Handelsbanken (SHB) Investor presentation summary

Safety, stability, and credit quality

• Maintains the highest credit ratings globally (Aa2/AA-/AA) and strong asset quality compared to peers.

• CET1 capital ratio stands at 18.9%, 400bp above regulatory minimum and 100bp above target range.

• Net credit loss ratio remains extremely low, with stable earnings growth and high collateralization (>90% of lending collateralized).

• Credit portfolio is diversified across geographies and sectors, with low LTVs and minimal exposure above 75% LTV.

• Asset quality is strong, with low probability of default and a small proportion of problem loans.

Balance sheet, liquidity, and funding

• Balance sheet is structured for low risk, with short-term assets 1.9x short-term liabilities and ample liquidity reserves.

• NSFR at 121% and LCR at 182%, with a liquidity reserve of SEK 333bn and additional liquidity measures prepared.

• Funding is diversified between deposits and wholesale markets, with a balanced maturity profile and no reliance on central bank facilities.

• Senior and covered bonds are well balanced, with international and domestic issuance.

• MREL requirements are comfortably met, with significant buffers above regulatory thresholds.

Financial performance and capital

• Q2 2024 operating profit reached SEK 8.5bn, with ROE at 15.2% and a cost/income ratio of 41.5%.

• Net interest income grew by 1% quarter-on-quarter, supported by FX effects and improved margins.

• Expenses decreased slightly, with staff reductions and lower consultant costs.

• CET1 ratio remains robust, with anticipated dividends to maintain a 400bp buffer above regulatory requirements.

• Capital position is strong, with total capital ratio at 22.5% and significant distance to MDA trigger levels.