ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO L LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA- PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPANKNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMNKROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND HANDELSBANKEN HAS LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ AMIRALSGATAN CITY DALA-615 BRANCHES WORLDWIDE PLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN ENEBY CENTRUM HAGEBY CENTRUM NORRTÄLJE NORSJÖ NYBRO NYKÖPING NYNÄSHAMN NÄSBY PARK NÄSSJÖ NÄSÅKER NÖDINGE OCKELBO OFFERDAL OLOFSTRÖM ORSA OSBY OSKARSHAMN PAJALA PARTILLE PITEÅ PÅLSBODA RAMSELE RIMBO ROBERTSFORS RONNEBY ROTEBRO RÅNEÅ RÄTTVIK RÖRVIK SALA SALEM SALTSJÖ-BOO SANDVIKEN SIGTUNA SIMRISHAMN SJÖBO SKANÖR SKARA SKELLEFTEÅ SKINNSKATTEBERG SKULTUNA SKURUP SKUTSKÄR SKÄRHOLMEN SKÄRPLINGE SKÖNDAL SKÖNSBERG SKÖVDE SLITE SOLLEBRUNN SOLLEFTEÅ SOLLENTUNA CENTRUM SOLNA SORSELE SPÅNGA STAFFANSTORP STENUNGSUND STOCKHOLM: BIRGER JARLSGATAN FLEMINGGATAN FRIDHEMSPLAN FRIHAMNEN GAMLA STAN GUSTAV ADOLFS TORG GÖTGATSBACKEN HORNSBERG HORNSGATAN HUMLEGÅRDEN HÖGALID KARLAPLAN KARLAVÄGEN KUNGSHOLMSTORG KUNGSTRÄDGÅRDEN MARIEBERG NORRMALMSTORG NORRTULL ODENGATAN ODENPLAN RENSTIERNAS GATA S:T ERIKSPLAN SERGEL SKANSTULL STRANDVÄGEN STUREPLAN SVEAVÄGEN TESSINPARKEN UPPLANDSGATAN VANADISPLAN VÄRTAVÄGEN VÄSTERMALM ÖSTERMALMSTORG ÖSTRA STATION STORA TUNA STORUMAN STORVIK STRÄNGNÄS STRÖMSUND STUVSTA SUNDBYBERG SUNDSVALL SUNNE SURTE SVEDALA SVEG SVENLJUNGA SVENSTAVIK SÄFFLE SÄTER SÄVSJÖ SÖDERHAMN SÖDERKÖPING SÖDERTÄLJE SÖLVESBORG SÖRBERGE SÖSDALA TIBRO TIDAHOLM TIERP TIMRÅ TINGSRYD TOMELILLA TORSBY TORSÅKER TORSÅS TRANEMO TRANÅS TREHÖRNINGSJÖ TRELLEBORG TROLLHÄTTAN TROSA TRÅNGSUND TULLINGE TYRESÖ TYRINGE TÄBY CENTRUM UDDEVALLA ULLÅNGER ULRICEHAMN ULVSUNDA UMEÅ: CITY TEG VÄSTRA UPPLANDS VÄSBY UPPSALA: CITY ERIKSBERG INDUSTRIOMRÅDE LUTHAGEN VADSTENA VAGGERYD VALLENTUNA VANSBRO VARA VARBERG VASAGATAN VAXHOLM VEBERÖD VELLINGE VETLANDA VILHELMINA VIMMERBY VINDELN VIRSERUM VISBY: ADELSGATAN ÖSTER VISLANDA VITTSJÖ VOLLSJÖ VRETEN VÅRGÅRDA VÄLLINGBY VÄNERSBORG VÄNNÄS VÄRMDÖ VÄRNAMO VÄSTANFORS VÄSTERHANINGE VÄSTERVIK VÄSTERÅS: CITY EMAUSGATAN KÖPINGSVÄGEN STORA GATAN VÄXJÖ YSTAD ÅHUS ÅKERSBERGA ÅLEM ÅMÅL ÅNGE ÅNÄSET ÅRE ÅRJÄNG ÅRSTA ÅSEDA ÅSELE ÅTVIDABERG ÄLMHULT ÄLVSBYN ÄLVSJÖ ÄLVÄNGEN ÄNGELHOLM ÖREBRO: EKERSGATAN STORTORGET VÅGHUSTORGET ÖRNSKÖLDSVIK ÖSMO ÖSTERBYBRUK ÖSTERSUND ÖSTERVÅLA ÖSTHAMMAR ÖVERKALIX ÖVERTORNEÅ ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKA AVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BOL LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: STORA TORGET VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BOL LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖPING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN ENEBY CENTRUM HAGEBY CENTRUM NORRTÄLJE NORSJÖ NYBRO NYKÖPING NYNÄSHAMN NÄSBY PARK NÄSSJÖ NÄSÅKER NÖDINGE OCKELBO OFFERDAL OLOFSTRÖM ORSA OSBY OSKARSHAMN PAJALA PARTILLE PITEÅ PÅLSBODA RAMSELE RIMBO ROBERTSFORS RONNEBY ROTEBRO RÅNEÅ RÄTTVIK RÖRVIK SALA SALEM SALTSJÖ-BOO SANDVIKEN SIGTUNA SIMRISHAMN SJÖBO SKANÖR SKARA SKELLEFTEÅ SKINNSKATTEBERG SKULTUNA SKURUP SKUTSKÄR SKÄRHOLMEN SKÄRPLINGE SKÖNDAL SKÖNSBERG SKÖVDE SLITE SOLLEBRUNN SOLLEFTEÅ SOLLENTUNA CENTRUM SOLNA SORSELE SPÅNGA STAFFANSTORP STENUNGSUND STOCKHOLM: BIRGER JARLSGATAN FLEMINGGATAN FRIDHEMSPLAN FRIHAMNEN GAMLA STAN GUSTAV ADOLFS TORG GÖTGATSBACKEN HORNSBERG HORNSGATAN HUMLEGÅRDEN HÖGALID KARLAPLAN KARLAVÄGEN KUNGSHOLMSTORG KUNGSTRÄDGÅRDEN MARIEBERG NORRMALMSTORG NORRTULL ODENGATAN ODENPLAN RENSTIERNAS GATA S:T ERIKSPLAN SERGEL SKANSTULL STRANDVÄGEN STUREPLAN SVEAVÄGEN TESSINPARKEN UPPLANDSGATAN VANADISPLAN VÄRTAVÄGEN VÄSTERMALM ÖSTERMALMSTORG ÖSTRA STATION STORA TUNA STORUMAN STORVIK STRÄNGNÄS STRÖMSUND STUVSTA SUNDBYBERG SUNDSVALL SUNNE SURTE SVEDALA SVEG SVENLJUNGA SVENSTAVIK SÄFFLE SÄTER SÄVSJÖ SÖDERHAMN SÖDERKÖPING SÖDERTÄLJE SÖLVESBORG SÖRBERGE SÖSDALA TIBRO TIDAHOLM TIERP TIMRÅ TINGSRYD TOMELILLA TORSBY TORSÅKER TORSÅS TRANEMO TRANÅS TREHÖRNINGSJÖ TRELLEBORG TROLLHÄTTAN TROSA TRÅNGSUND TULLINGE TYRESÖ TYRINGE TÄBY CENTRUM UDDEVALLA ULLÅNGER ULRICEHAMN ULVSUNDA UMEÅ: CITY TEG VÄSTRA UPPLANDS VÄSBY UPPSALA: CITY ERIKSBERG INDUSTRIOMRÅDE LUTHAGEN VADSTENA VAGGERYD VALLENTUNA VANSBRO VARA VARBERG VASAGATAN VAXHOLM VEBERÖD VELLINGE VETLANDA VILHELMINA VIMMERBY VINDELN VIRSERUM VISBY: ADELSGATAN ÖSTER VISLANDA VITTSJÖ VOLLSJÖ VRETEN VÅRGÅRDA VÄLLINGBY VÄNERSBORG VÄNNÄS VÄRMDÖ VÄRNAMO VÄSTANFORS VÄSTERHANINGE VÄSTERVIK VÄSTERÅS: CITY EMAUSGATAN KÖPINGSVÄGEN STORA GATAN VÄXJÖ YSTAD ÅHUS ÅKERSBERGA ÅLEM ÅMÅL ÅNGE ÅNÄSET ÅRE ÅRJÄNG ÅRSTA ÅSEDA ÅSELE ÅTVIDABERG ÄLMHULT ÄLVSBYN ÄLVSJÖ ÄLVÄNGEN ÄNGELHOLM ÖREBRO: EKERSGATAN STORTORGET VÅGHUSTORGET ÖRNSKÖLDSVIK ÖSMO ÖSTERBYBRUK ÖSTERSUND ÖSTERVÅLA ÖSTHAMMAR ÖVERKALIX ÖVERTORNEÅ ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKA AVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO L LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖPING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BOL LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTACENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTADGISLAVED GLOBEN GNARPGNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY

ANNUAL REPORT 2006

ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLND MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN Annual general meeting (Shareholders’ meeting)

LOCATION: Grand Hôtel, Vinterträdgården, Royal entrance, Stallgatan 4, Stockholm TIME: Tuesday, 24 April 2007, 10 a.m.

NOTICE OF ATTENDANCE Shareholders wishing to attend the AGM must: • be entered in the register of shareholders kept by VPC AB (Swedish Central Securities Depository and Clearing) by Wednesday, 18 April 2007 • give notice of their attendance at the latest by 3 p.m. on Wednesday, 18 April 2007, to Handelsbanken, Kungsträdgårds- gatan 2, SE-106 70 Stockholm, tel: +46 8 701 19 84, or online at www.handelsbanken.se/bolagsstamma To be entitled to take part in the AGM, any shareholders whose shares are nominee-registered must also request a temporary entry in the register of shareholders kept by the VPC. Shareholders must notify the nominee about this well before 18 April 2007, when this entry must have been effected.

DIVIDEND The board of directors proposes that the record day for the dividend be Friday, 27 April 2007. If the AGM votes in accordance with this proposal, the VPC expects to send the dividend to shareholders on Thursday, 3 May 2007. Contents

Handelsbanken in brief 2

Highlights of 2006 3

The group chief executive’s comments 4

Goals, methods and outcome 8

Economic outlook 10

The market 11

Our customers 12 Svenska Handelsbanken AB (publ) Our employees 13 Corporate identity no. 502007-7862 Business concept, working methods and organisation 15 www.handelsbanken.com

Income statement 40 Administration report Balance sheet 41 Review of operations 16 Statement of changes in equity 42

Key fi gures and quarterly performance 18 Cash fl ow statement 43

The Handelsbanken share and shareholders 19 Notes Risks and risk control 44 Segment information – review of business areas 21 1 Net interest income and net gains/losses on Branch offi ce operations 22 fi nancial items at fair value 54 Handelsbanken Markets 26 2 Net fee and commission income 55 Handelsbanken Asset Management 29 3 Risk result – insurance 55 Handelsbanken Pensions & Insurance 31 4 Other income 55 5 Staff costs 55 Financial reports 6 Other expenses 58 Accounting policies 34 7 Loan losses/recoveries 58 The Group’s income statement and balance sheet and notes 40 8 Gains/losses on disposal of property, equipment and intangible assets 59 Five-year review – Group 82 9 Earnings per share 59 The parent company’s income statement 10 C l a s s i fi c a t i o n o f fi n a n c i a l a s s e t s a n d fi n a n c i a l l i a b i l i t i e s 60 and balance sheet and notes 84 11 Loans to credit institutions 62

Five-year review – Parent company 111 12 Lending and deposits, the public 63 13 Interest-bearing securities 64 Recommendation for appropriation of profi ts 112 14 Shares and participating interests 65 15 Assets where the customer bears the value change risk 66 Other 16 Derivative instruments 66 Audit report 113 17 Intangible assets 68 Corporate social responsibility 18 Property and equipment 69 69 Handelsbanken in the community 114 19 Other assets Environmental issues 115 20 Prepayments and accrued income 69 Ethical standards and corporate social responsibility 117 21 Due to credit institutions 70 22 Liabilities where the customer bears the value change risk 70 Corporate governance report* 23 Issued securities 71 Corporate governance 118 24 Other trading liabilities 71 The board 122 25 Insurance obligations 72 Senior management 124 26 Taxes 72 Branches and branch managers 125 27 Provisions 72 Defi nitions and explanations Inside back cover 28 Other liabilities 72 29 Accruals and deferred income 72 30 Subordinated liabilities 73 31 Specifi cation of changes in equity 73 Other disclosures – Group 74 * The corporate governance report is not part of the statutory annual report.

HANDELSBANKEN ■ ANNUAL REPORT 2006 1 HANDELSBANKEN IN BRIEF

Satisfi ed customers lead to higher profi tability

HANDELSBANKEN’S GOAL HANDELSBANKEN’S CORPORATE PHILOSOPHY • Handelsbanken’s fi nancial goal is to have higher • A strongly decentralised organisation – the branch profi tability than the average of its competitors. is the Bank. • Focus on the customer. HANDELSBANKEN’S STRENGTHS • Profi tability always has higher priority than volume. • For the past 35 years, Handelsbanken has had higher • A long-term perspective. profi tability than the average for its competitors. Since the survey began 16 years ago, Handelsbanken • HANDELSBANKEN TODAY has had the highest level of customer satisfaction of the • Total assets: SEK 1,790bn four largest banks in Sweden. • Operating profi t: SEK 17.2bn • For many years, Handelsbanken has been one of the most cost-effective universal banks in Europe. • Number of employees: over 10,000 • For a long period of time, Handelsbanken has had a • Number of branches: 615 lower loan loss ratio than its competitors. • Number of countries with operations: 20

HANDELSBANKEN’S BRANCHES ON ITS DOMESTIC MARKETS IN THE NORDIC COUNTRIES Three branches in Poland. AND GREAT BRITAIN Two branches in France and Germany. 457 branches in Sweden One branch in each of Austria, China, Estonia, Hong Kong, 42 branches in Norway Luxembourg, Netherlands, Russia, Singapore, Switzerland 36 branches in Finland and USA. 37 branches in Denmark 26 branches in Great Britain

Handelsbanken has seven representative offi ces: Beijing Nice La Nucia St. Petersburg Marbella Taipei Mumbai

2 HANDELSBANKEN ■ ANNUAL REPORT 2006 HIGHLIGHTS OF 2006

Highest profi t ever

SEK 17.2bn Operating profi t increased by 10% SEK 8.00 The board proposes to SEK 17.2bn – the highest ever. increasing the dividend by 14% to SEK 8.00. 20.9% Return on equity was 20.9%. The most Handelsbanken has operations in 20 countries. 19 new Nineteen new branches were international opened: six in Great Britain, fi ve in branches Norway, three in Sweden, two in Nordic bank and two Denmark, two in Poland and one in Estonia. Representative offi ces new were opened in India and in Spain. representative offi ces Satisfi ed Handelsbanken had the most satisfi ed customers in the Nordic customers region, when weighing together Over For the fi rst time, the branch offi ce the autumn surveys in Sweden, operations outside Sweden had Norway, Denmark and Finland. SEK 2bn profi ts of more than SEK 2bn. Source: SKI, EPSI, Dansk KundeIndex.

HANDELSBANKEN ■ ANNUAL REPORT 2006 3 THE GROUP CHIEF EXECUTIVE’S COMMENTS

The branches are the Bank

A brief summary of our fi gures for 2006: • Return on shareholders’ equity was 20.9%. • Never before has the Bank had so many branches – at the end of the year there were 615 branches, 158 of them outside Sweden. • Operating profi t was SEK 17.2bn.

Our fi nancial statements with all their fi gures really say three things: The branches are where our customers are, in their everyday lives. We have achieved our corporate goal, we have grown, and we earn Thus our branches know their customers well, know their personal more money than ever before. circumstances and limitations, their opportunities and goals. The But the annual report doesn’t really explain how we did it, and it branches know better than anyone else at the Bank what their custo- defi nitely doesn’t answer what is probably the most important ques- mers need and desire. It is therefore natural that the business deci- tion – how can we do it again in future years? sions are also taken there, close to the customer, close to real life, at I will instead try to respond to these two questions here. We should the branches. This gives better service, greater effectiveness and not also see the answers in light of the fact that we have increased our least higher quality credit decisions. This is why responsibility for profi ts and our business volumes in a year when running a bank customers always lies with a branch offi ce. was unusually free of risks. In times like this, our skill in assessing These strengths are enough for most customers. Even a multi- business and credit risks would in fact tend to hamper our growth, national group belongs to the branch of Handelsbanken situated rather than favour it – at least in Sweden. closest to the head offi ce of that corporate group – and these large To fi nd the answers I think you need to look further than the companies are happy with this. plain, black fi gures of the annual report. For behind all these sum- Our position among small and medium-sized companies is very maries lie hundreds of thousands of meetings with customers, advi- strong. I believe this is because these enterprises have a strong, gen- sory sessions, business arrangements and fi rm handshakes. But above uine local presence where “being local” is important. At the same all, we fi nd people there – people who have met, gained confi dence time I would stress that today’s small and medium-sized companies in each other and therefore started doing business together. have become much more international in the last few years. Their need of advanced fi nancial advice and business support is often on OUR BEST ADVICE LEADS TO SATISFIED CUSTOMERS a par with that of the major industrial groups. But even these small You can gain people’s confi dence in many different ways. Our advice and medium-sized companies continue to belong to “their” branch to customers is always based on their personal conditions, their risk of Handelsbanken. propensity, their goals – it is not based on the Bank’s goals, margins The way we meet customers has given us a network of contacts or the profi t it can make. For this reason, none of our 615 branch with Swedish business and industry which no other bank can ap- managers receives a bonus, nor does anyone else in the branch op- proach. Almost one-third of all corporate lending in Sweden is done erations. The same applies to the senior management of the Bank by Handelsbanken. Our clients are among the best in the Swedish including myself. But we do have written instructions stating that business world, which is one reason why the international rating our advice must always be in the customer’s best interests, even if agency Moody’s gives the Bank its high Aa1 rating. that advice is not the most profi table for the Bank in the short term. In the long run, we all benefi t from this. This is because we are con- WITH OUR EARS TO THE GROUND vinced that running a bank cannot only be a matter of wanting to Another advantage of the fact that business decisions are taken at earn money. It must also be combined with a desire to serve people. the local level, close to customers, is that this creates a greater aware- I am convinced that there is a direct link between our ability to ness of the market which runs right through our organisation. To earn money and the fact that, according to the Swedish Quality In- put it simply, you could describe this as continuous market research, dex (SKI) and its counterpart in the other Nordic countries, we have where the lead-times between identifying needs and fi nding solu- the most satisfi ed customers in the Nordic countries. In the Pros- tions are extremely short. Each individual branch determines its own pera survey we were ranked number one by Swedish mutual fund mix of products and services that it offers its local market. This is savers, and the Swedish business weekly Affärsvärlden acclaimed us logical, as only the branch knows exactly what its customers want, Commercial Bank of the Year. The list could be made longer but I need or are lacking. think I have made my point. Customers like us and what we do. The This gives our specialists at our central units a continuous chal- explanations for this are many and could be expressed at length, but lenge to develop, discontinue or change our various products and they can also be summarised in two words – our branches. solutions, according to the needs and wishes of the market. The fact that the specifi cations are made by experienced bank staff with daily THE BRANCH IS THE BANK customer contact means that the feedback during the entire process Handelsbanken is its branches and the branches are Handelsbanken. is well-informed, detailed and completely ruthless. This is not a marketing strategy, a concept, or some other temporary We can point to a number of examples where the branches togeth- idea we are testing at present. It is much, much more. er with central specialists have carved out new products and refi ned

4 HANDELSBANKEN ■ ANNUAL REPORT 2006 THE GROUP CHIEF EXECUTIVE’S COMMENTS

“ Handelsbanken is its branches and the branches are Handelsbanken. This is not a marketing strategy, a concept, or some other temporary idea we are testing at present. It is much, much more.”

old products. Examples of the former are equity-linked bonds and other capital-protected products where the branches together with Capital Markets have designed various products. Handelsbanken introduced equity-linked bonds to Sweden, and the Bank dominates the market in Sweden and in some of its neighbouring countries. The product has steadily been refi ned, and different variations have been tested and approved by branch customers. This would not have been possible without continuous market research in the form of close collaboration between the branches and Capital Markets. The importance of this collaboration was emphasised even more when Capital Markets became a separate business segment on 1 January this year. This change denotes the Bank’s increased level of ambition in the area of investment banking. Another example is mortgages, where the Bank has improved its product range and the branches have worked hard with existing and new customers. Mortgage business is vital to the Bank, not only through its direct contribution to Group earnings, but also via the extra business that it generates. Buying a house is often a private customer’s largest transaction, and therefore a mortgage is nearly always an excellent fi rst stage to gaining all of a customer’s banking business. A third example is credit and charge cards, where the Bank’s op- erations weren’t quite up to the rest of the market. But in 2006, our Allkort was the credit card with the highest turnover per card in the whole of Europe. It is an excellent card, giving access to a range of good services. Handelsbanken Finans, whose responsibility includes the Bank’s card services, made more improvements. Our custom- ers with Bankomat ATM cards were given the opportunity to swap these for our new Frikort ATM/debit card, at no extra charge. In less than three months, 70,000 customers accepted the offer. Finally, I would like to mention Handelsbanken Asset Manage- ment, where fund management performance has improved over the past few years. This has been refl ected in a sharply improved rating from the independent rating institute Morningstar, and a main- tained level for the Bank’s high market share of new savings in mu- tual funds. Morningstar ranks Handelsbanken’s range of products highest among all the major Swedish players.

WE GO OUR OWN WAY Handelsbanken also challenges what is generally accepted. One example is our work to make Handelsbanken Liv and SPP profi t- distributing, in complete contrast to how the rest of the sec- tor functioned – and largely still does. When we demutualised Handelsbanken Liv in 2002, it was the fi rst time that a mutually run life insurance company had been reorganised on profi t-dis- tributing lines. Profi t-distributing life insurance companies are good for customers, and good for the Bank. Every year since then,

HANDELSBANKEN ■ ANNUAL REPORT 2006 5 THE GROUP CHIEF EXECUTIVE’S COMMENTS

“ We have written instructions stating that our advice must always be that which is best for the customer, even if that advice is not the most profi table for the Bank in the short term.”

Handelsbanken Liv has given its customers higher yields than the customer who decides what is regarded as advanced service. And not average for mutually run life insurance companies. On many annual all customers are the same. Some customers are very familiar with ranking lists, Handelsbanken has been right at the top. SPP, which the banking market, while others need considerably more advice. has only been a profi t-distributing company for one year, also gener- This actually has nothing to do with what the customer regards as ated higher than average yields for the mutually run companies. At advanced service on any given occasion. Sometimes, a simple, com- the same time as the policyholders received good yields on their sav- mon transaction, such as transferring money between two accounts ings, SPP delivered a large contribution to the Group’s profi ts and can, for a customer with high demands, suddenly turn into an insur- the fi nancial risks were reduced. mountable task. This is where we come into the picture. By solving However, it is not just the form of the companies that is impor- the problem in a smooth, unbureaucratic manner, we are a highly tant, but also how they work. A commercially run company aiming qualifi ed business partner – in the customer’s eyes. And that is the to make a profi t must be transparent and simple for the customer to most important thing. comprehend. Here, the Bank has helped to set new standards for the If we can deal with these seemingly unglamourous tasks then market. A commercially run company must offer its customers free- and there, we will be the best bank in town. And we’ll be the cus- dom of choice such as the option of transferring their insurance to tomer’s fi rst choice when they want to do some business which is another company. Handelsbanken Liv and SPP have been pioneers really profi table for us – business that often involves expert advisory in this respect, and it should be self-evident that customers are enti- services and asset management. With our everyday service we build tled to transfer their insurance funds. up customer relationships, increase customer satisfaction, and create A further example of Handelsbanken going its own way concerns security for customers in their relationship with the Bank. This is collaboration with estate agents. Handelsbanken has not acquired very diffi cult for our competitors to copy, since it assumes familiarity an estate agent or entered into a central agreement with any fi rm of with and experience of the customer, as well as the staff’s ability to estate agents. This is because our branches decide how they wish to make their own decisions. We create these conditions by consistently market their products and services, and thus centrally issued direc- applying our decentralised way of working. tives are not appropriate. But what we have done is develop e-bud, our electronic property bidding service, (www.e-bud.nu) into an ef- DOMESTIC MARKETS OUTSIDE SWEDEN fi cient and effective means for local collaboration with estate agents Finland, Denmark, Norway and Great Britain – completely in line with the Bank’s basic philosophy. Today, 10% of The strength of our business model becomes, perhaps, even clearer properties sold via estate agents go through e-bud. The Bank collab- abroad than in Sweden. Outside Sweden we could be regarded as an orates locally with almost 800 estate agents, and during 2006, over anonymous bank, with its head offi ce far away in a foreign country. 30,000 bidders – customers or potential customers – made roughly But we are not. Decisions are taken close to the customer outside 85,000 bids on properties. The success of e-bud is one of many rea- Sweden too. In fact, our newly opened branches outside Sweden sons why the Bank’s mortgage operations have performed so well. have nothing else with which to compete, since the Handelsbanken Possibly the prime example of us going our own way is our untir- name is unknown there. The range of products we offer is – at least ing effort to ensure that private customers can open an account, initially – limited, we have few reference customers and we have little pay their bills (by Privatgiro or online) have access to their money experience of the local area. In short, the only factor that can differ- (e.g. the Frikort cards) at no extra charge. An added benefi t of entiate us from our competitors is our ability to satisfy a customer. the Frikort card is that it can be used for point-of-sale purchases. In Norway, our operating profi t for 2006 was up 13% to Handelsbanken is almost alone in making this effort. SEK 965m – our best ever result in that country. Here, too, there was a strong link to customer satisfaction. In 2006, EPSI, which WORLD-CLASS EVERYDAY SERVICE conducts annual customer satisfaction surveys in Norway, named But products and solutions must be combined with world-class servi- Handelsbanken as “the clear winner in the corporate market”. Just ce. The fact that this is one of our main strengths is corroborated by as in Sweden, customers are drawn towards an effi cient bank. In all customer surveys, and in my view, this is also due to our decen- Norway, our cost/income ratio was 44.9% – an effi ciency fi gure that tralised way of working. The high degree of independence that the is the envy of many of our competitors. branches enjoy gives the staff the feeling that the customers of the The Finnish regional bank also raised its operating profi t to branch really are the branch’s own. Customers appreciate being able SEK 447m, compared with SEK 381m in 2005. Among the major to talk directly to the employee who makes the decision, and not banks in Finland, Handelsbanken had the most satisfi ed customers merely to someone who has to ask a central department for approval. – both private and corporate. Satisfi ed customers do more business. I often hear from our branches that a high service level is not always In Finland, a great deal of effort has been put into improving our the same thing as high level banking transactions. It’s actually the range of savings products. We have never sold so many capital-

6 HANDELSBANKEN ■ ANNUAL REPORT 2006 THE GROUP CHIEF EXECUTIVE’S COMMENTS

protected products, and new sales of mutual funds increased in Finland.In Denmark, operating profi t climbed 8% to SEK 456m. At the beginning of the decade, Handelsbanken launched a long-term mortgage loan called a priority loan, and at year-end 2006, volumes exceeded DKK 10bn. Also in Denmark, private customer business was developed, and the Bank had success with sales of capital-pro- tected products.In 2006, our British operations maintained their rapid growth. The Bank opened six new branches in Great Britain, and at year-end we had 26 branches there. More branch managers have been recruited, and these branches will open in the fi rst half of 2007. Business volumes grew very rapidly, with lending increasing by more than 50% to GBP 2.4bn.

HANDELSBANKEN – THE MOST INTERNATIONAL NORDIC BANK Handelsbanken has units – branch offi ces and/or representative offi ces – in 15 countries outside the Nordic region and Great Britain, making us the most international Nordic bank. These operations are branch is SEK 5m. This includes paying for the initial investments, run by the Handelsbanken International business area, which beca- while taking into account the defi cit arising before the branch breaks me an independent unit when Handelsbanken Markets was split into even. This takes on average between 16 and 18 months. two separate units. A vital task for Handelsbanken International will be to increase the number of markets in which the Bank can start WE AIM TO BE EVEN BETTER up and grow organically by running profi table universal banking It must become even simpler to contact the Bank, and it must be- operations through its own branch network. And the Bank will con- come even simpler to do business with us. Last year, we began a tinue to grow internationally – and even more quickly than before. major project to expand our online banking services, and now each In 2006, our operations in the Nordic countries and Great Britain branch’s web page is even more focused on business and customer contributed over SEK 2bn to our operating profi ts. We are continu- service. We started up Handelsbanken Direct, a new service for ing our international drive and will open more branches in Great customers whose fi rst contact with us is via the internet. We must Britain, Finland and Norway, probably around ten in each country always – 24 hours a day, seven days a week – be prepared to do bu- during 2007. There will probably be some in Denmark too, but siness when the customer wants. We will continue to make things not as many. In Germany and Poland we will double the number of simpler, for ourselves and for our customers. During the year, the branches and start universal banking operations. branches submitted 400 suggestions for changes, with the aim of In countries where Handelsbanken has not (yet) established a creating more time to meet customers and do business; 160 of these regional bank, we are still making advances. For example, we have suggestions have already been implemented. This is how Handels- now established an infrastructure for opening more offi ces in Russia banken fi ts together: we are all dependent on each other to achieve through our branches in Moscow and St Petersburg. our common corporate goal – a higher return on equity than the We were the fi rst Nordic bank to start up in Russia, we were the weighted average of other banks on our domestic markets. With fi rst in China, and we were also fi rst on another rapidly growing pride I can say that once again – for the 35th consecutive year – we market – India, where we opened a representative offi ce in Mumbai, have achieved this corporate goal. I am proud of the extraordinary the country’s fi nancial capital. There was a record amount of inter- expertise, versatility and commitment that I encounter every day in est, even before the offi ce had opened for business, above all from my contacts with staff. This is the base from which we have achieved clients in our domestic markets which have, or will be starting up, our corporate goal, and I thank you all. And I am convinced that we operations in India. will continue to achieve it. How? By continuing to be Handelsban- Our model of running a bank on markets outside Sweden works, ken – only a little more so, and in even more locations around the as confi rmed by 300,000 active customers outside Sweden. We are world. much better at starting branches abroad now. We see that their earn- ings grow every year and that the return on equity of the regional Stockholm, February 2007 banks outside Sweden is approaching that of the Swedish branches. Pär Boman Growing organically is cost-effective. The average cost of a new

HANDELSBANKEN ■ ANNUAL REPORT 2006 7 GOALS, METHODS AND OUTCOME

Creating sustainable profi tability

Handelsbanken’s fi nancial goal is to have higher profi tability than other banks. The Bank will achieve this goal by having more satisfi ed customers, while having lower costs than its competitors.

High profi tability

GOAL Return on shareholders’ equity 1973–2006

 Handelsbanken’s overall financial goal is to have higher  return on equity than a weighted average of comparable  listed Nordic and British banks.  GOAL ACHIEVEMENT   Handelsbanken’s return on equity after standard tax was 19.7% for the whole of 2006. Return on equity for a   weighted average of comparable banks was just over 18%.             This means that 2006 was the 35th consecutive year that  Handelsbanken met its overall financial goal.  (ANDELSBANKEN /THER3WEDISHBANKS

Most satisfi ed customers

METHOD Customer satisfaction index, private customers in Sweden

The Bank aims to achieve this goal by having the most )NDEX satisfied customers. The quality of the Handelsbanken  Group’s services must therefore meet the expectations of  demanding customers.   OUTCOME  Once again in 2006, Handelsbanken had the most satisfied  customers in Sweden – both private and corporate – when  compared with the four largest Swedish banks. An overall  weighting of the results of surveys in Denmark, Finland and  Norway showed that Handelsbanken had the most satisfied                   customers in the Nordic region. (ANDELSBANKEN 3%" .ORDEAAND3WEDBANK

8 HANDELSBANKEN ■ ANNUAL REPORT 2006 GOALS, METHODS AND OUTCOME

Most effective bank

METHOD Cost-effectiveness Cost-effectiveness should be higher than in comparable #OSTSINCOMEEXCLLOANLOSSES banks.   OUTCOME  Costs as a proportion of income were 42%. Thus, as in pre-  vious years, Handelsbanken was the listed Nordic bank with  the highest cost-effectiveness level.             

(ANDELSBANKEN !VERAGEn.ORDICBANKSEXCL(ANDELSBANKEN

Lowest loan losses

METHOD Loan losses as a percentage of lending

Profitability is always more important than volumes. This  means that when granting credits, the credit quality must  never be disregarded in order to achieve higher volume.   OUTCOME  Handelsbanken had no loan losses – it had net recoveries.  The loan loss ratio was –0.01%. The corresponding figure for  other Swedish banks was –0.05%.  

         

(ANDELSBANKEN /THER3WEDISHBANKS

HANDELSBANKEN ■ ANNUAL REPORT 2006 9 ECONOMIC OUTLOOK

2006 – another strong year for the global economy

Handelsbanken’s chief economist Jan Häggström sums up the past year.

How would you sum up the trends in 2006? stronger GDP growth than Finland and Sweden in 2006. The Nor- “2006 was another strong year for the global economy in many dic countries were buoyed by low interest rates and robust govern- respects. Company earnings reached record levels, and several stock ment fi nances. This also provided stimulus for fi scal policy.” exchange indices reached all-time highs. This was against a backdrop “A normalisation of central banks’ key rates began in the euro- of continued strong growth in the global economy. In 2006, global zone, as well as in Norway and Sweden. Despite this, lending to GDP growth was at roughly the same level as the year before, i.e. households and companies continued to show double-digit growth. among the highest of the past 20 years. However, the global pattern House prices in the Nordic countries rose sharply, and price in- of growth began to change. The US economy showed clear signs creases in the UK picked up again. The historically low interest rates of the cooling effect that recent years’ interest rate hikes have had. meant that households experienced few credit problems in 2006, House prices stopped rising, and activity on the housing market was despite the high debt levels.” more subdued in terms of sales and new construction. During the autumn, industry also began to be affected by the weak housing At the beginning of 2006, you were one of the few analysts who construction market.” predicted that the Riksbank’s repo rate would double during the year, from 1.50% on January 1 to 3.00% at the end of 2006. And the trend in Europe? This turned out to be the case. What is your forecast for 2007? “Europe, on the other hand, experienced a surprisingly sharp up- “Many factors suggest that there is a fair way to go before key rates swing, driven by rising corporate earnings and investments. The in Norway and Sweden reach a neutral level, and that 2007 will also long-standing decline in the German construction sector was turned see rapid credit growth and rising house prices. This also means that around. At the same time, emerging markets in Asia and Eastern the level of household debt in the Nordic countries will rise from Europe were the locomotive for many European industrial compa- already high levels, except possibly in Denmark, where the peak may nies, particularly Nordic players.” have been reached.”

And what about the trends on the corporate side? “ In Western Europe, only the “The combination of companies’ strong return on capital, bond yields remaining low, and small credit risk premiums created favour- Republic of Ireland showed able conditions for acquisition calculations. Thus, 2006 became stronger GDP growth than Finland another record year for corporate acquisitions. A large proportion of these were carried out in Europe, with the Nordic region receiv- and Sweden.” ing its due share. These transactions were a vital driving force for growth in corporate loans, counteracting the tendency for compa- nies to use their strong cash fl ows to reduce the debt side of their How are Sweden and the other Nordic countries being affected by balance sheets. The corporate sector enters 2007 with key ratios still increasing globalisation?“The structure of industry in the Nordic looking good, which indicates that activity levels in mergers and ac- region is particularly well suited to fulfi l the increasing demand in quisitions will remain high.” emerging markets, with its focus on infrastructural investments, transport and raw materials. This is one reason why the Nordic region as a whole has grown much more rapidly than the OECD average. In Western Europe, only the Republic of Ireland showed

10 HANDELSBANKEN ■ ANNUAL REPORT 2006 THE MARKET

Handelsbanken – a major player in the fi nancial markets

Handelsbanken took market share in a growing savings market.

MARKETS by 14% per year. In 2006, it grew by a further 13% to SEK 1,241bn Handelsbanken offers a full range of fi nancial products and services (1,102). Competition remained intense. Handelsbanken had a 27% in Sweden, Denmark, Finland, Norway and since 2002, in Great share of the market in new lending which was the same as its share Britain. The Bank regards these countries as domestic markets. of total lending volume (adjusted for securitisation). The Bank had Sweden is the largest fi nancial market in the Nordic region, and 24% of the total market for household lending, that is mortgage Handelsbanken’s position here is strong. Seventy-fi ve percent of loans and bank loans. Handelsbanken’s income is generated in Sweden. The other Nordic During the year, lending to non-fi nancial companies in Swe- countries and Great Britain accounted for 19% of Group income, as den was 7% higher at the end of the year than the beginning. compared with 16% two years ago. Handelsbanken was the largest player on the corporate market, with a 30% share. MARKET TRENDS The fi nancial market can be divided into various segments. The THE SAVINGS MARKET most important of these are the credit market and the savings mar- In the past fi ve years, Swedish households’ fi nancial savings (exclud- ket. Handelsbanken has no volume goals, either in absolute fi gures ing directly-owned shares) have increased by an average of 9% per or as market share; instead, it always gives priority to profi tability year. As at 31 December 2006, they amounted to SEK 4,171bn. over volumes. Handelsbanken had an 11% share of the total market, and has an 18% share of new savings since 1 January 2000. Thus, over the Lending course of this decade, Handelsbanken has increased its share of the The Swedish mortgage market continued to grow. Between 2001 overall market, and in terms of new savings, Handelsbanken has a and 2005, the household mortgage lending market in Sweden grew larger share than any of its competitors.

The Swedish savings market, 31 December 2006 The Swedish market for loans to the public, 31 December 2006

Bonds SEK 144bn Mutual funds Total lending to (incl PPM and households, SEK 1,635bn Bank deposits unit-linked insurance) SEK 680bn SEK 1,775bn

Total lending to Traditional insurance non-financial companies, SEK 1,572bn SEB 1,227bn

OF WHICH: OF WHICH:

Handelsbanken’s market shares Handelsbanken’s market shares

Bonds 19 % Mutual funds (incl PPM and Household lending, 24% unit-linked insurance) Bank deposits 16 % 12 %

Traditional insurance 7 % Corporate lending, 30 %

Source: SEB Sparbarometern Source: Statistics Sweden, refers to total lending, i.e. mortgages and bank loans

HANDELSBANKEN ■ ANNUAL REPORT 2006 11 OUR CUSTOMERS

Handelsbanken has the highest customer satisfaction

Handelsbanken is a service company that focuses on its customers – not on individual products.

Handelsbanken’s organisation and methods of work are based on authorised in the investment and insurance fi eld, so that they can customers’ needs and on the branches’ responsibility for individual meet the requirements of customers and also their own and external customers – not on the central units’ responsibility for product areas competence demands. In addition, more than 3,300 employees of or market segments. The local branch is responsible for the profi ta- the Handelsbanken Group are authorised in accordance with the bility of the Group’s overall exchange of business with the customer. Insurance Mediation Act. The branch is responsible for providing the customer with expert Handelsbanken’s fi nancial advisory services are based on the indi- and co-ordinated services from all units in the Handelsbanken vidual customer’s needs. The adviser obtains an overall picture of the Group. customer’s circumstances and fi nancial situation, and the Bank can then make an investment proposal which is individually adapted to the CUSTOMER SATISFACTION customer’s needs, investment horizon and risk level. As in other areas, Handelsbanken aims to have the most satisfi ed customers of the customers themselves are responsible for the actual decision. Nordic banks. The Bank therefore attaches great importance to customer satisfaction surveys and acts on the results. In Sweden, CUSTOMER COMPLAINTS independent surveys of customer satisfaction in the banking fi eld Dealing with customer complaints is one way of focusing on rou- have been performed every year since 1989. They are carried out by tines and services that do not function as they should. The Bank’s Svenskt Kvalitetsindex (Swedish Quality Index). The survey weighs website informs customers how to draw the Bank’s attention to any together a number of variables such as image, expectations, prod- problems. Customers should fi rst talk to their local branch, where uct and service quality and value for money. Originally, the survey the problem will normally be solved directly. only covered the large nationwide banks, and compared with these, The Bank also has a designated complaints manager to whom Handelsbanken has been in top position every year for private cus- customers can turn if they wish to have their case reconsidered. The tomers and every year but one for corporate customers. This year’s Bank’s management is kept regularly informed about complaints cases. survey reached the same conclusion. All branch employees, both in Sweden and abroad, attend annual Corresponding surveys in Denmark, Finland and Norway showed training courses on complaints management. that Handelsbanken has the highest customer satisfaction levels in For several years, Handelsbanken has had the lowest propor- the Nordic region. Among private customers, Handelsbanken had tion of complaints submitted to the National Board for Consumer more satisfi ed customers than the sector average in all countries, Complaints of all the major banks. Once again in 2006, of the four showing results which are well above those of its main competitors. major Swedish banks, Handelsbanken was the one with the lowest proportion of complaints in relation to its business volume (house- RESPONSIBILITY FOR FINANCIAL ADVICE hold deposits). Many of Handelsbanken’s employees have long experience and excel- lent knowledge of the investment area. In Sweden, the Bank has 913 Number of active customers Other Nordics investment advisers who are licensed by the Swedish Security Deal- and Great ers’ Association. Thousands Sweden Britain Total The Swedish legislation on consumer fi nancial advice stipulates Active private customers 1 823 253 2 076 that the Bank must be able to show that its employees who provide Active corporate customers 149 46 195 advice on fi nancial instruments have relevant knowledge appropriate Definition of an active customer: A customer who makes at least one transaction to their work tasks. Handelsbanken offers a licensing course which a month on their own account, has a balance of at least SEK 1,000 at the end of complies with these requirements. Over 4,200 employees, more the month, has a loan with the Handelsbanken Group or has mutual fund savings of at least SEK 1,000. Customers who appear in several categories are only counted than 3,200 of them in the branch operations, have completed the once. course and are now licensed. Employees are regularly trained and

Customer satisfaction, Private customers Customer satisfaction, Corporate customers

Index Index 80 Handelsbanken 80 Handelsbanken SEB, Nordea and Swedbank SEB, Nordea and Swedbank 75 75

70 70

65 65

60 60

55 55

50 91 93 95 97 00 02 04 06 50 -91 -93 -95 -97 -00 -02 -04 -06

12 HANDELSBANKEN ■ ANNUAL REPORT 2006 OUR EMPLOYEES

Committed employees make for satisfi ed customers

Handelsbanken aims to recruit the best people, develop them and keep them within the Group. The Bank has over 10,000 employees active in 20 countries.

RECRUITMENT INDIVIDUAL SALARY DIALOGUE REVIEWS Handelsbanken sees each recruitment as a vital investment. The Individual salary reviews are an expression of the Bank’s aim to fur- Bank aims to recruit the best people, develop them and keep them ther decentralise responsibility and powers. All employees in Sweden within the Group. “Best” means people who have the personal qual- have individual salary reviews with their immediate superior with no ities for further development at the Bank. They should also have an central directives concerning defi ned salary levels. The reviews are education which is broad and appropriate for the Bank’s operations, based on the individual action plans and follow-up of these plans. usually at university level. To attract potential employees when they are students, the Bank has regular local contact with students and EQUALITY universities. The Bank aims to meet its need for employees at various Handelsbanken’s equal opportunity policy states that equal condi- levels through internal recruitment and promotion. Some 96% of all tions must apply to men and women regarding career development managers in Sweden were recruited internally. The corresponding within the Handelsbanken Group. One long-term goal is that the fi gure for the whole Group was 91%, including the markets where proportion of women and men who are managers will be the same the Bank is relatively new. One of the most important tasks for as the overall gender distribution at the Bank. At the year-end, 36% managers is to stimulate employees to develop their career within (35) of managers at the Handelsbanken Group were women. The the Bank. Internal mobility is highly valued both within and across proportion of women among the total number of employees was national borders. External employee turnover was 5% (3). 54% (52). To make it easier for both men and women to combine a career COMPETENCE DEVELOPMENT with parenthood, the Bank offers household services to all employ- Every year, all employees have a planned and structured develop- ees with children under the age of eight. In Sweden, the Bank also ment review with their immediate superior. Based on the unit’s busi- compensates employees on parental leave with 80% of that part of ness/operational plan, they discuss the employee’s skills and compe- their salary which is not compensated by national insurance. Em- tence, how he or she should contribute to the goals of the operation ployees who take parental leave have the same right to salary devel- and any skills development needed. The dialogue results in an action opment as other employees. plan describing how the individual goals are to be achieved. The dialogue also includes a discussion of the next step in the employ- WORKING ENVIRONMENT AND HEALTH PROMOTION ee’s development. The action plan is regularly followed up by the Handelsbanken has various types of programmes for health promo- manager and the employee. Handelsbanken defi nes competence as tion among its employees. The Bank’s recreation programme is a the ability to acquire, use, develop and pool knowledge, skills and vital ingredient in caring for its employees and their health. The pur- experience. All employees are required to take responsibility for their pose of this is to make the employees active, mainly through health own competence development and for sharing their competence promotion measures. It is considered very important to reach out to with others. The most important means of improving professional all employees and to increase the feeling of community at the Bank. skills is, and always has been, learning from daily work. The Bank’s overall goal in its working environment efforts is for the

Average number of employees Age and gender distribution 2006

4HOUSANDS 

 Men Women 65–  60–64 55–59  50–54

 45–49 40–44  35–39

 30–34      25–29 3WEDEN $ENMARK &INLAND –24 .ORWAY 'REAT"RITAIN /THERCOUNTRIES 1,200 1,000 800 600 400 200 0 200 400 600 800 1,000 1,200

HANDELSBANKEN ■ ANNUAL REPORT 2006 13 OUR EMPLOYEES

employees to enjoy good health, to develop on a personal level and shareholders. All employees receive an equal part of the allocated to function in an optimal way. This is a long-term goal based on sev- amount and the scheme includes all employees in the Nordic coun- eral factors that will help to keep the employees healthy. Examples of tries and since 2004, also employees in Great Britain. Disbursement this are the importance of keeping an appropriate balance between can be made when the employee reaches the age of 60. work and leisure time, having the right skills and competence to In spring 2006, the board approved the allocation for the 2005 perform tasks and manage various work-related situations, clear and fi nancial year of SEK 22,000 (35,000) for each full-time employee honest communication and showing individuals trust and respect. in Sweden. Staff who have worked full-time since the profi t-sharing In line with the Bank’s decentralised way of operating, work tasks scheme was introduced in 1973, have received over SEK 855,000 in which may imply responsibility for the working environment are del- allocations. Through share price increases, however, mainly in the egated to managers and supervisors at workplace level. The regional Handelsbanken share, the value of the allocations has risen to over banks, subsidiaries and central units have working environment SEK 8m. The corresponding value for a person fi rst employed in committees, and at central level, there is also a working environment 1990, was almost SEK 2.4m at the year-end. One of the fundamen- and safety committee. tal concepts in managing the foundation is that a considerable part of the funds are invested in shares in Handelsbanken. Oktogonen is OKTOGONEN – THE BANK’S PROFIT-SHARING SYSTEM one of the Bank’s largest shareholders. The board of the Oktogonen In order to achieve its overall goal – higher profi tability than compa- Foundation is appointed by the local organisation of the Union of rable banks – Handelsbanken is dependent on high-quality perform- Finance Sector Employees. ance from its employees. It is therefore reasonable that the employees receive part of any extra profi ts. Every year but one since 1973, the Bank has allocated part of its profi t to a profi t-sharing scheme for its employees. The funds are managed by the Oktogonen Foundation. A condition for making an allocation is that the Handelsbanken Group achieves its goal of higher return on shareholders’ equity af- ter standard tax than a weighted average of other listed Nordic and British banks. One third of the extra profi ts can then be allocated to the employees. The amount is limited to 15% of the dividends to

Business plan process The Wheel depicts the interplay between the Bank’s operations and the employee’s career development as a continual process in Business plan order to achieve Handelsbanken’s overall objectives. Every year, each unit at the Bank makes a business plan. Based on this, all employees have a planned development review (PLUS) Salary Customer with their immediate superior. The discussion results in an indi- dialogue PLUS vidual action plan presenting the employee’s goals and possible review review needs for support and skills development. The action plan is then followed up and forms the basis of the individual salary dialogue review between employee and manager.

Individual follow-up Action plan

14 HANDELSBANKEN ■ ANNUAL REPORT 2006 BUSINESS CONCEPT, WORKING METHODS AND ORGANISATION

Overall customer responsibility at one place in the Handelsbanken Group

Handelsbanken is a universal bank with strongly decentralised business operations.

BUSINESS CONCEPT The Bank does not make central marketing plans, nor does it con- Handelsbanken is a universal bank and its business concept is to trol the branches’ marketing activities at the central level by giving offer private and corporate customers in the Nordic countries and priority to certain customer categories or product areas. For many Great Britain a complete range of fi nancial services, based on the years, Handelsbanken has consistently and successfully applied and customer’s needs. A basic concept is that for every customer – private developed this basic concept. and corporate – there is overall responsibility at one place in the Handelsbanken Group. The overall customer responsibility is at the ORGANISATION local branch of the Bank in the locations where the customer oper- Handelsbanken’s organisation aims at promoting the interplay be- ates. tween branches, support functions, specialists and central units with business responsibility. The Bank’s organisation should be viewed as WORKING METHODS a single unit focusing on the individual customer and with the local The business operations of the Handelsbanken Group are strongly branch offi ce at the forefront. decentralised. The Bank’s organisation and work methods are based on the branches’ responsibility for individual customers and not on the central units’ responsibility for product areas or market seg- ments. The most important means of control are a deep-seated cor- porate culture, and an effective fi nancial control system.

Central 6 central 11 regional 615 branches CUSTOMER departments business areas head offices “Always responsible for the customer”

HANDELSBANKEN ■ ANNUAL REPORT 2006 15 ADMINISTRATION REPORT ■ REVIEW OF OPERATIONS

Highest profi t ever

Operating profi t rose by 10% to SEK 17.2bn (15.7). The Bank’s insurance operations boosted their profi ts by 356% to SEK 2.6bn (0.6), of which SPP contributed SEK 2.1bn.

Operating profi t increased by 10% to SEK 17,164m (15,650). mainly consist of equities and interest-bearing assets. The change Return on shareholders’ equity increased to 20.9% (17.9). in the deferred capital contribution was SEK 1,045m. Income rose by 12% to SEK 29,559m (26,323). Expenses were Trading operations performed well, and net fi nancial items at SEK 12,451m (10,938). Starting on 1 January 2006, SPP is Capital Markets increased by 43% to SEK 1,378m (964). In par- included in the Group’s consolidated accounts, and thus affects ticular, currency trading and structured products generated higher both expenses and income. The cost/income ratio was 42.1% income. (41.6). Earnings per share were SEK 20.41 (16.98). REDUCED RISKS IN SPP INCREASING BUSINESS VOLUMES BUT SQUEEZED SPP’s stated goal has been to reduce the effects on the company’s LENDING MARGINS results of interest rate fl uctuations. For this reason, in the second Average lending volumes in the Group rose by 13% and deposits by quarter, SPP started to conduct transactions with the purpose of 14%. Branch offi ce operations outside Sweden continued their rapid hedging against changes in market value with respect to the deferred growth: lending rose by 25% and deposits by 22%. capital contribution. The rapid growth in lending volumes could not compensate for Value-at-Risk (VaR), which is the most common measurement of poorer lending margins, particularly as regards mortgage loans to aggregated risks, was SEK 1,276m before SPP started to reduce its households. Net interest income was positively affected by higher risks and at the end of 2006, the amount was SEK 259m. deposit margins but in total, net interest income in the Group fell This means that with a confi dence level of 99%, the maxi- by SEK 118m to SEK 14,972m (15,090). Net interest income in mum possible loss in an individual month has been reduced from the branch offi ce operations outside Sweden increased by 17% to SEK 1.3bn to SEK 0.3bn. VaR can be complemented by simulating SEK 2,951m (2,525). Net interest income was lower in the Swed- the effect of an interest rate shock. In the case of a parallel shift in ish branch offi ce operations at SEK 10,722m (11,511). Net interest all interest rates in all currencies of 100bp, SPP’s earnings would be income includes the impact of previous decisions concerning repur- affected by SEK 30m. Finally, it is also possible to view the capital chases of bonds, the funding of Stadshypotek’s mortgage loans and requirement in relation to the Swedish Financial Supervisory Au- other aspects of the operations which cannot be directly infl uenced thority’s so-called traffi c light model. At the end of the year, only by the branches. SEK 1,078m, i.e. less than 10% of the company’s capital base, was required to obtain a green light in the traffi c light model. At the end RECORD HIGH NET FEE AND COMMISSION INCOME of Q1 2006, the corresponding fi gure was SEK 4,196m. Net fee and commission income increased by 31% to SEK 9,232m (7,055). This high rate of increase was mainly due to higher insur- SPP AND PERFORMANCE-RELATED REMUNERATION ance commissions and equity-related commissions. Insurance com- ACCOUNTED FOR MOST OF THE INCREASE IN COSTS missions totalled SEK 2,338m (937). SPP accounted for SEK 1,316m Expenses were SEK 12,451m (10,938), an increase of 14%. The of this amount. The positive yield split was SEK 1,023m, with SPP’s underlying increase in expenses was just under 2.6%, excluding SPP, share being SEK 752m and Handelsbanken Liv’s SEK 271m (263). performance-related remuneration and cost increases in operations Equity-related commissions – comprising equity commissions, equi- outside Sweden. SPP’s expenses, which were not included in the ty-related income in mutual fund and custody operations, corporate Bank in the previous year, were SEK 734m, or almost 6.7 percent- fi nance and structured products – were SEK 4,151m (3,308). This age points of the cost increase. Performance-related remuneration was 25% higher, where the increase for structured products was 72% rose by SEK 169m to SEK 589m, corresponding to 1.5 percentage to SEK 279m (162). Total commissions from mutual fund manage- points of the increase. Although the Bank opened more branches ment rose by 26% to SEK 1,548m (1,232). in 2006 than in the previous year, expenses for new branches were unchanged. The growth in operations outside Sweden meant that CONSOLIDATION OF SPP AFFECTED NET FINANCIAL expenses, excluding performance-related remuneration, went up by ITEMS AT FAIR VALUE SEK 327m, corresponding to 3.0 percentage points of the cost in- Net gains/losses on fi nancial items at fair value were SEK 4,261m crease. Part of this is due to an increase in the number of employees (3,459), with most of the increase due to the effects of SPP. At the outside Sweden by 145. The number of employees increased and time SPP became a profi t-distributing company on 1 January 2006, totalled 10,320 (9,922) at the year-end. certain insurance contracts were underfunded since the market value of the assets did not cover the insurance liability. This underfunding NET RECOVERIES ON LOAN LOSSES was reported in liabilities as a deferred capital contribution. When Recoveries exceeded loan losses and totalled SEK 55m (261). Gross calculating the insurance liability, this is discounted by using a long- losses continued to decline. The loan loss ratio was –0.01 (–0.03). term market yield as the discount rate and fl uctuations in this rate Net bad debts decreased to SEK 876m (1,256), equivalent to 0.07% affect the amount of the liability. The deferred capital contribution (0.12) of lending. is also affected by changes in the market value of the assets which

16 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ REVIEW OF OPERATIONS

CAPITAL RATIO AND RATING The Bank’s capital ratio was 9.5% (11.6) and the Tier 1 capital ratio was 6.8%. The reason for the decrease in the capital ratio between 2005 and 2006 is that at the end of 2005, the Bank raised a loan with the purpose of contributing capital to SPP in connection with converting it into a profi t-distributing company. Thus the capital ratio was unusually high at the end of 2005. Handelsbanken’s rating was unchanged with all three rating agencies which rate the Bank.

Rating as at 31 December 2006 Long-term Short-term

Moody´s Aa1 P-1 Standard & Poor´s AA- A-1+ Fitch AA- F1+

BUYBACK AND CANCELLATION OF SHARES At the 2006 annual general meeting, a resolution was passed to can- cel 20.6 million shares which the Bank had previously repurchased. In connection with the cancellation, the nominal value of the share was increased from SEK 4.30 to SEK 4.45. The AGM also resolved to authorise the Board to repurchase a maximum of 40 million shares during the period until the 2007 AGM. During the second and third quarters, the Bank repurchased 14.8 million shares. The board is requesting the 2007 AGM to cancel the repurchased shares and any shares repurchased before the 2007 AGM, and also to authorise the board to repurchase a maximum of 40 million shares during the period up to the 2008 AGM. The purpose of this is to adjust the capital structure.

BRANCH OPERATIONS OUTSIDE SWEDEN EARNED OVER SEK 2BN Branch offi ce operations outside Sweden boosted their total profi ts by SEK 205m to SEK 2,018m, an increase of more than 11%. This increase took place at the same time as 14 (9) new branches were opened. Income rose by SEK 571m or more than 14%, while the increase in expenses was slightly less. However, the Bank opened more branches than the 14 started in Denmark, Finland, Norway and Great Britain. Three new branches were opened in Sweden, two in Poland, and also two representa- tive offi ces, one in Spain and one in Mumbai, India. Thus the Bank started up operations in 21 new locations during the year. The rate of expansion will increase. Some 30–40 branches will be opened during 2007 with the focus on Great Britain, Finland and Norway. New markets will be opened up for universal banking operations.

HANDELSBANKEN ■ ANNUAL REPORT 2006 17 ADMINISTRATION REPORT ■ KEY FIGURES AND QUARTERLY PERFORMANCE

Key fi gures and quarterly performance

Key figures for the Handelsbanken Group 2006 2005 2004 2003 2002

Profit before loan losses, SEK m 17 108 15 385 13 718 11 843 10 781 Loan losses/recoveries, SEK m 55 261 -167 -492 -392 Impairment losses/reversals on financial non-current assets, SEK m 199 -199 Operating profit, SEK m 17 164 15 650 13 553 11 550 10 190 Profit for the year, SEK m 13 128 11 354 9 860 8 116 7 282 Total assets, SEK m 1 790 008 1 582 907 1 316 789 1 260 454 1 277 514 Shareholders’ equity, SEK m 66 226 65 758 61 372 56 835 52 192 Return on equity, % 20.9 17.9 16.6 14.9 14.6 Return on equity after standard tax, % 19.7 17.8 16.4 15.3 14.6 Return on total assets, % 0.99 1.08 1.05 0.90 0.83 Cost/income ratio, % 42.1 41.6 42.8 46.9 50.2 Loan loss ratio, % -0.01 -0.03 0.02 0.06 0.05 Bad debt reserve ratio, % 69.5 65.9 53.4 51.4 60.9 Proportion of bad debts, % 0.07 0.12 0.21 0.28 0.23 Capital ratio, % 9.5 11.6 10.0 10.2 9.3 Tier 1 ratio, % 6.8 7.6 7.6 7.3 6.4 Average number of employees 10 163 9 395 9 150 9 258 9 752 No. of branches in Sweden 457 455 453 453 456 No. of branches in Nordic countries and Great Britain 141 128 120 101 96 No. of branches in other countries 17 14 11 11 11

For definitions, see inside back cover. 2004 has been restated in accordance with IFRS. For 2002 and 2003, the figures are presented according to the previous format.

Quarterly performance for the Handelsbanken Group

SEK m 2006:4 2006:3 2006:2 2006:1 2005:4

Interest income 14 672 12 871 11 743 10 847 13 551 Interest expense -10 946 -9 175 -7 977 -7 063 -9 758 Net interest income 3 726 3 696 3 766 3 784 3 793 Fee and commission income 3 073 2 417 2 379 2 652 2 284 Fee and commission expense -324 -345 -310 -310 -305 Net fee and commission income 2 749 2 072 2 069 2 342 1 979 Net gains/losses on financial items at fair value 1 607 -247 1 064 1 837 1 517 Risk result – insurance 187 38 297 49 38 Other dividend income 9 2 149 33 0 Share of profit of associated companies 11 21 7 66 4 Other income 58 51 38 78 81 Total income 8 347 5 633 7 390 8 189 7 412

Administrative expenses Staff costs -1 988 -1 543 -2 142 -2 041 -1 775 Other expenses -1 131 -929 -1 052 -1 068 -995 Depreciation, amortisation and impairments of property, equipment and intangible assets -141 -137 -136 -143 -70 Total expenses -3 260 -2 609 -3 330 -3 252 -2 840

Profit before loan losses 5 087 3 024 4 060 4 937 4 572

Loan losses/recoveries -55 -22 53 79 37 Gains/losses on disposal of property, equipment and intangible assets 00100 Operating profit 5 032 3 002 4 114 5 016 4 609

Taxes -1 358 -887 -904 -887 -1 289 Profit for the period 3 674 2 115 3 210 4 129 3 320

Attributable to Ordinary shareholders 3 674 2 115 3 210 4 129 3 320 Minority interest -----

Earnings per share * 5.79 3.31 4.97 6.32 4.98

* No dilution.

18 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ SHARE AND SHAREHOLDERS

The Handelsbanken share

Handelsbanken’s higher profi tability has benefi ted shareholders through greater growth in dividends than the average for other listed Nordic banks. Handelsbanken’s share was fi rst listed on the Stockholm stock exchange in 1873, and is the share that has been listed longest on the Swedish stock market.

THE HANDELSBANKEN SHARE DIVIDEND Handelsbanken’s share is listed on the Nordic stock exchange in Handelsbanken’s policy is that the dividend should be competitive Stockholm and on the Nordic Large Cap list. One trading unit is in relation to other listed Nordic bank shares. For 2006, the board equivalent to 100 shares. The share capital amounts to SEK 2,888m, recommends a dividend of SEK 8.00 (7.00), an increase of 14%, divided over 649 million shares. Each share thus represents corresponding to a payout ratio of 39% (41). The board proposes SEK 4.45 of the share capital. that the record day for dividend be 27 April 2007, implying that the There are two classes of shares: class A and class B. Of the total share will be traded ex-dividend from 25 April 2007. number of outstanding shares, 98% are class A. If the annual general meeting resolves in accordance with the board’s proposal, this will mean that Handelsbanken’s dividend will VOTING RIGHTS have increased by 78% over the past fi ve years. The corresponding Class A shares each carry one vote, while class B shares have one- rate of increase for comparable Nordic banks is 68%. tenth of a vote each. At the annual general meeting, no shareholder is allowed a greater voting power than 10% of the total number of SHARE PRICE PERFORMANCE votes in the Bank. As at 31 December 2006, Handelsbanken’s market capitalisation was SEK 131bn (129). OWNERSHIP STRUCTURE The Swedish stock market grew by 24% during the year. The Handelsbanken has approximately 100,000 shareholders. As at 31 OMX Bank Index climbed by 21%. The price of Handelsbanken’s December 2006, most of these, or around 60% of the total number class A share rose by 5%. The total yield, including dividends paid, of shareholders, owned fewer than 500 shares. The 10% of sharehol- was 9%. ders (approx.) whose holdings exceeded 2,500 shares each, together Over the past fi ve years, Handelsbanken’s share price has climbed held just over 90% of the share capital. The two largest owners, by 34%, while the Stockholm stock exchange as a whole has grown Industrivärden and the Oktogonen Foundation, each owned just by 57% and the Bank Index has increased by 82%. over 10% of the shares. As at 31 December 2006, roughly 50% of the outstanding shares The largest Swedish shareholders were owned by large Swedish institutions. International investors % of % of as at 31 December 2006 votes capital owned some 28% (25). Industrivärden 10.7 10.5 REPURCHASING OF SHARES Oktogonen Foundation 10.4 10.2 For a company, repurchasing its own shares is a way of transferring Alecta 5.3 5.2 capital to shareholders. It also allows the company to adjust its capi- AMF and funds 2.6 2.6 Swedbank Robur funds 2.6 2.5 tal structure continuously throughout the year. The latter factor is Handelsbanken’s funds incl. XACT 1.9 1.8 particularly important for a bank whose fi nancial objective is higher SEB funds 1.8 1.8 return on shareholders’ equity. Livförsäkrings AB Skandia 1.7 1.7 The scope and size of the buyback depends on the Bank’s fi nan- AFA Försäkring 1.6 1.6 cial position, its net earnings trend, investments and credit demand. Lundbergs etc. 1.6 1.6 At the annual general meeting on 25 April 2006, it was resolved 1st National Swedish Pension Fund 1.1 1.0 to cancel the 20.6 million shares that the Bank had repurchased 4th National Swedish Pension Fund 1.0 1.0 since the 2005 AGM. At the same time, the Bank’s board received Nordea funds 1.0 0.9 a mandate to repurchase 40 million shares during the period until Folksam/KPA/Förenade Liv 0.9 0.9 the 2007 AGM. The buybacks were begun on 26 April 2006, and 2nd National Swedish Pension Fund 0.9 0.9 by the end of the year, 14.8 million shares had been repurchased. Since 2000, the Bank has bought back 80.5 million shares (net), which has led to capital totalling SEK 13.3bn being transferred to Handelsbanken’s shareholders.

HANDELSBANKEN ■ ANNUAL REPORT 2006 19 ADMINISTRATION REPORT ■ SHARE AND SHAREHOLDERS

Market capitalisation 1997–2006 Share price performance 1997–2006

SEK bn Index 140 350

120 300

100 250

80 200

60 150

40 100 ■ SHB A 20 50 ■ AFGX Bank & Insurance ■ AFGX 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Key figures 2006 2005 2004 2003 2002

Earnings per share, SEK 20.41 16.98 14.55 11.70 10.50 Dividend per share, SEK 8.00* 7.00 6.00 5.25 4.75 Dividend growth, % 14.3* 16.7 14.3 10.5 5.6 Adjusted shareholders’ equity per share, SEK 104.27 100.23 92.30 82.61 75.48 Price of class A share, 31 December, SEK 207.00 197.00 173.00 147.00 116.00 Average daily turnover on Stockholm stock exchange Class A, number of shares 3 180 486 2 573 108 2 550 130 2 663 856 2 488 517 Class B, number of shares 41 024 59 610 154 003 57 964 52 986 Highest/lowest price paid, class A shares, SEK 240.0/173.0 199.5/156.5 174.5/136.5 148.5/103.5 162.5/97 Dividend yield, % 3.9* 3.6 3.5 3.6 4.1 P/E ratio 10.1 11.6 11.9 12.6 11.0 Stock exchange price/equity, % 199 197 187 178 154

* Dividend as recommended by the board. In all material respects, the figures have been adjusted to take account of current accounting policies and definitions. For definitions, see inside back cover.

Shares per shareholder 31 December Shareholdings

No. in thousands % of Number of Class A Class B share % of Number of shares shareholders shares shares capital votes

1–500 shares 59 058 8 560 1 828 1.6 1.4 501–2 500 shares 28 236 29 386 3 379 5.0 4.7 2 501–25 000 shares 9 373 50 979 4 226 8.5 8.0 25 001–250 000 shares 617 44 997 1 034 7.1 7.1 250 001– shares 221 488 537 1 283 75.5 76.5 Shares repurchased by Handelsbanken 14 517 306 2.3 2.3 Total 97 505 636 976 12 056 100.0 100.0

Shares divided into share classes Average 31 December prices/ % of % of repurchased Share Share class No. capital votes amount capital

Class A 636 976 319 98.14 99.81 2 834 544 620 Class B 12 055 943 1.86 0.19 53 648 946 649 032 262 100.00 100.00 2 888 193 566 Repurchased during the year Class A 14 517 300 2.23 2.28 at 190.63 64 601 985 Class B 305 500 0.05 0.00 at 206.56 1 359 475 14 822 800 2.28 2.28 2 830 475 672 65 961 460 After repurchases Class A 622 459 019 98.15 99.81 2 769 942 635 Class B 11 750 443 1.85 0.19 52 289 471 Total after repurchases 634 209 462 100.00 100.00 2 822 232 106

As at 13 June 2006, 12,972,900 Class A shares and 7,636,300 Class B shares were cancelled. The quotient value of the shares was simultaneously increased from SEK 4.30 to 4.45 through a bonus issue. During the year, 14,517,300 Class A shares and 305,500 class B shares were repurchased. The average number of outstanding shares in 2006 was 643,284,311.

20 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ SEGMENT INFORMATION

Segment information

Segment information Branch Asset Pensions & Other Total Total SEK m operations Markets Management Insurance operations Eliminations 2006 2005 Change %

Net interest income 14 324 572 168 139 -216 -15 14 972 15 090 -1 Net fee and commission income 4 174 1 728 1 193 2 304 -167 9 232 7 055 31 Net gains/losses on financial items at fair value 1 206 1 422 33 907 693 4 261 3 459 23 Risk result - insurance 571 571 194 194 Other income 391 839 90 153 3 526 -4 476 523 525 0 Total income 20 095 4 561 1 484 4 074 3 836 -4 491 29 559 26 323 12

Of which internal -8 841 9 634 -240 -262 4 200 4 491 3 890 15

Administrative expenses -8 241 -3 244 -677 -1 297 -2 926 4 491 -11 894 -10 425 14 Depreciation, amortisation and impairments of property, equipment and intangible assets -153 -21 -2 -199 -182 -557 -513 9 Total expenses -8 394 -3 265 -679 -1 496 -3 108 4 491 -12 451 -10 938 14

Profit before loan losses 11 701 1 296 805 2 578 728 17 108 15 385 11 Loan losses/recoveries 53 2 - - 55 261 -79 Gains/losses on disposal of property, equipment and intangible assets 0 0 - - 1 1 4 -75 Operating profit 11 754 1 298 805 2 578 729 17 164 15 650 10

Return on equity, % 18.5 14.0 30.4 34.7 20.9 17.9 Assets 1 119 346 702 974 24 133 216 669 297 568 -570 682 1 790 008 1 582 907 Liabilities 1 074 401 696 177 22 227 209 669 291 990 -570 682 1 723 782 1 517 149

Other disclosures Investments in non-financial assets 152 33 4 30 283 502 4 436 Average number of employees 6 155 1 244 339 681 1 744 10 163 9 395

Internal income and expenses are included in the respective item on the income statement. Internal income consists of payment for services rendered according to the cost price principle. Expenses also include the distribution of costs made internally within the Group for services from business support operations. The Other operations business area includes Treasury and the central head office departments. It also includes capital gains/losses, divdends and income and expenses that are not attributable to a specific segment. Return on equity for the segments is computed after standard tax while for the whole Group and Pensions & Insurance, it is computed after full tax. The shareholders’ equity, on which calculation of return on equity is based, corresponds to the assessment of the Group’s overall actual capital requirement.

HANDELSBANKEN ■ ANNUAL REPORT 2006 21 ADMINISTRATION REPORT ■ BRANCH OFFICE OPERATIONS

Branch offi ce operations

Branch office operations comprise a total of 599 branches in eleven regional banks, and also include Handelsbanken Finans. Seven of the regional banks are in Sweden, with the remaining four in Great Britain, Denmark, Finland and Norway. At Handelsbanken, the branches are the base of all operations and co-ordinate services for all customers, includ- ing major corporations. The regional banks are responsible for their own profits and all pursue the same goals – to provide universal banking services with a higher service level and at lower cost than comparable banks. Handelsbanken Finans offers a full range of fi- nance company services in the four Nordic countries and in Great Britain. Handelsbanken Finans works through the Bank’s branches and in financing collaborations with retailers and vendors.

EARNINGS PERFORMANCE volumes rose by 10%, household lending by 11% and corporate lend- Demand for credit remained strong, while margins on mortgage ing by 9%. The increase in lending volumes could not compensate loans in particular remained under pressure. Deposit margins im- for the pressure on margins but higher deposit margins boosted net proved slightly on practically all markets. Operating profi t decreased interest income. by 5% to SEK 11,754m (12,416). Income was generally unchanged, The margin on fl oating rate household deposits was 38bp higher while expenses increased at the same time as recoveries were slightly during the fourth quarter than in the same quarter one year previ- lower than the previous year. A total of 17 new branches were ously. In terms of lending margins, the margin on mortgage loans opened. to private individuals was under particular pressure throughout the year. The average margin was 77 bp, a decrease of 17 bp. Fee and BRANCH OFFICE OPERATIONS IN SWEDEN commission income rose, particularly equity-related commission Earnings performance income. Expenses increased, while recoveries were SEK 134m Operating profi t was SEK 9,764m (10,583), a decrease of 8%. Net lower and totalled SEK 55m (189). interest income fell in the Swedish branch offi ce operations. Lending

Quarterly performance Branch offi ce operations SEK m 2006:4 2006:3 2006:2 2006:1 Total 2006 Total 2005 Change %

Net interest income 3 624 3 550 3 609 3 541 14 324 14 655 -2 Net fee and commission income 1 123 917 1 047 1 087 4 174 3 803 10 Net gains/losses on financial items at fair value 297 172 412 325 1 206 1 261 -4 Other income 78 89 127 97 391 369 6 Total income 5 122 4 728 5 195 5 050 20 095 20 088 0

Of which internal -2 589 -2 513 -1 946 -1 793 -8 841 -6 399 38

Administrative expenses -2 235 -1 841 -2 158 -2 007 -8 241 -7 797 6 Depreciation, amortisation and impairments of property, equipment and intangible assets -57 -32 -32 -32 -153 -138 11 Total expenses -2 292 -1 873 -2 190 -2 039 -8 394 -7 935 6

Profit before loan losses 2 830 2 855 3 005 3 011 11 701 12 153 -4

Loan losses/recoveries -55 -22 52 78 53 259 -80 Gains/losses on disposal of property, equipment and intangible assets 000004-100 Operating profit 2 775 2 833 3 057 3 089 11 754 12 416 -5

Return on equity, % 17.8 18.1 18.5 19.6 18.5 16.6 Average number of employees 6 193 6 364 6 055 6 007 6 155 6 018 2

22 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ BRANCH OFFICE OPERATIONS

Balance sheet Operating profit Branch offi ce operations 31 December Branch offi ce operations in Sweden SEK m 2006 2005 Change % SEK m 2006 2005 Change %

Loans to credit institutions 39 998 35 127 14 Income 15 943 16 354 -3 Loans to the public 1 042 171 946 997 10 Expenses -6 234 -5 959 5 Interest-bearing securities 9 985 12 164 -18 Loan losses/recoveries 55 189 -71 Assets where the customer bears the Disposal of property, equipment/in- value change risk 1 437 0 tangible assets 0 -1 100 Other assets 25 755 33 523 -23 Operating profit 9 764 10 583 -8 Total assets 1 119 346 1 027 811 9

Due to credit institutions 367 602 367 722 0 Business volumes Sweden Deposits and borrowing from the Average volumes public 322 321 286 185 13 SEK bn 2006 2005 Change % Issued securities 351 381 288 231 22 Deposits from the public 278 246 13 Liabilities where the customer bears of which households 105 93 13 the value change risk 1 437 0 companies 173 153 13 Other liabilities 31 660 29 175 9 Shareholders’ equity 44 945 56 498 -20 Loans to the public* 797 727 10 Total liabilities and equity 1 119 346 1 027 811 9 of which households 369 333 11 of which mortgage loans 319 285 12 companies 428 394 9 Business development in Sweden of which mortgage loans 142 142 0 As shown in the table, business volumes increased, to both house- * excl. loans to the National Debt Office holds and companies. The rate of increase was high throughout 2006, except for lending to companies where the rate of increase GREAT BRITAIN decreased between the last two quarters of the year. The average Earnings performance in Great Britain volume of deposits from households increased by 13%. Operating profi ts fell to SEK 150m (154). The decrease was mainly Credit volumes at Handelsbanken Finans, reported under branch due to a provision for probable loan losses. The operating profi t offi ce operations, increased by 14% to SEK 42bn. before loan losses increased by 6%, despite the continuing rapid Handelsbanken was acclaimed Commercial Bank of the Year by expansion in the form of new branches and costs for upgrading IT Affärsvärlden, a Swedish business periodical. This award is based on systems. The number of employees grew in line with the expan- a survey among major companies in Sweden. sion, and at the end of 2006 there were 267 employees, an increase During the autumn, Swedish Quality Index (SKI) presented its of 23%. The increase in income was mainly due to the continued annual survey of how satisfi ed bank customers are. This survey has strong growth in business volumes, in both newly-opened and exist- been carried out since 1989, when only the four major Swedish ing branches. The average volume of lending rose by 51% to GBP banks were included. Among these four, Handelsbanken has always 2.4bn, while deposits rose by 25% to GBP 1.3bn. been in top position, among both private and corporate customers. This was the case again in this year’s survey. Operating profit Three new branches were started during the year, in Frösunda Branch operations in Great Britain and Ekerö outside Stockholm and in Viared, outside Borås. Thus SEK m 2006 2005 Change % the Bank had 457 branches in Sweden. More branches will be Income 591 493 20 opened in 2007. Expenses -421 -332 27 Within the organisation of Handelsbanken Finans, Loan losses/recoveries -20 -7 186 Handelsbanken Direct was started on 1 October with the aim of Operating profit 150 154 -3 increasing availability for customers, existing and potential, who use the Bank’s online services. The intention is to develop the online Business volumes, Great Britain banking service so that more transactions can be generated via the Average volumes service, customers can be given personal service by phone 24 hours GBP m 2006 2005 Change % a day, 7 days a week, and the branches’ administration is also made Deposits from the public 1 254 1 004 25 easier. The range of offerings via the online banking service will Of which households 102 70 46 gradually be increased. So far, customers can apply for loans and companies 1 152 934 23 card services, or sign up for a selection of the Bank’s savings prod- Loans to the public 2 403 1 591 51 ucts. Of which households 432 301 44 The volume of purchases made using the Bank’s Allkort credit companies 1 971 1 290 53 card increased, and it had the highest purchase volume per card in Europe in its class. The total number of Allkort cards was 179,000, an increase of 20%. Business development in Great Britain The Frikort ATM and debit card, which replaced the Bankomat Six new branches were opened – in Slough, Sheffi eld, Oxford, ATM card, has been a success. Since its launch in October, around Leicester, Swindon and Wolverhampton. This brought the number 70,000 cards have been distributed to customers. It is particularly of branches to 26. Managers have been recruited for several new gratifying that these customers, who previously used cash dispensers, branches and premises acquired. These branches will start up in the have started to use their cards when shopping instead of using it solely fi rst half of 2007, and discussions are in progress to open branches as an ATM card. in other locations. In 2006, Handelsbanken was fi rst to launch private label corpo- Handelsbanken in Great Britain was assessed for the Best Com- rate cards. panies accreditation. This is based on a detailed questionnaire to all

HANDELSBANKEN ■ ANNUAL REPORT 2006 23 ADMINISTRATION REPORT ■ BRANCH OFFICE OPERATIONS

employees with a response rate of 88% – which is considered a high Business volumes, Denmark fi gure. The outcome was the highest possible rating – three stars Average volumes DKK bn 2006 2005 Change % – which is only awarded to companies which are assessed as being ”extraordinary”. The results of this survey refl ect the fact that Han- Deposits from the public 19.4 16.3 19 delsbanken’s business model is popular with its staff. Customers also Of which households 5.7 5.3 8 showed their appreciation in a survey arranged by the “Forum of companies 13.7 11.0 25 Private Business”, where Handelsbanken was one of the banks cus- Loans to the public 26.2 22.0 19 tomers least wanted to leave. Of which households 11.6 9.5 22 companies 14.6 12.5 17

DENMARK FINLAND Earnings performance in Denmark Earnings performance in Finland Operating profi ts rose, despite pressure on margins. The operating Operating profi t increased by 17% to SEK 447m (381). Increased profi t for the fourth quarter was the highest ever. The increase in business volumes – resutling in higher net interest income – and profi ts was mainly generated through higher business volumes. higher commissions mainly on investment operations, led to an The average volume of lending was DKK 26.2bn, with lending overall increase in income of 16% to SEK 1,173m. Costs rose by to households representing DKK 11.6bn. The average volume of 10%, due mainly to the ongoing change of bank systems, but also to lending to households went up by 22%, while the average volume higher staff costs. of total lending increased by 19%. One reason for the growth in Demand for credit by households remained strong in 2006, household lending was the strong demand for priority loans, Han- particularly for mortgage loans. The average volume of lending to delsbanken’s mortgage loan on the Danish market. The average households climbed by 19%. In corporate lending, Handelsbanken volume of deposits from households increased by 8% to DKK 5.7bn, reinforced its position as one of the largest corporate fi nanciers in and total deposits rose by 19% to DKK 19.4bn. Finland. One example of this is fi nancing the local trains in the The positive trend in the area of securities continued. Turnover Helsinki region. A fi nancing agreement for 32 trains worth some on the Danish stock market was at a record high level with rising EUR 300m was Handelsbanken’s largest ever leasing transaction in share prices, although the third quarter had temporarily lower activ- Finland. ity. Fee and commission income rose by 8% overall. Net gains/losses on fi nancial items increased, mainly due to a positive trend for for- Operating profit eign exchange trading and the fair value measurement of interest Branch operations in Finland rate derivatives. SEK m 2006 2005 Change % In 2006, two structured products were launched: an equity- Income 1 173 1 011 16 linked bond worth DKK 168m and a commodity-indexed bond Expenses -668 -608 10 with sales of DKK 186m. The volume of priority loans – a product Loan losses/recoveries -58 -22 164 which Handelsbanken was the fi rst bank to introduce in Denmark in Operating profit 447 381 17 2000 – exceeded DKK 10bn in December. The number of currency transactions and leasing transactions with companies increased substantially, particularly in the second Business volumes, Finland half of the year. In parallel with the increased level of business activ- Average volumes ity, there was a signifi cantly heightened interest in Handelsbanken in EUR m 2006 2005 Change % the Danish media. Handelsbanken was mentioned in the nationwide Deposits from the public 1 967 1 778 11 media twice as often in 2006 as in 2005. Of which households 942 894 5 In Dansk Kundeindex, which is an independent survey of satisfac- companies 1 025 884 16 tion among Danish banking customers, Handelsbanken was once Loans to the public 7 286 6 636 10 again very highly rated by both private and corporate customers. Of which households 2 323 1 955 19 Two new branches were opened in 2006, one in Hillerød, north companies 4 963 4 681 6 of Copenhagen, and one in Køge, south of Copenhagen. This brought the number of branches in Denmark to 37. Business development in Finland

Operating profit EPSI’s survey of satisfaction among Finnish bank customers showed Branch operations in Denmark that Handelsbanken had Finland’s most satisfi ed customers among SEK m 2006 2005 Change % the large banks. The Bank had the best ratings from both private and corporate customers. Income 972 907 7 Expenses -546 -492 11 For some time Handelsbanken in Finland has been developing Loan losses/recoveries 30 4 its product range in the area of savings and investments. The Bank Disposal of property, equipment/ started to see the result of these investments during the year. Along- intangible assets 0 4 -100 side its traditional savings and investment accounts, the Bank offers Operating profit 456 423 8 several different mutual funds and structured products as investment options. A commodity index bond issued in April was subscribed for some EUR 40m. This bond issue was the largest so far issued in Finland by Handelsbanken. New sales in the Bank’s mutual funds were EUR 66m (47) and the total volume in mutual funds was

24 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ BRANCH OFFICE OPERATIONS

EUR 367m (269) at the end of the year. A Private Banking opera- The average lending volume increased by 33% to NOK 90.0bn tion was started in 2006. In addition to structured products, two (67.7), as compared to the overall increase among Norwegian banks new retail bond loans were issued during the year. which was 15%. The Bank’s lending to households rose by 22%. One On 1 June, the branch in Tallinn, Estonia was opened. In or- contributory factor to this was the increasing proportion of “bolig- ganisational terms, this branch is part of Regional Bank Finland, krediter” (housing credits), a product well received by the market. bringing the number of branches to 37. Handelsbanken in Finland Lending to corporate clients rose by 41%. Average deposits were up decided to expand its operations with a major drive on opening new 31%, of which household deposits grew by 21% to NOK 7.4bn (6.1). branches in 2007. It is planned to open around 10 branches in 2007. Handelsbanken Finans also showed strong growth in Norway. Defi nite decisions were taken to open a branch in Mikkeli and a The most important factor for sustainable profi table growth is third branch in Espoo. satisfi ed customers. It is therefore pleasing that EPSI, in its yearly Handelsbanken in Finland ordered a local banking system survey of customer satisfaction among Norwegian banking custom- from Samlink. Since its collaboration with Samlink is long-term ers, in 2006 acclaimed Handelsbanken as the “outstanding winner and strategic, Handelsbanken acquired an 8% stake in Samlink. in the corporate market”. Handelsbanken Finans boosted sales in Retail Finance Consumer In the private market too, Handelsbanken’s customer satisfaction by 28%. An important reason for the successes was the transfer to ratings were considerably higher than for the other universal banks MasterCard, which led to more active and loyal customers and thus on the Norwegian market. increased turnover and higher profi ts. Branches were opened in Kolbotn, Asker, Moss, on Sotra, and in Molde, bringing the total number of branches in Norway to 42.

NORWAY Key figures Operating profi t for 2006 was up by 13% to SEK 965m (855), the Branch offi ce operations outside Sweden 2006 2005 highest ever fi gure. Income increased by 16% to SEK 1,809m. High- er business volumes for both deposits and lending created higher net Number of branches 142 128 interest income, despite increasing pressure on the margin for loans. Number of employees 1 568 1 423 Number of active customers, private, 1000s 255 244 Interest margins were adversely affected by Norges Bank raising key Number of active customers, corporate, 1000s 44 42 rates on fi ve occasions during the year. These rate increases did not Total assets, SEK bn 299 251 have a direct impact on lending rates, due to the long periods of Loans to households, SEK bn 87 77 notice that banks are obliged to give private customers under Nor- Loans to corporates, SEK bn 154 124 wegian law. The full-year effect is estimated at SEK 35m. Fee and Deposits from the public, SEK bn 94 83 commission income also increased signifi cantly, as Handelsbanken Norway is doing more and more business with households. The increase in costs was 13%, due mainly to the establish- ment of new branches, but also to the rapid rate of expansion. Handelsbanken Norway invested in a corporate profi le marketing campaign, including TV advertising, which was one factor in the increase in costs. The underlying cost trend was moderate, and the C/I ratio improved to 44.9% (45.9).

Operating profit Branch operations in Norway SEK m 2006 2005 Change %

Income 1 809 1 563 16 Expenses -812 -718 13 Loan losses/recoveries -32 10 Operating profit 965 855 13

Business volumes, Norway Average volumes NOK bn 2006 2005 Change %

Deposits from the public 34.7 26.5 31 Of which households 7.4 6.1 21 companies 27.3 20.4 34

Loans to the public 90.0 67.7 33 Of which households 35.0 28.7 22 companies 55.0 39.0 41

Business development in Norway The Norwegian economy maintained its positive trend during 2006. Almost all sectors showed high activity and good profi tability, which helped to boost consumer purchasing power. This provided good conditions for the Norwegian banking sector.

HANDELSBANKEN ■ ANNUAL REPORT 2006 25 ADMINISTRATION REPORT ■ HANDELSBANKEN MARKETS

Handelsbanken Markets

Handelsbanken Markets is organised into four business areas: Capital Markets, Markets International, Financial Institutions and Cash Management and Payments. Capital Markets is the Bank’s investment bank comprising corporate finance, including debt capital markets, equities, fixed income, commodities and foreign exchange trading, structured products and research. It also includes support to the branch office operations for products in these ar- eas. Markets International comprises banking operations outside the Nordic countries and Great Britain, trade finance, export and project finance. Financial Institutions is responsible for monitoring countries, banks and other financial institutions. Cash Management and Payments is the Bank’s central function for development and sales support for payment products. There are just over 1,300 employees in 16 countries.

EARNINGS PERFORMANCE

Profi ts increased by 34% to SEK 1,298m (969). Handelsbanken Balance sheet Capital Markets reported signifi cantly higher earnings, while Handelsbanken Markets 31 December Handelsbanken Markets International reported slightly lower earn- SEK m 2006 2005 Change % ings, mainly due to the fact that the new units opened in 2005 and Loans to credit institutions 395 713 424 604 -7 2006 have not yet reached break-even. Total income rose by 29% to Loans to the public 52 457 28 689 83 SEK 4,561m (3,536), while expenses were up by 27%. Interest-bearing securities 151 993 158 839 -4 Other assets 102 811 93 386 10 Changes in organisational structure at year-end 2006 Total assets 702 974 705 518 0 As part of the Bank’s increased focus on both its investment banking Due to credit institutions 301 351 301 870 0 operations and its international expansion, Handelsbanken Markets Deposits and borrowing from the was split into two on 1 January 2007. Handelsbanken Capital Mar- public 88 403 78 023 13 kets continues to run the Bank’s investment banking operations, but Issued securities 166 070 175 869 -6 as a separate business area. Handelsbanken International consists of Other liabilities 140 353 144 490 -3 three units: International, Financial Institutions and Cash Manage- Shareholders’ equity 6 797 5 266 29 ment and Payments. Total liabilities and equity 702 974 705 518 0

Quarterly performance Handelsbanken Markets SEK m 2006:4 2006:3 2006:2 2006:1 Total 2006 Total 2005 Change %

Net interest income 150 145 145 132 572 482 19 Net fee and commission income 515 353 440 420 1 728 1 523 13 Net gains/losses on financial items at fair value 328 235 427 432 1 422 1 010 41 Other income 231 182 281 145 839 521 61 Total income 1 224 915 1 293 1 129 4 561 3 536 29

Of which internal 2 580 2 653 2 460 1 941 9 634 6 344 52

Administrative expenses -891 -679 -938 -736 -3 244 -2 550 27 Depreciation, amortisation and impairments of property, equipment and intangible assets -6 -5 -5 -5 -21 -20 5 Total expenses -897 -684 -943 -741 -3 265 -2 570 27

Profit before loan losses 327 231 350 388 1 296 966 34

Loan losses/recoveries 001123-33 Gains/losses on disposal of property, equipment and intangible assets 0000000 Operating profit 327 231 351 389 1 298 969 34

Return on equity, % 13.9 10.0 14.8 17.6 14.0 13.8 Average number of employees 1 321 1 332 1 213 1 111 1 244 1 102 13

26 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ HANDELSBANKEN MARKETS

HANDELSBANKEN CAPITAL MARKETS fi nance, debt capital markets and structured products in the same Earnings performance organisation. Earnings increased by 41% to SEK 965m (686), the highest fi gure Corporate fi nance and debt capital markets comprise stock mar- since Capital Markets was formed in 2003. Virtually all business ket introductions (IPOs), the raising of equity and loan capital on units improved their earnings. Income rose by 24%, while expenses public markets, corporate mergers and acquisitions, and structured went up by 18%. The increase in costs was mainly a result of higher fi nancing. Operations are primarily oriented towards companies and staff costs, partly due to higher performance-related remuneration their main owners. and partly to the average number of staff rising from 518 to 540. Stockbroking operations comprise equities trading and research on behalf of customers with a focus on the Nordic markets, as well Operating profit as the production of independent research reports. Quantitative and Handelsbanken Capital Markets macroeconomic research are also produced. Operations mainly focus SEK m 2006 2005 Change % on major Nordic and international investors. Foreign exchange and fi xed income trading comprise all trading in fi xed income, com- Income 3 198 2 572 24 Expenses -2 233 -1 886 18 modities and foreign exchange products, for both Nordic and inter- Loan losses/recoveries 000national investors. Operating profit 965 686 41 The structured products unit provides customised fi nancial solu- tions suited to different customers’ needs and risk level, for example, Business development equity-linked bonds, multi-asset bonds, credit-linked notes, war- Capital Markets’ objective is to be the leading Nordic investment rants, equity certifi cates, baskets of equities or other types of assets bank. During the year, it advanced its positions and is one of the and share redemption programmes. These products demand broad top three investment banks in virtually every area of operations, and fi nancial knowledge and a strong capital base. market leader in several areas. The fact that Capital Markets is an integral part of Handelsbanken This was particularly evident in brokerage income, which in- offers proximity to Nordic customers via the Bank’s branch offi ce creased by 28%. Brokerage operations in the Nordic countries and network. Marketing to international customers is done through in London showed especially strong progress. Handelsbanken is one Handelsbanken Capital Markets’ units in London, New York and of the leading players in Nordic equities, and customers outside the Singapore. Handelsbanken’s strong balance sheet offers the op- Nordic region accounted for over 38% of Capital Markets’ brokerage portunity to handle both complex transactions and high risk which income. is a necessity for its ability to compete effectively with international Business fl ows at corporate fi nance and debt capital markets re- investment banks. mained strong. Handelsbanken was the largest player for IPOs in Sweden, and also one of the two largest bookrunners for syndicated HANDELSBANKEN MARKETS INTERNATIONAL AND loans. FINANCIAL INSTITUTIONS For several years, Handelsbanken Capital Markets has been Earnings performance the Nordic market leader in structured products. In 2006, Earnings for the Handelsbanken Markets International and Financial Handelsbanken Capital Markets arranged SEK 18.6bn worth of Institutions business areas, which make up the business core of the capitalprotected products. For equity-linked bonds, the largest prod- operation which, on 1 January 2007 became Handelsbanken Interna- uct in terms of volume, the Bank’s market share in Sweden was 24%. tional, totalled SEK 107m (116), a decrease of 8%. Income increased On the warrants and certifi cates market, Handelsbanken Capital by 6% while expenses rose by 9%. The fall in profi ts was due to in- Markets’ sales rose by 209% to SEK 20bn. The Bank’s Nordic mar- creased investments in newly opened units such as in Poland, Russia, ket share grew by 10 percentage points to 53%. 2006 saw the launch China and India. Income increased in all international units. Corpo- of the Maxcertifi kat (discount certifi cate), an alternative to outright rate business in Germany, the US and Hong Kong and clearing serv- equity investments. ices for foreign banks were particularly successful. The number of Earnings from trading in fi xed income and foreign exchange in- employees was 369 (326), some 70% of these being outside Sweden. struments climbed by 26%. Research products were improved: rapid, close-to-the-market analysis was combined with more long-term re- Operating profit search. The Bank’s market position improved, and the international Handelsbanken Markets International and Financial Institutions fi nancial magazine Global Finance acclaimed Handelsbanken as SEK m 2006 2005 Change % Scandinavia’s best foreign exchange bank. Income 631 594 6 Following the takeover of commodity broker, Svenska Metall- Expenses -526 -481 9 börsen’s operations in September, the Bank can now also offer Loan losses/recoveries 2 3 -33 fi nancial solutions in this product range. The acquisition made Operating profit 107 116 -8 Handelsbanken the leading commodity broker in the Nordic region. During the fourth quarter, the Bank began working with a lead- ing provider of direct equity trading services, which means that the Business development Bank’s institutional clients will have access to direct trading in equi- One long-term goal of the international expansion is to increase the ties on all the leading European stock exchanges. The solution is ex- number of markets where the Bank can conduct profi table universal pected to be ready for launch in Q1 2007. In the second stage of the banking operations via its own branch network. launch, North American stock exchanges will also be included. Handelsbanken was the fi rst Nordic bank to open a representative offi ce in Mumbai, India. The representative offi ce in St. Petersburg, Organisation Russia is expected to be converted to a branch during the fi rst Handelsbanken Capital Markets is Handelsbanken’s investment quarter of 2007. bank. Capital Markets was formed on 1 January 2003 and was the Operations in Poland were expanded with two new branches, in fi rst Nordic investment bank to integrate its operations in the fi elds Gdansk and Poznan. Since 2005, the Bank has been able to offer of equities, foreign exchange, fi xed income instruments, corporate mortgage loans to local customers in Poland. In summer 2006, the

HANDELSBANKEN ■ ANNUAL REPORT 2006 27 ADMINISTRATION REPORT ■ HANDELSBANKEN MARKETS

Bank also started to offer leasing services to corporate customers. The plan is to continue expanding in Poland in the years ahead. Through the export and project fi nance unit, the Bank arranged the fi nancing of a road project in Finland. Handelsbanken’s position as a leading bank for trade fi nance was confi rmed when the Bank for the second year running was acclaimed “Best Trade Finance Bank and Provider in Sweden” by the international specialist periodical Global Finance.

Organisation Handelsbanken Markets International is responsible for the branch offi ces and representative offi ces outside the Nordic region and Great Britain, clearing services for foreign banks, trade fi nance, ex- port and project fi nance. Outside Sweden, its purpose is twofold: to support the Bank’s Nordic and British corporate customers by acting as a business partner in the international markets where the Bank’s customer base is strongly established, and to develop and enhance relationships with international corporate groups. Outside the Nor- dic region and Great Britain, Markets International has banking op- erations in New York, Luxembourg, Amsterdam, Paris, St Raphaël, Vienna, Frankfurt, Hamburg, Warsaw, Poznan, Gdansk, Moscow, Singapore, Hong Kong and Shanghai and representative offi ces in Beijing, Mumbai, Taipei and St. Petersburg.

28 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ HANDELSBANKEN ASSET MANAGEMENT

Handelsbanken Asset Management

Handelsbanken Asset Management comprises fund management, discretionary management and Nordic custody services. Apart from services aimed at companies, institutions and pri- vate individuals, Asset Management provides support to the branch offices regarding invest- ments, portfolio systems and accounting for foundations. Operations are conducted in the four Nordic countries, and in Luxembourg, Switzerland, France, Spain and Singapore.

EARNINGS PERFORMANCE SEK 220bn (184). Some 49% (49) of the assets under management Operating profi t increased by 35% to SEK 805m (598). Income, were invested in equity funds, 25% (24) in fi xed income funds, 24% which was mainly based on the volume of assets managed, increased (25) in mixed funds, and just over 2% (2) in hedge funds. The aver- by 23% due to higher share prices and new sales. Expenses increased age volume of assets under management in Handelsbanken’s mutual by 11%. Since autumn 2004, the Bank has invested in an enhanced funds increased by 27% from the previous year and amounted to management organisation and an expanded range of products, SEK 199bn (156). The gross margin, that is the management com- which have had an impact on both expenses and income. mission in relation to the assets under management, fell during The volume of assets managed by Handelsbanken Asset Manage- the summer months with the decline in stock markets. However, it ment grew to SEK 371bn (332). The total volume of assets under improved towards the end of the year due to rising share prices and management by the Group was SEK 435bn (388). the Bank’s launch of new mutual funds with higher management commissions. HANDELSBANKEN MUTUAL FUNDS Net new savings in the Group’s funds on the Swedish mutual 2006 was another good year for savers in mutual funds, with a good fund market were SEK 15.4bn (14.9), equivalent to a market share performance on most of the world’s stock markets. Several equity of 22% (18). This was the eighth year running in which the Bank’s funds increased by 25-30%. The Nordic small cap funds reported market share of new sales was higher than its share of total mutual the best performance among the Bank’s mutual funds with an in- funds savings, which at year-end amounted to 14.0% (13.7). Han- crease of 36-38%. delsbanken was thus the third largest player on the market.In 2004, At the end of 2006, the Bank’s mutual fund management a major restructuring programme was launched to improve fund company managed 106 (106) mutual funds with a total value of management performance. The programme has achieved the desired

Quarterly performance

Asset Management SEK m 2006:4 2006:3 2006:2 2006:1 Total 2006 Total 2005 Change %

Net interest income 41 51 43 33 168 113 49 Net fee and commission income 296 282 320 295 1 193 985 21 Net gains/losses on financial items at fair value 7 4 15 7 33 42 -21 Other income 29 23 17 21 90 69 30 Total income 373 360 395 356 1 484 1 209 23

Of which internal -48 -25 -74 -93 -240 -408 -41

Administrative expenses -183 -155 -178 -161 -677 -608 11 Depreciation, amortisation and impairments of property, equipment and intangible assets 0 -1 0 -1 -2 -3 -33 Total expenses -183 -156 -178 -162 -679 -611 11

Profit before loan losses 190 204 217 194 805 598 35

Loan losses/recoveries ------Gains/losses on disposal of property, equipment and intangible assets - - - - - 0 Operating profit 190 204 217 194 805 598 35

Return on equity, % 28.8 30.8 32.6 29.3 30.4 23.2 Average number of employees 357 344 328 325 339 320 6

HANDELSBANKEN ■ ANNUAL REPORT 2006 29 ADMINISTRATION REPORT ■ HANDELSBANKEN ASSET MANAGEMENT

effect, not the least of which was an improved rating. Every month, DISCRETIONARY MANAGEMENT the independent ratings institute Morningstar rates selected mutual The Bank managed discretionary assets totalling SEK 177bn (169), funds from the fund management companies. In the December of which 34% were exposed to equity markets and the rest to fi xed ratings from Morningstar (three-year ratings), Handelsbanken’s mu- income markets. SEK 40bn (34) of the managed assets were invested tual funds received an average rating of 3.31, which was the highest in the group’s mutual funds. among the major Swedish banks. In addition, Handelsbanken was In 2006, portfolios under discretionary management generally best among the major Swedish banks in the equity and fi xed income achieved good returns, mainly due to strong equity markets, coupled funds categories for the same period. with structured and customised management solutions. Discretion- ary management acquired several new institutional customers during Balance sheet the year, Q4 being the strongest quarter with net sales of approxi- Asset Management 31 December mately SEK 6.6bn. SEK m 2006 2005 Change %

Loans to credit institutions 14 752 11 095 33 NORDIC CUSTODY SERVICES Loans to the public 2 437 2 221 10 Custody holdings in the Bank’s Nordic custody services amounted Interest-bearing securities - - to SEK 790bn, an increase of 4%. The number of securities transac- Other assets 6 944 5 292 31 tions rose by 68%. This refl ects increased activity among customers, Total assets 24 133 18 608 30 as well as the strong performance of the Nordic stock exchanges. Due to credit institutions 9 367 6 001 56 During the year, Handelsbanken’s institutional custody services Deposits and borrowing from the entered into a collaboration agreement with one of the largest global public 11 352 8 493 34 custodian banks in the USA. The aim of the agreement is to offer a Issued securities - - sophisticated range of products in institutional custody services to Other liabilities 1 508 2 359 -36 Nordic fi nancial institutions. Shareholders’ equity 1 906 1 755 9 Global Investor Magazine, which annually ranks institutional Total liabilities and equity 24 133 18 608 30 custody services, awarded Handelsbanken’s Nordic custody services a high rating in all the Nordic countries. Handelsbanken was ac- Sweden claimed the best custodian bank in Denmark and Norway. Customer interest in regular savings in mutual funds increased sharply during the year, both in terms of number of customers and PRIVATE BANKING OUTSIDE THE NORDIC COUNTRIES volume. The monthly amount saved in mutual funds during the year AND GREAT BRITAIN increased by approximately 16%. An independent customer survey Private Banking outside the Nordic countries and Great Britain is reported that Handelsbanken’s mutual fund customers were again conducted through Svenska Handelsbanken S.A. in Luxembourg, the most satisfi ed. Handelsbanken received the highest rating of the with a branch in Zurich, a representative in Singapore, and repre- major banks for all 12 rating criteria and the highest rating of all sentative offi ces in Marbella (Costa del Sol), Nice (Côte d’Azur), fund management companies on 9 of the 12 criteria. and La Nucia (Costa Blanca), which was opened this year. The Two new mutual funds were launched on the Swedish market representative offi ces market private banking services to Nordic – the India Fund and Garantifond Plus (Guarantee Fund Plus). expatriates. Garantifond Plus was launched in June as the fi rst mutual fund of its The volume outside the Nordic countries and Great Britain was kind in Sweden. The fund guarantees 80% of the highest price ever SEK 14bn (12), which represents an increase of 17% for the year and achieved for a fund unit. 12% in the fourth quarter.

Finland and Norway There was a continued focus on increased sales via the Norwegian and Finnish regional banks during the year. Two new mutual funds were launched, the India Fund and Klick Norge 90. Good perform- ance, especially by the equity funds and mixed funds, contributed to the sales increase. New sales in the Bank’s mutual funds in Finland were EUR 66m (47), and at year-end, volumes of Finnish customers’ mutual funds totalled EUR 367m (269). Net savings in the Bank’s mutual funds by customers in the Nor- wegian branch operations increased by NOK 0.8bn (0.2) and the volume of funds managed rose by 12% to NOK 2.7bn (2.4).

Exchange-traded funds The assets managed in the XACT funds increased by 16% to SEK 17bn (14). The average volume increased by 105% to SEK 16.8bn. Three new mutual funds were launched, giving XACT a total of eight listed mutual funds. Six of these are traded on the Stockholm stock exchange, with the other two being traded on the Oslo and Helsinki stock exchanges respectively. XACT Bull increased by 33%, making it the best performance in the Swedish funds category for 2006, according to Morningstar. XACT Bull is a special fund with the objective of giving a daily return equivalent to approx. 150% of the daily change in the OMXS30TM Index.

30 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ HANDELSBANKEN PENSIONS & INSURANCE

Handelsbanken Pensions & Insurance

Handelsbanken Pensions & Insurance comprises Handelsbanken Liv and SPP. On 1 January 2006, SPP became a profit-distributing company, as did Handelsbanken Liv in 2002. Together, these companies are among the market leaders, with a complete range of life insurance products for occupational and private pensions, as well as asset protection schemes for companies, organisations and private individuals. The compa- nies sell their services via Handelsbanken’s branch offices, their own sales organisa- tions, independent brokers, workplaces at corporate customers, and direct marketing.

Breakdown of results Handelsbanken Liv SPP Pensions & Insurance

SEK m 2006 2005 2006 2005 2006 2005

Administration result 102 101 44 146 101 Risk result 218 194 353 571 194 Financial result 213 258 1 578 1 791 258 Other 100 12 130 230 12 SPP brand name -160 Operating profit 633 565 2 105 2 578 565

Quarterly performance

Pensions & Insurance SEK m 2006:4 2006:3 2006:2 2006:1 Total 2006 Total 2005 Change %

Net interest income 68 25 23 23 139 -2 Net fee and commission income 832 518 340 614 2 304 857 169 Net gains/losses on financial items at fair value 160 -355 -123 1 225 907 65 Risk result - insurance 187 38 297 49 571 194 194 Other income 42 44 37 30 153 109 40 Total income 1 289 270 574 1 941 4 074 1 223 233

Of which internal -91 -61 -69 -41 -262 -68 285

Administrative expenses -303 -276 -335 -383 -1 297 -631 106 Depreciation, amortisation and impairments of property, equipment and intangible assets -48 -48 -49 -54 -199 -27 Total expenses -351 -324 -384 -437 -1 496 -658 127

Profit before loan losses 938 -54 190 1 504 2 578 565 356

Loan losses/recoveries Gains/losses on disposal of property, equipment and intangible assets ------Operating profit 938 -54 190 1 504 2 578 565 356

Return on equity, % 54.8 -8.0 6.2 86.0 34.7 35.9 Average number of employees 680 681 674 687 681 185 268

HANDELSBANKEN ■ ANNUAL REPORT 2006 31 ADMINISTRATION REPORT ■ HANDELSBANKEN PENSIONS & INSURANCE

Consolidation of insurance operations Balance sheet Pensions and Insurance 31 December SEK m 2006 2005 Change % Reported in the insurance Income/expense Income statement companies’ sub-results Loans to credit institutions 22 276 8 391 166 Fees Net fee and commission Administration result Interest-bearing securities 75 317 15 420 388 income Assets where the customer Yield split Net fee and commission Financial result bears the value change risk 58 468 134 432 -57 income Other assets 60 608 18 241 232 Yield on equity Net gains/losses on Other Total assets 216 669 176 484 23 financial items at fair value Due to credit institutions 24 223 90 Yield – risk insurance Net gains/losses on Financial result Deposits and borrowing from financial items at fair value the public 111 682 30 804 263 Liabilities where the customer Capital contribution to Net gains/losses on Financial result bears the value change risk 58 473 135 926 -57 meet guaranteed interest financial items at fair value Insurance obligations 2 871 862 233 Other liabilities 12 420 7 452 67 Risk result Risk result – insurance Risk result Shareholders’ equity 7 000 1 350 419 Other income Other income Administration result Total liabilities and equity 216 669 176 484 23 Staff costs Staff costs Administration result Other expenses Other expenses Administration result Amortisation of intangible Depreciation, amortisa- Other HANDELSBANKEN LIV assets tion and impairments of Profi ts for Handelsbanken Liv improved sharply for the fourth year property, equipment and intangible assets running. Operating profi t increased by 12% to SEK 633m (565). SPP Liv Fondförsäkring AB was part of Handelsbanken Liv in 2005, but was sold to SPP on 1 January 2006. If the comparative PERFORMANCE FOR PENSIONS & INSURANCE period is adjusted for this, the profi t fi gure improves by 20%. Operating profi ts were SEK 2,578m (565). Since 1 January 2006, The administration result increased to SEK 102m (101). Exclud- SPP has been included in Handelsbanken’s consolidated accounts. ing SPP Liv Fondförsäkring, the administration result rose by 50%, 2006 was another good year for the policyholders at which was mainly due to rising income as a result of higher business Handelsbanken. For Handelsbanken Liv, this was the fourth year volumes. running that policyholders’ insurance assets showed higher growth Since demutualisation on 1 January 2002, the risk result has than the average for life insurance companies offering traditional gradually improved, and totalled SEK 218m (194). savings. In its fi rst year as a demutualised company, SPP also offered Total return on policyholders’ funds was 8.24% (11.65). Since the higher return on customer’s assets than the sector average. total return was greater than the guaranteed rate, which is between These high returns meant that the full yield split was received for 3% and 5% depending on when the contract was entered into, the all insurance contracts within Handelsbanken Liv and SPP. Hence company receives 10% of the total return for all insurance contracts. the companies received 10% of the total return in the yield split and Policyholders saw their capital adjusted upward by 7.42% (10.49). the net income was SEK 745m. Handelsbanken Liv’s share of the return was thus SEK 196m (237). Handelsbanken Liv and SPP had a strong, positive net infl ow. The fi nancial result was SEK 213m (258). For the year, premium income less insurance claims were SEK 7bn. The Other component was SEK 100m (12), of which the return Together with a good total return, this means that assets under on assets corresponding to shareholders’ equity was SEK 146m (94). management increased by 10% to SEK 171bn, including SEK 59bn Interest expenses and depreciation of intangible assets reduced the in unit-linked insurance. result by SEK 46m (82). Assets managed rose by 16% to SEK 59bn (51), of which SEK Defi nitions of the result components 32bn (26) was invested in unit-linked insurance. The increase was The administration result is the difference between the company’s actual due mainly to a continued positive net infl ow, but also to a positive costs and the fees charged on the insurance contracts to cover administration. change in the value of the assets. At the end of the year, 34% of The fees are either based on assets managed, the premiums, the number of the assets were placed in equities, of which 12 percentage points in contracts or the disbursement. Swedish equities and 22 percentage points in international equities. In connection with demutualisation in 2002, Handelsbanken Liv The risk result is the difference between the fees the company charges to became one of the fi rst life insurance companies to introduce the cover the insurance risks (mortality, longevity, disability and accident) and the actual cost of these. right for customers to transfer their insurance funds. In 2006, SEK 519m was transferred to Handelsbanken Liv, while 126m was trans- The financial result consists of the difference between the return on assets ferred from the company. On 1 February 2007, the Swedish govern- managed on behalf of the policyholders and that which has been allocated to ment proposed a temporary stop in transfers for pension insurance the policyholders. When the total return exceeds the guaranteed rate, the com- contracts entered into on or before 1 February 2007. The total net pany receives 10% of the total return as its share. If the value of a customer’s infl ow was SEK 3.7bn. Premium income, reported in accordance insurance contract is less than the guaranteed value, the company provides capital. A capital contribution of this kind affects the financial result. with IFRS 4, was SEK 774m (680). Insurance claims reported in accordance with IFRS 4 were SEK 422m (368). Other includes amortisation of intangible assets, interest expense on deben- The available solvency margin was SEK 3,239m. This should be tures loans and the change in value of assets not managed on behalf of the related to the required solvency margin which was SEK 1,674m, policyholders. implying a solvency ratio of 1.94 (2.41).

32 HANDELSBANKEN ■ ANNUAL REPORT 2006 ADMINISTRATION REPORT ■ HANDELSBANKEN PENSIONS & INSURANCE

Investment assets, average exposure % Investment assets, average exposure % Handelsbanken Liv Full year Jan–Jun Full year SPP Full year Jan–Jun Full year 2006 2006 2005 2006 2006 2005

Shares 37 38 34 Shares 36 36 18 Fixed income 55 54 58 Fixed income 60 60 79 Property 666Property 0 0 0 Other 222Other 4 4 3 Total 100 100 100 Total 100 100 100

Key figures Key figures Handelsbanken Liv Full year Jan–Jun Full year SPP Full year Jan–Jun Full year 2006 2006 2005 2006 2006 2005

Total return, % 8.24 0.52 11.65 Total return, % 6.76 -0.17 6.60 Assets managed, SEK bn, end of Assets managed, SEK bn, end of period 59 53 51 period 112 104 105 of which unit-linked 32 27 26 of which unit-linked 27 23 23 Solvency ratio, end of period 1.94 2.39 1.43 Solvency ratio, end of period 3.10 3.24 1.44

* Administration result for SPP 2005 is calculated proforma. SPP SPP’s profi ts were SEK 2,105m. The administration result was Demutualisation of SPP SEK 44m. This was a substantial improvement compared to the pre- In connection with the demutualisation of SPP, the surplus was vious year, primarily due to a 39% reduction in operating expenses distributed to the policyholders. Savers who held policies with gua- to SEK 636m. Increased business volumes also contributed to an ranteed return shared over SEK 2.5bn. SPP introduced the right for improvement in this part of the result. customers to transfer their insurance in connection with the demu- The risk result was SEK 353m. tualisation. Activity in the fi rst year was extremely low: SEK 3m was The fi nancial result was SEK 1,578m. Total return was 6.76% transferred to SPP and SEK 40m was transferred out. (6.60). Since the return was higher than the guaranteed rate on all contracts, SPP received SEK 549m as its share of the return on CERTIFICATION ENHANCED SALES CAPACITY these contracts. The guaranteed rate is between 2.50% and 5.20%, AT BANK BRANCHES depending on when the contract was entered into. Some 75% of the Insurance plays a very important role in the Bank’s investment con- assets under management have a guaranteed rate of 3.50% or less. cept. As a further step in the integration of insurance in the banking Policyholders saw their capital adjusted upward by 6.08%. business, the insurance advisers were transferred in organisational Prior to the demutualisation, some of SPP’s insurance portfolios terms to the respective regional banks. During the year, some 3,000 were underfunded. At year-end 2005, the shortfall was estimated at Handelsbanken employees were trained and certifi ed in compliance SEK 3.6bn on the basis of prevailing interest rates. When calculat- with the legal requirements for insurance advisers. ing the insurance liability, a long-term market yield is used as the discount rate. At year-end 2006, the discount rate was 54bp higher CONTINUED FOCUS ON NORDIC BUSINESS than at the start of the year. This meant that the value of the insur- A large number of companies in the Nordic countries became new ance liability for previously underfunded contracts was lower than at customers, following a successful collaboration with the insurance year-end 2005, which had a positive impact on the fi nancial result. company If. Thus, Handelsbanken Liv has become one of the major Since Q3, the company has hedged a large part of the sensitivity in insurers of mandatory occupational pensions in Norway. In Den- the valuation of the underfunded contracts caused by market interest mark, preparations began to be able to offer occupational pension rates and share price movements. The positive impact on the fi nan- plans to existing customers of the regional bank during 2007. cial result was SEK 1,045m. Among other things, the Other component reports the yield on assets corresponding to the company’s equity. This fi gure was SEK 353m. In Q4, the portion of the company’s own funds previ- ously invested in equities was reinvested in fi xed-income securities. Amortisation of intangible assets and interest expenses had a nega- tive impact of SEK 224m on the Other component. SPP had a positive net infl ow of SEK 3.3bn. Together with a good total return, this means that assets under management increased by 7% to SEK 112bn (105), of which 27bn (23) were invested in unit- linked insurance. At the end of the year, 32% of the managed assets were placed in equities, of which 11 percentage points in Swedish equities and 21 percentage points in international equities. Premium income, reported in accordance with IFRS 4, was SEK 612m. Insur- ance claims, reported in accordance with IFRS 4, were SEK 197m. The available solvency margin was SEK 10.9bn. This should be related to the required solvency margin, which was SEK 3.5bn, implying a solvency ratio of 3.10.

HANDELSBANKEN ■ ANNUAL REPORT 2006 33 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

Accounting policies

The accounts have been prepared in accordance with international financial reporting standards, IFRSs, as adopted by the EU. The accounting also follows the additions and restrictions of the regulations in the Annual Accounts Act for Credit Institutions and Securities Companies (ÅRKL), and the directives issued by the Swed- ish Financial Supervisory Authority, (FFFS 2005:33) and where applicable, the Swedish Financial Accounting Standards Council’s recommendations. Classification and valuation of items in the income statement and bal- ance sheet for the parent company follows ÅRKL, FFFS 2005:33 and where applicable, the Swedish Financial Accounting Standards Council’s recommendations if complete adjustment to IFRS is not allowed. Differences in the accounting policies between the Group and the parent company are presented under the appropriate heading below. The currency used for reporting is Swedish kronor.

CHANGED ACCOUNTING POLICIES ETC. ASSESSMENTS AND ESTIMATES As from 2006, SPP is a profi t-distributing company. Previously it was When preparing the annual report and consolidated accounts, the run on mutual principles. When SPP was demutualised, the insurance accounting regulations require that the company makes assessments contracts were amended, and all the surplus funds in SPP as at 31 De- and estimates. These are based on experience, assumptions and assess- cember 2005 were allocated to the policyholders. The insurance capi- ments which the management considers to be reasonable. The critical tal is then individual for each policyholder. This results in a change in assessments made by the company management when applying the accounting policy with the purpose of refl ecting SPP’s commitment. accounting policies are stated under the respective section and in the The change implies that the reported obligation per customer will be descriptions pertaining to each note. The fi nal accounting of indi- at least the amount of the guaranteed assets. The EU occupational vidual transactions may deviate from the estimated values. pensions directive is now applied in Swedish legislation. One impli- Areas which are particularly complex where assessments and esti- cation of this is that a market rate of interest must be used to cal- mates are of crucial importance are: culate the insurance obligations. For the insurance obligations that • Valuation of fi nancial instruments. Holdings of instruments were previously measured using a maximum interest rate established where prices are lacking from well-functioning liquid markets by the Financial Supervisory Authority, the valuation now applies means that standard valuation models must be used where assess- a risk-free market interest rate. Through this change of accounting ments and assumptions are applied apart from the market param- policy the group’s opening shareholders’ equity has decreased by eters that can be used in the valuation models. SEK 3,265m. • Insurance obligations. In order to calculate the technical insur- The defi ned-benefi t policies for the employees in the insurance ance obligations which consist of insurance provisions and provi- business were previously treated as defi ned-contribution in the con- sions for unsettled claims, advanced assessments of a technical solidated accounts. It has now been possible to change the account- nature are carried out with assumptions regarding for example ing policy so that the pension obligations can now be reported as mortality, future interest rates, expenses and taxes. defi ned-benefi t. The opening shareholders’ equity has been adjusted • Pension provisions. A number of actuarial, demographic and by SEK 280m. fi nancial assumptions are used to calculate the Group’s various New policies are applied concerning consolidation of mutual pension liabilities. The various parameters used for calculation are funds managed by the Group where it has signifi cant holdings. stated in the information given in the note on staff costs. Mutual funds managed by the Handelsbanken Group are consoli- • Loan losses/bad debts. The value of the loan receivables is tested dated if: at regular intervals. Such tests contain a great many various as- • A company in the Group owns more than 50% of the total units sumption and assessments that are objective in various degrees. in an individual fund. This impairment testing includes, for example, testing the value • The Group’s return from a fund exceeds 5% of the fund’s total of collateral and estimating the cash fl ows that can be expected return, regardless of the size of the Group’s fund unit holding. to be received from the customer as well as the estimated times of In the case of consolidation, the part of the fund’s assets cor- receipt of these cash fl ows. responding to the ownership share is reported in the balance sheet • Intangible assets. Impairment testing is carried out annually re- as shares and participating interests. The part of the fund’s assets garding intangible assets with an undefi ned utilisation period by belonging to other unit holders is reported in the balance sheet as comparing the calculated recovery value with the value reported. assets or liabilities where the customer bears the value change risk. The recovery value is calculated by estimating future cash fl ows Comparative fi gures for 2005 have been adjusted but this has not and relevant discount interest rates. led to any change in shareholders’ equity. Due to a reclassifi cation, all interest income and interest expense CONSOLIDATED ACCOUNTS relating to fi nancial assets in the trading book are now reported un- The consolidated accounts comprise all companies in which der Net gains/losses on fi nancial items at fair value. This is in order Handelsbanken directly or indirectly has a controlling infl uence. Nor- to arrive at a fi gure for net interest income which is clear of fi nancial mally Handelsbanken has a controlling infl uence when its holding is assets and liabilities in the trading book and to gain an overall view more than 50% of the voting rights. In exceptional cases, legal obsta- of activity in the trading book. The adjustment of the comparative cles may prevent a controlling infl uence. In such cases, consolidation fi gures has an impact only on the distribution within net interest does not take place, even though the participating interest exceeds income. 50% of the number of votes. Subsidiaries are consolidated in accordance with the acquisition accounting method.

34 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

Companies in which Handelsbanken directly or indirectly has a measurement is considered to provide a fairer picture of the earnings signifi cant infl uence are reported as associated companies. A signifi - trend than measurement at amortised cost. cant infl uence normally exists when the participating interest is at Assets available for sale comprise all instruments which do not least 20% and at most 50% of the voting rights. Associated compa- come under any of the other three categories. These assets are meas- nies are reported in the consolidated accounts in accordance with ured at fair value in the balance sheet. Unrealised changes in value the equity method. are classed as shareholders’ equity. However, changes in value attrib- Since 2001, SPP Livförsäkrings AB has been 100-percent owned utable to interest as well as exchange rate fl uctuations are recognised by Handelsbanken. The balance sheet has been consolidated since 31 directly in the income statement. Impairment testing is performed in December 2005. As of 1 January 2006, the company distributes prof- those cases where indications of an impairment loss are present. The its, which means that the earnings risk in SPP’s operations is borne by impairment loss is recorded in the income statement. Handelsbanken and the income statement is also consolidated. There may be signifi cant holdings of units in mutual funds man- Loans to the public and credit institutions aged by the Handelsbanken Group. These mutual funds are consoli- In the balance sheet, depending on the counterparty, receivables are dated if: reported either as Loans to the public or as Loans to credit institu- • A company in the Group owns more than 50% of the total units tions. This classifi cation is independent of the measurement category. in an individual fund. The items are reported in the balance sheet on the settlement date. • The Group’s return from a fund exceeds 5% of the fund’s total Leasing agreements where the lessee bears the economic risks and return, regardless of the size of the Group’s fund unit holding. acquires the rewards associated with ownership of the asset are also In the case of consolidation, the part of the fund’s assets correspond- reported as receivables. ing to the ownership share is reported in the balance sheet as shares Loan receivables which represent bad debts are reported on the and participating interests. The part of the fund’s assets belonging to balance sheet at their net amount, i.e. after deduction for probable other unit holders is reported in the balance sheet as assets or liabili- and actual loan losses. ties where the customer bears the value change risk. Undrawn loans (including the risk related to fi xed advance inter- All foreign operations have activities that could cause their func- est rates) are regarded as an off-balance-sheet commitment until the tional currency to deviate from the currency that the Group uses for settlement date. The accounting standards allow measurement at fair reporting. In line with the Group’s decentralised organisation, each value or at the highest of fair value and carrying amount. operation is run independently, and transactions between the parent If a loan receivable is redeemed ahead of time, any early redemp- company and the respective unit represent only part of their opera- tion charge received is reported immediately under Net gains/losses tions. The foreign units also conduct their own funding and the on fi nancial items at fair value. parent company is only affected indirectly by each operation’s cash fl ows. Salary payments and purchases are normally made in local Repo transactions currency. When translating the foreign subsidiaries’ balance sheets Repurchase transactions, also called repo transactions, refer to agree- and income statements, the current method has been used. Assets, ments where the parties simultaneously agree on the sale of specifi c liabilities and minority interests in equity have been converted at the securities and the repurchase of these securities at a pre-determined closing day rate. Shareholders’ equity is translated at the rate applica- price. The securities provided remain in the balance sheet while those ble at the time of investment or earning. The income statement has received are not carried in the balance sheet. The securities provided been translated at the average annual rate. Liabilities in foreign cur- are carried as Collateral pledged. Payment received is recognised un- rencies raised for the purpose of hedging exchange rate differences der Due to credit institutions or as Deposits and borrowing from the in the net investment in independent foreign units are recorded at public, depending on the counterparty. Payment made is recognised the closing day rate. The resulting translation differences have been under Loans to credit institutions or as Loans to the public, depend- classed as shareholders’ equity. ing on the counterparty.

VALUATION OF RECEIVABLES AND LIABILITIES IN FOREIGN Securities loans CURRENCIES Securities lent out are recognised in the balance sheet as securities and Receivables and liabilities in foreign currencies have been recorded at as collateral pledged. Borrowed securities are not recognised as assets. the end-of-day exchange rate. In the parent company, liabilities raised Securities which have been lent out are measured in the same way as for the purpose of hedging exchange rate differences in subsidiaries’ other securities of the same type. In cases where borrowed securities shares are recorded at the rate applicable on acquisition. are sold, an amount corresponding to the fair value of the sold securi- ties is recognised as a liability. CLASSIFICATION AND MEASUREMENT RULES FOR FINANCIAL ASSETS Interest-bearing securities Financial assets are classifi ed for measurement into the following On the balance sheet, interest-bearing securities are carried either as categories: Instruments eligible as collateral with central banks or as Bonds and 1. Loans and other receivables. other interest-bearing securities. This classifi cation is independent of 2. Assets held to maturity. the measurement category. Interest-bearing securities acquired with 3. Assets measured at fair value. the intention of being held until maturity are classifi ed as Assets held 4. Assets available for sale. to maturity. Categories 1 and 2 are measured at amortised cost. In simplifi ed The acquisition value of discount and coupon instruments (held terms, this means that the individual instrument’s effective interest and issued) refers to the accrued acquisition value. This value is the rate is used as a basis for calculating the carrying amount. Measure- discounted present value of future payments where the discount in- ment is supplemented by impairment testing when indications of an terest rate is the effective interest rate at the time of acquisition. This impairment loss are present. The impairment loss is recorded in the implies that acquired premiums and discounts on coupon instru- income statement. Assets measured at fair value mainly comprise as- ments are allocated over the bond’s remaining period to maturity sets held for trading purposes. In addition, individual lending port- or, for loans with interest rate adjustments, until the next time the folios may be classifi ed as measured at fair value in cases where such interest rate is adjusted.

HANDELSBANKEN ■ ANNUAL REPORT 2006 35 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

Shares and participating interests PROPERTY AND EQUIPMENT Shareholdings are reported in the balance sheet as Shares and partici- Buildings in the banking business are carried at historical cost after pating interests. This classifi cation is independent of the measurement deductions for depreciation and impairment losses, if any. Deprecia- category. In the Group, measurement is always done at fair value in tion according to plan is based on an estimated useful period for each the balance sheet in those cases that can be reliably measured. Impair- sub-component of the buildings. The remaining useful period for ment testing is also carried out for shares classifi ed as Available for sale each sub-component is tested annually. In addition, impairment test- if there are indications that an impairment loss may need to be rec- ing is performed if indications of the need for impairment are present. ognised. Impairment losses, if any, are recognised immediately in the Any impairment losses are recognised immediately in the income income statement. In the parent company, shareholdings in associated statement. Buildings owned as investment assets in the insurance busi- companies and subsidiaries are measured at their acquisition value. ness are reported at fair value in the balance sheet, since changes in the value of the latter are related to the size of the fi nancial undertak- Assets where the customer bears the value change risk ings in the insurance contracts. In the balance sheet, assets where the change in value is completely linked to a liability are reported as Assets where the customer bears CLASSIFICATION AND MEASUREMENT RULES FOR the value change risk. FINANCIAL LIABILITIES Financial liabilities are normally measured at amortised cost. How- Measurement at fair value of loan receivables and other unlisted ever, fi nancial liabilities are carried at fair value in cases where they fi nancial items classifi ed for measurement at fair value have a trading book purpose. Assets are classifi ed for measurement at fair value if such measure- ment is judged to provide a fairer picture of the earnings trend than Due to credit institutions and deposits and measurement at amortised cost. borrowing from the public When disclosing the change in fair value of the credit risk compo- In the balance sheet, liabilities to credit institutions, as well as de- nent in a fi nancial instrument, calculations are made by separating posits and borrowing from the public are reported under Due to fair value attributable to changes in interbank interest rates. This credit institutions and Deposits and borrowing from the public, method is applied since this component can be read directly in a respectively. This classifi cation is independent of the measurement liquid market and therefore gives a reliable objective measurement of category. the change in fair value. The method avoids the subjectivity attribu- The fi nancial component separated from insurance contracts in table to measuring fair value of the credit risk component separately. traditional legal life insurance agreements is also carried here. In The fair values of the credit risk component cannot be set at a single these contracts, the fi nancial portion of the insurance contracts has value. Measurement of the credit risk component offers a wide va- an annual yield split. The yield split means that the policyholders riety of possible outcomes. This is because several different models every year receive an amount which is the highest of the adjusted li- can be used and because usually there is no liquid market for the ability based on the original guaranteed yield and the yield arising as credit risk in these assets. a result of the yield split model. The calculation is accumulated for each individual insurance contract. This means that the conditional REINSURANCE ASSETS bonus is reduced in those cases where the yield in an individual year Receivables related to reinsurance agreements classifi ed as insurance is less than the guaranteed interest rate. The portion of the yield contracts are reported in the balance sheet as Reinsurance assets. which according to the yield split model belongs to the Bank is reported as fee and commission income. If the yield is less than the INTANGIBLE ASSETS guaranteed yield per contract, it is reported under Net gains/losses An intangible asset is an identifi able non-monetary asset without on fi nancial items at fair value. physical form. An asset is a resource that is expected to provide future The fi nancial component in the liabilities relating to occupational economic benefi t over which there is control as a result of past events. pension contracts is measured at a market rate of interest. When acquiring companies, an acquisition balance sheet is pre- pared in which identifi able assets and liabilities are measured at fair Issued securities value at the time of acquisition. This measurement is also performed Various types of securities issued by a stock exchange or other market- when acquiring intangible assets that do not yet fulfi l the require- place are reported in the balance sheet under Issued securities. This ment for classifi cation as an asset. The reason for this is that this classifi cation is independent of the measurement category. intangible right may nevertheless have a separable fair value. The part of the acquisition price that cannot be attributed to identifi - Other trading liabilities able assets and liabilities is recognised as goodwill. Acquired brands Trading liabilities are measured at fair value. These consist of short are recognised in the balance sheet at cost, after deduction for any positions in various types of spot instruments. Other types of trad- amortisation and impairment losses. Internally accrued values in the ing book liabilities are reported divided into categories of fi nancial form of goodwill, trademarks, publishing rights, customer databases liability. and similar are not reported as assets in the balance sheet. Investments in software developed by the Bank are carried as an Subordinated liabilities expense on a current basis where the expenditure refers to mainte- Subordinated liabilities contain various types of fi nancial liabilities nance of existing business operations or an existing intangible asset. for which fi nanciers are entitled to payment only after other lenders For development of new intangible assets, or new business opera- have been paid. The item may consist of securities issued on a stock tions for existing intangible assets, the costs accrued are capitalised exchange or of loans raised from individual counterparties. Subordi- from the time when it is probable that economic benefi t that can be nated liabilities are classed in this category regardless of the measure- reliably measured will arise. ment category. An impairment test is performed when there is any indication that the asset may have decreased in value. In addition, in cases where INSURANCE OBLIGATIONS the intangible asset has an indefi nite useful life, an annual impair- Insurance obligations comprise insurance contracts that have been ment test is performed at the same point in time each year. classifi ed in their entirety as insurance, as well as the insurance com-

36 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

ponent in those insurance contracts that have been divided into a fi - EMBEDDED DERIVATIVES nancial and an insurance component. Insurance obligations for which If there are liabilities or assets containing fi nancial components that the insured party bears the entire value change risk are reported in can clearly be separated, these are separated and then reported sepa- the balance sheet item Liabilities where the customer bears the value rately. Exceptions include items in the trading book of embedded change risk. derivatives carried at fair value, as well as instruments with similar changes in value in the different components. For example, the com- Valuation of technical provisions ponents may be separated in issued structured bonds – known as Technical provisions consist of life insurance provisions and provisions equity linked bonds and credit-linked notes. for claims outstanding. The various components in the insurance obligations are meas- TRADE DATE OR SETTLEMENT DATE ACCOUNTING ured using market-adapted valuation parameters. Purchases and sales of money market and capital market instruments on the spot market are subject to trade date accounting. The same ap- Mortality assumptions plies to derivative instruments. Other fi nancial assets and liabilities are Mortality assumptions vary depending on when various insurance normally reported on the settlement date. All instruments measured policies were taken out. The assumptions applied are based on joint at fair value, however, are measured starting on the trade date. This industry statistics. For the main part of the portfolio, the mortality as- also applies to the currency risk component in the fi nancial assets and sumptions used were compiled in 1990. These assumptions take into liabilities that are carried at cost or amortised cost. account the expected future increase in life expectancy. HEDGE ACCOUNTING Fee assumptions Hedge accounting is divided into two hedge categories depending on The fee assumptions vary depending on when various insurance poli- the purpose of the hedge: fair value hedges or cash fl ow hedges. cies were taken out and are based on the fees applying at the time In the case of fair value hedges, the item being hedged and the hedg- the contract was signed. Principally, this means one fee that is pro- ing instrument are both recognised at fair value. Changes in value are portional to the premium and one fee that is proportional to the life recorded directly in the income statement. This accounting policy is insurance provisions. used in cases where the purpose of the hedge is to protect the com- pany against unfavourable changes in market prices. Provision for claims outstanding In the case of cash fl ow hedges, the derivatives are recognised at fair Provision for claims outstanding consists of insurance indemnity due value while the hedged item is carried at amortised cost. For the effec- but not paid at the close of the fi nancial year, together with the esti- tive portion of hedges, the change in value of the derivative is recog- mated future operating costs for settling these claims. The provision nised in equity. An effective hedge means that the cash fl ows on the also consists of a reserve for claims incurred but not yet reported to hedged item correspond to the cash fl ows in the hedging instrument. the company at the close of the fi nancial year. The ineffective portion of the derivative’s change in fair value is recog- nised directly in the income statement. The change in fair value of the LIABILITIES WHERE THE CUSTOMER BEARS THE VALUE derivative is then transferred from equity at the same rate as the cash CHANGE RISK fl ows of the hedged item are recognised in the income statement. The item Liabilities where the customer bears the value change risk comprise various fi nancial liabilities where the liability has a direct link INCOME to the value of a fi nancial asset reported in the balance sheet but for Income is reported in the income statement when it is probable that which the Group bears no risk whatsoever for changes in the fair value future economic benefi ts will be gained and these benefi ts can be reli- of the asset. ably measured.

PROVISIONS INTEREST INCOME AND EXPENSE Provisions consist of expected negative outfl ows of resources from the Interest income and interest expense on fi nancial assets and liabilities, Group charged against earnings. Whether or not the outfl ow occurs, excluding interest for trading purpose are recognised in the income however, is dependent on some type of future event that is fully or statement using the effective interest method. partially beyond the control of the Group. Provisions are reported, Also reported under net interest income is interest attributable to when the Group has a legal or informal obligation, as a consequence derivative instruments used as formal or economic hedges of hedged of past events when it is probable that an outfl ow of resources will items that have interest fl ows reported in net interest income. be required to settle the obligation. The provision is recorded in the To arrive at a fi gure for net interest income which is clear of fi nan- amount estimated to be most probable taking into account the time cial assets and liabilities that are in the trading book and to gain an of settlement. overall view of activity in the trading book, all interest income and interest expense relating to fi nancial assets in the trading book is DERIVATIVE INSTRUMENTS now reported under Net gains/losses on fi nancial items at fair value. Derivative instruments consist of fi nancial derivative contracts. All de- rivative contracts are carried in the balance sheet at fair value. Where FEE AND COMMISSION INCOME AND EXPENSE the fair value is positive, it is reported as an asset. When fair value is Income and expense for various types of services are reported un- negative, it is reported as a liability. der fee and commission income and fee and commission expense, respectively. This means that brokerage income and various types of NET ACCOUNTING management fees are reported as commissions. Other types of income Receivables and payables with the same counterparty which can be reported as commissions are payment commissions and card fees, as set off, i.e. where a contractual relationship exists implying that there well as commissions from insurance operations. Positive results from are legal grounds for applying set off, are reported net in the balance the yield split in the profi t-distributing part of the insurance business sheet in cases where there is an intention to settle the obligations by are also reported as commissions. netting or at the same time.

HANDELSBANKEN ■ ANNUAL REPORT 2006 37 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

NET GAINS/LOSSES ON FINANCIAL ITEMS AT FAIR VALUE + Accrued pension rights during the year. This item refers to the Net gains/losses on fi nancial items at fair value includes all items with year’s proportion of the calculated fi nal total pension payment. an impact on income which arose when measured at fair value and The calculation is based on an estimated fi nal salary and is subject when realising fi nancial assets and liabilities. Specifi cally, the following to actuarial assumptions. items are reported here: + Interest expense. The present value of the pension liability in- • Unrealised changes in fair value of those assets and liabilities clas- creases during the year since the time to disbursement becomes sifi ed as Assets at fair value, excluding the component of change shorter. This increase in liability is reported as an interest expense. in value reported as interest. The interest rate applied is the current government bond rate for • Unrealised changes in fair value of those assets and liabilities that maturities corresponding to the remaining period until the pen- are subject to fair value hedges, excluding the component of sion liability is due to be disbursed. change in value reported as interest. - Expected rate of return. The expected rate of return is based on • Capital loss or gain from the sale of fi nancial assets and liabilities. an assessment of the average return which will be earned on the • Realised and unrealised changes in value as well as interest on as- assets which are kept separate for securing defi ned-benefi t pen- sets and liabilities classifi ed as held for trading. sion obligations. The time horizon for the assessment is related to • Unrealised and realised changes in fair value on derivative con- the entire term of the commitment. The return is reduced by the tracts used as formal or economic hedges of other fi nancial assets taxes and administrative costs for managing the pension obliga- and liabilities in addition to the component of changes in value tions. reported as interest. In addition, individual years may include parts of the actuarial profi ts • Dividend income on those fi nancial assets classifi ed as the trading and losses carried in the income statement. book. For defi ned-benefi t pension plans, the pension payable is based • Negative yield split. This item contains the effects on operating on the salary and period of employment implying that the employer profi ts of the yield on fi nancial assets in the insurance business bears all the material risks for fulfi lling the pension obligation. For being less than the change in guaranteed liability during the year. the majority of defi ned-benefi t plans, the assets are kept separate in • Ineffective component of derivatives used as hedging instruments pension foundations and a pension fund. The net amount of esti- in cash fl ow hedges. mated pension obligations and fair value of the plan assets is report- ed in the balance sheet. The assumptions applied are shown in the RISK RESULT – INSURANCE note on staff costs. The difference between the actual and expected Risk result – insurance comprises the changes that affect the operating return on the assets which are kept separate for securing the pension profi t in those liabilities classifi ed as insurance obligations. obligations is called actuarial gains or losses. The part of the actual return on the assets which is kept separate for guaranteeing pension OTHER DIVIDEND INCOME obligations and which is higher or lower than the expected rate of Other dividend income consists of dividends on shares other than return is called actuarial profi t or loss. Actuarial profi ts and losses those classifi ed as holdings in the trading book. In the parent com- also exist in those cases where the actual pension liability at the end pany’s income statement this item is called Dividends received. In the of the reporting period differs from the pension liability which has parent company, dividends from subsidiaries and associated compa- been estimated to exist at the end of the period based on actuarial nies, as well as dividend income from shares in the trading book are assumptions. These profi ts and losses can occur when actuarial as- also reported here. sumptions are changed and as an effect of the assumptions differing from the actual outcome. Only that part of fair value on the plan SHARE OF PROFITS OF ASSOCIATED COMPANIES assets which can be expected to accrue to the Group is recognised as In the Group, the Bank’s share of the associated companies’ profi t a net asset. The amount is tested annually. before tax is reported as Share of profi ts of associated companies. The The accounting standard allows that parts of actuarial profi ts and share of the associated companies’ taxes is reported with other taxes. losses do not need to be carried in the income statement. Only that part of the actuarial profi ts and losses exceeding the higher of 10% OTHER INCOME of pension assets/liabilities at the opening of the reporting period is Income from sold services as well as external rental income relating carried in the income statement. The amount outside this corridor to leases pertaining to the Bank’s own properties are reported under is carried in the income statement on a straight-line basis during the Other income. average remaining period of employment. For Handelsbanken, this means capitalisation over a period of 20 years. STAFF COSTS Premiums paid for defi ned-contribution pension plans are report- Staff costs consist of all direct staff costs, including various forms of ed as an operating expense. social security costs and other payroll overheads. OTHER EXPENSES PENSION COSTS Other expenses consists of administrative expenses other than staff A pension cost computed on an actuarial basis, relating to pension ob- costs and depreciation. Operating expenses pertaining to own proper- ligations backed by the Bank’s own pension foundations, is reported ties are also reported here. as an operating expense in the parent company. The calculations comply with the Swedish Act on Safeguarding Pension Obligations. DEPRECIATION, AMORTISATION AND IMPAIRMENT OF Premiums paid for pension insurance are also reported under Operat- PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS ing expenses. The actuarial pension premium is reversed as an ap- Depreciation and amortisation propriation under Settlement of pensions, where settlement is made All assets that have been classifi ed as Property and equipment are against disbursed pensions and any compensation from the pension depreciated over an estimated useful life. A linear depreciation plan is foundations. usually applied. The property and equipment that consist of compo- The net amount of three different items related to defi ned-benefi t nents with different set periods of useful life are divided into different pension plans is reported as an operating expense in the Group: categories with separate depreciation plans. Normally this only applies to properties.

38 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ ACCOUNTING POLICIES

Personal computers are usually written off over 3 years and invest- into account whether there have been loan losses in these groups of ments in bank vaults and similar investments in premises over 10 loan receivables that cannot yet be allocated to an individual loan. years. Other equipment is depreciated over fi ve years. If necessary, a group provision is made for these loan receivables. As Intangible assets are divided into two categories. The fi rst catego- soon as the receivable can be individually identifi ed, the provision is ry applies to assets for which it is possible to assess a useful period. transferred to probable loan losses. These are amortised over this set period of useful life. The other category involves intangible assets for which it is not possible to VALUATION OF REPOSSESSED PROPERTY establish a defi nite useful period. These are not amortised. Instead, Property repossessed to protect claims is measured at the time of they are the object of annual impairment testing. Goodwill is not repossession at fair value. Repossessed property is reported and subject to amortisation. valued thereafter together with other similar properties. In the par- Intangible assets for which it is possible to establish an estimated ent company repossessed property, other than repossessed fi nancial useful period are amortised, usually for a maximum of fi ve years. instruments, is valued according to rules for Valuation of inventory as Normally the useful period does not exceed fi ve years. Acquired stipulated in IAS 2, which means they are valued at the lower of cost brands are normally regarded as having a very long useful life, and and net realisable value. In the parent company, fi nancial assets repos- thus the amortisation period may be much longer. The same applies sessed for protection of receivables must always be valued and reported to acquired customer contracts in the insurance business. The am- as if they had been classifi ed as available for sale. ortisation period is tested on an individual basis at the time of new acquisition and also on a continuous basis if there are indications GAINS/LOSSES ON DISPOSAL OF PROPERTY AND that the useful life period may have changed. EQUIPMENT AND INTANGIBLE ASSETS The differences between the remaining carrying amount for property Impairment losses and equipment and intangible assets and the sale price is reported Impairment losses on property and equipment and intangible assets as under Gains/losses on disposal of property, equipment and intangible well as shares in subsidiaries, associated companies and any participa- assets. tion in joint ventures are reported when the recovery value is less than the carrying amount. The recovery value is calculated, at the cash- TAXES generating unit to which the asset refers, as the higher of an asset’s The tax expense for the period consists of Current tax and Deferred value in use or net realisable value. The recovery value is determined tax. Current tax refers to taxes relating to the period’s taxable result. when there is an indication that the asset has fallen in value. The item also includes the Bank’s share of associated companies’ tax- es. Deferred tax is tax referring to temporary differences between the LOAN LOSSES value of an asset or liability in the accounts and its taxable value. Actual loan losses for the year and impairments in respect of probable loan losses for loan receivables and other receivables are reported as LOAN COSTS Loan losses, after an individual assessment has been made. A loan loss Loan costs are normally carried as expenses on a current basis. Where is reported in cases where the estimated value that can be recovered the expenditure refers to intangible assets developed by the Bank, the is less than the book value. Any part of the receivable for which there expenditure is capitalised from the date on which a decision is made to is no realistic possibility of recovery is reported as an actual loss. This capitalise development costs. is the case, for example, when a trustee in bankruptcy has estimated bankruptcy dividends, a scheme of arrangement has been accepted LEASING or the receivable has been reduced in some other way. An amount Leases are defi ned as fi nance or operating leases. A fi nance lease im- forgiven in connection with a reorganisation is always reported as an plies that the lessor transfers substantially all the risks and rewards actual loss. associated with ownership to the lessee. Operating leases are all For loans which have earlier been reported as actual loan losses in non-fi nancial leases. In accordance with the Annual Accounts Act for full, a reappraisal of the size of the loss is made in those cases where Credit Institutions and Securities Companies, all leases in the parent the customer is following a payment plan. company have been classifi ed as operating leases. This means that leas- Impairment for probable loan losses is made for bad debts if the ing fees paid are reported as costs, regardless of whether the lease is value of the collateral together with other payments from the coun- of the fi nance or operating type. In the Group, the majority of leases terparty do not cover the book value of the receivable. Impairment for which the Group is lessor are fi nance leases. A fi nance lease implies losses are recognised down to the amount which is expected to that the leases are reported as loans. be realised, taking into account the value of the collateral and the present value of expected payments from the customer. If the col- SEGMENT REPORTING lateral is a listed asset, the valuation of the collateral is based on the Income and expenses are reported both by business area and by geo- list price; otherwise the valuation is based on the yield value or the graphical area. Classifi cation into segments is based on differences in market value estimated in some other manner. risks and opportunities. The primary basis of classifi cation is business If the collateral consists of property mortgages, the underlying areas, regardless of geographical location. Income and expenses in collateral valuation is made in the same way as for repossessed prop- each segment are reported gross before transactions between the vari- erties. ous segments have been eliminated. Transactions within the segments In cases where the amount expected to be recovered has been cal- have been eliminated. culated by discounting future cash fl ows, the method of calculation implies that the recovery value increases as the time for the payment from the customer approaches. The difference thus arising in the book value is recorded as interest income. Apart from the risk assessment for individual loan receivables made quarterly by all units in the Group that are responsible for customers and loans, a central assessment of homogeneous groups of loan receivables is made at the central level. This assessment takes

HANDELSBANKEN ■ ANNUAL REPORT 2006 39 FINANCIAL REPORTS ■ INCOME STATEMENT – GROUP

Income statement – Group

The accounting and valuation principles applied are shown in the section titled Accounting Policies.

GROUP SEK m 2006 2005

Interest income Note 1 50 133 39 134 Interest expense Note 1 -35 161 -24 044 Net interest income 14 972 15 090 Fee and commission income Note 2 10 521 8 182 Fee and commission expense Note 2 -1 289 -1 127 Net fee and commission income 9 232 7 055 Net gains/losses on financial items at fair value Note 1 4 261 3 459 Risk result – insurance Note 3 571 194 Other dividend income 193 158 Share of profit of associated companies Note 14 105 59 Other income Note 4 225 308 Total income 29 559 26 323

Administrative expenses Staff costs Note 5 -7 714 -6 678 Other expenses Note 6 -4 180 -3 747 Depreciation, amortisation and impairments of property, equipment and intangible assets Note 17, 18 -557 -513 Total expenses -12 451 -10 938

Profit before loan losses 17 108 15 385

Loan losses/recoveries Note 7 55 261 Gains/losses on disposal of property, equipment and intangible assets Note 8 14 Operating profit 17 164 15 650

Taxes Note 26 -4 036 -4 296 Profit for the year 13 128 11 354

Attributable to Ordinary shareholders 13 128 11 354 Minority interest --

Earnings per share * Note 9 20.41 16.98

* No dilution.

40 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ BALANCE SHEET – GROUP

Balance sheet – Group

The accounting and valuation principles applied are shown in the section titled Accounting Policies.

GROUP SEK m 2006 2005

ASSETS Cash and balances with central banks 4 800 7 014 Treasury bills and other eligible bills Note 13 86 565 44 490 Loans to credit institutions Note 11 177 175 136 546 Loans to the public Note 12 1 100 538 983 681 Bonds and other interest-bearing securities Note 13 180 178 140 220 Shares and participating interests Note 14 72 917 28 857 Assets where the customer bears the value change risk Note 15 62 827 134 432 Derivative instruments Note 16 53 703 68 169 Reinsurance assets 108 48 Intangible assets Note 17 12 524 12 789 Property and equipment Note 18 3 545 3 318 Current tax assets 747 67 Deferred tax assets Note 26 265 197 Net pension assets Note 5 3 914 3 698 Other assets Note 19 21 012 13 629 Prepayments and accrued income Note 20 9 190 5 752 Total assets Note 10 1 790 008 1 582 907

LIABILITIES AND EQUITY Due to credit institutions Note 21 320 482 289 053 Deposits and borrowing from the public Note 12 533 885 407 617 Liabilities where the customer bears the value change risk Note 22 62 833 135 926 Issued securities Note 23 595 001 486 344 Derivative instruments Note 16 66 182 73 734 Other trading liabilities Note 24 51 829 48 137 Insurance liabilities Note 25 2 871 862 Current tax liabilities 488 767 Deferred tax liabilities Note 26 6 810 5 950 Provisions Note 27 127 36 Pension obligations Note 5 422 - Other liabilities Note 28 15 537 10 180 Accruals and deferred income Note 29 15 643 11 748 Subordinated liabilities Note 30 51 672 46 795 Total liabilities Note 10 1 723 782 1 517 149

Minority interest 00 Share capital 2 888 2 879 Other reserves 3 972 3 583 Retained earnings 46 238 47 942 Profit for the year 13 128 11 354 Total equity 66 226 65 758

Total liabilities and equity 1 790 008 1 582 907

HANDELSBANKEN ■ ANNUAL REPORT 2006 41 FINANCIAL REPORTS ■ STATEMENT OF CHANGES IN EQUITY – GROUP

Statement of changes in equity – Group

GROUP Fair Share Statutory Hedge value Retained Minority SEK m capital reserves reserve reserve earnings interest Total

Shareholders’ equity 31 December 2004 2 878 2 751 55 743 0 61 372 Impact of transition to IFRS 2005 Net effects of transition to measuring at fair value according to IAS 39 -149 680 -872 -341 Provision by group for individually assessed receivables -360 -360 Impact of changed accounting policies in the insurance operations 2006 118 118 Opening equity 2005 after adjustment 2 878 2 751 -149 680 54 629 0 60 789

Acquisition SPP -580 -580 Change in available-for-sale instruments, after tax Note 31 192 192 Change in cash flow hedges, after tax 109 109 Exchange difference Note 31 380 380 Total changes in equity not recognised in the income statement - - 109 192 -200 - 101

Profit for the year according to 2005 income statement 11 365 11 365 Impact of changed accounting policies in the insurance operations 2006 -11 -11 Profit for 2005 after adjustment 11 354 11 354 Total changes before transactions with the owners - - 109 192 11 154 - 11 455

Dividend -4 018 -4 018 Repurchase of own shares -2 468 -2 468 Reduction of share capital by means of cancellation -99 99 - Bonus issue 100 -100 - Shareholders’ equity 31 December 2005 2 879 2 751 -40 872 59 296 0 65 758

Impact of changed accounting policies in the insurance operations 2006 -3 652 -3 652 Opening equity 2006 after adjustment 2 879 2 751 -40 872 55 644 0 62 106

Change in available-for-sale instruments, after tax Note 31 251 251 Change in cash flow hedges, after tax 138 138 Exchange difference Note 31 -492 -492 Total changes in equity not recognised in the income statement - - 138 251 -492 - -103 Profit for the year 13 128 13 128 Total changes before transactions with the owners - - 138 251 12 636 - 13 025

Dividend -4 543 -4 543 Repurchase of own shares -4 362 -4 362 Reduction of share capital by means of cancellation -89 89 - Bonus issue 98 -98 - Shareholders’ equity 31 December 2006 2 888 2 751 98 1 123 59 366 0 66 226

42 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ CASH FLOW STATEMENT – GROUP

Cash fl ow statement – Group

GROUP SEK m 2006 2005

OPERATING ACTIVITIES Operating profit 17 164 15 650 of which paid-in interest 47 690 46 823 of which paid-out interest -31 639 -30 137 of which paid-in dividends 2 223 252 Adjustment for non-cash items in the operating profit Loan losses 233 238 Unrealised changes in value -2 088 1 364 Depreciation, amortisation and impairments 557 513 Paid income tax -4 248 -6 735 Changes in the assets and liabilities of operating activities Loans to credit institutions -40 629 -27 470 Loans to the public -117 091 -121 494 Financial current assets -123 416 -21 463 Due to credit institutions 45 429 30 057 Deposits and borrowing from the public 122 648 65 374 Issued securities 108 657 43 708 Derivative instruments, net positions 6 879 -13 681 Short-term positions 3 691 21 940 Claims and liabilities on investment banking settlements -7 165 -150 Other -8 501 -2 675 Cash flow from operating activities 2 120 -14 824

INVESTING ACTIVITIES Acquisition of subsidiaries -- Change in shares 266 342 Change in interest-bearing securities 05 Change in property and equipment -323 -276 Change in intangible non-current assets -83 -23 Cash flow from investing activities -140 48

FINANCING ACTIVITIES Repayment of subordinated loans -- Issued subordinated loans 4 876 21 613 Dividend paid -4 543 -4 018 Repurchase of own shares -4 362 -2 468 Cash flow from financing activities -4 029 15 127

Cash flow for the year -2 049 351

Liquid funds at beginning of year 7 014 6 396 Cash flow from operating activities 2 120 -14 824 Cash flow from investing activities -140 48 Cash flow from financing activities -4 029 15 127 Exchange rate difference on liquid funds -165 267 Liquid funds at end of year 4 800 7 014

HANDELSBANKEN ■ ANNUAL REPORT 2006 43 FINANCIAL REPORTS ■ NOTES – GROUP

Risks and risk control

HANDELSBANKEN’S UNIQUE WORK METHOD HANDELSBANKEN’S APPROACH TO CREDIT RISK At Handelsbanken, business transactions are always based on the The Bank’s approach to credit risk can be summarised in the customer’s requirements. The branch has responsibility for the cus- following points: tomer and all decisions are made as close to the customer as possible. • The Bank strives to maintain its historically low level of credit The branches aim to achieve sustainable and high profi tability by of- losses in relation to other banks, thus contributing to the Bank’s fering high-quality services to satisfi ed customers. Handelsbanken’s profi tability target and retaining its sound fi nancial position. decentralised method of working is a cornerstone in how it achieves • A new borrower should have a repayment ability which in the its corporate goal. At Handelsbanken, credit decisions are made at opinion of the Bank is normal or better than normal. the branches, which are also responsible for following up credit risks • The Bank’s overall profi tability target means that the credit risk and being proactive in its risk management. The fact that all branch- must be in reasonable proportion to the profi tability of the expo- es are so active in managing credit risk means that Handelsbanken sure. in historic terms has had low loan losses. New capital requirements • The Bank aims for the individual employee’s responsibility for affect how capital adequacy will be calculated and how risks will be business transactions to be combined with the responsibility for managed. Handelsbanken is currently working on developing new risk. The person who best knows the customer and the market methods and tools in the area of risk management. conditions is also in the best position to assess the risk.

HISTORICALLY LOW LOAN LOSSES RISK ORGANISATION An excellent picture of Handelsbanken’s management of credit risks The board is responsible for assessing and monitoring the risks aris- is obtained by looking at the actual outcome. For a long time – and ing in the Group’s operations. The board ratifi es policy documents particularly during the fi nancial crisis in the early 1990s – the Bank’s and instructions describing how various risks should be managed method of managing credit risk has led to signifi cantly lower loan and reported. For credit risks, the board draws up a decision struc- losses than for its competitors in relation to outstanding loan vol- ture for limits but does not set any limit for the total exposure. umes. In the past fi ve years, Handelsbanken’s average loan loss ratio The board decides on limits for other fi nancial risks in the banking has been 0.02%, compared to 0.08% for the other Swedish banks. operations and the CEO allocates these limits over various business This picture is further enhanced when looking at bad debts as areas. For the Group’s profi t-distributing insurance companies, there a proportion of lending at Handelsbanken. In the past fi ve years, is a risk that the yield agreed with the customer will not be attained Handelsbanken’s average bad debt reserve ratio has been 0.20%, and that the companies must therefore contribute capital. The board compared to 0.47% for the other Swedish banks. does not set a limit for this risk. The CEO ensures that this risk is subject to regular follow-up and that any risk exposure exceeding Loan losses as a percentage of lending a certain amount determined by the board is reported to the CEO and the board.  At the beginning of 2007, the credit risk control and fi nancial  risk control units were merged into an independent risk control unit  for the whole of the Handelsbanken Group, reporting to the head  of Central Control and Accounting. At group level, risk exposure  is checked by this unit which measures and follows up risks and re-  ports to the Bank’s CEO and board. In each business area that has  been allocated a limit, a local risk control unit reports the risk expo- sure to the central risk control units and to the business area.  

         

(ANDELSBANKEN /THER3WEDISHBANKS

44 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

DESCRIPTION OF RISK Following a detailed review, the Swedish Financial Supervisory

MAIN RISKS Authority has assessed that the Bank’s method for internal risk Credit risk WHERE THE RISK MAINLY ARISES classifi cation is reliable. Their assessment included a condition con- Depends whether an individual borrower cerning the organisational location of the independent risk control can fulfil his commitments to the Bank. Branch office operations function. This condition has now been met by an organisational Handelsbanken Capital Markets change. This means that the Bank meets the Supervisory Authority’s Handelsbanken International strict requirements for applying the internal rating method and that Handelsbanken Liv / SPP the method will be used to calculate the capital requirements.

FINANCIAL RISKS Market risk Operational risks – Handelsbanken will use the standard model Impact on the Bank’s profits of where the capital requirement is based on the Bank’s income in its changed market prices Handelsbanken Capital Markets various business areas. Handelsbanken Liv / SPP Central Treasury Market risks – calculated in accordance with the Financial Super- Liquidity risk visory Authority’s standardised directives and where there are rela- That the Bank cannot obtain funding at normal prices Whole Group tively few changes.

OTHER RISKS Capital assessment and risk management – Pillar 2 Operational risk Banks must have a process for assessing their total capital require- Manual efforts, errors in procedures and systems leading to losses Whole Group ment in relation to their risk profi le and a strategy for maintaining the capital level where the board is responsible for establishing Insurance risk the bank’s risk tolerance. The process is known as internal capital A life insurance contains uncertainty depending on the insured party’s adequacy assessment (ICAAP). All signifi cant risks must be identi- longevity or health Handelsbanken Liv / SPP fi ed, measured and reported in this process. The assessment must Business risk put special focus on the risks which are not managed under Pillar 1. The risk related to variations Some risks are appropriate for capital cover while other risks such as in income and expenses Whole Group liquidity risk, are better managed by other measures. All risks, in- cluding those which are not covered by capital, must be included in NEW CAPITAL ADEQUACY RULES the internal capital adequacy assessment. The banks are expected to On 1 February 2007, new capital adequacy regulations were imple- keep a larger capital base than the minimum level specifi ed in Pillar mented – the Basel II rules. The new rules entail major changes in 1. In 2006, substantial resources have been devoted to developing how the Bank’s capital requirement is to be calculated and how a processes and methods for ICAAP. satisfactory capital base is ensured. To avoid dramatic changes, there Handelsbanken has decided to base its ICAAP on an economic are transitional rules with gradual adaptation over a period of three capital model (EC). The EC model provides a measure of the years. The new regulations will be fully implemented from 1 January Group’s overall risks and corresponds to the capital which with very 2010. The changes apply in particular to banks which apply to use high probability will cover unexpected losses or decreases in value their own risk calculations – called the Internal Rating Based Ap- from the perspective of the shareholders. The calculation is made proach – when calculating the minimum capital cover requirement. with a time horizon of one year and with a given confi dence level. The work on adapting the Bank to Basel II has been in progress The confi dence level is currently 99.97%. The rating agencies’ statis- for several years with the main focus on the regulations regarding tics show that for AA-banks, the probability is approximately 99.97% minimum capital. During 2006, the work continued of adapting the that they will meet their payments in time, with a time horizon of Bank to the regulations. The branches verifi ed the credit informa- one year. The confi dence level to be applied is determined by the tion and new procedures. Development of system support for inter- board which also establishes the Board’s capital policy where the nal risk classifi cation, risk calculation, internal and external reporting Bank’s approach to risk is set out. continued and is still in progress for use with capital assessment The capital available to meet risks is called Available Financial and risk management. The Bank’s work to fully implement the new Resources, AFR. AFR consists of the Bank’s equity including other regulations will continue until the end of 2009. available fi nancial values. The regulations cover three main areas, known as pillars. Pillar 1 The head of Central Control and Accounting has the main deals with how the requirements for minimum capital will be ful- responsibility for Handelsbanken’s ICAAP. His task is to weigh fi lled and Pillar 2 with the supervision of the authorities and banks’ together all the signifi cant risks and other factors for assessing and assessment and management of capital and risks. Finally, Pillar 3 deciding the Bank’s and the Handelsbanken Group’s need of risk- deals with publication of information concerning risk management bearing capital and other fi nancial resources. and capital adequacy. Internally, the regional banks and business operations are steered towards the Bank’s overall profi tability goal. To measure and steer Minimum capital requirements – Pillar 1 the business operating units towards the Bank’s overall goal, all the Credit risks – Handelsbanken applies an internal method for risk capital requiring return is allocated to these units. classifi cation and calculation of credit risk. The method is also called Internal Risk Classifi cation and is based on the internal rating meth- Public disclosure – Pillar 3 od which the Bank has successfully used for more than 25 years. Information which must be published mainly covers two areas: The internal rating method is adjusted and developed, but the focal • Detailed mandatory information concerning models and data point of the credit process is the personal contact with the customer. according to the minimum requirements in Pillar 1. An important starting point is to retain the strengths in the Bank’s • Information about how the Bank works with Internal Capital credit process and credit culture. Adequacy Assessment and risk control according to Pillar 2.

HANDELSBANKEN ■ ANNUAL REPORT 2006 45 FINANCIAL REPORTS ■ NOTES – GROUP

CREDIT RISKS Credit organisation

The Bank’s focus on understanding and individually assessing each Proportion of limit volumes per risk class customer in depth requires a strongly decentralised organisation. The credit responsibility lies with the branch manager or the em-  ployee delegated by the manager at the branch responsible for the  customer. The day-to-day business relationship with the customer gives the  branch an up-to-date picture of how the customer’s operations are  progressing. The branch can quickly identify potential problems which may affect the Bank’s credit risk. The fi nancial consequences 

of the lending affect the earnings of the branch both positively and  negatively and it is the branch that handles the problems arising if a  customer’s ability to pay is impaired. The Bank’s method of work-     ing means that everyone who carries out transactions which entail   risk, learns a well-established way of assessing what is an acceptable level of risk for the Group. This unambiguous responsibility and

Decision levels for granting credits

The board Proportion of number of limits Proportion of limit amounts 7% Credit committee of the board 74%

Central Credit Department

36% Regional banks Credit committee Credit committee Credit committee 21%

Credit committee 57% Branches foreign branches 5%

Regional banks Handelsbanken Markets Handelsbanken Finans Handelsbanken Stadshypotek Handelsbanken Asset Management

Credit risk exposure SEK m 2006 2005

Loans to the public 1 100 538 983 681 Loans to credit institutions 177 175 136 546 Unutilised part of granted overdraft facilities 130 956 124 200 Credit commitments 166 576 149 664 Commercial paper programmes 22 392 9 387 Other commitments 61 70 Guarantees, credits 18 395 12 052 Guarantees, other 39 618 33 144 Documentary credits 49 150 50 542 Derivatives 42 132 42 934 Treasury bills and other eligible bills 86 565 44 490 Bonds and other interest-bearing securities 180 178 140 220 Shares and participating interests 72 372 28 461 Total 2 086 108 1 755 391

Geographical distribution Off-balance-sheet Lending commitments Credit SEK m Public institutions Derivatives* Investments Guarantees Other Total

Sweden 834 978 86 133 32 244 246 797 30 320 219 096 1 449 568 Norway 104 494 117 174 1 505 4 386 22 727 133 403 Finland 63 549 368 23 9 045 10 745 12 564 96 294 Denmark 34 659 8 132 169 2 067 2 387 5 206 52 620 Great Britain 37 022 442 115 2 851 1 793 8 552 50 775 Other countries 25 836 81 983 9 407 76 850 8 382 100 990 303 448 Total 1 100 538 177 175 42 132 339 115 58 013 369 135 2 086 108

* Refers to positive market values after taking into account legally viable netting contracts.

46 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

Loans to the public, by sector 2006 2005 Provisions Loans before for probable Loans after Loans after SEK m provisions loan losses provisions provisions

Private individuals 484 034 -341 483 693 432 118 Of which mortgage loans 338 087 -22 338 065 302 526 Property management 322 413 -481 321 932 298 870 Of which ownership housing co-operatives 79 179 -62 79 117 77 647 Corporate services 40 362 -71 40 291 37 160 Manufacturing 40 674 -239 40 435 38 513 Retail 37 368 -233 37 135 35 686 Transport and communication 17 333 -22 17 311 18 823 Construction 12 673 -51 12 622 11 888 Municipalities 7 880 0 7 880 8 542 Agriculture, hunting and forestry 6 371 -6 6 365 6 344 Hotel and restaurant 5 220 -21 5 199 5 173 Insurance operations 10 671 0 10 671 4 520 Other sectors 117 532 -189 117 343 86 460 Total loans to the public, before taking into consideration collective provisions 1 102 531 -1 654 1 100 877 984 097

Collective provisions -339 -416 Total 1 100 538 983 681

Loans to the public, collateral SEK m 2006 2005

Residential property 1 607 966 547 384 Agricultural property 14 334 10 059 Other property 88 128 83 593 Governments, municipalities and county councils 95 221 106 207 Floating charges on assets 17 767 21 283 Guarantees 17 912 13 348 Unsecured 138 440 116 454 Other collateral 120 770 85 353 Total 1 100 538 983 681 1 Including ownership housing co-operatives.

Bad debts and/or non-performing loans, by sector Bad debts Non-performing Of which loans which SEK m Gross Provisions Net2 non-performing are not bad debts

Private individuals 750 -341 409 377 370 Property management/corporate services 952 -552 400 99 143 Manufacturing 451 -239 212 58 18 Retail 328 -233 95 79 17 Transport and communication 32 -22 10 9 4 Construction 59 -51 8 7 84 Hotel and restaurant 28-21750 Other 272 -198 74 63 34 Total 2 872 -1 657 1 215 697 670 2 Book value after provisions.

Bad debts and/or non-performing loans, geographic distribution Bad debts Non-performing Of which loans which SEK m Gross Provisions Net3 non-performing are not bad debts

Sweden 1 851 -1 071 780 483 453 Norway 136 -60 76 76 199 Finland 156 -31 125 106 0 Denmark 689 -462 227 25 18 Great Britain 33-27660 Rest of Europe 7-6110 North America 00000 Asia 00000 Total 2 872 -1 657 1 215 697 670 3 Book value after provisions.

HANDELSBANKEN ■ ANNUAL REPORT 2006 47 FINANCIAL REPORTS ■ NOTES – GROUP

proximity to the customer means that problems can be identifi ed at individual customer is a combination of the customer’s repayment an early stage and the Bank’s loan losses can thus be reduced. Most capacity, the size of the credit/limit and the collateral provided by branch employees have a personal limit within which they have sole the customer. The assessment is performed at least once a year for all responsibility for their decisions. The limit determines the total customers with a limit, for both corporate customers and private in- amount of credit which the employee can grant to a customer. The dividuals. The assessment of repayment capacity results in an internal size of the limit may vary depending on the customer category and rating of the customer. The Bank has applied the same rating system collateral. If there is a need for larger credits, there are correspon- for 25 years. ding decision limits at the regional level. The largest credits are deci- Each branch makes a quarterly risk report, where it reviews its ded by the board’s credit committee. credit commitments to identify and report credits where the bor- The credit process always starts at the branch, and any decision at rower’s repayment capacity is impaired and the Bank’s collateral is a higher level of the Bank is based on the credit process planning pre- insuffi cient. For each such commitment, the probability of loss is pared by the branch. No credit process may proceed at the Bank with- specifi ed as well as the amount at risk. The risk is classifi ed as low out the recommendation of the branch responsible for the customer, potential, high potential or probable loss. If it is considered probable and thus the branch always has the credit responsibility. This does not that a borrower will not meet his or her obligations to the Bank, mean, however, that the branches have no support from the regional the credit is classifi ed as a bad debt and will be written down to and central functions. Regionally, there are credit departments that the value of the payments expected to be received. Low potential assist the branches with matters relating to business economics and or high potential risk exists if the borrower’s repayment capacity is risk assessment. impaired, but it is still deemed probable that payments will be made. For commitments over SEK 1 million – for mortgages, over SEK Normally, risks are identifi ed and reported and risk-limiting meas- 4 million – the branch draws up a credit limit. This specifi es a limit ures are taken before a commitment becomes non-performing. The amount for the customer’s maximum credit commitment to Han- risk reports are presented each quarter to the boards of the regional delsbanken. The credit limit also contains information concerning banks and subsidiaries and to the board of the Bank. the collateral requirements that apply to the limit amount. A business evaluation with an analysis of the customer’s operations and an assess- Measurement of credit risks ment of the customer’s repayment capacity is attached to the credit To quantify its credit risks, the Bank calculates the probability of limit. The amount and arrangement of the credit limit are determined default (PD), the exposure at default (EAD), and the proportion of by the customer’s need of various types of credit and the Bank’s risk the loan that the Bank would lose in the case of default (loss given assessment. default – LGD). These factors are mainly calculated on the basis of previous losses incurred. This information is used for several impor- Principles for managing credit risk tant purposes, above all the pricing of risk and the calculation of The Bank must have a high capacity to grant credit and must always capital requirements according to the Swedish Financial Supervisory be able to offer good customers credit on competitive terms. This Authority’s capital adequacy regulations. implies a commitment in terms of both competence and processing times. A high level of skills and competence on the part of those Credit risk in the insurance operations working with credits contributes to retaining the Bank’s low credit The investment policy for the insurance companies describes how risk level and thus increasing the Bank’s profi tability. This is based the credit risk is to be managed. Investments in fi xed income secu- on business being done according to the Bank’s strict requirements. rities that are not issued by governments, municipalities or bank- The Bank aims to be selective in choosing customers and the bor- owned mortgage institutions may comprise a maximum of 25% of rowers must be of high quality. The quality requirement must never the fi xed income investments. Investment in fi xed income securities be neglected in order to achieve a high loan volume. with a credit rating from an external rating institution below “A” Some 96% of the overall limit volume for credit risks was to cus- requires approval from the board of the insurance companies. The tomers with a repayment capacity assessed as normal (risk category creditworthiness of issuers and counterparties is determined via both 5 according to the Bank’s rating model) or better than normal. This internal and external credit assessments. approximately corresponds to an investment grade rating from exter- nal rating agencies such as Moody’s and Standard & Poor’s. OPERATIONAL RISKS Skills and working methods are crucial in credit processing and are Operational risk is defi ned as the risk of loss due to defi cient or also important conditions for rapid organic growth. The Bank would incorrect procedures and systems, human error on the part of the not have been able to grow so quickly outside Sweden in the past ten Bank’s employees or external events. The Bank’s defi nition of op- years without such deeply rooted working methods and skills in the erational risk also includes legal risks. Identifi cation, management area of credits. An important stage in international expansion is to im- and control of operational risks is a clear and integrated part of plement Handelsbanken’s credit culture on new markets. managerial responsibility at all levels at Handelsbanken. The Bank’s The Bank regards the Nordic region and Great Britain as do- decentralised method of work promotes cost-consciousness that re- mestic markets where it can maintain close contact with customers sults in vigilance against potential loss risk in the daily procedures. through a local presence. In future domestic markets such as Poland Operational losses are the subject of careful examination. Major ef- and Germany, the credit risk mandate will gradually become more forts are put into analysing how to avoid recurrences. In 2006, the similar to that which applies in the Nordic countries and Great Brit- Bank’s operational losses were SEK 68m. This refers to the total of ain. Lending in other countries is mainly aimed at customers with a individual losses in excess of SEK 25,000. SEK 31m of these losses valuable relationship with the Bank in one of its domestic markets. was due to external crime. Apart from the responsibility for operational risk borne by the Internal rating and risk assessment managers responsible for various functions, there are managers with A risk assessment is made on which to base credit/limit decisions. special responsibility for information security and physical security This results in an assessment of the size of the credit risk in the who report directly to the group chief executive. As an aid to identifi - Bank’s exposure to the customer. In particular, the customer’s cation, measurement and handling of operational risk, the Bank has a repayment capacity is analysed. The Bank’s risk assessment for an separate reporting system for operational incidents and losses. The risk

48 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

control function at Central Control and Accounting has the overall The head of Central Control and Accounting has overall respon- responsibility for the methods used for identifying and quantifying sibility for the independent control of market risks in the Group. operational risk and for monitoring and reporting these risks to the This responsibility entails ensuring that documentation for decisions management and the board. is produced for risk measurements and limits. The head of Central To supplement the day-to-day control of operational risk, all main Control and Accounting is also responsible for appropriate informa- departments, regional banks and subsidiaries in the Group carry out tion and report systems being produced for risk measurements and annual self-evaluations of operational risk. This review is for the pur- limits. poses of identifying operational risk and quantifying the losses that The fi nancial risks and limit utilisation for the trading operation, may arise. Following the review, measures are to be proposed and the internal bank and the mortgage business are checked on a daily taken to reduce the risks. A general review of the Group’s operation- basis. Market risks are regularly assessed by the risk committee, led al risks is performed twice a year by the heads of the regional banks, by the head of Central Control and Accounting. The risk commit- main departments and subsidiaries. The outcome of these reviews is tee’s analyses and observations are regularly reported to the group reported to the board. chief executive and the board of the Bank.

FINANCIAL RISKS Interest rate risk Market risk The Group’s interest rate risks arise mainly at Handelsbanken Capi- Market risk is the risk that price changes in the fi nancial markets tal Markets, Central Treasury, the insurance operation and in the – such as interest rates, currencies, equities, commodities or real regular lending operations at subsidaries and the regional banking estate – result in profi ts or losses for the Group. Market risks arise operations. Interest rate risk arises in banking operations as a result in Handelsbanken Capital Markets’ trading portfolios, insurance of the lending partly having longer maturities than the refunding. operations and the internal bank. Market risks also arise in the The Bank eliminates most of this risk by entering into interest rate other banking operations. Handelsbanken Capital Markets is market swap agreements. In the insurance operation, the opposite applies, maker for fi xed income products, currencies and equity instruments. i.e. the liabilities have longer maturities than the assets. Further- Risks arise either through customer-related business or the Bank’s more, traditional life insurance products frequently offer a guaran- own positions. Central Treasury’s trading portfolio, with one or teed yield. As a result of this, rising interest rates have a positive effect two exceptions, consists of securities that are eligible as collateral on the insurance operation’s activities. This fundamental difference with the Riksbank and is used for securing payments in the daily between banking operations and insurance means that combined op- clearing operations. In the insurance operations, management of the erations reduce the Group’s vulnerability to changes in interest rates. policyholders’ funds and the equity capital is exposed to market risk, In general, interest rate risk is taken in markets which are character- mainly interest rate and equity price risks. ised by good liquidity. Interest rate risk is measured at the Group in several ways. Value at Risk, VaR, is used for Handelsbanken Capital Risk management and analysis Markets’ trading portfolios and for the insurance operation. For other The board establishes the Bank’s fi nancial risk policy, stating how units and for the aggregate interest rate risk in the Group, the interest the Group’s fi nancial risks should be measured and reported. Based rate risk is measured as the effect on fair value of a major instantane- on the fi nancial risk policy, the board determines the total market ous parallel shift of all interest rates. As at 31 December 2006, the risk and liquidity risk limits for the entire Group within each type Bank’s interest rate risk in the case of a parallel shift in the yield curve of risk. The limits are then allocated to the various business areas by of one percentage point was SEK –637m (–877). the group chief executive.

Interest rate adjustment periods for the Group’s assets and liabilities

SEK m –3 mths 3–6 mths 6–12 mths 1–5 yrs 5 yrs– Total

Assets Lending 783 063 52 601 46 787 208 929 32 943 1 124 323 Banks and other financial institutions 171 470 5 500 1 753 487 35 179 245 Bonds, etc. 105 858 23 673 28 610 61 641 51 020 270 802 Total assets 1 060 391 81 774 77 150 271 057 83 998 1 574 370

Liabilities Deposits 442 443 5 605 4 104 15 951 92 877 560 980 Banks and other financial institutions 286 902 17 679 7 796 2 262 2 916 317 555 Issued securities 340 154 101 382 152 040 36 581 15 895 646 052 Other liabilities 824 1 183 3 029 39 587 9 576 54 199 Total liabilities 1 070 323 125 849 166 969 94 381 121 264 1 578 786

Off-balance sheet items 42 910 -110 941 8 750 28 399 33 997 3 115 Difference between assets and liabilities including off-balance-sheet items 32 978 -155 016 -81 069 205 075 -3 269 -1 301

The above table shows the interest rate adjustment periods for the Group’s interest-rate related assets and liabilities as at 31 December 2006, reported by the trade date. Non-interest bearing assets and liabilities have been excluded.

HANDELSBANKEN ■ ANNUAL REPORT 2006 49 FINANCIAL REPORTS ■ NOTES – GROUP

Measured as the impact on net interest income for the period January operations’ own equity is chiefl y invested in fi xed income securities. to December 2006 in the event of an immediate parallel increase/ In traditional insurance with guaranteed returns, the insurance decrease in the yield curve of one percentage point, the net interest companies bear the risk of the policyholder not achieving a guaran- income risk in banking operations was SEK –153m (70). This risk teed return on paid-in premiums. If the total yield exceeds the guar- measure is constructed so that it assumes that all interest-bearing anteed rate, the yield is split so that the policyholder receives 90% and assets and liabilities and off-balance-sheet items in the banking ope- the insurance company 10%. For savings in unit-linked insurance, the ration as at 31 December 2006 are held to maturity and that no new policyholder accepts the entire fi nancial risk. The insurance company positions are taken. bears no risk; nor does it receive any of the yield. The non-linear interest rate risk is measured and a limit set in terms Asset management operations are exposed to market risks, liquidity of the impact on fair value in the case of substantial changes in under- risks, credit risks and operational risks. The insurance operations ap- lying market interest rates and volatilities. ply integrated management and risk assessment of assets and liabilities called Asset and Liability Management (ALM). Equity price risk In order to control exposure to different market risks, the insurance The Group’s equity price risk mainly occurs in the Bank’s strategic companies’ chief fi nancial offi cer establishes a benchmark portfolio. share portfolio and also at Handelsbanken Capital Markets and the The resistance of the balance sheet is calculated continually by meas- insurance operations. Handelsbanken is a leading market maker for uring the theoretical effect of dramatic fl uctuations in market prices structured products which give rise to equity price risks in the trad- on the company’s available solvency margin. ing operations. Apart from this, the Bank takes its own positions to Changes in prices on the fi nancial markets may lead to the value of a limited extent. In addition to positions in underlying shares, the the insurance companies’ commitments to various customers exceed- equity price risk in the trading portfolio also contains positions in ing the value of these customers’ total assets. Defi cits arise either from options which give rise to non-linear risk. The Bank has elected to a decrease in the valuation rate for liabilities, which pushes up the set limits on and measure the risk in this portfolio using pre-defi ned value of the discounted commitment, or from the return on managed stress scenarios. This means that the price risk is measured when there assets decreasing, which causes the customers’ total assets to shrink. are signifi cant changes in underlying shares prices and volatitilies. This To measure the effect of price variations on the fi nancial markets, the method captures the non-linear risk in an appropriate manner. Value insurance companies follow up these risks on a regular basis. at Risk is used as a complementary risk measure for equity price risk in trading operations. Risk management at SPP The equity price risk is small in the Bank’s other operations. The defi cits at SPP – the deferred capital contribution (DCC) – are A limit is set for the risk and it is measured as the value change risk in managed by the company carrying these as a liability. The main fac- the case of 10-percent fl uctuations in share prices. For the equity price tor affecting the size of the fi nancial risk, apart from allocation in risk in insurance operations, see a separate section. the traditional insurance portfolio, is DCC’s sensitivity to changes in The table below shows the risk in the Bank’s equity positions as at valuation rates for liabilities, and its sensitivity to changes in returns 31 December 2006 for hypothetical changes in underlying prices and in the traditional insurance portfolio. volatilities. No correlation is taken into account between the equity To reduce the sensitivity of the fi nancial result to these factors, markets in different countries. fi nancial derivatives are traded on the company’s own behalf. The movements in the market that the company protects itself against are Equity price risk changes in interest rates and stock market performance. During the 31 December 2006 year, the company traded in interest rate swaps, interest rate swap- SEK m Change in volatility tions, equity futures and share options. Change in equity price 25% 0% -25%

10% 590 596 605 Risk control in insurance operations -10% -590 -567 -550 The risk control group is responsible for producing methods and processes for risk measurement, ALM analyses, and reporting. In- Exchange rate risk surance risks and market risks are regularly reported to the chief ex- The Bank’s foreign exchange exposure mainly arises from Handels- ecutive of the insurance companies and the Handelsbanken Group’s banken Capital Markets’ trading in the international foreign exchange central risk control unit. markets. Most of this trading is intra-day trading. The board has established limits for Value at Risk and stress risk relating to the ex- Value at Risk change rate risk arising in Handelsbanken Capital Markets’ trading Value at Risk (VaR )is used to measure the losses that may arise in operations. risk positions due to movements in the underlying markets over a Foreign exchange exposure also arises in the normal banking oper- specifi ed holding period and for an assumed level of probability. The ations as part of processing customers’ payment fl ows. The board has VaR method implies that the various risk categories, equity risk, allocated small position limits for this part of the Bank’s exchange rate interest rate risk, exchange rate risk and commodity risk, are handled risk. The exchange rate risk was SEK 21m (5), measured as the impact in a uniform way and that the risks can be aggregated into a total on the Bank’s earnings if exchange rates change by 5%. market risk. For Handelsbanken Capital Markets’ trading portfolios, VaR is Market risk in the insurance operations calculated for the individual classes of risk and at the portfolio level Asset management in the insurance operations manages traditional with a 99% confi dence interval and a one-day holding period. The insurance portfolios, unit-linked insurance and the company’s own calculations are based on historical simulation and measure the im- equity. Insurance obligations with guaranteed interest, known as tra- pact on the portfolio in question, revalued using the past year’s daily ditional insurance, are managed in a diversifi ed portfolio consisting changes in interest rates and prices. The model used implies that of fi xed income securities, equities, real estate and alternative invest- every hundredth trading day, a loss will occur which exceeds VaR. ment assets. Unit-linked policies are mainly invested in mutual funds Since VaR is based on model assumptions, it is important to con- managed by Handelsbanken Asset Management. The insurance tinually verify the effectiveness of the model. VaR is a good estimate

50 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

of the risk under normal conditions, but it does not capture extreme, Worst outcome relative VaR, individual market movements. VaR is therefore regularly evaluated trading portfolio, using back-testing. This verifi es the number of days when the actual Capital Markets loss exceeded VaR. Back-testing is performed both on the actual re- Worst outcome sult and the hypothetical result, which measures the result excluding SEK m scenario test VaR Multiplier the impact on commission income and intra-day trading. Average 104 33 3.5 The table entitled “VaR for trading port folio. Capital Markets” Maximum 158 59 7.7 refers to the trend in 2006 and 2005. The minimum and maximum Minimum 54 16 1.9 amounts show the intervals within which VaR fl uctuated during the Year-end 104 44 2.4 specifi ed period. The VaR trend relative to hypothetical results is presented in the below table. On two occasions, the hypothetical outcome was worse Value at Risk in the insurance operations 2006 than the VaR. This is in line with the two to three occasions implied by a VaR model with a 99% confi dence level. 3%+M In the insurance operations, VaR is calculated using a 99% confi -   dence interval and a one-month holding period. The calculations are   based on historical simulation and measure the impact of the 250 most recent monthly changes in market prices.  

Stress tests and scenario analyses   The VaR model does not identify risks associated with extreme market fl uctuations, and thus VaR calculations are regularly sup-  plemented by stress tests. The Bank performs stress tests on the  trading portfolios compared to historical scenarios and, when *ANUARY *UNE $ECEMBER necessary, compared to extreme hypothetical events. The historical scenarios comprise events on the fi nancial markets during the period 1994–2006. The most unfavourable result in these tests is always compared with the corresponding VaR estimate for that day. The relation be- tween the worst outcome and VaR can be expressed as a multiplier. This multiplier provides an indication of the possible risk of loss in the case of extreme market movements. The table below shows the result of these stress tests during 2006.

VaR for trading portfolio, Capital Markets Total Fixed income and currencies Equities SEK m 2006 2005 2006 2005 2006 2005

Average 32 20 27 19 15 8 Maximum 61 42 46 41 49 26 Minimum 1079821 Year-end 44 22 24 23 29 7

Value-at-Risk in relation to hypothetical outcome 2006 trading portfolio, Capital Markets

SEK m 40

20

0

-20

-40

-60 Hypthetical outcome VaR

-80 January June December

HANDELSBANKEN ■ ANNUAL REPORT 2006 51 FINANCIAL REPORTS ■ NOTES – GROUP

Liquidity risk

Maturity analysis for contracted payment commitments – remaining contractual time to maturity SEK m Up to 3 mths 3–12 mths 1–5 yrs Over 5 yrs Total

Sight deposits from the public 319 750---319 750 Other borrowing from the public and credit institutions 383 204 33 264 17 259 100 890 534 617 Issued securities and subordinated loans 208 605 99 177 268 708 70 183 646 673 Short-term positions 81 2 627 37 696 9 372 49 776 Unutilised credit commitments – unutilised part of overdraft facilities 297 532---297 532 Total 1 209 172 135 068 323 663 180 445 1 848 348

Short-term volatile financing by market 2006 Short-term funding is obtained by means of active commercial paper programmes in Sweden, the US and Europe. These programmes are supplemented by funding in the international interbank market. Sweden 26 % USA 30 % Long-term funding is mainly obtained through mortgage bond is- sues in Swedish kronor and utilisation of other funding programmes at the Bank. If it is assumed that the concentration in the funding

Europe 40 % Asia 4 % portfolio or maturity structure entails too high a risk, Central Treas- ury must make sure that this concentration is reduced or that the maturity structure of the balance sheet is changed. In autumn 2006, all outstanding bonds in Stadshypotek with a Refers to the average market distribution during 2006 for issued securities with a nominal value of some SEK 245bn, were converted into covered residual maturity of less than one year and financing from credit institutions. bonds. Covered bonds are bonds with priority in the issuing insti- tution’s collateral. These bonds have received an Aaa rating from Moody’s. New issues under existing bond loans and new bond loans Liquidity risk is the risk that the Bank will not be able to meet its in Stadshypotek will in future be in the form of covered bonds. This payment obligations when they fall due, or that the Bank will not be is part of the Bank’s strategy to achieve liquid, easily available, long- able to raise new loans at acceptable prices to fund its obligations. term funding with competitive funding costs. Liquidity risk is measured and limited by carrying out a gap The table above shows all sight deposits as maturing debt within analysis of cash fl ows for various maturities and all currencies, and one month. Historically, these deposits have been very stable over also gap analysis of groups of currencies. As a general rule, a larger time and the Bank expects the majority of the sight deposits to be exposure is permitted in currencies with high liquidity than in cur- available to the Bank for a considerably longer period. The table rencies where the liquidity is low. shows credit promises and unutilised overdraft facilities for the con- The liquidity defi cit consists of the amount by which estimated tracted tenors. The total outstanding amount of these commitments out-payments exceed estimated in-payments, and is restricted by does not necessarily represent future funding requirements. limits. With the purpose of managing disturbances on the fi nancial mar- Liquidity risk in insurance operations kets that may have a temporary or long-term effect on the Bank’s Liquidity risk is the risk that the company will not be able to meet liquidity, the head of Central Control and Accounting ensures that its payment obligations when they fall due, or that the company will a contingency plan for the Bank’s liquidity risk management is es- not be able to sell securities at acceptable prices. This risk is greatly tablished annually. Under this plan, the Bank’s liquidity is regularly limited by most of the assets being invested in listed securities with analysed by the liquidity committee, which is led by the head of good liquidity. Central Treasury. The liquidity analysis includes development of gap analysis, benchmarks for volatile funding and funding costs. INSURANCE RISKS The Bank also develops scenario tests in which the effect on liquid- The uncertainty in the outcome of an insurance policy which is de- ity is simulated, given factors such as substantially reduced deposit pendent on the insured party’s life or health is called insurance risk. volumes and high utilisation of committed credit lines. Central In Handelsbanken Liv/SPP, there are the following main groups of Treasury has overall responsibility for the Bank’s liquidity and fund- insurance risks: ing. It must ensure that the Bank has continuous control of its bal- • death – payment in the event of the death of the ance sheet and that the actual funding costs are allocated out in the insured person organisation. • life – payment as long as the insured person lives The daily liquidity management is supplemented by contingency • disability/accident – payment in the event of reserves to meet any disruptions in the market. The Bank therefore illness/inability to work holds assets eligible as collateral that can be turned into liquidity at A policy often includes combinations of the three insurance risks. In short notice through borrowing in central banks or on the capital mutual insurance companies, it is the policyholders collectively that market. The extra cost arising for funding this portfolio at a matu- take the risks, since they have the role of both owner and customer. rity which is suffi ciently long to handle a temporary liquidity disrup- In SPP and Handelsbanken Liv, which are demutualised (profi t- tion, is distributed over the units at the Bank which use liquidity. distributing) insurance companies, the policyholders no longer need Liquidity in Swedish kronor must normally be in balance at the end to bear the risks collectively; instead, the insurance companies bear of each working day. the risks. The Bank aims for well-diversifi ed funding in terms of currencies, Before risk insurance can be granted, a medical risk assessment is markets and products. Liquidity is also created through the Group performed for the insured party. The purpose is to assess whether having good access to the international and Swedish capital markets. and on what terms the insured party can be granted insurance on

52 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

the basis of his or her state of health. This is essential in order to be able to offer long-term insurance at a reasonable premium in a profi table manner.

Future insurance risks Mortality in Sweden continues to fall. This is favourable with re- gards to death benefi t insurance, but has little effect on the profi t, as risk pricing is continually adjusted. On the other hand, falling mortality has consequences for pension insurance, since it means a rising average longevity. In savings insur- ance – products that provide fi nancial compensation as long as the insured person lives, e.g. endowment insurance and pension insur- ance – risk pricing usually applies to the entire duration of the con- tract. If actual mortality proves to be 10% lower than the assump- tions that are normally used in the sector, thus representing an addi- tional 1 to 1.5 years’ life expectancy, this will result in a total profi t reduction of about SEK 40m per annum over a fi fty-year period. Most of SPP’s risk products, which provide fi nancial compensa- tion in the event of death and disability/accident, are priced annu- ally and the company can unilaterally change the premium from year to year. Thus, an incorrect mortality assumption can be corrected, with a rapid effect on the results.

BUSINESS RISK Business risk is the risk that Group earnings will be lower than expected over a one-year period. For example, unexpected changes in earnings may arise if demand alters in a manner which could not have been anticipated, or if competition has increased to an unex- pected extent, resulting in declining volumes and squeezed margins. The size of the business risk depends on how much the income var- ies, the Bank’s cost structure, and the ease with which operations can be adapted to new business conditions in the short term. Only changes in earnings that cannot directly be linked to other catego- ries of risk are included in estimations of business risk. The business risk is taken into account in the Bank’s internal capital assessment.

INFORMATION GATHERING The data/documentation for the reporting of risk is obtained mainly from IT systems. Information relating to credit risk management is obtained from a central data warehouse. Not all credit systems have yet been linked up, but a permanent linking-up of credit ledgers is being carried out, and is going according to plan. Credit risk is calculated using special calculation models. The information which forms the documentation for fi nancial risks is obtained from the business information and risk systems of the various business areas. The Group’s risks are aggregated and analysed by the central risk control function. In 2006, substantial resources were devoted to im- proving system support and calculation capacity for risk control. In 2007, these improvements will remain in sharp focus.

HANDELSBANKEN ■ ANNUAL REPORT 2006 53 FINANCIAL REPORTS ■ NOTES – GROUP

Notes – Group

NOTE 1 NET INTEREST INCOME AND NET GAINS/ LOSSES ON FINANCIAL ITEMS AT FAIR VALUE Net gains/losses on fi nancial items at fair value shows the unrealised Specifi cation of interest 2006 2005 and realised changes in value of items which are wholly or partly Credit institutions and central banks 6 650 4 838 dependent on changes in market value. General public 40 486 35 937 Treasury bills and other eligible bills 2 878 986 Hedge accounting Bonds and other interest-bearing securities 8 902 5 404 The profi t/loss item Fair value hedges includes the net result of Derivative instruments recognised as hedges 557 -279 unrealised and realised market value changes on fi nancial assets and Other interest income 1 114 619 liabilities which are part of hedging packages. Interest income and Total interest income, including trading-related 60 587 47 505 interest expense for these instruments are recognised under net in- Of which trading-related interest reported in net gains/ terest income. The impact on earnings of the ineffective portion of losses on financial l items at fair value 10 454 8 371 derivative contracts which are used to hedge cash fl ows is reported Interest income according to income statement 50 133 39 134 under Ineffective portion of cash fl ow hedges. Further information about hedge accounting is shown in Note 16, Derivative instru- Credit institutions and central banks -11 681 -7 848 ments. General public -8 495 -5 339 Issued securities -22 730 -16 955 Instruments measured at fair value Derivative instruments recognised as hedges 1 020 877 Instruments measured at fair value refers to a small number of lend- Subordinated liabilities -2 299 -1 520 Other interest expense -4 333 -1 989 ing portfolios outside Sweden. The change in fair value for these Total interest income, including trading-related -48 518 -32 774 lending portfolios largely corresponds to equally-sized opposite changes in value on other fi nancial instruments which are reported Of which trading-related interest reported in net finan- under Trading within Net gains/losses on fi nancial items at fair cial items at fair value -13 357 -8 730 value. Interest income is reported under net interest income. Interest expense according to income statement -35 161 -24 044

Loan receivables and fi nancial liabilities Net interest income 14 972 15 090 Loan receivables are capital gains/losses arising when loans are Includes interest income on bad debts SEK 61m (72). redeemed ahead of time. Financial liabilities contain the capital Total interest income on assets recognised at amortised cost during 2006 was gains/losses generated from repurchases of the Bank’s own issued SEK 46,341m (39,295). Total interest expense on liabilities recognised at amortised cost during 2006 was securities. SEK 39,877m (29,319). Business volumes were larger than the previous year, see Note 12 Loans and Trading deposits, the public. Trading contains unrealised and realised changes in market value of derivative instruments which are not used as hedges, and changes Specifi cation net gains/losses on fi nancial items at fair value 2006 2005 in market value of other fi nancial assets and liabilities at fair value. A change has been carried out whereby interest pertaining to activ- Available for sale, realised 937 992 ity in the trading book is now included in this item. Previously they Hedge accounting were included in the net interest income. The change means that the Fair value hedges 85 -17 net interest income has been positively affected by SEK 310m com- of which hedging instruments -1 035 -125 pared to the previous year. of which hedged items 1 120 108 Ineffective portion of cash flow hedges 0 0 Gains/losses on unbundled insurance contracts Instruments measured at fair value -184 -82 of which change due to changed interbank The result consists both of gains/losses arising on revaluation of li- interest rate -186 -82 ability to policyholders due to changes in the valuation interest rate Loan receivables, valued at cost 359 604 and of the results of hedging transactions carried out to counteract Financial liabilities, valued at cost -165 -240 them. The sub-result also contains any negative yield split. Gains/losses on unbundled insurance contracts 767 - Trading, incl trading-related interest 2 462 2 202 Total 4 261 3 459

54 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 1 CONTINUED NOTE 5 STAFF COSTS

Valuation techniques 2006 2005 The result includes unrealised results as a consequence of measur- Salaries and fees -5 297 -4 611 ing balance sheet items at fair value. The assessment is mainly made Social security costs -1 480 -1 287 on the basis of market prices. When there are no market prices the Pension costs* -260 -147 assessment uses models based on offi cial market prices. More ad- Provision to profit-sharing foundation -135 -130 vanced calculation models contain parameters that are not listed, Other staff costs -542 -503 where assumptions and estimates must be made instead. These Total -7 714 -6 678 more advanced valuation models are seldom needed and when they *Information about defined-benefit pensions is shown in the Net pension assets table. are, valuation models that are generally accepted by the market are Insurance premiums paid to group companies are SEK 5m (5). always used. Net gains/losses on fi nancial items at fair value include an item of SEK -535m, where the fair value is partly based on the 2006 2005 Bank’s own assumptions. The instruments included in this item are Gender distribution % Men Women Men Women mainly equity index options. The positions are essentially matched Total number of employees 46 54 48 52 by opposite positions in listed fi nancial instruments and instruments Managers 64 36 65 35 whose fair value has been assessed on the basis of models based on CEOs and EVPs 94 6 90 10 offi cial market prices. Board 69 31 69 31 Board incl. subsidiaries 87 13 86 14

Sickness absence rate in Sweden 2006 NOTE 2 NET FEE AND COMMISSION INCOME 9 Short-term sick leave men 2006 2005 8 Short-term sick leave women 7 Brokerage 1 718 1 383 Long-term sick leave men 6 Mutual funds and custody 2 106 1 660 Long-term sick leave women 5 Insurance 2 338 937 4 Payments 1 983 1 875 Lending and deposits 793 835 3 Guarantees 402 388 2 Other 1 181 1 104 1 Total fee and commission income 10 521 8 182 0 – 29 years 30–49 years 50 years–

Brokerage, mutual funds and custody -260 -208 Sickness absence in the Swedish operations was 4.0% (4.3). The figure Payments -888 -839 for men was 2.2% (2.3) and for women 5.4% (5.8). Sickness absence in the form of long-term sick leave fell to 2.4% (2.5). Other -141 -80 Total fee and commission expense -1 289 -1 127

Salaries and other remuneration 2006 2005 Net fee and commission income 9 232 7 055 Board, CEO and EVPs Sweden -72 -75 Norway -6 -5 Finland -5 -5 NOTE 3 RISK RESULT – INSURANCE Denmark -3 -5 Great Britain -4 -5 2006 2005 Luxembourg -2 -2

Premiums written 1 194 593 USA -2 -2 Insurance claims paid -684 -433 Sub-total -94 -99

Change in provisions for unsettled claims 162 52 Others Other -101 -18 Sweden -3 593 -3 179 Total 571 194 Norway -416 -333 Finland -306 -270 Denmark -312 -281 Great Britain -278 -204 Luxembourg -64 -58 NOTE 4 OTHER INCOME Germany -28 -28 USA -121 -97 2006 2005 Singapore -27 -23 Rental income 37 38 Hong Kong -11 -12 Other operating income 188 270 Poland -17 -14 Total 225 308 Other countries -30 -13

Other income includes income for services sold and external rental income relating to Sub-total -5 203 -4 512 the Bank’s own properties. Total -5 297 -4 611

HANDELSBANKEN ■ ANNUAL REPORT 2006 55 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 5 CONTINUED Remuneration Lars O Grönstedt retired as group chief executive at the AGM in Average number of employees 2006 2005 Men Women April 2006 and was simultaneously appointed chairman of the board of the Bank. This is a full-time position. The chairman also has over- Sweden 7 829 7 228 3 523 4 306 all responsibility for ownership issues relating to shareholdings in the Norway 623 569 324 299 Bank’s pension foundation, pension fund and staff foundation. In ad- Finland 572 542 229 343 dition to the board fee from the Bank, Lars O Grönstedt is employed Denmark 475 461 233 242 Great Britain 292 248 213 79 by the pension fund and pension foundation and receives remunera- Luxembourg79724633tion accordingly. Germany 41 50 21 20 In 2006, Lars O Grönstedt received remuneration and other ben- USA 82815824efi ts from the Bank amounting to SEK 3.7m (7.5), with SEK 0.2m Singapore40391723(0.3) of this amount being other benefi ts. This remuneration refers Hong Kong 26 26 18 8 to salary and benefi ts for the part of the year Lars O Grönstedt was Poland 38 28 17 21 group chief executive of the Bank and the fee for his services as chair- Other countries66513234man of the board. Apart from this, remuneration and benefi ts have Total 10 163 9 395 4 731 5 432 been paid by the Bank’s pension foundation and pension fund of SEK 4.5m, with SEK 0.2 of this amount being other benefi ts. Hence his PRINCIPLES FOR REMUNERATION TO SENIOR MANAGEMENT total remuneration from the Bank, the pension fund and the pension The remuneration for senior management is revised annually in ac- foundation was SEK 8.2m (7.5), with other benefi ts being SEK 0.4m cordance with the decision process described below. The main prin- (0.3). External fees amounting to SEK 0.3m have been paid to the ciple in this process is that remuneration is only given in the form pension fund. of fi xed salary and customary benefi ts. Variable remuneration in the The Bank’s former full-time chairman of the board Arne Mårtens- form of bonuses is not paid. son retired in 2006 with a pension in accordance with the terms of his employment contract. In 2006, Arne Mårtensson received remunera- Decision process for remuneration to senior management tion and other benefi ts of SEK 10.1m (11.5), with SEK 0.1m (0,5) The board of the Bank appoints a special remuneration committee being other benefi ts. Board fees of SEK 0.9m (3.5) for serving on composed of three board members, one of whom is appointed chair- other boards have been paid to the Bank. man. The remuneration committee convenes when its chairman calls Board members who are not employees of the Bank have not a meeting. Its assignment is to: received any compensation from the company over and above the 1) establish the principles and overall policy for the salaries, benefi ts normal fees. and pensions of the executive vice presidents Board members who are employees of the Bank receive remunera- 2) prepare proposals relating to salaries, benefi ts and pensions for tion and pension benefi ts by reason of their employment. No further the group chief executive and the head of the auditing depart- remuneration or pension benefi ts are paid for serving on the board. ment, to be decided by the board The group chief executive Pär Boman has received remuneration 3) every year, report the results of its work to the board. and other benefi ts amounting to SEK 6.0m, with SEK 0.3m of this amount being other benefi ts. No external fees have been received. No TERMS AND REMUNERATION OF SENIOR MANAGEMENT variable bonuses are paid. Terms The 21 (21) executive vice presidents have received remuneration The Bank has no agreements on severance pay. The group chief and other benefi ts amounting to SEK 51.8m (61.1), with SEK 3.9m executive, Pär Boman, has a retirement age of 58. His retirement (4.5) of this amount being other benefi ts. External fees are paid to the pension is 65% of his salary immediately before retirement. Bank. No variable bonuses are paid. The chairman of the board of the Bank and former group chief Like all other employees of the Bank, the chairman of the board, executive, Lars O Grönstedt, has a retirement age of 60. His retire- the group chief executive and other senior managers have been allo- ment pension between the ages of 60 and 64 is 75% of his salary im- cated one unit in Handelsbanken’s profi t-sharing scheme, Oktogonen. mediately before retirement, and from the age of 65 it is 65%. From A unit for an employee in Sweden amounted to SEK 21,932 (35,319). the date that Lars O Grönstedt was appointed as chairman of the board his pension benefi ts accrue entirely in the Bank’s pension fund Pension obligations and pension foundation (see below). Accrued pension rights during the year have increased the pension ob- The lowest pension age for the Bank’s executive vice presidents ligations for the group chief executive by SEK 3.0m (1.6) and for the is 60. Between the ages of 60 and 64, their retirement pension is chairman of the board by SEK 8.1m (7.2). 65% of their salary immediately before retirement. From the age of Accrued pension rights during the year have increased pension obli- 65, their retirement pension is 10% of the annual salary up to 7.5 gations for the 21 (21) executive vice presidents by SEK 22.2m (24.2). income base amounts. They also receive a pension under the general Accrued pension rights during the year relating to defi ned-benefi t national insurance scheme. On the portion of the salary in excess of pension plans and premiums relating to defi ned-contribution pension 7.5 income base amounts, a retirement pension of 65% is paid. plans for the present and previous boards, chief executives and execu- Pensions for the chairman of the board, the group chief executive tive vice presidents were SEK 51.2m (45.2) for the Group and SEK and executive vice presidents are accrued successively during the years 46.0m (42.0) for the parent company. until retirement age, and are fully accrued by the time the stipulated Pension obligations for the same people are SEK 1,575m (1,417) retirement age is reached. The Bank is charged annually for the cost in the Group and SEK 1,410m (1,302) in the parent company. The at the same rate as the pension is accrued. Accrued pension commit- number of people covered by these obligations is 70 (69), of whom 32 ments are guaranteed by the Bank’s pension foundation and pension (32) are pensioners. The obligations are covered by the Bank’s pen- fund, and are vested. If they leave the Bank before the stipulated re- sion foundation. tirement age, a paid-up policy is issued for the pension accrued. All data concerning pension obligations and accrued pension rights during the year has been calculated in accordance with IAS 19.

56 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

Loans to senior management 2006 2005 Plan assets Loans to the board, chief executives and executive vice presidents at Opening balance 20 147 16 036 the Bank or group companies are SEK 125m (122) for the Bank or Expected return on plan assets 1 014 952 other group companies and SEK 37m (57) for the parent company. Funds contributed by the employer 427 185 Funds paid to employer -534 -9 PENSION PLAN – OTHER EMPLOYEES Funds paid directly to employees -303 -215 From the age of 65, a retirement pension is paid in accordance with Actuarial gains (+) / losses (-) 3 126 3 142 the pension agreement between the Employer’s Association of the Price differences -35 56 Swedish Banking Institutions (BAO) and Union of Finance Sector Closing balance 23 842 20 147 Employees and between BAO and SACO (the Swedish Confedera- tion of Professional Associations). The amount is 10% of the annual Return on plan assets salary up to 7.5 income base amounts. On the part of the salary Expected return on plan assets 1 014 952 between 7.5 and 20 income base amounts the retirement pension is Actuarial gains (+) / losses (-) 3 126 3 142 65% and in the interval between 20 and 30 income base amounts, it Real return 4 140 4 094 is 32.5% of the annual salary. On the portion of the salary over 30 income base amounts no retirement pension is paid. Provision for pension obligations Opening balance -3 310 -3 195 Pension costs, defined benefit plans 16 -33 Net pension assets Paid benefits 241 -304 The following provisions for pension obligations Funds contributed by the employer -427 -185 have been made in the balance sheet: Costs for early retirement pensions - - 2006 2005 Redeemed Pension obligations - - Pension obligations 14 343 13 709 Price differences -12 19 Fair value of plan assets 23 842 20 147 Closing balance -3 492 -3 698 Pension obligations minus plan assets -9 499 -6 438 Retained income on accruals in previous periods - - Net actuarial gains /losses Retained actuarial gains (+) / losses (-) 6 007 2 740 Opening balance, actuarial gains (+) / losses (-) 2 740 884 Retained income in accordance with transitional rules - - Actuarial Allocated for pensions -3 492 -3 698 gains (-) / losses (+) to be recognised -45 6 Of the amount allocated for pensions, SEK -3 914m (-3 698) is pension assets Actuarial and SEK 422m (0) a pension liability. gains (-) / losses (+), redeemed pension obligations 0 0 Total pension costs are distributed as follows: Actuarial Pensions accrued during the year -518 -359 gains (+) / losses (-), pension obligations 179 -1 286 Interest on pension liability -557 -554 Actuarial gains (+) / losses (-), plan assets 3 126 3 142 Expected return on plan assets 1 014 952 Price differences 7 -6 Write-off of retained income - 0 Closing balance, Write-off of retained actuarial gains (+) / losses (-) 45 -6 actuarial gains (+) / losses (-) 6 007 2 740 Pension costs, defined benefit plans -16 33 Redemption of pension liability - - The plan assets mainly comprise shares and interest-bearing securities with the fol- Costs for early retirement pensions -18 -3 lowing market values on the balance sheet date: Pension costs, funded plans -34 30 Shares and participating interests 20 712 16 638 Pension costs, defined-contribution plans -219 -172 Interest-bearing securities, etc. 3 130 3 509 Special employer’s contribution and policyholder tax, Total 23 84220 147 other pension costs -7 -5 The plan assets include shares in Svenska Handelsbanken AB (publ) with a market Total pension costs -260 -147 value of SEK 994m (946) on the balance sheet date 31 December 2006. In Sweden, Norway, Great Britain and Germany the pension plans are defined benefit, meaning The actuarial calculation of pension obligations and pension costs is based on the that the pension is based on a certain percentage of the final salary. There are no following main assumptions: post-retirement health care plans. Discount rate % 3.9 3.9

Expected salary increase % 3.6 3.6 History Expected rate of return on plan assets % 7.0 7.0 Pension obligations 14 343 13 709 Pension indexing % 2.1 2.1 Fair value of plan assets 23 842 20 147 Income base amount % 2.8 2.8 Pension obligations minus plan assets -9 499 -6 438 Staff turnover % 2.7 2.8

Expected remaining years of employment 19 19 Actuarial gains (+)/losses (-) for the period, pension obligations 179 -1 286 Pension obligations, plan assets and provisions for pensions and net actuarial gains/ losses for the defined-benefit plans have developed as follows. Funds paid to the of which experience adjustments 209 -1 089 employer refer to funds paid for the employer’s pension costs. of which changed actuarial assumptions -30 -197 Pension obligations Actuarial gains (+)/losses (-) for the period, Opening balance 14 097 11 957 plan assets 3 126 3 142 Pensions accrued during the year 518 359 of which experience adjustments 3 126 3 142 Interest expense 557 554 of which changed actuarial assumptions 0 0 Paid benefits -596 -528 Costs for early retirement pensions - - Outcome Forecast Redemption of pension obligations - - Future cash fl ows 2006 2007 Retained income on accruals in previous periods - - Expected pension payments -596 -586 Actuarial gains (-) / losses (+) -179 1 286 Price differences -54 81 Closing balance 14 343 13 709

HANDELSBANKEN ■ ANNUAL REPORT 2006 57 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 6 OTHER EXPENSES NOTE 7 LOAN LOSSES/RECOVERIES

2006 2005 Actual and probable losses minus recoveries are reported as loan losses. Property and premises -935 -894 Recoveries exceeded loan losses and net recoveries totalled External IT costs -1 263 -920 Communication -386 -389 SEK 55m as compared to net recoveries of SEK 261m in the Travel and marketing -430 -343 previous year. The loan loss ratio was thus –0.01% (–0.03). Purchased services -696 -753 Net bad debts decreased to SEK 876m (1,256), equivalent to Supplies -211 -186 0.07% of lending. Other expenses -259 -262 2006 2005 Total -4 180 -3 747 A. SPECIFIC PROVISION FOR INDIVIDUALLY Of which lease expenses ASSESSED LOAN RECEIVABLES Minimum lease fee -685 -579 This year’s write-off for actual loan losses -596 -550 Variable fee -18 -146 Write-back of previous provisions for probable loan Total -703 -725 losses which are reported as actual loan losses in the year’s accounts 499 380 Rental costs for premises normally have a variable fee related to the inflation rate and The year’s provision for probable loan losses -468 -480 to property taxes. Only one of the major lease contracts has a variable fee (related to Paid in from actual loan losses in previous years 265 476 Stibor). In 2006, the cost of the largest individual lease contract was approx. SEK 61m (58). Write-back of provisions for probable losses no longer necessary 302 366 Net expense for the year, individually IT DEVELOPMENT valued loan receivables 2 192 Research and development B. PROVISION BY GROUP FOR INDIVIDUALLY IT development at Handelsbanken is principally intended to meet ASSESSED LOAN RECEIVABLES the requirements of the business operations. This means that, since Allocation to/dissolution of provision by group 77 84 operational stability and delivery speed are the crucial factors, the Bank only changes to new technologies or environments in excep- C. COLLECTIVELY ASSESSED HOMOGENEOUS GROUPS OF LOAN RECEIVABLES WITH LIMITED VALUE AND SIMILAR CREDIT RISK tional circumstances. At the same time there are constant efforts This year’s write-off for actual loan losses -44 -43 to increase the effi ciency of existing processes and to enhance the Paid in from actual loan losses in previous years 22 23 Bank’s technical environment and IT architecture. Allocation to/dissolution of reserve for loan losses -2 2 Net expense for the year for collectively assessed IT PROCEDURES WHEN STARTING NEW BRANCHES homogeneous loan receivables -24 -18 In 2006, IT infrastructure was produced for several units world- D. TRANSFER RISK wide. There are several different methods. When the Bank starts Allocation to/dissolution of reserve for transfer risks - - new branches in countries with existing branches, the work is based Net expense for the year for loan losses on the existing infrastructure. When starting up in a new country, (A+B+C+D) 55 258 the solution is based on local conditions, combined with using the Change in value of repossessed property - 3 Bank’s existing infrastructure as far as possible. Total loan losses/recoveries 55 261

IMPROVED INTERNAL SUPPORT Both actual and probable loan losses reduce the corresponding receivable amount on the assets side of the balance sheet. The reserve for probable loan losses has During the past two years, the number of employees at internal IT decreased by SEK 29m for the Group in the form of exchange differences. support has decreased by 35%. This decrease was due to the imple- mentation of a standard workstation for the Handelsbanken Group. There are thus fewer technologies used in the organisation.

Audit Consulting Auditing costs 2006 2005 2006 2005

Auditors elected by the AGM

KPMG Bohlins AB -9.9 -8.5 -1.4 -1.9 Ernst & Young AB -1.2 -0.8 -0.0 -0.2

Auditor elected by the Swedish Financial Super- visory Authority PricewaterhouseCoopers AB -2.4 -2.1 -0.7 -1.0

Internal auditing -72.2 -69.5

58 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 7 CONTINUED

2006 2005

Impairment losses Claims on credit institutions 0 0 Claims on the public -611 -693 Total impairment losses -611 -693

Write-backs Claims on credit institutions 1 14 Claims on the public 378 438 Total write-backs 379 452

Bad debts etc (For definitions, see inside back cover) 2006 2005

Bad debts 2 872 3 689 Specific provision for individually assessed loan receivables -1 550 -1 910 Provision for collectively assessed homogeneous groups of loan receivables with limited value and similar credit risk -107 -107 Group provisions for individually assessed loan receivables -339 -416 Net bad debts 876 1 256

Total bad debt reserve ratio, % 69.5 65.9 Proportion of bad debts, % 0.07 0.12 Bad debt reserve ratio excl. group provisions, % 57.7 54.7 Non-performing loans which are not bad debts, SEK m 670 602 Book value of loan receivables restructured during the year, before restructure, SEK m 46 47 Book value of loan receivables restructured during the year, after restructure, SEK m 50 55 Bad debts reclassified as normal loans during the year, SEK m 171 391

NOTE 8 GAINS/LOSSES ON DISPOSAL OF PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS

2006 2005

Equipment 1 0 Property - 4 Total 1 4

The difference between the sale price and the remaining value for property, equipment and intangible assets is reported here.

NOTE 9 EARNINGS PER SHARE

2006 2005

Profit for the year, SEK m 13 128 11 354 Average number of outstanding shares (millions) 643.3 668.6 Earnings per share, SEK* 20.41 16.98

*No dilution.

Earnings per share is calculated by dividing the net profi ts attribut- able to holders of ordinary shares by the weighted average number of ordinary shares in issue during the period. The denominator excludes the Bank’s holding of repurchased own shares. There are no potentially dilutive instruments, and therefore the calculation is the same for earnings per share before and after dilution.

HANDELSBANKEN ■ ANNUAL REPORT 2006 59 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 10 CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES 2006

Recorded at fair value Derivative in income statement instruments Financial Non- sub-divided into designated as Investments Loans and assets Others fi nancial hedging held to customer available fi nancial assets/ Trading Other* instruments to maturity receivables for sale liabilities liabilities Total

Assets Cash and balances with central banks 4 800 4 800 Treasury bills and other eligible bills 86 512 53 86 565 Loans to credit institutions 12 844 164 331 177 175 Loans to the public 4 632 1 095 906 1 100 538 Bonds and other interest-bearing securities 170 838 9 340 180 178 Shares and participating interests 66 410 6 507 72 917 Assets where the customer bears the value change risk 61 390 1 437 62 827 Derivative instruments 51 916 1 787 53 703 Reinsurance assets 108 108 Intangible assets 12 524 12 524 Property and equipment 3 545 3 545 Current tax assets 747 747 Deferred tax assets 265 265 Net pension assets 3 914 3 914 Other assets 21 012 21 012 Prepayments and accrued income 3 471 5 660 59 9 190 Total assets 391 991 66 022 1 787 1 293 146 15 959 21 103 1 790 008

Liabilities Due to credit institutions 13 275 307 207 320 482 Deposits and borrowing from the public 111 756 422 129 533 885 Liabilities where the customer bears the value change risk 61 396 1 437 62 833 Issued securities 40 681 554 320 595 001 Derivative instruments 61 677 4 505 66 182 Other trading liabilities 51 829 51 829 Insurance liabilities 2 871 2 871 Current tax liabilities 488 488 Deferred tax liabilities 6 810 6 810 Provisions 127 127 Pension obligations 422 422 Other liabilities 181 15 356 15 537 Prepayments and accrued income 2 944 12 699 15 643 Subordinated liabilities 51 672 51 672 Total liabilities 282 343 61 396 4 505 1 363 383 12 155 1 723 782

* Classifi ed to be measured at fair value.

60 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 10 CONTINUED CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES 2005

Recorded at fair value Derivative in income statement instruments Financial Non- sub-divided into designated Investments Loans and assets Others fi nancial as hedging held to customer available fi nancial assets/ Trading Other* instruments to maturity receivables for sale liabilities liabilities Total

Assets Cash and balances with central banks 7 014 7 014 Treasury bills and other eligible bills 44 325 165 44 490 Loans to credit institutions 283 136 263 136 546 Loans to the public 15 4 574 979 092 983 681 Bonds and other interest-bearing securities 125 387 502 38 14 293 140 220 Shares and participating interests 23 562 5 295 28 857 Assets where the customer bears the value change risk 134 432 134 432 Derivative instruments 63 522 4 647 68 169 Reinsurance assets 48 48 Intangible assets 12 789 12 789 Property and equipment 3 318 3 318 Current tax assets 67 67 Deferred tax assets 197 197 Net pension assets 3 698 3 698 Other assets 446 2 13 181 13 629 Prepayments and accrued income 1 282 11 4 459 5 752 Total assets 258 822 139 006 4 647 515 1 140 047 19 753 20 117 1 582 907

Liabilities Due to credit institutions 420 288 633 289 053 Deposits and borrowing from the public 24 255 383 362 407 617 Liabilities where the customer bears the value change risk 52 462 83 464 135 926 Issued securities 146 200 340 144 486 344 Derivative instruments 66 110 7 624 73 734 Other trading liabilities 48 137 48 137 Insurance liabilities 862 862 Current tax liabilities 767 767 Deferred tax liabilities 5 950 5 950 Provisions 36 36 Other liabilities 591 9 589 10 180 Prepayments and accrued income 187 11 561 11 748 Subordinated liabilities 46 795 46 795 Total liabilities 285 900 52 462 7 624 1 080 084 91 079 1 517 149

*Classifi ed to be measured at fair value.

HANDELSBANKEN ■ ANNUAL REPORT 2006 61 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 11 LOANS TO CREDIT INSTITUTIONS

2006 2005

Loans in Swedish kronor Banks 44 781 23 861 Other credit institutions 26 179 7 130 Sub-total 70 960 30 991

Loans in foreign currency Banks 31 652 24 793 Other credit institutions 74 565 80 762 Sub-total 106 217 105 555

Probable loan losses -2 0 Total 177 175 136 546

Of which reverse repos 120 491 100 461

Payable on Within >3 mths >1 yr Over Remaining maturities demand 3 mths to 1 yr to 5 yrs 5 yrs Total

2006 95 108 69 269 7 109 3 109 2 580 177 175 2005 77 425 49 234 5 260 2 217 2 410 136 546

Average volumes 2006 2005

Loans to credit institutions in Swedish kronor 62 433 45 922 Loans to credit institutions in Swedish kronor insurance operations 7 146 620 Loans to credit institutions in foreign currency 149 741 130 460 Loans to credit institutions in foreign currency insurance operations 451 57 Total 219 771 177 059

Of which reverse repos 46 975 32 882 Of which reverse repos, insurance operations 7 109 387

62 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 12 LOANS AND DEPOSITS, THE PUBLIC

2006 2005

Loans in Swedish kronor Households 391 483 351 035 Companies etc 395 141 369 363 Sub-total 786 624 720 398

Loans in foreign currency Households 92 551 81 539 Companies etc 223 356 184 176 Sub-total 315 907 265 715

Probable loan losses -1 993 -2 432 Total 1 100 538 983 681

Of which reverse repos 21 947 7 930 Of which subordinated 91 101

Payable on Within >3 months >1 year Over Remaining maturities demand 3 months to 1 year to 5 years 5 years Total

2006 98 029 308 489 153 510 339 922 200 588 1 100 538 2005 41 581 266 466 142 831 320 885 211 918 983 681

Average volumes – loans to the public 2006 2005

Loans to the public in Swedish kronor 752 671 689 540 Loans to the public in foreign currency 295 599 241 090 Total 1 048 270 930 630

Of which reverse repos 18 022 7 417

Deposits and borrowing from the public 2006 2005

Deposits and borrowing from the public 533 885 407 617

Deposits from the public 2006 2005

Deposits in Swedish kronor Households 106 002 91 769 Companies etc 108 391 107 888 Total 214 393 199 657

Deposits in foreign currency Households 23 800 23 930 Companies etc 103 922 96 826 Total 127 722 120 756

Total deposits from the public 342 115 320 413

Payable on Within >3 months >1 year Over Remaining maturities demand 3 months to 1 year to 5 years 5 years Total

2006 319 750 13 442 1 379 703 6 841 342 115 2005 294 331 21 032 3 379 501 1 170 320 413

Average volumes of deposits from the public 2006 2005

Deposits from the public in Swedish kronor 203 245 184 719 Deposits from the public in foreign currency 126 861 111 660 Total 330 106 296 379

HANDELSBANKEN ■ ANNUAL REPORT 2006 63 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 12 CONTINUED

Borrowing from the public 2006 2005

Borrowing from the public Swedish kronor 151 674 46 780 Foreign currency 40 096 40 424 Total 191 770 87 204

Of which repos 5 777 2 853

Payable on Within >3 months >1 year Over Remaining maturities demand 3 months to 1 year to 5 years 5 years Total

2006 2 460 70 709 9 401 15 965 93 235 191 770 2005 2 913 54 984 5 552 4 874 18 881 87 204

Average volume of borrowing from the public 2006 2005

Borrowing from the public in Swedish kronor 38 852 29 560 Borrowing from the public in Swedish kronor, insurance operations 107 693 22 352 Borrowing from the public in foreign currency 48 996 41 335 Total 195 541 93 247

Of which repos 7 558 3 931

LENDING AND DEPOSIT VOLUMES Loans to the public increased by 12% to SEK 1,101bn (984). operations outside Sweden increased by 24% to SEK 224bn(180). Stadshypotek increased by 8% to SEK 480bn (445). Stadshypotek’s Deposits from the public, including the insurance operations went lending represented 44% of the Group’s loans to the public. Loans up by 31% to SEK 534bn (408). Household deposits went up by to the public in Sweden, excluding the National Debt Offi ce rose by 14% to SEK 159bn (139) and deposits from companies increased by 10% to SEK 831bn (755), where household lending rose by 11% to 39% to SEK 375bn (269). The consolidation of SPP partly explains SEK 391bn (352). the increase in deposit volumes. The average volume of loans to the public excluding loans to The average volume of deposits in Sweden, excluding insur- the National Debt Offi ce increased by 13% to SEK 1,045bn (927). ance operations, increased by 13% to SEK 278bn (246), of which Household lending rose by 13% to SEK 457bn (405), while corpo- SEK 104bn (93) was from households. Outside Sweden, the aver- rate lending was up 13% to SEK 588bn (522). Average lending in age volume of deposits rose by 15% to SEK 140bn (122), of which Sweden increased by 10% to SEK 797bn (727) while branch offi ce SEK 29bn (27) was from households.

NOTE 13 INTEREST-BEARING SECURITIES

2006 2005 Payable Nominal Fair Nominal Fair Remaining on Within >3 mths >1 yr Over value value value value maturities demand 3 mths to 1 yr to 5 yrs 5 yrs Total

Interest-bearing 2006 253 18 808 65 833 119 694 62 155 266 743 securities 2005 2 878 14 040 43 595 97 711 26 486 184 710 Government instruments 79 415 84 145 32 663 34 514 Credit institutions 48 948 49 316 38 181 38 673 Average volumes 2006 2005 Mortgage institutions 47 507 47 817 27 497 28 249 Other 84 492 85 465 76 957 83 277 Interest-bearing securities 194 516 160 508 Total 260 362 266 743 175 298 184 713 Interest-bearing securities, insurance operations 70 905 15 190 Total 265 421 175 698 Adjustment to book value for investments held to maturity - -3 Total book value 266 743 184 710

Bonds and other interest-bearing securities 180 178 140 220 Treasury bills and other eligible bills 81 819 86 565 42 253 44 490 Total interest-bearing securities 266 743 184 710

Of which unlisted securities 1 061 7 926 Of which subordinated 499 146

64 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 14 SHARES AND PARTICIPATING INTERESTS

2006 2005

Held for trading Listed 65 169 22 744 Non-listed 1 241 818 Total 66 410 23 562

Holdings classified as available for sale Listed 5 160 4 537 Non-listed 802 362 Total 5 962 4 899

Holdings in associated companies, non-listed 545 396 Total shares and participating interests 72 917 28 857

Participating interests in associated companies Carrying amount at beginning of year 396 354 Participating interests added via consolidation of SPP 108 - Share of profit for the year 105 59 Taxes -29 -20 Shareholders’ contribution 86 Dividend -32 -11 Exchange difference -11 8 Carrying amount at close of year* 545 396

* Of which goodwill 125 87

Corporate identity Registered No. of Participating Book value Associated companies number offi ce shares interest % 2006 2005

Bankomatcentralen AB 556197-2265 Stockholm 1 100 21.9 0 0 BGC Holding AB 556607-0933 Stockholm 25 382 25.4 58 41 Centralen för Elektroniska Korttransaktioner CEK AB 556362-0383 Stockholm 370 37.0 16 16 BDB Bankernas Depå AB 556695-3567 Stockholm 8 000 20.0 2 - Finansiell ID-teknik BID AB 556630-4928 Stockholm 12 735 28.3 3 2 Nordben Life and Pension Insurance Co Ltd. 14 861 Guernsey 3 000 000 50.0 127 - Privatgirot AB 556302-4552 Stockholm 290 29.0 6 5 Upplysningscentralen UC AB 556137-5113 Stockholm 2 429 24.3 12 7 VPC AB 556112-8074 Stockholm - - - 325 VPC Holding AB 556709-1763 Stockholm 443 700 24.8 321 - Total 545 396

2006 2005 Financial information on associated compa- nies referring to 100% of the companies Assets Liabilities Income Profi t/loss Assets Liabilities Income Profi t/loss

Bankomatcentralen AB 0000 0000 BGC Holding AB 383 155 854 169 750 582 850 21 Centralen för Elektroniska Korttransaktioner CEK AB 62 18 133 2 66 23 120 6 BDB Bankernas Depå AB 9 1 57 -12 - - - - Finansiell ID-teknik BID AB 40 29 46 -14 43 43 25 -26 Nordben Life and Pension Insurance Co Ltd. 7 801 7 547 338 16 - - - - Privatgirot AB 48 27 113 -6 49 33 138 1 Upplysningscentralen UC AB 110 59 30 0 163 138 224 0 VPC AB ----1 464266687161 VPC Holding AB 1 595 302 712 50 - - - -

VALUATION METHODS FOR UNLISTED SHARES the Bank in its capacity as shareholder cannot control the price at Unlisted shares are valued on the basis of valuation models at fair which the share will be sold, since this is regulated by the company value. The choice of model is applied consistently for each share. The agreement. These shares are valued at the pre-determined values. For choice of model is governed by what is considered appropriate for example, there are cases where the shareholders’ meeting resolves the individual share. Several of the unlisted shares are shares where the value at which transfers will be made.

HANDELSBANKEN ■ ANNUAL REPORT 2006 65 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 15 ASSETS WHERE THE CUSTOMER BEARS THE VALUE CHANGE RISK

2006 2005

Insurance assets in SPP Liv - 83 664 Unit- linked insurance assets 58 468 48 594 Other fund assets 1 437 - Share of consolidated funds not owned 2 922 2 174 Total 62 827 134 432

NOTE 16 DERIVATIVE INSTRUMENTS

Nominal amount/maturity Positive market values Negative market values > 1 year to Over Total Total Up to 1 year 5 years 5 years2006 2005 2006 2005 2006 2005

Derivatives held for trading Interest rate-related contracts Options 177 251 76 343 4 820 258 414 264 052 3 118 2 931 2 803 2 632 FRA/futures 3 087 592 985 100 8 856 4 081 548 3 986 026 1 138 820 1 091 806 Swaps 910 816 1 040 615 460 553 2 411 984 2 279 990 18 422 33 211 20 439 34 415 Other instruments 10 510 208 - 10 718 14 840 4 6 0 6 Currency-related contracts Options 33 203 2 183 - 35 386 50 775 88 439 98 365 Futures 1 129 468 13 057 405 1 142 930 1 351 482 13 313 17 255 18 159 12 590 Swaps 152 025 162 158 23 293 337 476 269 470 4 526 2 652 5 115 3 689 Equity-related contracts Options 79 394 45 100 6 088 130 582 118 946 8 247 5 314 9 953 8 537 Futures 31 992 2 152 - 34 144 23 168 838 150 1 187 682 Swaps 718 1 405 418 2 541 3 038 320 133 1 204 1 385 Other instruments 32 - - 32 449 328 13 16 24 Other derivative contracts 365 29 346 749 30 460 15 440 1 574 598 1 612 979 Sub-total 5 613 366 2 357 667 505 182 8 476 215 8 377 676 51 916 63 522 61 677 66 110

Derivatives for fair value hedges Interest rate-related contracts Options - - - - 4 290 - 13 - - FRA/futures 3 500 6 300 - 9 800 8 100 6 4 2 5 Swaps 22 821 101 676 54 670 179 167 249 528 794 3 300 3 251 6 171 Other instruments 29 206 - - 29 206 3 953 4 2 4 2 Currency-related contracts Options 45--45-0- -- Futures 71 092 15 344 - 86 436 89 197 658 1 161 1 183 1 222 Other instruments 345 48 - 393 - 0 - - - Other derivative contracts 182 - - 182 - - - 0 - Sub-total 127 191 123 368 54 670 305 229 355 068 1 462 4 480 4 440 7 400

Derivatives for cash flow hedges Interest rate-related contracts FRA/futures --- -83-0 -- Swaps 4 671 15 018 3 223 22 912 14 231 325 167 65 224 Sub-total 4 671 15 018 3 223 22 912 14 314 325 167 65 224

Total 5 745 228 2 496 053 563 075 8 804 356 8 747 058 53 703 68 169 66 182 73 734

Of which cleared 2 878 349 2 992 847 2 973 5 412 1 776 5 693

Currency breakdown of market values SEK 174 936 11 032 250 432 96 620 USD -117 607 223 279 -221 426 122 327 EUR 24 954 -62 449 5 556 -89 125 Others -28 580 -103 693 31 620 -56 088

66 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 16 CONTINUED

HEDGE ACCOUNTING Cash fl ow hedges Fair value hedges Handelsbanken also hedges the uncertainty of future cash fl ows. Handelsbanken mainly uses fair value hedges to protect itself against Uncertainty in future cash fl ows arises when funding is at variable changes in fair value for lending and deposits at fi xed interest rates interest rates. These interest rates are fi xed for between one and six and to hedge foreign exchange exposure when borrowing in foreign months. The maturity horizon of the loan is much longer, however: currencies. The main hedge instruments used are interest rate swaps up to 15 years. To hedge the future interest payments for a required and currency forwards. In a very few cases, changes in fair value of maturity, interest rate swaps are used. For future cash fl ows which credit risk exposures are subject to hedge accounting. In these cases, are to be reinvested or refi nanced, interest rate swaps are used with credit derivatives are used as the hedge. value dates in the future so as to guarantee a known reinvestment As at 31 December 2006, derivatives have been used as fair value or refi nancing interest rate. The future cash fl ows to be hedged have hedges for a nominal amount of SEK 305bn (355). The fair value of a high probability of occurring since they are contracted. these derivatives was SEK 1bn (4) in positive market values and SEK As at 31 December 2006, derivatives which have been used as 4bn (7) in negative market values. The value change for the year cash fl ow hedges have a nominal amount of SEK 23bn (14). The fair for these derivatives is SEK –1,035m (–125) and this is reported in value of these derivatives was SEK 325m (167) in positive market the income statement under Net gains/losses on fi nancial items at values and SEK 65m (224) in negative market values. For the effec- fair value. The change in fair value for the hedged items relating to tive portion of hedges, the change in value of the derivative is rec- hedged risk is SEK 1,120m (108), which is also reported under Net ognised in equity. The change in value is transferred to the income gains/losses on fi nancial items at fair value. Thus, the Group’s fair statement at the same pace as the hedged item’s cash fl ows affect value hedges had a positive impact of SEK 85m (–17) on the year’s the profi t/loss. At the end of the year, the hedge provision was profi ts. SEK –136m (57). There were almost no ineffective hedges.

HANDELSBANKEN ■ ANNUAL REPORT 2006 67 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 17 INTANGIBLE ASSETS

Trademarks Internally and other Customer developed Total Total Goodwill rights contracts software 2006 2005

Cost of acquisition at beginning of year 12 498 3 003 954 57 16 512 12 223 Cost of acquisition of additional intangible assets 12 - - 71 83 4 120 Foreign exchange effect -160 - - - -160 169 Cost of acquisition at close of year 12 350 3 003 954 128 16 435 16 512

Accumulated amortisation and impairments at beginning of year -2 956 -725 -35 -7 -3 723 -2 932 Accumulated amortisation of additional intangible assets ------580 Amortisation for the year according to plan -150 -39 -5 -194 -178 Impairments for the year - - - -25 -25 - Foreign exchange effect 31 - - - 31 -33 Accumulated amortisation and impairments at end of year -2 925 -875 -74 -37 -3 911 -3 723

Closing residual value 9 425 2 128 880 91 12 524 12 789 Information on goodwill referring to associated companies can be found in Note 14 Shares and participating interests.

Amortisation is based on the expected useful life. At present, this Assumptions means that principally the following amortisation rates are applied. – The cash fl ow period used to calculate the recoverable amount is Goodwill Not amortised normally 20 years for cash-generating entities relating to bank- Trademarks 20 years ing operations and 40 years for insurance operations. The type of On a straight-line basis over the life contract and nature of the operations dictates the choice of cash Customer contracts of the relevant contract fl ow period. Internally developed software 5 years Other intangible assets Individual testing – Detailed forecasts are made for the fi rst fi ve years. In the subse- quent years, gradually declining changes in the future cash fl ows are assumed. Normally, the rate of increase of future cash fl ows is assumed to be no larger than the corresponding historical rise in ESTIMATES USED TO CALCULATE THE RECOVERABLE GDP in the country in question. These forecasts are based partly AMOUNT OF CASH-GENERATING ENTITIES WITH on historical trends and partly on knowledge of future events GOODWILL OR OF INTANGIBLE ASSETS WITH AN which can affect the historical trend. The outcome in individual INDEFINITE USEFUL LIFE years is compared to the forecast values. These comparisons are Goodwill and other intangible assets with an indefi nite useful life is used to decide whether an adaptation should be made of the fore- allocated over the following segments/cash-generating units. casting method and the forecast values in the future. Branch office operations SEK 5,796m – The discount rate used is the weighted return requirement for Markets SEK 12m the respective type of operations. Since capital is allocated on the Asset Management SEK 12m basis of a risk assessment, normally the same discount rate can Pensions & Insurance SEK 3,607m be used for all types of goodwill items and other intangible items arising when business operations are acquired. However, the dis- An impairment test that the recoverable amount exceeds the book count rate is always tested on a case-by-case basis. The discount value is performed by comparing the values in the balance sheet with rate applied is 4.2%. the estimated recoverable amount. If the recoverable amount ex- ceeds the value in the balance sheet, no impairment loss needs to be Intangible assets with an indefi nite useful life recognised. The recoverable amount for entities to which goodwill The individual assets which are not subject to annual amortisation and other intangible assets have been allocated has been determined are those where the economic life and the useful life cannot be re- by calculating the value in use per entity. This means that future garded as defi nable. Examples of such items are brand names and in cash fl ows including an estimated closing value are estimated. The certain cases customer relations in cases where these are attributable calculations are before taxes. to sectors which cannot be regarded as associated operations with a limited life. In cases where the Bank only has the exclusive rights to – The assessment is that the difference between the recoverable a brand name or other intangible asset for a limited period of time, amount and the book value is satisfactory. the cost of acquisition of the brand name is amortised over this pe- – An impairment loss has been recognised for capitalised software riod at the rate it is used. since it is not estimated to have any value.

68 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 18 PROPERTY AND EQUIPMENT

Other property and equipment Operating properties at Investment 1–4 years 5-9 years 10-19 years 20+ years No Total Total fair value property depreciation depreciation depreciation depreciation depreciation 2006 2005

Opening cost of acquisition 1 380 - 742 911 124 1 212 593 4 962 4 815 Opening cost of acquisition, SPP 145 - 10 6 32 - 0 193 New acquisitions during the year - - 143 169 11 - 0 323 276 Changes as a consequence of revaluations during the year170------17070 Capitalised new construction and rebuilding costs during the year30----66- 9640 Cost of acquisition of property and equipment sold during the year - - -194 -176 -24 -31 0 -425 -297 Foreign exchange effect - - -13 -26 -3 - 0 -42 58 Total cost of acquisition 1 725 - 688 884 140 1 247 593 5 277 4 962

Accumulated depreciation at beginning of year - - -570 -655 -58 -554 -1 837 -1 764 Accumulated depreciation at beginning of year, SPP - - -10 -4 -24 - -38 Accumulated depreciation on equipment sold during the year - - 188 168 20 32 408 281 Year’s impairment losses recognised in the income statement------10 -10-5 Year’s depreciation - - -135 -135 -15 -36 -321 -316 Foreign exchange effect - - 11 17 -1 - 27 -33 Total accumulated depreciation - - -516 -609 -78 -568 -1 771 -1 837

Book value of leasing assets taken over 7720 Book value of other repossessed property ------139 Book value of property repossessed for protection of claims 32 - - 32 34 Total collateral taken over 32----739193

Residual value according to plan 1 725 32 172 275 62 679 600 3 545 3 318

Of which land 762 583 1 345 1 253 Tax assessment value, Swedish properties 927 2 172 3 099 3 004

Apart from owned equipment, the Bank also has at its disposal amount of the premises would have been SEK 1,555m, if they had equipment under operating leases. The residual value of leased not been carried at fair value. equipment in the Bank was SEK 38m (54). The year’s depreciation for other repossessed property is Property held for use in the business at fair value was valued SEK 7m (14). individually taking cash fl ows into account. The valuation was Property repossessed to protect claims is sold as soon as reason- performed in December 2006 by an external valuer. The carrying able market conditions exist.

NOTE 19 OTHER ASSETS

2006 2005

Claims on investment banking settlements 17 610 8 645 Other 3 403 4 985 Probable loan losses -1 -1 Total 21 012 13 629

NOTE 20 PREPAYMENTS AND ACCRUED INCOME

2006 2005

Accrued interest income 7 727 5 065 Other accrued income 1 248 542 Prepayments 215 145 Total 9 190 5 752

Of which subordinated 4 3

HANDELSBANKEN ■ ANNUAL REPORT 2006 69 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 21 DUE TO CREDIT INSTITUTIONS

2006 2005

Due in Swedish kronor Banks 52 133 48 532 Other credit institutions 15 635 3 027 Sub-total 67 768 51 559

Due in foreign currency Banks 239 122 214 654 Other credit institutions 13 592 22 840 Sub-total 252 714 237 494

Total 320 482 289 053

Of which repos 35 743 10 783

Payable on Within >3 months >1 year Over Remaining maturities demand 3 months to 1 year to 5 years 5 years Total

2006 71 141 225 451 22 485 591 814 320 482 2005 47 046 217 876 22 064 1 047 1 020 289 053

Average volumes 2006 2005

Due to credit institutions in Swedish kronor 55 996 58 792 Due to credit institutions in foreign currency 312 130 257 471 Total 368 126 316 263

Of which repos 29 468 17 396

NOTE 22 LIABILITIES WHERE THE CUSTOMER BEARS THE VALUE CHANGE RISK

2006 2005

Insurance liabilities in SPP Liv - 83 464 Unit-linked insurance liabilities 58 474 48 634 Other fund liabilities 1 437 - Share of consolidated funds not owned 2 922 2 174 Other - 1 654 Total 62 833 135 926

70 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 23 ISSUED SECURITIES

2006 2005 Nominal Book Book amount value value Certificates Certificates in Swedish kronor 26 579 28 037 26 428 Of which at amortised cost 19 298 19 250 26 428 for trading 7 281 8 787 - Certificates in foreign currency 219 379 218 616 207 217 Of which at amortised cost 174 538 173 775 188 263 for fair value hedges 12 955 12 947 18 954 for trading 31 886 31 894 - Sub-total 245 958 246 653 233 645

Bonds Bonds in Swedish kronor 265 631 276 769 222 301 Of which at amortised cost 195 306 202 325 177 911 for fair value hedges 70 325 74 444 44 390 Bonds in foreign currency 73 412 71 579 30 398 Of which at amortised cost 53 096 51 699 29 182 for fair value hedges 20 316 19 880 1 216 Sub-total 339 043 348 348 252 699

Total 585 001 595 001 486 344

Payable on Within >3 months >1 year Remaining maturities carrying amount demand 3 months to 1 year to 5 years >5 years Total 2006 1 657 204 474 96 236 241 846 50 788 595 001 2005 - 175 658 135 614 159 886 15 186 486 344

Average volume of issued securities 2006 2005 Swedish kronor 301 113 245 392 Foreign currency 285 467 273 391

Turnover of own issued securities 2006 2005

Issued 1 403 1 491 Repurchased 292 275 Repaid 1 001 1 171

NOTE 24 OTHER TRADING LIABILITIES

Short positions at fair value 2006 2005

Equities 2 053 3 868 Interest-bearing securities 49 776 44 269 Of which Other issuers 48 318 41 755 Own issued 1 458 2 514 Total 51 829 48 137

Payable on Within >3 months >1 year Remaining maturities short positions interest-bearing securities demand 3 months to 1 year to 5 years >5 years Total

2006 3 78 2 627 37 695 9 373 49 776 2005 - 2 035 5 735 29 333 7 166 44 269

Average volumes of other trading liabilities 2006 2005

Swedish kronor 41 014 22 674 Foreign currency 2 860 6 057

HANDELSBANKEN ■ ANNUAL REPORT 2006 71 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 25 INSURANCE OBLIGATIONS NOTE 27 PROVISIONS

2006 2005 2006 2005

Liability for sickness annuities 2 158 437 Opening balance 36 10 Liability for other unsettled claims 410 318 Additional provisions when consolidating SPP 167 Liability for prepaid premiums 303 107 Provisions during the year 5 36 Total 2 871 862 Utilisation - - Other changes -81 -10 Closing balance 127 36 NOTE 26 TAXES

Deferred tax assets 2006 2005 NOTE 28 OTHER LIABILITIES Loans to the public 17 - Shares and participating interests 6 8 2006 2005 Derivative instruments - 57 Liabilities on investment banking settlements 5 505 3 705 Intangible assets 105 147 Other 10 032 6 475 Property and equipment 49 54 Total 15 537 10 180 Pension obligations 118 - Other 18 46 Offsetting against deferred tax liability -48 -115 Total 265 197 NOTE 29 PREPAYMENTS AND ACCRUED INCOME

2006 2005 Deferred tax liabilities 2006 2005 Accrued interest expense 13 509 9 636 Loans to the public * 4 627 3 912 Other accrued expense 2 084 2 026 Shares and participating interests 252 219 Deferred income 50 86 Derivative instruments 38 42 Total 15 643 11 748 Intangible assets 611 643 Property and equipment 150 159 Pension assets 1 118 1 055 Other 62 35 Offsetting against deferred tax assets -48 -115 Total 6 810 5 950

Net deferred tax liabilities 6 545 5 753 * Of which leasing SEK 4 603m (3 858).

Recognised Recognised Year’s change in Opening in the income directly Closing deferred taxes balance statement in equity balance

Loans to the public 3 912 699 -1 4 610 Shares and participating interests 211 2 33 246 Derivative instruments -15 - 53 38 Intangible assets 496 5 5 506 Property and equipment 105 -4 0 101 Pension assets/obligations 1 055 33 -88 1 000 Other -11 -10 65 44 Total 5 753 725 67 6 545

Tax expenses recognised in the income statement 2006 2005

Current tax Tax expense for the year -3 776 -3 636 Adjustment of tax attributable to previous years 465 55 Deferred tax Changes in temporary differences -725 -715 Total -4 036 -4 296

Nominal tax rate in Sweden, % 28.0 28.0 Deviations Different tax base in insurance operations -3.8 -0.7 Taxes for previous years, and other -0.7 0.0 Effective tax rate, % 23.5 27.4

72 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

NOTE 30 SUBORDINATED LIABILITIES NOTE 31 SPECIFICATION OF CHANGES IN EQUITY

2006 2005 Change in exchange differences

Subordinated loans in Exchange differences 31 December 2004 -23 Swedish kronor 349 349 Change in exchange differences in branches 176 Subordinated loans in Change in exchange differences in subsidiaries 417 foreign currency 51 323 46 446 Change in exchange differences in associated Total 51 672 46 795 companies 8 Change in exchange difference on Average volumes financing of net assets in subsidiaries -213 Subordinated loans in Exchange difference 31 December 2005 365 Swedish kronor 349 380

Subordinated loans in Change in exchange differences in branches -271 foreign currency 49 080 31 286 Change in exchange differences in subsidiaries -339 Change in exchange differences in associated Specifi cation, subordinated loans companies -11

Original Change in exchange difference on nominal financing of net assets in subsidiaries 129 amount Exchange difference 31 December 2006 -127 Issue/conv./fi nal in each Interest Outstanding paymt year Currency currency rate % amount Specifi cation of instruments available IN SWEDISH KRONOR for sale (amount after tax) 2006 2005 Other Swedish 7 349 Unrealised market value at Total 349 beginning of year 872 680 Unrealised market value of IN FOREIGN CURRENCY holdings sold during the year -336 -303 2005/20151 EUR 500 variable 4 517 Unrealised market value change during 2005/20172 EUR 700 variable 6 317 the year for remaining and new holdings 587 495 2005/perpetual3 GBP 500 5.000 6 506 Unrealised market value at end of year 1 123 872 2005/perpetual4 EUR 500 4.194 4 261 2006/20165 EUR 600 4.000 5 372 Revaluations in insurance operations 2006/20166 USD 800 variable 5 477 recognised directly in equity 2006 2005

7 Other foreign 18 873 Changes in value of properties Total 51 323 recognised directly in equity 170 70 Insurance liabilities recognised Total 51 672 directly in equity -170 -70

1 Fixed-term subordinated loan with 3-month variable coupon linked to Euribor. Total - - Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2010. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. 2 Fixed-term subordinated loan with 3-month variable coupon linked to Euribor. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from October 2012. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. 3 Perpetual subordinated loan at fixed rate. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2010. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. In connection with the right of redemption, the interest rate becomes variable linked to Libor. 4 Perpetual subordinated loan at fixed rate. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2015. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. In connection with the right of redemption, the interest rate becomes variable linked to Euribor. 5 Fixed-term subordinated loan at fixed rate. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2011. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. In connection with the right of redemption, the interest rate becomes variable linked to Euribor. 6 Fixed-term subordinated loan with 3-month variable coupon linked to Libor. Prema- ture redemption may occur in the case of changed tax regulations or on the interest due dates from 2011. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. 7 Other subordinated loans which are not specified here are issued in the form of fixed-term or perpetual subordinated loans.

HANDELSBANKEN ■ ANNUAL REPORT 2006 73 FINANCIAL REPORTS ■ NOTES – GROUP

Other disclosures – Group

CAPITAL ADEQUACY

Capital base and capital requirement SEK m 2006 2005

CAPITAL BASE Tier 1 capital 1) 59 272 58 424 Net tier 2 capital 23 976 30 890 Total capital base 83 248 89 314

RISK-WEIGHTED AMOUNT Credit risks 827 649 723 658 Market risks 48 529 45 581 Total 876 178 769 239

Capital ratio, % 9.5 11.6 Tier 1 ratio, % 6.8 7.6

Capital base 2006 2005

TIER 1 CAPITAL Equity1 61 467 59 035 Tier 1 capital contribution 5 358 5 681 Minority interest 00 Deducted items Goodwill and other intangible assets -5 917 -5 992 Revaluation -152 -159 Deferred tax asset -264 -197 Unrealised accumulated profit -1 123 Adjustments in accordance with stability filter Cash flow hedges -97 56 Total tier 1 capital 59 272 58 424

TIER 2 CAPITAL Perpetual subordinated loans 20 838 13 421 Fixed-term subordinated loans after reduction 25 072 26 548 Adjustment unrealised accumulated profit 1 128 Revaluation adjustment 152 159 Total tier 2 capital 47 190 40 128

Total 106 462 98 552

Less shareholdings in insurance companies and 5–50% in companies conducting banking business -22 148 -9 238 Less adjustment, unrealised pension obligations -1 066 Total tier 1 and tier 2 capital 83 248 89 314

Enlarged capital base -- Total capital base 83 248 89 314

1 Tier 1 capital has been affected by the board’s proposed appropriations.

74 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

CAPITAL COVER CONTINUED

Risk-weighted amount for credit risks 2006 2005 Risk-weighted Risk-weighted Balance sheet items Weighting Investments amount Investments amount

Risk weight 0% (group A) 0% 367 231 266 254 Risk weight 20% (group B) 20% 42 693 8 539 43 466 8 693 Risk weight 50% (group C) 50% 545 623 272 811 502 984 251 491 Risk weight 100% (group D) 100% 471 262 471 262 392 683 392 683 Total 1 426 809 752 612 1 205 387 652 867

2006 2005 Nominal Converted Risk-weighted Nominal Converted Risk-weighted Off-balance-sheet items 2 Weighting amount amount amount amount amount amount

Risk weight 0% (group A) 0% 21 925 12 264 16 614 10 075 Risk weight 20% (group B) 20% 174 099 14 269 2 854 42 061 12 670 2 534 Risk weight 50% (group C) 50% 430 084 3 362 1 681 88 346 2 487 1 244 Risk weight 100% (group D) 100% 136 290 70 502 70 502 125 777 67 013 67 013 Total 762 398 100 397 75 037 272 798 92 245 70 791

Total credit risks 1 527 206 827 649 1 297 632 723 658

2 The nominal amounts for off-balance sheets items are recalculated using a factor which varies according to the credit risk in the commitments. The recalculated amounts are subsequently allocated according to the same principles (group A-D) which apply for the balance sheet items.

Risk-weighted amount for market risks 2006 2005 Specifi c General Risk-weighted Specifi c General Risk-weighted risk risk amount risk risk amount

Interest rate risks 24 620 10 466 35 086 20 584 10 844 31 428 Equity price risks 815 764 1 579 791 612 1 403 Settlement risks 15 12 Counterparty risks and other risks 10 316 11 770 Exchange rate risks 1 533 968 Total market risks 48 529 45 581

Total risk-weighted amount for credit and market risks 876 178 769 239

CAPITAL POLICY with very high probability will cover unexpected losses or decreases The Bank aims to maintain a satisfactory capital level corresponding in value from the perspective of the shareholders. The assessment to the risk implied by the Group’s operations and which exceeds the is carried out regularly and also monitors compliance with external legal minimum requirement. A satisfactory capital level is needed to statutory capital requirements. manage situations of fi nancial strain and also other events such as acquisitions and strong growth in volumes. In 2006, the Board DESCRIPTION OF THE CAPITAL BASE FOR established a new capital policy, which provides guidelines for THE FINANCIAL CORPORATE GROUP Handelsbanken’s internal capital assessment. The Bank’s capital base consists of tier 1 capital, tier 2 capital and the enlarged capital base (to cover market risks). Tier 1 capital INTERNAL CAPITAL ASSESSMENT consists of the equity belonging to the companies which are part Handelsbanken must have available fi nancial resources correspond- of the fi nancial corporate group and issued tier 1 loans. Accumu- ing to all the risks which lead to unexpected losses or reductions in lated shareholders’ equity deriving mainly from the Group’s insur- value. Capital planning must be undertaken to ensure that capital ance companies is excluded when calculating the capital base for is available when needed. The internal capital adequacy assessment the fi nancial corporate group. Tier 1 capital loans (certain types also includes the groupwide risk control so that there is an overall of subordinated loans) can be included up to 15% of the total tier assessment of the Group’s risks. Handelsbanken has decided to use 1 capital excluding tier 1 capital loans, net after reduction items. an economic capital model (EC). The EC model provides a measure Handelsbanken has included 9% so far. The items which must be ex- of the Group’s overall risks and corresponds to the capital which cluded from the tier 1 capital are the impact of cash fl ow hedges,

HANDELSBANKEN ■ ANNUAL REPORT 2006 75 FINANCIAL REPORTS ■ NOTES – GROUP

CAPITAL COVER CONTINUED

deferred tax assets and goodwill and other intangible assets. Tier Handelsbanken has met the requirements of the Act (2006:531) 2 capital mainly consists of perpetual and fi xed-term subordinated on special supervision of fi nancial conglomerates, which came into loans. Tier 2 capital must never exceed tier 1 capital. The extended force on 1 July 2006. Institutions and insurance companies which capital base also comprises subordinated loans and may only be used are part of a fi nancial conglomerate must have a capital base which to cover parts of the capital requirement for market risks. is adequate in relation to the capital requirement for the fi nancial conglomerate. LEGAL CAPITAL REQUIREMENT On 1 February 2007, new capital adequacy regulations were in- In 2006, the Bank complied with requirements of the Act on the troduced in accordance with the Act on capital adequacy and large capital adequacy and large exposures of credit institutions and exposures (2006:1371). The Bank is expected to reserve a larger securities companies (1994:2004). This Act states that at any time capital base than the minimum requirements to cover the risks the Bank must have a capital base corresponding to 8% of its risk- arising in the operations in the form of credit risks, market risks and weighted assets. Risk-weighted assets are assets on the balance sheet, operational risks. For further information see the note on risks and but also off-balance sheet items, sorted into different groups and risk control. allocated a capital requirement in the form of risk weights on the basis of risk classes defi ned in the Act.

COLLATERAL PLEDGED FOR OWN DEBT

SEK m 2006 2005

Book value pledged assets 407 390 78 433

Of the book value of pledged assets, interest-bearing securities represent 11% (61), repos 11% (32) and mortgage loans 69% (0). In addition there are cash funds, shares and securities loans representing 9% (7). Collateral pledges in the form of mortgage loans comprise the assets separated in favour of holders of covered bonds issued by the compa- ny. The collateral in Stadshypotek comprises loans to the public against mortgages in real property which are single-family dwellings, second homes, multi-family dwellings and ownership housing co-operatives with a loan to value ratio within 75% of the market value and additional collateral in the form of cash funds on a blocked account. A separate specifi cation is kept of the assets and the covered bonds, and also deri- vatives relating to these.

OTHER COLLATERAL PLEDGED

SEK m 2006 2005

Market value – collateral obtained 180 126 164 932 Market value – sold or pledged collateral -- Total 180 126 164 932 Policyholders’ registered assets represent 91% (96) of the market value of collateral obtained. In addition there are cash funds, interest-bearing securities, securities and other loans of 9% (4).

COMMITMENTS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

SEK m 2006 2005

Guarantees, loans 18 395 12 052 Guarantees, other 39 618 33 144 Irrevocable letters of credit 46 211 46 678 Own acceptances 213 201 Other 2 790 3 716 Total 107 227 95 791 Commitments and contingent liabilities and assets total SEK 107,227m (95,791). This amount includes SEK 61m (49) relating to a number of civil actions which the Group is bringing in general courts of law. The largest individual amount in dispute is SEK 30m (24). The Bank’s assessment is that the actions will essentially be settled in its favour. None of the disputed amounts, nor any insurance compensation, has been recognised in income. The data for contingent liabilities is reported in nominal amounts and an assessed expected value is included in the “Other” amount for the civil actions that the Group is bringing. The Group is currently pursuing a tax dispute. The total claim is approx. SEK 20m, excluding interest, which in the case of a positive judgement would increase the Group’s income by the same amount.

76 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

OTHER COMMITMENTS

SEK m 2006 2005

Commercial paper programmes 22 392 9 387 Other commitments 61 70 Total commitments regarding future payments 22 453 9 457

Credit promises 166 576 149 664 Unutilised part of granted overdraft facilities 130 956 124 200 Total other commitments 297 532 273 864

Total 319 985 283 321

Contracted irrevocable future operating lease charges distributed by the year they fall due for payment 2006 2005

2007 645 364 2008 487 264 2009 424 184 2010 249 125 2011 187 84 2012 106 67 2013 70 33 2014 46 26 2015 38 21 2016 28 13 2017 20 12 2018 and later 41 24 Total 2 341 1 217

SEGMENT REPORTING 2006

Branch Asset Pensions & Total SEK m offi ces Markets Management Insurance Other 2006

Net interest income 14 324 572 168 139 -231 14 972 Net fee and commission income 4 174 1 728 1 193 2 304 -167 9 232 Net gains/losses on financial items at fair value 1 206 1 422 33 907 693 4 261 Risk result - insurance 571 571 Other income 391 839 90 153 -950 523 Total income 20 095 4 561 1 484 4 074 -655 29 559

Of which internal -8 841 9 634 -240 -262 4 200 4 491

Administrative expenses -8 241 -3 244 -677 -1 297 1 565 -11 894 Depreciation, amortisation and impairments of property, equipment and intangible assets -153 -21 -2 -199 -182 -557 Total expenses -8 394 -3 265 -679 -1 496 1 383 -12 451

Profit before loan losses 11 701 1 296 805 2 578 728 17 108

Loan losses/recoveries 53 2 - - 55 Gains/losses on disposal of property, equipment and intangible assets 0 0 - - 1 1 Operating profit 11 754 1 298 805 2 578 729 17 164

Return on equity, % 18.5 14.0 30.4 34.7 20.9 Assets 1 119 346 702 974 24 133 216 669 -273 114 1 790 008 Liabilities 1 074 401 696 177 22 227 209 669 -278 692 1 723 782

Other disclosures Investments in non-financial assets 152 33 4 30 283 502 Average number of employees 6 155 1 244 339 681 1 744 10 163

HANDELSBANKEN ■ ANNUAL REPORT 2006 77 FINANCIAL REPORTS ■ NOTES – GROUP

SEGMENT INFORMATION 2005

Branch Asset Pensions & Total SEK m offi ces Markets Management Insurance Other 2005

Net interest income 14 655 482 113 -2 -158 15 090 Net fee and commission income 3 803 1 523 985 857 -113 7 055 Net gains/losses on financial items at fair value 1 261 1 010 42 65 1 081 3 459 Risk result – insurance 194 194 Other income 369 521 69 109 -543 525 Total income 20 088 3 536 1 209 1 223 267 26 323

Of which internal -6 399 6 344 -408 -68 4 421 3 890

Administrative expenses -7 797 -2 550 -608 -631 1 161 -10 425 Depreciation, amortisation and impairments of property, equipment and intangible assets -138 -20 -3 -27 -325 -513 Total expenses -7 935 -2 570 -611 -658 836 -10 938

Profit before loan losses 12 153 966 598 565 1 103 15 385

Loan losses/recoveries 259 3 - -1 261 Gains/losses on disposal of property, equipment and intangible assets 4 0 0 - 0 4 Operating profit 12 416 969 598 565 1 102 15 650

Return on equity, % 16.6 13.8 23.2 35.9 17.9 Assets 1 027 811 705 518 18 608 176 484 -345 514 1 582 907 Liabilities 971 313 700 252 16 853 175 134 -346 403 1 517 149

Other disclosures Investments in non-financial assets 96 14 6 4 103 217 4 436 Average number of employees 6 018 1 102 320 185 1 770 9 395

Internal income and expenses are included in the respective item Return on equity for the segments is computed after standard tax on the income statement. Internal income consists of payment for while for the whole Group and for Pensions & Insurance, it is com- services rendered according to the cost price principle. Expenses also puted after full tax. include the distribution of costs made internally within the Group The shareholders’ equity, on which calculation of return on equity for services from business support operations. is based, corresponds to the assessment of the Group’s overall actual The Other operations business area includes Treasury and the capital requirement. central head offi ce departments. It also includes capital gains/losses, dividends, and income and expenses that are not attributable to a specifi c segment.

GEOGRAPHICAL SEGMENT INFORMATION

Sweden Other Nordic countries Rest of world Eliminations Group SEK m 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Income 22 031 20 579 4 747 3 779 2 912 2 042 -131 -77 29 559 26 323 Assets 1 466 953 1 223 920 246 230 221 206 461 163 421 439 -384 338 -283 658 1 790 008 1 582 907

Other disclosures Investments in non-financial assets 399 4 388 60 29 43 19 502 4 436

78 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

ASSETS AND LIABILITIES IN FOREIGN CURRENCIES

Other SEK m USD EUR DKK NOK GBP JPY HKD SGD currencies

Assets Loans to credit institutions 83 531 9 387 6 068 1 497 610 438 134 36 4 488 Loans to the public 22 506 106 208 33 717 102 718 34 779 920 2 052 288 7 324 Bonds and other interest-bearing securities 70 231 30 772 2 203 4 945 631 0 77 23 5 784

Liabilities Due to credit institutions 124 528 80 655 7 883 7 877 11 437 1 013 9 535 37 9 335 Deposits and borrowing from the public 37 548 49 202 19 075 43 936 14 664 126 173 244 3 773 Issued securities 177 677 91 593 483 3 347 15 183 1 114 0 0 1 094 Subordinated liabilities 9 676 22 727 0 0 18 041 892 0 0 0 Other assets and liabilities including positions in derivatives 172 899 97 199 -14 419 -53 799 23 164 1 514 7 437 23 -2 934 Net foreign currency positions -262 -611 128 201 -141 -273 -8 89 460

FAIR VALUE DISCLOSURES

Book Adjustment Book Adjustment value to fair value to fair SEK m 2006 value 2006 2005 value 2005

Assets Loans to credit institutions 177 175 -34 136 546 -57 Loans to the public 1 100 538 -14 983 681 5 775 Interest-bearing securities 266 743 - 184 710 3 Other assets 245 552 2 500 277 970 2 185 Total assets 1 790 008 2 452 1 582 907 7 906

Liabilities Due to credit institutions 320 482 76 289 053 331 Deposits and borrowing from the public 533 885 -14 407 617 -6 Issued securities 595 001 -2 169 486 344 2 626 Other liabilities 222 742 - 287 340 - Subordinated liabilities 51 672 111 46 795 556 Total liabilities 1 723 782 -1 996 1 517 149 3 507

Total surplus/deficit 4 448 4 399

In accordance with IFRS, a comparison is to be made between fair off-balance-sheet items are valued in the same way. value and book value for both assets and liabilities in the balance Items which are not traded on liquid markets, irrespective of sheet and also fi nancial items which are not reported in the balance whether these are current assets, non-current assets, issued liabilities sheet. Values which are based on customer relations are not to be or off-balance-sheet fi nancial items are valued at the current market taken into account, although they may be of importance in valuing, rate for the corresponding maturity adjusted to take into account the for example, deposit accounts and mortgage and consumer credits. credit and liquidity risk. The credit and liquidity risk premium by The directives allow scope for choice of method and various as- which the market rate has been adjusted when making the valuation sumptions. Thus, the methods applied and the assumptions made is assumed to be the same as the average margin for new lending at may vary among the credit institutions. Information concerning fair the time of the measurement. value is not a corporate valuation and therefore cannot constitute Properties are valued on the basis of an external valuation. the basis of a comparison between credit institutions. With the method applied, the interest risk in the balance sheet For means of payment, current receivables and liabilities and also gives rise to surplus values if short-term rates are falling and defi cits for receivables and liabilities with a variable interest rate, the fair if interest rates are rising. A surplus value also occurs when margins value is considered to be the same as the book value. Receivables decrease, and a defi cit when margins increase. and liabilities with fi nal maturity or date for next interest rate fi xing In cases where the fair value of assets is less than the book value within 30 days are considered to be short-term. and for liabilities, the book value is less than the fair value, this is Assets and liabilities which are traded on liquid markets have been because these items are subject to hedge accounting. valued at the average price on the balance sheet day. Market-listed

HANDELSBANKEN ■ ANNUAL REPORT 2006 79 FINANCIAL REPORTS ■ NOTES – GROUP

RELATED PARTY DISCLOSURES

SEK m Opening balance Increase/Decrease Closing balance

Lending Associated companies 23 -11 12 Others - - - Total 23 -11 12

Other assets Associated companies - - - Others 6 514 520 Total 6 514 520

Total assets Associated companies 23 -11 12 Others 6 514 520 Total 29 503 532

Deposits and borrowing Associated companies 155 85 240 Others 85 105 190 Total 240 190 430

Other financial liabilities Associated companies - 7 7 Others 674 102 776 Total 674 109 783

Other liabilities Associated companies 1 -1 - Others - - - Total 1-1-

Total liabilities Associated companies 156 91 247 Others 759 207 966 Total 915 298 1 213

SEK m 2006 2005

Interest income Associated companies 11 Others -65 Total 166

Interest expense Associated companies -6 -3 Others -11 -144 Total -17 -147

Fee and commission income Associated companies 185 201 Others 6 167 Total 191 368

Fee and commission expense Associated companies -209 -237 Others -- Total -209 -237

Net result on financial items at fair value Associated companies -- Others -53 -14 Total -53 -14

Other income Associated companies -- Others 2 154 Total 2 154

Other expenses Associated companies - -53 Others -198 -69 Total -198 -122

Total Associated companies -29 -91 Others -254 159 Total -283 68

80 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – GROUP

RELATED PARTY DISCLOSURES CONTINUED The associated companies are listed in Note 14. These companies perform various types of services linked to the fi nancial markets. “Other” includes the various pension organisations: Svenska Handelsbankens Pensionsstiftelse, Svenska Handelsbankens Personalstiftelse and Pensionskassan SHB, försäkringsförening which use the Bank for customary banking and accounting services. Shareholders’ contribution to associated companies, see Note 14. For 2005, ”Other” in the income statement includes SPP Livförsäkring AB (SPP). Svenska Handelsbanken AB mainly performs IT-related services and asset management. Handelsbanken Liv Försäkrings AB and SPP also have close cooperation.

Related-party transactions with CEO, EVPs and board of directors SEK m 2006 2005

Lending 85 98 Interest income 22

2006 2005

Deposits 16 10 Interest expense 00

For other transactions, see Note 5, Terms and remuneration for senior management.

Credit is granted after customary credit review. The interest rate is determined on normal commercial terms. However for employees of the Bank (not members of the board), the interest rate on credit up to SEK 1.5m is two percentage points lower than the equivalent interest rate for external customers. This benefi t is taxable for the employee and constitutes a basis for social security charges payable by the Bank. Credit to close family members is granted on normal commercial terms and is not included in this report. In exceptional cases, if credit to a close family member is granted at the subsidised interest rate described above, this is reported as a taxable benefi t for the employee. For deposits, the interest rate for employees is the same as for external customers.

LEASES

Disclosures on gross investment and present value of future minimum leasing payments SEK m 2006 2005

Gross investment 36 066 32 831 Present value of future minimum lease payments at balance sheet date 32 641 30 883

Within Between 1 Later than Distribution of gross investment and minimum lease payments by maturity 1 year and 5 years 5 years Total

Distribution of gross investment 5 066 10 852 20 148 36 066 Distribution of present value minimum leasing payments 5 014 10 287 17 340 32 641

Unearned fi nance income SEK m 2006 2005

Unearned finance income 3 424 2 615

NON-GUARANTEED RESIDUAL VALUES ACCRUING TO THE LESSOR All leases have guaranteed residual values.

PROVISION FOR BAD DEBTS REFERRING TO MINIMUM LEASE PAYMENTS The book value of the provision for bad debts with respect to minimum lease payments is SEK 5.5m (4.7).

VARIABLE PART OF LEASE PAYMENTS INCLUDED IN EARNINGS FOR THE PERIOD Amounted to SEK 142m (38) for 2006 due to higher interest rates in 2006 than 2005.

MAJOR LEASE CONTRACTS The largest individual lease exposure is worth SEK 8.3bn (7.4).

HANDELSBANKEN ■ ANNUAL REPORT 2006 81 FINANCIAL REPORTS ■ FIVE-YEAR REVIEW – GROUP

Five-year review for the Group

As a consequence of the transition to IFRS the formats for the income statements and balance sheets for 2004–2006 have changed. The accounting policies are described on page 34. The income statements and balance sheets for 2002–2003 are reported in the format and according to the principles in force at the close of the respective years, as no retroactive restatements can be made for these years without considerable difficulty.

Income statement SEK m 2006 2005 2004 2003 2002

Net interest income 14 972 15 090 14 808 Net interest income 18 345 17 006 Dividends received 491 392 Net fee and commission income 9 232 7 055 6 000 Net fee and commission income 4 707 4 587 Net gains/losses on financial items at fair value 4 261 3 459 2 390 Net gains/losses on financial items -1 827 -938 Risk result - insurance 571 194 44 Other dividend income 193 158 218 Share of profit of associated companies 105 59 104 Other income 225 308 399 Other operating income 243 320 Total income 29 559 26 323 23 963 Total operating income 21 959 21 367

Administrative expenses General administrative expenses Staff costs -7 714 -6 678 -6 380 Staff costs -6 216 -6 203 Other expenses -4 180 -3 747 -3 364 Other expenses -2 855 -3 267 Depreciation and impairments of property, Depreciation and impairments of property, equipment and intangible assets -557 -513 -501 equipment and intangible assets -807 -866 Total expenses -12 451 -10 938 -10 245 Total expenses before loan losses -9 878 -10 336

Profit before loan losses 17 108 15 385 13 718 Profit before loan losses 12 081 11 031

Loan losses incl. change in value Loan losses/recoveries 55 261 -167 of repossessed property -492 -392 Gains/losses on disposal of Impairment loss/reversals of financial property, equipment and intangible assets 1 4 2 fixed assets 199 -199 Share of profit of associated companies 29 20 Result of banking operations 11 817 10 460

Result of insurance operations -267 -270 Operating profit 17 164 15 650 13 553 Operating profit 11 550 10 190

Appropriations -89 -80 Profit before taxes 11 461 10 110

Taxes -4 036 -4 296 -3 693 Taxes -3 345 -2 817 Minority interest - -11 Profit for the year 13 128 11 354 9 860 Profit for the year 8 116 7 282

Attributable to Ordinary shareholders 13 128 11 354 9 860 Minority interest --- Earnings per share, SEK * 20.41 16.98 14.55 11.70 10.50

* No dilution.

82 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ FIVE YEAR REVIEW – GROUP

Balance sheet SEK m 2006 2005 2004 2003 2002

Assets Loans to the public 1 100 538 983 681 861 252 823 142 839 340 Loans to credit institutions 177 175 136 546 109 076 115 273 79 517 Interest-bearing securities 266 743 184 710 169 854 127 309 137 327 Other assets 245 552 277 970 176 607 194 730 221 330 Total assets 1 790 008 1 582 907 1 316 789 1 260 454 1 277 514

Liabilities and equity Deposits and borrowing from the public 533 885 407 617 342 243 303 326 292 838 Due to credit institutions 320 482 289 053 258 995 202 689 235 113 Issued securities 595 001 486 344 441 614 458 701 464 402 Subordinated liabilities 51 672 46 795 25 182 26 732 26 801 Other liabilities 222 742 287 340 187 383 212 171 206 168 Shareholders’ equity 66 226 65 758 61 372 56 835 52 192 Total liabilities and equity 1 790 008 1 582 907 1 316 789 1 260 454 1 277 514

Memorandum items Collateral pledged 111 535 125 570 Contingent liabilities 71 311 78 958 Pension obligations -- Other commitments 5 954 068 6 594 156

HANDELSBANKEN ■ ANNUAL REPORT 2006 83 FINANCIAL REPORTS ■ INCOME STATEMENT – PARENT COMPANY

Income statement – Parent company

The accounting and valuation principles applied are shown in the section titled Accounting Policies.

SEK m 2006 2005

Interest income Note P1 34 644 24 156 Interest expense Note P1 -25 510 -15 557 Net interest income 9 134 8 599 Dividends received Note P2 3 362 815 Fee and commission income Note P3 7 107 6 430 Fee and commission expense Note P3 -1 276 -1 184 Net fee and commission income 5 831 5 246 Net gains/losses on financial items Note P4 2 220 2 582 Other operating income Note P5 812 608 Total operating income 21 359 17 850

General administrative expenses Staff costs Note P6 -7 186 -6 629 Other administrative expenses Note P7 -3 695 -3 192 Depreciation, amortisation and impairments of property, equipment and intangible assets Note P16, P17 -634 -310 Total expenses before loan losses -11 515 -10 131

Profit before loan losses 9 844 7 719

Loan losses, net Note P8 -200 -160 Operating profit 9 644 7 559

Appropriations Note P9 4 365 4 712 Profit before taxes 14 009 12 271

Taxes Note P24 -3 302 -3 404 Profit for the year 10 707 8 867

84 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ BALANCE SHEET – PARENT COMPANY

Balance sheet – Parent company

The accounting and valuation principles applied are shown in the section titled Accounting Policies.

SEK m 2006 2005

ASSETS Cash and balances with central banks 4 676 6 919 Treasury bills and other eligible bills Note P13 37 484 37 031 Loans to credit institutions Note P11 338 037 312 391 Loans to the public Note P12 571 960 495 442 Bonds and other interest-bearing securities Note P13 153 935 149 057 Shares and participating interests Note P14 72 466 55 145 Assets where the customer bears the value change risk 1 437 - Derivative instruments Note P15 57 271 72 863 Intangible assets Note P16 1 597 1 918 Property and equipment Note P17 1 741 1 716 Current tax assets 689 - Deferred tax assets Note P24 -- Other assets Note P18 20 842 12 683 Prepayments and accrued income Note P19 6 057 3 891 Total assets Note P10 1 268 192 1 149 056

LIABILITIES AND EQUITY Due to credit institutions Note P20 353 112 311 876 Deposits and borrowing from the public Note P21 412 664 376 947 Liabilities where the customer bears the value change risk 1 437 - Issued securities Note P22 254 484 217 774 Derivative instruments Note P15 67 719 76 724 Other trading liabilities Note P23 51 829 50 716 Current tax liabilities - 491 Deferred tax liabilities Note P24 382 248 Provisions Note P25 -- Other liabilities Note P26 13 282 9 122 Accruals and deferred income Note P27 9 419 7 286 Subordinated liabilities Note P28 51 672 46 795 Total liabilities Note P10 1 216 000 1 097 979

Untaxed reserves Note P29 1 183 1 397

Share capital 2 888 2 879 Statutory reserve 2 682 2 682 Retained earnings 34 732 35 252 Profit for the year 10 707 8 867 Total equity 51 009 49 680

Total liabilities and equity 1 268 192 1 149 056

MEMORANDUM ITEMS Collateral pledged for own debt Note P31 121 978 79 319 Other collateral pledged Note P32 5 397 5 986 Contingent liabilities and commitments Note P33 136 268 126 703 Pension obligations Note P34 -- Other commitments Note P35 309 852 271 389

HANDELSBANKEN ■ ANNUAL REPORT 2006 85 FINANCIAL REPORTS ■ STATEMENT OF CHANGES IN EQUITY – PARENT COMPANY

Statement of changes in equity – Parent company

Restricted equity

Statutory Hedge Fair value Retained SEK m Share capital reserve reserve reserve earnings Total

Shareholders’ equity 31 December 2004 2 878 2 682 42 589 48 149 Impact of transition to IFRS 2005 Net effect of changeover to measuring at fair value according to IAS 39 -221 680 -347 112 Opening equity 2005 after adjustment 2 878 2 682 -221 680 42 242 48 261

Change in available-for-sale instruments, after tax Note P30 163 163 Change in cash flow hedges, after tax 75 75 Exchange difference Note P30 176 176 Total changes in equity not recognised in the income statement - - 75 163 176 414

Profit for the year 8 867 8 867 Total changes before transactions with the owners - - 75 163 9 043 9 281

Dividend -4 018 -4 018 Group contributions provided -1 376 -1 376 Repurchase of own shares -2 468 -2 468 Reduction of share capital by means of cancellation -99 99 - Bonus issue 100 -100 - Shareholders’ equity 31 December 2005 2 879 2 682 -146 843 43 422 49 680

Change in available-for-sale instruments, after tax Note P30 259 259 Change in cash flow hedges, after tax 222 222 Exchange difference Note P30 -261 -261 Total changes in equity not reported in the income statement - - 222 259 -261 220

Profit for the year 10 707 10 707 Total changes before transactions with the owners - - 222 259 10 446 10 927

Dividend -4 543 -4 543 Group contributions provided -693 -693 Repurchase of own shares -4 362 -4 362 Reduction of share capital by means of cancellation -89 89 - Bonus issue 98 -98 - Shareholders’ equity 31 December 2006 2 888 2 682 76 1 102 44 261 51 009

86 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ CASH FLOW STATEMENT – PARENT COMPANY

Cash fl ow statement – Parent company

SEK m 2006 2005

OPERATING ACTIVITIES Operating profit 9 644 7 559 of which paid-in interest 33 404 34 668 of which paid-out interest -23 729 -23 500 of which paid-in dividends 2 223 252 Adjustment for non-cash items in the operating profit Loan losses 578 306 Unrealised changes in value -2 271 1 360 Depreciation, amortisation and impairments 634 310 Paid income tax -4 465 -6 783 Changes in the assets and liabilities of operating activities Loans to credit institutions -25 646 -32 107 Loans to the public -77 096 -85 711 Financial current assets -7 469 -36 758 Due to credit institutions 41 236 41 507 Deposits and borrowing from the public 35 717 61 944 Issued securities 36 710 18 757 Derivative instruments, net positions 6 551 -12 882 Short-term positions 1 113 24 519 Claims and liabilities on investment banking settlements -9 270 1 610 Other 5 511 -2 949 Cash flow from operating activities 11 477 -19 318

INVESTING ACTIVITIES Change in shares -12 180 -136 Change in interest-bearing securities 054 Change in property and equipment -293 -258 Change in intangible non-current assets -84 -23 Cash flow from investing activities -12 557 -363

FINANCING ACTIVITIES Repayment of subordinated loans -- Issued subordinated loans 4 876 21 612 Dividends paid -4 543 -4 018 Group contribution paid 3 027 4 867 Repurchase of own shares -4 362 -2 468 Cash flow from financing activities -1 002 19 993

Cash flow for the year -2 082 312

Liquid funds at beginning of year 6 919 6 302 Cash flow from operating activities 11 477 -19 318 Cash flow from investing activities -12 557 -363 Cash flow from financing activities -1 002 19 993 Exchange rate difference on liquid funds -161 305 Liquid funds at end of year 4 676 6 919

HANDELSBANKEN ■ ANNUAL REPORT 2006 87 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

Notes – Parent company

NOTE P1 NET INTEREST INCOME NOTE P3 NET FEE AND COMMISSION INCOME

2006 2005 2006 2005

Interest income Brokerage 1 575 1 269 Credit institutions and central banks 11 033 8 414 Mutual funds and custody 936 935 General public 21 275 17 535 Insurance - 8 Treasury bills and other eligible bills 2 610 986 Payments 1 948 1 843 Bonds and other interest-bearing securities 8 902 5 406 Lending and deposits 586 667 Derivative instruments recognised as hedges 409 -280 Guarantees 397 386 Other interest income 869 454 Other 1 665 1 322 Total interest income 45 098 32 515 Total fee and commission income 7 107 6 430

Of which interest income reported in net gains/losses on Brokerage, mutual funds and custody -343 -302 financial items at fair value 10 454 8 359 Payments -862 -814 Interest income according to income statement 34 644 24 156 Other -71 -68 Total fee and commission expense -1 276 -1 184 Interest expense Credit institutions and central banks -14 172 -8 902 Net fee and commission income 5 831 5 246 General public -8 417 -5 184 Issued securities -10 646 -7 496 Derivative instruments recognised as hedges 989 804 Subordinated liabilities -2 299 -1 520 NOTE P4 NET GAINS/LOSSES ON FINANCIAL ITEMS

Other interest expense -4 322 -1 989 2006 2005 Total interest expense -38 867 -24 287 Available for sale, realised 922 1 019

Of which interest expense reported in net gains/losses Hedge accounting on financial items at fair value -13 357 -8 730 Fair value hedges 93 65 Interest expense according to income statement -25 510 -15 557 of which hedging instruments 115 62 Net interest income 9 134 8 599 of which hedged items -22 3 Ineffective portion of cash flow hedges 0 0 Includes interest income on bad debts SEK 50m (55). Total interest income on assets Written back from equity on cash flow hedges 0 - recognised at amortised cost during 2006 was SEK 31,908m (23,849). Total interest Ineffective portion of net investment hedges - - expense on liabilities recognised at amortised cost during 2006 was SEK 33,509m (20,382). Instruments measured at fair value -184 -82 of which change due to changed interbank interest rate -186 -82 NOTE P2 DIVIDENDS RECEIVED Loan receivables, valued at cost 78 - Financial liabilities, valued at cost 98 - 2006 2005 Trading 1 213 1 580 Total 2 220 2 582 Dividend on shares and participating interests 1 332 720 Dividend from associated companies 32 11 Valuation techniques Dividend from group companies 1 998 84 The result includes unrealised results as a consequence of measuring balance sheet Total 3 362 815 items at fair value. The assessment is mainly made on the basis of market prices. When there are no market prices the assessment uses models based on official market pric- es. More advanced calculation models contain parameters that are not listed, where assumptions and estimates must be made instead. These more advanced valuation models are seldom needed and when they are, valuation models that are generally ac- cepted by the market are always used. Net gains/losses on financial items at fair value include an item of SEK -535m, where the fair value is partly based on the Bank’s own assumptions. The instruments included in this item are mainly equity index options. The positions are essentially matched by opposite positions in listed financial instruments and instruments whose fair value has been assessed on the basis of models based on official market prices.

NOTE P5 OTHER INCOME

2006 2005

Rental income 37 38 Other operating income 775 570 Total 812 608

88 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P6 STAFF COSTS NOTE P7 OTHER ADMINISTRATIVE EXPENSES

2006 2005 2006 2005

Salaries and fees -4 586 -4 205 Property and premises -827 -810 Social security costs -1 262 -1 172 External IT costs -1 228 -873 Pension costs * -718 -649 Communication -331 -345 Provision to profit-sharing foundation -117 -115 Travel and marketing -309 -272 Other staff costs -503 -488 Purchased services -671 -524 Total -7 186 -6 629 Supplies -188 -173

* SEK 468m (442) of the pension costs are costs calculated on an actuarial basis and Other expenses -141 -195 SEK 302m (207) are pension premiums. Total -3 695 -3 192 The calculated pension cost which is charged to the operating profit is based on the number of employees in active service. See the specification of the Group’s pension expenses in Note P34. Of which lease expenses Insurance premiums paid to group companies are SEK 5m (5). Minimum lease fee -697 -575 Variable fee -18 -146 Salaries and other remuneration 2006 2005 Total -715 -721

Board, CEO and EVPs Rental costs for premises normally have a variable fee related to the inflation rate and to property taxes. Only one of the major lease contracts has a variable fee (related to Sweden -58 -67 Stibor). Norway -3 -3 In 2006, the cost of the largest individual lease contract was approx. SEK 61m (58). Finland -3 -4 Denmark -3 -3 Audit costs Audit Consulting Great Britain -4 -5 2006 2005 2006 2005 Sub-total -71 -82 Auditors elected by the AGM Others KPMG Bohlins AB -7.0 -5.6 -0.2 -1.7 Sweden -3 099 -2 935 Ernst & Young AB -1.1 -0.8 0.0 -0.2 Norway -377 -300

Finland -265 -234 Auditors elected by the Swedish Finan- Denmark -299 -270 cial Supervisory Authority Great Britain -278 -204 PricewaterhouseCoopers AB -1.3 -1.4 -0.7 -0.9 Luxembourg -13 -14 Germany -28 -28 Internal audit -64.9 -66.0 USA -88 -80 Singapore -27 -23 Hong Kong -11 -12 Poland -17 -14 Other countries -13 -9 Sub-total -4 515 -4 123

Total -4 586 -4 205

Gender distribution % 2006 2005 Men Women Men Women

Board of directors 69 31 69 31 CEO/EVPs 90 10 90 10

Sickness absence rate in the Swedish operations % 2006 2005 Age Men Women Total Men Women Total

–29 1.6 2.8 2.3 2.3 2.5 2.4 30–49 1.9 4.6 3.3 1.8 5.1 3.6 50– 3.0 7.3 5.4 3.4 7.6 5.8 Total 2.2 5.3 3.9 2.3 5.8 4.2

Of which on long-term sick leave, percentage points of total sickness absence

–29 0.6 0.7 0.6 1.0 0.4 0.6 30–49 0.8 2.8 1.9 0.5 3.2 2.0 50– 1.7 5.2 3.7 2.0 5.4 4.0 Total 1.0 3.4 2.3 1.0 3.8 2.5

See Group Note 5. Principles for remuneration to senior management. Decision process for remuneration to senior management. Terms and remuneration for senior management. Pension obligations. Loans to senior management.

HANDELSBANKEN ■ ANNUAL REPORT 2006 89 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P8 LOAN LOSSES

2006 2005

A. SPECIFIC PROVISION FOR INDIVIDUALLY ASSESSED LOAN RECEIVABLES The year’s write-off for actual loan losses -554 -574 Write-back of previous provisions for possible loan losses which are reported as actual loan losses in the year’s accounts 490 406 The year’s provision for probable loan losses -448 -466 Paid in from actual loan losses in previous years 377 144 Write-back of provisions for probable loan losses which are no longer necessary 273 324 Net expense for the year for individually assessed loan receivables 138 -166

B. PROVISION BY GROUP FOR INDIVIDUALLY ASSESSED LOAN RECEIVABLES Allocation to/dissolution of provision by group -339 -

C. COLLECTIVELY ASSESSED HOMOGENEOUS GROUPS OF LOAN RECEIVABLES WITH LIMITED VALUE AND SIMILAR CREDIT RISK The year’s write-off for actual loan losses 00 Paid in from actual loan losses in previous years 12 Allocation to/dissolution of reserve for loan losses 00 Net expense for the year for collectively assessed homogenous groups of loan receivables 1 2

D. TRANSFER RISK Allocation to/dissolution of reserve for transfer risks -- Net expense for the year for loan losses (A+B+C+D) -200 -164

Change in value of repossessed property -4 Total loan losses -200 -160

Both actual and probable loan losses reduce the corresponding receivable amount on the assets side of the balance sheet. The reserve for prob- able loan losses has decreased by SEK 27m for the parent company in the form of exchange differences. Recovered from actual loan losses in previous years includes calculations relating to recoveries in the portfolio of overdue loans which is subject to monitoring. Previously these were only booked in the consolidated accounts but they can now be reported for a legal entity. For 2006, this has resulted in an income item of SEK 217m. Allocation to/dissolution of group provisions were previously only booked in the consolidated accounts but can now be reported for a legal entity.

2006 2005

Impairment losses Claims on credit institutions 00 Claims on the public -851 -634 Total impairment losses -851 -634

Write-backs Claims on credit institutions 114 Claims on the public 272 310 Total write-backs 273 324

NOTE P9 APPROPRIATIONS

2006 2005

Settlement of pensions Calculated pension premiums in the Bank 468 442 Pensions paid by the Bank -534 -438 Compensation from pension foundation 520 - Total 454 4

Change in amortisation of goodwill in excess of plan 152 -208 Change in other untaxed reserves - 23 Group contribution 3 759 4 893 Total 4 365 4 712

90 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P10 CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES 2006

At fair value in the income Derivatives Financial Non- statement divided into: designated Investments Loans and assets Other fi nancial as hedge held to customer available fi nancial assets/ Trading Other * instruments maturity receivables for sale liabilities liabilities Total

Assets Cash and balances with central banks 4 676 4 676 Treasury bills and other eligible bills 37 439 45 37 484 Loans to credit institutions 338 037 338 037 Loans to the public 4 632 567 328 571 960 Bonds and other interest-bearing securities 144 595 9 340 153 935 Shares and participating interests 18 746 53 720 72 466 Assets where the customer bears the value change risk 1 437 1 437 Derivative instruments 55 910 1 361 57 271 Intangible assets 1 597 1 597 Property and equipment 1 741 1 741 Current tax assets 689 689 Deferred tax assets Other assets 20 842 20 842 Prepayments and accrued income 2 090 3 908 59 6 057 Total assets 258 780 4 632 1 361 936 228 63 164 4 027 1 268 192

Liabilities Due to credit institutions 850 352 262 353 112 Deposits and borrowing from the public 108 412 556 412 664 Liabilities where the customer bears the value change risk 1 437 1 437 Issued securities 40 681 213 803 254 484 Derivative instruments 65 227 2 492 67 719 Other trading liabilities 51 829 51 829 Current tax liabilities Deferred tax liabilities 382 382 Provisions Other liabilities 181 13 101 13 282 Accruals and deferred income 3 196 6 223 9 419 Subordinated liabilities 51 672 51 672 Total liabilities 162 072 2 492 1 049 617 1 819 1 216 000

* Classified to be measured at fair value.

HANDELSBANKEN ■ ANNUAL REPORT 2006 91 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P10 CONTINUED CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES 2005

At fair value in the income Derivatives Financial Non statement divided into identifi ed Investments Loans and assets Other fi nancial as hedge held to customer available fi nancial assets/ Trading Other * instruments maturity receivables for sale liabilities liabilities Total

Assets Cash and balances with central banks 6 919 6 919 Treasury bills and other eligible bills 36 866 165 37 031 Loans to credit institutions 55 312 336 312 391 Loans to the public 15 4 574 490 853 495 442 Bonds and other interest-bearing securities 134 224 502 38 14 293 149 057 Shares and participating interests 14 495 40 650 55 145 Derivative instruments 71 373 1 490 72 863 Intangible assets 1 918 1 918 Property and equipment 1 716 1 716 Current tax assets Deferred tax assets Other assets 446 2 12 235 12 683 Prepayments and accrued income 1 058 11 2 822 3 891 Total assets 258 532 4 574 1 490 515 825 203 55 108 3 634 1 149 056

Liabilities Due to credit institutions 420 311 456 311 876 Deposits and borrowing from the public 746 376 201 376 947 Issued securities 146 200 71 574 217 774 Derivative instruments 73 995 2 729 76 724 Other trading liabilities 50 716 50 716 Current tax liabilities 491 491 Deferred tax liabilities 248 248 Provisions Other liabilities 591 8 531 9 122 Accruals and deferred income 187 7 099 7 286 Subordinated liabilities 46 795 46 795 Total liabilities 272 855 2 729 821 656 739 1 097 979 * Classified to be measured at fair value.

92 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P11 LOANS TO CREDIT INSTITUTIONS

2006 2005

Loans in Swedish kronor Banks 32 291 23 690 Other credit institutions 178 385 170 858 Sub-total 210 676 194 548

Loans in foreign currency Banks 31 157 24 941 Other credit institutions 96 206 92 902 Sub-total 127 363 117 843

Probable loan losses -2 0 Total 338 037 312 391

Of which reverse repos 108 067 100 461

Remaining maturities Payable Within >3 months >1 year to Over on demand 3 months to 1 year 5 years 5 years Total

2006 101 729 146 740 42 957 36 738 9 873 338 037 2005 78 510 135 232 61 657 27 636 9 356 312 391

Average volumes 2006 2005

Loans to credit institutions in Swedish kronor 214 911 195 967 Loans to credit institutions in foreign currency 164 299 146 631 Total 379 210 342 598

Of which reverse repos 46 975 32 882

HANDELSBANKEN ■ ANNUAL REPORT 2006 93 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P12 LOANS TO THE PUBLIC

2006 2005

Loans in Swedish kronor Households 46 525 42 166 Companies etc 226 764 202 948 Sub-total 273 289 245 114

Loans in foreign currency Households 87 900 77 869 Companies etc 212 613 174 307 Sub-total 300 513 252 176

Probable loan losses -1 842 -1 848 Total 571 960 495 442

Of which reverse repos 21 947 7 930

Remaining maturities Payable on Within >3 months >1 year to Over demand 3 months to 1 year 5 years 5 years Total

2006 84 317 87 438 96 087 146 245 157 873 571 960 2005 30 603 71 665 86 888 128 673 177 613 495 442

Average volumes 2006 2005

Loans to the public in Swedish kronor 258 960 234 094 Loans to the public in foreign currency 281 253 228 096 Total 540 213 462 190

Of which reverse repos 18 022 7 417

Bad debts etc. For defi nitions see inside back cover 2006 2005

Bad debts 2 483 3 158 Specific provisions for individually assessed loan receivables -1 505 -1 848 Provision for collectively assessed homogeneous groups of loan receivables with limited value and similar credit risk 0 0 Provisions by group for individually assessed loan receivables -339 0 Net bad debts 639 1 310

Total bad debt reserve ratio, % 74.3 58.5 Proportion of bad debts, % 0.08 0.17 Non-performing loans which are not bad debts, SEK m 440 277 Book value of loan receivables restructured during the year, before restructure, SEK m 17 34 Book value of loan receivables restructured during the year, after restructure, SEK m 18 39 Bad debts reclassified as normal loans during the year, SEK m 40 83

Group provisions were previously only booked in the consolidated accounts, but are now booked on the legal entities.

94 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P13 INTEREST-BEARING SECURITIES

2006 2005 Nominal value Fair value Nominal value Fair value

Interest-bearing securities Government instruments 34 611 35 265 25 797 27 080 Credit institutions 48 787 49 136 38 061 38 547 Mortgage institutions 29 583 29 838 39 260 41 082 Other 76 891 77 180 73 395 79 382 Total 189 872 191 419 176 513 186 091

Adjustment to book value for investments held to maturity --3 Total book value 191 419 186 088

Bonds and other interest-bearing securities 153 935 149 057 Government instruments eligible as collateral with central banks 34 611 35 265 25 797 27 080 Other instruments eligible as collateral with central banks 2 221 2 219 9 570 9 951 Total interest-bearing securities 36 832 191 419 35 367 186 088

Of which unlisted securities 569 7 926 Of which subordinated 7 146

IFRS 7 is applied from 1 January 2005 onwards.

Remaining maturities Payable on Within >3 months >1 year to Over demand 3 months to 1 year 5 years 5 years Total

2006 253 16 779 58 007 93 410 22 970 191 419 2005 2 878 14 445 37 014 106 729 25 022 186 088

Average volumes 2006 2005

Interest-bearing securities 194 517 160 523

NOTE P14 SHARES AND PARTICIPATING INTERESTS

2006 2005

Held for trading Listed 18 253 14 485 Non-listed 28 10 Sub-total 18 281 14 495

Holdings classified as Available for sale Listed 5 161 4 537 Non-listed 801 354 Sub-total 5 962 4 891

Holdings in associated companies, non-listed 245 237 Holdings in group companies, non-listed 47 978 35 522 Total 72 466 55 145

HANDELSBANKEN ■ ANNUAL REPORT 2006 95 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P14 CONTINUED

Associated companies Corporate Registered Number of Participating Book value identity number offi ce shares interest % 2006 2005

Bankomatcentralen AB 556197-2265 Stockholm 1 100 21.9 0 0 BGC Holding AB 556607-0933 Stockholm 25 382 25.4 4 4 Centralen för Elektroniska Korttransaktioner CEK AB 556362-0383 Stockholm 370 37.0 0 0 BDB Bankernas Depå AB 556695-3567 Stockholm 8 000 20.0 4 - Finansiell ID-teknik BID AB 556630-4928 Stockholm 12 735 28.3 19 15 Privatgirot AB 556302-4552 Stockholm 290 29.0 1 1 Upplysningscentralen UC AB 556137-5113 Stockholm 2 429 24.3 0 0 VPC AB 556112-8074 Stockholm - - - 217 VPC Holding AB 556709-1763 Stockholm 443 700 24.8 217 - Sub-total 245 237

Group companies Corporate Registered Number of Participating Book value identity number offi ce shares interest % 2006 2005

Swedish credit institutions Handelsbanken Finans AB 556053-0841 Stockholm 1 550 000 100 145 145 Stadshypotek AB 556459-6715 Stockholm 162 000 100 26 870 26 870 Stadshypotek Bank AB 516401-9803 Stockholm 3 000 000 100 361 361 Sub-total 27 376 27 376

Foreign credit institutions SH 2005 S.A 017277754 Warsaw 125 100 1 494 Handelsbanken Markets Securities, Inc 11-3257438 New York 1 000 100 23 23 Svenska Handelsbanken Delaware Inc., USA 13-3153272 Delaware 1 000 100 0 0 Svenska Handelsbanken S.A. RCS Lux B-15992 Luxembourg 1 000 000 100 147 147 ZAO Svenska Handelsbanken 1057711005384 Moscow 1 500 000 100 453 415 Sub-total 624 1 079

Other Swedish companies AB Handel och Industri 556013-5336 Stockholm 100 000 100 5 5 Fritidsvärden AB* 556192-4803 Göteborg 1 000 100 0 0 FV Fastighetsvärden AB 556043-2766 Stockholm 1 000 100 134 134 Förvaltnings AB Lejontrappan* 556481-1551 Göteborg 1 000 100 0 0 Handelsbanken Fondbolagsförvaltning AB 556070-0683 Stockholm 10 000 100 1 1 Handelsbanken Försäkring AB 516401-8326 Stockholm 1 500 100 300 300 Handelsbanken Liv Försäkrings AB 516401-8284 Stockholm 100 000 100 3 238 1 538 Handelsbanken Mezzanine Management AB 556679-2668 Stockholm 5 000 100 1 1 Handelsbanken Mezzanine Fond 1 KB 969710-3126 Stockholm Participation 100 95 100 Handelsbanken Skadeförsäkrings AB 516401-6767 Stockholm 1 500 100 30 15 Siboelf Shipping AB* 556482-2525 Göteborg 1 000 100 0 0 SPP Fonder AB 556397-8922 Stockholm 1 000 100 51 51 SPP Livförsäkring AB 516401-8524 Stockholm 2 000 100 15 464 4 264 Sub-total 19 319 6 409 * Shares taken over to protect claim.

Other foreign companies Corporate Registered Number of Participating Book value identity number offi ce shares interest % 2006 2005

Ejendomsselskabet af 1. januar 2002 A/S 38300512 Herning 2 460 000 100 393 392 Forva AS 945812141 Oslo 4 000 000 100 1 1 Rådstuplass 4 ASA 910508423 Bergen 40 000 100 146 146 SHB Verwaltungs- und Beteiligungsgesellschaft mbH HRB 29714 Frankfurt Participation 100 - - SIL (Nominees) Limited 1932320 London 100 100 - - Svenska Finans International BV 0055 97 705 Rotterdam 10 200 100 84 84 Svenska Property Nominees Limited 2308524 London 100 100 - - Svenska Re S.A. RCS Lux B-32053 Luxembourg 19 999 99.99 35 35 Sub-total 659 658

Total 47 978 35 522

96 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P15 DERIVATIVE INSTRUMENTS

Nominal amount/maturity Positive market values Negative market values Up to > 1 year to Over Total Total 1 year 5 years 5 years 2006 2005 2006 2005 2006 2005

Derivatives held for trading Interest rate-related contracts Options 179 614 82 034 8 545 270 193 272 728 3 118 2 944 2 874 2 644 FRA/futures 3 086 800 985 100 8 856 4 080 756 3 986 109 1 138 820 1 085 806 Swaps 934 920 1 224 515 563 425 2 722 860 2 668 322 22 425 41 034 23 882 42 239 Other instruments 10 510 208 - 10 718 14 841 4 6 0 6 Currency-related contracts Options 33 204 2 183 - 35 387 50 775 89 439 98 365 Futures 1 109 219 12 238 405 1 121 862 1 354 674 13 196 17 270 17 834 12 639 Swaps 170 209 162 158 23 293 355 660 269 470 4 594 2 651 5 115 3 689 Equity-related contracts Options 79 285 47 452 6 089 132 826 118 947 7 892 5 314 10 310 8 537 Futures 30 683 2 152 - 32 835 23 168 1 232 150 1 197 682 Swaps 718 1 404 418 2 540 3 038 320 134 1 204 1 385 Other instruments 32 - - 32 449 328 13 16 24 Other derivative contracts 365 29 346 749 30 460 15 440 1 574 598 1 612 979 Sub-total 5 635 559 2 548 790 611 780 8 796 129 8 777 961 55 910 71 373 65 227 73 995

Derivatives for fair value hedges Interest rate-related contracts FRA/futures 3 500 6 300 - 9 800 8 100 6 4 3 5 Swaps 22 821 46 709 18 872 88 402 58 806 545 326 1 260 1 472 Other instruments29 206- -29 2063 9534242 Currency-related contracts Options 45--45-0--- Futures 71 092 15 344 - 86 436 76 032 658 1 141 1 183 1 028 Other instruments 345 48 - 393 - 1 - - - Other derivative contracts 182 - - 182 - - - 0 - Sub-total 127 191 68 401 18 872 214 464 146 891 1 214 1 473 2 450 2 507

Derivatives for cash flow hedges Interest rate-related contracts Swaps 1 677 6 611 3 223 11 511 10 942 147 17 42 222 Sub-total 1 677 6 611 3 223 11 511 10 942 147 17 42 222

Total 5 764 427 2 623 802 633 875 9 022 104 8 935 794 57 271 72 863 67 719 76 724 Of which cleared 2 878 349 2 992 847 2 973 5 412 1 776 5 693

Currency breakdown of market values SEK 166 787 15 754 268 692 105 342 USD -120 028 223 253 -234 722 120 697 EUR 33 307 -62 451 5 649 -91 711 Others -22 795 -103 693 28 100 -57 604

See Group Note 16 for a description of Hedge accounting.

HANDELSBANKEN ■ ANNUAL REPORT 2006 97 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P16 INTANGIBLE ASSETS

Goodwill on Internally the purchase developed of net assets software Total 2006 Total 2005

Cost of acquisition at beginning of year 2 170 29 2 199 2 066 Cost of acquisition of additional intangible assets 12 72 84 23 Foreign exchange effect -104 - -104 110 Cost of acquisition at close of year 2 078 101 2 179 2 199

Accumulated amortisation and impairments at beginning of year -280 -1 -281 -265 Amortisation for the year according to plan -297 -2 -299 -1 Impairments for the year - -25 -25 - Foreign exchange effect 23 - 23 -15 Accumulated amortisation and impairments at end of year -554 -28 -582 -281

Closing residual value 1 524 73 1 597 1 918

Amortisation Amortisation is based on the expected useful life. At present, this means that principally the following amortisation rates are applied:

Goodwill 20 years Internally developed software 5 years Other intangible assets Individual testing

The useful life of goodwill on acquisition assets in the parent company is assessed to have a life which is virtually without limit. The depreciation period has been set at 20 years.

NOTE P17 PROPERTY AND EQUIPMENT

Other property and equipment Investment 1–4 years 5–9 years 10–19 years 20+ years No property depreciation depreciation depreciation depreciation depreciation Total 2006 Total 2005

Opening cost of acquisition - 671 831 117 1 212 593 3 424 3 345 New acquisitions during the year - 132 151 9 - 0 292 258 Capitalised new construction and rebuilding costs during the year - - - - 66 - 66 40 Acquisition value of property and equipment sold during the year - -192 -171 -4 -31 0 -398 -275 Foreign exchange effect - -12 -25 -2 - 0 -39 56 Total cost of acquisition - 599 786 120 1 247 593 3 345 3 424

Accumulated depreciation at beginning of year - -510 -588 -56 -554 -1 708 -1 630 Accumulated depreciation on sold property and equipment - 187 166 4 32 389 271 Year’s impairment losses recognised in the income statement - - - - -10 -10 -5 Year’s depreciation - -128 -125 -11 -36 -300 -304 Foreign exchange effect - 10 15 0 - 25 -40 Total accumulated depreciation - -441 -532 -63 -568 -1 604 -1 708

Book value of repossessed property for protection of claims - - - - 0 Total collateral taken over - - - - 0

Residual value according to plan - 158 254 57 679 593 1 741 1 716

Of which land - 583 583 583 Tax assessment value for Swedish properties - 2 172 2 172 2 172

Apart from owned equipment, the Bank also has at its disposal equipment under operating leases. The residual value of leased equipment in the Bank was SEK 99m (117).

98 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P18 OTHER ASSETS

2006 2005

Claims on investment banking settlements 14 866 3 481 Other 5 976 9 202 Total 20 842 12 683

NOTE P19 PREPAYMENTS AND ACCRUED INCOME

2006 2005

Accrued interest income 4 854 3 394 Other accrued income 1 171 464 Prepayments 32 33 Total 6 057 3 891

NOTE P20 DUE TO CREDIT INSTITUTIONS

2006 2005

Due in Swedish kronor Banks 44 146 30 753 Other credit institutions 23 793 10 160 Sub-total 67 939 40 913

Due in foreign currency Banks 240 951 217 401 Other credit institutions 44 222 53 562 Sub-total 285 173 270 963

Total 353 112 311 876

Of which repos 23 318 10 783

Remaining maturities Payable on Within 3 >3 months to >1 year to demand months 1 year 5 years Over 5 years Total

2006 77 722 248 852 24 409 2 079 50 353 112 2005 49 079 234 285 25 766 2 645 101 311 876

Average volumes 2006 2005

Due to credit institutions in Swedish kronor 53 452 40 688 Due to credit institutions in foreign currency 350 047 286 595 Total 403 499 327 283

Of which repos 29 468 17 396

HANDELSBANKEN ■ ANNUAL REPORT 2006 99 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P21 DEPOSITS AND BORROWING FROM THE PUBLIC

Deposits and borrowing from the public 2006 2005

Deposits and borrowing from the public 412 664 376 947

Deposits from the public 2006 2005

Deposits in Swedish kronor Households 101 636 87 484 Companies etc. 108 701 108 810 Sub-total 210 337 196 294

Deposits in foreign currency Households 22 976 23 249 Companies etc. 104 870 97 955 Sub-total 127 846 121 204

Total 338 183 317 498

Remaining maturities Payable on Within >3 months >1 year to demand 3 months to 1 year 5 years Over 5 years Total

2006 315 551 13 321 1 401 701 7 209 338 183 2005 290 549 21 631 3 376 500 1 442 317 498

Average volumes of deposits from the public 2006 2005

Deposits from the public in Swedish kronor 208 299 187 277 Deposits from the public in foreign currency 127 596 112 798 Total 335 895 300 075

Borrowing from the public 2006 2005

Borrowing from the public Swedish kronor 36 457 21 012 Foreign currency 38 024 38 437 Total 74 481 59 449

Of which repos 5 777 2 853

Remaining maturities Payable on Within >3 months >1 year to demand 3 months to 1 year 5 years Over 5 years Total

2006 2 473 64 040 6 814 793 361 74 481 2005 2 948 50 461 4 947 1 081 12 59 449

Average volume of borrowing from the public 2006 2005

Borrowing from the public in Swedish kronor 35 916 26 775 Borrowing from the public in foreign currency 46 844 39 343 Total 82 760 66 118

Of which repos 7 558 3 931

100 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P22 ISSUED SECURITIES

2006 2005 Nominal amount Book value Book value

Certificates Certificates in Swedish kronor 7 281 8 787 5 353 Of which at amortised cost - - 5 353 for trading 7 281 8 787 - Certificates in foreign currency 166 389 166 137 163 872 Of which at amortised cost 121 548 121 296 144 918 for fair value hedges 12 955 12 947 18 954 for trading 31 886 31 894 - Sub-total 173 670 174 924 169 225

Bond loans Bond loans in Swedish kronor 29 081 25 647 18 151 Of which at amortised cost 18 176 14 831 18 151 for fair value hedges 10 905 10 816 - Bond loans in foreign currency 55 334 53 913 30 398 Of which at amortised cost 53 096 51 700 29 182 for fair value hedges 2 238 2 213 1 216 Sub-total 84 415 79 560 48 549

Total 258 085 254 484 217 774

Remaining maturities carrying amount Payable on Within >3 months >1 year to demand 3 months to 1 year 5 years >5 years Total

2006 1 657 132 064 70 008 48 644 2 111 254 484 2005 - 94 779 101 592 20 606 797 217 774

Average volume of issued securities 2006 2005

Swedish kronor 34 566 26 463 Foreign currency 231 438 228 167

Turnover of own issued securities SEK bn 2006 2005

Issued 872 1 019 Repurchased 153 109 Repaid 668 922

NOTE P23 OTHER TRADING LIABILITIES

2006 2005

Short positions at fair value Shares 2 053 3 868 Interest-bearing securities 49 776 46 848 Of which Other issuers 49 626 46 848 Own issued 150 - Total 51 829 50 716

Remaining maturities short positions interest-bearing securities Payable on Within >3 months >1 year to demand 3 months to 1 year 5 years >5 years Total

2006 3 78 2 627 37 695 9 373 49 776 2005 - 2 037 5 735 31 910 7 166 46 848

Average volumes of other trading liabilities 2006 2005

Swedish kronor 41 014 22 674 Foreign currency 2 860 6 057

HANDELSBANKEN ■ ANNUAL REPORT 2006 101 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P24 TAXES

Deferred tax assets 2006 2005

Derivative instruments -57 Property and equipment 46 48 Other 210 Offsetting against deferred tax liability -48 -115 Total --

Deferred tax liabilities 2006 2005

Shares and participating interests 252 219 Property and equipment 148 144 Derivative instruments 30 - Offsetting against deferred tax assets -48 -115 Total 382 248

Net deferred tax liabilities 382 248

Year’s change in deferred taxes Recognised Recognised Opening in the income directly in Closing balance statement equity balance

Shares and participating interests 219 33 252 Derivative instruments -57 87 30 Property and equipment 96 7 103 Other -10 10 -3 -3 Total 248 17 117 382

Tax expenses recognised in the income statement 2006 2005

Current tax Tax expense for the year -3 449 -3 677 Adjustment of tax attributable to previous years 164 45 Deferred tax Changes in temporary differences -17 228 Total -3 302 -3 404

Nominal tax rate in Sweden, % 28.0 28.0 Deviations Non-taxable dividend -4.1 -0.2 Non-taxable income/non-deductible expenses -0.0 -0.1 Tax relating to previous years -0.3 - Effective tax rate, % 23.6 27.7

NOTE P25 PROVISIONS

2006 2005

Opening balance - 10 Provisions during the year - - Utilisation - - Other changes - -10 Closing balance - -

NOTE P26 OTHER LIABILITIES

2006 2005

Liabilities on investment banking settlements 4 764 2 650 Other 8 518 6 472 Total 13 282 9 122

102 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P27 ACCRUALS AND DEFERRED INCOME NOTE P29 UNTAXED RESERVES

2006 2005 2006 2005

Accrued interest expense 7 556 5 404 Accumulated amortisation on goodwill Other accrued expense 1 829 1 851 in excess of plan 1 183 1 397 Deferred income 34 31 Total 1 183 1 397 Total 9 419 7 286

NOTE P30 SPECIFICATION OF CHANGES IN EQUITY NOTE P28 SUBORDINATED LIABILITIES Change in exchange differences 2006 2005 Exchange differences 31 December 2004 -22 Subordinated loans in Swedish kronor 349 349 Change in exchange differences in foreign branches 176 Subordinated loans in foreign currency 51 323 46 446 Exchange difference 31 December 2005 154 Total 51 672 46 795 Change in exchange differences in foreign branches -261 Exchange differences 31 December 2006 -107 Average volumes

Subordinated loans in Swedish kronor 349 380 Specifi cation of instruments available for sale Subordinated loans in foreign currency 49 080 31 286 (amount after tax) 2006 2005

Unrealised market value at beginning of year 843 680 Specifi cation, Original Unrealised market value of associated holdings sold subordinated loans nominal during the year -327 -303 amount in Unrealised market value change value during the year Issue/conv./fi nal each Interest Outstanding for remaining and new holdings 586 466 paymt yr Currency currency rate % amount Unrealised market value at end of year 1 102 843 IN SWEDISH KRONOR Other Swedish 7 349 Turnover of own shares Sub-total 349 SEK bn 2006 2005

IN FOREIGN CURRENCY Issued 16.1 11.5 2005/2015 1 EUR 500 variable 4 517 Repurchased 20.4 14.0 2005/2017 2 EUR 700 variable 6 317 2005/perpetual 3 GBP 500 5.000 6 506 2005/perpetual 4 EUR 500 4.194 4 261 2006/2016 5 EUR 600 4.000 5 372 2006/2016 6 USD 800 variable 5 477 NOTE P31 COLLATERAL PLEDGED FOR OWN DEBT Other foreign 7 18 873 2006 2005 Sub-total 51 323 Government instruments and bonds 44 356 47 982 Total 51 672 Repos 42 999 25 803 Shares - 366 1 Fixed-term subordinated loan with 3-month variable coupon linked to Euribor. Cash 20 330 4 442 Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2010. Premature redemption requires the approval of the Securities loans 14 293 726 Swedish Financial Supervisory Authority. Total 121 978 79 319 2 Fixed-term subordinated loan with 3-month variable coupon linked to Euribor. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from October 2012. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. 3 Perpetual subordinated loan at fixed rate. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2010. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. In NOTE P32 OTHER COLLATERAL PLEDGED connection with the right of redemption, the interest rate becomes variable linked to Libor. 2006 2005 4 Perpetual subordinated loan at fixed rate. Premature redemption may occur in the case of changed tax regulations or on the interest due dates from 2015. Premature Cash funds 783 233 redemption requires the approval of the Swedish Financial Supervisory Authority. In Government instruments and bonds 2 778 3 994 connection with the right of redemption, the interest rate becomes variable linked to Euribor. Securities loans 1 836 1 759 5 Fixed-term subordinated loan at fixed rate. Premature redemption may occur in the Total 5 397 5 986 case of changed tax regulations or on the interest due dates from 2011. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. In connection with the right of redemption, the interest rate becomes variable linked to Euribor. 6 Fixed-term subordinated loan with 3-month variable coupon linked to Libor. Prema- ture redemption may occur in the case of changed tax regulations or on the interest due dates from 2011. Premature redemption requires the approval of the Swedish Financial Supervisory Authority. 7 Other subordinated loans which are not specified here are issued in the form of fixed-term or perpetual subordinated loans.

HANDELSBANKEN ■ ANNUAL REPORT 2006 103 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

NOTE P33 COMMITMENTS, CONTINGENT LIABILITIES NOTE P34 CONTINUED AND ASSETS The plan assets mainly comprise shares and interest-bearing securities with the following market values on the balance sheet date. 2006 2005 2006 2005 Guarantees, loans 48 106 44 358 Shares and participating interests 22 492 18 297 Guarantees, other 41 614 35 288 Interest-bearing securities, etc. 819 987 Irrevocable letters of credit 46 211 46 678 Total 23 31119 284 Own acceptances 201 201 Other 136 178 The plan assets include shares in Svenska Handelsbanken AB (publ) with a market Total 136 268 126 703 value of SEK 994m (946) on the balance sheet date 31 December 2006. From the age of 65, a retirement pension is paid in accordance with the pension Commitments and contingent liabilities and assets total SEK 136,268m (126,703). This agreement between the Employer’s Association of the Swedish Banking Institutions amount includes SEK 61m (49) relating to a number of civil actions which the parent (BAO) and Union of Finance Sector Employees and between BAO and SACO (the Swedish Confederation of Professional Associations). The amount is 10% of the an- company is bringing in general courts of law. The largest individual amount in dispute nual salary up to 7.5 price base amounts. A retirement pension of 65% is paid in the is SEK 30m (24). The Bank’s assessment is that the actions will essentially be settled interval between 7.5– 20 price base amounts. in its favour. None of the disputed amounts, nor any insurance compensation, has In addition a commitment has been made which is part of the Bank’s profit-sharing been recognised in income. system Oktogonen (regarded in the Group as a non-defined benefit plan). Changes in The data for contingent liabilities is reported in nominal amounts and an assessed this commitment are included in Other increase in capital value. expected value is included in the amount under ”Other” for the civil actions that the The pension commitments are SEK 2,495m (2,787) in the Bank’s pension fund parent company is bringing. (Pensionskassan SHB, försäkringsförening) and the market value of the assets is The parent company is currently pursuing a tax dispute. The total claim is approx. SEK 9,786m (8,308). The surplus value in this pension fund is thus SEK 7,291m SEK 20m, excluding interest, which in the case of a positive judgement would increase (5,521). the parent company’s income by the same amount.

NOTE P35 OTHER COMMITMENTS NOTE P34 PENSION OBLIGATIONS 2006 2005 Pension obligations, plan assets and pension commitments are calculated in accord- ance with the Act on Safeguarding Pension Obligations and the Swedish Financial Commercial paper programmes 22 392 9 307 Supervisory Authority’s regulations, and have developed as follows. The pension obligations are entirely covered by assets in the pension foundations and are not Other commitments 61 66 reported on the balance sheet. Total commitments regarding future payments 22 453 9 373 Credit commitments 156 618 137 985 2006 2005 Unutilised part of granted overdraft facilities 130 781 124 031 Pension obligations 17 358 15 258 Total other commitments 287 399 262 016 Fair value of plan assets 23 311 19 284 Surplus value (not reported) -5 953 -4 026 Total 309 852 271 389

Pension costs -527 -911 Contracted irrevocable future operating lease Interest expense -281 -268 charges distributed by the years they fall due Yield 4 547 4 675 for payment. 2006 2005 Cost of own retirement plans 3 739 3 496 2007 633 372 Insurance premiums -302 -207 2008 471 266 Costs covered by surpluses in specially designated assets/ -3 753 -3 934 increase of surplus in specially designated assets 2009 403 184 Pension costs -316 -645 2010 225 125 Of which reported under appropriations -14 -438 2011 174 84 2012 100 67

PENSION OBLIGATIONS 2013 63 33 Opening balance 15 258 12 512 2014 39 26 Pension costs 527 911 2015 31 21 Interest expense 281 268 2016 20 13 Pensions paid by the Bank -534 -438 2017 13 12 Other increase in capital value 1 826 2 005 2018 and later 24 24 Closing balance 17 358 15 258 Total 2 196 1 227

PLAN ASSETS Opening balance 19 284 14 609 Return 4 547 4 675 Funds paid from pension foundation -520 - Closing balance 23 311 19 284

Percentage return on specially separated assets 20 24

104 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

Other disclosures – Parent company

CAPITAL COVER

PARENT COMPANY

Capital base and capital requirement SEK m 2006 2005

CAPITAL BASE Tier 1 capital 48 366 48 893 Tier 2 capital, net 46 064 28 928 Total capital base 94 430 77 821

RISK-WEIGHTED AMOUNT Credit risk 529 842 451 877 Market risks 48 526 45 581 Total 578 368 497 458

Capital ratio, % 16.3 15.6 Tier 1 ratio, % 8.4 9.8

Capital base 2006 2005

TIER 1 CAPITAL Equity 1 45 935 45 085 Tier 1 capital contribution 5 358 5 681 Minority interest - Deducted items Goodwill and other intangible assets -1 597 -1 918 Revaluation -152 -159 Deferred tax asset -- Unrealised accumulated profit -1 101 Adjustments in accordance with stability filter Cash flow hedges -77 204 Total tier 1 capital 48 366 48 893

TIER 2 CAPITAL Perpetual subordinated loans 20 838 13 421 Fixed-term subordinated loans after reduction 24 183 24 446 Adjustment unrealised accumulated profit 1 108 Revaluation adjustment 152 159 Total tier 2 capital 46 281 38 026

Total 94 647 86 919

Less shareholdings in insurance companies and 5–50% in companies conducting banking business -217 -9 098 Total tier 1 and tier 2 capital 94 430 77 821

Enlarged capital base -- Total capital base 94 430 77 821

1 Tier 1 capital has been affected by the board’s proposed appropriations.

HANDELSBANKEN ■ ANNUAL REPORT 2006 105 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

CAPITAL COVER CONTINUED

Risk-weighted amount for credit risks 2006 2005 Risk-weighted Risk-weighted Balance sheet items Weighting Investments amount Investments amount

Risk weight 0% (group A) 0% 563 039 421 734 Risk weight 20% (group B) 20% 42 079 8 416 43 306 8 661 Risk weight 50% (group C) 50% 157 242 78 621 140 566 70 283 Risk weight 100% (group D) 100% 352 927 352 927 291 032 291 032 Total 1 115 287 439 964 896 638 369 976

Risk-weighted amount for credit risks 2006 2005

Nominal Recalculated Risk-weighted Nominal Recalculated Risk-weighted Off-balance-sheet items 2 Weighting amount amount amount amount amount amount

Risk weight 0% (group A) 0% 150 561 47 668 174 315 45 190 Risk weight 20% (group B) 20% 141 923 13 702 2 740 28 896 12 518 2 504 Risk weight 50% (group C) 50% 428 478 3 343 1 672 91 573 5 959 2 979 Risk weight 100% (group D) 100% 151 203 85 466 85 466 134 903 76 417 76 417 Total 872 165 150 179 89 878 429 687 140 084 81 900

Total credit risks 1 265 466 529 842 1 036 722 451 876

2 The nominal amounts for off-balance sheets item are recalculated using a factor which varies according to the credit risk in the commitments. The recalculated amounts are subsequently allocated according to the same principles (group A–D) which apply for the balance sheet items.

Risk-weighted amount for market risks 2006 2005

Specifi c General Risk-weighted Specifi c General Risk-weighted risk risk amount risk risk amount

Interest rate risks 24 620 10 466 35 086 20 584 10 844 31 428 Equity price risks 815 764 1 579 791 612 1 403 Settlement risks 15 12 Counterparty risks and other risks 10 316 11 770 Exchange rate risks 1 530 968 Total market risks 48 526 45 581

Total risk-weighted amount for credit and market risks 578 368 497 457

See the Group for a description of the capital base, capital requirement and capital management.

106 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES PARENT COMPANY

CREDIT RISK EXPOSURE

PARENT COMPANY SEK m 2006 2005

Loans to the public 571 960 495 442 Loans to credit institutions 338 037 312 391 Unutilised part of granted overdraft facilities 130 781 124 031 Credit commitments 156 618 137 985 Commercial paper programmes 22 392 9 307 Other commitments 61 66 Guarantees, loans 48 106 44 358 Guarantees, other 41 614 35 288 Documentary credits 46 483 47 004 Derivative instruments 47 503 44 089 Treasury bills and other eligible bills 37 484 37 031 Bonds and other interest-bearing securities 153 935 149 057 Shares and participating interests 24 243 19 386 Total 1 619 217 1 455 435

LOANS TO THE PUBLIC, BY SECTOR

PARENT COMPANY 2006 2005 Provisions Lending before for probable Lending after Lending after SEK m provisions loan losses provisions provisions

Private individuals 134 425 -220 134 205 119 707 Property management 188 859 -447 188 412 161 455 of which ownership housing co-operatives 4 398 -7 4 391 4 371

Corporate services 40 362 -71 40 291 37 160 Manufacturing 37 204 -242 36 962 35 222 Retail 34 097 -238 33 859 32 536 Transport and communication 13 604 -22 13 582 15 390 Construction 8 152 -51 8 101 7 207 Municipalities 6 374 - 6 374 6 990 Agriculture, hunting and forestry 5 526 -6 5 520 5 513 Hotel and restaurant 4 449 -21 4 428 4 390 Insurance operations 10 539 0 10 539 4 413 Other sectors 89 872 -185 89 687 65 459 Total loans to the public 573 463 -1 503 571 960 495 442

LOANS TO THE PUBLIC, COLLATERAL

PARENT COMPANY SEK m 2006 2005

Residential property 157 242 134 631 Agricultural property 4 865 1 816 Other property 72 939 66 572 Governments, municipalities and county councils 61 871 69 794 Floating charges on assets 17 767 21 283 Guarantees 17 890 13 318 Unsecured 133 210 112 060 Other collateral 106 176 75 968 Loans to the public 571 960 495 442

HANDELSBANKEN ■ ANNUAL REPORT 2006 107 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

BAD DEBTS AND/OR NON-PERFORMING LOANS, BY SECTOR

PARENT COMPANY Bad debts Non- performing Of which loans which non- are not SEK m Gross Provisions Net* performing bad debts

Private individuals 518 -220 298 288 171 Property management/corporate services 799 -518 281 89 113 Manufacturing 455 -242 213 58 17 Retail 335 -238 97 80 17 Transport and communication 31 -22 9 9 4 Construction 60 -51 9 6 84 Hotel and restaurant 28 -21 7 5 0 Other 257 -193 64 53 34 Total 2 483 -1 505 978 588 440

BAD DEBTS AND/OR NON-PERFORMING LOANS, GEOGRAPHIC DISTRIBUTION

PARENT COMPANY Bad debts Non- performing Of which loans which non- are not bad SEK m Gross Provisions Net* performing debts

Sweden 1 462 -919 543 374 224 Norway 136 -60 76 76 199 Finland 156 -31 125 106 0 Denmark 689 -462 227 25 17 Great Britain 33 -27 6 6 0 Rest of Europe 7-61 1 0 North America 0000 0 Asia 0000 0 Total 2 483 -1 505 978 588 440

FAIR VALUE DISCLOSURES

PARENT COMPANY 2006 2005 Book Adjustment Book Adjustment SEK m value to fair value value to fair value

ASSETS Loans to credit institutions 338 037 -275 312 391 21 Loans to the public 571 960 3 495 442 895 Interest-bearing securities 191 419 - 186 088 3 Other assets 166 776 2 500 155 135 2 185 Total assets 1 268 192 2 228 1 149 056 3 104

LIABILITIES Due to credit institutions 353 112 22 311 876 -73 Deposits and borrowing from the public 412 664 -19 376 947 2 Issued securities 254 484 -262 217 774 517 Other liabilities 144 068 - 144 587 - Subordinated liabilities 51 672 111 46 795 555 Total liabilities 1 216 000 -148 1 097 979 1 001

Total surplus/deficit 2 376 2 103

In accordance with the Swedish Financial Supervisory Authority’s directives (2006:16) Items which are not traded on liquid markets, irrespective of whether they are a comparison is to be made between fair value and book value for both assets and assets, issued liabilities or off-balance-sheet financial items are valued at the current liabilities in the balance sheet and also financial items which are not reported in the market rate for the corresponding maturity adjusted to take into account the credit and balance sheet. Values which are based on customer relations are not to be taken into liquidity risk. The credit and liquidity risk premium by which the market rate has been account, although they may be of importance in valuing, for example, deposit accounts adjusted when making the valuation is assumed to be the same as the average margin and mortgage and consumer credits. The directives allow scope for choice of method for new lending at the time of the measurement. and various assumptions. Thus, the methods applied and the assumptions made may Properties are valued on the basis of an external valuation. vary among the credit institutions. Information concerning fair value is not a corporate With the method applied, a surplus value occurs in the assets when margins de- valuation and therefore cannot constitute the basis of a comparison between credit crease and a deficit when margins increase. institutions. In those cases where fair value on assets is less than the book value and for liabili- For means of payment, current receivables and liabilities and also for receivables ties, the book value is less than the fair value, this is due to these items being a) subject and liabilities with a variable interest rate, the fair value is considered to be the same to hedge accounting and b) that they are to be regarded as fixed assets where the fall in as the book value. Receivables and liabilities with final maturity or date for next interest value has been considered temporary. rate fixing within 30 days are considered to be short-term. Adjustment to fair value for 2005 has been made in accordance with the Financial Assets and liabilities which are traded on liquid markets have been valued at the average Supervisory Authority’s directives (2005:33). price on the balance sheet day. Market-listed off-balance-sheet items are valued in the same way.

108 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

RELATED PARTY DISCLOSURES

PARENT COMPANY SEK m Opening balance Increase/Decrease Closing balance

Lending Subsidiaries 178 223 -1 063 177 160 Associated companies 23 -11 12 Others - - - Total 178 246 -1 074 177 172

Derivatives with positive market value Subsidiaries 4 700 -630 4 070 Associated companies - - - Others - - - Total 4 700 -630 4 070

Other assets Subsidiaries 5 231 -1 093 4 138 Associated companies - - - Others 6 514 520 Total 5 237 -579 4 658

Total assets Subsidiaries 188 154 -2 786 185 368 Associated companies 23 -11 12 Others 6 514 520 Total 188 183 -2 283 185 900

Deposits and borrowing Subsidiaries 49 670 3 117 52 787 Associated companies 155 85 240 Others 85 105 190 Total 49 910 3 307 53 217

Other financial liabilities Subsidiaries - - - Associated companies-77 Others 674 102 776 Total 674 109 783

Derivatives with negative market value Subsidiaries 3 195 -661 2 534 Associated companies--- Others --- Total 3 195 -661 2 534

Other liabilities Subsidiaries 2 216 -873 1 343 Associated companies 1 -1 - Others --- Total 2 217 -874 1 343

Total liabilities Subsidiaries 55 081 1 583 56 664 Associated companies 156 91 247 Others 759 207 966 Total 55 996 1 881 57 877

Off-balance sheet Derivatives nominal value Subsidiaries -4 438 -422 -4 860 Associated companies--- Others --- Total -4 438 -422 -4 860

Guarantees Subsidiaries 34 731 870 35 601 Associated companies--- Others --- Total 34 731 870 35 601

HANDELSBANKEN ■ ANNUAL REPORT 2006 109 FINANCIAL REPORTS ■ FIVE-YEAR REVIEW PARENT COMPANY

RELATED-PARTY DISCLOSURES CONTINUED

SEK m 2006 2005

Interest income Subsidiaries 4 467 3 700 Associated companies 11 Others -65 Total 4 468 3 766

Interest expense Subsidiaries 2 387 -1 391 Associated companies -6 -3 Others -11 -144 Total 2 370 -1 538

Fee and commission income Subsidiaries 569 316 Associated companies 185 201 Others 6 167 Total 760 684

Fee and commission expense Subsidiaries -27 -11 Associated companies -209 -235 Others -- Total -236 -246

Net gain/losses on Subsidiaries -- financial items Associated companies -- Others -53 -14 Total -53 -14

Other income Subsidiaries 710 439 Associated companies -- Others 260 Total 712 499

Other expenses Subsidiaries -166 -141 Associated companies - -52 Others -198 229 Total -364 36

Total Subsidiaries 7 940 2 912 Associated companies -29 -88 Others -254 363 Total 7 657 3 187

The subsidiaries and associated companies are listed in Note P14. These companies perform various types of services linked to the financial markets. “Other” includes the pension organisations: Svenska Handelsbankens Pensionsstiftelse, Svenska Handelsbankens Personalstiftelse and Pensionskassan SHB, försäkringsförening which use the Bank for customary banking and accounting services. Shareholders’ contribution to associated companies and Group companies, see Note P14. Group contributions received, see Note P14. Group contributions made, see Change in equity, Parent company page 86. For 2005, “Other” in the income statement includes SPP Livförsäkring AB (SPP). Svenska Handelsbanken AB mainly performs IT-related services and asset management. Handelsbanken Liv Försäkrings AB and SPP also have close cooperation.

RELATED-PARTY TRANSACTIONS WITH CEO, EVPS AND BOARD OF DIRECTORS

PARENT COMPANY SEK m 2006 2005

Lending 85 98 Interest income 22

2006 2005

Deposits 16 10 Interest expense 00

For other transactions, see Note 5, Group, Terms and remuneration for senior management.

Credit is granted to closely-related persons after customary credit review. The interest rate is determined on normal commercial terms. However for employees of the Bank (not members of the board ), the interest rate on credit up to SEK 1.5m is two percentage points lower than the equivalent interest rate for external customers. This benefit is taxable for the employee and constitutes a basis for social security charges payable by the Bank. Credit to close family members is granted on normal commercial terms and is not included in the accounts. In exceptional cases, if credit to a close family member is granted at the subsidised interest rate described above, this is reported as a taxable benefit for the employee. For deposits, the interest rate for employees is the same as for external customers.

110 HANDELSBANKEN ■ ANNUAL REPORT 2006 FINANCIAL REPORTS ■ NOTES – PARENT COMPANY

Five-year review – Parent company

Income statement SEK m 2006 2005 2004 2003 2002

Net interest income 9 134 8 599 8 469 12 213 10 925 Dividends received 3 362 815 716 600 500 Net fee and commission income 5 831 5 246 4 518 4 015 4 011 Net gains/losses on financial items 2 220 2 582 2 053 -1 840 -964 Other operating income 812 608 728 223 240 Total operating income 21 359 17 850 16 484 15 211 14 712

General administrative expenses Staff costs -7 186 -6 629 -6 284 -5 751 -5 742 Other administrative expenses -3 695 -3 192 -2 891 -2 374 -2 726 Depreciation, amortisation and impairments of property, equipment and intangible assets -634 -310 -307 -441 -482 Total expenses before loan losses -11 515 -10 131 -9 482 -8 566 -8 950

Profit before loan losses 9 844 7 719 7 002 6 645 5 762

Loan losses, net -200 -160 -325 -791 -715 Impairment losses/reversals on financial non-current assets - - - 199 -759 Operating profit 9 644 7 559 6 677 6 053 4 288

Appropriations 4 365 4 712 18 077 4 040 4 371 Profit before taxes 14 009 12 271 24 754 10 093 8 659

Taxes -3 302 -3 404 -6 746 -2 779 -2 207 Profit for the year 10 707 8 867 18 008 7 314 6 452

Dividend for the year 5 074 * 4 585 4 018 3 640 3 294

* As proposed by the board

Balance sheet SEK m 2006 2005 2004 2003 2002

Assets Loans to the public 571 960 495 442 408 842 398 859 438 372 Loans to credit institutions 338 037 312 391 280 285 256 462 246 014 Interest-bearing securities 191 419 186 088 155 189 127 500 139 666 Other assets 166 776 155 135 162 223 183 696 208 387 Total assets 1 268 192 1 149 056 1 006 539 966 517 1 032 439

Liabilities and equity Deposits and borrowing from the public 412 664 376 947 315 004 296 470 286 226 Due to credit institutions 353 112 311 876 270 369 234 900 280 219 Issued securities 254 484 217 774 198 864 195 883 233 107 Subordinated liabilities 51 672 46 795 25 182 26 734 26 560 Other liabilities 144 068 144 587 147 822 161 183 159 180 Untaxed reserves 1 183 1 397 1 149 13 121 11 473 Shareholders’ equity 51 009 49 680 48 149 38 226 35 674 Total liabilities and equity 1 268 192 1 149 056 1 006 539 966 517 1 032 439

Memorandum items Collateral pledged for own debt 121 978 79 319 79 720 69 395 73 077 Other collateral pledged 5 397 5 986 3 791 5 984 19 932 Contingent liabilities 136 268 126 703 109 182 102 782 122 022 Pension obligations ----- Other commitments 309 852 271 389 252 595 6 061 784 6 754 119

HANDELSBANKEN ■ ANNUAL REPORT 2006 111 FINANCIAL REPORTS ■ RECOMMENDATION FOR APPROPRIATION OF PROFITS

Recommendation for appropriation of profi ts and statement from the board

In accordance with the balance sheet for Handelsbanken, profi ts totalling SEK 45,439m are at the disposal of the annual general meeting.

The board recommends that the profi ts be distributed as follows: Dividend per share paid to the shareholders SEK 8.00 (SEK 7.00 for 2005) 5,074 Balance carried forward 40,365 Total allocated 45,439

When assessing the amount of the company’s proposed dividend, account has been taken of the nature of operations, their scope, consolidation requirement and risk-taking. Our assessment is that the above appropriation of profi ts is prudent and well-adapted to the operations as a going concern.

Unrealised changes in value of assets and liabilities at fair value have had a net impact of SEK –4,542m on the shareholders’ equity.

The capital base of the fi nancial corporate group exceeded the statutory capital requirement by SEK 13,154m at the year-end. The surplus capital in the parent company was SEK 48,161m.

We hereby declare that to the best of our knowledge, this annual report has been prepared in accordance with sound accounting practices for limited companies, that the information provided corresponds to the actual circumstances and that nothing of material importance has been omitted which could affect the view of the company presented in the annual report.

STOCKHOLM 20 FEBRUARY 2007

L a r s O G r ö n s t e d t Chairman

Hans Larsson Anders Nyrén

Pirkko Alitalo Jon Fredrik Baksaas Ulrika Boëthius

Tommy Bylund Göran Ennerfelt Sigrun Hjelmquist

Fredrik Lundberg Sverker Martin-Löf Bente Rathe

Pär Boman President and Group Chief Executive

112 HANDELSBANKEN ■ ANNUAL REPORT 2006 Audit report

To the annual general meeting of the shareholders of Svenska Handelsbanken AB (publ) Corporate identity number: 502007-7862

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the chief executive of Svenska Handelsbanken AB (publ) for the year 2006. The company’s annual accounts and consolidated accounts are included in the printed version of this document on pages 16–112. We have not audited the corporate governance report on pages 118–123. The board of directors and the managing director are responsible for these accounts and the administration of the company as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of international fi nancial report- ing standards IFRSs as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the conso- lidated accounts are free of material misstatement. During the year, the auditing department of Handelsbanken has continuously examined the internal controls and accounts. We have received the reports that have been prepared. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the chief executive and signifi cant estimates made by the board of directors and the chief executive when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined signifi cant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the chief executive. We also examined whether any board member or the chief executive has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act for Credit Institutions and Securities Companies or the Articles of Association. We believe that our audit provides a reasonable basis for our opinions set out below. The annual accounts have been prepared in accordance with the Annual Accounts Act for Credit Institutions and Securities Companies, and give a true and fair view of the company’s fi nancial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international fi nancial reporting standards IFRSs as adopted by the EU and the Annual Accounts Act for Credit Institutions and Securities Companies and give a true and fair view of the group’s fi nancial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts. We recommend to the annual general meeting of shareholders that the income statements and balance sheets of the parent company and the Group be adopted, that the profi t of the parent company be dealt with in accordance with the recommendation in the administration report, and that the members of the board and the chief executive be discharged from liability for the fi nancial year.

STOCKHOLM 8 MARCH 2007

KPMG Bohlins AB Ernst & Young AB

Thomas Thiel Torsten Lyth Authorised public accountant Authorised public accountant

Ulla Nordin Buisman Authorised public accountant Appointed by the Swedish Financial Supervisory Authority

HANDELSBANKEN ■ ANNUAL REPORT 2006 113 CORPORATE SOCIAL RESPONSIBILITY

Handelsbanken in the community

Handelsbanken makes a better contribution to society than other banks by having higher productivity, that is, more satisfi ed customers combined with higher cost-effectiveness.

HANDELSBANKEN’S PURPOSE HANDELSBANKEN’S CONTRIBUTION TO THE By delivering fi nancial services, Handelsbanken, together with other COMMUNITY players in the fi nancial sector, fulfi ls an important function in soci- Handelsbanken is one of the largest tax payers in Sweden and for the ety. The Bank’s purpose is to be a link between the different players past few years has paid over SEK 4bn in tax every year. in society so that capital can be transferred from those who have a As in all other issues at Handelsbanken, the local branch decides surplus of liquid funds to those who need to borrow money. The whether the Bank should sponsor various cultural and community banking system also maintains a functioning and effi cient payment projects. A guiding principle here is whether the project is perceived system. An effi cient banking system is a condition for a modern, as having a link to the Bank’s business operations. Since all customer functioning society. responsibility is decentralised to the local branches, there is usually The word economy means careful management of scarce resourc- no reason for Handelsbanken to make central decisions on these es. The company with the highest level of cost-effectiveness that issues. can also deliver the best products or services, so that it has the most Over the years, Handelsbanken’s board has decided to allocate satisfi ed customers, has the highest productivity and thus makes the funds to independent research foundations. These foundations are best contribution to society. named after Jan Wallander, Tom Hedelius and Tore Browaldh, In the banking sector, cost-effectiveness is usually measured as the all previous group chief executives and chairmen of the board of proportion of costs to income, the C/I ratio. Handelsbanken has Handelsbanken. In 2006, these foundations made 113 grants (92) the lowest C/I ratio of the Nordic banks and also compares very fa- totalling SEK 113m (88), representing resources greater than 250 vourably with other European banks. Handelsbanken had the most full-time working years for research posts. satisfi ed customers in the Nordic region. CORPORATE SOCIAL RESPONSIBILITY HANDELSBANKEN IN THE LOCAL COMMUNITY A responsible business approach – delivering better service than Handelsbanken has a nationwide branch network in Sweden and other banks, at the same time as the Bank has lower costs – is nec- a large branch network in the other Nordic countries. High cost- essary if Handelsbanken is to continue to have higher profi tability effectiveness allows Handelsbanken to retain a local presence and and thus make a larger fi nancial contribution to society than other thus continue to fulfi l an important function in local communities Nordic banks. including places where other banks have closed their local branches. Handelsbanken is convinced that a local presence is necessary. The basic concept of the Bank’s way of operating is that decisions are made as close to the customer as possible, including granting loans. In concrete terms, this means that loan applications are proc- essed and – with few exceptions – decided by Handelsbanken’s local branch. It is the local branch which has the best knowledge of the customer’s circumstances. This work method gives Handelsbanken close ties with the local community.

114 HANDELSBANKEN ■ ANNUAL REPORT 2006 CORPORATE SOCIAL RESPONSIBILITY

Environmental issues

In environmental terms, Handelsbanken’s policy is to promote long-term sustainable develop- ment by taking action to minimise the negative environmental impact by the Bank.

Environmental issues are a vital element in the Handelsbanken Environmental responsibility and organisation Group’s operations, both in terms of the direct environmental im- As in other areas at Handelsbanken, the responsibility for practi- pact of the Bank’s operations and any indirect impact. The latter in- cal environmental issues is decentralised. All managers in the cludes environmental aspects of granting credits, offering savings in Handelsbanken Group have the primary responsibility for environ- mutual funds with an environmental or ethical profi le and offering mental issues at their units and all employees have a responsibility customers online and other electronic banking services. for the environment as part of their duties. For the Group as a The Folksam Index for corporate social responsibility reviews whole, internal environmental issues are co-ordinated by the central all listed companies on the Stockholm stock exchange regarding administration department. The head of the central credit depart- their preparedness to handle risks related to environmental impact. ment is responsible for environmental issues related to granting Among the 35 companies reviewed in the fi nancial sector, Handels- credits. Environmental issues are an integral part of the introduction banken was awarded “Best in sector”. programme for new employees, and also of credit training courses.

Environmental policy DIRECT ENVIRONMENTAL IMPACT

As far as technically and fi nancially possible, and to the extent that it Carbon dioxide (CO2) emissions is an area where the Bank’s opera- is compatible with the Bank’s undertakings, Handelsbanken aims to tions have a direct impact on the environment. For several years, the promote long-term sustainable development. The Bank also aims to Bank has measured the carbon dioxide emissions generated by its take measures to minimise any negative impact on the environment. own operations. The Bank’s direct impact mainly derives from busi- Consistent and long-term improvements will generate benefi ts to the ness travel and the use of heating and electricity. environment as well as cost savings. Sweden is one of the few countries in the world where an increa- Handelsbanken has signed and complies with voluntary agre- sing GDP is accompanied by diminished emissions of greenhouse ements, such as the ICC Business Charter for Sustainable Deve- gases. Handelsbanken is part of that trend. Over the past few years, lopment and the United Nations Environmental Program Finance the Bank’s earnings and business volumes have increased while its (UNEP FI), “Banks and the environment”. UNEP FI is a statement carbon dioxide emissions have decreased. that economic development must be compatible with social welfare In 2005, Handelsbanken’s carbon dioxide emissions fell by 20%. and a sound environment. The proportion of purchased electricity with the Good Environ- mental Choice mark was 42% and the average use of electricity at Objectives and policy the Swedish branches in 2005 was 133 kWh/m2 as compared to an The aim of Handelsbanken’s environmental work is to promote average value of 150 kWh/m2 for premises in Sweden (Energy indi- long-term sustainable development. Action is taken to cause as little cators – 2005, Swedish Energy Agency). negative impact on the environment as possible, by minimising en- ergy use, choosing environment-friendly materials and products and Emissions CO2 minimising residual products. The Bank has produced material with tonnes 2005 2004 the purpose of inspiring and motivating its employees to act in an Electricity 3 886 5 762 environmentally conscious way, so that environmental issues become Heating 1 719 2 474 a natural part of their daily work. Travel 2 693 2 577 Transport of goods 2 246 2 246 Other 5 85 Total 10 549 13 144

Information concerning emissions in 2006 is not yet available. Electricity and heating refer to Handelsbanken’s Nordic operations. Other refers to operations in Sweden.

HANDELSBANKEN ■ ANNUAL REPORT 2006 115 CORPORATE SOCIAL RESPONSIBILITY

Actions to reduce negative environmental impact that the products in question remain competitive after environmen- Handelsbanken makes continuous efforts to reduce environmental tal and health risks have been taken into account. A large part of impact. Here are some examples from 2006: Handelsbanken’s lending portfolio consists of mortgage loans. For • The Bank launched an e-mailbox function as part of its online property-related credits, it is essential to take into account environ- services, where customers can receive information in electronic mental factors pertaining to buildings or environmentally harmful form. Customers can cancel paper information online and instead activities conducted in the building now or in the past. Environ- receive this electronically. mental factors in the vicinity of the property are also considered. • Information to the same customer is put in the same envelope to It is always the customer who is responsible for how its own a greater extent, leading to fewer mail items. operations are conducted, but repayment capacity and thus the • Movement detectors have been installed in the public areas at the Bank’s credit risk is affected by the customer’s willingness or ability Tegeluddsvägen property so that the lights are extinguished when to manage these risks. there is nobody on the premises. • Several cooling plants in the Bank’s premises were shut down and Ethical and environmental mutual funds these buildings were linked to district cooling facilities. The Handelsbanken Group offers the opportunity to save in mutual • Heat recycling was installed in one of the Bank’s properties in funds with an ethical or environmental profi le. For several years, Stockholm. the Bank’s range of funds has included the SPP Global Sustain- • Waste separation at source is being gradually introduced in the ability Share Index Fund. This fund invests in companies which, in Bank’s units. addition to fi nancial targets, also have social objectives and aim to • When renovating the facades of the Bank’s premises in central use natural resources in a long-term sustainable manner. In 2005, Stockholm (Arsenalsgatan and Blasieholmstorg), environmentally- the Bank started another fund with this focus. The Handelsbanken friendly methods and material were used. Sweden Index Ethical Fund invests in companies which have been • At the branches, the power installed in the machine rooms was examined on the basis of ethical criteria relating to the environment, lowered from 3kW to 2kW which affected the need for cooling. human rights and business ethics. The assets managed in the two funds totalled SEK 3.3bn (2.3). INDIRECT ENVIRONMENTAL IMPACT The Bank also offers a global environmental fund via an external Environmental issues associated with granting loans fund manager. This fund only invests in companies that are expected The Bank can infl uence the environment in a broader perspective in to offer good returns and that also comply with special environ- the application of its credit policy. In accordance with Handelsbanken’s mental criteria. credit policy, environmental factors are taken into consideration when assessing the customer’s repayment capacity. For lending com- Environmental impact of purchases and projects mitments over SEK 1m and in the case of mortgages over SEK 4m, Environmental requirements are always made on suppliers when a limit document is drawn up. For all customers with a credit limit, the Bank procures goods and services. Environmental considera- an annual review and analysis is made in the form of a business eval- tions are included in decisions on all investments and purchases. uation. This includes an assessment of possible environmental risks Handelsbanken maintains an ongoing dialogue with its suppliers for each customer. This is particularly important when assessing the to promote and develop environmental issues. When planning the repayment capacity of a customer engaged in environmentally haz- Bank’s buildings, premises and furnishings, environmental guide- ardous activities or selling products that involve environmental or lines are applied and declarations of environmental and material health risks. The assessment may concern the required governmental content are required. Materials and components must be long-life, authorisations, adherence to the prescribed limits for emissions, and recyclable and low-energy.

116 HANDELSBANKEN ■ ANNUAL REPORT 2006 CORPORATE SOCIAL RESPONSIBILITY

Ethical standards and corporate social responsibility

All operations at Handelsbanken must be characterised by high ethical standards.

ETHICAL GUIDELINES familiar with the local insider trading laws and observe the Bank’s Handelsbanken’s ethical guidelines state that operations must be char- own rules governing employees’ and closely-related persons’ private acterised by high ethical standards. Employees must conduct them- securities and currency transactions. selves in a manner that upholds confi dence in the Bank. The ethical In their work at the Bank and in their private affairs, employees guidelines are ratifi ed every year by the board of Handelsbanken. must refrain from business transactions that violate the Bank’s rules A fundamental, self-evident rule is that the Bank and its employees or current legislation. Employees must not handle matters in which must comply with the laws and regulations that govern its operations they or a relative have a personal interest nor matters for companies in various ways. General recommendations and statements from the in which they or a relative have a material interest. Handelsbanken’s Swedish Financial Supervisory Authority and other authorities must employees must also refrain from transactions or other commitments be observed when designing procedures and instructions. that may seriously jeopardise their own fi nancial position. Employees must notify the Bank of assignments outside the Bank Money laundering and economic crime and obtain approval. These rules also apply to secondary occupations The Bank must not participate in transactions involving funds which and posts in clubs, societies and the like. Remuneration for being a may be suspected of originating from criminal activities, or in trans- member of a board on behalf of the Bank must be paid to the Bank. actions the implication of which the responsible employees do not Employees who are in doubt regarding the Bank’s ethical guidelines understand. Nor should the Bank participate in transactions which and dealing with related issues must contact their immediate supe- can be perceived as assisting tax evasion. The appropriate managers rior to discuss the correct action. at Handelsbanken are responsible for keeping employees regularly in- formed of the content of legislation on combatting economic crime. CORPORATE SOCIAL RESPONSIBILITY Handelsbanken applies laws and regulations in its work against The success of Handelsbanken in the market derives from the trust money laundering and particularly serious crime. The Bank has in- it enjoys from the public and authorities. The Bank’s work meth- ternal instructions for this purpose and all employees are regularly ods stem from a fundamental human outlook based on trust and trained in issues relating to money laundering and the fi nancing of respect. All employees are clearly responsible for their actions profes- particularly serious crime. sionally and in social and ethical issues. Therefore, it is important that business decisions at the Bank can be justifi ed also from a social Customer relations and ethical perspective. Financial advice must always be based on the customer’s needs, fi - nancial position and risk propensity. It is important that employees Human rights ensure that customers understand the implications of the decisions Handelsbanken endorses the principles set out in the UN Universal they make. The advice given aims to provide the customer with the Declaration of Human Rights. This means that the Bank strives to most suitable product from the Bank’s range, regardless of what is support and respect the protection of international human rights best for the Bank in the short term. The Bank must not take advan- within the area which the Bank can infl uence. It also means that the tage of its superior expertise and fi nancial position in relation to cus- Bank endeavours to ensure that it is not involved in any breach of tomers. Sound business practices, acting in a consistent manner and human rights. When granting credits, the Bank takes account of its fair treatment of customers are key concepts at the Bank. No type of customers’ attitudes to human rights. discrimination is allowed. In some cases, for example securities trading, where the Bank is Working conditions and union rights acting on behalf of both customers and itself, a confl ict of interests Handelsbanken complies with the laws and agreements on working may arise. Operations must be oriented in such a way to avoid this hours in all countries where it has operations. In the Nordic coun- type of confl ict as far as possible. tries, where 93% of the Bank’s employees work, Handelsbanken ad- heres to the collective bargaining agreements which regulate work- The Bank as customer ing hours, overtime, rest periods, breaks and holidays. All employees Handelsbanken is a major purchaser of goods and services from both in the Handelsbanken Group have the right to organise and join a Swedish and international suppliers. Ethical considerations are just union. The Oktogonen profi t-sharing foundation has a representa- as important for the Bank in its role as customer as when it supplies tive on the central board. The local boards of the regional banks services and products. To avoid incurring obligations to customers include employee representatives. At Handelsbanken, all individuals and suppliers, the Bank has rules regarding receiving and giving per- with the same competence have the same right to employment, pro- sonal gifts and entertainment. motion, salary and professional development, regardless of gender, age, ethnic background or sexual orientation. Handelsbanken’s Conduct of employees equal opportunity policy states that equal conditions shall apply It is important that the Bank’s employees are not suspected of taking to men and women regarding personal development within the improper advantage of knowledge about the fi nancial markets which Handelsbanken Group. they obtain in the course of their work. All employees must be

HANDELSBANKEN ■ ANNUAL REPORT 2006 117 GOVERNANCE AND CONTROL

Corporate governance

Corporate governance is the term used to describe a set of regulations for management and control of companies. Handelsbanken strictly applies the Swedish Code of Corporate Governance.

members were re-elected. The AGM elected Lars O Grönstedt as GOVERNANCE AND CONTROL chairman of the board. At the subsequent fi rst board meeting, Hans Corporate governance is the term used to describe a set of regula- Larsson and Anders Nyrén were appointed vice chairmen. At the tions for management and control of companies. Handelsbanken same time, the board appointed Pär Boman as president and group strictly applies the Swedish Code of Corporate Governance. This chief executive after Lars O Grönstedt. corporate governance report, which comprises pages 118–123, has not been examined by the Bank’s auditors. Size and independence Handelsbanken’s board comprises 13 members who are elected INFORMATION ABOUT CORPORATE GOVERNANCE by the Annual General Meeting. No employee representatives are The aim of the board’s information policy is to ensure that elected. The employees are instead represented by two board mem- stock market operators have access to fast, simultaneous, bers, elected by the AGM, who represent the Bank’s profi t-sharing correct, relevant and reliable information. The Bank’s website foundation, Oktogonen. (www.handelsbanken.se/ireng) includes all published information The rule concerning confl icts of interest in credit matters means provided to the stock market during the past three years. that the board members cannot participate in credit decisions con- The website also contains a section on corporate governance cerning companies where they have ownership interests or where issues, where the information in the corporate governance report they are employed or are board members. The Bank’s board is there- is continually updated. fore somewhat larger than is the case in other listed companies. The Stockholm stock exchange’s listing requirements make ANNUAL GENERAL MEETINGS (SHAREHOLDERS’ certain stipulations concerning the composition of the board. For MEETINGS) example, the majority of the members elected by the AGM must be Shareholders exercise their right to decide on matters relating to the independent of the company and the management. At least two of company at general meetings of shareholders. The annual general the board members must also be independent of the company’s ma- meeting (AGM) appoints the board, the chairman of the board jor shareholders. Handelsbanken’s board fulfi ls these requirements. and the auditors, and also decides on their fees. The annual general Regarding the requirement that no more than one board member meeting also decides on policies for salary and other remuneration is allowed to work in the senior management of the Bank, it may be for the group chief executive and other members of the Bank’s mentioned that the group chief executive is a member of the board. senior management. The composition of the board also fulfi ls the requirements concer- Information in preparation for meetings as well as minutes of ning independence as expressed in the Swedish corporate annual general meetings can be viewed on the Bank’s website. governance code. Notice of general meetings and all proposals for the meeting are available on the website. The fundamental work of the board According to the Swedish Companies Act, the Board’s overall task APPOINTMENT OF THE BOARD AND AUDITORS is to manage the company’s business on behalf of the owners. The The nomination committee is the AGM’s body for preparing the board of a universal bank such as Handelsbanken must also comply meeting’s decisions relating to appointment issues. By decision of with a large number of industrial regulations. Central among these the 2006 AGM, the four largest shareholders in voting terms each is the Swedish Banking and Financing Business Act (2004:297). In appointed a representative who, together with the chairman, would addition, there is specifi c legislation for operations such as securities constitute the nomination committee until the next AGM appoints and insurance. The industrial legislation is supplemented by regula- a new nomination committee. The nomination committee consists tions from Swedish Financial Supervisory Authority. Many of these of Carl-Olof By (Industrivärden), Henrik Forssén (the Oktogonen regulations include instructions directed at the board of the Bank. Foundation), Tomas Nicolin (Alecta), Lars Öhrstedt (AFA Banking legislation requires the board to ensure that certain Försäkring) and Lars O Grönstedt (chairman of the board of general operating regulations on fi nancial strength, liquidity, risk Handelsbanken). Together, the members of the nomination management, transparency and soundness are fulfi lled. committee represent approximately 29% of the number of votes for all shares in the Bank. Financial strength and liquidity A bank’s operations must be pursued in such a way that its ability BOARD OF DIRECTORS to fulfi l its obligations is not jeopardised. Risks are inherent in all In advance of the AGM on 25 April 2006, the chairman of the operations, but these risks must be adapted to the size of the buffer board, Arne Mårtensson had declined re-election. At the annual capital. Similarly, suffi cient liquidity is vital for the Bank to also fulfi l general meeting, Pär Boman was elected to the board and the other its obligations in the short term, and not risk incurring temporary

118 HANDELSBANKEN ■ ANNUAL REPORT 2006 GOVERNANCE AND CONTROL

payment problems. Good liquidity requires advanced liquidity plan- Following a co-ordinated risk assessment, the audit work should be ning and tight control of payment fl ows. planned so that it focuses on examining operations and procedures The specifi c implications of the regulations on fi nancial strength which are of material importance and/or involve risks. The planned and liquidity are set out in the more detailed provisions of other legisla- auditing commitments are documented annually in an audit plan tion. This include the regulations on capital adequacy. As of 1 February which is established by the board’s audit committee on behalf of the 2007, certain new capital adequacy regulations apply (Basel II), which board. The result of internal audits, the actions to be taken and the place a greater focus on the responsibility of the board for total capital status of these, are continually reported to the audit committee. requirements and requirements for transparency. Transparency Risk management – internal control A bank’s operations must be organised and pursued in such a way A bank must have systems adapted to its operations which enable it that the Bank’s structure, links with other companies and position to identify, measure, govern, internally report and have control over are visible. The overall responsibility for the transparency of the the risks associated with its operations. In particular, the board must institution’s fi nancial position and organisational structure rests ensure that the combination of different forms of risk such as credit with the board. The more detailed implications of the requirement risks, market risks and operating risks does not jeopardise the Bank’s for transparency are, for example, set out in the Swedish legislation ability to fulfi l its obligations. This requirement can only be met if for annual accounts. The Bank’s accounts have been prepared in good internal control exists. Thus, good internal control is part of accordance with international fi nancial reporting standards, IFRS, the risk management and capital evaluation functions. as adopted by the EU. The amendments and restrictions pursuant Risk control in terms of credit risks and operating risks is carried to the Swedish Annual Accounts Act for Credit Institutions and out by the credit risk control unit at the Central Credit department. Securities Companies (ÅRKL) and the implementation directives Risk control in terms of other risks, such as market risks, liquidity issued by the Swedish Financial Supervisory Authority are also ap- risks, insurance risks and business risks, is carried out by the fi - plied. The requirement for transparency also entails compliance with nancial risk control unit at Central Control and Accounting. The stock exchange regulations such as the listing agreement and listing responsibility for capital planning rests with the head of the capital requirements. unit at Central Control and Accounting department. Reporting to the head of Central Control and Accounting, the head of Treasury Soundness has responsibility for group liquidity and funding. In other respects, too, the operations of a credit institution must The Bank applies strict methods for risk assessment and risk ma- be pursued in a sound manner. This means that the Bank must nagement to ensure that the risks to which it is exposed are managed maintain a level of quality in its operations, such that the confi dence within the established framework. The outcome of the company’s of the market can be upheld. The areas affected by this include the process for risk assessment and risk management is discussed an- Bank’s conduct with respect to its customers. nually by the board. Credit risks, operational risks, market risks and liquidity risks are regularly presented to the board. Guidelines and instructions The fundamental issues on the allocation of expertise among the Financial reporting board, the committees of the board, the chairman, the group chief Internal control for fi nancial reporting is based on the Bank’s own executive and the internal auditing function are manifested in the control environment (organisation, decision paths, authority and re- board’s work regulations and its instructions to the group chief ex- sponsibility) which is documented and communicated in governing ecutive. The set of instructions that is established every year at the documents such as internal policies, guidelines, manuals and codes. statutory meeting includes credit instructions for the Group, as well Examples of these are the division of work between on the one hand as various policies relating to the management of the fi nancial risks the board, and on the other hand the group chief executive and the associated with the Group’s operations. Every year, the board sets other bodies which the board establishes, instructions for the right funding limits and assumes responsibility for the Bank’s base pro- to approve costs, and accounting and reporting instructions. The spectus (i.e. prospectus responsibility). In addition, every year, the risks which have been identifi ed for fi nancial reporting are managed board establishes a risk mandate relating to interest rate risks, liquid- via the Bank’s control structures which are documented in descrip- ity risks and other risks. tions of processes and internal control. The board’s working instructions state that the chairman should The Bank has information and communication channels with the assist the group chief executive in contacts with the Bank’s most aim of achieving completeness and correctness in its fi nancial re- important relationships, particularly the main owners. The chairman ports, for example by means of making the governing documents for also has overall responsibility for ownership issues relating to share- fi nancial reporting available and known to the employees concerned. holdings in the Bank’s pension foundation, pension fund and staff The Bank follows up how the control structures are managed and foundation. their effi ciency. One of the tools for this is self-assessment tests. The In the absence of the chairman, in order of seniority on the company’s information and communication channels are also fol- board, the vice chairmen of the board must fulfi l the chairman’s lowed up to ensure that they are appropriate for their purpose with tasks and assist the chairman as decided by him. In other respects reference to the fi nancial reporting. there is no other division of work for the board than that which in- volves the committees. Internal auditing The group chief executive also establishes a series of instructions The head of the Central Auditing department is appointed by the and policy documents, either in response to assignments from the board. The Central Auditing department has some seventy employ- board, or to fulfi l regulatory requirements relating to the Bank’s ees, a large number of whom have competence corresponding to senior management specifi ed by the Swedish Financial Supervisory public authorised accountants. The Bank’s external auditors evalu- Authority. ate and perform quality control on the work of the internal audit department. The internal auditing department’s assignment is based The work of the board in 2006 on a policy for internal auditing operations established by the board. During the year, the board held 12 ordinary general meetings

HANDELSBANKEN ■ ANNUAL REPORT 2006 119 GOVERNANCE AND CONTROL

(including one telephone meeting) and one strategy meeting. It Remuneration committee discussed the economic situation and the Bank’s strategy at regu- The board’s remuneration committee consists of the chairman of lar intervals. One of the regular items discussed is a report on the the board and two other members, both of whom are independent Bank’s position compared to other Swedish and international banks. in relation to the company and its management. The committee met Also, risk limits for interest rate risks and other categories of risk three times during the year. were reviewed and followed up. In addition, the board was regularly The task of the remuneration committee is to prepare proposals informed about operating risks. It also took decisions on matters of to the board regarding adjustments to the salary and benefi ts of the borrowing, major credit-related matters, large investments and stra- group chief executive. The committee also prepares proposals to the tegic issues. board regarding adjustments to the salary and benefi ts of the head During the year, the board held an internal training day which of the Bank’s internal auditing department. This committee also included the Bank’s payment services. establishes the principles and overall policy for the salaries, benefi ts In December, as a result of the new capital adequacy regulations, and pensions of the executive vice presidents. The committee reports the board established a new capital policy and fi nancial risk policy, annually on the results of its work to the board. It has also been etc. for the Group. This capital policy sets out responsibilities and assigned to prepare the board’s proposal to the AGM regarding guidelines for internal capital evaluation and capital planning. The remuneration principles and other employment terms for the Bank’s board also established a confi dence level for the calculation of eco- senior management. nomic capital and a target for the Tier 1 ratio and other relevant capital ratios, to apply from 1 February 2007. Responsibility for the The audit committee/Work with accounting and audit issues Bank’s liquidity and fi nancing is set out in a fi nancial policy, while The audit committee consists of the chairman of the board, plus the fi nancial risk policy includes responsibilities and guidelines for two members who are independent of the company and its manage- the independent risk control function. As of 2007, the Bank will ment. One of these members is also independent of the Bank’s major report more detailed information on capital adequacy and risk ma- shareholders. One of the independent members is the committee’s nagement. chairman. The audit committee met three times during the year. The board’s work is evaluated in individual discussions between The board’s audit committee prepares the work of the board the board members and the chairman of the board, supported by to ensure compliance with the principles established for fi nancial a questionnaire which is answered individually by the members. reporting and internal control. The committee normally performs The results were compiled and discussed at the board meeting in this by processing crucial accounting matters and material events November. The chairman reported the results of the evaluation and after the balance sheet date, and any other circumstances which may the board’s discussion to the nomination committee. The board also affect the qualitative content of the fi nancial reports. The audit com- met on one occasion to evaluate the work of the group chief execu- mittee maintains regular contacts with the Bank’s external and inter- tive without him being present. nal auditors. In conjunction with the six-monthly fi nancial accounts, the internal and external auditors are to inform about the risk ana- Credit committee lyses which have been performed, including co-ordination between The credit committee consists of the chairman of the board, the two the internal and external auditors and observations made at their vice chairmen, the group chief executive and four other members. summary audit of the six-monthly fi nancial report. In conjunction The head of the central credit department is also a member of the with the full-year fi nancial accounts, the internal and external audi- credit committee. The board’s credit committee met 11 times dur- tors are to inform about material uncertainties in reported values, ing the year. observations relating to internal control, compliance, irregularities The credit committee makes decisions on behalf of the board and observations made when auditing the full-year fi gures. regarding the majority of credit cases referred to the board for its A written annual report of observations from the regular audits decision. It also prepares credit cases which, due to their special and an examination of six-monthly and annual accounts is submitted importance, must be presented to the whole board. The rules regar- every year by the external auditors to the chairman of the board and ding confl icts of interest in the Swedish Companies Act are carefully the group chief executive. In addition, the chairman of the external observed and are the subject of special attention. auditors commented on these reports at separate meetings of the au- ditors and the chairman of the board and the group chief executive,

Handelsbanken’s board Information about remuneration refers to the 12-month period between the 2006 and 2007 AGMs Information about attendance refers to 2006

Nationality Remuneration (SEK) Attendance board meetings Attendance committee work

Lars O Grönstedt, chairman Swedish 1 415 000 13/13 100% Hans Larsson, vice chairman Swedish 745 000 12/13 100% Anders Nyrén, vice chairman Swedish 745 000 13/13 100% Pirkko Alitalo Finnish 440 000 12/13 100% Jon Fredrik Baksaas Norwegian 365 000 8/13 - Ulrika Boëthius Swedish - 13/13 - Pär Boman, CEO Swedish - 13/13 100% Tommy Bylund Swedish - 13/13 100% Göran Ennerfelt Swedish 555 000 10/13 82% Sigrun Hjelmquist Swedish 440 000 12/13 100% Fredrik Lundberg Swedish 365 000 13/13 - Sverker Martin-Löf Swedish 655 000 13/13 100% Bente Rathe Norwegian 655 000 11/13 100%

120 HANDELSBANKEN ■ ANNUAL REPORT 2006 GOVERNANCE AND CONTROL

respectively, and at an audit committee meeting. When the audit has Remuneration to the board been completed, the head of internal auditing and the chairman of At the 2006 AGM, the board’s fees were set at SEK 6,380,000, of the external group of auditors provide a verbal report of their obser- which SEK 1,050,000 to the chairman. The board has allocated vations to the board. The chairman of the external group of auditors the fees such that the vice chairmen receive SEK 555,000 each and also meets the board once a year without the group chief executive the other members, SEK 365,000 each. Members of the credit or other members of the Bank’s management being present. The committee receive another SEK 190,000 each, members of the re- chairman of the external auditors also presents a report of the Bank’s muneration committee SEK 75,000 each and members of the audit auditing to the annual general meeting of shareholders. committee SEK 100,000 each. Members who work in the Bank’s operations receive no fee. AUDITORS The AGM appoints external auditors. Two auditing companies are Remuneration principles for senior management appointed, which in turn nominate authorised public accountants The 2006 AGM approved the following principles for remuneration who bear the main responsibility. The Swedish Financial Supervisory and other conditions of employment for the group chief executive Authority also appoints an auditor for the Bank. As stipulated by and senior managers who report directly to the group chief law, the mandate period for the auditors appointed by the sharehold- executive and are members of the senior group management: ers’ meeting is four years. At the 2004 annual general meeting, • The total remuneration shall be on market terms. KPMG Bohlins and Ernst & Young were appointed for the next • Remuneration is paid only in the form of a fi xed salary and four years, that is until the AGM in 2008. customary benefi ts. Bank auditors are not permitted to own shares in the Bank or • Variable remuneration in the form of bonuses is not paid. to be granted loans by the Bank. Handelsbanken aims to avoid • The minimum retirement age is 60. However, the retirement age purchasing other consulting services from the companies which for the group chief executive may be lower than this. Pension are responsible for auditing the Bank. When procuring consulting benefi ts are defi ned-benefi t. services from the companies which are responsible for auditing the • The period of notice on the part of the employee is six (6) months Bank, the auditing policy states that a special review must be made and on the part of Handelsbanken, twelve (12) months. If the in accordance with the Swedish Institute of Authorised Public Bank terminates the employment contract later than fi ve years Accountants’(FAR) analysis model and the American Sarbanes- after the person’s appointment as a member of the Bank’s Oxley Act. management, the period of notice is 24 months. In exceptional cases, periods of notice may be shorter. KPMG Bohlins AB • No severance pay is paid. This company was elected by the 2004 AGM for the period up to • The senior managers in question are included in the Oktogonen and including the 2008 AGM. They have been chief auditors since profi t-sharing system on the same terms as all employees of the the 2000 AGM and since then the auditor in charge has been Tho- Bank. mas Thiel, authorised public accountant. The senior management positions to which these principles apply Ernst & Young AB are the group chief executive and the senior managers who report This company was elected by the 2004 AGM for the period up to directly to the group chief executive and are members of the senior and including the 2008 AGM. They have been auditors since 1998 group management. and since 2005, the chief auditor has been Torsten Lyth, authorised public accountant. Terms for senior management The Bank has no agreements on severance pay. The group chief Authorised public accountant executive, Pär Boman, has a retirement age of 58. His retirement Ulla-Britt Nordin Buisman (Öhrlings Pricewaterhouse Coopers pension is 65% of his salary immediately before retirement. The AB). Appointed by the Swedish Financial Supervisory Authority at chairman of the board of the Bank and former group chief execu- the 2004 AGM. tive, Lars O Grönstedt, has a retirement age of 60. His retirement pension between the ages of 60 and 64 is 75% of his salary immedi- SENIOR MANAGEMENT ately before retirement, and from the age of 65 it is 65%. From the See page 124 for information about the senior management and the date that Lars O Grönstedt was appointed as chairman of the board shares they own in the company. his pension benefi ts accrue entirely in the Bank’s pension fund and pension foundation. Further information about conditions and re- REMUNERATION muneration for senior management can be found in Note 5 on pages Neither the board members nor the Group management receive 55–57. variable remuneration such as bonuses. There are no existing equity- related or equity price-related incentive programmes for the board Loans to senior management and the company management. Like all employees of the Bank, the Loans to the board, chief executives, and executive vice presidents management and board members who are employees of the Bank total SEK 125m (122) for the Group and SEK 37m (57) for the receive allocations made to the Bank’s profi t-sharing system Oktogo- parent company. nen, when these are made.

HANDELSBANKEN ■ ANNUAL REPORT 2006 121 GOVERNANCE AND CONTROL

The board

LARS O GRÖNSTEDT HANS LARSSON ANDERS NYRÉN PÄR BOMAN chairman vice chairman vice chairman Engineering and Business/Economics B.A. and Graduate in Business B.A. Stockholm, year of birth 1942. Graduate in Business Administration degree, Stockholm, year of birth 1961. Administration Stockholm, year of birth Member since 1990. Member of the and MBA. President and group chief Member since 2006. Member of the 1954. Member since 2001. board’s credit committee. executive of AB Industrivärden, Bromma, board’s credit committee. Chairman of the board’s remuneration Other assignments: Chairman of Nobia year of birth 1954. Member since 2001. Other assignments: Director of the committee and credit committee. AB, Biolight International AB, Attendo Member of the board’s credit committee. Swedish Bankers’ Assocation. Member of the board’s audit committee. Holding AB, CreVal Partners Fund 1 AB, Other assignments: Director of Own shareholdings and those of Other assignments: Director of director of Holmen AB, Dynea Oy. Telefonaktiebolaget L M Ericsson, immediate family: 3,627, of which AB Industrivärden, Vice chairman of Own shareholdings and those Ernströmgruppen AB, AB Industrivärden, 2,927 indirectly via the Oktogonen Stockholm Chamber of Commerce. of immediate family: 18,600 Sandvik AB, Skanska AB, Svenska profi t-sharing foundation. Own shareholdings and those of Cellulosa AB SCA, SSAB Svenskt immediate family: 9,025, of which Stål AB and chairman of the Swedish 8,425 indirectly via the Oktogonen profi t- Association of Listed Companies and the sharing foundation. Association for Sound Practices in the Securities Market. Own shareholdings and those of immediate family: 2,000

PIRKKO ALITALO JON FREDRIK BAKSAAS ULRIKA BOËTHIUS TOMMY BYLUND Graduate in business administration, Graduate in business administration Sciences programme Upper Secondary Upper Secondary School, Bank Vice Helsinki, year of birth 1949. and MBA, President and group chief School, Bank employee, Stockholm, President, Ljusdal, year of birth 1959. Member since 2000. Member of the executive of Telenor ASA, Sandvika, year year of birth 1961. Member since 2004. Member since 2000. Member of the board’s remuneration committee. of birth 1954. Member since 2003. Other assignments: Vice chairperson board’s credit committee. Other assignments: Director of Other assignments: Director of Aker of Swedish Union of Financial Sector Other assignments: Chairman of Lagercrantz Group AB. ASA, Det Norske Veritas (council). Employees. Oktogonen Foundation. Own shareholdings and those Own shareholdings and those of Own shareholdings and those Own shareholdings and those of of immediate family: 2,500 immediate family: 0 of immediate family: 2,897, of which immediate family: 11,812, of which 2,897 indirectly via the Oktogonen profi t- 10,868 indirectly via the Oktogonen sharing foundation. profi t-sharing foundation.

122 HANDELSBANKEN ■ ANNUAL REPORT 2006 GOVERNANCE AND CONTROL

GÖRAN ENNERFELT SIGRUN HJELMQUIST FREDRIK LUNDBERG SVERKER MARTIN-LÖF B.A. and Graduate in business Graduate engineer and Licentiate of Graduate Engineer and Graduate in Doctor of Engineering in Technology administration, President and group chief Technology. Chairperson and Partner business administration, Honorary in Paper and Chemical Pulping, executive of Axel Johnson Gruppen of Sight Executive Group AB, Djursholm, Doctor of Economics and Honorary Stockholm, year of birth 1943. AB, Upplands Väsby, year of birth 1940. year of birth 1956. Member since 2003. Doctor of Engineering. President Member since 2002. Chairman of the Member since 1985. Member of the Member of the board’s remuneration and group chief executive of L E board’s audit committee, Member of the board’s credit committee. committee. Lundbergföretagen AB, Djursholm, board’s credit committee. Other assignments: Chairman of Axfood Other assignments: Director of year of birth 1951. Other assignments: Chairman of AB, director of Spirent plc. Sandvik AB, IBS AB, E.ON Sverige AB Member since 2002. Svenska Cellulosa AB SCA, Own shareholdings and those (previously Sydkraft AB), Other assignments: Chairman of Skanska AB, SSAB Svenskt Stål AB, of immediate family: 65,000 RAE Systems Inc. Holmen AB, Cardo AB, Hufvudstaden Vice chairman of Telefonaktiebolaget Own shareholdings and those AB, Director of L E Lundbergföretagen LM Ericsson, AB Industrivärden. of immediate family: 1,000 AB, NCC AB, AB Industrivärden, Own shareholdings and those Sandvik AB. of immediate family: 1,500 Own shareholdings and those of immediate family: 1,849,500

Handelsbanken’s board of directors Refers to the 12-month period between the 2006 and 2007 AGMs Credit Remuneration Audit Nationality Independent * Remuneration committee committee committee Lars O Grönstedt, chairman Swedish 1 415 000 chairman chairman member Hans Larsson, vice chairman Swedish 745 000 member Anders Nyrén, vice chairman Swedish • 745 000 member Pär Boman, CEO Swedish - member Pirkko Alitalo Finnish • 440 000 member Jon Fredrik Baksaas Norwegian • 365 000 Ulrika Boëthius Swedish - Tommy Bylund Swedish - member BENTE RATHE Göran Ennerfelt Swedish 555 000 member Graduate in business administration Sigrun Hjelmquist Swedish • 440 000 member and MBA, Trondheim, year of birth Fredrik Lundberg Swedish • 365 000 1954. Member since 2004. Member of Sverker Martin-Löf Swedish • 655 000 member chairman the board’s credit committee and audit Bente Rathe Norwegian 655 000 member member committee. • Other assignments: Chairman of Petoro • This member is to be regarded as independent in relation to the company and its management. AS and Enviro Energi ASA, Director of • This member is to be regarded as independent in relation to the company and its management Kongsberg Automotive ASA, Powel ASA. and also to major shareholders in the company. Own shareholdings and those * As defined in the Swedish Corporate Governance Code. of immediate family: 1,330

HANDELSBANKEN ■ ANNUAL REPORT 2006 123 Senior management

President and group chief executive Executive vice presidents Chief executives at the subsidiaries at the regional banks PÄR BOMAN year of birth 1961 MICHAEL ZELL year of birth 1950 Employed: 1991 PER BECKMAN year of birth 1962 Head of Handelsbanken Liv and SPP Shareholding: 3,627, of which 2,927 indirectly* Head of Northern Norrland Employed: 1978 Employed: 1993 Shareholding: 14,667, of which 13,667 indirectly* Executive vice presidents at Shareholding: 1,073, of which 1,073 indirectly* Call options equivalent to 10,000 shares central head offi ce RAINER LAWNICZAK year of birth 1958 YONNIE BERGQVIST year of birth 1961 Head of Handelsbanken Finans BJÖRN BÖRJESSON year of birth 1951 Head of Southern Norrland Employed: 1979 Head of Handelsbanken International Employed: 1982 Shareholding: 10,314, of which 10,177 indirectly* Employed: 1981 Shareholding: 9,246, of which 9,246 indirectly* Shareholding: 9,901, of which 9,901 indirectly* LARS KAHNLUND year of birth 1954 FRANK VANG-JENSEN year of birth 1967 Head of Stadshypotek MIKAEL ERICSON year of birth 1960 Head of Stockholm City Employed: 1998 Head of Handelsbanken Capital Markets Employed: 1975 Shareholding: 1,232, of which 932 indirectly* Employed: 1993 Shareholding: 18,574, of which 18,574 indirectly* Shareholding: 2,248, of which 2,248 indirectly* THOMMY MOSSINGER year of birth 1951 Others at central head offi ce ANDERS H JOHANSSON year of birth 1955 Head of Central Sweden Head of IT Employed: 1982 KATARINA BERNER FRÖSDAL year of birth 1956 Employed: 1999 Shareholding: 9,161, of which 9,161 indirectly* Head of Infrastructure Shareholding: 764, of which 764 indirectly* ANDERS OHLNER year of birth 1955 Employed: 1979 Shareholding: 11,685, of which 11,685 indirectly* PATRIK HERTSBERG year of birth 1963 Head of Eastern Sweden Head of Handelsbanken Asset Management Employed: 1985 JAN HÄGGSTRÖM year of birth 1949 Employed: 1994 Shareholding: 5,365, of which 5,365 indirectly* Head of Handelsbanken Markets Research Shareholding: 1,269, of which 1,269 indirectly* M JOHAN WIDERBERG year of birth 1949 Employed: 1988 Shareholding: 3,842, of which 3,842 indirectly* OLLE LINDSTRAND year of birth 1949 Head of Western Sweden Head of Credit Department Employed: 1972 ELISA SAARINEN year of birth 1963 Employed: 1985 Shareholding: 26,147, of which 22,647 indirectly* Head of Corporate Communications Shareholding: 6,586, of which 6,586 indirectly* CLAES NORLÉN year of birth 1955 Employed: 1995 Shareholding: 1,190, of which 1,190 indirectly* ANNA RAMBERG year of birth 1952 Head of Southern Sweden Head of Human Resources Employed: 1978 Shareholding: 13,667, of which 13,667 indirectly* Employed: 1971 Changes during the year Shareholding: 25,013, of which 24,104 indirectly* MAGNUS UGGLA year of birth 1952 Pär Boman, previously head of Handelsbanken ULF RIESE year of birth 1959 Head of Great Britain Markets, was appointed president and group chief Head of Control and Accounting Employed: 1983 executive. Employed: 1983 Shareholding: 38,333, of which 8,333 indirectly* Shareholding: 27,016, of which 8,359 indirectly* ANDERS BOUVIN year of birth 1958 Ulf Riese, previously head of Handelsbanken Asset Management, was appointed head of Central Control HÅKAN SANDBERG year of birth 1948 Head of Denmark and Accounting. Employed: 1969 Employed: 1985 Shareholding: 25,715 of which 25,206 indirectly* Shareholding: 7,069, of which 6,569 indirectly* Mikael Ericson, previously head of Handelsbanken PETRI HATAKKA year of birth 1962 Capital Markets, was appointed executive vice Head of Finland president and head of Handelsbanken Capital Employed: 1990 Markets. Shareholding: 1,143, of which 1,143 indirectly* Rainer Lawniczak was appointed executive vice INGA-LILL NICOLIN year of birth 1950 president and head of Regional Bank Southern Head of Norway Norrland. Employed: 1986 Björn Börjesson, executive vice president, previously Shareholding: 5,060, of which 5,060 indirectly* head of Handelsbanken Markets, was appointed head of Handelsbanken International.

Katarina Berner Frösdal was appointed head of Infrastructure.

In February 2007, Patrik Hertsberg was appointed executive vice president and head of Handelsbanken Asset Management.

* Indirect holding of shares in Handelsbanken via the Oktogonen profit-sharing foundation.

124 HANDELSBANKEN ■ ANNUAL REPORT 2006 Branches and branch managers

NORTHERN NORRLAND SOUTHERN NORRLAND Skutskär Tom Wallin Branch Branch manager Branch Branch manager Skärplinge Stefan Holmquist Arvidsjaur Hans Albert Lindgren Alfta Dan Silvroth Skönsberg Urban Strömbom Backe Berit Bölander Arbrå Pär Lindh Stora Tuna Catrine Stenback Bjurholm Vacant Avesta Pia Källarbo Storvik Helene Hedin Bjästa Mats Hållberg Bergby Ylva Wallén Svensson Strömsund Lars-Erik Olsén Björna Margareta Persson Bergsjö Ulrika Sjöström Sundsvall Owe Sundin Boden Eva Rångevall Bispgården Lars-Göran Fahlén Sveg Gunilla Bäckius Bredbyn Mats Ågren Bjursås Anders Rapp Svenstavik Bengt Adolfsson Bureå Helen Bergwall Björbo Gerd Kosjanow Säter Ingela Hedberg Burträsk Catharina Johansson Björk Bollnäs Irene Hörberg Söderhamn Kerstin Nordstrand Byske Sören Markström Borlänge Katarina Rülcker Sörberge Bertil Sjöstrand Domsjö Roland Wennerberg Bräcke Tomas Wallström Tierp Mats Hansson Dorotea Anna-Karin Öhnerud Delsbo Joakim Frithiof Timrå Johanna Lundberg Gammelstad Eva-Britt Lindström Edsbyn Anders Lundin Torsåker Kerstin Persson Gällivare Lars Beyron Fagersta Lars Annerman Vansbro Fredrik Hallqvist Haparanda Roger Keisu Falun Anders Forsgren Västanfors Mikael Johansson Holmsund Stenebo, Marina Fränsta Lars Gustafsson Ånge Stefan Mattsson Hoting Marianne Rullander Furudal Bengteric Andersson Åre Hans Pernelind Husum Thomas Kassman Föllinge Anette Nilsson Östersund Petter Dahlin Härnösand Johan Grahn Gagnef Kerstin Berg Lindgren Östervåla Ove Johannesson Jokkmokk Kent Aidanpää Gnarp Niclas Södergren Junsele Annica Olofsson Grangärde Maria Jonasson STOCKHOLM CITY Kalix Gunnar Sandqvist Grängesberg Eva Ludvigsson Branch Branch manager Kiruna Vacant Gällö Tomas Wallström Danderyd Kramfors Lars Norlinder Gävle City Svante Larsson Djursholm Leif Jadvi Lugnvik Tommy Sjölund Hammarstrand Lars-Göran Fahlén Mörby centrum Fredrik Christofferson Luleå Storgatan Jan Persson Hammerdal Örjan Olsson Lidingö Luleå Örnäset Lisbeth Aidanpää Heby Åsa Olsson Centrum Mia Hiljebäck Lycksele Henrik Johansson Hede Thomas Ohlsson Larsberg Vacant Lövånger Kjell-Ove Löfgren Hedemora Håkan Arvidsson Näset Evalena Holmqvist Malå Ann-Charlotte Renström Hedesunda Susanne Persson Sigtuna Nordingrå Tommy Sjölund Hudiksvall Thony Nylund Arlanda Lars Åsgårdh Nordmaling Ivan Forsgren Insjön Clas Bond Märsta Ann Lilja Norsjö Greger Holmström Järpen Henrik Lindqvist Stora gatan Katarina Fridén Näsåker Jan-Åke Sjömäling Järvsö Ove Larsson Sollentuna Pajala Per-Anders Juntti Kilafors Sten Morin Centrum Fredrik Andersson Piteå Stefan Uddström Kopparberg Lena Ragnarsson Vöks Rotebro Yvonne Orre Ramsele Vacant Krokom Ulf Hellström Solna Robertsfors Jenny Berglund Kvissleby Per Pettersson Centrum Per Eldestrand Råneå Ellinor Eriksson Leksand Anders Ekström Frösunda Ulf Eliasson Skellefteå Göran Olsson Liden Inger Nordström Vreten Klas Bornälv Sollefteå Thomas Rönnberg Lima Lena Eggens Stockholm Sorsele Hans Albert Lindgren Lit Mikael Hansson Birger Jarlsgatan Jörgen Nielsen Storuman Peter Persson Ljusdal Tommy Bylund Frihamnen Richard Nordgård Trehörningsjö Gunilla Näslund Ljusne Catarina Bengtsson Gamla Stan Linda Kyrkander Ullånger Tommy Sjölund Ludvika Mats Johansson Gustav Adolfs Torg Bo Kaijser Umeå Malung Åsa Björlin Humlegården Jörgen Larson City Peter Hansi Matfors Johan Billström Karlaplan Magnus Ericson Umeå Teg Catrine Danielsson Mockfjärd Håkan Eriksson Karlavägen Per Andersson Umeå Västra Vacant Mora Henrik Ragnarsson Kista Thomas von Schéele Vilhelmina Roland Wennerberg Mörsil Astrid Larsson Lindh Kungsträdgården Åsa Öhlund Vindeln Alexander Bagrov Norberg Leif Magnusson Norrmalmstorg Jan Ringblom Vännäs Ann-Christine Söderberg Rånman Ockelbo Karin Eriksson Norrtull Helena Ericsson Ånäset Eva Nordenstam Offerdal Jörgen Nordqvist Odengatan Carl-Magnus Gustafsson Åsele Anna-Karin Öhnerud Orsa Bengteric Andersson Odenplan Joakim Becker Älvsbyn Britt-Marie Stenvall Rättvik Martin Sellberg S:t Eriksplan Mats Byrstedt Örnsköldsvik Helena Johansson Sala Peter Gustavsson Stockholm Sergel Göran Lönnstad Överkalix Maria Fältmark Sandviken Sven-Erik Larsson Strandvägen Bengt Bohman Övertorneå Håkan Funck Skinnskatteberg Andreas Byrén Stureplan Mikael Westerback

HANDELSBANKEN ■ ANNUAL REPORT 2006 125 BRANCHES AND BRANCH MANAGERS

Sveavägen Malin Bergström Salem Catharina Persson Linköping Tessinparken Peder Wiberg Saltsjö Boo Hans Ek City Gert Lundmark Upplandsgatan Lisbeth Andersson Skanstull Per Anders Tranberg Tornby Anders Hallros Vanadisplan Richard Johnson Skultuna Lars-Åke Pettersson Mjölby Patrik Rosengren Vasagatan Maria Hellberg Skärholmen Kenneth Wadling Motala Michael Minnered Värtavägen Björn Åhlander Sköndal Vacant Mönsterås Karin Mattsson Östermalmstorg Anders Danielsson Spånga Anders Nygren Mörbylånga Marianne Wigforss Östra Station Thomas Anttila Stuvsta Mats Nordling Mörlunda Börje Samuelsson Sundbyberg Carina Idberg Södertälje Peter Almström Norrköping Täby Trosa Maria Westerfalk Drottninggatan Åke Stenberg Täby Centrum Johan Lurén Trångsund Malin Berglund Eneby Mats Borgsjö Näsby Park Mats Kivilä Tullinge Vacant Hageby Lars Blomqvist Upplands Väsby Urban Wolters Tyresö Lars Holm Nybro Manfred Sass Vallentuna Fredrik Enander Ulvsunda Karin Enestad Nyköping Eva Wahlberg Vaxholm Anneli Sönmez Uppsala Nässjö Mats Andersson Åkersberga Sune Werkell City Jörgen Ericsson Oskarshamn Ingvar Persson Eriksberg Lars Olsson Slite Catarina Bylund CENTRAL SWEDEN Industriomr Baruch Grauman Strängnäs Wilhelm Trahn Branch Branch manager Luthagen Lars Sandberg Sävsjö Jonas Flink Alviks Torg Johan Lindblom Vällingby Thomas Wedholm Söderköping Michael Rimstedt Arboga Ulla-Karin Aufrecht Värmdö Per Anwret Tingsryd Ingela Nilsson Blackeberg Susanne Signell Västerhaninge Jenny Lööw Torsås Stefan Pålsson Brommaplan Peter Lindh Västermalm Lena Wennerberg Tranås Jens Fransson Bålsta Joakim Kihlgren Västerås Vaggeryd Jörgen Bruhn Dalarö Maud Lyckenius City Kent Johansson Vetlanda Olle Hagström Ekerö Jesper Hellström Emausgatan Cecilia Hallqvist Vimmerby Hans Will Enköping Ulla Reuterskiöld Köpingsvägen Lena Nilsson Virserum Maria Bjarnehäll Farsta Rickard Svallfors Stora Gatan Håkan Jansson Visby Fellingsbro Ingrid Persson Årsta Vacant Adelsgatan Madeleine Gottfridsson-Endrell Finnerödja Olle Jonsson Älvsjö Birgitta Billström Öster Stefan Lövkvist Fjugesta Anders Hedvall Örebro Vislanda Johan Isaksson Fleminggatan Jan Larsson Stortorget Kenneth Wallin Värnamo Lars-Eric Ericsson Fridhemsplan Niklas Hedblom Ekersgatan Christer Larsson Västervik Michael Skännestig Frövi Mikael Jansson Våghustorget Bengt Gunnarson Växjö Mikael Jismark Globen Hans Widmark Ösmo Renée Andersson Ålem Susann Svenzén Gnesta Mårten Larsson Österbybruk Christer Lindgren Åseda Peter Holmberg Götgatsbacken Anders Lindegren Östhammar Christer Lindgren Åtvidaberg Erik Torbrand Hallsberg Yvonne Bülow Hallstavik Roland Ericson EASTERN SWEDEN WESTERN SWEDEN Hallunda Per Molin Branch Branch manager Branch Branch manager Hammarby Marion Ulander Alvesta Thorwald Burman Alingsås Peter Romedahl Haninge Mikael Wenngren Anderstorp Pernilla Åkestrand Arvika Göran Eriksson Hornsberg Anki Lenksjö Bankeryd Thomas Landén Bollebygd Eva-Lotta Duneskog Hornsgatan Mats Eriksson Borensberg Birgitta Östergren Borås Huddinge Kjell Andersson Borgholm Conny Johansson Hulta Thomas Strömberg Hägersten Susanne Norman-Taube Eksjö Karin Jönsson Norrby Thomas Bogsjö Hässelby Marie Lindström Emmaboda Sven-Erik Karlsson Viared Thomas Bogsjö Högalid Pernilla Eldestrand Eskilstuna Stora Torget Janne Pehrsson Högdalen Jörgen Nilsson Fristadstorget Jonas Elfridsson Falkenberg Michael Sterne Jakobsberg Marie Cedergren Östermalm Bo Vallin Falköping Magnus Kvarnmarker Järna Laila Jansson Finspång Dag Kinnerud Filipstad Peter Bergkvist Knivsta Agneta Nygården Flen Lotta Peppas Fristad Gunilla Lööf Kolbäck Eva Klang Fårösund Leif Närström Färjelanda Gunilla Andersson Kumla Thomas Ljungberg Färjestaden Jan Pilemyr Gällstad Kenneth Thörnqvist Kungsholmstorg Göran Almberg Gislaved Jörgen Asp Göteborg Kungsängen Maria Wedholm Hemse Magnus Gardell Almedal Anders Gross Kungsör Niklas Johansson Hultsfred Monica Carlenskog Avenyn Olle Eksell Kärrtorp Anders Hagman Huskvarna Hans Färemo Backa-Ringön Christina Hjälte Köping Peter Fällman Högsby Anne-Helene Markström City Jan Wergeland Lindesberg Larry Andersson Jönköping Claes Ericson Eriksberg Anders Hjälte Marieberg Karin Lundqvist Kalmar Frölunda Tommy Häggström Marievik Tomas Ejnar Kvarnholmen Mikael Fredriksson Första Långgatan Knut Pokorny Nacka Susanne Danielsson Kalmar Berga Markus Hagström Gårda Mats Berntsson Norrtälje Bo Schotte Katrineholm Göran Bjerke Hisings Kärra Anna Ekstrand Nynäshamn Stefan Zettergren Klintehamn Lars Cramér Hjällbo Christian Pennert Pålsboda Helene Wiberg Lammhult/Rörvik Per-Olof Lenegård Högsbo Annette Bertilsson Renstiernas G Katarina Alf Landsbro Kent Lind Kortedala Jan Gottberg Rimbo Tina Nylén Landala Michael Åhman

126 HANDELSBANKEN ■ ANNUAL REPORT 2006 BRANCHES AND BRANCH MANAGERS

Lilla Bommen Katarina Helgen Karlskrona Jan Erik Dahl Kolding Jesper Andersen Majorna Marie Jakobsson Kivik Andreas Jeppsson Copenhagen: Marieholm Britt-Marie Linse Klippan Lena Johansson City Lars Moesgaard Odinsgatan Christian Sjöberg Knislinge Ingela Ström Frederiksberg Henrik Bengtsson Sisjön Assar Larsson Kristianstad Mikael Rubin Østerbro Carsten Heger Torslanda Veronica Wallin Kävlinge Göran Camitz Køge Brian Arnvig Volvo Eva Hasselström Laholm Lars Andersson Lemvig Lars Balle Olsen Örgryte Ingemar Rask Landskrona Annila Hansson Odense Tom Skjellerup Övre Husargatan Jan Sahlin Ljungby Thomas Eldh Park Allé Henrik Eg Hagfors Pär Skogfeldt Ljungbyhed Eva Aurell Roskilde Boje Nielsen Herrljunga Acting – Gunnar Jönsson Lomma Mona Persson Sdr. Felding Kristian Hansen Hjo Lena Karlsson Lund Sdr. Omme Bent Egdal Karlskoga Charlotte Schreck-Pettersson City Nils-Erik Persson Silkeborg Carsten Hjortflod Karlstad Ideon John Persson Struer Poul Bakkegaard Stora Torget Peter Andersson Markaryd Staffan Werner Sunds Anders Frederiksen Våxnäs Fredrik Ekenberg Malmö Vejle Peter Sørensen Kristinehamn Mats-Ove Mattsson Amiralsgatan Per-Ove Kamlund Viborg Arnth Stougaard Kungsbacka Mats Rollof City Göran Johnsson Videbæk John Nyby Kungälv Anette Pettersson Dalaplan Jens Isaksson Vildbjerg Henrik Kristiansen Landvetter Claes Ahlström Fosie Dag Sundewall Aalborg Ole Dahl Nielsen Lerum Camilla Sjöberg Fridhem Gunnar Holmqvist Århus Jan Arup Lidköping Anders Stigson Köpenh.vägen Maria Zanichelli Lilla Edet Jan-Olof Strand Limhamn Bengt Rosendahl FINLAND Mariestad Kerstin Waller Lundavägen Bengt Nyquist Branch Branch manager Mellerud Cecilia Blom Triangeln Ulf Dahlqvist Espoo Mölndal Martin Henriksson Värnhem Roger Håkansson Leppävaara Tuija Nuutinen Mölnlycke Ann Sundvisson Olofström Katarina Ring Tapiola Pekka Ursin Nödinge Lena Gillholm Osby Jonas Skyman Helsinki Partille Liselott Mattson Ronneby Carl-Gustaf Larsson Pasila Sirpa Pensas Skara Martin Drebin Simrishamn Lennart Jirback Dianapuisto Mirjam Sarkki Skövde Niklas Standar Sjöbo Thomas Johansson Esplanadi Tiina Roschier Sollebrunn Hans-Göran Nilsson Skanör Christer Nilsson Hakaniemi Leif Grönlund Stenungsund Mats Ingemarsson Skurup Håkan Lennartsson Kamppi Nina Arkilahti Sunne Pär Olsson Staffanstorp Olle Svensson Munkkivuori Reima Jokela Surte Christian Nielsen Svedala Gert Nilsson Itäkeskus Hannu Oksanen Svenljunga Bengt Larsson Sölvesborg Helen Olofsson Hämeenlinna Jutta Ruuskanen-Tähtinen Säffle Elisabeth Korp Sösdala Karin Eriksson Hyvinkää Mervi Karsikas Tibro Marianne Bergman Tomelilla Bengt-Göran Grenander Imatra Pekka Lankinen Tidaholm Lena Lundh Trelleborg Marie Brunstam Joensuu Juha Saastamoinen Torsby Morgan Smegärd Tyringe Yvonne Liljeqvist Jyväskylä Tauno Virkki Tranemo Lars Nydén Veberöd Hans-Åke Mårtensson Kerava Kimmo Heiskanen Trollhättan Thomas Eriksson Vellinge Tomas Wall Kokkola Sören Björkgård Uddevalla Stefan Widlund Vittsjö Catharina Munkberg Kouvola Jorma Qvick Ulricehamn Kenneth Olofsson Vollsjö Bonnie Cederquist Kuopio Seppo Tujunen Vara Joakim Carlsson Ystad Jan-Olof Petersson Lahti Tarmo Kallio Varberg Jan Bogsjö Åhus Thomas Hansson Lappeenranta Acting - Martti Mäkelä Vårgårda Anna-Karin Heljegård Älmhult Fredrik Roghner Mikkeli Jouko Kervinen Vänersborg Mats Johansson Ängelholm Kenneth Persson Oulu Jari Murtoperä Åmål Bo Larson Pietersaari Anders Norrena Årjäng Peter Johansson DENMARK Pori Esa Yli-Sipilä Älvängen Peter Kornesjö Branch Branch manager Raisio Juha Vasanen Amager Claes Peulecke Rauma Erkki Nissilä SOUTHERN Aulum Helle Bjerre Rovaniemi Pekka Pistokoski SWEDEN Ballerup Fin Mortensen Salo Juho Huovinen Branch Branch manager Brande Benny Larsen Seinäjoki Esa Alkio Arlöv Jonas Sjöberg Esbjerg Morten Andersen Tallinn, Estonia Harri Tuohimaa Broby Peter Andersson Fredericia Jens Christian Jørgensen Tampere Båstad Joakim Holm Give Niels Peder Nielsen Kauppakatu Tarja Suvisalmi Eslöv Dag Olsson Hammerum Børge Thomsen Kyttälä Ilkka Pehkonen Halmstad Tony Bringevall Herning Tornio Pirkko Lääkkölä Helsingborg City Niels Viggo Malle Turku Markku Ropponen Norr Per Franklin Fredhøj Bruno Hansen Tammisaari Marika Lindholm Stortorget Göran Pelvén Holstebro Claus Gade Vaasa Yngve Svens Söderport Sven Rosenkvist Horsens Jann Due Vantaa Hässleholm Ola Tyrberg Ikast Morten Smith Tikkurila Jaakko Hara Höganäs Magnus Landbring Karup Gitte Nielsen Myyrmäki Stephan Björkell Höllviken Göran Fredriksson Kgs. Lyngby Knud Jacobsen Höör Annika Johansson Kibæk Preben Staal Karlshamn Per Bjerstedt

HANDELSBANKEN ■ ANNUAL REPORT 2006 127 BRANCHES AND BRANCH MANAGERS

NORWAY GREAT BRITAIN Branch Branch manager Branch Branch manager Arendal Per Olav Nærestad Birmingham Patrick Hanlon Asker Turid Williksen Bournemouth Tracey Davidson Bergen Bristol Tim Wilkinson Fana Arvid Føleide Cambridge Richard Waters Flesland Gunnar Røsland Cardiff Rick Spencer Fyllingsdalen Mette Skauge Chelmsford Justin Grainger Minde Erik Ramsdal Guildford Neil Truman Sentrum Arild Andersen Hull Pete Sumners Strandgaten Åse Fluge Nordgreen Leeds Andy Copsey Vest Christian Ravnå Leicester Sean Martin Åsane Tore Svein Nese Liverpool Sean Mcgurren Drammen Kirsti Jensås London Simon Silvester Fredrikstad Tove Anita R Torp Maidstone Jonathan Watson Halden Roar Elsness Manchester Simon Raine Hamar Hans Skjelbreid Newcastle Kevin Pattison Haugesund Knut Børge Lunde Norwich John Harper Kolbotn Geir Anders Sundnes Nottingham Colin Kirk Kristiansand Arild Andresen Oxford David Woodhead Larvik Hans Jørgen Ormar Plymouth Paul Wilmot Lillestrøm Line Thams Blikstad Reading Roy Arbon Lysaker Jørgen Misvær Sheffield Mike Harrison Molde Kolbjørn Heggdal Slough John Parker Moss Jan Fredrik Fogth Southampton Jeremy Tollworthy Oslo Stoke-on-trent Michael Smith Fyrstikktorget Glenn Steinbø Swindon Trevor Harrison Kirkegaten Harald Søreide Wolverhampton Mike Priddy Majorstuen Ronny Myreng Nydalen Torstein Haugland UNITS OUTSIDE THE NORDIC COUNTRIES Olav Vs Gate Knut Berge AND GREAT BRITAIN Skøyen Sven Ove Oksvik Unit Head of unit Sandefjord Ingelise Schliekelmann Amsterdam Brian Herring Sandnes Anette Wathne Luxembourg Göran Högvall Sandvika Cecilie Tvedt Hong Kong Göran Stille Sarpsborg Espen Lerkerød Singapore Jan Djerf Ski Hanne Fjellheim Shanghai Johan Andrén Skien Jan Egil Hafredal Germany Holger Namér Sotra Lisbeth Turøy Frankfurt Mattias Metzger Stavanger Hamburg Vacant Sentrum Hroar Gudbrandsen New York Mikael Green Straen Terje Lind Poland Mikael Sörensen Tromsø Bjørn Andreassen Gdansk Beata Suchocka Trondheim Poznan Jaroslaw Ladziak Heimdal Bente E Dahl Warsaw Marzena Malek Søndregt Ola Grøtte Paris Peter Einarsson Tønsberg Jan Erik Skjolden Russia Raimo Valo Ålesund Jan Petter Larsen Moscow Svante Anderback St. Petersburg Markku Vasari Vienna Carl-Christian Prinz Zu Solms-Lich Mumbai John Ödmann

128 HANDELSBANKEN ■ ANNUAL REPORT 2006 Defi nitions and explanations

General defi nitions Explanation of insurance terms

ADJUSTED SHAREHOLDERS’ EQUITY PER SHARE. Shareholders’ equity AVAILABLE SOLVENCY MARGIN. Mainly comprising equity and any at the end of the period is adjusted by surplus/defi cit values on fi nancial assets subordinated loans. classifi ed to be held to maturity and reduced by the equity effect of cash fl ow BONUS RATE. The interest rate, before fees and taxes, at which the hedges and the minority share of shareholders’ equity. Adjusted equity is then insurance capital (the insured party’s savings) earn interest. This is the most divided by the number of outstanding ordinary shares at the end of the period. important component when calculating the allocated bonus. This normally only BAD DEBTS. Loans where payments will probably not be met according to applies at companies run on mutual principles. See Yield rate. the conditions of the contract. A loan is not a bad debt if there is collateral COLLECTIVE CONSOLIDATION RATIO. The market value of the insurance which covers the principal amount, interest and penalties for late payments by company’s assets in relation to the insurance commitments. a satisfactory margin. EXPENSE RATIO. Operating expenses in relation to premiums written. BAD DEBT RESERVE RATIO. Provision for probable loan losses as a percentage of gross bad debts. GUARANTEED RATE. The interest rate, before fees and taxes, which is used to calculate the guaranteed funds. CAPITAL BASE. The capital base is the sum of tier 1 (primary) and tier 2 (supplementary) capital. Tier 1 capital comprises shareholders’ equity less PREMIUMS WRITTEN. Mainly the total of premiums paid in during the year. goodwill plus 72% of untaxed reserves in the parent company. Tier 2 capital REQUIRED SOLVENCY MARGIN. Consists mainly of the sum of includes fi xed-term subordinated loans with some reduction when the residual 4% of the life insurance provisions, 1% of the unit-linked commitments, 1% of maturity is less than fi ve years. These loans must not exceed 50% of tier 1 conditional bonuses and 0.1–0.3% of mortality risks. capital. With permission from the government or, following authorisation by the government, from the Swedish Financial Supervisory Authority, other SOLVENCY RATIO. Available solvency margin in relation to required solvency instruments may also be included in tier 1 or tier 2 capital. However, tier 2 margin. The ratio, which should be at least 1, shows the company’s ability to capital must never exceed tier 1 capital. The total of tier 1 and tier 2 capital meet its commitments. is reduced by the book value of holdings in insurance operations and certain TOTAL RETURN. Mainly the sum of changes in value and return on the fi nancial operations. To cover the capital requirement on the market risks, investment assets. subordinated loans with an original maturity of at least two years can be included in the capital base. YIELD RATE. The interest rate, before fees and taxes, at which the insurance capital (the insured party’s savings) earn interest. This is the most important C/I RATIO. Total expenses in relation to total income. component when calculating the conditional bonus. This normally only applies CAPITAL RATIO. Capital ratio or capital adequacy is the capital base in in profi t-distributing life insurance companies. See Bonus rate. relation to risk-weighted volume. The capital ratio must be at least 8%. DIVIDEND YIELD. Dividend per share divided by the share price at year-end. EARNINGS PER SHARE. The profi t/loss for the year divided by the average number of outstanding shares. Where applicable, the dilution effect is taken into account. LOAN LOSS RATIO. Loan losses and changes in value of repossessed property as a percentage of the opening balance for loans to the public, loans to credit institutions (excluding banks), repossessed property and credit guarantees. NON-PERFORMING LOANS. Loans where interest, repayments or overdrafts have been due for payment for more than 60 days. P/E RATIO. The share price at year-end divided by earnings per share. PROPORTION OF BAD DEBTS. Bad debts (net) in relation to total loans to the public and credit institutions (excluding banks). RETURN ON EQUITY. Profi t for the year in relation to average shareholders’ equity excluding the equity impact of fi nancial assets classifi ed as available for sale, and cash fl ow hedges. An adjustment is also made for a weighted average of rights issues, dividends and repurchase of own shares. RETURN ON TOTAL ASSETS. Operating profi t in relation to average total assets. RISK-WEIGHTED VOLUME. The risk-weighted volume is determined by the assets and off-balance-sheet items being placed in varying risk classes, in accordance with the Act on Capital Adequacy and Large Exposures of Credit Institutions and Securities Companies. The volumes are weighted taking into account the assessed risk such that they are included in the risk-weighted volume by 0%, 20%, 50% or 100%. Narva. Printing: EkotryckRedners Photos: Peter Hoelstad Photos of board: Bengt Wanselius

HANDELSBANKEN ■ ANNUAL REPORT 2006 129 ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO L LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA- PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPANKNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMNKROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALA PLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN ENEBY CENTRUM HAGEBY CENTRUM NORRTÄLJE NORSJÖ NYBRO NYKÖPING NYNÄSHAMN NÄSBY PARK NÄSSJÖ NÄSÅKER NÖDINGE OCKELBO OFFERDAL OLOFSTRÖM ORSA OSBY OSKARSHAMN PAJALA PARTILLE PITEÅ PÅLSBODA RAMSELE RIMBO ROBERTSFORS RONNEBY ROTEBRO RÅNEÅ RÄTTVIK RÖRVIK SALA SALEM SALTSJÖ-BOO SANDVIKEN SIGTUNA SIMRISHAMN SJÖBO SKANÖR SKARA SKELLEFTEÅ SKINNSKATTEBERG SKULTUNA SKURUP SKUTSKÄR SKÄRHOLMEN SKÄRPLINGE SKÖNDAL SKÖNSBERG SKÖVDE SLITE SOLLEBRUNN SOLLEFTEÅ SOLLENTUNA CENTRUM SOLNA SORSELE SPÅNGA STAFFANSTORP STENUNGSUND STOCKHOLM: BIRGER JARLSGATAN FLEMINGGATAN FRIDHEMSPLAN FRIHAMNEN GAMLA STAN GUSTAV ADOLFS TORG GÖTGATSBACKEN HORNSBERG HORNSGATAN HUMLEGÅRDEN HÖGALID KARLAPLAN KARLAVÄGEN KUNGSHOLMSTORG KUNGSTRÄDGÅRDEN MARIEBERG NORRMALMSTORG NORRTULL ODENGATAN ODENPLAN RENSTIERNAS GATA S:T ERIKSPLAN SERGEL SKANSTULL STRANDVÄGEN STUREPLAN SVEAVÄGEN TESSINPARKEN UPPLANDSGATAN VANADISPLAN VÄRTAVÄGEN VÄSTERMALM ÖSTERMALMSTORG ÖSTRA STATION STORA TUNA STORUMAN STORVIK STRÄNGNÄS STRÖMSUND STUVSTA SUNDBYBERG SUNDSVALL SUNNE SURTE SVEDALA SVEG SVENLJUNGA SVENSTAVIK SÄFFLE SÄTER SÄVSJÖ SÖDERHAMN SÖDERKÖPING SÖDERTÄLJE SÖLVESBORG SÖRBERGE SÖSDALA TIBRO TIDAHOLM TIERP TIMRÅ TINGSRYD TOMELILLA TORSBY TORSÅKER TORSÅS TRANEMO TRANÅS TREHÖRNINGSJÖ TRELLEBORG TROLLHÄTTAN TROSA TRÅNGSUND TULLINGE TYRESÖ TYRINGE TÄBY CENTRUM UDDEVALLA ULLÅNGER ULRICEHAMN ULVSUNDA UMEÅ: CITY TEG VÄSTRA UPPLANDS VÄSBY UPPSALA: CITY ERIKSBERG INDUSTRIOMRÅDE LUTHAGEN VADSTENA VAGGERYD VALLENTUNA VANSBRO VARA VARBERG VASAGATAN VAXHOLM VEBERÖD VELLINGE VETLANDA VILHELMINA VIMMERBY VINDELN VIRSERUM VISBY: ADELSGATAN ÖSTER VISLANDA VITTSJÖ VOLLSJÖ VRETEN VÅRGÅRDA VÄLLINGBY VÄNERSBORG VÄNNÄS VÄRMDÖ VÄRNAMO VÄSTANFORS VÄSTERHANINGE VÄSTERVIK VÄSTERÅS: CITY EMAUSGATAN KÖPINGSVÄGEN STORA GATAN VÄXJÖ YSTAD ÅHUS ÅKERSBERGA ÅLEM ÅMÅL ÅNGE ÅNÄSET ÅRE ÅRJÄNG ÅRSTA ÅSEDA ÅSELE ÅTVIDABERG ÄLMHULT ÄLVSBYN ÄLVSJÖ ÄLVÄNGEN ÄNGELHOLM ÖREBRO: EKERSGATAN STORTORGET VÅGHUSTORGET ÖRNSKÖLDSVIK ÖSMO ÖSTERBYBRUK ÖSTERSUND ÖSTERVÅLA ÖSTHAMMAR ÖVERKALIX ÖVERTORNEÅ ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKA AVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO LLE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMAPLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖPING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO L LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA- PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN ENEBY CENTRUM HAGEBY CENTRUM NORRTÄLJE NORSJÖ NYBRO NYKÖPING NYNÄSHAMN NÄSBY PARK NÄSSJÖ NÄSÅKER NÖDINGE OCKELBO OFFERDAL OLOFSTRÖM ORSA OSBY OSKARSHAMN PAJALA PARTILLE PITEÅ PÅLSBODA RAMSELE RIMBO ROBERTSFORS RONNEBY ROTEBRO RÅNEÅ RÄTTVIK RÖRVIK SALA SALEM SALTSJÖ-BOO SANDVIKEN SIGTUNA SIMRISHAMN SJÖBO SKANÖR SKARA SKELLEFTEÅ SKINNSKATTEBERG SKULTUNA SKURUP SKUTSKÄR SKÄRHOLMEN SKÄRPLINGE SKÖNDAL SKÖNSBERG SKÖVDE SLITE SOLLEBRUNN SOLLEFTEÅ SOLLENTUNA CENTRUM SOLNA SORSELE SPÅNGA STAFFANSTORP STENUNGSUND STOCKHOLM: BIRGER JARLSGATAN FLEMINGGATAN FRIDHEMSPLAN FRIHAMNEN GAMLA STAN GUSTAV ADOLFS TORG GÖTGATSBACKEN HORNSBERG HORNSGATAN HUMLEGÅRDEN HÖGALID KARLAPLAN KARLAVÄGEN KUNGSHOLMSTORG KUNGSTRÄDGÅRDEN MARIEBERG NORRMALMSTORG NORRTULL ODENGATAN ODENPLAN RENSTIERNAS GATA S:T ERIKSPLAN SERGEL SKANSTULL STRANDVÄGEN STUREPLAN SVEAVÄGEN TESSINPARKEN UPPLANDSGATAN VANADISPLAN VÄRTAVÄGEN VÄSTERMALM ÖSTERMALMSTORG ÖSTRA STATION STORA TUNA STORUMAN STORVIK STRÄNGNÄS STRÖMSUND STUVSTA SUNDBYBERG SUNDSVALL SUNNE SURTE SVEDALA SVEG SVENLJUNGA SVENSTAVIK SÄFFLE SÄTER SÄVSJÖ SÖDERHAMN SÖDERKÖPING SÖDERTÄLJE SÖLVESBORG SÖRBERGE SÖSDALA TIBRO TIDAHOLM TIERP TIMRÅ TINGSRYD TOMELILLA TORSBY TORSÅKER TORSÅS TRANEMO TRANÅS TREHÖRNINGSJÖ TRELLEBORG TROLLHÄTTAN TROSA TRÅNGSUND TULLINGE TYRESÖ TYRINGE TÄBY CENTRUM UDDEVALLA ULLÅNGER ULRICEHAMN ULVSUNDA UMEÅ: CITY TEG VÄSTRA UPPLANDS VÄSBY UPPSALA: CITY ERIKSBERG INDUSTRIOMRÅDE LUTHAGEN VADSTENA VAGGERYD VALLENTUNA VANSBRO VARA VARBERG VASAGATAN VAXHOLM VEBERÖD VELLINGE VETLANDA VILHELMINA VIMMERBY VINDELN VIRSERUM VISBY: ADELSGATAN ÖSTER VISLANDA VITTSJÖ VOLLSJÖ VRETEN VÅRGÅRDA VÄLLINGBY VÄNERSBORG VÄNNÄS VÄRMDÖ VÄRNAMO VÄSTANFORS VÄSTERHANINGE VÄSTERVIK VÄSTERÅS: CITY EMAUSGATAN KÖPINGSVÄGEN STORA GATAN VÄXJÖ YSTAD ÅHUS ÅKERSBERGA ÅLEM ÅMÅL ÅNGE ÅNÄSET ÅRE ÅRJÄNG ÅRSTA ÅSEDA ÅSELE ÅTVIDABERG ÄLMHULT ÄLVSBYN ÄLVSJÖ ÄLVÄNGEN ÄNGELHOLM ÖREBRO: EKERSGATAN STORTORGET VÅGHUSTORGET ÖRNSKÖLDSVIK ÖSMO ÖSTERBYBRUK ÖSTERSUND ÖSTERVÅLA ÖSTHAMMAR ÖVERKALIX ÖVERTORNEÅ ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKA AVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO LLE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMAPLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTA CENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTAD GISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖPING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLNDAL MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA ALFTA ALINGSÅS ALVESTA ALVIKS TORG ANDERSTORP ARBOGA ARBRÅ ARLANDA SKY CITY ARLÖV ARVIDSJAUR ARVIKAAVESTA BACKE BANKERYD BERGBY BERGSJÖ BJURHOLM BJURSÅS BJÄSTA BJÖRBO BJÖRNA BLACKEBERG BODEN BO L LE BYGD BOLLNÄS BORENSBERG BORGHOLM BORLÄNGE BORÅS: HULTA NORRBY STORA TORGET VIARED BREDBYN BROBY BROMMA- PLAN BRÄCKE BUREÅ BURTRÄSK BYSKE BÅLSTA BÅSTA DALARÖ DELSBO DJURSHOLM DOMSJÖ DOROTEA ED SBYN EKERÖ EKSJÖ EMMABODA ENKÖPING ESKILSTUNA: FRISTADSTORGET ÖSTERMALM ESLÖV FAGERSTA FALKENBERG FALKÖPING FALUN FARSTACENTRUM FELLINGSBRO FILIPSTAD FINNERÖDJA FINSPÅNG FJUGESTA FLEN FRISTAD FRÄNSTA FRÖSUNDA FRÖVI FURUDAL FÅRÖSUND FÄRGELANDA FÄRJESTADEN FÖLLINGE GAGNEF GAMMELSTADGISLAVED GLOBEN GNARP GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GNESTA GRANGÄRDE GRÄNGESBERG GÄLLIVARE GÄLLSTAD GÄLLÖ GÄVLE CITY GÖTEBORG: ALMEDAL AVENYN BACKA RINGÖN CITY ERIKSBERG FRÖLUNDA FÖRSTA LÅNGGATAN GÅRDA HISINGS

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KÄRRA HJÄLLBO HÖGSBO KORTEDALA LANDALA LILLA BOMMEN MAJORNA MARIEHOLM ODINSGATAN SISJÖN TORSLANDA VOLVO PVB ÖRGRYTE ÖVRE HUSARGATAN HAGFORS HALLSBERG HALLSTAVIK HALLUNDA TORG HALMSTAD HAMMARBY HAMMARSTRAND HAMMERDAL HANINGE CENTRUM HAPARANDA HEBY HEDE HEDEMORA HEDESUNDA HELSINGBORG: NORR STORTORGET SÖDERPORT HEMSE HERRLJUNGA HJO HOLMSUND HOTING HUDDINGE CENTRUM HUDIKSVALL HULTSFRED HUSKVARNA HUSUM HÄGERSTEN HÄRNÖSAND HÄSSELBY GÅRD HÄSSLEHOLM HÖGANÄS HÖGDALEN HÖGSBY HÖLLVIKEN HÖÖR INSJÖN JAKOBSBERG JOKKMOKK JUNSELE JÄRNA JÄRPEN JÄRVSÖ JÖNKÖP ING KALIX KALMAR: BERGA KVARNHOLMEN KARLSHAMN KARLSKOGA KARLSKRONA KARLSTAD: VÅXNÄS KATRINEHOLM KILAFORS KIRUNA KISTA KIVIK KLINTEHAMN KLIPPAN KNISLINGE KNIVSTA KOLBÄCK KOPPARBERG KRAMFORS KRISTIANSTAD KRISTINEHAMN KROKOM KUMLA KUNGSBACKA KUNGSÄNGEN KUNGSÖR KUNGÄLV KVISSLEBY KÄRRTORP KÄVLINGE KÖPING LAHOLM LAMMHULT LANDSBRO LANDSKRONA LANDVETTER LEKSAND LERUM LIDEN LIDINGÖ: CENTRUM LARSBERG NÄSET LIDKÖPING LILLA EDET LIMA LINDESBERG LINKÖPING: CITY TORNBY LIT LJUNGBY LJUNGBYHED LJUSDAL LJUSNE LOMMA LUDVIKA LUGNVIK LULEÅ: STORGATAN ÖRNÄSETLUND: CITY IDEON LYCKSELE LÖVÅNGER MALMÖ: AMIRALSGATAN CITY DALAPLAN FOSIE FRIDHEM KÖPENHAMNSVÄGEN LIMHAMN LUNDAVÄGEN TRIANGELN VÄRNHEM MALUNG MALÅ MARIESTAD MARIEVIK MARKARYD MATFORS MELLERUD MJÖLBY MOCKFJÄRD MORA MOTALA MÄRSTA MÖLND MÖLNLYCKE MÖNSTERÅS MÖRBY CENTRUM MÖRBYLÅNGA MÖRLUNDA MÖRSIL NACKA: FORUM NACKA NORBERG NORDINGRÅ NORDMALING NORRKÖPING: DROTTNINGGATAN