The ratings on Sweden-based Skandinaviska Enskilda Banken AB (SEB) reflect the group's well-diversified revenue base, underpinned by its very strong franchise in corporate and merchant banking in Sweden; its adequate capitalization; and the group's solid and sustained profitability and tight cost discipline. The ratings are further supported by SEB's very good asset quality, although this could be threatened by the negative prospects of the Baltic countries. Furthermore, the group's profitability is highly dependent on the contribution from capital markets-related revenues. Concentration on single large exposures remains a constraining ratings factor. With assets of Swedish krona (SEK) 2.34 trillion ($360 billion at SEK6.50 to $1) at Dec. 31, 2007, SEB ranks as the third-largest financial services group in the Nordic region.
