Handelsbanken Will Exit Denmark, Finland to Pursue U.K. Growth

(Bloomberg) -- Svenska Handelsbanken AB will exit operations in Denmark and Finland as the Swedish lender seeks to focus on growing in other European markets. 

The 150-year-old bank said Tuesday that it has begun a process to divest its units in the countries. The company pointed to its small market share in those nations and new regulations that make operating across regions more cumbersome. 

Handelsbanken, Sweden’s second-biggest bank by market value, has seen its shares rally 30% this year after a slide in the early months of the pandemic. Its Denmark and Finland units had weighed on the firm’s profit margin this year, and Chief Executive Officer Carina Akerstrom says the bank will focus on “building the business” in the U.K. and Norway -- its core remaining markets alongside Sweden.

“We need to invest where we see growth,” Akerstrom said in a phone interview. She cited asset management and financing as key target areas to fuel that expansion.

The lender said its allocated capital for Denmark and Finland stands at about 15 billion kronor ($1.74 billion). Handelsbanken also announced results for the third quarter, with net income of 5.19 billion kronor that beat the average analyst estimate, while net interest income fell short of the 8.04 billion kronor average estimate.

Click here for more details on Handelsbanken’s quarterly results

The planned divestments could trigger a wave of deal making in the Nordic banking sector. Antti Saari, an analyst at OP Group in Helsinki, said the bank’s Finnish operations could be of interest to Danske Bank, S-Bank or Swedbank. 

“Nordea might be hampered by market shares,” Saari said. “On the other hand, the Danish operations could be of interest to Nordea as well.”

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