Swedish consumer bank Handelsbanken has decided to slash nearly 1,000 jobs and permanently close around 200 out of 380 branches in the country to save costs.
The downsizing will take place over the next two years.
Go deeper with GlobalData
The decision to trim its workforce and branch network comes after more customers adopt digital banking services.
The branch closures will be completed by next year-end.
The move is expected to reduce its costs by about SKR1.7bn ($194m) – compared to last year – to around SKR20bn by 2022-end.
Over the next two years, Handelsbanken will invest SKR1bn ($115m) from its cost savings in information technology (IT) and digital services.
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By GlobalDataIn a statement, Handelsbanken noted: “On one hand, many of Handelsbanken’s core customers have ever more advanced demands for their personal meetings. For this reason; Handelsbanken is now strengthening its presence at the branches, in order to meet the demands of, for example, corporate customers and private banking customers.
“On the other hand, customers would like to be able to perform more and more banking transactions digitally – quickly, simply and personally. Therefore, the Bank is investing a total of SEK1bn in IT over the next two years, in order to take its digital customer offering to an entirely new level.”
The bank also said that it will set aside nearly SKR1.5bn during its fourth quarter to pay for the redundancies.
Handelsbanken CEO Carina Akerstrom said: “Our ambition – as always at Handelsbanken – is to manage these redundancies with care and respect for individual employees.”
Analyst comments
Danske Bank senior analyst Andreas Hakansson said: “I fear that the big changes due on the branch network will lead to a very volatile, even painful, couple of years for Handelsbanken.
“When all the cost savings and revenue losses are delivered, it’s a very small benefit that you get out of this restructuring, which is a little disappointing.”
Berenberg analyst Adam Barrass said: “It may prove a big step change in people’s perception of Handelsbanken as a bank. The ethos has been that the branch is the bank.”
Handelsbanken’s Finance Union representative Anna Hjelmberg said: “It is a very sad decision. We will do everything to ensure that every individual, employee, member is treated with a lot of respect.”
Recently, Handelsbanken was urged by the country’s financial watchdog to change how it calculates risk at its UK subsidiary.
