July 18, 2018 / 4:54 AM / 4 months ago

UPDATE 1-Handelsbanken profit narrowly beats forecast, to guide on savings in Q3

* Q2 operating profit 6.22 bln SEK vs mean forecast 6.13 bln

* Says saw good growth in all major markets

* Interest income and commissions just beat forecast

* Says to quantify efficiency measures in Q3 (Adds detail, background, quote)

STOCKHOLM, July 18 (Reuters) - Swedish banking group Handelsbanken reported a slightly bigger than expected rise in operating earnings for the second quarter on Wednesday as firm growth across its main markets boosted income from lending and commissions.

Operating profit at the bank, with branches across the Nordics, Britain and the Netherlands, rose to 6.22 billion crowns ($702.6 million) compared to a year-ago 5.26 billion, topping a mean forecast of 6.13 billion seen in a Reuters poll of analysts.

The results were boosted by a previously announced capital gain of 837 million crowns from the sale of a stake in credit information agency UC.

Shares in Sweden’s third biggest bank by market value have been dented this year by a steeper than anticipated cost rise in the first quarter while worries over a slump in the country’s residential property market has weighed on the broader sector.

Handelsbanken, which has seen spending rise due to investments in IT and its expansion in Britain, said its total costs rose 8 percent year-on-year to 5.20 billion crowns in the quarter, higher than the 5.13 billion seen by analysts.

The bank said it was in the process of implementing strategic initiatives to boost efficiency, such as digitalising an increasing share of administration, and would quantify the effects of the measures in its report for the third quarter.

“Many of the efficiency-enhancing measures will result in cost savings,” the bank said in a statement.

The Stockholm-based bank, which has placed greater stock on retaining a sizable branch network than many of its rivals, stood by its estimate of spending 300 million crowns this year to develop its British business.

Handelsbanken said its quarterly net interest income, which includes income from mortgages, grew to 7.90 billion crowns from 7.32 billion a year earlier to come in just ahead of the mean forecast at 7.83 billion. ($1 = 8.8524 Swedish crowns) (Reporting by Niklas Pollard, editing by Johannes Hellstrom)

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