Handelsbanken's Interim Report January - March 2003

Profits rose to SEK 2 857m (2 659), an increase of 7% compared with the same quarter of last year. The return on equity was 15.1% (15.3). The cost/income ratio improved and was 47.2% (50.1) before loan losses and 47.7% (51.6) after loan losses. Earnings per share were SEK 2.89 (2.69) and as a 12-month moving total SEK 10.70 (11.31).

 

Expenses continued to fall and were at the same level as during the second quarter of 2001. Expenses were SEK 2 579m (2 755), a reduction of 6%. Following the salary review for the year, staff costs increased somewhat compared to the previous year. The number of employees fell by 475 to 9 298, a reduction of almost 5% over a twelve-month period. Compared to the previous quarter, there were 160 fewer employees. Other expenses, excluding depreciation, were 19% lower and totalled SEK 737m (905). A decrease in almost all categories of expenses was noted.

 

Net interest income increased by 6% to SEK 3 658m (3 463). The increase was due to higher lending volumes and a continued improvement in lending margins. Deposit volumes were unchanged.

Lending volumes in Sweden and other home markets continued to rise and were unchanged in the rest of the world. Average volumes of lending to the general public were SEK 824bn (796). This was affected by the fact that some lending previously designated as lending to the general public was redesignated as lending to credit institutions. This change affected the comparison by SEK 14bn. The corresponding impact on the end of period figures was SEK 13bn. Adjusted for the change and lending to the National Debt Office, the average volume of lending to the general public rose by 5%. Mortgage lending to households in Sweden rose by 9%.

Net commission income rose by 1% to SEK 1 251m (1 238). Generally speaking, equity-related commissions continued to decline. Payment commission increased by 10% to SEK 351m (320) but fell slightly compared with fourth quarter levels, due in part to normal seasonal variations in card commissions. Net trading income was SEK 454m (625), a decrease of 27%. Compared to the fourth quarter, net trading income remained unchanged. Almost all of the net trading income was generated by the bank's foreign exchange and fixed income trading.

 

Loan losses remained very low and amounted to SEK 31m (79), a reduction of SEK 48m. The loan loss ratio was 0.01% (0.04). The share of bad debts in relation to lending was 0.25% (0.23).

 

The capital ratio was 9.6% (9.5) and the Tier 1 ratio 6.5% (6.2). These ratios include profits generated during the quarter.

The Bank neither repurchased nor sold shares previously bought back. The AGM on 29 April 2003 will be asked to decide on a proposal regarding the buy-back of shares that is identical to the current authorisation.

 

Lars O Grönstedt

President and Group Chief Executive

 

For further information please contact:

 

Lars O Grönstedt, President and Group Chief Executive

phone: +46 8 - 22 92 20, e-mail: lagr03@handelsbanken.se

 

Lennart Francke, Head of Control and Accounting

phone: +46 8 -22 92 20, e-mail: lefr01@handelsbanken.se

 

Lars Lindmark, Head of Corporate Communications         

phone: +46 8 -701 10 36, e-mail: lali12@handelsbanken.se

 

Bengt Ragnå, Head of Investor Relations       

phone: +46 8 -701 12 16, e-mail: bera02@handelsbanken.se

 

The full Interim Report (including tables) can be downloaded from the following link: