Handelsbanken Proposes Extra Dividend After Profit Rises 35%

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Sweden’s second-biggest bank reported a 35 percent rise in profit in the fourth quarter and proposed an extra dividend, resulting in a record payout to shareholders.

Shares in Svenska Handelsbanken AB rose as much as 4.5 percent in Stockholm and traded 1.9 percent higher at 102.20 kronor as of 9:18 a.m. Sweden’s benchmark index of the country’s most-traded stocks was down about 0.1 percent.

Net income was 4.50 billion kronor ($533 million) in the three months through December, the Stockholm-based bank said on Tuesday. That was just shy of an average forecast of 4.6 billion kronor in a Bloomberg analyst survey. Handelsbanken proposed an ordinary dividend of 4.50 kronor a share, plus an extra payout of 1.50 kronor, after profit was boosted by a capital gain of 1.2 billion kronor from the sale of an equity stake. The total dividend per share is the biggest in the bank’s history.

Net interest income rose 1 percent to 6.97 billion kronor, as falling interest costs helped counter the erosion of lending income from a negative central bank rate. Loan losses exceeded estimates by about 20 million kronor.

Handelsbanken proposed extending its 120-million-share buyback program for another year. The bank is also seeking shareholders’ permission to issue convertible debt to allow it greater flexibility with its capital structure. It already has issued additional Tier 1 debt.