WE ARE DELIVERING ON OUR LONG-TERM STRATEGY

OUR DEEPENED CUSTOMER RELATIONSHIPS and our diversified business mix further strengthened profitability and resilience in a challenging economic climate.

ANNIKA FALKENGREN, PRESIDENT AND CEO

Major transformative shifts have changed the conditions for banking in recent decades. In the early 1990s volatility in financial markets was high on the back of the formation of the euro. The internet promoted a major shift in demands on banking services. The strong globalisation trend was accentuated during the first years of the new millennium, boosting global growth. Financial markets boomed, risk levels grew and were priced incorrectly. The past seven years have been marked by the global financial crisis and subdued growth. At the same time, digitisation spurred by the smartphone is changing consumer behaviours. Today, we are experiencing extraordinary times: low or zero inflation and negative interest rates. In addition, more than six years of central bank liquidity support have contributed to sharply higher asset prices. An environment like this calls for prudence, resilience and long-term perspective. SEB has that.

With the strong balance sheet that we have built, we have continued to grow in core segments in the Nordic countries and Germany, among SMEs in Sweden and in the long-term savings area. We have invested in a growing and active customer base. We have de creased costs and increased capital efficiency. As the leading Nordic corporate bank, in 2014 we saw a positive turn in business sentiment among Nordic and German large corporate customers, evidenced by a high level of event-driven activities. We confirmed our number one position in Nordic mergers and acquisitions and arranged the largest number of transactions. However, activity levels were lower among Swedish SMEs as they refrained from investments in a more cautious business environment. The Baltic countries were affected by the conflict in Ukraine, even though exporters were quick to find alternative markets. Overall we increased the number of full-service customers. All in all, this was reflected in the 2014 numbers. Excluding one-off capital gains, operating profit was up 12 per cent and return on equity was 13.1 per cent.

At SEB we strive to develop and invest in better customer offerings based on a firm belief that high customer loyalty is the foundation for long-term profitability. In 2014, we en hanced all of the bank’s digital customer interfaces as we see that customers’ demands for accessible and user-friendly offerings are increasing. Swedish retail customers now choose digital channels for 96 per cent of all their interactions with us. In the longterm savings area we have reviewed our investment approach and developed an advisory-driven comprehensive savings offering that also includes traditional life insurance. We have launched new funds – with our Microfinance fund as one example. We also actively strive for common solutions for financial infrastructure. In Sweden, the Swish-application for mobile payments is one initiative. Another is our partnership with a global leader in asset servicing, where our customers will be offered state of the art global custody functionality.

Much has changed in banking over the years. However, one thing never changes: the importance of deeply committed employees working together as a team and never compromising on building customer value. I am proud of this distinct culture in SEB where employees have a genuine service approach, sharing quality advice with our customers. I would like to take this opportunity to thank all our employees for their hard work. The entire team’s energy and commitment to continue enhancing SEB as the relationship bank in our part of the world – for the benefit of all our customers and shareholders – remain strong.

Stockholm, February 2015

Annika Falkengren
President and Chief Executive Officer