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Sweden's SEB says to write off 753 mln SEK for IT project
January 22, 2013 / 7:41 PM / 5 years ago

Sweden's SEB says to write off 753 mln SEK for IT project

STOCKHOLM, Jan 22 (Reuters) - Swedish bank SEB said on Tuesday it would write off 753 million crowns ($115.26 million) in its 2012 earnings for its computer systems and that it had made a loss of around 400 million crowns buying back bonds.

SEB said the 753 million crown charge related to write-offs for the cost of developing an internet banking platform the bank had decided not to use.

The bank also made a loss of 402 million crowns in the fourth quarter from buying back covered bonds (bonds backed by mortgages) and replacing them with longer-dated bonds.

SEB, like many other Swedish banks, has been extending the duration of its funding to better match its liabilities.

“Through this liability management, the balance sheet is further strengthened and the average cost of funding going forward will be lowered,” the bank said in a statement.

SEB also said a cut in Sweden’s corporate tax rate from 26.3 per cent to 22 per cent would have a positive effect of 1.1 billion crowns on its results, due to be published on Jan. 31.

“The total effects in the results for the whole year of 2012, net, amount to 7 million crowns,” the bank said in a statement.

At the end of the year, SEB’s Tier 1 ratio - a measure of a bank’s financial strength - was around 13.5 percent under new rules known as Basel III. This was in line with previous estimates.

The bank said its cost base for the full year, excluding the IT charge, was below 23 billion Swedish crowns.

$1 = 6.5331 Swedish crowns Reporting by Simon Johnson. Editing by Jane Merriman

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