Handelsbanken is founded in 1871 as Stockholms Handelsbank, with share capital of one million Swedish kronor. The share is listed on the Stockholm Stock Exchange later that same year and the Bank begins operating from Kornhamnstorg in Gamla stan, with twelve employees all working the same office. Over the first few years, several additional branches are opened around Stockholm to meet the needs of Stockholm’s flourishing business community. The Bank enjoys a successful start. The economy is prospering and income outgrows expenses after just a matter of months.
In 1874 a new, largely independent branch is opened in Jönköping. This is the Bank’s first branch outside Stockholm.
A Sweden in flux
Around this time, the building of railways represents one of society’s major projects. The surrounding optimism is huge – but so are the risks involved. When the bond rally and railway speculations collapse in 1878-1879, the effects are widespread. The Bank has already thought ahead, bolstering its capital and keeping risks low. Handelsbanken is thus in a solid position to help companies needing to adapt and restructure, limiting credit losses and thereby contributing to the stable development of society in general.
Trade and industry expand
During the 1870s and 1880s, there is a boom in trade and industry that gives the branches a deeper understanding of their local markets and sectors, of seasonal impacts and of which investments are critical to a company’s development. Thanks to close co-operation with its customers, the Bank is able to adapt credits according to genuine requirements.
When the stark optimism around the expansion of the rail network begins to wane in the late 1870s, the real value of the Bank’s prudent approach becomes apparent. The Bank has substantial reserves, has diversified its risks and always maintained a close dialogue with its customers. Viable companies that find themselves temporarily under pressure are afforded time and support to adjust, which helps keep losses down and build trust.
