Operating profit rose 10% quarter on quarter to SEK 7,353 million, supported by stronger fee income and gains from derivative valuations. However, total income remained 2% below Q3 2025 as net interest income fell 5%. Nine-month earnings also benefited from a non-recurring VAT recovery5. Fee growth is the main support, and the nine-month result leans on a VAT recovery 457.
Sv. Handelsbanken · Q3 2026 · Reported 21 Oct 2026 · Nordic
Key figures
SEK million | Q3 2026 | Q2 2026 | Change |
|---|---|---|---|
Net interest income | 10,051 | 10,008 | +43 |
Net fee income | 3,330 | 3,135 | +195 |
Net gains on financial transactions | 515 | 116 | +399 |
Total income | 13,959 | 13,456 | +503 |
Total expenses | 5,910 | 5,963 | -53 |
Operating profit | 7,353 | 6,678 | +675 |
Profit rebounded on the prior quarter, but income is below a year earlier
Operating profit rose 10% to SEK 7,353m from SEK 6,678m in Q2, and earnings per share were SEK 2.87 against SEK 2.60 2. Against Q3 2025 the picture is weaker: total income was SEK 13,959m, down 2%, and EPS was SEK 3.00 a year earlier 4.
Return on equity was 13.5%, against 12.8% in Q2 and 13.3% a year earlier 4. The C/I ratio improved to 42.3% from 44.3% in Q2 but was worse than the 41.1% of Q3 2025 4. Expenses fell 1% to SEK 5,910m, and other expenses fell mainly on seasonally lower activity 5. My reading is that part of the sequential gain is seasonal cost relief rather than a structural improvement.
The sequential profit improvement was not primarily driven by recurring banking income. Net gains on financial transactions increased by SEK 399 million, largely reflecting a SEK 384 million improvement in the valuation of derivatives outside formal hedge accounting. By comparison, net fee income increased by SEK 195 million and net interest income by just SEK 43 million.
Lower regulatory fees and seasonally reduced operating expenses also supported the quarter. This makes the 10% profit rebound less indicative of underlying earnings momentum than the headline suggests.
Net interest income is still shrinking year on year, and funding costs now add to the pressure
Net interest income was SEK 10,051m, 5% below SEK 10,578m in Q3 2025, and fell 9% to SEK 30,075m over the nine months 4. For the nine months, margins and funding costs reduced it by SEK 2,719m, mainly on lower market rates, while higher volumes added SEK 468m 6.
In Q3 the line rose SEK 43m on Q2 3. Excluding foreign exchange of SEK 112m and a day effect of SEK 31m, it fell SEK 100m, or 1% 5. Margins and funding costs took SEK 194m, which the bank attributes to higher funding costs from higher market rates, and volumes added only SEK 87m 5. Home-market lending grew just 0.5% in local currencies in the quarter, so volume is not yet offsetting the margin drag 8.
Fee income and asset growth are lifting the top line
Net fee and commission income was SEK 3,330m, up 6% on Q2 and 12% on SEK 2,978m in Q3 2025 4. Fund management, custody and other asset management commissions rose 10% on Q2 to SEK 2,130m 5. Assets under management reached SEK 1,508bn, up 23% over twelve months, helped by rising market values and strong net inflows 8.
Some of the support is market-driven, and the flow data is softer. Net flow into the home-market mutual funds was SEK 10.7bn, against SEK 14.4bn in Q2, and SEK 44.1bn over nine months against SEK 49.3bn a year earlier 8. Brokerage income fell 18% and advisory income 27% on Q2 5. My reading is that fee growth is more exposed to market levels than the headline suggests.
The nine-month result rests on a one-off VAT item, and CET1 is below a year ago
Operating profit for January–September declined 3% to SEK 22,226 million, but fell 8% after adjusting for items affecting comparability. The reported result benefited from SEK 1,127 million in non-recurring VAT recovery income recognised in Q1, relating to the years 2020–2025. This partially masked weaker underlying profitability, particularly the decline in net interest income. 2. Other income was SEK 1,402m against SEK 272m, and the non-recurring items include SEK 1,127m of VAT to be recovered 47. Credit losses were SEK -70m against a positive SEK 278m a year earlier 7.
The CET1 ratio after anticipated dividends was 17.0%, against 18.2% a year earlier and 17.2% in Q2, and 2.5 percentage points above a requirement lowered from 14.7% to 14.5% 2. CET1 capital fell 4% to SEK 140,696m while risk-weighted exposure rose 3% to SEK 829,576m 9. Anticipated dividends of SEK 8.02 per share correspond to 92% of profit for the period 2.
What to watch next
The new household PD model is expected to cut the CET1 requirement by about SEK 3bn net in Q4 2.
Whether net interest income stabilises, given the SEK 194m margin and funding-cost drag in Q3 5.
Whether mutual fund net flows, SEK 10.7bn in Q3 against SEK 14.4bn in Q2, hold up as fee growth depends on them 8.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.