1 SEB Swedbank + CREATING A EUROPEAN FINANCIAL GROUP March 30, 2001.

1

SEB Swedbank

+CREATING A EUROPEAN FINANCIAL GROUP

March 30, 2001

2

1. Strategic rationale and terms of the transaction

2. Synergies

3. Proforma financials

4. Conclusion

3

Strengthen Swedish operations to enhance possibilites for European growthin selected segments

Increaseshareholder

value

4

SEB SwedbankThe New European Financial Group

Strongly positioned for continued growth

and international expansionImproved service

and product offering

Two complementary banks creating Sweden’s leading financial group

5

Excellent fit

Strong local presence

Households incl. many affluent

SMEs, organisations

Local and regional authorities

Leading in metropolitan areas

Large corporations

Financially active customers

Private banking

Internationally oriented

6

The combined entity will beamong the top 25 banks in Europe

Top 50 European banks by market value – March 2001Company Euro Mn Company Euro Mn

1 HSBC 118 529 25 DANSKE BANK A/S 13 5772 UBS 64 322 26 CREDIT LYONNAIS 13 3333 RBS 57 463 27 BK SCOTLAND 13 2814 CREDIT SUISSE 56 632 28 KBC 12 3855 LLOYDS TSB 56 321 29 SHB 11 8576 BARCLAYS 50 243 30 BCP 11 3717 DEUTSCHE BANK 47 841 31 BIPOP 10 0298 BBVA 45 189 32 AIB 9 2189 BCSCH 44 052 33 NAT.BK.OF GREECE 8 831

10 BNP PARIBAS 39 106 34 BOI 8 60111 FORTIS 34 300 35 BCA DEI PASCHI 8 58412 HVB 30 791 36 ROLO BANCA 8 52913 ABN-AMRO 29 603 37 BNC.POPUL.ESPANOL 7 92614 SOC GEN 25 739 38 ALMANIJ 7 48015 HALIFAX 24 205 39 SEB (TODAY) 7 23116 ABBEY NATIONAL 24 161 40 BCA.NAZ.LAVORO 7 14117 UNICREDITO 23 795 41 SWEDBANK (TODAY) 6 76218 DRESDNER 23 251 42 TURKIYE IS BANK 6 39619 BCA INTESA 22 775 43 BANCA DI ROMA 5 97720 NORDEA 20 486 44 A & L 5 71221 SAN PAOLO-IMI 20 260 45 EFG EUROBANK ERGASIAS 5 37522 DEXIA 15 939 46 BHW HOLDING 5 33223 COMMERZBANK 15 496 47 JB 4 93324 STD CHTRD 13 983 48 ALPHA BANK 4 75325 SEB-Swedbank 13 993 49 COML.BK. OF GREECE 4 29026 DANSKE BANK A/S 13 577 50 DNB HOLDING 4 164

7

Advantages for

Customers

Employees

Community

Shareholders

8

Enhancing shareholder value Efficiency gains

– Cost and revenue synergies

Improved strategic position– Excellent fit in the Swedish market

Stronger growth opportunities– European expansion

More diversified revenue mix

Increased liquidity of the share

Strong combined management, with merger and restructuring experience

9

SEB Swedbank

* Includes independent savings banks

7.5 million in Sweden(of which 430,000 SMEs)

3.5 million in rest of Europe(of which 115,000 SMEs)

11 million customers in Europe*

10

SEB Swedbank


1.5 million in Sweden0.5 million in rest of Europe

2 million Internet customers*

11

SEB Swedbank

19,000 in Sweden16,000 in rest of Europe

35,000 employees

12

SEB Swedbank


1,126 in Sweden624 in rest of Europe

1,750 branch offices*

13

SEB Swedbank

Total assets of SEK 2,000 billion

Leading in asset management,SEK 1,300 billion in assets under management

Market value of SEK 146 billion

14

Leading market position– Sweden

RankDeposits– private # 1– corporate # 1

Mutual funds # 1

Life insurance, unit linked # 1

Equity trading # 1

Lending– private # 1– corporate # 1

Mortgages– private # 1– corporate # 1

15

Investment Management/Life

Corporate and Financial Institutions

Retail and Private Banking in Sweden

Retail and PrivateBanking International

Business mix

Revenue split (%) Pro forma 2000

Förenings-Sparbanken SEB

SEBSwedbank

0

25

50

75

100

16

SEB Swedbank’s vision

a leading customer-oriented European financial group based upon a broad Swedish base,

a combination of personal service/advice, local presence and modern technology

Create

through

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1. Improve the Swedish offering

Increase service and improve advice through better accessibility

Broader, complementary and more customised services and products

Third party products

Improve product offering to SMEs

Increase cost efficiency

Improve cash-flow

Strategy

18

2. Increase growth withinexisting markets in Europe

Strengthen existing operations in – the Nordic countries– the Baltic states– Germany – Poland and the UK

Use existing competence and experience from the Swedish operations

Continue acquisitions and alliances

Strategy

19

Financial targets

Create shareholder value

ROE: 15.0%

Tier I ratio: 6.5-7.5%

Total capital ratio: 10.5%

Capital allocation: according to risk and strategic and financial requirements

Dividend policy: 30.0% of net income

Create shareholder value in line with the best European financial institutions

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Board of directors andmanagement

Göran Collert and Jacob Wallenberg co-ChairmenGöran Collert, Legal ChairmanJacob Wallenberg, Chairman from 2003

Lars H Thunell,Managing Director and CEO

Birgitta Johansson-Hedberg,Deputy for the Managing Director and CEO

21

SEB Swedbank

Group staff

Investment Management/

Life

Corporateand Financial

Institutions

Retail and PrivateBanking

in Sweden


International• Robur Fonder• Robur Kapital-

förvaltning• SEB Invest• SEB Fonder• Gyllenberg • Robur

Försäkring• SEB Trygg Liv

• Merchant Banking• Custody Services• Enskilda Securities• Swedbank Markets• FIH

• Retail Sweden• Private Banking

Sweden• Product companies

- Spintab- SEB Kort- Etc...

• Cooperation with independent savings banks

• Germany• Baltic states• Poland • Private Banking

International– Norway– Finland– Denmark– UK– Luxembourg

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2. Synergies


4. Conclusion

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Profitability impact

On-going internal improvement programs

Cost synergies

Revenue synergies

Integration costs

SEB’s overfunded pension funds

24

% of SEK M per year cost base

Central units, product companies etc. 1,350-1,600 6-7

IT 600–700 12-14

Swedish branch network 400–500 7-8

e-banking/Internet 150-200 10-13

Total 2,500-3,000 7-8

Cost synergies

Full effect during 2005

Closure of approx. 100 Swedish branch offices

Not including effects of ongoing internal improvement programs and utilisation of SEB’s overfunded pension funds for Swedbank employees

Financial effects

25

23

na

na

4

6

15

na

15

15

Selected comparisons

Estimated synergiesat announcement

Planned staffreductions

BNP/Paribas

UBS/SBC

Chase/Chemical

Sparbanken/ Föreningsbanken

SEB/FSB

TSB/Lloyds

Royal BoS/Natwest

Merita/Nordbanken

DDB/RealDanmark

24

13

7

4

11

15

17

14

7-8 *

*10-12% of Swedish cost base

% of total cost % of total staff

Financial effects

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Projected timing ofcost synergies

SEK M 12 months 24 months 36 months 48 months

Central units,product companies, etc 25% 40% 75% 100%

IT 20% 40% 60% 100%

Swedish branchnetwork 20% 40% 80% 100%

e-banking/internet 20% 40% 70% 100%

Total 500-700 1,000-1,200 1,800-2,200 2,500-3,000

Financial effects

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SEB Swedbank

Group staff

Cost synergies per area

450-525

250-325

2,500-3,000*

575-72575-100

Synergies, SEK M

IT costs distributed to business areas

1,150-1,325


Life


Institutions


in Sweden


International

Financial effects

* Whereof of IT synergies SEK 600-700 M.

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Financial effectsRevenue synergies

Lower funding costs through improved rating

Improved product offerings

Increased business opportunitieswith corporate clients

Cross selling

Positive effect of best practice

Revenue increase estimated to exceed revenue losses

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Strong Swedish customer baseF

inan

cial

cap

acit

y

Low High

Low

High

Financial interest

( ) Percent of customer base

Group 2SEB 405 (27%)FSB 1,176 (28%)Total 1,581Avg Sweden (27%)

Group 1SEB 600 (40%)FSB 924 (22%)Total 1,524Avg Sweden (25%)

Group 4SEB 360 (24%)FSB 1,476 (36%)Total 1,872Avg Sweden (35%)

Group 3SEB 135 (9%)FSB 574 (14%)Total 723Avg Sweden (13%)

No. of customers ‘000

Private customers

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Opportunities – corporateand financial institutions

Increased placing power

Increased distribution capacity

Stronger capital base enables larger transactions e.g. legal lending limits

Cross-selling of specialist productse.g. trading station

Scale economies e.g. payments,cash management, trade finance

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Integration costs

In total approx. SEK 4 bn

Covered over time by– Use of SEB’s pension funds*– Selling branch offices to independent savings banks

Financial effects

* No. of employees expected to be reduced by 2,000 persons during a 3-year period, through natural retirement.

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SEB’s overfunded pension funds

SEB’s pension funds are currentlysignificantly overfunded

The overfunding can be used to cover– early retirements – both banks’ future pension liabilities

Foundation specific rules

SEB’s pension funds 31 December 2000 SEK bnAssets 23.2Liabilities 8.0Overfunding 15.2

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Integration planning structure

Swedbank SEBGöran Collert Jacob WallenbergBirgitta Johansson- Hedberg Lars H Thunell Carl-Eric Stålberg Urban JanssonNils-Fredrik Nyblaeus Lars GustafssonKaisa Bratt Ulf Jensen

Meeting every other week

Integration committee

Swedbank SEBNils-Fredrik Nyblaeus Lars GustafssonCFO CIO

17 PROJECT TEAMS

Responsible for integration planning

Until completion of merger

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Several parallel processes

The legal process

Review by competition authorities

Integration

”Business as usual”

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Project teams - integration planningVision and Strategy Corporate communications Lars H Thunell /Urban Jansson Gunilla WikmanBirgitta Johansson-Hedberg /Carl Eric Stålberg Staffan Salén

Retail and Private Banking Sweden Investor RelationsBirgitta Johansson-Hedberg /Jan Lidén/Ingrid Persson Staffan SalénMariana Burenstam Linder /Mats Larsson/Magnus Cavalli-Björkman Anders Rydin

Savings banks alliances Financial controlAnnika Wijkström Nils-Fredrik Nyblæus /Jan-Gunnar EurellFleming Carlborg Anders Rydin

Retail and Private Banking International Treasury Lars Lundquist Zaid PedersenAnnika Wijkström Jan Lilja

Corporate and Financial Institutions CreditMonica Caneman/ Annika Bolin Lars Erik Kvist /Bengt-Erik LindgrenJan Lidén/ Robert Charpentier Liselotte Hjort /Magnus Carlsson

Investment Management Marketing and branding isues Anders Ek Birgitta Johansson-Hedberg /Angela Hellryd-DahlénAnders Mossberg/ Kaj-Gustaf Bergh Ingrid Jansson

Life insurance Other central unitsAnders Mossberg Per Anders FasthAnders Ek Lars Eklund

IT Organisation/ GovernanceGert Engman Lars H Thunell /Per Anders FasthLars Gustafsson /Kenneth Lundberg Birgitta Johansson-Hedberg /Olov Lydén

Human Resources / Cultural issuesGöran TheodorssonAnn-Charlotte Dahlström

Bold = Team leaderUnderlined = Deputy team leader

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2. Synergies


4. Conclusion

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Profit and loss statement2000 pro forma summary

* Insurance operations are reported as net figures separately in accordance with the demands from the Financial Supervisory Board (Finansinspektionen)

** SEB also reports operational result which includes changes of surplus values in the life insurance operation. Operational result after taxes amounted in 2000 to SEK 6,885 million

Förenings-SEK bn Sparbanken SEB SEB SwedbankNet interest income 13.6 11.6 25.1Net commission income 6.8 13.5 20.2Net result of financial transactions 1.7 3.5 5.2Other operating income 1.9 3.1 5.1Total income 24.0 31.7 55.6

Staff costs -6.7 -12.2 -19.0Other operating costs -7.0 -10.0 -17.0Total costs -13.7 -22.3 -36.0

Result before loan losses 10.3 9.4 19.6

Loan losses and otherwrite-downs, net -1.1 -0.9 -2.0Share of profit of associated comp. 0.2 0.1 0.3Operating profit from insurance op.* - 0.2 0.2Operating profit 9.4 8.8 18.1

Pension compensation 0.0 0.9 1.0Profit before tax 9.4 9.7 19.1

Taxes -2.5 -2.9 -5.3Minority interests -0.5 -0.2 -0.8Net profit for the year** 6.4 6.6 13.0

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Other operating incomeNet result of financialtransactions

Net interest income

Net commission income

Income mix

Income split (%) Pro forma 2000

Förenings-Sparbanken SEB

SEBSwedbank

0

25

50

75

100

39

European banksC/I Ratio vs commissions as % of total income

20%

30%

40%

50%

60%

70%

80%

90%

15% 20% 25% 30% 35% 40% 45% 50%

Commissions as % total income

C/I

Ra

tio

Northern Rock

Deutsche

Monte Paschi

San Paolo

Halifax

Unicredito

Popular

Handelsbanken

SEBUBS

Dresdner

Intesa

BarclaysBES

BCP

DnB

BPIABN AMRO

Dexia

Credit Lyonnais

Danske

BSCH

SG

Paribas Commerzbank

BOS

OKOBANK

Fortis

NordeaRBOS

Bankinter

Sw edbank BNL

A&LHypo

SEB Swedbank

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Balance sheet31 December 2000 pro forma summary

Förenings-SEK bn Sparbanken SEB SEB Swedbank

Lending to the public 630 606 1,235

Lending to credit institutions 130 165 295

Interest-bearing securities 60 158 219

Other assets 109 194 303

Total assets 929 1,123 2,052

Deposits and borrowing fromthe public 247 420 667

Amounts owed to credit institutions 126 217 344

Dept securities in issue 380 199 579

Subordinated liabilites 29 31 61

Other liabilities 112 213 325

Shareholders’ equity 35 42 77

Total liabilities andshareholders’ equity 929 1,123 2,052

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SEB Swedbank

Group staff


Life


Institutions


in Sweden


International• Total income

25.3

• Total costs13.8

• Operating profit10.5

• No. of employees11,900

• C/I 0.55

(Proforma 2000, SEK Billion)

• Total income 10.9

• Total costs8.0



• C/I 0.74


• Total costs7.7



• C/I 0.53


• Total costs3.5



• C/I 0.68

Other, net -1.6

42

Key ratios and per share data2000 pro forma

Förenings-Sparbanken SEB SEB Swedbank

Return on equity, %* 19.4 17.8 18.5

Earnings per share, SEKFSPAR surviving 12.10 11.93SEB surviving 9.43 9.55

Equity per share, SEKFSPAR surviving 66.22 70.15SEB surviving 59.06 56.12

I/C-ratio before loan losses 1.76 1.42 1.55

C/I-ratio before loan losses 0.57 0.70 0.65

Capital adequacy ratio, % 10.8 10.8 10.8

Primary capital ratio, % 6.9 7.4 7.1

No. of shares (FSPAR surviving), million 527.8 1,091.5

No. of shares (SEB surviving), million 704.6 1,364.3

* Net profit for the year in relation to the average of shareholders’ equity at the beginning of the year and year end

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The transaction in brief

Legal merger – pooling method

Exchange ratio value of4 shares in FöreningsSparbanken equivalent to 5 shares in SEB

FöreningsSparbanken’s shareholderswill receive approx. 48.5% andSEB’s shareholders approx. 51.5%in the new group

Unanimous recommendation by the two Boards of Directors

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Shareholders (Dec. 2000) Share of capital, %Savings banks foundations 9.6Wallenberg foundations 5.5Investor 5.2Trygg foundation 4.8Alecta (former SPP) 3.4Independent savings banks 3.2SEB mutual funds 2.3Swedish farmers’ co-operatives 1.6Skandia 1.2Robur mutual funds 1.2SPK 1.2SEB’s employees’ foundations 1.1Foreign shareholders 30.0Other 29.7Total 100.0

Ownership structure of the new group

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Completion of the proposed merger between FöreningsSparbanken AB (publ) and Skandinaviska Enskilda Banken (publ) is subject to the satisfaction of terms and conditions set out in a merger agreement concluded between these parties, including, inter alia, regulatory clearances mandated by merger control law.

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Conclusions

Two complementary banks creating Sweden’s leading financial group

Substantial cost synergies

Revenue increase to exceed revenue losses

Immediate effect from using SEB’s pension funds and improved SEB rating-outlook

Financially and strategically well positioned for future growth in Europe

= Increased shareholder value

47

Preliminary time plan Project teams begin integration planning

– 2 April

Ordinary Annual General Meetings – 5 April

Merger prospectus– Second half of May

Extra–ordinary General Meetings- Second half of June

European Commission/Anti trust regulators– Phase1 finalised end of June (?)– Phase 2, if necessary, finalised end

of October (?)

Government approval

Merger

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SEB Swedbank

+CREATING A EUROPEAN FINANCIAL GROUP

1 SEB Swedbank + CREATING A EUROPEAN FINANCIAL GROUP March 30, 2001.

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Transcript of 1 SEB Swedbank + CREATING A EUROPEAN FINANCIAL GROUP March 30, 2001.