
| Fair value impact - if not reclassified | |||||||
| In Equity (AFS origin) | 177 | 242 | -27 | 177 | 339 | -48 | 1 117 |
| In Income Statements (HFT origin) | 4 | 98 | -96 | 4 | 107 | -96 | 217 |
| Total | 181 | 340 | -47 | 181 | 446 | -59 | 1 334 |
| Effect in Income Statements* | |||||||
| Net interest income | 88 | 103 | -15 | 88 | 209 | -58 | 602 |
| Net financial income | - 311 | 697 | -145 | - 311 | - 662 | -53 | - 639 |
| Other income | - 8 | - 1 | - 8 | - 276 | -97 | - 391 | |
| Total | - 231 | 799 | -129 | - 231 | - 729 | -68 | - 428 |
* The effect in the Income Statement is the profit or loss transactions from the reclassified portfolio reported gross. Net interest income is the interest income from the portfolio without taking into account the funding costs. Net financial income is the foreign currency effect related to the reclassified portfolio but does not include the off-setting foreign currency effects from financing activities. Other income is the realised gains or losses from sales in the portfolio.
Non-performing loans – SEB Group
| 31 Mar | 31 Dec | 31 Mar | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Individually assessed impaired loans | |||
| Impaired loans, past due > 60 days | 6 643 | 7 234 | 9 442 |
| Impaired loans, performing or past due < 60 days | 665 | 767 | 1 236 |
| Total individually assessed impaired loans | 7 308 | 8 001 | 10 678 |
| Specific reserves | - 3 796 | - 4 165 | - 5 783 |
| for impaired loans, past due > 60 days | - 3 417 | - 3 783 | - 5 142 |
| for impaired loans, performing or past due < 60 days | - 379 | - 382 | - 641 |
| Collective reserves | - 1 787 | - 1 790 | - 1 882 |
| Impaired loans net | 1 725 | 2 046 | 3 013 |
| Specific reserve ratio for individually assessed impaired loans | 51.9% | 52.1% | 54.2% |
| Total reserve ratio for individually assessed impaired loans | 76.4% | 74.4% | 71.8% |
| Net level of impaired loans | 0.25% | 0.28% | 0.36% |
| Gross level of impaired loans | 0.52% | 0.58% | 0.79% |
| Portfolio assessed loans | |||
| Portfolio assessed loans past due > 60 days | 4 802 | 5 389 | 6 404 |
| Restructured loans | 405 | 450 | 498 |
| Collective reserves for portfolio assessed loans | - 2 534 | - 2 914 | - 3 284 |
| Reserve ratio for portfolio assessed loans | 48.7% | 49.9% | 47.6% |
| Reserves | |||
| Specific reserves | - 3 796 | - 4 165 | - 5 783 |
| Collective reserves | - 4 321 | - 4 704 | - 5 166 |
| Reserves for off-balance sheet items | - 289 | - 299 | - 346 |
| Total reserves | - 8 406 | - 9 168 | - 11 295 |
| Non-performing loans | |||
| Non-performing loans* | 12 515 | 13 840 | 17 580 |
| NPL coverage ratio | 67.2% | 66.2% | 64.3% |
| NPL % of lending | 0.90% | 1.01% | 1.29% |
* Impaired loans + portfolio assessed loans past due > 60 days + restructured portfolio assessed loans
Seized assets – SEB Group
| 31 Mar | 31 Dec | 31 Mar | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Properties, vehicles and equipment | 2 315 | 2 251 | 1 800 |
| Shares | 50 | 49 | 53 |
| Total seized assets | 2 365 | 2 300 | 1 853 |
Discontinued operations – SEB Group
Income statement
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Total operating income | 34 | 78 | -56 | 34 | - 3 | 0 | 305 |
| Total operating expenses | - 42 | - 89 | -53 | - 42 | - 251 | -83 | - 645 |
| Profit before credit losses | - 8 | - 11 | -27 | - 8 | - 254 | -97 | - 340 |
| Net credit losses | 0 | - 1 | - 181 | ||||
| Operating profit | - 8 | - 11 | -27 | - 8 | - 255 | -97 | - 521 |
| Income tax expense | 8 | 10 | -20 | 8 | 9 | -11 | 33 |
| Net profit from discontinued operations | 0 | - 1 | -100 | 0 | - 246 | -100 | - 488 |
Assets and liabilities held for sale
| 31 Mar | 31 Dec | 31 Mar | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Loans to the public | 662 | ||
| Other assets | 1 164 | ||
| Total assets held for sale | 1 826 | ||
| Deposits from credit institutions | 1 126 | ||
| Deposits and borrowing from the public | 676 | ||
| Other liabilities | 1 | ||
| Total liabilities held for sale | 1 803 |
Cash flow statement
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Cash flow from operating activities | - 25 | 52 | -148 | - 25 | - 7 | 0 | 65 |
| Cash flow from investment activities | 0 | - 9 | - 100 | 38 | |||
| Cash flow from financing activities | 25 | - 53 | -147 | 25 | 97 | - 74 | 87 |
| Net increase in cash and cash equivalents | |||||||
| from discontinued operations | 0 | - 1 | -100 | 0 | 81 | - 100 | 190 |
Discontinued operations includes the work to finalise the operational separation of the divested retail operations in Germany and the divestment of the Ukrainian retail operations.
SEB financial group of undertakings
Capital base of the SEB financial group of undertakings
| 31 Mar | 31 Dec | |
|---|---|---|
| SEK m | 2013 | 2012 |
| Total equity according to balance sheet | 106 044 | 109 513 |
| Dividend (excl repurchased shares) | -1 501 | -6 028 |
| Investments outside the financial group of undertakings | -63 | -64 |
| Other deductions outside the financial group of undertakings | -4 769 | -4 451 |
| = Total equity in the capital adequacy | 99 711 | 98 970 |
| Adjustment for hedge contracts | -356 | -473 |
| Net provisioning amount for IRB-reported credit exposures | 0 | 0 |
| Unrealised value changes on available-for-sale financial assets | -1 109 | -597 |
| Exposures where RWA is not calculated | -762 | -802 |
| Goodwill | -4 055 | -4 147 |
| Other intangible assets | -2 528 | -2 559 |
| Deferred tax assets | -1 883 | -2 003 |
| = Core Tier 1 capital | 89 018 | 88 389 |
| Tier 1 capital contribution (non-innovative) | 4 172 | 4 300 |
| Tier 1 capital contribution (innovative) | 9 580 | 9 704 |
| Investments in insurance companies | -5 250 | |
| = Tier 1 capital | 97 520 | 102 393 |
| Dated subordinated debt | 6 322 | 6 515 |
| Deduction for remaining maturity | -51 | -39 |
| Perpetual subordinated debt | 1 728 | 1 890 |
| Net provisioning amount for IRB-reported credit exposures | 419 | 485 |
| Unrealised gains on available-for-sale financial assets | 1 074 | 990 |
| Exposures where RWA is not calculated | -762 | -802 |
| Investments outside the financial group of undertakings | -63 | -64 |
| Investments in insurance companies | -5 250 | |
| = Tier 2 capital | 3 417 | 8 975 |
| Investments in insurance companies | 0 | -10 501 |
| = Capital base | 100 937 | 100 867 |
The deduction for investments in insurance companies, which was earlier made from the capital base, has been changed from 2013 so that half is deducted from Tier 1 capital and the remaining half from Tier 2 capital.
On 31 March 2013 the parent company's core Tier 1 capital was SEK 83,520m (85,756 March 2012) and the reported core Tier 1 capital ratio was 12.1 per cent (13.9 March 2012).
Risk-weighted assets for the SEB financial group of undertakings
| Risk-weighted assets | 31 Mar | 31 Dec |
|---|---|---|
| SEK m | 2013 | 2012 |
| Credit risk IRB approach | ||
| Institutions | 24 343 | 23 879 |
| Corporates | 327 170 | 326 666 |
| Securitisation positions | 4 682 | 5 177 |
| Retail mortgages | 41 822 | 42 896 |
| Other retail exposures | 9 471 | 9 365 |
| Other exposure classes | 1 411 | 1 461 |
| Total credit risk IRB approach | 408 899 | 409 444 |
| Further risk-weighted assets | ||
| Credit risk, Standardised approach | 64 575 | 68 125 |
| Operational risk, Advanced Measurement approach | 41 132 | 40 219 |
| Foreign exchange rate risk | 13 592 | 14 042 |
| Trading book risks | 55 293 | 54 009 |
| Total risk-weighted assets | 583 491 | 585 839 |
| Summary | ||
| Credit risk | 473 474 | 477 569 |
| Operational risk | 41 132 | 40 219 |
| Market risk | 68 885 | 68 051 |
| Total | 583 491 | 585 839 |
| Adjustment for flooring rules | ||
| Addition according to transitional flooring | 317 955 | 293 398 |
| Total reported | 901 446 | 879 237 |
| Capital adequacy analysis | for the SEB financial group of undertakings | |||
|---|---|---|---|---|
| 31 Mar | 31 Dec | |
|---|---|---|
| Capital adequacy | 2013 | 2012 |
| Capital resources | ||
| Core Tier 1 capital | 89 018 | 88 389 |
| Tier 1 capital | 97 520 | 102 393 |
| Capital base | 100 937 | 100 867 |
| Capital adequacy without transitional floor (Basel II) | ||
| Risk-weighted assets | 583 491 | 585 839 |
| Expressed as capital requirement | 46 679 | 46 867 |
| Core Tier 1 capital ratio | 15.3% | 15.1% |
| Tier 1 capital ratio | 16.7% | 17.5% |
| Total capital ratio | 17.3% | 17.2% |
| Capital base in relation to capital requirement | 2.16 | 2.15 |
| Capital adequacy including transitional floor | ||
| Transitional floor applied | 80% | 80% |
| Risk-weighted assets | 901 446 | 879 237 |
| Expressed as capital requirement | 72 116 | 70 339 |
| Core Tier 1 capital ratio | 9.9% | 10.1% |
| Tier 1 capital ratio | 10.8% | 11.6% |
| Total capital ratio | 11.2% | 11.5% |
| Capital base in relation to capital requirement | 1.40 | 1.43 |
| Capital adequacy with risk-weighting according to Basel I | ||
| Risk-weighted assets | 1 120 256 | 1 091 468 |
| Expressed as capital requirement | 89 620 | 87 317 |
| Core Tier 1 capital ratio | 7.9% | 8.1% |
| Tier 1 capital ratio | 8.7% | 9.4% |
| Total capital ratio | 9.0% | 9.2% |
| Capital base in relation to capital requirement | 1.13 | 1.16 |
| RWA development | The Basel III framework |
Overall Basel II risk-weighted assets (RWA) before the effect of transitional flooring decreased by 0.5 per cent or SEK 3bn, since year-end.
| Risk-weighted assets | SEK bn |
|---|---|
| RWA 31 December 2012 | 586 |
| Volumes changes | 7 |
| Risk class migration | -1 |
| Risk-weight changes | -5 |
| Market and operational risk changes | 2 |
| Currency effect | -8 |
| Other | 2 |
| RWA 31 March 2013 | 583 |
Un-floored Basel II RWA was 48 per cent lower than Basel I RWA. The ultimate target is to use IRB reporting for all credit exposures except those to central governments, central banks and local governments and authorities, and a small number of insignificant portfolios.
The Basel III framework
The Basel III framework is in the process of being incorporated into EU legislation through the CRD IV/CRR package for implementation 1 January 2014. Due to delays in the EU process the planned implementation date of 1 January 2013 was not met and as a consequence, the Swedish transition rules, which limit the effect on the RWA, were extended to include 2013.
The CRD IV establishes explicit minimum levels for Common Equity Tier 1 and Tier 1 capital and requires banks to hold more and higher quality capital. RWA will mainly be affected by an additional so called credit value adjustment requirement for OTC-derivatives, new requirements for exposures on central counterparties, and an increase in risk weights for exposures on financial institutions.
In 2011, the Swedish government proposed stricter Common Equity Tier 1 capital ratio requirements than under Basel III; 10 per cent from 2013 and 12 per cent from 2015 (with capital and RWA defined according to fully implemented CRD IV / Basel III framework). Due to the delays in the legislative process at the EU level, Swedish authorities were not able to implement the stricter capital requirements as planned and are not expected to do so before 1 January 2014.
The following table summarises average risk weights (Risk-Weighted Assets, RWA, divided by Exposure At Default, EAD) for exposures where RWA is calculated following the internal ratings based (IRB) approach. Repos and securities
lending transactions are excluded from the analysis since they carry low risk-weight and can vary considerably in volume, thus making numbers less comparable.
| IRB reported credit exposures (less repos and securities lending) | 31 Mar | 31 Dec |
|---|---|---|
| Average risk-weight | 2013 | 2012 |
| Institutions | 16.7% | 15.9% |
| Corporates | 40.3% | 40.8% |
| Securitisation positions | 34.8% | 34.7% |
| Retail mortgages | 10.0% | 10.4% |
| Other retail exposures | 37.5% | 37.4% |
In 2012 the Swedish Financial Supervisory Authority announced a planned increase of capital requirements for Swedish retail mortgages. This will be achieved by a 15 per cent minimum level of mortgage risk weights and an additional capital requirement under Pillar 2. The Pillar 2 implementation raises questions about the practical implication.
Skandinaviska Enskilda Banken AB (publ)
| In accordance with FSA regulations | Q1 | Q4 | Jan - Mar | Full year | |||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Interest income | 8 692 | 9 889 | -12 | 8 692 | 9 718 | -11 | 38 470 |
| Leasing income | 1 399 | 1 424 | -2 | 1 399 | 1 528 | -8 | 5 817 |
| Interest expense | -5 594 | -6 729 | -17 | -5 594 | -7 084 | -21 | -26 809 |
| Dividends | 25 | -100 | 2 214 | ||||
| Fee and commission income | 2 175 | 2 616 | -17 | 2 175 | 2 114 | 3 | 8 963 |
| Fee and commission expense | - 339 | - 456 | -26 | - 339 | - 345 | -2 | -1 523 |
| Net financial income | 824 | 949 | -13 | 824 | 1 169 | -30 | 4 046 |
| Other income | 165 | - 288 | 165 | 12 | 159 | ||
| Total operating income | 7 322 | 7 430 | -1 | 7 322 | 7 112 | 3 | 31 337 |
| Administrative expenses | -3 418 | -4 568 | -25 | -3 418 | -3 420 | 0 | -15 077 |
| Depreciation, amortisation and impairment | |||||||
| of tangible and intangible assets | -1 252 | -1 734 | -28 | -1 252 | -1 278 | -2 | -5 446 |
| Total operating expenses | -4 670 | -6 302 | -26 | -4 670 | -4 698 | -1 | -20 523 |
| Profit before credit losses | 2 652 | 1 128 | 135 | 2 652 | 2 414 | 10 | 10 814 |
| Net credit losses | - 97 | - 87 | 11 | - 97 | - 139 | -30 | - 385 |
| Impairment of financial assets | - 1 | - 20 | -95 | - 1 | -1 114 | ||
| Operating profit | 2 554 | 1 021 | 150 | 2 554 | 2 275 | 12 | 9 315 |
| Appropriations | 327 | -4 401 | 327 | 279 | 17 | -3 175 | |
| Income tax expense | - 857 | 1 037 | - 857 | - 765 | 12 | -1 289 | |
| Other taxes | - 15 | - 86 | - 15 | 9 | - 86 | ||
| Net profit | 2 009 | -2 429 | 2 009 | 1 798 | 12 | 4 765 |
Income statement – Skandinaviska Enskilda Banken AB (publ)
Statement of comprehensive income – Skandinaviska Enskilda Banken AB (publ)
| Q1 | Q4 | Jan - Mar | Full year | ||||
|---|---|---|---|---|---|---|---|
| SEK m | 2013 | 2012 | % | 2013 | 2012 | % | 2012 |
| Net profit | 2 009 | -2 429 | 2 009 | 1 798 | 12 | 4 765 | |
| Items that may subsequently be reclassified to the income statement: | |||||||
| Available-for-sale financial assets | 486 | 554 | -12 | 486 | 226 | 115 | 693 |
| Cash flow hedges | - 547 | 152 | - 547 | - 586 | -7 | 584 | |
| Translation of foreign operations | - 12 | - 31 | -61 | - 12 | - 15 | -20 | - 72 |
| Other comprehensive income (net of tax) | - 73 | 675 | - 73 | - 375 | -81 | 1 205 | |
| Total comprehensive income | 1 936 | -1 754 | 1 936 | 1 423 | 36 | 5 970 |
Balance sheet - Skandinaviska Enskilda Banken AB (publ)
| Condensed | 31 March | 31 Dec | 31 March |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Cash and cash balances with central banks | 201 752 | 165 994 | 20 430 |
| Loans to credit institutions | 237 134 | 200 189 | 299 699 |
| Loans to the public | 950 818 | 937 734 | 897 300 |
| Financial assets at fair value | 484 934 | 426 326 | 381 910 |
| Available-for-sale financial assets | 16 942 | 17 610 | 16 909 |
| Held-to-maturity investments | 920 | 1 636 | 2 757 |
| Investments in associates | 1 053 | 1 044 | 1 113 |
| Shares in subsidiaries | 49 709 | 50 671 | 53 606 |
| Tangible and intangible assets | 41 868 | 43 026 | 42 915 |
| Other assets | 43 185 | 64 823 | 33 101 |
| Total assets | 2 028 315 | 1 909 053 | 1 749 740 |
| Deposits from credit institutions | 238 259 | 199 711 | 257 863 |
| Deposits and borrowing from the public | 695 429 | 637 721 | 525 645 |
| Debt securities | 664 048 | 641 413 | 601 114 |
| Financial liabilities at fair value | 252 079 | 232 062 | 199 105 |
| Other liabilities | 59 890 | 74 097 | 47 760 |
| Provisions | 141 | 160 | 62 |
| Subordinated liabilities | 23 414 | 24 213 | 24 362 |
| Untaxed reserves | 26 346 | 26 346 | 25 049 |
| Total equity | 68 709 | 73 330 | 68 780 |
| Total liabilities, untaxed reserves and shareholders' equity | 2 028 315 | 1 909 053 | 1 749 740 |
Pledged assets, contingent liabilities and commitments - Skandinaviska Enskilda Banken AB (publ)
| 31 March | 31 Dec | 31 March | |
|---|---|---|---|
| SEK m | 2013 | 2012 | 2012 |
| Collateral and comparable security pledged for own liabilities | 313 434 | 294 990 | 294 428 |
| Other pledged assets and comparable collateral | 134 969 | 119 577 | 108 025 |
| Contingent liabilities | 81 406 | 78 565 | 79 423 |
| Commitments | 332 924 | 315 157 | 309 665 |
This is SEB
| Mission | To help people and businesses thrive by providing quality advice and financial resources. |
|---|---|
| Vision | To be the trusted partner for customers with aspirations. |
| Customers & markets | 2,800 large corporates and institutions, 400,000 SMEs and 4 million private customers bank with SEB. They are mainly located in eight markets around the Baltic Sea. |
| Brand promise | Rewarding relationships. |
| Corporate objectives | The leading Nordic bank for corporates and institutions. |
| The top universal bank in Sweden and the Baltic countries. | |
| Strategic priorities | Long-term customer relationships – build and develop relationships based on the customers' long-term needs with a holistic perspective. |
| Growth in areas of strength – pursue growth in three selected core areas – large corporations and financial institutions in the Nordic countries and Germany, small and medium-sized companies in Sweden, and a holistic savings offering. |
|
| Resilience and flexibility – ensure the financial strength needed to demonstrate stability and resilience as well as the flexibility to adapt operations in a cost-efficient manner to the prevailing market conditions. |
|
| People | 16,000 highly skilled people serving customers from locations in some 20 countries; covering different time zones, securing reach and local market knowledge. |
| Values | Guided by our Code of Business Conduct and our core values: professionalism, commitment, mutual respect and continuity. |
| History | Over 150 years of business, building trust and sharing knowledge. The Bank has always acted responsibly in society promoting entrepreneurship, international outlook and long-term relationships. |