Sveriges Handelsbanken leaves Denmark and Finland when profits for the third quarter rise | The Mighty 790 KFGO
By Johan Ahlander
STOCKHOLM (Reuters) – Handelsbanken in Sweden announced on Tuesday that it will leave Denmark and Finland, as it saw no chance to grow without making large investments in these markets.
Handelsbanken, one of Sweden’s oldest banks and a major mortgage lender, said that new regulations meant that the bank needed central personnel functions and infrastructure in each market and that synergies had diminished for small markets.
“Despite a lasting presence in these markets, the bank’s market position is still small and the bank sees little opportunity to scale up its offering without significant investments,” Handelsbanken said in a statement, adding that the process of divesting operations had begun.
Together, Denmark and Finland account for 10% of revenue, 13% of costs and 8% of Handelsbanken’s operating profit.
Handelsbanken’s main markets are Sweden, Norway and the United Kingdom, and these markets account for 91% of profits. Handelsbanken also has small operations in the Netherlands and in Luxembourg.
Handelsbanken reported a better-than-expected result for the third quarter, which increased to SEK 5.19 billion ($ 602 million) from SEK 3.32 billion the previous year, beating the average forecast of SEK 4.65 billion by analysts, according to Refinitiv data.
Handelsbanken, with a low-risk, decentralized business model, has proved resilient to COVID-19 and its shares, up 30% this year, are very close to pre-pandemic levels.
“Handelsbanken’s transformation is bearing fruit,” says CEO Carina Akerstrom in an e-mail. “Cost-cutting measures continue unabated.”
However, the bank said that the underlying total costs, which worried investors in recent years, increased by 3% in the first nine months of this year compared to the same period last year.
($ 1 = 8.6135 Swedish kronor)
(Reporting by Johan Ahlander; Editing by Edmund Blair, Bernadette Baum and Emelia Sithole-Matarise)