Svenska Handelsbanken
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ANNUAL REPORT 1997 Svenska Handelsbanken THE ANNUAL GENERAL MEETING OF SVENSKA HANDELSBANKEN will be held at the Grand Hôtel’s Winter Garden, Royal entrance, Stallgatan 4, Stockholm, at 10.00 a.m. on Tuesday, 28 April 1998. Notice of attendance at Annual General Meeting Shareholders wishing to attend the Meeting must • be recorded in the register of shareholders kept by Värdepapperscentralen VPC AB, on or before Friday, 17 April 1998, and • give notice of attendance to the Chairman’s office at the Head Office of the Bank, Kungsträdgårdsgatan 2, 106 70 Stockholm, telephone +46 8 701 19 84, by 3 p.m. on Thursday, 23 April 1998. Any shareholders whose shares are nominee- registered must also, in order to be entitled to take part in the Meeting, request a temporary entry in the register of shareholders kept by VPC. Shareholders must notify the nominee about this well before 17 April 1998, when this entry must have been effected. Dividend The Board of Directors recommends that the record day for the dividend be Monday, 4 May 1998. If the Annual General Meeting votes in accord- ance with this recommendation, the Swedish Securities Register (Värdepapperscentralen VPC AB) expects to be able to send the dividend to shareholders on Monday, 11 May 1998. Publication dates for interim reports January – March 27 April 1998 January – June 25 August 1998 January – September 27 October 1998 Svenska Handelsbanken AB (publ) Registered no. 502007-7862 www.handelsbanken.se ANNUAL REPORT 1997 HANDELSBANKEN HIGHLIGHTS................................................................................. 2 THE GROUP CHIEF EXECUTIVE´S COMMENTS........................................... 4 OBJECTIVES, POLICY AND ORGANISATION............................................ 10 Objectives and principles ................................................................................................. 10 Policy....................................................................................................................................... 10 Organisation............................................................................................................................. 10 Our staff....................................................................................................................................... 12 Branches...................................................................................................................................... 14 Regional Head Offices in the Nordic countries............................................ 16 Units outside the Nordic countries........................................................................ 18 Central Head Office and Subsidiaries................................................................. 20 Board of Directors............................................................................................................... 22 Senior Management........................................................................................................... 24 Auditors....................................................................................................................................... 24 REVIEW OF OPERATIONS............................................................................................. 25 Lending........................................................................................................................................ 25 Deposits....................................................................................................................................... 25 Payments..................................................................................................................................... 25 Card services........................................................................................................................... 26 Property finance.................................................................................................................... 26 Stadshypotek........................................................................................................................... 27 Finance company operations...................................................................................... 28 Pensions savings/Life assurance............................................................................ 30 Nordic bank operations................................................................................................... 31 Handelsbanken Markets.................................................................................................. 32 Handelsbanken Asset Management....................................................................... 35 EMU................................................................................................................................................ 36 IT development...................................................................................................................... 36 The Bank and the environment ................................................................................ 37 DIRECTORS’ REPORT.......................................................................... 39 Objective..................................................................................................................................... 39 A well-integrated universal bank............................................................................. 39 Total assets............................................................................................................................... 39 Capital ratio............................................................................................................................. 39 Rating............................................................................................................................................ 39 Result and profitability.................................................................................................... 40 Loan losses and credit risks....................................................................................... 42 Financial risks........................................................................................................................ 43 Derivative instruments.......................................................................................................45 Operational risks.................................................................................................................. 46 Competent staff..................................................................................................................... 47 Oktogonen.................................................................................................................................. 47 Acquisition of Stadshypotek........................................................................................ 47 PROFIT AND LOSS ACCOUNTS AND BALANCE SHEETS....... 48 Accounting principles...................................................................................................... 50 Notes.............................................................................................................................................. 52 RECOMMENDATION FOR DISTRIBUTION OF PROFITS................ 74 REPORT OF THE AUDITORS........................................................................................ 75 HANDELSBANKEN’S SHARES.................................................................................. 76 Share price performance and dividend.............................................................. 76 Market capitalisation........................................................................................................ 76 The shares................................................................................................................................. 76 The shareholders................................................................................................................. 76 PROFIT AND LOSS ACCOUNTS AND BALANCE SHEETS 1993–1997........................ 78 ADDRESSES.................................................................................................................................. 80 HANDELSBANKEN HIGHLIGHTS Svenska Handelsbanken highlights Performance for the Handelsbanken Group 1997 1996 Change SEK m SEK m % Net interest income 11 169 9 381 19 Commission, net 3 337 2 628 27 Net result on financial operations 593 2 143 – 72 Other income 716 397 80 Total income 15 815 14 549 9 Staff costs 4 150 3 477 19 Other expenses 3 543 2 547 39 Total expenses 7 693 6 024 28 Profit before loan losses 8 122 8 525 – 5 Loan losses 302 1 806 – 83 Operating profit 7 820 6 719 16 Minority interests – 19 – 1 — Appropriations 532 201 165 Profit before taxes 8 333 6 919 20 Taxes – 2 326 – 1 829 27 Profit for the year 6 007 5 090 18 Total assets 859 466 571 123 50 Number of employees 8 184 7 398 11 Number of branches in Sweden 485 480 Number of branches in other Nordic countries 30 24 DEFINITIONS ADJUSTED SHAREHOLDERS’ EQUITY PER ORDINARY In order to cover the capital requirement on (30% 1993, 28% since 1994) divided by the SHARE. Shareholders’ equity as reported in the market risks, subordinated loans with an number of ordinary shares. An adjustment the balance sheet adjusted for the capital original maturity of at least two years can has been made to take into account prefe- part of the difference between the book value be included in the capital base. rence