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SEB: Annual Accounts 2002


Stronger result, despite weaker markets:

 -- Operating result(a) SEK 7,412 M, an increase of 6 per cent on a
    comparable basis

 -- Income decrease of 4 per cent on a comparable basis

 -- Total costs down by 9 per cent on a comparable basis -- cost
    target reached

 -- Credit losses remained at low level

 -- Increased customer satisfaction and strengthened market positions

 -- Return on equity: 12.0 per cent (11.9)

 -- Earnings per share: SEK 7.60 (7.17)

 -- Proposed dividend: SEK 4.00 (4.00)

 -- Includes pension compensation of SEK 948 M (1,002). Statutory
    operating profit (excluding pension compensation) amounted to
    SEK 6,464 M (6,151).

President's Statement

SEB's profit for 2002 was better than in 2001 as a result of our current change programme. The world economy weakened and for the third consecutive year the value of stock exchanges worldwide declined. Stockholm fell by 37 per cent for the full year (compared with a decline of 16 per cent in 2001). It has been a difficult year for many of our customers.

In recent years, SEB has undergone a strategic transformation and a strong expansion, particularly internationally. During the past year, we have focused our efforts on an internal change programme, with the aim of realising our potential and creating a sustainable profitability level. This programme, launched in the autumn of 2001, has more than offset the impact of the weak economic trend in the world. It is gratifying to see all the achievements made by all divisions, business areas, companies and staff units throughout the Group. The programme is called "3C," which stands for Customer satisfaction, Cross-servicing and Cost-efficiency.

Customer satisfaction has been strong among Nordic corporations and customers in Germany, while the rating from retail customers in Sweden needed to be improved. Following our increased focus on the branch offices, the degree of satisfaction among our Swedish retail customers increased according to an external survey made last autumn. That is a good basis for our continued efforts.

Cross-servicing stands for increased co-operation and cross selling within the Group. This is possibly the most important instrument over the long term to improve customer satisfaction, increase revenues and reduce costs. Therefore a process, under the heading of "one SEB," was initiated during 2002 in order to strengthen the internal co-operation. We have chosen to focus on four common core values: commitment, continuity, mutual respect and professionalism.

Our Cost-efficiency programme started during the autumn 2001 and aimed at reducing cost levels from SEK 22.5 billion on an annual basis to SEK 20 billion in the first quarter of 2003 (including Trygg Liv and excluding restructuring costs). That level has already been reached - a quarter earlier than planned. In total, the Group's number of employees declined by approximately 1,600, or 8 per cent, in 18 months.

It is clear that our 3 C programme has yielded results all through the Group. It is also rewarding to see how all business areas have strengthened their market positions!

Nordic Retail & Private Banking succeeded in reducing costs that more than offset declining revenues. The improved efficiency increased return on capital to almost 26 per cent.

Within the Corporate & Institutions division, Merchant Banking posted a result of more than SEK 4 billion, which was in line with the preceding year and a very strong performance. It is especially gratifying to see the stability in the Merchant banking earnings. Naturally, the decline in earnings was substantial for Enskilda Securities, but it was nevertheless positive to yield a result of nearly SEK 200 M during such a year.

SEB Germany suffered from the weak business climate. Increased sales and cost savings could not entirely offset the impact of the difficult market conditions. Our strategy is to work with a long-term focus to strengthen our position in the German market. SEB Asset Management has succeeded well in cost-efficiency terms, improving its cost/income ratio in spite of falling income. The SEB Baltic & Poland division showed very strong growth in volumes and income resulting in an earnings increase by 30 per cent.

SEB Trygg Liv was hit by the value decline on the stock markets. During the year, the Group supported Nya Livforsaekringsaktiebolaget SEB Trygg Liv with capital infusions totaling SEK 530 M in order to support the operation and its continued growth.

The level of credit losses remained low. The increase in 2002 was mainly due to the fact that reversals were higher than normal in 2001. Today, we cannot see any significant deterioration of our credit portfolios. However, the continued weak economic outlook makes us humble and demands high attention to the credit area.

In 2002, we managed to increase the result despite a weak economic climate. It is natural that uncertainty is great at the beginning of the year. This year is even more difficult then ever. At the time of writing, we do not know whether there will be war in Iraq or how it would affect oil prices, currencies, share prices and interest rates. We also face a referendum in Sweden during 2003 on the EMU. Preparations are already under way within SEB - in the event that the voting results in a yes -- so that we can handle a transition to the euro in January 2006. In addition, there are referendums on the EU in the Baltic States and Poland.

Our business climate scenario for 2003 is fairly pessimistic and we are not counting on any boost from an improved economy. Even though our cost reduction target set in 2001 has been reached, we will continue to improve cost efficiency within our operations. We now know that we can do it, and it is important to capitalise on that experience. Our goal for cost efficiency is a cost/income ratio of 0.60 long-term and 0.65 in 2004 under condition that the market situation shows some improvement.

SEB's vision is to be a leading North-European bank, based on long-term customer relations, competence and e-technology. Our business concept is to create more value for our customers in a changing world. We will continue to work hard to further improve relations with our customers and to deliver financial and advisory services of the highest quality. With our competent staff, effective and united organisation and strong capital base, it is our conviction that this will also create a good profitability and, as a result, more value for our shareholders.

Finally, I want to take the opportunity, also here, to thank all employees as well as customers for their strong commitment to our bank! Stockholm, February 13, 2003

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  Credit exposure
 Appendix 3  Risk and capital management
 Appendix 4  Capital base for the SEB financial group of undertakings

 Operational Profit & Loss Account quarterly performance eight quarters

 - The SEB Group
 - Bridge between present and previous accounting principles
 - The Divisions and business areas
 - Revenue split
 - One-off items

 Statutory Profit & Loss Account etc.
   - The SEB Group
   - Skandinaviska Enskilda Banken

 Financial information during 2003:

 February 13, 2003  Annual Accounts 2002
 April 9, 2003      Annual General Meeting
 May 8, 2003        Interim Report January-March
 August 14, 2003    Interim Report January-June
 October 22, 2003   Interim Report January-September

 This information was brought to you by Waymaker http://www.waymaker.net

 The following files are available for download:

 The full year-end report

 The full year-end report

 Additional Information
CONTACT:  SEB, Stockholm
          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