Annual Report 2000 00 A financial partner for Europe Through acquisitions and successful development of new services and distribution channels SEB has grown into a European financial partner for primarily companies and financially active individuals. More than half of SEB’s staff is now employed outside Sweden. Contents SEB’s financial information is found on Chairman’s statement 2 www.seb.net. President’s statement 3 The SEB share 4 Economic development 6 Financial information during 2001 This is SEB 8 Publication of annual accounts 20 February Publication of Annual Report End of March SEB’s main groups 13 Annual General Meeting 5 April Retail Distribution 14 Interim report January-March 4 May Interim report January-June 23 August Merchant Banking 16 Interim report January-September 25 October SEB Securities Services 19 SEB Invest & Funds 20 Private Banking 21 For further information please contact: SEB Trygg Liv 22 Gunilla Wikman Boo Ehlin Head of Group Communications Press Officer BfG 24 Telephone +46 8 763 81 25 Telephone +46 8 763 85 77 Enskilda Securities 26 e-mail: [email protected] e-mail: [email protected] SEB Kort 28 The Baltic 29 Lotta Treschow Annika Halldin SEB’s e-banking activities 30 Head of Investor Relations Responsible for financial Telephone +46 8 763 95 59 information/Shareholder contacts Report of the Directors 32 e-mail: [email protected] Telephone + 46 8 763 85 60 e-mail: [email protected] Risk- and capital management 39 Cover picture: Ingrid Nabseth, relationship manager, mid-corporate market Accounting principles 44 Definitions 47 Profit and loss accounts 48 Balances sheets 50 Cash flow analysis 51 Notes 52 Five-year summery 82 Proposal for the distribution of profit 84 Auditor’s report 85 Board of Directors 86 Executive Committee and auditors 87 Addresses 88 2000 in brief The German BfG Bank is incorporated with SEB on 3 January, 2000. Enskilda Securities merges with Norwegian Orkla Finans (Fondsmegling). SEB is closing 50 of its branch offices as a result of the increased use of the Internet. SEB joins the Volvo Ocean Race project as principal sponsor and will participate with its own boat in the race that will take place in 2001–2002. SEB launches cash offers to the share- holders of Eesti Ühispank, Estonia, Latvijas Unibanka, Latvia, and Vilniaus Bankas, Lithuania. By year-end SEB has nearly 100 per cent of the shares in these three banks. SEB increases its ownership of the Polish Bank Ochrony Srodowiska, BOS, from 4.5 to 33 per cent. After year-end SEB is announcing merger plans with FöreningsSparbanken. SEB ANNUAL REPORT 2000 1 CHAIRMAN’S STATEMENT European strategy unchanged The year 2000 developed its decision after SEB had published its annual accounts. into yet another strong year The purpose of the planned merger is to create a strong Swe- for SEB, with increased busi- dish base for further expansion in Europe with the help of the ness volumes and improved new Group’s collective experience, competence and financial result. I note with pleasure strength. Our customers will get better service and accessibility. the strength that the Bank SEB and FöreningsSparbanken complement each other has demonstrated as a cor- very well. Together, we will be able to consolidate our success- porate bank, as an asset ma- ful achievements within e-banking, where we both are among nagement bank and as a the world leaders. The merger will lead to the release of partner to our private custo- resources for development, which means that we will be able mers. to offer customers the best financial services also in the future. To all appearances, the Our discussions with FöreningsSparbanken have shown world economy reached its that we – in spite of our differences in structure and history - peak in 2000. After a strong in all essentials share the same view of the development of rally in the equities of the so-called new economy at the the financial market. I can assure you that our discussions beginning of the year, increasing uncertainty characterised have been held in a very good spirit. This constructive dialo- the financial markets. There was a strong slump in stock pri- gue bodes well for our common future. I look forward to ces and deteriorating liquidity in the credit markets. working with the new Board and Management, building a The economic outlook for 2001 is hard to assess. The new and successful bank. slowdown in U.S. was faster than expected and the future is The merger proposal will be tried by the relevant compe- highly dependent upon how faith in the future will develop. tition authorities. We hope that they will arrive at a positive Also Europe is showing signs of a recession. Productivity is decision and that their examination will not be a drawn-out furthered through continued integration and structural reforms. process. The proposal will be submitted to our respective Even if growth should slow down a little the European econ- Annual General Meetings for decision. omy may very well develop better than that of the U.S. in 2001. The road to Europe Structural transformation of the “new economy” Regardless of these decisions, SEB’s strategy to develop The slumping stock prices of IT-related companies will be into a leading, modern European bank stays firm. We are in followed by a strong consolidation of the sector. At the same a stage of rapid expansion, both in terms of turnover and time, the rationalisation of the more traditional economy geography. In the course of a couple of years we have esta- continues concurrently with the introduction of new ways of blished a presence in Germany, Poland and the Baltic coun- working. The new technology has penetrated all areas of ac- tries and are now operating around the whole Baltic Sea. tivity and has come to stay – like the ongoing globalisation. Based upon our traditional business, we have also mana- ged to take a significant lead over our competitors in the use Changes within the European financial sector of modern information technology. We have gained great The restructuring of the European financial sector continued experience from being a partner to internationally active during 2000, with several new mergers. The demand for growth companies. This is a unique and valuable asset in an more efficient capital markets increases as a result of globali- ever-increasingly global world. sation, deregulation, the common currency and new techno- 2000 was not just a successful year for SEB, but filled with logy. The need for a critical mass in business leads inevitably hard work for many of our employees. Our staff has focused to consolidation. More customers lead to economies of scale on customers and their needs at the same time as a number of and decreasing costs per customer. structural projects were carried out. On behalf of the Board I In the Nordic area, consolidation so far has primarily wish to express my great appreciation and thanks to SEB’s been achieved within each respective country and between Management and all employees for their outstanding perfor- the countries of the region. However, I am convinced that it mance and the fine result. is just a matter of time before Nordic and European financial companies start building closer relations with each other. Stockholm 23 February 2001 Planned merger with FöreningsSparbanken On 22 February 2001, a merger of SEB and FöreningsSpar- banken was proposed. The parties had discussed the matter Jacob Wallenberg during a relatively short period of time and the Board made Chairman 2 SEB ANNUAL REPORT 2000 PRESIDENT’S STATEMENT A year of strong growth Work within SEB was characterised by strong expansion. The good. It is also gratifying to German BfG Bank was consolidated from the beginning of the see how rapidly these banks year and the shares outstanding in the three Baltic banks were have been assimilated in the acquired towards the end of the year. The acquisition of a SEB culture and how smoo- block of shares in the Polish Bank Ochrony Srodowiska, BOS, thly the co-operation is func- signified the closing of our Baltic circle. But in addition to this tioning. The acquisition of acquisition-based geographic expansion, we also invested in slightly more than 30 per cent organic growth in new markets during the year through the of the BOS reflects a first step development of new e-banking and e-brokerage services. for SEB in a large and expan- Against the background of the weaker market trend, the ding market. year’s total result of SEK 10,080 M was gratifyingly strong. All in all SEB had a completely different form at the end Development of of 2000, compared with the end of 1999. The number of platform for e-growth employees had been increased from 14,000 to 21,500, and the Outside SEB’s core busines- proportion of employees in Sweden decreased from 75 per ses on a Nordic base and the geographically extended core, cent to 45 per cent. The base in the Nordic countries within a strategy for exporting our knowledge of e-banking from Nordic Banking and Asset Management & Life has shown Sweden was started in 1999. We have in year 2000 built and great strength during the year. From that base we have introduced our pan-European model in Denmark and expanded our core business geographically into the Baltic Germany and in early 2001 in the UK. In contrast to markets states and Germany. The third development phase within for physical goods, e-banking and e-brokerage operations SEB is the growth into new markets with totally new con- are continuing to expand.