Global profit boost for Handelsbanken

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.

Global profit boost for Handelsbanken
Handelsbanken is Sweden's second largest bank. Photo: Bertil Eriksson/TT

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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Police to investigate Nordea bank over money laundering

Danish police will investigate the Swedish bank Nordea after a year-long probe by regulators into money laundering led to "criticism" of its procedures, the bank said Friday.

Police to investigate Nordea bank over money laundering
Photo: Marcus Ericsson / TT

Detectives will examine how money laundering rules were followed at the bank's Danish subsidiary and could result in “sanctions”, Nordea said in a statement.

“We realize that we initially underestimated the complexity and the time it takes to change our procedures,” said Nordea chief executive Casper von Koskull.

The bank added that 850 Nordea employees are currently involved in the fight against money laundering which the bank plans to increase to 1,150 by the end of the year.

In May 2015 the bank was fined 50 million kronor (€5.4 million euros) – the maximum possible – by Swedish regulators who accused Nordea of “not following money laundering rules for several years” and failing to “evaluate the risks of (doing business with) certain clients”.