20 09 Annual report Highlights of 2009 t 0QFSBUJOHQSPmUXFOUEPXOUP4&, NJMMJPO t 1SPmUCFGPSFMPBOMPTTFTHSFXCZQFSDFOUUP4&, NJMMJPO t 5IFMPBOMPTTSBUJPSPTFUPQFSDFOU BOEMPBOMPTTFTXFSF4&, NJMMJPO t 3FUVSOPOTIBSFIPMEFSTFRVJUZGPSUPUBMPQFSBUJPOTXBTQFSDFOU t *ODPNFJODSFBTFECZQFSDFOUUP4&, NJMMJPO t 'PSUIFmSTUUJNFFWFS JODPNFJO(SFBU#SJUBJOFYDFFEFE4&,CJMMJPO t /FUJOUFSFTUJODPNFSPTFCZQFSDFOUUP4&, NJMMJPO t 5IFBWFSBHFMPBOWPMVNFJODSFBTFECZQFSDFOUBOEIPVTFIPMEEFQPTJUTSPTFCZQFSDFOU t /FUGFFBOEDPNNJTTJPOJODPNFXFOUVQCZQFSDFOUUP4&, NJMMJPO t 5IFDBQJUBMCBTFBNPVOUFEUP4&,CJMMJPOBOEUIFDBQJUBMSBUJPBDDPSEJOHUP#BTFM**JODSFBTFEUPQFSDFOU t 5JFSDBQJUBMXFOUVQCZ4&,CJMMJPOUPCJMMJPOBOEUIF5JFSSBUJPBDDPSEJOHUP#BTFM**JODSFBTFEUPQFSDFOU t 1SPmUBGUFSUBYGPSUPUBMPQFSBUJPOTBNPVOUFEUP4&, NJMMJPO BOEFBSOJOHTQFSTIBSFXFSF4&, t 5IFCPBSEQSPQPTFTBEJWJEFOEPG4&,QFSTIBSF t )BOEFMTCBOLFOIBEUIFNPTUTBUJTmFECBOLDVTUPNFSTJOUIF/PSEJDDPVOUSJFTBOE(SFBU#SJUBJOBDDPSEJOHUPUIF4,*&14*TVSWFZ ANNUAL GENERAL MEETING (SHAREHOLDERS’ MEETING) FINANCIAL INFORMATION Location: Grand Hôtel, Vinterträdgården, Royal Entrance, The following publications can be downloaded or ordered from Stallgatan 4, Stockholm. Handelsbanken’s website: www.handelsbanken.se/ireng. Time: at 10 a.m. on Thursday, 29 April, 2010. tBOOVBMSFQPSUT tJOUFSJNSFQPSUT Notice of attendance tSJTLSFQPSUT Shareholders wishing to attend the AGM must: tDPSQPSBUFHPWFSOBODFSFQPSUT tCFFOUFSFEJOUIF3FHJTUFSPG4IBSFIPMEFSTLFQUCZ tGBDUCPPLT Euroclear Sweden AB (formerly VPC AB), at the latest on Friday, 23 April 2010. IMPORTANT DATES 2010 tHJWFOPUJDFPGUIFJSBUUFOEBODFUP 18 February Financial statements the Board Office, Handelsbanken, Kungsträdgårdsgatan 2, 28 April Interim report January – March SE-106 70 Stockholm, Sweden, telephone +46 8 701 19 84, 29 April Annual general meeting or online at www.handelsbanken.se/bolagsstamma at the 20 July Interim report January – June latest by 3 p.m. on Friday 23 April 2010. 20 October Interim report January – September To be entitled to take part in the meeting, shareholders whose shares are nominee-registered must also request a temporary en- try in the register of shareholders kept by Euroclear. Sharehold- ers must notify the nominee of this well before 23 April 2010, XIFOUIJTFOUSZNVTUIBWFCFFOFGGFDUFE Dividend 5IFCPBSEQSPQPTFTUIBUUIFSFDPSEEBZGPSUIFEJWJEFOECF 5VFTEBZ .BZ*GUIFNFFUJOHSFTPMWFTJOBDDPSEBODFXJUI UIFQSPQPTBM &VSPDMFBSFYQFDUTUPEJTUSJCVUFUIFEJWJEFOEPO Friday, 7 May 2010. Svenska Handelsbanken AB (publ) Corporate identity number: 502007-7862 Registered office: Stockholm www.handelsbanken.com This annual report is also available in Swedish. Contents Page The group chief executive’s comments 2 Concept, working methods and organisation 6 Goals, methods and outcomes 7 Strength and stability 8 Growth 9 Market 10 CORPORATE SOCIAL RESPONSIBILITY Handelsbanken in the community 11 Ethical standards and social responsibility 12 Most satisfied customers – year after year 13 ADMINISTRATION REPORT Contents Administration report 14 Review of operations 15 Five-year overview Group 18 Key figures per year 20 Quarterly performance 21 Business segments 22 Branch office operations in Sweden 23 Branch office operations outside Sweden 25 Handelsbanken Capital Markets 32 Handelsbanken Asset Management 34 Contents Corporate governance 37 Corporate governance report 2009 38 The board 50 Senior management 52 The Handelsbanken share and shareholders 53 Employees 55 Environmental work 57 FINANCIAL REPORTS Contents Group 59 Income statement Group 60 Statement of comprehensive income Group 61 Balance sheet Group 62 Statement of changes in equity Group 63 Cash flow statement Group 64 Notes Group 65 Contents Parent company 119 Income statement Parent company 120 Balance sheet Parent company 121 Statement of changes in equity Parent company 122 Cash flow statement Parent company 123 Five-year overview Parent company 124 Notes Parent company 125 Recommended appropriation of profits 151 OTHER Audit report 152 Branches and branch managers 153 Addresses 159 Definitions and explanations 160 HANDELSBANKEN O ANNUAL REPORT 2009 1 THE GROUP CHIEF EXECUTIVE'S COMMENTS 2009 t XBTUIFZFBSXIFOUIFHMPCBMmOBODJBMDSJTJTHSBEVBMMZUVSOFEJOUPBEFFQSFDFTTJPO BOEDPO- cern about suspended payments no longer applied to just individuals and companies, but to entire countries. t 'PS)BOEFMTCBOLFO JUXBTBZFBSXIFOUIFCVTJOFTTDZDMFIBEBTVCEVJOHFGGFDUPOFYJTUJOHDVTUPN- ers’ business activities, but the Bank was able to offset this by a further improvement in its productiv- ity and a continuing healthy inflow of new customers. t 8FDPOUJOVFEUPHSPXPOPVSEPNFTUJDNBSLFUTPVUTJEF4XFEFO*O(SFBU#SJUBJO PVSJODPNFFY- ceeded SEK 1 billion for the first time. t )BOEFMTCBOLFOTQSPmUBCJMJUZ NFBTVSFEJOUFSNTPGSFUVSOPOFRVJUZGPSUPUBMPQFSBUJPOT XBTEPVCMF digit and stable for every quarter of 2009. For the full year, profitability was 12.6 percent. Operating profit for 2009 was SEK 13.7 billion. t 0VS5JFSDBQJUBMHSFXCZ4&,CJMMJPOEVSJOHUIFZFBS5IFDBQJUBMCBTFBNPVOUFEUP4&, billion and the capital ratio according to Basel II increased to 20.2 percent. t &BSOJOHTQFSTIBSFEFDMJOFEGSPN4&,UP4&,5IFEFDSFBTFXBTNBJOMZEVFUPIJHIFS loan losses. t 5IFTFSFTVMUTNFBOUIBU GPSUIFUIZFBSSVOOJOH UIF#BOLBDIJFWFEJUTDPSQPSBUFHPBMPGBIJHIFS return on equity than the average for our competitors. The financial crisis is now in its fourth year, and indeed 2009 FINANCIAL CRISIS was characterised by the crisis and the recession. During this At fairly regular intervals – every 15 years or so – the financial period, Handelsbanken has been able to grow, increase customer sector, often in an economic upswing, appears to misjudge the satisfaction and strengthen its balance sheet. risks in its lending so badly that we talk of a financial crisis. A Operating profit for 2009 decreased by 10 percent to common denominator prior to these crises seems to be that the SEK 13,727 million (15,326) as a result of higher loan losses financial sector has attempted to grow more quickly than the and because the 2008 figures included capital gains of a non- real economy. recurring nature totalling nearly SEK 1 billion. Personally, I have always been sceptical about ideas that regard However, profits before loan losses increased by 3 percent to the financial industry as a separate business sector, just like any SEK 17,115 million (16,661). other sector. My view is that the banking system is primarily a A strong factor in this profit increase before loan losses was support function for the real economy. In other words, sound the fact that net interest income in the Group rose by 14 per- banking operations means moving at the same pace as the natu- cent, while net fee and commission income rose by 9 percent. ral growth in households and companies. Net interest income from branch operations outside Sweden in- A bank’s ability to manage the savings of those who wish to creased by no less than 28 percent. The increase in commissions postpone their consumption is therefore what essentially legiti- was mainly attributable to rising brokerage income. mises a bank’s operations, before it lends these savings to compa- Although much has gone our way in the past year, the trend nies and households that wish to consume and invest now. for loan losses is disappointing. For the full year, these totalled Thus, redistributing savings over time becomes the main task SEK -3,392 million, or 0.21 percent of our lending. of a normal bank, that which many people would call proper banking operations. 2 HANDELSBANKEN O ANNUAL REPORT 2009 THE GROUP CHIEF EXECUTIVE'S COMMENTS Handelsbanken endeavours to be a proper bank, too: we do not We strengthened our capital by reducing the capital tied up in attempt to overreach our role as a support function of the actual, assets that were not directly linked to our core business. Among real economy. Therefore, a Bank like ours grows in step with the other things, we wound down our bond trading in the US in real economy, and in step with our customers. the second half of 2007 and the first half of 2008. The divest- On the other hand, if the customer wishes to take a higher ment of SPP helped to reduce the amount of capital tied up and risk in return for a higher yield, or to try out new forms of sav- produce a capital gain of SEK 4.1 billion. ings or types of assets, naturally we can offer a wide range. We During this period, liquidity reserves were gradually built are also market leaders in exchange-traded savings products such up in the form of balances with the Riksbank and a number of as warrants, capital-guaranteed products, certificates, equities other central banks. Every week since the summer of 2007, we and exchange-traded funds (ETFs). But it is always the customer, have been a net lender on the Swedish interbank market. based on his/her own risk preferences, that decides how the sav- ings capital will be invested. A WELL-MANAGED BALANCE SHEET If the customer opts for a savings account, it is because he or Over the past year we have had access to a broad spectrum of fund- she is aiming for high liquidity, and at the same time prioritises ing sources. Our credibility on the international capital markets re- low risk. In short, the customer wants a risk-free investment. mains high, and demand for our bonds and certificates has at times Therefore, given the turbulent times, Handelsbanken now has been greater than our need to issue them. a liquidity reserve that exceeds our private customers’ account Our liquidity reserves are large and securely invested in several balances. central banks. Throughout 2009 we were net lenders to the