Financial data for the Group:
· Operating income amounted to SEK 1,386m (1,622*). The decline was mainly due to discontinued operations and lower activity in the market for corporate transactions.
· Operating expenses totalled SEK 1,355m (1,506*). The decline was due to implemented savings programmes. Items affecting comparability had a negative net impact of SEK 71 million (neg: 168) on earnings.
· Operating profit before items affecting comparability amounted to SEK 31m (115*). Including items affecting comparability, the Company posted a loss of SEK 40m (loss: 52*) before credit reserves.
· The loss for the period was SEK 38m (profit: 14*).
· The Company reported a strong financial position at the end of the period, with equity amounting to SEK 2.5 billion, a capital ratio of 21.5% and a Tier 1 ratio of 15.9%.
· Net inflow of SEK 900 million to Carnegie Fonder during the first nine months of 2011.
· Streamlining of the offering in Securities – market making operations for derivatives, issuance of warrants and arbitrage trading were discontinued.
· Carnegie’s Danish operations ranked number one in Prospera’s survey of corporate finance advisory services.
Market climate remains uncertain
The sovereign debt crises in Europe have igniting considerable turmoil in the world’s financial markets. One consequence of this market uncertainty is a general decline in activity: a number of structural transactions are being put on hold, private customers are becoming increasingly cautious and many institutions have a low proportion of shares in their portfolios.
All of these factors have impacted Carnegie and its results. Nonetheless, underlying operating profit was positive for the first nine months of the year. The private banking operations and the fund company reported stable earnings and continued to experience inflow of capital, which is impressive given the market turmoil. The number of transactions in the Investment Banking business area decreased following the postponement of a number of transactions due to market uncertainty. The Securities business area reported lower income than in the year-earlier period, mainly as a result of the discontinuation of parts of the business previously included in HQ Bank.
In periods of turbulence, maintaining sound cost control is crucial. Although our extraordinary expenses still remain high, the cost programmes we have implemented are gradually taking effect. We will continue working to reduce our expenses and we recently decided to reduce the Swedish IT and support operation with 30 positions, capitalizing from synergies related to the acquisitions in 2010.
The purchase of HQ Bank and HQ Fonder slightly more than a year ago has enabled Carnegie to generate a larger share of recurring income, which is reassuring in an uncertain market climate. In an effort to focus on advisory and management services, we streamlined our operations in the Securities business area during the quarter by discontinuing our market-making operations for derivatives, the issuance of warrants and arbitrage trading.
Never is the need for competent advisory services greater than in periods characterised by uncertain economic outlooks. Carnegie has cutting-edge expertise in all of its areas of operation and strong prospects for strengthening its relative position during such turbulent times. We have the advantage of offering personal and flexible service, while our size provides us with the critical mass to present a comprehensive offering in our segments.
Frans Lindelöw, President and CEO
*) Pro forma 2010: Includes profit from HQ Bank and HQ Fonder but excludes the trading loss of SEK 1.2bn in HQ Bank. Pro forma also excludes negative goodwill income pertaining to the acquisition of HQ Bank. The comparison figures on page 5 and onward are not pro forma.
For further information, please contact:
Andreas Koch, Head of Communications, phone: 46 73 417 86 39, e-mail: email@example.com