Handelsbanken's interim report January - March 2001


· Profits were SEK 3 121m (2 905), an increase of over 7 %

· Income increased by more than 5 % to SEK 5 419m

· Net interest income rose by 12 %

· Net trading income went up by 20 %

· Expenses were SEK 2 376m (2 278), an increase of 4 %

· Recoveries exceeded reported loan losses by SEK 78m (32)

· Handelsbanken became the first Nordic bank to open a branch in Vienna

· Handelsbanken made a public bid for Midtbank A/S worth SEK 2.5bn

Profits continue to rise

Profits were SEK 3 121m (2 905). The rise in profits was slightly more than 7 % and return on shareholders’ equity was 21.7 % (22.4). For the full year 2000, return on shareholders’ equity was 21.5 %, excluding the one-off effect of the sale of the Bank’s shares in Svensk Exportkredit. The cost/income ratio before loan losses improved to 43.8 % (44.2) and after loan losses to 42.4 % (43.6). Earnings per share were SEK 3.38 (3.10) and as a 12-month moving total SEK 13.17 (10.21).

Net interest income rose sharply – small increase in expenses

Net interest income rose by 12 % to SEK 3 240m (2 904) while net trading income went up by 20 % to SEK 813m (676). The increase in net interest income was due mainly to a sharp increase in business volumes. The Bank’s trading income continued to develop well. Almost all trading income derives from customer-related transactions. In particular, foreign exchange-related and interest rate-related trading developed very well during the period. Commission income went down, particularly equity-related commission in the branch office operation.

Expenses were SEK 2 376m (2 278). This is an increase of 4 %, of which one percentage point is explained by changes in exchange rates. Staff costs rose by 6 %. This was mainly due to contractual salary increases, expansion in the Nordic countries and exchange rate changes. The average number of employees in the Swedish branch office operation decreased by 34 while the number in the Group as a whole rose by 273. Other expenses went up by 1 %.

Recoveries higher than loan losses

Recoveries, including the change in value of repossessed property, exceeded loan losses by SEK 78m (32). The proportion of bad debts amounted to 0.33 % (0.29) of lending.
The volume of collateral taken over was SEK 140m (131).

Capital ratio, share buybacks and rating

The Group's capital ratio was 9.3 % (9.3). The Tier 1 capital ratio was 5.9 % (6.4).
Profits for the period are not included in the calculation of capital ratio. Including these, the capital ratio was 9.5 % (9.7) and the Tier 1 ratio 6.1 % (6.7). The Annual General Meeting in 2000 authorised repurchases of shares. Handelsbanken has repurchased a total of 26.9 million shares at an average share price of SEK 141.48. The number of outstanding shares is now 687.8 million.

Handelsbanken’s ratings from the leading rating agencies remained unchanged. In Europe, only two of the thirty largest universal banks have a higher rating from Moody’s than Handelsbanken.

Internet – opportunities for further decentralisation

The branch offices can now create their own home pages. Each branch can adapt its pages and markets its products according to local conditions. The ‘church spire principle’ has gone digital, and the branches now have their own web-masters. This is an example of the practical use of the Internet at Handelsbanken, where new technology is utilised to strengthen the branches’ position in the market.

Another example of the practical use of the Internet is e-bud™. This is an open service where buyers and sellers of private housing, and all other interested parties, can follow bidding for properties via the Internet.

Handelsbanken opens a branch in Vienna

Handelsbanken has become the first Nordic bank to open a branch in Vienna. The branch, organised under the Bank's Frankfurt unit, will serve Nordic companies in Austria and Austrian companies with operations in the Nordic region. The initiative has been very well received by the local market.

Handelsbanken makes a bid for Midtbank A/S

On 11 April 2001, Handelsbanken made a public offer for Midtbank A/S, a bank with its head office in Jutland in Denmark. Midtbank has total assets of approximately SEK 12bn and around 25 branches. The total value of the bid is approximately SEK 2.5bn. The objective is to combine Handelsbanken’s operations in Denmark with those of Midtbank. Through the acquisition, Handelsbanken will be able to add to the range of products it offers its customers e.g. mutual funds via a Danish fund management company.

Including planned new branches, Handelsbanken and Midtbank will have 35 branches all told. The Bank will be represented in every region in Denmark, with the emphasis on Jutland.
After the acquisition, Handelsbanken will be the fifth largest bank in Denmark. Handelsbanken is already the fifth largest player on the Copenhagen Stock Exchange.

Stockholm, 23 April 2001

Arne Mårtensson
President and Group Chief Executive

The full Interim report including tables can be downloaded from the enclosed link.

For further information please contact: <BR> <BR>Arne Mårtensson, <BR>Group Chief Executive <BR>tel: +46 8 22 92 20 <BR>e-mail arma01@handelsbanken.se <BR> <BR>Lennart Francke, <BR>Head of Accounting and Control <BR>tel: +46 8 22 92 20 <BR>e-mail lefr01@handelsbanken.se <BR> <BR>Lars Lindmark, <BR>Head of Corporate Communications <BR>tel: +46 8 701 10 36 <BR>e-mail lali12@handelsbanken.se <BR> <BR>Bengt Ragnå, <BR>Head of Investor Relations <BR>tel: +46 8 701 12 16 <BR>e-mail bera02@handelsbanken.se <BR> <BR> <BR> <BR>This interim report has not been examined by the company's auditors <BR> <BR>The interim report for the second quarter of 2001 will be published on 21 August 2001. <BR>Handelsbanken's interim reports and other publications are also available on the Internet (http://www.handelsbanken.se/ir). <BR> <BR>

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