Handelsbanken (SHB) Investor presentation summary

Business model and long-term performance

• The business model remained unchanged for 41 years, emphasizing branch-level responsibility, profitability over volume, organic growth and minimized risk-taking.

• Return on equity exceeded the weighted average of comparable banks for 41 consecutive years.

• Adjusted equity per share, including reinvested dividends, grew at a 15% CAGR through Q4 2012.

Customer, cost and credit performance

• Customer satisfaction rankings in 2012 placed the bank ahead of peer and sector averages for private and corporate customers across Sweden, Denmark, Finland, Norway and Great Britain.

• Cost/income ratio excluding loan losses was 46.3% in Jan–Dec 2012, versus 53.0% for the weighted average of peers excluding the bank.

• Five-year senior CDS spread was 67 bps on 8 March 2013, the tightest among the listed banks.

• Loan loss ratio was 0.08% in 2012, versus 0.14% for other Swedish banks and 0.26% for other Nordic banks; the 1998–2012 average was 0.04%.

Funding and financial strength

• 2012 bond issuance totaled SEK 231bn, comprising SEK 148bn covered bonds, SEK 80bn senior bonds and SEK 3bn subordinated bonds; 2011 issuance totaled SEK 214bn.

• Maturities through early 2014 were prefunded; total 2014 maturities were SEK 164bn.

• Non-encumbered assets totaled SEK 1,635bn at 31 Dec 2012, equal to 207% of unsecured funding; liquidity reserve exceeded SEK 750bn.

• At year-end 2012, Basel II core Tier 1 ratio was 18.4%, up from 15.6% in 2011; Basel III core Tier 1 ratio was 16.4%.