Banking group SEB operating profit drops, seeking new capital
Swedish banking group SEB on Thursday said fourth-quarter 2008 operating profit declined 12 per cent year-on-year to 4 billion kronor (481 million dollars).
The bank, one of four major groups in Sweden, also said it was to make a 15-billion-kronor rights issue, reported dpa.
Operating income in the quarter increased 27 per cent year-on-year to 12.7 billion kronor, SEB said in its report, released a week earlier than scheduled.
The group, which also has operations in the neighbouring Baltic states and Germany, said its net credit losses were 1.7 billion kronor, mainly over provisions in the Baltic countries.
SEB chief executive Annika Falkengren said in a comment that the bank believed there would be a "protracted period of declining GDP in Estonia and Latvia, but also in Lithuania over the next few years."
For the full-year 2008, operating profit declined 27 per cent to 12.47 billion kronor.
SEB said had secured funding from main shareholders including the investment group Investor AB for the rights issue. Investor AB, which has close ties with Sweden's influential Wallenberg family, was to underwrite 3.5 billion kronor.
Furthermore, the board suggested that no dividend be paid, raising the capital base to 19.5 billion kronor.
The funds would "give us the necessary buffer to cope with this severe downturn," Falkengren added.
The group has some 5 million private customers and 400,000 corporate customers.