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Interim report January-September 2002

Cost reduction offsets income decrease
  • Operating result* for the first nine months: SEK 5,537 M (5,706 corresponding period last year)
  • Operating result for the third quarter, isolated: SEK 1,551 M (1,461)
  • Total costs down by 9 per cent
  • Lower income level due to deteriorating market conditions
  • Credit losses at low levels
  • Return on equity: 11.6 per cent (12.2)
  • Earnings per share for the first nine months: SEK 5.46 (5.44)
  • SEB's position in the Nordic area strengthened.
* Includes pension compensation of SEK 759 M (766). Statutory operating profit (excluding pension compensation) amounted to SEK 4,778 M (4,940).
President's statement
Market conditions deteriorated further in the third quarter. Stock markets plunged by 20 to 30 per cent, bond rates kept decreasing and the Swedish krona weakened.
The economic outlook worsened in most countries. In Sweden, the economy still held up quite well by strong private consumption. The German economy is weak and no signs of improvement can be seen. The Baltic countries, however, continue to show strong growth.
Our internal 3 C change programme proceeds at full speed within all areas of the bank.
  • Cost efficiency measures are proceeding according to plan.
  • Our efforts to increase Customer Satisfaction have started to yield results, and it is gratifying to see how the Swedish retail network has improved its customer satisfaction ratios. The launching of new products and services has proved successful.
  • The area of Cross-servicing is becoming more and more important to us in order to increase customer satisfaction and revenues as well as to save costs.
Our credit losses remained low, and doubtful claims have been stable during the year. A further deterioration of the economy would of course also have an impact on SEB's credit portfolio in the future, thus demanding continued close attention.
Generally, it is satisfying to note that our net profit remains unchanged despite the difficult market conditions. However, there are no signs of a recovery in the world economy. On the contrary there are increased risks for a prolonged or deepened downturn. Given that negative outlook, the internal efforts in SEB are directed towards further cost savings and tight risk control.
However, there are also opportunities for us. With our strong capital base and a focused, operational management in control of costs and risks we will be able to gain market shares in the long term by supporting our customers.
Third quarter isolated
Improved result compared to last year
The operating result for the third quarter isolated amounted to SEK 1,551 M, an increase of 6 per cent compared to July-September 2001. This was an effect of cost reductions that more than compensated for the decrease in income. The result was, however, lower than the previous quarters of 2002.
The deteriorating market conditions had a negative effect on total income of SEK 6,407 M, which was a decrease both in comparison with the previous quarter and with the corresponding quarter last year.
Total costs, SEK 4,632 M, were 6 per cent lower than in the third quarter last year and about 2 per cent lower than in the first and second quarters of 2002, on a comparable basis. Staff costs and particularly other operating costs have been reduced.
Net credit losses, SEK 181 M, were in line with the previous quarters.
Operating result: SEK 5.5 billion
Operating result, including pension compensation, for the period January-September 2002 amounted to SEK 5,537 M (5,706). The comparison with the corresponding period 2001 was affected by capital gains and other one-off items, restructuring costs and currency translation differences. Adjusted for these items affecting comparability, the operating result increased by 6 per cent, mainly due to reduced costs.
Net profit (after tax) for January-September was unchanged, at SEK 3,827 M (3,830).
Lower income level
Total income during January-September amounted to SEK 20,449 M (21,781). On a comparable basis income decreased by 4 per cent, mainly due to the negative impact of the falling markets on net commission income and net financial transactions.
Net interest income amounted to SEK 10,176 M (9,513), an increase of 7 per cent on a comparable basis. The improvement was due to slightly increased volumes and somewhat decreased costs for funding.
Net commission income decreased by 9 per cent to SEK 7,516 M (8,285), mainly due to the gloomy stock market development.
Net result of financial transactions amounted to SEK 1,755 M (2,296). The third quarter showed a decrease in trading related income compared to the previous quarters, especially in the foreign exchange area, mainly due to lower customer activity level.
Other income was SEK 1,002 M (1,687). Capital gains, this year consisting of a number of minor transactions, totalled SEK 378 M (929). Last year included capital gains of SEK 512 M from sale of shares in OM and SEK 248 M from sale of shares in Deutsche Börse. Adjusted for these and other items affecting comparability, other income was down 18 per cent.
Stockholm, 6 November 2002
Lars H. Thunell
President and Group Chief Executive
More detailed information is presented on the Internet (www.seb.net). The "Additional information" includes:

Appendix 1 SEB Trygg Liv
Appendix 2 SEB AG Group (SEB's operations in Germany)
Appendix 3 Credit exposure
Appendix 4 Capital base for the SEB Financial Group of Undertakings
Appendix 5 Market risk
Operational Profit & Loss Account quarterly performance seven quarters
- The SEB Group
- The Divisions and business areas
- Bridge between present and previous accounting principles
- Revenue split
- One-off items
Statutory Profit & Loss Account
- The SEB Group
- Skandinaviska Enskilda Banken
Further information is available from:
Gunilla Wikman, Head of Group Communications, +46 8 763 81 25
Per Anders Fasth, Head of Group Investor Relations, +46 8 763 95 66
Annika Halldin, Responsible for Financial Information, +46 8 763 85 60
This Interim Report has not been reviewed by the Auditors of the Bank.
Financial information during 2002-2003

5 December 2002 Capital Market's Day
13 February 2003 Annual Accounts 2002
9 April 2003 Annual General Meeting
8 May 2003 Interim Report January-March
14 August 2003 Interim Report January-June (N.B. new date)
6 November 2003 Interim Report January-September
The full report including tables can be downloaded from the following link:
Additional information can be downloaded from the following link: