Large Swedish bank quarterly reports continued with Svenska Handelsbanken (OMX: SHB A) on Thursday. Income increased to 8.8 billion where as operating profit for continuing operations grew by 16% to 4.57 billion SEK. The bank is far above any perceived upcoming stricter capital requirements at 19.1% Tier 1 Capital ratio and 16.4% Core Tier 1 Capital ratio. The share responded with a small minus on Thursday but took back those losses on the heels of an UBS upgrade on Friday.
On Friday the bank also posted a new macro forecast. The expectations for BRIC were adjusted upwards where as PIGS countries are seen as weaker still. The feeling in it is that more monetary stimulus is needed to jumpstart economic growth. Signs of credit easing from China are visible, which should lead to more imports, and hard-landing concerns seem to be easing. Spain is seen as the problematic part. While the Swedish slowdown is likely coming to an end, no strong drivers to return to rapid growth seem visible.
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