banks - seb group · handelsbanken ab (aa-/stable/aa-), and swedbank ab (a+/positive/a+) dominate...
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Banks
www.fitchratings.com 23 October 2014
Sweden
Skandinaviska Enskilda Banken AB Full Rating Report
Key Rating Drivers
Strong Standalone Strength: The ratings of Skandinaviska Enskilda Banken AB (SEB) reflect
its strong domestic franchise, particularly in corporate banking, solid capitalisation, sound asset
quality and robust revenue generation. They also consider the bank's high dependence on
merchant banking and a structural reliance on wholesale funding. The Positive Outlook reflects
a more conservative risk profile in recent years as well as improving profitability.
Merchant Bank Business Model: SEB's business model is more geared towards corporate
and merchant banking than its Nordic peers. However, the bank is managing the risk well.
Revenue is well diversified and is increasingly focused on long-term relationship banking, with
reduced reliance on market-driven income. Its loan book is weighted towards large export-
orientated corporations with geographical diversification.
Good Revenue Generation, Stable Costs: Fitch Ratings expects SEB to maintain revenue
growth and contain costs, strengthening pre-impairment operating profitability. Its strategy to
expand retail banking enhances the bank's sources of recurring income.
Sound Asset Quality: Asset quality should stay sound, driven by conservative underwriting,
robust portfolio diversification and a growing retail book. The corporate loan book is of sound
quality, and loan concentration is at acceptable levels.
Solid Capitalisation: SEB's risk-weighted capital ratios, as well as its leverage, compare well
with regional and international peers.
Wholesale Funding Reliance: SEB is reliant on wholesale funding although to a lesser extent
than its Nordic peers. Fitch expects continued good access to debt capital markets, driven by
strong liquidity and a domestic captive investor base for covered bonds. Fitch also expects
SEB to continue to lengthen its maturity profile. The group funds its corporate lending through
corporate deposits, which it monitors closely.
Extremely High Support Probability: Fitch believes there is an extremely high probability that
support would come from the Swedish authorities if required, given SEB‟s importance within
the Swedish financial sector. Fitch expects to revise SEB‟s Support Rating Floor to „BBB-‟ by
mid-2015, reflecting a decreasing likelihood of sovereign support for financial institutions in the
European Union.
Rating Sensitivities
One Notch Upgrade Possible: Fitch could upgrade SEB by one notch over the next one to
two years if the trends of de-risking and improving profitability continue. An upgrade is also
contingent on the bank maintaining strong capital and leverage ratios, sound asset quality and
a healthy funding and liquidity profile.
Investor Sentiment Key Risk: Although not expected, pressure on the ratings could come
from an adverse change in investor sentiment materially affecting SEB's access to debt capital
markets, a shortened funding profile or reduced emphasis on liquidity. Larger-than-expected
losses or revenue volatility in corporate banking would also put pressure on the ratings
Ratings
Skandinaviska Enskilda Banken AB
Foreign Currency
Long-Term IDR A+ Short-Term IDR F1 Viability Rating a+ Support Rating 1 Support Rating Floor A−
SEB AG
Long-Term IDR A+ Short-Term IDR F1
Support Rating 1
Sovereign Risk
Foreign-Currency Long-Term IDR AAA Local-Currency Long-Term IDR AAA
Outlooks
Skandinaviska Enskilda Banken AB
Foreign-Currency Long-Term IDR Positive
SEB AG
Foreign-Currency Long-Term IDR Positive
Sovereign Risk
Sovereign Foreign-Currency Long-Term IDR
Stable
Sovereign Local-Currency Long-Term IDR
Stable
Financial Data
Skandinaviska Enskilda Banken AB
30 June 14
31 Dec 13
Total assets (USDm) 394,991 386,817 Total assets (SEKm) 2,653,784 2,484,834 Total equity (SEKm) 123,224 122,814 Operating profit (SEKm)
10,122 18,111
Published net income (SEKm)
8,058 14,778
Comprehensive income (SEKm)
8,823 20,464
Operating ROAA (%) 0.8 0.7 Operating ROAE (%) 16.8 16.1 Fitch core capital/ weighted risks (%)
16.5 17.3
a
Tier 1 ratio (%)
17.9 16.5 a
a Excluding transitional floors
Related Research
Peer Review: Large Swedish and Finnish Banks (June 2014)
SEB – Ratings Navigator (June 2014)
Analysts
Olivia Perney Guillot + 33 1 44 29 91 74 [email protected] Bjorn Norrman +44 20 3530 1330 [email protected]
Banks
Skandinaviska Enskilda Banken AB
October 2014 2
Operating Environment
„AAA‟ Sovereign; Stable Political and Economic Environment
The four major Swedish banks (SEB, Nordea Bank AB (AA-/Stable/aa-), Svenska
Handelsbanken AB (AA-/Stable/aa-), and Swedbank AB (A+/Positive/a+) dominate the banking
system with a combined market share of 75%. These banks‟ performances are closely linked to
the performance of the Swedish and also other Nordic economies.
Sweden has maintained its „AAA‟/Stable rating through the global financial crisis, and its low
net sovereign debt allows for some flexibility to support the economy. Sweden's gross general
government debt is lower than the 'AAA' median. Sweden has high governance and human
development indicators, high income per capita, and a track record of sound macroeconomic
policy implementation, which contribute to a stable political and economic environment.
Strong Regulator; Well-Functioning Markets
The Swedish regulatory environment is highly developed and transparent. The banking
authorities have been vocal advocates of tougher requirements for banks, including capital and
liquidity buffers, and also for more frequent and transparent reporting. Higher capital
requirements and liquidity buffers are being introduced than in most other European countries.
The depth and sophistication of the domestic debt capital markets is an important mitigating
factor to this wholesale funded banking system.
Company Profile
Strong Swedish Franchise; Nordic Corporate Bank
SEB offers a full range of financial services including retail, corporate and investment banking,
wealth management and life insurance. It has a strong market share in Sweden and in the
Baltics where it operates a universal bank. In Germany and in the other Nordic countries it
focuses on corporate and investment banking activities. Sweden, its home market, represents
around 55% of group operating profit.
SEB has offices in a number of cities around the world, including London, New York, Shanghai,
Singapore and Hong Kong. Their role is to provide global services to selected Nordic and
German corporates and to help global financial institutions access Nordic investment
opportunities. Overall SEB is present in around 20 countries.
Its German operations are conducted via SEB AG, its wholly owned subsidiary. SEB AG‟s IDRs
are aligned with those of SEB. The close integration of SEB AG into the SEB group means that
Fitch does not assign the subsidiary a Viability Rating.
Merchant Banking Driven Business Model
SEB's business model is more geared towards corporate and merchant banking than its Nordic
peers, reflecting its traditionally very strong merchant bank franchise, particularly in Sweden.
Merchant banking revenue is potentially volatile, but the bank benefits from diversification and
good risk management. Like its Nordic peers, its business model is based on building close
customer relationships and promoting cross selling.
Management
Strong Management
SEB has an experienced management team. Corporate governance and internal controls are
efficient, and there is a high degree of transparency. The bank is listed on the Stockholm Stock
Exchange. The AGM elects 12 members to the board of directors annually, for a one-year term.
All are independent of the bank except SEB‟s president and CEO, Annika Falkengren. Two
more board members are elected as staff representatives.
Figure 1
SEB
Source: SEB
Universal Banking
Merchant Banking and Wealth
Management
Related Criteria
Global Financial Institutions Rating Criteria (January 2014)
Banks
Skandinaviska Enskilda Banken AB
October 2014 3
Good Execution of Strategy in Recent Years
Since the CEO took charge in 2005, management has taken significant steps towards
improving the bank‟s competitiveness by strengthening revenue generation in core businesses,
selling non-core operations (e.g. German retail) and reducing operational complexities. It has
also improved the bank‟s risk profile through portfolio de-risking and the strengthening of its
liquidity. Management‟s ability to continue to execute its strategy is an important rating driver.
This includes expanding SEB‟s merchant banking position among Nordic corporates and
financial institutions, and among selected medium-sized companies in Germany. In Sweden it
is focused on strengthening its retail franchise, including with small and medium–sized
enterprises (SMEs). The retail franchise is important for SEB as it creates a more balanced
business mix for the group. Fitch does not expect SEB to expand into other geographical
areas.
Risk Appetite
Good Risk Framework; Active De-Risking in Recent Years
SEB has a sound risk appetite, in Fitch‟s opinion, and has strengthened its risk management
framework in recent years. Lending has shifted towards relatively low-risk Swedish households
and large Nordic corporates, with reduced exposure to German real estate and the Baltics.
Merchant banking revenue has increasingly been geared towards relationship lending and
transaction services, with less reliance on more volatile market driven products such as
customer-driven trading and brokerage services. Credit risk is the most significant risk for SEB,
and represented 81% of total group risk exposure amount at end-June 2014.
Controlled Growth in Strategic Areas
SEB is strategically growing in its target markets including Swedish retail (households and
SMEs) as well as large Nordic corporates. Fitch expects modest loan growth, on average
around 4% in keeping with recent years, with continued strong internal capital generation.
Following the Baltic crisis 2008 and 2009, the group has put a cap on Baltic credit exposure (on
and off balance sheet). It also has a cap on commercial real estate lending.
Low Market Risk; Mostly Customer Driven Trading
Capital markets activities are essentially customer driven, with FX forwards and interest rate
swaps being the two main products demanded by the corporate customers. Market making is
focused on Nordic bonds, equities and currencies. The bank has only recorded 50 trading loss
days since 1 January 2007, with an average loss of SEK12m.
Monitoring is done through value-at-risk (VaR) calculations, stop-loss limits and sensitivity
analysis. The maximum VaR in 2013, based on a 10-day holding period, a 99% confidence
interval and a one-year observation period, was SEK199m and SEK356m in the trading book
and banking book, respectively, or 0.2% and 0.4% of Fitch core capital (FCC). The maximum
stressed VaR for the trading book was SEK777m in 2013.
SEB‟s structural interest rate sensitivity is somewhat more material. The banking book‟s value
sensitivity to a one percentage point parallel yield curve shift was an acceptable SEK1.5bn at
end-2013, or 1.6% of FCC.
Insurance – Limited Risk to the Group
Insurance represents only a moderate share of group assets (10-12%) and is not a material
risk to SEB. The operations are well capitalised and new sales are focused on unit-linked
products. Assets relating to traditional policies with guaranteed returns amounted to SEK255bn
at end-June 2014. SEB is technically not liable for 70% of this book, which was previously sold
through its Swedish mutual insurance company and is not consolidated, but for reputational
purposes it may have to cover any potential shortfall. The Danish operation, which makes up
the remaining 30% of the traditional book, is the only one that still writes new traditional
policies, although it is mainly a unit-linked underwriter.
Banks
Skandinaviska Enskilda Banken AB
October 2014 4
Financial Profile
Asset Quality Strong Asset Quality
SEB has strong asset quality, in line with its peer group, with an impaired loans ratio (impaired
loans / gross loans) of 66bp at end-June 2014 (impaired loans include portfolio assessed loans
that are more than 60 days overdue as well as restructured loans). The impaired loans ratio
has fallen in recent years as the bank has been working out its Baltic book, although this
continues to carry the largest stock of impaired loans. Sweden represents around 70% of the
total loan portfolio, and around 45% of total loans are linked to Swedish real estate, although
most of it relates to low-risk mortgage loans and lending to housing associations. SEB‟s
German and Baltic exposures are subject to the ECB‟s asset quality review, but Fitch does not
expect any material negative findings.
Figure 3 Figure 4
Household Mortgage and Housing Associations Lending is Low Risk
Sweden makes up the bulk of these portfolios, which together represented 34% of group loans
at end-June 2014. They are of very high quality with a combined impaired loans ratio of 8bp at
end-June 2014. The bank maintains a strict focus on loan serviceability (including stressing
interest rates up to 7% for household mortgage loans) and has recently introduced amortisation
requirements on all new mortgage loans. Average loan-to-value ratios are good. Loans to
housing cooperative associations share similar risk characteristics to mortgage loans. They are
often tenant owned and are sensitive to the financial health of its residents.
Although property prices are high by an international standard and have continued to rise in
2014, Fitch believes that debt serviceability among households remains strong. In the event of
a fall in employment and rising interest rate costs, the agency expects households to prioritise
their debt obligations and instead reduce consumption. As a result of very strict and efficient
bankruptcy laws combined with a shortage of rental accommodation, households have strong
incentives not to default on their mortgage loans. The agency‟s base case for house prices
remains one of a stabilisation to a moderate fall, although a larger correction is not ruled out.
Resilient Nordic Corporate Portfolio
SEB‟s non-Baltic corporate loan book has good industry diversification, and around three-
quarters represent large companies with often sound geographical revenue distribution. The
bank benefits from strong client relationships, and the portfolio proved resilient through the
financial crisis. The targeted growth in SME lending could potentially weaken asset quality
somewhat but it is of limited size and therefore manageable. Loan concentration is acceptable,
and the bank‟s largest counterparts have good creditworthiness. The impaired loans ratio was
32bp at end-June 2014.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
End-2011 End-2012 End-2013 End-June2014
(%) SEB Peer average
Source: Banks' data, adjusted by FitchPeers = SEB, Nordea Bank AB, Svenska Handelsbanken AB, Swedbank AB
Impaired LoansAs % of gross loans
0123456789
10
End-2011 End-2012 End-2013 End-June2014
Net Impaired Loans/Equity
SEB Peer average
Source: Banks' data, adjusted by Fitch
(%)
Figure 2
Figure 5
Source: SEB, Fitch
Property Management
16%
Corporates31%
Householdmortgage
loans30%
Banks &
public9%
Baltics 8%
Housingassociations
3%
Householdother3%
Group Loan SplitEnd-June 2014
Source: SEB, Fitch
Manufacturing24%
Businessand
household services
20%Finance and
insurance11%
Wholesaleand retail
10%
Shipping9%
Utilities7%
Transport7%
Other12%
Non-Baltic Corporate Loan Split (Excl. CRE)End-June 2014
Banks
Skandinaviska Enskilda Banken AB
October 2014 5
Exposure to riskier industries is managed conservatively. The shipping book has good sub-
industry diversification, and lending targets industrial companies with strong cash flows rather
than project finance. Impaired loans in the shipping book are low.
Non-Baltic Property Management; Large Sophisticated Clients
SEB‟s non-baltic property management lending comprises both commercial and residential real
estate management, with the latter representing just less than 40% of this portfolio. Three
quarters of the portfolio is in Sweden, and the remaining exposure is in Germany. Residential
real estate management is subject to rent control in Sweden which reduces the speculative
nature often present in this industry, increases affordability and has partly contributed to a
shortage of rental properties which in turn creates stable demand. The Swedish commercial
real estate (CRE) market is characterised by large strong clients with good cash flows that
often have access to both debt and equity markets, and SEB takes a corporate rather than
asset based approach when lending to these companies. Fitch expects a continued strong
performance. The impaired loans ratio of this book was 41bp at end-June 2014, most of which
related to the German exposure.
Baltics: Recovering
Fitch expects impaired loans in the Baltic portfolio to continue to decrease, driven by continued
economic recovery and strict underwriting standards. The impaired loans ratio fell to 4.3% at
end-June 2014 (end-June 2013: 7.7%). CRE lending in particular was the main driver of the
problems experienced by banks in the region, but SEB identified this at an early stage and took
appropriate action. The loan portfolio developed favourably compared to initial expectations,
resulting in reversals of loan impairment charges (LICs) between 3Q10 and 4Q11.
The Baltic countries could be negatively affected by the political and economic uncertainties
relating to Russia. However, Fitch believes SEB could withstand a deterioration in the Baltics
given the limited size of the book to the group (8% of total lending at end-June 2014) and the
relatively conservative reserving of the current stock of impaired loans (67%).
Germany: Legacy Portfolio of Impaired Loans Reducing
Impaired loans in the German portfolio remain relatively high, at 68bp of gross loans at end-
June 2014, which are almost fully reserved for (78%). This is a legacy from the past, and there
have been no material LICs in recent years. Fitch expects the volume of impaired loans to
continue to slowly decrease.
High Quality Securities Portfolio
The credit risk in the debt securities portfolio is low. At end-June 2014, it totalled SEK251bn
and mainly comprised „AAA‟ rated covered bonds and government and public sector securities.
The bank‟s exposure to eurozone peripherals (Greece, Ireland, Italy, Portugal and Spain)
amounted to SEK8bn and was mostly Spanish covered bonds.
Earnings and Profitability
Improving Performance
SEB‟s profitability has traditionally lagged somewhat behind its Swedish peers but it is
addressing this through good cost management and stronger revenue generation. Merchant
banking income is potentially volatile although it has been stable through the cycle. The
strategic growth in retail banking contributes to revenue stability, as does SEB‟s focus on
capturing a large share of its customers‟ wallet.
Fitch expects the net interest margin to be relatively stable. SEB, like its Swedish peers,
currently benefits from cheap market funding. This is partly offset by low deposit margins and
limited scope for loan re-pricing. The lowering of the central bank‟s policy rate by 50bp in July
will come at a cost to the bank, although Fitch expects most of this to be passed onto
customers over time.
Banks
Skandinaviska Enskilda Banken AB
October 2014 6
The cost to income ratio should continue to improve and is already more in line with peers. The
bank has reduced complexity in the group by, for example, centralising support functions. It has
a cost cap in place of SEK22.5bn for 2014 and 2015, and Fitch believes the bank has the
infrastructure to achieve continued revenue growth while keeping costs contained. LICs are
very low, reflecting strong asset quality and risk management.
Figure 6 Figure 7
Figure 8 Operating Profit by Division
1H14 2013
(SEKm) (%) (SEKm) (%)
Merchant banking 4,809 48 8,171 45 Retail banking 3,324 33 5,743 32 Wealth management 1,000 10 1,610 9 Life 1,046 10 1,892 10 Baltics 801 8 1,280 7 Eliminations and others -874 -9 -569 -3 Operating profit 10,106 100 18,127 100
Source: SEB, Fitch
Merchant Banking: Franchise Key to Revenue Generation
Revenue is dependent on customer flows, although income is well diversified by product
groups (see figure 9) and increasingly geared towards relationship banking. Capital markets-
driven revenue account for less than 10% of SEB‟s total revenue and has averaged around
SEK1.5bn per quarter in the last four years, with low volatility. There are signs that corporate
activity in SEB‟s operating environments is gaining momentum. Fitch expects improved
earnings in 2015.
Retail Banking: Volume Growth and Cost Focus
Fitch expects continued growth in revenue, driven by volume rather than margins. The bank
aims to increase cross selling among its existing customer base and to win new clients. Fitch
expects this to result in more robust income generation and a healthy mix of commission and
interest income. Cost management is a key management focus, and the reported cost to
income ratio for the Retail Banking segment improved to 44% in H114 (H113: 51%).
Wealth Management: Strong Inflow of Assets under Management
The Swedish savings business is a growth area for SEB. Assets under management increased
by 9% from end-2013 to an all-time high of SEK1,535bn at end-June 2014, and total net inflow
in the same period was SEK42.7bn. A similar trend was also reported by many of SEB‟s
Swedish peers. To improve efficiency and increase cross-selling the bank aims to integrate the
expertise of its Wealth Management and Life operations.
Life: Focus on Sale of Unit-Linked Products
Fitch expects Life Insurance to remain a stable profit generator for SEB. Unit-linked policies
0
10
20
30
40
50
60
70
2011 2012 2013 1H14
(%)
Cost/Income Ratio
SEB Peer average
Source: Banks data, adjusted by Fitch
02468
101214161820
2011 2012 2013 1H14
(%)
Operating ROAE
SEB Peer average
Source: Banks data, adjusted by Fitch
Figure 9 Merchant Banking Operating Income (SEKm) 1H14 2013
Markets 3,096 5,594 Coverage and investment banking
4,552 8,628
Transaction banking 1,563 2,507 Total 9,211 16,729
Source: SEB, Fitch
Banks
Skandinaviska Enskilda Banken AB
October 2014 7
represent around 80% of sales. While traditional products with guarantees create an earnings
challenge in the current low interest rate environment, this is not a material risk to the bank.
Baltics: Profitability Focus
SEB focuses on strengthening profitability among its existing customer base and expanding its
advisory services among its corporate clients. Lending volumes are currently stable. Fitch
expects continued growth in earnings.
Figure 10
Capitalisation and Leverage
Solid Capitalisation and Leverage
SEB‟s risk-weighted capital ratios are solid and compare well with peers, although they lag
some Swedish competitors. At end-2013, the bank used the Advanced and Foundation internal
ratings-based approach to calculate around 60% and 20% of its total credit exposure,
respectively. It ultimately aims to roll out internal models for all credit exposure except central
bank and public sector lending. The bank‟s adjusted leverage of 4.7% at end-June 2014 is in
line with its peer group.
High Regulatory Requirements
Fitch expects SEB to maintain its strong capital ratios, in particular in light of its wholesale
funding reliance and the need to maintain investor confidence. The Swedish regulator has
proposed new capital requirements for the large Swedish banks, including SEB. Based on end-
June 2014 data, it is estimated that the bank must maintain a minimum common equity Tier 1
(CET1) ratio of 15.4%, compared to a reported ratio of 16.0%. SEB had previously
communicated a CET1 target of 13% but this will be revised once the new regulatory
requirements are finalised. SEB targets a minimum dividend payout ratio of 40%.
Figure 11 Figure 12
-2
-1
0
1
2
3
4
5
6
Sweden(59%)
Denmark(8%)
Norway(8%)
Germany(7%)
Finland(4%)
Lithuania(4%)
Latvia(3%)
Estonia(3%)
(%) 2012 2013 2014F 2015F 2016F
Source: Fitch, 19 September 2014
GDP Growth(%) = country's share of SEB's total operating income in 2013 (4% is in other markets)
0
5
10
15
20
25
End-2011 End-2012 End-2013 End-June2014
(%)
Total capital - SEBFitch core capital - SEBFitch core capital - peer averageTotal capital - peer average
Source: Banks data, adjusted by Fitch
Risk-Weighted Capital Ratios
0
1
2
3
4
5
6
End-2011 End-2012 End-2013 End-June2014
(%) SEB Peer average
a Tangible common equity/tangible assets less insurance assets and net derivativesSource: Banks data, adjusted by Fitch
Adjusted Leveragea
Banks
Skandinaviska Enskilda Banken AB
October 2014 8
Funding and Liquidity
Wholesale Funded Although Less than Local Peers
SEB is reliant on wholesale funding, although to a less extent than its local peers. This is due to
its relatively high weighting towards corporate banking. Retail loans are funded mostly by a
combination of covered bonds and deposits, while corporate lending is almost entirely deposit
funded.
The Swedish covered bond market is very deep and liquid, with limited refinancing risk in
Fitch‟s opinion. There is a structural shortage of deposits in the banking system in Sweden as
households prefer to invest in savings products offered by pension funds and insurance
companies. These entities have a need to invest in low-risk Swedish krona-denominated
assets, which creates a stable demand for highly rated covered bonds, in particular since there
is a limited supply of government debt.
The bank has some senior unsecured funding, and Fitch expects it to maintain a diversified
long-term funding structure. It retained good access to the debt capital markets through the
financial crisis, and Fitch expects this to continue.
The corporate deposit base is monitored closely by the bank and has historically been sticky.
SEB benefits from strong customer relationships and a substantial part of this funding is
operational deposits which Fitch believes would be less volatile in the event of a stress.
SEB‟s encumbrance is lower than most Nordic peers, reflecting less use of covered bond
funding. Its adjusted asset encumbrance ratio (encumbered assets/(total assets – derivatives –
insurance assets)) of 24% at end-June 2014 was acceptable (17% excluding unused
overcollateralisation in the covered bonds‟ pool). Covered bonds represent most of the
encumbrance.
Strong Liquidity Critical for Investor Confidence
SEB, like its Nordic peers, maintains strong liquidity. This is critical in light of the bank‟s
wholesale funding and corporate deposit base. At end-June 2014, the liquidity portfolio
amounted to SEK411bn. Including the bank‟s extended liquidity reserve, which takes into
account both unused overcollateralisation in its covered bonds cover pool and net trading
assets held outside the treasury operation, the bank‟s total liquidity buffer was SEK686bn.
SEB‟s liquidity coverage ratio (LCR), based on Swedish regulation, was 127% at end-June
2014. A significant part of the liquidity portfolio is in foreign currency, and the bank‟s EUR and
USD LCR were 345% and 330%, respectively.
Figure 14
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2014 2015 2016 2017 2018 2019 2020 >2020
(SEKm)
SEB Maturity Profile
Senior secured Senior unsecured Senior subordinated Junior subordinated
a As of 14 Oct 2014Source: Bloomberga
Figure 13
Source: SEB, Fitch
Deposits -corporate
29%
Covered bonds 17%CPs/CDs
16%
Deposits -individuals
13%
FIs and central banks10%
Seniorunsecured
8%
Deposits -public
5%
Subordinated2%
Non-Equity Funding MixEnd-June 2014
Banks
Skandinaviska Enskilda Banken AB
October 2014 9
Support
Support Less Certain Within Next One to Two Years
In Fitch's view, there is a clear intention ultimately to reduce implicit state support for financial
institutions in the EU, as demonstrated by a series of legislative, regulatory and policy
initiatives. As an EU member country, Sweden is subject to the requirements of the Bank
Recovery and Resolution Directive (BRRD). However, the country was notable in its desire for
flexibility in the application of BRRD, in part because of its experience of cleaning up banks in
its 1990s crisis, but also because it has a concentrated, largely homogenous banking sector
that relies on attracting international and foreign currency funding. For this reason, prudential
requirements for its banks are high. In maintaining control over supervision and resolution
decisions, Sweden has more flexibility to interpret and apply BRRD than Banking Union
member countries, for example. However, Sweden is bound by EU state aid rules, meaning it
does not have full control over support decisions.
The Support Rating and Support Rating Floor are primarily sensitive to the progress made in
implementing a resolution regime in Sweden. As outlined in its report 'Sovereign Support for
Banks: Rating Path Expectations' dated 27 March 2014, Fitch believes that support for
systemically important Swedish banks, while likely to be less certain within the next one to two
years, is still likely to be highly probable, meaning that SEB's Support Rating is likely to be
downgraded to '2' from '1' and the Support Rating Floor revised down to 'BBB-' from 'A-'.
Banks
Skandinaviska Enskilda Banken AB
October 2014 10
Appendix
Merchant Banking
This division incorporates SEB‟s investment and corporate banking operations servicing large
corporate clients and institutional customers. Active in about 20 countries, its strategic objective
is to expand its presence in the Nordic and German markets. Its operations are primarily
customer driven through corporate lending and other financial products. It benefits from being a
large entity on the Nordic and Baltic stock exchanges.
Retail Banking
SEB‟s Swedish retail operations (including SME customers) and its pan-Nordic card business
are reported under this segment. SEB focuses on the more wealthy part of the population and
most of its clients are urban white-collar workers or entrepreneurs. A strategic objective is to
grow market share among domestic private and SME clients.
SEB Kort, SEB‟s charge and debit-card business, has a Nordic-wide strategy, with good market
shares of in all four countries.
Wealth Management
This comprises asset management and private banking for private individuals and institutional
investors. Around 25% of assets under management are from outside Sweden, mainly other
Nordic countries and Germany. The German fund management operation is being dismantled.
Life
This division consists of SEB Trygg Liv in Sweden (the largest domestic unit-linked insurance
provider), SEB Pension in Denmark (the country‟s fourth-largest private pension company), and
SEB‟s life and pension operations outside these two markets (including in the Baltics, which
management considers to have good long-term prospects). SEB is among the top three life
insurance companies in the three Baltic states.
Assets under management totalled SEK536.3bn at end-June 2014, a 10% increase from end-
2013. Unit-linked life insurance products continue to increase, representing 75% of total
premiums in H114. SEB‟s share of Swedish new unit-linked business was 17% in the 12
months to end-March 2014.
Baltics
The Baltics division comprises SEB‟s private banking and advisory services for retail and SME
customers in Estonia, Latvia and Lithuania. Having grown aggressively in these markets up to
2006, SEB faced material and disproportionate LICs in 2008 and 2009. It has since significantly
restructured the division, and reviewed and provided for the credit risk. SEB‟s deposit market
shares amount to approximately 20%, 10% and 30% in Estonia, Latvia and Lithuania,
respectively; its market shares for lending are approximately 25%, 20% and 30%.
Banks
Skandinaviska Enskilda Banken AB
October 2014 11
Skandinaviska Enskilda Banken AB
Income Statement30 Jun 2014 31 Dec 2013 31 Dec 2012 31 Dec 2011
6 Months - Interim6 Months - Interim As % of Year End As % of Year End As % of Year End As % of
USDm SEKm SEKm SEKm SEKm
Unaudited Unaudited Unqualified Unqualified Unqualified
1. Interest Income on Loans n.a. n.a. - 37,636.0 1.67 41,441.0 1.91 41,010.0 1.92
2. Other Interest Income 3,664.0 24,617.0 2.08 12,087.0 0.54 12,353.0 0.57 15,153.0 0.71
3. Dividend Income n.a. n.a. - 72.0 0.00 75.0 0.00 115.0 0.01
4. Gross Interest and Dividend Income 3,664.0 24,617.0 2.08 49,795.0 2.21 53,869.0 2.48 56,278.0 2.64
5. Interest Expense on Customer Deposits n.a. n.a. - 11,222.0 0.50 14,694.0 0.68 15,652.0 0.73
6. Other Interest Expense 2,211.2 14,856.0 1.26 19,674.0 0.87 21,465.0 0.99 23,610.0 1.11
7. Total Interest Expense 2,211.2 14,856.0 1.26 30,896.0 1.37 36,159.0 1.67 39,262.0 1.84
8. Net Interest Income 1,452.8 9,761.0 0.83 18,899.0 0.84 17,710.0 0.82 17,016.0 0.80
9. Net Gains (Losses) on Trading and Derivatives 274.9 1,847.0 0.16 4,231.0 0.19 4,714.0 0.22 4,072.0 0.19
10. Net Gains (Losses) on Other Securities 11.5 77.0 0.01 352.0 0.02 (109.0) (0.01) (27.0) (0.00)
11. Net Gains (Losses) on Assets at FV through Income Statement n.a. n.a. - (179.0) (0.01) (73.0) (0.00) (53.0) (0.00)
12. Net Insurance Income 247.4 1,662.0 0.14 3,255.0 0.14 3,428.0 0.16 3,197.0 0.15
13. Net Fees and Commissions 1,181.6 7,939.0 0.67 14,664.0 0.65 13,620.0 0.63 14,175.0 0.66
14. Other Operating Income 34.8 234.0 0.02 314.0 0.01 (424.0) (0.02) (271.0) (0.01)
15. Total Non-Interest Operating Income 1,750.2 11,759.0 0.99 22,637.0 1.00 21,156.0 0.98 21,093.0 0.99
16. Personnel Expenses 1,035.0 6,954.0 0.59 14,029.0 0.62 14,596.0 0.67 14,325.0 0.67
17. Other Operating Expenses 580.9 3,903.0 0.33 8,258.0 0.37 9,056.0 0.42 9,188.0 0.43
18. Total Non-Interest Expenses 1,616.0 10,857.0 0.92 22,287.0 0.99 23,652.0 1.09 23,513.0 1.10
19. Equity-accounted Profit/ Loss - Operating n.a. n.a. - 17.0 0.00 19.0 0.00 48.0 0.00
20. Pre-Impairment Operating Profit 1,587.1 10,663.0 0.90 19,266.0 0.86 15,233.0 0.70 14,644.0 0.69
21. Loan Impairment Charge 80.5 541.0 0.05 1,155.0 0.05 937.0 0.04 (710.0) (0.03)
22. Securities and Other Credit Impairment Charges n.a. n.a. - n.a. - 62.0 0.00 403.0 0.02
23. Operating Profit 1,506.6 10,122.0 0.86 18,111.0 0.80 14,234.0 0.66 14,951.0 0.70
24. Equity-accounted Profit/ Loss - Non-operating n.a. n.a. - n.a. - n.a. - n.a. -
25. Non-recurring Income n.a. n.a. - 16.0 0.00 1.0 0.00 0.0 0.00
26. Non-recurring Expense 2.4 16.0 0.00 n.a. - n.a. - n.a. -
27. Change in Fair Value of Own Debt n.a. n.a. - n.a. - n.a. - n.a. -
28. Other Non-operating Income and Expenses n.a. n.a. - n.a. - n.a. - 2.0 0.00
29. Pre-tax Profit 1,504.2 10,106.0 0.85 18,127.0 0.80 14,235.0 0.66 14,953.0 0.70
30. Tax expense 304.8 2,048.0 0.17 3,338.0 0.15 2,093.0 0.10 2,942.0 0.14
31. Profit/Loss from Discontinued Operations n.a. n.a. - (11.0) (0.00) (488.0) (0.02) (1,155.0) (0.05)
32. Net Income 1,199.4 8,058.0 0.68 14,778.0 0.66 11,654.0 0.54 10,856.0 0.51
33. Change in Value of AFS Investments 104.3 701.0 0.06 1,105.0 0.05 1,276.0 0.06 722.0 0.03
34. Revaluation of Fixed Assets n.a. n.a. - n.a. - n.a. - n.a. -
35. Currency Translation Differences 55.5 373.0 0.03 75.0 0.00 (386.0) (0.02) (134.0) (0.01)
36. Remaining OCI Gains/(losses) (46.0) (309.0) (0.03) 4,506.0 0.20 (1,706.0) (0.08) 911.0 0.04
37. Fitch Comprehensive Income 1,313.2 8,823.0 0.75 20,464.0 0.91 10,838.0 0.50 12,355.0 0.58
38. Memo: Profit Allocation to Non-controlling Interests n.a. n.a. - 6.0 0.00 22.0 0.00 37.0 0.00
39. Memo: Net Income after Allocation to Non-controlling Interests 1,199.4 8,058.0 0.68 14,772.0 0.66 11,632.0 0.54 10,819.0 0.51
40. Memo: Common Dividends Relating to the Period n.a. n.a. - 8,725.0 0.39 6,004.0 0.28 3,795.0 0.18
41. Memo: Preferred Dividends Related to the Period n.a. n.a. - n.a. - n.a. - n.a. -
Exchange rate USD1 = SEK6.71860 USD1 = SEK6.42380 USD1 = SEK6.50450 USD1 = SEK6.88770
Earning Assets
Earning
Assets
Earning
Assets
Earning
Assets
Banks
Skandinaviska Enskilda Banken AB
October 2014 12
Skandinaviska Enskilda Banken AB
Balance Sheet30 Jun 2014 31 Dec 2013 31 Dec 2012 31 Dec 2011
6 Months - Interim6 Months - Interim As % of Year End As % of Year End As % of Year End As % of
USDm SEKm Assets SEKm Assets SEKm Assets SEKm Assets
AssetsA. Loans
1. Residential Mortgage Loans 65,687.3 441,327.0 16.63 427,142.0 17.19 402,052.0 16.39 368,346.0 15.61
2. Other Mortgage Loans 6,106.6 41,028.0 1.55 40,643.0 1.64 36,437.0 1.49 34,966.0 1.48
3. Other Consumer/ Retail Loans 6,759.9 45,417.0 1.71 43,713.0 1.76 43,233.0 1.76 44,567.0 1.89
4. Corporate & Commercial Loans 107,052.8 719,245.0 27.10 630,528.0 25.38 599,608.0 24.44 580,719.0 24.61
5. Other Loans 5,996.8 40,290.0 1.52 79,626.0 3.20 87,892.0 3.58 95,922.0 4.07
6. Less: Reserves for Impaired Loans 940.4 6,318.0 0.24 6,520.0 0.26 8,836.0 0.36 10,541.0 0.45
7. Net Loans 190,663.1 1,280,989.0 48.27 1,215,132.0 48.90 1,160,386.0 47.30 1,113,979.0 47.21
8. Gross Loans 191,603.5 1,287,307.0 48.51 1,221,652.0 49.16 1,169,222.0 47.66 1,124,520.0 47.66
9. Memo: Impaired Loans included above 1,273.6 8,557.0 0.32 9,453.0 0.38 13,795.0 0.56 16,558.0 0.70
10. Memo: Loans at Fair Value included above n.a. n.a. - n.a. - n.a. - n.a. -
B. Other Earning Assets
1. Loans and Advances to Banks 13,145.0 88,316.0 3.33 92,287.0 3.71 112,919.0 4.60 179,110.0 7.59
2. Reverse Repos and Cash Collateral 21,357.1 143,490.0 5.41 107,433.0 4.32 106,524.0 4.34 102,445.0 4.34
3. Trading Securities and at FV through Income 46,669.7 313,555.0 11.82 321,951.0 12.96 277,891.0 11.33 232,300.0 9.85
4. Derivatives 24,862.3 167,040.0 6.29 142,776.0 5.75 170,600.0 6.95 167,821.0 7.11
5. Available for Sale Securities 7,373.1 49,537.0 1.87 48,903.0 1.97 50,599.0 2.06 57,377.0 2.43
6. Held to Maturity Securities 13.1 88.0 0.00 85.0 0.00 82.0 0.00 282.0 0.01
7. Equity Investments in Associates 200.3 1,346.0 0.05 1,274.0 0.05 1,252.0 0.05 1,289.0 0.05
8. Other Securities n.a. n.a. - n.a. - n.a. - n.a. -
9. Total Securities 100,475.7 675,056.0 25.44 622,422.0 25.05 606,948.0 24.74 561,514.0 23.80
10. Memo: Government Securities included Above n.a. n.a. - n.a. - n.a. - n.a. -
11. Memo: Total Securities Pledged n.a. n.a. - n.a. - n.a. - n.a. -
12. Investments in Property n.a. n.a. - 10,804.0 0.43 10,074.0 0.41 9,901.0 0.42
13. Insurance Assets 50,829.6 341,504.0 12.87 311,897.0 12.55 277,447.0 11.31 269,557.0 11.42
14. Other Earning Assets 0.0 0.0 0.00 n.a. - n.a. - n.a. -
15. Total Earning Assets 355,113.4 2,385,865.0 89.90 2,252,542.0 90.65 2,167,774.0 88.36 2,134,061.0 90.45
C. Non-Earning Assets
1. Cash and Due From Banks 27,456.6 184,470.0 6.95 173,950.0 7.00 191,445.0 7.80 148,042.0 6.27
2. Memo: Mandatory Reserves included above n.a. n.a. - n.a. - n.a. - n.a. -
3. Foreclosed Real Estate n.a. n.a. - n.a. - n.a. - n.a. -
4. Fixed Assets 1,628.0 10,938.0 0.41 949.0 0.04 1,133.0 0.05 1,243.0 0.05
5. Goodwill 1,563.7 10,506.0 0.40 10,408.0 0.42 10,460.0 0.43 10,487.0 0.44
6. Other Intangibles 1,038.9 6,980.0 0.26 6,763.0 0.27 6,827.0 0.28 7,385.0 0.31
7. Current Tax Assets n.a. n.a. - 6,702.0 0.27 6,915.0 0.28 6,403.0 0.27
8. Deferred Tax Assets n.a. n.a. - 1,586.0 0.06 2,010.0 0.08 2,562.0 0.11
9. Discontinued Operations 134.0 900.0 0.03 n.a. - n.a. - 2,005.0 0.08
10. Other Assets 8,056.0 54,125.0 2.04 31,934.0 1.29 66,892.0 2.73 47,193.0 2.00
11. Total Assets 394,990.6 2,653,784.0 100.00 2,484,834.0 100.00 2,453,456.0 100.00 2,359,381.0 100.00
Liabilities and Equity
D. Interest-Bearing Liabilities
1. Customer Deposits - Current 131,168.2 881,267.0 33.21 835,917.0 33.64 845,405.0 34.46 837,624.0 35.50
2. Customer Deposits - Savings n.a. n.a. - n.a. - n.a. - n.a. -
3. Customer Deposits - Term n.a. n.a. - n.a. - n.a. - n.a. -
4. Total Customer Deposits 131,168.2 881,267.0 33.21 835,917.0 33.64 845,405.0 34.46 837,624.0 35.50
5. Deposits from Banks 28,394.6 190,772.0 7.19 167,522.0 6.74 156,284.0 6.37 174,957.0 7.42
6. Repos and Cash Collateral 2,869.5 19,279.0 0.73 19,961.0 0.80 28,835.0 1.18 50,375.0 2.14
7. Other Deposits and Short-term Borrowings 54,792.1 368,126.0 13.87 340,084.0 13.69 319,693.0 13.03 267,508.0 11.34
8. Total Deposits, Money Market and Short-term Funding 217,224.4 1,459,444.0 54.99 1,363,484.0 54.87 1,350,217.0 55.03 1,330,464.0 56.39
9. Senior Debt Maturing after 1 Year 55,854.8 375,266.0 14.14 366,767.0 14.76 334,798.0 13.65 322,365.0 13.66
10. Subordinated Borrowing 4,502.1 30,248.0 1.14 13,008.0 0.52 14,577.0 0.59 14,950.0 0.63
11. Other Funding 0.0 0.0 0.00 n.a. - n.a. - n.a. -
12. Total Long Term Funding 60,356.9 405,514.0 15.28 379,775.0 15.28 349,375.0 14.24 337,315.0 14.30
13. Derivatives 21,834.6 146,698.0 5.53 138,159.0 5.56 159,780.0 6.51 152,430.0 6.46
14. Trading Liabilities 15,825.8 106,327.0 4.01 75,705.0 3.05 76,770.0 3.13 79,817.0 3.38
15. Total Funding 315,241.7 2,117,983.0 79.81 1,957,123.0 78.76 1,936,142.0 78.91 1,900,026.0 80.53
E. Non-Interest Bearing Liabilities
1. Fair Value Portion of Debt n.a. n.a. - n.a. - n.a. - n.a. -
2. Credit impairment reserves n.a. n.a. - n.a. - n.a. - n.a. -
3. Reserves for Pensions and Other 339.1 2,278.0 0.09 1,992.0 0.08 5,572.0 0.23 5,845.0 0.25
4. Current Tax Liabilities n.a. n.a. - 1,997.0 0.08 2,440.0 0.10 1,605.0 0.07
5. Deferred Tax Liabilities n.a. n.a. - 8,395.0 0.34 8,501.0 0.35 9,367.0 0.40
6. Other Deferred Liabilities n.a. n.a. - n.a. - n.a. - n.a. -
7. Discontinued Operations 256.2 1,721.0 0.06 n.a. - n.a. - 1,962.0 0.08
8. Insurance Liabilities 50,672.6 340,449.0 12.83 315,512.0 12.70 285,973.0 11.66 269,683.0 11.43
9. Other Liabilities 10,140.4 68,129.0 2.57 67,200.0 2.70 95,611.0 3.90 57,995.0 2.46
10. Total Liabilities 376,649.9 2,530,560.0 95.36 2,352,219.0 94.66 2,334,239.0 95.14 2,246,483.0 95.21
F. Hybrid Capital
1. Pref. Shares and Hybrid Capital accounted for as Debt n.a. n.a. - 9,801.0 0.39 9,704.0 0.40 10,159.0 0.43
2. Pref. Shares and Hybrid Capital accounted for as Equity n.a. n.a. - n.a. - n.a. - n.a. -
G. Equity
1. Common Equity 17,755.3 119,291.0 4.50 119,646.0 4.82 111,975.0 4.56 104,214.0 4.42
2. Non-controlling Interest 4.9 33.0 0.00 33.0 0.00 90.0 0.00 261.0 0.01
3. Securities Revaluation Reserves 309.4 2,079.0 0.08 1,378.0 0.06 273.0 0.01 (1,003.0) (0.04)
4. Foreign Exchange Revaluation Reserves (244.8) (1,645.0) (0.06) (2,018.0) (0.08) (2,422.0) (0.10) (1,279.0) (0.05)
5. Fixed Asset Revaluations and Other Accumulated OCI 515.9 3,466.0 0.13 3,775.0 0.15 (403.0) (0.02) 546.0 0.02
6. Total Equity 18,340.7 123,224.0 4.64 122,814.0 4.94 109,513.0 4.46 102,739.0 4.35
7. Total Liabilities and Equity 394,990.6 2,653,784.0 100.00 2,484,834.0 100.00 2,453,456.0 100.00 2,359,381.0 100.00
8. Memo: Fitch Core Capital 14,643.4 98,383.0 3.71 97,639.0 3.93 86,637.0 3.53 79,072.0 3.35
9. Memo: Fitch Eligible Capital 14,643.4 98,383.0 3.71 97,639.0 3.93 86,637.0 3.53 79,072.0 3.35
Exchange rate USD1 = SEK6.71860 USD1 = SEK6.42380 USD1 = SEK6.50450 USD1 = SEK6.88770
Banks
Skandinaviska Enskilda Banken AB
October 2014 13
Skandinaviska Enskilda Banken AB
Summary Analytics30 Jun 2014 31 Dec 2013 31 Dec 2012 31 Dec 2011
6 Months - Interim Year End Year End Year End
A. Interest Ratios
1. Interest Income on Loans/ Average Gross Loans n.a. 3.06 3.45 3.60
2. Interest Expense on Customer Deposits/ Average Customer Deposits n.a. 1.27 1.78 2.04
3. Interest Income/ Average Earning Assets 2.14 2.23 2.48 2.73
4. Interest Expense/ Average Interest-bearing Liabilities 1.45 1.52 1.90 2.21
5. Net Interest Income/ Average Earning Assets 0.85 0.85 0.82 0.82
6. Net Int. Inc Less Loan Impairment Charges/ Av. Earning Assets 0.80 0.79 0.77 0.86
7. Net Interest Inc Less Preferred Stock Dividend/ Average Earning Assets 0.85 0.85 0.82 0.82
B. Other Operating Profitability Ratios
1. Non-Interest Income/ Gross Revenues 54.64 54.50 54.43 55.35
2. Non-Interest Expense/ Gross Revenues 50.45 53.66 60.86 61.70
3. Non-Interest Expense/ Average Assets 0.84 0.88 0.99 1.05
4. Pre-impairment Op. Profit/ Average Equity 17.67 17.10 13.99 14.35
5. Pre-impairment Op. Profit/ Average Total Assets 0.83 0.76 0.64 0.65
6. Loans and securities impairment charges/ Pre-impairment Op. Profit 5.07 6.00 6.56 (2.10)
7. Operating Profit/ Average Equity 16.77 16.07 13.07 14.65
8. Operating Profit/ Average Total Assets 0.79 0.71 0.60 0.67
9. Taxes/ Pre-tax Profit 20.27 18.41 14.70 19.67
10. Pre-Impairment Operating Profit / Risk Weighted Assets 3.59 2.10 1.73 1.77
11. Operating Profit / Risk Weighted Assets 3.41 1.97 1.62 1.81
C. Other Profitability Ratios
1. Net Income/ Average Total Equity 13.35 13.11 10.70 10.64
2. Net Income/ Average Total Assets 0.63 0.58 0.49 0.48
3. Fitch Comprehensive Income/ Average Total Equity 14.62 18.16 9.95 12.11
4. Fitch Comprehensive Income/ Average Total Assets 0.69 0.81 0.45 0.55
5. Net Income/ Av. Total Assets plus Av. Managed Securitized Assets n.a. n.a. n.a. n.a.
6. Net Income/ Risk Weighted Assets 2.72 1.61 1.33 1.31
7. Fitch Comprehensive Income/ Risk Weighted Assets 2.97 2.23 1.23 1.49
D. Capitalization
1. Fitch Core Capital/ Risk Weighted Assets 16.45 10.65 9.85 9.55
2. Fitch Eligible Capital/ Risk Weighted Assets 16.45 10.65 9.85 9.55
3. Tangible Common Equity/ Tangible Assets 4.01 4.26 3.75 3.58
4. Tier 1 Regulatory Capital Ratio 17.90 11.80 11.60 13.01
5. Total Regulatory Capital Ratio 20.50 11.70 11.50 12.50
6. Core Tier 1 Regulatory Capital Ratio 16.00 11.00 10.10 11.20
7. Equity/ Total Assets 4.64 4.94 4.46 4.35
8. Cash Dividends Paid & Declared/ Net Income n.a. 59.04 51.52 34.96
9. Cash Dividend Paid & Declared/ Fitch Comprehensive Income n.a. 42.64 55.40 30.72
10. Cash Dividends & Share Repurchase/Net Income n.a. n.a. n.a. n.a.
11. Internal Capital Generation 13.19 4.93 5.16 6.87
E. Loan Quality
1. Growth of Total Assets 6.80 1.28 3.99 8.24
2. Growth of Gross Loans 5.37 4.48 3.98 3.20
3. Impaired Loans/ Gross Loans 0.66 0.77 1.18 1.47
4. Reserves for Impaired Loans/ Gross Loans 0.49 0.53 0.76 0.94
5. Reserves for Impaired Loans/ Impaired Loans 73.83 68.97 64.05 63.66
6. Impaired loans less Reserves for Impaired Loans/ Fitch Core Capital 2.28 3.00 5.72 7.61
7. Impaired Loans less Reserves for Impaired Loans/ Equity 1.82 2.39 4.53 5.86
8. Loan Impairment Charges/ Average Gross Loans 0.09 0.09 0.08 (0.06)
9. Net Charge-offs/ Average Gross Loans 0.14 0.30 0.23 0.23
10. Impaired Loans + Foreclosed Assets/ Gross Loans + Foreclosed Assets 0.66 0.77 1.18 1.47
F. Funding
1. Loans/ Customer Deposits 146.07 146.15 138.30 134.25
2. Interbank Assets/ Interbank Liabilities 46.29 55.09 72.25 102.37
3. Customer Deposits/ Total Funding (excluding derivatives) 44.71 45.96 47.59 47.93
Banks
Skandinaviska Enskilda Banken AB
October 2014 14
Skandinaviska Enskilda Banken AB
Reference Data30 Jun 2014 31 Dec 2013 31 Dec 2012 31 Dec 2011
6 Months - Interim6 Months - Interim As % of Year End As % of Year End As % of Year End As % of
USDm SEKm Assets SEKm Assets SEKm Assets SEKm Assets
A. Off-Balance Sheet Items
1. Managed Securitized Assets Reported Off-Balance Sheet n.a. n.a. - n.a. - n.a. - n.a. -
2. Other off-balance sheet exposure to securitizations n.a. n.a. - n.a. - n.a. - n.a. -
3. Guarantees n.a. n.a. - 90,325.0 3.64 81,488.0 3.32 70,204.0 2.98
4. Acceptances and documentary credits reported off-balance sheet n.a. n.a. - 996.0 0.04 509.0 0.02 374.0 0.02
5. Committed Credit Lines 83,277.5 559,508.0 21.08 486,844.0 19.59 407,423.0 16.61 390,352.0 16.54
6. Other Contingent Liabilities 16,051.1 107,841.0 4.06 12,078.0 0.49 12,178.0 0.50 23,426.0 0.99
7. Total Business Volume 494,319.2 3,321,133.0 125.15 3,075,077.0 123.75 2,955,054.0 120.44 2,843,737.0 120.53
8. Memo: Risk Weighted Assets 89,030.8 598,162.0 22.54 917,040.0 36.91 879,237.0 35.84 827,615.0 35.08
9. Fitch Adjustments to Risk Weighted Assets n.a. n.a. - n.a. - n.a. - n.a. -
10. Fitch Adjusted Risk Weighted Assets 89,030.8 598,162.0 22.54 917,040.0 36.91 879,237.0 35.84 827,615.0 35.08
B. Average Balance Sheet
Average Loans 186,030.7 1,249,865.7 47.10 1,228,547.2 49.44 1,202,321.0 49.01 1,139,299.8 48.29
Average Earning Assets 345,601.7 2,321,959.7 87.50 2,234,098.0 89.91 2,169,296.8 88.42 2,063,543.8 87.46
Average Assets 386,486.4 2,596,647.7 97.85 2,536,604.0 102.08 2,383,787.8 97.16 2,243,613.4 95.09
Average Managed Securitized Assets (OBS) n.a. n.a. - n.a. - n.a. - n.a. -
Average Interest-Bearing Liabilities 307,786.1 2,067,892.0 77.92 2,034,999.4 81.90 1,906,729.8 77.72 1,776,150.8 75.28
Average Common equity 17,547.2 117,892.7 4.44 113,468.2 4.57 110,742.2 4.51 104,353.2 4.42
Average Equity 18,115.0 121,707.3 4.59 112,684.4 4.53 108,891.2 4.44 102,037.8 4.32
Average Customer Deposits 129,529.3 870,255.7 32.79 884,705.8 35.60 827,473.4 33.73 766,950.4 32.51
C. Maturities
Asset Maturities:
Loans & Advances < 3 months 45,870.7 308,187.0 11.61 381,018.0 15.33 322,187.0 13.13 317,550.0 13.46
Loans & Advances 3 - 12 Months 39,108.4 262,754.0 9.90 23,699.0 0.95 249,266.0 10.16 214,540.0 9.09
Loans and Advances 1 - 5 Years 84,632.4 568,611.0 21.43 534,282.0 21.50 473,396.0 19.30 448,001.0 18.99
Loans & Advances > 5 years 21,051.6 141,437.0 5.33 151,003.0 6.08 188,473.0 7.68 202,924.0 8.60
Debt Securities < 3 Months n.a. n.a. - 20,926.0 0.84 23,566.0 0.96 14,492.0 0.61
Debt Securities 3 - 12 Months n.a. n.a. - 38,644.0 1.56 37,781.0 1.54 40,883.0 1.73
Debt Securities 1 - 5 Years n.a. n.a. - 154,810.0 6.23 158,112.0 6.44 149,764.0 6.35
Debt Securities > 5 Years n.a. n.a. - 73,891.0 2.97 69,994.0 2.85 82,951.0 3.52
Loans & Advances to Banks < 3 Months 9,277.4 62,331.0 2.35 72,785.0 2.93 86,350.0 3.52 79,744.0 3.38
Loans & Advances to Banks 3 - 12 Months 1,596.9 10,729.0 0.40 10,866.0 0.44 10,653.0 0.43 8,356.0 0.35
Loans & Advances to Banks 1 - 5 Years 2,218.9 14,908.0 0.56 17,698.0 0.71 22,598.0 0.92 32,471.0 1.38
Loans & Advances to Banks > 5 Years 51.8 348.0 0.01 821.0 0.03 5,680.0 0.23 7,454.0 0.32
Liability Maturities:
Retail Deposits < 3 months 111,592.4 749,745.0 28.25 723,910.0 29.13 715,614.0 29.17 733,511.0 31.09
Retail Deposits 3 - 12 Months 10,199.7 68,528.0 2.58 47,097.0 1.90 37,104.0 1.51 41,702.0 1.77
Retail Deposits 1 - 5 Years 5,734.7 38,529.0 1.45 32,517.0 1.31 29,773.0 1.21 28,698.0 1.22
Retail Deposits > 5 Years 3,641.4 24,465.0 0.92 32,393.0 1.30 62,914.0 2.56 55,001.0 2.33
Other Deposits < 3 Months n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Other Deposits > 5 Years n.a. n.a. - n.a. - n.a. - n.a. -
Deposits from Banks < 3 Months 26,563.7 178,471.0 6.73 164,128.0 6.61 152,814.0 6.23 178,287.0 7.56
Deposits from Banks 3 - 12 Months 1,146.2 7,701.0 0.29 5,038.0 0.20 5,754.0 0.23 4,588.0 0.19
Deposits from Banks 1 - 5 Years 300.5 2,019.0 0.08 4,209.0 0.17 2,749.0 0.11 4,463.0 0.19
Deposits from Banks > 5 Years 384.2 2,581.0 0.10 5,439.0 0.22 8,951.0 0.36 13,526.0 0.57
Senior Debt Maturing < 3 months 32,120.5 215,805.0 8.13 154,900.0 6.23 137,652.0 5.61 199,597.0 8.46
Senior Debt Maturing 3-12 Months 22,671.5 152,321.0 5.74 134,163.0 5.40 134,541.0 5.48 40,616.0 1.72
Senior Debt Maturing 1- 5 Years 45,485.8 305,601.0 11.52 85,635.0 3.45 76,288.0 3.11 68,739.0 2.91
Senior Debt Maturing > 5 Years 10,369.0 69,665.0 2.63 22,628.0 0.91 19,264.0 0.79 13,011.0 0.55
Total Senior Debt on Balance Sheet 110,646.9 743,392.0 28.01 397,326.0 15.99 367,745.0 14.99 321,963.0 13.65
Fair Value Portion of Senior Debt n.a. n.a. - n.a. - n.a. - n.a. -
Covered Bonds n.a. n.a. - 309,525.0 12.46 286,746.0 11.69 260,423.0 11.04
Subordinated Debt Maturing < 3 months n.a. n.a. - 3,892.0 0.16 3.0 0.00 n.a. -
Subordinated Debt Maturing 3-12 Months 1,161.6 7,804.0 0.29 n.a. - n.a. - n.a. -
Subordinated Debt Maturing 1- 5 Year 1,906.6 12,810.0 0.48 4,488.0 0.18 7,037.0 0.29 n.a. -
Subordinated Debt Maturing > 5 Years 1,433.9 9,634.0 0.36 4,628.0 0.19 4,378.0 0.18 n.a. -
Total Subordinated Debt on Balance Sheet 4,502.1 30,248.0 1.14 13,008.0 0.52 14,577.0 0.59 14,950.0 0.63
Fair Value Portion of Subordinated Debt n.a. n.a. - n.a. - n.a. - n.a. -
D. Equity Reconciliation
1. Equity 18,340.7 123,224.0 4.64 122,814.0 4.94 109,513.0 4.46 102,739.0 4.35
2. Add: Pref. Shares and Hybrid Capital accounted for as Equity n.a. n.a. - n.a. - n.a. - n.a. -
3. Add: Other Adjustments n.a. n.a. - n.a. - n.a. - n.a. -
4. Published Equity 18,340.7 123,224.0 4.64 122,814.0 4.94 109,513.0 4.46 102,739.0 4.35
E. Fitch Eligible Capital Reconciliation
1. Total Equity as reported (including non-controlling interests) 18,340.7 123,224.0 4.64 122,814.0 4.94 109,513.0 4.46 102,739.0 4.35
2. Fair value effect incl in own debt/borrowings at fv on the B/S- CC only 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
3. Non-loss-absorbing non-controlling interests 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
4. Goodwill 1,563.7 10,506.0 0.40 10,408.0 0.42 10,460.0 0.43 10,487.0 0.44
5. Other intangibles 1,038.9 6,980.0 0.26 6,763.0 0.27 6,827.0 0.28 7,385.0 0.31
6. Deferred tax assets deduction 0.0 0.0 0.00 649.0 0.03 809.0 0.03 1,016.0 0.04
7. Net asset value of insurance subsidiaries 1,094.7 7,355.0 0.28 7,355.0 0.30 4,780.0 0.19 4,779.0 0.20
8. First loss tranches of off-balance sheet securitizations 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
9. Fitch Core Capital 14,643.4 98,383.0 3.71 97,639.0 3.93 86,637.0 3.53 79,072.0 3.35
10. Eligible weighted Hybrid capital 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
11. Government held Hybrid Capital 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
12. Fitch Eligible Capital 14,643.4 98,383.0 3.71 97,639.0 3.93 86,637.0 3.53 79,072.0 -
Exchange Rate USD1 = SEK6.71860 USD1 = SEK6.42380 USD1 = SEK6.50450 USD1 = SEK6.88770
Banks
Skandinaviska Enskilda Banken AB
October 2014 15
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