Low profile challenger bank Handeslbanken hits 200 branch mark

Having only opened six branches between 1982, when it established in London to support Nordic customers, and 2001, it then unveiled 20 between 2002 and 2006, 78 between 2007 and 2011 and then 96 between 2012 and 2015.

Handelsbanken now employs in excess of 1,900 staff in the UK, all part of its unique set up which sees branch managers retain full autonomy over lending decisions. Its latest quarterly financially report revealed lending of £14.6bn for British customers. It now holds £8.3bn of deposits for UK clients, while its wealth and investment subsidiary manages £2.4bn.

The Swedish bank has traditionally kept a low profile, shunning the normal big-budget marketing campaigns of fellow banks and not giving out large bonuses – instead favouring a long-term profit-sharing scheme that matures when workers reach 60.

The scheme, called Oktogonen, provides an equal share of the bank’s profits provided its annual return on equity is better than the average of its rivals. This target has been achieved in each of the past 42 years.

However, despite its harking back to the power of branch managers, the lender has embraced technology and launched a mobile app two years ago. This online presence, combined with in-branch operations, have seen it placed top of the pile for satisfaction and loyalty among business and personal customers for six years running – according to a survey from EPSI Rating.

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Handelsbanken’s UK chief executive Anders Bouvin said: “Time and again, our branches are bowled over by the warm welcome they receive in their local communities. This tells us genuine local banking relationships are as valued today as they always were, which is why we have built our digital and other services to reinforce, rather than replace them.

“Of course, a branch’s value will be judged on the level of advice and service it can offer, and Handelsbanken’s customers have high expectations. Our local teams focus all efforts on meeting these expectations, free from sales targets, and with full power to make all the everyday banking decisions that matter to their customers.”

A recent report from KPMG shed light on a “significant year” for challenger banks, with five being listed on the LSE and raising over £350m of new capital. It also pointed to the fact that during that year, lending assets for these banks increased by 16 per cent, set against a decline of 2.1 per cent for the “Big Five” (Barclays, HSBC, Lloyds, RBS and Santander).

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