vinjett Brödtext Annu A l report 2010 report l Annual Report 10 seb annual report 2010 ii this is seb SEB is a leading Nordic financial services group. As a relationship bank, SEB in Sweden and the Baltic countries offers financial advice and a wide range of other services. 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. The international nature of SEB's business is reflected in its presence in some 20 countries worldwide. The Group has about 17,000 employees. Markets Operating income Branches and repre- Geographical distribution, per cent sentative offices SEB representation worldwide 2010 2009 Sweden 56 (56) Beijing Singapore Norway 8 (9) Kiev Nice Germany 1) 8 (8) Warsaw Luxembourg Denmark 8 (7) Shanghai Moscow Finland 3 (3) New York Hong Kong Estonia 3 (3) Sao Paulo Latvia 3 (4) London Lithuania 4 (4) Geneva Other 7 (6) New Delhi SEB’s activities principally embrace customers based in the Nordic and Baltic countries and Germany. Sweden is the single largest market, accounting for more than half of operating income in 2010. 1) Excluding centralised treasury operations Key figures Return on equity 1) Net profit Tier 1 capital ratio 1) Dividend Per cent SEK bn Per cent SEK bn 25 15 15 5 20 12 12 4 15 9 9 3 10 6 6 2 5 3 3 1 0 0 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 20101) Peer average Target: Sustainable profit growth Target: at least 7 per cent up to Target: 40 per cent of net profit per 1) Continuing operations and including 2008, 10 per cent share over a business cycle as from 2009, an interim until Basel Target: Highest among peers 1) A dividend of SEK 1.50 per share III effects have been analysed. is proposed for 2010, corresponding 1) 2006 Basel I. 2007–2010 Basel II to a pay-out ratio of 49 per cent. without transitional rules. this is seb SEB's customers Rewarding relationships are the cornerstones of our business. Ever since A O Wallenberg founded SEB in 1856, we have provided financial services to assist our customers in reaching their financial objectives. 2,600 400,000 4,000,000 Corporates and Institutions SME customers Private customers SEB is the leading corporate and invest- SEB offers small and medium-sized corpo- SEB provides some four million individuals ment bank in the Nordic countries, serving rate customers several customized prod- with products and services to meet their large corporations, financial institutions, ucts that were initially developed in co- financial needs. These include products and banks and commercial real estate clients operation with SEB’s large corporate services for daily finances, savings, wealth with corporate banking, trading and capital clients. In addition, numerous services are management and life insurance. SEB strives markets and global transaction services. specifically designed for small companies for excellence in customer service and tele- Comprehensive pensions and asset man- and entrepreneurs. phone service is available to most of our agement solutions are also offered. customers around-the-clock, all-year round – in Sweden in more than 20 languages. Meeting places and customer interaction 2010 Branch offices1) 375 Number of syndicated loans in the Nordic region 21 International branches and representative offices 20 (value USD 4.8bn) Automatic bank service machines 1) 2) 1,500 Number of equity capital markets transactions in the Nordic region 32 International private banking branches 12 (value EUR 4.8bn) Card transactions 435 million Number of M&A transactions in Sweden 20 Users of SEB's Internet bank services 1) 3.4 million (value EUR 2.7bn) Answered no. of telephone calls 1) 4.6 million Life insurance intermediaries and brokers 2,000 1) Excl. Retail Germany 2) ATMs, machines for cash deposits, transfers and foreign exchange . SEB's Business divisions Operating income Operating profit Merchant Banking – Commercial and investment banking services to large corporate SEK 17,130m (20,052) SEK 8,498m (11,428) and institutional clients in 17 countries, mainly in the Nordic region and Germany. Retail Banking – Banking and life insurance services to private individuals and small and SEK 8,569m (9,034) SEK 2,484m (2,891) medium-sized corporate customers in Sweden as well as card operations in the Nordic countries. Wealth Management – Asset management, investment management, including SEK 4,384m (3,646) SEK 1,651m (1,142) mutual funds, and private banking services to institutional clients and high net worth individuals. Life – Life insurance products for private individuals and corporate customers, SEK 4,539m (4,425) SEK 2,202m (2,115) mainly in the Nordic and Baltic countries. Baltic – Banking and life insurance services to private individuals and small and SEK 2,846m (3,794) SEK –121m (–10,363) medium-sized corporate customers in Estonia, Latvia and Lithuania. Contents 2010 in brief This is SEB Cover 2010 in brief Cover Chairman's statement 2 ● Operating income: SEK 36,879m (41,575) President's statement 3 Strategy 4 ● Profit before credit losses: SEK 12,928m (16,377) Markets and competition 6 ● Operating profit: SEK 11,105m (4,351) The people in SEB 12 ● Net profit from continuing operations: SEK 8,584m (1,869) Corporate sustainability 14 ● Return on equity, continuing operations: 8.65 per cent The SEB share 16 (1.89) ● Report of the Directors 18 Earnings per share, continuing operations: SEK 3.88 (0.95) ● Financial Review of the Group 18 Proposed dividend: SEK 1.50 (1.00) Result and profitability 18 ● Core Tier I capital ratio1): 12.2 per cent (11.7) Financial structure 21 ● Tier I capital ratio1): 14.2 per cent (13.9) Divisions 24 Merchant Banking 24 1) without Basel II transitional floor Retail Banking 28 Wealth Management 32 Life 34 The most important events in 2010: Baltic 36 Risk and Capital Management 38 ● In July, SEB reached an agreement to divest its retail opera- Corporate Governance within SEB 55 tions in Germany to Banco Santander. The long-term finan- Board of Directors 64 cial impact is positive for SEB. Strategically the divestment Group Executive Committee 66 allows SEB to concentrate on its core areas of competitive Remuneration report 70 advantage in Germany. The divestment was finalised as of 31 January, 2011. Financial Statements 73 SEB Group 74 ● SEB’s operations in the Baltic region experienced a signifi- Income statement 74 cant improvement during the year. For the first time since Balance sheet 75 2008, SEB published positive operating profit for its Baltic Statements of changes in equity 76 operations in the third and fourth quarters of 2010. Cash flow statement 77 Skandinaviska Enskilda Banken 78 Income statement 78 ● The final version of Basel III, the capital and liquidity related Balance sheet 79 regulatory framework, was announced by the Basel Com- Statements of changes in equity 80 mittee in December 2010. The regulations will be in force Cash flow statement 81 starting from 2013. Notes to the income statements 91 Five-year summary 147 Definitions 149 Proposal for the distribution of profit 150 Auditors’ report 151 Addresses Cover SEB’s financial information is available on www.sebgroup.com Financial information during 2011 Publication of Annual Accounts 4 February Interim report January – March 3 May Publication of Annual Report on the Internet 28 February Interim report January – June 14 July Annual General Meeting 24 March Interim report January – September 27 October For further information please contact: Jan Erik Back Ulf Grunnesjö Viveka Hirdman-Ryrberg Malin Schenkenberg Chief Financial Officer Head of Investor Relations Head of Communications Financial Information Officer Telephone +46 8 22 19 00 Telephone +46 8 763 85 01 Telephone +46 8 763 85 77 Telephone +46 8 763 95 31 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Front cover: Kätlin Kruusoja (from SEB) and Raul Kaljuraid (from Ferroline) at Ferroline's warehouse in Tallinn (read more in SEB’s Annual Review 2010, page 20). The deep financial crisis had a major impact on the economies around the world. The Nordic region was also affected but did indeed show resilience. Three years later it is time to summarise and conclude on a period of exceptional market conditions. On pages 2–3, Marcus Wallenberg, the Chairman of the SEB Board, and Annika Falkengren, SEB's President and CEO, give their outlook on the new financial land­ scape that is emerging. They also discuss how the Bank has strengthened its position in the past few years by prioritising finan­ cial stability and customer relationships. seb annual report 2010 1 chAirmAn's stAtement As the new regulatory framework is being fin- alised, the challenge is to not cramp financial institutions so that they can not adequately meet the needs of the wider economy. It has been said many times during the Europe new regulatory bodies on a pan- The German retail business was recent years' global financial turbulence, European level are being introduced. divested, and the focused growth initia- but it nevertheless deserves to be Taken together, the prerequisites have tives in the Nordic and German whole- repeated: banks differ from other institu- been to create a more stable, a more sale segments were launched. tions as the collapse of a bank affect not transparent and a more properly super- only customers and shareholders, but a vised global financial system. Strong balance sheet wider circle of stakeholders resulting in a Indeed, better financial regulation Another key priority was the establish- lack of trust and a weak financial system has much to accomplish, but cannot ment of a holistic view on SEB’s balance itself.