EUROPE - SEB, the Swedish banking group, has seen the operating profits in its life business decrease by 6%, while the wealth management division saw profits fall by nearly a quarter.
The SEK67m (€10m) decrease in the life business was related to lower income from traditional insurance and investments for own accounts, while the income from the core, unit-linked business continued to increase. Total operating income was 2% or SEK 52m lower than last year.
The banking group's life arm consists of three business areas - SEB Trygg Liv (Sweden), SEB Pension (Denmark) and SEB Life & Pension International.
SEB's wealth management division saw profits fall 24% to SEK309m compared to Q1 results. Profits were also down 19% compared to the same time period last year.
Further, performance and transaction fees were lower compared with the same period last year, SEK 144m (SEK181m).
The private banking saw strong net sales amounting to SEK17bn (SEK12bn) in addition to new clients, 716 (589). Overall net sales for institutional clients during the first six months amounted to SEK11 bn. In response to customer demand a service of identifying, evaluating and recommending external fund managers was established. Assets under management were SEK1.298bn (SEK1.321bn), virtually unchanged from year-end 2010.
The strong unit-linked income supported operating profit in Sweden, which improved by SEK19m to SEK707m. Income from traditional and risk insurance in Sweden decreased. Operating profit in Denmark decreased by SEK35m to SEK274m, reflecting substantially lower return in the own account investment portfolio. The operating profit for the non-Nordic business decreased by SEK51m to SEK37m and reflected lower income from traditional insurance.
The weighted sales volume on new policies decreased for all product groups. Overall, the decrease was 8% reflecting lower volumes in Sweden and Denmark.
During the first six months, the unit-linked fund value increased by SEK0.7bn to SEK180bn. The net inflow was SEK5.2bn and the depreciation of value was SEK4.5bn.
One year ago, the total value was SEK 164bn. Total assets under management (net assets) amounted to SEK 427bn which was an increase of 5% from a year ago and 1% higher than at year-end 2010.
Meanwhile, Storebrand, the Norwegian pension and insurance provider, saw pre-tax profits increase to NOK434m (€55m) in the second quarter compared to a loss of NOK135m in the same period last year. According to a statement, the increase in profit was a result of the transition to less capital intensive products, which continued to improve the quality of underlying earnings in life and pensions in both Norway and Sweden.
The solvency margin of the Storebrand Life Insurance Group (Life and Pensions Norway and Life and Pensions Sweden) was 162% and its capital adequacy was 13.6%. This represents an increase in the solvency margin of 1 percentage point compared with Q1.
Its Swedish subsidiary, SPP, saw unit linked business increase by 8% in the year-to-date, while traditional business is down by 26%.
The asset management arm's result improved by NOK11m in the quarter and by NOK34m in the year-to-date as a result of higher management fees. Net new sales in asset management (external discretionary assets and mutual funds) totalled NOK900m for the quarter and NOK3.5bn for the year-to-date. Total assets under management amounted to NOK409bn (NOK384bn) at the end of the second quarter.