Swedish CEO sees no reason to upend UK expansion plans

Bloomberg

The man running Svenska Handelsbanken AB, one of Sweden’s biggest banks, sees no reason to let Brexit upend his expansion plans in the UK.
Anders Bouvin, chief executive officer of the Swedish bank known for its commitment to branches in a digital age, says his strategy is proving especially effective in attracting small UK businesses looking for funding. And despite Brexit, Handelsbanken is adding branches in Britain.
“As our reputation grows in the UK, business opportunities grow also,” Bouvin, who took over as CEO in August, said in an interview in Stockholm. “We can clearly see this even more when it comes to SMEs because our local branch-led model seems particularly attractive to SMEs.”
Britain is Handelsbanken’s biggest market after Sweden, delivering about 13 percent of revenue last year. The bank saw a 16 percent decline in its U.K. operating profit last quarter from a year earlier, after costs rose and income slipped. It opened nine more British branches, bringing its total in the country to 207.
“We’ve been gaining market share for a good number of years, and I can’t see that changing,” Bouvin said.
From the third quarter, Handelsbanken’s UK business saw a slight increase in net interest income. Net income from fees and commissions jumped 21 percent on a quarterly basis. The bank saw a 3 percent gain in loans to households, and its deposit base among British household jumped 10 percent. Loans to businesses rose 2 percent from the third quarter, according to its annual
results.
The bank’s shares sank after it unveiled a smaller dividend proposal than expected, in part as management hoards capital it says will help it meet an expected pick-up in lending.
Handelsbanken held capital equivalent to just over a quarter of its risk-weighted assets at the end of the fourth quarter. Common equity Tier 1 capital rose to 25.1 percent, compared with 24 percent in the third quarter and up from 21.2 percent a year earlier.
While Bouvin is confident his bank will do well in the U.K., he struck a more cautious tone with the U.S. following the election.
“There’s a huge amount of uncertainty in the U.S. regarding a lot of issues,” he said.