Handelsbanken reports quarterly profit setback
Swedish bank Handelsbanken reported a sharp quarterly profits setback and rise in loan provisions on Wednesday but also revealed a leap in profits from its basic lending activities.
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The overall figures were better than analysts had expected but Handelsbank gave no guidance to its forthcoming results.
The bank, which had increased profits so far this year, reported a 14-percent drop in net profit in the third quarter compared with the equivalent figure last year.
But this was better than expected by analysts' who had forecast a 19-percent drop on average, as polled by Dow Jones Newswires.
Net banking income, the profit margin on the basic business of taking in money and lending it out, shot up by 15 percent to 5.61 billion kronor.
Handelsbanken, the second-biggest Swedish bank by capitalisation, said that in the quarter to the end of September net profit amounted to 2.43 billion kronor (235 million euros, 350 million dollars) from 2.81 billion kronor 12 months earlier.
Provisions, or money set aside for losses on bad loans, rose by 231 million kronor to 866 million kronor, but this fell far short of 1.35 billion kronor foreseen by analysts.
Until now, Handeslbanken was the only big Swedish bank to have increased its results this year, mainly because it had low exposure to deep recession in the Baltic countries of Estonia, Lithuania and Latvia.
Its rivals Nordea and notably SEB and Swedbank suffered big losses on their activities in these countries.
The price of shares in the company fell by 2.1 percent to 188.70 kronor. The overall Swedish market was showing a fall of 0.5 percent in mid-morning trading.
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Last Updated (Wednesday, 28 October 2009 10:59)
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