The ratings on Sweden-based Skandinaviska Enskilda Banken AB (SEB) reflect the group's very strong franchise in corporate and merchant banking in Sweden, its adequate capitalization, and the group's sustained profitability in the past three years. The ratings are further underpinned by very good asset quality, growth in business volume in retail banking primarily in Sweden, asset management, life insurance, banking in Eastern Europe, as well as tight cost discipline. In Germany, SEB is still under-performing relative to group financial targets, and this remains a constraint in Standard&Poor's Ratings Services' assessment. With assets of Swedish krona (Skr) 2.03 trillion ($276.1 billion at Skr7.36 to $1) at March 31, 2006, SEB ranks as the third-largest financial services group in the
