interim report · 2019-04-17 · press release 30 april 2014 handelsbanken’s interim report...

Interim ReportJanuary–March

2014

PRESS RELEASE 30 April 2014

Handelsbanken’s Interim Report JANUARY – MARCH 2014

Summary January – March 2014, compared with January – March 2013

The period’s profit after tax for total operations increased by 13% to SEK 3,909m (3,466)

Earnings per share increased to SEK 6.15 (5.47)

Operating profit went up by 13% to SEK 4,920m (4,336) and rose by 30% in home markets outside Sweden

Return on equity for total operations rose to 14.1% (13.8)

Income increased by 8% to SEK 9,481m (8,800)

Net interest income went up by 2% to SEK 6,653m (6,541) and in the home markets outside Sweden, net interest income increased by 13%

The C/I ratio improved to 44.8% (47.5)

The loan loss ratio was 0.07% (0.06)

The common equity tier 1 ratio according to CRD IV increased to 19.5% (17.5) and the total capital ratio rose to 24.5% (21.0)

The Bank’s liquidity reserve exceeded SEK 800bn

Summary of Q1 2014, compared with Q4 2013

The period’s profit after tax for total operations increased by 11% to SEK 3,909m (3,527) and earnings per share were SEK 6.15 (5.55)

Operating profit increased by 10% to SEK 4,920m (4,458)

Return on equity for total operations was 14.1% (13.3)

Income increased by 2% to SEK 9,481m (9,278)

The loan loss ratio was 0.07% (0.07)

Handelsbanken’s Interim ReportJANUARY – MARCH 2014

SUMMARY JANUARY – MARCH 2014, COMPARED WITHJANUARY – MARCH 2013

• The period’s profit after tax for total operations increased by 13% to SEK 3,909m (3,466)

• Earnings per share increased to SEK 6.15 (5.47)

• Operating profit went up by 13% to SEK 4,920m (4,336) and rose by 30% in home markets

outside Sweden

• Return on equity for total operations rose to 14.1% (13.8)

• Income increased by 8% to SEK 9,481m (8,800)

• Net interest income went up by 2% to SEK 6,653m (6,541) and in the home markets outside

Sweden, net interest income increased by 13%

• The C/I ratio improved to 44.8% (47.5)

• The loan loss ratio was 0.07% (0.06)

• The common equity tier 1 ratio according to CRD IV increased to 19.5% (17.5) and the total

capital ratio rose to 24.5% (21.0)

• The Bank’s liquidity reserve exceeded SEK 800bn

SUMMARY OF Q1 2014, COMPARED WITH Q4 2013

• The period’s profit after tax for total operations increased by 11% to SEK 3,909m (3,527)

and earnings per share were SEK 6.15 (5.55)

• Operating profit increased by 10% to SEK 4,920m (4,458)

• Return on equity for total operations was 14.1% (13.3)

• Income increased by 2% to SEK 9,481m (9,278)

• The loan loss ratio was 0.07% (0.07)

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INTERIM REPORT JANUARY – MARCH 2014

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Contents Page Group – Overview 4

Group performance 5

Group – Business segments 9

Branch operations in Sweden 10 Branch operations in the UK 12 Branch operations in Denmark 14 Branch operations in Finland 16 Branch operations in Norway 18 Branch operations in the Netherlands 20 Handelsbanken International 22 Handelsbanken Capital Markets 24 Other units not reported in the business segments 26 Key figures 27 The Handelsbanken share 27

Condensed set of financial statements – Group 28 Income statement 28 Earnings per share 28 Statement of comprehensive income 29 Quarterly performance 30 Balance sheet 31 Statement of changes in equity 32 Cash flow statement 32 Note 1 Accounting policies 33 Note 2 Net interest income 34 Note 3 Net fee and commission income 35 Note 4 Net gains/losses on financial transactions 35 Note 5 Other administrative expenses 35 Note 6 Loan losses and impaired loans 36 Note 7 Discontinued operations 37 Note 8 Loans and credit exposure 37 Note 9 Derivatives 39 Note 10 Goodwill and other intangible assets 40 Note 11 Due to credit institutions, deposits and borrowing from the public 40 Note 12 Turnover of own debt instruments and shares 40 Note 13 Assets pledged, contingent liabilities and other commitments 40 Note 14 Classification of financial assets and liabilities 41 Note 15 Fair value measurement of financial instruments 43 Note 16 Related-party transactions 44 Note 17 Offsetting of financial instruments 45 Note 18 Assets and liabilities by currency 46 Note 19 Capital base and capital requirements in the consolidated situation 47 Note 20 Risk and capital management 51

Condensed set of financial statements – Parent company 56

Information on phone conference etc. 58

Auditors’ report concerning review of interim report 59

Share price performance and other information 60

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Handelsbanken Group – Overview SEK m

Q12014

Q42013 Change

Q12013 Change

Jan-Mar 2014

Jan-Mar 2013 Change

Full year 2013

Summary income statementNet interest income 6,653 6,772 -2% 6,541 2% 6,653 6,541 2% 26,669

Net fee and commission income 2,060 2,107 -2% 1,877 10% 2,060 1,877 10% 7,804

Net gains/losses on financial transactions 658 304 116% 259 154% 658 259 154% 1,357

Risk result - insurance 42 35 20% 51 -18% 42 51 -18% 142

Other dividend income 4 1 300% 1 300% 4 1 300% 161

Share of profit of associates -11 7 -5 -120% -11 -5 -120% 9

Other income 75 52 44% 76 -1% 75 76 -1% 185Total income 9,481 9,278 2% 8,800 8% 9,481 8,800 8% 36,327

Staff costs -2,887 -2,980 -3% -2,783 4% -2,887 -2,783 4% -11,404

Other administrative expenses -1,248 -1,411 -12% -1,279 -2% -1,248 -1,279 -2% -5,181Depreciation, amortisation and impairments of property, equipment and intangible assets -111 -116 -4% -120 -8% -111 -120 -8% -476Total expenses -4,246 -4,507 -6% -4,182 2% -4,246 -4,182 2% -17,061

Profit before loan losses 5,235 4,771 10% 4,618 13% 5,235 4,618 13% 19,266Net loan losses -315 -322 -2% -283 11% -315 -283 11% -1,195Gains/losses on disposal of property, equipment and intangible assets 0 9 -100% 1 -100% 0 1 -100% 17

Operating profit 4,920 4,458 10% 4,336 13% 4,920 4,336 13% 18,088Taxes -1,038 -966 7% -885 17% -1,038 -885 17% -3,915Profit for the period from continuing operations 3,882 3,492 11% 3,451 12% 3,882 3,451 12% 14,173Profit for the period pertaining to discontinued operations, after tax 27 35 -23% 15 80% 27 15 80% 122Profit for the period 3,909 3,527 11% 3,466 13% 3,909 3,466 13% 14,295

Summary balance sheetLoans to the public 1,727,011 1,696,339 2% 1,655,041 4% 1,727,011 1,655,041 4% 1,696,339 of which mortgage loans 972,365 955,251 2% 904,669 7% 972,365 904,669 7% 955,251

Deposits and borrowing from the public 867,225 825,205 5% 642,314 35% 867,225 642,314 35% 825,205 of which households 291,582 287,319 1% 268,340 9% 291,582 268,340 9% 287,319

Total equity 107,820 111,339 -3% 100,366 7% 107,820 100,366 7% 111,339Total assets 2,575,840 2,484,721 4% 2,385,335 8% 2,575,840 2,385,335 8% 2,484,721

Summary of key figuresReturn on equity, total operations * 14.1% 13.3% 13.8% 14.1% 13.8% 13.9%

Return on equity, continuing operations * 14.0% 13.2% 13.7% 14.0% 13.7% 13.8%

C/I ratio, continuing operations 44.8% 48.6% 47.5% 44.8% 47.5% 47.0%

Earnings per share, total operations, SEK 6.15 5.55 5.47 6.15 5.47 22.52 - after dilution 6.08 5.49 5.41 6.08 5.41 22.26

Common equity tier 1 ratio, CRD IV 19.5% 18.9% 17.5% 19.5% 17.5% 18.9%

Total capital ratio, CRD IV 24.5% 21.6% 21.0% 24.5% 21.0% 21.6%

* When calculating return on equity, equity is adjusted for the impact of unrealised changes in the value of financial assets classified as "Available for Sale" and for cash flow hedges and revaluation effects on defined-benefit pension plans.

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Group performance JANUARY – MARCH 2014 COMPARED WITH JANUARY – MARCH 2013 The period’s profit after tax for total operations increased by 13% to SEK 3,909m (3,466). Earnings per share increased to SEK 6.15 (5.47). Return on equity for total operations was 14.1% (13.8).

The Group’s operating profit rose by 13% to SEK 4,920m (4,336). In the home markets outside Sweden, the increase was 30%. The C/I ratio went down to 44.8% (47.5).

Income

Income increased by 8% to SEK 9,481m (8,800). Exchange rate movements increased income by SEK 26m.

Net interest income rose by 2% to SEK 6,653m (6,541). Higher business volumes boosted net interest income by SEK 338m and rising lending margins increased net interest income by SEK 76m. The total increase was counteracted by the fact that lower short-term interest rates had a negative impact of SEK 235m on net interest income and that the benchmark effect in Stadshypotek went down by SEK 34m to SEK -10m (24).

Net interest income fell by 4% in Sweden, but increased overall by 13% in other home markets. In the UK, net interest income rose by 30%. In Finland, the increase was 26% while in the Netherlands it was 40%.

The cost for the Stabilisation Fund and various deposit guarantees rose to SEK -290m (-282).

The average volume of loans to the public grew by 3% to SEK 1,703bn (1,649). The effect of exchange rate movements was marginal. Household lending increased by 6% to SEK 831bn (781) and corporate lending increased marginally to SEK 872bn (868).

The average volume of deposits and borrowing rose by 18% to SEK 822bn (696). The average volume of household deposits went up by 9% to SEK 282bn (258) and corporate deposits increased by 23% to SEK 540bn (438).

Net fee and commission income rose by 10% to SEK 2,060m (1,877), mainly as a result of increased asset management and card commissions. Fund management commissions rose by 19% to SEK 554m (465) and card income increased by 21% to SEK 522m (432). Net payment commissions increased by 17% to SEK 429m (366).

Increased activity in the equity markets contributed to brokerage income growing by 7% to SEK 328m (306).

Net gains/losses on financial transactions went up by 154% to SEK 658m (259). During the quarter, reallocations of the Bank’s shareholdings were made, contributing to a one-off capital gain of SEK 306m. Adjusted for this, net gains/losses on financial transactions rose by 36%, mainly as a result of higher profits in the foreign exchange business.

Expenses

Total expenses rose by 2% to SEK -4,246m. Adjusted for exchange rate movements of SEK 28m, expenses increased by almost 1%.

Staff costs increased by 4% to SEK -2,887m (-2,783) as a result of annual salary increases and a higher number of employees. The provision to the Oktogonen Foundation went down to SEK -183m (-256). The provision is based on the assumption of a maximum provision corresponding to 10% of the ordinary dividend to the shareholders (15% in the previous year). Variable compensation, including social security costs and other payroll overheads, increased to SEK -33m (-28).

The average number of employees increased by 391 to 11,633 (11,242), mainly as a result of the continued expansion in the number of employees in the UK (+374) and the Netherlands (+25).

Other administrative expenses decreased by 2% to SEK -1,248m (-1,279), chiefly due to lower IT-related costs.

Loan losses

Loan losses were SEK -315m (-283) and the credit quality remained stable. The loan loss ratio was 0.07% (0.06). Net impaired loans fell by 4% to SEK 2,971m (3,091), equivalent to 0.17% (0.18) of lending.

SEK mJan-Mar

2014Jan-Mar

2013 Change

Net interest income 6,653 6,541 2%

Net fee and commission income 2,060 1,877 10%

Net gains/losses on financial trans. 658 259 154%

Other income 110 123 -11%

Total income 9,481 8,800 8%

SEK mJan-Mar

2014Jan-Mar

2013 Change

Staff costs -2,887 -2,783 4%

Other administrative expenses -1,248 -1,279 -2%

Depreciation and amortisation -111 -120 -8%

Total expenses -4,246 -4,182 2%

SEK mJan-Mar

2014Jan-Mar

2013 Change

Net loan losses -315 -283 32Loan loss ratio as a % of loans 0.07 0.06 0.01

Impaired loans, net 2,971 3,091 -4%

Proportion of impaired loans, % 0.17 0.18 -0.01

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Q1 2014 COMPARED WITH Q4 2013 The period’s profit after tax for total operations grew by 11% to SEK 3,909m (3,527) and earnings per share were SEK 6.15 (5.55).

Operating profit rose by 10% to SEK 4,920m (4,458), and the C/I ratio decreased to 44.8% (48.6).

Return on equity increased to 14.1% (13.3).

Income

Income increased by 2% to SEK 9,481m (9,278). The effect of exchange rate movements was marginal.

Net interest income fell by 2% to SEK 6,653m (6,772), chiefly due to lower short-term interest rates, a reduced benchmark effect, and a smaller number of days than in the preceding quarter. Adjusted for these effects, net interest income grew marginally. Volume and margin effects in deposit and lending operations increased net interest income by SEK 68m.

The decrease in net interest income is primarily attributable to the the fact that the benchmark effect in Stadshypotek went down by SEK 42m to SEK -10m (32) and by lower short-term interest rates which reduced net interest income by SEK 52m. The fact that the quarter was two days shorter than the comparison quarter reduced net interest income by SEK 39m. In addition, the Group’s costs for the Stabilisation Fund and various deposit guarantees rose to SEK -290m (-281).

The average volume of loans to the public increased by 1% to SEK 1,703bn (1,691). The total average volume of deposits and borrowing rose by 4% to SEK 822bn (790). Household deposits grew by 2%, while corporate deposits increased by 5%.

Net fee and commission income went down by 2%, or SEK 47m, to SEK 2,060m (2,107). Brokerage income increased by 5% to SEK 328m (312), while advisory income declined by 28% to SEK 49m (68). Payment commissions were seasonally lower than in the previous quarter, decreasing in net terms by 8% to SEK 429m (466), chiefly due to lower card income.

Positive stock market performance contributed to mutual fund commissions growing by 3% to SEK 554m (537).

Net gains/losses on financial transactions increased to SEK 658m (304). Adjusted for capital gains of SEK 306m from sales of equities, net gains/losses on financial transactions rose by 16%, as a result of higher customer activity, chiefly in foreign exchange trading.

Other income increased to SEK 110m (95).

Expenses

Total expenses decreased by 6% to SEK -4,246m (4,507). Staff costs decreased by SEK 93m, or 3%, to SEK -2,887m (2,980), while other administrative expenses fell by 12% to SEK -1,248m (-1,411).

The decrease in staff costs was chiefly due to a fall in the provision to the Oktogonen profit-sharing foundation by SEK 145m to SEK -183m (-328). The provision is based on the assumption of a maximum provision corresponding to 10% of the ordinary dividend to the shareholders (15% in the previous year). The period’s provision for variable compensation was SEK -33m (-36).

Expansion, chiefly in the UK, led to the average number of employees increasing to 11,633 (11,585).

Other administrative expenses, which seasonally decrease in the first quarter, fell by 12% to SEK -1,248m (-1,411). The decrease was a general one over most cost categories.

Expansion costs increased by 7% to SEK -97m (-91).

Loan losses

Loan losses went down to SEK -315m (-322), which corresponds to a loan loss ratio of 0.07% (0.07). Credit quality continued to be stable. Net impaired loans decreased by 2% to SEK 2,971m (3,041), equivalent to 0.17% (0.18) of lending.

SEK mQ1

2014Q4

2013 Change

Net interest income 6,653 6,772 -2%

Net fee and commission income 2,060 2,107 -2%

Net gains/losses on financial trans. 658 304 116%

Other income 110 95 16%

Total income 9,481 9,278 2%

SEK mQ1

2014Q4

2013 Change

Staff costs -2,887 -2,980 -3%

Other administrative expenses -1,248 -1,411 -12%

Depreciation and amortisation -111 -116 -4%

Total expenses -4,246 -4,507 -6%

SEK mQ1

2014Q4

2013 Change

Net loan losses -315 -322 -7Loan loss ratio as a % of loans 0.07 0.07 0.00

Impaired loans, net 2,971 3,041 -2%

Proportion of impaired loans, % 0.17 0.18 -0.01

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PERFORMANCE IN THE BUSINESS SEGMENTS (Q1 2014 compared with Q4 2013)

Operating profit from branch operations in Sweden decreased by 9% to SEK 2,826m (3,101). Income decreased by 3%, while expenses fell by 2%. The loan loss level increased to 0.09% (0.03).

Operating profit from branch operations in the UK grew by 9% to SEK 381m (351). Income increased by 4%, while expenses rose by 1%. The loan loss ratio was 0.00% (-0.01).

Operating profit from branch operations in Denmark improved by 30% to SEK 258m (199). Income decreased by 4%, while expenses fell by 6%. The loan loss ratio fell to -0.01% (0.40)

Operating profit from branch operations in Finland increased by 54% to SEK 232m (151), owing to lower loan losses. Income increased by 1%, while expenses decreased by 1%. The loan loss ratio went down to 0.19% (0.54).

Operating profit from branch operations in Norway fell by 2% to SEK 628m (641). Income decreased by 5%, while expenses fell by 6%. The loan loss ratio fell to 0.04% (0.08).

Operating profit from branch operations in the Netherlands improved by 59% to SEK 27m (17). Income increased by 7% and expenses increased by 4%. The loan loss ratio fell to -0.02% (0.17)

Handelsbanken International increased its operating profit by SEK 44m to SEK 61m (17). Income increased by 1%, while expenses decreased by 12%. The loan loss ratio fell to 0.02% (0.18).

Handelsbanken Capital Markets increased its operating profit by 37% to SEK 375m (274). Income increased by 7%, while expenses decreased by 4%.

FUNDING AND LIQUIDITY Handelsbanken’s very strong liquidity position meant that during the first quarter, the slightly lower activity on the long-term funding market continued. The volume of bonds issued totalled SEK 42bn (SEK 65bn in Q1 2013), including SEK 36bn in covered bonds and SEK 6bn in senior bonds. The average maturity of bond issues during the quarter was 4.3 years.

In addition, the Bank issued a ten-year tier 2 subordinated loan in the euro market. The amount was EUR 1.5bn, the equivalent of SEK 13.4bn, and it is fully included in the capital base.

In late March, the Bank redeemed a tier 1 capital contribution of SEK 2.9bn that had been issued in Q1 2009.

The Bank has continued to diversify its long-term funding, and early in the second quarter it became the first Nordic bank to issue senior bonds in Australia.

Demand was very high, and the volume issued totalled SEK 4bn, with a maturity of 5 years. The price level was the same as the Bank pays on other international funding markets.

Total liquidity reserves exceeded SEK 800bn. Cash funds and liquid assets invested with central banks amounted to SEK 409bn, while the volume of liquid bonds and other liquid assets totalled SEK 110bn. The remainder of the reserve mainly comprises an unutilised issue amount for covered bonds at Stadshypotek.

According to the current Swedish definition from January 2013, the Handelsbanken Group’s liquidity coverage ratio (LCR) at the end of the period was 152%. In USD, the LCR was 158% and in EUR it was 122%. The Group’s LCR according to the definition in CRD IV is estimated to be approximately 170%.

CAPITAL

31 March 2014 compared with 31 December 2013 The capital base increased to SEK 119bn (106) and the total capital ratio according to CRD IV rose to 24.5% (21.6). During the period, the Bank issued a subordinated loan for SEK 13.4bn, which had a positive impact on the total capital ratio of 2.9 percentage points.

Common equity tier 1 capital increased to SEK 95.3bn (93.0). The common equity tier 1 ratio according to CRD IV rose by 0.6 percentage points to 19.5%, with the period’s profit contributing 0.4 percentage points.

A lower volume of corporate lending increased the common equity tier 1 ratio by 0.1 percentage point and credit risk migration in the loan portfolio increased it by another 0.1 percentage point. The mix effect of the fact that new lending volumes are of higher credit quality than the portfolio average, made a positive contribution of 0.1 percentage point.

Exchange rate movements increased the common equity tier 1 ratio by 0.2 percentage points and IAS 19 (pensions) by 0.1 percentage point. An increase in the capital requirement for operational risks (standardised approach) had a negative impact of 0.1 percentage point on the common equity tier 1 ratio.

Other net effects reduced the common equity tier 1 ratio by 0.3 percentage points.

SEK m31 Mar

201431 Dec

2013 Change

Common equity tier 1 ratio, CRD IV 19.5% 18.9% 0.6

Total capital ratio, CRD IV 24.5% 21.6% 2.9

Risk exposure amount CRD IV, SEK 487,913 492,785 -1%

Common equity tier 1 capital 95,293 93,039 2%

Total own funds 119,303 106,394 12%

Capital requirement, Basel I floor 85,892 81,295 6%

Total capital base, Basel I floor 121,519 100,406 21%

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31 March 2014 compared with 31 March 2013 The common equity tier 1 capital increased by 7% to SEK 95.3bn (89.0) and the common equity tier 1 ratio rose to 19.5% (17.5). Of the increase of 2.0 percentage points, the period’s profit contributed 0.7 percentage points after a deduction for the dividend paid. Changed lending volumes had only a marginal effect while credit risk migration in the loan portfolio reduced the core tier 1 ratio by 0.1 percentage point. New lending volumes continued to improve the average credit quality, which increased the common equity tier 1 ratio by 1.2 percentage points. Exchange rate movements made a positive contribution of 0.4 percentage points while the net effect of other factors reduced the common equity tier 1 ratio by 0.2 percentage points.

Capital requirements for Swedish mortgage loans in Pillar 2 As a Pillar 2 supervisory measure, on 21 May 2013, the Swedish Financial Supervisory Authority decided to introduce a capital requirement equivalent to a 15% risk weight floor for Swedish mortgage loan portfolios. For Handelsbanken, this will involve a capital requirement in Pillar 2 of approximately SEK 8.3bn in 2014, based on the Bank’s Swedish mortgage loan volumes at the end of the first quarter. If the proposal from the Swedish authorities is implemented to increase the total capital requirement of systemically important banks by an

additional 2 percentage points in 2015, the Bank’s add-on in Pillar 2 will increase to around SEK 9.5bn.

During the fourth quarter of 2013, the Swedish Financial Supervisory Authority stated that it is considering increasing the risk-weight floor in Pillar 2 to 25% if the new capital adequacy regulations allow this. An implementation of this second step in 2015 would increase the Bank’s capital requirement in Pillar 2 by approximately a further SEK 9.2bn.

The Bank’s assessment is that the Group will continue to be well capitalised after a possible implementation as described above.

RATING During the quarter, Handelsbanken’s short-term and long-term ratings with the rating agencies which monitor the Bank were unchanged.

Long-term Short-termFinancial strength

Standard & Poor's AA- A-1+

Fitch AA- F1+

Moody's Aa3 P-1 C

DBRS AA (low)

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Handelsbanken Group – Business segments

The business segments consist of the branch operations in Sweden, the UK, Denmark, Finland, Norway and the Netherlands, as well as Handelsbanken International and Capital Markets. The income statements by segment include internal items such as internal

interest, commissions and payment for internal services rendered, primarily according to the cost price principle. The part of Capital Markets’ operating profit that does not involve risk-taking is distributed to the branch with customer responsibility.

January - March 2014

SEK m Sweden UK Denmark Finland NorwayNether-

landsInter-

nationalCapital

Markets OtherAdj. & elim.

GroupJan-Mar

2014

Net interest income 3,937 767 380 344 843 70 174 28 122 -12 6,653

Net fee and commission income 920 76 95 108 97 5 62 702 -5 2,060Net gains/losses on financial transactions 86 36 25 9 17 2 29 326 128 658

Risk result - insurance 42 42

Share of profit of associates -11 -11

Other income 19 3 6 2 6 2 -2 43 79Total income 4,962 882 506 463 963 77 267 1,096 277 -12 9,481Staff costs -840 -329 -140 -85 -169 -29 -126 -524 -645 0 -2,887

Other administrative expenses -266 -71 -43 -35 -53 -6 -41 -178 -555 -1,248

Internal purchased and sold services -764 -96 -63 -61 -90 -16 -35 -10 1,123 12Depreciation, amortisation and impairments of property, equipment and intangible assets -19 -5 -4 -2 -2 0 -3 -9 -67 -111Total expenses -1,889 -501 -250 -183 -314 -51 -205 -721 -144 12 -4,246Profit before loan losses 3,073 381 256 280 649 26 62 375 133 0 5,235

Net loan losses -248 0 2 -48 -21 1 -1 -315

Gains/losses on disposal of property, equipment and intangible assets 0 0 0 0 0 0

Operating profit 2,825 381 258 232 628 27 61 375 133 0 4,920

Profit allocation 209 9 13 21 11 5 13 -281 0

Operating profit after profit allocation 3,034 390 271 253 639 32 74 94 133 0 4,920

Internal income * -347 -300 -115 -101 -832 -45 -9 -284 2,033


SEK m Sweden UK Denmark Finland NorwayNether-

landsInter-

nationalCapital

Markets OtherAdj. & elim.

GroupJan-Mar

2013

Net interest income 4,094 592 356 273 849 50 153 43 142 -11 6,541

Net fee and commission income 826 25 81 99 86 6 81 660 13 1,877Net gains/losses on financial transactions 116 23 8 9 19 0 16 211 -143 259

Risk result - insurance 51 51

Share of profit of associates -5 -5

Other income 7 3 5 2 3 3 4 50 77

Total income 5,043 643 450 383 957 56 253 969 57 -11 8,800

Staff costs -833 -220 -130 -83 -171 -22 -130 -507 -676 -11 -2,783

Other administrative expenses -302 -56 -46 -34 -59 -5 -38 -185 -554 -1,279

Internal purchased and sold services -768 -72 -63 -58 -86 -11 -35 5 1,077 11Depreciation, amortisation and impairments of property, equipment and intangible assets -20 -7 -4 -4 -3 0 -3 -14 -65 -120

Total expenses -1,923 -355 -243 -179 -319 -38 -206 -701 -218 -4,182

Profit before loan losses 3,120 288 207 204 638 18 47 268 -161 -11 4,618

Net loan losses -103 -55 -30 -36 -63 4 -283

Gains/losses on disposal of property, equipment and intangible assets 1 0 - 0 0 0 1

Operating profit 3,018 233 177 168 575 18 51 268 -161 -11 4,336

Profit allocation 162 4 8 11 6 2 8 -201 0

Operating profit after profit allocation 3,180 237 185 179 581 20 59 67 -161 -11 4,336

Internal income * -385 -291 -106 -111 -878 -35 -28 -372 2,206

Home markets

Home markets

* Internal income which is included in total income comprises income from transactions with other operating segments and Other. Since interest income and interest expense are reported net as income, this means that internal income includes the net amount of the internal funding cost among segments and Other.

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Branch operations in Sweden Branch operations in Sweden comprise six regional banks, as well as Handelsbanken Finans’s and Stadshypotek’s operations in Sweden. At Handelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank. The regional banks offer a full range of banking services at 462 branches throughout Sweden. Handelsbanken Finans offers finance company services and works through the Bank’s branches.Stadshypotek is the Bank’s mortgage company, and is completely integrated with the branch operations.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar

2013 ChangeFull year

2013

Net interest income 3,937 4,066 -3% 4,094 -4% 3,937 4,094 -4% 16,424

Net fee and commission income 920 978 -6% 826 11% 920 826 11% 3,528

Net gains/losses on financial transactions 86 52 65% 116 -26% 86 116 -26% 462

Other income 19 9 111% 7 171% 19 7 171% 27Total income 4,962 5,105 -3% 5,043 -2% 4,962 5,043 -2% 20,441

Staff costs -840 -814 3% -833 1% -840 -833 1% -3,300

Other administrative expenses -266 -326 -18% -302 -12% -266 -302 -12% -1,190

Internal purchased and sold services -764 -770 -1% -768 -1% -764 -768 -1% -3,027Depreciation, amortisation and impairments of property, equipment and intangible assets -19 -21 -10% -20 -5% -19 -20 -5% -87Total expenses -1,889 -1,931 -2% -1,923 -2% -1,889 -1,923 -2% -7,604Profit before loan losses 3,073 3,174 -3% 3,120 -2% 3,073 3,120 -2% 12,837

Net loan losses -248 -75 231% -103 141% -248 -103 141% -357Gains/losses on disposal of property, equipment and intangible assets - 2 1 - 1 9Operating profit 2,825 3,101 -9% 3,018 -6% 2,825 3,018 -6% 12,489

Profit allocation 209 361 -42% 162 29% 209 162 29% 902Operating profit after profit allocation 3,034 3,462 -12% 3,180 -5% 3,034 3,180 -5% 13,391

Internal income -347 -278 -25% -385 10% -347 -385 10% -1,104

Cost/income ratio, % 36.5 35.3 36.9 36.5 36.9 35.6

Loan loss ratio, % 0.09 0.03 0.04 0.09 0.04 0.03

Allocated capital 65,504 61,805 6% 60,084 9% 65,504 60,084 9% 61,805

Return on allocated capital, % 14.5 17.5 16.5 14.5 16.5 17.7

Average number of employees 4,350 4,357 0% 4,350 0% 4,350 4,350 0% 4,420Number of branches 462 462 0% 461 0% 462 461 0% 462

Average volumes, SEK bnQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public*

Household 631 625 1% 602 5% 631 602 5% 613

of which mortgage loans 580 572 1% 548 6% 580 548 6% 560

Corporate 486 489 -1% 482 1% 486 482 1% 490

of which mortgage loans 260 255 2% 239 9% 260 239 9% 248Total 1,117 1,114 0% 1,084 3% 1,117 1,084 3% 1,103

Deposits and borrowing from the public

Household 231 227 2% 213 8% 231 213 8% 220

Corporate 168 170 -1% 168 0% 168 168 0% 166Total 399 397 1% 381 5% 399 381 5% 386* Excluding loans to the National Debt Office.

10 Handelsbanken



10 Handelsbanken

JANUARY– MARCH 2014 COMPARED WITH JANUARY – MARCH 2013

Financial performance Operating profit fell by 6% to SEK 2,826m (3,018), due to lower net interest income and higher loan losses.

Net interest income decreased by SEK 157m, or 4%, to SEK 3,937m (4,094). Lower deposit and lending margins reduced net interest income by SEK 26m and SEK 14m respectively; this was offset by higher deposit and lending volumes, which had a positive effect of SEK 114m. Falling interest rates also meant that interest income on allocated equity decreased by SEK 141m. The benchmark effect in Stadshypotek reduced net interest income by SEK 34m and amounted to SEK -10m (24). Fees for the Swedish Stabilisation Fund and the deposit guarantee increased to SEK -163m (-159).

Net fee and commission income grew by 11% to SEK 920m (826), chiefly due to increased payment and mutual fund commissions.

Net gains/losses on financial transactions fell by 26% to SEK 86m (116).

Total expenses fell by 2% to SEK -1,889m (-1,923), and the C/I ratio decreased to 36.5% (36.9).

Loan losses increased to SEK -248m (-103), chiefly due to provisions for a single exposure. The loan loss ratio was thus 0.09% (0.04).

Business development For the third year running, Handelsbanken was awarded first prize for best customer service among Swedish banks in the annual Servicescore survey.

The average volume of deposits from households continued to increase, amounting to SEK 231bn (213), a rise of 8% compared with the equivalent period in the previous year. During the first three months of the year, new fund savings in the Bank’s mutual funds in Sweden amounted to SEK 9.3bn, corresponding to a market share of 31.4%.

The average volume of mortgage loans to private individuals increased by 6% to SEK 580bn (548), while the average volume of lending to companies grew by SEK 4bn to SEK 486bn (482).

Q1 2014 COMPARED WITH Q4 2013 Operating profit fell by 9% to SEK 2,826m (3,101), due to lower income and higher loan losses.

Net interest income declined by 3% or SEK -129m, compared with the previous quarter and totalled SEK 3,937m (4,066). Deposit margins went down by SEK -32m as a result of lower short-term interest rates, which also reduced interest income on allocated equity by SEK -38m. Higher deposit and lending volumes positively affected net interest income by SEK 11m. Fees for the Swedish Stabilisation Fund and the deposit guarantee increased to SEK -163m (-161), and the benchmark effect in Stadshypotek fell by SEK 42m to SEK -10m (32).

Lending to households continued to grow and the average volume of mortgage loans to private individuals increased by 1% to SEK 580bn (572). The gross margin on the mortgage portfolio – before advisory and administration expenses – was 0.91% (0.88). The average volume of corporate lending went down by 1% to SEK 486bn (489).

Net fee and commission income fell by 6% to SEK 920m (978), mainly due to seasonally lower payment commissions.

Net gains/losses on financial transactions increased to SEK 86m (52).

Expenses decreased by 2% to SEK -1,889m (-1,931), as a result of other administrative expenses being seasonally higher in the fourth quarter. Staff costs rose by 3%, chiefly due to annual salary adjustments. The average number of employees fell to 4,350 (4,357).

Loan losses increased to SEK -248m (-75), chiefly due to provisions for a single exposure. The loan loss ratio was thus 0.09% (0.03).

11 Handelsbanken



11 Handelsbanken

Branch operations in the UK Branch operations in the UK comprise four regional banks and the asset management company Heartwood.Handelsbanken Finans’s operations in the UK are also included. At Handelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank. The regional banks offer banking services at 166 branches throughout the UK.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 767 719 7% 592 30% 767 592 30% 2,624

Net fee and commission income 76 73 4% 25 204% 76 25 204% 213

Net gains/losses on financial transactions 36 51 -29% 23 57% 36 23 57% 120

Other income 3 4 -25% 3 0% 3 3 0% 13Total income 882 847 4% 643 37% 882 643 37% 2,970

Staff costs -329 -327 1% -220 50% -329 -220 50% -1,059

Other administrative expenses -71 -75 -5% -56 27% -71 -56 27% -243

Internal purchased and sold services -96 -82 17% -72 33% -96 -72 33% -317Depreciation, amortisation and impairments of property, equipment and intangible assets -5 -14 -64% -7 -29% -5 -7 -29% -41Total expenses -501 -498 1% -355 41% -501 -355 41% -1,660Profit before loan losses 381 349 9% 288 32% 381 288 32% 1,310

Net loan losses 0 2 -100% -55 0 -55 -168Gains/losses on disposal of property, equipment and intangible assets 0 0 0% 0 0% 0 0 0% 1Operating profit 381 351 9% 233 64% 381 233 64% 1,143

Profit allocation 9 15 -40% 4 125% 9 4 125% 30Operating profit after profit allocation 390 366 7% 237 65% 390 237 65% 1,173

Internal income -300 -306 2% -291 -3% -300 -291 -3% -1,212


Loan loss ratio, % 0.00 -0.01 0.19 0.00 0.19 0.14



Average number of employees 1,476 1,405 5% 1,102 34% 1,476 1,102 34% 1,260

Number of branches 166 161 3% 138 20% 166 138 20% 161

Average volumes, GBP mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 3,763 3,580 5% 2,963 27% 3,763 2,963 27% 3,252

Corporate 8,782 8,677 1% 8,021 9% 8,782 8,021 9% 8,381Total 12,545 12,257 2% 10,984 14% 12,545 10,984 14% 11,633


Household 1,032 821 26% 548 88% 1,032 548 88% 688

Corporate 5,366 4,132 30% 2,288 135% 5,366 2,288 135% 2,988Total 6,398 4,953 29% 2,836 126% 6,398 2,836 126% 3,676

12 Handelsbanken



12 Handelsbanken

JANUARY– MARCH 2014 COMPARED WITH JANUARY – MARCH 2013

Financial performance Operating profit rose by 64% to SEK 381m (233), chiefly due to improved net interest income. The profit figure also benefited from lower loan losses and, to a lesser extent, from exchange rate movements. Expressed in local currency, operating profit increased by 53%. The result was charged with expenses related to continuing expansion; over the past 12 months, 28 new branches have been opened.

Profit before loan losses grew by 32% to SEK 381m (288), as a result of continuing growth in business volumes and customer numbers.

Income increased by 37% and net interest income grew by 30% to SEK 767m (592), chiefly due to greater business volumes – mainly increasing deposit volumes. Lending margins to corporate customers improved, but deposit margins decreased.

Net fee and commission income more than doubled to SEK 76m (25). The increase was attributable mainly to increased asset management commissions, as a result of the acquisition of Heartwood in May of the previous year, but also to higher payment commissions. Heartwood contributed asset management and advisory commissions of SEK 45m (-).

Net gains/losses on financial transactions increased by 57% to SEK 36m (23).

Expenses rose by 41% to SEK -501m (-355); this was attributable entirely to the continuing expansion. The average number of employees increased by 34% to 1,476 (1,102).

No loan losses were reported during the quarter (-55), and thus the loan loss ratio went down to 0.00% (0.19).

Business development Business volumes – particularly deposits – continued to grow. The average volume of lending increased by 14% compared to the corresponding period in the previous year; lending to households grew by 27%. Average deposits were up 126%; household deposits increased by 88%. Deposits increased by GBP 3.6bn, while lending grew by GBP 1.6bn.

During the first quarter of the year, five new branches were opened, so that at the end of the quarter, the Bank had 166 branches in the UK. In addition, managers have been recruited for another seven new branches.

Work with integrating the Bank’s acquisition of the asset management company Heartwood continues according to plan. Since the acquisition was made at the end of May, assets under management have increased from GBP 1.5bn to GBP 2.0bn.

Q1 2014 COMPARED WITH Q4 2013 Operating profit increased by SEK 30m, or 9%, to SEK 381m (351), of which SEK 4m was due to exchange rate movements.

Income increased by 4%, mainly as a result of net interest income growing by 7% to SEK 767m (719), due to higher business volumes and increasing lending margins to companies. The average volume of deposits increased by 29%, while the average volume of lending grew by 2%.

Net fee and commission income rose by 4% to SEK 76m (73).

Expenses increased by SEK 3m, or 1%, to SEK -501m (-498), due to exchange rate movements. Expressed in local currency, expenses were down by 1%. The average number of employees rose by 5% to 1,476 (1,405).

Loan losses were SEK 0m (2), and the loan loss ratio was 0.00% (-0.01).

13 Handelsbanken



13 Handelsbanken

Branch operations in Denmark Branch operations in Denmark comprise the regional bank, as well as Handelsbanken Finans’s and Stadshypotek’s operations in Denmark. At Handelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank. The regional bank offers a full range of banking services at 57 branches throughout Denmark.Handelsbanken Finans offers finance company services and works through the Bank’s branches. The mortgage operations at Stadshypotek are fully integrated with the branch operations.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 380 397 -4% 356 7% 380 356 7% 1,519



Other income 6 5 20% 5 20% 6 5 20% 18Total income 506 529 -4% 450 12% 506 450 12% 1,963

Staff costs -140 -142 -1% -130 8% -140 -130 8% -546

Other administrative expenses -43 -49 -12% -46 -7% -43 -46 -7% -175

Internal purchased and sold services -63 -69 -9% -63 0% -63 -63 0% -252Depreciation, amortisation and impairments of property, equipment and intangible assets -4 -5 -20% -4 0% -4 -4 0% -17Total expenses -250 -265 -6% -243 3% -250 -243 3% -990Profit before loan losses 256 264 -3% 207 24% 256 207 24% 973

Net loan losses 2 -65 -30 2 -30 -161Gains/losses on disposal of property, equipment and intangible assets - - - - - -Operating profit 258 199 30% 177 46% 258 177 46% 812Profit allocation 13 17 -24% 8 63% 13 8 63% 47Operating profit after profit allocation 271 216 25% 185 46% 271 185 46% 859

Internal income -115 -89 -29% -106 -8% -115 -106 -8% -395


Loan loss ratio, % -0.01 0.40 0.19 -0.01 0.19 0.25



Average number of employees 633 625 1% 619 2% 633 619 2% 624


Average volumes, DKK bnQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 31.4 30.6 3% 27.9 13% 31.4 27.9 13% 29.1

Corporate 28.0 27.9 0% 30.7 -9% 28.0 30.7 -9% 30.0Total 59.4 58.5 2% 58.6 1% 59.4 58.6 1% 59.1


Household 9.4 9.3 1% 8.9 6% 9.4 8.9 6% 9.1

Corporate 15.2 14.6 4% 14.8 3% 15.2 14.8 3% 13.6Total 24.6 23.9 3% 23.7 4% 24.6 23.7 4% 22.7

14 Handelsbanken



14 Handelsbanken

JANUARY – MARCH 2014 COMPARED WITH JANUARY – MARCH 2013

Financial performance Operating profit rose by 46% to SEK 258m (177), due to higher income and lower loan losses. Profit before loan losses increased by 24% to SEK 256m (207). Income increased by 12%, while expenses grew by only 3%. Exchange rate movements had a SEK 8m positive impact on profits, and in local currency, profit before loan losses grew by 18%.

Net interest income grew by 7%, or SEK 24m, to SEK 380m (356). In local currency, the increase was 3%, and was due chiefly to higher business volumes. At the same time, lower deposit margins due to falling interest rates had a SEK -7m negative effect on net interest income. Fees for the Swedish Stabilisation Fund and the deposit guarantee, together with the Danish state deposit guarantee, burdened net interest income by SEK -13m (-10).

Expenses increased by 3% to SEK -250m (-243). Exchange rate movements affected expenses negatively by SEK 9m. In local currency terms, expenses were down slightly from the corresponding period of the previous year. The average number of employees rose by 2% to 633 (619).

Recoveries exceeded new provisions and net loan losses amounted to SEK 2m (-30). The loan loss ratio was -0.01% (0.19).

Business developmentThe Bank continued to have a stable inflow of new customers and both business volumes and market share continued to increase. The average volume of lending to households climbed by 13%, while corporate lending declined by 9%. In total, the average volume of lending to the public increased by DKK 0.8bn. The average volume of deposits from the public grew by DKK 0.9bn, or 4%, to DKK 24.6bn (23.7). Fund saving also performed well and increased by 14%.

During the first quarter of the year, one new branch was opened, in Aarhus North, bringing the Bank’s total number of branches in Denmark to 57.

Q1 2014 COMPARED WITH Q4 2013Operating profit rose by 30% to SEK 258m (199), due to lower loan losses. Profit before loan losses for the quarter declined by 3%. The effect of exchange rate movements was marginal.

Income went down by 4%. Net interest income went down by 4% to SEK 380m (397), due mainly to lower margins and the fact that there were fewer days in the first quarter.

Net fee and commission income increased by 3% to SEK 95m (92), while net gains/losses on financial transactions declined to SEK 25m (35).

Expenses increased by SEK 15m to SEK -250m (-265), as a result of seasonally higher expenses in the fourth quarter.

Recoveries exceeded new provisions and loan losses amounted to SEK 2m (-65). The loan loss ratio was -0.01% (0.40).

15 Handelsbanken



15 Handelsbanken

Branch operations in Finland Branch operations in Finland comprise the regional bank, as well as Handelsbanken Finans’s and Stadshypotek’s operations in Finland. At Handelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank. The regional bank offers a full range of banking services at 45 branches throughout Finland.Handelsbanken Finans offers finance company services and works through the Bank’s branches. The mortgage operations at Stadshypotek are fully integrated with the branch operations.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 344 337 2% 273 26% 344 273 26% 1,219



Other income 2 1 100% 2 0% 2 2 0% 5Total income 463 457 1% 383 21% 463 383 21% 1,676

Staff costs -85 -85 0% -83 2% -85 -83 2% -331


Internal purchased and sold services -61 -62 -2% -58 5% -61 -58 5% -239Depreciation, amortisation and impairments of property, equipment and intangible assets -2 -2 0% -4 -50% -2 -4 -50% -10Total expenses -183 -185 -1% -179 2% -183 -179 2% -725Profit before loan losses 280 272 3% 204 37% 280 204 37% 951

Net loan losses -48 -121 -60% -36 33% -48 -36 33% -268Gains/losses on disposal of property, equipment and intangible assets 0 0 0% - 0 - 0Operating profit 232 151 54% 168 38% 232 168 38% 683Profit allocation 21 27 -22% 11 91% 21 11 91% 70Operating profit after profit allocation 253 178 42% 179 41% 253 179 41% 753

Internal income -101 -99 -2% -111 9% -101 -111 9% -417


Loan loss ratio, % 0.19 0.54 0.16 0.19 0.16 0.30





Average volumes, EUR mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 3,787 3,773 0% 3,598 5% 3,787 3,598 5% 3,693

Corporate 8,207 8,166 1% 7,807 5% 8,207 7,807 5% 7,979Total 11,994 11,939 0% 11,405 5% 11,994 11,405 5% 11,672


Household 1,249 1,273 -2% 1,271 -2% 1,249 1,271 -2% 1,262

Corporate 3,043 2,457 24% 1,546 97% 3,043 1,546 97% 1,764Total 4,292 3,730 15% 2,817 52% 4,292 2,817 52% 3,026

16 Handelsbanken



16 Handelsbanken


Financial performance Operating profit improved by 38% to SEK 232m (168), chiefly due to rising net interest income. Income grew by 21%, while expenses increased by only 2%.

Net interest income went up by SEK 71m, or 26%, to SEK 344m (273), as a result of both growing business volumes and higher corporate lending margins. In local currency, net interest income rose by 21%. Fees for the Swedish Stabilisation Fund and the deposit guarantee burdened net interest income by SEK -12m (-9).

Net fee and commission income grew by SEK 9m, or 9%, to SEK 108m (99); this was mainly attributable to a net SEK 10m increase in payment commissions. Net gains/losses on financial transactions were unchanged at SEK 9m (9).

Total expenses increased by 2% to SEK -183m (-179); this was entirely attributable to the depreciation of the Swedish krona. Expressed in local currency, expenses were down by 2%. The average number of employees rose by nine, or 2%.

Loan losses increased to SEK -48m (-36), which corresponds to a loan loss ratio of 0.19% (0.16).

Business development Business volumes increased. The average volume of lending, compared to the corresponding period of the previous year, increased by 5%. The Bank’s lending to companies increased by 5%, and the average volume of lending to households rose by 5%.

The average volume of deposits from households decreased by 2%, while corporate deposits increased by 97%. During the quarter, the Bank opened a meeting-place on Åland and recruited a branch manager for a new branch in Helsinki – Ruoholahti.

Q1 2014 COMPARED WITH Q4 2013 Operating profit rose by 54% to SEK 232m (151), chiefly due to lower loan losses. Profit before loan losses increased by 3%. Income increased by 1%, while expenses decreased by 1%.

Net interest income improved by 2% to SEK 344m (337), mainly as a result of higher volumes and margins for deposits.

Expenses fell by 1% to SEK -183m (-185). Staff costs were unchanged.

Loan losses went down to SEK -48m (-121), and the loan loss ratio was 0.19% (0.54).

17 Handelsbanken



17 Handelsbanken

Branch operations in Norway Branch operations in Norway comprise the regional bank, as well as Handelsbanken Finans’s and Stadshypotek’s operations in Norway. At Handelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank. The regional bank offers a full range of banking services at 49 branches throughout Norway.Handelsbanken Finans offers finance company services and works through the Bank’s branches. The mortgage operations at Stadshypotek are fully integrated with the branch operations.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 843 902 -7% 849 -1% 843 849 -1% 3,574


Net gains/losses on financial transactions 17 22 -23% 19 -11% 17 19 -11% 83

Other income 6 3 100% 3 100% 6 3 100% 12Total income 963 1,017 -5% 957 1% 963 957 1% 4,033

Staff costs -169 -161 5% -171 -1% -169 -171 -1% -662


Internal purchased and sold services -90 -104 -13% -86 5% -90 -86 5% -368Depreciation, amortisation and impairments of property, equipment and intangible assets -2 -2 0% -3 -33% -2 -3 -33% -10Total expenses -314 -333 -6% -319 -2% -314 -319 -2% -1,272Profit before loan losses 649 684 -5% 638 2% 649 638 2% 2,761

Net loan losses -21 -43 -51% -63 -67% -21 -63 -67% -169Gains/losses on disposal of property, equipment and intangible assets - 0 0 - 0 0Operating profit 628 641 -2% 575 9% 628 575 9% 2,592Profit allocation 11 22 -50% 6 83% 11 6 83% 43

Operating profit after profit allocation 639 663 -4% 581 10% 639 581 10% 2,635

Internal income -832 -895 7% -878 5% -832 -878 5% -3,606


Loan loss ratio, % 0.04 0.08 0.12 0.04 0.12 0.08





Average volumes, NOK bnQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 75.0 74.2 1% 70.3 7% 75.0 70.3 7% 72.0

Corporate 113.4 112.0 1% 109.9 3% 113.4 109.9 3% 110.8Total 188.4 186.2 1% 180.2 5% 188.4 180.2 5% 182.8


Household 14.6 14.3 2% 13.5 8% 14.6 13.5 8% 14.0

Corporate 43.7 39.5 11% 38.7 13% 43.7 38.7 13% 35.6Total 58.3 53.8 8% 52.2 12% 58.3 52.2 12% 49.6

18 Handelsbanken



18 Handelsbanken


Financial performance Operating profit increased by 9% to SEK 628m (575), due mainly to lower loan losses, but also to a 2% decrease in expenses, while income grew by 1%. The Norwegian krone weakened and exchange rate movements reduced operating profit by SEK 37m. In local currency, profit before loan losses grew by 10%.

Net interest income fell by 1%, but adjusted for exchange rate movements of SEK -56m, net interest income improved by 7%, due to higher deposit and lending margins, as well as higher business volumes. Fees for the Swedish Stabilisation Fund and the deposit guarantee, together with the Norwegian state deposit guarantee, burdened net interest income by SEK -25m (-20).

Net fee and commission income increased by 13% to SEK 97m (86), chiefly due to higher lending and payment commissions and increased fund management income.

Expenses fell by 2% to SEK -314m (-319), which was entirely attributable to exchange rate movements. Expressed in local currency, expenses were up by 6%. Staff costs, in local currency terms, rose by 6%. This was attributable to an increase of 19 in the average number of employees (3%), and higher pension costs.


Business development Business volumes continued to grow. The average volume of lending rose by 5%, with household lending increasing by 7% and corporate lending by 3%.

The average volume of deposits from households increased by 8%, while corporate deposits grew by 13%.

Q1 2014 COMPARED WITH Q4 2013 Operating profit decreased by 2% to SEK 628m (641). Adjusted for exchange rate effects, operating profit went down by just under 1%.

Net interest income went down by 7%, or SEK 59m, to SEK 843m (902). In local currency, net interest income decreased by 5%, due to lower lending margins.

Net fee and commission income rose by 8% to SEK 97m (90), chiefly due to higher equity market-related commissions.

Expenses fell by 6% to SEK -314m (-333). Adjusted for movements in exchange rates, expenses went down by 4%. Expressed in local currency, staff costs increased by 6%. The increase is mainly attributable to the annual salary adjustments, but also to the fact that pension costs in the comparison quarter were lower. The average number of employees rose by eight, or 1%. Other expenses decreased because they are seasonally higher in the fourth quarter.


19 Handelsbanken



19 Handelsbanken

Branch operations in the Netherlands Since 1 January 2013, branch operations in the Netherlands are organised as a separate regional bank. AtHandelsbanken, the branches are the base of all operations, with responsibility for all customers of the Bank.The regional bank offers banking services at 18 branches in the Netherlands.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 70 66 6% 50 40% 70 50 40% 230

Net fee and commission income 5 6 -17% 6 -17% 5 6 -17% 23

Net gains/losses on financial transactions 2 0 0 2 0 1

Other income - - - - - -Total income 77 72 7% 56 37% 77 56 37% 254

Staff costs -29 -26 12% -22 32% -29 -22 32% -96

Other administrative expenses -6 -6 0% -5 20% -6 -5 20% -21

Internal purchased and sold services -16 -17 -6% -11 45% -16 -11 45% -56Depreciation, amortisation and impairments of property, equipment and intangible assets 0 0 0% 0 0% 0 0 0% -1Total expenses -51 -49 4% -38 34% -51 -38 34% -174Profit before loan losses 26 23 13% 18 44% 26 18 44% 80

Net loan losses 1 -6 - 1 - -7Gains/losses on disposal of property, equipment and intangible assets - - - - - -Operating profit 27 17 59% 18 50% 27 18 50% 73Profit allocation 5 1 400% 2 150% 5 2 150% 4Operating profit after profit allocation 32 18 78% 20 60% 32 20 60% 77

Internal income -45 -33 -36% -35 -29% -45 -35 -29% -140


Loan loss ratio, % -0.02 0.17 - -0.02 - 0.05

Allocated capital 865 818 6% 745 16% 865 745 16% 818




Average volumes, EUR mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 625 567 10% 389 61% 625 389 61% 478

Corporate 1,460 1,264 16% 1,226 19% 1,460 1,226 19% 1,250Total 2,085 1,831 14% 1,615 29% 2,085 1,615 29% 1,728


Household 27 27 0% 24 13% 27 24 13% 26

Corporate 960 1,264 -24% 639 50% 960 639 50% 918Total 987 1,291 -24% 663 49% 987 663 49% 944

20 Handelsbanken



20 Handelsbanken


Financial performance Operating profit increased by 50% to SEK 27m (18). Income rose by 37%, while continuing investments in operations led to a 34% increase in expenses.

Net interest income grew by 40% to SEK 70m (50), mainly as a result of increased business volumes from private customers.

Expenses rose to SEK -51m (-38), as a result of the expansion of the regional head office and the branch network. The average number of employees grew to 120 (95).

Recoveries exceeded new provisions and loan losses amounted to SEK +1m (-). The loan loss ratio was -0.02% (-).

Business development Average lending volumes rose by EUR 470m, while deposits grew by EUR 324m. Household deposits grew by 13%, while lending to households increased by 61%. Corporate lending grew by 19%, while the average volume of deposits from companies went up by 50%.

Q1 2014 COMPARED WITH Q4 2013 Operating profit rose by 59% to SEK 27m (17), due to higher income and the fact that the comparison quarter was charged with loan losses. In local currency, profit before loan losses grew by 7%.

Net interest income increased by 6% to SEK 70m (66), and total income rose by 7% to SEK 77m (72).

Expenses rose to SEK -51m (-49), as a result of the continuing expansion. The average number of employees increased by 9% to 120 (110).

Recoveries exceeded new provisions and loan losses amounted to SEK +1m (-6). The loan loss ratio was -0.02% (0.17).

21 Handelsbanken



21 Handelsbanken

Handelsbanken International Handelsbanken International’s main task is to support the Bank’s customers in the home markets with their international business. The Bank has operations in 28 locations (19 branches and nine representative offices) in 18 countries outside its home markets.

INCOME STATEMENT

BUSINESS VOLUMES

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 174 176 -1% 153 14% 174 153 14% 660

Net fee and commission income 62 73 -15% 81 -23% 62 81 -23% 308

Net gains/losses on financial transactions 29 14 107% 16 81% 29 16 81% 79

Other income 2 2 0% 3 -33% 2 3 -33% 6Total income 267 265 1% 253 6% 267 253 6% 1,053

Staff costs -126 -126 0% -130 -3% -126 -130 -3% -510


Internal purchased and sold services -35 -47 -26% -35 0% -35 -35 0% -153Depreciation, amortisation and impairments of property, equipment and intangible assets -3 -3 0% -3 0% -3 -3 0% -11Total expenses -205 -234 -12% -206 0% -205 -206 0% -855Profit before loan losses 62 31 100% 47 32% 62 47 32% 198

Net loan losses -1 -14 -93% 4 -1 4 -65Gains/losses on disposal of property, equipment and intangible assets 0 0 0% 0 0% 0 0 0% 0Operating profit 61 17 259% 51 20% 61 51 20% 133Profit allocation 13 18 -28% 8 63% 13 8 63% 38Operating profit after profit allocation 74 35 111% 59 25% 74 59 25% 171

Internal income -9 2 -28 68% -9 -28 68% -50


Loan loss ratio, % 0.02 0.18 -0.05 0.02 -0.05 0.22

Allocated capital 4,024 4,221 -5% 4,269 -6% 4,024 4,269 -6% 4,221


Average number of employees 503 498 1% 519 -3% 503 519 -3% 511


Average volumes, SEK bnQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Loans to the public

Household 3.8 3.7 3% 3.4 12% 3.8 3.4 12% 3.5

Corporate 28.5 29.3 -3% 29.9 -5% 28.5 29.9 -5% 29.7Total 32.3 33.0 -2% 33.3 -3% 32.3 33.3 -3% 33.2


Household 2.3 2.4 -4% 2.4 -4% 2.3 2.4 -4% 2.4

Corporate 28.7 34.7 -17% 23.6 22% 28.7 23.6 22% 26.3Total 31.0 37.1 -16% 26.0 19% 31.0 26.0 19% 28.7

22 Handelsbanken



22 Handelsbanken


Financial performance Operating profit rose by 20% to SEK 61m (51), because higher business volumes boosted net interest income by 14% to SEK 174m (153).

Net fee and commission income fell by 23% to SEK 62m (81), chiefly due to lower payment commissions and higher fee and commission expenses.

Net gains/losses on financial transactions, which mainly consisted of foreign exchange-related earnings and early redemption charges, increased to SEK 29m (16).

Expenses decreased slightly to SEK -205m (-206). The average number of employees fell to 503 (519).

Loan losses amounted to SEK -1m (4), which corresponds to a loan loss ratio of 0.02% (-0.05).

Business development The average volume of lending decreased by 3% to SEK 32.3bn (33.3) compared with the previous year. Deposits grew by 19% to SEK 31.0bn (26.0), as a result of corporate deposits increasing by 22% to SEK 28.7bn (23.6).

Q1 2014 COMPARED WITH Q4 2013 Operating profit improved to SEK 61m (17), due chiefly to seasonally higher administrative expenses in the fourth quarter, but also to lower loan losses. Profit before loan losses increased to SEK 62m (31).

Income rose by 1% to SEK 267m (265), while expenses fell by 12% to SEK 205m (234).

Loan losses were SEK -1m (-14), which corresponds to a loan loss ratio of 0.02% (0.18).

23 Handelsbanken



23 Handelsbanken

Handelsbanken Capital Markets Capital Markets comprises Handelsbanken’s investment bank and asset management operations, including insurance savings. The unit has a functional and product responsibility throughout the Group for trading in financial instruments, structured products, cash management, corporate finance and debt capital markets, as well as for economic and financial research. The unit is also responsible for all savings products except for savings in bank accounts.

In the table below, the income figures and comments for Capital Markets’ products throughout the Group are presented first, followed by the equivalent figures and comments for the Handelsbanken Capital Markets segment.

INCOME DISTRIBUTION IN THE GROUP FOR HANDELSBANKEN CAPITAL MARKETS’ PRODUCTS

JANUARY – MARCH 2014 COMPARED WITH JANUARY – MARCH 2013 The Group’s brokerage income increased by 7% to SEK 328m (306). Asset management commissions increased by 26% to SEK 689m (549). Fund commissions increased by 19% to SEK 554m (465), mainly due to positive value changes in the funds.

Insurance commissions grew to SEK 158m (141), due to increases in both the numbers of people insured and the assets under management.

Net gains/losses on financial transactions went up by 30% to SEK 438m (336). Currency transactions related to branch operations, which are included in net gains/losses on financial transactions, resulted in a currency gain of SEK 112m (126).

Q1 2014 COMPARED WITH Q4 2013 Brokerage income increased by 5% to SEK 328m (312). Asset management commissions rose by 4% to SEK 689m (661), chiefly due to larger management volumes.

Net gains/losses on financial transactions went up by 13% to SEK 438m (389), chiefly as a result of higher customer activity.

Currency transactions for customers in the branch operations gave a net gain of SEK 112m (136).

Business development The Bank remained the largest player in new savings in mutual funds in Sweden, with a net inflow of SEK 9.3bn. During the quarter, net new savings in Handelsbanken’s funds were SEK 10.9bn. Morningstar, an independent mutual fund research company, gave Handelsbanken’s funds the highest average grade of all the major Swedish banks in its three-year rating of mutual funds on the Swedish market.

The total fund volume, including exchange-traded funds, increased during the quarter by SEK 17bn to SEK 288bn (271), the highest ever volume. Total assets under management in the Group rose by SEK 21bn to SEK 473bn (452).

Handelsbanken was the largest player in Sweden for capital-protected investments focused on the general public, with a market share of 22%.

Demand for the Bank’s occupational pension solutions remains high. Total new sales of insurance increased by 10% during the quarter.

Demand for capital market funding remained healthy, and during the quarter the Bank carried out around 40 bond issues for a total value of EUR 5.7bn.


SEK m Capital Markets Branch operations Other

Total income in the group from Capital Market's

products

Change Jan-Mar 2014 /Jan-Mar 2013

Net interest income 28 28 -35% Commission income 796 554 -30 1,320 12%

of which brokerage income 211 123 -6 328 7%

of which mutual funds and custody 381 326 -18 689 26%

of which insurance 60 105 -7 158 12%

Net fee and commission income 702 542 -7 1,237 20%Net gains/losses on financial trans. 326 112 0 438 30%Risk result - insurance 42 42 -18%Other income -2 -2 -164%

Total income 1,096 654 -7 1,743 19%

24 Handelsbanken



24 Handelsbanken

INCOME STATEMENT IN HANDELSBANKEN CAPITAL MARKETS BUSINESS SEGMENT All results for Handelsbanken Capital Markets products which are attributable to customers in branch operations are reported in branch operations. In the Capital Markets segment, only the results of transactions with institutional counterparties and corporate finance are reported, together with the risk result and yield split in the insurance operations.

INCOME DISTRIBUTION

JANUARY – MARCH 2014 COMPARED WITH JANUARY – MARCH 2013 Operating profit improved by 40% to SEK 375m (268). Asset management operations, excluding Handelsbanken Liv, increased their profit to SEK 122m (86), while in the investment bank, profits rose to SEK 158m (97).

Net interest income decreased to SEK 28m (43). Net gains/losses on financial transactions improved in all major asset categories, increasing to SEK 326m (211).

Net fee and commission income grew by 6% to SEK 702m (660), chiefly due to higher mutual fund, insurance and securities commissions.

The risk result in Handelsbanken Liv declined to SEK 42m (51).

In total, income grew by 13% to SEK 1,096m (969), while expenses rose by 3% to SEK -721m (-701). The average number of employees fell by 2% to 1,427 (1,463).

Q1 2014 COMPARED WITH Q4 2013 Operating profit grew by 37% to SEK 375m (274), due to higher levels of activity. Income grew by 7% to SEK 1,096m (1,025), chiefly due to higher income from investment banking operations.

Net fee and commission income decreased by 1% to SEK 702m (707), while net gains/losses on financial transactions increased by 29% to SEK 326m (253), mainly as a result of higher customer activity.

Expenses decreased by 4% to SEK -721m (-751), due to a fall in other administrative expenses. Staff costs rose by 2%. During the quarter, the average number of employees fell by 1% to 1,427 (1,448).

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 28 28 0% 43 -35% 28 43 -35% 151

Net fee and commission income 702 707 -1% 660 6% 702 660 6% 2,658

Net gains/losses on financial transactions 326 253 29% 211 55% 326 211 55% 977


Other income -2 2 4 -2 4 10Total income 1,096 1,025 7% 969 13% 1,096 969 13% 3,938

Staff costs -524 -512 2% -507 3% -524 -507 3% -2,033


Internal purchased and sold services -10 0 5 -10 5 31Depreciation, amortisation and impairments of property, equipment and intangible assets -9 -11 -18% -14 -36% -9 -14 -36% -50Total expenses -721 -751 -4% -701 3% -721 -701 3% -2,837

Profit before loan losses 375 274 37% 268 40% 375 268 40% 1,101

Net loan lossesGains/losses on disposal of property, equipment and intangible assets 0 0 0 0 0 0Operating profit 375 274 37% 268 40% 375 268 40% 1,101Profit allocation -281 -461 -39% -201 40% -281 -201 40% -1,134

Operating profit after profit allocation 94 -187 67 40% 94 67 40% -33

Internal income -284 -412 31% -372 24% -284 -372 24% -1,414


Allocated capital 2,934 3,061 -4% 3,954 -26% 2,934 3,954 -26% 3,061

Return on allocated capital, % 10.0 - 5.3 10.0 5.3 -

Average number of employees 1,427 1,448 -1% 1,463 -2% 1,427 1,463 -2% 1,464

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Asset management and custody 250 260 -4% 206 21% 250 206 21% 945

Handelsbanken Liv 194 189 3% 185 5% 194 185 5% 690

Investment banking 652 576 13% 578 13% 652 578 13% 2,303

Total income 1,096 1,025 7% 969 13% 1,096 969 13% 3,938

25 Handelsbanken



25 Handelsbanken

Other units not reported in the business segments

Reported below are the income and expenses related to treasury and the central head office departments and also allocations to the Oktogonen profit-sharing foundation. Capital gains/losses, dividends, and other income and expenses that are not attributable to any of the segments are also reported here.

INCOME STATEMENT

JANUARY – MARCH 2014 COMPARED WITH JANUARY – MARCH 2013 Operating profit was SEK 133m (-161). This profit figure includes capital gains of SEK 306m from the sale of shares. The figure also includes the allocation to the Oktogonen profit-sharing foundation, which totalled SEK -183m (-256). Adjusted for this, operating profit was SEK 10m (95).

Q1 2014 COMPARED WITH Q4 2013 Operating profit was SEK 133m (-316). This profit figure includes capital gains of SEK 306m from the sale of shares. The figure also includes the allocation to the Oktogonen profit-sharing foundation, which totalled SEK -183m (-328). Adjusted for this, operating profit was SEK 10m (12).

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 122 93 31% 142 -14% 122 142 -14% 313

Net fee and commission income -5 -19 74% 13 -5 13 -31

Net gains/losses on financial transactions 128 -135 -143 128 -143 -502


Other income 43 27 59% 50 -14% 43 50 -14% 255Total income 277 -27 57 386% 277 57 386% 44

Staff costs -645 -810 -20% -676 -5% -645 -676 -5% -2,858

Other administrative expenses -555 -567 -2% -554 0% -555 -554 0% -2,209

Internal purchased and sold services 1,123 1,139 -1% 1,077 4% 1,123 1,077 4% 4,336Depreciation, amortisation and impairments of property, equipment and intangible assets -67 -58 16% -65 3% -67 -65 3% -249Total expenses -144 -296 -51% -218 -34% -144 -218 -34% -980

Profit before loan losses 133 -323 -161 133 -161 -936Net loan lossesGains/losses on disposal of property, equipment and intangible assets 0 7 -100% 0 0% 0 0 0% 7Operating profit 133 -316 -161 133 -161 -929

Profit allocation 0 0 0% 0 0% 0 0 0% 0Operating profit after profit allocation 133 -316 -161 133 -161 -929

Internal income 2,033 2,110 -4% 2,206 -8% 2,033 2,206 -8% 8,338

Average number of employees 1,975 2,002 -1% 1,973 0% 1,975 1,973 0% 1,982

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26 Handelsbanken

KEY FIGURES – GROUP

THE HANDELSBANKEN SHARE

Q12014

Q42013

Q12013

Jan-Mar 2014

Jan-Mar 2013

Full year 2013

Return on equity, total operations * 14.1% 13.3% 13.8% 14.1% 13.8% 13.9%Return on equity, continuing operations * 14.0% 13.2% 13.7% 14.0% 13.7% 13.8%

C/I ratio, continuing operations 44.8% 48.6% 47.5% 44.8% 47.5% 47.0%C/I ratio, continuing operations, incl. loan losses 48.1% 52.0% 50.7% 48.1% 50.7% 50.3%

Earnings per share, total operations, SEK 6.15 5.55 5.47 6.15 5.47 22.52 - after dilution 6.08 5.49 5.41 6.08 5.41 22.26

Ordinary dividend, SEK 11.50Total dividend 16.50Adjusted equity per share, SEK ** 170.64 177.71 157.20 170.64 157.20 177.71

Common equity tier 1 ratio, CRD IV 19.5% 18.9% 17.5% 19.5% 17.5% 18.9%Total capital ratio, CRD IV 24.5% 21.6% 21.0% 24.5% 21.0% 21.6%

Capital base in relation to capital requirement according to Basel I floor 141% 124% 126% 141% 126% 124%

Average number of employees, continuing operations 11,633 11,585 11,242 11,633 11,242 11,503Number of branches in Sweden 462 462 461 462 461 462Number of branches outside Sweden 354 348 321 354 321 348

* When calculating return on equity, equity is adjusted for the impact of unrealised changes in the value of financial assets classified as "Available for Sale" and for cash flow hedges and revaluation effects on defined-benefit pension plans.

** When calculating equity per share, equity is adjusted for the impact of cash flow hedges and for dilution.

Q12014

Q42013

Q12013

Jan-Mar 2014

Jan-Mar 2013

Full year 2013

Number of converted shares 18,941 173,428 1,790,667 18,941 1,790,667 2,838,683Number of repurchased shares - - - - - -

Holding of own shares in trading book, end of period - - - - - -Number of outstanding shares after repurchases and deduction for trading book, end of period 635,664,736 635,645,795 634,597,779 635,664,736 634,597,779 635,645,795

Number of outstanding shares after dilution, end of period 647,937,156 647,601,239 647,835,385 647,937,156 647,835,385 647,601,239

Average number of shares converted during the year 5,873 2,761,416 714,286 5,873 714,286 2,139,580Average holdings of own shares (repurchased and holdings in trading book) 73,587 10,079 374,600 73,587 374,600 157,183Average number of outstanding shares 635,578,081 635,558,449 633,146,798 635,578,081 633,146,798 634,789,509 - after dilution 647,527,652 647,591,165 647,316,445 647,527,652 647,316,445 647,533,862

Share price ordinary class A, SEK 324.80 316.00 278.50 324.80 278.50 316.00Market capitalisation, SEK bn 206 201 177 206 177 201

27 Handelsbanken



27 Handelsbanken

Condensed set of financial statements – GroupINCOME STATEMENT – GROUP

EARNINGS PER SHARE – GROUP

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Interest income 12,870 13,573 -5% 13,777 -7% 12,870 13,777 -7% 54,463

Interest expense -6,217 -6,801 -9% -7,236 -14% -6,217 -7,236 -14% -27,794

Net interest income Note 2 6,653 6,772 -2% 6,541 2% 6,653 6,541 2% 26,669

Net fee and commission income Note 3 2,060 2,107 -2% 1,877 10% 2,060 1,877 10% 7,804

Net gains/losses on financial transactions Note 4 658 304 116% 259 154% 658 259 154% 1,357


Other dividend income 4 1 300% 1 300% 4 1 300% 161


Other income 75 52 44% 76 -1% 75 76 -1% 185

Total income 9,481 9,278 2% 8,800 8% 9,481 8,800 8% 36,327Staff costs -2,887 -2,980 -3% -2,783 4% -2,887 -2,783 4% -11,404

Other administrative expenses Note 5 -1,248 -1,411 -12% -1,279 -2% -1,248 -1,279 -2% -5,181Depreciation, amortisation and impairments of property, equipment and intangible assets -111 -116 -4% -120 -8% -111 -120 -8% -476

Total expenses -4,246 -4,507 -6% -4,182 2% -4,246 -4,182 2% -17,061Profit before loan losses 5,235 4,771 10% 4,618 13% 5,235 4,618 13% 19,266Net loan losses Note 6 -315 -322 -2% -283 11% -315 -283 11% -1,195Gains/losses on disposal of property, equipment and intangible assets 0 9 -100% 1 -100% 0 1 -100% 17

Operating profit 4,920 4,458 10% 4,336 13% 4,920 4,336 13% 18,088Taxes -1,038 -966 7% -885 17% -1,038 -885 17% -3,915Profit for the period from continuing operations 3,882 3,492 11% 3,451 12% 3,882 3,451 12% 14,173Profit for the period pertaining to discontinued operations, after tax Note 7 27 35 -23% 15 80% 27 15 80% 122

Profit for the period 3,909 3,527 11% 3,466 13% 3,909 3,466 13% 14,295

Attributable to

Shareholders in Svenska Handelsbanken AB 3,909 3,527 11% 3,466 13% 3,909 3,466 13% 14,295

Minority interest 0 0 0 0 0 0

Q12014

Q42013 Change

Q12013 Change

Jan-Mar 2014

Jan-Mar 2013 Change

Full year 2013

Profit for the year, attributable to shareholders in Svenska Handelsbanken AB 3,909 3,527 11% 3,466 13% 3,909 3,466 13% 14,295- of which interest expense on convertible subordinated loan after tax -27 -28 -4% -35 -23% -27 -35 -23% -119

Average number of outstanding shares, million 635.6 635.6 633.1 635.6 633.1 634.8Average number of outstanding shares after dilution, million 647.5 647.6 647.3 647.5 647.3 647.5

Earnings per share, continuing operations, SEK 6.11 5.50 11% 5.45 12% 6.11 5.45 12% 22.33 - after dilution 6.04 5.44 11% 5.39 12% 6.04 5.39 12% 22.07

Earnings per share, discontinued operations, SEK 0.04 0.05 -20% 0.02 100% 0.04 0.02 100% 0.19 - after dilution 0.04 0.05 -20% 0.02 100% 0.04 0.02 100% 0.19

Earnings per share, total operations, SEK 6.15 5.55 11% 5.47 12% 6.15 5.47 12% 22.52 - after dilution 6.08 5.49 11% 5.41 12% 6.08 5.41 12% 22.26

Earnings per share after dilution is calculated by taking in account the effects of a conversion of outstanding convertible debt instruments. This means that the average number of shares is adjusted by potential shares and that the period’s earnings are adjusted by the period’s interest expense on the outstanding convertible debt instruments after tax.

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28 Handelsbanken

STATEMENT OF COMPREHENSIVE INCOME – GROUP

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013Profit for the period 3,909 3,527 11% 3,466 13% 3,909 3,466 13% 14,295

Other comprehensive income

Items that cannot be reclassified into profit or lossDefined-benefit plans 417 341 22% 1,143 -64% 417 1,143 -64% 1,402Taxes on items that cannot be reclassified into profit or loss -92 -72 -28% -251 63% -92 -251 63% -307Total items that cannot be reclassified into profit or loss 325 269 21% 892 -64% 325 892 -64% 1,095

Items that can be reclassified into profit or lossCash flow hedges 1,309 -1,045 -346 1,309 -346 -3,410

Available-for-sale instruments 148 175 -15% 320 -54% 148 320 -54% 535

Translation differences for the period 1,888 1,942 -3% -1,378 1,888 -1,378 763

of which hedging net investment in foreign operations 1,378 1,266 9% -109 1,378 -109 767

Taxes on items that can be reclassified into profit or loss -614 -72 54 -614 54 514

of which cash flow hedges -282 224 76 -282 76 744

of which available-for-sale instruments -29 -17 -71% -46 37% -29 -46 37% -61

of which hedging net investment in foreign operations -303 -279 -9% 24 -303 24 -169

Total items that can be reclassified into profit or loss 2,731 1,000 173% -1,350 2,731 -1,350 -1,598

Total other comprehensive income for the period 3,056 1,269 141% -458 3,056 -458 -503Total comprehensive income for the period 6,965 4,796 45% 3,008 132% 6,965 3,008 132% 13,792

Attributable to

Shareholders in Svenska Handelsbanken AB 6,965 4,796 45% 3,008 132% 6,965 3,008 132% 13,792 Minority interest 0 0 0% 0 0% 0 0 0% 0

Discontinued operations only affects Translation differences for the period in Other comprehensive income.

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29 Handelsbanken

QUARTERLY PERFORMANCE – GROUP

SEK mQ1

2014Q4

2013Q3

2013Q2

2013Q1

2013

Interest income 12,870 13,573 13,569 13,544 13,777

Interest expense -6,217 -6,801 -6,886 -6,871 -7,236

Net interest income 6,653 6,772 6,683 6,673 6,541

Net fee and commission income 2,060 2,107 1,896 1,924 1,877

Net gains/losses on financial transactions 658 304 354 440 259

Risk result - insurance 42 35 30 26 51

Other dividend income 4 1 4 155 1

Share of profit of associates -11 7 5 2 -5

Other income 75 52 37 20 76

Total income 9,481 9,278 9,009 9,240 8,800Staff costs -2,887 -2,980 -2,845 -2,796 -2,783

Other administrative expenses -1,248 -1,411 -1,187 -1,304 -1,279Depreciation, amortisation and impairments of property, equipment and intangible assets -111 -116 -125 -115 -120

Total expenses -4,246 -4,507 -4,157 -4,215 -4,182Profit before loan losses 5,235 4,771 4,852 5,025 4,618Net loan losses -315 -322 -284 -306 -283Gains/losses on disposal of property, equipment and intangible assets 0 9 3 4 1

Operating profit 4,920 4,458 4,571 4,723 4,336Taxes -1,038 -966 -997 -1,067 -885Profit for the period from continuing operations 3,882 3,492 3,574 3,656 3,451

Profit for the period pertaining to discontinued operations, after tax 27 35 33 39 15

Profit for the period 3,909 3,527 3,607 3,695 3,466

Earnings per share, continuing operations, SEK 6.11 5.50 5.63 5.76 5.45 - after dilution 6.04 5.44 5.56 5.69 5.39

Earnings per share, discontinued operations, SEK 0.04 0.05 0.05 0.06 0.02 - after dilution 0.04 0.05 0.05 0.06 0.02

Earnings per share, total operations, SEK 6.15 5.55 5.68 5.82 5.47 - after dilution 6.08 5.49 5.61 5.75 5.41

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30 Handelsbanken

BALANCE SHEET – GROUP

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Assets Cash and balances with central banks 367,464 334,794 345,109 211,274 219,746

Other loans to central banks Note 8 42,941 35,160 34,403 34,327 40,312

Interest-bearing securities eligible as collateral with central banks 61,782 57,451 63,245 54,996 56,866

Loans to other credit institutions Note 8 58,295 62,898 72,984 71,693 87,206

Loans to the public Note 8 1,727,011 1,696,339 1,682,552 1,685,665 1,655,041

Value change of interest-hedged item in portfolio hedge 95 96 2,143 2,396 2,702

Bonds and other interest-bearing securities 59,175 64,125 63,947 65,575 72,049

Shares 48,345 48,595 41,929 38,698 35,488

Investments in associates 267 272 278 277 219

Assets where the customer bears the value change risk 83,246 80,930 77,496 73,199 71,552

Derivative instruments Note 9 68,435 69,961 74,627 90,141 101,865

Reinsurance assets 4 4 1 1 1

Intangible assets Note 10 7,890 7,835 7,716 7,747 7,162

Property and equipment 2,187 2,205 2,114 2,183 2,156

Current tax assets 360 405 785 387 365

Deferred tax assets 243 269 407 480 362

Net pension assets 2,134 1,733 1,907 1,043 1,964

Assets held for sale 1,294 1,247 1,159 1,084 985

Other assets 37,892 13,262 32,460 37,144 21,044

Prepaid expenses and accrued income 6,780 7,140 6,705 7,013 8,250Total assets 2,575,840 2,484,721 2,511,967 2,385,323 2,385,335

Liabilities and equityDue to credit institutions Note 11 173,675 171,624 169,761 197,223 213,004

Deposits and borrowing from the public Note 11 867,225 825,205 807,630 636,776 642,314

Liabilities where the customer bears the value change risk 83,294 80,977 77,559 73,228 71,572

Issued securities 1,173,702 1,150,641 1,180,015 1,209,644 1,158,140

Derivative instruments Note 9 61,555 61,529 71,564 73,086 92,369

Short positions 21,001 22,845 18,371 20,098 29,040

Insurance liabilities 1,304 622 632 672 679

Current tax liabilities 343 831 1,069 928 1,389

Deferred tax liabilities 7,999 7,413 7,568 7,363 8,027

Provisions 117 141 123 110 111

Liabilities related to assets held for sale 575 539 537 549 442

Other liabilities 29,977 13,189 31,303 24,139 24,725

Accrued expenses and deferred income 20,730 21,861 23,412 19,977 23,184

Subordinated liabilities 26,523 15,965 15,911 19,139 19,973Total liabilities 2,468,020 2,373,382 2,405,455 2,282,932 2,284,969

Minority interest 2 2 2 2 2

Share capital 2,956 2,956 2,955 2,955 2,951

Share premium 2,847 2,843 2,813 2,798 2,659

Reserves 4,893 1,837 568 69 1,882

Retained earnings 93,213 89,406 89,406 89,406 89,406Profit for the period, attributable to shareholders in Svenska Handelsbanken AB 3,909 14,295 10,768 7,161 3,466Total equity 107,820 111,339 106,512 102,391 100,366Total liabilities and equity 2,575,840 2,484,721 2,511,967 2,385,323 2,385,335

31 Handelsbanken



31 Handelsbanken

STATEMENT OF CHANGES IN EQUITY – GROUP

During the period January to March 2014, convertibles for a nominal value of SEK 4m (336) relating to the 2008 subordinated convertible bond were converted into 18,941 Class A shares (1,790,667). At the end of the period, the number of Handelsbanken shares in the trading book was 0 (0).

CONDENSED STATEMENT OF CASH FLOWS – GROUP

January - March 2014 SEK m

Share capital

Share premium

Defined benefit

plansHedge

reserve

Fair value

reserveTranslation

reserveRetained earnings Minority Total

Opening equity 2,956 2,843 3,110 -1,517 1,043 -799 103,701 2 111,339 Profit for the period 3,909 0 3,909

Other comprehensive income 325 1,027 119 1,585 0 3,056Total comprehensive income for the period 325 1,027 119 1,585 3,909 0 6,965

Dividend -10,488 -10,488Conversion of convertible subordinated loan issued in 2008 0 4 4

Closing equity 2,956 2,847 3,435 -490 1,162 786 97,122 2 107,820

January - March 2013SEK m

Share capital

Share premium

Defined benefit

plansHedge

reserve

Fair value

reserveTranslation

reserveRetained earnings Minority Total

Opening equity 2,943 2,337 1,149 569 -1,393 101,290 2 106,897Effects of implementing revised IAS 19 2,015 -5,062 -3,047

Opening equity after adjustment 2,943 2,337 2,015 1,149 569 -1,393 96,228 2 103,850 Profit for the period 3,466 0 3,466

Other comprehensive income 892 -270 274 -1,354 0 -458Total comprehensive income for the period 892 -270 274 -1,354 3,466 0 3,008

Dividend -6,822 -6,822Conversion of convertible subordinated loan issued in 2008 8 322 330

Change of minority interests 0 0 0

Closing equity 2,951 2,659 2,907 879 843 -2,747 92,872 2 100,366

SEK mJan-Mar

2014Jan-Mar

2013Full year

2013

Cash flow from operating activities 21,879 -8,686 107,784Cash flow from investing activities -1,521 245 -592Cash flow from financing activities 10,526 -6,822 -10,870Cash flow for the period 30,884 -15,263 96,322

Liquid funds at beginning of the period 334,794 236,545 236,545Cash flow for the period 30,884 -15,263 96,322Exchange rate differences on liquid funds 1,786 -1,536 1,927Liquid funds at end of period 367,464 219,746 334,794

32 Handelsbanken



32 Handelsbanken

NOTES

Note 1 Accounting policies This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated accounts have been prepared in accordance with international financial reporting standards (IFRS) and interpretations of these standards as adopted by the EU. The accounting policies also follow the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559), and the regulations and general guidelines issued by the Swedish Financial Supervisory Authority, FFFS 2008:25 Annual reports in credit institutions and securities companies. RFR 1 Supplementary accounting rules for groups as well as statements from the Swedish Financial Reporting Board are also applied in the consolidated accounts.

The interim report for the parent company has been prepared in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (1995:1559), and the regulations and general guidelines issued by the Swedish Financial Supervisory Authority, FFFS 2008:25 Annual reports in credit institutions and securities companies. The parent company also applies RFR 2 Accounting for legal entities, and statements from the Swedish Financial Reporting Board.

Changed accounting policies

On 1 January 2014, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, and IFRS 12 Disclosures of Interest in Other Entities came into effect for application in the EU. The new regulations mean that the current stipulations in IAS 27 and SIC 12 concerning when a company is to be consolidated in the consolidated accounts are being replaced by a number of assessment criteria for when an entity controls another entity. One of the effects of the new regulations is that fund units owned by the Bank through unit-linked insurance contracts will not be included in the assessment of whether controlling influence of a fund management company applies. The new regulations have led to the balance sheet adjustments set out in the table below. The changes also imply extra disclosures, particularly relating to shares in non-consolidated structured entities. The application of the new regulations does not affect the income statement, and has no effect on the Bank’s capital adequacy.

It is proposed that IFRIC 21 Levies applies from the financial year starting on 1 January 2014, but it has not yet been adopted by the EU. The interpretation clarifies that if the obligating event of a levy is that banking operations are carried out at the end of the accounting period, this liability is not to be recognised before this date. The assessment is that the new interpretation will not have a material impact on the Group’s financial position and earnings, nor will it have an impact on the capital adequacy.

In other respects, the interim report of the Group and the parent company has been prepared in accordance with the same accounting policies and calculation methods that were applied in the annual report for 2013.

Future amendments to regulations

IASB is currently revising a number of existing standards. Among these future changes in the regulations, IFRS 9 Financial Instruments, which is to replace IAS 39 Financial Instruments: Recognition and Measurement, is expected to have the greatest effect on Handelsbanken’s financial reports. Since much of the work with IFRS 9 remains to be completed, the Bank is refraining from estimating how the financial reports will be affected or when application of the new regulations will start.

None of the other changes in the accounting regulations issued for application are expected to have a material impact on Handelsbanken’s financial reports, capital adequacy, large exposures or other circumstances according to the applicable operating rules.

SEK m31 M ar

2013Adjust-

ment31 M ar

201330 June

2013Adjust-

ment30 Jun

201330 Sep

2013Adjust-

ment30 Sep

201331 Dec

2013Adjust-

ment31 Dec

2013

Assets where the customer bears the value change risk 75,098 -3,546 71,552 77,144 -3,945 73,199 81,766 -4,270 77,496 86,015 -5,085 80,930

Liabilities where the customer bears the value change risk 75,118 -3,546 71,572 77,173 -3,945 73,228 81,829 -4,270 77,559 86,062 -5,085 80,977

33 Handelsbanken



33 Handelsbanken

Note 2 Net interest income

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Interest incomeCredit institutions and central banks 407 402 1% 374 9% 407 374 9% 1,575

Loans to the public 12,592 13,102 -4% 13,193 -5% 12,592 13,193 -5% 52,614Interest-bearing securities eligible as collateral with central banks 162 241 -33% 634 -74% 162 634 -74% 2,106

Interest-bearing securities 262 289 -9% 512 -49% 262 512 -49% 1,898

Derivative instruments -774 -594 -30% -554 -40% -774 -554 -40% -2,556

Other interest income 381 349 9% 383 -1% 381 383 -1% 1,459

Total interest income 13,030 13,789 -6% 14,542 -10% 13,030 14,542 -10% 57,096Of which interest income reported in Net gains/losses on financial transactions 160 216 -26% 765 -79% 160 765 -79% 2,633

Interest income according to income statement 12,870 13,573 -5% 13,777 -7% 12,870 13,777 -7% 54,463

Interest expenseCredit institutions and central banks -227 -260 -13% -385 -41% -227 -385 -41% -1,287

General public -1,030 -1,169 -12% -1,232 -16% -1,030 -1,232 -16% -4,608

Issued securities -5,559 -5,851 -5% -5,687 -2% -5,559 -5,687 -2% -23,137

Derivative instruments 1,211 1,002 21% 668 81% 1,211 668 81% 3,591

Subordinated liabilities -331 -273 21% -318 4% -331 -318 4% -1,214

Other interest expense -368 -368 0% -985 -63% -368 -985 -63% -3,294

Total interest expense -6,304 -6,919 -9% -7,939 -21% -6,304 -7,939 -21% -29,949Of which interest expense reported in Net gains/losses on financial transactions -87 -118 -26% -703 -88% -87 -703 -88% -2,155

Interest expense according to income statement -6,217 -6,801 -9% -7,236 -14% -6,217 -7,236 -14% -27,794Net interest income 6,653 6,772 -2% 6,541 2% 6,653 6,541 2% 26,669

34 Handelsbanken



34 Handelsbanken

Note 3 Net fee and commission income

Note 4 Net gains/losses on financial transactions

Note 5 Other administrative expenses

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Brokerage and other securities commissions 328 312 5% 306 7% 328 306 7% 1,189

Mutual funds 554 537 3% 465 19% 554 465 19% 2,008

Custody and other asset management fees 135 124 9% 84 61% 135 84 61% 427

Advisory services 49 68 -28% 104 -53% 49 104 -53% 278

Insurance 158 148 7% 141 12% 158 141 12% 571

Payments 708 776 -9% 619 14% 708 619 14% 2,813

Loans and deposits 279 284 -2% 282 -1% 279 282 -1% 1,124

Guarantees 108 108 0% 108 0% 108 108 0% 438

Other 106 127 -17% 101 5% 106 101 5% 446

Commission income 2,425 2,484 -2% 2,210 10% 2,425 2,210 10% 9,294Securities -69 -47 47% -58 19% -69 -58 19% -228

Payments -279 -310 -10% -253 10% -279 -253 10% -1,175

Other -17 -20 -15% -22 -23% -17 -22 -23% -87

Commission expense -365 -377 -3% -333 10% -365 -333 10% -1,490Net fee and commission income 2,060 2,107 -2% 1,877 10% 2,060 1,877 10% 7,804

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Trading, derivatives, FX effect etc -155 -14 634 -155 634 2,026

Other financial instruments at fair value in profit/loss 533 184 190% -374 533 -374 -785 of which interest-bearing securities 536 177 203% -319 536 -319 -707 of which loans -3 7 -55 95% -3 -55 95% -78

Financial instruments at amortised cost 14 132 -89% -18 14 -18 149

of which loans 93 203 -54% 62 50% 93 62 50% 439

of which liabilities -79 -71 -11% -80 1% -79 -80 1% -290

Financial instruments available for sale 313 17 -15 313 -15 24

Hedge accounting -45 -18 -150% 52 -45 52 2

of which net gains/losses on fair value hedges -37 -24 -54% 15 -37 15 -26

of which hedge ineffectiveness -8 6 37 -8 37 28

Gains/losses on unbundled insurance contracts -2 3 -20 90% -2 -20 90% -59Total 658 304 116% 259 154% 658 259 154% 1,357

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Property and premises -287 -288 0% -281 2% -287 -281 2% -1,118

External IT costs -410 -467 -12% -422 -3% -410 -422 -3% -1,704

Communication -97 -95 2% -99 -2% -97 -99 -2% -369

Travel and marketing -78 -108 -28% -82 -5% -78 -82 -5% -378

Purchased services -238 -277 -14% -261 -9% -238 -261 -9% -1,031

Supplies -53 -58 -9% -46 15% -53 -46 15% -202

Other expenses -85 -118 -28% -88 -3% -85 -88 -3% -379Other administrative expenses -1,248 -1,411 -12% -1,279 -2% -1,248 -1,279 -2% -5,181

35 Handelsbanken



35 Handelsbanken

Note 6 Loan losses and impaired loans

Loan losses

Impaired loans Impaired loans includes all loans for which not all the contracted cash flows will probably be fulfilled. The full amount of all loans which give rise to a specific provision is included in impaired loans, including the amount which is covered by collateral. This means that the impaired loans reserve ratio is stated without taking into account collateral received. Thus this key figure may vary substantially between the quarters, even though the provisioning policies are unchanged.

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013Specific provision for individually valued loan receivablesProvision for the period -569 -412 38% -312 82% -569 -312 82% -1,287

Reversal of previous provisions 236 115 105% 37 236 37 289

Total -333 -297 12% -275 21% -333 -275 21% -998

Collective provisions

Net provision for the period for individually valued receivables 1 -10 5 -80% 1 5 -80% -60

Net provision for the period for homogeneous loan receivables 4 4 0% 0 4 0 15

Total 5 -6 5 0% 5 5 0% -45

Other provisions

Losses on off-balance sheet items -6 -9 -33% - -6 - -9

Reversal of losses on off-balance-sheet items 1 - 0 1 0 0

Change in collective provision for off-balance-sheet items 8 -7 -1 8 -1 -10

Total 3 -16 -1 3 -1 -19

Write-offs

Actual loan losses for the period -482 -352 37% -464 4% -482 -464 4% -1,503

Utilised share of previous provisions 438 290 51% 417 5% 438 417 5% 1,174

Recoveries 54 59 -8% 35 54% 54 35 54% 196

Total 10 -3 -12 10 -12 -133

Net loan losses -315 -322 -2% -283 11% -315 -283 11% -1,195

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013Impaired loans 6,763 6,944 6,799 7,266 7,006

Specific provision for individually assessed loans -3,347 -3,454 -3,467 -3,589 -3,522

Provision for collectively assessed homogeneous groups of loans with limited value -88 -92 -94 -103 -113

Collective provisions -357 -357 -347 -350 -280

Impaired loans, net 2,971 3,041 2,891 3,224 3,091Total impaired loans reserve ratio 56.1% 56.2% 57.5% 55.6% 55.9%

Proportion of impaired loans, % 0.17% 0.18% 0.17% 0.19% 0.18%

Impaired loans reserve ratio excl. collective provisions 50.8% 51.1% 52.4% 50.8% 51.9%

Loan loss ratio as a % of loans, accumulated 0.07% 0.07% 0.07% 0.07% 0.06%

Loans past due > 60 days 5,596 6,185 6,661 6,834 6,396

Loans past due > 60 days, which are not impaired 1,838 2,150 2,478 2,382 2,136

36 Handelsbanken



36 Handelsbanken

Impaired loans and loans which are overdue by more than 60 days, by sector

Note 7 Discontinued operations Discontinued operations comprise the results from the Plastal Industri AB subsidiary, including the acquired parts of the Plastal Group. The Bank intends to divest Plastal Industri AB.

Note 8 Loans and credit exposure

31 March 2014

SEK m Gross Provisions Net*Of which past due >60 days

Private individuals 1,606 -795 811 664 1,187Housing co-operative associations 76 -25 51 28 32Property management 1,245 -364 881 570 439Manufacturing 524 -360 164 19 5Retail 507 -246 261 85 11Hotel and restaurant 26 -14 12 11 6Passenger and goods transport by sea 205 -204 1 - -Other transport and communication 49 -37 12 11 2Construction 140 -83 57 53 83Electricity, gas and water 63 -34 29 26 8Agriculture, hunting and forestry 10 -9 1 2 2Other services 81 -53 28 19 31Holding, investment and insurance companies, funds etc. 1,177 -575 602 5 1Other corporate lending 1,054 -636 418 273 31Credit institutions - - - - -Total 6,763 -3,435 3,328 1,766 1,838* Book value after deduction of specific provisions.

Impaired loansLoans past due > 60 days, which are not

impaired

31 December 2013

SEK m Gross Provisions Net*Of which past due >60 days

Private individuals 1,634 -790 844 689 1,316Housing co-operative associations 101 -33 68 45 7Property management 1,299 -394 905 560 526Manufacturing 890 -517 373 189 9Retail 705 -362 343 210 42Hotel and restaurant 37 -24 13 11 9Passenger and goods transport by sea 424 -423 1 1 1Other transport and communication 110 -80 30 28 5Construction 194 -116 78 71 88Electricity, gas and water 72 -44 28 28 7Agriculture, hunting and forestry 33 -25 8 7 2Other services 153 -101 52 43 33Holding, investment and insurance companies, funds etc. 1,138 -569 569 61 4Other corporate lending 154 -68 86 74 101Credit institutions - - - - -Total 6,944 -3,546 3,398 2,017 2,150* Book value after deduction of specific provisions.

Impaired loansLoans past due > 60 days, which are not

impaired

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Loans to the public 1,727,011 1,696,339 1,682,552 1,685,665 1,655,041

of which reverse repos 18,539 15,711 22,932 24,284 16,056

Loans to other credit institutions 58,295 62,898 72,984 71,693 87,206


Other loans to central banks 42,941 35,160 34,403 34,327 40,312 of which reverse repos 1,436 360 2,326 505 1,389

37 Handelsbanken



37 Handelsbanken

Loans to the public, by sector

Specification of Loans to the public – Property management

SEK mLoansgross Provisions

Loansnet

Loansgross Provisions

Loansnet

Private individuals 801,443 -795 800,648 788,495 -790 787,705 of which mortgage loans 651,822 -45 651,777 642,459 -54 642,405 of which other loans with property mortgages 80,175 -100 80,075 77,461 -111 77,350 of which other loans to private individuals 69,445 -650 68,795 68,575 -625 67,950Housing co-operative associations 143,238 -25 143,213 140,320 -33 140,287 of which mortgage loans 130,903 -9 130,894 128,524 -9 128,515Property management 463,774 -364 463,410 461,726 -394 461,332Manufacturing 42,679 -360 42,319 39,051 -517 38,534Retail 29,947 -246 29,701 31,570 -362 31,208Hotels and restaurants 7,742 -14 7,728 7,396 -24 7,372Passenger and goods transport by sea 14,059 -204 13,855 14,733 -423 14,310Other transport and communication 28,799 -37 28,762 26,972 -80 26,892Construction 14,125 -83 14,042 12,295 -116 12,179Electricity, gas, water 23,115 -34 23,081 23,620 -44 23,576Agriculture, hunting and forestry 9,451 -9 9,442 8,365 -25 8,340Other services 19,615 -53 19,562 22,996 -101 22,895Holding, investment, insurance, funds, etc. 59,514 -575 58,939 73,272 -569 72,703Government and municipalities 28,664 0 28,664 20,935 - 20,935Other corporate lending 44,638 -636 44,002 28,496 -68 28,428Total loans to the public, before collective provisions 1,730,803 -3,435 1,727,368 1,700,242 -3,546 1,696,696Collective provisions -357 -357Total loans to the public 1,727,011 1,696,339

31 March 2014 31 December 2013

SEK mLoansgross Provisions

Loansnet

Loansgross Provisions

Loansnet

Loans in SwedenState-owned property companies 7,673 - 7,673 7,798 - 7,798Municipal-owned property companies 16,269 - 16,269 15,430 - 15,430Residential property companies 85,582 -5 85,577 73,571 -15 73,556 of which mortgage loans 69,143 -2 69,141 57,726 -1 57,725Other property management 140,325 -102 140,223 151,410 -110 151,300 of which mortgage loans 67,406 -3 67,403 75,969 -3 75,966Total loans in Sweden 249,849 -107 249,742 248,209 -125 248,084Loans outside SwedenDenmark 11,923 -99 11,824 12,108 -117 11,991Finland 23,067 - 23,067 23,612 - 23,612Norway 78,547 -68 78,479 76,457 -60 76,397UK 82,851 -68 82,783 81,129 -69 81,060The Netherlands 9,916 - 9,916 12,633 - 12,633Other countries 7,621 -22 7,599 7,578 -23 7,555Total loans outside Sweden 213,925 -257 213,668 213,517 -269 213,248

Total loans - Property management 463,774 -364 463,410 461,726 -394 461,332

31 March 2014 31 December 2013

38 Handelsbanken



38 Handelsbanken

Credit risk exposure

Note 9 Derivatives

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Loans to the public 1,727,011 1,696,339 1,682,552 1,685,665 1,655,041


Loans to other credit institutions 58,295 62,898 72,984 71,693 87,206


Unutilised part of granted overdraft facilities * 91,538 99,660 98,937 98,862 99,885

Committed loan offers 258,152 246,518 247,486 247,482 240,965

Other commitments 9,552 9,046 16,248 10,637 21,851

Guarantees, credits 8,390 8,371 9,002 10,145 10,364

Guarantees, other 58,838 58,568 58,623 59,186 56,416

Documentary credits 5,702 7,190 7,559 8,187 9,609

Derivative instruments ** 68,435 69,961 74,627 90,141 101,865

Treasury bills and other eligible bills 61,782 57,451 63,245 54,996 56,866

Bonds and other interest-bearing securities 59,175 64,125 63,947 65,575 72,049Total 2,406,870 2,380,127 2,395,210 2,402,569 2,412,117

** Refers to the total of positive market values.

* As of 2014, unutilised overdraft facilities which the counterparty does not have at its disposal at the time of recognition are not included and therefore do not give rise to a capital requirement. The comparative figures have been restated.

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Positive market valuesTrading 52,799 51,868 56,410 69,079 79,969

Fair value hedges 194 198 10,274 10,170 13,954

Cash flow hedges 22,281 23,930 12,105 12,533 11,423

Amounts set off in the balance sheet -6,839 -6,035 -4,162 -1,641 -3,481Total 68,435 69,961 74,627 90,141 101,865

Negative market valuesTrading 56,801 54,591 60,439 60,919 77,521

Fair value hedges 733 762 2,023 2,515 2,826

Cash flow hedges 10,860 12,211 13,264 11,293 15,503

Amounts set off in the balance sheet -6,839 -6,035 -4,162 -1,641 -3,481Total 61,555 61,529 71,564 73,086 92,369

Nominal valueTrading 6,323,042 6,374,976 6,776,464 7,106,437 7,116,556

Fair value hedges 58,967 63,580 240,982 272,337 308,575

Cash flow hedges 734,681 703,460 543,797 510,452 392,017Total 7,116,690 7,142,016 7,561,243 7,889,226 7,817,148

Derivative contracts are presented gross in the table. Offsetted amounts disclosed in Note 17 consist of the offsetted market value of contracts for which the bank has the legal right and intention to settle contractual cash flows net (including cleared contracts). These contracts are presented on a net basis in the balance sheet per counterparty and currency.

39 Handelsbanken



39 Handelsbanken

Note 10 Goodwill and other intangible assets

Note 11 Due to credit institutions, deposits and borrowing from the public

Note 12 Turnover of own debt instruments and shares

The Handelsbanken Group issues and repurchases debt instruments and equity-related securities which it has issued on its own account. This turnover is mainly intended as part of the Bank’s securities operations and also as a component in funding its operations. During the period January to March 2014, the turnover was:

Interest-bearing securities, bonds and certificates (SEK bn): Group Parent company Issued (sold): 246 157 Repurchased (bought): 19 3 Repaid: 204 160

Equity-related securities (SEK bn): Issued (sold): 0.3 0.3 Repurchased (bought): 0.2 0.2

Note 13 Assets pledged, contingent liabilities and other commitments

The total contingent liabilities mainly consist of credit guarantees.

Goodwill Other intangible assets Total

SEK mJan-Mar

2014Jan-Mar

2013Full year

2013Jan-Mar

2014Jan-Mar

2013Full year

2013Jan-Mar

2014Jan-Mar

2013Full year

2013Opening residual value 6,431 6,273 6,273 1,404 933 933 7,835 7,206 7,206Additional during the period - - 144 53 91 596 53 91 740The period's amortisation - - - -33 -33 -140 -33 -33 -140The period's impairments - - - - - -2 - - -2Foreign exchange effect 31 -99 14 4 -3 17 35 -102 31Closing residual value 6,462 6,174 6,431 1,428 988 1,404 7,890 7,162 7,835

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Due to credit institutions 173,675 171,624 169,761 197,223 213,004

of which repos 910 748 816 2,097 3,200

Deposits and borrowing from the public 867,225 825,205 807,630 636,776 642,314 of which repos 6,834 7,604 10,442 12,289 5,204

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Assets pledged for own debt 766,480 754,265 751,303 763,360 747,573

Other pledged assets 44,230 41,679 36,265 35,612 33,027

Contingent liabilities 72,930 74,129 75,184 77,556 76,389Other commitments * 359,242 355,224 362,671 356,981 362,701

* As of 2014, unutilised overdraft facilities which the counterparty does not have at its disposal at the time of recognition are not included and therefore do not give rise to a capital requirement. The comparative figures have been restated.

40 Handelsbanken



40 Handelsbanken

Note 14 Classification of financial assets and liabilities

The tables show valuation categories for financial instruments in accordance with IAS 39.

31 March 2014

SEK m Trading Other

Derivatives identified as

hedgeinstruments

Investments held to

maturity

Loans and other

receivables

Financial assets

available for sale

Other financial assets/

liabilities

Totalcarrying amount Fair value

Assets Cash and balances with central banks 367,014 450 367,464 367,464Other loans to central banks 42,941 42,941 42,941Interest-bearing securities eligible as collateral with central banks 30,643 26,455 3,437 1,247 61,782 61,793Loans to other credit institutions 58,295 58,295 57,870Loans to the public 2,503 1,724,508 1,727,011 1,737,004Value change of interest hedged item in portfolio hedge 95 95Bonds and other interest-bearing securities 22,565 34,740 254 1,616 59,175 59,173Shares 38,777 1,345 8,223 48,345 48,345Investments in associates 267 267 267Assets where the customer bears thevalue change risk 82,559 687 83,246 83,246Derivative instruments 45,960 22,475 68,435 68,435Other assets 20 37,512 360 37,892 37,892Prepaid expenses and accrued income 545 1,061 160 2,050 2 2,962 6,780 6,780Total financial assets 138,510 148,663 22,475 3,851 2,233,102 11,088 4,039 2,561,728 2,571,210Other non-financial assets 14,112Total assets 2,575,840

Liabilities Due to credit institutions 173,675 173,675 175,443Deposits and borrowing from the public 867,225 867,225 867,186Liabilities where the customer bears the value change risk 82,607 687 83,294 83,294Issued securities 15,514 1,158,188 1,173,702 1,193,213Derivative instruments 49,962 11,593 61,555 61,555Short positions 21,001 21,001 21,001Other liabilities 83 29,894 29,977 29,977Accrued expenses and deferred income 468 20,262 20,730 20,730Subordinated liabilities 26,523 26,523 29,518Total financial liabilities 87,028 82,607 11,593 2,276,454 2,457,682 2,481,917Other non-financial liabilities 10,338Total liabilities 2,468,020

At fair value in income statement divided into

41 Handelsbanken



41 Handelsbanken

31 December 2013

SEK m Trading Other

Derivatives identified as

hedgeinstruments

Investments held to

maturity

Loans and other

receivables

Financial assets

available for sale

Other financial assets/

liabilities

Total carrying

amount Fair value

Assets Cash and balances with central banks 334,185 450 334,794 334,794Other loans to central banks 35,160 35,160 35,160Interest-bearing securities eligible as collateral with central banks 32,611 19,819 3,463 1,558 57,451 57,471Loans to other credit institutions 62,898 62,898 62,413Loans to the public 2,580 1,693,759 1,696,339 1,701,517Value change of interest hedged item in portfolio hedge 96 96Bonds and other interest-bearing securities 26,959 35,331 933 902 64,125 64,123Shares 41,542 1,328 5,725 48,595 48,595Investments in associates 272 272 272Assets where the customer bears the value change risk 80,234 696 80,930 80,930Derivative instruments 46,692 23,269 69,961 69,961Other assets 68 12,846 348 13,262 13,262Prepaid expenses and accrued income 480 791 117 3,848 1,904 7,140 7,140Total financial assets 148,352 140,083 23,269 4,513 2,143,488 8,185 3,133 2,471,023 2,475,638Other non-financial assets 13,698Total assets 2,484,721

Liabilities Due to credit institutions 171,624 171,624 173,128Deposits and borrowing from the public 825,205 825,205 824,904Liabilities where the customer bears the value change risk 80,281 696 80,977 80,977Issued securities 17,420 1,133,221 1,150,641 1,167,147Derivative instruments 48,790 12,739 61,529 61,529Short positions 22,845 22,845 22,845Other liabilities 19 13,170 13,189 13,189Accrued expenses and deferred income 357 21,504 21,861 21,861Subordinated liabilities 15,965 15,965 17,710Total financial liabilities 89,431 80,281 12,739 2,181,385 2,363,836 2,383,290Other non-financial liabilities 9,546Total liabilities 2,373,382

At fair value in income statement divided into

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Note 15 Fair value measurement of financial instruments

Handelsbanken’s independent risk control function is responsible for checking and validating the fair value measurement of financial instruments. In general, the valuations are based on externally generated data as far as is possible, considering the circumstances in each case.

Financial instruments for which price information is easily available, and which are representative of real and frequently occurring transactions, are valued at their current market price. The current bid price is used for financial assets and the current ask price is used for financial liabilities. For groups of financial instruments which are managed on the basis of the Bank’s net exposure to market risk, the current market price is presumed to be the price which would be received or paid if the net position were divested.

For financial instruments where there is no reliable information about market prices, fair value is established using valuation models. These models can, for example, be based on price comparisons, present value calculations or option valuation theory depending on the nature of the instrument.

The models use input data in the form of market prices and other variables that are deemed to affect pricing. The models and input data which form the basis of the valuations are regularly validated to ensure that they are consistent with market practice and established financial theory.

In the model valuation of derivatives, material positive differences between the value measured at initial recognition and the transaction price (day -1 effect), are distributed over the life of the derivative. Such differences occur when the applied valuation model does not capture all the components which affect the value of the derivative. As a consequence of the application of this principle, SEK 22m was amortised in net gains/losses on financial transactions during the January-March 2014 period. At the end of the period, non-recognised day -1 gains amounted to SEK 392m. In addition, the Bank makes an independent valuation of the total credit risk component (own credit risk as well as counterparty risk) in outstanding mark-to-model method derivatives. Changes in fair value due to changed credit risk are recognised in profit/loss to the extent that the overall effect exceeds non-recognised day -1 effects.

31 March 2014SEK m Level 1 Level 2 Level 3 Total

58,345 - - 58,345

- 2,486 17 2,503

53,987 4,934 - 58,921

45,891 1,041 1,413 48,345

82,023 - 536 82,559

673 67,762 - 68,435

240,919 76,223 1,966 319,108

82,071 - 536 82,607

4 15,430 80 15,514

1,488 60,067 - 61,555

20,922 79 - 21,001

104,485 75,576 616 180,677

31 December 2013SEK m Level 1 Level 2 Level 3 Total

53,988 - - 53,988

- 2,562 18 2,580

52,612 10,580 - 63,192

45,384 1,823 1,388 48,595

79,744 - 490 80,234

1,333 68,628 - 69,961

233,061 83,593 1,896 318,550

79,791 - 490 80,281

4 17,332 84 17,420

2,158 59,371 - 61,529

21,951 894 - 22,845

103,904 77,597 574 182,075Total financial liabilities at fair value

LiabilitiesLiabilities where the customer bears the value change risk

Issued securities

Derivative instruments

Short positions


Loans to the public

Bonds and other interest-bearing securities

Shares

Assets where the customer bears the value change risk

Total financial assets at fair value

Assets

Liabilities

AssetsInterest-bearing securities eligible as collateral with central banks

Total financial assets at fair value

Liabilities where the customer bears the value change risk

Issued securities


Short positions

Interest-bearing securities eligible as collateral with central banks

Loans to the public

Bonds and other interest-bearing securities

Shares

Assets where the customer bears the value change risk

Total financial liabilities at fair value


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Valuation hierarchy

In the tables, financial instruments at fair value have been classified in terms of how the valuations have been carried out and the extent of market data used in the valuation on the balance sheet date. If the classification on the balance sheet date has changed from the classification at the preceding year-end, the instrument will have been moved between the levels in the table. During the January-March 2014 period, no instruments were moved between levels 1 and 2. The changes in level 3 are shown in a separate table.

Financial instruments which are valued at the current market price are categorised as level 1. These financial instruments mainly comprise government instruments and other interest-bearing securities that are traded actively, listed equities, and short positions in corresponding assets. Level 1 also includes shares in mutual funds and other assets which are related to unit-linked insurance contracts and similar agreements and the corresponding liabilities (assets and liabilities where the customer bears the value change risk).

Financial instruments which are valued using valuation models which are substantially based on market data are categorised as level 2. Level 2 mainly includes interest-bearing securities, as well as interest rate and currency-related derivatives.

Financial instruments valued using models which are based on input data that is not possible to verify using external market information

and which have affected the valuation to a material extent, are categorised as level 3. These holdings essentially consist of holdings in private equity funds and unlisted equities.

Investments in private equity funds are valued using valuation models mainly based on a relative valuation of comparable listed companies in the same sector. The performance measurements used in the comparison are adjusted for factors which distort the comparison between the investment and the company used for comparison. Subsequently, the valuation is based on earnings multiples, e.g. P/E ratios. Most of these holdings represent plan assets in the Group’s insurance operations.

The Group’s holdings of unlisted securities mainly consist of the Bank’s participating interests in various types of joint operations which are related to the Bank’s business. For example, these may be participating interests in clearing organisations and infrastructure collaboration on Handelsbanken’s home markets. In general, such holdings are valued at the Bank’s share of the company’s net asset value, or alternatively at the price of the last completed transaction. Changes in level 3 holdings during the period are shown in a separate table. In all material respects, unlisted shares are classified as available for sale. Value changes for these holdings are thus reported in other comprehensive income.

Note 16 Related-party transactions On 25 March 2014, Svenska Handelsbanken AB, Handelsbanken’s Pension Foundation and Handelsbanken’s Pension Fund made mutual reallocations of their respective shareholdings; the Bank divested several shareholdings and, at the same time, purchased shares in Industrivärden and SCA. Following these transactions, Svenska Handelsbanken AB controls 10.46% of the votes in Industrivärden (7.5% of the capital) and 10.15% of the votes in SCA (2.1% of the capital). These transactions generate a capital gain of SEK 306m for the Bank. All business transactions with associated companies are made on market terms.

January - March 2014SEK m Shares

Loans to the public

Assets where the customer bears the

value change risk

Liabilities where the customer bears the

value change risk

Issued securities

Carrying amount at beginning of year 1,388 18 490 -490 -84Acquisitions/issues 4 - - - -Repurchases/sales -18 - - - -Matured during the period - -2 - - -Unrealised value change in income statement -31 - 43 -43 4Unrealised value change in other comprehensive income 70 - 3 -3 -Transfer from level 1 or 2 - 1 - - -Transfer to level 1 or 2 - - - - -Carrying amount at end of period 1,413 17 536 -536 -80

January - December 2013SEK m Shares

Loans to the public

Assets where the customer bears the

value change risk

Liabilities where the customer bears the

value change risk

Issued securities

Carrying amount at beginning of year 1,560 24 - - -77Acquisitions/issues 107 - - - -1Repurchases/sales -304 - - - -Matured during the period -1 -2 - - -Unrealised value change in income statement -12 0 - - -6Unrealised value change in other comprehensive income 38 1 - - -Transfer from level 1 or 2 - 3 490 -490 -Transfer to level 1 or 2 - -8 - - -Carrying amount at end of period 1,388 18 490 -490 -84

Reconciliation of financial instruments in level 3

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Note 17 Offsetting of financial instruments

31 March 2014SEK m Derivatives Total

75,274 55,697 130,971

-6,839 - -6,839

68,435 55,697 124,132

-37,286 - -37,286

-7,800 -55,689 -63,48923,349 8 23,357

68,394 7,744 76,138

-6,839 - -6,839

61,555 7,744 69,299

-40,440 - -40,440

-5,461 -4,202 -9,66315,654 3,542 19,196

31 December 2013SEK m Derivatives Total

75,996 53,586 129,582

-6,035 - -6,035

69,961 53,586 123,547

-41,036 - -41,036

-10,540 -53,569 -64,10918,385 17 18,402

67,564 8,352 75,916

-6,035 - -6,035

61,529 8,352 69,881

Related amounts not set off in the balance sheet-41,036 - -41,036

-4,793 -7,889 -12,68215,700 463 16,163

Repurchase agreements, securities

lending/borrowing and similar agreements

Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements

Gross amounts of recognised financial assets

Gross amounts of recognised financial liabilities set off in the balance sheet

Net amounts of financial assets presented in the balance sheet

Related amounts not set off in the balance sheetFinancial instruments not set off in the balance sheet

Collateral receivedNet amount

Financial liabilities subject to offsetting, enforceable master netting agreements and similiar agreementsGross amounts of recognised financial liabilities

Gross amounts of recognised financial assets set off in the balance sheet

Net amounts of financial liabilities presented in the balance sheet

Financial instruments not set off in the balance sheet

Assets pledgedNet amount

Derivative instruments are set off in the balance sheet when the settlement of two or more derivatives reflects the Bank’s anticipated cash flows. This occurs when the Bank has both a contractual right and intention to settle the agreed cash flows with a net amount. The remaining counterparty risk in derivatives is reduced through netting agreements if payments are suspended, i.e. netting positive values against negative values in all derivative transactions with the same counterparty in a bankruptcy situation. Handelsbanken’s policy is to sign netting agreements with all bank counterparties. Netting agreements are supplemented with agreements for issuing collateral for the net exposure. The collateral used is mainly cash, but government securities are also used. Collateral for repurchase agreements and borrowing and lending of securities is normally in the form of cash or other securities.

Repurchase agreements, securities

lending/borrowing and similar agreements


Assets pledgedNet amount


Collateral receivedNet amount

Gross amounts of recognised financial liabilities

Gross amounts of recognised financial assets set off in the balance sheet

Financial liabilities subject to offsetting, enforceable master netting agreements and similiar agreements

Net amounts of financial liabilities presented in the balance sheet

Related amounts not set off in the balance sheet

Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements

Gross amounts of recognised financial assets

Gross amounts of recognised financial liabilities set off in the balance sheet

Net amounts of financial assets presented in the balance sheet

Related amounts not set off in the balance sheet

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Note 18 Assets and liabilities by currency

31 Mar 2014

SEK m SEK EUR NOK DKK GBP USDOther

currencies Total

AssetsCash and balances with central banks 215 55,742 2,516 70 47,228 261,346 347 367,464

Other loans to central banks 20,468 0 7,645 14,596 232 - 0 42,941

Loans to other credit institutions 5,290 11,326 261 206 842 37,769 2,601 58,295

Loans to the public 1,141,984 164,683 184,541 65,946 135,639 23,295 10,923 1,727,011

of which corporates 506,328 121,922 101,375 28,012 94,436 23,228 9,727 885,028

of which households 635,656 42,761 83,166 37,934 41,203 67 1,196 841,983Interest-bearing securities eligible as collateral with central banks 28,386 6,779 2,959 6 - 22,410 1,242 61,782

Bonds and other interest-bearing securities 50,586 5,618 2,315 81 434 141 59,175

Other items not broken down by currency 259,172 259,172Total assets 1,506,101 244,148 200,237 80,905 184,375 344,961 15,113 2,575,840

LiabilitiesDue to credit institutions 27,311 18,957 6,928 13,728 11,265 82,269 13,217 173,675

Deposits and borrowing from the public 424,213 97,824 60,071 25,750 81,752 172,126 5,489 867,225


of which households 237,667 12,310 15,970 11,307 12,331 1,786 211 291,582

Issued securities 483,079 228,525 19,723 283 84,110 335,294 22,688 1,173,702

Subordinated liabilities 7,594 17,851 - - - 135 943 26,523

Other items not broken down by currency, incl. equity 334,715 334,715Total liabilities and equity 1,276,912 363,157 86,722 39,761 177,127 589,824 42,337 2,575,840

Other assets and liabilities broken down by currency and off-balance sheet items 118,888 -113,389 -41,108 -7,289 244,984 27,304Net foreign currency position -121 126 36 -41 121 80 201

31 December 2013

SEK m SEK EUR NOK DKK GBP USDOther

currencies Total

AssetsCash and balances with central banks 342 48,191 4,263 85 46,585 235,126 202 334,794

Other loans to central banks 2,540 130 11,105 21,156 229 0 35,160

Loans to other credit institutions 4,120 11,124 132 151 583 43,811 2,977 62,898

Loans to the public 1,121,986 164,903 182,613 62,231 129,807 24,378 10,421 1,696,339


of which households 627,212 41,827 80,804 37,266 38,915 65 1,222 827,311Interest-bearing securities eligible as collateral with central banks 26,826 6,727 1,137 6 0 21,202 1,553 57,451

Bonds and other interest-bearing securities 54,921 5,651 2,667 75 - 734 77 64,125

Other items not broken down by currency 233,954 233,954Total assets 1,444,689 236,726 201,917 83,704 177,204 325,251 15,230 2,484,721

LiabilitiesDue to credit institutions 29,695 24,208 5,252 13,315 12,156 75,355 11,643 171,624

Deposits and borrowing from the public 429,266 83,433 52,273 32,072 69,091 153,580 5,490 825,205


of which households 236,766 12,752 15,463 11,314 9,186 1,642 197 287,320

Issued securities 477,393 227,389 18,769 226 89,640 317,453 19,771 1,150,641

Subordinated liabilities 10,472 4,427 - - 143 923 15,965

Other items not broken down by currency, incl. equity 321,286 321,286Total liabilities and equity 1,268,112 339,457 76,294 45,613 170,887 546,531 37,827 2,484,721

Other assets and liabilities broken down by currency and off-balance sheet items 102,703 -125,629 -38,049 -6,362 221,290 22,683Net foreign currency position -28 -6 42 -45 10 86 59

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Note 19 Capital base and capital requirements in the consolidated situation

Figures reported in this section refer to the minimum capital requirements under Pillar 1, according to the capital adequacy regulations applying from time to time. On 1 January 2014, the European Capital Requirements Regulation (CRR) came into force. Capital base and capital requirement as at 31 March 2014 are calculated in accordance with the new EU regulations.

Capital base *

* The historic comparison figures in the table refer to CRR/CRD IV and are estimates based on the Bank’s interpretation of the regulations at the respective reporting date and assuming full implementation of the regulations.

** The amount as at 31 March 2014 assumes that Handelsbanken will receive the permission of the Swedish Financial Supervisory Authority to continue applying the same calculation principles for the pension assets as previously applied by virtue of the regulations. The Swedish Financial Supervisory Authority has not yet made a decision on this matter. If the application were to be rejected, common equity tier 1 capital would decrease by SEK 1,628m, the total risk exposure amount by SEK 4,969m and the capital requirement based on the Basel 1 floor by SEK 134m.

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

TIER 1 CAPITAL Equity, Group 107,820 111,339 106,512 102,391 100,366

Accrued unpaid dividend last year - -10,485 -5,123 -3,415 -1,707

Accrued dividend current year -1,904 - - - -

Result from unconsolidated entities -180 -680 -326 -227 -174

Equity in unconsolidated entities 1,031 1,727 1,842 1,829 1,843

Minority interests -2 -2 -2 -2 -2

Equity (consolidated entities) 106,765 101,899 102,903 100,576 100,326Deducted items

Goodwill and other intangible assets -7,883 -7,835 -8,164 -8,136 -7,533

Value adjustments (fair value) -1 -67 -7 -14 -12

Special deduction for IRB institutions -2,216 -1,986 -1,750 -1,852 -2,222

Positions in securitisation -492 -490 -486 -512 -496

Net pension assets ** -47 - - - -174

Adjustments in accordance with stability filter - - - - -

Cash flow hedges 490 1,518 696 831 -879

Unrealised accumulated gains, shares -1,323 - - - -

Common equity tier 1 capital, gross 95,293 93,039 93,192 90,893 89,010Threshold deductions Capital contributions to unconsolidated financial entities >10% CET1 - - - - -

Deferred tax assets >10% CET1 - - - - - Amount of capital contributions and deferred tax assets >15% - - - - -

Common equity tier 1 capital 95,293 93,039 93,192 90,893 89,010Additional tier 1 instruments 7,746 10,602 10,577 10,685 11,617

Total tier 1 capital 103,039 103,641 103,769 101,578 100,627

TIER 2 CAPITALSubordinated loans 17,393 3,882 4,313 7,362 7,231

Deducted items

Tier 2 contribution in unconsolidated financial entities -1,129 -1,129 -1,129 -1,129 -1,129

Total tier 2 capital 16,264 2,753 3,184 6,233 6,102

Total own funds 119,303 106,394 106,953 107,811 106,729

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Capital adequacy analysis *

* The historic ratios refer to CRR/CRD IV and are estimates based on the Bank’s interpretation of the regulations at the respective reporting date and assuming full implementation of the regulations.

Capital requirement

Capital requirement credit risks standardised approach

31 Mar 2014

31 Dec 2013

30 Sep 2013

30 Jun 2013

31 Mar 2013

Common equity tier 1 ratio, CRD IV 19.5% 18.9% 18.8% 17.8% 17.5%

Tier 1 ratio, CRD IV 21.1% 21.0% 21.0% 19.9% 19.8%

Total capital ratio, CRD IV 24.5% 21.6% 21.6% 21.1% 21.0%

Risk exposure amount CRD IV, SEK m 487,913 492,785 495,174 511,041 507,415Capital base in relation to capital requirement according to Basel I floor 141% 124% 125% 123% 126%

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Credit risk according to standardised approach 5,731 4,225 4,089 3,885 3,690

Credit risk according to IRB approach 27,729 28,015 28,385 29,555 29,342

Market risks 700 770 711 988 1,089

Credit value adjustment risk (CVA) 434

Operational risk 4,439 4,246 4,246 4,246 4,246Total capital requirement 39,033 37,256 37,431 38,674 38,367

Adjustment according to Basel I floor 46,859 44,039 43,363 42,957 41,990Capital requirement, Basel I floor 85,892 81,295 80,794 81,631 80,357

Total capital base, Basel I floor 121,519 100,406 101,360 102,210 101,117

SEK m31 Mar

201431 Dec

201331 Mar

201431 Dec

201331 Mar

201431 Dec

2013

Sovereign and central banks 455,245 406,996 0.0 0.0 3 12Municipalities 60,987 57,231 0.0 0.0 2 2Multilateral development banks 1,368 1,647 0.0 0.0 0 0Institutions 2,767 2,238 28.1 25.4 62 45Corporates 25,156 23,032 71.2 100.0 1,432 1,842Households 14,594 11,117 74.6 75.0 871 667Collateral in real estate 37,964 36,378 34.5 37.8 1,048 1,102Past due items 172 168 171.2 136.2 24 18Equities 7,111 0 230.8 0.0 1,313 0Other items 9,752 14,748 124.9 45.5 976 537Total 615,116 553,555 11.6 9.5 5,731 4,225

Exposure after credit risk protection (EAD) Average risk weight, % Capital requirement

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Credit risks IRB

Handelsbanken applies an internal method called the IRB model for categorising risk and calculation of credit risk. The capital adequacy regulations contain two different IRB approaches: a foundation approach and an advanced approach. In the foundation approach, the Bank uses its own method to determine the probability of the customer defaulting within one year (PD), while the other parameters are set by the Financial Supervisory Authority. In the advanced approach, the Bank also uses its own methods to calculate the loss in the case of default (LGD), the exposure at default (EAD) and the maturity factor (M).

Handelsbanken uses the foundation IRB method for exposures to institutions and for certain product and collateral types for corporate exposures in the whole of the regional banking operations and in the following subsidiaries: Stadshypotek AB, Handelsbanken Finans AB, Handelsbanken Finans (Shanghai) Financial Leasing Co Ltd and Rahoitus Oy. The advanced IRB approach is applied to the majority of exposures to large corporates, medium-sized companies, property companies and housing co-operative associations in regional bank operations (excluding the Netherlands), Handelsbanken Capital Markets, Stadshypotek AB and Handelsbanken Finans AB, and retail exposures in Sweden, Norway, Finland and Denmark, as well as in the subsidiaries Stadshypotek AB, Handelsbanken Finans AB and Rahoitus Oy.

At the end of the quarter, the IRB approach was applied to approx. 83% of the total risk exposure amount. For the remaining credit risk exposures, the capital requirement was measured using capital adequacy standard regulations. Repos and securities loans are reported separately in the table of capital requirements according to the IRB model, since they give rise to very low capital requirements, while the volumes vary considerably over time. The low capital requirement is because the exposure is reported gross and the exposure is secured.

The total average risk weight for the IRB exposures decreased slightly during the quarter, and as at 31 March 2014 it amounted to 18.7% (19.0). The decrease was mainly due to a fall in the average risk weight for corporate exposures. An important reason for the decreasing risk weight for corporate exposures is that the new CRR/CRDIV capital adequacy regulations entail lower risk weights for small and medium-sized enterprises (SMEs). The average risk weight for corporate exposures is also affected by the fact that the credit volume to counterparties with low risk weights in relative terms has increased, while volumes to counterparties with high risk weights in relative terms has decreased.

Credit quality is good. Some 95% of Handelsbanken’s corporate exposures were to customers with a repayment capacity assessed as normal or better than normal, i.e. with a rating grade between one and five on the Bank’s ten-point rating scale.

The advanced IRB models are based on historical losses from both the recent financial crisis and the Swedish banking crisis of the early 1990s. These risk weights reflect the fact that Handelsbanken has reported low loan losses over a long period. The risk measurements applied contain safety margins to ensure that the risk is not underestimated.

The level of the risk weight in the corporate exposures reflects the portfolio composition and how various loans are classified in the different exposure classes. Handelsbanken has classified its lending to housing co-operative associations as corporate, while some other banks have opted to classify this as retail lending.

The capital requirement for equity exposures in the IRB model is calculated according to a simplified risk weight method.

SEK m31 Mar

201431 Dec

201331 Mar

201431 Dec

201331 Mar

201431 Dec

2013

Corporates 918,852 915,218 26.1 28.4 19,204 20,824 of which repos and securities loans 8,629 8,376 0.7 0.5 5 3 of which other loans foundation approach 143,513 140,425 33.6 35.8 3,860 4,023 of which other loans advanced approach 766,710 766,417 25.0 27.4 15,339 16,798 of which large companies 146,069 153,810 51.4 52.5 6,003 6,458 of which medium-sized companies 72,598 72,305 51.2 57.4 2,971 3,323 of which property companies 406,876 401,705 18.2 20.0 5,914 6,435 of which housing co-operative associations 141,167 138,597 4.0 5.2 451 582

Households 830,431 818,080 8.2 8.3 5,448 5,405

Private individuals 802,201 789,722 7.5 7.3 4,812 4,604

of which property loans 717,143 705,004 5.5 5.2 3,167 2,934

of which other loans 85,058 84,718 24.2 24.6 1,645 1,670

Small companies 28,230 28,358 28.2 35.3 636 801

Institutions 99,045 100,503 16.6 11.9 1,314 954

of which repos and securities loans 48,384 48,863 3.4 0.8 133 31

of which other loans 50,661 51,640 29.1 22.3 1,181 923

Equity exposures 6,581 5,693 301.2 143.6 1,586 654

of which listed shares 5,664 4,369 290.0 133.0 1,314 465

of which other shares 917 1,324 370.0 180.7 272 189

Exposures without a counterparty 2,187 2,204 100.0 100.0 175 176

Securitisation positions 854 878 3.2 3.1 2 2

of which Traditional securitisation 854 878 3.2 3.1 2 2

of which Synthetic securitisation - - - - - -

Total IRB 1,857,950 1,842,576 18.7 19.0 27,729 28,015 of which repos and securities loans 57,013 57,239 3.0 0.7 138 34 of which other loans foundation approach 203,796 200,840 41.7 36.0 6,803 5,778 of which other loans advanced approach 1,597,141 1,584,497 16.3 17.5 20,788 22,203

Exposure after credit risk protection (EAD) Average risk weight, % Capital requirement

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BOKSLUTSKOMMUNIKÉ JANUARI – DECEMBER 2008

49 Handelsbanken

Capital requirement market risks

The capital requirement for market risks is calculated for the Bank’s consolidated situation. The capital requirement for interest rate risks and equity price risks is, however, only calculated for positions in the trading book. When calculating the capital requirement for market risks, the standardised approach is applied.

Capital requirement operational risks Handelsbanken uses the standardised approach according to which calculation of the capital requirement is based on the Bank's income in various business segments.

Historical statutory key figures*

* Key figures according to capital regulations applying in 2013.

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Position risk in the trading book 691 756 701 978 1,073

Interest rate risk 675 745 690 956 1,047

of which general risk 441 493 466 568 684

of which specific risk 228 252 224 387 362

of which positions in securitisation instruments 0 0 0 1 1

of which non-delta risk 6 - - - -

Equity price risk 16 11 11 22 26

of which general risk 4 3 4 6 5

of which specific risk 8 6 6 16 21

of which mutual funds 1 2 1 0 0


Exchange rate risk - - - - -

of which non-delta risk - - - - -

Commodities risk 9 14 10 10 16


Settlement risk 0 0 - - 0Total capital requirement for market risks 700 770 711 988 1,089

SEK m31 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Total tier 1 capital 100,137 100,682 98,779 97,961

Total capital base for capital adequacy purposes 100,406 101,360 102,210 101,117

Risk-weighted assets, transitional rules 1,016,192 1,009,925 1,020,391 1,004,465

Risk-weighted assets, Basel II 465,701 467,888 483,425 479,588

Capital ratio, Basel II 21.6% 21.7% 21.1% 21.1%

Capital ratio, transitional rules 9.9% 10.0% 10.0% 10.1%

Tier 1 ratio, Basel II 21.5% 21.5% 20.4% 20.4%Tier 1 ratio, transitional rules 9.9% 10.0% 9.7% 9.8%

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Note 20 Risk and capital management

Risks and uncertainty factors Although the turbulence in the financial markets has decreased, the structural problems that brought on the crisis remain. The debt problems of certain countries are still a concern, and both the financial sector and the real economy continue to be supported by massive stimulus in the form of monetary policy. Sooner or later the players in the economy must adapt to more normal circumstances. For the financial sector, apart from managing these circumstances, it also means adapting to significantly more stringent and extensive regulatory requirements – which have not yet been established in their entirety.

Handelsbanken’s historically low tolerance of risk, sound capitalisation and strong liquidity situation mean that the Bank is well

equipped to cope with substantially more difficult market conditions than those experienced during the quarter. The core operations will continue to be run using the same business model, even under stricter regulations. The Bank’s liquidity situation is described below in more detail under the heading Liquidity and funding.

Other aspects of the Bank’s risk and capital management are described in Handelsbanken’s Annual Report and in Handelsbanken’s Risk and capital management – Information according to Pillar 3. No material changes have occurred since the publication of these documents that are not presented in this interim report.

Liquidity and funding Handelsbanken’s liquidity situation is healthy. For a long period of time, the Bank has actively worked with liquidity measures and has adopted a conservative approach. Part of this work has involved centralising liquidity management with the purpose of strengthening control of the liquidity risks and of guaranteeing and optimising the Bank’s funding in all scenarios.

The Bank has worked for a long time on extending the maturities of its funding by increasing bond issues and ensuring that liquidity risks are included in internal pricing. The Bank’s funding programme covers the entire maturity spectrum in SEK, EUR and USD that the Bank needs to finance its lending, and also creates the opportunity for issues in all currencies that are relevant for the Bank.

Funding programmes/limits as at 31 March 2014 - Group

Programme (in millions) Programme size CurrencyUnutilised

amountCountervalue

SEK m Latest issue

ECP * 5,000 EUR 2,907 26,033 Feb-14

ECP (Stadshypotek) * 4,000 EUR 2,308 20,669 Mar-14

French Commercial Paper 7,500 EUR 6,380 57,134 Mar-14

EMTCN (Stadshypotek) * 20,000 EUR 7,426 66,501 Mar-14

MTN * 100,000 SEK 76,425 76,425 Mar-14

Swedish Commercial Paper 25,000 SEK 24,980 24,980 Mar-14

Swedish Commercial Paper (Stadshypotek) 90,000 SEK 90,000 90,000 Jun-13

EMTN * 50,000 USD 25,929 168,247 Mar-14

General funding >1 y * 15,000 USD 12,650 82,083 Jun-13

USCP 15,000 USD 6,765 43,896 Mar-14

Extendible Notes 15,000 USD 7,920 51,391 Oct-13

US 144A / 3(a)(2) 15,000 USD 5,150 33,417 Sep-13

Stadshypotek US 144A 15,000 USD 12,250 79,487 May-13

Stadshypotek AUD Covered Bond Programme 5,000 AUD 4,250 25,496 Oct-12

Samurai 400,000 JPY 349,500 21,963 Jun-13

AUD MTN 5,000 AUD 5,000 29,996 -

Total 897,718Total programme (or limited) amounts, SEK m 1,438,086

Unutilised amount, SEK m 897,718

Available amount 62%

* Under these programmes it is possible to issue in other currencies than the original programme currency. Currency conversion takes place at the time of issue.

51 Handelsbanken


DELÅRSRAPPORT JANUARI – MARS 2013

51 Handelsbanken

As at 31 March 2014, total liquidity reserves exceeded SEK 800bn. Balances with central banks and banks, as well as securities that are eligible as collateral with central banks, totalled SEK 519bn (see table

below). In addition, there was an unutilised issue amount for covered bonds and other liquidity-creating measures.

Balances with central banks and banks, and securities holdings in the liquidity reserve

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Cash and balances with and other lending to central banks 408,519 368,351 377,187 245,601 258,670 Balances with banks and the National Debt Office, overnight 11,809 2,182 1,827 2,770 9,701

Securities issued by governments and public entities 51,225 42,746 48,648 40,947 42,969

Covered bonds 43,340 43,318 49,566 54,449 57,910

Securities issued by non-financial companies 1,757 976 929 1,156 1,141

Securities issued by financial companies 1,942 2,505 2,214 2,785 2,119Total 518,592 460,078 480,371 347,708 372,510 of which in SEK 90,448 56,378 70,608 76,349 100,384 of which in EUR 68,143 59,496 81,996 69,425 63,374 of which in USD 277,388 250,024 247,795 164,579 187,881 of which in other currencies 82,613 94,180 79,972 37,355 20,871

Market value

31 March 2014

Market value, SEK m SEK EUR USD Other Total

Cash and balances with and other lending to central banks 19,085 55,675 261,335 72,424 408,519

Balances with other banks and the National Debt Office, overnight 9,318 121 322 2,048 11,809

Securities issued by governments 25,560 7,623 14,523 2,725 50,431

Securities issued by municipalities and other public entities 344 434 - 16 794

Covered bonds, external issuers 31,823 2,527 13 5,008 39,371

Own covered bonds 3,638 64 32 235 3,969

Securities issued by non-financial companies 680 1,077 - - 1,757

Securities issued by financial companies - 622 1,163 157 1,942Total 90,448 68,143 277,388 82,613 518,592

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52 Handelsbanken

Maturities for financial assets and liabilities

For maturities in SEK, EUR and USD, see the Fact book.

31 March 2014SEK m Up to 3 mths 3 - 6 mths 6 - 12 mths 1 - 5 yrs 5 yrs -

Unspecified maturity Total

Cash and balances with central banks 410,405 - - - - - 410,405Interest bearing securities eligible as collateral with central banks 61,782 - - - - - 61,782

Bonds and other interest-bearing securities 59,175 - - - - - 59,175

Loans to credit institutions 52,163 358 542 1,949 2,356 927 58,295

-of which reverse repos 30,436 - - - - - 30,436

Loans to the public 165,670 45,154 131,700 357,906 1,024,791 1,790 1,727,011

-of which reverse repos 18,539 - - - - - 18,539

Other 80,311 - - - - 178,861 259,172

-of which shares and participating interests 48,345 - - - - - 48,345

-of which claims on investment banking settlements 31,966 - - - - - 31,966

Total 829,506 45,512 132,242 359,855 1,027,147 181,578 2,575,840

Due to credit institutions 147,899 4,241 525 52 5,259 15,699 173,675 -of which repos 910 - - - - - 910 -of which deposits from central banks 76,118 3,454 - - - 1,507 81,079

Deposits and borrowing from the public 221,283 11,075 12,518 4,722 8,086 609,541 867,225

-of which repos 6,834 - - - - - 6,834

Issued securities 263,554 104,045 134,714 567,530 103,859 - 1,173,702

Subordinated liabilities - - - 25,587 936 - 26,523

Other 33,372 - - - - 301,343 334,715

-of which short positions 21,001 - - - - - 21,001

-of which investment banking settlement debts 12,371 - - - - - 12,371Total 666,108 119,361 147,757 597,891 118,140 926,583 2,575,840

The table shows holdings of bonds and other interest-bearing securities in the time intervals in which they can be converted to liquidity if they are pledged as collateral or sold. This means that the table does not reflect the actual maturities for the included securities.

In “Other”, assets and liabilities are reported as maturing in the time intervals that correspond to the contractual maturity dates, taking into account contractual amortisation plans.

Sight deposits are reported under “Unspecified maturity”. “Other” includes market values in derivative transactions.

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Liquidity Coverage Ratio (LCR)

In the area of liquidity, a number of new regulations have been gradually introduced, with the purpose of strengthening market financial stability. The Swedish regulations implemented as of 2013 contain a measurement of banks’ liquidity in the form of a short-term liquidity buffer – the Liquidity Coverage Ratio (LCR). This measure is based on the LCR measure proposed internationally, but it contains some deviations. In particular, the major changes to the ratio proposed by the Basel Committee in January 2013 have not yet been implemented in the Swedish regulations.

At the end of the quarter, Handelsbanken’s LCR according to the Swedish Financial Supervisory Authority’s regulations was 152%, which shows that the Bank has high resistance to short-term disruptions in the funding market. This also applies in US dollars and euros.

As at 31 March, the Group’s Net Stable Funding Ratio (NSFR) according to the Basel Committee proposal was 97%.

Stress test with liquidity-creating measures

The Bank’s liquidity position is regularly subjected to a stress test. In the test, the Bank’s cash flows are stressed, based on certain defined assumptions. The stress test shows resistance to more long-term market disruptions. For example, it is assumed in the stress test that the Bank cannot obtain funding in the financial markets while there is a gradual disappearance of 10% of deposits from households and companies over the first month. It is further assumed that the Bank continues to conduct its core activities, i.e. loans to households and companies and that committed loan offers and other credit facilities

are partly utilised by customers. Account is also taken of the fact that holdings with central banks are utilised and that the Central Treasury liquidity portfolio can provide immediate additional liquidity. In addition, liquidity-creating measures – for example, unutilised facilities to issue covered bonds – are used in order to gradually provide liquidity to the Bank. The result of the stress test shows that also in a stressed scenario, the liquidity reserves cover the Bank’s liquidity requirement for over two years, even if access to new funding in the markets were to disappear.

Liquidity Coverage Ratio (LCR), %31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

EUR 122 110 119 118 132

USD 158 170 163 190 229Total * 152 128 139 128 135

* In accordance with the Swedish Financial Supervisory Authority's directive FFFS 2012:6.

Liquidity Coverage Ratio (LCR) - decomposition, SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Liquid assets 208,504 162,346 241,407 155,703 186,891Liquid assets level 1 172,740 130,591 209,400 114,666 154,375

Liquid assets level 2 35,764 31,755 32,007 41,037 32,516

Cash outflows 547,871 507,882 507,019 420,415 403,258Deposits from customers 188,615 165,295 150,616 133,322 175,906

Market funding 285,119 265,572 277,439 200,704 163,881

Other cash flows 74,137 77,016 78,964 86,389 63,471

Cash inflows 410,903 380,912 333,567 298,888 265,085Inflows from maturing lending to non-financial customers 25,658 22,080 22,827 21,610 29,381

Other cash inflows 385,245 358,832 310,740 277,278 235,704The components are defined in accordance with the Swedish Financial Supervisory Authority's regulations and requirements for the liquidity coverage ratio and reporting of liquid assets and cash flows (FFFS 2012:6). Liquid assets level 1 corresponds to Chapter 3, Section 6. Liquid assets level 2 corresponds to Chapter 3, Section 7. Deposits from customers corresponds to Chapter 4, Sections 4-9. Market funding corresponds to Chapter 4, Sections 10-13. Other cash flows corresponds to Chapter 4, Sections 14-25. Loans to non-financial customers corresponds to Chapter 5, Section 4. Other cash inflows corresponds to Chapter 5, Sections 6-12.

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54 Handelsbanken

Non-encumbered assets, NEA 31 March 2014

SEK bn NEA

Holdings with central banks and securities in the liquidity portfolio 519 67%

Mortgage loans 353 113%

Other household lending 133 131%

Property company lending lowest risk class (1-3) 201 157%

Other corporate lending lending lowest risk class (1-3) 165 178%

Loans to credit institutions lowest risk class (1-3) 55 185%

Other corporate lending 224 214%

Other assets 115 229%

Total non-encumbered assets (NEA) 1,765 229%

Encumbered assets without underlying liabilities ** 57Encumbered assets with underlying liabilities 754

Total assets, Group 2,576

31 December 2013

SEK bn NEA

Holdings with central banks and securities in the liquidity portfolio 460 60%

Mortgage loans 340 105%

Other household lending 130 122%

Property company lending lowest risk class (1-3) 203 149%

Other corporate lending lending lowest risk class (1-3) 168 171%

Loans to credit institutions lowest risk class (1-3) 68 179%

Other corporate lending 224 209%

Other assets 96 221%

Total non-encumbered assets (NEA) 1,689 221%

Encumbered assets without underlying liabilities ** 57Encumbered assets with underlying liabilities 739

Total assets, Group 2,485

* Issued short and long non-secured funding and due to credit institutions** Over-collateralisation in cover pool (OC).

Accumulated coverage ratio in % of unsecured funding *

Accumulated coverage ratio in % of unsecured funding *

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55 Handelsbanken

Condensed set of financial statements – Parent company INCOME STATEMENT – PARENT COMPANY

STATEMENT OF COMPREHENSIVE INCOME – PARENT COMPANY

Information for the parent company with comments concerning financial performance, significant events and risk is covered by the report provided for the whole of the Handelsbanken Group.

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013

Net interest income 3,989 3,985 0% 3,897 2% 3,989 3,897 2% 15,962Dividends received 426 8,054 -95% 92 363% 426 92 363% 8,995Net fee and commission income 1,471 1,311 12% 1,461 1% 1,471 1,461 1% 5,649Net gains/losses on financial transactions 168 257 -35% 190 -12% 168 190 -12% 589

Other operating income 549 602 -9% 489 12% 549 489 12% 1,953Total income 6,603 14,209 -54% 6,129 8% 6,603 6,129 8% 33,148Staff costs -2,681 -2,175 23% -2,591 3% -2,681 -2,591 3% -9,977Other administrative expenses -1,235 -1,366 -10% -1,247 -1% -1,235 -1,247 -1% -5,075Depreciation, amortisation and impairments of property, equipment and intangible assets -116 -119 -3% -129 -10% -116 -129 -10% -498Total expenses before loan losses -4,032 -3,660 10% -3,967 2% -4,032 -3,967 2% -15,550Profit before loan losses 2,571 10,549 -76% 2,162 19% 2,571 2,162 19% 17,598Net loan losses -311 -311 0% -274 14% -311 -274 14% -1,189Impairments of financial assets - -29 - - - -29Operating profit 2,260 10,209 -78% 1,888 20% 2,260 1,888 20% 16,380Appropriations 27 25 8% 4,193 -99% 27 4,193 -99% 4,267Profit before tax 2,287 10,234 -78% 6,081 -62% 2,287 6,081 -62% 20,647Taxes -513 -2,284 -78% -1,360 -62% -513 -1,360 -62% -4,619

Profit for the period 1,774 7,950 -78% 4,721 -62% 1,774 4,721 -62% 16,028

SEK mQ1

2014Q4

2013 ChangeQ1

2013 ChangeJan-Mar

2014Jan-Mar


2013Profit for the period 1,774 7,950 -78% 4,721 -62% 1,774 4,721 -62% 16,028

Other comprehensive income

Items that can be reclassified into profit or lossCash flow hedges 21 -1,472 -436 21 -436 -3,009Available-for-sale instruments 148 173 -14% 315 -53% 148 315 -53% 534Translation differences for the period 1,795 1,837 -2% -1,133 1,795 -1,133 879 of which hedging net investment in foreign operations 1,385 1,312 6% -160 1,385 -160 901Tax related to other comprehensive income -332 13 85 -332 85 397 of which cash flow hedges 2 318 -99% 96 -98% 2 96 -98% 656 of which available-for-sale instruments -29 -17 -71% -46 37% -29 -46 37% -61 of which hedging net investment in foreign operations -305 -288 -6% 35 -305 35 -198

Total items that can be reclassified into profit or loss 1,632 551 196% -1,169 1,632 -1,169 -1,199Total other comprehensive income for the period 1,632 551 196% -1,169 1,632 -1,169 -1,199Total comprehensive income for the period 3,406 8,501 -60% 3,552 -4% 3,406 3,552 -4% 14,829

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56 Handelsbanken

BALANCE SHEET – PARENT COMPANY

SEK m31 Mar

201431 Dec

201330 Sep

201330 Jun

201331 Mar

2013

Assets Cash and balances with central banks 367,464 334,794 345,023 211,158 219,496Interest-bearing securities eligible as collateral with central banks 57,687 53,785 59,515 51,144 52,358Loans to credit institutions 494,644 475,440 473,074 453,562 460,841Loans to the public 702,872 685,372 691,725 703,996 694,576Bonds and other interest-bearing securities 54,680 58,943 58,813 60,273 67,206Shares 46,956 47,221 40,462 37,263 33,810Shares in subsidiaries and investmentsin associates 46,016 46,153 46,161 46,160 45,753Assets where the customer bears the value change risk 3,811 2,188 2,181 2,243 2,146Derivative instruments 75,570 78,295 85,847 100,270 115,317Intangible assets 1,760 1,750 1,705 1,715 1,646Property and equipment 980 978 899 957 944Current tax assets 160 - 642 105 -Deferred tax assets 224 202 239 265 346Other assets 20,056 16,468 25,631 26,133 14,224Prepaid expenses and accrued income 4,943 5,272 4,816 4,942 5,875Total assets 1,877,823 1,806,861 1,836,733 1,700,186 1,714,538

Liabilities and equityDue to credit institutions 232,531 226,631 229,132 264,573 284,862Deposits and borrowing from the public 864,097 814,227 796,090 621,562 626,806Liabilities where the customer bears the value change risk 3,859 2,236 2,244 2,273 2,166Issued securities 529,127 532,607 562,521 568,481 530,401Derivative instruments 75,804 77,143 86,430 87,599 109,121Short positions 21,001 22,845 18,371 20,098 29,040Current tax liabilities - 816 - - 635Deferred tax liabilities 447 114 177 154 577Provisions 106 128 109 94 104Other liabilities 29,354 12,703 30,859 23,622 20,065Accrued expenses and deferred income 10,203 9,915 11,879 11,034 10,679Subordinated liabilities 26,523 15,965 15,911 19,138 19,973Total liabilities 1,793,052 1,715,330 1,753,723 1,618,628 1,634,429

Untaxed reserves 753 773 783 823 816

Share capital 2,956 2,956 2,955 2,955 2,951Share premium 2,847 2,843 2,813 2,798 2,659Other funds 3,543 1,911 1,360 1,478 1,941Retained earnings 72,898 67,020 67,021 67,021 67,021Profit for the period 1,774 16,028 8,078 6,483 4,721Total equity 84,018 90,758 82,227 80,735 79,293Total liabilities and equity 1,877,823 1,806,861 1,836,733 1,700,186 1,714,538

Memorandum itemsAssets pledged for own debt 23,833 25,216 27,348 35,622 28,902Other assets pledged 44,230 41,679 36,265 35,612 33,027Contingent liablilities and commitments 126,886 121,509 123,391 129,902 135,041Other commitments 480,384 495,502 513,631 492,815 530,443

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57 Handelsbanken

SUBMISSION OF REPORT I hereby submit this interim report.

Stockholm 30 April 2014

Pär Boman President and Group Chief Executive

PRESS AND PHONE CONFERENCE A press and analyst conference is being arranged at the Bank’s head office on 30 April at 9.00 a.m. (CET).

A phone conference will be held on 30 April at 10.15 a.m. (CET).

Press releases, presentations, a fact book and a recording of the phone conference are available at www.handelsbanken.se/ireng

The interim report for January – June 2014 will be published on 17 July 2014.

For further information, please contact: Pär Boman, President and Group Chief Executive Tel: +46 (0)8 22 92 20

Ulf Riese, CFO Tel: +46 (0)8 22 92 20

Mikael Hallåker, Head of Investor Relations Tel: +46 (0)8 701 29 95, [email protected]

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58 Handelsbanken

Auditors’ report concerning review of interim report To the Board of Svenska Handelsbanken AB (publ), corporate identity number 502007-7862

INTRODUCTION We have reviewed the interim report for Svenska Handelsbanken AB (publ) as at 31 March 2014 and for the three-month period ending as at this date. The Board of Directors and the Chief Executive are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act for Credit Institutions and Securities Companies. Our responsibility is to express a conclusion on this interim report based on our review.

FOCUS AND SCOPE OF THE REVIEW We have conducted our review in accordance with the Standard on review engagements SÖG 2410, Review of interim financial information performed by the auditors elected by the company. A review consists of making inquiries, primarily to persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review differs from and is substantially less in scope than an audit conducted in accordance with the International Standard on Auditing

and generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

CONCLUSION Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim report is not, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act for Credit Institutions and Securities Companies for the Group and in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies for the parent company.

Stockholm 30 April 2014

KPMG AB Ernst & Young AB Stefan Holmström, Authorised Public Accountant Erik Åström, Authorised Public Accountant

59 Handelsbanken



Svenska Handelsbanken AB (publ), Corporate identity no. 502007-7862 SE-106 70 Stockholm, Sweden, Telephone: +46 (0)8-701 10 00, www.handelsbanken.se

Share price performance and other informationThe Swedish stock market grew by 2% during the first quarter of the year. The Stockholm stock exchange’s bank index rose by 3%. Handelsbanken’s class A shares closed at SEK 324.80, a rise of 3%, but including dividends paid amounting to SEK 16.50, the total return was 8%. Since 1 January 2000, Handelsbanken’s share price has increased by 204%, excluding dividends, while the Stockholm Stock Exchange has risen by 14%.

SHARE PRICE PERFORMANCE, 31 DECEMBER 1999 – 31 MARCH 2014

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SHB A OMX Stockholm Banks PI OMX Stockholm 30 Index

Company Analyst Email addressABG SUNDAL COLLIER Magnus Andersson [email protected]

ARCTIC SECURITIES Fridtjof Berents [email protected]

AUTONOMOUS Jacob Kruse [email protected]

BANK OF AMERICA MERRILL LYNCH Johan Ekblom [email protected]

BARCLAYS Christoffer Rosquist [email protected]

BERENBERG BANK Nick Anderson [email protected]

CARNEGIE Tobias Kaj & Peter Kessiakoff [email protected]

CITIGROUP Henrik Christiansson [email protected]

CREDIT SUISSE Jan Wolter [email protected]

DANSKE BANK John Bäckman [email protected]

DEUTSCHE BANK Omar Keenan [email protected]

DNB NOR Hakon Reistad Fure [email protected]

EXANE BNP PARIBAS Andreas Håkansson [email protected]

GOLDMAN SACHS Pawel Dziedzic [email protected]

J P MORGAN Sofie Peterzens [email protected]

KEEFE, BRUYETTE & WOODS Ronny Rehn & Aldo Comi [email protected]

KEPLER CHEUVREUX Mats Anderson [email protected]

MACQUARIE SECURITIES Dave Johnston [email protected]

MEDIOBANCA Riccardo Rovere [email protected]

MORGAN STANLEY Alvaro Serrano [email protected]

NOMURA INTERNATIONAL PLC Chintan Joshi [email protected]

NORDEA Pawel Wyszynski & Richard Henze [email protected]

PARETO Vegard Eid Mediås [email protected]

ROYAL BANK OF CANADA Claire Kane [email protected]

SEB ENSKILDA EQUITIES Masih Yazdi & Nicolas Mcbeath [email protected]

SOCIETE GENERALE Geoff Dawes [email protected]

SPAREBANK 1 MARKETS Odd Weidel [email protected]

SWEDBANK FIRST SECURITIES Bengt Kirkøen [email protected]

UBS Nick Davey [email protected]

INDEX, 31 December 1999=100

60 Handelsbanken


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