Handelsbanken Net Profit Misses Forecast As Restructuring Costs Weigh

STOCKHOLM: Sweden’s Handelsbanken reported lower-than-expected quarterly net earnings on Wednesday due to restructuring costs, though the bank’s loan portfolio continued to weather the impact of the coronavirus pandemic with ease.

Third-quarter net profit fell to 3.32 billion Swedish crowns ($380.88 million) from 3.57 billion in the previous year, falling short of the mean forecast of 3.72 billion seen by analysts according to Refinitiv data.

Handelsbanken said in its report that results had been impacted by a provision for a restructuring reserve of 1.47 billion crowns referring to the branch closure and IT investment programme the bank unveiled in September.

Loan losses, a figure closely watched due to a slump in the pandemic-hit wider economy, were 49 million crowns, better than a year-ago 192 million and much lower than the 492 million loss expected by analysts.

In the first three quarters of 2020, the bank has showcased resilience in the face of a pandemic expected to result in a jump in soured debt for banks as the spread of the coronavirus has shut businesses around the world.

Net interest income, which includes income from mortgages, fell 2% to 7.89 billion crowns from 8.05 billion a year ago, narrowly missing a Refinitiv estimate of 7.97 billion.

Increased unemployment due to the pandemic is still likely to mean some heavily indebted households may have trouble paying their mortgages.

Total expenses, a line which worried investor’s in recent years, rose 7% to 6.74 billion from a year ago 6.3 billion, as the bank continued to restructure its business to control costs in the long run.

Gains on financial transactions were 358 million crowns, up 32% from a year-ago, amid high demand for trading during the pandemic, while fee and commission income fell to 2.67 billion crowns from 2.70 billion a year ago.

($1 = 8.7166 Swedish crowns)

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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