Net operating income and loan losses
The Svenska Handelsbanken Group's result before loan losses continued to show a favourable trend, rising by 15% to SEK 5 965 million.

Loan losses were SEK 3 188 million or 1.1% of the loan portfolio. This percentage level is less than half of what is expected for the Swedish banking system as a whole in 1991. SEK 455 million of the losses were attributable to the finance company Gamlestaden.

Non-performing loans, i.e. loans for which interest and/or amortisation have been due for payment for more than 60 days or where other circumstances have led to uncertainty as to the value of the credit, amounted to SEK 5.2 billion. Write-offs deemed necessary on non-performing loans have been made. Interest concessions, i.e. relaxation of original interest terms, were SEK 694 million and have also decreased net operating income.

Profits after loan losses were SEK 2 777 million, a decrease of 39%.

Return on equity after standard national tax was 11.3% as compared to 22.2% for 1990.

This means that, also for 1991, the Svenska Handelsbanken Group's return on equity was well above the average for the Swedish commercial banks.

Capital strength
The Group's capital adequacy ratio at December 31, 1991 was 10.1%, thus by a wide margin exceeding the 8 % capital cover requirement to be attained by the end of 1992. This capital surplus allows an increase in volume of 26%, given that the increase is subject to the same average capital requirement as at the end of 1991. If the opportunity to issue subordinated loans is utilised to a maximum, the possible increase in volume is 43%.

Extraordinary items
The extraordinary items resulted from the restructuring of the wholly-owned finance company Svenska Finans. As part of the Group's new strategy with emphasis on the Nordic area, Svenska Finans is winding up all its operations outside this region. Svenska Finans' operations will concentrate on services which supplement the Group's other products and services.

Earnings per share
Earnings per ordinary share adjusted for outstanding convertibles and after full tax were:

* before extraordinary items SEK 11.82 (SEK 19.11)
* after extraordinary items SEK 8.90 (SEK 19.22)

By full tax is meant tax paid plus 30% tax on appropriations.

Dividend
The Board of Directors recommends a dividend on the ordinary shares, Series A and B, of SEK 4.75 (SEK 4.50).

The dividend on the index shares, which is adjusted for changes in the consumer price index, is raised from SEK 0.65 to SEK 0.70.

The proposed dividend represents in all SEK 734 million.

Arne Mårtensson

Svenska Handelsbanken Group
Change	1991	1990
	SEK M	SEK M	%
Operation revenue
Net interest income	8 824	7 632	+16
Commissions and other revenue	2 649	2 462	+ 8
Total operating income	11 473	10 094	+14
Operating expenses
Personnel expenses	2 863	2 591	+10
Other expenses incl. depreciation	2 645	2 322	+14
Total expenses	5 508	4 913	+12
Result before loan losses	5 965	5 181	+15
Loan losses	3 188	623	+412
Net operating income	2 777	4 558	-39
Extraordinary items	-666	+25
Result after extraordinary items	2 111	4 583	-54
Return on equity after 30% standard national tax	11.3%	22.2%
Income/Expense ratio
before loan losses	2.08	2.06
after loan losses	1.32	1.82
Total assets	409 671	367 719	+11
Profit/loss per ordinary share: before extraordinary items 1)
after 30% standard national tax (SEK)	12.41	20.27
after full tax (SEK)	11.82	19.11
after extraordinary items 1)
after 30% standard national tax (SEK)	9.49	20.38
after full tax (SEK)	8.90	19.22
Dividend per ordinary share (SEK)	4.75	4.50
Total dividends, SEK M	734	695
1) Adjusted for outstanding convertible notes

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