Annual Report 1991

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Definitions
Ouerall in terest margin
Net interest earnings as a percentage of average total assets.
Aoeragetotal assets
The Bank: Total assetson a daily-average basis.
The Group: Average o{ each month's closing figure; the parent
Bank's total assetson a daily-average basis are included.
Return on equity after standardtax
Operating profit after 30 per cent tax as a percentage of equity - de'
fined as taxed shareholders' equity at the opening of the year minus
the dividends paid during the year plus any new share issue plus
70 per cent of all untaxed reseryes (including the valuation adjustment reserve for bonds) plus minority interests in shareholders'
equity.
Grossreturn
Total operating income as a percentage of average total assets.
Profit margin
Profit after standard tax as a percentage of total operating income.
Earningsper shareafter standardtax
Profit excluding capital gains divided by the number of ordinary
sharesat year-end, where profit excluding capital gains is defined
as operating profit plus extraordinary items excluding capital gains
minus 30 per cent tax minus minority interests in profit plus share
of profit in associatedcompanies in excessof dividends received.
Earnings per shareafter full tax
The same definition as above except that the year's tax cost is calcuIated as the sum of tax paid plus 30 per cent of all appropriations.
"The Bank" refers to Skandinaviska Enskilda Banken {9€-Banken),
parent company in the 9E-3ank Group. Unless otherwise stated,
figures in parentheses refer to 1990. All percentage figwes relating
to the business of the $E-Bank Group, the Bank and its subsidiaries
are based on exact amounts. Per cent changes refer to comparisons
with 1990,unless otherwise stated.
SEK refers to Swedish kronor. For other currency codes, see page
Adjusted shareholders'equity I per share
Taxed shareholders' equity, plus 70 per cent of untaxed resewes
and the surplus value of the bond portfolio, divided by the number
of ordinary shares at year-end.
Adjusted shareholders'equity II per share
Adjusted shareholders' equity I plus the surplus value of properties
after 30 per cent standard tax, divided by the number of ordinary
shares at year-end.
Core capital ratio
The core capital of the S-E-Bank Group as a percentage of riskweighted balance sheet and off-balance sheet volume. Core capital
consists of taxed shareholders' equity, pius 70 per cent of untaxed
reserves and the surplus value of the bond portfolio, plus extra
depreciation on equipment leased to clients plus minority interest
in shareholders' equity minus goodwill.
Total capitalratio
The total shareholders' eouitv of the S-E-Bank Croup as a percentage of risk-weighted badnc6 sheet and off-balance iheet iolume.
Total capital consists of core capital and supplementary capital
minus shareholdings in unconsolidated companies. Supplementary
capital includes subordinated debenture loans plus reservesand
supplementary capital approved by the Government. Supplementary capital may not exceed the amourt of core capital.
Lending lossleael
The lending loss level is defined as lendiag lossesdivided by yearend loans outstanding (to the public and financial institutions).
38. MillionCs) is abbreviated M. Billion means one thousand milli
on. "The Riksbank" refers to Sweden's central bank. "The Riksdag"
refers to the Swedish Parliament. "Goteborg" is Swedish for Gothenburg.
Annual reports and interim reports (January-Apri1 and JanuaryAugust) can be ordered from Corporate Communications, Skandinaviska Enskilda Bankery 9-106 40 Stockholm, Sweden.
TheS-E-Bank
GroupAnnualReport1991
Table of contents
2 Highlights of 1991
Re;ulfsdndker1
figures
Diuidend
3 Organisational chart, the S-E-Bank Group
4 Chairman's statement
An eaentfulyear- t'orbetteror worse
6 Statementof the Group Chief Executive
Earningsin 199Lbothgoodandbad
8 SEB Sweden
Consumerbanking
Corporatebanking
14 SEB International
Major corporations
Inztestment
banking
Mutual fund andassetmanagement
20 Staff and training
Report of the Directors
22 Marketdevelopments
n
uepostrsana tenatng
24 Earnings and profitability
27 Lending policies and lending losses
28 Treasury
Theoisualthemeof thisAnnual
Report,with illustrationsby
GunnarErkner(watercolors)
and
StephanMaxkellen (photographs),
reflectstheroleof theS-E-Bnnk
Croupin theSwedish
economy.
Capital baseand capitaladequocy
Rating
30 Other events in7997
Changes
in theorganisation
Skandia
andtheBank's
insurance
aenture
Gamlestaden
andNobel
Newdireclors
andofficers
32 S-E-Bankenshares
34 Accountingprinciples
36 Profit and lossaccounts,balance
sheetsand notes
50 Proposalfor the distribution of profit
50 Auditors'report
51 Long-termstatistics
52 Board of Directors
54 Group ExecutiveCommittee
55 Auditors
56 Addresses
1991,
in brief
Key figures for the S-E-BankGroup*
1.987
Operating profit, SEK M
Operating profit before losses, SEK M
Total assets, SEK billion
Return on equity after 30Votax, Vo
Total capital ratio, To
4,042 4,669 4,444 3,312 2,326
4,300 5,090 5,005 5,461 7,096
234
289
366
452
451
24.9
23.5
78.2
11.8
7.6
8.8
9.7
70.7
Core capital ratio, Vo
Operating income/costs,
excl. lending losses
Earnings per share after 30% tax, SEK
Dividend per Series A share, SEK
"1991.
^1990
1989
/.J
O.U
1.96 7.99 1.85
10.93 72.61 77.56
2.73 2.55 3.00
"t.75
7.61
3.30
6./
1.88
4.50
3.35
* For definitions, see the inside front cover.
Earningssituation in brief
The S-E-Bank Group
SEKM
Change,
7O
S-E Banken
SEKM
Change,
%
9,473
+17
7,550
+24
Other operating income
4,859
825
3,291.
455
Total operating income
15,157
+19
l'1,296
+20
Staff costs
Other operating costs
Depreciation
4,202
3,319
550
+72
+10
+16
-3,007
2,440
277
+
Total operating costs
8,071
+11
5,664
+10
Profit before losses
Lending losses
7,086
4,760
+30
+744
5,632
4,278
+ 33
+188
Operating profit
2,326
-30
1,354
-47
Net interest earnings
+24
Commissions, fees and foreign
exchange earnings
, n o
, o n
T L W
-20
9
+ 72
77
Proposed dividend
The Board of Directors proposes a dividend of SEK 3.35 per share on both
SeriesA and Series C shares.This proposal entails an increase of SEK 0.05 per
share within the framework of an unchanged dividend sum of SEK 883M. The
reason is that the previous Series B shares, which entitled shareholders to a
higher dividend, were exchanged for SeriesA shares during 1991.
For facts about S-E-Banken shares, see page 32.
Organisationalchart,the S-E-BankGroup
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The restructuring of the S-E-Bank Group into two divisions,
SEB Sweden and SEB International, was implemented late in
the summer of 1,991.SEB Sweden, which is responsible for consumer banking and the corporate banking maiket (mainly small
and medium-sized companies), had an average of more than
7,300 employees and a total business volume of SEK 250 billion.
The corresponding figures for SEB International, which is
responsible for major corporations and mutual fund and asset
management, were 2,400 employees and SEK 170 billion.
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CunrG Orssox
An eventful year - for better or worse
Another year into the 1990s,we can
see that the rapid pace of change prevailing in recent years has not slowed
down at all. Quite the contrary. This
is especially true of other countries,
and above all those to our east, where
the upheavals of 1991 occurred with
a spe^edand intensity hardly anyone
could have foreseen. The collapse of
communism and the breakthrough
of democracy and market economies
in these states will greatly alter our
world picture - geographically,
politically and economically.
Western Europe focused mainly on
its continuing process of international
integration. The treaty between the
European Community (EC) and the
Euronean Free Trade Association
GFTA) to establish a 19-nation European Economic Area (EEA), and the
Maastricht agreement to create a
closer union among the 12 EC
countries themselves, were important milestones in this process.
In Sweden, too,1.991.brought major
changes,both positive and negative.
There was a welcome reorientation
in official policies, which in the long
term should help to create a firmer
set of rules governing the business
sector and a more favourable economic climate. Sweden needs longrange growth promotion policies if it
is to perform well in international
competition. Deregulation, anti-inflationary measures and incentives for
saving are important elements of such
policies. Many significant steps in
this direction were taken during7997.
Moving closer to Europe
Yet perhaps the foremost example of
a policy shift during 1991 was the
change in the former Government's
attitude toward Swedish membership in the EC. When Sweden submitted its membership application on
luly 7, this action consequently
enjoyed broad-based support from the
political parties. This should facilitate
our country's continued pursuit of
closer ties with Europe. Only as a
full-fledged EC member can Sweden
play an active role in the expanded,
more intensive European co-operation that is emerging.
Another important event that
further highlights Sweden's closer relations with the EC was the Riksbank's
decision in May 7997 to link the
Swedish krona to the European
Currency Unit (ECU). This is a first
step toward membership in the European Monetary System (EMS). It has
eliminated much of the earlier uncertainty about Sweden's exchange rate
policy. It has also paved the way for
more stable exchange rates vis-d-vis
our most important trade partners in
Europe.
Recession is squeezing the banks
Yet the positive effects of these initial
reforms in our economic system are
being obscured by the fact that right
now we are in the deepest economic
downturn we have experienced in
decades. Already in the final months
of 1990, our economic climate cooled
perceptibly in the shadow of the
approaching Gulf war. Since then the
Swedish economy has continued to
weaken at an unusually rapid pace,
with sharp adverse effects on production, employment and capital
sPenqlng.
This steep economic downturn accompanied by a drastic increase in
the number of bankruptcies and suspensions of payments - has had very
noticeablefinancial repercussions.
The refreshing winds of innovation
that swept over the banking market
during the second half of the 1980s
have turned into a piercing storm
wind. Lending lossesin the Swedish
banking system have risen dramati-
the outflow had reversed, the Riksbank
again lowered the
call money rate
gradually, albeit not
to the same level as
before the currency
market turmoil
began.
cally and will probably remain high
for another couple of years as a consequence of recession, new tax rules
and continued high real interest rates.
Although its link with the ECU has
resulted in more stable exchange
rates, the krona remains sensitive to
outside pressures, as the events of
early December reminded us. A large
outflow of foreign exchange from
Sweden, resulting from speculation
against the krona following the devaluation in neighbouring Finland,
caused the Riksbank to raise its call
money rate by no less than six percentage points in a single move. After
Simplistic criticism
of Swedish banks
As their lending
losseshave grown,
Swedish banks have
- out of necessity become more cautious in their evaluation of new loan applications. This has
led to criticism from
some quarters. The
banks are being accused of strangling
the flow of credit
and being too riskaverse. At the same
time, of course, they
are also criticised for
their mounting loan
losses.
It is no easy task
to strike a balance
between - on the one hand - managing the funds of depositors, lenders
and shareholders in a sound, profitable manner and - on the other hand
- willingly taking risks by supplying
investment and working capital to
companies with uncertain futures.
Misjudgements inevitably occur in
individual cases,but I am convinced
that most of the people who take the
lending decisions at Swedish banks
exercise good judgement, based on
the best information available at the
time of each decision. It is hardly
necessaryto point out that realities
can subsequently change, and not
always in predictable ways. Besides,
it is not a question of a lending
freeze. Projects with good potential
to succeed are not likely to have any
trouble being financed.
A certain amount of self-criticism
by Swedish banks is justified, however. The increased freedom of action
they gained in the mid-1980s was
perhaps not always handled with
sufficient prudence. Yet we should
recall that under the nressure of
pent-up loan demand, growing
credit market competition and rapidly rising share prices and real estate
values, it was often hard to resist the
pressures and remain sufficiently critical of optimistic projections. Since
then, the rapid general economic
downturn and plummeting property
markets have led to a painful but
necessaryreturn to sobriety.
Our gratitude to the Group's
employees
Tougher times impose heavier
demands on everyone who works in
the S-E-Bank Group. Unfortunately,
owr 1991.operating profit did not
provide a fair picture of the contributions of our employees. Yet we
must not allow this to obscure the
fact that the Bank's earning capacity
is good and that its cost curve is
pointing in the right direction. I therefore feel a particularly strong obligation, on behalf of the Board of
Directors, to express our gratitude to
all emplovees for their fine contributioni to the Group during a year
that has been trying for all of us.
Stockholm, F ebruary 7992
Curt G Olsson
Chqirmanof theBoard
Bo C E Reupons
Earningsin 1991bothgood and bad
Despite a sharp rise in lending losses,
the S-E-Bank Group managed to show
an operating profit of SEK 2.3 billion
in a year filled with problems. This
cleaity demonstrates^the Group's
fundamental earning capacity. The
same thing is apparent from the fact
that the year's profit before lending
losses climbed by 30 per cent, or
faster than at any other Swedish
bank. All types of operating income net interest earnings, commissions,
foreign exchange earnings etc - improved sharply, while the increase in
operating costs slowed markedly.
Thanks to this income trend, the
situation was still looking very bright
for the S-E-Bank Group well into the
autumn of 1,991,,
when we reported a
30 per cent rise in operating profit in
the eight-month Interim Report.
While making ample allowance for
uncertainties about the trend of lending losses during the rest of the year,
we thus dared to forecast equally
good earnings growth for 1991 as
a whole.
But the downturn during the final
months of the year was far more dramatic than we had anticipated. Due
to a sharp increase in the number of
corporate bankruptcies and suspensions of payments, S-E-Banken's lending losses for small and medium-sized
companies were more than twice as
large as in 1990.We were also obliged
to make sizeable write-downs on a
few large loans to finance and property companies.
Due to the alarming rise in lending
losses, the task of evaluating and
managing credit risks has been given
even higher priority than before. We
continued the action programme to
improve loan processing that was
initiated in 1990.As part of this, we
introduced clearer loan portfolio
policies,specifying careiully formulated goals for the Group's maximum
exposures in shipping, property and
local government lending.
Continued cost-cutting programme
The extensive programme to reduce
Group operating costs that we set in
motion during the autumn of 7990
continued throughout 1991.An early
retirement offer, rationalisation of
working procedures and restructuring helped us to decrease our labour
force in Sweden gradually during the
year. This was one of the reasons
why our operating costs, adjusted for
the purchase of Scandinavian Bank
Group and the effects of the threeweek labour dispute in the Swedish
banking sector early in 1990,did not
increase more than about 2 per cent
during the year.
One important element of our costcutting programme is the "Turbo"
project, which is based on employees'
own suggestions for streamlining
operations. Manv effects of the Turbo
pioject will be feit only during7992,
nowever.
Broad-based venture into insurance
The fact that we were unable to realise our ambitions to form an internationally competitive banking and
insurance group together with
Skandia was naturally a setback. We
had (and still have) a very strong faith
in the advantages of combining banking and life insurance operations.
Indeed, today we are even more
convinced of the synergistic effects of
this combination, both in savings and
asset management, than we were in
the autumn of 1990, when we acquired the option to buy 28.2per cent
of Skandia. Moreover, the successof
our unit-linked insurance policies indicates that the Bank's branch office
network is an excellent sales channel
for insurance products.
Our conviction that banking and
life insurance fit together led to our
1991 decision to enter the life insurance business on a broad front,
under the name SEB Forsrikring. This
venture means that we are adding to
our unit-linked insurance company
Aktiv Frirsdkring a traditional insurance company that sells deferred
retirement annuities ("pension insurance") and endowment policies,
health insurance policies etc. In response to growing customer interest
in foreign insurance products, we
also plan to establish co-operation
with foreign-based insurers or start
our own insurance company abroad.
Quality and profitability
During 7991 we conducted a systematic review of the overall goals, strategies and organisational structure of
the S-E-Bank Group. Our goals which all employees are familiar
with - are simple and clear:
. We should nrovide our customers
with the highest-quatifyservice in
the market.
. We should achieve and maintain
high enough profitnbility to give our
shareholders a competitive return
on their investment.
We naturallv place
such heavy emphasis
on the concept of quality because we are
convinced that this is
the best guarantee of
success.We thus want
to be the obvious
choice of those customers who are mainly
Iooking for professionalism and quality.
Among other things,
this requires that we
maintain impeccable
ethical standards and
continuouslv develop
the professional skilG,
service-mindedness
and sound business
sense of our emolovees. In addition, we
should constantly
renew and adapt our
products to the needs
of our customers and
put a high priority on
good customer service
and long-term customer relationshios.
A high profitability level is, of
course, not only important to shareholders but also necessaryto ensure
our future expansion by raising fresh
canital in Sweden and in international markets.
To achieve this, the Bank's return
on shareholders' equity has to exceed
the average return at Swedish commercial banks and be comparable
with that of the best banks abroad.
With an average return on equity
of 20 per cent, the Bank performed
well during the 1980s,both from a
Swedish and international perspective. In 1990 and 1991,return on
equity stood at 72 and 8 per cent, respectively. Although these levels are
not satisfactory, they must be viewed
in the context of the deep recession
that has hit the banking system very
hard, both in Sweden and abroad.
It is important to emphasise that
this deterioration in profitability was
entirely due to a sharp increase in
lending losses.As I pointed out earlier, the Group's earning capacity is
very good. It is also important to
bear in mind that the S-E-Bank
Group has a strong capital base
and that - even after its ratings were
lowered over the past year - it enjoys
very good creditworthiness from an
international perspective.
Customer-orientated structure
As part of our strategy for responding to the continued changes facing
the banking system in the 1990s,the
Group's various customer segments
- private individuals, small and
medium-sized companies and major
corporations - are now reflected even
more clearly in the Group's organisational structure.
During 1991 responsibility for
mainly regional or domestic consumer and corporate banking markets was gathered under SEB Sweden,
while responsibility for globally orientated major corporations was placed
under SEB International. Structuring
the S-E-Bank Croup into these two
divisions was a logical step following
the organisational changes of 7990,
when our geographic units were supplemented by two functionally based
areas of responsibility: Commercial
and Merchant Banking, respectively.
Continued structural transformation and cost-cutting programmes
have naturally led to severe strains in
many parts of our organisation. Yet
our employees have demonstrated
both adaptability and loyalty, and I
would like to thank all of them for
their fine contributions during a
difficult year.
Bo C E Ramfors
ManagingDirectorand G
Executiae
SEBSweden
SEB Sweden includes the operations
of the Bank's three central oifices in
Stockholm, Griteborg and Malmd, its
ten geographic regions with their
total of 326 branch offices around
Sweden, SEB Kort (credit and charge
cards) plus the Swedish subsidiaries
Svensli Fastighetskredit (real estate
loans), FinansSkandic (leasing etc),
Arsenalen and Garnisonen (property related services) and Aktiv Forsdkring, an insurance company taken over at the beginning of 7992.
The responsibilities of the SEB
Sweden Division include two of the
Group's three principal markets:
consumer banking and corporate
banking. Most customers in these
sectors have a mainly domestic focus, and the competition primarily
consists of Swedish banks, finance
companies and property mortgage
lenders. In southern and western
Sweden, SEB Sweden also serves
major corporations.
During 1991 SEB Sweden initiated
a process that will give the regions
greater independence and authority
to handle operations in their respective territories. In other words, its
ambition is to delegate responsibility
and decision-making closer to the
market and to its customers.
Consumerbanking
Customer orientation and specially
tailored services
In all, about two million private individuals are customers of the S-EBank Croup. Of these, 1.5 million are
customers of the parent Bank. Most
earnings from consumer banking,
about 60 per cent, derive from services related to savings and investment management, while the remaining 40 per cent comes from lending.
Transaction services,which were
once a lossmaking segment overall
for the Bank, largely break even nowadays. This improvement is mainly
due to systematic efforts in the past
few years to expand self-service systems and automation - an investment that has simultaneously made
it easier for customers to carry out
their routine banking transactions.
S-E-Banken'sgoal in consumer
banking is to offer the highest quality
in the market and provide an active,
personal touch - without sacrificing
cost-effectiveness.Among other
things, this means the Bank should
take more initiatives and tailor its
products to the varying needs of customers - while continuing its efforts
to improve efficiency in handling
routine transactions and back office
tasks.
S-E-Bankenhas a very high share
of the market for investment management and custody servicesbetween 25 and 65 per cent of the
various market seghents.
During 1997, salesat themorethan 70,000retail outIetsin SwedentotallednearlySEK 300 billion.
TheS-E-BankGrouphasthousandsot'customers
amlng Swedishretailers- t'rom major chainsto
tiny one-of-a-kind
shopsthroughoutthe country.
Oneexampleis theHennes€t Mauritz clothing
chain,ntheretheBnnkis responsible
for both
paymentsnndfinancingand - aia the internationalnetwork- seroices
to HEM's units
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Part of the Bank'sstrategyfor
maintaining
andstrengthening
this
position is to base its serviceson cusiomer needs and offer the best possible asset growth consistent with controlled risk-taking. To achieve this,
the Trust Business unit supports and
activates the Bank's investment
advisors in various ways. In the
metropolitan areas, the Bank is also
bringing together advanced advisory
services at separate specialist offices.
Customers with extra needs and very
large investment portfolios are gathered into a separate unit within Trust
Business.
Larger share of household deposits
market
The consumer banking market is
verv imnortant to the S-E-Bank
Group. bne indication of this is that
in re&nt years, household deposits
have accounted for nearly half of the
Bank's total deposit base. Over the
past five years, S-E-Banken's share of
household deposits has also grown
slowly but surely. In7987 the Bank
had1.L.4 per cent of all household deposits in Swedish banks. At the end
of September 1991,its market share
had climbed to 12.5 per cent. Among
the reasons behind this success is the
Bank's decision to market such highinterest accounts as the Shareholders'
Account and Capital Account.
Broader array of savings alternatives
Over the past decade, traditional
bank savings have lost ground to taxadvantaged national public savings
accounts, equities, mutual funds and
life insurance products, including
deferred retirement annuities. In the
past year, as new income tax rules
have made interest-bearing investments more attractive, bullet bonds
targeted to individual investors and
zero coupon bonds have been added
to the available savings alternatives.
Today the S-E-Bank Group can
offer its customers a broad array of
investments in all these areas.
As for mutual funds, the S-E-Bank
Group manages a large number of
Swedish and international equity,
money market and bond funds. For
the convenience of customers who
have invested in more than one of
these funds, the Group introduced a
10
singlebrokerageaccountcalledthe
FundAccount,
whichhasbeena
maior success.
The performanceof the Group's
mutual funds during 1991is described in the sectionon Enskilda
page19.
SvenskFastighetskredit(SFK),the
Bank'smortgageloan subsidiary,
beganto sell bullet bonds targetedto
individual investorsin 1990.and bv
theend of1991ithad fivesuchloans
outstanding.Both the Bank and SFK
also sold zero couponbonds during
the year.Thesebonds carry no interest
while maturing. Their advantageis
that the owner is taxed only when
they are sold or redeemed.At the
sametime they are a safe,liquid
investment.
S-E-Bankenwas very successfulin
selling Aktiv Fcirsdkring'sunit-linked
life insurances,
whosepremiumsare
invested in various mutual funds
chosenby the customer.During1991"
the Bank sold about 26,000insurance
policies with a total premium value
of SEK1.2billion.Thiswasequivalent to a 63 r,er cent shareof Sweden's new unit-linked insurancemarket and 77 per centof the overall
market for new life insurancepolicies.
During 1992this venture will be
broadenedto include all forms of life
insurance(seealsopage31).
The S-E-BankGroup's savings
alternativesfor households
(December
31,7991)
Total amount
SEKbillion
National public
savings accounts
Bank savings accounts
Bullet bonds for
private investors
incl. zero coupon
Money mdiket funds
Equity mutual funds
Unit-linked insurance
*Estimate
Of Sweden's
3 .8 million households,
2.3 million liae in
singleJamily homesor co-operatiue
flats.
At year-end,S-E-Banken's
subsidiarySaensk
Fastighetskredithad 203,000mortgageloans
outstandingfor single-familyhomesand co-operatiae
flats, with an aggregateaalueof SEK42 billion. In
addition,theBankhadloansof aboutSEK10 billion
to prioateindioidualssecuredbysecond
mortgagedeeds.
Change
during
the year Market
SEKbillion share,7o
9.4
47.0
+0.9
+3.7
74
1,2
3.5
9.6
1,9.7
1,.2
+2.'I
-0.8
+4.4
+0.9
25*
31,
24
63
able trend of interest rates during
most of the year and SFK's efforts to
improve its customer service also
contributed to the increase.
Less credit card borrowing
The trend of recent years toward
lower borrowing on credit cards
continued during 1991.SEB Kort, the
Bank's credit and charge card unit,
reported that sales on the credit card
accounts of individual customers
totalled SEK 8.1 billion, whereas their
outstanding balances subject to
interest pavments and finance
chargesiv-eraged no more than
SEK2.2 billion during the year. (For
the corporate card sector, the corresponding figures were SEK 7.4billion
Consumerloans down, home
loans up
For the first time in many years,the
volumeof Swedishbanli loansto
householdsdeclinedduring 1991.
For S-E-Banken's
part, however,the
declinewas partly offsetby continued heavy demandfor residential
mortgageloansfrom SvenskFastighetskredit.During 1991SFK's
new lending to householdsroseby
SEK2.2 billion or 65 per cent. One
reason behind this increase in demand
was that many households restructured their loans - for example to
eliminate some of their credlt card
and hire-purchase debt. The favour.
ffi
I r..l
ii
;:i,
ii
iir
, ,' 'li .,;'i'ft"
11.fii1',,,
#,*knqit
SEB SwnonN
and SEK 0.8 billion.) The shift from
creditcardstowarddebitandcharge
cards is expected to continue, and this
is entirely in line with the business
strategy of SEB Kort.
Of SEB Kort's 1.2 million cards
outstanding, 950,000were held by
private individuals. The company's
product range includes the Eurocard
charge card, the ONLINE debit and
credit cards plus affinity cards issued
in co-operation with B & W hypermarkets, the Hennes & Mauritz
clothing chain and other companies
and organisations. SEB Kort has an
estimated one third of the Swedish
credit and charge card market
(excluding oil company cards), both
in terms of number issued and sales
on these card accounts.
The S-E-Bank Group's lending
products for households
(December31,7991,)
Total anount
SEK billion
Change duling
the year
SEK billion
29.2
Bank loans
Mortgage loans
for single-family
homes and
co-operative flats
(sFK)
42.4
Credit card balance 2.2
* Estimate
72
Market
share, %
-6.4
11.6
+0.6
-0.3
10.3
33*
Corporate banking
New service packages
Todav more than 100.000small and
medium-sized comnanies are clients
of the S-E-Bank Group. These customers constitute an important base for
the Group's operatibns. In recent
years, however, the corporate market
has become less nrofitable as a consequence of growing insolvencies
among borrowers. Dwing 7997,
small and medium-sized comr:anies
accountedfor 60 per cent of the
S-E-Bank Group'i lending losses.
Lending lossesare not the only
thing that adversely affects profitability in corporate banking, however.
Unsatisfactory pricing levels for the
Bank and a lower market share in
services to industries with good
growth potential have also contributed to the Bank's weak financial
returns in this sector.
In the corporate market, the Bank's
strategy is therefore to reduce its
costs for routine transactions by
means of more efficient processing,
thereby freeing resources for more
advanced customer needs. During
the autumn, the Bank also reviewed
its pricing. One result was that it began to charge for a number of services
that had not previously covered their
costs.Around year-end the Bank also
introduced a corporate banking
package providing certain basic services at a fixed annual cost.
One important component of the
Bank's strategy to improve its weak
profitability in the corporate market
is naturally also to improve loan processing. The programme for achieving a better credit evaluation process,
initiated in7989, was therefore intensified and expanded during 1991 (see
also the section on lending policies
and lending losses, page27).
Smallershareof corporatedeposit
market
S-E-Banken'sdeposits from small
and medium-sizbd companies have
accounted for more than one fifth of
the Bank's total deposits during the
past five vears. In 1991 S-E-Banken's
heposits from this sector did not increaseas rapidly as those of the
Swedish banking system as a whole,
resulting in a somewhat smaller
market share.
Sharp increase in corporate lending
The supposed and much-debated
tightening of credit from the Swedish
banks to small and medium-sized
companies is not borne out by statistics. The banking system's total loans
outstanding to companies with fewer
than 200 employees rose by nearly 4
per cent during 7997.At S-E-Banken,
the increase was even larger, about
10 per cent. The Bank's share of this
market thus rose somewhat. During
both 1990 and1.991,about half of
S-E-Banken'stotal lending went to
companies with fewer than 200 employees.
Property loans to the business sector
SFK did not actively engage in selling new loans in the corporate market during 1991.Instead, it concentra-
ted on servicing its existing corporate
loan portfolio, Most of the new loans
that SFK nevertheless approved for
commercial properties and apartment
blocks were based on price quotations that it submitted in co-operation
with its parent Bank.
Larger share of leasing market
The expansion in the equipment leasing market over the past few years
slowed during 1991.The FinansSkandic group, which is Sweden's
largest company in this field, strengthened its position and increased its
market ihare from 16 to more than
20 per cent. In factoring services (purchasesof accounts receivable and
lending with invoices as collateral),
FinansSkandic held nearly one fifth of
the Swedish market.
One key to the successof the FinansSkandic group, which in7997 reported its best earnings ever, is that the
various companies in the group
specialise in different fields. FinansSkandic Foretag offers loans for capital spending and working capital,
primarily in the form of leasing and
factoring. SkandicBilfinans specialises
in vehicle financing, Vendax focuses
mainly on large computer leasing
transactions etc. An extra source of
strength is that the different units sell
theirservices
throughseveralchanncls- via theBank'sbranchoffice
network, equipment dealers and/or
suppliers.
FinansSkandic's international strategy concentrates on supplying
Swedish and other Nordic-owned
companies abroad with loans for
capital spending via five wholly
owned subsidiaries.
FinansSkandic sold its Consumer
Division (credit and charge cards,
consumer loans) to S-E-Banken at
year-end 1990,thereby enabling the
company to concentrate completely
on the corporate market.
Tough market for property related
services
In addition to traditional financial
services,the SEB Sweden Division offers a wide range of property related
services through the subsidiaries
Arsenalen (Stockholm and Malmo)
and Garnisonen (Goteborg). Despite
the tough situation in the real estate
market, both companies increased
their appraisal and property analysis
business. This largely offset a marked
downturn in property management,
estate brokerage and construction
management business.
Tzuothirds of Sweden'sexportsand importsare shippedby sea.In
addition,t'erry lines carry a largeaolumeof goodsand passengers.
The marketaalueof the Swedishmerchantfleet, which includes
many shipsdeliaeredduring the past threeyears,is estimatedat
SEK100 billion.S-E-Banken
is a marketleaderin financing
Swedishaessels.
Its shippingclientsincludeWalleniusLines,
Argonaut,Tor Line and Atlantic ContainerLine,which
is ownedby theforwarding companyBilspedition,
I J
SEBInternational
SEB International includes the former SEB International as well as the
Bank's international network,
Treasury & Trading (including the
treasury and trading units at the three
central offices), the operations of
Enskilda in Sweden and abroad, plus
Banque Scandinaveen Suisse(BS-S).
The Division is responsible for the
S-E-Bank Group's globally orientated
major corporate clients - except for
the major corporations handled by
the Cciteborgand Malmo groups in competition with commercial and
investment banks operating internationally. The Bank's international
network also provides services to
SEB Sweden's customers abroad.
Major corporations
S-E-Banken traditionally occupies a
unique position in the market for
major Swedish corporations, with a
very high market share in a number
of service segments. The Bank's strategy is to intensify and maintain existing relationships with major Swedish
corporations by being their most skilful advisor and business Dartner.
At the same time, foreign clients are
offered a number of genuinely international products and services in
areas where S-E-Banken is especially
proficient. These include equity
trading, corporate finance, foreign
exchange trading and cash management.
During 7997, 588 International except for Enskilda - has been divided
into three areas of responsibility that
cut straight through the Division,
including the international network:
. Credits - credit research and analysis, loan administration, lending policies etc.
o Trade Seraices- payments, cash
management, short-term trade
financing, servicing of accounts,
correspondent banking etc.
. Financing and Trading - foreign exchange and money market trading,
interest rate and debt-related nroducts in the money and capital markets plus corporate relationships and
special financing services.
The new structure of the Division
is thus much more customer- and
product-centered than previously,
while at the same time underscoring
the ambition to provide services to
corporations on a global basis.
iit,
*.t
"ii
ft
il'
itil,-.
debt-burdened countries in the Third
"debt
World, After the
crisis" of the
early 1980s,most banks, including
S-E-Banken,therefore assumed a
defensive attitude toward such transactions. But since short-term trade
financing is an important product for
client companies - and is profitable
to the Bank * S-E-Banken recently became active in this field once again.
Foreign banks are very important
clients, both as counterparts in the
Bank's pavment transactions and
foreign exchange trading and as
depositors. S-E-Banken,which has
account relationships with about
2,500 banks throughout the world,
took steps during 7997 to further
improve its co-operation with them.
Large share of payment traffic
S-E-Bankenis highly proficient in
providing payment services.This is
reflected in its dominant share of
payment traffic to and from Sweden.
During 1.991.
two thirds of all incoming and outgoing payment volume went through S-E-Banken. The
skills that the Bank has built up in
the domestic market are also being
increasingly utilized in its international network.
During 1990 S-E-Banken began the
task of adapting its payment system
to the new EDIFACT world standard. This work intensified during
1991.EDIFACT enables computers at
major corporations to deal directly
with each other in handling orders,
deliveries, payments etc. This in turn
means that paper documents can be
reduced or eliminated. Due to its extensive investment in electronic banking services,S-E-Banken has good
prospects for further increasing its
share of payment traffic after EDIFACT technology is phased in.
Increased trade financing activity
During the 1980s,the once-dominant
system of long- and medium-term
export and import financing was increasingly replaced by short-term
trade financing. This kind of financing is used particularly when trading
with high-risk countries, such as
Forestproducts,oneof thecountry's oldestbasicindustries, accountsfor
- throughbothits predeaboutonefifth of Szaedish
exports.S-E-Banken
cessorbanks- hascentury-oldconlactszuithSzuedish
forestproductcompanies.During 1991,for example,the Bankarrangeda syndicatedloanof
USD 1.4 billiont'or Storain the internationalcapitalmarket.
Growing share of foreign exchange
trading
The foreign exchange trading market
was relatively calm in7997, despite
the sharp decline in the U.S. dollar
during the year. In the Swedish market, the Riksbank's decision to link
the krona to the European Currency
Unit (ECU) required major adjustments. Banks and companies that had
used currency basketsas a financing
technique until May 1991 quickly
had to change their procedures. This
resulted in sharplv lower volume
during the summer and autumn.
S-E-Banken strengthened its position as the leading Swedish foreign
exchange trader. The Bank's market
share climbed from about 35 to nearly
40 per cent, which also resulted in
higher earnings.
,.i:
'
,t.'-'
15
SEB lxrsnNalolrel
Of the Bank's foreign exchange
units abroad, those in London and
New York performed best. During
1991 the London branch office was
the largest market maker in Scandinavian currencies outside the Nordic
region, and its customer base expanded sharply. In New York, foreign
exchange trading rose by 43 per cent,
mainly due to a successful marketing
campaign aimed at American companies.
Strong position in capital markets
The Bank's resources in debt-related
products and services in the money
and capital markets strengthened
further during 1991.Among other
things, the Money and Capital Markets
department at the subsidiary bank in
Frankfurt was folded into the functional Capital Markets unit - with
oDerations in London and Stockholm
- that was established during 1990.
The Bank thereby strengthened its
leading position in dealing with
Nordic borrowers, markets and currencies and also in supplying Nordic
clients with funds from international
investors.
Sixth place in Europe for syndicated
loans
As expected,Nordic companies
sharplv increased their international
borrowing during 1991.S-E-Banken
arranged syndicated loans totalling
USD 5.7 billion for its Nordic clients,
including USD 1.4 billion to the Stora
forest products group and USD 1.6
billion to Saab-Scania Holding. The
Bank was thus the sixth largest arranger of syndicated loans in Europe.
The private placements market
also grew. S-E-Banken was an advisor for a number of such investment transactions, totalling about
one billion dollars in value.
Heavier activity in bond market
Bond issues in the Swedish market
rose by 75 per cent during 7997 to
more than SEK 220 billion. This was
mainly because the Covernment,
faced with a growing budget deficit,
nearly quintupled its volume of bond
76
issues to SEK 76 billion and because
residential mortgage institutions increased their new borrowing from
SEK 80 billion to SEK 123 billion.
Issues of Eurokronor bond loans,
which were on a modest scale during
1990,rose to more than SEK 7 billion
in 1,997.S-E-Banken arranged the
first international bond issue denominated in Icelandic kronur, totalling
iSK 2.5 billion, for the Nordic Investment Bank.
The Bank's participation in Swedish bond issues on behalf of borrowers other than the Covernment
remained at the same level as in
1990 and amounted to a21. per cent
market share.
The finance company crisis and
mounting concern about lending
losses led to a major change in the
structure of the Swedish non-cornorate money market during 7997.^
Large first-class borrowers continued
to increase their volumes of money
market instruments, while lowerrated borrowers found it increasingly
difficult to use this market. S-EBanken maintained its leading position in this area as well.
Svensk Fastighetskredit (SFK),
which in 1990became the first
"export"
Swedish credit institution to
in
form
assets the
of single-family
home loans, continued to use this
financing technique during 1991.
SFK sold a total of about 18,500loans
worth SEK 2.5 billion to Osprev
M o r t g a g eS e c u r i t i e s( N o . 2 - b l
Limited in Jersey during the year. As
in7990, Osprey financed the purchase
by issuing international bond loans.
Zero coupon bonds launched
As a consecuence of the Swedish tax
reform, early in 1991 the Riksbank
granted permission for zero coupon
bond issues in Sweden. In March,
S-E-Banken was the first Swedish
borrower to issue its own 10-year
zero coupon loan, primarily targeted
to private investors. The issue was
successful and reached a nominal
value of SEK 1 billion during the
year. Late in7997 the Bank issued a
similar loan on behalf of Electrolux,
which thereby became the first in-
f:;i,,
Engineeringis by far the largestsector
in Szuedish
industry,accountingfor half
of kuedishmerchandise
exportsand industrial employment.
TheS-E-BankGrouphasthousandsof
customers
in this sector,rangingfrom
major corporationslike Vokto and Saaband small-scale
Scaniato subcontractors
manufacturers.
During 1991, for instance,
the Bank atanged a syndicatedloan of
USD 1.6 billionfor Saab-Scania
in the
internationalmarket.In Gritebor
g, the
Bankput togethera creditfacility of SEK
6 billion (commercialpaperprogramme,
short-termbonowingetc.)for Volztofinans,
tuhichis ozunedin equalsharesby Volao
and Sweden'sVoloo dealers.
;
*o1:i"'"ii;'--
during 1991.Despite this severe
financial climate, Enskilda - which is
responsible for the Group's activities
in investment banking and mutual
fuhd and asset management - succeeded in consolidating its strong
market position.
dustrial corporation to sell Swedish
zero coupon bonds in the consumer
banking market.
The Swedish market for bullet
bonds improved substantially,
mainly due to the tax reform and expected high real interest rates. To improve liquidity further, the Stockholm
Stock Exchange established a separate
exchange, SOX, as a market for bullet
bonds targeted to private investors .
At year-end more than 50 bullet
bond loans were outstanding. Their
aggregate value was SEK 18 billion.
Aside from the Covernment (the
National Debt Office),the S-E-Bank
Group with sevenloanstotalling
SEK3.5billion was Sweden'ssecond
largestissuerof bullet bonds (after
the Urban Mortgage Bank) targeted
to private investorsand accountedfor
abbut one fourth of the market.
Inoestmentbanking
Conditions in the global financial
markets deteriorated in responseto
economic and political developments
Larger share of Swedish
equity trading
With a 5.4per cent increase in the general share price index, the Swedish
stock market was one of the weakest
in Europe during 1997.It underwent
major fluctuations during the year,
nowever.
During the first half of 1997,the
Swedish equity market was strong
from an international perspective.
But during the second half, it became
clear that the American economy
could not be expected to serve as the
locomotive of a recovery. Combined
with climbing interest rates in Europe and domestic problems in Sweden, for example plunging property
prices and sharply higher lending
losses in the banking system, this
led to growing pessimism among
Swedish investors.
; i
I
T7
SEBIrurrnNarrorvar-
At the same time, there was strong
interest in Swedish shares among
foreign investors. During the year,
they made net purchases of SEK 11
billion in Swedish equities, up from
only SEK 1 billion during 1990.Swedish interest in buying shares of
foreign-based companies continued
to decline, however, and net purchasesreached only SEK 14 billion in
1997, compared with SEK 20 billion
the year before.
For the first time since 1986,
trading volume increased on the AI
and AII lists, reaching SEK 724.6bi1lion compared with SEK 94 billion
during t990. Activity increased in
December due to the abolition of the
share turnover tax, and this positive
trend continued into early 7992.
Enskilda strengthened its position as
the leading brokerage house in Sweden, increasing its share of trading
on the Stockholm Stock Exchange
from1.6.2 to 18.5 per cent.
Lower international market volume
The recession in Europe caused
many international investors to narrow their European holdings to quality stocks in less cyclical businesses,
such as pharmaceuticals and food.
Many investors also transferred part
of their portfolios from Europe to the
United States and the Far East.
In spite of this, the total holdings
of international investors in European securities remained at their
i990 level. The volume of trading on
the London Stock Exchange continued to climb, while competition from
Frankfurt and Paris grew stronger.
Enskilda's international trading in
European securities declined during
the year, despite higher trading volume in options and other derivatives.
In response to increasingly stiff competition and changes in the market,
Enskilda continued to expand its
investment research services while
strengthening its staffing levels in
Frankfurt, Paris and New York.
Large market share in corporate
finance
The gloomy world economic situation had a negative impact on the international corporate finance market.
18
Share prices on selectedstock exchanges
Lastdayof eaehmonth,
Index:
December
19BB= 100
Volumeof equitytrading,
Stockholm
StockExchange
SEK billion
1989 r 990
In spite of this, Enskilda'scorporate
finance unit managed to maintain
good profitability by participating in
a number of large transactions,both
in Swedenand internationally.
In Sweden,the total volume of
new issuesof equities and equityrelatedsecuritiesrosesharply,from
SEK4.9billion in 1990to SEK 15.6
billion in1.991.,dominated by a few
very large issues.At the sametime,
the aggregatevalue of initial public
offerings on the Stockholm Stock
Exchangedropped from SEK3.3
billion to SEK0.4billion.
The increasein takeoverbids in the
Swedishmarket was almost equally
dramatic.from SEK 17.8billion to
SEK47.6billion.In this area.too.a
few companiesaccountedfor the
snalDlncrease.
Enskilda'sprominentrole in very
large corporatefinance transactions
is reflectedin the following breakdown of its sharein various segmentsof the Swedishmarket:
Per cent of
totalvalue
199"1 1.990
Takeover bids
New issues
Initial public
nffprinoc
84
54
51
42
96
34
Per cent of
number of
transactions
"t997
1.990
25
32
40
43
39
LJ
S-E-Banken'sshare of stock
market trading in Sweden
percent
Quarterly
figures,
Enskilda Properties,with real
estateinvestment funds in London.
Parisand Germany,expandedits operations to include property brokerage assignmentsin Stockholm.
As part of its expansionin EC markets, Enskilda's corporatefinance
unit added an office in Madrid during the year.
Mutualfund and asset
managfuent
Sixth in European cross'border
transactions
During 1991,the international expansion frenzy of the 1980swas succeededby a businessclimatecharacterised by caution and financial
restraint.
Enskilda participated in mergers
and acquisitionswith an overall
value of SEK 51 billion. Eight of these
assignmentsinvolved cross-border
transactionsworth SEK 28 billion.
Enskilda was placed sixth among the
world's international investment
banks participating in the year's
Europeancross-bordermergersand
acquisitions.
Enskilda's mutual fund and asset
managementoperations are carried
out by Enskilda Kapitalforvaltning in
Stockholm and Enskilda Asset ManagementLimited in London. These
operationsare closely coordinated
with ihe investment management
activities at BanqueScandinaveen
Suisse(BSS)in Geneva,as well as
with the Bank's Trust Businessunit.
Enskilda and BSSmanageover 60
mutual funds, whose total year-end
value was more than SEK 32 billion.
In addition, they provide extensive
discretionary managementfor private individuals and institutions.
In Sweden,businesswas affected
by the tax reform, which among
other things put capital gains from
the saleof shareson the samefooting
as interest revenues,effectivefrom
January1991.This contributedto a
shift toward interest-bearinginvestments among customers.The introduction of unit-linked insurance
policies, whose premiums are invested in mutual funds of the customer's
own choice,also helped changethe
market.
Swedish mutuai funds: 27 per cent
of market
At year-end,Enskilda Kapitalforvaltning and Enskilda Asset Management managed a total of 60 mutual
funds - 15unit-linked funds,23 Swedish and international equity funds,
five interest-bearingfunds and 17
Luxembourg-basedfunds. S-E-Banken
had a27 per cent shareof the total
mutual fund market in Sweden.
Swedish investors' interest in
foreign-basedmutual funds continued to grow during 1991.S-E-Banken
consolidatedits position as Sweden's
largest manager of international
mutual funds.
Good growth in mutual fund unit
value
All of the Swedish equity funds performed better than the GeneralIndex
for the Stockholm Stock Exchange.
S-E-Banken'sAllemansfond 1 - 3 did
very well compared to the Index,
also showing the best growth of all
national public sharesavingsfunds
over a two- and three-yearperiod.
S-E-BankensAktiesparfond, -hi.h
received official permission early in
7991to invest some of its assets
abroad, climbed by 757 per cent. At
year-endits assetstotalled SEK3.9
billion.
Ldkemedelsfonden(pharmaceutical-relatedsecurities)was by
far the most successfulof the international funds. During 1991,the assets
of this fund increasedfrom SEK320M
to more than SEK 1 billion, while the
value of one unit rose by a full 70 per
cent.
There was also great interest in
mutual funds that invest in the
United Statesand the Far East.One
example was Skandifond North
America, which increasedten times
in assetswhile the value of a single
unit climbed by 45 per cent.
One innovation during 1997was
Miljofonden, an environmental
mutual fund that quickly became
very popular, attracting about SEK
95M in a little more than two
months.
The mutual funds managedby BSS
also performed well. This *as eipecially true of the bank's global equities fund Intelsec,which was the most
successfulof all Swissinternational
equity funds over the past five years.
With the aid of a flexible and farsighted investment policy, BSSalso
achievedvery good earningsin its
investment managementfor private
individuals. At year-end BSS,managed and was trustee for investments
totalling CHF 10 billion (about SEK
40 billion).
19
Staffandtraining
At vear-end 1991, the S-E-Bank
Group had ab.out 77,700employees,
including 1.,700in its international
network. This means that during the
year its labour force in Sweden
shrank by more than 600 - with the
aid of early retirements and a hiring
freeze. At the same time, the number
of emplovees abroad increased due
to the^r:uichase of Scandinavian Bank
Group in the summer of 7990.
Steps to increase employee mobility
During 7997,5-E-Bank Group employees themselves helped to suggest
cost-cutting measures in various
units and departments, mainly
"Turbo" project. The task
through the
of implementing the organisational
and staffing changes entailed by
these suggestions will, of course,
require greater employee mobility in
the S-E-Bank Group.
In order to encourage mobility and
create an active internal labour market, the Bank's management has
introduced a number of temporarvpersonnel policy measures. They
include moving allowances, leaves
of absence and changes to part-time
emr:lovment status.
A special job centre was started in
order to help employees find suitable
new positions in the S-E-Bank Group.
Sharedresponsibility
for Group goals
According to the goalsand strategies
of the S-E-BankCroup, every individual employeeis responsiblefor
ensuringthat the Croup's goalsquality and profitability - areachieved
in the bestpossibleway. To accomplish this, the organisationmust share
clearly stated values and have open,
straightforward communications.
Thesesharedvaluesinclude the
maintenanceof irreproachableethical
standardsand professionalbehavior
in decision-makingand other actions.
The Group's personnelpolicy
strategy also includes strengthening
and developing its management
S-E-Banken's staff structure
By age,sex and full{ime/part-time
stalus
As of December31. 1991
20
skills and taking steps to encourage
individual developmental potential.
The latter is based, among other
things, on continuous enhancement
of job content, training courses and
annual professional development
discussions. During 1991 all employees received a special booklet on
the importance of such discussions,
and 500 managers received special
training in this subject.
Staff turnover.S-E-Banken
Percentof average
numberof employees
No profit share for 1991
A profit share is payable to employees on the condition that Group
return on eouitv achieves a certain
level. Owing tothe decline in return
on equity, employees are not receiving any profit share for the year.
Since the scheme was introduced
in1.977,a total of SEK 503M has been
transferred to the Profit-Sharing
Foundation. Those entitled to maximum participation from the start
have received profit share units equivalent to 2,762 shares in the Bank. In
addition, bonus units may have been
received for7986-89.
Staff absenteeism, S-E-Banken
Percent of averagenumberof employees
'1989
1990 19S1
Staff costs per employee in the
S-E-BankGrouo
SEKthousands
1989 1990 1991
27
Reportof the Directors
Marketdevelopments
Slower expansionin loans outstanding
In1997 the Swedish credit market
was characterised
by a good increase
in depositsand a slower expansionin
lending than over the past few years.
This trend was governed mainly by
three factors- changesin the tax system which made it more worthwhile
to saveand more expensiveto borrow, the high prevailing interest
rates in Swedencompared with
other countries and the problems of
the Swedisheconomy.
Favourablesavingsclimate pushes
up deposits
Total deposits- in SEK and foreign
currencies- in the Swedish banking
market rose by SEK 46 billion or 7
per cent.SEK-denominated
deposits
roseby SEK26 billion (+5 per cent),
whereasdepositsin foreign currenciesclimbed by SEK 20 billion
(+17per cent).
Depositsfrom householdsclimbed
at a somewhatfasterrate,nearly 9
per cent.
One consequence
of the new tax
systemis thafbanks are requiredto
withhold tax on the interest earnings
of customers.This meantthat the volume of depositsas of December31,
1,997was lower than it otherwise
would have been.
Deposits in the S-E-BankGroup by
currencies,December31
"199L
Swedish kronor
Foreign
currencies
Total
22
97
SEK billion
7990
Change,
%
87
+11.6
42
26
+65.4
139
113
+23,9
Deposits in the S-E-BankGroup by
market segments,December3L
t99"1
Households
Small and
medium-sized
companies
Major
corporations
Total
SEKbillion
1990
Change,
7"
39
+28.6
35
32
+10.0
55
139
42
113
+30.2
+23.9
S-E-Banken'sshareof depositsin
the Swedish banking market, all
currencies
Aaerage
end-ot'-quarler
, t'irst
t'igures;
t'or1991
threequarters
onlu.
Per cenl
1987
Deposits from
the public 15.4
Of which
Househoulds 11.4
Small and
medium-sized
companies 25.1
Major corporations
29.3
1988
't989
7990
7991
1,5.9 16.2 76.3 17.4
1,1.6 1,2.2 72.2 1.2.5
24.9 24.4 24.8 23.9
33.2 34.6 30.7 39.5
Smaller household loan volume
Total SEK-denominated and foreign
currency loans in the Swedish credit
market grew by nearly 6 per cent,
despite the problems of the financial
service sector. While the lending volume of the banks declined by more
than 1 per cent and the loan portfolios of finance companies shrank
by 16 per cent, the lending volume
of residential mortgage institutions
rose by more than 17 per cent.
The new tax system had a restraining effect on loans to private
individuals in particular. While the
overall volume of SEK-denominated
bank loans declined by 1 per cent,
Swedish kronor bank loans to households fell bv 9 per cent. This reversed
the expansi,onary trend in consumer
loan volume over the past few years.
Customers were more sensitive to
interest rates. This resulted in a more
active pricing policy by residential
mortgage institutions. This, combined with heavier price competition
among these institutions, contributed
to a flow of customers from banks to
residential mortgage institutions. Of
the SEK 139 billion increase in the
loan portfolios of these institutions,
SEK 56 billion consisted of lending to
households.
Smaller foreign currency
loan portfolios
The rapid expansion in foreign currency loans over the past few years
was reversed during the second
quarter of 7997. The linking of the
Swedish krona to the ECU starting in
May 7997 narrowed the interest rate
gap between the krona and other
currencies, which in turn led to a
shrinking market for interest rate
arbitrage transactions. The decline
of the U.S. dollar against the krona
also contributed to the 2 per cent decreasein total foreign currency loans
outstanding in the Swedish banking
market during 1991.
Stalled growth
After several years of rapid expansion, the overall 1991 loan portfolio
of the S-E-Bank Croup stayed at the
same level as during 1990.After midyear, this also brought an end to the
rapid growth in total assetsthat has
prevailedin recentyears.At yearend, the total assetsof the S-E-Bank
Croup were SEK451billion, largely
unchangedfrom 1990.At the same
time, averagetotal assetsfor the entire year roseby 15per cent.
Loan portfolio of the S-E-Bank
Group, by currencies,December31
"t991
SEKbillion
1990
Change,
E,
Swedish kronor
183
Foreign currencies 732
181
130
+1.1
+7.4
315
311
+'1,.2
Total
Loan portfolio of the S'E-Bank
Group, by market segments,
December31
7997
Households
Small and
medium-sized
comPanres
Major
corporations
Total
SEK billion
7990
Change,
7"
106
110
-3.5
723
120
+2.0
86
81
+6.2
315
311
+-1,.2
In the Bank, the volume of loans to
households including loans in
foreign currencies declined by 18 per
cent compared with 1990.Since this
figure was more than the average for
the market, the Bank's market share
S-E-Banken's
lendingand deposits,
by customer categories,1991
fell slightly. In the corporate market,
however, S-E-Banken'sloan portfolio
grew more rapidly than average, resulting in a substantial climb in the
Bank's market share, especially in
loans to major corporati,ons.
The year-end loan portfolio of
Svensk Fastighetskredit (SFK)
amounted to SEK 104 billion, an increase of more than7 per cent. Since
other mortgage institutions increased
their loan volumes faster, SFK's market share fell by 1 point to 11.1 per
cent at year-end.
FinansSkandic's total loan volume
rose by 28 per cent, increasing its
market share by 2.6 points to 9.8 per
cent. (These figures refer to September 1990-September1991.)
S-E-Banken's share of loans
outstanding in the Swedish
banking market, all currencies
Aaerageend-of-quarter
t'igures;t'or 1991,first
threequartersonly
per cent
7987
1988
1989
1990
L991
Lendingto
the public 77.4 17.2 17.0 18.0 20.2
Of which
Households 71.7 72.4 12.4 12.0 71..6
Small and
medium-sized
companies 18.9 1 8 . 3 1 8 . 1 79.9 27.5
Large corporations
25.9 24.5 20.1 20.9 27.7
Lending by various credit institutions
S E Kb l l l o n
Average balances
Lendrng
Smal and medium-szed
companies, 48Ya (sAYo)
Households,
44ya (46Vo)
Others,
2% (2%)
(1990figures n parentheses)
ZJ
Reportof the Directors
Earnings
andprofitability
The goal of the S-E-BankGroup is to
achieveand maintain a profitability
that givesits shareholdersa competitive return on their investment. Profitability, measuredas the return on
shareholders'equity, is thus the most
important financial ratio for the
Groun.
During the 1980s,the S-E-Bank
Croup's return on equity after 30 per
centtax averagedmore than 20 per
cent.This was higher than the averagelevel of return among its competitors,and at the sametime representeda good return evenafter
adjustingfor inflation. But in 1990
this picture changed.The Group's
return on equity fell to 11.8per cent.
In 7997it fell further, to 7.6 per cent.
The decisiveexplanationfor this
negativetrend in operatingprofit is
the Croup's large lending losses.
fasterthan averagetotal assets.
Crossreturn on assetsconsistsof
two parts:overall interestmargin
(net interestearningsas a percentage
of averagetotal assets)plus commissionsand other operatingincomeas
a percentageof averagetotal assets.
The total assetsof the S-E-Bank
Group on an averagebasisroseby
SEK57 billion (+15per cent)to SEK
452billion. This increasewas a result
of growth during 1990and early
7997.
Sincethe Group's operatingincomeroseat a fasterrate (19per cent),
grossreturn on assetsimproved from
3.22to 3.36per cent.This reversed
the negativetrend that had prevailed
since1986.The improvementwas
due to a wider overall interestmargin and very good growth in commissionsand other operatingincome.
Good earning capacity
The good growth in Group operating
incomeover the pastfew yearscontinued during 1991.Coupled with a
slower increasein operatingcosts,
the outcomewas very good growth
in the Group's underlying earning
capacity.Operatingprofit before
lossesroseby SEK 1,625M(+30per
cent)to SEK7,086M.However, operating profit fell SEK986M or 30 per
centcomparedwith 1990,because
lending lossesmeanwhileincreased
bv
- SEK2,677M.
The Group's operatingprofit and
return on equity after 30 per centtax
changedas follows:
Wider margin increasesnet interest
earnings
Net interestearningsroseby SEK
7,373M(+77per cent)to 5EK9,473M.
Not only did averagevolume rise,but
marginsimproved in most markets.
Foreigncurrencyloansaccountedfor
the most striking improvement.Margins on the Bank'scoredepositsand
loans,as well as on FinansSkandic's
corporatelending,alsowidened.During1991the interestrateson the
Bank'scoredepositsand loanswere
lowered four times and raised twice.
Takenaltogether,the Croup's overall
interestmargin roseby 0.05percentagepoints to 2.10per cent.
The volume of the Group's investment portfolio, which consistsof
1991.
1.991.
1990
7990
Outcome Retuin Outcome Returrr
on equrty,
on equrty/
SEKM
% SEKM
%
Operating profit
before losses 7,086 23.2 5,467 1,9.4
Lending losses 4,760 -75.6 *1,949* -6.9
Provision for
poiitical risks
abroad
0 -200 -0.7
Operating r{ofit 2,326
7.6 3,312 11.8
n Including an additional provision of SEK
The S-E-BankGroup's return on equity
After30 percentstandard
tax
Percent
500M for possiblelending losses.
Gross return on assets climbing
One important component in an
evaluation of the Group's earning capacity is the trend of its gross return
on assets,i.e. total operating income as
a percentage of average total assets.
This financial ratio shows a positive
trend if operating income is growing
24
I989 1990 1991
interest-bearing bonds, rose somewhat during the year. Earnings on
the Bank's portfolio improved both
because of the wider margin (despite
lower bond yield) and because of an
improvement in capital gains from
bond sales.
Net interest earnings were adversely affected by deferred interest
payments totalling SEK 255M. Most
of these interest deferrals involved
loan commitments to a few large
companies connected with the real
estate business. In addition, there
was an estimated shortfall of SEK
583M on interest -pavments for
unsettled claims.
Sharp increase in commissions
The linking of the Swedish krona to
the ECU, successful trading when the
Riksbank increased Swedish interest
rates in December, a larger share of
Swedish foreign exchange trading
and higher earnings at the Group's
international foreign exchange units
are all factors that contributed to an
improvement of nearly SEK 1 billion
in commissions including foreign exchange earnings.
An unstable world situation - including the Gulf war early in7997
and the tense situation in Eastern Europe - increased the hazards of trade
with many countries. This resulted in
higher risk premiums for payment
services such as documentary letters
of credit.
SEB International landed a number
of large deals in connection with
corporate acquisitions and mergers,
in competition with other banks and
The S-E-BankGroup's gross return on assets
Totaloperat
ng ncomeasa
ve, uv, ,Lovq
v^ f o. \v/ co,. . ^o^9 o
+--^r
r^^.+-
financialservicecompanies.These
transactions
addedsubstantiallyto
commissionearningsduring 1991.
The Group's purchaseof Scandinavian Bank Group (SBG)including
BanqueScandinaveen Suisse(BSS)
during the summer of 7990both increasedits volume and gaveit additional expertisein international
investmentmanagement.Operating
incomeroseby about SEK550M in
7997as a result of theseacouisitions.
TheGroup'sventuresin unitlinked insurlnce and the credit and
chargecard markets also contributed
subtantially to the favourable trend
of operatingincome.
Narrower profit margin
While grossreturn on assetsprovides
an indicationof the trend of ooerating income,the profit margin indicateshow much of operatingincome
is left after subtractingoperating
costs,lossesand standardtax. The
profit margin is thus a yardstick of
how well the S-E-BankGroup has
managedto hold down its totalcosts,
including lending losses.The lower
theseoperatingcostsand lossesare,
the higher the profit margin will be.
From a level of roughly 30 per
cent,the Group's profit margin slid
to 18per centin 1990and 11per cent
in7991.The decisiveexplanationfor
this declinewas the large lending
lossesof the past two years.
At 11per cent,the increase
in operatingcostsduring 1991was lower
than during the immediatelypreceding years.Adjusted for the purchase
of SBGand the labour dispute in the
Balancesheet structure
of the S-E-BankGroup
Averages,
SEKbillion
Swedishbanking sector early in7990,
operating costsrose by only 2 per
cent.
Effectsof Turbo project continuing
The programmeto reduceoperating
costswhich the Group initiated in
the autumn of 7990continuedat full
intensityduring 7997.Itincluded
such measuresas offering early retirements,streamliningwork proceduresand restructuringentireareas
of operations.Most unitiin Sweden
were involved in an extensivecostcutting project known as Turbo.
As a result of thesemeasures,the
labour force at Swedish units was
gradually trimmed by more than 600
or 6 per cent during 1991.The averagenumber of employeesin Sweden
thus fell by 250.
Many effectsof the Turbo project
will not be felt until1992, however.
The 1991salaryagreementfor the
Swedishbanking sectorwas in line
with the recommendationsof the
Covernment-appointedRehnberg
Commission.Including the effects
of 7990agreements,salarycostsat
Swedish units attributable to central
collectiveagreementsroseby more
than 4 per cent during 1991.
Comparisonsbetween1990and
7997areaffectedby the 1990labour
dispute in the Swedishbanking market, which reducedthe operating
costsof the S-E-BankGroup by SEK
85M that year.
The new tax systemalso affected
the Group's operatingcosts.Swedish
companieswere orderedto pay
socialchargeson a broaderrangeof
S-E-Banken'sinterestmargins
periods,
percent
Fourmonth
staff benefits than before. This resulted in a cost increase of nearly
SEK 8OM.
The acquisition of SBG during the
summer of 1990 increased costs bySEK 400M in 7991.This included
higher depreciation of goodwill. The
restructuring of the Group's London
units which began in 1990 continued
during 1991,resulting in additional
costs. Although staffing in London
was cut back after the SBG acquisition, the purchase increasedihe
average number of Group employees
abroad by 350 between 1990 and
7997.
In the autumnof 1997,the Group's
units abroad began a cost-cutting
programme similar to the one under
way in Sweden.
Sharply higher loss level
Lending losseswere more than twice
those of 1990,reaching SEK 4,760M.
As a result, the Group's loss level lending losses as a percentage of
year-end loans outstanding climbed from 0.63 per cent in7990
to 1.51 per cent iniggt. (Seealso
the section on lending policies and
lending losses, page 27.)
In the case of loan commitments in
countries experiencing payment difficulties, S-E-Banken applies the principle that the loan portfolio is reported at the value stated by the authorities or its estimated market value,
whichever is lower. At the close of
1991 the market value of this portfolio was.high enough that no further
ross provrsron was necessary.
After the meeting of the Board of
Profit margin of the S-E-BankGroup
Asa pecentage
o{totaope.alngnco-ne
Core lending
ano oeposrls
Botrowing
in forelgn
currences
nveslmenls
in fore gn
currenc es
Core
Core
renong
[,/oney
market
b,orrowtng
l\loney
market
rnvestments
Other
liabI ties
Other
tnvestments
Flxed-rate
borrowng
Equityand
reseryes
F xed-rate
nvestments
1990 1991
Overallinterest
margin
Long-term
nveslmenlSano
financingcosts
Lendingand
depositsin
rorergn
currenctes
1991 1990
25
Reportof the Directors
Earuvuvcs
aNo ooorrroo
Directorson January28,1992,when
the preliminary resultsfor the S-EBank Group were presented,certain
eventsoccurred that were related to
large loan commitments by the
Group. Parts of the Reinhold Group,
a real estateand construction
company/ suspendedpayments and
the Avena property companywas
declaredbinkiupt. The f9g1"accounts included provisions of
SEK1.1billion foi thesecommitments.
Theseeventshave quite naturallv
increasedthe level of uncertaintv. but
until the present insolvency neg-otiations are completed the Board finds
no reasonto make further provisions.
New property appraisal
At the end of 1988the value of the
Group's real estateholdings in Sweden was estimatedat more than
SEK5 billion by an independentappraisalcompany.A new appraisalperformed at the end of 1997estimated
their market value at slightly above
SEK4 billion, a declineof approximately25 per cent.The sameSwedish
properties have a book value of
SEK 1.5billion. This doesnot include
the new bank building in Rissne,outside Stockholm,which will be ready
for occupancyin the summer of 7992.
New book values for shares
Owing to developmentsin banking
markets elsewherein the Nordic
countries,S-E-Bankenwrote down
the book value of its shareholdingsin
the other banks belonging to Scandinavian Banking Partners- Den norske Bank, Unidanmark and Unitas
(holding companyof Union Bank of
Finland) -by u total of SEK235M.
In the Bank's1991accounts,the
book value of its shareholdingin the
SwedishExport Credit Corporation
(SvenskExportkredit) was written up
to more than half of net assetvalue.
This revaluationtotalled SEK235M,
i.e.an amount equivalentto the total
write-down of sharesin the SBP
banks.
ScandinavianInvestmentsLtd. (SI)
is a wholly-owned subsidiary of the
Bankand consistsof a number of
units from the former Scandinavian
Bank Group (SBG)which are being
restructured.When most of the loan
portfolio of SBGwas transferred to
the Bank's London branch office in
January7997,it becamenecessaryto
26
write down the SI sharesby SEK
322M.
This write-down was offset by an
equally large SEK322M revaluation
of the Bank'ssharesin most of its
foreign subsidiaries.It was possible
to do so becausethe book vilue of
theseshareshad remained far below
their net assetvalue.The reasonwas
that the Bank had not brought home
retained earningsfrom thesesubsidianes.
Withdrawal of reservesmeans
higher taxes
According to the new corporatetax
rules that went into effect on lanuarv
7,1991,banks- like other companiei
- may appropriateearningstoi tax
equalisationreserve.Bankswill thus
no longer be permitted to appropriate earningsto untaxed reservesfor
lending, foreign currencies,bonds
and interestrate risks.
As a consequenceof the new regu-
lations,the S-E-BankGroup closed
out its untaxed reserves- thosementioned above plus the payroll reserve
- by withdrawing a toial of SEK
79,923M.At the sametime, it appropriated SEK5,729Mto new tax equalisationreserves.
The S-E-BankGroup's tax costs
were SEK4,224M,up from SEK
552Min 1990.Of the 199i amount.
SEK287Mwas attributableto ordinary operating profit while SEK
3,937Mwas related to the withdrawal of reserves.According to the
existing rules, banks do not have to
pay taxesimmediatelyon suchwithdrawals,but may insteadpay them
in installments over a four-year
periodbeginning1n1992.Sincethe
Croup will postpone its tax payment,
a sizeabletax liability remains in the
balancesheet.Group companiesnot
classifiedas banks or othei credit
institutions follow somewhat different rules.
Sensitivity analysisof the S-E-BankGroup,s earnings
Impact on earnings, Impact on earnings
SEK M
per share, SEK *
Net interest earnings
Commissions
Average change
in staff
Salary increase
Other operating costs
Lending losses
+ / -17o
+/-1%
+/-95
+/- 49
+/ -0.24
+/ -0.1.2
+/-100 persons
+ 7 %
+/-1%
SEK +/-500 M
-/+ 39
_40
-/+ 39
-/ +500
-/+0.1.0
- 0.10
- / +0.70
- / +7.26
* After 30 per centstandardtax.
Changes in interest rates affect earnings to differinq deqreesdependine
on*the size of tfr'ediYference'betwee"n
the interest rate commitment periods
on volumesof investedand borrowed funds - and what tvpe of
interest rate these volumei ire tied to.
Some of the Bank's investments
and borrowings in Swedish kronor
carry interest rates that are tied to
various money market rates, while
others have fixed interest rates. The
difference is far larger in the caseof
volumes directly re-iatedto money
market rates,and their interest raie
maturities diverge. Interest rate sensitivity is greatest on fixed-interest
items, where investments are considerablylarger than financingbecauseof the Bank's bond portFolio.
Since the financing of fixedinterest assetsthus carries a different
interest rate commitment period
mainly related to the mon-eymarket,
fixed-interestinvestmentsentail a
substantial interest rate exposure.
Sensitivity to interest rates'can be
limited by employing special risk
management instruments.
Changes in interest rates also affect
the yield on the bond portfolio in
another way. Bonds which are subject to interest rate adjustments begin
to carry a different interest rate wfien
their interest rate period runs out. If
long-term rates have risen since the
preceding adjustment date, this has a
favourable effect on bond yield.
During 1991,SEK 0.4billion of the
Bank's bond portfolio was subject to
interest rate adjustment. The corresponding amount in1992 is SEK 0.2
billion.
Lendingpoliciesandlendinglosses
Greatlysimplified, traditional banking is basedon beingan intermediarv
betweencustomers-witha surplus o?
capital and customerswith a siortage,while accommodatingthe diver-
gentwishes
of depositors
andbor-
rowers with regard to amounts,
maturities and other terms. Lending
is thus a natural and important pari
of a bank's total customer relationships.
Of necessity, banking involves various kinds of risks - mainly lending
risks, but also interest rate and
foreign currency risks. Each office of
S-E-Banken,like those of other banks.
thereforehas a certain definite ceiling
or limit on the size of loans it is entitled to approve. Applications for
loans exceedingthis limit are referred to a higher level. The very
largest loans are approved by the
Bank's central Board of Directors.
Improved loan processing
The S-E-BankGroup experienceda
9ha1prise in lending lossesstarting
in 1990.During 1991 the Bank took
a number of steps to help prevent a
continued increase. This included
introducing clearer portfolio policies,
including carefully formulated goals
concerning the Group's maximum
exposure to property, shipping and
local government loan commitments.
The Group also intensified the training programmes for credit analysts
that it had begun earlier.
During 1991 the Group also developed a computer-based system for
analyzing loan applications from
small and medium-sized companies.
Its purpose is to provide support and
guidance to loan officers at SEB Sweden's branch network, while ensuring that these loans comply with the
lending policies established by the
Bank. The system will begin to be installed at branch offices during the
autumn of 7992, and users wifl
undergo a brief training programme
at the same time.
Property companies and small
businesses hardest hit
The Group's lending losses during
799'l were distributed as follows:
Businesssegments*
Small and medium-sized companies
Major corporations
Private individuals
Per cent
60
37
9
Economicsectorst
Per cent
Manufacturing
jI
Retailing and wholesaling
10
Financialservicesand insurance
L9
Property management and construction 3g
Service and transport
13
Private individuals
9
* Beforerecoverieson loanspreviously
written
down and withdrawal from specialreservefor
possiblelendinglosses
unsettledclaimstotalled SEK5.Sbillion net at year-end.
Structureof the loan portfolio in 1991
About 85 per centof the S-E-Bank
Croup'soutstandingloansto thepublic consistof lendinf in the Swedish
market.The Group'l year-endloan
portfoliowas distiibutedas follows:
Per cenl
Size of losses
Number Total amount
Lessthan SEK 10M ca 8,800
SEK 10 - lOOM
66
sEK 100- 300M
3
More than SEK 300M
3
Lessrecoveries
and withdrawal
from special reserve for
possiblelending losses
2,030
1,553
413
- 188
Retailing and wholesaling, industry,
service and agriculture
Mortgage and construction loans
Loans to private individuals,
excluding mortgage loans
Insurance companies, finance
companres etc
Miscellaneous
50
g4
10
3
3
100
- 500
4,760
The individual write-downs of SEK
300M or more are for loans to the
property companiesAvena (SEK
625M)and Reinholds (SEf 4ZSl4r)
and to the finance companv Gamlestaden(SEK352M).
Interest defermentsof SEK 255M
In order to help a number of customers get through the economic
slump, the Group has approved
interestdefermentson loanstotalling
SEK4.1billion net. In the 1991
accounts,unpaid interestdue on
theseloansamountedto SEK2S5M.
During 7992,interestdeferments
basedon agreementsin effect at
year-end1991will result in an estimated income shortfall of SEK 257M.
In addition, the interest shortfall
on unsettledclaimswas estimatedat
SEK583M in1997.The Group's net
The S-E-BankGroup'slending losses
and year-endlendingvolume
Aside from mortgage loans to private individuals and companies,
property Ioans are also iniluded in
other categories in the table. In all,
property-related lending - i.e. loans
whose purpose is acquisltion of property etc or where property is the collateral - comprises about half of the
!1! Bank Group's total lending of
SEK 315 billion.
Small business and start-ups:
big credit risk
During 1991 the Bank conducted a
study of all lending losses of SEK
0.5M or more at branch offices.
Among its findings were that
companies with fewer than 10 employees accounted for two thirds of
these lending losses and that companies established in 1988 or later
accounted for 30 per cent of losses.
Write-down process in four stages
The procedure of making writedowns and provisions begins with a
selection.
The loan commitments that
are examined are:
o Unsettled claims - i.e. loans where
the borrower has gone bankrupt, suspended payments or not paid interest
and/ or principal for two months.
o Loan watches - i.e. loan commitments which can be regarded as
possible lending losses"forvarious
reasons. Here the rule is that all
loans exceeding SEK 1M should be
reported to the regional management
committee if at least one of the following criteria is fulfilled:
1. The company has an equity/assets
ratio of less than 10 per cent.
27
Repqrtof the Directors
LE\DI\C poLtcTFS
ono arto,**
2. The company shows negative earnings for one of the past two years.
3. The company is newly established
(younger than two years) or is a new
customer in the Bank.
4. Collateral is insufficient.
5. The company has been granted a
temporary easing or postponement
of interest payments.
6. The borrower's repayment capacity is considered uncertain for
other reasons.
The offices divide up their loan
watches into three categories - A, B
and C. For loan commitments in category C, where there is believed to
be an obvious danger of a lending
loss within the next few years, only
the regional management can approve an increase in the loan amount
br a change in the collateral.
The second stage consistsof appraising the collateral.This appraisal is performed in compliance with the directives of the Finlncial Suoervisorv
Authority and is based on a conservative market appraisal of the collateral. The amount that remains
after the value of the collateral has
been subtracted from the loan
amount is the Bank's risk exnosure.
The third stage in the write-down
process is appraisingthe borrower.This
includes a thorough analysis of the
comDanv's financial statements and
figuies for the current period in
order to make an assessmentof the
borrower's payment capacity on the
basis of cash flow, earnings and net
assetvalue data.
In the final stage, the loan commitments in question are divided up into
incurred losses,prouisionst'or possible
lossesand loan commitmentswhere
proaisionsto reseraesnre not considered
necessary.
Incurred lending losses are those
resulting, for example, from bankruptcies, composition agreements or
similar creditor arrangements where
the amount of assetsto be distributed
has been fixed. Loan commitments
where there are other very strong arguments for a write-down are also
reported as incurred losses.
Possible lending losses are those
where the Bank believes that borrowers cannot fulfill their pavment
obligations. Provisions foipossible
lending lossesrepresent by far the
largest category of total lending
Iosses - 77 per cent.
28
Treasury
Strongercapital base
- with the
In recentyearsS-E-Banken
aid of good profits, new shareissues
and subordinateddebentures- has
built up a strongfinancialposition.
At year-endthe Croup's risk capital
amountedto SEK31.7billion. This
capitalbaseis managedby the Bank's
Treasuryunit, which is alsoresponsiblefor the Group's short- and longterm borrowing, foreign exchange
and interest rate risks, liquidity managementand portfolio management.
To further strengthenthe Group's
capitalbase,during 1991the Bank
issuedsix subordinateddebenture
loans in the international market
with a total value equivalent to SEK
2.2billion. The issueof a domestic
zero couponbond loan contributed
an additional SEK 1 billion.
At year-end 1997,the S-E-Bank
Group's total capitalratio amounted
to 70.7per cent,representingan increaseof 1.6percentagepoints since
December1990.This improvement
was primarilv due to an increaseof
SEKr.6 billion in the capitalbase,but
alsoa reductionof SEK 1.7billion in
the capitalrequirement.The overall
effectwas that the Croup's capital
surplus rosebv SEK4.3billion to
SEk7.9billion. This surplus is equivalent to an expansionof approximately 40 per centin total assetsat
current averagecapitalrequirements.
The corecapitalratio was 6.7per
centat year-end.This level exceeds
the Group's establishedtargetand is
alsogood in internationalterms.
The level of capitaladequacyis important not onlv to enablethe S-EBank Groun to varv its sourcesof
Higher liquidity
In order to strengthenthe Group's
liquidity, 19bond loanstotalling the
equivalentof SEK3.8billion were
issuedin the internationalcapital
market.
Comparedwith 1990,when S-EBankenissuedmore than SEK20
billion worth of subordinateddebentures and bond loans,the volume of
long- and medium-termborrowing
was not especiallylarge during 1991.
This was mainly becausethe Bank
had taken advantageof the good
conditions prevailing in the market
during 7990to undertake extra large
borrowing. The Bank'sfinancing
requirementswere consequently
not so large during 1991.
At the sametime, the economic
problems of the Nordic countries and
ihe severeplight of a number of
Nordic banksmeant that it was not
as easyas beforeto find investorsfor
debt instrumentsof Swedishbanksin
the internationalcapitalmarkets.It
thus becamemuch more important
than previouslyfor S-E-Banicen
to
Swedish and international interest rates
per cent
I B0 day maturity,
Interest rate movements in Sweden
l\,4onthly
averages,per cent
financingbut alsoto achievethe
cheapestpossiblefinancing.On all
reporting datessincenew internationalcapitaladequacyrules went
into effectin Februaryi990, the
Group has also exceededthe minimum capital requirement that will
becomemandatoryonly at year-end
7992.Thecapitalbasewas so strong
in7997 that the Bank could even
have exercisedits option to acquire
28.2per cent of the sharesin Skandia
without capitaladequacycompliance
problems.
present a clear image of itself to institutional investors abroad. These marketing efforts, which are also aimed
at reducing dependence on the interbank market and increasing investors' deposits in the Bank, are being
further strengthened during 1992.
S-E-Banken's short-term borrowing base was broadened during
7997 after changes in U.S. banking
regulations made it possible for the
Bank's New York branch office to
issue certificates of deposit in the
American market. At year-end the
value of the Bank's outstanding CD's
totalled USD 2.5 billion. On the same
date, the branch office's outstanding"
volume of short-term commercial
paper was USD 1.7 billion.
The liquidity of the bond portfolio
also increased, because bondholdings
declined as a percentage of assets
while holdings of Treasury discount
notes and German and American
government securities increased.
Duration, a yardstick of the risk
level of the portfolio, continued to
fall and was 1.5 years at the end of
1991compared with 2.3in1990.
Lower rating
For many years, S-E-Banken enjoyed
a first-class rating for its international
borrowing. But the growing problems of the Swedish economy and
the related increasein the Bank's lending losseshave led to a downgrading
of its creditworthiness over the past
year. In January 1991Moody's Investors Service lowered its rating of the
Bank's long-term senior debt borrowing from Aaa to Aa1. In August
it lowered this rating a further step,
to Aa2.
In January 79925-E-Bankenwas
againplacedon Moody's watchlist,
at the sametime as the other maior
Swedishbankshad their credit
ratings lowered. One month later,
Standard& Poor'slowered its rating
of S-E-Banken's
long-terminternational borrowing from AA to AA-.
Even after the downgradings of
the past year, however, S-E-Banken's
Uorecaprlal
70 per centof
ta
equalistion
reserue
- extra
depreciatlon
on eouomenl
leasedio
clients
Equiqr
Suppementary
captal')
i i : t t ,r t , : : t r l t . t : i : : : i : , t t t r , : l
Otherreserues
andsuoole- :
mentary'capital'
by pemission
oTile uovernment
Subordinated
debt,whiah
maynot oxc€d
50 perrent of l
aore €pital
market,at thesametimeasit means
greater security for the Bank's customers. In order for S-E-Banken to
maintain its leading position in the
long term, it is therefore very important to have the best possible rating.
Capital adequacy
Capital requirement, SEK M
Dec.37,7997
The Bank
Risk category
Assets
Risk-weighted
amount
146,367
1,07,758
29,873
156,386
07a
207o
50%
100%
TotaI
Requirement 8%
0
74,906
1,56,386
440,324
192,844
75,428
The Group
Assets
Risk category
Risk-weighted
amount
1,05,676
0%
20%
50%
700%
0
q6 1)1
Total
Requirement B%
1q ))q
27,551,
182,985
10,775
182,985
406,337
212,985
"17,039
Risk-weighted
amount
87,036
120,808
111,847
217,805
0
24,162
55,923
217,805
537,496
297,890
23,837
Dec.31,1990
The Bank
The Group
Assets
Risk-weighted
amount
63,566
778,354
101,055
0
23,671
50,527
)Lq 1)7
528,502
319,725
)q 17R
Capital base, SEK M*
Dec.31.,7997
The Bank
Capitalbaseaccordingto new rules
rating is very good in an international comparison.
A high rating leads to lower costs
and good opportunities for borrowing in the international capital
Dec.31, 1990
The Group
The Bank
The Group
Taxed equity
Minority interest
Untaxed reserves
Minus goodwill
73,454
0
3,488
0
.14
0
6,457
-1,,206
4,667
0
17,975
0
5,537
300
14,853
Total core capital
16,942
19,844
1.6,582
19,246
70,874
12,325
9,498
10,830
-779
-978
Subordinated
debenture loans
Minus shares in unconsolidated companies
-477
Total capital base
27,405
Surplus
Total capital ratio
Core capitai ratio
77,977
74.2%
8.87o
Deductons
tgg
31,742
7,977
70.77a
6.7%
25,361.
I ?))
77.9%
7.87o
-1 444
29,-t58
3,580
9.1,%
6.0%
* After appropriations
.) Suppementary
capitalmaynot
exceedcorecaptallessgoodwll
29
Report of the Directors
Other eventsin199l,
Changesin the organisation
During 1991theS-E-Bank
Groupwas
reorganised
into two divisions,
5EB
Sweden and SEB International, each
governed by its own management
committee. Roger Holtback, also
Head of the Goteborg group, was appointed chairman of SEB Sweden
while the chairmanship of SEB International was assumedby Bo C E
Ramfors, Group Chief Executive.
SEB Swedenlncludes the operations of the three central offices in
Stockholm, Gdteborg and Malmci,
the ten geographic regions and their
respective branch office networks
as well as the Bank's Swedish subsidiaries.
SEB International comprises the
operations of the previous SEB International, plus the foreign network,
Treasury & Trading and Enskilda
(equity trading, corporate finance
and mutual fund and asset management).
At the end of 7991the Bank, which
had owned 58 per cent of the credit
and charge card processing firm
Kortbetalning Servo AB, sold 10 per
cent of the companv to the Swedish
banking groupbota.
The number of branch offices was
reduced by 14 and totalled 326 at
year-end, mainly due to closures and
mergers in the Stockholm, Goteborg
and Malmo metropolitan areas.
FinansSkandic sold its bill collection subsidiary Finanslnkasso to the
company's Managing Director.
Early in 79929-E-Banken decided
to be the first Nordic bank to open a
branch office in Tokyo. It is expected
to begin operations during the second half of 1992, initially focussing
mainly on foreign exchange trading
and money and capital market transactions. S-E-Bankenhas had a representative office in Tokyo since 1971.
The new branch office requires the
approval of Swedish and Japanese
authorities.
At the end of 7991.a Luxembourg
branch office was establishedto
supplement the operations of the subsidiary bank Skandinaviska Enskilda
Banken (Luxembourg) S.A., in the
same way as had been previously
done in New York and Singapore.
During the first half of 7992 the rep-
30
resentative office in Berlin is being
reorganisedinto a branchofficeof
the subsidiary bank in Frankfurt,
which changedits name during 1991
from Deutsch-SkandinavischeBank
AG to SkandinaviskaEnskilda
BankenAG.
Resolution ofr the Skandia
affair
In October 1990 S-E-Banken acquired
an option to buy 27,685,080shaies in
the insurance company Skandia
Group Fcirsdkrings AB, equivalent to
28.2per cent of share capital. The
agreed purchase price was SEK
4,717M or SEK 277.50per share plus
a price supplement of 72 per cent annually minus dividends received on
shares until the option was exercised.
After a year of ?ruitless negotiations, S-E-Banken decided to reduce its option holding. In November
the Bank reached agreement with
two insurance companies, Norway's
UNI Storebrand and Denmark's
Hafnia, to sell them most of the
option, equivalent to23.3 per cent of
the share capital in Skandia, for SEK
4 billion. There was a difference of
SEK 415M between this sale price
and the originally agreed purchase
price for the portion of the Bank's
option holding being divested. This
amount was reported in the 1991
accounts as an extraordinary cost.
The agreement also specified that
the Bank and the two insurance
companies will objectively examine
the potential for joint Nordic cooperation in banking and insurance.
To manifest its commitment to such a
link between these two lines of business, the Bank thus decided to
acquire its own 4.9 per cent stake in
the share capital of Skandia. This also
ensured a basis for continued dialogue on possible co-operation with
Skandia.
In January 7992 the Bank received
Government permission to acquire
4.9 per cent of the shares in Skandia.
The option was written down by
SEK 76M, which was reported in
the financial statements as an extraordinary cost. This amount is equivalent to the difference between the
price that the Bank paid to the seller
of these shares and the price the Bank
received for the shares included in its
sale of most of the Skandia option to
UNI Storebrand
andHafnia.
M ai or insur ance 7)enture
At the sametime as it resolvedthe
Skandiaaffair, the Bank also decided
to expandits own life insurance
operationsunder the name SEB
Forsdkring.
The basisfor this large-scaleventure is the unitlinked ilrsurance
company Aktiv Fors:ikring, which
the Bankestablished
in co-operation
with the investmentcompanvCustos
4gtlg 1990.Early in February1992
S-E-Banken
exercisedits option to acquire Aktiv Forsiikringfrom Custos
at a cost of SEK 123M.Around the
sametime, a permit application was
submitted to the authorities to establish a traditionalIife insurancecompany that will provide all types of
retirement annuity and endowment
insurances,health insurancepolicies
etc. This venture will involve doubling the number of salespeople,which
totalledmore than 100at year-end
7997.
GamlestadenandNobel
In the autumn of 7990,non-bank
finance companies in Sweden lost
the opportunity to finance their business operations by selling short-term
debt certificates. As a result, the
finance company Gamlestaden ended
up in an acute liquidity crisis. The
seven banks that had previouslv
issued its debt certificites approved
a new collateralised consortium loan
of SEK 6.5 billion. Among the terms
of the loan was a joint guirantee by
Gamlestaden's two main owners, ihe
diversified chemicals group Nobel
Industries and the investor Erik
Penser'sholding company Yggdrasil,
that the equity /issets ratio of bamlestaden wouldbe maintained at16per
cent or higher at all times. Nobel ind
Yggdrasil undertook to cover any
shortfall on a joint basis by meatrs
of shareholders' contributions or
subordinated debenture loans.
In March 7997, Gamlestaden's 14
creditors formed a new consortium
which also received guarantees concerning the company's equity/assets
rauo.
During the spring and summer of
1991the financialsituationof Gamlestadendeteriorated,and in August
the companyannouncedthat ii
would have to make substantialprovisionsfor possiblelendinglosses.
Due to the equity/assetsratio guarantee,this developmentimplied an immediate risk that Nobel would suspend payments.In order to ensure
the continuedoperationsof Gamlestadenand Nobel, late in the summer
an agreementwas therefore reached
betweentwo bank consortiaheaded
by S-E-Banken(Gamlestaden)
and
Nordbanken (Nobel), respectively,
and Gamlestaden,Nobel and
Yggdrasil.
For Nobel, this agreementmeant a
capital injection in the form of a new
shareissuetotaling SEK4.7billion.
S-E-Bankentogetherwith Nordbanken, SvenskaHandelsbanken
and SwedBanksupplied SEK2.T
billion of this amount by converting
their claimsinto correspondingholdings of preferencesharesin Nobel.
The nominal value of S-E-Banken's
shareholdingin Nobel is SEK575M.
In the caseof Gamlestaden,the
solution was that the 14banksin the
"Co-operation
Coirsortium" together
formed a company called GamlestadenIntressenterAB (GIAB).GIAB
took over Nobel's and Yggdrasil's
sharesin the company,which added
up to an 87.5per cent stake.It was
agreedthat Nobel and Yggdrasil
fulfilled their obligation in terms of
the equity/assetsratio guaranteeby
writing off certain claims and supplying a conditionalshareholder-s'
contributionof SEK2.3billion.
Early in 7992GIAB,which had increasedits holding to more than 90
per cent following the agreement,
submitted a public tender offer for
the remainingsharesin Gamlestaden
while also taking stepsto implement
a compulsory redemption. At the
sametime, the partnersin GIAB approved the restoralof the company's
"
sharecapital,provided that it icquiresall sharesin Gamlestaden.
This meant that the banks undertook
to make conditionalwrite-downs of
portion
SEK2.2billion. S-E-Banken's
amountedto SEK 352M,and this
sum was reportedas a lending lossin
the 1991financialstatemenrs.
Early in 1992Nobel demandedthe
repaymentof assetsthat included the
SEK 1.6billion that the companvhad
so far paid to Gamlestaaen.inii aemand was rejectedby Gamlestaden
and the banks,however.
New directors and officers
Four new directorsjoin the Board
At S-E-Banken's
Annual General
Meeting on April 24,7997,threeformer Deputy Directors - GciranAhlstrcim,Managing Directorof Sydkraft, Rune And6rsson,Chairmanof
Trelleborg,and Lars Oberg,Managing Directorof Custos- aswell asMauritz Sahlin,Managing Director of
SKF,were electednew Directors.
Pehr G Gyllenhammar, Chairman of
Volvo, was electeda new Deputy
Chairman as well as Chairmin of the
GoteborgBoard of Directors.Gunnar
Skoog,Managing Director of Skoogs
Foretagsgrupp,was electeda new
Deputy Director.
ClasBlix, Deputy Auditor, was
electedan Auditor and Lars Bonnevier
was electeda new Deputy Auditor.
BjcirnStensonwas appointed by the
Financial Supervisory Authority as a
new Auditor.
In October1991,IngegerdTroedsson
resignedfrom her position asa Deputy
Director of the Bank after shehad
beenelectedSpeakerof the Riksdag.
Three new Group Executives
In January1991RogerHoltback,former Managing Director of Volvo Car
Corporationand memberof Volvo,s
Croup ExecutiveCommittee,became
Head of the Bank'sGoteborggloup.
_ At the end of January Arne Ogren,
former Managing Director of the
subsidiaryFinansSkandic,
became
Head of the Stockholm group.
Late in the summerGerard De
Geer,who was Chairmanof Enskilda
until the end of the year, left the S-EBank Group ExecutiveCommittee
and was succeededthereby CarlDiedric Hamilton, Chief Executive
Officer of Enskilda.
31
S-E-Banken
shares
Sharecapital
At year-end 7991,the sharecapital of S-E-Bankenwas
divided as follows:
Data per share
Earnings per share
- after 307o
standard tax, SEI( 1)
- after full tax, SEK 1)
1987
1988 1989
1990
1991
10.93
9.58
12.61 11..56
11.47 11.53
7.61
6.86
4.50
5.04
Adjusted shareholders'
equity per shareI, 556 r,z) 94.34
Adjusted shareholders'
equity per share II, SEK 1,2)
Dividend
- per SeriesA share,SEK 3) 2.13
- per SeriesC share, SEK r)
Year-end market price
-perSeriesA share,SEK 61.00
- per SeriesC share, SEK
69.25
74.46 80.11
78.50 83.33 87.93
2.55
3.00
3.00
89.90
3.35
3.35
86.00 91.00 56.00
103.00 57.00
52.00
52.00
43.3
4.0
5.9
6.4
Year-end market price per SeriesA share
- divided by earnings per share
(30% tax) = P/E ratio
5.6
6.8
7.9
7.4
- as a percentage of adjusted
equity I per share
112.2 124.2 1,22.2 69.9
11.5
Earningsper S-E'Bankenshare*
After30%standard
tax
SEK
62.3
Price
7975
1976
7981
1983
1986
7990
1:5
7:6
18:10
1A:5
14:15
Directed
96.9
2.5
4.9
2.6
0.5
100.0
100.0
SEK125
SEK140
S E K1 1 0
SEK160
SEK90
SEK88.42
Total increase
SEK135M
SEK152M
SEK167M
SEK642M
SEK723M(paid up in^1987)
SEK577M
The first five issueslisted above were rights issues.In
1,982,
a bonus issueof one SeriesA sharefor five old
shareswas carriedout, increasingsharecapitalby
SEK 167M.In 1989the Bank carriedout a bonus i-ssueof
nine SeriesA sharesand one SeriesC sharefor ten old
shares,increasingsharecapitalby SEK 1,285M.
Through splits in 1977(2:1)and1984(5:1)the nominal
value of a sharehas changedfrom SEK 100to SEK 10.
Market price of S-E-Bankenshares
purchase
price,SEK
Average
S-E-Banken
shares
40
JZ
92.6
S-E-Banken'ssharecapital
SinceS-E-Banken
was establishedin7972,its shareholders' equity has been increasedby the following new
snarelssues:
General
Index
defined by the Swed sh
Bankers'Association
Percentage
of voting
power
Eachsharehas a nominal value of SEK 10.EachSeriesA
shareentitlesits holder to one vote, whereasone SeriesC
shareentitlesits holder to 1/10 vote.
100
.As
244,082,887
6,530,370
1,2,846,467
Percentage
of share
capital
* Held by Den norske Bank (Norway),
Unidanmark (Denmark) and Union
Bank of Finland.
T10
T9B7 1988 1989 1990 1991
Number
263,459,664
74.4
4.7
1) After full conversion of convertible debentures, startins in 1988.
2) Seethe definition on the inside front cover.
3) According to the Board's proposal.
A unrestricted *
C unrestricted
83.47
3.30
3.30
Dividend per SeriesA share as a percentage of
- earnings per share
(30% tax),7o
19.5
20.2 26.0
- adjusted sharehoiders'
equity I per share, To
3.9
3.7
4.0
- market price per
SeriesA share, Vo
3.5
3.0
J.J
Shareseries
1987 19BB 1989 1990 1991
Source Findata
Growth of S-E-Banken'sdividend
Index1985=1
00
Distribution of sharesby size of holding
Size of holding
1- 500
501- 1,000
1,001- 2,000
2,001,- 5,000
5,001-10,000
10,001-20,000
20,001-50,000
50,001-100,000
100,001-
Number of shares
28,202,542
73,81,3,775
16,834,757
20,955,855
70,898,870
7,578,263
6,369,851,
4,929,470
153,863,678
S-E-Bankenshareson the Stockholm Stock Exchange
Numberof
shareholders
70.70
q 1A
6.39
7.95
4.74
2.88
2.42
7.87
58.40
1987
1988
1989
1990
1991
Year-end market
capitalisation,SEK M
Volume of share trade,
sEK M
15,711 22,734 23,527 74,789 13.700
748,395
18,574
2,747
7,876 3,227 2,077
3.254
1"1,758
6,933
1,567
The 20 largest shareholders
533
208
Number of shares
Of which,
Percentage
SeriesC
of all
69
shares
135
AB Custos
(investment company)
Total
263,459,664
100.0
788,172 Knut and Alice
* Unexchanged share
Wallenberg Foundation
certificates and unclaimed bonus issue shares.
Forsiikringsbolaget SPP
These figures are based on the public shareholders, register for S-E-Banken
(pension insurance)
maintained by the Swedish Securities Register Centre iVdrdepapperscentra_
len, VPC) and are dated Artgust 2-1,1991.
Li vforsdkrings AB Skandia
(life insurance)
Of the approximately188,000shareholdersof S-E-Banken, Trygg Omsesidig Liv
about2 per cent are institutionalinvestors.They account
(life insurance)
for more than 60 per cent of the Bank's total shires.
S-E-Bankens
Allemansfonder 1-4 (national
Dividend policy
public share savings funds)
It is the goal of S-E-Bankenthat the dividend paid to its
Skandinaviska Enskilda
shareholdersshould increaseat a faster pace than inBanken Profit-Sharing
flation. Owingto the declinein earningJduring 1991,this
Foundation
was not possiblethis year.
The Bank's pension funds *
National Pension Insurance
Convertible debentures
Fund, Fourth Fund Board
A convertibledebentureloan of SEK 1.2billion was isInvestment AB Cardo
Union Bank of Finland
ry"d_tg the employeesof the S-E-BankGroup in 1988.
The debenturecertificatescarry fixed interest of 8.25per
Trygg-Hansa Forsiikrings AB
cent annually and may be convertedinto SeriesA shares
(insurance)
1? ? r ? x
during the period June1990-june1995.The conversion
price is SEK 79 per share.In the event of full conversion,
the number of sharesin S-E-Bankenwill increasebv
15.2million, equivalentto lessthan 6 per cent of the
presentnumber of shares.
AB Export-Invest
S-E-BankenShare Savings Fund
Fcirvaltnings AB Providentia
(investment company)
AB Investor
Den norske Bank
Unidanmark A/S
AMF Arbetsmarknadsforsdkringar,
pensionsforsdkring
(pension insurance)
Forvaltnings AB Oresund
(investment company)
27,535,375
8.17
74,318,680
640,934
5.43
11.,920,996
24,879
4.52
9,098,124
66,300
J.rt3
8,647,974
?R) qA4
3.28
6,249,485
8,067
2.37
5,357,791
5,272,000
377,982
200,000
2.03
1.98
4,815,400
3,178,480
2,902,264
261,800
1.83
1.21
1.10
2,700,950
2,000,000
7,970,600
101,332
1.03
0.76
0.75
1,900,000
1,900,000
1,841,654
1,,786,477
0.72
0.72
0.70
0.68
7,777,491
0.67
1,685,000
0.64
" Stockholms Enskilda
Banks Pensionsstiftelseand Skandinaviska Bankens
Pensionsstiftelse.
According to the Bank's Articles of Association, no one
may vote for more than 2 per cent of all shares in the
Bank. This means that each of the seven largest shareholders at year-end had their voting poweireduced to
5,269,793votes.
JJ
Accounting
principles
Consolidated accounts
TheS-E-Bank
Groupincludes
Skandinaviska Enskilda Banken and those
companies in which the Bank directly
or indirectly has more than 50 per
cent of the voting power. The consolidated accounts do not include
companies which the Bank has taken
over for the protection of claims.
The consolidated balance sheet has
been prepared accordingto the purchasemethod of accounting. This
means that the book values of shares
in subsidiaries are eliminated against
the amount of equity of each subsidiary at the time of acquisition. In
connection with acquisitions in
Sweden, a deferred tax liability of
30 per cent has been charged to untaxed reserves. Outside Sweden, this
has been done at the tax rate prevailing in each respective country.
Each subsidiary's contribution to
consolidated shareholders' equitv is
thus only the equity capital t6at has
been created after acquisition. Excess
values arising on elimination of
shares in subsidiaries are allocated to
the assets of the respective company
or are shown as goodwill. These excessvalues are depreciated according
to their estimated economic lifespan.
For some goodwill this means a lepreciation period of 5 years; for most
goodwill 10 years; and for property
(real estate) during its remaining
period
of use.
The profit and loss accounts and
balance sheets of foreign subsidiaries
have been drawn up according to the
accounting practices prevailing in
each respective country. When preparing the consolidated financial
statements of the S-E-Bank Group
these statements have been adiusted
to reflect the accounting principles of
the parent Bank.
Valuation of assets and liabilities in
foreign currencies
Each respective subsidiary translates
assets and liabilities denominated in
a currency other than the local one at
an exchange rate based on the average of the buying and selling rates
quoted in Sweden on the balance
sheet date.
34
In translating the financial statements of foreign subsidiaries, the
current rate methodis used. Balance
sheet items, except shareholders,
equity, are thus translated using the
exchange rate prevailing on the balance sheet date. Shareholders' equitv
is translated using the exchange rate
on the date of the respective investment or the date on which income
was reported. Items in the profit and
loss statement are translated according to the average exchange rates
during the year.
Since different items in the
financial statements are translated at
different exchange rates, exchange
differencesarise. These exchange
differences are not recorded in the
consolidated profit and loss accounts
but are directly included in shareholders' equity, distributed between
statutory and free reserves.
The Bank'ssssetsand liabilities in
foreign currencies,aside from shares
in subsidiaries and corresponding
financing, are translated at the exchange rate prevailing on the balance
sheet date. The average of buying
and selling rates quoted in Sweden
is used as the exchange rate on the
balance sheet date.
Liabilities in foreign currencies
intended for refinancing of shares
in subsidiaries are translated at the
exchange rate on the date incurred.
The net amount of unrealised gains
less unrealised lossesfrom forward
foreign exchange contracts on the
balance sheet date has been carried
forward in its entirety.
Depreciation
The Bank's oft'iceequipment is depreciated according to a schedule. The
difference between scheduled der:reciation and depreciation for tax purposes is reported as an extra depreciation reserve. Bank premisesare
depreciated at the highest percentages
permissible for tax purposes.
Equipment leased to clients is depreciated in annuities, based on a
conseruatively
estimated
residual
value at the end of the contract
period, according to earlier experience. For leased equipment that cannot be sold in a functioning market at
the end of the contract peri"ocl,the
scheduled residual value is zero.
Reporting of lending losses,
unsettled claims and deferred
interest payments
Actual lending lossesincurred
(directly written off) during the year
and provisions for possible lending
lossesare reported as lending losses.
The loan portfolio is reported on a
net basis, i.e. after subtracting provisions for possible lending losses.The
gross amount is reported separately
in a note to the financial statements.
The general reserve for political risks
abroad is reported on a gross basis
among liabilities in the balance sheet.
Incurredlending lossesare those
losseswhose amount is regarded as
finally established, for example in
bankruptcy proceedings, through the
acceptanceof a composition proposal
to creditors or through other remission of claims.
A provision for a possiblelossis
defined as the difference between the
loan amount and the amount that is
expected to be recovered, taking into
account the repayment capacity of
the borrower and the value of the
loan collateral. A provision is made if
* interest or principal is more than 60
days past due or other circumstances
give reason for uncertainty as to
whether the loan will be repaid and
- it does not appear possible to improve the borrower's repayment
capacity sufficiently within two
years ano
- the value of the collateral does not
cover the amount of the loan.
The value of the loan collateral is
calculated on the basis of its market
value. If the collateral consists of a
property mortgage deed, the valuation is based on a conservative estimate of market value, taking into
account the property's return on
assets,condition and location. An
equivalent valuation of properties
taken over for protection ofclaims is
undertaken. Any necessarywritedown is reported as a lending loss in
this case,too.
Extra depreciation of equipment
leased to clients due to the leaseholder's inability to make payments
is also reported as a lending loss.
Provisions for political risks
abroad are madeln the requisite
amounts in accordancewilh either
the Financial Supervisory Authority's recommendation or the market
price quotation, whichever is lower.
Information on unsettledclaimsis
provided in connection with each respective assetitem. Unsettled claims
are defined as loans that are more
than 60 days past due or where other
circumstances give reason for uncertainty as to whether the loan will be
repaid. In caseswhere these loans are
believed to involve a lending loss
risk, provisions for possible'iending
losses have been made. The remaining amount described as unsettled
clairns is thus not an exr:ression of
lending loss risk in the ioan portfolio.
Information is also provided on the
amount of loans for which interest
defermentshave been granted,
compared with the original terms of
the loan. These items refer to loans of
at least SEK 1M on which the interest
rate has been lowered to less than
market level. Information on the
affected loan volume at year-end
1991 and on the estimated impact of
interestdeferral agreementson earnings (income shortfall) during 1991
and7992 is also included.
Loan terms are renegotiated in
order to enable a borrower experiencing temporary payment difficulties to resume pavments at a normal
level. Defermenis a.e granted only if
there are good prospects of a turnaround in the borrower's situation.
They are also normally granted on
the condition that if all goes well, the
borrower will also repay the deferred
amounts to the Bank.
Taxes
The item "Taxes" in the profit and
loss statement includes the estimated
tax on business operations and the
total tax on funds withdrawn from
untaxed reserves in7997. Propertv
tax is reported as an operating coit.
Tax equalisation reserve
Banks are required by law to restore
their untaxed reserves to taxable
status during1997. The taxes will,
however, be payable over a four-year
period fi991-199r.
"tax
A
equalisation reserve" has
been introduced as a replacement
for these appropriations. Briefly, it
enables companies to make appropriations to an untaxed reserve based
on either payroll or shareholders'
equity after certain adjustments. The
S-E-BankGroup's appropriations are
based on shareholders' equity.
Valuation of interest-bearing debt
instruments
The Group's bondholdings and holdings of other interest-bearing debt
instruments are divided into a
trading and an investment portfolio.
The trading portfolio is valued at
market price on the balance sheet
date, and the resulting gain or loss is
reported as part of net interest earnings, along with interest income and
gains or lossesrealised on an ongoing
basis during the year.
The investment portfolio is valued
at the market price on the balance
sheet date. The resulting gain or loss
is shown as an appropriation to, or a
withdrawal from, a special value adjustment account for tonds, which is
reported on a net basis against bonds
in the balance sheet. The investment
portfolio is thereby presented at the
lower of cost or market value.
Changes in accounting principles
The 1990 financial statements have
been adjusted to 7997 accounting
principles. Certain figures in the
accounts have therefore been placed
in new categories.
35
Profitand lossaccounts
Notes
onpages
38-41.
The S-E-Bank Group
Operating
income
Netinterest
earnings
Note 1
Commissions,
feesand foreignexchangeearnings.
Domesticoperations
International
operations
Otheroperatingincome
1990
SEK M
9,473
8,100
3,.161
1,698
4,859
825
2,458
1,470
3,928
Change
TO
S-E-Banken
19 9 1
S E KM
1990
S E KM
16.9
7,550
6,084
24.1
28.6
2,130
'1 61
,1
26,9
8.7
19.8
-19.8
Note
2
NoTe 3
Total operating income
Operatingcosts
Staff costs
Costs for premises
Otheroperatingcosts
Depreciatlon
1991
SEK N/
ot4
23.7
22.4
3,291
455
1,679
1,068
2,747
567
tc.c
12,702
19.3
11,296
9,399
20.2
Note4
Note 5
4,202
3,750
678
12.1
3,007
885
Note 6
2,552
550
ZTJJV
474
9,1
15.9
217
2 , 74 7
770
1, 4 0 1
244
9.5
14.9
11.0
-1'1.1
11.5
5,664
5,162
9.7
29.7
144.2
5,632
4,2t6
4,236
1,486
186
IOI
|,t.z
Totaloperatingcosts beforelosses
8,071
7,241
Operating profit before losses
Lendinglosses
Provisionsfor politicalrisksabroad
7n086
4,760
5,461
1,949
200
Operatingprofit
2,326
3,312
- 25.8
1,354
2,564
120
624
14
406
53.9
95
499
171
1,822
2,920
- 37.6
Extraordinary
costs
Note I
,--
Noie I
Profit before appropriations and taxes
Appropriations
N o t e1 0
+12,87O
Taxes
Minority
interests
N o t e1 1
-4224
Reported profit for the year
36
a/n
15,157
Note Z
Extraordinaryincome and cosfs
Extraordinary
income
Change
-
to
10,453
-t,t
t\t
- 552
+9
604
lJo
33.0
187.9
- 47.2
- 30.1
2,529 -62.4
+12,439 -1,4O1
- 3,851
-128
950
9,538
1,000
Balancesheets
December
31
Noteson pages41 * 49.
TheS-E-BankGroup
19 9 1
S E KM
,4ssefs
Cashholdings
andcompulsory
cashreserves
Tradingportfolio
portfolio
Investment
Depositedwith
Swedishbanks
foreignbranks
Lenolng
Note13
.._'
Equipmentleasedto clients_,_.
Properlyand officeequipment
Shares
Note12
N o t e1 3
N o t ei 4
__
-_
Notetb
Notero
public
Nationat
savings
"""*"t", ""t =
illi!]l
Otherassets
N o t e1 9
Total assets
of which due from Groupcompanies_.
pledged
Collateral
Totalcreditcommitments
Note 20
Liabilities
Borrowedfrom
Swedishbanks
otherSwedishfinancialinstitutions
foreignbanks
Deposits
Nore2i
paper
Commercial
(lortifinatoc
nf
rlanncil
Long-termliabilities
Reservefor politicalrisksabroad
Otherliabilities
-
Nore
22
Note 23
Minority
interests
Total liabilities
of whichliabilities
to Grouocomoanies
1990
S E KM
2,867
3,929
Change
a/o
19 9 1
S E KM
1990
SEK IVl
- 25.1
2,836
5,442
3,821 - 25.8
10,684
35,440
34,227
3.5
14,330
27,879
314,661
10,896
3,726
2,130
210
27,956
26,863
34,521
3 11, 0 2 9
9,347
3,902
935
130
26,936
- 46.7
- 19.2
1 4
t . a
to.o
- 4.5
127.9
61.7
3.8
450,779 451,719
-o.2
5,882
1,580
338,188 332,117
13.7
5,544
16,137
113,446
139,479
11,849
24,623
82,070
547
32,027
205
12,093
21,606
137,809
112,555
11,487
4,781
8'1,116
610
43,713
308
425,927
426,078
S-E-Banken
- 54.2
a F a
- 17.7
23.9
3.2
t.z
- 10.4
- 26.7
- 33.2
0.0
26,809
29,762
Change
v.
- 9.9
10,540 25,662 - 58.9
48,702
45,439
7.2
224,355 208,745
7.5
14
-11.5
628
710
7,062
5,386
31.1
210
130
6 1. 7
22,211 17,398
27.7
348,809 337,053
65,525
52,874
5,788
1,057
246,266 229,701
3.5
7.2
8,581 11,301
1, 1 0 8
1, 5 9 6
109,9
1 5 1 2 1, 7 2 9
1 3 1, 9 0 1 11 5 , 5 9 9
1,770
2,403
'19,135
1, 7 6 3
34,715 33,528
568
596
2 2 , 4 0 3 2 7, 3 5 6
- 24]
- 30.6
- 10.3
14.1
- 26.3
329,376 315,971
18,789 15.990
4.3
3.5
- 4.7
- 18,1
Untaxedreseryesand shareholders'eauitv
ll^+^,,^i
ur rLo^vu
tEDvt vvD
Sharecapital
- 5 1. 9
5,109
2,635
2,244
659
604
- 3.9
* 63.8
1 7CC
15,482
6,142
152.1
14,324
5,667
152.8
24,852
25,641
- 3.1
19,433
21,182
- 8.3
-o.2
348,809
337,053
3.5
37,604
7,300
40,263
6,455
9,370
19,499
2,635
2,635
2,156
238
10,453
1 5 , 5 1 5 - 6 7. 1
2,635
2 5 0 , 6 1 3 , 1 9S
/ e r i e sA s h a r e sn, o m i n avl a l u eS E K 1 0 e a c h
12,846,467SeriesC shares,nominalvalueSEK 10 each
Statutorv
reserves
Freereserves
Reportedprofitfor the year
Total untaxed reserves and shareholders' equity
Total liabilities, untaxed reserves
and shareholders' equity
Note2b
Guaranteesissued
Approvedbut unutilisedlettersof credit
Note26
450,779 451,719
30,545
7,545
34,037
6,455
|,tzz
310
1,000
429
38.4
Claims on and liabilities to Swedish financial institutions as well as claims and liabilities in foreign currencies are inctuded in several balance sheet items;
a summaryof these is pravided in Note 27. ln addition, Note28 providesa specificatianof ceftain obligationsoutside the Bank'sbalance sheet.
J/
Notesto the financialstatements
Amounts
inSEKM, unless
otherwise
specified
Currency codes
Thefollowing
international
currency
codesareused:
AUD Australian
dollar
BEF Belgian
francs
CAD Canadian
dollar
CCU Capitalcurrency
unit
(basket
of USD,cBp,
CHF,DEM)
CHF Swissfrancs
,{ Net interest earnings
DEM Germanmarks
DKK Danishkroner
ESB Spanishpesetas
FIM Finnishmarks
GBP Britishpoundssterling
INR lndianrupees
JPY Japaneseyen
LUF Luxembourgfrancs
MXP Mexicanpesos
NCZ Braziliancruzeiros
NLG Dutchguilders(florins)
NOK Norwegiankroner
PTE Portuguese
escudos
SGD
THB
TND
USD
XEU
Singaporedollar
Thaibaht
Tunisiandinars
U.S.dollars
Europeancurrencyunits(ECU)
Specificationof net interesiearnings inthe Bank. Dailyaverages(annualaverages
of each balance
sheet item day by day) as well as correspondinginterestrates and interestamounts.
The averageofficialdiscountrate during 1991 was 9.40 per cent, down l.T2percenragepoints
on the 1990 average.
1990
Daily Interest
average raie, a/o
lnteresl
SEK l\l
Daily
average
Interest
rate, yo
Investments and lending
C o m p u l s o rcya s hr e s e r v e.s. . . .: . . . . . . . . . .. . . . 2,937
3,297
Swedish
bonds............
21,591 10.29 2,222
23,459
Othergovernmentsecuritiesand bonds .... 1 0 , 831 1 2 . 5 9 1 , 3 6r1)
5,044
Depositedwith
Swedish
b a n k s, . , , , . . . . . . . . . . ,1. 4 , 9 3 1 1 2 . 4 5 1, 8 5 9
17,000
foreignbanks
68,589 9.0S 6,204
44,838
Lendingin
Swedishkronor
88,020 13.37 1 1, 7 7 3 2 ) 7 3 , 1 3 1
foreigncurrencies
129,757 8.70 11,284
102,583
Otherassets
10,376
21
8,244
Total investments and lending .
347,O14 10.01 34,724
277,596
Sources of funds
Borrowedfrom
S w e d i s h b a n k s . . , . , . . . . . . . "6. ., .0.9 4 1 2 . 5 9
767
other Swedish
financial
institutions
..,.......
260 12.61
33
'l
foreignbanks
61,068 8.27 13,326
Deposits
in
S w e d i s khr o n o r. . . , . , . , . , . . . . . . , .89,666
...
foreigncurrencies
19,144
Long-termliabilities
36,178
.1
Otherliabilities
1, 19 1
Total borrowed funds
323,601
Shareholders'
equityand untaxedreserves 2 3 , 4 1 3
Totaf sources of funds
.... g4Z,O14
Net interestearnings
O v e r a il n
l t e r e smt a r g i n. . , . . . . . . . .
1) of which,intereston monev
marketinstruments
2) of which,loanfees
B.68
6 . 1B
B.38
9.36
7,787
1, 1 8 3
3,031
1,047
8.40 27,174
Interest
SEK 1\,4
10.56 2,477
11, 6 6
5BB1)
13.61 2,314
B.B7 3 , 9 7 7
1 4 . 9 7 rc,9472)
9 . 3 8 9,620
_42
10.76 29,881
7,619 1.1.81
900
3BB 11.60
45
109,387 9.35 10,224
78,606 9.92 7,797
22,326 9.16 2,044
22,992 LB6 2,268
14,616
51I
255,934
9.30 23,797
21,662
7.Bg 27,174
7,SS0
2j8
277,596
8.57 23,797
6,084
2.19
167
242
150
222
The 19911
net interestearningsof the Group,sEK 9,479M(sEKB,j o0M),includednet leasing
incomeof sEK 1,156M(sEKBg2M),consisting
of teasing
feestotailing
sEK 9,153M(sEK
2,497M)lessdepreciation
on equipment
leasedto clientstotalling
sEK j,997M(sEK1,604M).
$ Commissions,fees and
fr foreign exchange earnings
The Group
D o m e s t ilce n d i n g
operations,..,.............
Domesticand international
securitiesoperations
Legaland trust operations
Otherdomesticoperations
lnternational
operations
38
The Bank
1991
1990
-!9r
-]!!9
478
B9B
593
350
592
494
453
582
593
502
1, 16 1
3,291
267
497
486
429
1, 0 6 8
2,747
1,1e2 1p22
1 , 6 9 8 1, 4 7 0
4,859 3,928
S
Otheroperatingincome
TheGroup
1991
1990
Rentalincome
Dividends
Dealing
in bonds,etc
Miscellaneous
118
55
86
64
BB
564
825
16
508
674
TheBanks
1991
1990
0
230
56
449
36
82
567
tov
455
Anticipated
dividendsIo theBankwereSEK162M(SEKSTOM)
4
Staff costs
The Group
Salaries
and remuneration
.....,...........
lmputedpensions
Pensionpremiumspaid
Socialbenefitcharges
Otherstaffcosts
Salariesand remuneration:
to Boardsof Directorsand ManagingDirectors......
to other emploveesin Sweden
to other employeesabroad
appropriation
to holiday
andoveftime
reseryes
.......
Bonuses:
to Boardsof Directors
andManaging
Directors
......
Averagenumberof employees:
Of which,Stockholm
Goteborg
Malmo
Branch offices
1991
1990
2,807
114
51
2,440
124
37
1,926
114
951
815
279
334
4,202 3,750
770
181
3,007
33
48
2,014 2,158
754
217
6
17
1,731
177
6
8
to
2,747
20
92
I
2
10,846 10,743
1,729
Numberof hoursworked
1990
1,717
124
B
659
239
a e^n
8,382
2,922
2,796
629
653
293
319
4 rAO
4,162
1, 3 7 7
376
322
1 3 , 6 3 9 , 2 5 81 3 , 8 9 7 , 5 9 9
Excludingthe effectsof the SBG acquisitionon July 1, 1990,the averagenumberof employeesdeclined
by 173.
Detailedinformationabout the averagenumberof employeesand salariesand remuneration
as required by Chapter4, Section9, Paragraph2 of the SwedishBankingOperationsAct will be providedby the
Bank upon request,Ofthe S-E-BankGroupemployees,57 per cent werewomen and 43 per cent men,
Pensioncosts in lhe Bank havebeencalculatedin accordancewith the instructionsof the Swedish
FinancialSupervisory
Authority,which involvesan actuarialcalculationof imputedpensioncosts.
The Bank's pension funds, December 31
Skandinaviska
BankensPensionsstiftelse
StockholmsEnskildaBanksPensionsstiftelse
Pension
commitments
'1991
1990
,,212
817
\?11
674
3p29
2385
Marketvalue
of assets
1991
19 9 0
4,156 4530
3,376 3,070
sr132 ?,600
Thesharpincreasein pensioncommitments
was dueto the earlvretirement
offercarriedout in
late1990andduring1991
S
Gostsfor premises
The Group
'1991
1990
R e n t s. . . . . . . . . . . . .
Othercostsfor premises
S
Other operatingcosts
535
232
767
405
273
678
The Group
1991
Stationery
Postageand telecommunications
charges
M a c h i n e rrye n t a l s. . . . . . . . , . .
Printedmatteretc..............,..
T r a n s a c t i of ene s . . . . . . . . . . . . " , .
Servicespurchased
Miscellaneous
The Bank
19 9 1
1990
699
546
224
too
885
The Bank
1990
1i9
125
3OS
297
241
i93
156
199
190
178
659
b11
BB2
936
2,552 2,339
83
221
212
82
187
296
474
1,555
82
194
163
107
1B0
282
393
1,4O1
39
7
Depreciation
The Group
1991
Goodwill
Officeequipment
Property
1r,
31I
3
1990
The Bank
1991
1990
135
314
216
4
2
5
1
244
550
474
21244
Goodwill is depreciatedat an annual rate of 10 per cent (in some cases 20 per cent).
Total goodwill in |he Group was SEK 1,206M after depreciation.Office equipment in lhe Bank
is depreciatedaccordingto a speclalschedule,In brief.it specifiesthat personalcomputersand
in 3 years, office terminalinstallationsin 7 years and other office equipI:]f,"^
^l?lreciated
ment rnT5 years
&
Lendinglosses
The Group
r 991
I n c u r r el d
o s s e s. . . . . . . . . . . . . . . . .
Provision
for possiblelosses...............
Hecovenes
on prevtous
wnte-downs.,.
s
Extraordinaryitems
1,263
3,685
* 188
4,760
.1
,159
3,288
- 169
4,278
Costs
Loss,partialsaleof Skandiaoptionbelow book value
Write-down,
portion,Skandiaoption,.............
valueof exercised
Write down of sharesin
Scandinavia
l nnv e s t m e nLi st d . . . . , . . . , . . . . . . . .
pt\,ta
O t h e cr o m p a n i e.s. . . . . . , . , . . . . . . . .
Termrnation
allowances
..,..
C a p i t allo s s e so n s a l eo f s h a r e s. . . . . . . . . . , .
Miscellaneous
write-downsin the FinansSkandic
group
Stampdutytor new shareissue
,....:.,.
.
Allocation
to S-E-Banken
Development
Foundation
Discontinuation
of Scandinavian
Bank,..........
Shareholders'
contribution
to DSB .........,.
Repaymentof excesstax withheld
Otherextraordjnary
costs
565
994
*73
1,486
The Bank
1ee0
_j!gl
,=1990
B6
B6
lo
123
7
13
B
120
14
B
1
6
95
136
415
76
415
76
7
25
7
123
20
20
3
12
5
12
5
3S
o l
aFa
B
a
o l
624
Appropriations
680
1,369
- 100
1,949
The Group
lee1
Income
Capitalgain on saleof OM option
Capitalgain on saleof properties
Capitalgainson saleof shares
E n s k i l dS
a e c u r i t i eLst d . , . , . . . . . . . . . . , . ,
BanqueMarocaine
Othershares
Otherextraordinary
income
10
The Bank
1990
9
406
The Group
19 9 1
r990
1
499
171
The Bank
19 9 1
19 9 0
- 4,983
Appropriation
to equity-based
tax equalisation
reserve.,........... - 5,729
Appropriationto valueadjustmentaccounl
*694
-35
-678
for investmentporlfolio
- 1,215
- 1, 1 7 4
Appropriations
to untaxedreservefor lending(seeNote 24) ......
Withdrawalfrom untaxedreservefor
l e n d i nagn df o r e i gcnu r r e n c i e s , . . . . . . . . . . . . . . . .
+16,783
+1 +15,377
Withdrawalfrom untaxedreservesfor bonds/interestrate risks
+ 3,132 + 138 + 3,112
Withdrawal
from payrollreserve..........
+B
+2
Recovery
fromspecialinvestment
reserve.,.........
+22
+6
Withdrawalfrom developmentand investmentreserves
+1
+3
-956 -970
Drfference
betweenbook and scheduleddeoreciation
+12
+4
Recoveryof imputedpensionpremrums
+ 114 + 124
+ 114 + 124
Compensationfrom pensionfunds
+ 390 + 300
+ 390 + 3OO
- 201 * 127
- 201 - 127
Pensiondisbursements
Groupcontributionsreceived
+236 + 135
paid .....
Groupcontributions
+12,870 -1,773 +12,439 -1/4Ol
40
${
raxes
The Group
1991
Estimated
corporatetax etc .......,...
Estimatedtotal tax on deferredamount
Estimatedprofit-sharing
tax (feeto employeeinvestmentfunds)
287
3,937
1990
470
profittax
andtemporary
1991
239
3,612
128
82
4,n4
552 3.851
{" *$ Cash holdingsand
compulsory cash reserves
128
The Bank
--l9a
Cashholdingsin Swedishkronor ...,
Fundsdepositedwith the Riksbank.
Cashholdingsin foreigncurrencies
To covercash reserverequirement
Total cash holdings and compulsory cash reserves
Cash reserverequirement
-i!9g
2,374
386
2,760
76
2,836
1,899
1,827
3,726
95
3,A21
1,969
3j82
Riksbankregulations
imposea cashreserverequirement
on lhe Bankamountingto 2 per cent(4)
of the Bank'sdepositsin Swedishkronorand cerlainotherobligations.
The Bank'sown cashholdingsin Swedish
kronorplusfundsdeposited
inthe Riksbank
mustadd up to at leastthisamount.
{r u
fr Tradingand investment portfolios
Holdingsof bondsand otherinterest-bearing
debt instruments
aredividedintoa tradingporlfolio
(short-term
holdings)
portfolio(long-term
and an investment
holdings)
whicharereportedbelow
for 1991" For 1990,bothtypesof holdingsarereportedunderthe investment
porlfolio.
A. Trading portfolio
The Group
1991
Acquisition value
lvloneymarketinstruments
Treasurydebt cedificatesincl.Treasurydiscountnotes
G o v e r n m e nb to n d s . . . . . . . . . , . .
Localgovernmentbonds
Housingbonds
Industrial
btonds.....
F o r e i gb
n o n d s. . . . . . .
M r s c e l l a n e o .u.s. . . . .
1,154
4,714
2,623
5
1,993
14
79
102
Total acquisition value
10,684
Market value
Moneymarketinstruments
Treasury
debt certificates
incl.Treasury
discountnotes .............
G o v e r n m e nb to n d s . . . . . . . . . . . .
Localgovernmentbonds
H o u s i n bg o n d s , . , . , . . . . . . .
1,154
4,778
2,607
5
1,974
14
The Bank
1991
896
2,033
727
5
1, 7 2 0
14
47
5,442
896
2,084
701
5
1,695
14
o l
Total market value
B. Investment portfolio
Total acquisition value
Less: valueadjustmentaccountfor bonds
47
10,695
5,442
The Group
19 9 1
Acquisition value
Moneymarketinstruments
Treasurydebt cerlificatesincl.Treasurydiscountnotes .......,
G o v e r n m e nb to n d s. . . . . . . . . . . .
Localgovernmentbonds
Housing
b o n d s. . . . . . . . . . . .
I n d u s t r ib
ao
l n d s. . . . . , . . . . . .
Foreignbonds
Miscellaneous
102
The Bank
I 990
990 2,268
990
1,372
5,489 6,475
395
3,121
6 , s 3 3 10 , 8 5 0 6 , 114
9,408
319
318
86
114
8,931 7,574 9,931 11,794
1 , 6 8 7 3,422 1,499 3,374
8,996 5 , 1 1 2 7 , 2 2 5 3 , 2 4 3
3 , 18 9 1 , 3 4 0 1 , 2 4 7
448
36,134 37,359 27,487
- 694 - 3j32
32,874
* 678 - 3,112
N e t b o o k v a l u ea s p e r b a l a n c es h e e t . . . , . , . . . . . .
35,440 34,227 26,809
B o n d si n c l u d e
s u b o r d i n a t edde b e n t u r eosf , . . . . . . , . . . . . . . . . . . . . . . . . . . 205
369
205
29,762
369
47
Note 13, continued
The Group
'1991
1990
Market value
Moneymarketinstruments
Treasury
debt certificates
incl,Treasury
discountnotes,,,,,,,,,,,,,,,
G o v e r n m e nb to n d s. . . . . . . . . . . ,
Localgovernmentbonds
Housing
b o n d s. . . . . . . . . . . .
I n d u s t r i ba ol n d s. . . . . . . . , . , .
Foreignbonds
Miscellaneous
The Bank
--1rr1
1,002 2,268
0,594
6 4 r A 10,304
320
315
8,33S 6 , 7 3 8
1,620 3,217
8,983 5 , 4 2 5
3 , 13 8 1 , 2 5 6
5 F'14
lrro
1, 0 0 2 1 , 3 7 2
520 3,249
6,005 8,962
87
111
9,327 10,948
1,441 3,167
7,214 3,240
1,213
366
gS,44O36,117 26,909 91,406
Total market value ,...........
E x c e s sv a l u e( m a r k evta l u em i n u sn e tb o o kv a l u e.). . . . . . . . . . . . . . . . . . . . .
0
1,890
0
1,644
The Bank's total holdingsof governmentsecuritiesand bonds at nominalvalue are distributed
as follows in terms of remainingmaturitiesuntil redemption:
D e c .3 1 , 1 9 9 1
Nominal o/oo{
total
L e s st h a n1 y e a r. . . . . . . . . . . . .
1 - 5 years
6-10years
Morethan 10 years
Averageremainingmatunty
Averagecouponrateas a percentage
of acquisition
value.........
$ $ Lendine
% oftotal
25 5 , 6 9 2
53 1 6 , 8 3 2
7,625
15,891
3,943
2,526
29,985
Dec.31,1990
Nominal
5,439
3,612
18
53
17
12
100 31,575
100
14
B
3.7 years
10.88
4.6 years
11. 3 0
Lendingincludes
allloansexceptloans/claims
involving
Swedishandforeignbanks,i.e.loansto
insurance
companies,
intermediary
institutions
and financecompaniesas wellas to otherleqal
entitiesand privateindividuals.
The Group
The Bank
1990
Swedishfinancialinstitutions
Othar
lanrl
aniitioc
Privateindividuals
1991
1990
11 , 0 3 5 1 0 , 5 8 6 48,629 39,980
197,419 190,4321 4 6 , 5 1 81 3 3 , 0 9 9
106.207 11 0 . 011 29,208 35,666
314,661 311,029 224,355 208,745
Of which
unsettled
claims,net
Interestdefermentvolume,net
5,527
4,053
3,446
730
1,077
t,/oc
payments
Deferred
1991interest
totalledSEK103Mforthe BankandSEK255Mfor ihe Group.
Unsettledclaimsaredefinedas receivables
on whichborrowershavesuspendedpaymentsor
on whichprincipalor interestpaymentsaremorethantwo monthspastdue.An unsettledclaimis
not necessarily
recordedas a possiblelendingloss.
Provisions
for possiblelendinglossesaresubtractedin the abovetableof loansoutstandinq.
Thetotalreserveis soecifiedas follows:
The Bank
n^^^i-^
h^t^^^^
vPYr ilr rg uarar ruu
T r a n s p o s i t iw
on
i t h i nt h e G r o u p. . . . , . . . . . . .
-fho
rrorr'c
innr
rrrori
lnccoc
The year'srecoveriesof previouswrite-downs
P r o v i s i of n
o r p o s s i b l leo s s e s. . . . . " . . , . , .
Closing balance
,d fi
rw
Equipment leased
to clients
'r
991
1990
1,615
577
1991
1,026
372
- 1, 2 4 9 - 3 3 1 - 1 , 0 0 6
-64
-64
3,685 1,369 3,288
3,987
1,615
The Group
r9g1
1990
3,616
1990
325
-293
994
1,026
The Bank
T991
A c q u i s i t i ovna l u eo f l e a s e de q u i p m e n. t. . . . . . . . . . . . . . . . . .
Accumulated
oepreciation
accordingto plan ,..........
Write-downof leasedequipment
Advancespaid on leasedequipment
13,422 11,252
- 3,463 - 2,993
-86
*35
1,O23 1]23
24
_10
Residual value according to plan
10,896 9,347
14
1990
ResidualvalueincludesSEK 1 12M (SEK7BM)in equipmentwhich has been leasedto Group
companiesand thus constitutesofficeequipmentfrom the standpointof the Group.
42
{' vff Propertyand office
equipment
TheGroup
'1991
1990
Prnnorhr
2,916
810
n#i^^
^^.,i^-^^+
v i l r u s E g u r p r I r v tt L . . . . . . . , . , . . . . . . . . .
'1991
1990
.13
25
603
628
2,988
914
697
710
7
Totalpropertyand officeequipment
3,726 3,902
Taxable
valueof property
2,210 't,788
1'l
"Propefty"
Theheading
includessEK 1,122M(sEKj ,0s9M)for Bankhusgo, the new bank
buildingunderconstruction
in Rissne,outsideStocknotm.
$ p- Shares
Sharesin foreigncompaniesarerepoftedat theirnominalvaluein millionsof eachrespective
currency;bookvaluesaretranslated
to Swedishkronorat the exchangerateprevailing
on the
dateof acquisition.
Certainholdingsin foreigncompaniesarewrittendownto SEK1 fer holding.Dividends
arereportedin the profitand lossstatementunder"Otheroperatinqincome".
Book value
'1990
A. Subsidiaries
B. Scandinavian
BankingPartners
Cl . Othercompaniesin Sweden
C2. Sharestaken overfor the protectionof claims
C3. Sharesin stockbrokingoperations
C 4 . O t h e rs h a r e s. . . . . . . . . . . .
D. Othercompaniesabroad.,.........
Dividends
4,636.9 175.5
5,718.2
306.4 541.3
18.4
444.7 1 9 9 . 9 3 4 . 8
1 1 . 5 0.1
3.8
7.5
0.1
386,3
The Bank's shareholdings
2.8
0.5
1.2
7,062.45,386.2 230.0
0.8
448.9
E . S h a r e h o l d i nogfss u b s j d i a r i e. s. . . . . . , . , . . . . . . , . .
Total Group shareholdings (B+G+D+E)
785.8 j85.3
2,190.1 934.6
eAa
26.7
0.3
0.7
SS.2
1.5
64.1
For a specificationof these shareholdings,see page 48.
{* v$l Nationalpublicsavings
accounts,net
The Bank
1990
Receivable
from SwedishNationalDebt Office
Balance,nationalpublicsavingsaccounts
Net claimon SwedishNatlonalDebt Office
$S
Otnerassets
9,627
8,667
210
130
-v!7 - jfgz
OtherassetsincludeSEK1,206M(SEK1,444M)in netgoodwill
'1991
1990
Earningsitemsbroughtforward
Interest
10,913
1,058
11,971
10,240
Otheritems
Other assets .
8,782
167
g,g4g
8,449
22,211 1?/398
ffiffi
Collateralpledsed
The Group
1991
Lending
Mortgagedeeds
Other
The Bank
1990
1991
1990
5 , 7 8 4 1, 1 5 6
98
421
5,784
1,055
5^88'
1,580
:
5,788
:
1,057
The item"Lending"in theBankrefersto the pledgingof sEK 672Min promissory
notesfor the
benefitof AB SvenskExporlkredit.
ffi$ Denosits
The Bank:
Thousands
of accounts
^h^^,,^
vr raquE
ouuuur
[-
60
P r i v a t ae c c o u n t s. . . . . . . . . , . . " . . . . .
413
Companyaccounts
o l
Savingsaccounts
829
Depositson soecialterms
Otherdeposits
939
T o t a ld e p o s i t si n S w e d i s hk r o n o r . . . . . . . . . . . . . . . . . . . . .2,314
Depositsin foreigncurrencies
6
2,320
Balance
SEK M
20,745
5,226
7,278
35,204
2 1, 4 2 7
5,647
95,527
36,374
.131
,901
Thousands
of accounts
RA
389
5B
869
I
899
2,278
7
2,285
Balance
SEK IV
19,967
4,954
7,274
24,146
19,304
11,066
86,711
2B,BBB
11 5 , 5 9 9
43
pp
LonS-termliabilities
The Group: In addition to the Bank's subordinateddebentureloans, this item mainlyincludes
long-term borrowing by Svensk FastighetskreditAB.
The Bank: This item includesthe book value of subordinateddebentureloans and bond issues
outstanding.Nominalamountsare in millionsof the respectivecurrencv
Maturity
Subordinateddebentureloans
1974/84/94
1986/92
1AA7 /AA
1987/92
1987/92
lgBB/94
19BB/93
1989/99
1990/9s
lggo/97
1990/95
1990/05
1990/05....
1 9 9 0 / 0 0. . . .
1990/00
1991/98
1991/93
1991/98
1991/99
Original
nominalvalue
SEK
75,0
LUF 300"0
sEK 1,000.0
LUF 300,0
LUF 300.0
cHF .100.0
DKK 300.0
sEK 1,000.0
LUF 3OO.O
LUF 600.0
LUF 300.0
DKK 300.0
DKK
25,0
usD 330.0
XEU 60,0
GBP
12,0
cHF 100.0
DEM 200.0
LUF 1,000.0
usD 100,0
DEM 170.0
AUD 2OO,O
AUD 150,0
AUD 1OO,O
AUD 230.0
sEK 1,000.0
DKK 350.0
JPY 8,902.6
sEK 450.0
USD
92,5
cHF 100.0
LUF 750,0
USD
2B,O
CHF
USD
89.9
I0.0
Book
value
11.2
53.3
970.4
53.3
53.3
403.9
279.4
817.7
53.3
106.6
53.3
281.7
23.5
1,830.7
445.2
124.8
411.2
731.9
ttt,o
554.8
622.1
844.0
633.0
422.0
970.6
341.8
262.9
392.8
450.0
513.1
4 1 1. 2
133.2
155.3
369.6
55.5
14,O14.2
hterestrate%
7.50
7.25
r)
7.25
7.625
4.50
10.75
2)
10.125
9.75
10.25
3)
3)
3)
6.0
7.125
9.0
9.375
3)
3l
6.0
6.0
7.5
6.0
0
0
3)
3)
7.5
9.25
3)
8.4375
3)
Convertible subordinated debenture loan
1oqR/o6
Bond issues
1987/92
1987/93
19BB/93
19BB/94
19BB/93
1989/92
1989/99
1989/92
1989/96
1989/94
1s\g/s2
1990/95
r 990/96
1990/95
1990/96
1990/00
1990/95
1990/9s
1990/95
I OOn/Ot
1990/93
1990/93
1990/97
M
sEK 1,203.2
JPY 10,000.0
DEM 100,0
USD 1OO,O
LUF
300.0
JPY 10,000.0
CAD
87.5
D E M 1 6 1. 0
JPY 5,000.0
150.0
usD
JPY 16,644.0
DEM
5O,O
100.0
GBP
JPY 48,OOO.O
l OO.O
CHF
usD
100.0
100.0
GBP
DE|V 400.0
J P Y 8 , 10 4 . 3
JPY 30,000.0
DEM 189.1
JPY 15,000.0
JPY 6,000.0
150.0
cHF
1, 19 4 . 8
15,209.0
8.75
441.3
365.9
554.8
53,3
354.1
418.7
589.2
220.6
832.1
734.4
183.0
1,039.9
2,118.O
4 1 1. 2
554,8
1,039.5
1,463,8
3s6.8
4.50
| ,,52J, I
691.9
6 6 1. 9
264.8
616.8
9.00
7.50
11.25
6.00
10.00
5.00
8.00
3)
3)
6.5
9.05
13.125
3)
7.O
6.45
7.375
Note 22, continued
Original
nominal
value
1990/90
1990/95
1990/95
1990/93
1991/94
1991/93
lool/oA
t99t/93
1991/92
1001 /oo
1991/93
1991/94
1991/93
1991/98
t v v| . . . . . . . . . . . . . . .
Book
value
XEU
3O.O
JPY 5,000.0
GBP
5O.O
JPY 10,000.0
DEM 200.0
JPY 4,500.0
100.0
cHF
JPY 4,000.0
USD
24.0
JPY 5,000.0
JPY 5,000.0
JPY 5,000.0
2O.O
SEK
JPY 10,000.0
36.8
SEK
Interestrate%
222-6
220.6
519.9
441.3
3l
731.9
9.0
8.0
198.6
411.2
176.5
133.1
220.6
220.6
220.6
7.O
7.5
3)
7.0
8.0
0
20.o
441.2
36.8
19,506.0
0
1) .FloatingRate Note; interestrate 3-month STIBOR.
2) FloaiingRate Note; interestrate 3-month STIBORless 0.10%.
3) Floaijng interest rate, related to LIBOR.
4) Discountloan, proceedsJPY 8,0241Vpaying 4.9252% interest
4ltl Otherliabilities
Art
Earningsitemscarriedforward
il ttgt EDL
7,945
478
8,423
2,252
. .. .. .. .. .
q 6Aa
1,440
7,003
2,891
1,497
48
3,741
6,566 1 5 , 9 1 7
Otheritems
Bank giro payments
Bank drafts
Taxliability
Otherliabilities
22,403 27,356
p$
Untaxedreserves
The Group
1991
1990
The Bank
1991
1990
A Tax equalisation reserve
Balanceat beginning
of year ...........
An^r
nririi^nc
Balance at year-end
B Untaxed reserves for lending
Balanceat beginning
of year ...........
Appropriations
Withdrawals
Acquisitions,
transpositions
and exchangedifferences
Bafance at year-end
tr,7CO
4,983
4,983
5,729
16,509 15,324 15,052 1 3 , 8 7 8
C Untaxed reserve for foreign currencies
Balanceat beginningof year
Withdrawals
Balance at year-end
326
-326
D Extra depreciation on equipment leased to clients
Balanceat beginning
of year ,..........
Appropriations
Exchangedifference
2,485 1,511
974
949
Balance at year-end
3,435
E Extra depreciation on office equipment
Balanca
e t b e g i n n i nogf y e a r. . , . , . . . . . .
Appropriations
Withdrawals
Balance at year-end
.tr:
1 215
- -15,052
.........- 16,464
-30
7
0 15,052
52 16,509
327
-1
325
- 325
326
325
325
1
2,485
143
147
- 14
-4
138
143
1 a
126
138
45
Note 24, continued
The Group
1991
F Other untaxed reserves
Specialinvestment
reserve.........
Payroll
reserve
4
Total untaxed reserves (A+B+C+D+E+F)...
9,370
gs
Shareholders' equity
and translation
difference reserve
1991
1990
22
1
B
5
36
Development
reserve
Generalinvestmentreserve
The Bank
1990
19,499
5,109
15,515
The Bank
Share
capital
Statutory
reserues
Balanceat beginning
of year ..............,....
z,oJc
Reallocation
of profitfor 1990 to retainedearnings
Dividend
for 1990
Profitfor the year
1,722
Balanceat yearend
1,722
2,635
profjt for
Fetained
earntngs
the year
310
1, 0 0 0
1,000 - 1,000
- BB1
9,538
429
5,667
_ BB1
9,538
9,538
14,324
TheGroup
Share
capttal
Balanca
e t b e g i n n i nogf y e a r . . . , . . . . . . . . . . . . . . .
2,635
Reallocation
of profitfor 1990to retainedearnings
Dividend
for 1990
Changein translationdifferencereserye..
Reallocationbetween free and statutory reserves
Profitfor the year
Balanceat year-end
*ffi
2,635
Statutory
reseryes
Free
reserues
Profitfor
the year
, ,LL
604
* 604
- 118
30
659
604
_ BBl
-114
-30
2,156
238
Guarantees
issued
_ BB1
* 232
The Group
1991
6,142
10,453
10,453
10,453
15,482
The Bank
I 990
1991
1990
7,925 14,752 6,249 11,227
20,435 17,8872 9 , 1 7 0 2 7 , 6 3 8
508
503
508
503
1 , 6 7 7 8 9 5 1 677
895
30,545 34,037 37,604 40,263
Suretybonds
Billspayable
The Bankhasalsopledgedto the MonetaryAuthorityof Singapore
that it willbe responsible
for
ensuring
thatthesubsidiary
bankin Singapore
fulfilsjts commitments.
$p t
b
Swedish financial
institutions and foreign
currencies
a)The balancesheetitemsbelowincludeclaimson and liabilities
to Swedishfinancialinstitutions
in thefollowing
amounts:
The Group
Assets
Cashholdingsand compulsory
cashreserves.........,
Investmentportfolio
Depositedwiih
S w e d i s bh a n k s. . . , . . . , . , . . .
Lendins
::::: .:.:::: .:::::
Otherassets
Total assets
Totalcreditcommitments
The Bank
1990
386
11 6
1,827
237
1 4 , 3 3 0 'A AAE
1 1 , 0 3 5 10,586
509
2,139
26,376
41,652
1991
386
116
1,827
237
10,540
48,629
s09
60,1801)
50,211
25,662
39,980
2,139
69,845
41,317
8,581
1,10B
7,954
852
18,495
11,301
1,596
6,776
2,179
21,852
1) Of which, SEK 391\,1
in unsetfledctaims.
Liabilities
Borrowedfrom
Swedishbanks
otherSwedishfinancialinstitutions
Deposits
Otherliabilitles
.
Total liabilities
46
q R/A
16,137
22,210
852
44,743
12,093
21,606
6,498
2,179
42,376
b) The balancesheetitemsbelowincludeclaimsand liabilities
in foreigncurrencies
in the
following
amounts:
The Group
Assets
Cashholdings
andcompulsory
cashreserves
......,...
Tradinp
g o r t f o l i o. . . . . , . . . . . . . . . . . . .
Investmentportfolio
Depositedwith
Swedish
b a n k s. . . . . . . , . , . . .
foreignbanks
Lending
Propertiesand officeequipment
Otherassets
Total assets
Liabilities
Borrowedfrom
Swedish
b a n k s. . . . . . . . . . . , "
other Swedishfinancialinstitutions
foreignbanks
Deposits
n^"n-^.^i^r
^^^^vvr | il | isr urqr Popvr
. ,. ,. ,. .. .. ..
Certificatesof deposit
l^^^
+^.LVr rg-rvr
ilr
ti^hiri+i^^
ilduilruv-
Reservefor politicalrisksabroad
Otherliabilities
Total liabilities
Off-balance sheet
obligations
The Bank
19 9 1
7B
2,188
10,115
1991
s4
8,939
78
358
7,060
1990
94
3,915
4,504
3,045
843
2,894
21,611
27,998 42,736 39,979
131,548 129,784 142,951 122,518
69
36
69
36
3,741
6,314
1,614
1,634
173,852 176,210 195,707 171,O70
2,772
5,960
36
6,084
2,058
2,283
894
1,275
103,092 127,990 1 0 1, 2 1 9 1 1 2 , 4 6 1
42,456 25,683 35,096 28,B8B
11,849 11,487
1,770
2,403
19,726
4,781
19,135
1,763
31.137
30.966 30,872
30,048
484
509
516
405
4,863
2,225
3,084
218,462 217,197 191,763 186,411
The Bankand certainsubsidiaries
haveobligations
outsidetheirbalancesheetsas partof the
Group'sbusinessoperations.
Theseobligations
entaila possiblelendinglossand createa
(calculated
capitalrequirement
on the basisof an B per cent requirement)
of SEK2,818Min the
Groupand SEK2,492Min the Bank.Thefollowingtablespecifies
theseobligations
as of
December
31, 1991(SEKM).
V o l u m e sD, e c .3 1 , 1 9 9 1
The Group
Guarantees
LOanguarantees
Athar
nr rrran+66c
Letters of credit
Unutilisedimportlettersof creditand
confirmedexportlettersof credit
Obligations for future payments
R e p o s. . . . . . . . . . .
Forwardcontracts to purchasesecurities
Forward/forwardcontracts .
Programmesto issuesecurities
The Bank
Capitalrequirement
The Group
The Bank
10,110
8,434
20,435 29,170
657
660
529
630
3,066
30
28
19,394
144
36
1
5
36
.1
J, roc
17,563
144
B3
523
5
toz
Exchange rate- and interest rate-related contracts
(translatedamounts that require capital coverage)
Exchangerate-relatedcontracts
Interestrate-relatedcontracts
38,619
5,963
35,456
5,582
Other obligations
Unutilisedportionof overdrafts
Liquiditymanagementassignments
Miscellaneous
oblioations
23,527
3,387
11 , 7 3 5
21,911
3,387
8,994
856
tuo
821
104
56
390
54
284
2,818
2,492
47
Specification of shareholdingsaccording to Note 17
1991
Nominal
valUe
Subsidiariesin Sweden
AktivPlacering
AB, Stockholml)
Aktiv PlaceringFondfinansAB, Stockholm
Arsenalen,AB, Stockholm
FinansSkandic
AB, Stockholm
Garnisonen,
AB, Goteborg
SEB-Fastigheter
AB, Stockholm
SvenskFastighetskredii
AB, Stockholm
EurocardAB, Stockholm
Totalsubsidiaries
in Sweden
1)Aktiv Placerlngowns SEB lnvestAB and the
Swedish mutual fund companies,among others.
2) Anticipateddividend.
3 ) D u r l n g1 9 9 1 , b o o k v a l u er o s e b y S E K 1 3 5 1 Vd1u e
l o a s h a r e h o ' d e r sc o n r r i b J L i o n .
4) ScandinavianInvestmentsLtd, London, owns
SBG HoldingsLtd, which in turn owns
EnsklldaSecurities,among others.
5) Was written down by SEK 866N,4.
6) ScandinavianFinanceBV owns Banque
Scandinaveen Sulsse,which it bought frorn
ScandinavianInvestmentsLtd,
7) Fevaluedby SEK 31 6M.
8) Revaluedby SEK 81]V.
9) Revaluedby SEK 162M.
10) Revaluedby SEK 81 N/.
11) Of which SEK 6.81Vls an anticipateddivldend.
12) Was written down by SEK 2M.
21.0
120.0
4.0
225.0
4.O
130.0
200.o
5,0
Book
value
Dlvldend
212
124.0
0,'1
145.0
0.0
980.0
608.93)
52.4
1 9 2 7. 6
20.02)
30.02)
15.02)
25.02)
65.02)
155.0
Subsidiariesabroad
Skandinaviska
EnskildaBankenAG,
Frankfurtam Main
D E M 8 1. 2
393,9
Scandinavian
InvestmentsLtd, Londona)
G B P 1 8 . 1 1 200.95)
S c a n d i n a v i aFni n a n c B
e V ,A m s t e r d a m 6 ) , . , . . . , . . . . . . . .NLG
. . , . , .266,5 1 2 0 0 . 0 7 )
Skandinaviska
EnskildaBankenCorporation,
New York
USD 2O.O
169.68)
Skandinaviska
EnskildaBanken(Luxembourg)
S,A.,
LUXemDOUTg
tuF 1000.0
292.4"\
Skandinaviska
EnskildaBanken
.1gl,3-0,
(SouthEastAsia)Limited,Singapore
SGD 4O,O
20,5111
Skandinaviska
EnskildaBanken
Fundinglncorporated,Delaware
USD O.O
0,1
InterscanServiqosde ConsultoriaLtda,
Sao Paulo
NCZ
0,2
0.012)
Skandinaviska
Enskilda
Reinsurance
S.A.,
LUXemOOUTg
BEF 5O.O
8.2
Subordinated
debentures
in Enskilda
Securities
..,.,... G B P 1 3 . 8
149.8
BanqueScandinave
d Luxembourg
S.A.,
LUXemOOUTg
BEF 450.0
75.2
Subordinateddebenturesin Skandinaviska
Enskilda
B a n k e n( L u x e m b o u rSg.)A .. . . , . , . , . , . . . . .
LUF 600,O
109.2
Total,subsidiaries
abroad
3,790,6
B. Scandinavian Banking Partnersl)
D e nn o r s k eB a n kA / S ,B e r g e n. . . , . , . . . . .
UnidanmarkA/S, Copenhagen
AffZirsbanken
UnitasAb, Helsinki
N O K 11 5 . 9
DKK 63.8
.100,8
FrM
Total,Scandinavian
BankingPartners
Book
value
Dlvldend
9.4
123.0
174.0
6.0
12.4
306.4
18.4
Book
value
100
100
100
100
gg
100
100
100
100
lnn
IUU
100
99
Banh's
voting
power, %
J.O
19 9 1
Nom nal
value
100
100
100
100
100
100
100
100
24.5
1991
Nominal
value
1) Altogether,SBP shareswere written down by SEK
2351\,4
to their market price on the balancesheet
date.
Bank's
voting
power,%
Dlvldend
I
1.38
2.20
Bank's
voting
power, 7o
C1. Other companies in Sweden
FastighetsAB Abisko
SvenskBostadsfinansierinq
AB BOFAB
Kortbetalning
ServoAB
Bankgirocentralen
BGC AB
1) Revaluedby SEK 235M.
Upplysningscentralen
UC AB .
Bankernas
PMC HoldingAB
BankomatCentralen
AB
Gamlestadenlntressenter
AB
SvenskExportkredit,
AB ,
Vardepapperscentralen
VPC AB
Penningmarknadsinformation
PlVlAB
Backupcentralen
AB
Industrikredit
AB
Foretagskapiial
AB
Penningmarknadscentralen
PMC AB
OM Fondkommission
AB
Sharesin co-operativeblocksof flats
Total,other companiesin Sweden
48
1.0
25.0
0.3
1.7
0.3
0.3
0.3
0.1
0,0
126.0
0.4
o.4
0.1
19.8
2.3
3.0
0.6
0.0
1,0
29.3
0.3
1.7
0.3
0,3
0.0
0.1
0.0
361.01)
0.4
0.4
0.0
19.8
t.o
1.7
30.2
0.3
2.3
0.3
0.0
t' .c
2.6
2.5
1.1
27.4
444.7
50.0
50.0
48.0
33.1
28.0
27.4
23.3
22.0
24.4
18.0
15,0
14 . 4
12.5
12.2
eta
C2' Sharestakenoverfor protection
of claimshavea nominalvalueof SEKB.4Mand a bookvalueof SEK11.5M,
C3, Thesesharesarecurrentassetsand havethusnot beenspecified.
c4. Preference
sharesin NobelIndustrier
AB havea nominaland bookvalueof sEK s75M,
Nominal
value
D. Other companies abroad
Scandinavian
BankingPartnersHoldingA,/S,Denmark D K K 0 . 1
Banco Finasade lnvestimento,
Sao Paulo
NCZ127.2
Euro-clearClearanceSystemPublicLimitedCo., Zurich U S D 0 . 2
Euro-clearClearanceSystemSbciet6Coop6rative,
Brussels
BEF O.O
AdelaInvestment
CompanyS,A.,Luxembourg...,..... U S D 2 , 8
pour les
Soci6t6Internationale
Financidre
Investissements
et la D6veloppement
en Afrique
(SlFlDA),Luxembourg
USD 0,2
Societyfor WorldwideInterbankFinancial
Telecommunication
(S.W.l.FT.),
Brussels
BEF 3.9
Banquede D6veloppement
Economique
de Tunisie,
T u n i s. . . . , . . . . . . . . .
TND 0.1
The IndustrialCreditand InvestmentCorporation
of IndiaLimited(lClOl),
Bombay.
tNR 0.6
LondonlnterbankFinancialFutures
E x c h a n g(eL I F F E.). . . . . . . . .
GBP 0.1
Total,othercompaniesabroad .......,...
Book
value
0.1
o.4
vuP
25.O
3.6
3.3
0.01
3.0
0.0
1.2
0.0
0.91
0.0
0.1
0.5
0.0
0.0
0.1
2.3
Book
value
E. Shareholdings of subsidiaries
PastorSkandicLeasinqS.A.. Madrid
ESB 90.O
4.8
N o k i aL e a s i n G
g m b H ,D u s s e l d o .r.f. . . , . . . , . . . . . . . . . . . . . . . .D, .E. M 0 . 5
1.9
GFIIndustriemontagen
GmbH& Co KG,
Dusseldorf
DEM 4,5
16.5
Leaseinvest
Sociedadde LocaqaoFinanceira
Mobiliaria,
s.a,r.l,,
Oporto
P T E1 9 0 . 1
6.8
EurocardInternational
S.A. Brussels
BEC 8,2
2.2
Liquiditdts-Konsortialbank
GmbH,
Frankfurtam Main
DEM 0.3
0.8
NeptunOrientLinesLimited
SGD 1.8
0.3
NestoL
r e a s i nC
g o Ltd .,.........
USD O.O
0.2
SwedishSuitesHotels
USD O,O
0.3
T h e R o y aB
l a c h e l o rCs l u bR e s i d e n cAeB . . . . . . . . . . . . . . . . . .S E K 0 , 1
0.1
I F AS y s t e m
AB ....,............
SEK O.2
0.2
.13.1
SwedishLeasingLtd, Bangkok
T H B1 2 0 . 0
ExportLeasing(CaymanIslands)Ltd
USD 0,2
1.2
1 4 5 E a s t3 2 n dS t r e e Lt . P . . . . . . . . . . . . . . . .
USD 8.7
48.4
260 PeachtreeStreetL.P
USD 11.7
65.0
Weigang
S c a n d i n a v iA
a n8 . . . . . , . . . . . ,
SEK 0,1
0.0
N o k i aR e n S
t .A..........,.....
ESB 0.5
0.0
A r l i n g t oH
n e n l e yD e vL t d . . . . , . . . , . , . , . .
GBP O.O1
1.2
Ania Pack International
NLG O,O2
0.0
ln+ararol+ .lrnr rn | +ri
GBP 0,7
0.0
R e n t a m i n s tpelrc . . , . . . . . . . . . . " . " .
GBP 0,1
2.2
PapisLtd
GBP O.O1
0.0
'I
EnsorHoldings
GBP 0.1
"1
Severnplc.
GBP 0.5
0,0
B l u eT h a n eL t d .. . . . . . . . . . . . , . , .
GBP 0.3
t.o
YorkdaleHoldings
GBP 0.3
Acuma Life Insurance.
GBP 0.5
2.6
PrivateCapitalPropertyInvestment.
GBP O.O
4.7
A u s t r a l i aW
n o o lT e x t i l eLst d . . . . . . . . . . . . . . . . .
AUD 0.1
0,0
T e l e k uA
r sG . . . . , ..,. . . . . . .
cHF 0.0
0.3
Sharesin stockbrokingoperationsl)
62.4
M u t u af lu n du n i t s. . . . . . . . . . . . . .
545.7
Othersincl,sharesin co-operative
blocksof flats......
2.2
T o t asl h a r e h o l d i nogfss u b s i d i a r i e. .s. . . . . . . . . . . . . . . . . . . . . . , . . .
785.8
v,
0.3
0.8
0.0
0.0
2.8
Nominal
value
Bank's
voting
Dividend power,%
0.0
1.2
Dividend
T
Voting
powers, %
45.0
25.1
24.O
14.0
8.0
0.2
L'v
0.0
0.0
0.0
0.0
25.0
49.0
1,0
33.0
0.0
20.0
64.0
66.0
25.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0,0
33.7
0.0
o.7
1) Heldby Enskilda
Securiiies
Ltd,,London.
49
Proposalfor the distributionof profit
The unrestricted
equitycapitalof the
S-E-Bank
Groupamountsto SEK10,691
M.
Standingat the disposalof the Annual
GeneralMeetingin accordance
withthe
BalanceSheetof Skandinaviska
Enskilda
Banken:
The Boardproposesthat,followingthe
aoorovalof the BalanceSheetof
Skandinaviska
EnskildaBankenfor the
year1991,theAnnualGeneral
financial
Meetingshoulddistributethe above-mentionedunappropriated
fundsas follows:
SEK M
Carriedforwardfrom 1990
429
profitfor 1991..............
Reported
9,538
9,967
SEK M
declarea dividendof
SEK3.35perSeriesA share... 84O
SEK3.35perSeriesC share... 43
and carryforwardto nextyear ....9,084
Stockholm,February25, 1992
CunrG OlssoN
PrrenWRnrNerRo PEHnG GvllENHRuunRKARL-ERIK
SnHLeEnc
AHrsrRoHlLrrrA Axoenssorr:RuNE
GOnnru
AruoERssoN
Rorr Bronr Hnrus
CRveu:-B;0RxvRrrt
ToneDnun
SreruGusrRrssorrrBrNcrHnnx ArurorurR
Ax;sol Jotri:soN
RornKnnrssoN lrucronno
J OsxnnssoN LrnruRrPerrEnsson
MRuRrrz
Snruru SvrNSOorneenc KruurWRcHrversrcR
TolltWncHrurrslen KRRIN
WgsreneeRcLansOsrnc
Bo C E RRvroRs
Auditors'report
We haveexaminedthe AnnualReport,
consolidated
financialstatements,
accountsand administration
of the Board
of Directorsfor 1991. Our examination
was performedin accordancewith
generally
acceptedauditingstandards.
We recommend,
that the orofitand lossstatementand
balancesheetbe approved
that the profitbe distributedaccording
to the proposalin the Reportof the
Directorsand
that the membersof the Boardof
The Bank
Directorsbe dischargedfrom
personalliabilityfor the financialyear.
The Bank'sinternalauditingdepartmeni
hasexaminedthe accountsand checked
the physicalexistenceof the Bank's
The Group
Theconsolidated
financialstatements
assets.Reoortson thesemattershave
beensubmittedto us.
havebeendrawnup in compliancewith
TheAnnualReoorthas beendrawn
the SwedishBankingOperations
Act.
withthe Swedish
up in compliance
We recommend,
profitand loss
BankingOperations
Act.
that the consolidated
statementand consolidated
balance
sheetbe approved.
Stockholm,March 6, 1992
LrruNRnr
Svrrussolr
Chairman
NrrsBRernreRCus Bux
Cru NRcxsrnD BJoRN
Srrrusoru
Auditorsappointedby the Financial
SupervisoryAuthority
50
gg1
Financial
summa
ry,1gB2-1
SEK
M
Profitand loss accounts,the S-E-BankGroup
Netinterestearnings
1982
1983
1984
1985
1986
1987
2,281
3,204
3,440
3,216
4]10
5,332
6,295
1,374
6,612
1,582
B,lOO
9,473
1,742
2,257
Z,ZIO
2,426
2.,811
S,gzg
4,859
1t ,,44v9t J8
1 , 449999
6 7744
925
commrssions,
feesandforeign
exchange
oarnings1,130
19BB
Other operatingincome
450
597
7r |7 1|
1| ,,r3t o2 5
1| ,,z244c5
Total operating income
3,861
1,138
255
5,175
1,329
323
5,763
1,473
388
s]29
1,665
439
8,292
1,969
469
8,787
2,276
512
508
84
681
98
799
120
907
139
1,066
199
1,442
1,719
Total operating costs before losses
1,985
2,431
2,780
3,150
3,703
257
4,487
Lending lossesetc
Operating profit
730
i,146
SS7
2,182
797
2,186
gZB
4,064
4,U2
Staffcosts
Costsfor premises
Otheroperating
costs
Depreciation
741
-^^
2,201
Returnon equity
after3oo/ostandardtax, %
pershare
Earnrngs
after30Vostandardtax,SEK
Averagenumber of employees
1989
1990
10,219@
2,459
2p2!---3/5o
679
767
67A
1991
4202
767
2,339
474
2.552
282
5,139
.1
,883
347
5,517
72i1
8.071
4,669
4,444
g,312
2,326
24.9
23.5
18.2
11.8
7.6
9,620
7.61
10.743
4.50
10,846
1990
1991
7.526
7,893
8,078
8,461
9 , 14 9
9,384
1983
1984
1985
1986
1987
1988
Balancesheets,the S-E-BankGroup
1982
Government
securities
and bonds
lnvestments
Len0rng
Otherassets
Borrowing
Deposits
Otherliabilities
Shareholders'
equityand untaxedreserues
Total assets
29,024
24,569
77,091
s,221
56,487
59,307
18,091
6,020
139,905
33,783
29,279
86,366
13 , 3 9 8
67,578
63,473
22,397
9,378
162,826
41,208
26,765
100,741
13,391
69,276
77,703
24,849
10,277
182,105
3 1 , 8 9 7 33,206 24,626
J I ,OJC
31,206 3 9 , 3 1 4 53,350
94,554 1 11 , 6 1 6 1 3 9 , 3 9 5 187,477
Ic , c o . ,
1 6 , 3 3 4 21,773 23,946
6 8 , 1 1 8 69,716 81,376 1 0 1, 9 1 9
66,426 69,306 8 1, 3 1 0 89,260
29,28O 3 8 , 6 1 5 54,209 77,209
11 , 1 8 9 1 3 , 4 1 6 1 6 , 7 9 3 2 1, 0 1 1
175,013 19.1
,053 233,688 289,399
QQ CA1
1989
30,624
53,510
239,440
42,066
I06,592
105,981
129,977
23,090
365,640
34,227
61,384
3 11 , 0 2 9
45,079
187,776
112,555
125,747
25,641
451,719
46,124
42,209
314,661
47.785
'171,599
139,479
114,849
24,852
450,779
Profitand loss accounts,S-E-Banken
1982
Netinterestearnings
1,863
Commissions,
feesandforeignexchange
earnings 1 , 0 3 3
Otheroperating
income
259
Total operating income
1983
1984
1985
2,636
1,249
354
4,239
2,829
1,392
416
4,637
1,222
298
639
70
2,229
2,498
1,451
366
4,315
1,359
332
716
B3
2,490
Staffcosts
Cosisfor premises
Otheroperating
costs
Depreciation
1,005
210
407
1,131
249
516
AF
E'
Total operating costs before losses
Lendinglosses etc
r,oo/
1,948
628
3,805
1,849
908
6,562
I,561
372
841
125
1987
1988
1989
1990
4,103
1,820
616
6,539
1,747
389
983
145
4,918
1,989
727
7,634
1,909
546
1,076
174
3.705
306
5,154
2,428
718
8,300
2,248
614
1,234
196
4,292
6,084
2,747
567
9,398
2,747
770
1,401
244
5,162
481
1,672
19 8 9
1990
2,903
676
1991
3,291
11,296
3,007
885
| ,ccc
217
4,278
Balancesheets,S-E-Banken
Governmentsecuritiesand bonds
Investments
Lending
Other assets
Borrowing
Deposits
Other liabilities
Shareholders'equity and untaxed reserves
Total assets
1982
1983
1984
28,596
20,797
56,431
7, 3 0 7
44,983
5 8 , 117
4,909
5.122
33,151
24,022
64,A92
10,712
52,344
64,063
7 , 16 8
8,402
1 1 3 , 1 3 1 1 3 1. 9 7 7
1985
1986
38,435
2 1, 3 6 2
74,249
I 0,157
29,284
24,258
65,531
1 1, 8 1 0
25,480
25,797
71,822
12,494
23,697
31,067
91,693
16,227
25,986
48,392
1I 6 , 0 3 1
18,530
2 9 , 1 0 4 29,762 32,251
49,217 7 1 , 1 0 1 59,242
1 4 5 , 1 3 9 208,745 224,355
23,680 27,445 32.961
49,745
7 6 , 10 0
9,336
I,O22
47,892
63,294
I 0 , 17 0
9,527
47,228
65,576
11,408
11,381
5 5 , 15 5
75,484
17,265
14,380
8 1, 4 9 4
46,474
22,773
18 , 19 8
9 6 , 1 3 1 138,792 1 3 9 , 7 8 9
9 8 , 5 2 5 11 5 , 5 9 9 1 3 1 , 9 0 1
33,267
6 1, 4 8 0
57,686
19,217
21,182 19,433
1987
1988
144,203 130,883 1 3 5 . 5 9 3 1 6 2 . 6 8 4 2 0 8 , 9 3 9
247,140
337.053 348,809
Curt G Olsson
Peter Wnllenberg
Pehr G Gyllenhammar
Karl-ErikSahlberg
Gdrsn Ahlstrdm
Rune Andersson
Hms Caualli-Bjdrkman
Tore Daun
StenGustafsson
Bengt Haak
Antonia .Lx :son I ohnson
Mauritz Sahlin
Saen Sdderberg
Knut Wachtmeister
Tom Wachtmeister
Karin Westerberg
LarsOberg
Board of Directors
Directors elected by the
Annual General Meeting
Cunr G OrssoN, 7927; 1,976(1,970)
Stockholm
Chairman of the Board
Shareholding: 10 312
PErER WALLENnnnc, 7926; 7974 (7969)
Dr. Econ. h. c., Skandinaviska Enskilda Banken,
Stockholm (S)
First Deputy Chairman, also Chairman of the
Stockholm Board
Shareholding: 92 600
Psun G GvrrENuavuan, 7935; 7982 (1,979)
Dr. Med. h.c., Dr. Techn. h. c., Chairman,
AB Volvo, Coteborg (G)
Deputy Chairman, also Chairmnn of the Gdteborg
Board
Shareholding: 200
Kenr-Enrr SaHrernc, 7928; 7989 (1982)
Chairman, Perstorp AB, Perstorp (M)
Deputy Chairman, also Chairman of the Malmd
Board
Shareholding: 540
"1991,
(1,987)
Gonan AslsrBdtr., 1936;
Managing Director, Sydkraft AB,
Malmo (M)
Shareholding: 620
SvsN Sonsnsruc, 1928; 7983 (7974)
Consul General, Managing Director, Forvaltningsaktiebolaget Ratos, Stockholm (S)
Shareholding: 5 440
RuNr AmornssoN, L944;1997 (7987)
Chairman, Tielleborg AB, Trelleborg (M)
Shareholding:0
KNur WecuruErsrrn, 1924; 1987 (1974)
Member of the Riksdag, Lund (M)
Shareholding: 19 629
HaNs Caverrr-BJonruerv, 1,928;1976 (7965)
Dr. Econ. h. c., Malmo (M))
Shareholding: 864
Tov Wacururrsrrn,
1931; 1989 (1982)
Deputy Chairman, Atlas Copco AB, Nacka (S)
Shareholding: 7 680
ToRE DAUN, 7929;1989 (7979)
Former Managing Director, Goteborg (G)
Shareholding: 431
7924;7985 (7978)
MRS. KARIN WESTERBERG,
Ph. D, Gciteborg (G)
Shareholding:3 000
Srsm Gusrepss oN, 7923; 1985 (197B)
Dr. Econ. h. c., Dr. Techn. h. c., Dr. Med. h. c.,
Chairman, AB Astra, Stockholm (S)
Shareholding: 340
Lens Osrnc, 1936;1991 (1989)
Managing Director, AB Custos,
Stockholm (S)
BnNcr H.n.a.x, 1925;1987 (1,980)
Chairman, AB Custos, Stockholm (S)
Shareholding:0
Bo C E RAMFoRS,1.936;1990 (1.981)
Stockholm
Managing Director and Croup Chief Executiae
Shareholding: 720
Mns. ANroNr.q. Ax:soN JoHNSoN, 1943; 7990
(1982)
Chairman, Axel Johnson AB, Stockholm (S)
Shareholding: 780
MAURrrz SnnlrN, 1,935;7997
Managing Director, AB SKF, Goteborg (G)
Shareholding: 0
52
Shareholding: 0
Leif A Andersson
Ingegiird I Oskarsson
Lennart Pettersson
RoIfBIom
RolfKarlsson
Bo Berggren
BertilBertilsson
Saen Borelius
Gijsta BAstedt
Lars V Kylberg
Martin Lundberg
Hdkan Mogren
Gunnar Skoog
UIf Wikman
LarsAhlborn
Hjiirdis Cronsjd
Directors appointed by the Government
L E I F A A N D E R S S o N1, 9 3 8 ; 1 9 8 6
Chairman, Gciteborgs Stads Fastighetskontor,
Gciteborg (G)
Shareholding: 920
Mns. INcrcAno J Osr<anssorv, 1932;1977
Former Member of the Swedish Riksdag, vice
President, European Handicraft Industries,
Grimslov (M)
Shareholding: 280
LsNNenr PErrrnssoN, 7936; 1983
Former Member of the Riksdag, Lund (S)
Shareholding:0
Directors appointed by the employees
RoLF BLoM, 1932;1,984
Senior Manager, Head office, Stockholm (S)
Shareholding: 2 313
Ror-pK.q.nrssors,7953; 7997
Department Manager, Central office,
Goteborg (G)
Shareholding: 1 204
Deputy Directors elected by the
Annual General Meeting
Bo BsnccnEN, 1936;7987
Dr. Techn. h. c., Managing Director, Stora
Kopparbergs Bergsiags AB, Falun (S)
Shareholding: 100
BEnrrr BlnurssoN, 7926; 7983
Managing Director, Henry och Gerda Dunkers
Stiftelse och Donationsfond, Helsingborg (M)
Shareholding:4 400
SvrN BonEuus , 1928;7984
Former Managing Director, Stockholm (M)
Shareholding:0
GOsra Bysrlor, 1929; 7985
Deputy Chairman, AB Electrolux,
Stockholm (S)
Shareholding: 800
L.qns V Kvrnenc, 7940;1990
Managing Director and Group Chief
Executive, Saab-Scania AB, Stockholm (S)
Shareholding:0
Menrrx LuNonEnc, 1938; 1,989
Dr. Techn., h.c. Chairman and Group Chief
Executive, Bilspedition AB, Giiteborg (G)
Shareholding: 0
HAreN MocREN, 7944; 7990
Dr. Techn., Managing Director and Group
Chief Executive, AB Astra, Sodertiilje,
Stockholm (S)
Shareholding: 200
STEFANPERSSoN,7947; 7987
Managing Director and Group Chief
Executive, H&M Hennes & Mauritz AB,
Stockholm (S)
Shareholding:0
GunNen Srooc, 1935; 1991
Managing Director and Group Chief Executive,
Skoogs Foretagsgrupp AB, Malmo (M)
Shareholding: 0
Mns. INcscrno Tnonossol, 1929; 1987
Speaker of the Riksdag, Grillby (S)
Deputy Director until October 22,199L
Uul-l WrrueN, 7928;7985
Chairman, Wikman & Malmkjell AB, Teby (S)
Shareholding: 1 064
RurcEn BARNEKoW 7935; 7976
Stockholm
Deputy Group Chief Executizte
Shareholding: 10 454
Deputy Directors appointed by the employees
LARS AHLBoRN, 7941; 1983
Department Manager, Central office,
Malmct (M)
Shareholding: 0
Mns. HJOnors CRoNSJO,7939;7990
Central office, Stockholm (S)
Shareholding: 308
Dates indicate year of birth and year of election
as Director or Deputy Director. Date within
parentheses indicates first year of election to
the Board; dates before 7972 refer to either of
the predecessor banks, Skandinaviska Banken
and Stockholms Enskilda Bank.
(S) = Member of the Stockholm Board of
Directors
(C) = Member of the Gdteborg Board of
Directors
(M) = Member of the Malm6 Board of
Directors
53
Otto Wrangel,RutgerBarnekow,RogerHoltback,AndersHedenstrcim.
!pp"t to- from the left: Carl Lrjwenhielm,
Lower row from the left: Carl-DiedricHamilton,YngaeAndersson,Bo C E Ramfors,Arne Ogren.
54
Group ExecutiveCommittee
Bo C E Ramfors,born1936,ManagingDirectorand
GroupChiefExecutioe
External directorships:Chairman Nolato; Director
Bilspedition and Regnbdgen.
Rutger Barnekow,born1935,
DeputyGroupChiefExecutioe.
External directorships:Chairman FastighetsRenting;
Deputy Chairman Industrikredit; Director Robert
Bosch,Rank Xerox Svenska,Saab-Scania
and Svenska
Dagbladet.
ManagementCommittee of
SEBSweden
ManagementCommittee of
SEBInternational
Roger Holtback, born1945,Headof Gdteborg
groupand
ChairmanSEBSweden.
External directorships:Director Frico International,
Getinge Intressenter,Scandinavium,Goteborg,
SvenskaMdssansStiftelse,Vdstsvenska
Handelskammarenand Thyssen-BornemiszaGroup,
Monaco.
Bo C E Ramfors,born1936,Chairman
SEBInternational.
Arne Ogren, born 1930,Headof Stockholm
group,
Externaldirectorships:ChairmanAngpanneforeningen; Director Arands, Arands International, Alfort
& Cronholm and ABB Asea-Skandia.
Anders Hedenstriim, bornL945,Headof Treasury.
Carl Ltiwenhielm, born1942,
External directorships:Director Electrolux och
G&L Beiier.
Carl-Diedric Hamilton, born1948,Headof Enskilda
Otto Wrangel, bornL943, Headof Malmrigroup.
Yngve Andersson,born1942,Head
of StaffSEBSweden.
External directorships:Director VdrdepapperscentralenVPC AB, and SvenskaFondhandlareforeningen
Auditors
Auditors electedbq the Annual
GeneralMeeting
Auditors appointedby the Financial
Superztisory Author ity
Deputy,Auditorselectedby the Annual
GeneralMeeting
Lennart Svensson
Authorised Public Accountant,
Malm<i
Chairman
Caj Nackstad
Authorised Public Accountant,
Stockholm
Lars Bonnevier
Authorised Public Accountant,
Stockholm
Biiirn Stenson
Authorised Public Accountant,
Stockholm
Giiran Jacobsson
Authorised Public Accountant,
Goteborg
Clas Blix
Authorised Public Accountant,
Stockholm
Nils Brehmer
Authorised Public Accountant,
Goteborg
Gilbert Larsson
Au thorised Public Accountant,
Malmo
55
Addresses
Units and subsidiariesin Sweden
HEAD OFFICE AND
SEB INTERNATIONAL
Officeaddress:
Kungstradgerdsgatan
8
Postaladdress:
3-70640 Stockholm
Telephone:
+46 I 763 50 00
+4682219
00
Board, Executive and
General Management
Fax:+46876371.63
+46 I 763 73 06SEB International
Telex:'1.6600 essebh s Head Office
11 000 essebi s SEB International
l0 400 essexs s Foreign Exchange
Dealing
12 620 esseds s Euro-deposits
Cable: Essebank stockholm
S.W .I .F.T . atldress;ESSE SE SS
ENSKILDA
Enskilda Fondkommission,
Stockholm
Officeaddress:
Norrlandsgatan15
^160
Postaladdress:
Box
67,
S-10322 Stockholm
Telephone:
+46 I 76395 00
Fax:+46I 7798 92
Telex:11009nsklda s
Enskilda Kapitalf iirvaltning,
Stockholm
Ot'ficeaddress:
17, plan 9
Jakobsbergsgatan
Box 16053,
Postaladdress:
5-10321 Stockholm
+46 8 791.37 00
Telephone:
Fsx:+468"1L8"129
Telex:1,3292 placabs
SEB SWEDEN
CENTRAL OFFICES
Stockholm
Officeaddress:
SergelsTorg 2
Postaladdress:
3--10640 Stockholm
TelEhone:+46 8 76350 00
Far +46 I 76371 63
Teler:15 000essebss
Cable:Essebankstockholm
S.W.LF.T.addressESSESESS
Giiteborg
Officeaddress:
Ostra Hamngatan24
Postaladdress:
3-40504 Gdteborg
+4637 6270 00
Telephone:
Fax:+4631 62"1430
Telex:16 500essebgs
20 000essexgs Foreign
ExchangeDealing
2238essengs Note Dealers
CnDle;
Essebankgoteborg
S.W.I.F.T. address:
ESSESESG
Malmii
Ot'ficeaddress:Ostergatan39
Postaladdress:
5-20520 Malmii
Telephone:
+4640 20 60 00
Fax:+4640 20 64 38
Teler:15 400essebms
32 850essexms Foreign
ExchangeDealing
Ca&le:Essebankmalmo
S.W.LF.T. address:
ESSESESM
AB Arsenalery
Stockholm
Officeaddress:
SEB-Fastigheter AB,
Stockholm
Telephone:
+46 8 79057 00
Fax:+4681.03661.
Officeaddress:
Malmskillnadsgatan42
Postaladdress:
Box703 46,
S-10723 Stockholm
Telephone:
+46 8 79057 00
F a x :+ 4 6 8 1 0 3 6 6 7
Eurocard AB,
Stockholm
SEB Fiirslikring
Stockholm
Officeaddress:
Mdster Samuelsgatan34
Postaladdress:
3-1.0383 Stockholm
+46 8^\467 00
Telephone:
Fax:+46 8 27 67 30
Telex:737
63
Officeandpostaladdress:
Sveavdgen90,
5-11359 Stockholm
Telephone:
+46 8 67392 00
^15
Fax:+46I 61218
Malmskillnadsgatan 42
Postal address:Box703 46,
S-107 23 Stockholm
FinansSkandic AB,
Stockholm
Officeaddress:
Malmskillnadsgatan42
Postaladdress:
3-1,0378 Stockholm
Telephone:
+46 8 14 60 00
Fax:+468"1038 45
AB Garnisonery
Giiteborg
Ot'ficeaddress:
Nordstadstorget3
Postaladdress:
Box1,1923,
5-40439 Gciteborg
+46 31.62 29 00
Telephone:
Fax: +46 37 1.552 96
SEB Kort, Stockholm
Officeaddress:
Mdster Samuelsgatan34
Postaladdress:
S-10383 Stockholm
Telephone:
+46 8 14 70 00
Fax:+468 21 67 30
+468 1064 08
Telex:"137
63
Svensk Fastighetskredit
Stockholm
Officenddress:
Regeringsgatan65
Postaladdress: Box 7370,
5-10391 Stockholm
Telephone:
+46 8 72375 00
F n x+
: 46821.1438
Branch offices in Sweden (326offices)
Stockholm group (144offices)
Arboga, Arlanda, Arninge, Askersund, Boden, Boliden, Borldnge, BAlsta,Danderyd, Djursholm, Eskilstuna (2), Falun,
Flen, Gnesta, Giillivare, Giivle, Hallstahammar, Haninge, Hofors, Huddinge, Hudiksvall, Hiillefors, Hdrnosand,
fakobsberg, Jiirna, Kalihiill, Karlskoga (2), Katrineholm, Kumla, Kungsor, Koping, Lidingo, Linkoping (2), LuleA, Marie
fred, Motala, Mdrsta, Nacka (2), Nora, Norrkoping (3), Nykoping, Nyndshamn, Niisbypark, Oxelosund, PiteA, Roslags
Niisby, Salem, Saltsjobaden,Skelleftehamn, Skellefted, Sollentuna, Solna (5), Stallarholmen, Stockholm (55), Stocksund,
Strdngnds, Sundbyberg, Sundsvall, Soderhamn, Sodertiilje (2), Torshdlla, Trosa, Tumba,.T:iby Centrum, Tiiby Kyrkby,
UmeA, Upplands Viisby, Uppsala (3), VagnhArad, Vaxholm, Viksjo, VingAker, VdsterAs,Orebro (3), Ornskoidsvik
Giiteborg group (111 offices)
AlingsAs, Anderstorp, Bor, BorAs (4), Brastad, Brdlanda, Burseryd, Dalsjofors, Ed, Ellos, Falkoping, Floby, Floda,
Fritsla, Gnosjo, GrAbo, Goteborg (39), Gotene, Habo, Halmstad (3), Hillerstorp, Hunnebostrand, Huskvarna, HogsAter,
Honci, Jonkoplng (2), Karlstad, Kinna, Kinnared, Kungsbacka (2), Kungshamn, Kungdlv, Kdllered, Lerum, Limmared,
Lindome, Lysekil, Mariestad, Mullsjci, Munkedal, Molndal, Partille (2), RonnAng, Sandared, Skdrhamn, Skovde, SmAlandsstenar, Smogen, Stenungsund, Stromstad, Tranemo, Trollhdttan (2), Uddevalla, Ulricehamn, Unnaryd, Varberg,
Virnamo, Vdrobacka, Ytterby, AmAl, Asarp, Alvsered, Ockero, Overlida.
Malmii group (71 offices)
Alsterbro, Anderslov, Arlciv, Bjuv, Bromolla, BAstad, Dalby, Eslov, Gamleby, Helsingborg (4), Hiissleholm, Hogands,
Hcirby, Kalmar, Karlshamn, Karlskrona, Klippan, Kristianstad, Lagan, Laholm, Landskrona, Lessebo, Ljungby,
Lomma, Lund (5), Malmo (14), Markaryd, Nybro, Oskarshamn, Perstorp, Ramkvilla, Ronneby, Simrishamn, Skancir,
Skurup, -Staffansto.rp,Svalov, Svedala, Siilvesborg, Tollarp, Trelleborg, Vellinge, Vinslov, VAstervik, V2ixjo (2), Ystad,
Astorp, Almhult, Angelholm, Orkelljunga
AB,
International branch offices and sr.lbsidiaries
Skandinaviska
Enskilda Bankery
London Branch
Trading name:
Scandinavian Bank
Ot'fice
andpostaladfuess:
Scandinavian
House
2/6 CannonStreet
GB-LondonEC4M6XX
Telephone:
+44775883494
Fax:+447'1
5880929
Telex:8950281.
esseldng
S.W.I.F.T.address:
ESSEGB 2L
Skandinaviska
Enskilda Banken,
Luxembourg Branch
Skandinaviska
Enskilda Banken
(Luxembourg) S.A.,
Luxembourg
Officeaddrus:
16, Boulevard Royal
Postaladdress:BP62L,
L-2016 Luxembourg
+352 47 79 81-L
Telephone:
Fax:+35247 3137
lelex:
Skandinaviska
Enskilda Banken,
NewYork and Cayman
Islands Branches
Skandinaviska
Enskilda Banken
Corporation, New York
Officeand postaladdress:
245 Park Avenue, 33rd Floor
New Yo& N.Y. 10157
Telephone:
+1.2'12286 06 00
Fax:+^l21237016 42
Telex:421.6^18
essebny
551590essebny
Cable:Essebanken
ESSEUS33
S.W.LF.T.address;
Skandinaviska
Enskilda Bankery
Paris Branch
Officeaddress:
59,BoulevardHaussmann
Postaladdress:BP 125
F-75353ParisCedex08
+33 7 M 71.92 00
Telephone:
Fax:+331 47 425499
Skandinaviska
Enskilda Banken,
Hong Kong Branch
Officeand postaladdress:
2201JardineHouse
1 Connaught Place
Central
Hong Kong
+852868201i
Telephone:
Fax:+8528684037
Telex:67341,essebhx
ESSEHKHH
S.W.LF.T.address;
Skandinaviska
Enskilda Eanken
Singapore Branch
Skandinaviska
Enskilda Banken
(South East Asia)
Limite4 Singapore
Officeand postaladdress:
50 RafflesPiace#36-01
Shell Tower
Singapore0104
Republicof Singapore
+652235 6M
Telephone:
Fax:+65 2253 047
Tele::RS25188essebk
Cable:Essebank
SG
S.W.l.F.T.address:ESSESG
(Branch)
(Merchant)
ESSESGMER
5/JL
eSSeD tU
ESSELU LL
S.W.I.F.T.address;
Skandinaviska
Enskilda Banken AG,
Frankfurt am Main
Oft'iceaddress:
Alte Rothofstrasse8
Postaladdress:
Postfach100548
W-5000 Frankfurt am Main
+49 69 29 83-0
Telephone:
Fax:+49 69 28 38 55
Telex:4-^13413sebf d
Scandinavian
Facific Lt4 Sydney
Officeand postaladdress:
Levei 3, 17-19Bridge Street
Sydney,N.S.W.2000
Telephone:+61.2 231 1433
Fax:+61.22511.893
Telex:7482'1,
scan
Banque Scandinave
en Suisse, Geneva
Ot'ficeaddress:
11,Cours de Rive
Postaladdress:
CasePostale901
Lll-lzrl
Geneva
J
"l'I
+41 22787 31.
Telephone:
Fax:+41227353370
Banque Scandinave
en Suisse, Zurich
Officeaddress:
Schipfe 2
Postaladdress:
Postfach5130
CH-8022 Zuich
Telephone:
+41 1 22933 33
"16
Fax:+41'1.2'11. 47
Banque
Scandinave i
Luxembourg S.A.,
Luxembourg
Officeaddress:
15,Boulevard Royal
BP 487
Postaladdress:
L-2014Luembourg
TelEhone:+3 52 46 17 1.7-1.
"17
Fax:+3 52 46 10
Representative offices
Banque Scandinave
Representative Off ice,
Monaco
Officeand postaladdress:
"Les Caravelles"
25,bd Albert 1:er
MC-98 000Monaco
TelEhone:+3393 50 84 67
Fax:+3393 50 03 97
ProductionSolbergs,Gciteborg
TranslationScanEdit,SanFransisco
Printed in Swedenby HelsingborgsLito
Banque Scandinave
Representative Off ice,
London
Officeand postaladdress:
30, Finsbury Square
GB-LondonEC2A 1SB
+M 71.6 38 64 39
Telephone:
Fax:+M77 6380778
International representative offices
Xtaly - Milan
Officeandpostaladdress:
YiaMGonzagaT,
1-20123Milan
Telephone:+39 2720 01144
Fax: +39 2720 01997
Telex:3'!^1420
swtr i
Switzerland
Banque Scandinave
Skandinaviska
Enskilda Bankery
Marbella
Ot't'iceand postaladdress:
Ricardo Soriano 50-4
E-29600Marbella
"12
Telephone:+34 52 82 81.
F a x :+ 3 4 5 2 8 2 9 4 7 6
Enskilda Securities,
Skandinaviska
Enskilda Limited,
London
Officeand postaladdress:
26, Finsbury Square
GB-LondonEC2A 1DS
Telephone:
+M7'l 6383 500
Fax: +44 7"1628 9 01.3
Telex:8955951.nsklda g
Enskilda Ventures
tr-imited, London
Officeand postalad.dress:
26, Finsbury Square
GB-LondonEC2A 1 DS
+M'I 6383500
Telephone:
Fax:+M^18679067
Enskilda Asset
Management Ltd, London
Officeand postaladdress:
30, Finsbury Square
GB-LondonEC2A 1 SB
+447^1374 6133
Telephone:
Fax:+M71.8679084
Enskilda S.A., Paris
Officeand postaladdress:
2, rue de la Baume
F-75008Paris
"18
Telephone:
+33 1.42 89 89
"15
Fax:+33 1.42 89 19
Telex:640 302 nsKda f
Enskilda Securities
Inc., New York
Officeand postaladdress:
245 Park Avenue, 33rd Floor
New York, N.Y. 10167
Telephone:+"121.23514870
Fax:+'l 2129836767
Enskilda
(Deutschland) Gnb[I,
JFIamburg
Officeand postaladdress:
Esplanade41
(Finnlandhaus)
W-2000Hamburg 36,
Telephone:
+4940 35 45 95
Fax:+49 40 35 45 90
Enskilda Espafia S.A.,
Madrid
Officeand postaladdress:
Monte Esquiroa, 11
E-28010Madrid
+34 1 3i9 0889
Telephone:
Fax:+34 1.3083682
- Zurich
Oft'iceand postaladdress:
Hottingerstrasse 21
CH-8032 Zwich
"l
Telephone:+41, 26'13141
Fax:+47'1.261309"1
Telex:872082seb2
ch
Spain och Portugal
- Madrid
People's Republic of China
- Beiiing
Officeand postaladdress:
Unit 11-10Liang Ma Tower
8 North Dongsanhuan Road
ChaoyangDistrict
Beijing i00026
+86 1 501 19 06
Telephone:
+86 1 501 66 88 ext 2'1745
Fax:+86'1.50119 13
Telex:222 535 sbpbj cn
Thailand - Bangkok
Officeand postaladdress:
17th Floor/Paci.fic Place
140Sukhumvit Road
Bangkok 10110
+66 2 25446 60
Telephone:
+662254 45 6L
Fax:+662254 46 62
Officeand postaladdress:
Carrerade SanJer6nimo17,3"
E-28014Madrid
Brazil - Sio Paulo
Telephone:+34 1.4 29 80 52
Officeand postaladdress:
Fax:+341 429 34 69
Centro Empresarial,Faria Lima,
telex: z/ / f,J esseD e
Avenida Brigadeiro Faria
Lima 2020- 7 andar - Conj. 71
Germany - Berlin
0145256o Paulo
address:
Ot't'ice
Telephone:
+55'1.1815-2733
-Internationales
HandelsFax: +55 11 81.52796
zenmm
Telex:017831 04 isac br
Friedrichstrasse 93-97
Cable;Essebankrep
Postaladdtess:Postfach 90
O-1086Berlin
Mexico - Mexico City
+49 30 26432313
Telephone:
Officeand postaladdress:
Fax: +49 30 26432312
CamposEliseosNo. 385,Esq.
Telex:114219ajco
MoliEre "Torro A" - Piso 1
Colombia Chapultepec
Hungary - Budapest
Polanco
Officeaddress:
11550 Mexico D.F.
Rdk6czi rit 1-3
Telephone:
+52 5 281.25 24,
Postaladdress:
52 5 28245 04,52 5 28249 74
Postafiok300/20
Fax: +52 5 281 24 46
HU-1443Budapest70
'11.7
77 70
Telephone:+36 1.
Scandinavian
Fax:+36'1.2527006
Banking Partners
Foland - Warsaw
Officeandpostaladdress:
LII JanaPawla iI, 73
PL-01038Warsaw
"10
+48 22 38 40
Telephone:
+4839'120237
Fax:+4822384202
Telex:825590 sbp pl
Czechoslovakia - Prague
Ot'ficeand postaladdress:
Parizskl25
CS-11000 Prague1
Telephone:+42 2 23^l4698,
+422231 4673
Fax:+42223"14656
CIS - Moscow
: Proy ezd
Officeaddress
Chudozhestvennogo
Teatra 6, Kv 34
: Prshkinskaya
Postaladdress
U].5/5, Kv 34 Moscow
+7 095292 0338
Telephone:
+7 095292 0738
Fax: +7 095 200 0237
Telex:413286 unlt st
fapan - Tokyo
Officeaddress:Rm 425,
Shin Tokyo Building
3-3-1Marunouchi,
Chiyoda-ku,
C.P.O.Box 1633,
Postaladdress:
Tokyo 100
+81 3321.455 85
Telephone:
Fax:+81.32'145595
Telex:022237 29 essebkj
Cable:Essebank
Finlanil - Helsinki
Officeaddress:
c/o Union Bank of Finland
Fabianinkatu31A
Postaladdress:
P.O.Box 630,
SF-00101
Helsinki
Telephone:
+3 58 0 17 1130
Fax:+3 58 0 17 1.938
Telex:125796 sebfsf
Nonnay - OsIo
Officeaddress:
c,/o Den norske Bank
Kirkegatan21
Postaladdress:
P.O. Box 9579,
Egertorget,
N-0128Oslo 1
Telephone:
+47 2 4270 66
Fax:+472 48 27 77
Denmark-
Copenhagen
Officeaddress:
c/o Unibank
Torvegade2
Postaladdress:
P.O.Box 1000
DK-l786 Copenhagen
Telephone:
+45 31 57 38 L"I
Fax:+45 3'1.57 81 70
Telex:271.96unib dk