From 1 January 1996, new accounting legislation for credit institutions and new regulations from the Swedish Financial Supervisory Authority apply. The new regulations are based on EU directives. The relevant comparative figures have been recalculated to conform to the new regulations and the contents of certain financial ratios have been changed

Substantial increase in profits
The Handelsbanken Group's profit for the period January-March 1996 increased by 13% to SEK 1 517M. The improved result is due to lower loan losses and also higher net interest income and net commission income.

The result before loan losses went up by 4% to SEK 1 966M.

Return on shareholders' equity increased to 17.9% (15.9).

Earnings per share rose to SEK 4.93 (4.00) and as a 12-month moving total, to SEK 16.31 (12.59).

Income and expenses
Total income went up by 7%.

Net interest income increased by 5% due to higher lending volume. The spread between lending and deposit rates continued to narrow.

Net commission income rose by 18%, mainly due to increased volumes in securities trading. During the first quarter, Handelsbanken was the largest player on the Stockholm Stock Exchange with 13% of turnover.

Net financial operations were up by 17%.

Expenses rose by 11%.

The increase in staff costs was 10%, of which approximately 7% was a real increase due to our acquisition in Finland and contractual salary increments for 1996. Around 3% is due to the corresponding salary increases in respect of the first quarter of 1995 being reported during the second quarter as a result of delayed salary negotiations.

Other expenses were up by 14%. Almost two-thirds of this was attributable to the expanded Finnish operations and other operations outside Sweden.

Loan losses continue to fall
Loan losses, including changes in value for property taken over to protect claims, fell by 19% to SEK 449M or 0.6% of lending (0.8%). Bad debts fell by 34% to SEK 2 771M or 1.0% of lending (1.5%). The volume of collateral taken over was SEK 741M (7 750). The decrease is due to the proposed distribution of the Bank's property company, Näckebro.

Capital ratio
The Handelsbanken Group's capital ratio remains high at 11.3% (14.2% at the year-end). The decrease is explained by the proposed distribution of Näckebro, the introduction of capital adequacy requirements for market risks and expanded operations. The Tier 1 capital ratio was 8.1% (10.3% at the year-end).

Rating
During most of the 1990s, Handelsbanken's credit rating by the international rating agencies has been higher than that of the other Swedish banks. In April 1996, Handelsbanken was again upgraded by Moody's and is now rated Aa3 for long-term funding. This is the same rating as the Kingdom of Sweden.

Stockholm, 22 April 1996

Arne Mårtensson
President and Group Chief Executive

For further information please contact Mr Arne Mårtensson, President and Group Chief Executive, or Mr Sven Grevelius, Executive Vice President and Head of Central Control and Accounting Department, tel: +46 8 22 92 20.

Profit and loss account
Svenska Handelsbanken Group	January - March
	1996	1995	Change
	SEK M	SEK M	%
Interest receiveable 1)	10 321	9 371	+ 10
Leasing income 1)	267	226	+ 18
Interest payable 1)	- 7 929	- 7 066	+ 12
Commission receivable	772	654	+ 18
Commission payable	- 99	- 82	+ 21
Net result on financial operations	256	218	+ 17
Other operating income	121	149	- 19
Total income	3 709	3 470	+ 7
General administrative expenses
- Staff costs	893	812	+ 10
- Other administrative expenses	575	506	+ 14
Depreciation and write-down in value of tangible and intangible fixed assets 1)	275	257	+ 7
Total expenses	1 743	1 575	+ 11
Profit before loan losses	1 966	1 895	+ 4
Net loan losses 2)	401	557	- 28
Change in value of property taken over	48	- 2	.
Operating profit	1 517	1 340	+ 13
Allocations
- Pension provisions	+ 44	- 8	.
- Other administrative expenses	0	- 4	.
Tax on profit for the period	- 388	- 381	+ 2
Net profit for the period	1 173	947	+ 24
1) Net interest income	2 467	2 351	+ 5
The net of interest receivable, leasing income and interest payable, with deduction of depreciation according to plan for leasing assets (part of the item Depreciation and write-down in value of tangible and intangible fixed assets).
2) Actual loan losses, net	445	459	- 3
Provision for possible loan losses	821	43	- 43
Recovered from actual loan losses	- 45	- 38	+ 18
Write back of provisions for possible loan losses	- 81	- 118	- 31
Allocation to/dissolution of reserve for claims valued as a group (incl. general reserve)	0	111	.

Balance Sheet
Svenska Handelsbanken Group
	1996	1995
	31 March	31 March	Change
	SEK M	SEK M	%
Loans to the general public	273 266	273 883	0
Loans to the credit institutions	143 357	64 101	+ 124
Interest-bearing securities
Financial fixed assets	23 966	45 988	- 48
Financial current assets	59 025	25 692	+ 130
Other assets	68 174	71 288	- 4
Total assets	567 788	480 952	+ 18
Desposits and funding from the general public	154 802	117 926	+31
Liabilities to credit institutions	183 219	151 410	+ 21
Issued securities etc	126 797	110 592	+ 15
Subordinated liabilities	12 473	13 803	- 10
Other liabilities	66 897	63 616	+ 5
Shareholders' equity	23 600	23 605	0
Total liabilities and shareholders' equity	567 788	480 952	+ 18

Fastighets AB Näckebro
It is proposed that the shares in Fastighets AB Näckebro be distributed during the second quarter of 1996. The figures for Fastighets AB Näckebro are not included in these figures for the Handelsbanken Group. As at 31 March, 1996, Fastighets AB Näckebro's share in the Group was as follows (SEK M):

Derivatives
31 March 1996, SEK M
	Interest-rate related		Exchange-rate related		Equity-price related
	Market value	Book value	Market value	Book value	Market value	Book value
Positive values	16 075	15 168	10 506	10 155	61	61
Negative values	18 626	17 297	11 255	10 398	13	13
The above table is compiled in accordance with the Swedish Financial Supervisory Authority's regulations and includes all derivative instruments in the Group. For derivative instruments which are part of trading operations, the book value is the same as the market value. The differences between market value and book value reported in the table correspond to the reversed differences between market value and book value in that part of the Group's operations which is subject to hedge accounting.

Bad debts etc
Svenska Handelsbanken Group	1996	1995
	31 March	31 March
	SEK M	SEK M
Bad debts, gross	7 436	9 410
Minus reserve for possible loan losses	- 4 665	- 5 231
Bad debts, net	2 771	4 179
Reduced rate loans without a provision for possible loan losses	1 515	2 300
Total problem loans	4 286	6 479
Bad debt reserve ratio	62.7%	55.6%
Proportion of bad debts	1.0%	1.5%
Loan loss ratio	0.6%	0.8%
Non-performing loans for which interest is reported as income	501	606
Collateral taken over
- Property	207	7 083
- Shares	534	667
Total collateral taken over	741	7 750

Definitions

NON-PERFORMING LOANS
Loans where interest, repayments or overdrafts have been due for payment for more than 60 days.

BAD DEBTS
A non-performing loan, or a loan where other circumstances lead to doubt concerning its value and where the value of the collateral does not cover the principal amount and the accrued interest by a satisfactory margin.

REDUCED RATE LOANS
Loans for which the interest rate has been reduced relative to market rates.

PROBLEM LOANS
The total of net bad debts and reduced rate loans.

BAD DEBT RESERVE RATIO
Reserve for possible loan losses in relation to gross bad debts.

PROPORTION OF BAD DEBTS
Net bad debts in relation to total lending to the general public and credit institutions (excl. banks) as well as leasing assets, property taken over and credit guarantees.

LOAN LOSS RATIO
Loan losses and changes in value of property taken over as a percentage of the balance brought forward for lending to the general public, credit institutions (excl. banks) as well as leasing assets, property taken over and credit guarantees.

Quarterly performance of Svenska Handelsbanken Group
	1995:1	1995:2	1995:3	1995:4	1996:1
	SEK M	SEK M	SEK M	SEK M	SEK M
Interest receivable	9 371	10 009	9 967	10 193	10 321
Leasing income	226	238	309	324	267
Interest payable	-7 066	-7 818	-7 833	-8 016	-7 929
Commission, net	572	526	562	706	673
Net result on financial operations	218	288	411	396	256
Other	149	213	166	198	121
Total income	3 470	3 456	3 582	3 801	3 709
Personnel expenses	812	868	867	866	893
Other administrative expenses	763	778	862	1 056	850
Total expenses	1 575	1 646	1 729	1 922	1 743
Profit before loan losses	1 895	1 810	1 853	1 879	1 966
Loan losses	555	578	631	628	449
Operating profit	1 340	1 232	1 222	1 251	1 517
Net interest income	2 351	2 239	2 199	2 244	2 467

Financial ratios for the Group
	January - March
	1996		1995
Return on shareholders' equity	17.9%		15.9%
Income/expenses (I/E ratio)
- before loan losses	2.27		2.36
- after loan losses	1.76		1.69
Earnings per ordinary share, SEK	4.93		4.00
- April 1995-March 1996		16.31
- April 1994-March 1995		12.59
Return on shareholders' equity is calculated on the net result for the period in relation to average shareholders' equity.
When computing the income/expenses ratio (I/E ratio), income and expenses are adjusted by depreciation of leasing assets according to plan. Earnings per ordinary share are determined by dividing the net profit for the period by the number of ordinary shares. An adjustment has been made to take into account preference shares, index shares and full conversion of convertible subordinated notes.

New accounting principles
New accounting principles for credit institutions came into force in Sweden on 1 January 1996. The legislation has been changed to comply with EU directives, and the Swedish Financial Supervisory Authority's regulations have also been modified.

Valuation rules
According to the previous rules, holdings of interest-bearing securities and derivatives based on them were divided into an investment portfolio (long-term holdings) and a trading portfolio (short-term holdings). In both cases they were valued at the lower of purchase price and market value. This practice had the effect that the net result included changes in unrealised discounts, but not changes in unrealised premiums. Changes in unrealised discounts in the trading portfolio were reported under net interest income while similar changes in the investment portfolio were treated as an allocation.

The new accounting principles imply that:
Long-term holdings of securities - in principle until maturity - are classified as Financial fixed assets. These are reported in the balance sheet at purchase price.

Other securities are classified as Financial current assets. These are valued either at the lower of purchase price or market value or at market value, ie, unrealised capital gains are also included in the result for the period. Unrealised capital gains are not available for payment of dividend, however.

Profit and loss account
The structure of the profit and loss account is laid down in the new act. The main changes are as follows: Net interest income was previously a separate item in the profit and loss account but is now a note to the profit and loss account. Net interest income no longer includes realised gains/losses and unrealised changes in value (based on the principle of the lower of purchase price or market value) arising in the trading portfolio. These items are now reported under a new heading: Net result on financial operations.

Net result on financial operations consists of
* Realised capital gains/losses and unrealised changes in the value of financial current assets. Previously, these were part of net interest income.
* Realised capital gains/losses and unrealised changes in value on equity-related current assets. Previously these were reported under other income/expense.
* Changes in exchange rates. These also include foreign exchange earnings which were previously reported under commission income. Previously, a reduction for depreciation of leasing assets according to plan was included in net interest income. These expenses are now included under the heading Depreciation and write-down in value of tangible and intangible fixed assets.

Expenses for services bought in order to earn commission (eg, transaction charges, custodian and brokerage commission) are included in commission payable which is a deductible item among income items.

Balance sheet
From 1 January 1996, negative and positive values of derivatives are to be reported separately and not offset as previously. This leads to an increase in the total assets. Apart from this, total assets are larger due to the changeover to trade date accounting instead of settlemen date accounting for transactions in financial instruments.

Effects for the Svenska Handelsbanken Group
In accordance with Recommendation No.5 from the Swedish Financial Accounting Standards Council, comparative figures have been recalculated to conform to the new regulations.

The majority of the Group's investment portfolio as at 31 December 1995 has been classified as financial fixed assets. SEK 6.0 billion of the portfolio has been classified as current assets, since these were not intended to be kept to maturity.

Financial current assets are valued at market value.

For the Group, the effects of the recalculation are that:
* Total assets as at 31 March 1995 increase by SEK 36 809M to SEK 480 952M.

* Shareholders' equity as at 31 December 1994 increases by SEK 577M to SEK 23 348M.

* Shareholders' equity as at 31 December 1995 decreases by SEK 12M to SEK 25 954M.

* Operating profit for 1995 increases by SEK 85M to SEK 5 045M.

* Operating profit for the first quarter of 1995 increases by SEK 66M to SEK 1 340M.

* The effects of the new rules on operating profit for the first quarter of 1996 are negligible.

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