SEB slashes bonuses as profits fall

SEB slashes bonuses as profits fall
SEB chief executive Annika Falkengren
Swedish bank SEB has reported an operating profit of 564 million kronor ($77 million) for the fourth quarter 2009, down on the 4.03 billion kronor in the corresponding period of 2008.

Analysts had expected an operating profit of 330 million kronor, according to a Reuters poll.

The bank announced that it was cutting staff bonuses in a move seen to be a response to stiff criticism from the government in the autumn when the bank announced that 1.5 billion kronor had been set aside for staff bonus in the first three financial quarters.

“While the bank has to consider the actions of Scandinavian and global competitors, the support of holders, colleagues and the society in general must be retained,” SEB CEO Annika Falkengren said in a company statement.

Bonuses will be cut by two-thirds and will amount to a total of 795 million kronor including social security contributions.

At the same time the bank’s board has recommended a dividend of one kronor per share. Last year, when the bank raised 15.1 billion kronor in a rights issue, the dividend was cut entirely.

Dividend payments equate to a total of 2.19 billion kronor and have been undertaken as a result of improved economic prospects and the concern’s capital situation.

SEB’s credit losses increased to 3.16 billion, up from 5.51 in the corresponding period of last year.

Revenues declined to 9.87 billion kronor, in comparison with 12.70 in the fourth quarter 2008.

The bank’s costs declined from 6.97 billion kronor to 6.13 billion.

“As we at the same time sustain costs from our investments, the bank’s financial development will be dampened somewhat in the short term,” Annika Falkengren explained.

SEB expects provisions for credit losses to decline somewhat during 2010 dependent on macroeconomic factors.

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