Pleasure principles

13 December 2018 By Christopher Thompson Follow @CGAThompson

The country’s second-biggest bank by assets said costs will increase 1 bln crowns by 2021 to cover digital investment, hitting profit. Yet unlike many stodgy European lenders battling online rivals, SEB is in a better position to defend the bottom line.

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Sweden’s SEB announced a business plan on Dec. 13 in which it said operating costs would rise by 1 billion Swedish crowns by 2021 as it invests up to 2.5 billion crowns over the next three years on digital banking and advisory services.

Johan Torgeby, SEB's chief executive, said the investment was needed “to secure long-term growth and ensure that SEB will deliver world class service to our customers in a rapidly changing and highly competitive banking landscape”.

The Stockholm-based lender also reaffirmed a pledge to pay out 40 percent of earnings to shareholders and maintain a common equity Tier 1 capital ratio that is 150 basis points above regulatory requirements. SEB’s CET1 ratio is presently 19.7 percent.

The bank added its “long-term” aspiration was a 15 percent return on equity.

SEB shares were down 3 percent to 89.28 Swedish crowns by 1424 GMT on Dec. 13.

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