Commercial banks alternative to credit and mortgage

The European banking sector, plagued by many problems, looked with a mixture of envy and admiration at the little-known Swedish bank Handelsbanken, which in 2020 also has 29 branches in the Netherlands. The Swedes are slowly conquering Europe: a little-known credit institution is making waves in the banking world.

Bonuses are not an issue at Handelsbanken

The Swedes are focusing on decentralization instead of expensive and all-powerful banking centers. Local branch managers at Handelsbanken are allowed to make many more decisions than their competitors. They also do not receive bonuses and have to answer for bad loans more than elsewhere. Anyone who causes problems for the bank as a local branch owner must put things right again themselves. Handelsbanken does not have a separate credit department that manages bad loans. Partly thanks to this philosophy, Handelsbanken emerged from the financial crisis unscathed and is one of the fastest growing retail banks in Europe. To illustrate: every ten days a new office is opened in England. And at the end of 2012, the 12th Dutch branch was completed in Maastricht. And in 2020, the number of branches in the Netherlands had already grown to 29.

Decentralized approach as a formula for success

Handelsbanken’s formula, with its focus on decentralization, can be considered downright fascinating. Or, as the head of the British central bank significantly put it: “For banking it is a way back to the future.” The interest in Handelsbanken’s model comes at a time when many European financial institutions are reshaping their activities. They do everything they can to regain the damaged trust of their traditional customers in order to improve their image, which has been tarnished by financial scandals. After all, until 2007, they mainly saw their customers as potential targets for sales of products that they did not need at all.

No state aid for Handelsbanken

While Handelsbanken was initially viewed with some pity by major banks in America and England, the financial world has now understood that the Handelsbanken concept can work very well. The Swedish bank does not use aggressive sales methods and is currently considered one of the most solid banks in the world. Handelsbanken’s formula may seem a bit old-fashioned, but the bank has weathered the crisis in the financial world with flying colors, while many fellow banks were kept afloat with taxpayer money.

Can Handelsbanken give impetus to stagnant lending?

It is an open secret that the financing of companies in particular has been leaving much to be desired for some time. As well as the fact that many financial institutions are refraining from further expanding their commercial real estate portfolio. As a result, the entrepreneur who wants to refinance or expand faces major problems. There is a lot of confidence among enterprising Dutch people that Handelsbanken can put an end to this impasse by expanding its activities in the Netherlands.

Mortgage from Sweden, a gap in the market?

It is not only the business community that is urgently in need of a more flexible credit policy. Banks have learned through trial and error that they are too risk-averse to provide mortgage loans to private individuals on a large scale. And the Eigen Huis Association has already indicated several times that the competition in the domestic mortgage market is in a sad state. We only know of 4 major parties in the Netherlands, 3 of which are not allowed in Europe to stunt with the rate and the 4th (major bank Rabobank) therefore lacks any incentive to come up with an attractive mortgage interest rate. The result: mortgage rates in our country are much higher than in the countries around us. The arrival of a Scandinavian party on the Dutch mortgage market (of course with a Dutch banking license) could therefore offer a solution.