Skandinaviska - 4th Qtr & Final Rslts - Pt.1

RNS Number:6081F
Skandinaviska Enskilda Banken
15 February 2000


PART ONE

SEB
YEAR-END REPORT FOR 1999

- Strong total result - all-time high. SEK 7,440 M (SEK 3,587 M) excluding
  non-life insurance operations 
- The operating result amounted to SEK 5,065 M (SEK 2,304 M) 
- SEB strengthens transformation to e-banking 
- Internet expansion in Europe starting this year 
- 50 branches in Sweden to be closed this year 
- Extensive restructuring started in BfG. Goals set for cost efficiency and     
revenue improvement are raised 
- Continued focus on efficiency, particularly in Nordic Banking operations 
- A dividend of SEK 3.50 is proposed (SEK 3.13) - an increase of 12 per cent


SEB - well positioned in the new economy

Since 1997 SEB has focused strongly on savings and asset management. In 1998 we
established a number of "stretch targets" for the Group: five domestic markets,
five times the amount of assets under management, and five million Internet
customers by the end of 2004.

The results for 1999 were favourable and clearly show that our efforts have
borne fruit. As a result of our distinct mobilisation of resources in Asset
Management, assets under management has increased from SEK 499 billion to SEK
702 billion and net commission income has risen by 26 per cent.

SEB strengthens transformation to e-banking

Nineteen ninety-nine was the year in which a number of critical steps were taken
to transform SEB from Nordic to European, from a "universal" bank to a Group
centred around the Internet, from being product oriented to being guided by
customer needs within two main customer groups - business-intensive private
customers and Nordic customers.

Approximately 50 branches to be closed in Sweden

With 380,000 of our most attractive customers on the Internet - 25 per cent of
the total number of customers, the highest percentage in the world -- we have
now reached a critical point in Sweden. The number of branch visits has declined
to such an extent that we can begin to measure the consequences of the changed
behaviour of customers. We will therefore close around fifty branches, a fifth
of the total number, during the first half of the current year. The branches
will continue to play an important role in the future, particularly with regard
to advisory services.

Our Internet lead offers an opportunity for a major step into Europe 

SEB was among the pioneers with regard to the Internet and has experience from
three years of continuous development in this field. In the first phase,
the Internet was a technology that was used to make such simple services
as payments available via a new channel. Gradually, we provided more and
more services such as funds and stock trading. We are now in transition to
a completely new phase, in which we are utilising a new business logic
that is made possible through the Internet.

SEB is among the elite in the world with regard to the number of its customers
who use the Internet bank - 25 per cent. Where the Internet is concerned in our
established markets -- Sweden, with 380,000 customers in February, and Estonia
with 35,000 -- we see that cost-savings are now beginning to develop in "the old
ways of working." However, Internet is much more than a way to save money in the
"old channels." Our customers on the Internet conduct more transactions that
those who do not use the Internet and provide for higher profitability. With the
pan-European model, which is a fantastic instrument for the customers' financial
planning, we also believe that we will acquire new customers in the markets in
which we are already operating.

The greatest and most attractive opportunity naturally lies in our expansion in
Europe, where we are participating in a growing investment market with a tool
that offers superior service for customers. The new pan-European model is being
launched in Denmark at the end of March, and in Germany under the auspices of
BfG in the third quarter. We are now analysing the opportunities to also start
up in Great Britain at the end of the year, under our own auspices or with a
partner.

SEB -- In the middle of Europe's "wireless valley"

The private segment is not the only one in which the Internet has become
substantial. SEB today has the largest percentage of corporate customers on
the Internet. During the year an additional substantial investment will be
made in this area to tie together our various corporate services. Growth in
Sweden generally, and in "new economy" companies in particular, is naturally
something that we are focusing on in the corporate sector, where we are already
strong.

Costs continue to be a priority concern

At the same time we are seeing clearly how our costs are increasing. The
largest increase is in Asset Management and Life, as well as other growing
operations such as Enskilda Securities, where revenues are growing even
more strongly. We will continue to invest in these areas, even though the
focus for Asset Management during 2000 will be to streamline and to prioritise
profitability ahead of growth. It is within the Nordic Banking operations, which
mainly conduct business in a mature market with shrinking margins, that the
costs savings must primarily be realised.

Cost reduction measures in intensified form are continuing in many areas,
however. In addition, the increase in information-technology (IT) costs has now
ended following a period of major projects. But a period following the initial
investments in new system is often required before the savings become visible.

SEB is in the middle of the bridge between old and new business logic. It is
clear to us that a paradigm shift is taking place. As a purely practical matter,
we can achieve the necessary change in expertise without major costs, due to the
large surplus values that we have in our pension funds. In the spring of 2000,
as part of its cost-savings, SEB is continuing the program of early retirement
of employees. The costs of this program are being met through compensation from
SEB's pension funds, in which surplus values increased from SEK 13 billion to
SEK 18 billion in 1999.

Continued increasingly efficient use of capital and reduction of risk

More efficient use of capital in Merchant Banking has been a priority area
during the year and the amount of capital allocated was reduced from SEK
10,400 M to SEK 9,500 M. The risks in proprietary trading and in emerging
markets have been reduced to lower, currently comfortable levels.

The restructuring of BfG has begun

A comprehensive program to restructure BfG and increase its profitability 
is currently under way. The core business in the savings and private-customer
segments is attractive and it recently became known that BfG is the German bank
with the highest percentage of satisfied customers.  The results of our surveys
since we took over the bank on 3 January have also been highly favourable. Goals
and plans for cost savings and revenue increases have been raised from EUR 60 M
to EUR 80 - 100 M annually through a restructuring program to boost
profitability. This means that at least 500 positions will be eliminated and
that nonstrategic units are being examined for the purpose of restructuring,
selling or closing them down. As we reported in October last year, BfG is to
become our portal to the market for savings programs in Europe. The pan-European
Internet model is being launched in the third quarter. Currently, BfG has 65,000
Internet and on-line customers.

"Changing old companies in traditional industries presents a challenge,"
says Lars H Thunell, President and Chief Executive Officer. "But it is not
a matter of disassembling; it is a matter of changing and creating something
new; that is the only way to achieve growth."

Results for main groups and business areas 

Effective as of 2000, several of SEB's business areas were organised to form
four main groups - Nordic Banking, Asset Management and Life, BfG and "Other
Group" operations. The latter comprises a number of companies/ business areas -
Enskilda Securities, SEB Kort, SEB Internet, SEB Baltic Holding and SEB IT -
that operate more independently under their own brands.

NORDIC BANKING 

Nordic Banking comprises the Retail Distribution, Merchant Banking and Financial
Services business areas, excluding SEB Kort, which forms a separate business
unit as of 2000. The new main groups reported a combined total result of SEK
4,644 M in 1999. Revenues rose 1 per cent.  The increase in costs was 5 per
cent, of which staff costs, net, amounted to 12 per cent. The average number of
employees was approximately 6,500 in 1999.

Retail Distribution

Income remained essentially unchanged, SEK 5,360 M. Net interest earnings
declined mainly due to reduction in margins. The decline in net interest
earnings was offset by a rise in commission income, primarily from
securities, funds, payments and insurance. Despite a reduction of 243 in
the number of employees, costs rose by 4 per cent due to higher staff
costs and the continued investment in the Internet. Total result declined
by 3 per cent to SEK 1,481 M. Return on allocated capital, SEK 7,100 M,
was 15.0 per cent (15.50 per cent).*


* Capital has been allocated to the Group's various business areas in
proportion to their risk exposure. In calculating the return for business
areas, the total results after standard tax have been compared with the
distributed risk capital. The calculation of the return also takes into
consideration that part of the Group's goodwill that may be attributed to
certain business areas.

Concurrently with the increasing use of primarily the Internet, but also
of telephone and automated services, far fewer customers visit branch
offices for simple transactions. During 1999, the trends reached a point
where the office as a physical meeting place is no longer required to the
same extent as previously. At the same time, the Banks' focus on more
business-intensive customers and their need for qualified advice resulted
in an aim to concentrate resources to the areas in which these customers
exist. Accordingly, some 50 offices will be closed in 2000. About 280
persons are affected by the reduction, which will result in a net savings
of about 150 positions.

Financial Services - continued high return

In Financial Services, SEB Finans displayed a particularly strong result,
+ 22 per cent. Overall, the business area increased its total result by 7
per cent to SEK 1,078 M. Return on allocated capital, SEK 1,300 M,
amounted to 59.7 per cent (55.8 per cent).

At year-end 1999, SEB Finans' lending volume totalled SEK 18,762 M (SEK
16,634 M). SEB Securities Services held Swedish and international
securities worth the equivalent of SEK. 2,211 billion (SEK 1,575 billion)
in custody. SEB Kort's turnover in 1999 amounted to SEK 112,889 M (SEK
103,030 M).

Merchant Banking - higher customer-related income and successful capital
rationalisation

Merchant Banking in 1999 reported a total result of SEK 2,470 M (SEK 291 M). The
goal to increase customer-related income and reduce dependence on more volatile
market-risk-related income was achieved. Customer-related income rose 4.5 per
cent, as a result of a highly positive trend in currency trading and the growing
European, corporate debt capital market.  As a result of lower market risk
levels, income from own position-taking declined to SEK 840 M (SEK 1,089 M).
Customer-related income accounted for 83 per cent of total revenues.

Extensive efforts have been made since 1998 to increase capital efficiency,
Since June 1998, when SEB began to measure risk level in accordance with the
Capital at Risk method, Merchant Banking has reduced its risk level by 19 per
cent. This has been achieved primarily through a sharp reduction of exposure in
emerging markets and through lower and better-controlled marker risks. Return on
allocated capital, which was reduced from SEK 10,400 M to SEK 9,500 M, amounted
to 18.7 per cent (2.0 per cent). Capital rationalisation programs will continue
during the current year. The focus on growth areas such as the European debt
capital market has been financed by enhancing the efficiency of the
international network. For example, the number of employees outside the Nordic
region was reduced by nearly 20 per cent since 1998. The fact that costs
nonetheless rose 8 per cent was due firstly to bonus-related remuneration and
secondly to higher IT costs in conjunction with the introduction of the euro and
preparations ahead of the millennium shift. Recoveries exceeded credit losses,
resulting in a net SEK+441 M (-2,010 in provisions in 1998).

ASSET MANAGEMENT AND LIFE 

This main group comprises the Asset Management and SEB Trygg Liv (life) business
areas, which attained a combined total result of SEK 2,597 M in 1999. Revenues,
including changes in surplus values, rose 39 per cent. The cost increase, net,
was 27 percent, of which staff costs rose 45 per cent. The average number of
employees was 1,800 during the year.

Asset Management - 40 per cent increase in managed assets

Income advanced 29 per cent to SEK 3,035 M, chiefly as a result of rising
stock prices, but also because of a higher level of activity and
acquisitions. Costs rose by 40 per cent, primarily as a result of the
acquisition of ABB Investment Management in autumn 1998 and ventures in
Denmark and Great Britain. Rising bonus-related remuneration as a result
of higher activity and improved investment performance also contributed to
the cost increase.

The total result rose by 19 per cent to SEK 1,211 M (SEK 1,019 M. Return on
allocated capital, including goodwill attributable to the group, SEK 3,750 M,
was 23.3 per cent (19.6 per cent).

At 31 December 1999, Asset Management had SEK 702 billion (SEK 499 billion)
under management. Of this total, portfolio management accounted for SEK 274
billion, traditional life insurance for SEK 228 billion and funds and
unit-linked insurance for SEK 200 billion. SEK 72 billion of the volume in
portfolio management and life insurance resulted from the agreement with Codan,
a Danish company. Net deposits amounted to some SEK 14 billion, of which about
SEK 8 billion was in the Group's mutual funds and SEK 6 billion in portfolio
management for customers in Sweden and the rest of the Nordic region, and in
Britain, Luxembourg, Switzerland and the U.S.

SEB Enskilda Banken experienced a strong capital inflow, of which 75 per cent
derived from new customers.  Assets under management increased from SEK 150
billion to SEK 230 billion in 1999.

SEB Trygg Liv - doubled result 
Total result more than doubled to SEK 1,386 M (SEK 575 M). Sales, that is, new
policies and extra payments on existing insurance policies, rose 22 per cent to
SEK 8.8 billion (SEK 7.3 billion).  Premium income (paid-in premiums) increased
20 per cent to SEK 15.1 billion (SEK12.6 billion). The change in surplus values
in life insurance operations was twice as Large compared with 1998, SEK 1,502 M
(SEK 752 M).

Return on allocated capital, including attributable goodwill, SEK 3,250 M,
amounted to 30.7 per cent (12.7 per cent).

Funds under management at year-end amounted to SEK 230 billion (SEK 190
billion). (See Appendix.

"OTHER GROUP" OPERATIONS

The combined total result for these units amounted to SEK 1,147 M (SEK 583 M).
Revenues rose 60 per cent and costs increased 48 per cent.  This included staff
cost increases, net, of 79 per cent.

Enskilda Securities - best result ever 
Enskilda Securities reported its best result ever, SEK 592 M (SEK 217 M). The
earnings improvement is based on a very high volume of share trading and a large
number of successful corporate finance transactions.  Revenues rose by 70 per
cent to SEK 2,279 M, while costs were up 55 per cent due to new recruitment and
increased bonus-related compensation.

Return on allocated capital, SEK 650 M, was 65.6 per cent (24.0 per cent).
Enskilda Securities' share of equities trading in Sweden in 1999 was slightly
more than 10 per cent, representing an unchanged position as the largest player
on the Swedish stock exchange. Enskilda is also the clear leader in Nordic M&A
transactions.

Effective 1 January 1999, the operations within Enskilda Securities are
incorporated.

After the close of the fiscal year, Enskilda Securities has signed an agreement
to acquire Norwegian Orkla Finans (Fondsmegling) from Orkla Finans ASA, with
payment in own newly issued shares.  After the acquisition, SEB will hold 77.5
per cent and Orkla Finans ASA 22.5 per cent of the shares in Enskilda
Securities.

The Baltic States - increased ownership
During 1999, SEB has gradually increased its ownership in the Baltic States,
which since the autumn of 1999 forms a separate business area in the Group. At
year-end 1999, SEB held 50.2 per cent in Eesti Uhispank, Estonia, 50.5 per cent
in Latvijas, Unibanka, Latvia, and 40.8 per cent in Vilniaus Bankas, Lithuania.
Accordingly, the first two banks were consolidated in SEB since October and July
1999, respectively, while Vilniaus Bankas is reported on a profit participation
basis. Earnings development in the three banks was positive. Total result
including amortisation of goodwill amounted to SEK 170 M. Return on allocated
capital, SEK 980 M, was 12.5 per cent.

During the current year, the number of branches in Eesti Uhispank will be
reduced from the current 82 to about 50-60. The reduction is a result of the
rapidly growing use of the bank's electronic services, mainly Internet. The
number of employees will be reduced this year. Personnel reductions are also
expected in Latvijas Unibanka and Vilniaus Bankas as a result of technical
development.

SEB Internet - now the hub
Since summer 1999, SEB Internet is a separate unit in the Group. Costs for the
Swedish Internet operations, which in 1999 amounted to nearly SEK 300 M, are
carried by the business areas, whose customers use the services. Income from the
operations accrues in the relevant business area, that is, mainly Retail
Distribution and Asset Management. Investment in the pan-European Internet model
amounted to about SEK 100 M in 1999.

During 1999, the number of business transactions on the Internet rose by 70 per
cent. Twenty per cent of stock trading transactions by private customers and 30
per cent of private bill payments are made via the Internet bank.

During the current year, SEB's new e-bank will be launched in Denmark in March
and in Germany during the third quarter, with Codan Bank's and BfG Bank's
existing services on the net as a base.

Non-life insurance operations
The result from the Group's non-life insurance operations amounted to SEK 57 M
(SEK 2,497 M). The result includes a capital gain of SEK 500 M from the
divestment of Trygg-Hansa Forsakrings AB to Danish Codan on 14 October 1999
(with settlement as of 31 August 1999). The result also includes the run-off
operations remaining in the SEB Group.

BfG
The BfG Bank was consolidated in the SEB Group on 3 January 2000 and,
accordingly, is not included in SEB's 1999 results. BfG's own reporting is still
in accordance with German accounting rules and are not yet adapted to the
Swedish and international principles applied in the SEB Group. Adjusted by SEB,
comparable profit before tax for BfG's amount to EUR 60 M in accordance with the
same model applied in the issue prospectus.

Including non-recurring gains that are part of BfG's own results, earnings
amount to EUR 117 M. Prior to the forthcoming acquisition, this result is
charged with restructuring costs of EUR 85 M and estimated general reserve
allocations, etc. in accordance with German accounting rules totalling EUR 197
M.  After these closing measures, BfG reports, in accordance with its own
accounting principles, a loss before taxes of EUR 164 M. The reported result is
treated in the acquisition analysis in such a manner that a portion of the
difference between the purchase price and shareholders' equity is appropriated
already before the acquisition.

At 31 December 1999, BfG managed SEK 110 billion, of which about 80 per cent in
mutual funds. BfG, which has been highly successful in its focus on savings, is
the bank in Germany with the highest proportion of satisfied customers,
according to a comprehensive survey conducted at the end of 1999.

In the current year, cost levels will be reduced through co-ordination with SEB
in a number of areas, divestments and rationalisation of central functions.
These measures will result in a staff reduction of at least 500 positions.
Moreover, the operations of Deutsche Handelsbank are being terminated, resulting
in reduction of an additional 75 positions.

Group performance

Income - strong rise in commission income 
Net interest earnings rose 3 per cent, to SEK 6,913 M (SEK 6,707 M), mainly due
to the growing differences during the year between long- and short-term interest
rates. Net interest earnings from deposits and lending increased marginally as a
result of added volumes from the Baltic States that, combined, accounted for
approximately SEK 200 M of net interest in 1999. The cost for the deposit
guarantee amounted to SEK 263 M (SEK 268 M).

Net commission income increased by 26 per cent, to SEK 8,317 M (SEK 6,619 M),
mainly due to increased securities commissions from equity trading and
asset management, but also due to improved commission on payment services.

Net result of financial transactions, excluding changes in Trygg-Hansa's market
portfolio, rose 29 per cent, to SEK 2,269 M (SEK 1,757 M). This was mainly
attributable to the favourable result in equity and currency trading.  The
result from proprietary trading was affected adversely by rising long-term
interest rates.  Risks in these operations were reduced by 40 per cent during
the year.

A one percentage unit change in the Swedish market rates as at 31 December
1999 would have resulted in an increase/decrease of approximately SEK 0.8
billion (SEK 1.9 billion) in the market value of the Group's total positions in
Swedish kronor and foreign currency. The decline is attributable to reduced
trading in own portfolios.

Other income declined 8 per cent, to SEK 2,040 M (SEK 2,218 M), Capital
gains amounted to SEK 948 M (SEK 1,181 M).  Comparable figures in the
preceding year included a capital gain on the sale of bank properties of
about SEK 1 billion.  The 1999 result includes return on and a gain on the
sale of investment portfolios of SEK 541 M and dividends from venture-capital
funds of SEK 300 M.

Combined, the Group operating result, excluding divestment of the non-life
insurance operations, amounted to SEK 19,758 M (SEK 17,528 M).

A significant portion of the result from the life insurance operations is
attributable to the change in the surplus value in these operations, primarily
unit-linked insurance. In accordance with the prevailing principles, this value
change is reported as a separate line within total result. In an analytical
perspective, however, the value change should be made the equivalent of income.
Measured in this fashion, the adjusted result amounts to SEK 21,260 M (SEK
18,280 M), an increase of 16 per cent.

Costs - increasing percentage variable 
Group costs amounted to SEK 15,098 M (SEK 12,973 M), an increase of 16 per cent.
The higher costs are attributable mainly to investment in expansion of the
Internet and continued rapid growth within Asset Management, SEB Trygg Liv and
Enskilda Securities, which also reported favourable result increases. In
addition, investments were made in Nordic Banking and Baltic States and Codan
Bank was added in the autumn.

In general, there are considerable differences in the cost structure and
costs development between the different new main groups within SEB, mainly
between the growth-oriented segments and the more management oriented.

Part of the cost increase is due to pension costs, for which compensation
is received from SEB's pension funds. Pension provisions are reported under a
separate item in the profit and loss account and amounted in 1999 to SEK 873 M
(SEK 531 M). If costs are reduced by this compensation/contribution, net costs
amount to SEK 14,225 M (SEK 12,442 M), an increase of 14 per cent.

The income/cost ratio amounted to 1.50 (1.47). The positive development during
the fourth quarter resulted in an income/cost ratio of 1.65.  The corresponding
cost/income figure (relation of costs to income) was 0.67 (0.68). This resulted
in an improvement to 0.61 in the fourth quarter.

A significant portion of the increase in staff costs is due - in addition to new
recruitment in growth areas - to an increase in bonus-related remunerations as a
result of positive earnings trend, mainly within Enskilda Securities, Asset
Management and Merchant Banking. Staff costs amounted to SEK 8,419 M (SEK 6,816
M), up 20 per cent, after reduction by the aforementioned pension provisions. In
other respects, the increase in costs was limited to 8 per cent.

IT costs - including personnel within SEB IT - amounted to SEK 2,806 M (SEK
2,857 M), down 2 per cent. Taking into account the personnel in the business
area, the total IT costs can be calculated at slightly more than SEK 3 billion,
which is the same level as a year earlier. This means that the previously
expressed ambition to maintain IT costs at an unchanged level in 1999 could be
realised. A further improvement of efficiency in the IT area is planned in 2000,
by linking control more closely to business development and incorporating the
actual IT organisation and establishing a central Chief Information Officer
(CIO) function.

The number of staff, measured as an average for the year, increased by 528 to
13,875. The increase is attributable to Eesti Uhispank and Latvijas Unibanka
being consolidated in the SEB Group during the second half of 1999. Excluding
the addition from the Baltic banks, the average number of staff declined by 459.

At the end of 1999, SEB's management and the trade unions agreed that the
profit-sharing system should be replaced with a pension insurance for the
years 1999 and 2000. The past year's costs for this amounted to SEK 376 M
(compared with an allocation to profit sharing in 1998 of SEK 292 M). As a
result of the agreement, a large portion of costs can be financed through
payments from SEB's pension funds.

At year-end 1999, SEK 1,699 M of the restructuring reserve of SEK 2,255 M was
utilised.

Lending losses and doubtful claims - recoveries and reduced exposure 
During 1999, the Group's recoveries and withdrawals were greater than lending
losses, including value changes in assets taken over and write-downs of
financial fixed assets. Accordingly, a net of SEK 289 M (loss: SEK 2,251 M) was
reported. Incurred losses and provisions for possible lending losses amounted to
SEK 1,089 M (SEK 2,801 M), while recoveries and withdrawals, including reserve
for political risks abroad, SEK 440 M, amounted to SEK 1,295 M (SEK 564 M).

The provision for the Group's undertakings in emerging markets at year-end
1999 amounted to SEK 1,797 M (SEK 2,525 M), of which SEK 790 M (SEK 1,318 M)
pertained to Russia.

Exposure, geographical distribution, SEK M

Asia(1)                                 5,166
   Hong Kong                            1,443
   China                                  791
   Other specified countries(2)         1,930

Latin America(3)                        3,190
   Brazil                               1,277

Eastern and Central Europe(4)           1,577
   Russia                               1,025

Africa and Middle East(5)               2,268
   Turkey                                 786

   Total                               12,202
   Provision                            1 797

Total net                              10,405


1. Includes Hong Kong, China, India, Pakistan, Taiwan, Macao and other          
  specified countries 
2. Includes the Philippines, Malaysia, Thailand, Korea and Indonesia
3. Includes Brazil, Argentina, Mexico and Peru
4. Includes Russia, Israel, Estonia, Latvia Lithuania, Poland, the Czech
   Republic, Slovakia, Rumania, Hungary, Slovenia, Croatia, Kazakhstan and the  
  Ukraine
5. Includes Turkey, Iran, Saudi Arabia, Egypt, South Africa, Ethiopia and
   Algeria

Doubtful claims, net, declined by 21 per cent, to SEK 2,824 M (SEK 3,577 M
and the volume of assets taken over declined by 39 per cent, to SEK 626 M
(SEK 1,031 M). The level of doubtful claims decreased to 0.82 per cent
(1.08 per cent), while the provision ratio for doubtful claims increased
to 59.6 per cent (52.0 per cent).

Pension provision - major surplus in pension foundation 
Operating costs are continuously charged with both general pension fund
contributions actually paid and with standard pension costs in accordance with
the supplementary pension plan of the Bank. These pension costs are restored in
the total result of the Group, because the Bank has the right to compensate
itself for this type of costs from the Bank's pension funds, which are
independent from the Bank. This right applies as long as the assets of the
pension funds exceed estimated pension commitments.

For 1999, this pension provision amounted to SEK 873 M (SEK 531 M). In
addition, a nonrecurring cost for early retirements is being charged directly
against the pension foundations in the amount of SEK 716 M (SEK 461 M). The
total assets of the pension funds were slightly more than SEK 25 billion (SEK 19
billion), while their commitments totalled SEK 7 billion (SEK 6 billion).
Accordingly, the surplus value rose from SEK 13 billion to SEK 18 billion during
1999.

Tax costs 
Taxes relating to the total result amounted to SEK 1,776 M (SEK 1,211 M), which
equals a weighted tax rate of 24 per cent. Tax costs of SEK 1,355 M (SEK 1,000 M
consist of SEK 1,288 M (SEK 527 M) in taxes paid, SEK 276 M (SEK -450 M) in
taxes for prior years, SEK -209 M (SEK 923 M in deferred taxes. Combined, this
corresponds to a tax rate of 23 per cent.

Rising total result 
Operating profit, excluding the non-life operations, amounted to SEK 5,065 M
(SEK 2,304 M) The change in the surplus value of the life insurance operations
was SEK 1,502 M (SEK 752 M). With the addition of changes in the surplus value
and a pension provision of SEK 873 M (SEK 531 M) total result - excluding
non-life operations - amounted to SEK 7,440 M (SEK 3,587 M).

Including non-life operations, the total result was SEK 7,497 M (SEK 6,084 M)
before taxes and SEK 5,665 M (SEK 4,867 M) after taxes.

Earnings per share and return on equity
The calculation of earning per share, including/excluding changes in surplus
values in life insurance operations, appears in the following table:

                                 Result, incl. changes   Result, excl. changes
                                  in surplus values        in surplus values
                                     1999   1998            1999   1998

Operating result                    5,122  4,801           5,122  4,801
Pension provision                     873    531             873    531
Change in surplus values in life
insurance operations                1,502    752
Total result                        7,497  6,084
Taxes and minority interests       -1,832 -1,217          -1,411 -1,006
Result after tax                    5,665  4,867           4,584  4,326
Earnings per share                   9.60   8.25            7.77   7.33
(based on a weighted number of
shares in connection with the new
issue, 589,839,372 shares)
Earnings per share                   8.60   7.40
(adjusted for bonus issue element)
Return                               17.1   16.1            14.6   14.8

Investments in Nordic region, Baltic States and Germany 
During the year, SEB Trygg-Hansa Forsakrings AB (non-life insurance) was
divested for slightly more than SEK 4.3 billion to Danish Codan. At the same
time, SEB acquired Codan Bank, 49 per cent of Codan Link and Codan's 15.8 per
cent interest in Amagerbanken for a approximately SEK 1 billion. The agreement
with Codan also included an agreement on asset management.

During the year, SEB successively increased its holdings in the three partly
owned Baltic banks, Eesti Uhispank in Estonia (from 34 per cent to 50.2 per
cent), Latvijas Unibanka in Latvia (from 44.3 per cent to 50.5 per cent) and
Vilniaus Bankas in Lithuania (from 35.8 per cent to 40.8 per cent). Accordingly,
the first two banks are consolidated in the SEB Group.

In October, SEB reached an agreement to acquire 100 per cent of the shares in
BfG Bank for EUR 1.6 billion, (DEM 3.1 billion) or SEK 13.9 billion from Credit
Lyonnais. The acquisition was financed partly through a rights issue of SEK 4.1
billion. BfG was consolidated in the SEB Group as of 3 January 2000.

After the close of the fiscal year, SEB's subsidiary Enskilda Securities and
Norwegian Orkla Finans ASA signed an agreement covering acquisition by Enskilda
Securities of Orkla Finans (Fondsmegling). Payment was made in the form of newly
issued own shares, whereby Enskilda Securities will be 77.5 per cent owned by
SEB and 22.5 per cent by Orkla Finans ASA.

Total assets and shareholders' equity
The total assets of the Group increased by 3 per cent, to SEK 710 billion,
mainly due to lending increasing 6 per cent to SEK 342.9 billion, including
repos. Shareholders' equity increased by 8 per cent, to SEK 33 billion. The
capital from the new issue of SEK 4.1 billion was not registered with the
authorities until January 2000 and, accordingly, is not included in
shareholders' equity at 31 December 1999. If the surplus value in the life
insurance operations is included, shareholders' equity would amount to SEK 35.8
billion.

                       Credit exposure by industry sector
         including contingent liabilities, undertakings and derivatives
                   (after provision for possible loan lesses)

                                       1999 Per cent     1998   Per cent
Companies and banks
Banks 1                              89,982    16.4     91,932    17.5
Finance and insurance                37,972     6.9     35,957     6.8
Property management                  60,288    11.0     60,867    11.6
Wholesale & retailing, hotels and    27,891     5.1     30,755     5.9
     restaurants
Transportation                       27,340     5.0     21,320     4.1
Other service sectors                22,191     4.1     19,582     3.7
Construction                          6,553     1.2      5,919     1.1
Manufacturing                        74,057    13.5     73,810    14.1
Other                                45,114     8.2     35,000     6.7
                                    391,388    71.4    374,962    71.5
     
Public administration
Municipalities, County Councils      14,395     2.6     13,125     2.5
Municipality-owned companies         29,910     5.5     30,730     5.8
                                     44,305     8.1     43,855     8.3

Households
Housing loans (first-mortgage        65,802    12.0     57,678    11.0
     loans)
Other loans                          36,366     6.7     33,182     6.3
                                    102,168    18.7     90,860    17.3
     
Not distributed by sector and        10,120     1.8     15,632     2.9
     industry

Total loan portfolio                547,981            525,309

Return of business areas and allocated capital

In order to capitalise on the capital base of the Group and to appraise the
profitability of the various business areas with greater precision, SEB has
introduced a control model, based on Capital at Risk.

Allocated capital of the business areas comprises Capital at Risk and that part
of goodwill attributable to corporate acquisitions and is matched by a need for
shareholders' equity.

Capital at Risk is the appraisal of the risk for unexpected losses in those
positions that the business operations of the Group imply at any given point in
time and is based upon statistical probability calculations for various types of
risk (credit, market, operational, etc.). The capital allocated to the various
business areas of the Group has been calculated in proportion to their
respective risk exposure. When calculating the return of the business areas,
their results, after standard tax, have been put in relation to allocated
capital.

Capital base and capital adequacy
At 31 December 1999, the capital base of the financial group of undertakings
(which includes the associated companies but not the insurance companies) was
SEK 34.3 billion (SEK 25.1 billion). SEK 4.1 billion of this amount pertains to
the new issue carried out before year-end 1999 in accordance with prevailing
rules. Core capital also includes a so-called core-capital contribution of EUR
200 M, which SEB issued in the spring of 1999. At year-end, the capital base
amounted to SEK 46.5 billion (SEK 33.6 billion). At the same time, risk-weighted
assets rose to SEK 318 billion (SEK 309 M) as a result of Eesti Uhispank and
Latvijas Unibanka being consolidated in SEB in the autumn of 1999. Consequently,
the total capital ratio was 14.6 per cent (10.9 per cent) and the core capital
ratio 10.8 per cent (8.1 per cent), compared with the target of at least 7.0 per
cent.

Dividend policy
It is the objective of the Board of Directors to declare a dividend that
corresponds to between 30 and 50 per cent of earnings per share, taking into
consideration the total result after tax.  The size of the dividend is
determined by the financial position and growth opportunities of the Group.  The
Group strives to achieve long-term growth on the basis of a capital base for the
financial group of undertakings that must not, in the long term, be inferior to
a core capital ration of 7 per cent.

Dividend
The Board of Directors proposes a dividend of SEK 3.50 (3.13) per Series A and
Series C share (SEK 3.00), corresponding to 43.5 per cent of earnings per share
according to SEB's definition.  The total dividend amounts to SEK 2,466 M (SEK
2,059 M).

Stockholm, 15 February 2000

Lars H Thunell
President and Group Chief Executive

The Annual Report will be distributed in late March 2000.  At the same time, it
will also be available on the Internet (www.sebank.se).

The Annual General Meeting will be held at 4:00 p.m. on 28 April 2000 at Circus,
Kungliga Djurgarden, Stockholm.

The Interim Report for the first quarter of 2000 will be published on 28 April
2000.  (Internet address:  www.sebank.se).  The following two Interim Reports
will be published on 22 August and 26 October 2000, respectively.

For further information, please contact:
Gunilla Wikman, Head of Group Communications, Telephone  [phone]
Lotta Treschow, Head of Investor Relations, Telephone    [phone]


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