SEB says new pension standard to hit profit

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SWEDEN – SEB estimates new pension accounting standards will hit 2004 profit by around 250 million crowns (27.2 million euros).

“The introduction of new accounting principles, SFASC 29 (IAS19), as from 2004 will have an impact on pension costs in the group accounts,” the bank said.

“The major change implies that the net of the value of pension funds and pension commitments must be consolidated into the group’s balance sheet and a number of actuarial assumptions must me made.”

It estimates that the excess value would be around 1.7 billion crowns as of January 2004. “The change is expected to affect profit before tax for 2004 negatively by approximately 250 million crowns, compared to current accounting principles,” SEB said in its 2003 annual report.

It also disclosed that SEB Asset Management’s operating result fell 15% in 2003 to 455 million crowns. The result was due to “a shift of product mix in 2002 and lower average assets under management, which had a negative impact on income”. Total income was down 13% at 1.34 billion crowns

At year-end assets under management had risen nine percent to 587 billion crowns. The strength of the crown against the dollar had a negative eight billion-crown impact on AUM.

Equities represented 35% of total assets, down from 32%, while fixed income was down to 56% from 58%. Real estate and cash accounted for five and four percent respectively.

SEB added that sales of occupational pensions rise by more than 20%, while private pension insurance sales rose 36%.

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