Slides
Page 1
Handelsbanken January – December 2024 5 February 2025 1
Page 2
2 Operating profit Q4 2024 6.4 7.6 9.1 9.2 0 2 4 6 8 10 Q4 2021 Q4 2022 Q4 2023 Q4 2024 SEK 9.2bn in operating profit 14.2% ROE 39.7% C/I ratio Resilient income and continued focus on cost efficiency Net credit loss recoveries 18.8% CET1 ratio, almost 400bp above SREP Proposed dividend SEK 15.00 per share Highest Q4 operating profit so far SEK bn
Page 3
Financial summary Q4 2024 compared to previous quarter 39.7% C/I-ratio -0.03% Net credit loss ratio 14.2% ROE 18.8% CET1-ratio 3 Key ratios: * Items affecting comparability consists of foreign exchange effects, Oktogonen, non-recurring items and special items. SEK m Q4 2024 Q3 2024 Change Adjusted for items affecting comparability* Net interest income 11,745 11,763 0% -1% Net fee and commission income 3,067 2,966 3% 3% Total income 16,025 15,545 3% 3% Total expenses -6,363 -5,956 7% 4% Profit before credit losses and regulatory fees 9,662 9,589 1% 2% Net credit losses 232 141 65% 64% Regulatory fees -719 -671 7% 7% Operating profit 9,177 9,061 1% 3%
Page 4
Financial summary Jan-Dec 2024 compared to previous year 40.4% C/I-ratio -0.02% Net credit loss ratio 14.6% ROE 18.8% CET1-ratio 4 Key ratios: * Items affecting comparability consists of foreign exchange effects, Oktogonen, non-recurring items and special items. SEK m Full year 2024 Full year 2023 Change Adjusted for items affecting comparability* Net interest income 46,841 47,578 -2% -2% Net fee and commission income 11,726 11,139 5% 5% Total income 62,345 62,249 0% 0% Total expenses -25,209 -23,182 9% 7% Profit before credit losses and regulatory fees 37,136 39,067 -5% -4% Net credit losses 601 -141 n.a. n.a. Regulatory fees -2,733 -2,624 4% 4% Operating profit 35,016 36,322 -4% -2%
Page 5
11,763 11,745 105 0 8 70 17 -218 11,400 11,450 11,500 11,550 11,600 11,650 11,700 11,750 11,800 11,850 11,900 Q3 2024 Volume in home markets Margins and funding Day count effect Deposit guarantee Foreign exchange effects Other Q4 2024 Net interest income development Q4 2024 compared to previous quarter NII change: 0% Contribution from: Volumes: +1%-points Margins and funding: -2%-points FX-effects: +1%-points SEK m 5
Page 6
Net fee and commission income SEK m Savings related* 68% Payment fees, net 15% Other, net 17% Net fee and commission income * Provisions from mutual funds, asset management, and insurance of net fee and commissions SEK m SEK m 01 000 6 2,694 2,800 3,067 2,200 2,300 2,400 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 Q4 2022 Q4 2023 Q4 2024 CAGR: +7% 1,717 1,819 2,076 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 Q4 2022 Q4 2023 Q4 2024 438 467 475 0 100 200 300 400 500 600 700 800 900 1,000 Q4 2022 Q4 2023 Q4 2024 CAGR: +4% CAGR: +10% 539 514 516 0 100 200 300 400 500 600 700 800 900 1,000 Q4 2022 Q4 2023 Q4 2024 SEK m CAGR: -2%
Page 7
-50 0 50 100 150 200 250 300 350 400 2010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Savings business in Sweden 7 * Top 10 institutions. Source: Swedish Investment Fund Association ** Morningstar Direct Peer 1-9 SEK bn Accumulated net inflows in Swedish mutual fund market* Handelsbanken SEK +346bn 24% Market share of net inflows 2011-2024 Strong and persistent net inflow Largest in the market in 2024 with 18% market share of net inflows
Page 8
Expenses and staff 8 Staff costs + Other expenses Total staffing* * Employees plus external resources 13,276 12,571 11,400 11,600 11,800 12,000 12,200 12,400 12,600 12,800 13,000 13,200 13,400 13,600 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 End of quarter Quarterly average Number of staff 5,600 5,627 5,000 5,100 5,200 5,300 5,400 5,500 5,600 5,700 5,800 5,900 6,000 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Oktogonen + Restructuring charge (staff costs) Staff costs + Other expenses excl items affecting comparability SEK m
Page 9
Net credit losses 9 Credit loss ratio 1997 – 2024** Credit losses Q4 2022 – Q4 2024 * Average for SEB, Nordea, Swedbank, Danske Bank and DNB ** Jan-Dec 2024 for Handelsbanken and Jan-Sep 2024 for comparable banks -0.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Handelsbanken Comparable Nordic banks* 0.01% 0.01% 0.00% 0.00% 0.00% -0.01% -0.02% -0.02% -0.03% -0.40% -0.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20%-1,200 -1,000 -800 -600 -400 -200 0 200 400 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Management addon diff (total accumulated amount = SEK 149m at end of Q4 2024) Net credit losses, ex. addon Net credit loss ratio (rhs) Credit loss ratioSEK m
Page 10
CET1 ratio and regulatory requirement Q4 2024 * Estimated requirement set by the Swedish FSA at the end of Q4 2024 10 Proposed dividend to the AGM: Ordinary dividend SEK 7.50 per share Special dividend: SEK 7.50 per share123 155 14.9% 18.8% 0 20 40 60 80 100 120 140 160 Regulatory minimum* CET1 capital 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% Long term target range 15.9 – 17.9% SEK bn Total REA: SEK 825bn Assessment of the additional capital buffer above the long term target range will be reviewed continuously Strong financial position: Almost 400bp CET1 ratio above the FSA requirement Almost 100bp above the long term target range
Page 11
11 Q4 2024 vs Q3 2024: Operating profit SEK 6.4bn Operating profit, qoq -5% C/I ratio 30.5% (28.0) Return on allocated capital 16.7% (18.2) Average lending, qoq 0% Average deposits, qoq +1% AUM, qoq 0% Q4 2024 vs Q3 2024: Operating profit SEK 0.2bn Operating profit, qoq +3% C/I ratio 50.7% (50.6) Return on allocated capital 13.6% (13.5) Average lending, qoq +1% Average deposits, qoq +8% AUM, qoq +5% Q4 2024 vs Q3 2024: Operating profit SEK 1.4bn Operating profit, qoq -2% C/I ratio 50.6% (53.0) Return on allocated capital 16.4% (17.3) Average lending, qoq +1% Average deposits, qoq +3% AUM, qoq +2% Q4 2024 vs Q3 2024: Operating profit SEK 0.9bn Operating profit, qoq +18% C/I ratio 41.2% (43.5) Return on allocated capital 12.6% (10.8) Average lending, qoq +1% Average deposits, qoq -1% AUM, qoq +8% Sweden 69% of Group operating profits The Netherlands 3% of Group operating profits Norway 10% of Group operating profits United Kingdom 16% of Group operating profits * All qoq comparisons in local currency Home markets
Page 12
Resilient income Delivery on efficiency initiatives materialising in the cost base Solid asset quality with increasing net credit loss recoveries Strong capital position and increased special dividend Expanded local footprint Q4 in sum 12
Page 13
Appendix 13
Page 14
The Board’s proposal to the AGM 2025 14 Earnings year 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Ordinary dividend, SEK/share 7.50 6.50 5.50 5.00 4.10 5.50 5.50 5.00 4.50 4.17 3.83 3.58 3.25 Extra dividend Industrivärden, SEK/share 4.30 Extra dividend, SEK/share 7.50 6.50 2.50 2.00 1.50 1.66 1.67 - - Total dividend, SEK/share 15.00 13.00 8.00 5.00 8.40 5.50 7.50 5.00 6.00 5.83 5.50 3.58 3.25 Total dividends, SEK bn 29.7 25.7 15.9 9.9 16.7 10.7 14.6 9.7 11.4 11.1 10.5 6.8 6.1 Payout ratio, ordinary dividend 54% 44% 51% 51% 52% 62% 66% 59% 53% 52% 51% 46% 49% Payout ratio, total dividend 108% 88% 74% 51% 107% 62% 91% 59% 70% 73% 73% 47% 49% Dividend growth, ordinary dividend 15% 18% 10% 22% n.a. 0% 10% 11% 8% 9% 7% 10% 8% Dividend growth, total dividend 15% 62% 61% -41% n.a. -27% 50% -17% 3% 6% 54% 10% 8% Ex-dividend date: Record date for dividends: Payment: March 27, 2025 March 28, 2025 April 2, 2025
Page 15
Income statement Compared to previous quarter 15 Key ratios: 39.7% C/I-ratio -0.03% Net credit loss ratio 14.2% ROE 18.8% CET1-ratio SEK m Q4 2024 Q3 2024 Change Net interest income 11,745 11,763 0% Net fee and commission income 3,067 2,966 3% Net gains/losses on financial transactions 1,147 626 83% Other income 66 190 -65% Total income 16,025 15,545 3% Staff costs, excl. Oktogonen -3,913 -3,797 3% Oktogonen -68 -28 143% Other expenses -1,860 -1,632 14% Depreciation, amortisation and impairment of property, equipment and intangible assets -523 -498 5% Total expenses -6,363 -5,956 7% Profit before credit losses and regulatory fees 9,662 9,589 1% Net credit losses 232 141 65% Gains/losses on disposal of property, equipment and intangible assets 3 2 50% Regulatory fees -719 -671 7% Operating profit 9,177 9,061 1% Taxes -1,976 -2,024 -2% Net profit from continuing operations 7,201 7,037 2% Net profit from discontinued operations -354 173 Net profit for the period 6,848 7,210 -5%
Page 16
Income statement Compared to the previous year 16 40.4% C/I-ratio -0.02% Net credit loss ratio 14.6% ROE 18.8% CET1-ratio Key ratios: SEK m Full year 2024 Full year 2023 Change Net interest income 46,841 47,578 -2% Net fee and commission income 11,726 11,139 5% Net gains/losses on financial transactions 3,103 2,661 17% Other income 675 871 -23% Total income 62,345 62,249 0% Staff costs, excl. Oktogonen -15,476 -13,357 16% Oktogonen -255 -285 -11% Other expenses -7,474 -7,796 -4% Depreciation, amortisation and impairment of property, equipment and intangible assets -2,004 -1,743 15% Total expenses -25,209 -23,182 9% Profit before credit losses and regulatory fees 37,136 39,067 -5% Net credit losses 601 -141 Gains/losses on disposal of property, equipment and intangible assets 13 20 -35% Regulatory fees -2,733 -2,624 4% Operating profit 35,016 36,322 -4% Taxes -7,795 -8,417 -7% Net profit from continuing operations 27,221 27,905 -2% Net profit from discontinued operations 234 1,209 -81% Net profit for the period 27,456 29,114 -6%
Page 17
Change in NII from previous quarter Net effect of margins and funding costs SEK -218m 17 Net interest income continuing operations Q3 2024, SEK m 11,763 Deposit volume 35 Lending volume 3 Net effect margins and funding costs -262 Day count effect 0 Deposit guarantee fee 8 Other -20 Sweden -236 -2.0% Deposit volume 52 Lending volume 15 Net effect margins and funding costs -47 Day count effect 0 Foreign exchange effects 54 Deposit guarantee fee 1 Other 19 Home markets outside Sweden 94 0.8% Net of funding costs and allocation to business segments 91 Foreign exchange effects 16 Deposit guarantee fee 0 Other 19 Group Treasury and other units 126 1.1% Change in NII continuing operations -18 -0.2% Net interest income continuing operations Q4 2024, SEK m 11,745 Summary of changes: Volumes in home markets 105 0.9% Net margins and funding -218 -1.9% Day count effect 0 0.0% Deposit guarantee fee 8 0.1% Foreign exchange effects 70 0.6% Other 17 0.1%
Page 18
Asset quality Credit losses, net SEK m Credit lossesExpected credit losses Stage 3, net SEK m SEK m SEK 232m 18 Expert based add-on SEK +229m Rating migrations SEK +8m Better quality on new loans compared to exits SEK +25m Other (incl. effects from change in loan durations and migrations to stage 3) SEK +43m -106 -120 -100 -80 -60 -40 -20 0 20 40 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 -106 9 305 23 -200-1000100200300400 Expected credit losses in Stage 3, net Write-offs and recoveries Other effects Stage 1 and Stage 2 Updated macro assumptions 232 -100 -50 0 50 100 150 200 250 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24
Page 19
842 825 12 6 2 10 7 11 2 3 800 805 810 815 820 825 830 835 840 845 REA, Q324 Volume change Credit risk migration in the lending portfolio Net effect different quality of inflows and outflows in exposures Mitigation from risk weight floors Sale of operations in Finland Structural FX-risk Foreign exchange effects REA Other, incl rounding effects CET1 ratio Q424, % Change in CET1-ratio from previous quarter CET1-ratio REA SEK bn Capital effects REA effects 19 18.8 18.8 0.8 0.1 0.0 0.0 0.2 0.1 0.2 0.1 0.3 1.4 0.1 0.3 18.0 18.2 18.4 18.6 18.8 19.0 19.2 19.4 19.6 19.8 CET1 ratio Q324 Earnings for the period Deducted dividends IRB deduction Foreign exchange effects CET1 capital Foreign exchange effects REA Volume change Credit risk migration in the lending portfolio Net effect different quality of inflows and outflows in exposures Mitigation from risk weight floors Sale of operations in Finland Structural FX-risk Other, incl rounding effects CET1 ratio Q424, % %
Page 20
Disclaimer Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, express or implied, by the forward looking statements. Factors that might cause forward looking statements to differ materially from actual results include, among other things, regulatory and economic factors. Handelsbanken Group assumes no responsibility to update any of the forward looking statements contained herein. No representation or warranty, express or implied, is made or given by or on behalf of Handelsbanken Group or its directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of Handelsbanken Group or any of its directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Handelsbanken Group, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. 20