OREANDA-NEWS. February 15, 2010. The operating result of SEB in Estonia for 2009 was -1 526 million Estonian kroons (569 million in 2008), reported the press-centre of SEB.

The operating income earned by SEB in the fourth quarter of 2009 amounted to 553 million Estonian kroons (449 million) an increase of 23 per cent in comparison to the fourth quarter of 2008, an increase by 5 per cent in comparison to the third quarter of 2009.

The operating expenses of SEB in the fourth quarter amounted to 436 million Estonian kroons (291 million).

Additional provisions for loan losses made in the fourth quarter amounted to 419 million Estonian kroons (122 million).

Provisions for loan losses increased to 3 056 million Estonian kroons (1 094 million), 1 962 million of which was added in 2009.

The amount of loans decreased by 8 per cent in comparison to the fourth quarter of 2008 and the amount of deposits decreased by 11 per cent.

Riho Unt Acting CEO of SEB Pank:
"A recovery of optimism has been noticeable in the economy since summer 2009. Hopefully we hit rock bottom in the recession in the second quarter of 2009, as things were looking up in the second half of the year. Both consumers and companies are regaining their confidence - the index used to measure this has exceeded its weakest result of March last year by more than 20 percentage points and has reached the level of summer 2008. The current account deficit has turned into a surplus, which reached 6.6 percent of GDP in the third quarter. The worrying factor amongst the positive developments is the continuing increase of unemployment, which will peak in the middle of this year, and the growing speed at which income is decreasing.

The economy of Estonia has adapted quickly to the changed economic situation, and considering the vastly improved outlooks of the global economy and countries in the Baltic Sea region, SEB decided to raise its forecast of Estonia's economic growth in 2010 to 2.0% (from the earlier -0.3%) and the growth forecast for 2011 to 5.0% (from the earlier 4.0%).

Despite of the improved outlook, SEB continued its conservative provisioning in the last quarter of the year, which resulted in the formation of a credit loss provision amounting to 3,1 billion kroons at the end of the year. In addition to the provisions, the economic results of SEB Estonia in 2009 were also affected by extraordinary expenses - in the second quarter, the company wrote off 379 million kroons of goodwill impairment that was on its balance sheet and in the fourth quarter, it compensated the bond issue of TR Majad to investors to the value of 177 million kroons.

The capital buffers of SEB Bank have remained strong - SEB almost doubles the 10% capital adequacy rate required by law. The capital base of SEB at the end of 2009 amounted to 10,1 billion Estonian kroons, which is 5,1 billion kroons more than required by law."

SEB Group
SEB's profit before provisions for credit losses in the fourth quarter 2009 amounted to SEK 3,748m, a decrease of 35 per cent compared with the corresponding strong quarter of 2008 (5,730). In comparison with the previous quarter (3,720), profit before provisions was up by 1 per cent. Operating profit for the quarter was SEK 564m (4,028).

Operating income amounted to SEK 9,874m, a decrease of 22 per cent compared with the last quarter of 2008. The decline was largely due to the lower Net interest income, negatively affected by additional costs for the extended funding duration, falling deposit margins and lower return on the bond investment portfolio. In relation to the previous quarter, operating income rose by 1 per cent.

Operating expenses amounted to SEK 6,126m, a decrease of 12 per cent compared with the fourth quarter of 2008 and up by 2 per cent from the third quarter.

Provisions for credit losses amounted to SEK 3,160m, of which the Baltic countries accounted for SEK 2,588m or 82 per cent. The credit loss level was 0.93 per cent (0.62). The Group's total reserve ratio was 69.5 per cent.

Core Tier I capital ratio was 11.7 per cent and Tier I capital ratio13.9 per cent.

The Board proposes a dividend of SEK 1.00 per share (no dividend in 2008).

"SEB's result for the fourth quarter is a proof of the merits of diversified business mix and long-term customer relationship. Positive developments in net fee and commission income and net life insurance income brought this quarter's operating profit above the third quarter level while net interest income declined. During the year, we have established a strong financial position.", says Annika Falkengren, SEB's President and CEO, commenting on today's interim report.

SEB is a North European financial group serving some 400,000 corporate customers and institutions and five million private individuals. SEB offers universal banking services in Sweden, Germany and the Baltic countries - Estonia, Latvia and Lithuania. It also has local presence in the other Nordic countries, Poland, Ukraine and Russia and a global presence through its international network in major financial centers. On 31 December 2009, the Group's total assets amounted to SEK 2,308bn while its assets under management totalled SEK 1,356bn. The Group has about 20,000 employees. Read more about SEB at www.sebgroup.com.