Handelsbanken beats forecasts despite profit dip

Sweden’s Handelsbanken on Wednesday announced lower quarterly profits which nevertheless beat forecasts on the back of a jump in earnings from basic lending operations.

The overall figures were better than analysts had expected but Handelsbanken gave no guidance to its forthcoming results.

Handelsbanken, the second-biggest Swedish bank by capitalization, said that in the quarter to the end of September net profit amounted to 2.43 billion kronor ($350 million) from 2.81 billion kronor 12 months earlier.

The bank, which had increased profits so far this year, reported a 14 percent drop in net profit in the third quarter compared with the equivalent figure last year.

But this was better than expected by analysts who had forecast a 19 percent drop on average, as polled by Dow Jones Newswires.

Net banking income, the profit margin on the basic business of taking in money and lending it out, shot up by 15 percent to 5.61 billion kronor.

Provisions, or money set aside for losses on bad loans, rose by 231 million kronor to 866 million kronor, but this fell far short of 1.35 billion kronor foreseen by analysts.

Until now, Handeslbanken was the only big Swedish bank to have increased its results this year, mainly because it had low exposure to deep recession in the Baltic countries of Estonia, Lithuania and Latvia.

Its rivals Nordea and notably SEB and Swedbank suffered big losses on their activities in these countries.

The price of shares in the company fell by 2.1 percent to 188.70 kronor. The overall Swedish market was showing a fall of 0.5 percent in mid-morning trading.

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Swedish banking giant sacks its top boss

Sweden's Handelsbanken has fired its chief executive, Frank Vang-Jensen.

Swedish banking giant sacks its top boss
Frank Vang-Jensen. Photo: Maja Suslin/TT

He will be replaced by Anders Bouvin, who will take up the position with immediate effect, the bank said in a statement. 

The board of the bank decided unanimously to let Vang-Jensen go after just a year and a half in the post. 

“This decision is purely related to the individual. Handelsbanken remains strong and our long-term goals stand firm,” said board chairman Pär Boman. 

He added that the post required a “special type of leadership”.

“Thus, it is possible to be an excellent leader and manager – as Frank Vang-Jensen has been – but not fulfil the requirements of CEO of Handelsbanken.” 

His successor, Anders Bouvin, has been Executive Vice President since 2002. He was posted in New York and Denmark before most recently heading up the bank’s operation in the UK.  

“Anders Bouvin has worked at Handelsbanken for more than 30 years and is totally familiar with the Bank’s working methods, culture and values. For the past ten years, he has worked at Handelsbanken in the UK, where he has built up a national branch network with stable finances, good profitability – and by far the most satisfied customers in the market,” said Boman.