Svenska Handelsbanken AB, one of Sweden’s biggest banks, is taking a long, hard look at its business model to see which corners it can ax so that costs stop growing faster than income.
Carina Akerstrom, who took over as chief executive officer in March, said she’s “not at all” happy with the way in which Handelsbanken’s costs are developing. She’s now trying to address that concern with a “major review” that started in the second quarter. The plan means the bank will exit some markets and cut jobs.
Shares in Stockholm-based Handelsbanken traded as much as 5.6 percent lower on Wednesday.
Analysts at RBC Capital Markets said the second-quarter results showed “mixed top-line developments, with higher than expected costs and impairments.”
The bank has already announced a complete retreat from the Baltics. On Wednesday, it said it would close offices in Poland, Jakarta and Sydney. Handelsbanken is also ceasing to offer export finance services and is channeling more resources towards “the creation of entirely digital customer relationships.”
One geographic area to which Handelsbanken remains committed is Britain, according to Akerstrom.
“The UK is definitely one of our growth markets,” she said in an interview in Stockholm. “It’s showing stable growth and it’s an important market to us, so we are very optimistic about the UK.”
“When or if Brexit happens, given the fact that we’ve turned our unit there into a subsidiary, we are, I would say, well prepared to handle” the situation in Britain, she said.
Handelsbanken said it has started a “realignment of strategy” that examines its presence outside its home markets in Europe.