OREANDA-NEWS. February 25, 2010.

SEB Latvia operating results in 2009
Operating income reached LVL 114,60m, which is 5 per cent lower compared to 2008 year result

Costs during the period was LVL 50,59m – 5 per cent lower than a year before

Operating profit or earnings before taxes and provisions for non performing loans amounted to LVL 64,01m, a decrease of 5 per cent compared with result of 2008

Provisions of LVL 214,33m were done during this period, in the 4th quarter provisions of LVL 39,72m were done

Operating losses during 2009 was LVL 128,90m; including LVL 24,58m during 4th quarter of 2009.

Customer deposits on the 31st September was LVL 976,90m
 
Total loan portfolio amounted to LVL 2,45bn

Capital and reserves for the period was LVL 218,93 m

Assets reached LVL 2,89bn - decrease of 13 per cent compared to last years amount

SEB Latvia capital adequacy ratio on the 31st of December was 13% per cent

SEB Latvia liquidity ratio on the 31st of December was 54,96 per cent

Assessment of operating results
Common sector results of 2009 were defined by dynamics of demand for financial services, loan amortization, as well as by the demand of provisions for non performing loans set by International Risk Management regulations. Despite the economic downturn, SEB Latvia operation in 2009 quarter from the quarter is characterized by stable operational result – according both to level of income and level of operational profit.

During 2009 SEB Latvia drew significant attention to adapt it`s activities to changes of economy – it worked both with the branch network optimization as well with wage reconsideration.

Head of SEB Latvia Ainars Ozols:
"The past year was outlined by significant decisions made both to optimise operation of the bank and provide customer support for those cases when settled repayment of the loan is impossible. During the last year we worked to find a balance and provide the banking services accordingly to current demand level and reasonable price for customer. Today we are in the optimal form to ensure our clients with the full value of services and to develop."
 
SEB Group operating results in 2009
Operating profit amounted to SEK 3,4 bn
Profit before provisions for credit losses amounted to SEK 15,816m (15,697), an increase of 1 per cent. Adjusted for goodwill impairment, capital gains and costs of structural transformations of the group, profit before losses rose by 11 per cent and amounted to 17,215m SEK

Operating profit amounted to SEK 3,372 m (12,471) and net profit to SEK 1,178m (10,050)

Operating income increased by 8 per cent. Net interest income rose by 4 per cent and Net fee and commission income dropped by 5 per cent

Operating expenses, excluding goodwill impairment charges of SEK 3.0bn, were up by 3 per cent

Provisions for credit losses were SEK 12,448m (3,231); the net credit provision level 0.92 per cent (0.30)

Return on equity was 1.2 per cent (13.1) and earnings per share SEK 0.58 (10.36)

The core Tier 1 capital ratio was 11.7 per cent (8.6) and the Tier 1 capital ratio 13.9 per cent (10,1)

The Board of Directors proposed to pay a dividend of 1.00 SEK per share.
 
SEB Group operating profit for 4th quarter 2009: SEK 0.6 bn (4.0)
Profit before savings amounted to 3.748 bn SEK (5,730). Operating profit activities amounted to 564 m SEK (4,028) and net profit – 284m SEK (3,507)

Operating income decrease by 22 per cent compared with the corresponding period a year ago. It includes the cost of SEK 185m compensation to Swedish investment fund owners.

Operating expenses were 12 per cent less than in the 4th quarter of 2008 and 2 per cent higher than in the 3rd quarter of 2009.

SEB's President and and Group Chief Executive Annika Falkengren:
2009th year's result confirm the correct choice of SEB Group's strategy for business diversification and long-term cooperation with customers in difficult period. Looking forward, we see the improved situation in the Baltic countries. While maintaining a solid base, we plan to invest in all business areas, with special emphasis on corporate banking in the Nordic countries and Germany.

The most significant improvements in customer service support area
Economical downturn in 2009 marked a significant role of the bank to promote support for borrowers. SEB Latvia, without waiting for government support mechanisms, already in the beginning of the year launched internal domestic support program. With this program SEB Latvia has given support to more than 5000 households, giving different solutions for financial strain abatement. For most of these borrowers SEB in Latvia provided a grace period and changed the loan currency and maturity, several hundreds of customers were given the opportunity to reduce the loan interest payments as well as the capitalization of interest. Thanks to this support and mutual cooperation with the borrowers, at the end of the year there was observed decrease of credit payment delay.

Assessing customer's needs for further development to receive convenient financial services in branch offices, during 2009 SEB in Latvia improved line control systems to provide a clearer and more rapid customer reception and attendance.

Significant improvements in 2009 were realized in SEB internet bank Ibanka. These improvements are assessed not only by customers of SEB banka, but also by the international financial magazine Global Finance Magazine, who has admitted Ibanka in its review of "World's Best Internet Banks as the best internet bank in Latvia for the individuals as well as the best internet bank for individuals according to safety of information in Central and Eastern Europe. In Metasite research "Baltic E-Banking Report 2009"Ibanka was admitted as the third best internet bank according to functionality as well as the second best internet bank according to convenience of use. In 2009 there was a new functionality established in Ibanka that allows SEB in Latvia customers apply not only to build savings, SMS bank, pension 2nd and 3rd pillars, but also to get in contact with the bank to apply for the new card receipt or make the necessary changes in existing cards.

To improve the bank's operation and achieve even higher customer satisfaction, SEB in Latvia paid much attention to customers` recommendations and the bank's assessment of treatment, as well as improving customer service quality between branches and administering units of the bank.

During 2009 SEB in Latvia created a new position in the bank – Senior Customer Service Officer - to provide an even better quality of service of small and medium-sized companies.

Lending in 2009
During the last year SEB group has given the finance in credit, leasing, factoring or credit guarantee for more than LVL 358m. About 90% of the total new loan volume was allocated to companies and 10% to individuals. Despite the economic downturn of 18%, total credit portfolio for SEB in Latvia decreased by 10%. The most financed sectors are agriculture, forestry, wholesalers and manufacturers.

The usage of electronic services is growing

Ibanka
The number of private individuals, active Ibanka users has increased by 24% in 2009, but the number of companies, who regularly use Ibanka, has increased by 14%. Total number of Ibanka users has reached 576 721. Number of payments made by private individuals in Ibanka during 2009 has increased by 20%, but number of payments made by enterprises has increased by 5% compared to transactions made in 2008.

Payment cards and their use
On the 31st of December SEB in Latvia had issued 539 598 payment cards, which has been used in more than 26m transactions during the year. Directly in 2009 SEB Latvia started to issue the first and exclusive corporate credit card Eurocard providing Latvian companies with the new solution for effective management of company's funds. During 2009 cooperation agreement for the usage of Eurocard cards has signed 135 companies, who all together use 520 corporate credit cards.

In 2009 SEB banka together wit the State Treasury exercised prior contract terms for network expansion of payment card acceptance, considering into account the growing demands for payment card usage not only in trading places, but also in service locations. In cooperation of SEB and the Treasury payment card acceptance has become possible in such places as, e.g., National Land Service, the Citizenship and Migration Affairs Board, the Company Register. At the end of the year 27,8% of trading venue, where it is possible to pay with payment cards, the card acceptance service is provided by SEB banka.

SMS bank
During 2009 the number of private individuals who use SMS bank has increased by 14%, but the number of companies, who has started to use this service, has increased by 10%. Total number of SMS bank users at the end of the year has reached 374 966.

SEB Trading Station
During 2009 the number of Trading Station (an electronic system to purchase and sale foreign currency) users has increased by 28%. This system provides SEB customers with online access to global currency market. SEB Trading Station is continuously updated with real-time information on currency exchange rates, interest rates and news. On the 31st of December 2009 SEB Trading Station was used by 280 companies operating in Latvia. The number of deals, which has made using SEB Trading Station has increased from 6309 deals in 2008 to 12086 deals in 2010.

Related business operation
In 2009 SEB Life Insurance (SEB dzivibas apdrosinasana) market share increased from 41 per cent to 45 per cent Premiums increased by 9 per cent compared with the previous year, reaching LVL 16.55m. The number of clients during the year has increased by 11 per cent, reaching more than 17 000 life insurance policy holders. At the end of the 2009th total assets capital of policyholder amounted to LVL 42.8m, an increase of 23 per cent compared with 2008 year.

At the end of 2009 both private individuals and corporate customers had entrusted their savings to investment management company SEB Wealth Management in more than LVL 391m. During 2009 total portfolio of SEB Wealth Management increased by LVL 81,5m or 26 per cent. Such growth had reached due to the increase of state funded pension scheme assets managed by SEB Wealth Management, as well as assets of SEB pension fund and SEB Life Insurance – increase of all these assets were for more than LVL 65m. When optimism in global financial markets was revived, also SEB Funds experienced significant growth of assets amount. During 2009 amount of SEB funds distributed by SEB Latvia increased by LVL 19m. Lats Reserve fund managed by SEB Wealth Management during 2009 maintained it`s position as the largest investment fund in Latvia during 2009. It`s market share reached 51,4 per cent of all investment funds registered and managed in Latvia.

SEB open pension fund for the private pension collectors on the 31st of December was accumulated more than LVL 37m. SEB pension fund is the largest open pension fund in Latvia, with 56 per cent market share. At the end of the reporting period, SEB pension fund was securing long-term savings for 71 308 participants or 40 per cent of all participants in the open pension funds.

SEB leasing operating results in 2009 were still affected by developments in the global economy - decline of economic activity, the global financial turmoil, as well as situation in Latvian economy – GDP fall by 18%, fall of consumer prices and income, significant increases in unemployment, significant increase of public debt and budget deficit. If in 2008 82% of total car finance SEB leasing provided exactly for new car purchases, then in 2009 this figure reached 63% of all car financing during this period.
 
SEB Latvia continues to support major cultural and educational initiatives, increasingly engaging in supporting socially significant projects
Always, but especially now, society expects bank's active involvement in Latvian social, educational, cultural and sports life. As in previous years, also in 2009 SEB in Latvia continued to support SOS Children village association, participating in donation campaigns and inviting to charity concerts. Thanks to the support of the bank there had been installed two solar collector systems in the village, which annually will provide significant cost savings in hot water.

In collaboration with the Community Initiative Funds SEB in Latvia provided funding for regional non-governmental organizations with the scope of family values, children and young people's educating promotion. In 2009, concluding the program "Together with the family", 29 projects were supported all over Latvia.

In July and August with financial support of SEB Cesis Art Festival took place for the third time, bringing together more than 12 000 music, theatre and art lovers in 17 different cultural events. SEB, "Sinfonietta Riga" and Latvian State Television continued a joint project in Rundale Castle, offering viewers to enjoy the Vienna classics led by performance of Vestards Shimkus and Normunds Sne chamber orchestra.

SEB continue to support SEB Student Basketball League. All summer long SEB Mountain bike marathons (SEB MTB) took place, in each of 6 stages gathering about 2000 cyclists. SEB in Latvia supported "19th Latvian Unit velo marathon", where record number of participants took part – more than 4 000 cycling enthusiasts.

Continuing the promotion of business education in Latvian schools, during 2009 SEB was together with association "Junior Achievement Latvia", supporting "Day of Shadows", Festival of Students Scholastic Companies and Economic Seminar proceedings. In 2009 SEB had granted 14 scholarships for talented and diligent youths for studies in Latvian universities.

SEB group is a Northern European financial institution that provides banking services to 400 thousand companies and institutional customers and five million private persons in Scandinavia, the Baltic States, Germany, Poland, Ukraine and Russia and is internationally represented in 10 other countries. SEB group employs more than 20 000 employees. For more about the SEB group: www.sebgroup.com.