(Corrects in eighth paragraph of Feb. 8 story to remove
reference to not paying into employee profit-sharing scheme
Oktogonen for second year in a row)
STOCKHOLM Feb 8 Sweden's Handelsbanken
reported fourth-quarter operating profit below
estimates on Wednesday and proposed a lower-than-expected annual
dividend as rising loan losses weighed on earnings.
Operating profit in the quarter fell to 4.70 billion Swedish
crowns ($529 million) from the year earlier's 5.53 billion,
lagging a mean forecast of 4.99 billion seen in a Reuters poll
Loan losses were up 75 percent to 832 million crowns,
compared with 475 million in the same period a year prior and
484 million in the analyst poll.
"This increase was entirely attributable to a single
exposure; the underlying credit quality remained stable," the
bank said in the report.
Net interest income, which includes income from mortgages,
rose 5 percent to 7.30 billion crowns from 6.97 billion a year
earlier and above the 7.15 billion crowns seen in the poll.
Net commission income rose to 2.45 billion crowns from 2.34
billion a year prior and 2.33 billion in the poll.
The bank proposed a dividend of 5.00 crowns per share, lower
than the expected dividend of 5.61 crowns per share and the 6.00
crowns per share paid out for 2015.
Handelsbanken, which does not pay out yearly bonuses, said
it had decided not to pay out any money to its long-term
employee profit-sharing scheme Oktogonen, citing hiked capital
requirements from the financial watchdog during 2016.
"The Bank's assessment is that provisions for Oktogonen can
resume during 2017," it said.
($1 = 8.8783 Swedish crowns)
(Reporting by Johan Ahlander; Editing by Johannes Hellstrom and