Stockholm--Sweden's second-largest bank, Handelsbanken, announced record annual profits Wednesday driven by strong growth in private lending and continued overseas expansion.
The Swedish group's net profit grew by 6.0 percent to 15.8 billion kronor ($1.92 billion, 1.6 billion euros), the biggest in the bank's history, helped by higher revenues from Britain and The Netherlands.
The bank -- which makes most of its profits in Sweden but has been bulking up its business abroad -- reported strong growth in private banking customers as well as increased lending in Sweden and overseas.
"Operating profit in Britain rose by 41 percent to 1.6 billion kronor, chiefly due to higher net interest income and improved net fee and commission income," the group reported.
Income from loans grew by one-third in Britain and by almost a quarter (23 percent) in The Netherlands but fell 3.0 percent in Sweden.
Overall household lending grew by 8.0 percent to 860 billion kronor compared with corporate loans, which increased by 1.0 percent to 886 billion kronor.
Handelsbanken is one of the best capitalised banks in Europe with a steadily rising funding level and "Tier 1" capital -- a measure of a bank's financial strength -- which grew to 20.4 percent from 18.9 percent a year ago.
But its higher lending has also exposed it to higher risks, and fourth-quarter profits were hit by extremely low interest rates and greater losses from bad loans which saw a 5.0 percent drop in net profits to 3.34 billion kronor compared with the same period in 2013.
The bank said that falling interest rates resulted in an 8.0 percent fall in net profits overall in the course of the year. Sweden's central bank cut its key interest rate to zero at the end of October.
AFP
