"The turnaround in the Baltic economies is even more visible today and in combination with falling impaired loans the Baltic operations are back in black. The political determination in the region to resolve a challenging economic situation together with our solid work-out processes have led to falling non-performing loans.
In a seasonally slow quarter, I am glad that Baltic operations again record a profit and that we report higher income in Swedish Retail and Life.
As global macro imbalances continue to hamper a broad based economic recovery, uncertainty as to the timing of the pick-up in corporate credit demand in the Nordic region remains. A sharp increase of committed facilities has not yet resulted in increased corporate lending," says Annika Falkengren, SEB's President and CEO, commenting on today's interim report.
Operating profit for the third quarter isolated excluding the divestment* of Retail Germany amounted to SEK 3,602m (702), 35 per cent up from the previous quarter. Including SEK 755m of restructuring charges for the continuing German operations, the reported operating profit was SEK 2,847m, 6 per cent higher than the previous quarter.
Operating income at SEK 8,882m, (9,097) dropped by 4 per cent in the quarter. Net interest income increased by 11 per cent whereas net fee and commission income decreased by 8 per cent.
Comparable operating expenses amounted to SEK 5,476m (5,192). Including restructuring costs of SEK 755m in Germany, operating expenses amounted to SEK 6,231m.
In the third quarter, SEB made a net release of provisions for credit losses of SEK 196m following the stabilisation in the Baltic countries. In the corresponding quarter of last year SEB's provisions for credit losses amounted to 3,206m, corresponding to a credit loss level of 0.98 per cent. In the Baltic region, the improved asset quality enabled a net recovery of SEK 273m (-2,642). The Group's total reserve ratio was basically unchanged in the quarter, at 73 per cent.
SEB has maintained stable and strong capital ratios. As at 30 September, the core Tier I capital ratio amounted to 12.1 per cent and the Tier I capital ratio to 14.2 per cent.
* On 12 July, SEB announced the divestment of its German retail operations expecting closing before year-end. For comparative purposes, the Group's income statement has been restated as continuing and discontinued operations.
SEB is a leading Nordic financial services group. As a relationship bank, SEB in Sweden and the Baltic countries offers financial advice and a wide range of financial services. In Denmark, Finland, Norway and Germany the bank's operations have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB's business is reflected in its presence in 20 countries worldwide. On 30 September 2010, the Group's total assets amounted to SEK 2,254bn while its assets under management totalled SEK 1,343bn. The Group has about 17,000 employees, excluding the German retail operations. Read more about SEB at www.sebgroup.com.
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For further information, please contact:
Jan Erik Back, CFO, +46 8 22 19 00
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Annika Halldin, Senior Financial Information Officer, +46 763 85 60; +46 70 379 00 60