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17th February 2012

Handelsbanken profits up - lower loan losses - expansion in UK

Handelsbanken reported net attributable profit of SeK 3,046m (€347m £289m $454m ¥35.6bn Y2,857m) for Q4 and SeK 12,323m (€1,403m £1,171m $1,836m ¥144.0bn Y11,559m) for the full year. The profits were UP 5% and 12% on the respective periods of 2010.


The biggest factor in the profit increase was reduced cost of risk, down 46% for the full year. The bank made progress more generally however with income growing 5% for the full year versus a 3% growth in expenses.


Handelsbanken UK loan growth indicates that despite the assertion from UK banks that businesses are not wishing to borrow in the current climate there is demand the British owned banks are not satisfying. The bank increased its UK operating profit by over one half mainly arising from a 25% increase in loan growth. It continues to grow its UK branch network with a further 21 branches opening taking the total to 104.


Income Summary 2011-Q4 2010-Q4 2011-FY 2010-FY
SeKm SeKm SeKm SeKm
Interest income 16,618 11,951 61,560 43,389
Interest expense -10,261 -6,339 -37,947 -22,052
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Net interest income 6,357 5,612 23,613 21,337
Net fee and commission income 1,877 2,127 7,673 8,022
Financial items at fair value change 63 276 1,016 1,377
Risk result - insurance 38 67 209 205
Other dividend income 0 1 146 190
Share of profit of associated companies -3 -4 9 11
Other income 42 49 143 154
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Total income 8,374 8,128 32,809 31,296

Staff costs -2,510 -2,466 -9,942 -9,504
Other administrative expenses -1,392 -1,425 -5,060 -5,062
Depreciation, amortisation and impairments -120 -106 -462 -452
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Total expenses -4,022 -3,997 -15,464 -15,018

Profit before loan losses 4,352 4,131 17,345 16,278
Net loan losses -243 -293 -816 -1,507
Gains/losses on disposal of assets 1 -5 7 -1
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Operating profit 4,110 3,833 16,536 14,770
Taxes -1,096 -1,030 -4,372 -3,962
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Profit from continuing operations 3,014 2,803 12,164 10,808
Profit from discontinued operations after tax 32 89 159 217
_______________________________________
Net profit 3,046 2,892 12,323 11,025
Minorities 0 0 0 0
_______________________________________
Attributable to shareholders 3,046 2,892 12,323 11,025