World Economy

Nordic Banks Performing Better

Nordic Banks Performing BetterNordic Banks Performing Better

Just seven months ago, Sweden’s Handelsbanken was worth almost $20 billion less than Deutsche Bank. This month, it eclipsed Germany’s flagship lender, Reuters reported. Its market value has held up as concerns over negative interest rates and bad debts, along with spiralling macro-economic worries, have seen other European lenders slide this year. Handelsbanken epitomizes a more conservative Nordic banking style that prioritizes cost control over revenue growth. It pays no annual bonuses to executives and has a decentralized model that gives branch managers control over lending, which it says helps reduce bad loan risks. It had an efficiency ratio of 45.3% in 2015. By comparison, Deutsche Bank had 115.3% and BNP Paribas 82.9%.