The ratings on Sweden-based Skandinaviska Enskilda Banken AB (SEB) reflect the group's well-diversified revenue base, underpinned by its strong franchise in corporate and merchant banking in Sweden. They also reflect the group's sustained profitability and tight cost discipline. Capitalization has been significantly enhanced by a Swedish krona (SEK) 15 billion rights issue announced in February 2009. Asset quality remains resilient but is likely to be threatened by a sharp adjustment in the Baltic countries. In addition to asset quality pressures, the group's profitability could be constrained by its relatively high dependence on capital markets-related revenues. Concentration on single large exposures remains a constraining ratings factor. With assets of SEK2.51 trillion ($300 billion at SEK8.37 to $1) as at Dec. 31,
