Handelsbanken (SHB) Q2 2021 earnings summary

Executive summary

• H1 operating profit rose 14% to SEK 11,600m; Adjusted for FX and the year’s Oktogonen provision, growth was 17%.

• H1 income increased 5% to SEK 22,894m, with strong fee growth and continued inflows to mutual funds.

• Q2 operating profit increased 7% QoQ to SEK 5,988m, while expenses were essentially unchanged at SEK 5,672m.

Financial highlights

• H1 net profit rose 15% to SEK 9,114m; EPS increased 15% to SEK 4.60.

• H1 net fee and commission income rose 15% to SEK 6,018m; net gains on financial transactions increased 64% to SEK 883m.

• Q2 income grew 3% QoQ to SEK 11,602m; net interest income rose 2% to SEK 7,961m and net fee and commission income rose 3% to SEK 3,055m.

• H1 net interest income was SEK 15,779m, flat reported and up 1% Adjusted for FX; positive home-market volumes offset FX and day-count effects.

Outlook and guidance

• Cost target remains a SEK 20bn annual cost base by end-2022, versus SEK 21.9bn in Q2 2020; SEK 1.3bn of initiatives have been agreed or addressed.

• Cost-cutting measures decided or initiated since Q3 2020 are expected to generate savings; SEK 400m of positive profit effects had been achieved, and more than 700 employees agreed to leave.