Sweden's Handelsbanken - which has an office in Birmingham - yesterday beat third-quarter operating profit expectations and said it would demutualise its life unit SPP after injecting £928.5 million.
Earnings before interest and tax ( EBIT) were £285.7 million against an expected £242.8 million and up from £235.7 million in the same period in 2004. Many analysts had been expecting Handelsbanken to abandon its demutualisation plans for life assurer SPP and use any spare cash to buy back its shares.
Handelsbanken said it would go ahead with the process on January 1, 2006, and that it would have to inject 13 billion crowns of capital into SPP, raised by issuing subordinated debt. The bank said its capital position would remain strong after the demutualisation and it was considering share buybacks.
Handelsbanken's third- quarter net interest income was £264.2 million, in line with analysts' forecasts.
Net commission income at £121.4 million was also in line and well above the total for last year, thanks to stronger securities markets.
Handelsbanken said net financial income such as share dividends and gains in the value of financial assets was £64.2 million, up from £40.2 million in the same period
2004. The bank said its Birmingham operation continued to perform well, with cumulative income up by 59 per cent.