← Back

Handelsbanken: Handelsbanken's Q4 2025 Earnings: A Resilient Performance

Handelsbanken reported a solid fourth quarter with net profits from continuing operations slightly up compared to Q3, and a return on equity of 13%. Earnings per share (EPS) came in at 2.98, beating analyst estimates of 2.64. Net interest income (NII) declined by 3% in the quarter due to negative margin effects from lower short-term market rates. However, net fee and commission income increased by 5% driven by strong net inflows into assets under management. The cost-income ratio improved to 41% from 42.5% in Q3. The bank's CET1 ratio stood at 17.6%, 2.85% above the regulatory requirement.

SHB-A.ST

SEK 136.35001

-2.57%

A-Score: 6.4/10

Publication date: February 4, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • ROE Stabilizes at 13% Fourth quarter return on equity maintained at 13%, aligning with full-year performance despite margin pressures from lower short-term rates.
  • Dividend Increase Proposed Shareholders to receive SEK 17.50 per share (SEK 8 ordinary + SEK 9.50 extra), reflecting capital returns while CET1 ratio remains 2.85% above regulatory requirements.
  • Net Fee Income Growth 5% quarterly increase in net fees driven by asset inflows and stock market gains, though NII declined 3% due to rate cuts and deposit fee adjustments.
  • Cost Efficiency Improves Cost-income ratio dropped to 41% (from 42.5% in Q3), with annual cost reductions of 7% offsetting inflation and wage increases.
  • Consecutive Credit Loss Reversals Eight quarters of net credit loss reversals totaling SEK 313 million in 2025, underscoring strong credit quality and risk management.

Revenue Streams and Profitability

The bank's savings business continued to perform well, with assets under management reaching an all-time high in their home markets. Household lending started to grow again in most of these markets. For the full year 2025, the return on equity (ROE) was 13%, and the cost-income ratio was 41.5%. Adjusted for currency effects, NII declined by 7%, mainly due to cuts in central bank policy rates. Net fee and commission income remained resilient, increasing by 2% adjusted for FX effects.

Capital Management and Dividend

The bank proposes a dividend of SEK 17.50 per share, comprising an ordinary dividend of SEK 8 per share and an extra dividend of SEK 9.50 per share. The CET1 ratio of 17.6% places the bank back in its long-term target range of 100 to 300 basis points above the regulatory requirement. Management indicated a desire to be within this interval going forward, citing prudency.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.47 and a Dividend Yield of 10.4%, Handelsbanken appears attractively valued. Analysts estimate revenue growth of 3.8% for the next year. The bank's strong capital position and resilient savings business are positives. As Marten Bjurman noted, "We believe so" regarding a pickup in the market, indicating potential for future growth.

Handelsbanken's A-Score