Handelsbanken (SHB) investor relations material

Executive summary

• Operating profit rose 9% sequentially and 4% year-over-year to SEK 8,195m, with ROE at 14% (13.6% year-over-year), aided by a SEK 1,127m VAT refund.

• Lending growth was strong in the UK and Netherlands, while Sweden saw flat lending due to slow economic growth; mutual fund net inflows exceeded market share in Sweden and Norway.

• Cost efficiency improved, with expenses declining 5% year-over-year and credit losses remaining minimal.

• Asset quality remained strong, with a credit loss ratio of 0.01% and high customer satisfaction across markets.

• Share price reached an all-time high during the quarter, though class A shares were down 8% in Q1; total return including dividend was 5%.

Financial highlights

• Net interest income declined 13% year-over-year to SEK 10,016m, mainly due to lower margins from reduced short-term rates.

• Net fee and commission income increased 7% year-over-year (FX adjusted) to SEK 3,073m, driven by strong savings business inflows.

• Total income was SEK 14,778m, down 1% year-over-year; underlying operating profit down 12% year-over-year.

• Credit losses were SEK 35m (one basis point), with asset quality remaining very strong.

• Cost/income ratio was 39.5% (41.2% year-over-year); underlying expenses dropped 1% year-over-year.

Outlook and guidance

• Management expects continued lending growth in the UK and Netherlands, with Swedish lending growth tied to broader economic recovery.

• No specific cost guidance provided; cost base expected to remain stable with decentralized decision-making.

• Policy rate movements in the UK and Norway will impact NII, but effects will lag and vary by country.

• Long-term profitable growth potential highlighted in stable home markets with opportunities for differentiation and customer satisfaction.

• Continued focus on efficiency and stable credit quality expected.