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Handelsbanken takes the bold step and design different strategy - aims to grow in Holland
Wednesday, 26 October 2011
All Swedish top banks have reported impressive third quarter results amidst growing economic uncertainty. But among the three top Swedish banks, one of them has stood out as an out wards facing bank with bullish attitude. That bank is Handelsbanken.

The big banks on their view for the future - Swedbank, Nordea and SEB have announced that their route to growth will be to cut down their workforce and to build a strong savings package. But Handelsbanken has chosen to take its own route, which some people had previously criticised saying that the bank was taking a leap into the unknown. That was when the bank decided to start business in the UK. Many people thought that UK was too risky but failed to understand that the UK is an open playing field unlike in Sweden where few are chosen to run a bank.

"Our ambition is that we will be more in five years," says CEO Pär Boman. The plans are to expand rather than launching some savings package.

New capital adequacy rules and requirements for enhanced liquidity buffers are putting pressure on banks' returns, and the three of the four major banks have launched savings package.

Swedbank has for example reduced staff numbers from 22,000 to almost 17,000 people in the past year. Among other things, employees in Central and Eastern Europe will suffer. And on Tuesday, the CEO Michael Wolf said, it is likely that even employees at the headquarters in Stockholm could be forced to go.

Handelsbanken's CEO Pär Boman has taken a different path.
"We have no plans to cut staff. Our ambition is that we will have more employees in five years than we have today, "he says to the Swedish business daily Dagens Nyehter.

Other banks talk a lot about the need to save because of new costly regulations and higher capital costs.
"Our ambition is that the costs will provide small problems to than our competition," says Pär Boman. 

In relations to how the bank will be able to maintain yields he said that "We have no explicit goal of a certain return on investment as a percentage. We have said we should have a better return than the average in the sector and we will achieve through lower costs. And significant costs of a bank's funding costs and credit losses, "he says.

"We are also working hard to open new branches, which we believe is an important component to bear the increased costs. In Sweden, We monitor how many Swedes who can walk or bike to the office. In metropolitan areas there are many offices but throughout the country, it may be more," says Pär Boman. 

In 2011, Handelsbanken also continued its expansion of branch network in the UK. The number of employees in the country has this year increased by about 30 percent to 732 employees and number of branches has increased by 18 to 111 pieces.
Business is going well for him. Operating profit for the third quarter rose 11 percent to 165 million due to higher revenues. Net interest income, expressed in local currency increased by 11 percent due to higher business volumes and lending margins.

The next market that Handelsbanken plans to tackle seriously is the Netherlands.
"What we do in Holland today is very similar to what we have done in the UK. I would not to rule out an expansion in Holland in some ways and it would be very nice if it could be so. But we must learn more about the Dutch market before we are ready to take such a decision."

Handelsbanken currently has a dozen offices in Holland, five of which have been opened recently. The bank was in a decent fresh news reports on the Dutch television channel Nederland 2 free advertising when Handelsbanken was presented.

In Holland, bank customers have become greatly disillusioned after major problems in large banks ING and Rabobank after the Lehman crash. The debate on the high bank managers' bonuses has increase interest for customers to seriously seek other options and Handelsbanken could that alternative.
By Scancomark.se Team

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