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 STOCKHOLM, Sweden, Aug. 24 /PRNewswire/ -- The Handelsbanken Group's result for first half (January - June) 1993 was a profit of Swedish kronor (SEK) 837 million (-658).
 Return on equity after 30 percent tax was 6.9 percent (-5.3 percent).
 Earnings per share for the six-month period were SEK 3.76 (-2.78).
 The result before loan losses increased by 34 percent to SEK 4,464 million (3,342).
 Income rose by 19 percent.
 Net interest income was up by 10 percent, mainly because of a shift in lending from foreign currency to Swedish kronor and higher net yield on the bond portfolio. However, the interest gap - the difference between deposit and lending rates for Swedish kronor - was almost half a percentage point lower at June 30 than at Dec. 31, 1992.
 Commission rose by 17 percent, particularly investment banking and international commission.
 The increase in other income is mainly attributable to rental income in the Bank's property company Nackebro and share dividends from companies other than subsidiaries. Capital gains on bond sales from the investment portfolio were SEK 218 million (61).
 Expenses increased by 2 percent mainly because expenses for operations outside Sweden are affected by the depreciation of the Swedish krona when converted to Swedish kronor. Personnel expenses fell by 1 percent. The number of employees was on average 7,025 which was 316 less than for the first half of 1992.
 The income/expenses ratio before loan losses rose from 2.27 to 2.67.
 Loan losses fell by nearly 10 percent to SEK 3,627 million (4,000). These losses represent 2.6 percent of lending volume and are a reflection of the long recession and the still weak property market.
 Handelsbanken's subsidiary Fastighets AB Nackebro took over property for a value of SEK 1.6 billion in order to protect the Bank's claims. As at June 30, the book value of the Group's property taken over was SEK 4.9 billion. When taken over, the properties are written down to a market value determined by external valuers. If this value is less than the value of the Bank's original collateral, the difference is reported as an actual loan loss.
 In order to protect the Bank's claims, the subsidiary company AB Handel och Industri took over shares in some operating industrial and trading companies for SEK 1.4 billion.
 The total volume of non-performing loans and loans with interest deferrals was more or less unchanged since the year-end - SEK 15.8 billion as against SEK 15.5 billion.
 Non-performing loans were SEK 11.2 billion (10.2 at year-end) and loans with interest deferrals SEK 4.6 billion (5.3 at year-end).
 The Group's capital cover as at June 30 was 10.3 percent (10.1 percent at the end of 1992). In accordance with the Swedish Financial Supervisory Authority's directives, the profit for the first six months is not included in the capital base.
 The Board of the Bank has decided - subject to approval by an extraordinary general meeting - to carry out a rights issue of ordinary shares totaling a maximum of SEK 2,650 million (A) with pre-emption rights for existing shareholders.
 Two ordinary shares of series A and series B, respectively, give pre-emption right to subscribe for one new ordinary share of series A and series B, respectively, at a price of SEK 35 per share. To the extent that the holders of ordinary shares do not exercise this right, owners of preference shares have the pre-emption right to subscribe for the part of the remaining ordinary shares which corresponds to their part of the preference share capital.
 Extraordinary general meeting: Sept. 10, 1993
 Publication of prospectus: Sept. 17, 1993
 Record date: Sept. 20, 1993
 Subscription period: Sept. 27 - Oct. 22, 1993
 Sept. 16, 1993 is the first day for quotation of the share excluding subscription right.
 Handelsbanken is one of the few Nordic banks which has been able to advance its positions during the financial crisis of the 1990s. The Bank's market shares in Sweden for both private and corporate customers have steadily grown. At the same time, operations in the other Scandinavian countries have been widely expanded. In Norway, Oslo Handelsbank was acquired in 1990, Stavanger Bank in 1991 and parts of Oslobanken's operations in 1993. Operations were started in Finland in 1991 and in Denmark in 1992. Today, Handelsbanken is the only Nordic bank with its own banking operations in all the Scandinavian countries. In 1992, Handelsbanken was also the first Swedish bank to acquire a life assurance company, RKA, the fifth largest in Sweden.
 It has been possible to accomplish all this and retain capital cover at a high level. However, the fact that the demand for credits has been small in the whole of Scandinavia has been a favorable factor. This will change when we start to come out of the recession and the demand for credits is expected to rise sharply. As a result of the Nordic organization which it has built up, Handelsbanken is well-equipped to handle a strong expansion in credits.
 During the next few years, the rights issue will enable the Handelsbanken Group to satisfy all sound credit proposals appearing on the Nordic market and thereby to advance its positions even more. It also creates freedom of action for any further acquisitions.
 The issue increases the Group's capital cover from 10.3 percent at June 30, 1993 to 12 percent.
 This is the first rights issue for ordinary shares which Handelsbanken has made since 1966.
 In the light of information currently available, the Board considers that, already for 1993, the Bank will resume paying some dividend on ordinary shares.
 --Arne Martensson, president and group chief executive
 (A) In the case of conversion of the Bank's convertible debenture loan in 1988/1996 the issue amount may be a maximum of SEK 149 million higher.
 Profit and loss account
 Svenska Handelsbanken Group
 January June
 1993 1992 Change
 SEK millions percent
 Net interest income 5,031 4,591 +10
 Commission 1,337 1,142 +17
 Other income 767 240 +220
 Total operating income 7,135 5,973 +19
 Personnel expenses 1,336 1,350 -1
 Other expenses 1,335 1,281 +4
 Total expenses 2,671 2,631 +2
 Result Before Loan Losses 4,464 3,342 +34
 Loan losses 3,627 4,000 -9
 Net Operating Profit/Loss 837 -658 N/A
 When determining the comparative figures for 1992, loan losses have been calculated as half those for the whole year. Other items have been adjusted to equal the total of the figures for the first four months and half of the figures for the second four-month period.
 No allocation was made to the profit-sharing foundation Oktogonen in 1992. For this reason, the preliminary allocation made in interim reports for 1992 has been reversed.
 Balance Sheet
 Svenska Handelsbanken Group
 6/30/93 12/31/92 Change
 SEK million percent
 Government securities and bonds 47,226 41,917 +13
 Lending 278,843 283,372 -2
 Financial institutions 36,137 34,925 +3
 Other 37,182 32,996 +13
 Total Assets 399,388 393,210 +2
 Funding 172,124 170,860 +1
 Deposits 162,270 160,476 +1
 Other liabilities 36,250 33,251 +9
 Subordinated loans 10,988 11,550 -5
 Shareholders' equity 17,756 17,073 +4
 Total Liabilities And
 Shareholders' Equity 399,388 393,210 +2
 Lending includes lending to the public and financial institutions other than banks, and leasing assets. Any adjustments in the value of the investment portfolio and other allocations are only included in the accounts for the whole of 1993. Shareholders' equity for 1993 includes 70 percent of the reported operating profit.
 Key figures for the Group
 January June
 1993 1992
 Return On Equity 6.9pc -5.3pc
 Efficiency, I/E Ratio
 before loan losses 2.67 2.27
 after loan losses 1.13 0.90
 Earnings per share (B)
 Jan-June, SEK 3.76 -2.78
 last twelve months, SEK 3.08 2.53
 (B) Before extraordinary items, after 30 percent standard notional tax and after full conversion of convertible notes.
 Profit and loss account
 Svenska Handelsbanken
 January June
 1993 1992 Change
 SEK million percent
 Net interest income 4,279 3,870 +11
 Commission 1,259 1,028 +22
 Other income 574 228 +152
 Total operating income 6,112 5,126 +19
 Personnel expenses 1,146 1,174 -2
 Other expenses 1,168 1,103 +6
 Total expenses 2,314 2,277 +2
 Result Before Loan Losses 3,798 2,849 +33
 Loan losses 3,281 3,542 -7
 Net Operating Profit/Loss 517 -639 N/A
 Auditor's Report:
 Auditor has carried out a summary examination of this interim report. A summary examination is not to be compared to a full audit. There is nothing to indicate that the interim report does not fulfill the requirements of the Swedish Banking Operations Act.
 --Sigvard Heurlin, Authorized Public Accountant
 -0- 8/24/93
 /CONTACT: Arne Martensson, president and group chief executive, or Sven Grevelius, executive vice president and head of Central Control Department, of Svenska Handelsbanken, in Stockholm, +46-8-229220/

CO: Svenska Handelsbanken ST: IN: FIN SU: ERN

MP -- NY016 -- 5379 08/24/93 10:20 EDT
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Publication:PR Newswire
Date:Aug 24, 1993

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