Handelsbanken said on Wednesday it will close almost half of its branches in Sweden and cut about 1,000 jobs over the next two years and use the savings to invest in its IT systems.
The bank said the job cuts and branch closures will lower costs by about 1.7 billion Swedish crowns ($194 million) compared with 2019, to around 20 billion crowns by the end of 2022.
Handelsbanken said it will invest 1 billion crowns in its IT and digital services over the next two years.
“On one hand, many of Handelsbanken’s core customers have ever more advanced demands for their personal meetings,” said Handelsbanken.
“For this reason; Handelsbanken is now strengthening its presence at the branches, in order to meet the demands of, for example, corporate customers and private banking customers.
“This will be achieved through the granting of an even greater degree of decision-making authority and increased accessibility to specialist expertise, although in fewer locations.
“The number of branches is expected to decrease from the current figure of 380 to approximately 200 by the end of 2021.
“On the other hand, customers would like to be able to perform more and more banking transactions digitally – quickly, simply and personally.
“Therefore, the bank is investing a total of SEK 1 billion in IT over the next two years, in order to take its digital customer offering to an entirely new level.
“These changes will help us to lower our costs.
“By the end of 2022, the Group’s overall expenses will amount to approximately SEK 20 billion (based on 2020 exchange rates) before any potential allocation to Oktogonen.
“The cost reductions required to achieve this are expected to result in the group’s income contracting by around SEK 1 billion.
“The downsizing of the workforce will affect around 1,000 employees in Sweden over the next two years, not including the measures announced in autumn 2019.
“Negotiations and consultations are being initiated immediately with the relevant trade unions.”
Handelsbanken Group Chief Executive Carina Åkerström said: “Our ambition — as always at Handelsbanken — is to manage these redundancies with care and respect for individual employees,”
The bank said it will make a provision for expenses estimated at SEK 1.5 billion during the fourth quarter.