SEB restructures its German business
(Thomson Reuters ONE) -
Sells German retail banking to Santander and invests in its corporate and
institutional business
SEB has signed an agreement to sell its retail banking business in Germany to
Banco Santander for EUR 555m. The strategic benefits and the long term financial
impact are positive for SEB. Strategically this allows SEB to concentrate on
its core areas of competitive advantage in Germany. Key group financial ratios
will improve - the cost to income ratio will improve by 0.04, return on equity
increase by 0.60 percentage points and the core capital ratio will be
strengthened by 0.50 percentage points.
"The sale of our German retail banking business will free up capital that will
be reinvested in SEB's core strategic growth areas. Germany, the largest economy
in Europe, remains an important market for us. We have been present there for
nearly 35 years and going forward we will focus on Merchant Banking and Wealth
Management - both profitable and growing businesses in Germany, " says Annika
Falkengren, SEB President and Group Chief Executive.
"I am pleased that in the present economic climate we together with Banco
Santander have concluded a mutually beneficial deal. The retail business has one
of the highest customer satisfaction rankings in Germany and serves one million
customers," says Annika Falkengren. "We have spent significant time and effort
restructuring the business since it was acquired more than ten years ago. I am
convinced that Banco Santander, as one of the largest banks in Europe and with a
strong retail track record will be the best possible home for our retail banking
business."
The transaction encompasses all 173 branch offices, 1 million private customers
and some 2,000 employees. As per year end 2009, loan and deposit volumes
amounted to EUR 8.5bn and EUR 4.6bn, respectively, and risk-weighted assets to
EUR 4.7bn.
The transaction price of EUR 555m is at a premium to allocated equity of EUR
420m. Transaction costs, including related funding and hedge accounting effects
are estimated at EUR 375m. The net negative financial impact up until closing,
including transaction costs is expected to be EUR 240m pre-tax. Restructuring
costs for the remaining German business are estimated to EUR 80m. In addition,
there will be further negative funding effects from the date of closing. For
2011 these effects are estimated to EUR 65m.
The divested retail banking business constitutes as per year end 2009, 6 per
cent of SEB Group's income, 11 per cent of costs and 8 per cent of Group
lending. In relation to SEB's German business, it constitutes 45 per cent of
income, 60 per cent of costs and 33 per cent of lending. SEB's German retail
banking business made an operating loss of EUR 117m in 2009.
A conference call on the financial effects will be held at 10.00 CET. Please
call in on +44 (0)20 7162 0025 at least 15 minutes in advance.
Please also see the presentation material on www.sebgroup.com/ir.
The completion of the sale is conditional upon regulatory approvals and certain
preparations for separation and is currently expected to close around year end
2010.
SEB is a North European financial group serving some 400,000 corporate customers
and institutions and five million private individuals. SEB offers universal
banking services in Sweden and the Baltic countries - Estonia, Latvia and
Lithuania. It also has local presence in the other Nordic countries and in
Germany and a global presence through its international network in major
financial centres. On 31 March 2010, the Group's total assets amounted to SEK
2,285bn (~EUR 236bn) while its assets under management totalled SEK 1,382bn
(~EUR 143bn). The Group has about 21,000 employees. Read more about SEB at
www.sebgroup.com.
_____________________________________________
For further information, please contact:
Ulf Grunnesjö, Head of Investor Relations, +46 8-763 85 01, +46 70-763 85 01
Viveka Hirdman-Ryrberg, Head of Corporate Communications, +46-8-763 85 77,
+46 70-550 35 00
[HUG#1430974]
Press release (PDF): http://hugin.info/1208/R/1430974/377515.pdf
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Source: SEB via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 12.07.2010 - 08:32 Uhr
Sprache: Deutsch
News-ID 23752
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