Second branch for Swedish bank that stresses customer services

Handelsbanken is opening a second branch in Leeds, 11 years after its arrival in the city.

The success of the first branch, its fifth in the UK, helped persuade the Swedish owners to develop the UK as an important market

Today, Handelsbanken has 124 branches in the UK, including 16 in Yorkshire, with more than half opening since the financial crisis of late 2008.

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Tracey Davidson, general manager in the North, told the Yorkshire Post: “From the word go, Leeds was very successful, with excellent people in that branch, many of whom have gone on to open other branches and do other jobs.”

These include Andrew Copsey, the first branch manager who is now equivalent to chief operating officer in the UK.

Ms Davidson said: “When we started to increase our branch opening programme, it was largely on the back of the success of branches like Leeds.”

The second branch will be at The Embankment and is expected to open within the next two months.

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Ms Davidson added: “As and when the right opportunities present themselves, we will open a branch.

“Here in Yorkshire, we have been really successful. We have some really talented and enthusiastic bankers who want to invest in their homes and communities and open more branches for us.”

A spokesman said the bank took the decision in the early 2000s to develop Britain as its fifth “home market” and first outside the Scandinavian countries of Sweden, Norway, Finland and Denmark.

Handelsbanken pays no bonuses to staff nor does it set sales targets for products. Its only target is higher return on equity than its peers, which it claims to have achieved for 40 years.

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Instead, the bank places strong emphasis on customer service and the individual branch as the means of delivering that service. It says branch managers are empowered to make lending decisions.

The decentralised model can be traced back to former chief executive Jan Wallander, who restructured the bank following a crash in the early 1970s.

Ms Davidson said that the bank was “entirely self-sufficient” through the most recent financial crisis and needed no taxpayer support.

Bloomberg rates Handelsbanken as the strongest bank in Europe and the second strongest in the world, based on measures including tier one capital, deposits to funding and costs to revenue.

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Ms Davidson said: “We continue to support existing customers and continue to take on new customers both in the UK and Sweden. We put that down to our conservative attitude. We stick to our knitting.

“We didn’t get into any areas that gave people trouble such as sub prime or expand into areas where we could not see the customer. We deal with people. That enabled us to continue right through the period.”

She said the main UK banks are “internally focused” on challenges like capital, infrastructure, compliance with new regulations and downsizing programmes.

The biggest impact of all this is on the staff, who are “nervous, uncomfortable and worried about their jobs”, she added.

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Ms Davidson said: “They are not looking at the customer. Because we are so strong we don’t have these distractions.

“If you look at the bigger banks, they have both sales targets which are product driven but also activity targets.

“Managers’ jobs are often reporting all these things. That means customers are not at the heart of what they are doing. The product is at the heart.

“In our bank, we don’t look at profitability of products. We look at what the customer wants.”

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She said the lack of bonuses did not make it difficult to recruit staff.

Ms Davidson added: “We hire excellent people. They want to be good bankers and use their knowledge and skill to serve customers.

“For them, this is an opportunity to be that banker rather than one that’s driven to do things they don’t agree with... a compromised banker.”

She said: “We should never compromise the fundamentals of what we are doing to chase short-term profit.”

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Staff benefit from the profit-sharing Oktogonen scheme, which holds shares until they are 60.

Ms Davidson said that despite short-term challenges, the UK has one of the strongest banking industries in the world.

But she added: “They are not thinking of the customer in what they are doing.”