SVNLF - Svenska Handelsbanken AB (publ) (SVNLF) Q2 2024 Earnings Call Transcript
2024-07-17 15:03:07 ET
Svenska Handelsbanken AB (publ) (SVNLF)
Q2 2024 Earnings Conference Call
July 17, 2024, 03:00 AM ET
Company Participants
Michael Green - President and Group CEO
Conference Call Participants
Magnus Andersson - ABG SC
Gulnara Saitkulova - Morgan Stanley
Sofie Peterzens - JPMorgan
Nicolas McBeath - the DNB
Shrey Srivastava - Citi
Namita Samtani - Barclays
Markus Sandgren - Kepler Cheuvreux
Andreas Hakansson - SEB
Riccardo Rovere - Mediobanca
Hugh Moorhead - Berenberg
Jacob Kruse - Autonomous
Piers Brown - HSBC
Presentation
Michael Green
Good morning, everyone, and welcome to this presentation of Handelsbanken's Results for the First Half and Second Quarter of 2024.
In the second quarter, we saw recovering earnings, the financial position remaining solid, and high activity within the Bank with execution efficiency-enhancing measures. ROE improved to 15.2% from 13.7% in the previous quarter. Operating profit rose by 3% to SEK8.5 billion. As income grew, costs dropped, and another quarter with net credit loss recoveries. The cost-income ratio dropped to 41.5% from 42.2%. In short, a positive development on the key lines.
The financial position of the Bank remains very healthy. The CET1 ratio was 18.9%, was 400 basis points above the regulatory requirement, which was in line with previous communication. As of April 1, a new organizational structure was implemented in the central and business supporting units.
With the organizational changes, decentralization was enhanced and measures taken for increased efficiency and profitability going forward. Business support functions have been more closely connected to the business-generating units, and Group functions have been streamlined. Group functions now account only for 4% of the workforce in the Bank, down from 8% prior to the reorganization.
As a result of the changes, the expenses and the revenues get more closely connected. With increased transparency, facilitates the prioritization of business-oriented IT development and clarifies P&L responsibilities.
As part of the efficiency initiatives in Q2, around 200 employees have signed agreements to leave the Bank, which was reflected in around SEK300 million of one-off cost for redundancy payments. About half of the related employees ended their employment at the last day of the quarter and the rest will leave in the coming months. Hence, there was no visible effects on underlying cost in Q2 from these agreements....
Svenska Handelsbanken AB (publ) (SVNLF) Q2 2024 Earnings Call Transcript