Printer Friendly

INTERNATIONAL BUSINESS NEWS SERVICE SVENSKA HANDELSBANKEN ANNOUNCES RESULTS TO AUGUST

 INTERNATIONAL BUSINESS NEWS SERVICE
 SVENSKA HANDELSBANKEN ANNOUNCES RESULTS TO AUGUST
 STOCKHOLM, Sept. 29 /PRNewswire/ -- The Svenska Handelsbanken Group has announced what it sees as 'a positive result' in its figures for the period January-August 1992. President and group chief executive Arne Martensson made the following statement:
 "The Svenska Handelsbanken Group's net operating income before loan losses was Swedish kronor (SEK) 4,384 million for the eight-month period January-August 1992, 2 percent up on the same period last year. Loan losses were SEK 3,943 million. The result after loan losses was thus SEK 441 million (SEK 2,159 million).
 Return on equity after 30 percent standard notional tax was 2.6 percent (13.2 percent), while earnings per share for the last twelve-month period were SEK 4.85 (SEK 16.03).
 Market share of household deposits continues to rise
 Svenska Handelsbanken continued to increase its market share of household deposits. The average volume rose by 8 percent while household deposits in the whole Swedish banking system fell. The bank's total Swedish kronor deposits increased on average by 6 percent.
 Swedish kronor lending was on average 13 percent up on the corresponding period in 1991. This rise was mainly attributable to corporate lending. Lending in foreign currencies fell on average by 6 percent.
 Rising revenue, falling expenses
 Net interest income increased by 2 percent in spite of interest deferrals of SEK 466 million. The increase is mainly due to higher lending in Swedish kronor.
 Commission rose by 1 percent. In particular, investment banking commission increased. The sale of the Swedish state's shareholdings in SSAB, which was led by Svenska Handelsbanken, contributed to this.
 Personnel expenses fell by 1 percent as a result of the number of staff decreasing by 500. Contractual salary increases as from April 1992 are included in personnel expenses. Other expenses also fell by 1 percent, in spite of the fact that costs for modernization of the bank's deposits system culminate during 1992. Thus total expenses decreased by 1 percent.
 The increase in revenue and fall in costs meant that the R/E ratio before loan losses increased from 2.20 to 2.23.
 Loan losses
 Loan losses were SEK 3,943 million, an increase of 86 percent. The figure for two thirds of last year's loan losses was SEK 2,125 million. These losses correspond to 2.1 percent of lending at the end of the eight-month period, which reflects the protracted recession and the deteriorating property market.
 In order to protect the bank's claims, Svenska Handelsbanken's subsidiary Fastighets AB Naeckebro has taken over property, the book value of which was SEK 1,393 million at the end of August. When properties were taken over, their value was written down to market value as determined by an external valuer. In cases where this market value is less than the value of the bank's original collateral, the difference is reported as an actual loan loss.
 Non-performing loans and loans with interest deferrals.
 Non-performing loans after allocation for possible loan losses were SEK 10,641 million or 3.9 percent of lending at the end of the first eight months. The corresponding amount at the end of the first four months was SEK 10,074 million. Thus the rapid increase we saw during the first four months has stopped. These non-performing loans are loans where interest and/or amortizations have been due for payment for more than 60 days, but where the customer's capacity to repay or the collateral is judged to be satisfactory.
 Loans where interest deferrals have been made were SEK 6,339 million or 2.3 percent of lending at the end of the period. The corresponding amount at the end of the first four months was SEK 6,160 million. Loans with interest deferrals are loans where the bank has lowered the interest rate in order to help customers with temporary payment difficulties. Interest deferrals are only offered to customers who are expected to be able to pay back their loans.
 Figures for non-performing loans and loans where interest deferrals have been made are therefore not an indicator of future risks of losses. Each loan which has been assessed to become a loss has been taken as an expense and charged to the bank's result.
 Capital cover
 In order to strengthen its capital base, Svenska Handelsbanken issued a subordinated loan of US dollars 500 million on the American market at the beginning of the summer. This issue increased capital cover to 10.8 percent."
 SVENSKA HANDELSBANKEN
 Svenska Handelsbanken Group
 Statement of Income January-August Percentage
 Millions Swedish kronor 1992 1991 Change
 Net interest income 6,112 5,994 + 2
 Commission 1,519 1,499 + 1
 Other revenue 307 370 -17
 Total operating revenue 7,938 7,863 + 1
 Personnel expenses 1,860 1,872 - 1
 Other expenses 1,694 1,707 - 1
 Total expenses 3,554 3,579 - 1
 Results before loan losses 4,384 4,284 + 2
 Loan losses 3,943 2,125 +86
 Net operating income 441 2,159 -80
 When comparing with the previous year, loan losses during 1991 have been distributed evenly over the year. Some other items have been adapted to 1992's system of reporting. The parent bank has obtained an exemption from its obligation to report results due to the problem of comparison with 1991 which was affected by the merger with Skanska Banken. An exemption has also been obtained from consolidating Handelsbanken Liv in the interim report.
 Balance Sheet Aug. 31 Aug. 31 Percentage
 Millions Swedish kronor 1992 1991 Change
 Government paper and bonds 45,218 40,052 +13
 Lending 275,811 280,727 - 2
 Banks 30,336 44,474 -32
 Other 26,199 36,039 -27
 Total Assets 377,564 401,292 - 6
 Funding 148,821 170,492 -13
 Deposits 169,067 164,072 + 3
 Other liabilities 30,747 37,253 -17
 Deferred tax liability 1,901 5,868 -68
 Subordinated loans 9,354 7,121 +31
 Shareholders' equity (A) 17,674 16,486 + 7
 Total Liabilities, Untaxed
 Reserves and Equity 377,564 401,292 - 6
 (A) Incl 70 percent of untaxed reserves and reported net operating income
 Key Figures January - August
 - 1992 1991
 Return on Equity 2.6pc 13.2pc
 Efficiency, R/E Ratio
 before loan losses 2.23 2.20
 after loan losses 1.06 1.38
 Earnings per share
 Jan.-Aug., SEK 2.07 9.62
 last twelve months, SEK 4.85 16.03
 Svenska Handelsbanken
 Auditor's Report
 I have 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.
 -0- 9/29/92
 /CONTACT: Arne Martensson, president and group chief executive, or Pehr Wissen, executive vice president and head of Central Control and Treasury Department, both of Svenska Handelsbanken, (Stockholm) +46-8-229220/ CO: Svenska Handelsbanken Group ST: IN: FIN SU: ERN


LR -- NY009 -- 4224 09/29/92 08:58 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 29, 1992
Words:1166
Previous Article:WITH DESIGN IN MIND FILES SUPERIOR COURT COMPLAINT AGAINST FORMER OFFICIALS
Next Article:O'BRIEN ENVIRONMENTAL ENERGY AWARDED 12 MW GENERATOR RENTAL CONTRACT BY DUTCH STEELMAKER
Topics:


Related Articles
SVENSKA HANDELSBANKEN ISSUES REVISED FORECAST
SVENSKA HANDELSBANKEN GROUP ACQUIRES LIFE INSURANCE COMPANY RKA
SVENSKA HANDELSBANKEN: HIGHLIGHTS OF THE 1991 ANNUAL REPORT
SVENSKA HANDELSBANKEN ANNOUNCE INTERIM RESULTS
Ericsson Extends Credit Facility.
Northern Trust Appointed by Folksam For US$17 Billion Global Custody Mandate.
Northern Trust Appointed by Folksam For $17 Billion Global Custody Mandate.
Svenska Handelsbanken plans seven-year sterling bond.
Handelsbanken plans three year euro benchmark bond.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters