ANNUAL REPORT 1999 Svenska Handelsbanken THE ANNUAL GENERAL MEETING OF SVENSKA HANDELSBANKEN will be held at the Grand Hôtel’s Winter Garden, Royal entrance, Stallgatan 4, Stockholm, at 10.00 a.m. on Friday, 14 April 2000. Notice of attendance at Annual General Meeting Shareholders wishing to attend the Meeting must • be recorded in the register of shareholders kept by VPC AB (Swedish Central Securities Depository and Clearing Organisation), on or before Tuesday, 4 April 2000, and • give notice of attendance to the Chairman’s office at the Head Office of the Bank, Kungsträdgårdsgatan 2, 106 70 Stockholm, telephone +46 8 701 19 84, or via the Internet www.handelsbanken.se/bolagsstamma, by 3 p.m. on Monday, 10 April 2000. Any shareholders whose shares are nominee-registered must also, in order to be entitled to take part in the Meeting, request a temporary entry in the register of shareholders kept by VPC. Share- holders must notify the nominee about this well before 4 April 2000, when this entry must have been effected. Dividend The Board of Directors recommends that the record day for the dividend be Wednesday, 19 April 2000. If the Annual General Meeting votes in accordance with this recommendation, VPC expects to be able to send the dividend to shareholders on Wednesday, 26 April 2000. Publication dates for interim reports January – March 13 April 2000 January – June 22 August 2000 January – September 24 October 2000 Svenska Handelsbanken AB (publ) Registered no. 502007-7862 www.handelsbanken.se 1999 ANNUAL REPORT 1999 HANDELSBANKEN HIGHLIGHTS............................................................................. 2 THE GROUP CHIEF EXECUTIVE´S COMMENTS...................................... 5 OBJECTIVES, POLICY AND ORGANISATION............................................. 10 Objectives and principles................................................................................................... 10 Policy.................................................................................................................................................... 10 Organisation................................................................................................................................... 10 Our staff.............................................................................................................................................. 12 Branches ............................................................................................................................................ 14 Regional Head Offices in the Nordic countries.............................................. 16 Units outside the Nordic countries ........................................................................... 18 Central Head Office and Subsidiaries..................................................................... 20 Board of Directors..................................................................................................................... 22 Senior Management................................................................................................................. 24 Auditors.............................................................................................................................................. 24 REVIEW OF BUSINESS AREAS................................................................................. 25 General ................................................................................................................................................ 25 Branch office operations..................................................................................................... 26 Handelsbanken Markets....................................................................................................... 29 Handelsbanken Asset Management........................................................................... 33 Handelsbanken Finans.......................................................................................................... 35 Handelsbanken Liv ................................................................................................................... 37 Stadshypotek Bank ................................................................................................................... 40 Handelsbanken Central Treasury................................................................................. 41 The Bank and the environment...................................................................................... 42 IT development............................................................................................................................. 43 DIRECTORS’ REPORT ........................................................................................................ 44 Objectives ......................................................................................................................................... 44 A well-integrated universal bank................................................................................. 44 Total assets ..................................................................................................................................... 44 Capital ratio.................................................................................................................................... 44 Rating ................................................................................................................................................... 45 Result and profitability......................................................................................................... 45 Buy-back of own shares ...................................................................................................... 46 Loan losses and credit risks ........................................................................................... 47 Financial risks.............................................................................................................................. 47 Operational risks........................................................................................................................ 53 The Board’s activities during the year.................................................................... 53 Competent staff............................................................................................................................ 53 The Oktogonen foundation................................................................................................ 53 Options programme................................................................................................................. 53 PROFIT AND LOSS ACCOUNTS AND BALANCE SHEETS ........... 54 Accounting principles............................................................................................................ 56 Notes ..................................................................................................................................................... 58 RECOMMENDATION FOR DISTRIBUTION OF PROFITS ................ 78 AUDIT REPORT.......................................................................................................................... 79 HANDELSBANKEN’S SHARES................................................................................... 80 Share price performance and dividend.................................................................. 80 Market capitalisation .............................................................................................................. 80 The shares........................................................................................................................................ 80 The shareholders........................................................................................................................ 80 PROFIT AND LOSS ACCOUNTS AND BALANCE SHEETS 1995–1999................................................................ 82 ADDRESSES ................................................................................................................................. 84 Ulf Tingström HANDELSBANKEN HIGHLIGHTS Handelsbanken highlights Performance for the Handelsbanken Group SEK m 1999 1998 Change % Net interest income 11 508 11 430 1 Commission, net 3 978 3 408 17 Net result on financial operations 969 1 242 – 22 Other income 601 757 – 21 Total income 17 056 16 837 1 Staff costs 4 888 4 579 7 Other expenses 3 780 4 227 – 11 Total expenses 8 668 8 806 – 2 Profit before loan losses 8 388 8 031 4 Loan losses – 219 319 Operating profit 8 607 7 712 12 Minority interests – 22 – 22 0 Appropriations 603 505 19 Taxes – 2 525 – 2 168 16 Profit for the year 6 663 6 027 11 Total assets 922 799 926 450 0 Number of employees 8 520 8 546 Number of branches in Sweden 465 480 Number of branches in other Nordic countries 43 33 Kjell Brattström DEFINITIONS ADJUSTED SHAREHOLDERS’ EQUITY PER ORDINARY In order to cover the capital requirement An adjustment has been made to take into SHARE. Shareholders’ equity as reported in on the market risks, subordinated loans with account preference shares, index shares and the balance sheet adjusted for the capital an original maturity of at least two years full conversion of convertible subordinated part of the difference between the book value can be included in the capital base. notes. and market value of interest-bearing securities CAPITAL RATIO. Capital ratio or the total capi- P/E RATIO. The share price at year-end divided