Quant Investing’s Shareholder Yield Letter for the month ended June 30, 2025.
Disclosure: I consider the publisher of Quant Investing (Tim Du Toit) a friend for over a dozen years now and I enjoy his writing and analysis. I think readers will too so I asked him if I could share some excerpts from his older newsletter issues with readers. This post contains affiliate links so we may earn a few dollars if you purchase a subscription to any of Tim’s services. – Jacob Wolinsky, Founder of Hedge Fund Alpha
Also see:
Invest smarter with the Shareholder Yield Letter, explore unbeatable value on our pricing, and supercharge your stock picks with the screener. Subscribe today and take your portfolio to the next level.
Svenska Handelsbanken AB (publ) – Sweden
Description
Svenska Handelsbanken AB (publ) (SHB) is one of the leading banking groups in Scandinavia.
The company provides a broad range of financial services across corporate banking, retail banking, asset management, capital markets and investment banking, insurance, and pension fund management.
Products and Services
It offers a broad range of banking products and services across its home markets.
- Core Banking Services: Provides loans and mortgages to households and businesses. It also offers deposit accounts and handles everyday payment services like cards and transfers.
- Asset and Wealth Management: Customers can invest in mutual funds and get help managing their savings. Services include investment advice, brokerage, and private wealth management.
- Insurance and Pension Services: The bank offers life and other insurance products and manages pension solutions, including employee benefit plans.
- Markets and Treasury Services: It supports clients with trading, risk management, and currency or interest rate solutions. The bank also manages its own funding and liquidity.
- Sustainable Finance: SHB finances green projects and offers products like green mortgages and sustainability-linked loans. Many of its funds are focused on environmental or social goals; and
- Digital and IT Services: The bank provides online and mobile banking. It also invests in its IT systems to improve efficiency and customer experience.
Segment Information
SHB organizes its results into geographical business segments:
- Sweden: 63.4% of FY2024 sales
- United Kingdom: 19.0% of FY2024 sales
- Norway: 9.6% of FY2024 sales
- The Netherlands: 3.5% of FY2024 sales
- Markets (this includes trading and advisory services, not restricted to a geographical market): 2.9% of FY2024 sales
- Others (this includes central functions like IT and HR): 1.6% of FY2024 sales
Management and Shareholding
Among the company’s board members, Lars Fredrik Elis Lundberg is both a director and a significant shareholder, owning 4.3% of the company’s shares, valued at SEK 1,091 million (USD 113 million). His dual role reflects a meaningful alignment between management oversight and shareholder interest.
Share Buyback Programs
No share buybacks occurred during the first quarter of 2025.
There was no change in the number of outstanding shares during the period, and no active or announced share repurchase program.
Dividend Policy
SHB did not declare an interim dividend for Q1 2025.
However, the first quarter 2025 financial report notes an anticipated dividend of SEK 5.00 per share.
For the full year 2024, the total dividend per share was SEK 15.00, including an ordinary dividend of SEK 7.50 per share, up 15.4% from SEK 13.00 paid in 2023, which included an ordinary dividend of SEK 6.50 per share.
Recent results
For the three months ended 31 March 2025, SHB reported a 3.5% decline in total income to SEK 14,789 million from SEK 15,318 million during the prior year period.
Net interest income decreased 2.1% to SEK 11,347 million from SEK 11,587, mainly due to SEK -481 million impact from lower margins and funding costs, partially offset by SEK 100 million from higher business volumes.
Net fee and commission income rose 5.3% to SEK 2,900 million, driven by stronger fund and insurance commissions and brokerage income.
Net gains/losses on financial transactions dropped 32.5% to SEK 506 million from SEK 750 million, due to lower market value changes and hedging inefficiencies.
Other income fell sharply by 84% to SEK 37 million from SEK 227 million, due to lower net insurance result and lower share of profit from associates and joint ventures.
Total expenses fell 6.9% to SEK 6,025 million from SEK 6,470 million driven by a 3.7% decline in staff costs and 16.2% decline in other expenses due to reduced use of external resources.
As a result, operating profit declined 1.6% to SEK 8,136 million from SEK 8,267 million, the previous year. On an adjusted basis (excluding non-recurring and special items), operating profit fell 3.7% to SEK 8,182 million from SEK 8,500 million.
Net profit after tax was SEK 6,322 million, down 4.3% from SEK 6,604 million while earnings per share decreased by 4.2% to SEK 3.19 from SEK 3.33.
Number of shares outstanding remained unchanged at 1.98 billion.
Operational Highlights
SHB improved its cost efficiency, with the Cost to Income (C/I) ratio decreasing to 40.7% (Q1 2024: 42.2%), supported by a streamlined organisation and reduced external consulting costs.
Credit losses remained low, with net reversals of SEK 54 million for the fifth consecutive quarter of net recoveries.
Business volumes were stable:
- Loans to the public: SEK 2,248 billion (flat vs Q1 2024’s SEK 2,246 billion).
- Deposits from the public: SEK 1,264 billion (up 3% from SEK 1,227 billion).
- Assets under management: SEK 1,131 billion (up 1% year-on-year from SEK 1,120 billion).
Green lending grew significantly:
- Green loans up 41% to SEK 132 billion from SEK 93 billion.
- Green mortgages up 39% to SEK 50 billion from SEK 36 billion.
Outlook
SHB expects continued resilience despite lower policy rates in core markets. It emphasized stable asset quality and high liquidity.
The Common Equity Tier 1 (CET1) ratio was 18.4%, positioning the bank well to grow in step with customer demand.
External challenges cited include:
- Macroeconomic uncertainty, including rate shifts.
- Currency effects, notably the Swedish krona’s appreciation.
- Regulatory fees, such as Sweden’s risk tax and the new UK Bank of England Levy.
The bank is maintaining a high capital buffer and aims to preserve flexibility for credit supply and business expansion in volatile environments.
Further Reading
Current Newsletter Portfolio
Notes:
The Shareholder Yield Letter portfolio is an equally weighted strategy and does not include dealing charges to buy or sell securities. Taxes are not included in total return calculations. “Return” includes gains from price appreciation, dividend payments, interest payments, and stock splits. For securities not quoted in Euro the total return is shown in the currency the security is quoted in. Sources for price data: Yahoo! Finance (finance.yahoo.com), Financial Times (www.ft.com), and company websites.
The Shareholder Yield Letter is published by Serendipity Ventures (UG) haftungsbeschränkt a limited liability company incorporated in Germany. The company’s address is Langbehnstr. 15, 22761, Hamburg, Germany. Telephone: +49 40 4146 6659, Email: [email protected]
Newsletter’s Investment Strategy
How the newsletter finds investment ideas
The see exactly how we select and analyse companies for the newsletter please click on the following link: How we find ideas for the Shareholder Yield investment newsletter.
Be sure to look at the two flow charts at the bottom of the article.
How the newsletter keeps your losses low
Stop buying when markets are falling!
The newsletter only recommends new investment ideas if the moving average of the MSCI World index is above its 200-day simple moving average (SMA).
The 200-day SMA rule only applies to the recommendation of new investment ideas, the stop loss strategy (see below) applies to existing ideas.
The index we use:
- Developed Markets World-Wide – MSCI World USD Index
(Click on the links to see a price chart with its 200-day simple moving average)
The Stop Loss strategy
The Shareholder Yield Letter follows a strict stop loss system which sells an investment if it has fallen more than 20% from the all-time high.
Stop-loss Rules.
The following are the rules of the newsletter’s stop loss strategy:
- A trailing stop-loss where you calculate the losses from the highest price the company has reached since it was recommended.
- Only look to see if the stop-loss percentage has been exceeded once a month, on the newsletter’s publication date. If you look at it daily, you may sell if the share price becomes volatile. This will also ensure that you keep your trading costs as low as possible.
- Sell your investment if at the monthly review date, the trailing stop-loss level of 20% has been exceeded.
- Measure the trailing stop-loss in the currency of the company’s primary listing. This means measure the stop-loss of a Swiss company in Swiss Francs (CHF) even if your portfolio currency is Euro (EUR).
- Adjust the trailing stop-loss for dividend payments as the share price usually falls by the amount of the dividend payment.
- Reinvest the cash from the sale in a current newsletter investment idea. This will make sure that you sell losing investments and invest the proceeds in the current best ideas
