Swedish-based UK challenger bank Handelsbanken grew third quarter profits by expanding business volumes and reducing loan losses.
The lender posted a nine per cent increase in operating profit for the three months to September across its UK branches, in sterling adjusted terms. The £46.4m generated in the quarter took aggregate operating profit for the first nine months of the year to £139m.
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However, although Handelsbanken generates income and expenditure in sterling in the UK, it reports in Swedish krona. When translated into its home currency, the third quarter results shrank compared to the same period in 2015. Operating profit was down eight per cent from 561m krona to 518m krona.
UK lending was up 12 per cent to £16.8bn compared to the same period in 2015, with business lending up 10 per cent at £11.2 bn. Deposits at the British arm grew by nearly a fifth to £10.3bn.
Expenses swelled considerably, again in sterling terms, and were up 16 per cent. The bank said that this was "entirely due to the expanding operations" in the UK. It now runs 205 branches across Britain.
Compared to the second quarter, operating profit decreased by 9 per cent in krona terms. The reduction was mainly attributable to one-off income in the period of comparison related to the sale of Visa Europe.
The results announcement is the first since Handelsbanken announced an executive board shake-up that saw group chief executive and president Frank Vang-Jensen being replaced by Anders Bouvin in August.
The wider group also fared well. It grew operating profit in the first nine months by seven per cent to 15,935m krona.