Swedish lender Handelsbanken has decided to exit its operations in Denmark and Finland as part of a strategy to increase focus on its main markets.
According to the bank, Denmark and Finland accounted for 10% of the income, 13% of the costs, and 8% of the operating profit within the group.
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Its allocated capital for these countries stands at around $1.74 bn (SEK15bn)
The bank said that it has started a process to divest its operations in these two markets as it sees little opportunity to scale up its offering without significant investment.
Handelsbanken also cited its small market share in these markets as well as the increasing regional and international regulations as reasons behind its decision to pull out.
Handelsbanken Group chief executive Carina Åkerström said that the bank will strengthen its focus on its primary markets in Sweden, Norway, and the UK, which accounts for about 91% of its profit.
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By GlobalDataÅkerström said: “From a commercial perspective, we want to have a presence in those locations offering the best conditions for profitable growth and a strong market position.”
Handelsbanken’s Swedish operations, which underwent transformation in recent years, has seen its managed fund volume increasing by 27%, and its mortgage volumes by 5% in the past year.
Last year, the bank decided to slash nearly 1,000 jobs and permanently close around 200 out of 380 branches in the country to save costs.
The bank’s Norwegian operations have exhibited very strong performance within the financing core business area over the past 15 years, particularly on the corporate side.
Handelsbanken has an independent subsidiary bank in the UK, where it sees further potential within corporate financing.
The bank’s business in the Netherlands will be a part of Capital Markets, together with Luxembourg and New York, by 1 January 2022.
Handelsbanken’s New York operations, which offer direct access to USD funding for the group, will remain the same.
This August, Handelsbanken agreed to outsource all card personalisation processes to French technology company IDEMIA.
