UPDATE 1-Handelsbanken to slash costs as restructuring charges dent Q3 profit

(Adds detail of cost-cutting drive, background, and company comment)

STOCKHOLM, Oct 23 (Reuters) – Handelsbanken on Wednesday unveiled plans to cut costs and streamline its business as the Swedish lender posted a drop in third-quarter earnings due to restructuring charges.

Handelsbanken said it planned to cut its annual spending by about 1.5 billion crowns ($155 million) after the company booked restructuring charges of 900 million crowns in the third quarter, in part to cover an unspecified number of job cuts at the bank.

Quarterly net profit fell to 3.57 billion crowns ($369 million) from 4.11 billion crowns last year.

Analysts had expected earnings to come in at 4.11 billion crowns, according to Refinitiv data, but the estimates did not include the restructuring charges.

Handelsbanken’s strategy of expanding west rather than east, primarily in Britain, has left it unperturbed by the Baltic money laundering scandals that have engulfed Nordic rivals Danske Bank and Swedbank.

The Swedish lender, who chose to retain a large network of independent branch offices, has faced criticism over mounting costs for modernising IT systems and overseas expansion.

Chief Executive Carina Akerstrom, who took the helm earlier this year, will focus on cost cuts and core businesses. Akerstrom had said in July that an ongoing review of the bank’s operations was likely to result in job cuts.

The bank said on Wednesday it had decided to gradually wind down its relatively small business in Asia and pull out of Germany, focusing on home markets in the Nordics, Britain and the Netherlands.

“The decision has also been made to reduce the parts of the customer offering that are not deemed to support the core business,” it said in a statement.

The bank’s total costs, a closely watched metric in the wake of rising spending in recent years, was also dented by restructuring charges. Total costs rose to 6.28 billion crowns from 5.16 billion crowns in the year-ago period, higher than analysts’ expecatations of 5.46 billion crowns.

All Sweden’s top three banks published results on Wednesday with SEB reporting higher-than-expected third-quarter net profit, while Swedbank’s net earnings fell more than expected as costs to deal with its money-laundering issues weighed.

$1 = 9.6675 Swedish crowns
Reporting by Niklas Pollard and Colm Fulton; Editing by
Johannes Hellstrom and Sherry Jacob-Phillips