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Global profit boost for Handelsbanken

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Global profit boost for Handelsbanken
Handelsbanken is Sweden's second largest bank. Photo: Bertil Eriksson/TT
07:50 CEST+02:00
Sweden's second-largest bank, Handelsbanken, has reported a rise in third-quarter profits, boosted by higher income from its loan book as it continues its expansion overseas.

The Swedish group's net profit grew by 8 percent from a year ago to 3.9 billion kronor ($537 billion), helped by higher revenues from Britain and the Netherlands.

The bank - which makes the bulk of its profits in Sweden but has been bulking up its business abroad - reported strong growth in private banking customers as well as increased lending from January to September.

Operating profit in Britain rose by more than half to 1.196 million kronor, "chiefly due to higher net interest income and improved net fee and commission
income," it said in a statement

Mortgage loans to private clients in Sweden also increased by 6 percent to 588 billion kronor.

Handelsbanken is one of the best capitalised banks in Europe with a steadily rising funding level and "Tier 1" capital -- a measure of a bank's financial strength -- which grew to 20.7 percent from 18.8 percent a year ago.

But its higher lending has also exposed it to higher risks, and losses from bad loans rocketed by 75 percent to 497 million kronor "due to higher provisions made on a few customer exposures," the bank said in a statement on Wednesday.

The bank did not specify which customers were responsible for the losses.

In the last year, the bank's revenue in Britain surged by 38 percent compared to last year and the Netherlands produced growth of 21 percent. It also had strong revenue growth in Denmark, where it rose 13 percent, and Finland, up 14 percent, which helped offset a 2 percent fall in revenue in Norway where Handelsbanken faced stiff competition to offer lower interest rates on loans.

The announcement by Handelsbanken follows profit rises at rival banks Nordea and Swedbank.

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