Handelsbanken Investors Demand More Transparency From Swedish Bank

Core Viewpoint - Svenska Handelsbanken AB has appointed Michael Green as CEO, reflecting a conservative approach to management and a preference for traditional banking practices over technological investment and transparency initiatives [2][3][4]. Company Strategy and Management - The bank's board selected Michael Green, a conservative operator, to replace Carina Akerstrom, who had been advocating for technological investments and a more open culture [2][3]. - Under Green's leadership, several of Akerstrom's planned changes have been overturned, indicating a shift back to more traditional banking practices [2][3]. - Handelsbanken has been slower than competitors to invest in high-growth areas and technology, focusing instead on branch-based lending and mortgages [3][5]. Financial Performance and Market Position - Handelsbanken's shares have underperformed compared to peers, with a 22% increase over the past six years, while SEB, Nordea, and Swedbank saw gains of 90%, 75%, and 65% respectively [6]. - The bank's revenue is heavily reliant on net interest income, accounting for about 75% of total revenues, making it vulnerable in a rate-cutting environment [8][9]. - The return on equity is projected to be around 11% through 2026, which is at the lower end among Swedish banks [9]. Operational Challenges - Handelsbanken has dismantled much of its investment banking arm over the past two decades and has not significantly invested in high-return businesses like asset management [5]. - The bank's conservative lending model, while historically profitable, has become less effective due to increased capital requirements and limited income from fees and asset management [7][8]. Shareholder Sentiment and Transparency Issues - There is a notable lack of transparency regarding the bank's operations, particularly concerning its media subsidiary, EFN, which has raised concerns among shareholders [16][17]. - Analysts have expressed frustration over the bank's reluctance to clarify its strategy, with more sell recommendations than buy or hold ratings compared to peers [11][16]. - The influence of major shareholders, such as Industrivarden and Oktogonen, has contributed to the bank's conservative approach and resistance to change [18][20].