Handelsbanken Liv is a non-mutual life insurance company and the acquisition does not affect the policyholders in Handelsbanken Liv. To finance the acquisition, Handelsbanken Liv will issue a subordinated loan of SEK 900m to Handelsbanken. Handelsbanken Liv will also receive a shareholder contribution of SEK 300m. As a result of the acquisition, goodwill in the Group increases by SEK 950m. Handelsbanken's key ratios are affected marginally. SPP Fondförsäkring AB has shareholders' equity of SEK 150m.

 

SPP Fondförsäkring has run at a loss since it started in 1996 and last year, its loss was SEK 73m. After the acquisition, the Bank, instead of SPP's policyholders, will bear the financial risk for the company.

 

Commenting on the deal, Handelsbanken's group chief executive, Lars O Grönstedt says: "The policyholders at SPP gave us a very clear mandate when 90 percent of them voted in favour of demutualisation. They want a model where we take more financial responsibility. We are therefore doing this now, rather than waiting until the actual time of demutualisation, in which case the policyholders would alone bear any losses until that date. The unit-linked company has good development potential and in the long run this will be a good deal for all parties involved. But to turn the tide, the efforts of a financially strong and long-term owner are needed. This is a task for Handelsbanken, not for the savers at SPP."

 

The acquisition also means that the capital which Handelsbanken will inject when SPP is demutualised will be somewhat lower.

 

The Swedish Financial Supervisory Authority has examined and approved the acquisition.

 

 

The press release can be downloaded from the following link: