By Dominic Chopping 
 

STOCKHOLM--Svenska Handelsbanken on Wednesday posted a forecast-beating first-quarter net profit as higher fees and loan loss reversals helped offset lower net interest income.

Handelsbanken said its previously announced cost-cutting program is proceeding according to plan, and so far, measures corresponding to 1 billion Swedish kronor ($118.6 million) have been decided on or initiated since the third quarter of 2020. These measures have so far achieved positive effects on profit of SEK200 million, it said.

As part of its previous plans to streamline the bank, Handelsbanken decided in January to adjust its U.K. bank operations. The move is expected to reduce the number of branches and lead to job cuts. The measures are part of the bank's target of achieving a sustainable annual cost level of SEK20 billion by year-end 2022.

The company reported net profit for the quarter ended Mar. 31 of SEK4.38 billion compared with SEK3.94 billion the year prior and a FactSet consensus forecast of SEK3.94 billion.

Net interest income fell to SEK7.82 billion, from SEK8.23 billion, in line with a forecast of SEK7.82 billion.

Loan loss reversals totaled SEK8 million versus loan losses of SEK538 million a year earlier.

Handelsbanken's common equity Tier 1 ratio--a measure of financial strength--was 20.2% compared with 17.6% , it said.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 21, 2021 02:20 ET (06:20 GMT)