The reports from the banks have been quite mixed. Handelsbanken’s report may be slightly better. Operating profit came in at SEK 9,177 million in the fourth quarter. This was much better than the analysts’ average of SEK 7,745 million. I would also like to point out that there are a total of 17 analysts following the bank.
The forecast for this year’s dividend was SEK 12.9/share. The board is now proposing a dividend of an incredible 15 SEK/share . This includes 7.5 SEK as an ordinary dividend and 7.5 SEK as an extra dividend. Last year, the dividend was 13 SEK.
When it comes to how much the big banks are “allowed” to distribute, the common equity tier 1 capital ratio is something that is taken into account. The common equity tier 1 capital ratio is expressed as a percentage and can be simply said to depend on how much capital the bank has in relation to its assets. In addition, the average risk weights of the assets are taken into the equation.
Despite this year’s large dividend, the bank is well above the requirement from the Swedish Financial Supervisory Authority. Perhaps most positively, the banks’ customers seem to be doing very well. Here, Handelsbanken reported net reversals of SEK 232 million and expected credit losses of SEK 171 million.
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