Update: Skandinaviska Enskilda Banken AB (publ)

The stable outlook reflects our expectation that SEB will comply with the requirements set by the financial regulators, having worked to improve their AML framework. Furthermore, we expect the bank will maintain robust capitalization over the next 24 months and that its asset quality will remain broadly in line with that of domestic peers, having gained support from pandemic-driven monetary and fiscal measures. 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 addition, we could lower the

...We expect SEB's diversified revenue mix will support earnings despite the COVID-19 operating environment. SEB's leading position among large corporates and top position in the Swedish and Baltic retail markets affords the bank with a steady stream of revenue. We believe the bank's diversified offerings will continue to serve SEB well in delivering approximately Swedish krona (SEK) 50 billion-SEK51 billion in annual operating revenue over the coming years. We presume about 30% of operating income is generated from outside Sweden (see chart 1) and just over half will be non-interest-income (see chart 2). Note that income booked in Sweden also cover larger international corporates, owing to SEB's leading position among corporates....

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