16 Mar 2020 12:01

‘We will help our customers”

“As a bank we have a great societal responsibility and must make sure that the customers who need it get support, help and strength to weather the storm we are facing,” comments Johan Torgeby, SEB’s president and CEO, in an interview where he speaks about what the bank does to protect operations and keep open for customers.

What is your strategy for protecting SEB’s employees and keeping operations going for our customers?

“As a bank we have a large, dual responsibility, and as CEO I feel this to the highest degree. We will protect our employees as far as possible, by not exposing ourselves to more risks than are absolutely necessary. At the same time we must make sure the bank is open 24/7 and that we take care of our customers.

“We must therefore remain in standby mode, be vigilant if anyone shows symptoms, and split up operations as much as possible to ensure minimal risk for contagion that could affect our operations.

“We also have a responsibility to be available for employees who are worried, but at the same time counterbalance this by not exaggerating fear to where it becomes part of the problem and not the solution. It is a difficult balancing act, since the uncertainty is so great.”

The coronavirus is leading to major disruptions in the economy. How big is the risk that it will lead to a deep recession?

“We have already witnessed one of the fastest and most aggressive financial market crashes in history. It is not unlikely that this will lead to a recession. But in the longer perspective, beyond one or two years, there is no reason to be worried. For it is not a question of if but rather when the virus epidemic comes to a conclusion. Right now it’s a matter of weathering the storm.”

Banks are part of the national economy. Nervous customers have begun asking questions about how SEB as a bank will be affected if many companies encounter problems. What is your message to them?

“The banking system is the sum of society in general. If households and companies run into adversity, it affects the banks. But SEB is an incredibly strong bank, and we are affected not only negatively. In certain parts of our business, activity is going down, but in others it is going up. The need for advice is rising, and companies’ need to shore up their finances, their liquidity and their need to borrow money is increasing.

“In certain sectors such as air travel, hospitality and tourism, we are seeing a drop in demand. This increases the risk for credit losses, but how large these will be it is too early to tell. But SEB is well-capitalised and has a conservative credit policy and sound credit exposure.”

Banks have a large responsibility in supporting the societal economy, how does SEB work with others in this?

“Us banks, together with the authorities who are responsible for the financial market in general, have a joint responsibility. It’s a matter of safeguarding three things: We have a responsibility to help those customers who need support, assistance and the resilience to weather this situation. Banks must be well-capitalised. Banks’ capital funding must work. Shareholders and investors who invest in banks’ bonds must have continued high confidence that it is attractive to invest in banks.”

The government and the Financial Supervisory Authority have announced several measures to support small businesses and secure the banks' credit supply. What does that mean?

“It is extremely welcome. It significantly increases our ability to provide credits to help customers weather the turbulence in this weak market.”

How are you acting yourself in this situation? Have you changed any of your work routines?

“I try to practice what I preach. I have cancelled engagements and have no trips planned in the near future. We have also changed our daily routines so that we have maximum crisis preparedness. We have a team who reviews the leading indicators of how the global economy and SEB are performing every day. I have not seen anything that gives reason to be worried about the bank’s well-being right now.

“In other respects, I am trying to observe the same precautionary measures that we are recommending in general within the bank, that is, to cut back on meetings and physical contact. But it is essential that we all press on to ensure that operations are working and that we are there to support our customers even in tough times.”