Handelsbanken January March 2009 28 April 2009
Summary Q1 2009 compared with Q1 2008 Operating profit increased by 30% to SEK 3,806m Return on equity went up to 13.8% Net interest income rose by 23% to SEK 5,393m C/I ratio decreased to 43.9% Average lending volume increased by 15% Household deposits up by 23% Capital ratio increased to 16.7% Tier 1 ratio according to Basel II rose to 11.6% Liquidity reserve currently more than SEK 400bn 2
Operating profit, Q1 2009 compared with Q4 2008 SEK m 2009 Q1 2008 Q4 Operating profit 3 806 5 216 Capital gain from sale of NCSD - -716 Fee to stabilisation fund 117 - US dollar arbitrage -325-900 Adjusted profit 3 598 3 600 3
Income statement, January - March Change SEK m 2009 2008 % Net interest income 5,393 4,399 23 Net fee and commission income 1,739 1,739 0 Net gains/losses on financial items at fair value 1,141-177 Other income 113 94 20 Total income 8,386 6,055 38 Staff costs -2,442-1,983 23 Other expenses -1,242-1,318-6 Total expenses -3,684-3,301 12 Profit before loan losses 4,702 2,754 71 Loan losses, net -896-107 Disposal prop. equipmt./ intang. assets 0 272 Operating profit 3,806 2,919 30 4
Key ratios Q1 2009 Q1 2008 RoE total operations, actual tax 13.8% 12.3% RoE total operations, after standard tax 14.1% 11.5% C/I-ratio, before loan losses continuing operations 43.9% 54.5% Earnings per share total operations, SEK 4.43 3.68 moving 12 months 20.22 24.08 Capital ratio, Basel II 16.7% 16.2% Tier I ratio, Basel II 11.6% 10.5% Change Q1 Tier I ratio, SEK m 5,532 Change Q1, Shareholder s equity, SEK m 2 971 5
Illustration Financial Strength Assets Liabilities Rating Long-term Short-term Moody s Aa1 P-1 S&P AA- A-1+ Fitch AA- F1+ Lending etc. Senior funding, deposits etc. Liquidity reserve >400 SEK bn Capital base 16.7% 6
7 6 000 5 000 4 000 3 000 2 000 1 000 0 Q1-98 Q3-98 Q1-99 Q3-99 Q1-00 Q3-00 Q1-01 Q3-01 Q1-02 Q3-02 Q1-03 Q3-03 Q1-04 Q3-04 Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Net interest income, quarterly SEK m From 2004 according to IFRS
Deposits from the public Q 1 Change Change Average volumes, SEK bn 2009 Q4 2008 Q1 2008 Branch offices in Sweden Private 162 3% 20% Corporate 152 4% 10% Total 314 4% 15% Branch offices outside Sweden Private 46 10% 34% Corporate 122 6% 15% Total 168 7% 20% Other operations 50 7% -39% Total 532 5% 8% 8
Loans to the public Q 1 Change Change Average volumes, SEK bn 2009 Q 4 2008 Q 1 2008 Branch offices in Sweden Private 476 1% 8% Of which mortgage loans 418 1% 9% Corporate 494 1% 7% Total 970 1% 8% Branch offices outside Sweden Private 139 6% 23% Corporate 381 7% 39% Total 520 6% 34% Other operations 19 +35% -5% Total 1 509 3% 15% 9
Fees and commissions, January March SEK m 2009 2008 Change % Brokerage 445 436 2 Mutual funds and custody 348 444-22 Advisory services 51 48 6 Insurance 131 136-4 Payments 585 553 6 Lending & deposits 251 205 22 Guarantees 134 99 35 Other 94 121-22 Commission expenses -300-303 -1 Total 1,739 1,739 0 10
Net gains/losses on financial items at fair value SEK m 3 000 Trading* Stapel 2 Available for sale, realised Other Liquidity portfolio 2 500 2 000 1 500 1 000 2 229 500 0 754 1362 415 523-177 634 483 1 141-500 -1 000-1 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2007 2007 2007 2008 2008 2008 2008 2009 11 * Incl fair value option.
Expenses, January March 2009 2008 Change Change SEK m Q 1 Q 1 SEK m % Staff costs -2,442-1,983 459 23.1 Other expenses -1,122-1,221-99 -8.1 Depreciation -120-97 23 23.7 Total expenses -3,684-3,301 383 11.6 %-points Oktogonen 163 4.9 IAS19 77 2.3 Exchange rate fluctuations 112 3.4 Lokalbanken 71 2.2 423 12.8 Running staff costs 113 3.4 Other expenses -153-4.6 12 383 11.6
Expenses, Q1 2009 compared to Q4 2008 2009 2008 Change SEK m Q 1 Q 4 SEK m Change % Staff costs -2,442-2,170 272 12.5 Other expenses -1,122-1,309-187 -14.3 Depreciation -120-121 -1 0.8 Total expenses -3,684-3,600 84 2.3 %-points Oktogonen 163 4.5 IAS19 77 2.1 Exchange rate fluctuations 152 4.2 392 10.9 Running staff costs -21-0.5 Other expenses -287-8.0 84 2.3 13
Loan losses as a percentage of lending % 1,75 1,50 1,25 1,00 0,75 0,50 0,25 0,00 Handelsbanken Other Swedish banks -0,25 1994 1997 2000 2003 2006 2009 * 14 * Only banks that have published the Q1 interim report.
Branch office operations in Sweden January March 2009 Operating profit SEK 2,312m RoE 17.8% Income increased by 9% Net interest income increased by 13% C/I ratio before loan losses 36.0% Number of branch offices 461 Average number of employees 4,536 Average volumes, SEK bn Loans 970 Deposits 314 15
Net interest income, Branch office operations in Sweden Q 1 2009 Q 4 2008 Change % Interest income, SEK m 9,554 13,163-27 Interest expenses, SEK m - 6,103-9,381-35 Net interest income 3,452 3,781-9 Average volumes SEK bn 970 959 1 16
Branch office operations outside Sweden January March 2009 Operating profit SEK 667m RoE 7.5% - excl. operating deficit 8.9% Total income increased by 32% Net interest income increased by 37% C/I ratio 55% Number of branch offices 245 Average number of employees 3,023 Average volumes, SEK bn Loans 520 Deposits 168 17
Handelsbanken has the most satisfied customers in Great Britain too Private customers Other Satisfaction Loyalty 18 Source: EPSI Rating 2009
Handelsbanken has the most satisfied customers in Great Britain too Corporate customers Other Satisfaction Loyalty 19 Source: EPSI Rating 2009
- Regional banks outside Sweden Income and expenses trend 151 branches opened 1995-2009 Average per branch, SEK m* 45 40 35 30 25 20 15 10 5 Branch offices Total income Total expenses Number of branch offices, March 2009 35 30 25 20 15 10 5 0 ** Y 0 Y 1 Y 2 Y 3 Y 4 Y 5 Y 6 Y 7 Y 8 Y 9 Y 10 Y 11 Y 12 Y 13 0 20 * Refers to figures for 2000-2008 ** Refers to the period January March 2009
Summary Stable underlying earnings on a par with the previous quarter Net interest income up by 23% Strong capital and liquidity situation Tier 1 ratio increased to 11.6% according to Basel II The capital ratio increased to 16.7% according to Basel II More than SEK 400bn in liquidity reserves Return on equity increased to 13.8% 21
22 Appendix
Income statement, five quarters Q1 Q4 Q3 Q2 Q1 SEK m 2009 2008 2008 2008 2008 Net interest income 5,393 5,474 4,856 4,494 4,399 Net fee and commission income 1,739 1,694 1,656 1,706 1,739 Net gains/losses on financial items at fair value 1,141 2,229 483 634-177 Risk result - insurance 57 50 55 71 39 Other income 56 65 74 294 55 Total income 8,386 9,512 7,124 7,199 6,055 Staff costs -2,442-2,170-2,015-1,946-1,983 Other expenses -1,242-1,430-1,118-1,249-1,318 Total expenses -3,684-3,600-3,133-3,195-3,301 Profit before loan losses 4,702 5,912 3,991 4,004 2,754 Loan losses, net -896-696 -231-571 -107 Disposal prop. equipmt./ intang. assets 0 0-2 0 272 Operating profit, continuing operations 3,806 5,216 3,758 3,433 2,919 Operating profit, discontinued operations 15 61 70 68 61 Operating profit, incl. discont. op. 3,821 5,277 3,828 3,501 2,980 23
Income statement, Q1 2009 compared to Q4 2008 Q1 Q4 Change SEK m 2009 2008 % Net interest income 5,393 5,474 Net fee and commission income 1,739 1,694 Net gains/losses on financial items at fair value 1,141 2,229 Risk result - insurance 57 50 Other income 56 65 Total income 8,386 9,512 Staff costs -2,442-2,170 Other expenses -1,242-1,430 Total expenses -3,684-3,600 Profit before loan losses 4,702 5,912 Net loan losses -896-696 Disposal prop. equipmt./ intang. assets 0 0 Operating profit. 3,806 5,216-27 24
- Change in net interest income, Q1 2009 compared to Q4 2008 SEK m Net interest income Q4 2008 5 474 Deposits in Sweden - margin -640 - volume 18 Lending in Sweden - margin 437 - volume 19 Volume & margin branch offices outside Sweden 82 Deposit guarantee and fee to the stabilty fund -117 Other 120 Change in net interest income -81 Net interest income Q1 2009 5 393-1.5% RR 25 3M STIBOR ref.rate in the respective quarter.
- Change in net interest income, Q1 2009 vs. Q1 2008 SEK m Net interest income Q1 2008 4 399 Deposits in Sweden - margin -691 - volume 70 Lending in Sweden - margin 730 - volume 145 Volume & margin branch offices outside Sweden 512 Deposit guarantee and fee to the stabilty fund -140 Other 368 Change in net interest income 994 Net interest income Q1 2009 5 393 +23% RR 26 Ref.rate Q1 2008, 1M STIBOR and in Q1 2009 3M STIBOR has been used
Net interest income outside Sweden, quarterly SEK m 1 800 Number of branches 210 1 600 1 400 1 200 200 190 180 170 1 000 160 800 150 600 400 200 140 130 120 110 0 100 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Branch office operations outside Sweden Number of branch offices within regional banks outside Sweden 27 * Lokalbanken s 14 branch offices, included from 21 October 2008.
Fee to the Stabilisation fund, January March 2009 Total liabilities and equity (SEK bn) 2 467 reduction for total equity -152 reduction for intercompany liabilities -217 Base for calculation of fee* 2 098 Fee 0.036% (SEK m) 755 reduction 50% during 2009 and 2010-377 Total fee 2009 378 Accrued fee in Q1 94 28 * Concerns credit institutions within the Group affected by the new Stabilisation fund law
Fees and commissions, Q1 2009 compared to Q4 2008 SEK m Q1 Q4 Change % Brokerage 445 453-2 Mutual funds and custody 348 317 10 Advisory services 51 49 4 Insurance 131 122 7 Payments 585 564 4 Lending & deposits 251 248 1 Guarantees 134 124 8 Other 94 126-25 Commission expenses -300-309 -3 Total 1,739 1,694 3 29
Equity-related commissions, January March SEK m 2009 2008 Change % Brokerage 395 424-7 Mutual funds and custody 317 412-23 Corporate finance 51 48 6 Commission expenses -59-71 -17 Total 704 813-13 30
Q4 2008 Q1 2009 Q2 2008 Q3 2008 Q1 2008 31 Oktogonen quarterly 2004 2009 SEK m 300 200 100 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q3 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 0-100 -200-300 Expense Adjust for previous yr
Other administrative expenses 2009 2008 Change 2009 2008 Change SEK m Q 1 Q 1 % Q 1 Q 4 % Property and premises -260-234 11-260 -290-10 External IT costs -330-338 -2-330 -348-18 Communication -108-112 -4-108 -105 3 Travel and marketing -84-107 -21-84 -124-40 Purchased services -199-178 12-199 -212-13 Supplies -59-64 -8-59 -60-1 Other expenses -82-188 -56-82 -170-88 Other administrative expenses -1 122-1 221-8 -1 122-1 309-14 32
Bad debts and loan losses as a percentage of lending Proportion of bad debts, net Loan loss ratio % % 1,0 1,0 0,8 0,8 0,6 0,6 0,4 0,4 0,2 0,2 0,0 0,0-0,2-98 -99-00 -01-02 -03-04 -05-06 -07-08 -09-0,2 33
Effective tax burden Corporation tax on the profit for banking operations No tax on the administration result and the risk result in the insurance operations, except for outright risk insurance The yield split has already been taxed Corporation tax on yield on shareholders equity in the insurance operations Effective tax burden January-March 2009 was 27.6% and Q4 2008 13.5% (Q1 23.1%) The lower tax rate for Q4 2008 is due to Profit on sale of property and shares in NCSD AB is not taxed Changed corporation tax rate from 2009 affects the deferred taxes 34
Balance sheet, 31 March Change SEK bn 2009 2008 % Loans to the public 1,519 1,316 15 Loans to credit institutions 198 173 14 Interest-bearing securities 242 153 58 Other assets 316 234 35 Total assets 2,275 1,876 21 Deposits and borrowing from the public 566 497 14 Due to credit institutions 366 270 36 Issued securities 908 751 21 Other liabilities 357 282 27 Shareholders equity 78 76 3 Total liabilities and equity 2,275 1,876 21 35
Loans to the public, quarterly Average volumes Q1 Q4 Q3 Q2 Q1 SEK bn 2009 2008 2008 2008 2008 Branch offices in Sweden 970 960 938 921 903 Branch offices outside Sweden 520 489 447 410 387 Private 139 131 121 115 112 Corporate 381 358 326 295 275 Other operations 19 13 14 15 20 Total 1 509 1 462 1 399 1 346 1 310 Private 625 602 586 568 554 Corporate 884 860 813 778 756 36
Lending outside Sweden Average volumes Jan-Mar 2009 Jan-Mar 2008 Change % *Denmark, DKK bn 40.0 31.2 28 Finland, EUR m 10 462 9 085 15 Norway, NOK bn 153.2 132.8 15 Great Britain, GBP m 5 395 4 450 21 Rest of the world, SEK bn 94 51 85 74% growth in local currency 37 * Lokalbanken included from 21 October 2008
Deposits from the public, quarterly Average volumes Q1 Q4 Q3 Q2 Q1 SEK bn 2009 2008 2008 2008 2008 Branch offices in Sweden 314 303 283 278 273 Private 162 157 147 141 135 Corporate 152 146 136 137 138 Branch offices outside Sweden 168 157 142 139 140 Private 46 41 38 37 34 Corporate 122 116 104 102 106 Other operations 50 47 54 62 81 Total 532 507 479 479 494 Private 208 199 185 177 169 Corporate 324 308 294 302 325 38
Loans to the public Branch offices in Sweden, quarterly Average volumes Q1 Q4 Q3 Q2 Q1 SEK bn 2009 2008 2008 2008 2008 Mortgage loans 574 563 552 540 529 Private 418 413 406 396 386 Corporate 156 150 146 144 143 Bank loans 396 396 385 380 374 Private 58 58 59 57 56 Corporate 338 338 327 323 318 Total Branch offices in Sweden 970 960 938 921 903 Private 476 472 465 454 442 Corporate 494 488 473 467 461 39
Conditional bonus* in relation to total insurance assets SEK m, end of period Q1 2009 2008 2007 2006 2005 2004 2003 Conditional bonus 2,240 3,327 4,824 5,713 4,874 3,552 3,248 % of total insurance assets 8.9 12.8 18.0 21.7 20.3 16.7 16.7 40 * Refers to conditional bonus from a customer perspective
Net lending in SEK in the Swedish interbank market 28 January 2008 31 March 2009, weekly SEK m 70 000 60 000 At March 31, liquidity reserves of over SEK 400 bn 50 000 40 000 30 000 20 000 10 000 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2 5 8 11 14 41