The company’s second quarter operating profits were 618 million kronor. This compares to a profit of 3.5 billion kronor in the same period in 2008. The results were significantly worse than analysts had expected. According to a Reuters survey, the market had expected operating profits of 2.1 billion kronor.
SEB’s credit losses for the period were 3.6 billion kronor, compared with 448 million kronor in the same period last year. The bank revealed that it had made write downs for all goodwill relating to its investments in the Baltic states and Russia. The total value of the write downs was 2.4 billion kronor.
Operating profit excluding credit losses was 4.2 billion kronor, a slight increase on the second quarter last year. Operating income increased by 27 percent to 13.2 billion kronor. Net interest income was up 21 percent. Costs rose to 9 billion kronor, compared with 6.4 billion in the second quarter last year.
CEO Annika Falkengren was bullish about the results:
“SEB generated overall strong income growth and strengthened its customer franchise, particularly within wholesale banking,” she said, adding that the bank’s “robust balance sheet” and strong capital ratio would help reinforce its position in the current economic difficulties.