Lending money with interest is a business model that goes back to time immemorial, and has always had its doubters. Over hundreds and hundreds of years, the model has been tweaked and refined, evolving into the more cultivated, professional banking business we have today.
What hasn’t changed are the risks, which have always been inseparable from the lending process. Risks that result in credit losses for the lender, but that can also ruin a life’s work or cause human tragedy for people unable to repay their loans.
A bank that is irresponsible in its lending can earn large sums on its loans. At least in the short term – before the credit losses start to bite. But there are other paths to long-term success.
The antithesis of other banks
Throughout history, there are several examples of banks who have overreached with their risk appetite, and more often than not these banks have held on to their profits while letting others pay for their losses.
When financial crises hit, there is something jarring about the bank managers in their designer suits pleading their helplessness. Major losses are blamed on the state of the economy or pure bad luck. An international investor with billions in capital said, after the financial crisis of 2008:
“Our practice is to avoid investing in such banks. But we are glad to invest in Handelsbanken. We have done so for a long time. And we do this because Handelsbanken is, put simply, the antithesis of other banks. People like the bank. Both customers and employees. If we knew nothing about you other than that, it would nonetheless be reason enough to consider investing in Handelsbanken.”
A business built on trust
We have actively made certain choices to stake out a more sustainable path for ourselves. Nothing ground-breaking – we have eliminated unhealthy risks and greed, and instead stood by and supported our customers whenever stormy weather has hit.
We are always ready to take responsibility as a social actor, and we aim to be a part of our customers’ day-to-day lives, helping them to achieve success while we work to find and implement sustainable solutions.
Our way of working has earned us the confidence of both customers and investors. Today, it is a source of immense pride for us that we have never needed to accept financial support from the taxpayer or central banks.
Stability and long-term relationships
We believe in a decentralised way of working, trusting our staff to make the right decisions for our customers. The best option for our customers is also beneficial for our Bank.
Thanks to good knowledge of local markets, personal service, high cost awareness and digital alternatives, we can offer what our customers really want and actually need.
Historically, we have been able to offer solid financial stability with lower credit losses than our competitors, despite lending just as much or more.
This has given us the possibility to show more understanding and patience to customers when they have run into difficulties with their finances, which has long been a contributing factor to how we build up trust, loyalty and long-term customer relationships.
A working model we are more than happy to continue building up together with today’s customers.
Our markets
Sweden, Norway, the UK and the Netherlands are our home markets. Each of these countries is home to well-developed branch networks, where each branch makes the decisions that affect their local area.
This decentralised way of seeing things has resulted in more satisfied customers, better cost efficiency and higher profitability compared with our peers. We also have a presence in Luxembourg and the USA to support our customers that do business there.
We have continually been among the highest-ranked banks by credit rating agencies.