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Press conference 25 October 1999

Press conference 25 October 1999. Jacob Wallenberg Chairman of the Board, SEB. Main strategies. Active participation in the growing savings markets of Northern Europe. Leading corporate bank in the Nordic region. Merchant Banking. Asset Management. Enskilda Securities. Trygg Liv.

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Press conference 25 October 1999

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  1. Press conference 25 October 1999

  2. Jacob Wallenberg Chairman of the Board, SEB

  3. Main strategies Active participationin the growingsavings markets of Northern Europe Leading corporate bank in theNordic region Merchant Banking Asset Management Enskilda Securities Trygg Liv Financial Services Retail Distribution INTERNET

  4. Internet • Second generation of Internet Service • Log ins > branch visits • SEB’s Travel Plaza (e-commerce) Internetcustomers • SEB Trading Station • 25% stake in Self Trade 300,000 • E-commerce payment solution 250,000 • Internet office for small businesses 200,000 150,000 • Internet service for individuals 100,000 50,000 0 Dec 1996 Dec 1997 Dec 1998 Oct 1999

  5. Assets under management 50% compounded annual growth BfG Germany ABB Investment Management Gyllenberg Finland Codan Denmark EUR 83bn SEK 720bn Trygg-Hansa Sweden Asset management Norway Dec 96 Jan 00 EUR 22bn Sweden 93% 65% Other countries 7% 35% SEK 194bn Dec 1996 Dec 1997 Dec 1998 Aug 1999 Jan 2000

  6. Lars H Thunell President and Group Chief Executive, SEB

  7. SEB January – September 1999 • Total result excluding non-life insuranceSEK 4,859 (SEK 2,505) million • Income increase 7% • Costs increase 12% • Recovered lending losses SEK 231 million (lending losses SEK 2,034) million • Return on equity 14.5 % (13.4 %) • Prioritised areas show good development • Sale of Trygg-Hansa completed • Expanded ownership in the Baltic region

  8. Focused growth INTERNET Sweden Nordic countries Baltic countries Activeparticipationin the growingsavings markets of Northern Europe Leading corporate bankin the Nordic region Germany Euroland

  9. Internet strategy • Build on first mover advantage from Sweden • Develop Paneuropean IT platform • Access to local • banking infrastructure • customers • Multichannel strategy with Internet focus • Build up financial services gateway through e-commerce

  10. Market size Inhabitants, million 5.2 8.9 4.5 7.7 5.3 82.0

  11. Germany high growth potential Total personal financial assets, 1997 Shares of assets held in equities EUR billion % UK 3,938 20 Germany 2,699 9 France 2,354 34 Sweden 304 20 187 9 Denmark 115 9 Finland Large market sizeand low penetration 111 14 Norway

  12. German mutual funds market Compared to GDP 32% 29% 15% Large market sizeand low penetration Large market sizeand low penetration Germany Sweden UK

  13. German Internet market Internet users Internet banking accounts Penetration Millions of users Millions 1999 Q1 2000E Germany 16.0 20% 0.8 UK 14.9 25% N/A France 0.1 11.8 20% Sweden 4.5 50% 0.7 Large market size and low penetration Source: JP Morgan

  14. Germany – 3,000 banks Market share by deposits Other banks 26% Savings &Landesbank 39% BfG 1% Deutsche Bank 6% HypoVereinsbank 4%Dresdner Bank 3% Commerzbank 2% Co-operative banks 19% Highly fragmented market Source: Deutsche Bundesbank, June 1999

  15. Thorough due diligence process First phase • Asset quality review • Financial performance and potential review • Tax review • Assess current Internet systems and development potential • Portfolio review Confirmatory due diligence September-October • “Audit” of the accounts by PWC • Examination of loan book and leasing portfolio • Valuation of real estate by external real estate evaluator • Examination of Treasury and Trading

  16. SEB acquires BfG • BfG will become a 100% subsidiary of SEB • Purchase priceSEK 13.9 (DEM 3.1, EUR 1.6) billion • Contract signed, share transfer on3 January, 2000

  17. BfG in brief SEB + 1998 EUR billion BfG SEB BfG Total assets 42 84 126 Assets undermanagement* 13 70 83 Customers millions 1.0 1.5 2.5 Employees 5,300 11,700 17,000 Branches 177 260 437 ** ** * 1999 Q3 ** Excluding Baltic banks

  18. BfG assets under management EUR billion 1998 1999 (August) FundsMutual, special, real estate 8 10 OtherPortfolio management,investment centres,BfG Luxembourg 3 3 11 13 > 70 % in funds

  19. 28.3% German Market BfG 22.8% 17.3% 15.9% 15.9% 15.5% 13.5% 6.8% 1996 1997 1998 19996 months BfG mutual funds growth

  20. Transaction rationale • Fits well with SEB’s strategic goals as regards asset gathering and Internet banking • Attractive financial terms • Access to the German market with high growth potential in asset gathering • Strengthens SEB’s position for further growth in Internet banking

  21. Karl-Heinz Hülsmann President, BfG

  22. BfG change programme • Restructuring • New position • New customers • New services • Competitivemarketing “Old BfG” 1991 “New BfG” 1999

  23. Kiel Neumünster Rostock Bad Schwaren Wismar Lübeck Wilhelmshaven Norderstedt Bremerhaven Schwerin Hamburg Harburg Emden Oldenburg Bremen Berlin Wolfsburg Potsdam Hanover Osnabrück Minden Braunschweig Hildesheim Herford Magdeburg Hamelin Cottbus Bielefeld Münster Salzgitter Gütersloh Bocholt Masl Duxlaken Lunen Recklingh. Hamm Gelsenk. C-Rauxel Bergkommen Meers Oberh. Dortmund Herne Duisburg Gottingen Bochum Essen Mülheim Halle Krefeld Witten Wuppertal Hagen Ratingen Leipzig Neuss Düsseldorf Lüdenscheid Kassel • Dresden Solingen Remscheld Mönchen- gladbach Langenfeld Leverkusen Köln Erfurt Siegen Brühl Düren • Chemnitz Aachen Bonn Bad Godesberg Gießen Zwickau Wetzlar Neuwied Koblenz Bad Homburg Sulzbach Frankfurt Hanau Wiesbaden Offenbach Mainz Heusersramm Schweinfurt Neu Isenburg Rüsselsheim Aschaffenburg Trier Würzburg Darmstadt Worms Mannheim Heidelberg Mannheim Kaiserslautern Ludwigshafen Saarbrücken Pirmasens Heilbronn Karlsruhe Regensburg Pforzheim Stuttgart Sindelfingen Göppingen Ingolstadt Esslingen Reutlingen Offenburg Ulm Augsburg Albstadt Munich Schaffhausen Freiburg Geveesried Konstanz Kempten Friedrichshafen Lörrach BfG’s geographic coverage • 177 branches in120 towns and cities Local reach 62% of total population

  24. BfG today 5,300 employees per December 1998 Service, IT, Central Staff 1,408 Retail 1,923 Trading/Treasury 129 Institutional 98 Plus subsidiaries 1,332 Real estate 111 Corporate 299

  25. BfG new customer growth 240,000 200,000 160,000 100,000 Unique selling position 1996 1997 1998 1999 Oct

  26. BfG customers Age structure Salary structure (net DEM/month) • Younger • Higher income • Higher education • More frequent Internet users 15% > 64 20% > 5,000 35% 45-64 50% 2,500-5,000 43% 20-44 30% < 2,500 7% < 20

  27. BfG customers used to direct channels Internet - 16,000 customers - 60,000 transactions/month Advanced usage compared with other German institutions Telephone bank - 130,000 customers - 145,000 transactions/month Online - 49,000 customers - 92,000 transactions/month

  28. BfG - satisfied and loyal customers Customer satisfaction BfG 69% Big four banks* 58% Customer loyalty BfG 85% Big four banks* 72% 92% of Germans know BfG** * Deutsche Bank, Commerzbank, Dresdner Bank, Hypo Vereinsbank ** ICON Werbetracking 95-98

  29. BfG mission statement ”We are a sales-driven bank. Offering qualified advice proactively is imperative to sell our excellent products and services. Excellent business results are the objective. Our yardstick and key to success are customer and staff satisfaction.”

  30. Lars H Thunell President and Group Chief Executive, SEB

  31. SEB’s intentions • Build on BfG’s existing clients and infrastructure • Distribute savings products through BfG’s distribution channels • Expand our leading position in Internet banking to the German market • Strategic review of other areas

  32. SEB and BfG management resources BfG Management Team • Karl-Heinz Hülsmann President • Lars Lundquist • DeputyPresident Chairman of the Supervisory Board Lars H Thunell SEB Project Teams SEB Change/Integration Support Team

  33. Lars Lundquist Executive Vice President and Head of SEB Asset Management

  34. Cost synergies • EUR 15 (SEK 130) million/year from 2002 • Treasury and Trading integrated with group functions • BfG’s and SEB’s German corporate banking reviewed, focused and integrated • BfG’s investment management co-ordinated with SEB Asset Management • BfG Bank Luxembourg mergedwith SEB Luxembourg • Faster development of BfG Internet

  35. Continued improved cost efficiency • EUR 30 (SEK 260) million/year from year 2002 • Review of • back-office operations • organisational structure • credit processes • Migration to direct channels • Improved management reporting system

  36. Other synergies • Enhanced asset management growth by supplementing BfG product range withSEB products EUR 10 (SEK 90) millionfrom 2005 • Funding synergies owing to SEB’s increased presence in local German market and access to BfG’s deposit surplus EUR 5 (SEK 45) million first year

  37. Growth potential • Internet banking and further asset management growth by extending upscale and institutional customer baseEUR 60 (SEK 520) million per year by 2005

  38. Total profit improvement until 2005 EUR million Cost synergies 15 Further operational improvement 30 Other synergies 15 Growth potential 60 120 SEB target ROE 15%

  39. Lars H Thunell President and Group Chief Executive, SEB

  40. Favourable transaction terms • Purchase price SEK 13.9 (DEM 3.1, EUR 1.6) billion for 100 % of BfG´s equity • Values BfG at approximately 0.8 times adjusted equity • Restructuring reserve SEK 3.0 (DEM 0.7, EUR 0.35) billion • Marginal increase in earnings per share year 2000 thereafter stronger growth in earnings per share * As of June 30, 1999

  41. Rights issue of SEK 4.1 billion Agreements regarding hybrid capital (core capital/subordinated debt) SEB intends to raise subordinated debt (total SEK 5.8, EUR 0.7 billion) in order to strengthen its capital adequacy Decrease of risk/weighted volume by SEK 36 (EUR 4) billion before closing the deal Financing

  42. SEB after BfG acquisition Leading corporate bank in the Nordic region Major step in PaneuropeanInternet strategy Euroland platform for further expansion in Asset Management

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