Handelsbanken (SHB) Investor presentation summary

Safety, stability, and credit quality

• Maintains the highest credit ratings globally from Moody's, S&P, and Fitch, reflecting strong asset quality and capital buffers relative to peers.

• Net credit loss ratio remains exceptionally low, with minimal losses over the past two decades and stable performance through recent quarters.

• Over 90% of lending is collateralized, with low loan-to-value ratios across property portfolios and a high proportion of secured lending.

• Credit portfolio is diversified geographically and by sector, with significant exposure to Sweden, Norway, UK, and the Netherlands.

• Asset quality remains strong, with low probability of default and a small proportion of problem loans compared to peers.

Financial performance and profitability

• Q3 2024 operating profit reached SEK 9.1bn, with a return on equity of 15.6% and a cost/income ratio of 38%.

• Income increased, costs decreased, and net credit loss reversals contributed to improved profitability.

• Net interest income remained stable quarter-on-quarter, supported by day count effects and stable margins.

• Net fee and commission income grew at a 5% CAGR, with savings-related fees comprising the majority.

• Expenses and staff numbers declined, reflecting ongoing efficiency measures.

Balance sheet, liquidity, and funding

• Maintains a low-risk balance sheet with short-term assets exceeding short-term liabilities by 1.7x.

• NSFR stands at 121%, providing 1.5 years of market funding headroom before reaching the regulatory minimum.

• Liquidity coverage ratio (LCR) is high at 182%, with a SEK 333bn liquidity cushion.

• Funding is diversified by instrument and currency, with a balanced mix of senior and covered bonds.

• No reliance on central bank facilities or government-guaranteed funding.