SEB Swedbank

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SEB Swedbank

CREATING A EUROPEAN FINANCIAL GROUP
March 30, 2001
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1. Strategic rationale and terms of the transaction
2. Synergies
3. Proforma financials
4. Conclusion

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Strengthen Swedish operations to enhance
possibilites for European growthin selected
segments
Increaseshareholder value
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SEB SwedbankThe New European Financial Group
Two complementary banks creating Swedens leading
financial group
Strongly positioned for continued growth and
international expansion
Improved service and product offering
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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

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The combined entity will beamong the top 25
banks in Europe
Top 50 European banks by market value March 2001
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Advantages for

• Customers
• Employees
• Community
• Shareholders

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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

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SEB Swedbank
11 million customers in Europe
7.5 million in Sweden(of which 430,000 SMEs)
3.5 million in rest of Europe(of which 115,000
SMEs)
Includes independent savings banks
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SEB Swedbank
2 million Internet customers
1.5 million in Sweden
0.5 million in rest of Europe
Includes independent savings banks
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SEB Swedbank
35,000 employees
19,000 in Sweden
16,000 in rest of Europe
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SEB Swedbank
1,750 branch offices
1,126 in Sweden
624 in rest of Europe
Includes independent savings banks
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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

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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
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Business mix
Förenings-Sparbanken
SEBSwedbank
SEB
Investment Management/Life
Corporate and Financial Institutions
Retail and Private Banking International
Retail and Private Banking in Sweden
Revenue split () Pro forma 2000
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SEB Swedbanks vision
Create
a leading customer-oriented European financial
group based upon a broad Swedish base, a
combination of personal service/advice, local
presence and modern technology
through
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1. Improve the Swedish offering
Strategy

• 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

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2. Increase growth withinexisting markets in
Europe
Strategy

• 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

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Financial targets
Create shareholder value
Create shareholder value in line with the best
European financial institutions

• 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

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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
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SEB Swedbank
Group staff
Investment Management/Life
Corporateand Financial Institutions
Retail and Private Bankingin Sweden
Retail and Private Banking International

• Robur Fonder
• Robur Kapital-förvaltning
• SEB Invest
• SEB Fonder
• Gyllenberg
• RoburFörsäkring
• 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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1. Strategic rationale and terms of the transaction
2. Synergies
3. Proforma financials
4. Conclusion

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Profitability impact

• On-going internal improvement programs
• Cost synergies
• Revenue synergies
• Integration costs
• SEBs overfunded pension funds

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Cost synergies
Financial effects
of SEK M per year cost base Central units,
product companies etc. 1,350-1,600 6-7 IT 60070
0 12-14 Swedish branch network 400500 7-8 e-bank
ing/Internet 150-200 10-13 Total 2,500-3,000 7-8

• Full effect during 2005
• Closure of approx. 100 Swedish branch offices
• Not including effects of ongoing internal
  improvement programs and utilisation of SEBs
  overfunded pension funds for Swedbank employees

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Selected comparisons
Financial effects
Planned staffreductions
Estimated synergies at announcement
of total cost
of total staff
UBS/SBC
Chase/Chemical
DDB/RealDanmark
Sparbanken/ Föreningsbanken
Royal BoS/Natwest
TSB/Lloyds
SEB/FSB

BNP/Paribas
Merita/Nordbanken
10-12 of Swedish cost base
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Projected timing ofcost synergies
Financial effects
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
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Cost synergies per area
Financial effects
IT costs distributed to business areas
SEB Swedbank
450-525
Group staff
Investment Management/Life
Corporateand Financial Institutions
Retail and Private Bankingin Sweden
Retail and Private Banking International
Synergies, SEK M
250-325
575-725
75-100
1,150-1,325
2,500-3,000
Whereof of IT synergies SEK 600-700 M.
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Revenue synergies
Financial effects

• 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 base
Private customers
High
Group 2 SEB 405 (27)FSB 1,176 (28)Total
1,581 Avg Sweden (27)
Group 1 SEB 600 (40)FSB 924 (22)Total
1,524 Avg Sweden (25)
Financial capacity
Group 4 SEB 360 (24)FSB 1,476 (36)Total
1,872 Avg Sweden (35)
Group 3 SEB 135 (9)FSB 574 (14)Total
723 Avg Sweden (13)
Low
Low
High
Financial interest
( ) Percent of customer base
No. of customers 000
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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
Financial effects

• In total approx. SEK 4 bn
• Covered over time by Use of SEBs pension
  funds Selling branch offices to independent
  savings banks

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

• SEBs pension funds are currentlysignificantly
  overfunded
• The overfunding can be used to cover early
  retirements both banks future pension
  liabilities
• Foundation specific rules

SEBs pension funds 31 December 2000 SEK
bn Assets 23.2 Liabilities 8.0 Overfunding 15.2
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Integration planning structure
Until completion of merger
Integration committee
Swedbank SEB Göran Collert Jacob
Wallenberg Birgitta Johansson- Hedberg Lars H
Thunell Carl-Eric Stålberg Urban
Jansson Nils-Fredrik Nyblaeus Lars
Gustafsson Kaisa Bratt Ulf Jensen
Meeting every other week
Responsible for integration planning
Swedbank SEB Nils-Fredrik Nyblaeus Lars
GustafssonCFO CIO
17 PROJECT TEAMS
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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 planning
Bold Team leaderUnderlined Deputy team leader
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1. Strategic rationale and terms of the transaction
2. Synergies
3. Proforma financials
4. Conclusion

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Profit and loss statement2000 pro forma summary
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 -19.0
Other 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
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
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Income mix
Förenings-Sparbanken
SEBSwedbank
SEB
Other operating income
Net result of financialtransactions
Net commission income
Net interest income
Income split () Pro forma 2000
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European banksC/I Ratio vs commissions as of
total income
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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 Deposit
s and borrowing fromthe public 247 420 667 Amount
s 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
(Proforma 2000, SEK Billion)
Other, net -1.6
Investment Management/Life
Corporateand Financial Institutions
Retail and Private Bankingin Sweden
Retail and Private Banking International

• Total income 14.6
• Total costs7.7
• Operating profit6.5
• No. of employees3,300
• C/I 0.53

• Total income 5.2
• Total costs3.5
• Operating profit1.7
• No. of employees1,700
• C/I 0.68

• Total income 25.3
• Total costs13.8
• Operating profit10.5
• No. of employees11,900
• C/I 0.55

• Total income 10.9
• Total costs8.0
• Operating profit2.0
• No. of employees12,400
• C/I 0.74

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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-r
atio 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
  
• FöreningsSparbankens shareholderswill receive
  approx. 48.5 andSEBs shareholders approx.
  51.5in the new group
• Unanimous recommendation by the two Boards of
  Directors

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Ownership structure of the new group
Shareholders (Dec. 2000) Share of capital,
Savings banks foundations 9.6 Wallenberg
foundations 5.5 Investor 5.2 Trygg
foundation 4.8 Alecta (former SPP) 3.4 Independent
savings banks 3.2 SEB mutual funds 2.3 Swedish
farmers co-operatives 1.6 Skandia 1.2 Robur
mutual funds 1.2 SPK 1.2 SEBs employees
foundations 1.1 Foreign shareholders 30.0 Other 29
.7 Total 100.0
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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 Swedens leading
  financial group
• Substantial cost synergies
• Revenue increase to exceed revenue losses
• Immediate effect from using SEBs pension funds
  and improved SEB rating-outlook
• Financially and strategically well positioned for
  future growth in Europe

Increased shareholder value
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Preliminary time plan

• Project teams begin integration planning 2
  April
• Ordinary Annual General Meetings 5 April
• Merger prospectus Second half of May
• Extraordinary 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