This article first appeared on GuruFocus .
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Operating Profit:SEK 6.7 billion for the second quarter.
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Return on Equity (ROE):Almost 13% for the second quarter.
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Income:SEK 13.5 billion for the second quarter.
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Expenses:SEK 6 billion for the second quarter.
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Cost/Income (C/I) Ratio:44% for the second quarter.
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Credit Loss Ratio:0% for the second quarter.
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CET1 Ratio:250 basis points above the regulatory minimum after anticipated dividends.
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Operating Profit in Sweden:Increased by 4% in the quarter.
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Operating Profit in the UK:Increased by 11% in the quarter.
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Operating Profit in Norway:Increased by 18% in the quarter.
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Operating Profit in the Netherlands:Increased by 13% in the quarter.
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Net Fee and Commission Income:Increased by 8% in the first half of the year, adjusted for FX effects.
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Dividend Payout:SEK 4.77 per share, equivalent to 82% of profits for the first half of the year.
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IT Development Spend:Increased by 6% compared to the same quarter last year.
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Regulatory Fees:Increased by 11% due to mandatory interest-free deposits at the central bank.
Release Date: July 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Svenska Handelsbanken AB ( SVNLF ) reported a solid operating profit of SEK 6.7 billion with a return on equity (ROE) of nearly 13% for the second quarter.
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The bank experienced business growth with increases in lending, deposits, and assets under management, alongside stable net interest income (NII) and expenses.
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Fee and commission income reached near all-time highs, driven by strong performance in the savings business.
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Asset quality remains robust with a credit loss ratio of 0%, indicating prudent risk management.
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The bank's financial position is strong, with a CET1 ratio 250 basis points above the regulatory minimum, allowing for anticipated dividends equating to 82% of profits.
Negative Points
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Operating profit decreased by 6% due to negative valuation effects on derivatives, impacting net financial income (NFI).
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The bank faces margin pressure in Sweden, both in the mortgage and corporate sectors, due to competitive dynamics.
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In Norway, increased low-margin competition has led to a drop in volumes, although deposits have increased.
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The bank's lending growth in Sweden has been flat over the past year, lagging behind the market's growth rate.
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Regulatory fees increased by 11% due to mandatory interest-free deposits at the central bank, impacting overall expenses.
Q & A Highlights
Q: Could you remind us of your strategy for driving growth and profitability in markets outside Sweden, given the lower returns on capital in the UK, Norway, and the Netherlands compared to Sweden? A: Morten Bjurman, CFO, explained that in the UK, they are happy with the growth in both mortgage and corporate spaces, supported by high customer satisfaction and efficiency gains. In the Netherlands, despite being small, they have doubled their corporate lending book over six years. In Norway, despite competitive pressures, they are satisfied with growth in assets under management and deposits. Overall, they are committed to a long-term strategy across all markets.
Q: Regarding the margin headwind of SEK 122 million on the NII in Sweden, is the margin pressure on the corporate or retail side, and how confident are you in passing through higher funding costs? A: The margin pressure is present on both the mortgage and corporate sides in Sweden. The competitive environment is impacting margins, but no specific guidance was provided for future periods.
Q: Why have you reduced your capital allocation to the international division, and why don't you report divisions with the actual tax rate paid? A: The reduction in capital allocation was influenced by the dividend payout in Q1. Regarding tax rates, internal costs and taxes are allocated in a way that maintains group-level figures, and adjustments can be made for individual calculations.
Q: Given the competitive environment in Norway and the strategic decisions in Denmark and Finland, is it time to reconsider your geographical footprint? A: Michael Green, CEO, stated that strategic footprint is always under discussion. They believe Norway has a strong offering and have invested in technology and cost reduction. They are committed to staying in Norway and see long-term potential in all home markets.
Q: On net interest income, should we expect any reversal of the SEK 250 million impact from funding costs and cash positions in future quarters? A: The notice period effect in Norway will pass, but the impact from cash positions at central banks is not a one-off. The dividend payout also affects this. The NFI swings are temporary and expected to balance out over time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
