ANNUAL2015 REPORT CONTENTS 2015 IN BRIEF THIS IS SEB Cover Chairman’s statement 2 KEY FIGURES President’s statement 3 2015 2014 STRATEGY Macro environment 4 Operating income, SEK m 44,148 46,936 Strategy 6 Operating profi t, SEK m 20,865 23,348 Overall targets 10 Return on equity, per cent 12.2 15.3 Value creation 12 Earnings per share, SEK 7.57 8.79 CUSTOMER SEGMENTS Proposed dividend, SEK 5.25 4.75 Large corporations 14 Financial institutions 16 Common Equity Tier 1 capital ratio, per cent 18.8 16.3 Companies 18 Leverage ratio, per cent 4.9 4.8 Private individuals 20 Liquidity Coverage Ratio (LCR), per cent 128 115 STAKEHOLDERS SEB’s employees 22 SEB in society 24 Shareholders and the SEB share 26 IMPORTANT EVENTS REPORT OF THE DIRECTORS IN 2015 FINANCIAL REVIEW OF THE GROUP Result and profi tability 29 Financial structure 32 SEB’s divisions 36 High volatility in asset prices and FX rates increased customer demand for SEB’s geographic markets 39 hedging and risk management services substantially throughout the year. RISK, LIQUIDITY AND CAPITAL MANAGEMENT Risk, liquidity and capital management 40 CORPORATE GOVERNANCE The number of initial SEB revised its long-term vision and Corporate governance 46 public off erings in the established a three-year plan for 2016–2018. Board of Directors 48 Nordic region was record- Group Executive Committee 54 Remuneration report 58 high but demand for Several European countries experienced Internal control over fi nancial reporting 60 other corporate negative interest rates and the Swedish The regulatory framework 61 transactions and large central bank lowered the repo rate during the Defi nitions 62 corporate credits was low. year from zero to minus 0.35 per cent. FINANCIAL STATEMENTS SEB Group 63 Income statement 64 SEB’s German operations were The total fee amount contributed Balance sheet 65 streamlined and SEB Asset by SEB for fi nancial stability Statements of changes in equity 66 Management AG was divested. Cash fl ow statement 67 purposes was SEK 1,201m Skandinaviska Enskilda Banken 68 – consisting of SEK 590m to Notes to the fi nancial statements 72 stability funds, SEK 429m Five-year summary 152 SEB delivered on and closed the to deposit guarantee schemes Proposal for the distribution of profi t 154 Auditor’s report 155 business plan for 2013–2015. and SEK 182m in resolution fees. MARKET SHARES, INTERFACES AND RANKING Market shares, interfaces and ranking 156 SEB launched additional funds with positive sustainability impact, CALENDAR AND OTHER INFORMATION Cover e.g. the SEB Global Sustainability and Green Bond Funds, and signed Montréal Carbon Pledge. THIS IS SEB WHO WE ARE We are strongly committed to deliver customer value. We build on our heritage of entrepreneurship, international outlook and long-term perspective. Our purpose Our vision We believe that entrepreneurial To deliver world-class minds and innovative companies service to our are key to creating a better world. customers. We are here to enable them to achieve their aspirations and suc- ceed through good times and bad. Our strategic Our strategic ambition priorities True customer centricity • Leading customer in a digitised world. experience • Maintaining resilience and fl exibility • Growing in areas of strength SEB’s fi nancial targets OUTCOME 2015 OUTCOME 2014 Dividend payout ratio of >40 per cent of 66 %1) 63 % earnings per share Common Equity Tier 1 ≈160 capital ratio of 150 18.8 %2) 16.3 % bps > requirement years in the service of enterprise Return on equity com- 3) petitive with peers 12.9 % 13.1 % 1) SEK 5.25 per share (4.75). Outcome excludes one-off item(s). Outcome incl. one-off item(s) is 69 % (54). 2) Regulatory requirement as of the fourth quarter of 2015: 16 %. 3) Outcome excludes one-off item(s). Outcome incl. one-off item(s) is 12.2 % (15.3). THIS IS SEB WHAT WE DO SEB plays an active part in the development of the societies in which it is operating. In Sweden and the Baltic countries we off er fi nancial advice and a wide range of fi nancial services. In Denmark, Finland, Norway and Germany, our operations have a strong focus on a full-service off ering to corporate and institutional clients. SEB meets stakeholders needs... ....generating value... 30,896 Customers FINANCIAL 23,614 STRATEGY RESILIENCE 18,788 DISTRIBUTED VALUE SEK 59bn Shareholders CUSTOMER CORPORATE 11,515 10,382 Interest paid to 8,719 • SERVICE GOVERNANCE customers • Dividends paid to 270,000 shareholders 11,891 11,330 11,189 • Salaries, pensions Employees and benefits to 15,500 employees RISK 9,350 9,180 Payments to 13,000 IT 10,286 • CULTURE business partners and suppliers 7,847 8,031 7,152 Taxes and fees Society at large • ...via our services... ...and diff erent channels IN AREAS LIKE: 252 158 • Commercial banking • Life insurance branch offi ces in million visits • Investment banking • Payments Sweden and the online • Advisory services • Financing Baltic countries • Long-term savings 20 165 international sites million mobile bank interactions 24/7 200 client executives telephone bank for large corporates services and institutions THIS IS SEB WHOM WE SERVE Customers always come fi rst. Our deeply committed 15,500 employees work together as a team to serve our customers. LARGE CORPORATIONS SEB’s corporate customers in the Nordic 2,300 region are among the largest in their respective industries. In Germany they range from large large corporations mid- corporates to large multinationals. FINANCIAL INSTITUTIONS The institutional clients 700 operate both in the Nordic countries and internationally. fi nancial institutions CORPORATE CUSTOMERS In all, SEB serves approximately 257,000 400,000 small and medium-sized companies in Sweden and the Baltic countries. Of these, some 257,000 are home bank customers home bank customers. PRIVATE CUSTOMERS SEB has approximately 4 million private individ- 1.3 uals among its customers in Sweden and the Baltic countries. Of these some 1.3 million are million home bank home bank customers. In addition, SEB serves customers around 27,000 private banking customers. SEB ANNUAL REPORT 2015 1 CHAIRMAN’S STATEMENT A LONG-TERM PERSPECTIVE We never compromise on safeguarding a sound financial position in order to support our customers in good times and bad. MARCUS WALLENBERG, CHAIRMAN n 2015, we have once again The regulatory framework for the the real economy. The long-term experienced the strong interde- banking system continues to be both perspective is important also in this pendence between the banking uncertain and changing. The cumula- context. system and the development in tive effects on the real economy fol- Our ambition to be long-term has Ithe real economy. It has in many lowing all the regulatory initiatives also been key in the work that has ways been a year marked by uncer- on the international Basel, EU and been undertaken over the past year in tainty – in terms of future global national levels are still difficult to order to lay the roadmap going for- growth prospects, the geopolitical assess. It is important to remember, ward for the bank. With the strategic situation, high volatility in asset that Swedish banks, through our priorities to focus on a leading cus- prices as well as also in terms of the credit support to the large and export tomer experience, ensure continued future banking regulatory frame- oriented corporate sector, contrib- resilience and to grow in areas of work. Strong and profitable banks, uted in a significant way in preventing strength, our CEO Annika Falkengren such as SEB, who uphold transparent the liquidity crisis in 2008 to spread and her management, have outlined a and liquid market mechanisms are to other parts of the economy. truly ambitious vision – to deliver vital for the development of the real world-class service to our customers. economy and the societies we all » Strong and profitable banks, Looking back at the execution of want to be an active part of. As a such as SEB, who uphold trans- the previous three year business plan Nordic corporate bank founded 160 parent and liquid market mech- we as shareholders have seen a total years ago in the service of entrepre- shareholder return of 23 per cent per neurs and enterprise, we know how anisms are vital for the develop- year. Going forward, SEB maintains important it is to always take a long- ment of the real economy.« its financial targets and our long-term term perspective in everything we aspiration to reach a return of 15 per do. It means that we take measures to In Sweden, we are starting to see a cent given a Common Equity Tier 1 ensure the highest standards for cor- flow of volumes from banks to other ratio of around 150 bps above the porate governance and risk control. – less transparent and less regulated requirement from the Swedish FSA. It means that we never compromise – parts of the financial sector. At the We are determined to work relent- on safeguarding and planning for a same time large corporates get more lessly for the best interests of our sound financial position through credit through corporate bonds than customers and thus the overall society, capital and liquidity buffers in order through the banking system. There is so that you as shareholders can expect to support our customers in good a proposal to move away from a bank a competitive return over time. times and bad. It means that we con- specific risk-based approach to the tinuously strive to increase efficiency, usage of homogeneous risk weights Stockholm, February 2016 so that we, by being profitable, can and leverage ratios.