SEB’s strategy remains firm – customer focus and growth in selected areas, continued cost efficiency and maintained resilience.

2011 was in many ways a difficult year. The financial markets were marked by uncertainty and high volatility on the back of the severe sovereign debt situation in Europe. The global banking system has thus faced challenges that also included adapting to a new regulatory framework for capital and liquidity. In this climate, resilience in terms of a strong balance sheet, stable income growth and a long-term perspective has been more important than ever for a bank. SEB has that resilience.

Resilience and flexibility

Over the past years, we have focused SEB’s strategy as the Relationship bank in our part of the world, firmly rooted in the belief that strong financial stability and long-term customer relationships are key to profitability. Two priorities have guided us – resilience and flexibility. Through a strong balance sheet and sufficient liquidity reserves, we can support our customers as a financial partner in good times and bad while at the same time having the flexibility to grow together with our customers.

It is against this background that we have taken steps towards increasing the integration of the bank into ‘One SEB’, where customers' needs and perspectives – not the product perspective – drive our actions. Other examples include investments in IT capacity and reducing risk in the balance sheet. SEB has a stable and high quality credit portfolio of which more than 90 percent is exposed to the Nordic countries and Germany, where the loss level has remained low – below 0.1 percentage points over the past ten years.

Stronger balance sheet and deepened customer relations

Resilience and flexibility guided our priorities also in 2011. SEB has a unique role as financial partner for 2,700 large corporations and financial institutions and increasingly so for 400,000 small and medium sized companies and 4 million private customers. As the uncertainty in the euro-area increased, we chose to take the costs of prolonging our funding, increase liquidity reserves and raise the quality in our bond portfolio. We improved our capital ratios further and SEB is now one of Europe’s best capitalised banks. SEB’s strong balance sheet was recognised by Standard & Poor’s in their rating upgrade of SEB.

Our customers today meet a more integrated bank where it is easier to do business with us. One effect is that despite the increased uncertainty, customers chose to increase their business volumes with SEB. Deposits in 2011 increased by SEK 150bn, corporate lending by SEK 62bn and household lending by SEK 46bn.

Growth in core areas

In line with our focused strategy, we finalised the sale of the German retail business and also sold our bank in Ukraine . We are well positioned for growth in a more robust part of Europe.

In the Nordic region and Germany, we have gained 200 new large corporate customers since the start of our investment in 2010. More Swedish small and medium-sized companies claim SEB as their home bank. We have also coordinated advisory services and product development in the savings area into one unit– all to better meet customers' needs for a holistic savings approach.

Increased cost efficiency

The new regulatory framework for capital and liquidity will increase costs for the banking industry and thus raise the requirement on cost efficiency. In 2011, costs were below the SEK 24bn target as of 2014. We have therefore raised our ambition to keep costs at this lower level of SEK 23.1bn for 2012.

The Relationship bank

An environment of low interest rates and higher capital requirements is challenging. Nevertheless, SEB’s strategy remains firm – customer focus, growth in selected areas, cost efficiency and maintained resilience. Together with all of SEB’s fantastic employees, I am deeply committed to reaching our long-term aim to be the Relationship bank in our part of the world.

Stockholm, February 2012