Handelsbanken Shrugs Off Brexit Concerns
Svenska Handelsbanken AB (SHB-B.SK), one of the Nordic region's largest lenders, posted an 8.6% drop in third-quarter net profit on Wednesday, in line with forecasts, and shrugged off any concerns surrounding the U.K.'s withdrawal from the European Union.
Net profit at the Stockholm-based bank fell to 4.17 billion Swedish kronor ($513.1 million) in the three months ending Sep. 30 from SEK4.56 billion in the same period a year ago, against expectations of SEK4.1 billion according to an analyst poll by FactSet. Net profit last year was boosted by a SEK769 million capital gain from the sale of shares.
The lender's U.K. operation makes up around 12% of group profit, and in a statement on Wednesday it said that it has continued to expand in the country despite uncertainty surrounding Brexit.
"The Bank continues to see good opportunities for expansion and growing business volumes in the U.K., regardless of Brexit," it said.
Expenses in the U.K. rose slightly as a result of its expansion and expenses relating to Brexit, it added.
"The preparations to convert the U.K. branch structure into a subsidiary are ongoing. The measures and expenses necessitated by such a process mean that operations in the U.K. will be given greater opportunities for continuing their favorable and long-term business development."
On a group level, higher lending and deposit volumes helped support net interest income in the quarter, while lower margins from lending and deposits as well as exchange rate effects weighed, it said.
Third-quarter net-interest income at the bank rose 7.8% to SEK7.59 billion from SEK7.04 billion a year earlier, while loan losses narrowed to SEK217 million from SEK476 million.
The common equity Tier 1 ratio--a key measure of financial strength--was 23.6% at the end of the quarter, down from 24.0% a year earlier.
-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
October 18, 2017 02:22 ET (06:22 GMT)