Svenska Handelsbanken Third quarter 2002 22 October 2002
Profit and loss account, January - September Handelsbanken Group Change SEKm 2002 2001 % Net interest income 10 611 9 856 8 Commission, net 3 782 3 729 1 Trading, net 1 248 1 994-37 Other income 403 430-6 Total income 16 044 16 009 0 Staff costs -4 806-4 426 9 Other expenses -3 357-3 078 9 Total expenses -8 163-7 504 9 Profit before loan losses and writedown 7 881 8 505-7 Loan losses -222 51 - Write-down of financial fixed assets -199 - - Operating profit 7 460 8 556-13
Profit and loss account, Five quarters Handelsbanken Group Q3 Q2 Q1 Q4 Q3 SEKm 2002 2002 2002 2001 2001 Net interest income 3 586 3 562 3 463 3 529 3 392 Commission, net 1 233 1 311 1 238 1 299 1 150 Trading, net 199 424 625 662 532 Other income 24 212 167 155 98 Total income 5 042 5 509 5 493 5 645 5 172 Staff costs, excl bonuses -1 574-1 571-1 536-1 472-1 449 Bonuses -2-70 -53-20 -59 Other expenses -1 045-1 146-1 166-1 298-1 099 Total expenses -2 621-2 787-2 755-2 790-2 607 Profit before loan losses and write-down 2 421 2 722 2 738 2 855 2 565 Loan losses -122-21 -79-203 -14 Write-down of financial F.A. -199 - - - - Operating profit 2 100 2 701 2 659 2 652 2 551
Operating profit, quarterly Handelsbanken Group SEKm 3 500 3 000 2 500 2 000 1 500 1 000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1997 1998 1999 2000 2001 2002
Lending to the general public, Sweden Handelsbanken Group, January - September Average volumes SEK bn 2002 2001 Change % Mortgage loans 355 334 6 Private 219 198 11 Corporate 136 136 0 Bank loans 288 261 10 Private 51 45 13 Corporte 237 216 10 Total Sweden 643 595 8 Private 270 243 11 Corporate 373 352 6
Lending to the general public Handelsbanken Group Average volumes SEK bn Q3 2002 Q2 2002 Q1 2002 Q4 2001 Q3 2001 Sweden 653 645 631 624 620 Other Nordic 113 115 106 107 103 Private 37 34 32 33 28 Corporate 76 81 74 74 75 Rest of world 58 59 59 63 61 Private 2 2 2 2 2 Corporate 56 57 57 61 59 Total 824 819 796 794 784 Private 313 307 298 291 280 Corporate 511 512 498 503 504
Deposits from the general public Handelsbanken Group, January - September Average volumes SEK bn 2002 2001 Change % Sweden 193 192 1 Private 79 73 8 Corporate 114 119-4 Outside Sweden 95 83 14 Private 19 14 36 Corporate 76 69 10 Total 288 275 5 Private 98 87 13 Corporate 190 188 1
Net interest margin, quarterly Deposits, SEK 160 Average volumes, SEK bn Margins 2,80% 155 2,60% 2,40% 150 145 1,94% 2,00% 1,97% 1,94% 1,97% 2,04% 1,92% 2,20% 2,00% 140 1,80% 1,60% 135 1,40% 130 Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 1,20%
Net interest margin, quarterly Mortgage loans 370 Average volumes, SEK bn Margins 1,00% 360 0,95% 350 340 330 0,85% 0,85% 0,85% 0,86% 0,87% 0,88% 0,90% 0,90% 0,85% 320 310 0,80% 300 Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 0,75%
Commission January September Handelsbanken Group SEKm 2002 2001 Change % Brokerage 648 771-16 Mutual funds & custody 845 973-13 Insurance 251 156 61 Payments 1048 958 9 Lending and deposits 888 823 8 Other 956 906 6 Commission expenses -854-858 0 Total 3 782 3 729 1
Net trading income, quarterly Handelsbanken Group SEKm 900 800 Equity related Currency & interest rate related 700 600 500 400 300 200 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1999 2000 2001 2002
Number of employees Handelsbanken Group 30 sep -02 01 Jan -02 Change No of employees 9 622 9 763-141 From SPP +50 Swedish branch offices -129 Handelsbanken Liv, excl. SPP -11 IT and development, Sweden excl. SPP -9 Other Nordic countries -41 Rest of world +21 Other -22 No of employees comparable units 9 572 9 763-191
Change in expenses, Jan - Sep 2002 Handelsbanken Group Comparable expenses Midtbank, SPP and HL 2.7 % -units 5,7 % -units Exchange rate effects 0,4 % -units Total expenses 8,8 % -units
Comparable expenses, Jan - Sep 2002 Handelsbanken Group Salary increases 1.3 % -units Performance-related staff costs Decreased number of employees -2.6 % -units -0.1 % -units Higher IT costs 1.5 % -units Expansion outside Sweden 0.8 % -units Other expenses 1.8 % -units Total comparable expenses 2.7 % -units
Operating profit by business area January-September SEKm 2002 2001 +/- RoE Jan Sep 2002 Branch operations 7 048 6 855 3% 19,4% Markets 461 871-47% 12,4% Securities 81 300-73% 9,8% Asset Management 360 407-12% 21,8% Handelsbanken Finans 312 268 16% 30,2% Pension & Insurance -139 31 - - Stadshypotek Bank 15 15 0 32,3% Treasury 28 120-77% 6,0% Handelsbanken Group 7 460 8 556-13% 14,3%
Results in other Nordic countries and Great Britain January - September SEKm 2002 2001 Change % Norway 401 455-12% Denmark 162 94 72% Finland 193 165 17% Great Britain 154 176-13% Total 910 890 2%
New branches outside Sweden No. of branches each year 1995-2002 12 10 No. of branches 8 6 4 2 0 1995 1996 1997 1998 1999 2000 2001 2002
New branches outside Sweden 1997-2002 No. of months to break-even 9 8 Average: 17 months 7 No. of branches 6 5 4 3 2 1 0 0-6 7-12 13-18 19-24 25-30 31-36 No. of months to break-even * Branches opened outside Sweden since 1997 and which as at 30 Sept 02 had achieved break-even.
Key ratios, January - September Handelsbanken Group 2002 2001 Return on equity after full tax 14,3 % 19,1 % Cost / income, excl. write down before loan losses 50,9 % 46,9 % after loan losses 52,3 % 46,6 % Net earnings per share, SEK 7:66 9:18 moving 12 mth total 10:47 12:43
Bad debts as a percentage of lending Handelsbanken Group % 1,2 1,0 0,8 0,6 0,4 0,2 0,0-97 -98-99 -00-01 -02 30 sept
Bad debts as a percentage of lending SHB and other Swedish banks % 5 4 3 2 SHB net / gross Other Swedish banks net /gross* 1 0 97 98 99 00 01 02 * As at 30 June 2002
Loan losses as a percentage of lending SHB and other Swedish banks % 0,5 0,4 0,3 Other Swedish Banks* Handelsbanken 0,2 0,1 0,0 1997 1998 1999 2000 2001 2002 * As at 30 June 2002
Balance sheet Handelsbanken Group 30 Sep 30 Sep Change SEKm 2002 2001 % Lending to the general public 819 398 785 460 4 Lending to credit institutions 82 502 91 372-10 Interest-bearing securities 135 622 129 155 5 Other assets 199 222 188 770 6 Total assets 1 236 744 1 194 757 4 Deposits & funding from general public 286 043 288 093-1 Liabilities to credit institutions 248 926 220 292 13 Issued securities 433 032 446 525-3 Other liabilities 218 541 193 593 13 Shareholders equity 50 202 46 254 9 Total liabilities and equity 1 236 744 1 194 757 4
Capital base and capital ratio Handelsbanken Group SEK bn 70 60 50 40 30 14,2 % 12,2 % 10,4 % 9,8 % 9,4 % 9,5 % 9,9 % 9,4 % Tier II capital 20 10 10,3 % 10,0 % 6,2 % 6,3 % 6,5 % 6,4 % 6,1 % 6,3 % Tier 1 capital 0 1995 1996 1997 1998 1999 2000 2001 2002
Return on equity after standard tax 30 September 2002 % 30 25 20 15 10 Handelsbanken Other listed banks 5 0-5 Q1 97 Q2 97 Q3 97 Q4 97 Q1 98 Q2 98 Q3 98 Q4 98 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02
Household deposits, SEK Market share Jun Dec Change % 2002 2001 % point Handelsbanken 16.6 16.2 +0.4 FöreningsSparbanken 25.2 25.3-0.1 Nordea 20.3 20.7-0.4 SEB 12.5 12.5 + - 0 Nordea incl. Postgirot Bank AB Handelsbanken incl. Stadshypotek Bank Source: SCB (2010151+52)
Swedish savings market Handelsbanken s market share Change % 2002 2001 % point SEK deposits, households * 16.6 16.2 +0.4 Mutual fund savings, volume * 11.9 11.4 +0.5 Mutual fund savings, new sales ** 27.9 19.0 +8.9 Capital-guaranteed products *** 35.3 35.5-0.2 Still highest return on equity of the Nordic banks * Market share for 2002 as at 30 June. ** Market share for 2002 as at 30 Sept. *** Newly-issued volumes on Stockholm Stock Exchange. Market share for 2002 as at 30 Sept. Source: Statistics Sweden, Svensk Fondstatistik
The Swedish mutual fund market Net sales Jan - Sep 2002 Proportion of total 31 Dec 2001 Handelsbanken 27,9 % 11,4 % Robur 15,7 % 30,3 % SEB 11,5 % 18,4 % Nordea 10,0 % 18,6 % Source: Svensk Fondstatistik/Sparöversikt and SHB Fonder
Customer satisfaction index, corporate Svenskt Kvalitetsindex Index 75 Handelsbanken Sector average (excl. SHB) 70 65 60 55 50-89 -90-91 -92-93 -94-95 -96-97 -98 / - 99 Source: Svenskt Kvalitetsindex -00-01 -02
Customer satisfaction index, private Svenskt Kvalitetsindex Index 75 Handelsbanken Sector average (excl. SHB) 70 65 60 55 50-89 -90-91 -92-93 -94-95 -96-97 -98 / - 99 Source: Svenskt Kvalitetsindex -00-01 -02
The Swedish pensions market - a growth market Premium income SEK bn 2001 2000 1999 1998 1997 Premium pension 18.7 56.0 Private sector occupational pensions 66.2 42.7 35.9 27.9 24.3 Private pension schemes 16.0 12.9 12.2 11.1 10.4 Total 100.9 111.6 48.1 39.0 34.7 Index, 1997=100 191 222 139 112 100
Private pension schemes - no. of people with deductions for private pension schemes No of people ( 000) Proportion 2 000 50% 1 750 1 500 1 250 29% 31% 33% 35% 38% 40% 30% 1 000 750 20% 500 250 10% 0 1996 1997 1998 1999 2000 No of private individuals Proportion with tax deductions 0%
Handelsbanken Liv... Demutualised and consolidated in Handelsbanken s accounts Gives policyholders guaranteed return - on average 4.4% Preliminary calculation every month, final calculation at year-end
Impact on Group results Handelsbanken Liv Jan-sep Jan-sep Change 2002 2001 % Income, SEK m 166 112 48 Expenses, SEK m -299-77 288 Operating profit, SEK m -133 35 - C/I ratio, % points +1.4 +0.2
Key ratios Handelsbanken Liv Available solvency capital, SEK m Required solvency capital, SEK m 30 Sep 2002 30 Jun 2002 1 382 1 451 1 056 1 062 Solvency ratio 1.31 1.37 In demutualised companies, the capital base only consists of equity
Investment assets, % distribution Handelsbanken Liv Exposure % 30 Sep 2002 30 Jun 2002 Equities 13 32 Fixed income 81 64 Property 3 3 Other 3 1 Total 100 100 Total return -1.7%* -7.7%** * Jul-Sep 2002 ** Jan-Jun 2002
Total return and results Handelsbanken Liv Results SEK m 400 Portfolio return Jan-Sep 2002 = -9.3% 300 200 100 0-100 -200-300 -400-500 -15% -10% -5% 0% 5% 10% 15% Portfolio return Time horizon 1 year.
SPP Run according to mutual principles implying that: - Policy-holders bear the risk - The whole result accrues to policy-holders (both profit and loss) All transactions between Handelsbanken and SPP are on a business basis SPP is not consolidated into Handelsbanken s accounts
Investment assets, % distribution SPP Exposure % 30 Sep 2002 30 Jun 2002 Equities 10 37 Fixed income 86 63 Property Other 4 0 Total 100 100 Total return -2.7%* -8.9%** * Jul-Sep 2002 ** Jan-Jun 2002
Key figures SPP Available solvency capital, SEK m 30 Sep 2002 30 Jun 2002 3 682 3 372 Required solvency capital, SEK m 2 987 2 988 Solvency ratio 1.23 1.13 Collective consolidation, % 95 97
Measures taken SPP Reallocation of investment assets Issued subordinated loans SEK 1.6bn Market valuation of unlisted assets Changes in certain actuarial assumptions Freeze on payments of client company funds
Life insurance operations should be demutualised! More transparent - good for customers - good for staff - good for the company - good for the owner Greater efficiency Increased customer benefit - freedom - security - justice Clearer responsibility
Share price performance up to 30 September 2002 Index SHB AFV Generalindex Nordix Bank exkl SHB 300 250 200 150 100 50 0 1997 1998 1999 2000 2001 2002