Skandinaviska Enskilda Banken : Good platform for continued growth in institutional business

Institutional Banking is both a coverage and product organisation. The business area has approximately 150 employees in Sweden, Norway, Denmark, Finland, Germany, the UK, New York, Singapore and Hong Kong.

Business is going very well, says Peter Lauridsen, both in the coverage and product units.

"We measure our success in slightly different ways," says Peter. "In Coverage we take overarching responsibility for institutional customer relationships concerning both customer satisfaction and profitability. The aim is to boost the combined business in the entire bank's product offering. Here our customers have generated a great deal of activity in both trading and custody services.

"On the product side, we noticed during the corona crisis last year that customers had some decision-making angst. Their focus was on continuity plans, and they did not want to make forward-looking decisions. The market in now beginning to normalise, and volatility is declining. But in return, customers are reverting to more normal decision-making processes. They are willing to invest in new assets, requesting more advice, and turning once again to SEB for more forward-leaning discussions."

Institutional Banking's customer base consists in part of financial investors such as pension funds, insurance companies and hedge funds, and in part of traditional actors as well as new, niche actors and fintech companies.

What do the growth opportunities look like?

"We have adopted an ambitious vision to be the undisputed leader in the Nordic market. We see no need for geographic expansion - for us it's best to dig where we stand. We already have a strong home bank position in Sweden, and in the other Nordic markets the goal is to advance our position and take the final leap from product provider to home bank. We also have much more to do in our non-Nordic markets of Germany, the UK and Asia in our strength areas of Nordic products and sustainability.

"The market is growing, and there is quite a sizeable flow of capital that needs to be placed. We are benefiting from investors' interest in alternative investments and sustainability-linked investments. We are strong in both of these areas.

"A lot is happening also on the bank side, where traditionally we have served banks that are more counterparts than customers. Now, new niche players are emerging that are focusing only on consumer credits or smart payment solutions, for example, but which are in need of financial infrastructure. This development is unfolding fast, it is disruptive, and it is quite hard to foresee. The only thing we know is that in five or ten years, things will look entirely different than they do today. We just have to go with the flow."

What are the most important priorities going forward?

"First, ensuring that we successfully handle the rush we are currently experiencing in sub-custody. SEB is essentially the only remaining Nordic actor in this area, and we are working closely with Investor Services to take care of customers. We also want to take advantage of the opportunity to build further momentum in Global Custody and the portfolio solutions area. As the absolute dominant sub-custody actor in the Nordic countries it is natural that we let our Nordic customers know that we want to take responsibility for all of their post-trade needs.

"Another priority area is alternative investments. We will make sure that we have a strategy and a value proposition that meet customers' special needs, and also ensure that our own product offering continues to be relevant. We have a strong position thanks to far-sighted investments more than ten years ago when we came out with the first private equity and real estate funds together with Investment Management. But continued investments like these are needed. In parallel with this we will also strengthen our focus on the fast-growing asset management segment, which specialises in illiquid assets.

"Thirdly, we will continue to focus on sustainability. We have a strong sustainability brand, but there is no doubt that essentially all banks in Europe see this as a key area. Development is going fast, and we need to work hard to maintain our position as a trusted sustainability adviser. This won't happen by itself.

"Now we are working with the business plan for the coming three years and are looking forward to investing in the above-mentioned areas and other, exciting activities. I am convinced that we can advance our positions in all of our home markets."