Handelsbanken profit up 29% on agency stake sale
STOCKHOLM–Svenska Handelsbanken AB (SHB-B.SK) on Wednesday posted a 29% rise inits second-quarter net profit, boosted by higher income and the sale of its stake in a credit reference agency.
Net profit at the Sweden-based bank rose to 5.23 billion Swedish kronor ($593.2 million) in the three months ended June 30 from SEK4.06 billion in the same period a year ago, against analysts’ expectations for SEK5.03 billion in a FactSet poll.
The bank said that technical advances will mean that, over time, most administration can be digitalized. Handelsbanken is carrying out a strategic initiative for improving efficiency, and will gradually implement this.
It said it intends to quantify the effects of the efficiency measures in its third quarter interim report.
In its IT investments over the next few years, the bank will carry out digital integration within both its mortgage loan business and its broader corporate business.
In the U.K., Handelsbanken said it is preparing for the implementation of Brexit in close consultation with public authorities in both Sweden and the U.K.
"The bank’s low tolerance of risk, sound capitalisation and strong liquidity situation mean that Handelsbanken is also well-equipped to operate under substantially more difficult market conditions than those experienced during the past few years," it said.
The SEK300 million cost guidance for development work on U.K. operations during 2018 still stands, it said.
Second-quarter net interest income at the bank rose 7.9% on year to SEK7.9 billion from SEK7.32 billion, while loan losses edged higher to SEK222 million from SEK186 million.
Handelsbanken’s common equity Tier 1 ratio–a key measure of financial strength–fell to 21.4% at the end of the quarter from 23.4% a year earlier.
-Write to Dominic Chopping at [email protected]; Twitter: @domchopping @WSJNordics
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