Handelsbanken's Interim Report January - September 2003

- Operating profit increased by 17% to SEK 8.7bn (7.5)
- Return on equity was 15.2% (14.3)
- Income increased by 4% to SEK 16.7bn (16.0)
- Expenses fell by 6% to SEK 7.7bn (8.2)
- Operating profit for the third quarter - SEK 2.8bn - was 33% higher than for the corresponding period last year
- The loan loss ratio was 0.04% (0.04)
- Profits after tax totalled SEK 6.1bn (5.3)
- Earnings per share were SEK 8.86 (7.66)
- Svenskt Kvalitetsindex measures customer satisfaction among Swedish bank customers - Handelsbanken best among the nationwide banks
The Group

Profits increased by 17% to SEK 8.7bn
Operating profit increased by 17% to SEK 8 726m (7 460).
0perating profit for the third quarter amounted to SEK 2 789m (2 100), an increase of 33% compared with the corresponding quarter last year. Excluding the write-down of financial assets by SEK 199m, which the Bank made during the third quarter of 2002, the increase between the two quarters was 21%.
Return on shareholders' equity for the period was 15.2% (14.3). For the third quarter, return on equity was 14.3% (11.1). The C/I ratio continued to improve and before loan losses it was 46.0% (50.9), and after loan losses 47.7% (52.3). The C/I ratio for the quarter was 45.7% (52.0). Earnings per share were SEK 8.86 (7.66) and as a 12-month moving total, earnings per share were SEK 11.70.
Income increased by 4%
Income continued to rise and was SEK 16 699m (16 044),
an increase of 4%. Throughout the year, the rise in income has accelerated compared to the corresponding periods in the previous year. From being flat during the first quarter, income rose by 4% in the second quarter and by 9% in the third quarter to SEK 5 496m (5 042). Despite lower deposit margins, net interest income rose during the period by 3% to SEK 10 936m (10 611). Net interest income was positively affected by higher business volumes and better lending margins. The average volume of lending rose in total by almost 4% to SEK 830bn, while average lending volumes in the Nordic countries, including Sweden, rose by nearly 5%.
Net commission income was unchanged at SEK 3 794m (3 782). Compared to the second quarter, net commission income rose by 7% to SEK 1 313m (1 230). Payment and lending/deposit commissions were the commission categories which rose most during the period.
Compared to the previous quarter, all commission categories rose except insurance commission, which was unchanged. Net trading income was SEK 1 601m (1 248), an increase of 28%. Net trading income was mainly generated in fixed income and foreign-exchange related trading.
Expenses at same level as beginning of 2001
Expenses fell by 6% to SEK 7 676m (8 163). Staff costs decreased by 3% and other expenses by 10%. Expenses for the third quarter were 3% lower than the previous quarter and amounted to SEK 2 512m (2 585). Staff costs were unchanged, while other administrative expenses decreased by 7% to SEK 984m (1 056). The number of employees fell by 530 compared to the same period last year and was 9 252 at the end of the quarter. Expenses in the third quarter were at their lowest level since the first quarter of 2001.
Low loan losses
Loan losses were SEK 297m (222). The loan loss ratio was 0.04% (0.04), and the share of bad debts in relation to lending was 0.25% (0.22).
Capital ratio, buy-back of shares and rating
The Annual General Meeting in April granted the Board authority to buy back the Bank's own shares. There has been no buy-back of shares during the period. The capital ratio was 9.8% (9.4) and the Tier 1 ratio was 6.9% (6.3). Handelsbanken's rating from all rating agencies was unchanged.
Svenskt Kvalitetsindex's Customer Satisfaction Survey 2003 - Handelsbanken best of the nationwide banks
Every year, Svenskt Kvalitetsindex (SKI) measures customer satisfaction among bank customers in Sweden. SKI is run by a consortium which includes the Stockholm School of Economics. The first survey was conducted in 1989 and the method used has been basically unchanged since then.
The results of this year's survey were published at the beginning of October. Handelsbanken had the most satisfied customers - both private and corporate - among Swedish banks with a nationwide network. Handelsbanken has had the most satisfied private customers every year the survey has been conducted and the same results for corporate customers for thirteen of the fourteen years the survey has existed.
In the other Nordic countries, similar surveys will be presented during the fourth quarter.
New method of reporting benefits to employees
In 2004, the Swedish Financial Accounting Standards Council's recommendation 29 (IAS19) will come into force. This entails changes in how and when certain types of benefits to employees are reported. The impact on the Group's net results will be more or less unchanged compared to the current situation.

The balance sheet is affected since any surplus values in the Bank's pension fund and pension foundation must be reported net in the Bank's shareholders' equity. The assessment is that shareholders' equity, assuming unchanged stock prices, will increase by nearly SEK 2bn.
Lars O Grönstedt
President and Group Chief Executive
The full report including tables can be downloaded from the following link:

For further information please contact: <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Lars O Grönstedt, Group Chief Executive <!-- hugin-supplied --><br> phone: +46 8 - 22 92 20, e-mail: lagr03@handelsbanken.se <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Lennart Francke, Head of Control and Accounting <!-- hugin-supplied --><br> phone: +46 8 - 22 92 20, e-mail: lefr01@handelsbanken.se <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Lars Lindmark, Head of Corporate Communications <!-- hugin-supplied --><br> phone: +46 8 - 701 10 36, e-mail: lali12@handelsbanken.se <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Bengt Ragnå, Head of Investor Relations <!-- hugin-supplied --><br> phone: +46 8 -701 12 16, e-mail: bera02@handelsbanken.se

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