UK Edition
Swedish challenger Handelsbanken posts record profits
The Swedish bank that is challenging British lenders on the high street has shrugged-off the Brexit vote a year ago to hail its strongest ever profits in the UK.
Handelsbanken posted operating profits of £53.2m in the UK for the second quarter, up 10pc on a year earlier which helped to lift its earnings for the half-year to £100.4m.
“It’s our best result to date, so we’re very pleased with that,” said Mikael Sorensen, the bank’s UK chief executive.
It comes as the lender continues to buck the trend by opening new branches in the country, while the big British banks instead shrink their estates to counter the rise in online banking.
Handelsbanken now has 207 UK sites and prides itself on its decentralised model that harks back to relationship banking of the past by handing significant influence to its local branch managers. The country is the lender’s biggest market outside its native Sweden.
A year on from Britain’s vote to leave the European Union, Mr Sorensen said that “for our branches it’s business as usual”.
He added: “For us, banking is really local. Our existing customers still need their banking products, no matter if the UK is inside our outside the EU.”
Total lending in the UK was up 11pc to £18.1bn in the quarter, while deposits grew by 28pc to £12.1bn.
At group level, although operating profits dipped to 5.26bn Swedish kronor (£487m) from 5.28bn kronor (£489m) a year earlier, it was still a better result than analysts had been expecting.
Separately, it emerged that Lloyds Banking Group, one of the incumbents on the high street from which Handelsbanken is trying to snatch market share, is considering plans to lease new offices in the City as part of a drive to cut costs by shrinking its overall property portfolio.
The bank is holding discussions with CMS Cameron McKenna, the law firm, to lease about 100,000 square feet of office space that would help it merge some sites.
It comes after the lender said last year that it wanted to slash its office estate by almost a third in a bid to save it around £100m.
A spokesman declined to comment on the talks with CMS Cameron McKenna, which were first reported by Bloomberg.