Handelsbanken's UK subsidiary, Handelsbanken plc, calculates the capital requirement for credit risk with the application of the standardised approach. At Group level, Handelsbanken applies the internal ratings-based approach to calculate the credit requirement for credit risk, including for those parts of its volumes which are reported by Handelsbanken plc. This is a requirement under the licence granted by the Swedish Financial Supervisory Authority.

The Swedish Financial Supervisory Authority has decided that, from 1 January 2021, the Bank is also to use the standardised approach at Group level, when calculating the capital requirement for credit risk at Handelsbanken plc. The risk exposure amount (REA) at the Bank will consequently increase by approximately SEK 65 billion in conjunction with the introduction of the new method. As at 30 June 2020, the total REA was around SEK 705 billion. The common equity tier 1 ratio was 18.7 per cent, while the common equity tier 1 capital requirement communicated to the Bank by the Swedish Financial Supervisory Authority was 14.0 per cent.

The Bank does not yet know what capital requirement the Swedish Financial Supervisory Authority will assign to the UK volumes at Group level, for which reason the impact of this decision on the common equity tier 1 ratio and total capital ratio at Group level will be announced at a later date. However, the Bank assesses that following this change, and in combination with other, previously announced changes, the common equity tier 1 ratio as at 30 June 2020, pro forma, remains over the target ratio range.

For further information, please contact:
Lars Höglund, Head of Investor Relations, +46 70 345 51 70
This information is of the type that Handelsbanken is obliged to make public pursuant to the EU Market Abuse Regulation, the Swedish Securities Markets Act and the Swedish Financial Instruments Trading Act. The information was submitted for publication through the agency of the contact person set out above, at 13:00 CET on 15 September 2020. For more information about Handelsbanken, see: www.handelsbanken.com

https://news.cision.com/handelsbanken/r/change-in-methodology-at-group-level-for-calculating-capital-requirement-for-credit-risk-at-handelsb,c3194287

https://mb.cision.com/Main/3555/3194287/1306405.pdf

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