Handelsbanken s interim report* January - September 2007

Summary January - September 2007, compared to January - September
2006

* Operating profit increased by 10% to SEK 11.6bn (10.6)
* Return on equity increased to 17.4% (17.1) and including
  discontinued operations it was 18.4%
* Income totalled SEK 20.5bn (19.0)
* Profits after tax were SEK 8.6bn (8.0)
* Earnings per share increased to SEK 13.78 (12.42) and SEK 14.58 for
  total operations
* Operating profits in branch office operations outside Sweden
  increased by 39%
* Net interest income went up by 17% in branch office operations
  outside Sweden and by 3% in the Swedish branch office operations
* The Bank opened 20 new branches outside Sweden and it has been
  decided to open a further 26 new units

Summary of Q3 2007, compared with Q2 2007

* Operating profit was SEK 3.5bn (4.4)
* Return on equity was 15.7% (20.2) and including discontinued
  operations it was 15.4%
* The Bank entered into an agreement to sell SPP and related
  operations to Storebrand for SEK 18bn

_________
*At the beginning of September, an agreement was made to divest SPP
and related operations. This means that as of this quarter, the Bank
will report continuing and discontinued operations in accordance with
IFRS 5. Note 5 describes what is included in discontinued operations.
All comments in the interim report refer to the continuing
operations, unless otherwise stated.

The Group

At the beginning of September, an agreement was made to divest SPP
and related operations. This means that as of this quarter, the Bank
will report continuing and discontinued operations in accordance with
IFRS 5. Note 5 describes what is included in discontinued operations.
All comments in the interim report refer to the continuing
operations, unless otherwise stated.


JANUARY-SEPTEMBER 2007 COMPARED WITH JANUARY-SEPTEMBER 2006

Operating profit was SEK 11,631m (10,589), an increase of 10%. Net
interest income went up by 4% to SEK 11,598m (11,099). It rose both
in the Swedish branch office operations and in the branch office
operations outside Sweden. Net fee and commission income rose by 11%
to SEK 5,789m (5,216) and net gains/losses on financial items at fair
value rose by SEK 576m to SEK 2,531m (1,955). Expenses rose to SEK
9,019m (8,473) and recoveries exceeded loan losses. Return on
shareholders' equity was 17.4% (17.1) and the C/I ratio was 44.0%
(44.7). Earnings per share were SEK 13.78 (12.42).

Return on equity for the total operations, including the operations
reported as discontinued, was 18.4% (20.2). Earnings per share for
the total operations were SEK 14.58 (14.63).

Income growth and continued increase in volume

The Group's income increased by 8% to SEK 20,510m (18,951). Net
interest income increased in both the Swedish branch office
operations (3%) and in branch office operations outside Sweden (17%).
In branch operations outside Sweden, the average volume of lending to
the public grew by almost 25% and lending in the branch operations
outside Sweden totalled SEK 319bn (256).  In the Swedish branch
operations, the increase in volume was just over 9% to SEK 831bn
(761). Lending to households increased more than corporate lending,
by almost 12% as compared with just over 7%.  The average volume of
household deposits in the Swedish branch office operations rose by
almost 16% to SEK 118bn (102). Total deposits increased by 12%.

Net fee and commission income increased by 11% to SEK 5,789m (5,216).
It was mainly equity-related commissions and card and advisory
commissions that increased. Brokerage income continued to perform
well and was considerably higher than for the same period in the
previous year. Advisory commissions, which are mainly generated at
the Bank's Corporate Finance department, rose to SEK 302m (188).

Net gains/losses on financial items at fair value increased by 29% to
SEK 2,531m (1,955). The increase is almost entirely due to the fact
that the Bank realised assets from its available-for-sale portfolio.
The total amount realised this year is SEK 707m (204). Wider credit
spreads affected the value of bonds that the Bank holds in its
liquidity portfolio. The value change led to earnings decreasing by
SEK 338m.

Expenses rose by 6% to SEK 9,019m (8,473), of which staff costs
increased by 4% to SEK 5,533m (5,326) and administrative costs by 11%
to SEK 3,486m (3,147). The increase in staff costs in the regional
banks outside Sweden was SEK 129m, almost two-thirds of the overall
increase. For other administration costs, most of the increase was
due to external IT expenses and purchased services totalling SEK
267m. The costs of expansion for the non-Swedish regional banks
totalled SEK 162m, an increase of just over SEK 56m.
Performance-related staff costs were SEK 375m (461) and the provision
for a possible allocation to the Oktogonen profit-sharing foundation
was SEK 125m (98).

Recoveries exceeded loan losses

Recoveries exceeded gross loan losses and net recoveries totalled SEK
139m (110). The net loan loss ratio was SEK -0.02% (-0.01). Net bad
debts were SEK 688m, a decrease from SEK 1,071m. The proportion of
bad debts was 0.05% (0.09) of lending.

Q3 2007 COMPARED WITH Q2 2007

Operating profit was SEK 3,532m (4,385), a decrease of 19%. Compared
with the corresponding quarter of the previous year, profits rose by
13%.

Net interest income continued to increase while net gains/losses on
financial items at fair value fell by almost SEK 1bn. Expenses were
10% lower. Return on shareholders' equity was 15.7% (20.2) and the
C/I ratio was 45.1% (42.8). Earnings per share were SEK 4.19. (5.33).

Return on equity for the total operations was 15.4% (22.7) and
earnings per share were SEK 4.10 (6.00).

Net interest income continues to increase

Income fell by 15% to SEK 6,427m (7,548). Net interest income rose by
almost SEK 100m to SEK 3,967m (3,868). In the branch office
operations outside Sweden, it increased by 10% to SEK 1,107m (1,002),
while in the Swedish branch office operations it fell by SEK 34m to
SEK 2,854m (2,888). Higher business volumes boosted net interest
income, which was also affected by a higher funding cost, mainly for
shorter maturities. All four regional banks outside Sweden increased
their net interest income, due mainly to higher business volumes.

Net fee and commission income fell by 3% to SEK 1,945m (2,000). The
largest individual decrease was for brokerage income (SEK -59m). The
change is mainly due to seasonal fluctuations, commission from
equities trading is always lower in the third quarter than in other
quarters. Compared with the corresponding quarter of the previous
year, net fee and commission income rose by 19%. Card commissions
continued to increase and were SEK 366m (344).

The decrease in total income by over SEK 1.1bn was mainly due to net
gains/losses on financial items at fair value. In total, this item
decreased by SEK 947m between the quarters. SEK 267m of this is due
to the fact that the realised result from the sale of assets in the
available-for-sale portfolio was lower in the third quarter than the
previous quarter. Net gains/losses on financial items at fair value
were adversely affected by SEK 338m since unrealised values of bonds
in the Bank's liquidity portfolio decreased. This meant that net
trading income was SEK 489m lower, most of this being attributable to
Capital Markets' operations.

Expenses fell by 10% and were SEK 2,899m (3,228). The lower staff
costs derive mainly from the fact that in the third quarter, the Bank
did not make a provision for a possible allocation to the Oktogonen
profit-sharing foundation, while the provision in the second quarter
was SEK 125m. Performance-related staff costs fell between the
quarters by SEK 106m. Other administrative costs were down SEK 112m,
which was almost entirely due to a seasonally lower level of
activity.

Sale of SPP

At the beginning of September, the Bank entered into an agreement
with Storebrand to sell SPP and related operations for SEK 18bn. The
Bank's capital gain is estimated at some SEK 4bn. Information is
available on the Bank's website.

Recoveries exceeded loan losses

Recoveries exceeded gross loan losses and net recoveries totalled SEK
4m (65). The net loan loss ratio was SEK -0.02% (-0.02). Net bad
debts were SEK 688m, a decrease from SEK 898m. The proportion of bad
debts was 0.05% (0.07) of lending.

BUSINESS AREA PERFORMANCE

(refers to accumulated figures unless otherwise stated)

Branch office operations in Sweden

Operating profit increased by 1% to SEK 7,555m (7,480). Income in all
the most important categories increased. The increase in card
commissions had a positive impact on net fee and commission income. A
factor that contributed to this was the success of the Frikort, the
card which is intended to replace the old Bankomat ATM card.

Volumes increased - particularly for mortage loans. The Bank
increased its share of the market during the third quarter and during
the year as a whole.

Household deposits increased, with quarter-on-quarter growth of
almost 6%.

Branch office operations outside Sweden

Handelsbanken had a total of 178 (156) branches outside Sweden. Of
these, 158 (139) were in the Nordic region outside Sweden and in
Great Britain. During the first nine months of 2007, a total of 20
new branches outside Sweden were opened: eight in Great Britain,
eight in Finland, two in Poland, and one in Denmark. In addition, the
representative office in St. Petersburg became a branch of the Bank.
In addition, 26 more branch managers were recruited for future new
units.

Operating profit increased by 39% to SEK 2,144m (1,545). Earnings
improved in all the non-Swedish regional banks, and in Handelsbanken
International. The average volume of lending grew by 25% to SEK 319bn
(256), while deposits increased by 10% to SEK 128bn (116). Great
Britain reported the largest increase in volumes. At Handelsbanken
International, the increase was over 40%.

Handelsbanken Capital Markets

Handelsbanken Capital Markets' operating profit was SEK 695m (879).
It was adversely affected (SEK -220m) by a change in the unrealised
values of bonds which are part of the Bank's liquidity portfolio.
Business flow remained strong. Foreign exchange business grew,
especially in September, and fixed income trading in short-term
instruments also increased. Adjusted for the effects of the changes
in value of the bond holdings, third-quarter profits for fixed income
and foreign exchange trading increased by almost 50%. The Bank was
also successful in Sweden, and No.1 in providing advisory services
for corporate acquisitions with a Swedish connection. Brokerage
income grew, with an increasing share of the business coming from
customers outside the Nordic region.

Handelsbanken Asset Management

Starting in the third quarter, Handelsbanken Liv is included in the
Asset Management business segment and previous periods have been
recalculated. The segment's profits improved by 13% to SEK 822m
(727). Average fund assets under management grew by 17% to SEK 174bn
(149).

Handelsbanken Liv's profits improved by 15% to SEK 401m (348). The
total return amounted to 2.49% (3.41), and the company therefore
received the yield split on some 45% of the traditionally managed
portfolio.

Discontinued operations

The operating profit before hedges for "Discontinued operations"
totalled SEK 1,228m (1,544).

New policies with SPP increased by 37% during the first nine months
of the year to SEK 2,188m (1,593). SPP's share of new policies
(occupational pensions market) rose to 15.7% (13.8) for the first six
months of the year. Premium revenue increased to SEK 14,335m (6,142),
of which 7,598m came from a portfolio transfer. Excluding this
transfer, premium revenue increased by 10% during the year and the
net inflow to SPP rose by 9% to SEK 2,683m (2,447). Finally, the
administration result in SPP increased from SEK 3m to 109m.

Operating profit for the third quarter increased by SEK 138m to SEK
-48m (-186), compared with the corresponding quarter in the previous
year. The earnings decline relative to the first two quarters of the
year, was mainly due to the fact that the yield did not reach a level
that was sufficient for a yield split. Portfolio management did not
achieve the same performance as the benchmark index which means that
earnings were SEK 188m lower than they otherwise would have been.

HANDELSBANKEN IS THE MAJOR BANK IN THE NORDIC COUNTRIES WITH THE MOST
SATISFIED CUSTOMERS

An important means of achieving the Bank's financial target is to
have satisfied customers. The surveys presented in early October by
Svenskt Kvalitetsindex for the Swedish market and by EPSI Rating for
Norway, Denmark and Finland clearly showed that Handelsbanken had
reinforced its position as the Nordic bank with the most satisfied
customers. Handelsbanken outperformed the three other major banks as
regards both private and corporate customers in Sweden. In Norway,
the Bank was ranked No.1 on the corporate side and No.2 among private
customers. In addition, Handelsbanken achieved the top ranking in
Denmark for corporate customers, and in Finland for both private and
corporate customers.

HANDELSBANKEN EXPANDS OUTSIDE SWEDEN

The Bank has decided to step up the pace of its organic growth and
aims to open 30-40 new branches during this year. So far this year,
twenty branches have been opened outside Sweden. In addition, another
26 branch managers have been recruited for new units.

The proportion of the Bank's operating profit generated from
operations outside Sweden was 19% (17). Just over 27% of the Group's
lending to the public is in the branch operations outside Sweden, and
almost 40% (33) of the increase in lending between the quarters was
generated in the non-Swedish branch operations.

THE BANK HAS STRONG LIQUIDITY
During the third quarter, banks' liquidity was in focus. Since the
beginning of the year, Handelsbanken has systematically extended the
average maturity of its funding. This resulted in the Bank having a
liquidity surplus in the early summer, and it has been a net lender
of Swedish kronor to the banking system since the end of May. In the
Swedish market during the third quarter, the Bank could fund its
domestic market operations as normal. Covered bonds were issued
regularly.

At the end of the quarter, the Bank held bonds to a value of some SEK
100bn, which are eligible as collateral with central banks. The bonds
have high credit quality and most of the holdings were rated AAA or
AA, with none lower than A. The holdings in a portfolio that is held
as a liquidity reserve are by nature long-term, although some bonds
are in trading portfolios. These bonds are assessed at market value,
and third-quarter earnings were adversely affected by some SEK 338m
due to unrealised changes in value. Since the holdings are long-term
by nature, the Bank will over time recover these changes in value.

CAPITAL REQUIREMENT, ETC.

Starting on 1 February 2007, the Bank reports the capital requirement
and capital base in accordance with the Basel II rules. The changed
capital requirements have a gradual impact since the transitional
rules allow for an adaptation over a period of three years and in the
first year, the Bank is only allowed to include 5% as a reduction.

Tier 1 capital increased to SEK 65,296m (58,543). Of this, SEK 6.7bn
was in the form of Tier 1 hybrid capital. Calculated according to the
transitional rules, the Bank's capital ratio was 9.4%, while the Tier
1 capital ratio was 6.9%. If no transitional rules had applied, the
statutory capital requirement with Basel II would have been reduced
by 42% compared to the requirement in accordance with Basel I.

At the AGM in April 2007, the Bank's board received a mandate to
repurchase 40 million shares during the period until the 2008 AGM. So
far, the Bank has repurchased 4.8 million shares, with the number of
outstanding shares amounting to 623.4 million.

RATING

Handelsbanken's rating was unchanged with all three rating agencies
which rate the Bank. Moody's rating for the Bank was Aa1, and from
Fitch and Standard & Poor's AA-.

ACCOUNTING POLICIES AND CHANGES IN REPORTED DISCLOSURES

This interim report has been prepared in accordance with accounting
standards from IASB, as adopted by the EU, the Annual Accounts Act
for Credit Institutions and Securities Companies and the accounting
directives issued by the Swedish Financial Supervisory Authority.

On 3 September, an agreement was made to divest SPP and operations
related to SPP. This means that as of the third quarter, these
operations are reported in accordance with IFRS 5, "Discontinued
operations". Briefly, this means that an operation which is being
divested is reported net on a separate line in the Group's income
statement. The comparative figures in the income statement for the
present and previous year have been adjusted as if the discontinued
operations had never been part of the Bank's operations.

In the consolidated balance sheet, starting in the third quarter,
assets and liabilities relating to the discontinued operations are
separated from other assets and liabilities. Separate summary income
statements and balance sheets for the discontinued operations are
presented in note 5. Previous periods have been recalculated.

After SPP and related operations were reported as "Discontinued
operations", the business segment reporting has been changed.
Handelsbanken Liv is now reported together with Handelsbanken Asset
Management. The new segment is named Handelsbanken Asset Management.

As of the third quarter, the Bank is changing the reporting of loan
and deposit volumes. The purpose of the change is to report volumes
and net interest income in a more consistent manner. At group level,
the volumes and net interest income are not changed, but they will be
changed among the business segments. For more details, see the"Accounting Policies and Changes in Reported Disclosures" section on
page 35.

Pär Boman
President and group chief executive


For further information please contact:

Pär Boman, President and group chief executive
phone: +46 (0)8 - 22 92 20, pabo01@handelsbanken.se

Ulf Riese, CFO
phone: +46 (0)8 - 701 1212, ulri02@handelsbanken.se

Bengt Ragnå, Head of Investor Relations
phone: +46 (0)8 - 701 1216, bera02@handelsbanken.se


The full report including tables can be downloaded from the attached
link.