Handelsbanken's Q2: Margins Squeezed, Savings Save the Day
Fee income and AUM inflows offset flat lending and margin pressure, while the CEO defends a long-term view on lower-return markets.
SHB-A.ST · Earnings Call · 2026-07-15
Svenska Handelsbanken reported a solid Q2 2026 with operating profit of SEK 6.7 billion, ROE of 13%, and a cost/income ratio of 44%. Credit losses remained essentially zero. But beneath the stable headline numbers, the bank's profit mix is quietly shifting: fee and commission income reached close to an all-time high, driven by strong net inflows into its net inflows in asset management. This is a bank that has historically been a lender through cycles, but the quarter's standout performer was the savings business, with assets under management growing across all four home markets.
A savings engine takes over
The fee line has become the main source of upside. In the prepared remarks, CEO Michael Green highlighted the dominance in Swedish fund flows: “The bank's market share of outstanding mutual funds volumes in Sweden is 12%. Over the past decade, the bank has attracted 27% of all net inflows into the market.” — Michael Green, Chief Executive Officer · 2026-07-15 Net fee and commission income rose 9% year-on-year, with savings-related fees up 14%.Margin pressure persists
Net interest income was flat sequentially, but the underlying mix is less flattering. A SEK 249 million drag from margin and funding costs, including the eight-week notice period in Norway and lagging repricing on central bank deposits, weighed on the quarter. CFO Marten Bjurman acknowledged the squeeze: “We see margin pressure both on the mortgage side and also on the corporate side in Sweden.” — Mårten Bjurman · 2026-07-15 This pressure is not new, but the bank continues to rely on volume growth elsewhere.The international debate
Investors remain unconvinced about the lower-return international markets. The U.K., Norway and the Netherlands each generate double-digit returns but below Sweden's 16.3%. Management pushed back, arguing the model is about long-term relationships. Bjurman said: “Generally speaking, in the U.K., we have a huge potential. As Michael said earlier on, we have a second to none customer satisfaction level in the U.K.” — Mårten Bjurman · 2026-07-15 The bank also highlighted a Moody's upgrade to the highest Baseline Credit Assessment rating. The CEO was equally firm on risk discipline. When asked if the bank should take on more risk to boost growth, Green responded:We don't like losing money. We want to have it back.