Handelsbanken (SHB) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating profit rose 3% sequentially to SEK 8.5bn, with ROE at 15.2% and improved margins and lower expenses.

• A new, more decentralized and efficient organization was implemented from April, including staff reductions and a SEK 300m restructuring charge.

• Moody’s upgraded the outlook to stable, confirming an Aa2 rating and Handelsbanken’s high credit quality.

• For H1 2024, operating profit was SEK 16,778m, down 3% year-over-year, with ROE at 14.4%.

Financial highlights

• Net interest income for Q2 2024 was SEK 11,746m, up 1% sequentially; net fee and commission income rose 7% to SEK 2,939m.

• Total income for Q2 2024 increased 1% to SEK 15,457m, while expenses fell 1% to SEK 6,420m.

• Net credit losses were net recoveries/reversals, with a credit loss ratio of -0.02% in Q2 and -0.01% for H1.

• Dividend for Q2 was SEK 4 per share (116% of quarterly earnings); SEK 5.2 per share for H1 (78% of H1 earnings).

• CET1 ratio stood at 18.9%, 400 basis points above regulatory requirement.

Outlook and guidance

• Efficiency initiatives and cost reductions will continue, with further redundancies and consultant reductions planned.

• IT investment pace expected to slow after major projects, but focus remains on digital offerings and internal efficiency.

• CET1 buffer of 400 basis points above regulatory requirement to be maintained through 2024, with review at year-end.

• Dividend accrual based on maintaining CET1 buffer, not strictly payout ratio.