SEB Proposes to Raise Dividend by 45 Percent as Profit Increases

SEB AB (SEBA), the second-largest bank in the Baltic countries, proposed increasing its dividend to shareholders by 45 percent after fourth-quarter profit rose.

The lender proposed a dividend of 4 kronor a share, compared with 2.75 kronor a year earlier, the Stockholm-based company said in a statement today. It was projected to pay shareholders 3.35 kronor, according to Bloomberg dividend forecasts, which take into account seven variables including analysts’ estimates, company guidance and industry analysis.

Net income rose to 4.22 billion kronor ($647 million) in the fourth quarter from 3.23 billion kronor a year earlier, beating the average estimate of 3.83 billion kronor in a Bloomberg survey of 11 analysts.

Sweden has subjected its banks to some of the strictest capital rules in Europe and warned it may raise requirements further this year after property prices and household debt levels soared to records. Swedish banks, the best capitalized lenders in Europe, already exceed the government’s 2015 requirement for a core Tier 1 ratio of 12 percent, fueling speculation they will return more money to shareholders.

SEB’s common equity Tier 1 ratio increased to 15 percent of risk-weighted assets under Basel III rules at the end of last year, compared with 13.1 percent at the end of 2012.

The bank joins Nordea AB, the Nordic region’s largest lender, Swedbank AB and Svenska Handelsbanken AB (SHBA) in raising its dividend. Nordea proposed on Jan. 29 to increase its dividend by 26 percent to 43 euro cents a share, while Swedbank on Jan. 28 proposed raising its 2013 payout by 2 percent to 10.1 kronor a share. Handelsbanken proposed hiking its dividend 53 percent to 16.5 kronor, including an ordinary dividend of 11.5 kronor.

To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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