Update: Skandinaviska Enskilda Banken AB (publ)

The stable outlook reflects our expectation that SEB will be able to comply with the requirements set by the financial regulators to further improve its AML framework. Furthermore, we expect the bank will maintain robust capitalization over the next 24 months, despite intensifying pressure on earnings and asset quality stemming from COVID-19. We expect that its asset quality will remain broadly in line with that of domestic peers. We also anticipate that SEB will continue building a considerable ALAC buffer in the coming years as it fulfils its MREL requirements, and that the ALAC buffer will durably exceed 5% of our risk-weighted assets metric by year-end 2021. We could downgrade SEB if its asset quality deteriorated beyond our expectations. In

...Key strengths Key risks Leading merchant bank franchise in the Nordics. Concentration of relatively large single-name exposures. Diversified revenue streams and improved efficiency supportive of earnings in the European context. Predominance of wholesale funding and corporate deposits in the funding profile. Strong risk-adjusted capitalization aided by robust asset quality....

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