Summary
The Handelsbanken Group's
profit was just over SEK 1.9 billion before allocation to
the profit-sharing foundation, Oktogonen, compared to a
loss of SEK 0.8 billion for 1992. After an allocation of
SEK 114 million to Oktogonen during the last quarter, an
operating profit of SEK 1.8 billion is reported.
The result before loan losses increased by 20% to SEK 8.6 billion.
Loan losses were 15% lower.
Problem loans decreased by 26% to SEK 9.7 billion.
Capital cover increased to 12.9%.
Result and return on equity
Handelsbanken's result was SEK
1 915 million before an allocation to the profit-sharing
foundation Oktogonen, compared to a loss of SEK 840
million in 1992. The result for the last quarter has been
charged with an allocation to Oktogonen of SEK 114
million. After this, the operating profit for 1993 was
SEK 1 801 million.
The rules stipulate that an allocation to Oktogonen can be made when Handelsbanken's result is better than the average of the other listed banks in Sweden. The maximum allocation is a third of the dividend paid to the shareholders. Since no dividend was paid to the shareholders for 1992, for the first time for 20 years no allocation was made to Oktogonen.
Return on equity was 7.9% (-3.0%).
Earnings per ordinary share after full tax were SEK 6.49 (-2.25).
Result before loan losses up by
20%
The result before loan losses
increased by 20% to SEK 8 602 million. The average rate
of increase has been an annual 20% during the 1990s.
Income rose by 12%.
Net interest income was up by 10% because of lower market interest rates and a continued shift of lending from foreign currency to Swedish kronor.
Commission fell by 3%. This decrease is almost totally attributable to international commission which was exceptionally high in 1992 because of the situation on the foreign exchange market. Investment banking commission rose sharply on the other hand.
Other income includes realised profits on investment bonds of SEK 537 million (150) and net operating income for properties taken over of SEK 313 million (59).
Total expenses rose by 2%. This increase is due to the allocation of SEK 114 million to the aforementioned foundation, Oktogonen, which was not made in 1992. Before this allocation, expenses for the Group's Swedish units fell by almost 3%. Expenses in the units abroad fell in local currency but rose by 14% in Swedish kronor because of the lower value of the krona. The number of employees fell by 330 or 4% to 7 040.
The I/E ratio, income in relation to expenses before loan losses, rose from 2.31 to 2.55.
Loan losses down by 15%
Loan losses fell by 15% to SEK
6 801 million or 2.2% (2.5) of the total loan volume
including credit guarantees.
Problem loans 26% lower
Problem loans after provision
for possible loan losses fell by 26% to SEK 9 706
million.
Property which has been taken over for protection of claims increased during the year from SEK 3 508 million to SEK 8 656 million. During the last quarter, the increase was marginal.
Capital cover increased to 12.9%
In 1993, the Handelsbanken
Group's capital cover increased to 12.9% (10.1) as a
result of the rights issue of SEK 2.6 billion in October
and the profit for the year. After the rights issue, the
number of ordinary shares is 227 million.
Dividend
The Board recommends dividend
on the ordinary shares, series A and B, of SEK 2.00
(0.00). Dividend on the index shares which follows the
consumer price index will be unchanged at SEK 0.75. In
accordance with the Articles of Association, dividend on
the preference shares will be SEK 0.45 for series A and
SEK 0.60 for series B.
The recommended dividend represents SEK 469.5 million (15.5 million).
Stockholm, February 22, 1994
Arne Mårtensson
President and Group Chief Executive
| Key figures for the Group | ||
| 1993 | 1992 | |
| Return on equity | 7.9% | - 3.0% |
| Income/expenses (I/E ratio) | ||
| - before loan losses | 2.55 | 2.31 |
| - after loan losses | 1.15 | 0.94 |
Earnings/loss per ordinary share 1) |
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| - before extraordinary items, SEK | 6.49 | - 2.25 |
| - after extraordinary items, SEK | 6.49 | - 1.91 |
Dividend per ordinary share, SEK |
2.00 | 0.00 |
| Total dividend, SEK m | 469.5 | 15.5 |
 |
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1) After full tax and conversion of outstanding convertible notes. Adjusted for 1993 rights issue. |
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| Profit and loss account | |||
| Svenska Handelsbanken Group | 1993 | 1992 | Change |
| SEK M | SEK M | % | |
|
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 |
|
|
|
| Net interest income 1) | 9 917 | 9 006 | + 10 |
| Commission | 2 804 | 2 894 | - 3 |
| Other income | 1 425 | 720 | + 98 |
| Total operating income | 14 146 | 12 620 | + 12 |
Personnel expenses |
2 820 | 2 740 | + 3 |
| Other expenses | 2 724 | 2 721 | - |
| Total expenses | 5 544 | 5 461 | + 2 |
Profit before loan losses |
8 602 | 7 159 | +20 |
Loan losses |
6 801 | 7 999 | - 15 |
| Operating profit | 1 801 | - 840 | . |
Extraordinary items |
- | 100 | . |
| Result before appropriations and taxes | 1 801 | - 740 | . |
|
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1) Interest income |
36 185 | 43 195 | - 16 |
| Interest expenses | 26 268 | 34 189 | - 23 |
| Balance sheet | |||
| Svenska Handelsbanken Group | 1993 | 1992 | |
| 31 Dec | 31 Dec | Change | |
| SEK M | SEK M | % | |
|
|||
|
|
|
|
| Government securities and bonds | 64 316 | 41 917 | + 53 |
| Lending | 263 569 | 283 372 | - 7 |
| Banks | 30 884 | 34 925 | - 12 |
| Other | 41 497 | 32 996 | + 26 |
| Total assets | 400 266 | 393 210 | + 2 |
Funding |
164 773 | 170 860 | - 4 |
| Deposits | 171 213 | 160 476 | + 7 |
| Other liabilities | 31 345 | 33 235 | - 6 |
| Subordinated loans | 11 358 | 11 550 | - 2 |
| Shareholders' equity | 21 577 | 17 089 | + 26 |
| Total liabilities and shareholders' equity | 400 266 | 393 210 | + 2 |
|
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Lending includes lending to the general public and financial institutions other than banks, and leasing assets. |
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| Non-performing loans for which interest is reported as income, problem loans and property taken over to protect claims | ||
| 1993 | 1992 | |
| 31 Dec | 31 Dec | |
| SEK M | SEK M | |
 |
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|
|
|
| Non-performing loans for which interest is reported as income | 1 821 | 2 421 |
| Problem loans: | ||
| - Non-performing loans where interest is not reported as income until payment has been made | 11 848 | 12 167 |
| - Loans where the interest rate has been lowered relative to market interest rates | 4 734 | 6 391 |
| - Minus: Reserve for possible loan losses | -6 876 | -5 431 |
| - Total problem loans allocation to reserve for possible loan losses | 9 706 | 13 127 |
| Property taken over to protect claims: | ||
| - Shares 1) | 1 651 | 219 |
| - Property | 7 005 | 3 289 |
| - Total | 8 656 | 3 508 |
|
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1) Excl. shares in Nobel Industrier, which yield market return. |
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