20 299 MARCH 2016 © MARCH 299 20 HANDELSBANKEN The History of Handelsbanken

If you have any questions about “The History of Handelsbanken”, please contact Handelsbanken’s Historical Society, [email protected] MARKETING MATERIALMARKETING In spring 1871, a new bank was founded

The history of Handelsbanken dates back to customers, were based on the first floor of the spring of 1871, when a number of promi- the Schinkel building at Kornhamnstorg 4. nent companies and individuals in Stockholm’s A couple of years later, the first branches business community founded Stockholms were opened in Stockholm: 1876 in the Handelsbank. This was the result of a per- Södermalm district (Götgatan 16), 1878 in sonal conflict at Stockholms Enskilda Bank Norrmalm (Fredsgatan 32) and 1882 in which culminated in April 1871 with the resig- Östermalm (Humlegårdsgatan 24). The Bank nation of eight board members who shortly opened a branch in Jönköping in 1874, but after decided to form a new bank. Handels- it was closed in 1895. banken’s first board largely comprised previ- The Bank’s first year of operations was very ous members of the executive board of successful and after only a couple of years, Enskilda Banken. Handelsbanken held a strong position among Unlike Enskilda Banken, which, being a Stockholm banks. The first major test for the bank where the owners had joint and several new bank came with the difficult crisis years of liability, could issue its own bank notes, 1878–1879, which severely impacted on large ­Handelsbanken became a limited company. sections of Swedish banking, particularly due The paid-up share capital totalled SEK 1 mil- to uncertainty regarding railway bonds. The lion. The Bank’s shares were first listed on the Bank put large amounts of money into a spe- Swedish market in 1873, and today it is the cial fund to meet expected loan losses. How- oldest share on the Stockholm exchange. ever, compared with other Stockholm banks, While its main competitors focused on Handelsbanken managed relatively well. While bond transactions and corporate customers its main competitors needed to be rescued outside Stockholm, Stockholms Handels- with state support, Handelsbanken was able banken emphasised at the outset that it would to advance its positions. pursue “true banking activities” with deposits and loans and that it would focus on the local bank market, that is, the business activities of Sweden’s capital city. The Bank received its first charter to run a bank from His Majesty the King on 12 May, and on 1 July 1871 the Bank began opera- tions in rented offices located at Kornhalms­ torg in Stockholm’s Old Town, which at that time was still the commercial and financial centre of the city. Including the managing director, there were twelve employees. During the Bank’s first year, the whole of its opera- tions, including the premises where it served Handelsbanken’s first advertisement dated 29 June 1871. Stockholms Handelsbank’s first branch at Kornhamnstorg in the Old Town of Stockholm.

2 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 3 The Fraenckel period

In the crisis years of the late 1870s and early would today call merchant banking. Increasing 1880s, the Bank grew more rapidly than its profits was one of his major goals and his competitors. The major crash in the construc- strategies included greater focus on bond and tion sector in Stockholm in 1885 and the sub- foreign exchange business. sequent economic downturn seriously He did not want the Bank to be direct affected the previously expanding bank. With owner of branches outside Stockholm. Instead still poor results in the early 1890s, the Bank’s it was an active participant in founding new owners demanded new management. In local banks with which Stockholms ­Handels- 1893, Louis Fraenckel, a private banker, was bank had close collaboration and ownership appointed new managing director. He would interests. In 1895, the Jönköping branch was lead the Bank for 18 years until 1911. The closed and transferred to the new Jönköpings business connections of Mr Fraenckel’s old Handelsbank. In 1896, Skånska Handelsbanken firm, including international ones, were trans- was founded, and in the following year Göte- ferred to Stockholms Handelsbank. borgs Handelsbank. Co-operation agreements A year or so after his appointment, rapid were entered into with these banks, and also economic development in Sweden created a with Sundsvalls Handelsbank. But the colla­ strong demand for banking services. The boration which Louis Fraenckel had set up boom offered opportunities for higher profits, between these “Handelsbanks” did not last but also risks which were difficult to assess. long and ended in 1911. In the tough competition between the banks, When Louis Fraenckel became managing under Louis Fraenckel’s leadership, Stock- director, Handelsbanken was the tenth largest holms Handelsbank succeeded best. It was commercial bank in Sweden. By the time he able to acquire a large number of corporate left, the Bank had risen to second place. customers and to develop its international In autumn 1896, the head office was contacts. Mr Fraenckel focused on what we moved from the Old Town to rented premises at Gustaf Adolfs Torg in the new business cen- tre of Stockholm. These premises turned out to be too small after only a couple of years so a larger property at Kungsträdgårdsgatan 2B was acquired, and a new head office for the Bank was built there. On 22 May 1905 – long after its two main competitors – Handels- banken moved into its own building on Kung- strädgårdsgatan where the Bank’s head office is still situated, now greatly expanded. At that time, the Bank had around 50 employees at six branches. Handelsbanken’s headquarters have been located at ­Kungsträdgården in Stockholm since spring 1905. Louis Fraenkel, Managing Director 1893–1911

4 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 5 Stockholms Handelsbank expands to become Svenska Handelsbanken

centre which reported directly to the managing director and had the task of managing the acquired operations in the provinces, was ­situated at Kungsträdgårdsgatan 16. The organisation with a Stockholm operation and a provincial operation was retained until the late 1960s. While competing banks expanded to the west and south during this consolidation period, Handelsbanken’s management con­ tinued to look to the north where the forest industry was booming. In 1917, Handels- banken further strengthened its position in this promising area through the acquisition of Norrlandsbanken and its 79 branches. As in the case of Bankaktiebolaget Norra Sverige, Norrlandsbanken was a product of the merger of several smaller banks. Although the acquisitions in Norrland improved the ratio between deposits and loans, having such a strong concentration in northern Sweden soon proved to be unwise. In 1918, Handelsbanken opened new branches Stockholms Handelsbank’s branch on the corner of Nybrogatan and Köpmangatan in Härnösand, which was included in the ­acquisition of Bankaktiebolaget Norra Sverige in 1914. One hundred years later, Handelsbanken’s branch is still in the same building. in Gothenburg and Malmö. The Stockholm banks also found an attractive deposit surplus The first decades of the twentieth century try. In spring 1914, Bankaktiebolaget Norra in southern Sweden, and in 1919, Handels- were an era of bank mergers in Sweden as Sverige was acquired. The merger significantly banken acquired Bankaktiebolaget Södra well as in Europe. The number of banks in expanded Handelsbanken’s operations, giving Sverige with its 67 branches. Sweden was reduced by more than one-half. it branch offices in 36 new towns, primarily Following the merger with Bankaktiebolaget During Louis Fraenckel’s time as managing along Norrland’s coast, but also some branches Södra Sverige, the Bank changed its name to director, Stockholms Handelsbank only had in Central Sweden. Svenska Handelsbanken. In addition, Svenska branches in Stockholm, but the new manage- In connection with the acquisition, operations Handelsbanken adopted the octagon symbol ment saw many advantages in expanding the were split into two divisions: a Stockholm oper- from Bankaktiebolaget Södra Sverige, which The octagon symbol accompanied the acquisition of Bankaktiebolaget Södra Sverige and served as the symbol branch operations to other parts of the coun- ation and a provincial operation. The provincial would function as its own logo for many years. for Svenska Handelsbanken for many years.

6 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 7 Deflation and the Kreuger crash

the commercial banks. For the first time in the companies were reconstructed, in the late the 50-year history of the Bank, the annual 1930s, the Bank began to plan for a coordi- accounts did not show a profit and at the nated phase-out of these interests. A holding AGM in spring 1923, both a new managing company called Industrivärden was formed in director and a new chairman of the Board the winter of 1943/1944 to which sharehold- were appointed. The major write-offs the Bank ings in seven companies were transferred. was forced to make in 1922 were due to the One of the largest holdings was in the L M previously expansive lending policy. Borrowers Ericsson telephone company. The Bank’s included Svenska Emissions AB, a company shareholders were offered the opportunity to associated with the Bank and companies in subscribe for shares in the new company and which it had significant ownership interests. it was listed on the stock exchange in 1945. But in the late 1920s, the situation improved Consolidation continued on the Swedish and the Bank’s operations developed well. bank market in the interwar era. Acquisitions The Wall Street Crash in late 1929 and the such as Mälarebanken in 1926, enabled ensuing worldwide depression in the first half ­Handelsbanken to generally maintain the of the 1930s led to renewed problems for ­number of branches at a stable level of just many of the Bank’s borrowers, and profits over 260, while the other commercial banks were more than halved. drastically reduced the number of branches. In the prosperous years of the 1920s, the In the post-war period, Handelsbanken most hyped name on the Swedish financial continued to expand on an increasingly con- market was the ‘Match King’, Ivar Kreuger, and solidated Swedish bank market. The acquisi- his corporate empire. In the early 1920s, the tions of Vänersborgsbanken and Norrköpings Kreuger Group was a large borrower from Folkbank in the 1940s were followed by the ­Handelsbanken but after the management purchase of Luleå Folkbank and Gotlands- change in 1923, Handelsbanken was more banken in the 1950s. Handelsbanken’s branch at Stortorget in Helsingborg in the 1950s. Handelsbanken took over the building, which was previously the headquarters of Bankaktiebolaget Södra Sverige, in 1919. cautious in its dealings with Mr Kreuger, and in the late 1920s, the only major dealings the Bank The 1920s were a testing time for the Swedish In 1921, Handelsbanken celebrated its 50th had with him related to Svenska Cellulosa­ economy. Early in 1920, the United States anniversary, but the annual report did not bolaget (SCA). After the Kreuger crash in 1932, entered a deep depression, and demand for bring good tidings. Instead, it was filled with Handelsbanken became by far the largest Swedish exports declined. Between 1920 and concern about the economic situation. The owner of SCA – it was a subsidiary of the Bank 1922, prices in Sweden fell by over 30 per Board pointed out in its report that “business right up until 1950, when it was sold to the cent. This deflation triggered a serious crisis has suffered under extreme conditions, which Bank’s shareholders and listed on the stock that threatened the entire financial system. have directly affected the bank’s operations”. exchange. Much of the Bank’s lending comprised credits It stated that “substantial amounts… are pro- During the financial crises of the 1920s and secured by shares. The stock market crash posed for write-downs due to losses”. 1930s, Handelsbanken took over majority between 1919 and 1922 meant that the Bank’s The year after, the situation became even shareholdings in several Swedish industrial Handelsbanken’s branch no. 8 in Stockholm, on Regerings- collateral was often insufficient. worse and 1922 was a major crisis year for companies in order to protect its claims. After gatan 47 in the 1920s.

8 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 9 Operations are broadened Handelsbanken in the 1960s

Alongside its traditional commercial banking finance company providing leasing and In Sweden, the decades following the Second operations offering lending and deposits, ­factoring services. The name Säljfinans was World War were the longest period of continu- ­Handelsbanken broadened its operations at an changed to Svenska Finans in 1973, and in ous economic growth that the country had early stage to include more product areas. In 1991 to Handelsbanken Finans. In 1971, experienced. 1955, the mortgage company SIGAB was pur- ­Handelsbanken took over as the general agent In the 1950s and 1960s, Handelsbanken chased, which subsequently changed its name for sales of the “Koncentra” funds from Åhlén focused not only on profitability; a great deal to Handelsbanken Hypotek. In 1963, Handels- & Holm AB. This was the start of the mutual of attention was focused on the Bank’s size banken was the first Swedish bank to form a fund operation, Handelsbanken Fonder. and volume growth. One milestone which attracted great attention internally at the Bank was in November 1964, when total assets surpassed SEK 10 billion. When the Riksbank put a ceiling on the growth of lending for pur- poses other than residential property con- struction, Handelsbanken began to focus on increasing deposits. The means to achieve this end was to focus more on household ­savings by setting attractive interest rates, implementing various sales campaigns, and expanding the branch network considerably. During the 1955–65 period, Handelsbanken opened no fewer than 157 new branches. Most of these were in the new suburbs of Stockholm, which were expanding rapidly, due to the substantial movements in popula- tion at that time. The expansion of the branch network was justified by a wish to improve service for existing customers, and to reach new customers. However, in the late 1960s, the Bank was affected by events that caused negative ­publicity in the media and brought criticism from public authorities: in 1966, the takeover of a well-known travel company, and in 1969, foreign exchange transactions that contra- vened the strict currency regulation at that To commemorate Handelsbanken’s 90th anniversary in 1961, time. However, the epilogue to these years CEO Tore Browaldh asked designer Stig Lindberg (left) to of ­crisis would spur the rejuvenation of create a new savings box. The Bank’s marketing used the Handelsbanken contributed financially to ­salvag­ing the Swedish warship, the Wasa, which sank in 1628 and was salvaged Scottie Dog savings bank a great deal in the 1960s to boost in 1961. Here we see Handelsbanken’s bank bus parked close the salvage site. ­Handelsbanken. household savings.

10 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 11 Jan Wallander focuses on profitability

In the late 1960s, while other functions were no longer needed. retirement, Oktogonen became an informed, in the next few years and a large part of the Handelsbanken This latter group included the central unit that long-term, major owner – something that is funds were invested in Handelsbanken shares. ran into a crisis. worked on budgeting. Mr Wallander consid- lacking in many companies. The Bank’s good Since 1998, Oktogonen has owned around 10 The management ered budgets to be not only an unnecessary profit development facilitated new allocations per cent of the voting rights in Handelsbanken. resigned and in evil but in some cases outright dangerous. early 1970, Jan Instead, a new financial reporting and man- Wallander was agement system was developed based on the recruited from the actual profit outcome. Norrland provincial The new organisation would focus on bank Sundsvalls- ­profitability rather than volumes. The goal was, banken as the new and still is, to have a return on equity that CEO of Handelsbanken. Mr Wallander intro- exceeds the average for the other listed duced new ideas which Sundsvallsbanken banks. From having lower profitability than its had started to practice. A decision was made competitors in the late 1960s, Handelsbanken to extensively decentralise Handelsbanken’s managed to achieve the same level of profita- organisation and to wind down the existing bility as the other banks in 1971. Every year organisation with 26 districts. But in order to since 1972, Handelsbanken has met the goal meet the requirements from larger customers, of being more profitable than the average for the branches needed specialist support, so other listed banks. they grouped into larger units. If these units A condition for achieving better profitability were about the same size as Sundsvalls- than other banks on the same market and banken, they would not be unmanageably working under the same conditions is that large. The Bank’s branch operations were Handelsbanken employees outperform their therefore divided into eight regional banks, peers in the rest of the sector. Consequently, each consisting of about 70 branches. In the Bank’s management thought it was rea- ­January 1971, the first regional bank was sonable that employees shared in these extra founded, with its head office in Malmö. When profits. At the time, there was lively debate in it was seen that operations in the Southern Sweden on how employees could gain more Sweden regional bank had generated healthy influence in companies. In February 1973, the profits, the other seven regional banks were Board decided to allocate SEK 10 million to started during the course of 1972. The new a profit-sharing foundation called Oktogonen regional banks had their own boards and a formed by the Bank’s trade union club. The high degree of independence. funds were invested in Handelsbanken shares, In the new, decentralised organisation, thus giving the employees owner representa- many of the previous tasks of the head office tion on the Board. Since the managed funds The first allocation to the Oktogonen profit-sharing foundation, which is owned by the employees. On 7 February 1973, were transferred to the regional head offices, are not paid out directly but at the time of CEO Jan Wallander (right) presents a symbolic cheque to personnel representative Kaj Ytterskog.

12 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 13 The evolution of IT

In the 1960s, work volumes at the Bank early 1960s. For the first few years, the com- In 1966, the Bank bought two computers increased considerably. Not least the increasing puter centre was based at the Grev Turegatan in the modern IBM 360 series, which were use of current accounts led to the number of 44 premises in the Östermalm area of Stock- to play a key role in its data processing. lending and deposit transactions close to holm, but in 1964 was transferred to Tegel­ In the mid-1960s, the idea of creating an quadrupling between 1957 and 1966. uddsvägen in the Gärdet area. In 1964, the online system for transfers and processing With the aim of rationalising laborious ledger computer centre changed its name to the monetary transactions was born. The idea routines for customer accounts, Handels- computer department and after 1967 was was to connect the branches via the telecom banken started its computer operations in the part of the administrative rationalisation unit. network to the Bank’s central computer at Gärdet in Stockholm. By providing the branches with cash and query terminals, it would be possible to collect the numerous monetary transactions from the cash desks and then book them centrally. The develop- ment work for the project – called System 71 – lasted several years. For the branch staff, a major change came in 1973–1975, when the first terminal system was introduced. These terminals facilitated faster service to customers, such as immedi- ate information about their account balance. This system, referred to in-house as HTS, was used for many years, but was replaced in 1986–89 by a new terminal system called HTD. With this multi-function terminal, most procedures at a branch could be carried out from a single workstation, faster than before and with higher quality. But it wasn’t until the early 1990s that the Bank approached a figure of one terminal per branch employee. In the late 1990s, when the concept of Electronic Data Processing support made way for IT, HTS (Handelsbanken’s Terminal System) was implemented Inside the computer department at Värtavägen, Stockholm, 1967. HTD was supplemented with networks of PCs. at the Bank’s branches in 1973–75.

14 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 15 The Swedish banking market Handelsbanken copes with the is deregulated major financial crisis of the 1990s

The last in a long line of Swedish provincial offer to acquire all shares. In December 1996, bank acquisitions was in 1990, when Handels- the government agreed to accept Handels- banken acquired Skånska Banken. With its 76 banken’s offer and on 26 February 1997 the branches, Skånska Banken boosted Handels- Bank became the owner of Stadshypotek AB banken’s service levels and business volumes for a total purchase price of SEK 23 billion. in southern Sweden. The acquisition was aptly Stadshypotek’s lending operations were described as a milestone at the time it was immediately integrated into the Bank’s branch presented. Handelsbanken’s expansion would network. certainly continue, but it was about to take a During the 1990s, its range of savings-­ new path. related products was also expanded. In 1992, During the protracted boom of the 1980s, for example, the Bank introduced equity-linked bank lending in Sweden had grown at an bonds, and since 1 January 1994, customers exceptionally fast rate, much of it going to have been able to save for their pensions speculative investments. In autumn 1990, a with the Bank and benefit from the same tax serious crisis emerged in Swedish banking as regulations as for pension insurance. a result of a deep recession. Corporate loans In late 1994, the Bank pooled all its opera- were the primary cause of huge loan losses tions on the securities and foreign exchange reported by Swedish banks. The Swedish markets in a new unit named Handelsbanken government’s costs for supporting the bank Markets, comprising equity, foreign exchange sector were an incredible SEK 66 billion. During and money market trading, asset manage- During the Second World War, state control way of preventing credit expansion, as greater the banking crisis, Handelsbanken was the ment, trade finance and corporate finance. of the Swedish financial market was tightened proportions of credit started to be granted only major Swedish bank that was not forced up, and in the ensuing decades, the credit outside the banking system. On 14 May 1985, to discuss applying for government aid. market became a vital part of government the Riksbank’s recommendation for the maxi- Handelsbanken was able to use the situation ­policy. The Riksbank (the Swedish central mum permitted average interest rate for bank to advance its position on the Swedish banking bank) came to control not only interest rates lending ceased, and six months later, on 22 market. For example, Handelsbanken’s share but also credit volumes. Lending in Swedish November 1985, the lending ceilings applying of deposits from Swedish households increased kronor was strictly regulated. Banks’ ability to to banks were removed. This deregulation from 11 per cent in 1990 to more than 17 per grant loans for purposes other than mortgage led to bank lending increasing sharply so the cent by the end of the decade. financing was limited, as the Riksbank decided banks were able to win back some of the In 1997 – a year of several restructuring to what extent lending volumes were allowed ­borrowers who had sought credit from other deals in the banking sector – Handelsbanken to increase. Naturally, this restricted free com- sources. In the last three years of the 1980s, utilised its strong financial position to make a petition and led to a deadlocked competitive Handelsbanken’s lending volumes doubled. cash acquisition of the mortgage company, situation between the banks. On 1 July 1989, the last step was taken in Stadshypotek. In summer 1996, when the In the mid-1980s, it became increasingly deregulating the Swedish credit market with government declared its intention to divest its clear that the lending ceiling was an ineffective the removal of foreign currency regulations. stake in Stadshypotek, the Bank made an

16 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 17 Expansion in the Nordic countries Increased interest in life insurance

Swedish foreign currency regulations were lifted marked the actual start of Handelsbanken in The 1990s was also a period of some realign- be affected by the change were given the in 1989, and a few years earlier it had become Finland. Handelsbanken has been a member of ment between the financial and insurance sec- opportunity to vote on it. 98 per cent of voters possible for Swedish banks to open branches the Finnish bank clearing system since February tors. Pension savings became an increasingly were in favour of demutualisation. abroad. This led to increased internationalisation 1992. The first street-level branch was estab- important part of long-term savings for the In March 2001, Handelsbanken acquired of the Swedish banking market. Handelsbanken lished at Eteläranta in Helsinki in 1993, and it Bank’s customers. Through a change in the the life insurance company SPP, a leading was well prepared for this change. During the opened in February 1994. The following year, law in 1991, banks in Sweden were allowed company for occupational pensions in Swe- 1980s, the Bank had built up its international Handelsbanken acquired the healthy parts of to own insurance companies and vice versa. den. But this market rapidly changed and as a operations with branches and subsidiaries in Skopbank and at the same time decided to Handelsbanken immediately entered the life result, independent insurance brokers gained London, New York and Singapore, for example. open branches in several major Finnish cities. insurance market by starting a unit-linked a stronger position, while mass marketing Could Handelsbanken’s successful Swed- Through this expansion, Handelsbanken insurance company. From the outset, the became increasingly important for success. ish model also be used to provide full-service became the fourth largest bank in Finland. Bank took the strategic decision to offer both This led to fewer points of contact between banking in other countries? Based on this In Denmark, a representative office was unit-linked insurance and traditional life insur- SPP and the Bank’s branches. On 3 Septem- premise, in 1988, Handelsbanken decided to opened in Copenhagen in 1990. Handels- ance. Given this development, in 1992, the ber 2007, the Bank therefore entered into start operations in Norway, opening its first banken’s first Danish branch opened for busi- Bank acquired the mutual life insurance com- an agreement to sell SPP to Storebrand, a branch in Oslo the year after. In February ness in 1996. This Copenhagen branch was pany RKA, with which it had closely collabo- Norwegian insurance company. During the 1990, the Bank made a cash offer for Oslo soon followed by others in Denmark. In 2001, rated since the late 1980s. In conjunction with six years Handelsbanken owned SPP, the Handelsbank. Through a combination of Handelsbanken purchased Midtbank, which this purchase, the company changed its name company was completely changed. SPP’s organic growth and the purchase of Stavanger had a very strong presence in the Jutland area. to Handelsbanken Liv. Following a change in operating costs were halved and on 1 January Bank in September 1991, Handelsbanken This added a further 23 branches to Handels- legislation, Handelsbanken Liv was demutual- 2006, it was converted into a for-profit insurance could take advantage of the historical opportu- banken’s network. Another 14 branches in ised on 1 January 2002, thus becoming a company. The sale of SPP helped to reduce nity for expansion created by the banking crisis a very attractive part of Denmark were added ­for-profit life insurance company. This was the amount of capital tied up and yielded a in Norway in the early 1990s. In the 1990s, the in autumn 2008 when Handelsbanken the first demutualisation of its kind in Sweden. capital gain of SEK 4.1 billion. Bank created a nationwide branch network in acquired Lokalbanken i Nordsjælland A/S, Before demutualisation, customers who would Norway, supplemented by the purchase of making Handelsbanken the fifth largest bank Bergensbanken in 1999. Handelsbanken’s in Denmark, with over 50 branches. Today, 50th branch in Norway opened in spring 2014. Handelsbanken is a full-service bank in In Finland, the Bank opened a representative ­Denmark with branches all over the country. office in Helsinki on 9 April 1985, with two On 1 January 1998, branch operations in employees. Five years later, in December 1990, Norway, Finland and Denmark gained the a subsidiary was formed, which was converted ­status of separate regional banks, after which to a branch in August 1991 to gain full access the business was run on the same principles to the parent company’s balance sheet. This as in Sweden.

Tornio, Finland Videbaek, Denmark Stavanger Straen, Norway

18 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 19 Increased availability Building Handelsbanken in the UK

Handelsbanken began its British banking By the end of that year, Handelsbanken had operations in London in the early 1980s. By grown to serve almost 60 communities across the end of that decade, a second office had England and Wales, and the following year the opened in Manchester, followed five years Bank announced its first branches in Scotland. later by a third in Birmingham. This organic expansion continued in Operations focused on Nordic-related cor- response to growing customer demand. The porate business until – at the turn of the mil- Bank’s 100th and 200th British branches were lennium – the Bank decided to offer individual announced in 2011 and 2015. Further regional and corporate customers in the UK a full banks were set up to provide increasingly range of banking services. Over the next three local, focused support for these branches, years, online banking services were developed along with a UK Head Office to develop com- and another five branches opened. In 2002, mon infrastructure and coordinate support Handelsbanken designated the UK its fifth where necessary. home market, establishing a regional bank Alongside this geographical expansion, based on the same principles as its Nordic Handelsbanken developed a complete range branch operations. of products and services for both individual and This regional bank structure supported a corporate customers. This range was further steady acceleration of branch openings over enhanced in spring 2013 through the acquisition the following years, leading to the establish- and integration of UK wealth and investment ment in 2008 of a second regional bank. management company, Heartwood.

Technical developments also benefited cus- The range of automated services entered a tomers, with the growth of self-service banking. new era on 10 December 1997, with online In the 1970s, Bankomat ATMs were launched banking. Customers could now carry out all in Sweden. In autumn 1991, the Bank launched common banking transactions online, includ- a telephone service in Sweden under the ing payments and securities trading. name Datasvar (the name was later changed In 2006, the Bank expanded its telephone to Telesvar), enabling customers to carry out service, offering individual and corporate standard banking business such as transfers ­customers in Sweden personal service via between accounts, as well as checking bal- Handels­banken Direkt, staffed 24/7 by experi- ances and the latest transactions. enced bank employees.

20 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 21 Stable throughout the global financial crisis 2008–2009

Early in 2007, Handelsbanken started to central bank – at times as much as SEK 100 reduce the financial risks in its operations in billion – these funds thus being available to the order to lower the volatility. One step in this central bank during the crisis. process in autumn 2007 was the sale of the In 2008, the Swedish National Debt Office occupational pension company SPP to Store- was given the mandate to provide government brand for SEK 18.2 billion. Other market risks guarantees for bank funding. When the need were also purposefully reduced. was at its greatest, in June 2009, the guaran- In summer 2007, there were increasingly tees amounted to SEK 354 billion. Two of strong signs of problems in the American Handelsbanken’s three main competitors ­sub-prime loan market – mortgage loans to in Sweden joined the state guarantee pro- families with weak repayment capacity, liber- gramme. The third bank was covered by the ally granted by American banks during the government capital contribution programme. economic boom in line with the wishes of Handelsbanken was the only one of the four leading politicians in the US. This proved to major Swedish banks which did not need any be the start of the worst global financial crisis kind of support from the tax-payers. since the major depression of the 1930s. During the financial crisis, Handelsbanken On Monday, 15 September 2008, one of was the only listed bank on the Stockholm the largest and oldest US investment banks stock exchange which did not need to ask its – Lehman Brothers – applied for bankruptcy, shareholders for a capital contribution – a new sending shock waves throughout the global share issue. Of the four major Swedish banks, financial markets. That autumn, more and only Handelsbanken created positive share- more banks worldwide ran into problems and holder value – changes in market capitalisation in several countries, banks had to be bailed plus dividends and minus new issue amounts out by the government. The Swedish Riks- – during the turbulent five-year period between bank was forced to lend money to the Swedish 2007 and 2011. banks in order to secure liquidity in the system. During these very tough years for the Handelsbanken was the only major Swedish ­banking sector, Handelsbanken was able to bank which did not receive support from a both expand its operations by opening new central bank during the crisis. Due to its large branches, to increase customer satisfaction financial reserves, Handelsbanken could and also strengthen its balance sheet and instead lend large amounts to the Swedish boost its profits.

22 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 23 The Netherlands becomes Digital paths to the branch the Bank’s sixth home market

The early years of the 2010s, saw continued But Handelsbanken differs from most of its rapid development in digitalisation of banking competitors in a very tangible way. Regardless services. Apps for mobile phones and tablet of how the customer opts to contact the Bank devices were launched in the Bank’s home mar- – digitally, by phone or by visiting in person – kets. When the Bank’s online payment services customer responsibility always lies with the were also made available as apps, customers local branch. Unlike most other banks, Handels- were able to carry out simple banking transac- banken has chosen to retain its local branches. tions on their mobile phones. The next step Not only does this offer customers better per- made it possible to manage cards and to trade sonal service, it also gives Handelsbanken in mutual funds and other securities via apps for clear advantages. Having local branches is a mobile phones and tablets. This means that cost-effective way of running banking opera- customers could do almost all their banking tions. Proximity to the customer gives the business via one of the Bank’s digital platforms. Bank better knowledge of its customers which Digitalisation has changed the banking sec- is an important reason why Handelsbanken tor. It has become much easier for customers has had more satisfied customers and lower to do most of their banking transactions, while loan losses than peer banks for the past Handelsbanken’s branch in Het Gooi in the Netherlands. the trend towards smaller screens has made it few decades. External customer satisfaction more difficult for banks to inform customers surveys also highlight that there is a strong link Handelsbanken became the first Nordic bank another branch was started in Amsterdam about their products. Since most banks have between available local branches and satisfied to start up in the Netherlands when it opened Zuid. The fourth branch in the country was similar digital solutions, it is also more difficult customers. a branch in Amsterdam in June 2002. This opened in autumn 2008 in Breda. More for banks to differentiate themselves. enabled the Bank to start the same process branches were started in the following years. in the Netherlands as it had previously devel- At the beginning of 2013, when the Bank oped on other home markets. Initially, opera- had 13 branches in the country, it was tions were part of Handelsbanken Markets’s decided to make the Netherlands Handels- unit for Mid-Europe with the task of supporting banken’s sixth home market. Since 1 January the Bank’s home market customers with their 2013, the branches in the Netherlands are banking business in the Netherlands. organised as a separate regional bank, run on Operations in Amsterdam performed well, the same principles as the branch operations so after five years it was decided to expand in the Nordic countries and the UK. the branch network in the Netherlands. The The Bank’s 20th branch in the Netherlands approach was exactly the same as in the UK: was opened in late summer 2014. More new organic growth as the basic strategy – grow- branches have been started since then. Since ing customer by customer, branch by branch. early 2016, Handelsbanken offers full-service In October 2007, the Bank opened a branch banking for both private and corporate cus- in Rotterdam and in the first quarter of 2008, tomers in the Netherlands.

24 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 25 Handelsbanken through the years

With a series of acquisitions of Handelsbanken carries Handelsbanken’s first Swedish provincial banks, beginning out a major reorganisa- branch in Denmark is in 1914, Handelsbanken grows from tion, and the first regional opened in Copenhagen. an important local Stockholm bank bank – with its head into a major nationwide bank. office in Malmö – was founded in January 1971.

The UK becomes Handelsbanken’s fifth home market.

The first local branch is opened on Götgatan in the Handelsbanken’s first Rapid developments in digitalisation of banking services. district of Södermalm – a branch in Finland is Handelsbanken offers its customers mobile banking stone’s throw from the Head opened in Helsinki. services for smartphones, tablet computers, etc. Office.

1871 1876 1914 1919 1970 1971 1989 1994 1996 1997 1998 2000 2002 2013 2010s

As a consequence of the ongoing The Netherlands becomes expansion, the Bank’s name was Handelsbanken’s sixth changed from Stockholms Handels- Online Handelsbanken home market. bank to Svenska Handelsbanken. banking begins building services are up a branch net- launched. work in the UK. On 1 July, Stock- holms Handelsbank opens in premises Jan Wallander takes over as at Kornhamnstorg Chief Executive and carries out Operations in Norway, in the old town of a far-reaching decentralisation of Handelsbanken’s first branch Finland and Denmark Stockholm, at the the Bank’s organisational struc- in Norway opens in Oslo. become separate time the financial ture. Mr Wallander increases the regional banks. and commercial focus on customer satisfaction centre of the capital. and profitability.

Handelsbanken was founded in 1871 in 1914–1990 was completed in the early 1990s, with the ­Denmark. By the turn of the millennium, the Bank ­premises at Kornhamnstorg in Stockholm, Between 1910 and 1920, the Bank expanded purchase of Skånska Banken. was ready to offer its services to UK customers, the ­capital’s financial centre at the time. In its operations greatly, from only having branches and in 2013, the Netherlands became the Bank’s 1876, the first local branch was opened on in Stockholm to a nationwide branch network. From 1990 sixth home market. Götgatan in Stockholm. This expansion was mainly achieved through The Swedish banking market was deregulated the acquisition of provincial banks from north in the late 1980s, and thus it became possible 1871–1914 to south. This was a process that continued for Handelsbanken to “export” its model of During the Bank’s first 40 years, it focused for most of the 20th century; it can be said that ­running banking operations to new markets. entirely on the banking market in the capital it began in the spring of 1914, with the acqui- The establishment of the Bank in Norway was city, and in 1910, all branches were located sition of Bankaktiebolaget Norra Sverige, and soon followed by branches in Finland and in central Stockholm.

26 | THE HISTORY OF HANDELSBANKEN THE HISTORY OF HANDELSBANKEN | 27