Carnegie’s net profit for the first nine months 2006 was SEK 720 million (SEK 400 million), a Y/Y increase of 80%. The net profit generated in the third quarter was SEK 137 million (SEK 161 million). Earnings per share for the first nine months were SEK 10.44 (SEK 6.00), fully diluted SEK 10.31 (SEK 5.96).
Total income for the first nine months 2006 increased by 42% to SEK 3,256 million (SEK 2,301 million). Income in the third quarter was SEK 777 million (SEK 847 million), a Y/Y decrease of 8%. In the third quarter, Securities’ income was SEK 347 million, a decrease of 4%. Investment Banking generated SEK 158 million, 16% below income from the third quarter 2005. Asset Management income was SEK 158 million, down 13% Y/Y and Private Banking income was down by 2% to SEK 114 million.
Assets under management amounted to SEK 102.5 billion, an increase of SEK 3.5 billion from the previous quarter, mainly reflecting increasing asset values of SEK 5 billion, a small net outflow and a reclassification of SEK 1 billion.
Total expenses before profit-share were SEK 1,226 million (SEK 1,157 million), an increase of 6% Y/Y. Total expenses for the third quarter was SEK 396 million (SEK 384 million), a Y/Y increase of 3%. Total expenses for the full year are expected to be below SEK 1.7 billion.
Dividend policy – the Board of Directors have discussed the dividend policy in light of the new rules for capital adequacy, effective from 1 January 2007. The overall policy remains, Carnegie shall distribute as dividend all excess cash not necessary for the development of the business. Business requirements on risk capital shall be assessed through Carnegie’s internal business planning process. The aim is to optimize the capital structure in terms of Tier 1 and Tier 2 capital. In the new regulatory environment, a CAD ratio of 12 per cent is considered prudent. In order to be able to explore future business opportunities in the Securities operations, and to address the increased need for liquidity, it is the Board’s view that a certain increase of the total risk capital is required in the medium term, which will be addressed partly through retaining a portion of total earnings for 2006.
The Board of Directors has decided to investigate further a share-based long-term incentive programme directed to key employees, aimed to be presented to the AGM on 29 March 2007.
Personnel changes: Mats-Olof Ljungkvist, CFO and member of Group Management has decided to resign from Carnegie with effect from 1 March 2007. Ulf Fredrixon, currently Head of Credit and Finance at Carnegie, will take over the role as CFO. He will also join Group Management.