Sweden’s Biggest Bank Says Cost Cuts to Hit 1,000 Employees

Svenska Handelsbanken AB unveiled a series of cost cuts as part of a digital revamp it says will affect about 1,000 employees.

Sweden’s biggest bank intends to almost halve its branch network, which has long been a hallmark of its business model, according to astatement on Wednesday. At the same time, management will invest about 1 billion kronor ($114 million) in technology, it said.

Read: Handelsbanken to Cut Jobs, Number of Branches in Cost-Cut Plan

“These changes will help us to lower our costs,” Handelsbanken said. It expects the shift to a more digital service to bring its “customer offering to an entirely new level.”

The announcement comes just one day after Handelsbanken’s investorslearned that its regulator was forcing management to recalculate loan-book risk. Analysts at Bloomberg Intelligence estimate the decision could wipe up to 160 basis points off the bank’s common equity tier 1 ratio, a key measure of capital strength. Shares in Handelsbanken fell 5% on Tuesday, after the announcement.

The bank said its latest plan to reduce its workforce, which comes on top of previously announced cuts, will take roughly two years. “Negotiations and consultations are being initiated immediately with the relevant trade unions.”

Handelsbanken will need to make a provision in the fourth quarter of around 1.5 billion kronor, it said.

“The changes are the result of the Swedish part of the review of the entire bank’s business operations, which was announced last autumn,” it said.

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