Svenska Handelsbanken AB (publ)

Good morning and welcome to the Handelsblanken Q2 report for the second quarter 2022. And we're going to begin by listening to our president and CEO, Carina Åkerström, presenting the Q2 figures together with the CFO of the company, Carl Sederholt. After that, we will have a short break and then we will have a Q&A session. over a phone conference service, not, therefore, broadcast in this channel. You can find information on how you log onto the Q&A session at handelsblanken.com under the section IR, and information was also included in the press release that was published together with the invitation. This presentation, the Q&A session, rather, will be held in English.

Presentation in English. You can do so by logging into the telephone conference service where it will be simultaneously translated. And you find information on how to log on to that on handelsbanken.com under investor relations. So då startar vi presentationen.

Now let's begin with the presentation. Carina, over to you. Thank you, Louise. Thank you. And once again, good morning. A warm welcome to you all for this Q2 report from Handelsblanken. We have a good first quarter to report, a good first six months with a record strong situation of control, cost development and virtually therefore is well positioned to continue to grow in a successful manner and with profit in funding, deposits and asset management. If you look more from a business focus perspective on the numbers, A picture is painted of a bank which is very well positioned and standing strong in the new global situation and the new market. We're now currently operating and we're growing in lending and deposits. We can see this in the net interest income, which reached the highest level so far ever recorded. It's increasing, as can be expected in a bank like ours, when market interest rates go up. And in a market with a decline in the stock exchanges rate, The Handelsbank performance is above and beyond those of many other players in net fees and commissions. The net flow out from the bank margin, and we've seen major movements in the market overall. Credit losses are virtually non-existent, so our asset portfolio is continuing to be at a very high quality level capital situation. We're remains comfortably strong and stable, and the costs are currently at a level which we are happy with. They are going up, but in the right places. All in all, the stability over the quarter means that CI ratios continue to drop, and perhaps the most rewarding point of all is the major changes we're witnessing in the UK. After a couple of years of intensive work, the UK is now delivering a very strong performance. Let's have a look at... and sum up the first quarter compared to the last year. So this is January to June. Operating profit up by 8%, adjusted to 2. CI ratio dropping. It's at 46%. Income up by 2%. Cost up by 1%. Income is driven by record strong net interest income, net fees and commission for the six months, holding effects which can be seen on the NFT line. So expenses going up by 1% adjusted for non-recurring items and at the same time we're stepping up the pace in our development and should also add whilst the overall inflation generally appears to be speeding up during the first six months. Credit quality, asset quality remains strong and credit losses as I mentioned are virtually non-existent. Let's have a look at this quarter. Compared to 2022, we see net interest income up by 5% between the first two quarters, increase in business volumes and a positive impact of the increasing market interest rates. Net fees and commissions are dropping somewhat, but it's still holding up. NFT has an impact here as well. So all in all, the impact Income is down by 2% from the previous quarter. Expenses on chains adjusted for octagon and currency effects increased by 1% a week, which can be explained by normal seasonal patterns. The operating profit is to a change of 5%. And this is excluding the valuation effects I mentioned on the NTF. The ratio amounted to 46.6%. And underlying credit losses is in fact consisting of net recoveries. But we're making general reserves as a result of the current global situation. Let's continue and have a look at our lending. We grow and we see an excellent growth in all of our markets. On the household lending side, we see a stable increase to the tune of 5%. Looking at corporate lending, we see a good development, 11% compared to previous year. And for the first five months of this year, Handelsbanken was the major lending player in Sweden in terms of lending to corporates. It is a very well-diversified business between property lending and operating companies. And if we look at deposits, we see excellent growth here as well, up by as much as 11%. And on the private side and on the corporate side, we also see good development. It's an important component in the bank's business. And in the current interest rate situation, it's important. Every four – one – four – invested in Sweden, deposited, went to Handelsbanken. Let's look at savings continually. We see a continued good development, the strength and the robustness we've managed to achieve and accomplish over a long time with net inflows into the bank, as you see to the right of this slide. In fact, over more than 10 years now, an average of 25% of the net inflows in the market ended up in Handelsbanken. And gradually, we've increased our market share. We're now at a market share of 12.2%. The market share of the net inflow from the past 12 months has been Just over 40%. So the savings business is operating well, given the current macroeconomical situation. The market sees outflows, but the bank net flows have only been impacted marginally. Now, let's try and sum this up. We are currently in a situation where income is increasing more rapidly than expenses. CI ratios trending downwards and our expectations, of course, is for this to continue. Let's have a look at our assets and our asset quality. As I mentioned previously, credit losses are virtually at zero. with a stable portfolio, low-risk portfolio, and as expected, no credit losses. And this has been the situation over the past few years. The provisions we're making are linked to the reserves, partially related to the pandemic, but also, of course, because there's a number of uncertainties in the world around us. So in addition to a robust credit process, skilled people working in the bank, and The explanation above and beyond that is explained by the actual identification of the portfolio. Let's zoom out to some extent and have a look at our home markets and the situation for the first six months of the year. Let's begin by looking at Norway. We continue the good growth. We've achieved an all-time high on net interest income of by as much as 6% over the first six months. Net fees and commissions increased. In Norway, up by 5% in spite of the market turbulence there. And all in all, income is up by 6%. CA ratio just below 38%. And we have an excellent business where we're also increasing our development focus to strengthen customer meetings on the household and private side in particular. And then Holland, the Netherlands, we continue to see excellent growth here as well. Lending up there. to move steadily downwards. Let's have a look more closely at the markets in Sweden and the UK. In Sweden, our largest market, here we continue to see a stable business development with good key ratios, stable development also in net interest income. households, mortgages, stable growth 5%, corporate lending growing by 10%, and with an excellent mix, as I mentioned earlier, between property and operating companies. Net fees and commissions impacted by the development on the stock exchanges, but we're holding on to our position and we're continuously gaining market shares, as I mentioned earlier. The UK, well, here the major trend change is perhaps to be found there. We've had a long period where we've invested a great deal of effort and time, but we've seen a clear momentum in the business and the tide appears to have turned. Income is up, costs are down. And expenses saw a rapidly dropping CEI ratio, which ended up at 57% compared to 73% a year ago. Operating profit in the UK is at the highest level ever for the partial year, 43%, and a return on equity as much as 14%. We also see a volume development in the UK. It's beginning to be more and more visible on the corporate lending side. Volumes are up. What we're also doing in the UK and been doing for a period is that some of the corporate lending has been... It's sort of hiding the general development in lending. We've strengthened our portfolio, in fact, by off-boarding to some extent. So all in all, we see excellent development in all our home markets, in particular considering the current macroeconomic situation. We're increasing business volumes. We see improved margins and keeping expenses at a good level. Let's have a look at our capital that I mentioned. is excellent. CET1 ratio, 18.7%, 480 basis points above the regulatory requirement and 180 basis points over the bank's target range. All in all, we see strong development in our business to have the capacity to meet the demand of our customers is placing the bank in In an excellent position, we are well positioned in the new current situation in the world, globally and in the market. And we focus on continued growth in the future. Over to you, Carl.