Handelsbanken (SHB) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating profit rose 3% sequentially to SEK 8.5bn, with ROE at 15.2% and EPS at SEK 3.43, reflecting improved margins and lower expenses.

• For January–June 2024, operating profit was SEK 16,778m, down 3% year-over-year, with ROE at 14.4% and EPS at SEK 6.77.

• Efficiency measures included a SEK 300m restructuring charge, staff reductions, and a new decentralized organization, supporting a lower cost base.

• Moody’s upgraded the outlook to stable, confirming an Aa2 rating.

Financial highlights

• Q2 2024 total income increased 1% sequentially to SEK 15,457m; net interest income was SEK 11,746m, up 1%, and net fee and commission income rose 7% to SEK 2,939m.

• Total expenses for Q2 2024 decreased 1% to SEK 6,420m; cost/income ratio improved to 41.5%.

• Net credit losses were net recoveries of SEK 133m (2 bps) in Q2 and SEK 228m (1 bp) for H1; credit loss ratio was -0.02% in Q2 and -0.01% for H1.

• Dividend accrual for Q2 was SEK 4.00 per share (116% of quarterly earnings); for H1, SEK 5.2 per share (78% of earnings).

• CET1 ratio stood at 18.9%, 400 bps above regulatory requirements.

Outlook and guidance

• Efficiency initiatives and cost reductions will continue, with further impact expected as redundancies and consultant reductions are realized.

• IT investment pace to slow after major projects, but focus remains on digital offerings and internal efficiency.

• CET1 buffer of 400 bps to be reviewed at year-end, with potential to revert to previous 100-300 bps range if macro risks recede.

• No specific guidance on margin development, but lending margins may widen as rates drop, while deposit margins could shrink amid competition.