Q1 2025 Svenska Handelsbanken AB Earnings Call Transcript
Key Points
- Svenska Handelsbanken AB (SVNLF) reported a stable operating profit of SEK8.1 billion for Q1 2025, with a return on equity of 13%.
- The bank's cost income ratio improved to 40.7% due to a significant reduction in costs by 7% year-on-year.
- Net credit losses amounted to net credit loss recoveries for the fifth consecutive quarter, highlighting strong asset quality.
- The capital situation is robust with a CET1 ratio of 18.4%, which is above the long-term target range.
- The bank continues to gain market share in the savings business, with net fee and commission income increasing by 5% compared to last year.
- Net interest income (NII) dropped by 2% compared to the previous quarter, partly due to negative currency effects.
- Total income decreased by 8% quarter-on-quarter, with fee and commission income seasonally lower by 5%.
- The underlying operating profit was down by 12% compared to the previous quarter.
- The UK market showed subdued volume growth with high amortization, despite having the most satisfied customers.
- The bank's cost reduction efforts in the UK are lagging, with a high cost income ratio of 54%.
Good morning, everyone and welcome to this presentation of Handelsbanken's results for the first quarter of 2025. The first quarter showed an operating profit of SEK8.1 billion, which was very stable compared to last quarter last year. The return on equity was 13%. Compared to the same quarter last year, the NII showed resilience and fee and commissions grew on the back of positive development again in the savings business.
The costs have come down significantly over the year, down 7%. This led to the cost income ratio improving year-on-year to 40.7% in the quarter. Net credit losses again for the fifth consecutive quarter amounted to net credit loss recoveries.
In times of volatile markets and uncertainties about the macro outlook, it's always important to remind about the low funding and liquidity risks in the bank. These are continuously handled in a prudent manner in order to safeguard the bank from potential unknown factors such as market disruptions or a rapid change in the macro environment.
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