Svenska Handelsbanken Interim report January-March 2002

Handelsbanken's interim report January - March 2002 Summary · Profits were SEK 2 659m (3 121) · Income rose to SEK 5 493m (5 419) · Net interest income rose by 7% to SEK 3 463m (3 240) · Comparable expenses increased by less than 6% · Loan losses were SEK 79m (+78) · Operations in Midtbank AS were transferred to Handelsbanken's Danish branch Profits were SEK 2.7bn Operating profits were SEK 2 659m (3 121) implying return on equity of 15.3% (21.7). The corresponding figure for the whole of 2001 was 18.4%. The C/I ratio before loan losses was 50.1% (43.8) and after loan losses 51.6% (42.4). The C/I ratio was affected negatively by the consolidation of Handelsbanken Liv into Handelsbanken's figures after the company had been demutualised. Life insurance operations in general have higher expenses in relation to income than banking operations. The C/I ratio excluding Handelsbanken Liv was 49.3% and 50.7% respectively. Earnings per share were SEK 2.69 (3.38), and as a 12-month moving total SEK 11.31 (13.17). For the full year 2001 earnings per share amounted to SEK 11.99. Net interest income increased Net interest income continued to increase to SEK 3 463m (3 240). The rise in net interest income is due to larger business volumes. During the quarter, lending grew by more than SEK 4bn to SEK 804bn, which represents an increase of nearly 13% compared to the first quarter of the previous year. Net commission income increased by 2% to SEK 1 238m (1 213). Equity-related commissions were lower compared with the previous year, while particularly lending and payments commission increased. Net trading income fell by just over 20% in relation to the high level in the first quarter of 2001. Expenses were SEK 2 755m (2 376), an increase of 16%. The acquisitions of SPP and Midtbank and the consolidation of Handelsbanken Liv affected the cost comparisons. The underlying increase in expenses, excluding Midtbank, SPP, Handelsbanken Liv and foreign exchange effects, was 5.8%. The foreign exchange effect was one percentage point. The higher cost level is primarily due to expansion outside the Nordic region, higher IT costs and salary increases from wage agreements. IT expenses, including Handelsbanken Liv, were SEK 734m (611). The average number of staff in the Group rose by 1 092 to 9 795, where Midtbank and Handelsbanken Liv contributed 636 employees to this increase. Comparable expenses decreased 4.3% in relation to the last quarter of 2001. The number of staff at the end of the quarter had decreased by 43 compared with year- end 2001. Low loan losses Loan losses continued to be very low and were SEK 79m compared to net recoveries of SEK 78m in the previous year. The share of bad debts in relation to lending fell from 0.33% to 0.17%. The volume of repossessed property was SEK 172m (140). Capital ratio, share buybacks and rating The Handelsbanken Group's capital ratio was 9.5% (9.5). The Tier 1 capital ratio was 6.2% (6.1). These ratios include profits for the period. At the Annual General Meeting in April 2001, Handelsbanken was authorised to repurchase up to 20 million shares until the next AGM in 2002 and, if considered appropriate, to sell shares that had already been repurchased to finance possible acquisitions. Handelsbanken has not repurchased any shares since the 2001 meeting, but it has sold 5.5 million shares in connection with the acquisition of Midtbank. Handelsbanken's rating from all three rating agencies was unchanged. However, Standard & Poor's changed its "outlook" for Handelsbanken's rating from "stable" to "positive". Danish operations are combined in a single legal entity The Bank's operations in Denmark are now run as a branch. The bank received the necessary authorisation to transfer operations in Midtbank to Handelsbanken's Danish branch. At the same time, the branch changed its name to Handelsbanken Midtbank, filial af Svenska Handelsbanken (publ). This change means that the integration of Midtbank has been completed in all main areas. A joint IT platform was already in place and Handelsbanken's organisational model and credit system have been implemented. Stockholm, 22 April 2002 [REMOVED GRAPHICS] Lars O Grönstedt President and Group Chief Executive For further information please contact: Lars O Grönstedt, Group Chief Executive tel: +46 8 22 92 20 e-mail lagr03@handelsbanken.se Lennart Francke, Head of Accounting and Control tel: +46 8 22 9220 e-mail lefr01@handelsbanken.se Lars Lindmark, Head of Corporate Communications tel: +46 8 701 10 36 e-mail lali12@handelsbanken.se Bengt Ragnå, Head of Investor Relations tel: +46 8 701 12 16 e-mail bera02@handelsbanken.se This interim report has not been examined by the company's auditors The interim report for the second quarter of 2002 will be published on 20 August 2002. Handelsbanken's interim reports and other publications are also available on the Internet (http://www.handelsbanken.se/ireng). ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/04/22/20020422BIT00630/wkr0001.doc The full report http://www.waymaker.net/bitonline/2002/04/22/20020422BIT00630/wkr0002.pdf The full report