Handelsbanken (SHB) Q1 2025 earnings summary

Executive summary

• Operating profit for Q1 2025 was SEK 8.1 billion, down 2% year-over-year and 11-12% sequentially, with a return on equity of 12.9-13% and a cost-to-income ratio of 40.7%.

• Net interest income showed resilience, declining 2% year-over-year to SEK 11,347m despite policy rate cuts, while fee and commission income grew 5% to SEK 2,900m, mainly from savings and mutual funds.

• Costs decreased 7% year-over-year, improving efficiency and the cost-to-income ratio.

• Net credit losses were net recoveries for the fifth consecutive quarter, with a net credit loss ratio of -0.01%, highlighting strong asset quality and low funding and liquidity risks.

• CET1 ratio stood at 18.4%, 50 basis points above the long-term target range and 350bp above regulatory requirement, with an anticipated dividend of SEK 5 per share.

Financial highlights

• Total income for Q1 2025 was SEK 14,789m, down 3% year-over-year and 8% sequentially; net profit for the period was SEK 6,322m, down 4% year-over-year.

• Net interest income dropped 2% year-over-year and 2% sequentially (adjusted for currency effects); fee and commission income dropped 5% sequentially due to seasonality.

• Net gains/losses on financial transactions fell 33% year-over-year to SEK 506m.

• Net credit loss recoveries of SEK 54 million (one basis point); excluding management add-ons, net credit loss recoveries were SEK 26 million.

• Dividend payout for Q1 set at SEK 5 per share, 157% of quarterly earnings.

Outlook and guidance

• Management expects continued focus on efficiency, cost control, and productivity gains from digital tool adoption, with NII influenced by timing effects from rate changes and margin compression.

• CET1 ratio buffer is being gradually reduced toward the 1-3% target range, with future adjustments communicated quarterly.

• The bank is well-prepared to support credit supply and business growth even in uncertain macroeconomic conditions.

• Local business model seen as a strength in volatile environments.