Handelsbanken (SHB) Investor presentation summary

Business model and returns

• Decentralized, branch-led model; local decision-making, no bonus system or budgets, and no central marketing.

• ROE exceeded the weighted comparable-bank average every year for 44 years through H1 2016.

• Strategy prioritizes client relationships, profitability over volume, long-term employee relations, low risk tolerance and organic growth.

• Adjusted equity per share plus accumulated dividends grew at a 15% CAGR from 2008 through Q2 2016.

Customers and digital services

• Customer satisfaction and loyalty were higher across all home markets; the presentation cited 2015 SKI and EPSI data.

• In Sweden, ranked first for both Corporate Bank of the Year and SME Bank of the Year.

• Smartphone, tablet and internet accounted for 86% of client interaction in 2015, versus 77% in 2013; branch interaction fell to 13% from 21%.

• Local branches serve as physical meeting points alongside digital and remote channels, supporting customer relationships and local decision-making.

Financial strength and asset quality

• Fitch upgraded the rating to AA from AA- in May 2016; combined Fitch, Moody’s and S&P ratings were described as the highest globally.

• Loan losses were significantly lower than peer banks across the periods presented, including 1990–1996 and 1997–June 2016.

• UK average loan loss ratio was 0.2% versus 0.9% for peers over 2008–January–June 2016; the UK peak during the financial crisis was 0.33% in 2010.