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UPDATE 2-Handelsbanken remains optimistic about UK operations
October 19, 2016 / 6:46 AM / a year ago

UPDATE 2-Handelsbanken remains optimistic about UK operations

* Swedish bank to press ahead with UK expansion

* New CEO was former head of its British business

* Third quarter profit in line with expectations (Adds CEO quotes, details)

By Johan Ahlander

STOCKHOLM, Oct 19 (Reuters) - Sweden’s Handelsbanken plans to press ahead with its expansion in Britain despite the country’s vote to leave the European Union, newly appointed Chief Executive Anders Bouvin said on Wednesday.

Bouvin was head of the Swedish bank’s British operations until he was promoted in August when the company fired Frank Vang-Jensen after less than 18 months in the job.

He has identified the Netherlands and Britain as areas with growth potential, despite Britain’s Brexit vote in June.

“We continue to be very optimistic about our prospects in Britain. Our view on the UK is not affected at all by Brexit, we take a long term view,” Bouvin told Reuters.

Handelsbanken is one of a number of competitors seeking to weaken the hold of Britain’s biggest banks on lending to households and businesses. It now has 205 branches in the country after a rapid recent expansion but its market share remains small.

There are concerns in Britain that global investment banks could move jobs to continental Europe if they lose access to the single market following the departure from the EU.

Handelsbanken has a decentralised business model based on a strong local presence. Local managers are given freedom to decide on lending, which the bank says leads to lower costs and loan loses and higher customer satisfaction.

“I would have been more worried if one of our competitors copied our model than I am about Brexit,” Bouvin said.

While Sweden is still Handelsbanken’s most important market the British operation now makes up around 16 percent of interest income.

Handelsbanken shares fell 2.2 percent by 1010 GMT, underperforming a pan-European banking index, which was down by 0.2 percent. Shares in the bank had risen around 17 percent since the Brexit vote.

Group operating profit in the third quarter rose to 5.69 billion crowns ($644 million) from 4.73 billion a year earlier, in line with the mean forecast in a Reuters poll of analysts.

The result was helped by a 764 million crown windfall related to the sale of shares in Industrivarden, the bank’s main owner. ($1 = 8.8350 Swedish crowns) (Reporting by Johan Ahlander; editing by Keith Weir)

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