"We will have as many offices as our customers want us to have. Then we will adapt accordingly," says Michael Green.
The same applies to staffing.
"I would love to have more employees because that would just mean we do more business with more customers, so that would be great. But we will also adjust and adapt it to the customer needs we see in each market."
"We do both"
Handelsbanken, despite its comparatively large branch network, is also investing in new technology and AI, according to Green:
"We embrace new technology vigorously. We do both. It's a physical presence with decentralized decision-making, but a digital offering on both apps and the internet."
Handelsbanken marginally beats expectations in its quarterly report. Net interest income – what the bank earns from the difference between deposit and lending rates – falls compared to a year earlier. But the decline is in line with expectations. And on the bottom line – operating profit – the bank gets a boost from a one-off item in the form of a large VAT refund of SEK 1.1 billion.
The stock market is reacting hesitantly. The stock is hovering just above the zero line at lunchtime.
Waiting demand
Market turmoil in the wake of the Iran war and the global energy price shock are having an impact. In Sweden and Norway, demand for loans is cautious due to "slow macroeconomic developments."
"They (the customers) are not directly affected. But they are very cautious and are thinking about how they will handle any cost increases. We are not seeing that right now, and we are not seeing anything in our books about people having more difficulty paying or being behind on things. Not at all," says Handelsbanken CEO Michael Green.
"There is a high level of savings among our customers, and the entrepreneurs are well positioned and skilled at managing their own businesses at the moment," he adds.
He says that customers appreciate "stable counterparties" and points to how the rating of Handelsbanken's credit portfolio was raised to A1 by the credit rating agency Moody's ahead of the report. Previously, the rating was A2.
"That's a very high rating. There are only six privately owned banks in the world that have such a high rating," says Green.
Handelsbanken's net interest income fell to SEK 10 billion in the first quarter of this year. This is 13 percent lower than in the corresponding quarter last year, but was in line with the average forecast among analysts, according to Bloomberg.
However, the bank's net commission income rose 6 percent to SEK 3.1 billion, slightly better than expected.
Costs were pushed down 5 percent to SEK 5.8 billion, compared with an expected SEK 6 billion.
Credit losses amounted to SEK 35 million, compared to an expected SEK 92 million.
Operating profit after credit losses and fees was SEK 8.2 billion, up from SEK 8.1 billion a year earlier. The average forecast was SEK 7.7 billion.
Source: Handelsbanken, Bloomberg
