Sweden's SEB bank to raise $1.8B; 4Q profits fall

Swedish bank SEB AB on Thursday said profits fell nearly 7 percent amid the financial turmoil in the fourth quarter and announced plans to raise 15 billion kronor ($1.8 billion) in cash from shareholders.

The bank said net profit in the last three months of 2008 was 3.5 billion kronor, down from 3.75 billion kronor in the same period a year earlier. Net interest income, its main source of revenue, rose to 5.5 billion kronor, from 4.4 billion kronor.

SEB said "deteriorated economic conditions resulted in increased provisioning, particularly in the Baltic countries."

The bank, which is the core holding of Sweden's powerful Wallenberg family, released its fourth-quarter earnings a week ahead of schedule after rumors of the rights issue had leaked to the Swedish media.

The cash injection was needed "to meet the challenging macro-economic conditions," Chief Executive Annika Falkengren said.

"The rapid development of events and increased uncertainty has created substantial challenges for the organization," she said.