SEB posts increased net profit

Sweden's top banking group SEB on Thursday reported an eight percent hike in its 2007 net profit, boosted by increased customer activity, but saw its fourth quarter earnings slip slightly.

For the October-December period, the company reported a 0.8 percent drop in net profits compared with the same quarter a year earlier, to 3.76 billion kronor ($584 million).

Although SEB’s total operating income also slipped 0.3 percent in the quarter, the 10.04 billion kronor reported was well above analyst expectations for 9.37 billion, according to a poll by SME Direkt.

The company’s operating profit for the quarter meanwhile climbed 11 percent to 4.58 billion kronor, also beating analyst estimates for 3.93 billion.

For all of 2007, the banking group, which has branches across the Nordic region, in Germany and in the Baltic countries, said its results improved despite rocky global financial markets.

Its full-year net profit rose eight percent to 13.64 billion kronor, with operating profit up nine percent to 17.02 billion kronor.

“The past year was characterized by a strong underlying performance in SEB’s customer business but also by increasingly challenging conditions in the capital markets,” SEB chief executive Annika Falkengren said in a statement.

Among the major challenges facing the bank has been the subprime mortgage crisis in the United States.

The subsequent turbulence in global financial markets hit SEB’s securities portfolios with charges of 2.47 billion kronor, the bank said, adding that 1.77 billion kronor of that directly impacted its 2007 operating profit.

“Despite the turbulent financial markets, continued high customer activity generated strong income growth reflecting SEB’s diversified business mix,” Falkengren said.

“SEB is well prepared for more uncertain times ahead,” she insisted.

The results received a warm welcome on the Stockholm stock exchange, where SEB shares rose 3.37 percent in late morning trade to 145.8 kronor.