Q3 2025 Svenska Handelsbanken AB Earnings Call Transcript
Key Points
- Svenska Handelsbanken AB (SVNLF) reported an 8% growth in operating profit and a return on equity (ROE) of 13% for the quarter.
- The cost/income ratio improved from 44% to 40% due to a 4% increase in income and a 5% reduction in costs.
- The bank maintained strong asset quality with net credit loss reversals for the seventh consecutive quarter.
- The CET1 ratio stood at 18.2%, significantly above the regulatory minimum, indicating a robust capital position.
- The bank received external recognitions, including being named Business Bank of the Year for the fourth consecutive year and Sweden's SME Bank for the 13th consecutive year.
- Net interest income (NII) declined by 7% year-on-year due to cuts in central bank policy rates.
- Despite positive signs of lending volume growth, the NII dropped by 2% in the quarter, offsetting these gains.
- The U.K. operations saw a decrease in operating profit by 4% due to lower net credit loss recoveries.
- The cost-to-income ratio in the U.K. remains high at 59%, indicating efficiency challenges.
- The bank's total income declined by 8% year-on-year, primarily due to the drop in NII.
Good morning, everyone, and welcome to this presentation of Svenska Bank's results for the first nine months. The bank reported a solid quarter with earnings growing compared to Q2. Operating profit grew by 8% and the ROE amounted to 13%. As income grew -- increased by 4% -- as income increased by 4% and costs dropped by 5%, the cost/income ratio improved from 44% to 40%. The cost/income ratio improved in all of our home markets in this quarter. Net credit losses again, now for the seventh consecutive quarter amounted to net credit loss reversals, and clearly, the asset quality remains very strong.
And highlighted many times before, the bank is not only run with low credit risk, but also with low funding and liquidity risks and an ample liquidity portfolio amounting to around 1/4 of the total balance sheet. The CET1 ratio stood at 18.2%, which was 350 basis points above the regulatory minimum and thereby, 50% above our long-term target range. The anticipated dividend for the first 9 months, which is deducted from the
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