SWEDEN - Swedish financial services group SEB posted a 31% drop in 1H net profits, citing a weak market as the reason.
Operating results - including pension settlements/provisions - amounted to SEK4,245m, compared with SEK6346m for the same period last year.
Other results included net interest income up 6% to SEK6,234m; net commission income down by 14% to SEK 5,958m; return on equity was 13.4%; staff costs decreased by 1% to SEK6,236m; lending losses were down 53% to SEK 248m; the Baltic's result was up 42% on a comparable basis.
Lars Thunell, president and group chief executive said: “The first half of 2001 was characterised by a marked weakening in the global economy. Development in the US, Japanese and the European economies was weak. Industrial production has fallen in several countries.”
He added: “Economic conditions in Sweden, Germany and the Baltic countries are important factors for SEB. Growth in the Baltic countries remained strong and stable. In Germany, however, the economy was weaker than anticipated, particularly with respect to private consumption, where price increases have undermined purchasing power.”
The investment management and life units were the second worse off division after Enskilda Securities, falling 38%. At June-end, SEB Group had assets under management totalling SEK 892m.
SEB also posted a SEK11.9bn pension surplus in its own pension fund at the end of June 2000. Total assets in the pension funds amounted to SEK21bn (23.2 at year-end 2000), while commitments were SEK9.1bn.
The firm retained an overall bearish stance: “Thus far, the positive trend noted on the stock markets during the second quarter does not appear to be lasting. For SEB, this means that further measures are being implemented to reduce costs over both the short and the long term.”
The interim report for January-September 2001 will be published on October 25, 2001.
*The European Commission has also started an in-depth investigation of the proposed merger with ForeningsSparbanken. A final decision is expected in mid-November.
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