Avanza Bank Aktie

Good day, and thank you for standing by. Welcome to the Avanza Bank Interim Report January and March 2026 Conference Call and Webcast.

[Operator Instructions]

I would now like to hand the conference over to our first speaker today, Gustaf Unger, CEO. Please go ahead.

Good morning, everyone, and welcome to the presentation of Avanza's Q1 report. With me in the room in Stockholm today, I have CFO, Jonas Svarling; and Karolina Johansson from Investor Relations.

I will start by quickly summarizing some highlights from the quarter and then hand over to Jonas, who will take you through the financials. After that, I will talk about the other exciting news announced this morning that we are now entering the next phase in our international expansion, establishing Avanza in Denmark by the second half of 2027.

But first, some key highlights from Q1. It's safe to say that a changing world has now become the rule rather than the exception. Rapidly shifting macro factors set the agenda throughout last year and the first quarter of 2026. Despite the turmoil and geopolitical concerns, we are again reporting a fantastic quarter, the strongest in the history of Avanza.

Our customers have once again had to navigate rapid turns and high market volatility. For us at Avanza, this means an environment with high trading activity, which boosted trading income. Foreign trading also held up well and in absolute terms, it was higher than the previous quarter, although it decreased slightly as a share of total trading, where our customers, especially at the beginning of the year, choose to shift their exposure towards Sweden. I believe this is a natural result of our large Swedish companies being seen as a safe haven when it storms on the stock exchange but potentially also a sign that savers were positioning themselves for hopes that the Swedish economy will finally gain momentum.

We have welcomed a total of 55,400 new customers and had net inflows of SEK 16.5 billion, although the phaseout of external savings accounts continue to have a negative impact. We are making solid progress within our strategic priorities. Regarding the private banking offering, we took steps along the way by further visualizing and differentiating the private banking offering from the general offering with a new visual design for private banking customers as well as a new landing page where we more clearly package everything included in the offering, i.e., a new and more exclusive look and feel.

In addition to polishing the surface, we have also sharpened the content by improving our mortgage with more interest rate levels and open up for lending for holiday homes. Furthermore, we have also soft launched our digital discretionary portfolio management for a selected group of customers, a milestone on the road to a broad launch later this year. We opened up for private banking customers during the quarter to register interest in the product, which many did.

For pensions, our great focus now lies on improving the product experience and the offering for corporate customers using Avanza's occupational pension for their employees. And here, we took the next step to strengthen the relationship with the corporate customers by having a number of our employees certified to provide advice to companies on pension and insurance-related issues.

I can also announce the positive news that Jesper Bonnivier, who since 2019 has been CEO of the fund company, has been appointed COO. While Jesper takes on his new assignment, I have begun the recruitment of a new CEO for Avanza Fonder, who will continue to drive that business forward. Also, Elin Wiker was hired as a new savings profile at Avanza. Elin is a well-known profile in the Swedish financial media with experience from both journalists and asset management. She will contribute with an increased focus on stocks, company analysis and market-related content across several platforms. Last but definitely not least, we announced the exciting news this morning that we are now entering the next phase of our international expansion, establishing Avanza in Denmark by second half of 2027.

I will speak a lot more about this later but we'll let Jonas take you through the Q1 financials first.

Thank you, Gustaf, and good morning all from sunny Stockholm. Let's start with some financials. We are today reporting fantastic results. This is the highest quarter result in the history of Avanza, once again with strong contributions from all income streams. It's up 9% versus last year and 10% versus previous quarter. Cost for Q1 came in below Q4, resulting in total in a record quarterly operating profit of SEK 879 million. All in all, net profit is up by 21% compared to last quarter and 7% compared to the previous year. Return on equity ended up at 40% for the quarter.

If we look at the income mix, it remains healthy with strong contributions from all income streams. The volatile market environment from last year continued and accelerated into 2026 and so did the high trading activity. This positively affected brokerage income, which increased by 21% compared to Q4 and by 10% compared to Q1 last year. Income increased despite the decreased brokerage margin, which was at 10.6% in the quarter compared to 11.2% in Q4. The share of brokerage generated by Private Banking and Pro was stable at 26%. So this was a result of higher turnover per note, especially in the fixed price brokerage class, which means a lower income per krona.

The relatively lower share of foreign trading also contributed to the margin decrease. However, in absolute numbers, brokerage generating turnover in foreign securities increased, and this led to a strong currency-related income up 10% since last quarter. If we move to fund commission income, that was the only income line that decreased compared to Q4. And if you look at the fund capital by the end of the quarter, it decreased slightly compared to end of Q4 following market value changes. But if you look at average daily volume, it was higher actually than last quarter.

And as the fund income is based on daily volume, this means that the small income decrease was a result of the mix in our customers' fund portfolios, where we in the quarter has seen a big interest for Swedish exposure, while U.S. and tech funds, in particular, have been net sold. This has resulted in an increased share of index funds amounting to 52.5% by quarter end and a decreased fund margin at 23.3 basis points on average and 22.8 basis points by quarter end.

Finally, other income more than doubled compared to Q4, and this was primarily a result of the volatile market environment, which fueled trading activity in ETPs and thus Avanza Markets income. Compared to Q1 last year, other income decreased, which is mainly due to the closing of external savings accounts but also higher other commission expenses where, among other smaller commission cost items, the cost for payment commissions increased as a result of more people logging in through bank ID, which typically happens when a lot happens on the market and not necessarily leading to trade activity, it's just when people want to check in on their accounts.

Zooming in a bit on the net interest income. Once again, we see a volume-driven NII increase. The policy rate was stable during the quarter and STIBOR 3-month average as well However, with around 20 basis points pickup towards the second half of March compared to when we entered 2026.

If we start by looking at the lending side, there were no changes to margin lending rates. Compared to end of Q1 to end of Q4, margin lending volume increased slightly but we have seen higher margin lending volumes intra-quarter when market sentiment was more positive. We have an attractive private banking mortgage and the mortgage volume increased also this quarter. As part of our work to improve the private banking offering, as Gustaf talked about, in late January, we introduced 3 new interest rate levels for customers with savings capital exceeding SEK 30 million, SEK 50 million and SEK 70 million, respectively. We expect, however, a very limited initial margin effect from this but we believe it will be a good way to attract more savings capital and increase share of wallet within the wealthier customer segment.

The annual average interest rate for internally financed lending was stable and amounted to 2.8%, down 1 basis point from last quarter. Our income from the surplus liquidity increased compared to Q4, primarily driven by higher deposit volumes. The policy rate cut from October is fully reflected now in the return on treasury portfolio in Q1 since we have up to 3-month interest rate duration in the portfolio. However, as I said since late March, the risk premium has increased in the interest rate market, which is reflected in slightly higher interest rates. But due to the interest rate duration, this only contributes marginally in the quarter, but will benefit the return in the portfolio with a delay.

On the interest cost side, interest expense for deposits increased due to higher volumes, and we made no changes to deposit interest rates and the annual average deposit rate also remained unchanged at 0.76%, 57% of customer deposits were on interest-bearing accounts by quarter end, more or less unchanged from 58% compared to end of Q4. How the policy rate and market rates develop is obviously yet to be seen. And when it comes to our interest rates, our strategy remains the same, making decisions in relation to each policy rate announcement, taking both customer behavior and competition into account. This applies to margin lending on the asset side and deposits on the liability side, whereas private banking mortgages are contractually linked to the Riksbank repo rate.

The return on the treasury portfolio naturally moves with increasing market rates with a minor delay depending on the term profile of up to 3 months. Although we hope for more stability in the market and for an economic pickup rather than higher interest rates and a delayed economic recovery, Avanza's business model can handle also an increasing interest rate environment, which all is equal, as you know, would mean an increasing NII.

Moving over to costs. They came in lower than Q4, in line with what we said with some of the Q4 costs being temporarily elevated. Personnel costs were stable, while other costs decreased mainly then as a result of lower cost for consultants. Also, marketing costs were elevated in Q4 due to initiatives within private banking and pension and came down a bit now in Q1. Our guidance of 9% and a cost increase, excluding international expansion, stands.

In March, we carried out our second successful issuance of AT1 capital as part of our long-term work to optimize the capital structure and prepare for continued strong growth in savings capital. The issuance amounted to SEK 500 million and carries a coupon rate of 3-month STIBOR+ 2.85 per cent compared to 325 basis points in last year's issuance. This issuance was heavily oversubscribed, which is a sign of strength for Avanza, which is evidently seen as a secured company in a quite volatile market. The capital constraint for Avanza is the leverage ratio and the main driver of the leverage ratio are changes in deposit flows. Strengthening the leverage ratio through additional AT1 issuance was, as said, part of optimizing the capital structure, both in light of external savings accounts being closed down and structurally internal savings accounts increasing.

Deposits on our balance sheet have grown by SEK 40 billion in 1 year and partly due to the closing of external savings accounts, with barely SEK 2 billion left in these accounts by end of the quarter. Deposit growth going forward will thus be linked to our overall growth in savings capital, where deposits will always constitute a natural part that is dependent on market conditions, risk appetite and how customers choose to allocate their savings.

The leverage ratio requirement remains, as I said, the main capital constraint for Avanza. And at the end of the period, it was at 4.2%. This means that we still have a good margin to the total leverage ratio requirement, including Pillar 2 guidance of 3.5% and that we can handle increased deposits of SEK 27 billion before breaching it. However, this is slightly less room compared to Q4, which might seem odd considering the AT1 issuance and that the retained earnings for Q1 have been included in owned funds. Here, we should bear in mind that March was a shaky month on the stock market for our customers, meaning that we did see net selling of securities. Also, in late March, the dividend season started, which always temporarily increases deposits as it typically takes a while before customers reinvest. And this is a healthy reminder of the importance of having a prudent buffer requirement.

Having said all that related financials, I will now hand back to you, Gustaf, as I'm sure all of you are listening are interested to hear a bit more about our international expansion.

Thank you, Jonas. This morning, we announced the exciting news that we are now entering a new phase of our international expansion. But looking back a bit, in late 2024, we announced international expansion as one of our 5 strategic priorities for sustained strong growth with the rationale that we, as the clear market-leading platform for savings and investment in Sweden, arguably the most developed and competitive market in Europe, should have great prospects to succeed also abroad. Although growth in Sweden is not expected to slow anytime soon, this is viewed as an important step to secure Avanza's long-term growth journey also many years from now.

There is a great potential to make a difference for savers outside of Sweden, where opportunities for quality savings are often substandard. Our long-term vision is to become a leading European platform, and now we're taking the first step by expansion to Denmark. There are many markets that are interesting for Avanza. In less developed savings markets, there are bigger opportunities to have an impact, but they require a longer-term effort to reach out and change deep-seated behaviors. As a first step, a market with more similarities to the Swedish one became the obvious choice.

Denmark is a natural fit for our first international market. It is the second largest savings market in the Nordics that resembles the Swedish one in many ways in terms of structure, competitive situation, culture and not least language. Furthermore, Danes, just like Swedes, have both high digital maturity and financial knowledge and willingness to switch provider when it comes to financial services. On top of this, it's a market with significant growth opportunities where the market is about 70% of the size of the Swedish savings market according to our definition and with a population that is about twice as wealthy as the median Swede.

In Sweden, with our unique customer-centric Avanza culture, we have succeeded in making investment and savings into something fun and inspiring for our customers. This is what we will also do in Denmark, and I'm convinced that Danes will also appreciate our offering.

Moving on to how we're doing this. We will establish ourselves organically while ensuring that the Swedish business continues at full speed. We have decided to build a new platform using an AI-first development approach. There are several reasons to why we made the decision to build new rather than adjusting the Swedish platform. One is the enormous leaps taken in technical development in recent years. The cost of building software has decreased drastically in a short time, which now allows us to do this in a cost-efficient way.

Another important reason is that it gives us full flexibility. Savings and needs look different in different countries. And by building a new, we can adapt the offering according to local savings culture where needs are different. By keeping the international platform separate, we also ensure that we maintain full speed in innovation for our Swedish customers and growth in our Swedish business, while we build a scalable path into Europe as this platform will serve as a foundation also for other markets in the future. We are, as always, keeping cost-conscious and low-risk approach. The establishment will involve an initial investment that we estimate at SEK 120 million to SEK 150 million, of which around 20% will be capitalized. This means that around SEK 50 million will impact the 2026 cost base.

Now to give you a rough idea of our road map, the main priority will now be to get started on establishing a Danish branch and recruit a branch manager and create local presence. We will also start staffing up in other areas to make sure that this does not weigh on any parts of the Swedish business. We are detailing the customer offering and local branding strategy, setting up processes and procedures while, of course, working on building the new platform. We will launch during the second half of 2027, bringing our customer promise of cheaper, better and simpler savings to Denmark. The main target will, of course, be to have Denmark's most satisfied customers.

After the launch in the second half of 2027, we estimate the annual cost base at SEK 80 million, which then increase over time as the business grows. Additionally, we will need to work with marketing and brand building in a completely different way than we need in Sweden today. Smart marketing requires timing and flexibility. And here, we expect to spend up to SEK 60 million per year during the first 3 years, after which these costs will decrease. I am convinced that our promise of a cheaper, better and simpler way to save will be appreciated in Denmark as well.

With that said, we are humble about the fact that it takes time to break into a new market. We, therefore, see it as reasonable to reach profitability around 5 years after launch. At the same time, as we take this exciting step to make savings and investing better for Danish customers, we continue with full energy in the efforts for our Swedish business where growth will occur in the coming years.

Our long-term vision is clear. We want to leverage our proven strong capabilities and become a leading European platform. Denmark is a natural fit for the first market as it bears similarities to the Swedish one in terms of structure, competition and culture, and it provides strong growth opportunities for Avanza. We will expand organically without affecting our strong and growing Swedish business at low cost with an initial investment of SEK 120 million to SEK 150 million, meaning very limited impact on the 2026 cost base.

Our customer promise remains when we export our Swedish success abroad, and I look forward to offering also Danes cheaper, better and simpler savings. The Swedish business is strong and the growth prospect remains. We report a record result where the strength of our business model with several income streams is once again demonstrated. We are working at full speed with our prioritized areas, and we are now entering a new phase of our international expansion, establishing Avanza in Denmark by the second half of 2027. So to conclude, Avanza is well positioned to capture future savings market growth in Sweden and abroad.

And with that, we open up for questions.

[Operator Instructions] And we're going to take our first question, and it comes from the line of Martin Ekstedt from Handelsbanken.

Can you hear me okay?

Yes, we can.

Great. So to no one's surprise, perhaps a few questions on your Danish expansion. So breakeven in 5 years from launch, can you share some of your scenario assumptions around this, including for margins? Simply put, I think Nordnet is currently making around SEK 50 to SEK 60 per trade versus the situation in Sweden is, I believe, below SEK 20 per trade. So is there a risk that this ends up just being a race to the bottom on margins in Denmark?

I think when it comes to our forecast into the future, We, of course, have an internal business case with different scenarios, landing in our external communication to reach breakeven after 5 years. When it comes to race to the bottom, I think one could have Sweden as a case example. If you look at the last number of years, our main focus would be to make savings and investments something joy and fun to do it with our tonality, to deliver on our customer promise that we have in Sweden. But we don't want to go into exactly what we will offer in the Danish market from -- for competitive reasons.

Okay. Understood. And then so I heard from you that a couple of quotes like other markets in the future will use the Danish platform and the long-term vision is to become a lead European platform, et cetera. Do I change a bit -- do I sense a bit of a strategic shift here? I think your earlier strategic review concluded to take basically one more European market before 2030 but didn't say very much about what lay beyond that.

I mean we have become more insightful now 1.5 years after we presented the 5 strategic pillars where going abroad was one of them. What we said then was that we will, by 2030, be established in at least one more European market. We see Denmark as a natural first step. It is a first step. Our ambition is to go into new markets when we see some traction in Denmark and when we have management capacity to do the next big thing. That is not here and now, but it is out in the future.

Okay. Understood. And then just quickly, if I could ask on the new platform that you're building in Denmark. And I also saw that the announcement includes some costs related to cloud. Isn't a general idea that the cloud transition makes taking new markets more plug-and-play for you rather than it would warrant further cloud investment? Just help me understand that.

Yes, I'm not sure I follow this cloud remark when building the Danish platform. Naturally, it will be cloud-based as we are also moving the Swedish platform into the cloud but the cost of SEK 120 million to SEK 150 million are the cost that we foresee to -- or investment basically to build the Danish platform to establish ourselves in Denmark with the processes, the procedures needed, the legal work to become a branch in Denmark and so on and so forth.

That's additional cloud-related costs on top of what's already communicated for the cloud transition in general. It's not a carve-out from the Swedish-related cloud transition cost.

Correct. So when we communicated that we are going into the cloud with our platform in Sweden, that is separate from what we're doing now. Now we're building a new platform, a new international platform, of course, taking the different modules from the Swedish one and the international platform will also be cloud-based. Yes but one should not intermix these 2 numbers and these 2 efforts. One is to move the Swedish platform from our data centers into the cloud. What we're talking about now is to build an international platform with the start in Denmark.

[Operator Instructions] And the question comes from the line of Patrik Brattelius from ABG.

Can you hear me?

Yes, we can.

Perfect. Yes. I will also follow up on some questions on Denmark. So if we start with this reaching profitability in 5 years, could you share a little bit again your underlying thesis here about what customer base and AUM levels do you need in Denmark to reach this breakeven level?

We have a quite detailed business case internally that we will not share externally, and that rendered the external communication around reaching breakeven after 5 years. It requires a certain intake of customers, and it requires a certain assumption on margin. and it requires certain assumption where we have been given more information on the cost side.

Okay. Fair enough. But as Avanza is currently unknown in Denmark, how do you aim to differentiate yourself versus more established players like Saxo Bank or Nordnet who has been in Denmark for quite a while in terms of price, product, user experience?

So we will use a lot of our success factors from the Swedish market when we go into Denmark. Of course, it needs to be adapted to the slightly different needs and customs in Denmark. We will need to work with marketing, as I mentioned, on a different scale compared to what we do in Sweden because in Denmark, we're not a white piece of paper when it comes to brands but compared to in Sweden, it's a much, much, much, much less known brand. So it will require more and different work on the marketing side. But apart from that, for competitive reasons, we will not discuss what exactly our offering will look like.

Okay. Fair enough. Moving a little bit away from Denmark temporarily. So given the elevated market volatility seen here in Q1, how do you think about the sustainability of brokerage income and also FX income here in the coming quarter as volatility normalizes?

I think one interesting observation from the first quarter is that I feel that it has been a lot of uncertainty. I feel that there has been a lot of geopolitically important news but if you look at the actual volatility, it's not that elevated. I think we peaked at 30 something, 35 or something. I mean now it's down below 20. It's -- and despite that, despite the fact that the volatility was not very high in Q1, it was slightly elevated, we saw a lot of activity. I think the environment where our trading-related incomes thrive is directions to trade on, not necessarily just noise, which volatility can be seen as, but actually directions to trade on. And then we want -- we don't want low volatility.

So when trying to project trading-related income, then one has to make some assumptions about will there be directions to trade on for our customers next quarter and will volatility be reasonable. We don't want the crazy volatility and crazy uncertainty that we saw when Russia invaded Ukraine because then our customers rather became a little bit passive for a while.

[Operator Instructions] Now we are going to take our next question and it comes from the line of Jacob Hesslevik from SEB.

I have 2 questions, one on Denmark and then on NII. If we start with the Danish cost phasing and KPIs, you guided SEK 50 million expense in 2026 and SEK 120 million to SEK 150 million in total until launch. What are the key milestones and go/no-go decision points? And how should we model cost run rate in 2027 after the launch? Should we expect you to capitalize 20% of the SEK 80 million running cost post launch as well?

So on the last question first, we have a philosophy where we try to be as transparent as possible to put as much of our cash out as possible on the cost line and not take it on the balance sheet. Here, our assumption is, and maybe you can detail on that but that of the initial investments, the -- up to SEK 150 million that we will capitalize around 20% of that.

Yes, exactly. Just adding to that, that's the investments that are made up to launch, which will be sometime during second half of 2027. And then that will transition then into more ongoing running costs, which we estimate starting at around SEK 80 million and then slowly growing as the business grows. Those SEK 80 million will include all running costs, but then also amortizations of capitalized costs during the start-up period, which would be part of the SEK 80 million going forward. And then the SEK 80 million will grow, as I said, when the business grows and staffing increases, et cetera.

And when it comes to your question regarding milestones and deadlines, just as we don't share exactly what our product offering and our target customer segments will be, we do not yet detail sort of the different milestones and the decisions that are made along the way but we will get back to that in the forthcoming quarterly updates.

Okay. And then on NII, market rates moved a lot during Q1, which Jonas talked about before from pricing in a rate cut to then pricing in rate hikes. I guess it is your bond portfolio that's linked to the 3-month STIBOR, correct?

Yes, that's correct.

Yes. So should we then expect the bond portfolio to yield more already in Q2? Or will the step up rather be in H2 if we assume current market rates stays at these levels?

Yes. I mean, we -- since somewhat longer rates than overnight, for instance, in STIBOR 3 months, then in some cases, we have some other investments as well, and we have some sort of even shorter-term investments like Riksbank certificates, et cetera. With those rates elevated, we hope to get somewhat higher returns in portfolios that are linked directly or indirectly to those types of market rates. And since the elevated market rates only applied to -- it was a little bit into March, we would expect then given market rates remain on this level, a pickup in Q2. But we also saw a little bit of a decline towards end of March and beginning of April. So it obviously depends on where market rates move. We say that our interest rate term profile is up to 3 months. We have a target to keep it below 3 months. That should imply what you say.

Yes. And then on deposit volumes, I mean, it increased in March versus February. Is this due to the dividend season starting? And has not deposited like historically developed positively in April, May, June as well when more dividends are paid out and you also get the tax refunds from the tax agency. So should we not expect a tailwind on NII from volumes as well into Q2?

What will happen in the future is always hard to answer. You are correct that we have seen a little bit of that pattern in past years. On the other hand, my feeling and why I say feeling and not fact is because our time series is a little bit distorted now by the phasing out of the external deposits. But my feeling is that our customers did reduce the risk levels during March. We saw that with the decrease in the margin lending exposure, and I feel that we saw that in going from risk assets into cash a little bit. So the deposit volume also, as you know, depends on the risk appetite of the customer next month or the month after that.

And the next question comes from the line of Andrew Lowe from Citi.

Can we please explore the decline in the gross brokerage margin this quarter in a bit more detail. I know that you flagged that the share of foreign trading is down but it remains above the average over the past 2 years, yet the commission margin is significantly below where you've been trading in the past 2 years. So can you specifically talk through the effect from the higher turnover per note within fixed price brokerage class. So what's going on there? How does that mix compare to history? And what are your expectations going forward for the brokerage margin? I would think that your average trade size will continue to go up, and it's gone up 7% Q-on-Q in Q1. So does this effect maybe nullify the benefit from larger trade sizes over time?

That's a good question, Andrew. I mean now we're talking about customer behaviors out in the future, which is always difficult. But you are correct that the lower brokerage margin in Q1 was influenced by a higher typical trade on the fixed commission trade that will continue. I don't know, Karolina or Jonas, if you have any -- dare to have any view about the future there.

Difficult to say.

Maybe then -- sorry, if you don't mind me interjecting. Could you just talk through how has that evolved over time over the past 2 years with the sort of mix of people doing floating rate or fixed price trading?

Maybe we will have to get back to you. I don't have that time series in my head, Andrew.

Now we're going to take our next question and the question comes from the line of Enrico Bolzoni from JPMorgan.

One, going back to the expansion in Denmark. Could you please confirm or clarify whether the offering in the Danish market will be completely equivalent to the one that you currently have in Sweden? I'm thinking about in terms of product offering as well as perhaps client segmentation. That would be helpful. Related to that, I appreciate you don't want to give too much detail, but you briefly mentioned that it is a very attractive market because the gains have quite a lot of capital. Do you expect that the profitability of your clients in Denmark will be higher compared to the profitability of clients in Sweden on average?

And then finally, I had a question on artificial intelligence. You briefly mentioned that this helps a lot, for example, when it comes to writing software. I think this is what you're referring to. But I was curious to know whether you are rolling out this technology in some form also within your existing platform in Sweden, whether clients can already access some AI functionalities or if not, whether you think this is something you'll be able to roll out in the near future?

Starting with your first question. If you just look clinically at the Danish market and compare it to the Swedish, what do you see when it comes to margins and so on and so forth. Prices are higher in Denmark. I mean, the brokerage fees are higher in Denmark than in Swedish, which is natural because Sweden is more competitive. If you look at banks and compare the net interest margin, it's higher in Denmark compared to Sweden. It's a little bit more difficult to compare because it's different currencies, so different central bank rates. But apart from that, I don't want to go into our assumptions behind our breakeven estimate of around 5 years.

When it comes to AI, I mean we use that today in our customer offering. It's not on a big scale but a little bit. We use it to enhance our development. And the third pillar where we want to use it is to improve internal efficiency in general, where classical automation is maybe not the right path forward or robotics is not the right way forward, then AI could be the way forward. But there, we have no concrete success stories yet.

And sorry, on the offering in Denmark, will it be equivalent in terms of products?

So we don't want to go into how our offering will look like in Denmark for competitive reasons. I understand that you want to know but I hope you respect that we need to go out with this message now for reasons but we don't want to give away more to the market.

And now we take our next question and the question comes from the line of Ermin Keric from DNB Carnegie.

Maybe starting off, you mentioned that the ambition is to be a leading European player. What do you mean by that? By what time, how will you measure that? Is that having most users among digital savings platforms, having the most savings capital? Or by what metric are you referring to then?

We want to state our ambition, Ermin. We will not communicate what exactly defines leading and by what time. We now -- we want to be clear to the market that we're now going into Denmark but we also want to be clear that, that's the first step. But I can't -- I don't want to be more specific than that on how do we define leading and how many markets do we need to be in to define leading and how many customers and so on and so forth. Not yet at least.

Okay. Fair enough. Then on the platform, so you're going to build a new platform for Denmark. If you add additional countries in the future, will that be added to that platform? Or will it be a separate one for each and every geography, given as you also mentioned, it makes it easier to kind of custom make the offering for local needs.

The plan is to build a platform that we will use in our international expansion. In the first phase, we will optimize it for Denmark but we will build it in such a way that we are able to deliver on our ambition to become the leading European platform. That will come at a certain cost, but it will be smaller adjustments when going into next markets compared to now building it from scratch.

I guess it's fair to say that if you would add another country, it would be a lower cost than what it will be for Denmark then?

Yes. We haven't done our thorough analysis, but that's clearly my view.

Okay. Great. Then just -- I mean, you don't want to talk so much about the actual offering but could you talk a bit about your insights as to how Danes are different in their savings culture compared to Swedes? What are the most contrasting things?

Maybe the propensity to get exposure to the fixed income market through their -- I mean, compared to the Swedish one advanced covered bond markets. So a little bit more fixed income compared to Swedes. But on a European perspective, they behave similar to the Swedish ones. Another one differentiates is, of course, the appetite for foreign exposure in Denmark on the equity side, which is bigger than in the Swedish one, which stems from the fact that the Danish Stock Exchange is in relative terms, much smaller than the Swedish one.

Then if I may, just one final question, going back a little bit to AI. We've seen some launches in the U.S. on kind of advice driven by AI within savings and so on. How do you see that going forward? Could you actually enter the whole advice space through AI? And how faraway are we from technology being mature enough for that?

I mean we want to build closer relationships with our customers. We want to do that without having to build up a large force of financial advisers. And the way to do that is through technology. And I think we have come a faraway today compared to 10 years ago. And of course, we will be much further advanced when you look out in the future. And I think AI will play an important role there.

Now we're going to take our next question and the question comes from the line of Haley Tam from UBS.

If I can, can I ask a couple about Denmark as well? And then -- yes. So just to confirm a very simple one. The target profitability in 5 years, can I just confirm that's the second half of 2032 that we're talking about? And then in terms of the nature of the business, I know you don't want to talk about too much detail but just to understand, should we be thinking about this as a trading and investments business only? Or should you also be doing lending and deposit taking? And I guess really the reason for asking that is to understand the 70% total addressable market versus Sweden. I'm just wondering how you define that, given I think Nordnet has said their Danish addressable market is, I think, SEK 6 trillion or SEK 7 trillion. And I think you said your Swedish one is SEK 13 trillion. So 70% would clearly make your addressable market higher. So there are some simple questions there, if I can.

The important for us is to meet the customer demand. And our focus is savings and investments. We are not talking about other parts of banking products like payments or salary accounts or P&C insurance but we're driving on the success we have in Sweden, where we have niched in on savings and investments. And that's the plan when -- to use that also when we go abroad. I know it's a little bit vague, Haley, but I don't want to be more specific than that.

No problem. And if I can ask again about the building of the brand new platform. Do you think there might be an enhancement you could then reverse into the Swedish platform once that's done? Or is it really just about the different regulatory structure and building something truly scalable for Europe that's driving this decision? Just help us understand that a bit better.

I mean we will optimize the totality. So if what you are asking about or reading would be the case, then we will, of course, use that advantages also for the Swedish side but that's not the focus here and now. The focus is to build a great international platform with the start in Denmark. That's the focus.

And the question comes from the line of Ian White from Autonomous Research.

Three from my side, please. First of all, given the comments you've made around technological change enabling your cross-border expansion, what are the constraints now for Avanza or indeed other firms to expand across borders in the future? Do you view AI as presenting a big watershed moment for the industry where it's much easier for firms to launch operations in new markets? That's question one.

You mentioned Denmark being a natural first step, and I appreciate you don't want to get too far ahead of ourselves but would you expect subsequent steps to be in Scandinavian countries or is the whole of Europe in the conversation here with respect to your longer-term expansion thoughts?

And finally, where are you so far in terms of your goals to achieve market leadership in private banking and occupational pensions? I know those are a couple of the key initiatives that you set out previously. What KPIs would you highlight to indicate that those things are on track, please?

So if we start with your first question, I think one should not -- when going into new markets, one should not underestimate that you need to put procedures in place, you need to -- you need to have the licenses in place, you need to have the connectivity to the payment system, to tax authorities, et cetera, et cetera. So you need a lot of knowledge, and I wouldn't say it's easy to go into a new market. But what we say is that the development of software is faster and easier now, and that helps us in this case. But building software is just one part of going into a new market.

The second question...

Would you expect the Nordics...

So we don't want to limit ourselves to the Nordics. So we have identified a number of interesting markets for us but the focus -- and they are in Europe but the focus right now is really on Denmark. And the third one was on progress in private banking and occupational pension and what do we measure. So we want to be, by 2030, the largest private banking player in Sweden in terms of number of customers. So internally, we track number of customers, especially much. And on the occupational pension side, we want to be the largest player, and we measure that in terms of premium space. So that's what we follow the most. I think we're doing good progress. I think we have a lot more to do and a lot of exciting things in the pipeline. And I think we had a Board meeting yesterday, and we flag the progress on both of those as good.

Okay. On the first question, thanks for the extra detail around that. Would you be prepared to sort of quantify that or indicate if we say software is no longer the same sort of barrier to expansion that it was. Is that sort of -- is that 20% of the challenge previously? Is it half of it? Is it sort of a small consideration or a big consideration in the context of those other things that you mentioned, licenses, connections to payment systems, et cetera?

If I phrase it this way, I think it's very hard for a pure tech company to go in and be successful in our industry. I think you need to know a lot about the customer behavior, how you make something that can be perceived as very scary and difficult like long-term savings to make that into something joyful. You need to understand and navigate in the very regulated environment. Those competencies that I just mentioned, they are just as important tomorrow as they are today. But the software side goes faster. I don't really dare to quantify what share there is. I'm looking to Karolina and Jonas, if you're there.

Now we're going to take our next question. And the question comes from the line of Oliver Carruthers from Goldman Sachs.

Oliver Carruthers From Goldman Sachs. I've got 3 more questions on Denmark, if that's okay. First one, I appreciate that you're not giving us the full details of the business plan, which makes sense. But one of the things that you did emphasize during the presentation at multiple points was this cheaper way to save points. So just where do you envisage being cheaper? Any detail you could give on that would be helpful.

The second point on the new platform that you're building for international expansion. So presumably, this means that you're going to be introducing dual running costs, new product launches are going to have to come on both platforms. Just trying to follow your rationale here. Maybe a little bit of a follow-up to Haley's question but is the idea that you'll retire the Swedish platform at some point in the future? Any color you can give on the rationale there would be helpful.

And then final question, I think it's really interesting that you're talking about building this European champion. And I'm sure you saw some of the comments from the European Commission last week about the potential upcoming merger reform, which could be some of the biggest reform we've seen in Europe in over 20 years, potentially moving to a more friendly backdrop in terms of their signing off on M&A, particularly surrounding innovation and the creation of European champions. So you're obviously going for more international expansion. You're going down the organic route here. But can you just share your latest thinking in terms of why this is the optimum way for you expanding rather than looking at acquisitions and combinations, particularly given that as you expand geographically, you're going to be increasingly competing against some of the U.S. players coming to Europe.

I'll start with the last question, Oliver. I think what the European Union is talking about is not blocking these large mergers in the perspective of the large traditional banks consolidating to match the industry structure better in the U.S. I don't think that changes if we would like to make an acquisition in my humble opinion. Why we have been looking at 3 ways to go abroad. One is organically, which we're now doing. We have also looked at acquisitions. We've also looked at the partner route, partner up with someone and do it together. We now decided for the organic approach. But of course, we will have our radar on for -- if opportunities would arise on the M&A. Now in the room, maybe help me with the first and second question.

On the product offering, if you could elaborate anything on that will be cheaper...

All right. So we stress in our communication our -- the philosophy that has guided us for 26 years and still guide us in Sweden, which we call better, simpler and easier. And that's -- we want to make -- and that's how we behave in Sweden today, and we want to behave in a similar way in Denmark. So you could use Sweden as an important data point when looking at Denmark.

The second question was...

And if we would retire the Swedish...

Yes. I mean we're now building this international platform focused on Denmark, partly because it is faster for us now and cheaper to build new and partly to save and protect the Swedish progress. We could have adjusted the Swedish platform, but it would have taken not large effort for the different teams, but it would have affected many teams a little bit, and we have so much interesting stuff in the pipeline that we don't want to slow down the development on the Swedish side. If you look far out in the future, do we like to have 2 platforms? No, we don't but that's not in the cards here and now. Now the focus is to have swift progress on our Swedish business. and going into Denmark by the second half of 2027.

If I just may add to that and emphasize what you said before, Gustaf, and what we have said in all quarterly calls up to this one is that we see very strong growth potential in Sweden, and that's where we will see the most meaningful growth in the coming 5 years. And that goes into the equation in terms of having the separate platforms, making sure we can really execute on the growth plan that we have in Sweden up to 2030 and beyond.

And the question comes from the line of Markus Sandgren from Kepler Cheuvreux.

Two questions from me, please. The first one, in your -- the share of trading in foreign currencies decreased this quarter. But for the past quarters, it has been trending up. In your business planning, what are you calculating with? How much do you expect to be done in foreign currencies going forward? So that's the first one.

And then secondly, speaking of AI and the downside of AI, there has been talked about that new systems will be used by criminals to -- for cyber issues basically. Do you expect any additional costs for increasing the -- yes, the shields towards cybercrimes basically?

If I start with the last one, that is high up on our agenda and cybersecurity in general, is very important to us. It's not a development that is very friendly out there. The scene changed with the 2022 Russian war on Ukraine and our -- the Swedish support of Ukraine. We have seen more activity from the East. And with more efficient technical tools potentially in the hands of criminals, we also need to get better, and that is something that we are working on. I think we are well invested on the cybersecurity side. We had an update from the Head of cybersecurity yesterday. I think he has a good plan how to counter what you referred to.

I think there was a first question also.

On the foreign trading.

On the foreign trading, we believe that our customers have too much home bias. We believe that, that home bias is less prominent today compared to 5 years ago, and we believe it will be even less prominent 5 years out. But market sentiment and asset allocation will distort that trend month-to-month. And now in -- especially in January, we saw an asset allocation towards Swedish equities. And next month, it may be something else, but we believe that there is an underlying trend towards bigger foreign exposure.

And we're going to take our last question for today, and it comes from the line of Andrew Lowe from Citi.

I had a question on your net flow expectations. So consensus has come down to about 7% when you first outlined your vision, Gustaf, the number that you gave was 10%. And you're talking more and more about international expansion. So could you just clarify, do you remain committed to that 10% figure? And could you just outline what you think the building blocks are to give the market confidence that 10% net flow growth in Sweden is the right long-term target?

Yes. We have now for 4 quarters been affected by our dismantling of our external deposits or deposits. We still have almost SEK 2 billion left that will negatively affect that number. I mean everything we do, Andrew, is to build the business long term, which we do through acquiring new customers and get net flow from new customers and existing customers. And the efforts we're doing in private banking and occupational pension but also in our core to the whole broader segment is to gain net inflow.

We have seen challenging markets now for the majority of last year and also this first quarter. And I don't have any data yet on the Swedish total market for this quarter. But last year, there was a big drop in Swedes' flows into funds. I think it was halved. And on the flip side, there was more than doubling inflow into deposits. And the majority of that deposits comes from salaries that are then stuck in salary accounts with the big banks. So we hope and I hope that the Swedish economy will get going and that the geopolitical concerns reduces so that the Swedes have long-term savings higher up on the agenda than they have had for the last 4, 5 quarters.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to Gustaf Unger for any closing remarks.

Well, many thanks for attending, and have a great day. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the Avanza's Full Year Report 2025 Conference Call and Webcast. [Operator Instructions] Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Gustaf Unger, CEO. Please go ahead, sir.

Good morning. With me in the room in Stockholm today, I have Karolina, Head of Investor Relations; Adnan, who has been our CFO during the interim period; and last but not least, Jonas Svarling our new CEO -- CFO, sorry, I hope not CEO, who will go through the financials after my initial presentation. So a warm welcome to you, Jonas.

The best news of the quarter was that Avanza for the 16th year in a row, has Sweden's most satisfied savers according to the Swedish Quality Index. It's also fantastic that we again ranked #1 in every subcategory. Avanza's overall score was 77.6, which can be compared to the industry average of 70. Avanza's Net Promoter Score remained highest in the industry at 41, while the industry average was at 3. I'm especially proud of this achievement considering our scale and that we're growing, which makes it increasingly challenging to maintain high customer satisfaction across a customer base of over 2.2 million.

We were also recognized as an employer where we were ranked as one of Sweden's most attractive employers by both Karriärföretagen and Universum and attracting and retaining top talent is, of course, essential to execute on our Strategy 2030. In Universum survey, we also ranked 11th among those with over 8 years of IT experience, this is fantastic since the market for senior IT expertise is limited and highly competitive.

It is also impressive that our savings economist, Felicia Schön was honored during the quarter as Savings Profile of the Year and Digital Rising Star of the Year, which is a confirmation of our influence as a powerful voice in personal finance. On top of this, our new podcast that was launched this year called [indiscernible] ranked top 10 most listened-to podcast on Spotify during 2025. We have also delivered new products at high speed with several long sought-after features now launched. With a focus on stock market enthusiasts, we now allow unlimited switches between brokerage fee classes, which is benefiting active traders who make transactions of varying sizes during the trading day. It was previously possible to switch brokerage fee class once a day. Customers who use manual currency exchange features are now paid dividends in local currency instead of automatic exchanges to Swedish krona. Also, the analysis tab on the stock pages now include forward-looking estimates.

For our Private Banking clients, savings for children was improved to allow policyholders of endowment insurance to set the age for transferring their wealth to an heir, which private banking customers, in particular, have asked for. Something that we have wanted for many years is to be able to offer mortgage LTVs of 85%.

The way that the Swedish mortgage market is currently structured, many customers find their savings locked in with other players in order to get a better mortgage rate. I'm therefore very pleased that we, as of this quarter, now offer mortgages with an LTV of 85% through both our external mortgage partners, Stabelo and Landshypotek. And as our CTO of Fredrik spoke about in the Q3 presentation, our target for 2025 within the cloud journey is to have migrated at least 1 production service to the cloud environment. And we reached this important milestone this quarter. And while this may seem like a small step, it means that everything is now in place for a broader migration.

And last but not least, now adding the Q4 results, we can conclude that we are at all-time high full year results. 2025 turned out differently than many of us had expected. I started the year with high hopes for the future, which was quickly turned upside down in the light of geopolitical turmoil and tariff chaos. The stock market climate with rapid and unpredictable terms has been tough for many customers to navigate in and market statistics for the first 9 months of the year show that Swiss deposited more than twice as much in savings on a net basis, but invested significantly less in equities, fixed income securities and funds compared to last year. This suggests that a large share of savings was stuck in current accounts with the universal banks during the year.

We welcomed over 170,000 new customers and had a net inflow of SEK 54 billion despite these challenging markets and despite the wind down of our external deposit products. The lower rates and the expansionary fiscal policies speaks for a turnaround for the Swedish long-term savings market in 2026. And although long-term savings might not have been accelerating the way we would have hoped during '25, trading activity did increase compared to '24. As always, well connected to market volatility as you see top left. Bottom left, you see that the number of brokerage regenerating customers increased going into the year and has kept stable at a high level, showing a broad participation in the markets in '25. Top right, you see the increased appetite for foreign securities trading and bottom right, you see the need for our customers to further reduce their big home buyers, which speaks for a continued trend towards foreign securities.

When comparing our performance with the target, we have overall done a good job. We did have Sweden's most satisfied savings customers. Our colleagues showed a strong engagement with an eNPS of 57. We produced a return on equity of 40%. The Board is proposing a dividend of 76% of the profit. And the cost to savings capital ratio was further reduced from 14.5 to 14.1 basis points. Our savings capital growth of 13% just fell short of the 15% target. The cost increase of 10.4% was in line with our indication of 11% for the year. And on the sustainability side, our sustainability score was improved during the year but we still have large potential in helping women to save more.

With respect to our target to grow savings capital by an annual average of 15% through 2030, we fell slightly short with a growth of 13%. The target was set knowing that growth will be lower in certain years. And this year, our net flow contributed less than we had wanted. One reason is the ongoing process to close the external savings accounts where we started the fall to close accounts belonging to partners that are actively migrating the remaining deposits to their own platforms. In early '25, just before we announced this move, there was nearly SEK 43 billion of our savings capital in these accounts, of which over SEK 26 billion now has left the product. We estimate that 55% of the -- sorry, SEK 26 billion has stayed with Avanza.

We also expect to retain approximately the same share of the remaining SEK 16 billion retaining more than half of the volumes we decided to phase out. That's a great deal about the strength of our brand and that customers want to consolidate their savings with Avanza. On the other hand, it also means that we expect our net inflows to continue to be offset by around SEK 8 billion in outflows due to the wind down of external savings accounts until the process is completed in late May 2026.

During 2025, we have progressed well with executing on our strategy across all 5 pillars and the target fulfillment I discussed earlier. I think there's strong engagement and energy among my colleagues for the way forward, which is important. Jonas, you have been with Avanza exactly 2 weeks, so I'm certain that you know every financial number inside out by now. Over to you, Jonas.

Of course. Thank you, Gustaf, and good morning, everyone. Great to finally be here. Before we move on to financials, I thought it would be good to just briefly introduce myself.

As you said, Gustaf, I joined Avanza as CFO just 2 weeks ago. And joining now is really exciting given what has been set out in our Strategy 2030 and a quite ambitious growth plan. And if you add to that, Avanza's market leading position in Sweden today and also it's a great culture. It was not difficult to say, yes, when you offer the job, Gustaf. So my views on operational efficiency, scalability and volume and customer growth ambitions, et cetera, are a little bit too early obviously to talk about. However, what I have experienced in the first weeks is the culture.

I think I've never seen such joint or common and clear commitment or I should rather say, passion for savings and investments and actually bringing that to customers. And that goes across the whole company. And that really stands out to me how people here love making great savings products and also helping each other. I joined from SEB where I spent more than 21 years in different finance risk and treasury positions as well as in different Swedish and Nordic CFO roles. Most recently, however, I co-head SEB's retail and business banking operations in Sweden, including the branch office network, the telephone bank and the digital bank in app and web channels. I hope I would be able to add some knowledge from being responsible for all Swedish private customers, including the smallest Private Banking segment and also smaller corporates. And before SEB, I cofounded an IT consultancy firm and also launched the hedge fund. So originally, actually worked as a programmer given my engineering background. So I look forward to meeting and talking to all of you later, but now let's get into the financials of Q4 last year.

And speaking of joining at exciting times. Of course, this is extra good to be here presenting the financials as we're reporting record full year results with both trading and interest-related income streams contributing to that. We're also reporting quite a strong Q4 with operating income in line with previous record levels. However, as we have planned for and also guided for, we're also increasing the cost this quarter resulting in an operating profit of SEK 733 million, which is still strong, although 10% lower than Q3. If you look at the full year cost, they came in at 10.4% cost increase. SEK 7 million or slightly below our guidance of 11%. All in all, net profit is up by 17% compared to last year and return on equity at a healthy 40% meeting the row target of atleast 35%. Earnings per share is at SEK 16.57, up 16% compared to 2024.

Now let's look at the income side. And here, we still see a stable and healthy income mix with some underlying trends that will begin to. It's been, as Gustaf said, a little bit of a special year with quite volatile markets. And as usual, volatility correlates quite well with customer activity. And as a result, we're seeing trading-related income accounting for an increased share of revenues compared to last year. At the same time, NII has remained stable despite lower market rates. Altogether, this has resulted and as said, in all-time high revenues in 2025.

If we look at Q4 specifically and start with brokerage income, trading activity held up well, although we saw a little bit of a slowdown in December, where we also had quite a few days when the stock market was closed. They were actually 4.5 fewer trading days in Q4 compared to Q3, which contributed to a 4% decrease in brokerage income. Adding to this, the brokerage margin then decreased slightly to 11.2 basis points, down from 11.4 as Private Banking and Pro customers a higher share of the brokerage 26% compared to 24% last quarter. When it comes to foreign trading, that high interest remained throughout the year, apart from a short dip in April. And in Q4, the turnover in foreign securities accounted for 30% of brokers generating turnover. And in absolute numbers, it was the second highest turnover in foreign securities ever, resulting in a strong FX income in Q4.

Moving over to fund commissions. We are seeing some margin pressure this quarter with the share of index funds increasing to 50.6% by the end of the period. The fund margin decreased to 24.4 basis points on average and was at 24.0 basis points by quarter end. And when it comes to the margin, the split between active and passive funds is one explanation, but also what type of index funds our customers choose to allocate their funds savings stores can also have an effect. As you talked about us that we hope for a stronger Swedish economy in 2026. And we also see that in signs in terms of fund savings where we've seen Swedish index funds among the most net bought during the later part of the year. These are in general price lower than those with international exposure, thus lowering margins. However, when it comes to funds, volumes are growing and despite the negative margin development, we had an all-time high fund commissions, both for a single quarter and for the year.

Lastly, other income was weaker in Q4, explained both by decreased income from several smaller and different income streams. And on the other side as well, several other smaller commission cost lines that are not reported separately. Part of this is related to the income from external savings accounts, which is a volume-based distribution income, which natural then decreases as we are closing down these accounts, as Gustaf highlighted. Also, cost for payment commissions increased as a result of more people logging in when markets were quite shaky, which means increased cost for bank ID usage. Income from corporate finance also decreased by the income from Avanza markets increased.

If we move over to NII. The importance of our growing volumes is once again demonstrated despite 100 basis points lower policy rate today and then going into 2025, full year NII remained stable compared to 2024, thanks to increase both deposit and lending volumes. This applies for the quarter, where we are seeing a volume-driven increase of NII despite the latest and possibly last policy rate cut on October 1. You first look quickly at the lending side. We reduced the rates on margin lending by 13 basis points following the latest policy rate cut.

The mortgage rate, however, is directly tied to the policy rate and was consequently reduced by 25 basis points. The combined effect of these rate changes led to the average rate for internal finance lending decreasing to 2.81% from 3.01%. We believe we have quite an attractive offering when it comes to the mortgages, and we have also done some extra marketing, as you will see later in the cost part towards Private Banking clients, and we're seeing some quite nice results of that in mortgage volumes that increased by over SEK 1 billion in the quarter, mainly related to Private Banking customers.

Moving over to interest cost side. Interest expense for deposit increased some due to the higher internal deposit volumes and an increased share of deposits that are interest-bearing accounts that was at 58% compared to 54% last quarter. This was the large extent, then offset, however, by the lower deposit rates, which also decreased with the policy rate cut on October 1, and the average annualized rate of deposits was 0.76%, 4 basis points lower than last quarter. To summarize, NII remains a stable contributor to income mix. As I said, the volume is the key driving factor. The Riksbank is estimating unchanged policy rate going forward, unless there are changes that outlet for inflation and economic activity. This would indicate a more stable rates and thus margins going forward, all else equal.

Moving over to costs. The full year costs increased, as I said before, by 10.4% compared to 2024, meaning that our spend has in SEK 7 million lower compared to the guidance of a cost growth at 11% in 2025. The slightly lower costs are explained mainly by us being able to keep the cost for the cloud journey below budget and to some extent, also by our work on operational efficiency, we have been quite successful in reducing external spend during the year. Looking specifically at Q4, we are at 24% higher cost than Q3. That's an increase of flag 4 when we reiterating our guidance in the last quarter presentation.

As I'm sure many of you know by now, our staff costs are seasonally low in Q3 due to vacation debt in reduce and as a result, are now comparatively higher. In addition to that, we had more consultants on site, mainly tied to the cloud migration. And on top of that, the marketing costs are up quite substantially this quarter compared to the very low levels of Avanza is usually at. Our very strong brand and our customers' high willingness to recommend us particularly how we drive inflow of the word of mouth. However, we do not have the same brand recognition when it comes to Private Banking and occupational pension, and that is why we increased our marketing initiatives towards these segments, which, as you saw earlier, improved, for instance, lending to the Private Banking segment.

It is quite important though to note that this quarter's cost level should not be seen as the new quarterly run rate for marketing costs going forward. Although we will continue to work to build brand awareness as part of our efforts to grow within Private Banking and pension. This reasoning also applies to the full cost base, where not all of the cost increases in Q4 are recurring running costs. If you look into the future in terms of cost then, our long-term target is, as communicated before, an average annual cost growth of 8%, up until and including 2030. And as said, this cost growth will be higher at the beginning of the period as we're investing within our Swedish growth initiatives with the aim to reach 5% by 2030. This implementation or strategy that continues at full speed, and we forecast cost to increase by 9% in 2026 driven by continued investments in accelerated growth in Sweden.

The planned investments, they include work to develop our Private Banking business and the launch of our new discretionary portfolio management product as well as investing in our pension business. It also includes all the continuous work within our core business to make sure Avanza stays in the forefront when it comes to offerings and user experience. The cloud journey also continues, where you mentioned that Gustaf that reaching quite an important milestone during the quarter when we migrated our first production service to the cloud. Meaning that everything is now in place for broader migration. And in 2026, the work will be focused on migrating services that we find suitable and easy to move at a controlled pace.

We are, of course, not immune to inflation, which will drive some of the cost growth as well. Our work on improving our internal efficiency is quite important to offset this. Total salary adjustments are expected to amount to around 4%, which when you consider the staff cost as a share of total cost yield a cost increase of somewhat above 2% as illustrated on the slide. Summarizing, our cost increase is related to investing in further growth and we continue our work to improving efficiency to be able to meet the planned volume growth with an improved platform. Our answer is built on scalability, and we are the leading position when it comes to cost to savings capital ratio and we intend to maintain that position. The target is to decrease the cost to savings capital ratio over time. And in 2025, it decreased to 14.1 basis points compared to 14.5 basis points in 2024.

Finally, and concluding a note on capitalization and the proposed dividend. Avanza is well capitalized with prudent margins, both the leverage ratio, including Pillar 2 guidance and the total capital requirement, including risk-based Pillar 2 requirements. The binding constraint is the leverage ratio. And even though our deposit volumes on balance sheet has increased substantially during the year, largely driven then by the closing down or external savings accounts, we still have a healthy margin leverage ratio requirements, which should be stress very poorly captures the extremely low risk profile of Avanza's balance sheet asset side.

Taking this and the strong result into account, the Board has decided to propose a higher dividend per share compared to last year of SEK 12.75 per share. This corresponds to a payout ratio of 76%, which exceeds our target of 70%, but also leaves us with capital flexibility going forward. And concluding and maybe repeating myself a little bit. As you can see, we still have good headroom to the total leverage ratio requirement of 3.5%, including the Pillar 2 guidance of 50 basis points which I said is the most constraining recline for us. This gives us a position where we can handle increased deposits of SEK 32 billion before reaching it.

And with that, I will hand back to you, Gustaf, for some closing remarks.

Thank you. I again start the new year optimistic about the future may sound strange given what's happening around us with Greenland. But we have received positive signals on inflation and that personal consumption is starting to grow, the Riksbank's policy rate of 175% is a whole percentage point lower than that at the start of 2025. And this is important for Swedish households who are more rate sensitive than in other countries where we typically own our homes, and we often have variable rate mortgages. The government has issued an expansionary budget for '26, which is likely to help the Swedish economy to finally gain momentum despite continued global uncertainty. I believe and hope that this leads to 2026 being a year when households actually have more money left in their pockets, which should be positive for the Swedish savings market and for Avanza.

Now we're happy to take questions from you.

[Operator Instructions] And then we'll go and take our first question. And it comes to the line of Martin Ekstedt from Handelsbanken.

Jonas first, welcome on board. Could I direct my first question to you, please, and ask what will be your first priorities as CFO, including -- I'm sorry for making this sounds like maybe a job interview question specifically in relation to finding a new home market for Avanza 2030. What is your experience of cross-border M&A and for that matter establishing new markets organically?

Yes. Thank you, Martin, lots of questions in one go. Maybe disappointing in saying that as joining as CFO, I would initially dig into all the numbers for me, the most important priority right now is listening to customers and meeting all the staff of Avanza and really understanding where we are right now and what is needed. Then based on that, I will spend more time on beginning to the financials and what can be done related to that. Then you also asked about the experience in terms of M&A and international expansion also where we stand on that. I think in general, when we have something more to communicate related to our international expansion, we will do that. I cannot add more related to that. Other than it's part of our strategy 2020 -- 2030 to grow internationally. That's also one really exciting thing about the Avanza growth case, the attractive neat Avanza when Gustaf and I had conversations related to that.

Having worked in SEB for 21 years, there have been numerous occasions where I've been involved in different cases in terms of both buying or divesting different types of businesses. Some have happened. Some have not happened. Those that haven't happened obviously cannot comment on, but there have been a few acquisitions that have been disclosed publicly, where I've been working behind the scenes. On top of that, I was CFO for a Nordic business, the Nordic SEB Kort Banking Group for a couple of years, so have some experience running across Nordic business as well. Hopefully, that answers some of your questions.

Loud and clear. And then for my second question, this quarter, you actually for once reported material loan loss provisions, SEK 4 million which looks like 5 basis points of lending annualized. That's not exactly low for our portfolio of Swedish Private Banking mortgage. So I just wanted to ask for some further clarity on that one. Doing some archeology around these numbers, it looks like you haven't reported provisions on this level since 2011, and your report still states that you have no realized credit losses attributable to events after 2011 and to quote. So I assume it's been no realized part of the statement that is key, right, i.e., this is a new provision and not a realized loss. Is that correct? And could you just give us some more added comfort around this that it's not the start of the more pronounced peak of credit losses.

Yes, I can comment on that. And it is exactly, as you say, it's related to expected credit losses, not realized credit losses and it should not be seen as an indicator and generally increased losses or risks in the credit portfolio is stable and healthy low. This is related to one single stock producing in estimated values related to Inteligo technologies related to our margin lending, related to that stock, which explains almost everything of the increase in expected credit losses.

Okay. So it's on the margin lending side?

Correct and we made a very conservative estimation of that.

Now we're going to take our next question. And it comes line of Jacob Hesslevik from SEB.

Let's start with the net flows during the fourth quarter. If we take your 55% take rate on external deposits, it means roughly SEK 11.7 billion has left platform. And if I remember correctly, SEK 3 billion had left as of Q3, meaning that outflow accelerated during the fourth quarter. In October, you had strong net inflows of above SEK 5 billion. Does that mean that the majority of the outflow occurred during November and December where the numbers were a bit weaker?

Jacob, I must admit I don't have the monthly numbers of the external deposit account flows in my head. But I mean, November, December were weak. They were clearly weaker than we hoped and planned for. '25 was a very challenging year for long-term savings. A lot of deposits were stuck with the universal banks that I mentioned. And the -- and during the fall, so -- some of the partners have been less -- have had less appetite to retain volumes and some partners have fought for it more. Let me put it that way. And the latter of the year was more challenging partners from our perspective.

Yes, but, Gustaf, if we think about it in this way, in total, roughly SEK 12 billion has left your platform, correct? And in Q3, you wrote that SEK 3 billion had left. So it's SEK 9 billion during the fourth quarter alone. And if we assume that Avanza usually have natural net inflows of roughly SEK 5 billion per month, we see that in November, December, you had roughly SEK 0.5 billion. But if you divide up the SEK 9 billion that you had in outflows, it's SEK 4.5 billion per month and SEK 5 billion in natural net inflows, less than SEK 4.5 billion outflow gives you the actual monthly data that you reported for November and December. Is it correct to assume that the majority of those SEK 9 billion went out in November and December, and that's why you only reported SEK 0.5 billion in net inflows?

My recollection is that I was disappointed with November and December also taking the external deposits accounts -- into account, so to say.

Okay. Yes. But if we then move forward looking instead, you have roughly SEK 16 billion left on the external deposit platform with your 55% take rate, it means that just above SEK 7 billion will leave up until May. Can you help us understand if this SEK 7 billion will be more front-loaded or back-loaded? Or should we expect it to be equally spread out per month?

I think we've guided SEK 8 billion. I mean it's a rounded number. But no, I don't want to stick out my head and say which months. So still it's an ongoing dialogue with our partners. We want to make this, as I think we've done in 2025, a good experience and controlled experience for our customers, but also for these partner banks who to some extent, are dependent on this funding. So we still stand with a view that we will be done with this closure by the end of May.

Okay. But if we have so little visibility on these outflows, I think as I speak for all analysts on this call when I say it would be very helpful if you could clarify and show in the upcoming monthly statistics per month, how much of the net inflow number was affected by outflow from external deposit platform.

It's noted Jacob.

And the next question comes from the line of Patrik Brattelius from ABG.

Can you hear me?

Yes.

Perfect. So my first question would go to Jonas, who is the new kid on the block. As you were announced quite much earlier than you joined, I reckon that you have followed the company from the sidelines. Could you talk a little bit from your point of view, which are the biggest areas of improvement potential that you see now entering the firm?

Thank you, Patrik. And also for calling me kid, it feels always good for a 47 year old man. So thank you for that. Yes, it's been 6 months on the sideline. However, I did stay and support SEB a little while so it's actually only 2 months fully on the sideline, but still and only having access to public and external data and previously then competing with Avanza in my previous role, it was always with a little bit of envy how Avanza attracted so many customers and so much saving capital and what was the secret source behind it. Was it the use experience itself? May be a function of culture or whatever was it. So that was -- I was also always then wondering how can it be improved because when you look at it from the outside, things look quite well in terms of both financials and flows, et cetera.

So that was maybe my sort of key questions of what are the efficiencies? What are the changes that can be made to further improve this because if you listen to Gustaf and if you listen to Sven, how they talk about the company, there are still lots of things to do, both with the core business in Sweden and when it comes to international expansion which only see a separate and interesting growth case. And then when you come inside, you see that we are not done. There are things to do. I think you, Gustaf, highlighted that in earlier calls that there are things we can do on the inside in terms of operational efficiency. I think Avanza has been quite good at making user experience and flows for customers strong and attractive, and I think those are customers have experienced that. There are some processes and systems, et cetera, on the inside that are maybe not on par with what customers experience on the outside. So I think there are improvement opportunities in that area, I would say.

Okay. Great. My next question is following up on the topic of the savings capital left on the external savings count. How do you view taking potential actions to get the larger share of the remaining capital to stay on the platform, potentially raising savings rate on your own account temporarily to keep a higher share? Or how do you view that or any other actions potentially?

We -- Patrik, I mean, we really want our customers to consolidate all their savings with us. So we want our customers to retain all of their savings with us. When -- with the last rate cut, I think it was announced late September, we did not reduce the rate on our savings account fully, left a little bit extra on the table for customers. Partly because we thought that this may be the last rate cap, and let's share it a little bit more with customers, but also with the savings, the external savings accounts in mind. So no, I don't have any -- we don't have any concrete things in mind here. And I think we're doing a pretty good job to guide our customers to make the right choice. And I think we have an attractive internal savings account.

Okay. Fair. I understand. And my last question, if I squeeze in a third one is that the other commission income line is down quite lot sequentially. You talked about the drivers here. But can you elaborate if any effect here or temporarily? Or is this the new base level as it is like minus SEK 26 million in the quarter?

All except one important factor are not a trend, but rather this quarter. But one is clearly a trend, and that is that we have, and we will continue up until end of May book the income we get from our banking partners for distributing their external savings deposits, and that, of course, naturally goes down as volume goes down. But the other ones are more fluctuations in market. We saw more interest from customers to log in, which increased the costs for Bank [indiscernible], which shows up as a negative income on that role. So I would say the savings account effect will continue and will be there forever, but the other ones are more market related.

And the question comes line of Markus Sandgren from Kepler Cheuvreux.

Congrats Jonas to your new position. I was actually looking a bit more on the longer-term trends. If you look at the transaction activity in relation to savings capital is clearly going down over the years. On the other hand, it has been both much higher volume traded in foreign currencies and also the price per trade is going up steadily in the last couple of years. Can you talk a bit about the dynamics for the coming years. What do you expect in terms of pricing dynamics and trading in relation to savings capital. So what base?

I mean if you take a long time series, I mean, Avanza started directing towards the very trading-oriented, trading interest suite. Today, we have more than 2.2 billion -- million, sorry, customers, which, of course, some are very interested to be active on the exchange and some are -- they want to buy a fund or a few funds and then be very happy with that allocation. So the mix of customers have changed. If you have -- if you look over many years, looking out in the future, I think it's very challenging. It is so market dependent. The only trend that I dare to be clear on that is for an exposure. I mean our customers have a way too big homebuyers still today almost 80% of their securities portfolio is exposed to Sweden. That is not a good geographical diversification. We will see over time further interest for foreign securities. That is my view.

Okay. And if I put the question like this then that the reason for higher average price per trade. Is that driven by larger volumes per trade or by high share of foreign securities? Or is there anything else?

I would need to dig in and get back to you, Markus. I haven't thought around it from that angle.

And the question comes line of Andrew Lowe from Citi.

The first one is just on your net brokerage margin and particularly on the expense part of that equation. So your brokerage fee expense was 15.3% of brokerage income having previously been between sort of low 14s in the mid-14s in the prior year. So it has been quite steady and it jumped up a lot in Q4. Could you just explain what drives that uplift and whether that uplift is recurring or we should expect it to come back down again?

The second question is if you could maybe just provide a little bit more detail on the Q-on-Q drag from other income from your lower external deposits? Or maybe just if you could give us the fee margin that you earn on those deposits. That would be really helpful. And the final clarification is just how much of your SEK 300 million of transformation costs that you called out a year or so ago was spent in 2025?

Hard questions, Andrew. On the first one, I need to get back to you. The second one was around...

Other income...

Okay. So we would like to give you transparency on this, and we would like to have done that already in early 2025, but our hands are tied with the agreements we have with our partner banks. So we are not -- we have not and we will not disclose the margin that we earn on that product. But what can we say on the other income line? It's hard to -- I mean, with the hands tied there, it's a little bit difficult to answer. The third question was...

How much of the SEK 300 million transformation cost was spent on 2025?

I mean we indicated going into '25, how our cost increase of 11% would be distributed. And you can use that and also what Jonas said that we are slightly below our budget for the cloud journey for this year. I haven't that number in my head, but it needs to be calculated backwards by those numbers, Andrew.

A question comes from the line of Haley Tam from UBS.

I add my welcome to Jonas as well. Hope you can hear me okay. My first question, I'm afraid, is just a follow up on the external servings accounts but perhaps a different way. The 55% retention rate, thank you very much for giving that number. And also, I would really be interested to understand what underpins your confidence in that 55% going forward because I might have anticipated that some of the earlier volume changes might have been from partners who did not intend to keep the deposits. So maybe any color you can give on the mix of the types of partner going forward or measures, as I think was previously asked, would be helpful to understand the confidence in that 55%.

And then the second question really was just a follow-up on what you said about the form in trading and then how that should continue to increase going forward. I just wondered whether you see any sort of short-term impacts as likely this year given the current geopolitical tensions, whether you see any evidence of any kind of shift in attitude amongst your clients since the start of this year towards U.S. stocks in particular?

And then the third and final question, if I may, was just about the launch of the discretionary mandate solutions. I just wondered whether you could give us any update on the feedback you've had from your Private Banking clients, what kind of expectations you have for uptake and speed of all at once you start that, I think, this quarter.

Thank you, Haley. Now first question was around savings account. So I mean, you and your colleagues pushed us already a year ago to guide more on how much of the volumes would Avanza retain. And we didn't dare to do that. We don't want to guide unless we are fairly certain. We feel fairly certain enough to guide you now on that we will -- we expect to retain slightly more than half of this retaining SEK 60 billion. What is that based on? It's based on a close dialogue with all the 6 out of 7 partners who still have volumes in their product. The data we have on client behavior, data we have on clients that actively take a choice, data we have on clients who do not make a choice, i.e. there comes to an agreement between us and the partner bank, what happens with those volumes. So we feel fairly comfortable. It's always a little bit scared to stick out your head looking into the future. But unless we were not certainly enough, we would not guide you.

The second question was around help me here -- foreign trading. But you asked a little bit for now, right? Of course, we have a lot of insight what's happening right now, but I think we are very transparent with our monthly statistics. What I can say and what I think we published out of the 5 most traded foreign securities, 4 of them are net sold year-to-date. In general, volatility is good for trading. Do we see volatility in the U.S., we typically see more trading in the U.S. What we saw though in April, with the Liberation Day, we saw a little bit of light from U.S. exposure into European exposure. So we saw that effect. So we try to be close to customers and guide them and help them in these challenging times.

I think there was a third question?

Discretionary mandate.

On the discretionary mandate, it's too early to say. I think we have had -- we have a number of customers who are willing to develop this product with us. And a lot of customers have wanted to participate and the feedback we've gotten so far is very positive. But the market is not -- the product is not out in the market yet. We're working according to plan with it, I look very much forward to market launch later this year.

And the question comes line of Ermin Keric from DNB Carnegie.

If we start on the net flows. But disregarding the Savings Account+. More in general, what do you feel that you could do to drive the underlying net inflows to be stronger? And do you see any indication that competition has impacted its again, underlying this regard to Savings Account+?

I think there's a lot we can do. I think there's a lot we do, but there's a lot of things we can do better. I think a lot of volumes have built up with the salary accounts with the big universal banks I think we can improve in trying to activate these customers' savings. There's a lot of pension money that sits with inexpensive solutions. I think we can do a better job to help our customers to move into more cost-efficient solutions, which they can find with us. We had a very good pilots on the occupational pension side in Q4, it's not seen in the numbers yet because that takes a little bit of time. But yes, so the short answer is yes. There's a lot of areas where we can improve, and we're slowly but shortly doing that.

There was something connected to that.

Yes. I suppose like do you see that there's been competition impacting it being a bit slower than you expected for 2025, generally. If I just take one example on Pro, it's not major numbers, but now you've had outflows for 3 consecutive months, for instance.

Yes. If you take the Pro segment, in general, we don't see increased competition for that segment. I mean, this is a client group who -- they don't have a normal job but normally in within brackets, I mean, they live out of this trading. So they will always have an outflow. So unless they put in more money, we will always see an outflow, but they can only -- we will only say a net outflow, but they live from this that they need to have a better return to be able to do this. And if you look at the savings capital development, it's still pretty okay for the Pro segment. In general, we see that some customers test new players with part of their money. We have seen that with -- we saw that with Sabre when they were new. We saw it a little bit with Lebler, we see it with Montrose. But in general, I would say no, I mean.

Okay. And you introduced that you could switch brokerage class more frequently now. Why didn't you just introduce automatic allocation to commission classes? Wouldn't that be the most true to kind of your DNA, you're making it simple for the customer?

I think we have done a clear improvement in Q4 for our customers for the ones who do want to change brokerage class. It's very few of our customers who want to actively do that. It's something that's been sought after for quite a while. It was actually a little bit tricky to do technically, and that's why it's also taken some time. When it comes to pricing in general, I think we have a very attractive offering. I think the average cost for a trade done with us in 2025 was like SEK 11. I think it's very cost efficient to run your portfolio with us. Having said that, of course, we want to constantly improved the offering towards customers be it either through better functionality or to even more efficiently run their portfolio.

Got it. Then the last question, just on the mortgage side. We see that on your internal Private Banking mortgage, you've seen growth ramping up per quarter now. You mentioned you've done some marketing. Is that what's already driving it? Is it the market? And kind of what should we expect from here in terms of growth on that product?

I think it's a combination of us being more visible with our Private Banking brand. And then for the whole group here, our own mortgages are only available to our Private Banking customers. So that is one factor. The other factor, which is not quarter-to-quarter, but if you look a year or 2 back, I mean, the funding cost relation to the universal banks has improved for us. So I mean in relative terms, our rates are more attractive today than a year or 2 ago. So I would say it's those 2 combinations.

We'll take our next question and it comes from the line of Enrico Bolzoni from JPMorgan.

So if I look at your customer growth has become a mid- to high single-digit annualized growth on a monthly basis roughly, while historically, you grew much stronger. If I look at your target of growing saving capital by 15% in Sweden over time, conscious of this in a way, deceleration in customer growth. Can you please help us to break down the 15% on its key components by that, I mean, could you tell us how much you expecting saving capital growth will come from new clients joining the platform, how much from market appreciation and how much from flows?

And lastly, a bit of I mean I try, I'm not sure if there's an answer to that. But going back again to the customer growth, do you have an idea of your market share of customer growth when it comes to clients that in Sweden every month, every quarter, every year, open an account with a digital platform like yours. So just to get a sense of how much would be the front book growth you're capturing in terms of customer growth?

So if your last question was our market share among new customers with the subsegment of the Swedish savings market, i.e., only the digital players, then I don't have that number, we don't have a market number. It's hard for us to estimate. But I would say it's aligned with our market share on the existing customers, and then it's very high. But we don't have market statistics on that subsegment, Enrico.

The first question -- all right. So what we have said, which we still stand by is that the 15% is decomposed in market depreciation of 5%. It is then 10% remaining in net inflow and of those net inflow, we estimate that the Swedish savings market will have net inflows of 3% to 4%. So we will capture those and then we will need to steal market share from competitors, equivalent to 6% to 7%, adding up to the 15%. We know that we have a big potential to have our customers move a larger share of their financial wealth to us. And on top of that, we have the growth of new customers, which was 8% this year.

[Operator Instructions] And now we'll proceed with the next question. And it comes from the line of Phillip Moe Mølmen from SB1 Markets.

First, following up on admin's first question. What's going to do to actuate the money sitting in current accounts and then not deployed in the markets? What are some triggers you see available to you?

It is a tricky one. But we -- and I think it boils down to the Sweet belief about the future, if it's bright or if it's scary. And if it's believed to be scary, then you don't take long-term decisions, which long-term savings is. But I think there is a clear opportunity for us since we believe that volumes has piled up with the current accounts with the big universal banks. So that, of course, is reflected in how we communicate with our customers and with the market now and going forward. But I don't want to go into the details to hand that to our competitors, how we will -- how we're planning to do that.

Sure, sure. Makes sense. My second question goes to you, Jonas. Maybe a little bit earlier, but we'll try. With increased deposits on your balance sheet, you state that you can now take on additional SEK 32 billion of deposits for reaching your requirements. My question is that with both the remaining migration, we expect around SEK 8 billion of inflows. And with the continued growth of savings capital, how do you think about your capital position going forward and long term as well?

When the Board proposes the dividend as indicated here, then we have taken into account volume growth, both from the underlying business as well as the inflow of additional deposits from the closing down of savings account, that's already included. We also, throughout the year, obviously, will have, if things go according to plan, a growth in capital due to growth in income.

So the accumulation of capital from profits will help offset to a large extent the increase of planned deposits, both organically and then those from the close down of the Sparkonto Plus product. Then we're obviously continuously looking at optimizing the capital structure of the group and the different companies within the group, and we will continue to look into that in 2026.

Sure. Sure. Okay. My final question is on NII. With the increased internal deposits that initially goes on to the balance sheet. With an increase in NII quarter-over-quarter in the first quarter of [indiscernible] all rate cuts, which is great. While other income or the distribution fees, it had some noise as well, but are reduced by less distribution fee from partner banks. How should we think about the relationship between lower fee income from partner banks and higher NII going forward, both in terms of numbers and in terms of quality of income streams?

The only thing that I want to say there, Phillip, is that the decision to close down the external deposit product was mainly driven by the fact that the product had passed its due date because of the new view from the Swedish FSA. Having said that and what we have said, what we have seen during 2025 and what we expect for '26, it is net positive for Avanza's P&L.

And now we'll go to the last question for today. And it comes from the line of Andrew Lowe from Citi.

A quick one. Could you maybe just elaborate a little bit about how you're feeling about crypto and sort of potential to do something there, lots of few peers implementing stuff. So it would be helpful just to have a recap of what your thinking is with this asset class.

If I start with looking back at Q4, I mean the -- we offer exposure to cryptocurrencies through ETPs. We saw the activity being modest when I compare to previous quarters. Having said that, we continuously look at our overall offering. And of course, this one, your question is on our table. Me, personally, I'm a bit divided, as I've said before, there is client demand. On the other hand, I've been educated my whole career to look at investments from a cash flow perspective. But it's on the table and looked at.

This because there are no further questions for today. I would now like to hand over to Gustaf Unger for any final remarks.

Many thanks for taking the time, all of you, and I hope you have a great day.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the Avanza Bank Interim Report January to September 2025 Webcast and Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Gustaf Unger, CEO. Please go ahead.

Thank you, and good morning, and welcome, everyone, to the presentation of Avanza's Q3 report. My name is Gustaf Unger. I'm the CEO of Avanza. And with me here in the room today, I have Karolina from IR; and Adnan, who is our Interim CFO; and also our Chief Technology Officer, Fredrik Broman, especially welcome to you, Fredrik.

Thank you.

Today, I will start off by summarizing the quarter and go through the financials. After that, I will hand over to Fredrik, who will give a briefing of our tech and the ongoing cloud journey. Starting with some key highlights from Q3. The business model with multiple revenue streams have been showing its best side with strong contribution from both trading and interest-related income. And we are proud to be reporting a strong operating result actually matching our previous record for a single quarter. Our customers had a much calmer market environment to navigate and their net buying of securities nearly doubled since Q2.

It has been a productive quarter here at Avanza. On the pension side, we initiated a collaboration with Lifeplan, which broadens our pension offering with a comprehensive personal and independent pension advisory service. The acquisition of Sigmastocks finalized and the work with creating Sweden's best and most modern discretionary mandate product is intensified. Now we're working in close collaboration with the private banking customers that have showed interest in the product, developing it together with them.

On the theme of private banking, Jacob Smith joined as Head of Private and Investment Banking. Meaning I now have a nearly complete management team only missing the new CFO, Jonas, that will join by the turn of the year. We also launched several features for the stock market enthusiasts, including digital trading on the London Stock Exchange, new and improved portfolio analysis and AI-generated report summary on the stock pages.

Looking forward, a lot speaks for brighter times ahead for the Swedish economy, although we are only seeing small signs of this in our numbers so far. During the autumn, the government presented an even more expansionary budget than last year, and the Riksbank has announced another policy rate cut; hopefully, this is what is needed for the Swedish economy to finally take off. Regardless, it is good for the household to get more money in their pockets. They are still cautious and have so far not accelerated either consumption or long-term savings this year.

The latest savings market statistics show that cash savings were more than twice as high during the second quarter this year compared to Q2 last year, and the flow into funds in that quarter decreased by 2/3. This aligns well with our theory that customers' money has largely remained in their salary accounts. However, we are seeing small signs of a turn in the right direction. We have welcomed 41,000 new customers in the quarter, reaching a total of over 2.2 million customers, which is fantastic. We're also seeing a cautiously positive trend in the net inflows, which have strengthened since Q2, although we're still pacing slower than our ambition.

Our savings capital is back above SEK 1 trillion and has increased by 10% so far in 2025. We are truly seeing our business model at its best this year. Operating income is at its second highest ever for a single quarter and increased by 8% compared to Q2, driven by higher brokerage, FX and fund commissions. Looking at the 9-month period, operating income increased by 18%, driven by all income streams, except for the NII that decreased slightly. Our costs are seasonally low in Q3 and therefore, decreased by 8% since last quarter. Altogether, this adds up to a strong operating profit of SEK 818 million, matching our previous record for a single quarter.

Return on equity for the quarter was strong at 45% and EPS at SEK 4.37. If we take a closer look at the revenues, both trading and interest-related income streams were contributing strongly as a healthy part of the income mix. Trading activity held up well in line with the latter part of Q2 despite the lower volatility in the market. On top of this, there were 8.5 more trading days in Q3, which provided an extra boost to the turnover and the number of trades. The number of brokerage-generating customers also increased.

Looking at the brokerage margin, it was steady at 11.4 bps, same as in Q2. This despite the higher share of the brokerage generated by the standard segment and a substantial increase in the share of foreign turnover from 23% to 28%. The positive margin effect from this was offset by higher turnover per trade, especially in the fixed fee brokerage class, which gives a lower income per trade. The aversion we saw to U.S. stocks in the spring turned out highly temporary. The interest for foreign trading is clearly back and our FX income increased by 34% compared to Q2.

This is good since our customers' portfolios still have too much exposure to Sweden to be considered well diversified and the trend of increased foreign trading should therefore continue. The fund business has developed nicely and net fund commissions increased driven by higher fund capital. The share of index funds increased by 1.1% in the quarter to 49.7%. Despite this, the fund margin was stable at 25 bps on average and at 24.8 bps on September 30. We have seen a big interest for global index funds, which are generally priced slightly higher than Swedish exposure.

Other income decreased as a result of lower income from Avanza markets and higher commission expenses. If we zoom in on the net interest side, we are once again seeing resilience to lower market rates. The Riksbank cut the policy rate in late June, which impacted the return on the surplus liquidity, although the full effect is delayed as we have up to 3 months interest rate duration in the bond portfolio. Looking at the lending side, the mortgage is directly tied to the policy rate and the rate was cut by 25 basis points in late June.

We also decided to cut the margin lending rate by 34 basis points. This had a positive effect of the attractiveness of our offering and the effect from lower interest rate was largely mitigated by higher volumes. The average rate for internally financed lending decreased to 3.01% from 3.27%. On the interest cost side, our interest rate expenses for deposits decreased as a result of lower deposit rates despite increased volumes on the savings accounts, especially by the end of the quarter. The volume increase was largely a result of our external savings accounts partners lowering their deposit rates.

The average annualized rate on deposits decreased from 91 to 80 bps, while the amount of customers' deposits in interest-bearing accounts increased to 54% at the end of Q3, which can be compared to 51% at the end of Q2. In September, the Riksbank announced another policy rate cut of 25 bps, which took effect October 1. With regard to this, we decided to cut the savings account rate by 20 basis points. The reason we're not fully passing through the policy rate cut is to position ourselves with a slightly more attractive rate in the process of discontinuing the collaboration with external savings accounts.

Also on interest cost, earlier this year, the Riksbank decided that all banks must deposit a portion of their deposit base to 0% interest rate by 31st October 2025. For Avanza, this means that SEK 225 million will be deposits. This lost interest income will be reported as an interest expense. Basically, this is a confiscation by the Riksbank. Altogether, we still have a healthy net II or net interest income contribution to the income mix, and the Riksbank is now estimating a stable policy rate for the foreseeable future if the outlook for inflation and economic activity remains intact.

Moving on to costs. The personnel costs are seasonally low in Q3 due to summer vacations, while the operating expenses were 8% lower than Q2. This year, vacation leave was higher compared to 2024, while the positive effect was even bigger. With last year's Q3 report, we announced strategic priorities up and including 2030. Our growth ambitions are high and initiatives in both pensions and private banking are intensified during the second half of the year. At the same time, the cloud journey is proceeding according to plan, and we're moving closer to our goal of having started development in the cloud environment before the year end.

Avanza is firing on all cylinders and, therefore, the cost guidance of 11% increases for the full year of 2025 stands. As you can see, we remain well capitalized, and we audited the figures this quarter, meaning that the profit has been included in own funds. We have a prudent margins both to the leverage ratio, including P2G and the total requirement, including risk-based P2R, even though our deposit volumes on balance sheet has increased some compared to Q2, largely driven by the closing down of our external savings accounts. We can handle increased deposits of SEK 40 billion before reaching the LR guidance.

In September, the Swedish FSA announced the results from their Supervisory Review and Evaluation Process of Avanza, the so-called SREP process. The Pillar 2 guidance on the leverage ratio remains at 0.5% and the total leverage ratio requirement, thereby still amounts to 3.5%. The risk-based Pillar 2 requirement, the P2R was reduced from 5.71% to 5.02%, which decreases Avanza's total risk-based requirement from 18.21% to 17.52%. In other words, the leverage ratio requirement remains governing for Avanza's capitalization. And since the margins to the risk-based capital requirements are now even higher, the likelihood of that changing is even lower.

With that, I will now hand over to Fredrik for a briefing of the tech and cloud journey.

Thank you very much, Gustaf, and good morning, everybody. So my name is Fredrik Broman. I joined Avanza team a little bit more than a year ago, August 2024 as CTO. So as you know, Avanza is one of the best known brands in Sweden. Customers love the product, and the company has a reputation of being one of the best employers in the country. I always had a personal interest in savings and savings products and had the advantage of looking at Avanza from the outside from the inception, continuously pushing the boundaries for what good looks like in this industry, and that has always been very impressive to me.

So when Gustaf offered me the opportunity to join the team and that very exciting journey, I did not hesitate to accept. It was a very easy decision, happily, so that I joined. It's been a fantastic year so far. What do I bring? I think that I've had quite a few years in fintech already and also been working with the stock broker previously. So I think I bring quite a lot of experience from fast-paced tech companies together with a solid understanding of the industry and also understand what it means to operate tech in a highly regulated environment.

So something about what I see and what impresses me the most. There are 2 bits to that. Avanza stands on a very strong tech platform. My predecessors have worked very hard to create a homogenous tech stack with few components standardizing tech and processes to a very high degree, and that makes us fast. Few components means less overhead. It means that people easily can move between teams and jobs because they recognize the tech stack wherever they go throughout the company.

We can make changes in one place that all teams can benefit from, whether it's upgrades to specific bits of technology or if always we have to roll out quick security updates, we can do it in one place and make it happen instantaneously across the platform. And it also means that all the investments we do in the platform benefit everybody. So the investments we do in the central teams, making sure that we gradually upgrade our tech platform, the entire company benefits. Obviously, it's a quite high-performing platform. We have a lot of customers averaging 450,000 daily active users. It's very high intense in transaction volume.

We have a very large portion of the trades on NASDAQ and First North, which means that we need to be on our toes to make sure that performance and reliability is top notch. But I can also see that the architecture is where it should be. The company has spent quite a lot of time and investments making sure that we stay on top of things and using best practices as they evolve in the industry. We have a modern microservice architecture already in place. It's easy for teams to deploy changes. We do many changes every day from different teams to the system and without our customer noticing.

We have structured A/B testing, making sure that we can try different versions of the product to different customer segments and trying out new features to see how customers react and what the effect actually are before we decide which way to go. And the data platform is very modern and very strong. We have had a quite a long investment in making sure that we can deliver data throughout the system to teams and to stakeholders to measure how we do, making sure we can track KPIs and making sure that our decisions and the way we operate the platform is data-driven. That's on the tech side, but you don't get far if you don't also have a very strong team.

Avanza has a very strong tech culture. That's part of the inception. I mean if you're a company that tries to do something completely different and you do it with tech, that's built into the walls on how you operate. It's been like that for 25 years, and it's still the case. But also the strong customer focus. I think that's quite unique to other places I've been, even though customer focus always has to be strong in successful companies, this is something that is very present in my teams. There's always a discussion around how we can improve things for the customer, what is the next step? How do we get that feature a little bit better, a little bit smarter, how can we take the next step in making things better.

And you can always hear the discussion focusing around, it's not the tech that it matters. It's how do we make sure that the customer benefits the most from what we do. The strong brand also attracts talent. I'm in the fortunate position to see quite steady inflow of very strong candidates when we open up new positions. This is quite different from other places I've been at, which is a very fortunate position to be in and something that we would like to protect, obviously. But also when people join, they stay. We have a very high employee NPS. People like working here and they enjoy the job they do. They enjoy the culture, they enjoy the way we operate. And we have a very low attrition rate. People stay for a long time.

Something about how we operate. So Obviously, the core operating unit as with other tech companies is a team. We group teams together into something we call areas, and we have 10 of those at the moment, 5 of those areas are within my domain and 5 of them are in the product domain. However, there's a very close collaboration, obviously, because you can't quite separate the product part from the tech part. They go very closely hand-in-hand. The team -- the purpose of a team is that they're expert within the domain, and they are giving a specific problem or a set of problems to solve for, and they're staffed according to that need.

So depending on what kind of team and what kind of problem they are asked to work with, we're going to staff the team differently. But typically, there are front-end developers, back-end developers, QA, UX, engineering managers, the product owner. But sometimes we also have people from other parts of the organization joining the team as product specialists if there are specific areas of expertise that are needed to better understand for how to build the product. We're asking teams to be responsible end-to-end. And what does that mean? It means that they look at the problem, they are responsible for the solution, they implement it, roll it out and then maintain it.

So we don't have any handovers. We make sure that the people working on a problem, they stay within that context so that they can improve of the solution over time. And one of the benefits of having an area, obviously, is that we can look at it from a bigger picture perspective that, all right, we don't suboptimize in a specific team, but we can make sure that the teams together solve for large problems and that we stay within what we need to do for the strategy, complete customer journeys, et cetera, et cetera. Team behaviors here at Avanza are very similar to what I've seen at other fast tech companies.

Agile processes are best practice here as in other places and focusing on customer problems. We work at high speed, and we are able to make changes as needed. Most teams will push out new changes every day. Decisions are made on data, as already mentioned. And we do use experiments and customer interviews and surveys to gain customer insights to make sure that what we build and what we deploy actually makes sense for our end customers and bring value. And we track progress using KPIs as a lot of other -- and most other tech companies would do as well.

Right. So let's talk a little bit about the cloud journey. So earlier this year, as earlier communicated, we signed a deal with Google, making them our main provider for the Google platform. That was already an existing relationship. We had used them for our data platform for quite a long time, and we also use them for productivity tools. But now the relationship broadens to include more parts of their product offering and basically allowing us to start moving more of our software to the cloud. So why do we do this? I think there are 4 main reasons, even though there might be other benefits as well.

I think the most important one is that allow us to spend more time creating customer value. So it's on the theme of stop doing things that we don't have to do. And instead, we can spend that time and that effort on building what we are best at, which is good savings products and services for our customers. We think that even though the developer experience at Avanza today is modern and good, we also have to spend time maintaining that. Instead, we can leverage on what Google has and allow us to ride on all their investments, and we can sort of use their productivity tools and the way that they write and deploy software into the cloud, allowing us to spend that time on other things.

But it's also important to continue to attract talent. I mean the cloud migration has been ongoing for quite some time and many, many years for -- as part of how the industry wants to operate. And it's an expectation for newer generations that tooling and infrastructure and components are in the cloud, and it's a way for us to make sure that we stay relevant and can keep attracting talents over time. Scalability, obviously, it's not hard for us to scale in our current setup, but it means that we have to do work, right? We need to buy hardware, install it in our data centers, maintain and operate that and make sure that we have enough scale for peak at all times in our data centers.

With the cloud platform, an exercise of process from our side to make sure that we utilize enough capacity at any given time. So it's less of a matter of buying and operating and more of process making sure that we have the right capacity at the right time, which is obviously a big advantage. So how are we doing? Well, we are on track on budget and time line. What we've said so far is that we're going to have one service in production before the end of the year, and we will make that target. And one service in this context means that we're going to have at least a little part of our savings offering in the bank, some computational part that makes -- that we're currently doing on-prem.

But it's worth mentioning that we already have several components in the cloud. I mentioned the data platform before that has been in the cloud for quite some time, but we also moved part of our infrastructure components already. Some of the networking components are now in the cloud. The content delivery network, they're basically pictures and text for the web and app are already in the cloud, et cetera. So even though the target is one service in production, that's not the only thing we're doing and not the only thing we're moving.

What happens next is, once we have a solid platform, which is what we're building at the moment, we will just start migrating at a controlled pace service by service to the cloud. That's an exercise that we expect to take several years. And at the end of 2030, the plan is to have moved everything that is suited for the cloud. What does that mean? It means that there could be components that for some reasons, are not well suited to run in the cloud, for example, for latency reasons. If there are parts of our trading platform that -- where it makes sense that they still run in the data centers, that is a decision we will make, and we will have a setup where the majority of our things run in the cloud and some parts will be left in the data centers for those reasons.

All right. So I, as a CTO, you cannot not say something about AI, which is obviously the biggest trend in the industry at the moment, not just in our industry, but tech globally. So what are we doing within AI? So I would say that we are exploring and selectively investing in AI. And we're doing so in 3 areas. Gustaf already mentioned that we launched an AI feature in our product this quarter, which is a summary of the quarterly reports from companies on the Swedish stock exchange. Basically, it's using our own existing data, summarizing it, making sure that people get the highlights from the quarterly reports.

And this is probably a good example of what our -- how we will use AI for the product offering initially, making -- using existing data, existing products to -- and enhance them with AI to see that, okay, how can we make this better? How can we use AI to improve on existing features. Within my teams, we use AI or generative AI to write code, obviously, also a trend within the industry. We're exploring different pathways. We have quite a few teams using AI already to produce code, and we're trying to integrate those kind of components more and more into our development pipeline.

And lastly, but perhaps most importantly, one of the advantages of AI is that we can solve for operational problems a lot easier or maybe solve them at all in a way that wasn't possible before. Thinking about internal processes that are complex, that contain a lot of data where human interaction previously was needed. And we're looking through quite a lot of those and see, all right, with AI as a new tool, can we solve this in a better way and making us more efficient. One example of that is that we have an internal tool for our customer service people to quickly get answers to questions they get for customers, shortening the time from question from a customer to how quickly we can respond.

And that was all from my side.

Thank you, Fredrik. If I summarize, I would say we're once again reporting a strong quarter at par with previous record and with healthy contribution from both trading and interest-related income streams. Avanza is going on all cylinders, and we're making solid progress within our strategic priorities. And looking forward, a lot speaks for brighter times ahead for the Swedish economy. Avanza is very well positioned to capture that future savings market growth.

Thank you. And with that, I will open up for questions.

[Operator Instructions] And your first question today comes from the line of Martin Ekstedt from Handelsbanken.

Congratulations on a good result today. So I wanted to focus first a bit on fund income. So the share of index funds in the fund mix jumped to around 50% in Q3 after staying flat since year-end, right? At the same time, it seems at least in my model that average fund commissions actually gained the basis points in Q3, although this may be within the margin of error given we don't have volumes in between quarters on a monthly basis, et cetera. But -- so first, I wanted to check if you have any clarity to add around the dynamics and what prompted customers to choose index funds in Q3 to a larger extent than in Q1 and Q2? And if these were you say international funds to a larger extent carrying then a higher margin, which perhaps explains the margin uptick?

And then secondly, could you just give us an idea of the average margin of index funds on other funds currently as well as any trends you see there, both on the customer side in terms of what customers are choosing as well as on the side of external fund providers, i.e., the pricing of funds? That's the first one.

Thank you, Martin. On your a little bit forwardly related questions on the index fund and what we believe going forward, I think it's hard. I think, we have seen -- if you have a little bit longer time series, as you know, we have seen an increased share of index funds. Now it has been fairly flat for a while, and then you see an uptick in Q3. Is that a new trend? Is this something new? I don't think so. I think we saw an aversion to U.S. exposure in the spring after Liberation Day and so on and so forth.

So also a lot of reallocation, not a lot, but it was a reallocation away from the U.S. exposure to European and Swedish. In the quarter, we saw the most bought fund category was global funds. So apparently, our customers did chose global exposure to a large extent through passive exposure this time. I don't see that as a trend shift or something like that. You had the second question?

It was around margins, yes.

I mean, we don't see much repricing from the fund companies that we have on our platform. We haven't done any repricing of the Avanza fund company funds. So I think the trend that we have seen is more on active to passive, and we have seen that flattening out still with an increasing allocation to passive exposure, but that trend is slowing down. That's still my view looking ahead.

Okay. And could you give us a rough idea of average margin on index funds versus active funds, if you have that at hand?

I don't have -- I would need to guess too much, Martin, to spit that number out right out. Maybe we can get back to you.

Yes. Yes, fine. And then second question quickly. Apologies for the long-winded first one. I just wanted to check around the tax rate quickly. So the implied tax rate fluctuates a bit more in 2025 than it's done in the past 2 years between 13.5% and 15.5%, and it's also come up on average since 2023 and '24. So can I just check what's a reasonable assumption for us to put in our models on an ongoing basis for you guys?

You would then need to make assumptions about profit contribution from the bank and the fund company vis-a-vis the pension company. I can just note that in Q3, the kapitalförsäkring-wrapper was very sought after. One could assume that the ISK and the capital endowment product would be more in favor given the more favorable tax rules that were implemented. But the division between ISK and the capital endowment, I would say we think that foreign exposure will increase over time because our customers' portfolios are not well diversified.

There's too much exposure to Swedish equities. I think it was 75% or something like that by the end of the quarter. So that if something speaks for more volumes in the capital endowment product because it's much simpler to handle foreign exposure there.

We will now go to the next question, and the question comes from the line of Patrik Brattelius from ABG Sundal Collier.

My first question is regarding the cost guidance. I think you reiterated your cost guidance of 11%, but year-to-date, we've only seen like 70% of the full year guidance. So that basically implies that the cost will grow 22% year-over-year in Q4 or being up by almost 25% quarter-over-quarter. Can you specify a little bit more in detail what it is that will happen here in the fourth quarter that will ramp up the cost so much?

I think it's a fair question, Patrik. I think, the way that we handle vacation in our profit and loss statement needs to be underlined here. So when our colleagues and myself take vacation to a larger extent than just linearly over the year, it has a positive effect on our staff cost. So in Q3, we seasonally have low staff costs. And actually, this year, we, at Avanza took vacation to a larger extent than, for example, last year.

So just looking at Q3 and then looking at what uptick would that -- would the 11% mean to Q4, I think, is a little bit misleading. And then we are doing a lot of interesting things. We incorporated Sigmastocks into our books. I think it was 1st of July. We are -- as I've said before, we are not hiring sales capacity on our occupational pension side before our offering towards the corporates are improved enough, and we are at that stage, and we are increasing the sales capacity there. And we're doing a lot of interesting things on the cloud. So hence, our cost guidance for the year stands.

Okay. Fair enough. My second question is regarding the deposit rate. To my understanding, you chose now to lower the deposit rate fully on savings accounts in order to attract more savings capital compared to the banks on the external savings platforms. What is your ambition here? Is there potential that you will even raise the savings deposit rate additionally? Or are you satisfied with the moves you have made as that [indiscernible] expected? Can you talk a little bit about that?

So our best guess at the moment is that the latest rate cut from 2 to 1.75 was the last one for quite a while. I mean that's at least what all the macro guys in the Swedish industry are telling us. So we felt this was the last chance to do something outside the normal. So we did reduce the rate of the savings account with 20 bps instead of the 25, which maybe would have been more normal given that the Riksbank cut the rate with 25%. We felt that we wanted to give a little bit extra to the customers, this last rate cut in this -- maybe last, but in this long rate cut from 4% down to 1.75%. And on the margin, we wanted to be a little bit more competitive with our savings accounts since that is even more important for our customers now when the external savings accounts are slowly, but surely disappearing.

What is our ambition here? Our ambition is very high as with everything we do, but we want to do it in a way that is good for our customers, that is good for our banking partner and that is seen to be good also from the regulator. So I think what we guided at in Q2 still stands. We would love our customers to remain with as much as possible of their savings capital on our platform. But how they will eventually decide to act, we don't know. And we run this process up until the spring next year, as we said also before, and we hope that our customers have chosen this product through us because they like Avanza, not because they like the underlying exposure to a certain consumer credit bank, for example. But how they act, we will have to wait and see.

This is to Fredrik. But in your view, since you talked about the different steps you will take involving going cloud base. How much of a platform in your view do you foresee needed to be cloud-based before it's reasonable to geographical expansion?

All right. Thank you very much for the question. It's a good one. So I don't see any limitations of the current platform in terms of going outside of Sweden. The cloud is not a prerequisite for us to do that; however, obviously, there are other advantages of going to the cloud, for example, assuming that international expansions will yield a strong customer inflow. Obviously, scalability is easier in the cloud than on-prem. But generally speaking, the platform as it stands from that perspective, I don't have a problem going outside of Sweden.

Your next question today comes from the line of Jacob Hesslevik from SEB.

Just to continue on Patrik's question on cost. I mean the cost increase in Q4 would be 22% year-over-year if we are going to keep the full year cost guidance despite you beating cost in Q1, Q2 and now Q3. Is the Q4 higher cost level the new run rate for 2026 as well? Or should we expect a lot of onetime costs to occur in Q4? Could you give us some more detail on it, please?

Yes, I would not want to be worried about hangover effect into 2026. We have communicated our cost for the whole period of 2030. We want that to be maximum 8%. It will be a little bit higher in the beginning, which we see this year when we're taking a number of investments. So it needs to be trending down, and we want to come down to a really scalable level by the end of the period of the 2030 period. So without going into detail, Jacob, I wouldn't be worried about this hangover effect into 2026.

Okay. And then on external platforms, you're right that some partner banks has decided not to fight with you regarding the deposit. But could you give us some more color on how many partners will take the fight? And could you give us any tangible results from the outcome with, for example, Nordax that was supposed to leave the platform at the end of September?

It would be nice to give you more transparency here, but I need to navigate what is agreed with different banking partners and what to keep private, what to be keep public. The data point we gave in Q2 that if customers do not act, we believe that 50% would end up on our balance sheet and 50% will end up with one of our banking partners. That is based on a legal handshake with different banking partners, but how customers would actually act, I mean, most of them, we hope, will act and not just wait and be passive. So it's hard for me, Jacob, to give more transparency than that.

Okay. Fair enough. Just a final question then. Net brokerage income per trade declined 4% sequentially despite strong overall results. What's driving the turnover per note increase in the quarter? And how sustainable is the shift towards a fixed price brokerage class, which you mentioned in your report?

I don't see a trend per se. When looking into other quarters, it's hard to see a trend that is -- would go in that direction. I mean you could argue that if it's larger customers that are active, then you would likely have a larger ticket size on average. But we don't see a trend here, but that was something we saw in Q3. That's why we highlighted it.

Your next question today comes from the line of Enrico Bolzoni from JPMorgan.

Sorry to go back again on cost. I was just curious whether you can provide some color because you clearly say that the progresses with the migration to cloud are going well. And I think in the past, you said that out of the 11% expected cost increase, about 5% was related to this cloud migration. So can you just give us some color how much of that 5% has already been implicitly reflected in the Q3 print? Again, I'm just surprised because clearly, costs are developing very well, and it seems a big jump now in Q4 versus Q3. So I was just wondering whether maybe a few things with the cloud are not progressing as fast as you hoped? Or any other color there would be helpful.

And then my second question, can you just give some color on the -- clearly, the ISK, the tax exemption has been increased to SEK 300,000, I think, from next year. How much of the impact you think we have already seen this year? And how much you think will be in 2026? In other terms, do you think that in '26, we will really see an uptick in contribution to ISK accounts?

If I start with your first question. I don't -- I think the -- I mean, we progress, of course, the cloud journey on our dashboard, the company dashboard as one of the most important KPIs, and that we're flagging green. So -- and when it comes to the 5%, that's still a good guess for 2025. And as I said to Jacob, I wouldn't be worried about spillover effect or that we go in with a too high run rate into next year, and that would create problems for us. I think we have good control of our costs. We are making conscious investments into the future.

When it comes to the ISK, if we look at the data for this year, so we saw a tax exempt up to SEK 150,000. I thought we saw some effect in January because we had strong inflows, if you recall, and a fair share of that ended up on the ISK side. After that, I think the data got blurred by everything happening around us with risk aversion and so on and so forth. So it's hard to actually use the data, I think, to predict what will happen next year when the tax exempts go up to SEK 300,000.

But more than half of our customers would enjoy that tax exempt to 100%. So it should have a big value for our customers. And it would make it even easier to save because you don't even have to worry about that yearly tax. But it's hard for me to give a number because this year has been so distorted by things going on around us.

And by that, you mean that you already have 50% of clients that have more than SEK 150,000 in an ISK. Is that fair?

More than 50% of our customers have less than SEK 300,000 in ISK.

Your next question today comes from the line of Ermin Keric from DNB Carnegie.

So maybe if I can -- one more question on cost, sorry for that. But just to understand how you can ramp it up that much in Q4 because typically, we talk mainly about staff costs with Avanza, right? So it's hard to get that run rate that much higher in Q4. So is your cost base going to change in terms of the composition going forward with being more, I don't know, kind of external fees? Or are you going to do much more marketing for Q4? Or how do you get up to that figure just to better understand?

And then second question would be, if we look on the net flows, we've actually seen almost a 30% drop on the perpetual pension flows year-over-year. What's driving that given that that's actually one of your focus areas? And then the last question would be on the kind of tech presentation. So you're talking a bit about a homogenous tech stack and being standardized. But I believe Gustaf, when you came in, you talked a bit about Avanza doing a lot of in-house solutions and maybe being a bit too complex in some regards. So is that -- can you have different views on it? Or you've already taken out all of those efficiency improvements from standardizing?

So if we start with the cost side, I mean 2025 is an investment year. We want to be mindful of what do we take on as fixed cost, as new colleagues and what do we take on as temporary costs in terms of help from the external side, consultants and so on and so forth. And we try to balance that. We have, in the past, been very, very keen to have everything done by colleagues and not from external help. But we are a little bit more mindful now when we're doing these investments not to carry on fixed costs to the full extent. So when you look at Q4, there is a mixture of those 2. There was a second question before Fredrik's question. I can't recall that one now.

It was on the net flows, the pensions.

I think when we look at the market statistics, it looks good when we look at premium vis-a-vis competitors, which I look at more than -- I haven't looked much on the 9 months versus 9 months. Maybe I can get back to you on that one, Ermin.

Absolutely. That's fine.

And then on the tech side, so we still have a lot to do. We have done good progress. So maybe just to repeat your question, I was impressed by how digital Avanza is towards me as a customer. But on the inside, I saw that we have a big potential to be more digital and efficient towards me as a colleague and to all our colleagues and that we have a work to be done to take out manual processes, automate more and that we're doing, and I think we have had good progress this year.

And -- but that will take a long time to be before I say, I think we're done with that. We have had 2 main focus areas this year. One is moving on of securities and the other one is how to handle debt estates. And next year, there will be 1 or 2 other areas that we shoot through and then the year after that, that will be something else.

Your next question today comes from the line of Andrew Lowe from Citi.

I've got one on competition, customer churn and marketing costs. So there's been lots of noise about rising competition in Sweden from other digital platforms. Your 2023 annual report quotes a customer churn of less than 1% and the 2024 annual report says around 1%. So I'm curious to hear how this has evolved during the year. And then kind of related to that, I guess, is the fact that you're only spending 1% of your revenues on marketing, which is far lower than any of your European peers. And Nordnet is up there, marketing costs, which seems sort of biased to Sweden, they're still relatively low. But why don't you do more here and increase your marketing budget?

Rebecka, our Head of Marketing, would love to hear what you're saying. Of course, always a debate on where to spend your money. I mean our biggest and most important marketing tools that are our existing customers and who refer us to friends and family. We have actually notched up marketing in 2 areas this year and where we feel that the brand recognition is not where we want it to be, and that is within occupational pension and that is within private banking. Can we do more? Yes, maybe, but we want to spend our money wisely.

When it comes to churn, that's something that we monitor very closely. What we report to you, we complement internally with soft churn and very soft churn, just to make sure that we could identify any early trends. It is fairly flat. Also during 2025. We monitor that on a monthly basis. Do we see high competition? Yes, we see high competition. We saw high competition also 5 years ago, even though the players were slightly different then. And I think we will see high competition also 5 years out.

[Operator Instructions] And the next question today comes from the line of Ian White from Autonomous Research.

Just a couple from my side, please, both around the net inflows. You've talked a bit about the dynamics in the second quarter. But just looking at 3Q, the net inflows are down 35% year-over-year and your listed peers look to be up sort of 20% or more. Just how would you explain that, please? And what makes you relaxed about it? That's question one.

And relatedly, on the private banking net inflows, there were some strong numbers there around the turn of the year, sort of 4Q '24 and 1Q '25. But I think it's fair to say the momentum has slowed in the last couple of quarters. Has anything changed there, regarding the competitive dynamic? And how do you regain momentum there, please?

When it comes to net flows overall, I'm not at all relaxed. I think that's a very important KPI. It is under our ambitions. But we try to understand, is it us or is it the market? And one important data point was the Q2 market statistics. We don't have it for Q3 yet, where we saw that SEK 100 billion went into deposits and very likely salary accounts. I think we were shell shocked and we have not activated that money into long-term savings. And if I talk to friends in the consumption industry, they feel that it hasn't gone into consumption neither.

We start to see signs of that in the end of the quarter, some brightening of the economy. But we are happy to see an increase in the net flows from Q2. And we hope that when the Swedish economy takes off and the Swedish households are more positive towards the future that they actually take this money in salary accounts from the sideline and not use it only for consumption, but a fair share also into long-term savings. The second part of the question was around -- yes, what was your second part of the question?

On the private banking net income specifically.

Yes, thank you. The way we measure net flows in the pro and private banking segments are, I think, a little bit unfortunate because they don't follow market practice. But I've discussed this with Karolina quite a while, and we feel that it's more important for you to have a long time series of comparable data. But if you join Avanza in September with SEK 10 million. And then in October, you apply for private banking, that flow of SEK 10 million is not recorded as private banking flow. So you need to -- for net flow or for inflow into private banking to be recognized, you need to sign up for private banking directly when you come from external.

Otherwise, it's shown as flow into the standard segment. So what I look at much more -- I mean, I can follow these flows more in detail than you can. But what I look at with the numbers we produce externally is actually the change in savings capital. That will give you a much better view of is the private banking franchise growing as it should or not. And as you see, the savings capital growth of both pro and private banking has been growing healthy.

But just to be clear on that latter point, the change in savings capital, I guess the biggest driver or at least a very material driver there is change in market levels, right? It's change in just the market values. Why would that be a good indicator for sort of growth in the private banking franchise?

I would compare it with the other segments to compensate for the fact that you need to sign up to become a private banking customer, the first thing you do when you come from one of the incumbent banks. Otherwise, it will show up as flow into the standard segment.

Okay. Is there any measure you can provide to us that tells us sort of the flow of new customers or capital that is sort of eligible or relevant for private banking, sort of whether or not that person has yet applied for the service? Because that sort of feels like the measure that we're trying to get at here is the sort of customer wins, if you like, that are relevant for that product, whether or not they've actually activated or applied for it. Is that something that you guys track at all?

We do. Let us reflect if we can help you better there going forward. What I look at internally is the target I have on the Head of Private Banking in terms of number of new customers per month, and that is tracking green.

And the next question comes from the line of Nicolas Vaysselier from BNP Paribas.

I will only have 2, please, a bit more on the big picture for the platform. I'm interested, particularly in private assets. We see strong demand in retail channels for private alternative assets. I know that you, from memory, offer some of them with providers like Schroders, for instance. But we've seen recently some of your peers taking new initiatives on that side.

So for instance, European peers, Trade Republic has partnered with a few of them and offer capabilities to invest through automated savings and for amounts as low as EUR 1 per trade. So I was wondering if you could update us on your capabilities in that segment and potential product innovation or new partnerships you could have? That would be the first.

When it comes to private exposure, I mean, that's something that has been hard to get as a private individual in Europe and in Sweden. And one of the reasons for launching the private asset funds last year was to make it more available for us retail investors. It was -- it's dipping the toes in these areas from our side. And I think we can do much more on that going forward. But we're also mindful that it needs to be products that are suitable for our customers and where the cost to get this exposure is something that we can stand for with our brand, where we want savings and investments to be -- it shouldn't be expensive to save with us.

I've looked into this area a lot also previously in my career, and the trend is clear. And I think we will see more of these products that are -- have been exclusively tailored to institutions in the past that they will trickle down to retail investors. But I don't think we're fully there yet to do it in a good and cost-efficient way.

So I understand that for now, it remains pretty marginal in your overall savings capital?

Yes. Today, it is.

Okay. And my second question would be, could you update us a bit on the numbers around the automated monthly flows you receive in the platform from the different saving plans? Has it changed much in the last few quarters?

That's also something we track monthly because that is -- it has an especially high value to us, and that is trending nicely, positively. We changed the measurement as we described also because we had a cap of, I think it was 20,000 in the past. So people who have a standing transfer of 30,000 would just be excluded from that. So that's why we made the change, and we follow it closely. It has great value, and we see a good positive trend in the numbers during 2025.

There are currently no further questions. I will hand the call back to Gustaf.

Thank you much. Thanks for joining, and have a great day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day and thank you for standing by. Welcome to the Avanza Bank Interim Report January-June 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CEO, Gustaf Unger. Please go ahead.

Hi, and welcome. By my side today, I have Anna Casselblad, CFO; and Karolina Johansson, IR Manager. Avanza had a strong first half of 2025 despite turbulent macro. Unpredictable tariff announcements and geopolitical conflicts clouded the near-term outlook and net flows in Q2. Long-term outlook for increased savings remains positive. We have in Sweden increased real wages, lower interest rates, meaning lower housing costs and also stock markets have rebounded quickly from the early April fall. Bottom left, you see that the savings capital is up 4% in H1 and 7% in Q2. That was driven by market appreciation and net inflow. Top right, you see that customer acquisition is on track for another strong year with H1 up from last year. Bottom right, we see that net inflows in H1, on the other hand, is slightly weaker than last year, where the macro uncertainty has put many suites in a wait-and-see mode.

I think customer activity held up well in the quarter despite a difficult market environment with rapid changes in the sentiment. Top right, you see that the number of brokerage-generating customers remained high in the quarter. And bottom left, you see that brokerage margin was stable. It was negatively affected by lower share of foreign trading but positively affected by the standard segment playing a larger role this quarter. Bottom right, we see that turnover in foreign securities is still high compared to historical levels but negatively affected by the unpredictable U.S. precedent in the quarter. The long-term trend of increased foreign trading is strong with our customers having a home bias of 77% at the end of the quarter in their equity portfolios. That's not geographically diversified portfolios to say the least.

Fund customers were net sellers in the turbulence in April, but net buyers in total, which, together with the large market fluctuations made the average fund capital decrease compared to Q1. This reduced mutual funds income. In the Q1 results presentation, I showed that our customers' U.S. exposure in their equity portfolios was 13%. Fund customers are more exposed to the U.S. market due to the popularity of global funds. My estimate is that fund customers hold roughly 35% U.S. exposure. Fund inflows was SEK 5 billion, which is high compared to Q1, but weak when looking at 2024 due to the wait-and-see mode of Swedes. Our strong brand is an important asset and competitive advantage that we built for decades through customer focus and innovation and where the daily interactions with customers are vital parts of the development of Avanza.

This has resulted in a loyal customer base with a low churn of 1.7%. And in the quarter, Avanza is ranked as one of the highest regarded companies in Sweden, together with names like Volvo and IKEA. The strong brand is also important for our employee value proposition, where being able to attract, develop and retain the best talent is key. And this quarter, Avanza is ranked one of the most attractive employers among students in Sweden. An important part of our strategy and to reach SEK 2,000 billion in total savings capital is to focus on our core business, which is savings and investments in Sweden. 2/3 of our customer savings are estimated to be held by other banks, half of which is considered addressable. We have a great opportunity to increase share of wallet where we need to make both smaller and bigger enhancements. One part is to constantly improve the offering so that we also, in the future, have the best platform.

During the quarter, we have added 2 new European markets, Spain and Switzerland, and launched analyst recommendations and target prices as decision support. An improved mortgage offering is another possible key to free up customer savings capital with other players who lock in their customer savings in exchange for decent mortgage rates. I think that Stabelo backed by Swedbank will allow us to significantly improve our mortgage offering later this year. Our existing customer base is an important source of future growth. The Sigma Stock acquisition was finalized 1st of July, creating an opportunity to increase our addressable market. Historically, Avanza has focused on the Do-it-myself and Help-me-do-it segments. To accelerate growth, we need to become more relevant for those less confident in making their own investment decision.

We will develop products to attract the large do-it-for-me segment while remaining fully digital, starting with the private banking segment. Our focus now is on integrating the new product in the Avanza experience. And the ambition is to launch the new discretionary mandate product around the turn of the year. Before handing over for a presentation of our financials, I'd like to thank Anna for being a fantastic colleague and CFO, always with a smile irrespective of workload. And I think this will be your last -- I know this will be your last, but I think of 18 quarterly presentations. Over to you, Anna.

Thank you, Gustaf, and good morning, everyone. As Gustaf already said, we are reporting really strong results today and are once again proving resilience to changing market conditions. Operating income decreased compared to Q1 due to lower trading-related income, while NII increased driven by higher deposit volumes. Looking at H1, operating income increased by 18% compared to last year, driven by all income streams except for NII that decreased slightly. Our operating expenses are developing according to plan and increased by 6% in the quarter. This resulted in a net profit of SEK 600 million, which is 15% below record quarter Q1, but nonetheless, a very strong result. Looking at January to June, net profit increased by 23%.

Return on equity for the quarter ended up at 37% and earnings per share at SEK 3.81. Our income mix is reflecting the events in the world around us, and the business model is once again proving resilience to various market conditions with an increasing NII and decreasing trading-related income streams, both as a result of customers derisking. Trading activity decreased compared to Q1, which, as usual, was a result of the general market sentiment, but also a result of 4.5 fewer trading days in Q2. On the other hand, if we zoom out the perspective a bit and compared to last year's figures, trading activity has increased substantially, and we are also seeing a higher number of brokerage-generating customers. Looking at the trading mix across the customer segments, Private Banking and Pro accounted for 26% of the brokerage, which was lower than in Q1.

This is somewhat unusual in a more turbulent market environment where the standard segment are usually the ones who tend to become more passive. Looking at the brokerage margin, it was stable at 11.4 bps compared to 11.5 bps last quarter. Slight decrease was driven by a lower share of trading in foreign securities. However, the standard segment accounting for a higher share of trading mitigated the negative effect. When it comes to FX income, this was negatively impacted by 20% lower turnover in foreign brokerage-generating securities compared to Q1, driven by customers being more hesitant to U.S. exposures in their portfolios, particularly in the beginning of the quarter. Here, we saw an increased share of turnover in foreign securities generated by private banking and Pro customers. This also partly affected FX income negatively as private banking and Pro customers have better prices for FX.

Net fund commissions decreased by 7% due to lower average fund capital despite fund capital being higher at the end of the quarter. The fund margin was stable at 24.9 bps compared to 25.2 bps in Q1 and was 25.1% at the end of the quarter. The share of capital in index funds was also stable, only increasing by 0.2 bps to 48.6 bps. Other income was also negatively affected by the market environment with lower income from Corporate Finance due to the sharp shift of sentiment for IPO transactions and income from Avanza Market also decreased. The turbulent market environment is evident also when looking at the NII. Deposit volumes, looking at the outgoing balance increased to close to SEK 10 billion compared to Q1, driven by customers' lower risk appetite and the dividend season, which resulted in higher surplus liquidity.

Looking at the intraday liquidity, this has been even higher at times as customers at some point have been net sellers of securities in the quarter. Looking at the lending side, mortgage volumes kept growing while the lower risk appetite drove customers to decrease margin lending. The average rate for internally financed lending decreased to 3.27% from 3.4% and the lending income decreased slightly. The policy rate has been kept stable throughout the main part of the quarter, but on June 25, the Riksbank made a 25 bps cap. This has a direct effect on our mortgage rate, which was cut accordingly. We also decided to reduce the margin lending rates by an average 34 bps. So far throughout the rate cut cycle, we haven't been more restrictive with capping the margin lending rate. To make sure that we have a fair offering for our customers as private competition, we made a decision to make a slightly larger cut this time.

Moving on to the interest cost side. Our interest expense has increased due to higher deposit volumes on our savings account. The average annualized rate on deposits decreased from 0.97% to 0.91%. The amount of customers' deposits in interest-bearing accounts decreased and amounted to 51% at the end of Q2. Since the policy rate cut in June, we now only pay interest on transactional accounts for the Pro segment, and we cut our savings account rate by 25 bps to 1.50%. All in all, NII increased by 8% since Q1, and this is contributing well to the overall income this quarter, and we'll continue to do so also going forward even though we will see some effect of the lower policy rates.

Our costs are developing in accordance with our communicated plan and increased by 6% compared to last quarter. Personnel costs increased by 10% compared to Q1 due to a higher average number of employees. Other costs also increased, mostly connected to the cloud journey. Marketing costs were seasonally lower. And the cost guidance of 11% increase where the full year stands.

As you can see from the table, we have further strengthened our capital position, especially looking at the risk-based capital surplus. In May, we successfully achieved AT1 capital of SEK 800 million. And this is something that we have aimed to do for a long time as we see it as a natural part of our capital structure, and that also paves the way for future savings capital growth. The issue was heavily oversubscribed and we paid 3 months STIBOR plus 325 bps, which was the lowest spread and, in other words, the lowest perceived risk for investors that an unrated Swedish bank has issued us since 2008. And that also shows the strength by Avanza.

With the AT Capital, we are now better prepared to cater for increased deposits and the leverage ratio requirement. And as you know, we are in the process of closing our external savings account, where we now know that partners that account for approximately half of the external deposits today will not migrate it to their own platforms. And that means that if customers don't actively move that, the deposits will stay at Avanza.

As I mentioned earlier, we have seen increased deposits this quarter and this year due to customers' derisking as well as dividend inflows. The pressure on the leverage ratio was mitigated by issuance of AT1 Capital, implying a strengthened ratio compared to last quarter. We still have a good headroom to the total leverage requirement of 3.5%, including the Pillar 2 guidance, and we can handle increased deposits of SEK 38 billion before reaching it. And I would also like to emphasize that we didn't audit the quarterly figures for Q2. It's only the Q1 results that have contributed to the capital base.

And with that, and since this is my last quarter with Avanza, I would like to take the opportunity to thank you all for a good collaboration and interesting discussions during the years and also thanks, Gustaf, and the Avanza team for an excellent time here at Avanza. And I wish you all the best.

Thank you much, Anna. To sum up, before we open up for questions, I'd like to summarize my view. I think we delivered a solid result despite turbulence in the world around us. I think we're making good progress with our strategic priorities and I think we have strong employee engagement around the direction. The long-term outlook for increased savings in Sweden remains positive. And last but not least, Avanza is well positioned to capture future savings market growth and to handle short-term possible uncertainties. Thank you.

[Operator Instructions] We will now take the first question from the line of Jacob Hesslevik from SEB.

If we start with your CEO letter, Gustaf, you wrote that circa half of the deposits in external savings accounts are today with partners that will allow the deposit to remain at Avanza while the remaining 50% will be up to the customer. So is the 50% referring to current deposit volumes in SEK or is that 50% number of external partner banks left on the platform?

Thank you, Jacob. So the customers of Sparkonto Plus, they are both customers with Avanza and with a partner bank. So what we have tried to settle and managed to settle with all 7 of our banking partners is what happens if the customers do not make an active choice before we reach the end of lifetime of this product? And with roughly half of the volumes in Sparkonto Plus today, we have come to the agreement that if the customer is not doing anything, the volumes will remain with Avanza. Does that clarify Jacob?

Yes. I mean, that sounds positive, that is, on the volumes. And then the second question is on the divestment of Stabelo and how it will affect Avanza. Will you continue to distribute their mortgages? And do you expect the LTV level to increase when the funding now comes from Swedbank? And lastly, how will the profit sharing setup look between you and Swedbank?

I think having a good mortgage offering is key in the Swedish savings market, as I mentioned in my presentation. Many of the incumbent banks, they lock in savings capital by only giving decent mortgage rate contingent that the customer keeps his or her savings with that bank. That has been a challenge from our side, and that's one of the reasons why we have a very attractive mortgage offering to our prized banking customers. But to our standard customers, we have had two external offerings with Landshypotek and Stabelo.

And if we focus on the Stabelo offering, it allows LTV only up to 60%. Now the majority of our young customer base, they cannot afford a house or a flat only going up to 60% in LTV. So for -- we have been thinking hardly for months and months how to improve our mortgage offering. And one unlocking was an improved LTV from Landshypotek I think a few months back, up to 75%, if I recall correctly. And with the rationale from our side to sell our shares in Stabelo to Swedbank is partly that it is -- it looks like a good financial deal for us, but mainly that we think and hope that this will significantly improve our mortgage offerings towards our customers and hence, unlocking savings capital with other banks. So the short answer to your question is yes and yes.

Okay. So if the LTVs then can come up to 85%, 90%, the Stabelo offering should be quite attractive towards your customer base, which has an average age of just around 40, correct?

Exactly. 37 is the average age of customer. And when it comes to the financials between us and Stabelo, that's something that we haven't communicated and will not communicate.

But is it fair to assume that the existing margins with the existing contract will continue in the future with Swedbank as a new owner? Or is it up for renegotiation?

No, I have no new information there, Jacob. We have a distribution agreement with Stabelo today. We have it tomorrow. And as with any contract, it's renegotiated every 3 years or something like that. But we will continue to be a distributor. I have high hopes with the constellation of Swedbank and Stabelo to make this product much more attractive and hence I hope for much higher volumes.

Okay. That sounds good. And I have a very last question. On net inflow, it was negative for both Private Banking and Pro in the quarter. I would have thought that these clients were slightly more sticky compared to the retail clients. And hence, if you could provide any more color on what's going on here would be appreciated.

Yes. I think there are two factors that are important here. One is related to the market environment, where a number of larger customers have decided to get an exposure now outside the stock exchanges. So those money, I think, will come back when we have a different sentiment in the market. The other factor is that how we calculate net flows for the Private Banking and Pro segment is not consistent with how the market does it.

So if a big saver becomes a customer with Avanza and does not sign up to become a Private Banking customer day 1, he or she will be registered as a positive net flow into the standard segment. If that person then after a year or after a week decides to become a prized banking customer that is not shown as a net flow in Private banking. So if I were you, I would look a little bit more at the development of the savings capital in this segment. And as you can see, the Private Banking and Pro segment savings capital grew much faster than the standard segment.

Okay. That was new information for me. Thanks for the clarification. Wish you all a good summer, and thanks, Anna, for these years.

Thank you, Jacob.

We will now take the next question from the line of Ermin Keric from DNB Carnegie.

Maybe I can continue on the flows actually. Do you see any tendencies of increased competition? And also, you mentioned that kind of regular flows you have are SEK 2.9 billion per month roughly. And then on top of that, we have the pension premiums of, call it, SEK 400 million. So we're almost up at SEK 10 billion. I mean is there basically no discretionary inflows then? Or have you seen some breakages of the recurring ones? Because I think that the numbers I just mentioned are on a rolling 12-month basis.

Yes, that's a fair observation, Ermin. I mean, you constantly have an outflow for consumption, which you need to fill with inflows. So if you would look at the gross numbers, so the gross inflow and the gross outflow, those numbers are much larger than when we look at the net inflows. But mathematically, you are correct.

When it comes to competition, do we see tougher competition today than a few years back? I don't think so. I hear and I read that a lot of players are focusing more on the private banking segment. I think that's understandable. It is a large segment. It is a profitable segment. It is a segment that is growing faster than the overall Swedish market. So I'm not surprised. But do I see it in the day-to-day interactions with customers? No, not really.

Okay. And if we look at the cost line, now you beat the consensus expectations in both Q1 and Q2, but you keep the guidance of 11%. So how should we think about that? Because then implicitly, you'll have a quite high exit rate of the year if we think in year-over-year terms in like a Q4. So does that mean we should have a much higher cost inflation in 2026 and '25? Or is there some seasonality or something that's causing this kind of trajectory?

No. The seasonality among costs or expenses is rather in Q3, where we have lower costs due to our employees taking out summer vacations. But I would say that we are focusing more on the cloud journey, which is in line with our plan, and also the acquisition of Sigmastocks, which will now take on even further work since the beginning of July started working with more closely with Sigmastocks and integrating it on the platform. So those are the two main focuses for the second half of the year, implying also that the costs for the last 6 months of year will increase. So that's why we iterate the overall cost guidance.

And Ermin, mind the communication from our side that the average cost increase during the planning period will not exceed 8%. So that limits our cost increase next year. So I wouldn't be very worried about a lot of hangover of late cost increases in 2025 making the cost increase in 2026 unmanageable or something like that.

Okay. That's great. And then one last question would be going back to the partnership now with Swedbank and Stabelo. As you said, I think many of the incumbent banks have used the mortgage to kind of lock up or lock in the savings capital as well. So what's the incentives for Swedbank here? Because I suppose you will now then have a stronger competitive offering on the mortgage side, which can lock in quite profitable savings capital. So will we need to share anything there in terms of kind of the rest of the capital you get from those users? Or kind of what's the incentive for them then?

We have no side agreement with Swedbank. So what's their rationale? I think this would clearly be positive for us. And we'll have to wait until November or something like that when the deal is expected to close. Hampus and his crew in Stabelo I think are very motivated to have a much improved offering by then. But when it comes to Swedbank's rationale, I think you'd better ask them.

Fair enough. Have a nice summer, and thank you, Anna.

Thank you. Have a nice summer.

We will now take the next question from the line of Enrico Bolzoni from JPMorgan.

The first one is on customer growth. You historically have been very, very strong, and the print in May and June was perhaps a bit softer than in the past. Can you just give some color on what might have caused that and whether you expect customer growth to accelerate again throughout in the second half of the year? So that's my first question.

My second question, just a clarification on costs. Thanks for what you already said, but can you confirm therefore the total cost in the third quarter will be higher than in the second quarter despite the typical seasonality of the summer?

And finally, on the external savings account, just a clarification. You say that 50% of accounts will be allowed to remain on Avanza. But then for the other, you say will require an active decision, which imply that this money are not on Avanza, but are on the third-party banks. I'm just trying to understand just the technicality. Are actually all this money technically all on Avanza and some will be able to stay and some not? Or it works in a different way?

And related to that, I wanted to ask you what proportion of these savings, once they move to Avanza, you think will remain in deposit? And what proportion you think will be instead invested near term?

Thank you, Enrico. I'll try to remember all your questions. The first one...

On customer growth.

Was on customer growth, thank you. So especially in May, June, why was it weak? I don't know where you are, how this consumer sentiment is. But in Sweden, it has been very soft, both consumption, and in our terms, savings. I think a lot of us in Sweden are a little bit shell-shocked from what's happening around us when it comes to trade wars and when it comes to geopolitical tensions. And my view is that we are a lot in a wait-and-see mode in Sweden.

So when I have friends who are out selling their houses, there are very few people coming and looking and showing interest, which is very unusual in Sweden. When you talk to other firms in the consumption sector, the consumption is weak. And there was a preliminary GDP data coming out just yesterday around in May, which was very weak in Sweden. So I think a lot of Swedes are in wait-and-see mode. Now what does that mean? Because the Swedes have more money available this year compared to last year and compared to 2023.

My guess is that those money remains on their salary accounts with the big banks. And the step to move them from there to long-term savings with Avanza, that drive has been less strong in May and June. And I think that, that will normalize when we get a little bit less shell shocked population here in Sweden. Your second question was?

On cost.

On cost, yes. So we don't guide. I think we're doing -- we're very transparent guiding on costs for the year. We do not guide on cost quarter-to-quarter. So you need to do the math there when it comes to Q3 and Q4. When it comes to your third question, that was...

External deposits.

External deposits. So I mean, the customer is a customer with Avanza. But legally, the money is -- deposits are very well protected in the law in Sweden. And technically that customer is a customer with his or her deposit with that partner bank. So we have been very mindful to clarify with all our 7 partner banks, what happens if the customer do not take a decision? And at the last day when the product ceased to exist, what happens then? So that is what I clarify.

If the customer does not act then half of the volumes will automatically be moved from Avanza and half of the volumes will stay with Avanza. Now I hope and we hope that the customers have chosen this product not because of the partner bank, but because of Avanza, and they want to gather all their savings and have it readily available for going into risk assets and hence to keep it with us. But that all depends on how the customers will react during this coming quarters. Then it was a fourth question, I think...

Yes, it was related to this one on what proportion of these deposits do you think might be invested once they are on Avanza? Rates are lower in Sweden, so perhaps I was just wondering whether you think that they will be converted quite quickly in equities or in funds.

Yes. I can give you some -- I don't know, but I can give you some data points to guide you in making up your own mind. By the end of the quarter, the customers held, on average, 8.9% of his or her savings capital in cash with us. So 8.9%. That gives us this SEK 88 billion that the bank has at deposits. In the end of the last quarter, it was 8.4%. A year ago, it was 6.9%.

So when looking a year back, you can say that currently customers are risk averse. They have a lot of cash, they have a lot of money readily available to invest in risky assets. That would speak for that when we get money from, say, Sparkonto Plus, that they would invest it in risk assets. But if you look further back, the 5-year average, it's 8.6%. And the 10-year average is 9.8%. So maybe customers are neutral now with their allocation. And I cannot give you a better answer than that, Enrico. It really depends on customers -- yes, decisions.

We will now take the next question from the line of Martin Ekstedt from Handelsbanken.

So I just wanted to check around index funds. So they have now been relatively flat for 3, 4 quarters at around 48.5%. And by the way, thank you for giving us that number now and not just delta from one quarter to the next in the report. So do you think the shift from active to passive or index funds have plateaued now? Or do you think it's a temporary plateau?

So my view, Martin, is that if you look -- if we start with the Swedish market, I think the Swedish fund market still has a fairly long way to go in reallocation from active to passive, i.e., a higher proportion will in Sweden be in index funds in 3 years than it is today.

If you look at Avanza, I think we have taken -- our customers, they have made the majority of that shift. I think we will still see an increase, but I think we're plateauing slowly. So the delta is still negative, but I think we're flattening out. That's my personal view.

Okay, okay. And then if I could do a follow-up on that one. So net fund commissions is almost 3/4 the size of brokerage income as you look over the last 3 years, say in your P&L. So given the importance of this line item, there's kind of an information skew in your monthly data towards brokerage income. And we don't get a lot of information around the fund income. Do you think you might consider reporting this on a monthly basis, fund volumes? Yes, just fund volumes would be helpful.

Yes. Fair point, Martin. We'll notice that and we'll think about it.

Okay. Great. And just a final one for me, if I may. Do you have any comments at all on the takeover rumors in Swedish media on the 2nd of July?

It's hard for me to comment on rumors in the market. I mean, my job and Anna's and Karolina's job is to continue to develop Avanza as a company and to develop the customer experience and to keep customers as happy as possible. Who owns and how the ownership structure looks like, it's not a question for us. That's a question for the Board and the shareholders. And I think that, Sven, our Founder and largest shareholder, was pretty clear in media here last week when the rumors -- I think it was last week when those rumors came.

We will now take the next question from the line of Andrew Lowe from Citi.

I've got two. The first is on your net interest income specifically and the interest income that you earn on your liquidity book. I think it's a bit higher than most people have been expecting. Can you helpfully give the period start and period end size of your liquidity book, we could take the average of those two, for example.

But then if I apply that average to the average 3-month STIBOR rate, then you'd come quite a lot short of what you've reported. So the question is, is there anything funny going on with the margins this quarter? Or is the higher-than-expected interest income, does that relate to the fact that the liquidity book over the period of the quarter average much higher than you would be if you did the simple average?

And maybe that's to do with the sell-off at the start of the quarter and people holding higher cash balances around then. So maybe if you could give, for example, the average size of the liquidity book in Q2 that would be really helpful. And then the second question is just relating to comments that Anna made on the margin lending and the pass-through was higher than it's been running at. I'm just curious if you can give any forward-looking comments about how you think the competitive dynamic there will evolve in the coming quarters.

Okay. First starting with the flows. I would say that it's more -- we cannot see any shifts when it comes to like the yield on the treasury portfolio. So it's rather that certain days we have seen quite high liquidity, for example, like a bid offering related to a corporate event in June, for example. Maybe deposits go up for a couple of days. And we also have had the dividend season. So it's definitely higher volumes that have had a positive effect on the treasury portfolio.

And you can not only just look at the -- it depends on also -- because we want to have an evenly maturity structure, implying that it's not that we just buy to hold and we find it like a 5-year bond. So we can -- if we see like we need to, for example, invest with a 3-year maturity, that could also affect the yield for the quarter. So that's why we don't disclose that. So I think it's hard to say that we can just say that we can see that the overall average liquidity has been higher in the quarter.

And also, there are some other effects. If customers sell off on a larger scale, like was it April 7 with the turbulence, they typically wouldn't place it with their savings accounts because it's really money that they want to have available to go in next hour or next 24 hours. So then the interest cost for us is much lower if they have it with the transaction account. That effect you also have.

Then, on the other hand, Oliver, our Treasurer, he did not really dare to invest our treasury book in higher yielding paper because we didn't know and he didn't know how customers would react. Would they want to use their deposits next day? So there are certain positive effects on net interest income and there are certain negative effects.

Just maybe to summarize on that point. So should I take away that the sort of big pick up is the volume thing not a margin thing? Is that the conclusion?

If you disregard the margin effect of customers increasingly holding short-term money on transaction account instead of savings account, where we pay less interest. But on the asset side of the balance sheet, I would rather say that during the quarter, Oliver was careful and conservative in placing that additional deposit coming in because we didn't know, would customers go risk on again? And that means that we didn't get the extra basis points of placing them with bonds or longer-term commitments.

Okay. That's really helpful. And then just on the margin point, that would be really helpful as well -- on the, sorry, margin lending.

Yes. We have always said that we want both the margin lending when it comes to pricing of all our products, except for the mortgage rate, which is linked to the policy rate. We say that we want a competitive offering, and that is always the competitive landscape that will be the most important part when we decide which rates to offer. And now we decided that we wanted to do a more aggressive decrease in prices because we saw once pricing comes where we thought that we could be more competitive. So that's why we decided to do that. But also on the other hand, looking at -- we have -- since we have higher volumes today, I would say that it's quite compensated by volumes.

We will now take the next question from the line of Markus Sandgren from Kepler Cheuvreux.

I was a bit late so maybe you've already explained this. But I was thinking about your brokerage income is down 14% and the number of trades are down 7%. So does that mean -- or is the -- so that means the average price is obviously 7%, 8% lower. Is that just related to that there's fewer trades in crypto and U.S. stocks and so forth? Or is it something else that I'm missing? And the same goes for the currency income, that it also seems to be lower priced on average.

Yes, as we said, like the brokerage margin was quite stable in the quarter, but it is always a mixed bag of which customers that are trading in what markets, the size of the trades and so on. So it's -- and then, of course, on the total, we have a 4.5 fewer trading days, but we could see the overall turnover decreasing.

Okay, okay. And then secondly, I was thinking, can you say anything about how your plan for another country is going? I mean, have you done anything during the quarter? Anything that you can share?

So that's one important part of our strategy in 2030. So we have a team in place looking at this to decide how, where and when. And a lot of work has been done during the quarter, but nothing specific concrete that I can share with you, Markus.

We will now take the next question from the line of Ian White from Autonomous Research.

Three from my side, please. First of all, can you just clarify for us, to what degree is the decline in FX margins in the quarter due to the introduction of currency accounts for Private Banking clients back in February? Maybe you could just call out what share of FX volume was done in those new currency accounts, please. That's question one.

Secondly, what has been the retention rate of maturing third-party deposits so far? I know it's relatively small numbers, but are you able to provide us with a split of the deposits that were recycled into, say, Avanza savings into transactional accounts and that left the bank altogether? That would be interesting too, please.

And just the last one. I just wanted to follow up on the comment you made earlier, the stuff around the disclosures. Did I understand correctly that basically a new large customer could be treated differently from a stock and flow perspective when it comes to the reporting? So the flow might end up being reported on the standard, but that same client's stock of assets might be in Private Banking? Did I get that right or I misunderstood, please?

So if I start with your last question. You have flows that are in typical traditional banks called retail referrals. So when customers move up from being a retail customer to a private banking customer that is reported as a net flow for Private Banking in the market and with other banks. With Avanza, we do not add that to the flows of Private Banking.

So if you become a customer in January to Avanza, you bring in SEK 100 million, and in May, you decide I want to be a private banking customer, those SEK 100 million did show up in January as a net inflow to the standard segment and it does not show up as a net flow to Private Banking in May. However, the savings capital is, of course, reflecting this SEK 100 million. So that's why I mentioned that it can be good to look also at the development of the savings capital.

The reason for not changing this to market practice is that we wanted to have -- we didn't want to destroy our long time series for you. But does that clarify that to you, Ian?

It does. That's very clear. Yes, I understand that. That's super clear.

And then the first question, I forgot now.

It was related to FX.

Okay. So the decline in FX, is that attributable to the introduction of currency account. I would say no to a very, little extent. We still see customers slowly but surely starting to use that product. So that has had very little effect in Q2. You had a second question also.

Retention rate.

Yes. So what's our experience so far with the retention rate of the external deposits. It's very difficult to draw any conclusions of what we have experienced so far because one of the banking partners acted to get the volumes out by reducing the rate from north of 2% to 1% and then even down to 0%.

So yes, we have data on what happened with those flows, but that's not representative of what will happen in the future where banks -- these partner banks will want to retain the volume. So I think the best we can guide you is what we have agreed will happen by the end of the period, which is 50-50.

Okay. And also just wanted to say thank you to Anna, and all best wishes for the next challenge.

Thank you.

[Operator Instructions] We will now take the next question from the line of Nicolas Vaysselier from BNP Paribas Exane.

Can you hear me?

Yes.

Yes.

Just two quick ones. The first one, on cost. It's a bit slightly in a different way, but could you concretely tell us what do you expect is going to drive the acceleration on cost in H2 given that the run rate for H1 is significantly lower than your guidance, and the guidance is reiterated. So is it like the spending on cloud migration are H2-dated or something like this or some inflation from contract renewals coming in H2?

And then my second question would be on the deposits side. So the markets are still pricing one rate cut towards the back end of the year. And if I do a review of your current 1.5% remuneration in the savings account, yes, it kind of screams okay versus the incumbent players.

But if we look at the savings platforms or even non-net, you seem to be lower. So I'm wondering whether or not you would have some willingness to not do a 100% pass-through on that cut in order to try being more competitive and attract more of those external deposits that you're looking to reinternalize.

I mean, on your last question, with every rate change that we make, apart from the mortgages where we 100% follow the policy rate because that's an agreement with our customer, but when it comes to our deposit products and when it comes to the margin lending product, every decision we take is based on factors that you mentioned.

Now if you look at the market, who offers better savings account rate than we do? It's essentially banks who have a very risky asset side, i.e., consumption credit banks and banks that have an expensive alternative funding source. So we have no appetite to be on par with those risky banks, but we want to have a good offering to our customers. So it's a little bit of a blah, blah answer. I know that. But we'll have to wait and see.

I think we have a pretty good offering today when it comes to savings account. We've been thinking a little about what's the term deposits to have an even better offering for those who wants to put money aside for 3 or 6 months. But if you look at the Swedish krona yield curve, I mean, it's almost inverted. So it's hard to give very good rates even when you lock it in 3 or 6 months.

And on the cost for H2?

On the cost for H2. So I think we guided fairly transparent when we delivered the Q4 report that we expect cost increase this year to be 11%. We also guided that of those 11%, around 3% would be eaten up by inflation. That 3% would be investments in our core business, Private Banking and pension. And that 5%, so that's majority, would be investments in making us as digital on the inside as we are on the outside, including the cloud migration.

If you look at those line items, I mean, inflation is going on all the time. When it comes to the second item, so growth in Sweden, basically, we have the acquisition of Sigmastocks that was finalized 1st of July, meaning that their company is now in our books, which they were not in H1. We are making the investments in pension as we have talked about, where we have made investments in the experience of the corporate and that we would not invest in more sales capacity before we feel that the offering towards the corporate is good enough. And that's something that we will ramp up during second half. That's just examples of costs.

And could you just give us the impact of Sigmastocks on a full year basis, the cost impact?

I mean the cost impact of the company we bought is not big, but still there is a number that we are making investments in the products now. And we really want to make that a world-class product towards the customers who do not want to make their investment decisions themselves. And we see a big opening in the market, where the competing products are not up to customers' expectations today.

Thank you. There are no further questions at this time. I would now like to turn the conference back to Gustaf Unger to conclude the call.

Thank you much for all the questions. Thank you, Anna, again. And have a great summer to all of you, and bye-bye.