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Handelsbanken Bank Case Study Report

Entry to the UK Market and Subsidiary Management Plan

Executive summary

This paper is a case study analysis report on the entry of Handelsbanken Bank into the UK market. The report briefly introduces the bank’s history, culture instilled in its employees, and financial status. After understanding the bank’s background, the case study analysis continues evaluating its mode of entry into the UK market compared to other banks. The paper reviews the Uppsala mode of internationalization as illustrated by the bank’s internationalization strategy. The paper also analyses the bank’s staffing approach and sustainability framework in the UK. The frameworks covered include polycentric and economic responsibility frameworks, respectively. Generally, the bank has grown tremendously after entering a new market, as illustrated in the study. Despite its growth, the report recommends further marketing ideas for the bank to attain maximum financial sustainability.


On 1 July 1871, the bank commenced its operations at Kornhamnstorg, located in the Old Town area of Stockholm, which was the primary hub for commerce and finance in the city at that time (Chopra, 2017). During that period, the majority of commercial banks in Sweden were categorized as “private” (known as “enskilda” in Swedish) banks, wherein the proprietors held joint and several liabilities for the bank’s obligations. In contrast, Handelsbanken was established as a corporation with restricted liability for its proprietors. The initial public offering of Handelsbanken’s shares occurred in August 1871 on the Stockholm Stock Exchange (Chopra, 2017). After this, the initial branches were established in Stockholm, with the first one being inaugurated in the Södermalm area in 1876, followed by the Norrmalm branch in 1878, and the Östermalm branch in 1882. 1874 the bank established a branch in Jönköping, which was subsequently terminated in 1895 (Whittington et al., 2019). Following the conclusion of World War II, Handelsbanken proceeded to augment its presence in Sweden by procuring smaller rival entities. Expanding internationally was precluded due to regulated national banking markets being closed to foreign players (Chopra, 2017). Moreover, regulations imposed restrictions on banks’ autonomy within the domestic sphere. Nonetheless, Handelsbanken exhibited strong financial performance and solidified its position as a prominent participant in the Swedish banking industry.

The organization exhibits remarkable prowess concerning its corporate values. The values of an organization serve as a fundamental support system for every employee. Chopra (2017) states that a proactive culture facilitates decision-making, behavior, and communication. The outcome is favorable as it transforms values into a cultural framework, subsequently shaping customer experiences. This generates a tangible outcome for the staff. A set of values guides the organization and does not prioritize using ostentatious slogans. “Our Way” delineates the recommended approach for Handelsbanken to conduct its banking operations, including selecting customers and employees, loan disbursement procedures, communication protocols, and various other aspects (Chopra, 2017).

From 2009 to 2020, there was an upward trend in the mean number of personnel employed by Handelsbanken, a financial institution based in Sweden. In 2021, the bank’s workforce comprised 12,240 individuals, indicating a marginal decline compared to the preceding year (Statista Research Department, 2022). Handelsbanken has set a target to achieve a representation of 30% female leaders by 30 June 2021 and a further target of 40% female leaders by 2026. The organization is cognizant that it may need to achieve its objectives for the year 2021. Nevertheless, it is steadfast in its resolve to adopt a strategic, long-term perspective and establish sustainable transformation and advancement as it sets its sights on 2026. The Swedish bank’s financial report indicates a net profit of 6.81 billion Swedish kronor ($660.7 million), an increase from the previous year’s profit of SEK5.69 billion (Chopping, 2023). This figure is also compared to a FactSet consensus forecast of SEK6.12 billion. The net interest income experienced an increase to SEK11.49 billion from SEK8.01 billion, surpassing the projected amount of SEK11.01 billion (Chopping, 2023). The escalation of interest rates has exerted a distinct influence on the real estate sector, owing to the augmented financing expenses when loans reach maturity and require refinancing.

Analysis and discussion

Handelsbanken Bank’sentry to the UK

During the 1980s, Handelsbanken established multiple branch offices in various countries to support its corporate banking operations. Since 1990, the bank has procured several smaller banks within the Nordic region in Norway, Finland, and Denmark. The bank commenced its operations in Denmark, Finland, and Norway proficiently in 1998 (Whittington et al., 2019). In 1999, Handelsbanken expanded its presence in the United Kingdom through organic growth. The bank commenced operations in the United Kingdom in 2002 as an additional regional bank.

Regarding the entry mode, Handelsbanken adopts a strategy of establishing a branch to enter the global market. The operations of the Swedish bank are subject to limitations imposed by regulatory frameworks within its domestic jurisdiction and in foreign territories—the regulations at the national level permitting solely minor operations in foreign markets. Foreign banking ventures were prohibited from operating on the mainland by other countries. The internationalization options and decisions of Swedish banks were limited. Since the 1990s, changes in circumstances have occurred due to foreign and domestic deregulation, which has enabled Swedish banks to expand their foreign ownership and increase their international presence (Chopra, 2017). According to the case study, the approach to developing branches in most areas of the UK serves as the internationalization model they used.

The company used an Uppsala model in conjunction with the internationalization approach. The Uppsala model is a theory that defines the approach a company like Handelsabanken Bank used to intensify its activity in foreign markets, which in this case include the United Kingdom and other nations in Europe. The Uppsala model was developed in Sweden (Hult et al., 2020). According to Igwe et al. (2021), in the Uppsala model, the business considers the fact that it needs an understanding of overseas markets before beginning to work on expanding its client network by establishing connections with other businesses and the government. This made Handelsbanken an early entrant in the UK market. In addition, it moderately interacted with other businesses on matters of growth and profitability. The Handelsbanken’s first steps into the international market were exploratory ones. After that, it expanded its international company into the 21st century by quickly duplicating its previously acquired knowledge up until the middle of the 1990s. After that, the company used a more adaptable approach to its replication strategy. As a result, it successfully codified the ideas behind the Handelsabanken Idea Concept and Concept in Practice, making it possible to replicate and modify the strategies with relative ease in new markets (Igwe et al., 2021).

The expeditious expansion of the financial institution can be attributed to the robust fiscal standing of its Swedish pioneer organization. The primary emphasis is exercising caution in lending practices and minimizing losses incurred from non-performing loans rather than diversifying into more transient customer relationships. Using a Greenfield entry mode, the bank managed to start its branches from the ground up. Greenfield foreign direct investment is one of the many options available to companies looking for opportunities to expand into new marketplaces (Rienda et al., 2019). This type of investment functions as a foray into the markets of other countries.

Handelsbanken’s organizational structure is highly decentralized and tailored to meet the specific needs of its customers (Whittington et al., 2019). This enables efficient decision-making concerning the bank’s relationships with individual customers. The bank operates in close collaboration with the customer. Handelsbanken initiated its initial overseas ventures independently but subsequently adopted a strategy of forming consortia with other banks from the Scandinavian region. Comparable approaches were adopted by the rivals of Handelsbanken, namely Kansallis of Finland, Köpenhamns Handelsbank of Denmark, and Den Norske Kreditbank of Norway (Chopra, 2017). Kansallis-Osake-Pankki, recognized as the most prominent commercial bank in Finland for a considerable period, has evolved into a diverse financial-services entity. Kansallis-Osake-Pankki, the parent organization of the Kansallis Banking group, exercises control over five primary sectors as per a reorganization implemented in January 1988 (Pohl, 1994). These sectors include corporate banking, retail and private banking, international banking, investment banking, and domestic and international trading. According to the case study, Kansallis-Osake-Pankki Bank used the same expansion model used by Handelsbanken Bank. However, the competing banks operated on shared costs in their internationalization process. Therefore, the competitors had a joint venture mode of entry. Since they came after Handelsbanken, this competitor is considered a late entrant into the UK market. The rationale underpinning this strategy was straightforward; by collaborating, the financial institutions could reduce expenses while enhancing their knowledge of global markets (Whittington et al., 2019). Given that each consortium was perceived as a service organization catering to its domestic customers, no intra-consortium competition existed. Nevertheless, divergent viewpoints regarding the objectives and functions of the consortia resulted in their dissolution after a few years, prompting the banks to revert to a tactic of establishing wholly-owned representative offices.

Analysis of UK Subsidiary Management Strategies

Handelsbanken Bank’s staffing policies for its UK subsidiary

Handelsbanken plc is a subsidiary fully owned by Svenska Handelsbanken AB (publ). The success of Handelsbanken plc is the collective responsibility of its Board of Directors, who are independently governed and accountable to the shareholders. As per the case study’s findings, the availability of a suitable branch manager was deemed to be of greater significance than the geographical location when selecting new branch locations. Handelsbanken may delay its entry into a promising local market without a branch manager who fully embraces the decentralized approach to banking culture. Following Handelsbanken’s decentralization approach, the branch manager is anticipated to exercise significant autonomy in managing their respective branch (Chopra, 2017). This is to be done while maintaining a cost-effective and moderately cautious approach to banking.

The model exhibited by the bank in terms of staffing during its entry into the UK is mainly a polycentric approach. The polycentric strategy assumes that people from the host country will be employed “from top to bottom of the organization” (Que, 2022). The local staff of the host nation is given additional authority with this strategy. The strategy is predicated on the idea that natives of the host country are more familiar with the specifics of the local market and may thus be more effective. Additionally, the country where it operates needs a distinct HR department. Because it offers additional opportunities and demonstrates the company’s dedication to the host nation, the local community typically receives the polycentric strategy (Que, 2022). Handelsbanken exhibits the illustration of this strategy during its entry. The bank showed a specific interest in recruiting seasoned bankers who had previously worked at central clearing or mid-sized banks and expressed dissatisfaction with the growing trend of centralization within their respective institutions.

Upon the bank’s inception, many newly appointed branch managers exhibited a strong inclination towards the concept of decentralization, displaying enthusiasm in recruiting their colleagues and implementing logistical arrangements within the office (Whittington et al., 2019). The case study illustrates the Leeds branch manager who demonstrated a strong commitment to the cost-conscious culture of Handelsbanken. The individual procured the office furniture at a discounted price and adorned the workspace with paintings crafted by his spouse, instead of acquiring costly artwork from an art establishment. The narrative of his experience gained widespread recognition within the British operations as a commendable illustration of implementing Handelsbanken’s culture of cost-consciousness and decentralized decision-making, which also plays a part in its sustainability approaches.

Handelsbanken Bank’s CSR and Sustainability approaches in the UK

Handelsbanken’s image as a mass market provider with street-level branches is prevalent in Nordic countries. However, Handelsbanken has positioned itself as a traditional private bank in the United Kingdom. As per the case study, the clientele was selectively chosen, wherein the branches sought lucrative enterprises and affluent individuals to engage with. Handelsbanken in the UK mitigates the likelihood of acquiring an unprofitable client portfolio by proactively seeking out customers rather than relying solely on customers to approach the bank (Whittington et al., 2019). Additionally, the management formulates strategic initiatives, such as expanding outreach to local clientele or accelerating growth. In 2006, Handelsbanken’s management decided to increase the pace of opening new branches for the following year, 2007, due to the rapid profitability of the British branches and the seemingly boundless market. The acceleration of organic growth resulted in a significant expansion within the territory of Great Britain.

Based on the review of their sustainability strategy above, the organization’s main framework is the economic responsibility framework. The concept of economic responsibility pertains to the act of making financial choices grounded on a dedication to ethical conduct (Olanipekun et al., 2021). In order to maintain economic accountability, corporate executives are faced with the task of transcending mere operational expenditure reduction and prioritizing their responsibility to corporate social responsibility in all financial deliberations, as exemplified by the banking decision of the Leeds manager. Like Handelsbanken Bank’s sustainability strategy, economic responsibility pertains to the practices that enable the business to achieve long-term growth while simultaneously adhering to the standards established for ethical, legal, and philanthropic practices (Negi et al., 2020). Although the company had initially set social objectives upon entering the market, its primary approach for market entry in the UK was cost-consciousness and profit maximization (Sustainability n.d).


Handelsbanken is a regional financial institution that prioritized customer satisfaction, financial stability, and sustainable principles during its entry. Every branch functioned as a regional enterprise, enabling them to understand their clientele and the local market and community comprehensively. Today, Handelsbanken is pursuing a strategy that integrates digitalization with a local presence. Handelsbanken has successfully adapted a branch-based business model to changes in the business environment, despite prior predictions that it would become obsolete. Nevertheless, it remains uncertain whether this trend will persist in the future. The bank has effectively aligned its objectives most suitably through a strategic approach. The organizational structure and culture facilitate the effective allocation of resources, resulting in optimal outcomes. Through this approach, the entity developed enduring objectives that prioritize sustainability. This facilitated the achievement of the dependable objectives outlined in the memorandum.


One of the key recommendations for the bank is incorporating a segmentation marketing strategy. Market segmentation refers to the practice of Svenska Handelsbanken dividing the broader market into smaller segments and groups that share common characteristics, purchasing patterns, socio-economic backgrounds, and other relevant factors. This approach is implemented to enhance the efficiency and effectiveness of consumer outreach to a specific group. A good example entails geographic segmentation. Geographic segmentation involves partitioning the entire market into distinct geographic units, including countries, continents, zip codes, states, trading blocks, cities, and neighborhoods. Using geographic segmentation is a highly effective strategy for Svenska Handelsbanken in the global marketplace, as it allows for identifying and targeting potential customers with varying cultural backgrounds, preferences, and administrative structures. If transportation expenses are a significant factor in delivering value propositions, it would be advisable to conduct geographic segmentation. This is because the costs of serving customers in various locations may vary significantly.


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