No dividend for SEB shareholders after earnings fall

No dividend for SEB shareholders after earnings fall
Sweden’s SEB bank announced plans on Thursday to raise 1.4 billion ($1.8 billion) in new capital and forgo paying a 2008 dividend following a steep drop in earnings last year.

Net profit fell by 26 percent to 10.04 billion kronor ($1.2 billion) in 2008. At the operating level net earnings dropped 27 percent to 12.47 billion kronor.

In the October-December period, net earnings declined 7.0 percent to 3.5 billion kronor despite a 27 percent increase in net banking income.

The bank said in a statement it would carry out a capital increase worth 15 billion kronor and would pay no 2008 dividend in order to improve its capital base, which currently stands at 19.5 billion kronor.

“In a year of unprecedented turbulence, we have continued to generate growth, reflecting a solid client base,” said SEB chief executive Annika Falkengren.

“With the proposed measures to strengthen our capital base SEB is well-equipped to confront macro-economic difficulties.”

The bank employs 22,000 people and operates in Scandinavia, the Baltic states and Germany.