By Dominic Chopping

STOCKHOLM--Svenska Handelsbanken on Wednesday posted a forecast-beating fourth-quarter net profit on slightly higher income and lower credit losses.

The Swedish bank said its previously announced streamlining, with fewer branches and a more decentralised decision-making process, is expected to lead to achieving a sustainable annual cost level of 20 billion Swedish kronor ($2.38 billion) by year-end 2022 at the latest. Full-year 2020 total costs were SEK23.33 billion, it said.

The bank said expects that during 2021 the cost effects of these measures will largely be offset by the temporary increase in IT investments.

The company reported net profit for the quarter ended Dec. 31 was SEK4.37 billion ($519 million), compared with SEK4.38 billion the year prior and a FactSet consensus forecast of SEK3.84 billion.

Net interest income slipped to SEK7.86 billion, from SEK8.09 billion a year earlier and a forecast of SEK7.92 billion.

Handelsbanken's common equity Tier 1 ratio--a measure of financial strength--was 20.3% compared with 18.5% , it said.

The bank declared a dividend of SEK4.10 a share and proposed that the existing repurchase program of a maximum of 120 million shares be extended for a further year.

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

(END) Dow Jones Newswires

02-03-21 0140ET