Svenska HandelsbankenThird quarter 2002
22 October 2002
SEKm 2002 2001Change
%Net interest income 10 611 9 856 8Commission, net 3 782 3 729 1Trading, net 1 248 1 994 -37Other income 403 430 -6Total income 16 044 16 009 0Staff costs -4 806 -4 426 9Other expenses -3 357 -3 078 9Total expenses -8 163 -7 504 9Profit before loan losses and write-down 7 881 8 505 -7
Loan losses -222 51 -Write-down of financial fixed assets -199 - -Operating profit 7 460 8 556 -13
Profit and loss account, January - SeptemberHandelsbanken Group
Profit and loss account, Five quartersHandelsbanken GroupSEKm
Q32002
Q22002
Q12002
Q42001
Q32001
Net interest income 3 586 3 562 3 463 3 529 3 392Commission, net 1 233 1 311 1 238 1 299 1 150Trading, net 199 424 625 662 532Other income 24 212 167 155 98Total income 5 042 5 509 5 493 5 645 5 172Staff costs , excl bonuses -1 574 -1 571 -1 536 -1 472 -1 449Bonuses -2 -70 -53 - 20 -59Other expenses -1 045 -1 146 -1 166 -1 298 -1 099Total expenses -2 621 -2 787 -2 755 -2 790 -2 607Profit before loan lossesand write-down 2 421 2 722 2 738 2 855 2 565Loan losses -122 -21 -79 -203 -14Write-down of financial F.A. -199 - - - -Operating profit 2 100 2 701 2 659 2 652 2 551
1 000
1 500
2 000
2 500
3 000
3 500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
SEKm
1997 1998 1999 2000 2001 2002
Operating profit, quarterlyHandelsbanken Group
Average volumesSEK bn 2002 2001
Change%
Mortgage loans 355 334 6Private 219 198 11Corporate 136 136 0
Bank loans 288 261 10Private 51 45 13Corporte 237 216 10
Total Sweden 643 595 8Private 270 243 11Corporate 373 352 6
Lending to the general public, SwedenHandelsbanken Group, January - September
Average volumesSEK bn
Q32002
Q22002
Q12002
Q42001
Q32001
Sweden 653 645 631 624 620Other Nordic 113 115 106 107 103
Private 37 34 32 33 28Corporate 76 81 74 74 75
Rest of world 58 59 59 63 61Private 2 2 2 2 2Corporate 56 57 57 61 59
Total 824 819 796 794 784Private 313 307 298 291 280Corporate 511 512 498 503 504
Lending to the general publicHandelsbanken Group
Average volumesSEK bn 2002 2001
Change%
Sweden 193 192 1Private 79 73 8Corporate 114 119 -4
Outside Sweden 95 83 14Private 19 14 36Corporate 76 69 10
Total 288 275 5Private 98 87 13Corporate 190 188 1
Deposits from the general publicHandelsbanken Group, January - September
1,97% 1,97% 1,92%2,04%1,94% 1,94%
2,00%
130
135
140
145
150
155
160
Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-021,20%
1,40%
1,60%
1,80%
2,00%
2,20%
2,40%
2,60%
2,80%Average volumes, SEK bn Margins
Net interest margin, quarterlyDeposits, SEK
0,85% 0,85% 0,85%0,86%
0,87%0,88%
0,90%
300
310
320
330
340
350
360
370
Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-020,75%
0,80%
0,85%
0,90%
0,95%
1,00%Average volumes, SEK bn Margins
Net interest margin, quarterlyMortgage loans
SEKm 2002 2001Change
%
Brokerage 648 771 -16Mutual funds & custody 845 973 -13Insurance 251 156 61Payments 1048 958 9Lending and deposits 888 823 8Other 956 906 6Commission expenses -854 -858 0Total 3 782 3 729 1
Commission January – SeptemberHandelsbanken Group
0
100
200
300
400
500
600
700
800
900
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Equity related
Currency & interest rate related
1999 200220012000
SEKm
Net trading income, quarterlyHandelsbanken Group
30 sep -02 01 Jan -02 C hange
N o of em ployees 9 622 9 763 -141
From SP P +50
Swedish branch offices -129
H andelsbanken L iv, excl. SPP -11
IT and developm ent, Sw eden excl. SPP -9
O ther Nord ic countries -41
R est of w orld +21
O ther -22
N o of em ployees com parable un its 9 572 9 763 -191
Number of employeesHandelsbanken Group
Comparable expenses 2.7 % -units
Midtbank, SPP and HL 5,7 % -units
Exchange rate effects 0,4 % -units
Total expenses 8,8 % -units
Change in expenses, Jan - Sep 2002Handelsbanken Group
Salary increases 1.3 % -units
Performance-related staff costs -2.6 % -units
Decreased number of employees -0.1 % -units
Higher IT costs 1.5 % -units
Expansion outside Sweden 0.8 % -units
Other expenses 1.8 % -units
Total comparable expenses 2.7 % -units
Comparable expenses, Jan - Sep 2002Handelsbanken Group
SEKm 2002 2001 +/-
RoEJan – Sep 2002
Branch operations 7 048 6 855 3% 19,4%
Markets 461 871 -47% 12,4%
Securities 81 300 -73% 9,8%
Asset Management 360 407 -12% 21,8%
Handelsbanken Finans 312 268 16% 30,2%
Pension & Insurance -139 31 - -
Stadshypotek Bank 15 15 0 32,3%
Treasury 28 120 -77% 6,0%
Handelsbanken Group 7 460 8 556 -13% 14,3%
Operating profit by business areaJanuary-September
SEKm 2002 2001 Change %
Norway 401 455 -12%
Denmark 162 94 72%
Finland 193 165 17%
Great Britain 154 176 -13%
Total 910 890 2%
Results in other Nordic countries andGreat Britain January - September
New branches outside SwedenNo. of branches each year 1995 - 2002
0
2
4
6
8
10
12
1995 1996 1997 1998 1999 2000 2001 2002
No.
of b
ranc
hes
New branches outside Sweden 1997-2002No. of months to break-even
0123456789
0-6 7-12 13-18 19-24 25-30 31-36No. of months to break-even
No.
of b
ranc
hes
Average: 17 months
* Branches opened outside Sweden since 1997 and which as at 30 Sept 02 had achieved break-even.
2002 2001
Return on equity after full tax 14,3 % 19,1 %
Cost / income,excl. write down
before loan losses 50,9 % 46,9 %after loan losses 52,3 % 46,6 %
Net earnings per share, SEK 7:66 9:18moving 12 mth total 10:47 12:43
Key ratios, January - SeptemberHandelsbanken Group
0,0
0,2
0,4
0,6
0,8
1,0
1,2
-97 -98 -99 -00 -01 -02
%
30 sept
Bad debts as a percentage of lendingHandelsbanken Group
0
1
2
3
4
5
97 98 99 00 01 020
1
2
3
4
5
97 98 99 00 01 02
%
SHBnet / gross
OtherSwedishbanksnet /gross*
* As at 30 June 2002
Bad debts as a percentage of lendingSHB and other Swedish banks
0,0
0,1
0,2
0,3
0,4
0,5
1997 1998 1999 2000 2001 2002
OtherSwedishBanks*
Handels-banken
%
* As at 30 June 2002
Loan losses as a percentage of lendingSHB and other Swedish banks
30 Sep 30 Sep ChangeSEKm 2002 2001 %
Lending to the general public 819 398 785 460 4Lending to credit institutions 82 502 91 372 -10Interest-bearing securities 135 622 129 155 5Other assets 199 222 188 770 6Total assets 1 236 744 1 194 757 4
Deposits & funding from general public 286 043 288 093 -1Liabilities to credit institutions 248 926 220 292 13Issued securities 433 032 446 525 -3Other liabilities 218 541 193 593 13Shareholders equity 50 202 46 254 9Total liabilities and equity 1 236 744 1 194 757 4
Balance sheetHandelsbanken Group
0
10
20
30
40
50
60
70
1995 1996 1997 1998 1999 2000 2001 2002
SEK bn
10,3 % 10,0 % 6,2 % 6,3 %
14,2 % 12,2 %
10,4 % 9,8 % 9,4 %
6,5 %
9,5 %
6,4 %
9,9 %
6,1 %
9,4 %
6,3 %
Capital base and capital ratioHandelsbanken Group
Tier IIcapital
Tier 1capital
-5
0
5
10
15
20
25
30
Q197
Q297
Q397
Q497
Q198
Q298
Q398
Q498
Q199
Q299
Q399
Q499
Q100
Q200
Q300
Q400
Q101
Q201
Q301
Q401
Q102
Q202
Q302
Handelsbanken
%
Return on equity after standard tax30 September 2002
Other listedbanks
Jun Dec Change% 2002 2001 % point
Handelsbanken 16.6 16.2 +0.4
FöreningsSparbanken 25.2 25.3 -0.1
Nordea 20.3 20.7 -0.4
SEB 12.5 12.5 + - 0
Household deposits, SEKMarket share
Source: SCB (2010151+52)
Nordea incl. Postgirot Bank ABHandelsbanken incl. Stadshypotek Bank
Change% 2002 2001 % point
SEK deposits, households * 16.6 16.2 +0.4
Mutual fund savings, volume * 11.9 11.4 +0.5
Mutual fund savings, new sales ** 27.9 19.0 +8.9
Capital-guaranteed products *** 35.3 35.5 -0.2
Swedish savings marketHandelsbanken’s market share
Source: Statistics Sweden, Svensk Fondstatistik
* Market share for 2002 as at 30 June.** Market share for 2002 as at 30 Sept.*** Newly-issued volumes on Stockholm Stock Exchange. Market share for 2002 as at 30 Sept.
Still highest return on equity of the Nordic banks
Net salesJan - Sep 2002
Proportion of total31 Dec 2001
Handelsbanken 27,9 % 11,4 % Robur 15,7 % 30,3 % SEB 11,5 % 18,4 % Nordea 10,0 % 18,6 %
The Swedish mutual fund market
Source: Svensk Fondstatistik/Sparöversikt and SHB Fonder
50
55
60
65
70
75
-89 -90 -91 -92 -93 -94 -95 -96 -97 -98 / -99
-00 -01 -02
Handelsbanken Sector average (excl. SHB)Index
Source: Svenskt Kvalitetsindex
Svenskt Kvalitetsindex
Customer satisfaction index, corporate
50
55
60
65
70
75
-89 -90 -91 -92 -93 -94 -95 -96 -97 -98 / -99
-00 -01 -02
Handelsbanken Sector average (excl. SHB)
Svenskt Kvalitetsindex
Index
Source: Svenskt Kvalitetsindex
Customer satisfaction index, private
Premium income SEK bn 2001 2000 1999 1998 1997
Premium pension 18.7 56.0Private sector occupationalpensions 66.2 42.7 35.9 27.9 24.3
Private pension schemes 16.0 12.9 12.2 11.1 10.4
Total 100.9 111.6 48.1 39.0 34.7
Index, 1997=100 191 222 139 112 100
The Swedish pensions market- a growth market
29%31% 33%
35%38%
0
250
500
750
1 000
1 250
1 500
1 750
2 000
1996 1997 1998 1999 20000%
10%
20%
30%
40%
50%
No of private individuals Proportion with tax deductions
No of people
(’000) Proportion
Private pension schemes- no. of people with deductions for private pension schemes
Source: SCB
Handelsbanken Liv...
• Demutualised and consolidated inHandelsbanken’s accounts
• Gives policyholders guaranteed return - onaverage 4.4%
• Preliminary calculation every month, finalcalculation at year-end
Jan-sep Jan-sep Change2002 2001 %
Income, SEK m 166 112 48Expenses, SEK m -299 -77 288Operating profit,SEK m -133 35 -
C/I ratio, % points +1.4 +0.2
Impact on Group resultsHandelsbanken Liv
Key ratiosHandelsbanken Liv
30 Sep 2002
30 Jun 2002
Available solvency capital,SEK m 1 382 1 451
Required solvency capital,SEK m 1 056 1 062
Solvency ratio 1.31 1.37
In demutualised companies, the capital base only consists of equity
Investment assets, % distributionHandelsbanken Liv
Exposure %30 Sep 2002
30 Jun 2002
Equities 13 32Fixed income 81 64Property 3 3Other 3 1Total 100 100
Total return -1.7%* -7.7%**
* Jul-Sep 2002** Jan-Jun 2002
-500
-400
-300
-200
-100
0
100
200
300
400
-15% -10% -5% 0% 5% 10% 15%
Total return and results Handelsbanken LivResultsSEK m
Portfolio returnTime horizon 1 year.Starting point 1 January 2002.
Portfolio return
Jan-Sep 2002 = -9.3%
SPP
• Run according to mutual principles implying that:
- Policy-holders bear the risk
- The whole result accrues to policy-holders (both profit and loss)
• All transactions between Handelsbanken and SPPare on a business basis
• SPP is not consolidated into Handelsbanken’saccounts
Investment assets, % distributionSPP
Exposure %30 Sep 2002
30 Jun 2002
Equities 10 37Fixed income 86 63PropertyOther 4 0Total 100 100
Total return -2.7%* -8.9%**
* Jul-Sep 2002** Jan-Jun 2002
Key figuresSPP
30 Sep 2002
30 Jun 2002
Available solvency capital,SEK m 3 682 3 372
Required solvency capital,SEK m 2 987 2 988
Solvency ratio 1.23 1.13
Collective consolidation, % 95 97
Measures takenSPP
• Reallocation of investment assets
• Issued subordinated loans SEK 1.6bn
• Market valuation of unlisted assets
• Changes in certain actuarial assumptions
• Freeze on payments of client company funds
Life insurance operations should bedemutualised!
• More transparent- good for customers- good for staff- good for the company- good for the owner
• Greater efficiency• Increased customer benefit
- freedom- security- justice
• Clearer responsibility
0
50
100
150
200
250
300
1997 1998 1999 2000 2001 2002
SHB AFV Generalindex Nordix Bank exkl SHBIndex
Share price performanceup to 30 September 2002