Handelsbanken convenes an Extraordinary General Meeting and proposes extra dividend

The Board of Directors of Handelsbanken intends to shortly convene an Extraordinary General Meeting to be held on 21 October 2021. The Board of Directors proposes an extra dividend of shares in Industrivärden corresponding, as of today, to a value of approximately SEK 8.7 billion, or SEK 4.42 per share in Handelsbanken.

• For many years, Handelsbanken’s business model has generated stable earnings and capital growth. This development has continued during the pandemic and the Bank’s capitalisation is, as of today, well above the Bank’s target ratio level.

• As a result of the Bank’s good capital situation, the Board of Directors of Handelsbanken has resolved to convene an Extraordinary General Meeting and propose an extra dividend.

• The dividend is intended to consist of approximately 30.5 million class A shares in Industrivärden, corresponding, as of today, to a value of approximately SEK 8.7 billion, or SEK 4.42 per share, based on the closing price for the Industrivärden class A share on 20 September 2021. The shares are currently managed by Handelsbankens Pensionsstiftelse, but are proposed to be acquired by Svenska Handelsbanken AB (publ) before they are distributed to the shareholders.

• The Bank’s exposure to shares in the pension management is reduced through a dividend in the form of shares, which increases long-term stability in the Bank’s capitalisation.

• The dividend increases return on equity by 0.3 percentage points.

• The Bank’s pension commitments – benefits and payments – towards employees and pensioners are not affected as a result of the transaction.

The Board of Directors’ complete proposals will be included in the forthcoming notice to the Extraordinary General Meeting. An information brochure on the proposed dividend is intended to be made available on Handelsbanken’s website www.handelsbanken.com around 30 September 2021.

For further information, please contact:

Lars Höglund, Head of Investor Relations & Group Financial Strategy, +46 70 345 51 70

Viktoria Aastrup, Head of Group Media Relations, +46 73 043 51 59

The proposal means:

For many years, Handelsbanken’s business model has generated stable earnings and capital growth, and has, also during the covid-19 pandemic, demonstrated a very good, and gradually even more improved, credit quality. Altogether, this implies that the Bank’s financial position has gradually been strengthened further and the current capitalisation is well above the Bank’s target ratio level.

As a result of the Bank’s good capital situation, the Board of Directors of Handelsbanken has resolved to convene an Extraordinary General Meeting and propose an extra dividend of shares in Industrivärden, a dividend-in-kind, to the shareholders, corresponding, as of today, to approximately SEK 8.7 billion. The CET1 level, the common equity tier 1 ratio, pro forma as of 30 June 2021, is estimated, with this level of dividend, to fall from 20.5% to approximately 19.4%.

The dividend-in-kind is proposed to be made through a distribution of approximately 30.5 million class A shares in Industrivärden, that simultaneously will be acquired from Svenska Handelsbankens Pensionsstiftelse, (the “Pension Foundation”), which is part of Handelsbanken’s pension management of the Bank’s occupational pensions. The net assets in the Pension Foundation have a direct impact on the Group’s equity and thereby also on CET1. Furthermore, net surplus is subject to a capital requirement according to the CRR in pillar 1 and the risks in the pension system are subject to a capital requirement in pillar 2 according to the Swedish Financial Supervisory Authority’s model for pension risk. The purpose of the proposal is therefore to reduce the portion of shares in the overall pension management for defined benefit occupational pensions in order to reduce volatility in the pension management. A reduction of volatility in the pension management’s asset values increases long-term stability in the Bank’s capitalisation.

Handelsbanken and the Pension Foundation therefore intend to enter into an agreement whereby Handelsbanken acquires approximately 30.5 million class A shares in Industrivärden from the Pension Foundation in connection with the Extraordinary General Meeting at the then prevailing share price.

The acquisition is subject to the Extraordinary General Meeting of Handelsbanken approving the acquisition and resolving on a distribution of these shares to the shareholders.
The proposal in brief:

• 30,461,977 class A shares in Industrivärden are proposed to be distributed to the shareholders in Handelsbanken. Shareholders in Handelsbanken would receive one class A share in Industrivärden for each 65^th share they own in Handelsbanken (irrespective of share class).
• The dividend is estimated to amount to a total of approximately SEK 8.7 billion, or SEK 4.42 per share, based on the closing price for the Industrivärden class A share on 20 September 2021.
• The shares in Industrivärden are currently managed by the Pension Foundation, but are intended to be acquired by Handelsbanken in connection with a resolution on the dividend at the then prevailing share price.
• The Board of Directors of Handelsbanken intends to shortly convene an Extraordinary General Meeting on 21 October 2021 to resolve on Handelsbanken’s acquisition of class A shares in Industrivärden from the Pension Foundation and distribution of these shares to the shareholders in Handelsbanken.
• The proposed record date is 25 October 2021. The shares in Industrivärden are expected to be available on the shareholders’ accounts around 27 October 2021.

About the pension management

Handelsbanken's management of defined benefit pensions in Sweden is secured by the Pension Foundation and by Pensionskassan SHB Tjänstepensionsförening (the “Pension Fund”). The assets that are managed to secure the defined benefit pensions exceed the total pension commitments. The defined benefit pension system is closed to new employees, and has been replaced with defined contribution pension. The risk in the management of the pension assets allocated for defined benefit pension commitments can be further decreased by reducing the portion of shares. A divestment of the Pension Foundation’s shares in Industrivärden to Handelsbanken is part of this strategy. The Bank’s pension commitments – benefits and payments – towards employees and pensioners are not affected as a result of the transaction.

This information is of the type that Svenska Handelsbanken AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact person set out above, at 17:35 CET on 21 September 2021.

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