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View Annual Report Annual Report 2017 This is Handelsbanken Handelsbanken has a decentralised way of working and a strong local presence. The Bank has a nationwide branch network in Sweden, the UK, Denmark, Finland, Norway and the Netherlands. The Bank regards these countries as its home markets. Handelsbanken was founded in 1871 and has operations in more than 20 countries. More satisfied customers than the sector average 146 in all six of our home years markets.* of availability. More than 800 branches in our six home markets. 46years running with better profitability than the average of peer banks in home markets. SATISFIED CUSTOMERS IN ALL SIX HOME HANDELSBANKEN’S CREDIT RATING IS POSITIVE SHAREHOLDER VALUE MARKETS* TOP OF GLOBAL BANKS Handelsbanken is one of few banks in Europe Every year, EPSI Rating – which includes SKI No other bank in the world has a higher rating that has generated positive shareholder value (Swedish Quality Index) – carries out independ- than Handelsbanken in terms of bank ratings since the financial crisis began in autumn ent surveys of customer satisfaction. This year’s from Fitch, Moody’s and Standard & Poor’s. 2007. Handelsbanken is the only commercial surveys showed that Handelsbanken has more During the first quarter of 2017, Standard & bank on the Stockholm stock exchange which satisfied private and corporate customers than Poor’s changed their outlook on Handelsbanken has not needed to ask its shareholders for new the average for the banking sector in all of the to stable, from negative. In other respects, capital during this period. Bank’s six home markets. Thus the Bank Handelsbanken’s long-term and short-term For the past five years – since 31 December continues to have a strong position in terms of ratings with the rating agencies which monitor 2012 – Handelsbanken has generated positive customer satisfaction. the Bank were unchanged. shareholder value of SEK 121 billion. Market In Sweden, Handelsbanken has had the most capitalisation has grown by SEK 71 billion, while satisfied customers for 29 years running accord- Handelsbanken has paid out SEK 50 billion in ing to SKI. dividends to shareholders. * According to EPSI/SKI (Swedish Quality Index). Since SKI’s surveys began in 1989, Handelsbanken has had the most satisfied private customers of the four major Swedish banks: Handelsbanken, Nordea, SEB and Swedbank. Highlights of the year Operating profit rose by 2 per cent Net fee and commission income to SEK 21,025 million (20,633); rose by 6 per cent to adjusted for non-recurring items, SEK 9,718 million (9,156). it rose by 3 per cent. Continued growth in lending The period’s profit after tax for and growth in assets under total operations decreased by management in all home markets. 1 per cent to SEK 16,102 million (16,245). The C/I ratio rose to 45.5 per cent (45.2). Earnings per share for total operations decreased to SEK 8.28 The loan loss ratio went down to (8.43). 0.08 per cent (0.09). Return on equity for total The common equity tier 1 ratio operations declined to 12.3 decreased to 22.7 per cent (25.1) per cent (13.1). after proposed dividend, and the total capital ratio was Income increased by 2 per cent 28.3 per cent (31.4). to SEK 41,674 million (40,763), but after adjustment for non-recurring The Board is proposing an items, it grew by 5 per cent. ordinary dividend of SEK 5.50 per share and an extra dividend Net interest income increased of SEK 2.00 per share and that the by 7 per cent to SEK 29,766 million existing mandate to repurchase (27,943). shares is extended for a further year. Average growth in equity Total return since the start of the financial crisis 2007–2017* 30 June 2007–31 December 2017 SEK % 150 200 125 150 100 CAGR: 15% 100 75 50 50 0 25 -50 0 -100 SEB UBS BNP KBC DNB Erste BBVA Intesa HSBC Lloyds Nordea Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Danske Barclays Unicredit Deutsche Santander Swedbank Credit Suisse Credit Crédit Agricole Crédit Commerzbank Adjusted equity per share Bank of Ireland Handelsbanken Accumulated dividends since 2008 * Including dividends. Société Générale Euro STOXX Banks Euro Standard Chartered Standard Source: SNL, as at 31 December 2017 (dividends reinvested). HANDELSBANKEN | ANNUAL REPORT 2017 1 Brief information Handelsbanken’s Annual General Meeting 2018 Location: Grand Hôtel, Winter Garden, Royal entrance, Stallgatan 4, Stockholm. Time: Wednesday, 21 March 2018 at 10.00 a.m. Notice of attendance Shareholders wishing to attend the AGM must be entered in the register of shareholders kept by Euroclear Sweden AB (formerly VPC AB), by Thursday, 15 March 2018 at the latest. Notice of attendance is to be made to Handelsbanken, Corporate Governance, SE-106 70 Stockholm, Sweden, telephone +46 (0)8 701 19 84, or via handelsbanken.se/ireng by Thursday, 15 March 2018 at the latest. To be entitled to take part in the meeting, shareholders whose shares are nominee-registered must also request a temporary entry in the register of shareholders kept by Euroclear. Shareholders must notify the nominee of this well before Thursday, 15 March 2018, when this entry must have been effected. Dividend The Board proposes that the record day for the dividend be Friday, 23 March 2018, which means that Handelsbanken’s shares will be traded ex-dividend on Thursday, 22 March 2018. If the meeting resolves in accordance with the proposal, Euroclear expects to distribute the dividend on Wednesday, 28 March 2018. Financial calendar 2018 7 February Annual accounts 2017 21 March Annual General Meeting 25 April Interim report January–March 2018 18 July Interim report January–June 2018 24 October Interim report January–September 2018 Financial information The following reports can be downloaded or ordered from handelsbanken.se/ireng: • annual reports • interim reports • risk reports • corporate governance reports • fact books • sustainability reports. Distribution The Annual Report can be ordered from Investor Relations, phone +46 (0)8 701 10 00 or at handelsbanken.se/ireng. Handelsbanken’s publication Risk and Capital Management – Information according to Pillar 3 and the other reports stated above are also available on the Bank’s website. Handelsbanken’s Sustainability Report 2017 In addition to Handelsbanken’s Annual Report 2017, Handelsbanken also publishes a complete Sustainability Report. The Sustainability Report is a separate publication covering activities and results during the 2017 calendar year. The report is prepared in accordance with Global Reporting Initiative (GRI) Standards and has been examined by the Bank’s external auditors. Handelsbanken reports the Group’s sustainability activities on an annual basis. The Sustainability Report encompasses the Group as a whole and constitutes the formal sustainability reporting in accordance with the Swedish Annual Accounts Act for the companies that are subject to the reporting requirement. The report constitutes Handelsbanken’s Communication on Progress for the UN Global Compact. Information regarding Handelsbanken’s sustainability activities is also published at handelsbanken.se/csreng. 2 HANDELSBANKEN | ANNUAL REPORT 2017 Contents The Group Chief An ordinary year for our FINANCIAL REPORTS Executive’s comments extraordinary bank 4 GROUP Contents 64 ADMINISTRATION REPORT Income statement Group 65 GROUP Statement of comprehensive Contents 7 income Group 66 Concept and goal 9 Balance sheet Group 67 Goal achievement 10 Statement of changes in equity Our concept 12 Group 68 Organisation and working Cash flow statement Group 69 methods 14 Notes Group 70 Our business model in a digitalised world 16 ADMINISTRATION REPORT PARENT COMPANY 164 Review of operations Financial overview 2017 19 FINANCIAL REPORTS Review of operations 20 PARENT COMPANY Five-year overview Group 22 Contents 165 Key figures per year 24 Income statement Parent company 166 Quarterly performance 25 Statement of comprehensive Business segments 26 income Parent company 166 Handelsbanken Sweden 28 Balance sheet Parent company 167 Handelsbanken UK 30 Statement of changes in equity Handelsbanken Denmark 32 Parent company 168 Handelsbanken Finland 34 Cash flow statement Parent company 169 Handelsbanken Norway 36 Five-year overview Parent Handelsbanken the Netherlands 38 company 170 Handelsbanken Capital Markets 40 Notes Parent company 172 Handelsbanken’s shares and shareholders 42 SIGNATURES OF THE BOARD AND THE GROUP CHIEF Sustainability, environment and EXECUTIVE employees 44 Signatures of the Board and the Group Chief Executive 205 Corporate Governance Corporate Governance Report Report 2017 47 AUDITOR’S REPORT Contents 47 Auditor’s report 206 Corporate Governance structure 48 The Board 60 CONTACT DETAILS Senior Management and Audit Contents 211 and Whistleblowing Function 62 Contact details 212 Branches and branch managers 214 Boards of subsidiaries 221 OTHER Definitions and explanations 222 Svenska Handelsbanken AB (publ) Corporate identity no.: 502007-7862 Registered office: Stockholm handelsbanken.com This report is also available in Swedish. Every care has been taken in this translation into English. In the event of discrepancies, the Swedish original will supersede the English version. 3 THE GROUP CHIEF EXECUTIVE’S COMMENTS An ordinary year for our extraordinary bank It was a fairly ordinary year for our rather extraordinary bank. This doesn’t mean that the year was uneventful – on the contrary, the level of activity was high throughout the Bank. This led to more customers, more satisfied customers, and more stable finances – just as usual. During the past year, Handelsbanken has gained many good, new what customers expect of us. Every day throughout the Bank we discuss customers. To a large extent, our existing customers also did more what more we can do to meet – and preferably exceed – our customers’ business with us this past year and, as in previous years, we had more expectations.
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