By Joe Hoppe

Svenska Handelsbanken said Tuesday that it intends to propose an extra dividend for its shareholders by distributing shares in Industrivarden, corresponding to around 8.7 billion Swedish kronor ($1.0 billion), or SEK4.42 a share.

The Swedish bank said that on the back of stable earnings and capital growth, along with good credit quality, its current capitalization is well above its target ratio level and as such it will propose an extra dividend of shares as a dividend-in-kind.

The company said it will distribute around 30.5 million Class A shares in Industrivarden to shareholders, taken from Handelsbanken's pension foundation. Taking the shares from the pension foundation will also reduce volatility in the pension management, increasing the long-term stability of the bank's capitalization, it said.

Following the dividend, Handelsbanken expects its capital equity Tier 1 ratio--a key measure of balance-sheet strength--to reduce to around 19.4%, from 20.5%.

The dividend is subject to shareholder approval at an extraordinary general meeting on Oct. 21.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

September 21, 2021 12:44 ET (16:44 GMT)

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