Annual Report 2003
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Annual Report 2003 SEB’s competent and committed employees play a vital role in making the customers even more satisfied. Contents The Annual Report will be available on www.sebgroup.com 2003 in brief 1 Financial information during 2004 Chairman’s statement 2 Publication of annual accounts 13 February President’s statement 3 Publication of Annual Report Mid March Economic development 4 Annual General Meeting 1 April Interim report January–March 6 May This is SEB 6 Interim report January–June 27 July Interim report January–September 20 October SEB in the society 12 The SEB share 14 For further information please contact: Gunilla Wikman Head of Group Communications SEB’s divisions Telephone +46 8 763 81 25 Nordic Retail & Private Banking 16 e-mail: [email protected] Corporate & Institutions 18 SEB AG Group 21 Per Anders Fasth German Retail & Mortgage Banking 22 Head of Group Investor Relations SEB Asset Management 24 Telephone +46 8 763 95 66 SEB Baltic & Poland 26 e-mail: [email protected] SEB Trygg Liv 28 Annika Halldin Head of Financial information Report of the Directors Telephone + 46 8 763 85 60 Financial Review of the Group 31 e-mail: [email protected] Risk and Capital management 37 Corporate Governance 43 Accounting principles 48 Definitions 52 Profit and Loss Accounts 53 Balance Sheets 55 Cash flow analysis 56 Notes 57 Five-year summary 94 Proposal for the distribution of profit 96 Auditors’ report 97 Board of Directors 98 Group executive Committee and Auditors 99 Addresses 100 SEB officers on the cover (from left to right): 1. Espen Östlyngen 2. Björn Jansson 3. Cecilia Gunne 4. Anders Johnsson 5. Henrik Mitelman 6. Simone Schenk 7. Elke Dott 8. Mireille Rydberg 9. Wolfgang Grünwald 10. Klas Eklund 11. Neslihan Demir 12. Vallo Pulk 13. Stefan Spahl 14. Viveka Andersson 15. Einar Thodal-Ness 16. Eerika Vaikmäe-Koit 17. Charwin Agard 18. Markus Schuwerack 19. Mart Altvee 20. Inger Pettersson 21. Matteo Biliotti 22. Helena Pajander 23. Doris Mayer 24. Fatma Topcu 25. Evelin Mals 26. Håkan Hellquist 27. Wolfgang Degenkolb 28. Evelin Pull 29. John Jawor 30. Jan Palmberg 31. Leif Nylén 32. Viveka Hirdman-Ryrberg 33. Gert-Jürgen Schimmelpfennig 34. Harald Radu 35. Birgitta Callin 36. Johan Magnusson 37. Marie Ekström 38. Figen Kandemir 2003 in brief Key figures Operating result including pension compensation in- creased by 7 per cent, to SEK 7,963m (7,412m). Net profit and dividend Cost development Per SEB share, SEK Incl. SEB Trygg Liv’s costs Net profit increased by 7 per cent to SEK 5,704m (5,318m) representing SEK 8.22 (7.60) per 10 25 1.0 share. 8 20 0.8 The SEB share rose by 46 per cent, better than Swedish SAX-index and European bank index. 6 15 0.6 The credit loss level remained stable. 4 10 0.4 Return on equity was 12.3 per cent (12.0). Proposed dividend is SEK 4.00 (4.00). 2 5 0.2 0 0 0 1999 2000 2001 2002 2003 2001 2002 2003 Result Dividend Cost development, SEKbn Cost/income ratio, % Key figures Operating result per division 2003 2002 SEKm Return on equity, % 12.3 12.0 Earnings per share, SEK* 8.22 7.60 Nordic Retail & Private Banking Cost/income ratio 0.67 0.69 Credit loss level, % 0.15 0.13 Corporate & Institutions Total capital ratio, % 10.23 10.47 German Retail & Mortgage Banking Core capital ratio, % 7.97 7.88 Number of full time equivalents, average 18,067 19,003 SEB Asset Management Number of e-banking customers, thousands 1,614 1,332 SEB Baltic & Poland Assets under management, SEK billion 822 742 SEB Trygg Liv * For further information on the SEB share, please see page 14 0 1,000 2,000 3,000 4,000 5,000 Strategy and change programme SEB’s change programme, called 3 C as in Customer • Improved co-operation and increased cross- satisfaction, Cross-servicing and Cost efficiency, selling within the Group – strengthened market continued to generate strong results during 2003. positions in many areas and higher employee motivation. • Increased customer satisfaction – record high • Increased cost efficiency – Group costs ratings among corporations and institutions, highest amounted to SEK 19,2bn at year-end compared ranking for Enskilda Securities, great improvements with SEK 22,5bn on a yearly basis summer 2001. for small and medium sized companies. SEB ANNUAL REPORT 2003 1 Chairman’s statement Continuous result improvement It gives me and my fellow Board members great pleasure to see that the Group’s patient cost-cutting work and efforts to increase efficiency and deepen customer relations has led to a considerable improvement of SEB’s result. The world economy This spring the Swedish “Åsbrink” Committee will present its started to recover in proposals on how to restore confidence in the business commu- 2003. After a turbu- nity, including one for a Swedish corporate governance code. lent start – with war For several years, SEB’s Board and Executive Management in Iraq, the Sars have attached great importance to openness, transparency and disease and risks for communication. This, in combination with clear corporate deflation – the world governance through the Board, auditors and committees, is began to look a little of absolutely vital importance for keeping the confidence of brighter, including shareholders and other interested parties. the stock markets. In the best interests of shareholders, the Board plays an The fact that most active part in the current monitoring of the bank by engaging of the world’s stock itself more continuously in SEB’s three existing committees: markets have recov- The Credit Committee, the Audit and Compliance Committee ered indicates that and The Compensation Committee. These are described more the world economy in detail in the Report of the Directors. is picking up, primarily in the U.S. and China that grows at a furious pace. Europe has fallen behind, not least due to the vast Employee stock option programme and repurchase structural challenges that countries like France, Germany and of own shares Italy are facing. Nevertheless, there are signs of a slow recovery My fellow Board members and myself strongly believe in long- here, too. term incentive programmes. The Board will therefore propose to the 2004 Annual General Meeting that it pass a resolution Long-term strategy now bearing fruit concerning a continuation of the employee stock option pro- Through its German, Baltic and Nordic acquisitions SEB has gramme for approximately 700 leading SEB officers and key in- become a North-European bank, operating in several home dividuals. The conditions are proposed to be largely identical markets. The on-going work of consolidation has yielded con- with those of the earlier programmes, with a few changes. For tinuous results. Efficiency and customer satisfaction continues example, we will suggest the introduction of a cap that limits to be of highest priority. the maximum amount disbursed for each option. The result of SEB’s long-term work is mirrored in the Group’s The Board will also ask the Annual General Meeting to pass share price, which rose by 46 per cent during the year. This was a resolution regarding a general repurchase of maximum 20 far above both the Stockholm Stock Exchange General Index and million shares. The reason for this is that we wish to have the the European Bank Index. possibility of making the most effective use of the capital struc- However, despite this improvement our return on equity has ture of the Bank, thus facilitating the successful management not reached our objective as the economic situation of Germany of SEB’s capital base. had a negative impact on our operations there. However, the 2003 turned out to be a rewarding year for SEB thanks to Board regards SEB’s German bank as a long term market invest- great achievements by the whole staff. I wish to seize this op- ment and is confident about the future of the Group’s German portunity to convey both my own and the Board’s gratitude to activities. the Executive Management and the staff for their dedication, hard work and strong financial results. I look forward to an Commitment to corporate governance exciting 2004 for SEB. In Sweden, as in the rest of Europe, the debate about Corporate Governance is engaging, as manifested by the Higgs Report Stockholm in February, 2004 in Great Britain, for example. Over the last decade, generally applied corporate governance codes have been introduced in ap- proximately 50 countries. In Sweden, we have a well developed Jacob Wallenberg system of self-regulation and an unusually strong corporate law. Chairman of the Board 2 SEB ANNUAL REPORT 2003 President’s statement Increased markets shares and satisfied customers Our 3 C Change programme continues to generate strong results, as seen within many areas of the Group. Our services have met with increased customer satisfaction, costs continued to decline and employee motivation was enhanced. The result has kept improving, quarter by quarter. It is gratifying to see Strong results in many areas that so many different In terms of contribution from various parts of the Group we parts of the Group note that large corporations – mainly Nordic and German large have contributed to companies as well as international financial institutions – have our improved result. become increasingly important for SEB from a profitability In a broader perspec- point of view. We are pleased with our high and stable earnings tive, not only our within this area as well as with our strong market position. shareholders but also The Nordic retail business has also reported strong improve- our customers and ments in terms of result, volumes and customer satisfaction staff have seen im- after the changes implemented.