Highlights of Annual Report 1999

Highlights of Annual Report 1999 Summary Record result for Handelsbanken * The Handelsbanken Group result was SEK 8.6 billion, an increase of 17 % excluding items affecting comparability. This result is the best ever - both on a yearly and quarterly basis * Return on shareholders' equity was 18.4 % * Income increased by over 3 %, excluding items affecting comparability * Net commission income rose by 17 % * Expenses fell by 2 % - 20 % of the Bank's transactions go via the Internet * The surplus value in the Bank's pension foundation and pension fund increased by 90 % to SEK 19 billion * The Board proposes that the dividend be raised to SEK 3.00 per share * The Board proposes buy-back of up to 50 million shares The Group Best result ever The Handelsbanken Group's operating profit was SEK 8 607m (7 712) an increase of 17 % excluding items affecting comparability. Both the annual and quarterly results were the best ever for the Bank. Income increased by over 3 % while expenses fell by 2 %. Return on shareholders' equity was 18.4 % (18.6). Favourable income performance Income increased by 3 % excluding items affecting comparability. Net interest income went up by 1 % in spite of the fact that generally lower interest rates reduced the return on the Bank's liquid funds. The interest spread in the Handelsbanken Group was slightly improved. Net commission income rose by 17 %. The increase was particularly strong in the last quarter of the year. It mainly originates from products relating to equities and mutual funds. The lowest expenses in the Swedish banking sector fell even more Expenses fell by 2 %. Staff costs rose by 7 % and other expenses fell by 11 %. The rise in staff costs includes contractual salary increases and also refers to an increase in the number of employees in the IT area as a result of a decrease in the number of consultants. The total number of employees in the Group fell by 112 during the year in spite of the addition of 189 employees through the acquisition of Bergensbanken. The main part of the decrease was in the Swedish regional banks - 235 employees. An important reason for this is the increased use of the Internet service. More Internet transactions than branch transactions this year The Bank currently offers Internet services in the four Nordic countries with two separate services in Sweden (Handelsbanken and Stadshypotek Bank). In 1999, Internet services were introduced for corporate customers in Sweden. They were given a very good reception. Less than one year after these services were launched, 25 % of the Bank's corporate customers are using them. Internet services will be launched in the UK in 2000. Approximately 20 % of the Bank's business is done via the Internet and during 2000, the number of Internet transactions will exceed the number of transactions carried out at branch offices. Use of Internet banking services at Handelsbanken is one of the highest of the European banks. Handelsbanken has the lowest costs among European listed universal banks. Since the early 1990s, Handelsbanken has put around 25 % of its total expenses into the IT field. This is very high in an international perspective and more than the average for the major Swedish banks. The Bank's long-term investments in IT are a contributory factor to its low level of expenses. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/22/20000222BIT00460/bit0001.doc http://www.bit.se/bitonline/2000/02/22/20000222BIT00460/bit0002.pdf

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