Is the Handelsbanken model under threat?
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Is the Handelsbanken model under threat?

Sweden’s Handelsbanken was the perfect antidote to investors burned by the pre-2008 bubble, but investors are no longer so enamoured of its consistent strategy.


Svenska Handelsbanken is akin to a European Wells Fargo. Like its American equivalent, it is almost entirely focused on one country – Sweden – and very successfully, at least until recently. A cohesive workforce, consistent strategy and conservative risk attitude made Handelsbanken the ideal bank for the post-2008 world: a “strategic blueprint that other banks should aspire to follow”, according to a 2015 Berenberg report.

Ten years after the crisis – and with Wells Fargo brought to earth by a series of consumer scandals – is the Handelsbanken model of banking under threat?

Handelsbanken maintains the highest consensus price-to-earnings ratio among the Nordic banks at 11.3x, according to Berenberg. As such, it is one of Europe’s highest-valued banks. But its shares fell about 7% between summer and autumn, while Swedish peers SEB and Swedbank rose by 11% and 6%, respectively.

The number of analysts recommending a sell or underperform on Handelsbanken shares rose to 11 by November, according to Reuters, compared with only three recommending a buy or outperform.

In that context, the announcement of Anders Bouvin’s intention to step down as chief executive in 2019 inevitably raised more questions about how Handelsbanken’s branch-centric strategy can compete in an era when other Swedish banks are switching almost entirely to digital channels.

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