Sweden’s Handelsbanken hails ‘local model’ for record UK profits

THE Swedish bank that is challenging British lenders on the high street has shrugged off the Brexit vote to hail its strongest profits in the UK.

Handelsbanken posted operating profits of £53.2m in the UK for the second quarter, up 10pc on a year earlier, which helped to lift its earnings for the half-year to £100.4m. “It’s our best result to date, so we’re very pleased,” said Mikael Sorensen, the bank’s UK chief executive.

It comes as the lender continues to buck the trend by opening branches while the big British banks instead shrink their estates to counter the rise in online banking.

Handelsbanken now has 207 UK sites and prides itself on its decentralised model that harks back to the past by handing significant influence to local branch managers. The country is its biggest market outside Sweden.

A year on from Britain’s vote to leave the European Union, Mr Sorensen said that “for our branches it’s business as usual”. He added: “For us, banking is really local. Our existing customers still need their banking products, no matter if the UK is inside our outside the EU.” Lending in the UK was up 11pc to £18.1bn in the quarter, while deposits grew by 28pc to £12.1bn. At group level, although operating profits dipped to 5.26bn Swedish kronor (£487m) from 5.28bn kronor a year earlier, it was better than analysts had expected.

Separately, Lloyds Banking Group is considering plans to lease new offices in the City as part of a drive to cut costs by shrinking its overall owned property portfolio.