Handelsbanken Earnings Miss as Growing Costs Draw More Focus - Hindustan Times
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Handelsbanken Earnings Miss as Growing Costs Draw More Focus

Bloomberg |
Apr 24, 2024 10:54 AM IST

Svenska Handelsbanken AB reported first-quarter earnings that missed analyst estimates and signaled it will double down on slashing expenses after costs rose faster than income.

Svenska Handelsbanken AB reported first-quarter earnings that missed analyst estimates and signaled it will double down on slashing expenses after costs rose faster than income.

Handelsbanken Earnings Miss as Growing Costs Draw More Focus
Handelsbanken Earnings Miss as Growing Costs Draw More Focus

Sweden’s biggest property lender said its net interest income — the difference between money made on lending and the cost of funding — came in at 11.59 billion Swedish kronor in the period, down 5% from the prior quarter. Analysts tracked by Bloomberg on average expected 11.98 billion kronor. The income line was hit by narrowing margins, the bank said.

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Handelsbanken’s cost-to-income ratio — a measure of a bank’s profitability — deteriorated in the quarter, setting it apart from peers Nordea Bank Abp and DNB Bank ASA, which saw the ratio improve.

“In a quarter marked by expenses rising more quickly than income, we are naturally far from satisfied,” the bank said in a statement Wednesday. “This outcome spurs us work even more focused with a resolute change work at a higher pace.”

Chief Executive Officer Michael Green, a Handelsbanken lifer who has steered the bank since the turn of the year, has said he is going to trim overhead costs and bring the bank closer to its roots. That means a bigger focus on clients and the daily interaction at branch offices as well as online.

Handelsbanken has the biggest property exposure among the nation’s banks and there has been a concern around risks for rising credit losses due to the financial difficulties in the sector. Those fears have yet to materialize. The bank reported net credit recoveries of 95 million kronor, compared with an estimate of 231 million kronor in loss provisions.

The Stockholm-based lender’s net income fell to 6.6 billion kronor. Analysts had penciled in 6.75 billion kronor.

The bank also announced a strategic refocus for its Norwegian operations, citing an “ongoing weak development,” and named Marion Ulander as acting head of operations in the country while it seeks a permanent country general manager.

With assistance from Christopher Jungstedt.

This article was generated from an automated news agency feed without modifications to text.

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