Svenska Handelsbanken has championed an entirely different way of doing business, and has the profits, loyalty and longevity to prove that it works.
Three years ago, stock market analysts at Sweden’s main business paper set about using data from the London School of Business to find the world’s best performing share since the start of the 20th century.
The answer? Handelsbanken. Ten pounds invested in the Swedish bank in 1900 would have been worth about £20m by 2009, a rise of 1.9m pc. General Electric could manage only an 843,000pc rise.
And if you think the fruits of this astonishing return were limited to an elite club at the bank, you would be wrong.
Handelsbanken has an almost religious devotion to Oktogonen, its profit-sharing scheme. ...Every employee receives an equal share of the bank’s profits as long as it makes a return on equity greater than the average of its peer group.
..branches ....scrutinise [head office] costs. If they are not happy...they make sure the head office ups their game...
The money is then used to buy Handelsbanken shares for each staff member but these can be accessed only when employees reach the age of 60. This ultra-equitable approach means the bank teller whose career is spent cashing cheques will receive the same payout from Handelsbanken on retirement as its chief executive.
Afew other differences:
- It does not pay bonuses, with the exception of a small number of staff in its investment banking arm;
- It has no financial plans;
- The bank sets no sales targets for staff;
- It does not set out long-term goals and has no central marketing budget;
- Even its largest corporate customers must still bank with it at a branch level, and it has no credit scoring system.
...Anders Bouvin, UK chief executive explains....branches decide the costs of the head office. They scrutinise our costs. If they are not happy with the service, they make sure the head office ups their game...[or]...go elsewhere. The branch manager is the king of the bank,” he says.
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