DNB ASA Aktie

Good afternoon, everyone, and welcome to DNB's pre-close call for the second quarter. The reason for this call is to remind you of what we already have shared with the market and some relevant public data, which could possibly affect the second quarter results. There will be no new information during this call. The script for this call will be published on our IR website.

And as usual, I will start with the NII and the capital, and Anne will continue with the rest of the P&L. Starting with the NII, there is one more interest day in the second quarter compared to the first. So this is expected to impact the second quarter's NII positively by approximately NOK 120 million. On the lending volume side, we saw FX adjusted growth of 0.3% in the first quarter. So far this quarter, we've seen the average NOK strengthen, impacting NII negatively. The FX split in the loan portfolio for the first quarter was 8% U.S. dollars, 7% Euro and 6% SEK.

Following the Central Bank's decision to raise the key policy rate by 25 basis points to 4.25% on May 6, we announced a customer repricing of loans and deposits of up to 25 bps. This repricing will become effective from July 12 for existing customers. With the Central Bank's decision to raise key policy rate by 25 basis points to 4.25 -- sorry, with the Central Bank's latest policy rate decision today, the key policy rate was kept unchanged at 4.25%. It states that it's likely to raise the policy rate further at one of the forthcoming monetary policy meetings.

The policy forecast is a little higher than the one published in March and is just above 4.5% at the end of the year. DNB Carnegie's macro team expect a 25 bps rate hike in August. Longer term, they expect 225 bps cuts in late 2027 to stabilize at a terminal rate of 4%. We continue to see strong competition in the bank market.

Over to capital. In the first quarter, we reported a CET1 ratio of 18.1%, well above the Norwegian FSA's expected level of 16.4% -- based on the FX development so far in the second quarter, there will be a small positive effect on CET1. To repeat the FX sensitivity on CET1, when there is a 10% change in FX, there is approximately 20 bps change in CET1 ratio. On May 15, we announced the initiation of a 1% share buyback program. The capital cost of approximately 40 bps will be taken in the second quarter.

Over to you, Anne.

Sure. Thanks, [ Jenna ]. Starting with a general comment on net commission and fees. Generally, activity levels tend to be higher in the second quarter compared to the first quarter, impacting fee levels positively. Moving on to financial instruments at fair value and starting with customer revenues in DNB Carnegie or FICC. This typically sees a seasonally higher activity level in the second quarter compared to the first and is, of course, also impacted by market volatility.

The mark-to-market effects on the AT1s and the basis swaps will be announced shortly after quarter end. And a reminder on the outstanding FX AT1 amounts, we have USD 700 million outstanding, and we have SEK 4.95 billion AT1s outstanding. Moving on to costs. Seasonally higher activity level than we typically see in the first quarter, all else equal, typically leads to somewhat higher costs in the second quarter. The central wage negotiation in Norway came in at 4.4% for 2026, and the wage adjustments will have effect from May 1.

DNB Carnegie's macro team expect salary inflation in Norway to come in at 4.6% in 2026. As communicated previously, we expect to incur nonrecurring integration costs related to Carnegie of up to NOK 200 million in 2026, and we saw NOK 33 million in the first quarter. A reminder on pension expenses. As previously mentioned, normalized pension expenses are expected to be approximately NOK 500 million per quarter and the closed defined benefit compensation scheme is primarily linked to the development in global equities.

Asset quality, there is really no change in our message on asset quality compared to what we presented at our first quarter release. The portfolio is carefully monitored, and we are still generally comfortable with the risk in the portfolio. As you know, impairments vary from quarter-to-quarter, driven by potential changes to macro input factors in the ECL model and/or company specific events as you've seen in past quarters. And as we've said previously, given the elevated level of uncertainty driven by the global macro picture, it would be natural to see more company-specific events.

And finally, a kind request or a reminder to please submit your consensus estimates to Rune by close of business on Friday, July 3. That marks the end of our call. We thank you very much for attending and wish you a good day ahead. Thank you very much.

Thank you.

Good day, and welcome to today's DNB Q1 Conference Call. This call is being recorded. And now I will hand the call over to Rune Helland. Please go ahead, sir.

Thank you very much, and hello, everyone, and welcome to DNB's analyst call for the first quarter. To answer your questions here in Oslo, we have the CEO, Kjerstin Braathen; CFO, Rasmus Figenschou; Head of Personal Customers, Maria Loevold; Corporate Norway, Marianne Saetre; and MCI, Harald Serck-Hanssen; and of course, DNB Carnegie's, Alex Opstad, in addition to Head of Risk, Eline Skramstad.

Before we take your questions, Kjerstin will give you the highlights for the quarter. Kjerstin?

Yes. Good afternoon, and thank you for spending the time with us. Just some brief comments that we have repeated during the day and for this release of our first quarter numbers that we believe to be a robust set of results to start the year that has been a rather turbulent start to the year with the conflict in the Middle East. A few points on the Norwegian macro, which continues to show resilience, and we see further proof points that Norwegian households are robust. We see the GDP estimates for this year and next year ticking slightly downwards, but we're still talking about healthy growth levels in the area of 1.4% this year for the Mainland economy and 0.9% for next year.

We continue to see unemployment remaining at a low level with 2.1%, and it is expected to remain so. And the expectations for this year's wage settlement process is that we will see a real wage growth for households, and this supports the expectations that consumption will continue to be a driver for economic growth. And inflation that has been somewhat more resilient to come down than expected and also last year's wage growth has led to, in combination with a more unstable environment, a turn in the outlook from the Central Bank and the turn that has been adopted by the market as well as the macro economists in DNB Carnegie. And this is related to the interest rate outlook for the key policy rates that is now expected to be increased on 2 occasions this year, each of 25 basis points, taking the key policy rate to a level of 4.5% rather than the expectations of a further cut that was the situation the last quarter when we had our call.

We believe the economy is robust in dealing with that and the resilience in the economy will continue to be demonstrated. And the outlook is still what we consider to be a benign outlook for our business despite the uncertainties being higher than normal. For the quarter as such, return on equity comes in at 14%, supported by growth and I think a strong performance across the customer segments. We continue to deliver growth on the lending side, nominally less visible this quarter because large corporate is the entity that grows the most with 2.3% growth, which is offset by a stronger Norwegian krone this quarter.

On the deposit side, we see very healthy growth in Corporate Customers Norway as well as on mortgages. And I think overall, the signal going forward is that we are confident that we will be able to deliver on our growth platform and the 3% to 4% we aim for a profitable growth within a year.

The growth impact and its impact to NII is, however, offset by narrower spreads stemming from repricing as well as a fewer number of interest days. We also have an impact from asset mix and NII is down 5.4% from the fourth quarter. Commission and fees up 18% compared to the corresponding quarter last year, in which Carnegie was only accounted for by 1 out of 3 months. We still believe this is a robust result with a very high activity in January and February, somewhat muted by the conflict in Iran and the postponement, I would say, of some of our customers' projects, but also in commission and fees, a very, very strong quarter for Wealth Management with a record inflow of new assets of NOK 20 billion in the quarter as such.

Important to note also that the portfolio remains very robust. There is no negative migration, no systematic deterioration in any area of the portfolio. The impairments that we booked of NOK 644 million in the quarter is mainly related to customer-specific events in Corporate Customers Norway, and there are no other systematic developments of concern that we feel need to point out to you.

Lastly, capital position, very robust, 18.1%, also supported by 20% from the dividend that was upstreamed from DNB Liv. That was the annual result. There was also a capital release in the fourth quarter. So we continue to demonstrate how that business is supporting our capital position. Earnings per share NOK 6.5, ample position to support our customers with further capital pay out on -- in accordance with the dividend policy. And the last comment I would like to make is our general assembly that was held on Tuesday, where the Board was given, again, a power to buy back up to 3.5% of our shares during the course of the year, and we have already sent an application to the FSA to initiate that, and we'll revert back to you once we have that response.

And with that, I think we will open up for questions.

[Operator Instructions]

The first question is from Gulnara Saitkulova from Morgan Stanley.

So my first question is on lending spreads. We see that they declined meaningfully quarter-on-quarter. Could you break down the drivers of this compression specifically? How much was attributable to lower interest rates versus potentially competitive pressure? And do you expect any further compression from here? Or do you think we reach the trough? And looking ahead, where do you expect the spreads to stabilize under 2 scenarios, one in which rate hikes resume and another in which rates remain unchanged?

Thank you so much for your questions. In order to consider the spread development, we usually say that it's important to look at the volume-weighted spread because when you look at individually the lending spread or the deposit spread, you will see the movements of the money market rates. And in particular, this quarter, you will see a weakening related to the growth in money market rates throughout the quarter, but then that also finds it's opposite in the development on the deposits.

So I think what we can give you in terms of meaningful guidance to understand the development on spreads that are in total NOK 449 million for the quarter is that roughly 1/3 of this is related to the last part of the impact from the repricing that we did that started to take effect in November last year. There is quite some impact also from changes in product mix effects. I will describe in further detail. And there is also slightly less than 1/3 that stems from competitive pressure across the segment, but particularly what we're talking about is personal customers and corporate customers in Norway.

Now product mix effects, what is that? One part of it is a change in the regulation for how companies pay their amount due for taxes throughout the year. There has been a regulation where they have been building up an amount in accounts. This has been low-margin accounts, very attractive for us. And they used to pay that on 4 occasions throughout the year. Now this is paid directly. So no deposits are accumulated in our accounts. And we have talked about this. This will have a negative impact on our NII for the year of NOK 300 million.

Another effect that we see on the large corporate side is that we see a repayment of loans that have higher margins than the average margins in the area. And we see that the growth coming on to our books, the new volumes coming in are low risk and lower margin volumes. There is also an element of that in corporate customers Norway. Beyond that, we continue to see that customers are rational in their deposits, typically moving deposits when they can from lower-margin accounts to higher margin accounts.

Now as for your question, where do we expect them to go if rates go up or down, I think it's very challenging for us to give you any specific guidance on in view of the fact that our margins develop with our potential decisions to change prices if and when the policy rates move, and we are not in a position to comment on our possible future action on pricing. I think what we can say is that we continue very systematically and disciplined, I would say, to prioritize profitable and sustainable growth, which is probably a reason for seeing a slower growth in parts of the business than others this quarter.

But we are very pleased to see that a large number of customers are interested in using our products and services for their needs, and we are able to grow across the business while also keeping a priority on profitability. And that is also our message for the remainder of the year. We are indicating 3% to 4% growth. We are not specifically splitting that up from one segment to the other, but 3% to 4% profitable growth is what we believe we will be able to deliver across the platform of the various customer segments. So I hope that was a little bit helpful.

And can I also stick into the revenues? Investment Banking asset management performance was softer this quarter. Could you provide an update on how your investment banking pipeline is shaping up across the different product lines? What trends are you currently seeing? And how would you characterize the key drivers of the fee income growth going forward? And have you observed any meaningful shifts in the sentiment towards the end of Q1 and into the start of Q2?

Thank you. I will make a few comments on Asset Management, and then I'll ask Alex to comment on Investment Banking. You can see from one of our slides that the revenue on a 12-month rolling basis continues to grow for both of these areas. I think for Asset Management, obviously, markets have been more volatile and come down. So it's a mere a consequence of the fact that market valuations are down in the year that you see a reduction in assets under management as a whole. But on the contrary, we have a decent growth on the fee side, and we see record volumes coming on to our books through the net inflow, which is more than NOK 20 billion in the quarter. And this is a record level of net inflow for our business.

We have also talked about that this record remains also if we look at the previous 12-month rolling period where the net inflow is NOK 65 billion. So it seems to be a lasting trend. And I think it is also a result that we have been working systematically with this across all of the DNB activities where we have a lot of different positions to work on in relation to activities related to savings and investments.

As for the margins in Asset Management, they're stable in the quarter. We do, however, comment that over time, there is a trend towards index-related products, but we have also seen other regulatory changes related to pension and account structures, but we've, along the past few years, been able to more than absorb these by new business coming on to our books and by a relatively attractive growth on the retail side, which is a higher-margin business. And the retail volumes also represents more than NOK 5 billion of the inflows this quarter, which we think is a pretty strong number.

Alex, Investment Banking?

Thanks, Kjerstin. So of course, softer quarter-over-quarter, but that's more of a seasonal effect. If we look at the year-over-year effects, our business is growing and the bright spot in Q1 on the investment banking side is M&A. The capital markets revenue lines were softer. If you look at the Nordic markets, for instance, on the Nordic high-yield side, issued volume in Q1 '26 versus last year was down about 35% and that we have to put on to the market volatility in March. So it was a good start to the year in January and February and then projects got postponed, particularly within DCM and ECM in March for obvious reasons.

I'd say the pipeline is strong and intact. And of course, sector-wise, there's been increased activity within oil and gas and energy, which on a relative basis is sort of to our favor. And in some other sectors, we see more of a cautious approach.

Our next question is from Sofie Peterzens from Goldman Sachs.

It's Sofie from Goldman Sachs. So just going back to the previous question on competition in Norway. All the banks are saying there is a lot of competition in Norway. You also had it in your report earlier today. But could you kind of just discuss the competition a little bit? Is it only on the pricing side? Or are you also seeing it in terms of kind of terms and covenants that these are being loosened? And what's the outlook? What could kind of trigger that competition eases? Do you think if rates go up, that should reduce some of the competition? Or how should we think about it? And do you also see a lot of competition on the deposit side?

And then my second question would be on the fee side. I know fees were up 18% year-on-year. But when we look at the kind of expectations that the market or consensus estimates are doing embed kind of 9% fee growth going forward. How confident do you feel that you can deliver over 9% fee growth kind of underlying over the next 2 years?

Thank you, Sofie. Good questions on the competitive dynamics. I would say that we see it, I think, primarily on the mortgage side, it is price related. Typically, the other alternatives are related to customer offering and other type services that customers value in addition to price for why they choose as they do and not so much structure. Moving into the corporate customers in Norway, I would say that we do see an impact both on the pricing and on structures. And part of the reason why our volume development is not as strong in Corporate Customers Norway this quarter is that we have said no to a larger number of transactions than we usually do.

All the same, we are overall pleased to see the total volume that we are able to put our on books while protecting both profitability and risk in accordance with our standards. What could reduce competition? It's always hard to be that specific overall, but I think nothing has changed in terms of the messaging of Norway being a rational market. What makes it a rational market is that all players active in the Norwegian market are focused on profitability and return on equity. And we have noted, as I'm sure you have, that some of the messaging is changing from certain of the players in the market. One could speculate that, that means that the focus on profitability is starting to become a bigger part of the conversation.

I can only answer on our behalf that we keep that employment of capital disciplined and keep our focus on profitability. Are we seeing it on the deposit side? I would say yes, but deposits are typically less what you call it, they're more sticky than loans, apart from in the large corporate sector, where we are typically more opportunistic, coordinate very closely with treasury and take on the deposits that makes sense for us at the pricing that makes sense. But this is the main reason why we have seen some deposit outflow in the large corporate sector, but we also see that we are an attractive counterpart.

On the fee side, we maintain our ambition of 9%. We continue to see the integration of DNB Carnegie progress as expected. We continue to reap the benefits, I would say, from a stronger and more competitive offering towards customers. But as we've also seen in the month of March, this quarter, we are not insulated for -- from what goes on in the market. So we will be impacted by that. And if that should turn out to be more turbulent than expected, I think it always has to be the relative performance that is evaluated in relation to this area. But we see no reason to change the communicated ambition on the fee side.

Our next question is from Namita Samtani from Barclays.

My first one, how do you think about capital allocation between the retail division and the corporate divisions, both Norway and large corporates now given the fierce competition in retail? Do you want to allocate more capital to corporate now? And secondly, just on market share on the retail loans and deposits. In many quarters, the fact book shows since the 31st of March '24, there's been a loss in market share. Do you think that's inevitable given the size of the bank you are? Or what can be done to improve the franchise that there isn't market share slippage?

Thank you, Namita. Capital allocation, I would say that we have been pretty consistent. We will prioritize allocating capital to the personal customer area and the lower part of the corporate customers Norway as long as we can do profitable business. But we are not sort of -- we have a dynamic approach towards capital allocation. We do not allocate in the start of the year a specific amount of capital to the 3 areas, and then we stick to that. We are keeping this dialogue ongoing in group management. But given the nature of the business, we will not put limitations on personal customers nor the lower part of corporate customers in Norway, the SMEs, if they can grow profitably.

And beyond that, large corporates, the limit is really related to profitability. And if they have even more opportunity to grow, they will have to use the various tools to increase the turnover of capital, which is why we have focused so systematically on originate to distribute and increase the turnover of capital, which is beneficial for the return. This is a tool that is particularly available in that sector. But naturally, when we see less capital being employed as we have seen this quarter in mortgages and in Corporate Customers Norway, there is a further room for large corporates to grow.

As for your question related to market share, it's important for us to show the ability to grow. It's important for us to maintain a very clear #1 position in the SME area, in the personal customer area. Both of these are fulfilled, if you will, also throughout the period where we are giving away some market share, but these are the 2 criteria that we are focused on.

Our next question is from Riccardo Rovere from Mediobanca.

The first one is on NII. Rasmus here I'm quoting you what you stated this morning during the press conference. As in every -- almost in every first quarter, activity is lower. This naturally impacts net interest margin, which was down by 7 basis points. The reduction reflects narrowed combined spreads and other NII not included in the customer segment. Now if I look at your fact book, which is -- and here I'm referring to Table 1, 0.2, 0.1, I don't know if you have it in front of you. And I look at the other net interest income, I noticed that over the past 3 years, systematically Q1 -- other net interest income in Q1 rose by roughly NOK 500 million. It was NOK 500 million in Q1 '24. It was NOK 540 million in Q1 '25 and now seems to be almost NOK 700 million, of which maybe NOK 170 million was a one-off in Q4.

Now 3 years in a row, maybe a coincidence or maybe there are technical factors that basically imposed, if I may say so, the NII going down in Q1. And then in 2024 and in 2025, that was recovered the following quarter. Now can you please explain if there are technicalities, technical factors that force other NII down in every single first quarter, please?

Very good. I will try to answer that as a very, very precise question. So I will try to answer it as precisely back. There are certain factors that are repeating, but they will play themselves out a little bit differently depending on the interest regime. One example being in the other NII would be the gradual buildup of interest, say, owed to our retail customers building up through the year being then deposited into the customer accounts in Q4, leading to a -- and having then benefited the bank within other NII gradually and then searing out at the start of the year. So that's a gradual buildup through the year being deposited into the customers' accounts and then starting over again the next year. So that would be one such example of a cyclical repeating nature.

One that is hitting us this year, but that is not repeating nature, but other effects in other years will be, for example, on the tax account for SMEs. That's due to regulatory change, where in the past, they've had a gradual buildup on their accounts and paid it to the government in, I guess, once every quarter as far as I remember. And now it's a much more frequent repayment to the government, thus reducing the holding period within the bank. That has about a yearly effect of NOK 300 million.

So there are some -- in other NII or that effect in terms of not hitting directly within the business areas. It's also treasury and risk management, which would be this year, for example, on the changes in the liquidity management portfolio, which has partly the effect on the other NII in the average. So even though it's not as -- even though there are not repeating patterns every year, some are repeating and others are more either happening like the tax account happening once -- yes, and then probably other things than in the past of similar nature.

But there are basically factors that naturally push NII down in Q1 that has nothing to do with what you do from a commercial standpoint.

Yes. Well, the delta from Q4 to Q1 pushed it down. That's correct.

It has not been -- it seems to have been a pattern, Riccardo, but I don't think that we can consistently say that you should expect this on every occasion. There was a couple of years that -- where this pattern changed in the aftermath of COVID, but you are right in saying that more years than others, that tends to be the direction.

Well, the new disclosure is in place since Q4 let's say, by quarter we have numbers since Q3, Q4 '23 and every single year in Q1. I mean, 3 years in a row. I don't know if that is a coincidence, but 3 years in a row. Maybe it's not a coincidence.

We have disclosures many more years back than that, if you look at our...

No, not the new one, the new one. Anyway, I understand. The other question I have is on -- you reiterated the 3% to 4% loan growth. Q1 numbers seem to be a bit lagging behind, if I may say so. So I would imagine your reiteration of the 3% to 4% loan growth means that you are expecting let's say, improvement throughout the rest of 2026. And I was wondering whether eventually higher policy rates could put the 3% to 4% at risk in case.

Of course, I mean, given the fact that we have a currency adjusted growth for the group of 0.3% in the first quarter, an indication that we believe we can reach 3% to 4% necessarily means that we need to see a higher growth rate in the coming quarters. And typically, we see that with the second and the fourth quarter being the higher growing quarters seasonality-wise in the year. We do expect this across our activity. I wouldn't say that we expect potential rate increases from the Central Bank to jeopardize this. Again, we reiterate the growth platform that we have been talking about where we both have our Norwegian activity as well as our activity now increasingly in Sweden, but also outside of Norway in industries and sectors where there are increasing investment and our messaging is consistent in saying that across all of this platform, we believe that we can deliver growth also at times where -- when and if there is a slower growth in mortgages and SMEs in Norway.

We did say this morning that activity in the housing market was a bit subdued and possibly in view of the messaging on rates. But I mean, it's not a very big change. We also pointed to the very strong results, we believe, in our brokerage -- property brokerage activity where our results were higher than they were the same quarter last year. And of course, a continued growth in house prices, a nominal wage settlement that is expected to be in the area of 4.5% and inflation are also positive drivers for growth in our business. And I think the performance given the market in the mortgage area was pretty strong in the first quarter.

And typically, second quarter is better and expectations are somewhat higher. But overall, it's really what we deliver across the whole of the platform that you should look at.

We'll now move to our next question from Martin Ekstedt from IDCM.

This was Martin Ekstedt from Handelsbanken and [indiscernible] So 2 questions from me, please, if I may. Looking at yesterday for growing Norwegian SME lending by 5% quarter-on-quarter. I think you started out by saying that you see healthy growth in your [ CCM ] division, but I assume you mean year-on-year then because quarter-on-quarter, it seems like you actually declined by 2%, 2.5%, if I'm right. I think you mentioned before that you said no to more business than usual. So I mean my quick interpretation would then be that one of you do or the other protected margins in Q1. Is this correctly interpreted?

Thank you for your question, Martin. I think I will refrain from commenting on what others are doing and just commenting on the development that we see. And if you heard me saying that our volumes grew for corporate customers in Norway, that was not precise. Our volumes were down 1.2% in the first quarter. It may be that those are currency adjusted numbers and what you're looking at are not. But where we see a stronger growth is on a 12-month basis, where it's 5.6% and 7.1% on deposits.

The development was substantially impacted by syndication and distribution of a couple of large transactions that we did within commercial real estate that were closed towards the end of fourth quarter. And we talked about them when we released our fourth quarter earnings. So the inflow and new business that we have done has not fully compensated for the distribution and syndication of these exposures. But we have also, as you were saying, commented on our experience of a pretty fierce competitive situation in the sector. And I commented earlier on the call that we see this both on pricing and on structure, which is why we have also let certain exposures go and also said no to others, been selected also in many, but also lost a few transactions.

We are, however, working very systematically with growth and future prospects, and there are plenty of opportunities to work on with our countrywide organization across the regions and many industries that are performing well also in today's market. So we're confident that we are competitive and will be able to continue to grow in this segment while also doing so at profitable levels.

Okay. That clarifies. And then second one, I had a look at your shipping portfolio, given what's going on in the Middle East and how it affects both oil and shipping and you're a large bank for both sectors, it was natural to take a look at your crude oil tanker portfolio that's NOK 17 billion out of NOK 54 billion in the shipping book. From what I can see in the fact book, you have no Stage 3 loans at the moment in that segment. And the medium risk category actually declined in size quarter-on-quarter.

Can you just talk a little bit how you view provisioning for this part of the loan book at the moment in light of the war in the Middle East now? Are you reviewing collective provisioning? Or are you still working on an individual loan basis? Are you making more model-driven provisions and so on? Or is it just less of a concern for you overall at the moment.

Thank you, Martin. It's Harald answering. The short answer is it's not a concern to us, several reasons for that. We don't basically do single vessel financing. So all the ship-owning companies we finance, they enjoy very high freight rates at the moment, partly driven by the obstacles in the Middle East. Second, I would like to emphasize is that all the ships we finance that are trapped in the Gulf, they have insurance. If that insurance should fall away, they have what we call a mortgage insurance. And on top of that, most of the ships that are trapped actually are there on the cost of the charters. So this is no concern to us.

Our next question is from Jacob Kruse from Bernstein.

Okay. Just one question. I just wanted to ask Carnegie in Sweden, I think you closed the savings account there as a product. What was the -- is that you shifting into DNB type account? Or are you changing the product mix in that business?

I'm not -- Alex, go ahead.

There are developments on the product side, but savings accounts in Sweden will definitely continue to be a part of the overall product offering, and this is then related on the private banking side.

Okay. Okay. They seem to be in the process of closing on the website.

So we will now move to our next question from Shrey Srivastava from Citi.

Just one for me as well. The NOK 200 million of integration costs for Carnegie that you previously guided for this year, correct me if I'm wrong, but I don't think you took in this quarter. When would you expect to take these maybe even be phased through the year or back-end loaded?

It's Alex here. I can say that we've identified NOK 33 million in the first quarter. And as you correctly point out, the guidance is up to NOK 200 million when we consider it sort of evenly distributed up to that number throughout the year.

Our next question is from Thomas Svendsen from SEB.

So on the CET1 ratio, as you point out, it's the capitalization is strong. Do you think this is over time, what would be the buffer you would like to have above the FSA requirements, which already include all these buffers? And do you think the buyback program, is it -- do you think you have from a practical point of view, possible to adjust the capital with the buyback program?

We completed a 2.5% buyback program in the previous year. And you will find that every time we initiate the buyback program, we find that we have a more than sufficient capital buffer to the regulatory requirements. And as signaled or as mentioned during today's presentation, we have already sent our request to the FSA for such a renewed program this year. So we will, as soon as that is approved, give information back to the market. And I think that sends a signal also in terms of at least we're feeling that there's more than sufficient buffer at the current time.

And just to add to that, I think we agree 18.1% is a very, very robust capital position, 170 basis points, not only above the required, but also the expected level that includes the Pillar 2 guidance of 125 basis points. So it is a buffer on the buffer. And I know some of you have asked us to be specific about the buffer on top. We have not given a specific buffer also for a reason of wanting to be more flexible given that 16.4% already contains a buffer. But needless to say, the capital level we're at today is more than we need as a minimum requirement. We will continue to deliver on our dividend policy that you know well. It does include the buyback, and we will look to how to optimize that -- but I think the final messaging around our capital position is that we will continue to seek to pay out excess capital to shareholders in one way or the other over time.

[Operator Instructions] We'll now take a follow-up question from Riccardo Rovere from Mediobanca.

A couple of follow-ups, if I may. The first one is DNB Liv has paid, if I'm not mistaken, NOK 1.9 billion to the parent company, which has contributed to capital this quarter. Still the Solvency II ratio now, if I remember correctly from your book is 275%. So I was wondering why that is still going up despite the dividend at some point, this should be supposed to go down. So I was wondering whether the amount of dividends that DNB Liv is paying to the parent company is enough to push that number down or at least keep it flat even this has gone up.

The second question I have is, you stated that competition in Norway is fierce, is strong, but is rational. Do you see any reason why the market as a whole, not DNB, the market as a whole should behave differently in case of rate had to go up differently from what we have seen, say, a couple of years ago when rates were definitely higher, a bit higher than today. I mean it's only literally a few months or, let's say, a few quarters since rates have started going down. So I was wondering why the market should all of a sudden change its behavior.

Thank you for your question. I believe solvency ratio is 274%. And of course, that is impacted by rate and rate expectations and the discounting of insurance contracts and varies over time. But you're quite right, for quite some time now, the solvency ratio has been way above the minimum level that we ask or that we require in order to consider paying up to 100% in dividend. This is also a result of the repositioning of the assets in the life insurance company, where we have reduced our volatility towards rate changes and increased the robustness of our ability to deliver on the guaranteed return.

The reason why capital is being freed up. It's also that we have now passed the cap of level of volumes of guaranteed obligations to our customers and the growth that we take on the books are related to defined contribution. Now as I'm sure you also remember, I believe this was the third or the second time before year-end that we paid also extraordinary dividend up to the parent by upstreaming capital from the life insurance business to the parent. And I think we have guided on our previous Capital Markets Day on an aggregate of NOK 30 billion of capital, a combination of results and also freeing up capital in the coming 10-year period from the life insurance business. And I guess somewhere you're asking the question, should we do it even quicker in view of the solvency ratio. We do need approval also from the FSA to upstream the capital extraordinarily. I think we are looking to do this step-wise in a prudent and sustainable manner, but we have systematically shown you our ability to do so, and this feeds into our ability to grow and also our dividend capacity from the parent.

Now I think it's a bit hard for me to answer your second question where you're asking me to predict the capital situation as such. I think we can only speak from experience and what we have seen so far and historically in the Norwegian market. And what we have seen is an increasing rational behavior over time. I think over time is important. And you know that businesses that run targeting profitability. I mean, they tend to adjust over time. And what we have seen is that an increasing number of banks have set return on equity as their most important target also being asked to do so, I think, and expected to do so from their owners.

And I think this is the cornerstone of maintaining a rational behavior in the market. I think historically as well, we have experienced periods where markets are very liquid. We have experienced periods where people are fighting for positions, but we have also seen historically that this has adjusted back once the priority and the intent to deliver on returns again takes priority. I can only lean to what we have seen in the past and the fact that there is nothing structurally happening that leads us to believe differently for what lies ahead.

That's good. And sorry to get back one second to DNB. What I am not thinking, what I'm imagining is not quicker, but actually larger because the number, the Solvency II ratio, you are distributing capital to the parent company, but solvency at the best stays where it was, actually going up, but rates will go down maybe 1 day. So the 275% will get back to 260%. But the number that never goes down. You see what I mean. So I'm wondering whether the NOK 30 billion that you have mentioned quite a while ago, that is still valid or not.

I think what we talked about stays in place. And keep in mind that the solvency is not only historical rates, it's also future rate expectations that are factored into this calculation. I can reiterate the messaging that I said earlier, and this incorporates our activity in the life insurance business. We will always seek to pay out excess capital to shareholders over time. This is very important in order for us to deliver on our minimum required targets on return on equity.

It appears there are currently no further questions at this time. With this, I'd like to hand the call back over to our speakers for closing remarks. Thank you.

Thank you so much. Thank you for your participation and your questions. And we hear from Oslo. We would like to wish you a good day. Thank you so much.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Good morning, everyone. Welcome to the presentation of the first quarter results for DNB and also welcome to everyone following the stream. Just for information, the emergency exits are in the front and also in the back, and there are no planned drills this morning.

Spring is here. The sun is shining, and we are really eager to present the results for you. CEO, Kjerstin Braathen, will kick off and then our CFO, Rasmus Figenschou, will continue with the details. And there will be time for questions afterwards.

Kjerstin, the floor is yours.

Thank you so much, Even, and a particularly warm welcome, we can say, since it's spring, as Even said, and the sun outside is shining. That, nonetheless, does not mean that there are calm waters around us in the world because this quarter, the turbulence around geopolitics has continued certainly with the increasing conflict and the war in the Middle East. This is something that has led to high and very volatile energy prices and the level of uncertainty is, as we have seen now for several quarters and years, higher than what we have been used to.

Despite the geopolitical backdrop and despite energy prices being higher, the market reactions overall, we would qualify as relatively benign. And the Norwegian economy continues to be resilient in this environment. Business activity overall across the Nordic markets, which does represent the majority of our activity, we would consider at healthy levels and the Norwegian households are robust. So despite a turbulent environment, we are relentless in our focus, which remains with our customers, focusing on giving them good customer experiences contributing with value creation and focus on the business short term and longer term.

As always, I would like to start also with the customer and demonstrate how we are working towards our mission, which is really to simplify life and help our customers prosper. In terms of simplification, we have this quarter launched a new equity trading platform in our digital savings app, Spare. This was launched in March. And already in the month of March, we saw that 1 out of 4 trades in shares were actually done on the platform, and I don't think we can get better feedback from our customers than that, that this is actually contributing both to simplicity and efficiency. We continue to see that our customers are putting their trust in us with their savings and their investments, and this is demonstrated by a record net inflow in our Asset Management business this quarter of NOK 20 billion.

Making it easier for the young children and adolescents to become customers is also something that we've done this quarter. Now young people below the age of 18 can become a customer with DNB in less than 2 minutes. For our Sbanken customers in chat, we have introduced an all AI -- generative AI chatbot, meaning it's not a chatbot that we have trained, it trains itself. And this has rapidly taken over 75% of the responses in chat and inquiries from our customers in Sbanken with very good customer satisfaction.

Across Large Corporates and DNB Carnegie, we continue to see a confirmation of our strengthened position and the offering. First, from Prospera in the Grand Total survey for Norway, where we are qualified as the leading bank in terms of customer satisfaction. And for DNB Carnegie this quarter in equities, where individually, we are #1 in each of the 4 Nordic countries and also with the overall number 1 position. And as always, I am very proud of the efforts that our team put in every day for our customers.

On to the results. The return on equity comes in at 14% this quarter, 15.5% on a rolling 12-month basis. This does represent a solid contribution from all our customer segments and also the macroeconomic development with lower rates than we saw this time last year. We do see profitable growth both in loans and deposits, a stronger development in deposits than loans this quarter. And the growth is offset by repricing effects and also a fewer number of interest days in the first quarter. And NII as a result of this is down by 5.4% compared to the previous quarter.

Net commission and fees is up by 18%. Contributions materially from all various product areas, the strong point, again, I would highlight is Asset Management, where we see a strong net inflow. We see assets under management grow despite values coming down. And we also see a record flow for the past 12-month period. The portfolio in a turbulent environment, again, remains very robust and well diversified. We do not see any structural changes or any negative migration in the portfolio as such. We do book impairments of NOK 644 million in the quarter in all its -- not in all its entirety, but primarily related to customer-specific events and no systematic development in the portfolio. Capital position remains solid, 18.1% core equity Tier 1 ratio, 170 basis points headroom to the required and expected level and a strong earnings per share, we believe, with NOK 6.5 in the first quarter.

The Norwegian economy is impacted by what goes on around us in the world. We are an open economy. We are an economy that trades with others. As a net exporter of oil and gas, we are partly benefiting also from higher energy prices and somewhat less impacted by inflation stemming from higher energy prices than other countries, but we emphasize that there is an increased uncertainty in the environment around us. This has led to growth estimates for the year coming somewhat down, but to what we would still qualify as healthy levels with an expected GDP growth in the Mainland economy of 1.4% this year and 0.9% next year.

Unemployment is something that we follow very clearly and talk to you about every quarter, still a stable level. We would qualify it with 2.1%, and we expect it to stay low and relatively stable in the time ahead of us. We do expect yet again this year to see real wage growth for consumers. This leads to increases in disposable income, and it does support consumption as a key driver for economic growth.

Given the development in inflation that has been more sticky than expected, I think, by both the Norwegian Central Bank and markets, we have seen a shift in the outlook for interest rates during this quarter, both in the messaging from the Central Bank as well as in the messaging from our own team in DNB Carnegie. The outlook for rates is now an expectation that we will see 2 rate increases this year, each by 25 basis points up to the level of 4.5% for the key policy rate, and rates are expected to come down by the similar amount in the year 2027 and stabilize around 4%. So again, in an uncertain world, the robustness of the Norwegian economy continues to be demonstrated as well as the resilience in households, and we do qualify this as a very healthy environment for us to run a sustainable business in.

A few highlights on the customer segments. And I would underline that we continue to see a very solid underlying performance across all of our customer segments in a competitive environment. The growth platform we've talked about in Norway as well as outside of Norway continues to deliver, and we see strongest growth on the lending side in Large Corporates. And in this quarter, the nominal growth in Large Corporates is offset by a somewhat stronger Norwegian kroner. We see a very healthy deposit growth across Personal customers as well as Corporate customers in Norway. In Large Corporates, we are more, I would call it, opportunistic. We qualify pricing towards the cost of funding in treasury and the volumes develop accordingly.

For Personal customers, we see that the activity in the housing market is somewhat more muted this quarter, but I would highlight the very strong results that we see in our brokerage business in Personal customers. I would like to highlight the pace of innovation that we experienced from the team in Personal customers as well as a strong cost control development in this area.

In Corporate customers Norway, last quarter, we talked to you about some larger transactions that were closed towards the end of the quarter in commercial real estate and the plan to syndicate and distribute these. This has been done successfully, both in terms of syndicating to other banks as well as taking out parts of the volume in the bond market. This has impacted volumes along a more stable development of volumes also across the SME market and volumes are slightly down in Corporate customers Norway. We do note a strong growth in other income in Corporate customers Norway compared to the same quarter last year, and this reflects not only an increased level of activity with DNB Carnegie, but also the systematic effort over time to work broadly on cross-selling in this area.

Large Corporates that delivers the strongest growth this quarter comes in at 2.3% for the quarter, 9.1% if we look at the year overall currency adjusted. We are working and making progress in terms of strengthening the team in Sweden, and we are getting positive feedback from that process and also how the cooperation is developing with the team across DNB Carnegie. And we see that half of the growth that we deliver is outside of Norway. And again, I reiterate the robustness and the strong quality of the portfolio and that we do not see other systematic risk outside of customer-specific situations. So all in all, a robust development we see for our customer segments.

We continue to talk about our activity across DNB Carnegie and across wealth management as the key growth drivers in our business going forward. And we saw a very strong start to the year that has been somewhat -- has been somewhat impacted by more turbulence towards the month of March. But despite this, we continue to see that the level of revenue growth both in DNB Carnegie and our Wealth Management business.

One year now after closing the Carnegie transaction, the integration is progressing well, and we continue to reap the benefits from having an improved and more competitive and broader offering towards our customers. We saw a very strong start to the year again across all product areas, I would say, in Investment Banking. With the conflict in the Middle East, we have seen and experienced that some of our clients naturally have decided to postpone some of their investment activity and activity related to stock listing and others, but we have not yet seen this leading to any cancellations of any plans. So the pipeline in the business remains strong going into the second quarter.

On Asset Management, again, I would highlight the strong point being net flows, NOK 20 billion for the quarter, NOK 65 billion for the year. This last quarter, more than NOK 5 billion stems from the retail market. And this is an effort we are systematically working on to grow that part of the business as it's more sticky, more recurring. And we have seen that customers are changing their positions, but they are more comfortable remaining in their investments in the market compared to what we saw during the turbulence that stemmed from Liberation Day during 2025.

So all in all, a robust quarter. And with that, I will hand over to my excellent CFO, Rasmus, who will take it from here.

Thank you, Kjerstin. I will now take you through the Q1 results in more detail. And please keep in mind that for 2025, Carnegie's results were included in 1 month of the first quarter.

We note continued high activity across all segments with FX-adjusted loan growth up 0.3%. Looking at the Retail Personal Customer segment, the growth is up by 0.2%. As mentioned by Kjerstin and as mentioned last quarter to the market, the growth in the commercial real estate was -- had a planned syndication of -- in Q1 and has been taken out with other banks as well as in the bond markets and thus leading to a volume reduction of 1.2%. Within the Large Corporate area, FX-adjusted volumes were up by 2.3%, driven by increasing volumes across industries and across geographies, mainly in low-risk customers. And we see that more than 50% of the growth comes from our international growth platform.

Currency-adjusted deposits were up by 2.6%, driven by positive development both in the Personal customer segment and Corporate customers in Norway. We maintain a strong deposit-to-loan ratio within the customer segment of 73.8%. As in every -- almost every first quarter, activity is slower. This naturally impacts net interest margin, which was down by 7 basis points, ending at 174 basis points. The reduction reflects narrowed combined spreads and other NII not included in the customer segments. Combined spreads in the customer segments were down by 5 basis points, driven by repricing effects, product portfolio mix effects and margin pressure and continued strong competition.

NII is down 5.4% in the quarter. We note that spreads are down by NOK 449 million, where roughly 1/3 stems from the full effects of the most recent repricing in November, roughly 1/3 comes from portfolio and product mix effects and slightly less than 1/3 comes from stronger competition. Higher average volumes during the quarter increased -- offset this with NOK 231 million and then having a negative FX effect of NOK 86 million. The reduction of 2 fewer interest days in the quarter was -- came in at NOK 248 million. Amortization effects and fees are down by NOK 176 million, reflecting lower activity, as mentioned in the quarter. No treasury effects in other NII of roughly NOK 150 million.

Moving on to commission and fees. Our fee platform is strong and well diversified in total, up 18% from the corresponding quarter last year. Real estate broking was up 3%, reflecting strong performance in a slower market where fewer properties were sold compared to Q1 last year. Investment Banking Services was up by 38%. We note strong development despite of market uncertainties. Our pipeline remains strong, as mentioned by Kjerstin, noting though the transaction in recent months have been postponed. Asset Management and custodial services was up by 34% and assets under management were down 1.2% due to high volatility and negative market developments.

However, and more importantly, we noted the positive net flow of NOK 20.4 billion this quarter, a record high, but also a record high when looking at the last 12 months of NOK 65 billion, well balanced between the retail and institutional investors. Money transfer and banking services were down by 17%. We note high customer activity, offset by costs related to payment services and use of credit insurance related to corporate exposures, which is part of our OAD model, driving profitability for the group as a whole. Sale of insurance products was up by 19%, supported by positive development from the non-life insurance commissions and continued strong income from defined contribution in our life insurance business. In addition to what can be seen on this slide, we also note positive momentum in other income with strong results from our life insurance company, DNB Liv, and our non-life insurance provider, Fremtind.

Operating expenses are down by NOK 920 million compared to Q4, of which NOK 51 million is currency effects. The reduction reflects seasonally lower activity as well as a persistent cost culture to drive efficiency. Activity is exemplified by the decrease in expenses related to variable salaries and IT and the nonrecurring effects booked last quarter of NOK 200 million. Low return on the closed defined benefit pension scheme is related to market development contribution and that contributes to lower cost this quarter. The scheme is partly hedged and reflected in our financial instruments. Due to seasonality, the second quarter generally carries higher activity-related costs and as well -- compared to the first quarter as well as the effects from the annual salary increases adjustment from May 1.

Now moving on to portfolio quality, which remains robust and well diversified with 99.4% being in Stages 1 and 2. In the Personal customers portfolio, which accounts for approximately 50% of our exposure, remains strong. We continue to note record low request for installment holidays and fewer loans with interest only compared to last quarter. Impairment provisions in the Personal customer segment is affected by a model adjustment on inputs on consumer finance and the underlying portfolio remains solid. For the Corporate customer, impairments totaled NOK 556 million. The portfolio remains robust and well diversified across industries and geographies. There is no structural change to our portfolio or general negative migration to note.

The impairments in Stage 3 are related to customer-specific situations, and these are typically exposures we've been following over time. And most are -- recent are industries that have been challenging for some time, such as construction. We remain comfortable with the quality of our portfolio.

Now moving over to capital. Our CET ratio -- CET1 ratio remains strong at 18.1% with 170 basis point headroom to the regulatory expectations. It was positively affected by the profit generation in the quarter as well as ordinary dividend of NOK 1.9 billion from DNB Liv. In line with previous years, the AGM on Tuesday gave the Board of Directors authority to buy back up to 3% of outstanding shares and an application has been sent to the FSA for approval. The leverage ratio remains strong at 6.5%, well above the regulatory requirements of 3% and combined with a CET1 ratio of 18.1%, our capital position remains strong and enables us to continue to deliver on our dividend policy and continue to support our customers.

Summing up, we delivered a strong set of results in the first quarter, having return on equity coming in at 14%, cost/income ratio of 38.7% and an earnings per share of NOK 6.5. We also mentioned that for 2026, tax rate is expected to be 22%, but our long-term guiding remains unchanged at 23%.

With that, I thank you for your attention, and we open up for questions.

Thank you so much, Rasmus and Kjerstin. We have a few microphones in the room, please. Yes, Roy Tilley from Arctic.

A couple of questions from me. Just on the -- touch upon the margin side, just on the competitive picture on retail, in particular. Have you -- has it changed anything recently? Or is it kind of still the same pressure? And is there anything similar on the corporate side? That's the first question.

And then a question on funding. So money market rates have come up quite significantly in the last few weeks. So on the funding side, you've already got a rate hike in your funding cost, I guess, and spreads have also widened somewhat. So I was just wondering, are you able to mitigate any of that on pricing on the asset side? I guess, repricing mortgages will be difficult until we get an actual rate hike, but have you done anything on deposits?

And then the third one, just on buybacks. Have you sent an application to the FSA? And if you have, when would we expect an answer?

Thank you, Roy. I can do the first and Rasmus, the 2 following. Competition is fierce. I would say it's gradually intensifying. We've seen that over the past year. It does reflect that there is ample capacity in the market that surpasses the credit demand overall. It is fierce in Personal customers. It's definitely fierce also in Corporate customers in Norway, including in the commercial real estate sector that we usually see when there is capital looking for employment across the market.

Still, we are very pleased to see that there is a high activity and interest coming into the business as such. In particular, we are focusing on our position towards young people. We have 12,000 people buying their first home, young people buying their first home during the course of last year. We continue to see stable to growing volumes even in a competitive market. For us, it's a demonstration of the performance in our team overall, and we are able to continue to grow at sustainable levels, and that continues to be a priority for us, and it will be. But overall, the market is impacted by competition, yes.

Very good. And on the funding side, of course, there is -- when there is volatility, I'm very happy that we have a strong set of treasury team that plans ahead. So for us, we are not affected by the day-to-day developments in that funding. And I will not go into detail of when we move in the market, but we are well funded. And we, of course, when the whole key policy -- well, when the market has moved in total, we are, of course, affected by that, and then that will feed on to our customers. But the volatility that you're referring to, we are funding our way through it, so to speak.

When it comes to the FSA application, we have applied similar to -- as previous years for 1%, and we'll refer to the market when we have their answer.

And just as Rasmus is saying very correctly, we have -- our team has funded a bit early in terms of expecting market development to be more volatile. But do keep in mind that relative to the LIBOR and the money market rate, our position is more or less stable. And this is in view of how our assets and liability size are matched in terms of margin-related exposure to customer versus what we are funding in the third-party market. So there is a slight impact from rate movement. But really, overall, I think you should see that more or less stable.

And then what matters beyond that is, of course, the level of spreads. And coming into the year, we saw the lowest risk premiums that we've seen in a long time. They have come out somewhat, but not to a very large extent. And our goal is always to fund ourselves better than our peers. That increases our competitiveness towards customers, and we continue to see that we get very, very competitive funding.

Thank you. Herman Zahl from Pareto.

Just following up on competition. Could you say something about what kind of peers are driving competition in Norway Corporate segment, specifically? Since it seems like both larger savings banks and your Nordic peers have stepped up a bit.

I think we have a clear principle that we'd rather talk about our performance and not so much specifically about others. I think what we can contribute and shed light on is that it's a broad specter of players that are active in the market. Changes that have been made to capital structures that has improved the position of standard banks as a more general example has taken an impact. We can see that, that has made that category of banks more competitive. Otherwise, there is a larger number of players who are very actively driving competition in the market.

Yes. And then just on some of the core banking fees, I think you mentioned some margin changes in guaranteed on the slides and money transfer fees as well. Is there something structural we should bear in mind there? Or is it mix effect?

It's an element impacting over the past 4 or 5 quarters or so, where we have more actively engaged in ensuring part of the exposure that we provide for some of our clients in larger corporates. So it's an added tool in the toolbox to originate and distribute. So when we look at that on a transaction per transaction basis, the return on the transaction and the customer and then to the group is improved because we have less exposure, but the cost related to this does appear in the commission and fee part of the book and has an impact there.

Thank you. Thomas Svendsen, SEB.

First, a question to commercial real estate. Now that the hope for interest rate declines have diminished and rates are going up, one could imagine that impacts the cash flow and the liquidity for these companies. So how do you look at commercial real estate?

We continue to remain comfortable with commercial real estate, Thomas. But as you know, of course, rates are very important in that sector of activity, and we have followed it closely. And I would say since rates topping out the last time around, there has been a restructuring and a shift in values that now is more or less 2 years back in time where some players that needed to reposition have positioned. We are now going back to interest rate levels we were at not too long ago, at least that's the expectation in the market. We do not see this as a particularly concerning factor related to our commercial real estate exposure overall.

Keep in mind that it is 10% of our book, and it's limited to that. 72% of the exposure is in low-risk customers. It is a diversified exposure across geographies, but mainly concentrated in the larger cities in Norway, and it's diversified across offices, across hotels, across the shopping malls and others. And there is no particular concern that we would like to highlight in view of rates coming somewhat back up again.

Okay. And just a second question on your latest CMD, you said you were targeting NOK 3 billion in gross cost cutting. Now that more than 1 year has passed, how are you according to this target? And should we expect it to be sort of linear over the planning period?

So we are progressing according to plan on that. And we are -- as our cost slide represented, we are working adamantly on the cost efficiency in the bank, and we see numerous specific targets or areas that we're working on. We're not going into detail on that, except that we are progressing according to plan.

But I think roughly, we can share that we feel that we are more or less on track. Our cost-income ratio this quarter is somewhat north of 38%. So it's higher than what you've seen in previous quarters. This is an expected impact from the Carnegie acquisition. We have bought a meaningful piece of business that has a higher cost income component, but an improved return for the business overall. And of course, we acknowledge that it's more difficult for you to follow gross cost-saving initiatives, but you have seen us taking several initiatives in terms of restructuring and making changements to our staff. We are working in areas such as digitization and automation, but I would also add innovation in terms of simplifying and reinventing value chains. And of course, AI is a very important tool for us in this area. Also simplifying business, increasing the magnitude of straight through processing in more complex processes.

I talked about a couple of examples in simplifying life for our customers, and we like doing that. But of course, simplifying life for customers also means improved efficiency for us. So we are on plan. It's not necessarily linear. Of course, we will also see what can be done with AI. That is a moving picture. But I think it's hard to give you sort of any guidance in terms of how you will see it being linear or not.

Thank you. Any questions from the online audience?

Yes, if we can pass the mic to Rune?

We have a question from Markus Sandgren from Kepler Cheuvreux. Nordea recently highlighted that Norwegian saving banks are currently competing quite aggressively, particularly on pricing. Are you seeing and sharing this view? And how is this affecting your ability to grow volumes without sacrificing margins? More specifically, how should we think about the trade-off between defending market share and protecting net interest margin in the current environment?

Thank you. I think we've touched upon parts of this question already, and it is a very important question. We recognize that there is competition in the market. I don't think we would limit it to a specific category of banks. I think we see it more broadly. But we also see that our team continues to perform and that we are able to continue to do profitable and sustainable business. Our growth platform stems across all of our customer segments. This is part of the strength that we have highlighted both in Norway and outside of Norway. And across the sectors, we will continue to prioritize growth.

And I think we have proven that in periods if growth is somewhat slower in Norway, we are able to leverage other parts of that growth platform to deliver profitable growth in the area of 3% to 4%, which we continue to target. Growth in the previous 12-month period has been 3.5% in terms of lending, non-currency adjusted. Currency adjusted, I believe it has been somewhat stronger. And we have seen a growth in Personal customers of 1.6%. We have seen in Corporate customers, 5.6% and then Large Corporates, 5% noncurrency adjusted for the year as a whole. And I think this demonstrates also in what has been a competitive market, our ability to deliver growth. The priority remains very firm also on profitability.

Thank you. Any more questions, Rune?

No.

I think we will close the session, if I don't see any more hands. Management will be available for members of the press, like we always are in the couch area afterwards. And I wish you all a very nice Thursday.

All right. Good afternoon, and welcome to DNB's pre-call close call for the first quarter of 2026. The objective of this call is to remind you of what we already have shared with the market and some relevant public available information that could possibly affect the Q1 results. There will be no new information during this call, and the script for the call will be published on our IR website.

I will start with the NII and capital, and Anne will go through the rest of the P&L. On the NII, there are 2 fewer interest days in the first quarter compared to the fourth. So this is expected to impact the Q1 NII negatively by approximately NOK 240 million. On the lending volume side, we saw average growth of 1% in Q4. Keep in mind that Q1 typically sees a seasonally lower activity level than Q4.

In the first quarter, we've seen the NOK strengthen impacting NII negatively. The FX split in the loan portfolio for the fourth quarter was 8% U.S. dollar, 7% euro, and 7% SEK. The second 25 bps key policy rate cut by the Central Bank in September of last year, and our corresponding customer repricing of a cut of up to 25 basis points on loans and deposits took effect from November 18, meaning that it will have full impact in the first quarter.

With the Central Bank's latest policy rate decision today, where the key policy rate was kept unchanged at 4%, they published an updated expected future rate path indicating that the key policy rate will be hiked by 25 bps to 50 bps by the year-end 2026. The DNB Carnegie's Micro team expect two 25 bps hikes in 2026 in June and September, followed by two 25 bps cuts in '27 in September and December to stabilize at a turnover rate of 4%. We continue to see strong competition in the bank market.

Other NII includes a number of line items. In the fourth quarter, almost all were positive and including a nonrecurring effect of NOK 171 million. As we have informed the market several times, we expect NII to be negatively impacted by a regulatory change related to tax accounts in Norway which came effective on January 1. The loss of deposit volume as a result of this change expected to have a negative annual NII effect of approximately NOK 300 million.

Over to capital. In the fourth quarter, we reported a CET1 ratio of 17.9%, well above the NFSA expected level of 16.3%. Based on FX development in the first quarter, there will be a positive effect on CET1. We repeat the FX sensitivity of CET1. When there is a 10% change in FX, there is an approximately 20 bps change in CET1. Just a reminder, the capital cost of the 0.5% share buyback program we announced in February was taken in the fourth quarter. We have completed the program. The ordinary dividend of NOK 1.9 billion from DNB Liv will be booked in the fourth quarter -- in the first quarter, sorry. This corresponds to approximately 15 bps on in the CET ratio. And then over to Anne.

Sure. Starting with a general comment on net commission and fees and other operating income. Generally, activity levels tend to be lower in the first quarter compared to the fourth quarter, impacting fee levels negatively. And the reminder on net insurance result, this is negatively impacted every year in the first quarter after the introduction of IFRS 17 due to booking or recognition of expected losses arising from loss-making or onerous contracts.

Moving on to financial instruments at fair value, starting with customer revenues in DNB Carnegie or FICC. This typically sees a seasonally lower activity level in the first quarter compared to the fourth quarter and is, of course, also impacted by market volatility. The mark-to-market effects on the AT1s and the basis swaps will be announced shortly after quarter end, as we usually do. And a reminder on the outstanding FX AT1s, we have USD 700 million outstanding and SEK 4.95 billion outstanding.

Moving on to costs. Seasonally lower activity level than we typically see in the fourth quarter, all else equal, typically leads to a somewhat lower cost level in the first quarter. In the fourth quarter, we had nonrecurring costs of approximately NOK 200 million, driven by year-end effects impacting operating expenses, including Carnegie integration costs of NOK 50 million.

As communicated previously, we expect to incur nonrecurring integration costs related to Carnegie of up to NOK 200 million in 2026. Salary inflation in Norway came in just below 5% for 2025. In its latest monetary policy report, the Central Bank expects salary inflation in Norway to come in at 4.5% in 2026.

And a reminder on pension expenses. As previously mentioned, normalized pension expenses are expected to be approximately NOK 500 million in the quarter. And the closed defined benefit compensation scheme is primarily linked to the development in global equities.

Moving on to asset quality. There's no change in our message on asset quality compared to what we presented at our fourth quarter release. The portfolio is carefully monitored, and we are still generally comfortable with the risk in the portfolio. As you know, impairments will vary from quarter-to-quarter, driven by potential changes to macro input factors in the ECL model and/or company-specific events as you've seen in past quarters. As we've said previously, given the elevated level of uncertainty driven by the global macro picture, it would be natural to see more company-specific events.

And finally, a kind request or a reminder to please submit your consensus estimates to Rune by end of business on Wednesday, April 8. That marks the end of our call. We thank you very much for attending and wish you a nice day ahead.

Welcome to the DNB Q4 Conference Call. My name is Alan, and I will be your coordinator for today's event. Please note this call is being recorded. [Operator Instructions]

I will now hand you over to your host, Rune Helland to begin today's conference. Thank you.

Thank you very much, and very welcome to the DNB's Analyst Call for the Fourth Quarter. Present here in Oslo, we have the CEO, Kjerstin Braathen; and CFO, Rasmus Figenschou; Head of Personal Customer, Maria Ervik Loevold; Head of Corporate Norway, Marianne Wik Saetre; Head of LCI, Harald Serck-Hanssen; and of course, Head of DNB Carnegie, Alex Opstad.

Before we open up for question, Kjerstin will give you highlights from the quarter.

Yes. Good afternoon, everyone. Just a few highlights on the backdrop with the Norwegian economy that continues to perform well in a world where uncertainty is growing. The GDP growth this year is expected to be 1.5%, 1.6% next year. We continue to see low unemployment. And this is, after all, I think this single indicator that demonstrates financial stability and health in the Norwegian economy.

Two rate cuts in '25. We believe there will be one more in '26 before the key policy rate stabilizes around 3.75% for the remainder of the forecast period.

Again, uncertainty is not the same as lack of opportunities for businesses in Norway and also sectors that we are involved in outside of Norway. And this translates, amongst others into the growth that you see us delivering in the fourth quarter. But the backdrop is still positive for our business.

The quarter, as such, we are pleased to see that our NII continues to grow even on the back of rate reductions that are also taking effect this quarter. 1.2% growth in NII reflects profitable lending growth across segments and as well as positive contributions from other interest-related elements offset by rate cuts as well as some mix effects on the NII segments.

The real strong point in our mind is fees that grows by more than 40% this quarter. Two very strong contributors is assets under management that has a strong net inflow of NOK 20 billion in the quarter and, of course, also DNB Carnegie with a sharp uptick in investment banking and equities and a high level of activity throughout the quarter.

I would even highlight more the strengthened position across asset management and investment banking, where we have received many proof points of our strengths and positions. Among them, the effect of being the institution that participated in the highest number of IPOs in Europe in '25 as well as the highest volume that was raised in the market.

Costs are up, reflecting high activity seasonally in the quarter and also some one-off elements that we have talked to. And we also chose to highlight the cost development for the year, believing that this is more representative of the development.

If we look at this pro forma, look at the underlying cost development, it's 2.6% for the year, slightly less than the inflation level that we have seen in Norway of 3.1% throughout the year, demonstrating that we work systematically towards delivering on the cost ambitions outlined in the Capital Markets Day.

Strong capital generation in the fourth quarter. Strong earnings per share, up from third quarter, contributing to the basis on which our Board intend to recommend a cash dividend per share for -- of NOK 18 per share for the year '25. We also announced today an additional share buyback program. In aggregate, taking this to a level of 2.5% of our shares being bought back and accounted for in 2025.

After deducting both the cash dividend and this last share buyback, our capital remains very strong, 17.9%, 160 basis points headroom towards the expected and required level by the FSA. So a positive backdrop, a strong capital position, supporting our ability to continue to grow and a commitment to deliver on our dividend policy as we demonstrate again by lifting the nominal level on the cash dividend from what was distributed in 2024.

And from there, we'll take your questions.

Thank you. Operator, we are ready for questions.

[Operator Instructions] We will take our first question from Gulnara Saitkulova, Morgan Stanley.

I have two, please. First one on competition. Can you share your current observations on the competitive dynamics in Norway? And whether you are seeing any meaningful changes compared with the last year? Lending spreads have come down this quarter. At what level do you expect them to normalize? And how DNB is responding to the competitive environment? And what initiatives can help you to offset the pressure on margins?

And maybe here you can -- maybe you can elaborate more broadly, are you prepared to match competitors' pricing actions? Or do you see digital capabilities and service quality as the primary levers to retain customers flow?

Thank you for these questions. In general, on the competitive environment in Norway, we qualify that as strong. I think we have seen and we have said for some quarters that the aggregate capacity and appetite to grow is larger than that of the demand.

Our focus on growth is always profitability. And that is why we're also pleased to say that even in this environment, we are able to deliver profitable growth across all sectors. The strongest contributor in the fourth quarter being corporate customers in Norway and large corporates. And on large corporates, we are, of course, also leveraging our platform to grow outside of Norway and half of the growth delivered in the quarter and for the year stems from our activities outside of Norway.

And again, we often talk about this platform and our ability to leverage these positions. And this is typically a year where you see that being demonstrated.

We always advise you to look at the volume-weighted margins rather than the individual spreads, in particular, in periods where the key policy rates and prices are moving. And there, for the group, you see a decrease of 6 basis points in the fourth quarter. This represents materially the impact of the repricing that has been implemented throughout the quarter. It does also represent in part a mix change, different growth between lending and deposits and also some margin pressure related to the competition we have talked about.

We are, I would say, offsetting margin pressure by leveraging our platform, our presence, our capability across Norway to grow also in times of strong competition. We would not match any price points. There is no need to match any price points as long as we can grow profitably. And we are working on initiatives that we have talked about to reduce time to pay out on mortgages. We have reduced the time for mortgage application and processes by 24% during '25. This is important to customers.

We have facilitated much easier registration of businesses for new companies and onboarding into the bank and reduce the timing of this by 37%. And of course, we actively use our distribution, both digital and physical in order to market and proactively seek growth.

So this will be our strategy going forward. We do not guide particularly on margins as such. I did mention that we do expect to see another cut in the key policy rates towards the summer. And this is likely to believe to have an effective banks continue to also change prices when key policy rates are priced, but we're confident in our ability to, over time, deliver growth and reiterate the ambition to grow 3% to 4% for the group. It's not a max. We did grow by 4.9% in '25. And as long as growth is profitable, there is some flex to this. But the main plan and sort of ambition is the 3% to 4% rhythm, I would say, on the back of the platforms that we command.

Very clear. And just second question, can I follow-up on these other impacts on NII. How should we think about this item going forward? And what are the key underlying drivers for other NII? And should we assume for the next quarters that this benefit is non-recurring?

Well, it's a harder element to give you, sort of, guiding on in relation to other elements related to volume and margins. Because other NII tends to be more volatile from quarter-to-quarter. It's a bucket consisting of many different elements.

If you look at the previous three quarters, it has been a negative delta from quarter-to-quarter. This quarter, we are in a situation where all of these major elements they come into positive territory. Among the categories that are represented in other NII is interest-bearing activity that is not directly linked to lending and deposits. One of the examples being securities finance, another being short-term management of liquidity.

It is also a bucket where any differences that stems from intercompany elimination in the accounting will be visible. And it also bears elements of the non-performing portfolio that can impact the numbers from quarter-to-quarter. So there's no real, sort of, ground rule for indicating the direction or which level it should be at. If you do, however, look at this over a longer period of time, I think you would find that more often than not, there is a stronger contribution in the fourth quarter than in other quarters.

We will take our next question from Sofie Peterzens, Goldman Sachs.

Here is Sofie from Goldman Sachs. So just on the fees, the investment banking fees were very impressive, up over 100% year-on-year and over 60% quarter-on-quarter. How should we think about the sustainability of this fee income line? Is it fair to assume that it could be, kind of, that this was a normalized Q4 level? Or should we expect, kind of, the level we saw this quarter to be a normalized level?

And then my second question would be on the Polish mortgage provisions. Could you please just remind us what the outstanding exposure is? Third, did you take any additional provisions this quarter for that book? And how much the debt provisioning or coverage is?

Sofie, it's Alex here. So, referring to the investment banking fees and the growth that you mentioned in Q4. Well, first of all, Q4 is, of course, a seasonally strong quarter for investment banking normally. And we saw that also this year. But I would say that the activity level was very broad-based. And while we also have some large significant transactions, it was broad based enough to say that we expect that to be a, sort of, normalized level for Q4.

Yes. And when it comes to the Polish portfolio, this quarter provisions is NOK 34 million, which is much lower than last quarter, but this is what we see sufficient for the situation. Currently, the size of the portfolio is NOK 3.4 billion, which -- where the competition is 89% in euro, 1% in Swiss francs, and 10% in zloty denominated.

And sorry, just a clarification. On the Polish portfolio, what was the original, like the max exposure of this, back?

The max exposure, back in time?

Yes.

I don't think -- I don't think we have those numbers. We need to come back with that. But yes, I'm not sure why that would be relevant. I mean, what we're outlining now is the current exposure and the spread across currencies.

Okay. No, because some of the other European banks with Polish exposures are saying -- I mean, if you look at the Polish banks, they have like closer to 200% coverage because they are saying that you basically also going to get claims for loans that have already been repaid. So I was just curious to understand what the size of this exposure at the peak was?

Okay. Yes. No, I think what we can say is that the aggregates that we have taken now is, sort of, our best estimate as to the representative level of impairments.

We will take our next question from Riccardo Rovere, Mediobanca.

A couple, if I may. The first one is, if I remember correctly, and if I understood it correctly, this morning, Kjerstin, you mentioned that in Q4, you somehow experienced some lower margin pressure than in Q3, if I got your comments right this morning. I was wondering if you could elaborate a little bit on what exactly that means?

And the other question I wanted to ask you is, if the loan book is supposed to grow, kind of, 4%, because this is more or less what you have delivered in 2025. This is a fairly elevated number, at least in Western European countries. Doesn't this mean that the pie is large enough for everyone to have a profitable growth without particular margin pressure? 4%, it's fairly, fairly high for Western European standards. So I was wondering whether that comment to you makes sense or not.

And the very, very last one, sorry to get back to what Sofie just asked on Poland. But it's not clear to me if you actually charge some provision in this quarter related to the Polish portfolio. And if that is the case, how much that was?

We charged another NOK 34 million on the Polish portfolio this quarter. You are correct. I did mention an observation that we had seen somewhat lower margin pressure in Q4 than Q3. I would qualify this as a comment related to the fact that we are not seeing the pressure spiraling and rapidly increasing rather than indicating what we expect to see in the future.

My reference was also pointing to the fact that it's not as binary as just thinking about growth versus pricing. I'm quite happy to see the work that Maria and her team is doing in order to leverage our position, our products and our channels, both in terms of physical distribution and digital in order to generate new customers and attract across the services and products we are offering. 3% to 4% growth has been, sort of, our marching rhythm, so to say, some years slightly above, some years slightly below. It speaks to our growth platform more than to the pace of economic growth in Western Europe.

And you know that we have more of a challenger position in other Nordic countries than Norway, which means that we are not as dependent on the growth in the economy overall, and we feel that our offering and capabilities towards clients, it's much improved with onboarding Carnegie across investment banking as well as wealth management. And this is well received by our customers.

Beyond that, we continue to have a very strong brand and offering across energy, across the maritime sector, across healthcare. And these are all industries that are driven by some of the mega trends that we see evolving. And this is the reason why we think we can detach a little bit and deliver profitable growth. If this means that everyone can deliver profitable growth, I'll leave it up to others to judge. But I think we have highlighted that we believe it's the fact that our growth platform is, in fact, a competitive advantage that gives us room and flexibility that others may or may not have.

Okay. Just a quick follow-up on this. Still 3% to 4%, it would be at least, for Norway, less than the nominal GDP. Why should that be the case? Because inflation is 3%, real GDP growth expected to be 1.5%, kind of, is one of your slides, if I'm not mistaken. So we land in 4.5%. Why the largest bank in the country should be growing less than the nominal GDP?

Well, I think you can also add the factor of development of house prices and refinancing activity that fluctuates. And I think if you go back and look at the historic development, it has not been very representative to just combine GDP as well as inflation. I mean, there are other factors that are impacting it. You need to look at credit demand. For one, this has come down somewhat, but credit demand, for example, among corporate customers, Norway in the SME sector, grew by 2.9% last year. We are growing more or less exactly in that rhythm.

If home construction, as an example, does pick up, we don't expect that really to materialize in '26, maybe towards the end and into '27. We wouldn't expect it to materially impact the GDP growth, but we would expect it to impact our growth numbers. So it's a little bit different than just combining the inflation and GDP.

And again, I'm pointing to the international platform. And the rapid turnover we have in the portfolio, meaning that if you took the gross amount that we are underwriting, if we were only looking to add volume we could add much more. But we are very focused on profitability. And the larger looking the clients, the larger the holdings, the more actively, we will also look to syndicate, originate and distribute. So the gross level of business that we're doing where -- which involves also a lot of refinancings of existing commitments is again much higher than the GDP growth.

[Operator Instructions] We will take our next question from Jacob Kruse, Autonomous.

So two questions. First, could I ask on Carnegie. What would be the areas where you found greater success than you had expected in your plan and conversely other areas where challenges were greater?

And secondly, on the NII, just to understand, when we look at this other effect and thinking about 2026 and I guess, Q1. Do you think it makes more sense to start at the Q3 as a base level? Or is Q4 kind of a better starting point? I realize that maybe some, sort of, mix if you can elaborate on that.

I'll hand it over to Alex to answer Carnegie, on the other NII. I'm afraid I won't be able to give you much assistance. You will see that it is a line that fluctuates. I would just reiterate that not having gone back and looked at this quarter, but over time, if you look at several years, it tends to be a lower contribution in first quarter than the fourth quarter, typically because of more eliminations happening also towards the end of the year. And you need to keep in mind that there is also a non-recurring element in the fourth quarter number of NOK 171 million.

Jacob, it's Alex here. So, your first question was what sort of areas have we had greater successes than we maybe foresaw at the outset. And I say we went into this believing really in two things, that the two businesses were a great fit in terms of capabilities. And secondly, of course, that all integrations are difficult and time consuming. And maybe start by highlighting that we are only really two full quarters in combined operations in. So, if we go back to May of last year, really, the focus point has been to bring the organizations together and bring our combined products to our clients and really focus on market position.

If I were to summarize them both Q4 and '25 in that context, we have made very good progress, I think, in terms of market position and the areas that are most affected in a sense by changes in equities and in investment banking.

In equities, we are a very, very clear market leader in the Nordic region, and we do see that the scale benefit that we are achieving is -- will result in more efficiency and a more attractive offer to our clients. I think at the moment, we are ranked #1 in three of the four Nordic countries in that respect.

And in investment banking, we really see that the products capabilities for the two organizations really complement each other. I think I've mentioned before that from the DNB side, we do have a DNA in DCM that Carnegie didn't have and Carnegie have a strong DNA in ECM that we've, for instance, benefited from during the fourth quarter, where Sweden was an active IPO market.

So altogether, we are I think very, very happy in where we've gotten on the client position and the client feedback that we are receiving and then highlight then that it's still early days, and we believe the better opportunities are actually still ahead of us.

And maybe following up on that, Harald, the work together with LCI is -- has been progressing well throughout the year. But I really feel that, that's accelerating at the moment.

And in terms of challenges, I think it is a significant amount of work to bring two organizations together, and that process is very much ongoing. But I think we're making good progress.

We will take our next question from Riccardo Rovere, Mediobanca.

A couple of follow-ups, if I may. The first one is on something that I always ask you, and I always get the answer, is on DNB Liv, the Solvency II ratio is again 260%, around 260%. It was supposed to come down, but it remains -- it always remains 260%. So I was wondering what is the level that you target over the medium term, not 10 years? And is it supposed to be upstream in a faster way the capital that is generated in insurance operations?

The second question is on SRT. I just wanted to have an idea if that have been active and what you have done? If it's an instrument you are actually using at the moment, you have been using in the past. Just a little bit of color on that. And then maybe just a curiosity, given the NOK 171 million one-off in NII, I was wondering what is -- would this refers to? Just a curiosity.

I will hand the SRT question over Rasmus, but I'll briefly respond on DNB Liv. We haven't specified a target specifically for solvency. We have said that if solvency ratio is above 140%, we will distribute up to 100% of the annual results as a dividend. We are very pleased that DNB Liv has managed to quite substantially reduce the volatility in the solvency ratio towards rate changes. So it's vastly more robust than it was.

We had a strong result this year from Liv. Pretax profit of NOK 1 billion for the fourth quarter. And of course, the solvency of 2.6, means that we will stream the 100% -- we are likely to upstream 100% of the results in dividend.

In addition to that, you know that we are in a process where we are gradually paying back capital up to the parent, which strengthens our core equity Tier-1 ratio and our ability, again, to pay dividend to our shareholders. And that amount, I think it was for the third time that we did this in the fourth quarter last year. Now NOK 1.5 billion.

You are asking the question, could we do this faster? I think what we have told you on the Capital Markets Day is that we look to upstream NOK 10 billion -- NOK 30 billion, sorry, in the coming 10-year period. I think that still stands firm. This is a process where we need approval from the FSA when we pay more than 100% of the results. And our focus is really to do this sustainably in a gradual manner that enables us to continue. But I think you're clearly seeing our intention and that is to repay excess capital, and we are now in a situation where the guaranteed portfolio is gradually diminishing.

NOK 171 million, it's non-recurring because you can't expect to see it every quarter. It's still real revenue, but it should have been spread out differently across the year. I think that is what I can tell you, but it's related to real interest income, but you shouldn't expect to see the same kind of delta in the next quarter.

Yes. In terms of significant risk transfer, so we have done one large securitization within the transport area, green transport, in the past. And we are looking at further potential in securitization and other important areas of the bank going forward. In addition to that, we also, and as mentioned during this morning's call or presentation, we use insurance actively to strengthen our originate and distribute on the large corporate side, which this year also became visible on our money transfer and banking fees area. So in terms of SRTs, both on the securitization and on the insurance side.

And Rasmus, do you think you could do -- there will be more room to offload to reduce capital absorption on the back of these? Or you think you are doing what you can do?

We believe there is more potential within securitization, and we are further pursuing that.

We will take our next question from Shrey Srivastava, Citigroup.

Two from me, please. The first is the NOK 200 million non-recurring costs that you saw in the quarter. Could you be a little bit more specific about what these relate to? Is it sort of variable comp or something else?

And the second one is, could you provide a bit more color on the growth, particularly in corporate costs in Norway? And specifically a breakdown between what sort of underlying and what might be shorter term, for example, bridging facilities or something like that would be very much appreciated.

I'll do the corporate customers in Norway, and I'll hand the question on costs to Rasmus. If we look at the growth for the year, because I think that makes more sense. The growth in corporate customers Norway was 5.2%.

Important to highlight that commercial real estate is also part of corporate customers in Norway as well as our regional business with SMEs. And of course, they differ when it comes to pattern and growth. I think what is important for us with SMEs is to continue to see profitable growth. For the year we see a credit growth demand of 2.9%, and our growth is 2.8% in the SME area throughout the year. And we are pleased also to see that a higher number of customers are choosing us as their bank, and we have a material uptick in terms of new customers selecting DNB.

So this also means that the larger part of the growth or approximately half of the growth come in commercial real estate. Several large transactions was closed in the fourth quarter. These are transactions that were composed of underwriting elements with a view to syndicate. And for the major part, these syndications have already been completed after New Year, that is towards the end of this year. This is normal for commercial real estate. So I'm not sure I would qualify it as recurring or non-recurring. We have an attractive book of commercial real estate where we turn the capital around more rapidly than you would typically see in an SME book.

But of course, what this means is that the tailwind that you can see from the quite material growth that came in towards the end of the fourth quarter is not necessarily, sort of, lasting through the first quarter as we are distributing material amounts into the market.

Very good. In terms of the one-off effects on costs, as NOK 200 million, as you pointed to. NOK 50 million of those are attributed to the integration costs of DNB Carnegie. There's also gear and events relating to -- an effect relating to variable salaries that have been sort of accrued differently throughout the year and then ending up in the last quarter and other operational expenses.

We will take our next question from Thomas Svendsen, SEB.

Yes. So a question to the buyback program. You now point to the fact that you buy back 2.5%, including the today's announced program. So -- the question is, how realistic is it to, sort of, manage to execute about 2%, 2.5% per year on this program from a -- or a total share buybacks from a practical point of view?

Well, I think what we can see now is that we are looking to deliver on this close to 2.5%. In terms of going forward, this depends on the total volumes and many variables. So it's hard to describe in the future years where it is. But in -- for 2025, this is what we are able to deliver.

But I think we can add that we've said all along when the Board asked general assembly for a proxy on share buybacks, it's not meant as an indication for the amount. I think we've also been quite clear that we do module, the buybacks according to the volume transacted in the market not as to interfere with the development of the shares. So at some point, there is a practical limit. And as you know, we are now splitting them up into smaller pieces where we need the approval from the FSA.

FSA has been quite efficient in approving what we have required for in 2025. We think that if everything is aligned, there is probably a potential to do some more. But we are not guiding specifically on this. And again, I reiterate that the magnitude of share buybacks in '25 alongside the dividend of NOK 18 per share takes our distribution back to shareholders above 86% of the annual results.

We will take our next question from Riccardo Rovere, Mediobanca.

Thanks again. This must be my lucky day. Sorry. Sorry about that. Sorry to pester you again on DNB Liv. But the solvency capital remains NOK 33 billion, NOK 32 billion, NOK 34 billion, always. So I'm just wondering, has the capital upstreaming started, the part of this NOK 30 billion or not? Because the number is always the same. And NOK 30 billion, and what do you need eventually to -- it's not clear what you need to do it. Is it NOK 30 billion out of NOK 1.2 trillion RWA is more than 2%. It's a big number.

Yes, it's a big number, and we think it represents a great potential to support the dividend capability of the group over time. Again, as long as it's above NOK 140 million, we will repay the results. We will ask the FSA to reallocate surplus capital back to shareholders. This is a relatively new situation to be in, and we're mindful of doing that in a sustainable and systematic manner and focus on the longer term rather than optimizing at any given point in time.

The development of the solvency when you look at it year-on-year, I mean, you have to appreciate that this is something that varies with the interest rate level, with the exposure under the insurance contracts, with the expected returns on the contracts in the future. So it's more complex than just, sort of, taking the capital of last year, adding the result and deducting the extraordinary dividend, if you will.

So these 3 years has been a situation where the performance of Liv has improved. We also mentioned that we have a very, I would call it, solid uptick in our risk results, and the financial results this quarter, which plays into the financial instrument line in the P&L. And this, of course, is something that we will continue to work on. But the focus is to be able to do this gradually, sustainably, but capital and excess capital will be paid out over time.

Sorry, Kjerstin. But the number is always the same. It's always NOK 33 billion. So -- or the repatriation has not started or the number is larger than NOK 30 billion? Because it's quarter-by-quarter-by-quarter.

But Riccardo, I'm telling you that there are more elements that goes into the solvency calculation than the results and the capital reallocation. It depends on the interest rate level. It depends on the exposure on the insurance contracts. It depends on the future expectations of return, and these are only a few elements. I'm sure we can provide you with details as to how solvency is calculated and we'll do this following -- we will do that following this call.

There are no further questions on the line, so I will now hand you back to your host for closing remarks.

All right. Thank you so much for your participation, and we would like to wish you all a good day. Thank you.

Thank you for joining today's call. You may now disconnect.

Welcome, everyone, and good morning. Welcome also to everyone following us on the stream because we are also online with the stream, we need to wait until the right time to start this session. And now it's 9:30, and we are ready to present the results for the fourth quarter and for the full year 2025. We see a lot of smiles in the audience. We hope it's because of the dividend. And I will give the floor to our CEO, Kjerstin Braathen, and also to our CFO, Rasmus Figenschou, for the first time on this stage. We will go through the results, and there will be time for questions after also from the online audience.

Please, Kjerstin.

Thank you so much, Even, and a very warm welcome to all of you, even if it's cold outside to this presentation of our fourth quarter results but where also I would like to highlight some of the key points for the year 2025 as a whole. I think it surprises no one if I say that these are historic times in terms of uncertainty. But we often say also that uncertainty does not mean that there are not opportunities out there for businesses and across industries. In fact, we almost see the contrary. Uncertain times in a bigger picture does not mean either that we need to forget the little things.

And today is an important day for us because of our results but it was also an important day to pick because it's an important day for a few of our colleagues. And in DNB, we like to talk about the importance of people. So first, I need to say that we have also invited you to celebrate Even's birthday today. But more importantly, we have invited you to celebrate Stig, our long-term photographer, who turns 60 years today. So that is an illustration to the DNB team.

In this environment where uncertainty is the new normal, the economy continues to perform well and prove its resilience in Norway. We also see that our customers continue to have a high activity, and they perform well across sectors. We focus on our core with our unwavering commitment to our customers and the development of our relationship and our business with them. We are, we believe, presenting a solid set of numbers today, demonstrating the activity level in the Norwegian economy and also the strategic value of the positions that we continuously build across the business.

I would like to start with a couple of highlights concerning our customers because we like to start with the customer in DNB. First, DNB Carnegie. In 2025, DNB Carnegie was the institution that took part in the highest number and the largest volume of IPOs across all of Europe. The position and the strength of the position is clearly demonstrated by being #1 in the Nordics in investment banking, #1 across equities and #1 in Norway and Sweden on also mergers and acquisitions.

On the retail banking side, we continue to make life easier for our customers. One of the things they achieved in '25 was to reduce the time it takes for a mortgage application to be implemented by 24%. We also note that Montrose, which is our challenger platform for retail savings in Sweden was awarded the best bank in Sweden in '25 and this only after having been in operation for a year. And we are motivated to see that the level of customer satisfaction is on its way upwards across many areas of our operation and that we see the highest level of customer satisfaction in Sbanken after the integration.

For the smaller customers, we have made it easier not only to become a customer in the bank but also in terms of registering your new business with an automatic process and through this, reduced the time consumed by these 2 activities by 37%, more time for our customers to focus on the business and creating value. I am very proud of the team that works very hard to deliver all of these results across the group and creates value for our customers every day.

Key highlights financially for the quarter is a return on equity that comes in at 16.6% in the quarter, driven by growth across lending and deposits but also very high activity in other areas. The return on equity is well above the minimum targeted level of 14%. NII is up by 1.2%, driven naturally by growth in the business as well as other interest income elements, and it's partly offset by mix effects as well as rate cuts that takes effect in this quarter.

Net commission and fees is up by more than 40%, 40.3% from fourth quarter last year, naturally reflecting the integration of the Carnegie activities since then. But I would highlight the fourth quarter with very strong performance across asset management and investment banking.

Our portfolio remains very robust. 99.4% of our exposure is in Stage 1 and 2. There are no negative migration. On the contrary, there are positive development in credit quality in areas such as large corporates but we do book some impairments in the quarter and have a cost of risk of 15 basis points. These are primarily related to specific customer situations.

Earnings per share, up by 9.6% compared to the third quarter this year, for the year, NOK 28.45 per share. And this is thus the basis for our Board's decision to propose a dividend of NOK 18 per share as a cash dividend for the year. This is up 7.5% from last year, fully in line with our dividend policy.

Our capital ratio remains rock solid, I would say, with a capital core equity Tier 1 of 17.9% after the deduction of dividend and after the deduction of an additional share buyback program of 0.5 percentage points that we do announce today, a headroom of 160 basis points towards the expected and required level by the FSA, comfortably to support a growing business as we move ahead, but also to deliver on dividend policy.

The outlook for the Norwegian economy remains robust. Our economists expect a healthy growth this year by 1.5 percentage points GDP, 1.6% next year. Unemployment remains low, 2.2%, and this is the level where we expect it to remain in the coming years. And unemployment is probably the most important factor for financial stability and economic health across the Norwegian economies and households. While inflation is still not fully down at the targeted level of 2%, we continue to see that it comes down. There is also an expectation in the market that the annual wage growth this year will lead to a growth in real wage for most people, and this will continue to drive consumption as a key element to support further economic growth.

We have seen, as you may recall, 2 cuts in the key policy rates during 2025. DNB Carnegie expects another cut in key policy rate in June this year and thereafter, a stable level for the key policy rate. With an additional cut, this would take the policy rate from 4% today to 3.75%, and this is the level it's expected to remain at for the remainder of the forecasting period. While the level of global economic uncertainty remains high, the activity level and the underlying fundamentals for our business and the opportunities that we see for our customers continue to provide a very favorable backdrop for our business as we move ahead.

A few highlights on the business areas and now for the full year of 2025. The growth in lending in '25 comes in at 4.9% across the group. Deposits are up 2.8% for the year. The growth is slightly above the 3% to 4% that we usually indicate. We believe this is a strong point. This is profitable growth. And I think it clearly demonstrates the value of our growth platform where we have talked about having a slightly different position than many, given our growth platform internationally, both in the Nordics but also outside in specific industries. And we see that this growth platform over time enables us to deliver even when the market is in Norway is somewhat slower.

Deposits, on the other hand, 2.8% is slightly below the 3% to 4%. What is important is that the attractive growth in deposit we see comes across Personal Customers and corporate customers in Norway by 7.7% for Personal Customers and 3.9% for our corporate customers. These are the areas where the deposits are the most sticky and the most valuable. There is a decrease in large corporates. This is related to a desired reduce on specific volumes on specific names and not very accretive to the NII. So all in all, 2.8% is also a number that we're pleased with.

On the personal customer side, we've seen a high activity, a growth of 2.2% for the year, a year with a lot of activity also generated by the fact that we have seen rate cuts. The net interest income is up for the year despite 2 rate cuts. And there is quite a substantial uplift in other income by 30.2%, of course, due to the integration of Carnegie but very strong contributions from assets under management and continued increasing quarter-by-quarter of the savings accounts that we offer to our customers.

We see during the year '25 that our real estate broker is doing increasingly better and better. And it's a good reference to note that of the sales that we saw in the previous quarter, we finance 32% of the sales that we have brokered, almost 10% higher than our market share, an element that demonstrates the value of having that type of a business within the group.

Cost-wise, nominally, it's up. If we look at the underlying cost development ex the effects from Carnegie, there is a flat cost development in this area, clearly demonstrating a very strong cost control. For our corporate customers, we also see profitable lending growth, 7.7%. There are growth in commercial real estate but I would like to highlight also growth among SMEs. We do follow that. We like to see that also the broader and regional part of the businesses are growing, which they are at a higher pace than the market. And the growth in NII is accompanied by an even stronger growth in revenues related from other areas than the interest-bearing one.

Higher customer satisfaction, in particular, for the smaller customers that are very attractive to many. We're working hard on that. And during the year, we have seen an uplift in the market share for start-ups, newly established companies by 3 percentage points up to 28.7%, which is a very strong position long term for the business.

Large Corporates, total revenue up 12% and NII growth of 4.4% also here despite the rate cuts. Other income, a strong up 29%, demonstrating the cooperation across with DNB Carnegie, a strong development in asset management and a strong development of the business as a whole. The quality in the portfolio is improved. The impairments across both Corporate Customer Norway and Large Corporates are this quarter related to customer-specific situations but the portfolios and the credit quality remains very robust.

A couple of comments on DNB Carnegie and our business in wealth management. You can see the uptick in revenues that we deliver in 2025. We believe this clearly demonstrates the value in the improved strategic position that we have across these 2 businesses, together with DNB Carnegie. The customer income in DNB Carnegie in '25 is up by 27%. More so, I would say we're very motivated by the strong reception from customers, having experience that we are working on and being awarded many transactions that we have not been -- we not would have been able to compete on if we had not joined forces.

We have received strong recognition of our positions or not even strong recognition, but I would say a strong track record in terms of the magnitude of the business that has been done. And we increasingly see how the organization works well together and markets are active across ECM, across DCM and even across M&A as we enter into 2026.

Wealth management, total income is up by a whole 41.7% from the prior year, NOK 527 billion growth in assets under management. More importantly, there is also a meaningful contribution from flow in this number, NOK 47 billion for the year as a whole, and 40% of this is related to retail volumes. This is a solid development. It solidifies our position as Norway's largest asset manager but it also demonstrates the value of having built a broader position.

We see that we are also continuing to strengthen our share as -- our market share in distribution of funds to the retail segment and see that now NOK 4 out of NOK 10 that are saved in mutual funds in Norway are actually saved in a DNB fund. We're still not even a year into having merged the Carnegie business into these 2 areas, and we continue to look forward to putting our efforts into further strengthening these positions, a broader offering to add even more value to our customers as we move ahead.

Lastly from me, I talked about the dividend and our Board's intention to propose a dividend of NOK 18 per share, which is a nominal increase per share per year, in line with our dividend policy. We have completed 2% buyback. So with an additional 0.5 percentage point of buyback, that brings us to 2.5% and a total payout for the year 2025 of 86.3%. We expect to continue to have a share buyback program with the Board asking the general assembly for a proxy also this time around. We have a strong capital position and ability to support our customers in their future growth and deliver dividend, and we continue to remain very firmly committed to our dividend policy that we have been for many years.

And with that, I have the pleasure to welcome on stage our rock-solid brand-new CFO, Rasmus Figenschou.

Thank you, Kjerstin. I will now take us through the financial results for the fourth quarter in more detail. We noted strong activity across the group with a currency-adjusted volume growth of 2.2%. In the personal customer side, the growth was 0.3% for the quarter. And on corporate customer Norway had a strong lending growth of 5.2%. This was driven primarily related to several specific transactions within the commercial real estate side and is expected to be syndicated and taken out in the bond market during the first quarter of this year.

Growth in Large Corporates and International came in at 2.7%, driven by increased activity across both geographies and industries in mainly low-risk customers. Currency-adjusted deposits are up by 0.2%. Firstly, corporate customers in Norway increased by 4.3%, driven by increased volumes across industries as well as public sector related to increased allocation through the government budget. Both within Personal Customers and LCIC, there is driven by seasonal effects and the underlying development in the portfolio remains stable. We continue to maintain a strong deposit-to-loan ratio within the customer segments of 72.2% in the quarter.

The net interest margin was up by 1 basis point in the quarter, ending at 181 basis points, supported by volume growth and an increase in other NII. Combined spreads in the customer segment was down by 6 basis points, driven by repricing effect, product portfolio mix effects and margin pressure from stronger but rational competition.

NII is up 1.2% for the quarter. The effect from the lower combined spreads showed on the previous slide is noted here with a reduction of NOK 504 million. Keep in mind that in the fourth quarter, we had full effect of the August repricing and partial effect of the November repricing, which will have full effect in this coming quarter. Interest on equity is up NOK 40 million, driven by average increased volumes of equity.

Amortization effects and fees are up NOK 47 million, reflecting higher activity during the quarter. Other NII is up NOK 476 million, of which NOK 171 million is related to nonrecurring year-end adjustments. Please note that from year-end, regulatory change related to tax accounts in Norway, which means that corporates will no longer be required to maintain a separate liquidity buffer in their banks for tax payments. The estimate is to have a negative annual effect on the NII of approximately NOK 300 million.

Moving on to commission and fees. We have a robust and well-diversified fee platform and the performance this quarter clearly signals the potential for continued future growth. Customer activity picked up during the quarter and net commission and fees are up NOK 1.3 billion or 40.3% from an already all-time high in the fourth quarter of 2024. Real estate broking was up 6%, where reflecting higher activity in the real estate market and the number of properties sold came in at 4.7%.

Investment banking services was up by 101%, a strong performance compared to an already strong quarter in the previous year. We note particularly strong performance within ECM, DCM and bank syndication, driven by high activity and several landmark deals in the quarter. Asset management and custodial services was up by 68%. Assets under management was up NOK 88 billion, well balanced between the commercial -- the retail segment and the institutional investors, retail being an attractive segment for us. We noted a positive net flow of NOK 20 billion, also evenly split between the retail and the institutionals.

And finally, we noted a positive development in the number of savings schemes. Money transfer and banking services were down by 25%. The result in this quarter is mainly driven by increased use of credit insurance and LCIC. This is a tool to ensure capital efficiency, driving origination and distribution strategy and ensuring increased profitability for the group as a whole.

In addition, we saw pressure on profits from the used car sales in DNB Finance this quarter. Sale of insurance product was up by 15%, supported by continued strong income from defined contribution in our life insurance business and positive development in the non-life insurance business as well. In addition to what can be seen on this slide, we also noted positive momentum in other income with strong results from our life insurance business, DNB Liv and our non-life insurance company provider, Fremtind.

The strong performance and high level of activity is also reflected in our costs, where operating expenses are up NOK 878 million. The high activity during the quarter resulted in an increase of NOK 330 million in variable salaries. The fixed salary uptick is related to Q3 lower costs due to Swedish holiday pay. Further reflecting seasonally high activity, we noted increasing costs in the next 3 categories on the slide. We also note a one-off effect on NOK 200 million, driven by an integration cost of NOK 50 million as well as year-end effects related to variable salaries and other operational expenses.

To paint the full picture, I also want to highlight the full year cost perspective as well, where inflation outgrew the underlying cost growth. Norwegian core inflation came in at 3.1%, where underlying growth in DNB was 2.6% for the year. The tax rate for 2025 came in at 18.5%. And going forward, as previously indicated also, our tax guiding is adjusted from 20% to 23%. We note integration costs of NOK 250 million in 2025 also communicated to the market in relation to the Carnegie transaction during the year. For 2026, we estimate up to NOK 200 million of integration costs for the same.

At year-end, we have 226 more FTEs than we had at the same time of last year, while at the same time, welcoming 840 new FTEs with the Carnegie merger. This illustrates a considerable gross reduction in FTEs in line with the cost reduction measures communicated at our Capital Markets Day in 2024.

Now over to our portfolio, which remains robust and well diversified with 99.4% of the portfolio being in Stage 1 and 2. The Personal Customers portfolio, which accounts for roughly half of our exposure, remains strong. Continuing the trend over the last few quarters, we note record low request for installment holidays and continued reduction in interest-only loans. For the Corporate Customers, impairments came in at NOK 793 million. The portfolio remains robust and well diversified. There is no structural changes to the portfolio or migration in general to note, negative migration.

The impairments in Stage 3 is related to specific names and specific situations in both LCIC and Corporate Banking Norway. These are typical exposures that we have been following closely and most are in industries that have been challenging for some time, such as residential, real estate, construction. Relating to the legacy portfolio in Poland, we incur a NOK 34 million provision. We remain comfortable in the credit quality in the portfolio but please bear in mind that losses will vary from quarter-to-quarter. I brought that from Ida and continuing on.

Now moving on to capital. Our CET1 ratio remained strong at 17.9% with 160 basis point headroom to the regulatory expectations. Pillar 2 guidelines was reduced by 25 basis points during the year from the SREP. The CET1 ratio was positively impacted by profit generation and the repayment of excess capital from DNB Liv. It was offset by the proposed cash dividend of NOK 18 per share, and the annual operational risk adjustment, which is driven by the average income over the last 3 years.

We recently finalized the previous 1% share buyback program and today announced a new 0.5% buyback program, reducing the CET1 by 19 basis points. We expect that the Board of Directors will request an authorization from the AGM for a share buyback program as they have done so in previous years.

The leverage ratio remains strong at 6.6%, well above the regulatory requirements of 3%. Combined with a CET of 17.9%, our capital position remains strong and enables us to continue to deliver on our dividend policy.

Summing up, we delivered a strong quarter in the with key figures of 16.6% return on equity, 39.7% of cost income and earnings per share of NOK 7.65, an increase of nearly 10% from the previous quarter.

And with that, I thank you for your attention and open up for questions.

So much, Kjerstin and Rasmus. We have some microphones in the audience. Please wait for the microphones before you ask your questions. Anyone wants to be the first one out, Thomas Svendsen, SEB, in this side.

So question to the capitalization. Why are you not using the opportunity today to sort of adjust the CET1 ratio lower down towards the requirements? And is that a signal of your growth opportunities during '26 or maybe some smaller M&As?

We have a capitalization level that remains fairly consistent to what it has been in previous quarter, and it's an ample room to have 160 basis points above the expected and required level. We are proposing a dividend with a substantial uptick. That's in line with our dividend policy. And we are mindful of having the capacity to grow for further growth and also have an intention to continue to do some share buybacks. You will, when you look at the growth in the previous quarter, see that in this quarter, in particular, the growth was very capital efficient. So probably more efficient than it is likely to be over time.

There is no signaling or no change in the way we think about our capitalization. Priority #1 is to support our customers and to grow. And beyond that, we aim to pay out excess capital over time to shareholders, and this gives us an ability to amply deliver on that.

Okay. And just a final question on the growth on the Personal Banking side, it was quite slow in the quarter. Do you have some reflections on that?

In our mind, the growth is not so slow in the fourth quarter. It's usually not one of the strongest quarters in the year. The fourth quarter this year also saw a lower activity in general compared to other quarters because the rate cuts that happened in the second and third quarter generated a lot of activity where customers reoriented themselves where they looked at swapping banks, and we could see a very positive impact on this on our Sbanken brand, which is typically a strong offering in such a situation, whereas fourth quarter is a calmer market where what we primarily see is refinancings and people buying new homes.

We have a decent growth. We have a sound development of margins given the market where competition is strong. So all in all, we're pleased with the performance of the teams throughout the year with 2.2% but also fourth quarter and how the business develops.

Yes, Simon in ABG.

Simon Brun, ABG Sundal Collier. Following up on Thomas' questions but turning to the Corporate side. As you mentioned, strong lending growth in Corporates in the quarter but also for the year, around 8%, well above the market growth. When you -- when you take market share on the corporate side, do you do that without any compromising on the margin? Are you -- are you comfortable with sort of the profitability on that growth? Yes, that's the first question.

Yes. Good question. We are very comfortable with the profitability and the sustainability of the growth. If I start with large corporates, it's primarily a growth in low-risk category of clients, which is also one of the reasons why it's very capital efficient. Bear in mind that half of this growth comes from our international platform. So it's very hard to measure the credit growth and certainly in the specific quarter towards market share. And if you look at our growth platforms outside of Norway, they are industry-specific. And if you look at the Nordics, we have more of a challenger position. So we have a much broader room to grow, and we do this together with our team members from DNB Carnegie, where we have offerings where we package together a broader spread of products. Growth will vary from quarter-to-quarter. But of course, we are very pleased to see that for the year 2025 for Large Corporates, our growth platform enables us to deliver 7% growth.

Now moving to Corporate customers in Norway, there are 2 elements to consider. One is commercial real estate, which is a substantial part of that portfolio. And the other is SMEs. SMEs is where we look at market shares. And SMEs, our growth for the year was 2.8%, I believe, whereas market growth of 1.8%. So that confirms the picture that we have communicated for some years that we are able to take some market share on the SME side due to our offering having competitive advantages amongst others in areas such as the broadness of product [indiscernible]. This is a very profitable business, a complex business to deliver on, which is also why we're happy to see customer satisfaction increase and an increased market share for start-ups.

Competition is strong. we don't win every deal. We are focused on the profitability in the growth. And when we see we're able to deliver on that, we are happy to see that. The area that is still lagging because the growth is lower than what you have been seeing for many years up until a couple of years ago is the construction activity for homes. That has still not picked up. We ask our team every day. And from what I hear now, they are seeing more inquiries for new projects, but it's a little bit early to say how well they will sell, and it's going to take a while before those volumes come back on the book but they will at some stage.

Now in '24, there is also some substantial transactions on the property side, commercial real estate. And this impacts the number, the overall gross number and is also why you cannot read the total number as a market share indicator. Typically, we do the transactions that are more complex that requires delivery of more than just the debt. And fourth quarter growth in Corporate Customers Norway, there are such deals in the numbers. And there are also some of these transactions that already have been syndicated, distributed to the market, which means that, yes, there is a tailwind going into the first quarter but maybe not as strong as it looks at the outset end of year numbers.

Thank you for a very comprehensive answer. Maybe one for Rasmus then on the NII bridge you showed. Obviously, a negative impact on the spreads, which I guess relates to the rate cuts and fierce competition, as you say. But on the other NII, very helpful in this quarter, I guess, and some nonrecurring items. But in general, how should we think of the other NII? Is that untypically beneficial this time around? Or how sustainable is that sort of tailwind from other NII?

The other NII will vary from quarter-to-quarter, as you see, and it's related to non-direct deposit and lending interest income. That could be, for example, on the prime financing, which externally we call...

Securities financing.

Securities financing. Thank you. And within treasury, et cetera. So this quarter, there were some of numerous factors that point to positive. Others, there will be more balanced and sometimes more on the negative side. So I think in some, there is -- we see in this quarter some of several positives playing in on the other NII.

Yes. Herman Zahl in Pareto.

I have 2 questions on costs. So first, you say underlying costs are up by 2.6% year-over-year. So I know you have a cost income target but could you help us with what we should expect on the underlying cost into next year and highlight some cost lines where you think there will be some cost pressure and where you will be able to be more cost efficient medium term?

Cost pressure is related to underlying inflation is obviously driving the costs and FTEs directly hitting that, some of those 2. IT costs are also hit in terms of cost pressure. So the -- looking at -- that's directly sort of the posts that are driving it. For us, I think looking at the year as a whole is much more conducive to looking forward rather than the quarter as a whole. The quarter as a whole -- the quarter, sorry, this last quarter was driven by high activity, as mentioned, also one-offs of NOK 200 million, as mentioned, NOK 50 million being to -- relating to the integration costs and also some year-end adjustments on variable costs, et cetera. So I think looking at the year as a whole is a more correct way of looking at the cost going forward.

So the clear guidance we have, as you're saying, it's sub 40. We don't nominally guide on cost, but I think comments were given on the quarterly development where there are several sort of activity-related elements as well as one-offs. But I think to add to just what Rasmus is saying, the annual development demonstrates that we are underway also in terms of delivering on the cost initiatives that we described at CMD with a reduction of more than 600 employees. So it very much highlights the fact that we are growing and we have specific areas of the business that we're growing, but we're also, at the same time, very much focusing on competitiveness and efficiency.

But then on the parts of the SEK 200 million nonrecurring, just to understand it correctly, some of it is related to sort of accrual of bonus payments and should be seen in the context of the strong fee performance?

Not in the quarter as such but as an adjustment for the year, which is why we're also showing the full year because it's not representative for the quarter as such.

Yes. And then just on the associated companies accounted for by equity method, Fremtind, obviously very strong. And -- but it also seems like maybe other contributions are improving. Could you update on the profitability in Vipps and Luminor or the other contributions there?

I think definitely, Fremtind is delivering very well, and we're pleased to see that new strategy, new management, better pricing. I mean, of course, they've been through the same cycle as many other non-life insurance businesses but we certainly also see strategic effects from repositioning the company, which is working well. They are the largest contributor to associated companies, representing roughly half -- more than half of the contribution. We are not obviously specifically guiding on the other companies but we're seeing a healthy development. Vipps had a positive contribution for the third quarter in a row.

So all of these businesses are doing well. Nothing in particular to highlight or that stands out, and we expect a meaningful contribution for them also as we move ahead.

Thank you. Roy Tilley from Arctic next up.

Just 2 questions from me. Just one quick one on tax. You had a 14% effective tax rate in the quarter, which I guess is that usual tax deductibility of interest expenses. In the national budget, they tried to change that regulation. So just wanted to check if your long-term tax guidance, is that still around 23% or 20%.

That's correct. We affirm the long-term tax guidance of 23%.

So this will be the last year with this effect most likely.

Correct.

All right. And then just on -- just one follow-up on growth and margins. So looking at your lending margins in the personal customer segment, it's down 18 basis points in the quarter, which I guess could be some timing effects, but also the competitive pressure we talked about. So just how do you see those margins into 2026? And if we look at the full year '26, will you -- is your guess that your -- most of your growth will come on the Corporate side? Or are you kind of targeting still high growth -- higher growth in Personal Customers given the backdrop?

Thank you, Roy. We are targeting growth and profitable growth across all sectors, and I think we've proven our ability to do so throughout this year. Now looking at margins and in particular, when rates are moving, it's important to look at the volume weighted to have a representative move. And I think that is -- that's not what is 18. That is a lower number for Personal Customers.

But clearly, as highlighted with the 6 basis points decrease on the margins volume-weighted wise for the group, there is a meaningful impact from rate cuts where they are impacting with a little more than one rate cut for the quarter as such, and there is the rest of the second rate cut that takes effect in the first quarter this year. There is also a mix effect due to higher growth on the lending side than on the deposit side. And there is a competition impact in the margins. There is also the fact that the growth in large corporates happens on low risk, which normally you would expect lower margins.

So there's a mix of effects. I think we could add that we have competitive prices. And our observation on the personal customer activity is that the margin pressure in fourth quarter was less than it was in the third quarter. But we do work very actively and very proactively in terms of leveraging the performance competence and platform, if you will, in order to deliver the growth that we do with the platform we have across all of Norway.

Thank you, Roy. Since it's my birthday, I will allow a second question from Thomas. Go ahead.

Final question, just on the number of employees was slightly down Q-over-Q. So is it fair to assume stability over the next 12 months?

Nice question. We do not guide on FTEs. We guide on costs.

Nice try. Rune, any questions from those working remotely? No, not today.

Okay. So thank you all for joining both remotely and physically. And for those of you who are from the press, there will be a press session in the area outside afterwards where members of the management will be available. And with that, this concludes our session. Thank you so much for listening and being here.

Thank you.

Good afternoon, and welcome to DNB's pre-close call for the fourth quarter. Just to remind you, the reason for this call is to remind you of what we have already shared with the market and some relevant public data, which could possibly affect the fourth quarter results. There will be no new information during this call, and this script for the call will be published on our IR website.

I will start going through the NII and capital, and Anna will go through the rest of the P&L. Starting with the NII, there are the same number of interest days in the fourth quarter as in the third. So there will be no impact of day counts in the Q4 NII.

On the lending side, on the lending volume side, the Q3 growth was plus 0.3% FX adjusted. Statistics Norway reports a fairly stable development in credit demand since the end of Q3 for both household and corporate. For November, last 12 months household growth was 4.5% and the corporate growth was 1.8%.

In the fourth quarter, we've seen only small FX developments on the average FX, so we expect to see minor effects on the NII. The FX split in the loan portfolio for third quarter was 8% U.S. dollars, 7% euro and 6% Swedish kroner.

The policy rate was cut by 25 basis points from 4.50 to 4.25 in June, and our corresponding customer repricing of a cut of up to 25 basis points on loans and deposits, took effect from -- took effect from August 25. Meaning that it will have full effect in the fourth quarter.

Furthermore, the Central Bank cut the key policy rate by another 25 basis points in September and our corresponding customer repricing of a cut of up to 25 basis points on loans and deposits, take effect from November 18. Meaning that it will have partial effect in the fourth quarter.

DNB Carnegie expect one additional 25 basis points cut to the key policy rate in June this year. To end at the terminal level of 3.75. With its latest policy rate decision in December, the Central Bank published and updated monetary policy report, which included only very minor adjustments to the expected policy rate cut.

We continue to see a fiercely competitive environment. One one-off, we will book at technical collection of other NII of approximately negative NOK 80 million in Q4. As we inform the market in November, we expect NII to be negatively impacted by a regulatory change related to tax accounts in Norway, which became effective on January 1, 2026. The loss of deposit volumes as a result of this change, is expected to have a negative annual NII impact effect for DNB of approximately NOK 300 million.

So on the capital. In the third quarter, we reported a CET1 ratio of 17.9%, well above the NFSA's expected level of 16.6%. Based on the end of period FX development in the fourth quarter, there will be only a minor positive effects on the CET1 ratio. We repeat the FX sensitivity on CET1 where there is a 10% change in FX, there is an approximately 20 bps change in CET1 ratio.

Just as a reminder, the capital costs of the 1% share buyback program that we announced in October was taken in Q3. And so far, we have completed more than 70% of the current program. As you know, we received the NFSA annual SREP decision in mid-November. The Pillar 2 requirement remains unchanged, but the Pillar 2 guidance was reduced by 25 basis points from 1.25% to 1%. The decision took effect from December 31, 2025.

As we did last year, we expect higher REA volume for operational risk, as a result of higher income in the last years. REA volumes for operational risk is adjusted once a year as a calculation of average income over the last 3 years. So in Q4 2024, the CET1 effect was negative 32 basis points.

Year-to-date, we have reserved 60% of retained profits, reflecting the average of the last 3 years' payout ratio. This will, in Q4, be adjusted to reflect the actual proposed payout ratio for 2025.

And then over to net commission and fees. [indiscernible].

Sure. Thanks, Rune. Starting with net commission and fees. Generally, activity levels tend to be higher in the fourth quarter compared to the third, impacting fee levels positively.

Moving on to financial instruments at fair value. Customer revenues in DNB Carnegie, FICC typically sees a seasonally higher activity level in the fourth quarter compared to the third quarter, but is, of course, also impacted by market volatility.

The mark-to-market effects on the AT1s and the basis swaps have already been announced. The basis swaps were a positive NOK 83 million, and the FX AT1 were a positive NOK 248 million. And a reminder on the outstanding FX AT1 amounts, we have USD 700 million outstanding and SEK 4.95 billion outstanding.

Moving on to costs. A seasonally higher activity level that we typically see in the fourth quarter compared to the third, all else equal, typically leads to somewhat higher costs in the fourth quarter. DNB Carnegie's macro team expects salary inflation in Norway to come in at 4.8% for the year 2025.

As communicated previously, we expect to incur nonrecurring integration costs related to Carnegie of NOK 250 million for the full year 2025. And year-to-date for the third quarter, we've seen such nonrecurring costs of approximately NOK 200 million. Keep in mind that we had seasonally low holiday paid disbursements in Sweden in the third quarter of approximately NOK 45 million.

And finally, on cost, a reminder on pension expenses. As previously mentioned, normalized pension expenses are expected to be approximately NOK 500 million per quarter and the closed defined benefit compensation scheme is primarily linked to the development in global equities.

Moving on to asset quality. There's really no change in our message on asset quality. The portfolio is still carefully monitored, and we are still generally comfortable with the risk in the portfolio. As you know, impairments will vary from quarter-to-quarter, driven by potential changes to macro input factors in the ECL model and/or company-specific events as you've seen in past quarters.

And as we've said previously, given the elevated level of uncertainty driven by the global macro picture, it would be natural to see more company-specific events. But again, we do not see any systemic areas of concern in our portfolio. And finally, a kind request or a reminder to please submit your consensus estimates to Rune by close of business this coming Friday, January 9.

That marks the end of our call. We thank you very much for attending, and we wish you a nice day ahead. Thank you so much.

Thank you.

Hello, and welcome to the DNB Q3 Conference Call. Please note this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Rune Helland, to begin today's conference. Thank you.

Thank you very much, and a warm welcome to all of you. Welcome to DNB's analyst call for the third quarter. Here in Oslo, we are, in addition to Kjerstin and Ida, we have Head of Personal Customers, Maria Ervik Loevold; and Head of DNB Carnegie, Alex Opstad.

Before we start the Q&A session, Ida will give you the highlights for the quarter. Ida?

Thank you, and hello, everyone, and thanks for taking the time to listen into this call and participate. The Norwegian economy continues to perform well, and we're also seeing that the recent updates stemming in terms of new data points shows that GDP growth will be higher than what was expected before. GDP growth this year is expected to come in at 1.8% and then continue to grow around 1.3%, 1.5% in the coming years. Mainland corporate investments continues also to show a positive outlook and also more importantly, when looking at the surveys done with the corporate customers and the corporates overall around Norway shows a very positive sentiment.

We noted higher real wages last year and also continue to see that real wages are expected to increase also this year, of course, supporting both purchasing power, but also lending growth overall. Unemployment levels remains low at around 2%, and that is, of course, also positive when looking at the potential in terms of loan growth going forward as well as consumption ahead. The Norwegian Central Bank has decreased the key policy rate twice by 25 basis points and now have a key policy rate of 4%. Our economists believe that there will be one further rate cut in June next year, which means that we will level out on a key policy rate of 3.75%, a very healthy level also for an economy such as Norway.

When turning to the quarter, we delivered a solid third quarter result with a return on equity of 15.8%, earnings per share of NOK 6.98, an uptick of 2.8% from the last quarter and year-to-date, an earnings per share of NOK 20.81. In the quarter, we saw net interest income coming down by 1%, impacted by the key policy rate, customer repricings and product mix effect. We saw a positive and profitable loan growth in all customer segments, but mainly pointing to Personal Customers increasing by 0.4%, Corporate Banking Norway being relatively stable this quarter also due to the fact there wasn't any major uptick in terms of new builds of houses. Large corporates increased by 0.5%. But underlying in that portfolio, there was significantly more movements than what you can see in those numbers. So actually, the activity picked up also during the quarter.

On deposits, we saw an increase of 0.6%, a seasonal decrease in Personal Customers and increase in Corporate Customer Norway also seasonal linked to the public sector. Underlying SMB customers, we had an uptick in deposits of 2%. Large corporate had an uptick in deposits of 8.5%, driven by 1 less tax payment within the oil industry. We continue to see a good and solid and well-diversified fee platform. Net commission is up 28.9% from the corresponding quarter last year. Underlying asset under management growth was NOK 54 billion in the quarter, net NOK 15 billion due to the fact that we also divested the Holberg portfolio in the quarter. There is also a strong activity and investment banking pipeline moving into the fourth quarter, but also good activity on the equity capital markets side, not the least as well as debt capital markets in the quarter where we saw a significant uptick towards the end of the quarter.

Our credit portfolio continues to be robust and well diversified. 99.4% of the portfolio is Stage 1 and 2. Of the total impairment provisions taken this quarter of NOK 862 million, Poland accounts -- the legacy portfolio in Poland accounts for NOK 281 million and the model adjustment of the expected credit loss model impacting Stage 1 and 2 in Personal Customers as well as Corporate Customer Norway amounts to NOK 150 million. That means that the underlying impairment provisions of the portfolio -- customer portfolio is NOK 431 million. There are no systematic changes in the portfolio. And overall, both the Personal Customers segment as well as the Corporate Customers segments are performing well and show a very solid development. Core equity Tier 1 of 17.9%, 135 basis points above the regulatory expectation, also taking into account that we today launched a new share buyback program of 1% in addition to the one that was completed during the third quarter.

So with that, thank you for your attention, and we open up for questions.

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

So I just wanted to ask about Poland loan loss provisions. You see that there's been surprisingly little disclosure around this in recent quarter given the size of provisions. I think in Q2 -- sorry, in Q1 this year, you just said it wasn't very material. Then in Q2, you said you took NOK 152 million, but mentioned that this was lower than the undisclosed amount you took in Q1. And now you took an additional NOK 281 million of losses this quarter then. So that means you've taken well north of NOK 0.5 billion in '25 alone, right, which has elevated your loan loss provisions ratio at least from my calculation, 3 basis points.

So I mean, provisioning for the FX part of the Polish lending portfolio seems to be just below 50% now based on what you said in the call earlier. Are you comfortable with this level of provisioning? Or is there possibly more to come? And what do you think you would just benefit from giving some more numbers on this? For example, I mean, the ECL adjustment of NOK 150 million, you've got the bullet in the credit quality slide of the presentation deck, right? But this Polish provision, which is almost twice the size it was already mentioned in [indiscernible] I mean, wouldn't it be better to just give a slide on this showing what you've taken in each quarter and how provisioning has evolved and so on?

Thank you so much, Martin, and we'll take your feedback into account and hear what you're saying. If we look at the Polish portfolio, as we've said before, this is related to a legacy currency portfolio, of which we have total outstanding loans of NOK 3.7 billion, as you rightly point to. 88% of that portfolio is in euros, 2.3% in Swiss francs and the remaining is in zloty. We have taken accumulated provisions of NOK 1.6 billion related to this portfolio. The reason why we've taken added provisions this quarter as well as the last -- the previous 2 quarters has not been in relation to change of activity among the customers, but more the fact that we have taken different approaches in order to try to solve this situation and really see how we can work with it.

In addition to the fact that we, of course, follow this portfolio very closely in terms of movements and also actions from -- reactions and actions from the customers. The impairment levels that we have taken today are in line with our best estimate given the information and also the development we've seen in the portfolio and also the development overall. So it's impossible for us to say if there will be more impairments or if it will not because that would have meant that we would have to take that today. On the other hand, if we continue to see a growth momentum in terms of solving these issues, that will also impact impairment provisions going forward. But today, we are very comfortable with the levels that we've taken, but follow this closely also ahead.

The next question comes from the line of Markus Sandgren from Kepler Cheuvreux.

So first one on commission income following the downturn this quarter. I think you've said that you expect to have a 9% growth in the coming years. And I was thinking there is less than half that comes from Corporate Finance and Asset Management and the rest has been at least historically growing pretty slow. So what -- I mean, if you -- could you elaborate a bit on how do you see this commission income pan out in the coming years? What should we expect from Corporate Finance, for example, in terms of growth year-on-year?

I can start by giving some more general comments and then maybe ask Alex to give some more flavor on this quarter. I think it's a substantial and growing portion of the fee and commission that stems from asset management and investment banking. And those are also the key engines that are fueling the growth that we do expect and talk about when we talk about expecting above 9% growth on an annual basis. I think if you trail back and adjust for changes in accounting principles, you will see that our trailing growth pace over previous years has been somewhere between 6% and 7%. So that should be a representative number for what the before -- looks like before the Carnegie transaction that is.

And then we will not be able to break out for you the expectations related specifically to Investment Banking or Asset Management. But needless to say, they need to be at an annual pace above 9% in order for us to deliver on the 9% in total fee and commission. Rationale is slightly different if you look at investment banking versus asset management. But from my side, I will refer to the complementarity of the businesses, the strengthened offering, the platform that we now have as a leading Nordic bank and also judging from the feedback that we already see from customers and the position that we have across RFPs and mandates that we see coming in that confirms the business rationale as we have seen it.

Asset Management, I think the strength of the platform is demonstrated also this quarter with an increase in assets under management by NOK 54 billion and divesting a sizable volume like Holberg isn't even visible in the numbers. We again also talk about a record high level of savings agreements, which is one of the main engines related to the retail area, where that, in addition to the defined contribution are very sticky and continuously growing amount, adding attractive assets to our total base on a monthly basis. So I think these are the drivers. And yet again, compared to historical pace with some changing accounting principle that makes it look less out of the box, the real sort of growing number has been between 6% and 7%. But Alex, maybe you can add some more flavor to this quarter.

Thank you, Kjerstin. Well, first of all, to say that I guess it's 366 days exactly since we announced this combination. And the starting point was a very, very good fit in terms of the complementarity that you talked about, Kjerstin, both in terms of geography, in terms of products and in terms of sectors. And we feel that, that has played out as expected over, say, the course of the 6, 7 months where we have been one combined entity. If we look at the business in the quarter, stronger in terms of capital markets, both on ECM and DCM and a little bit softer on M&A, if you ask about Corporate Finance in particular, especially the ECM momentum was strong towards the end of the quarter and into October.

As you know, Carnegie has an incredibly strong ECM platform that's been a driver of their business over -- for many years. If you, for instance, take the 30 largest IPOs in the Nordic region in the last 5 years, we combined have been an adviser on all of them, and we've led 25 out of the 30. And that's perhaps the area where we see the most visible business momentum at the moment, but only, say, one significant IPO closed in the third quarter, and that was the IPO of NOBA in Stockholm. And then we've seen significant market transactions into October, most notably the IPO of Verisure that listed in Stockholm on the 8th of October. And I think that's a good example of sort of synergies or business that one or the other firm wouldn't be able to do on their own because it was a combination of products that got DNB Carnegie invited into the RFP.

And of course, a fantastic effort and outcome both for the company but also for the legacy ECM Carnegie platform that brought this company to Stockholm in what is then the largest IPO in Europe in the past 3 years and the biggest one in Sweden in 25 years. So we do feel that there are significant successes that sort of validates the merger rationale, and we look quite optimistic upon our sort of positioning.

And if you look at the investment banking across the Nordic region, using data from Dealogic, year-to-date, we are a very clear #1 across products then ECM, DCM, M&A and loans. And our market share is, I guess, more than 50% larger than #2. So we do feel that the sort of business logic is being validated every day, and we do feel that we do get a lot of positive feedback from clients and that sort of makes us optimistic for the continuation. And then lastly, maybe just to highlight, it's still early days. We've been a combined sort of entity and brand operating since May. And it's going to be -- in some sense, this will always be a bit of a transition year because it takes time to build this business together.

[Operator Instructions] The next question comes from the line of Shrey Srivastava from Citi.

First, I'd like to say thank you to Ida for answering all of our questions over the last few years. I'm sure it can't have been easy. My question now, I want an updated assessment on the competitive dynamic for mortgages in Norway. I know this is a key feature of last quarter. And you mentioned you were prioritizing sort of margins over volumes. What is your updated assessment after the third quarter results? And how do you see the change in the dynamic from the change in risk weight floors?

Sorry, in terms of the changing dynamics on the competitive landscape, first of all, I think it's important to look at -- on the Personal Customers side, we've always talked about a strong competitive market, but rational. And we continue to say that the market is indeed rational with all the largest players focusing on profitability above growth. On the other hand, you also see that there is growth in the Norwegian market compared to other markets in our neighboring countries where there are less limited growth. That means that a lot of the Nordic players are also focusing on positioning themselves in the Norwegian market.

So what we're saying is that there is continuous strong and fierce competition and perhaps a bit elevated also in the periods where there are rate changes, which is also natural due to the fact that the customers then become even more active in looking at the loans. Having said that, I think for us being the largest player and also maintaining the position as being the largest player with a good room -- headroom above the second player is important for us and also shows that we have continued to focus on profitability above growth, and we'll continue doing that also going forward. If you look at the Corporate Customer segments, we are also seeing strong competition on the -- especially on the small and medium-sized enterprises. But again, I would point to a strong rational behavior and the same goes for large corporates, where there aren't really any changes to speak of in terms of competitive landscape.

And maybe just to add, since you mentioned specifically the risk weight floors. Naturally, this has increased the competitive edge or cost of capital, if you will, related to mortgages for the standard model banks. And we do see some impact of that insofar as they are slightly more aggressive in the market. We are not particularly concerned by that. It's just one piece in the element of competition. They represent roughly 20% of the market. And I think it's tough to grow as a small bank regardless. So it's not anything that we expect to materially impact the total picture overall.

The next question comes from the line of Sofie Peterzens from Goldman Sachs.

This is Sofie from Goldman Sachs. So my first question would be on your exposure to U.S. renewable energy. There was a press article maybe a couple of weeks ago where the regulator was kind of looking, I guess, at your U.S. renewable exposure. Is there anything you can add here? Do you see any risk for any higher risk [ weight ] for this exposure class or anything else that the regulator potentially could do? And if you also could just let us know how much exposure you have to U.S. renewables.

And then my second question would be, we have now heard a couple of other banks kind of talk about the need to invest maybe a little bit more to grow top line. Does DNB see any need to make any additional investments to grow revenues over the coming years?

So if we start with the report that came from the NFSA. -- and as you all know, the NFSA make all the reports public, and that's why some of them make headlines in terms of Bloomberg, and I think this is what you're referring to. What the NFSA pointed to in their revision of our U.S. operation was that we have had a relatively strong growth in the renewables area over the past few years. They also pointed to the fact that in a situation where you're growing in areas that are, in their view, new and unexplored not for DNB because we have a 15-year experience from working in this industry and understanding the industry, they are pointing to that there are, of course, risk factors, both geopolitically, political risk and other factors that we need to take into account.

We are not seeing anything in that report and also not in the discussions with the regulator following that report or that examination to say that we would need to change our models related to renewables. We are very comfortable with the position that we have there, the exposure that we have in the U.S. and the exposure that we have overall in renewables, which has been an area that we also believe that we can fill an important role globally, bearing in mind our know-how. The power and renewables portfolio accounts for 4.2% of total EaD in the group. And I think it's fair to say that we are seeing less activity in the U.S. renewables portfolio today than what we did a year and 1.5 years ago, and that we expect to continue to see also going forward. The growth that we're seeing today is more related to the U.K., for instance, where we're seeing carbon capture storage initiatives as well as other wind projects being initiated in other parts of the world rather than in the U.S.

And just to add, when Ida talks about 15 years of experience, that's 15 years of experience doing renewable renewables outside of Norway. If we look inside of Norway, we probably have 100 years of experience given the fact that all energy in Norway practically are renewable, the one that we are consuming. You asked the question related to the need to invest in order to grow. We have invested in Carnegie. That has given us a tremendous platform to grow our activity in the Nordics. Beyond that, I would not say that we have a material investment need in order to be able to deliver the growth that we have talked about targeting for the future.

The next question comes from the line of Thomas Svendsen from SEB.

So a question to the corporate, the lending markets -- lending margins in the corporate customer segment in Norway. So several of the smaller banks launching this growth ambitions in this segment, while you are disciplined, showing no growth this quarter. But do you think it's fair to assume that sort of the equilibrium margin above the LIBOR is lower to sort of get growth in this segment given the competition?

I think it's a very sort of challenging question to give a straight answer to if you're taking the corporate market as a whole, all the way from SMEs up to the larger ones or maybe you're asking midsize and larger ones. I would not say that one quarter is sufficient to judge this at all. I think local banks cooperating and regional banks going national certainly adds into the competitive picture, but still within what we would define as a rational framework. If you look at the volumes, yes, in Corporate Banking Norway, they are flat end quarter to end quarter. But I reiterate that when we look at the regions, we do see growth in 4 out of 5 regions in Norway and a healthy development of the portfolio.

So performance-wise, we are more or less on par with the growth that we have been used to delivering, lacking, of course, the volumes related to house construction activity. So I'd say there's no concern there, and we believe this continues to be an attractive area for growth. Talking large corporates, if you look at 12-month growth, it's 10.2%. We always say that you need to look at more than 1 quarter. It can be choppy from quarter-to-quarter in view of the very rapid turnover in this portfolio with a duration of less than 2 years. The quarter that we have just reported on also held high activity on refinancing, in particular, substantial takeout of several bridge to bond facilities. So I would not confirm that we see what you describe as a trend to be a trend, and we're comfortable with our ability to continue to grow profitably across these 2 areas.

The next question comes from the line of Riccardo Rovere from Mediobanca.

Two or 3, if I may. The first one, I just want to get back to the initial question, Polish provisions. But just in Poland, one of the reasons I believe that why today, the share price is down 4% is because, a, almost NOK 1 billion of provisions were not expected. Now your level of provisions is not only larger than that of the other Nordic banks, but it's also much more volatile. Now you have almost NOK 3.9 billion of expected loss deduction in your capital already deducted. Did you ever consider to increase the coverage ratio to take provisions in the P&L, maybe in Q4 in all the areas where you see some problems given that this would unlikely affect your capital, given that, that stuff is already deducted in one way or the other, so to make that line of the P&L a little less volatile. And that should not even impair your ability to pay dividends because that thing is already deducted. It's almost NOK 4 billion. It's a fairly large amount deducted from the capital base already. This is my first question.

The second question is in -- with regard to risk-weighted assets, if you -- if I strip out the impact of the floors on the mortgage book, risk assets are kind of flattish or maybe even a little bit down quarter-on-quarter. So I was wondering if you had any mitigation, if you executed any mitigation action in the quarter, SRTs, anything like that? Then I have another question on deposits in the large corporate. I don't know if [ Harald ] is on the call or not, but deposits in the large corporates have gone down quite significantly. Okay. I understand the seasonality, but the seasonality seems to be much, much larger this year than what I have on the back of my mind.

And then I have a very, very final question, if I may. I mean those are facts. Whenever you report numbers on a quarterly basis, and this is not a criticism, this is nothing. It's just that. That day, the stock generally is down like today. Now is that a problem for you? Do you see -- do you think is this disturbing for you? Or you think maybe you could change something in your communication on anything to prevent that basically 3x out of 4, the share price is down whenever you report the numbers?

Thank you, Riccardo. I'll leave the 3 first ones to Ida. But on the last one, let me just be very, very clear that we do not manage our business in view of expectations for share price development in one way or the other. And we do our utmost to be as clear and transparent as we see fit with regards to communication. And in general, the feedback that we get from most of our owners is that we have detailed, transparent and very open reporting. We believe that our focus should be on building a valuable business work systematically, which is what it takes in this business in our experience to create value for customers and through that actually create value for shareholders. And we believe that needs to be assessed over time. And if you look at the statistics over time, that is a fairly good testament to us having done exactly that. With regards to the other 3, I will hand it over to Ida.

Yes. Thank you, Riccardo, for your questions. In terms of -- I think it's important to say that over the past 15 years or even longer than that, we have worked quite diligently on diversification of the portfolio. That has taken down cost of risk over time. And we've also seen that, that's kind of if you look at it average 5 years, that has meant that we've taken down cost of risk from 21 basis points, which was the average then down to 12, 14 basis points. And this quarter, the underlying cost of risk is 8 basis points. Then, of course, I can see that there is always challenging to see that there is model adjustments. Expected credit loss model is expected to be updated on a general basis -- on an ongoing basis.

We have today and this quarter updated our expected credit loss, which is also in line with the expectation from our external auditor as well as the regulators. And this is something that we do on an ongoing basis to ensure that we also link it to your first question, in terms of management overlays. I know that other banks are working with significantly larger management overlays. Our understanding of IFRS 9 and also in close dialogue with the external auditors is that, that's not something that they prefer to see and also not something that is in line with the regulatory requirements on IFRS 9. But then I can see your point from an analytical point of view that, that would make it a lot easier in terms of seeing that there is less volatility, but that's not how we have interpreted regulatory regime and also not how our external auditors have interpreted.

When moving to your second question in terms of risk-weighted assets, yes, there is indeed a decrease. And if you look at Stage 3, you can see that there is a significant decrease in overall exposure in Stage 3, which is related to a sale of an exposure that was there for quite some time and therefore, reduces risk-weighted assets. And then you can see that, that's also, to some extent, being changed with low-risk exposure in the large corporate area. We are continuously working with securitization. As we talked about a year ago, we did the first securitization, and we are also now looking at new opportunities within securitization, which will be an important tool also going forward in order to ensure that we optimize the capital position and utilize the capital in a smart and efficient way as possible.

You also point to your last question in terms of large corporates and the deposit volumes there. It's true that underlying it's a decrease of 0.7% in the quarter. FX adjusted is an increase -- sorry, it's an increase of large corporate deposits of 7.4%. FX adjusted, it's an increase of 8.5%. I believe you might have then talked about the corporate customers in Norway when you said that there was a decrease. Am I correct in assuming that?

LCI over the year, I think.

No, it was actually LCI because if I look at your fact book, the amount of deposits in LCI was [ NOK 512 million ] in -- this is Q1, went down to [ NOK 462 million ] and now it's down to [ NOK 450 million ]. I don't know, maybe it's the dollar. The dollar has an effect here, maybe.

A very large amount of our deposits in the large corporate area is, first of all, time deposits. And second of all, it's dollar-denominated. So therefore, you will see an effect of that. As we mentioned in the second quarter, we had a larger decrease in deposits related to a few customer-specific situations in the large corporate area. Some of that has come back this quarter. But again, these are volatile deposits that are not as important from a funding perspective, but are still very profitable for the bank and therefore, it's something that we continue to work on as being part of the proposition to the large corporate area.

But overall, in terms of margin development and underlying growth on an NII perspective, these deposits are not as relevant for us as other deposits which is important then to look at when you look at the corporate customer area, for instance, where we mentioned earlier today that the underlying growth in the SMB segment is up 2%, while you see a decrease this quarter related to the public sector, which is again low-margin deposits.

Okay. If I may, just a very, very quick follow-up. When you mentioned the Verisure IPO, that was, if I'm not mistaken, more than EUR 3 billion IPO. So it's kind of more than SEK 30 billion IPO. Your role was, not mistaken, global joint coordinator, so it was not junior at all. Am I right in saying that you could book hundreds of millions of NOK in fees in Q4 on the back of that? If I may ask.

I guess there are -- it's Alex here, Riccardo. Thank you for your question. It's correct. So this was a very significant transaction, as I mentioned, the largest one in Europe, I believe, since the Porsche IPO in 2022. And the role that DNB Carnegie had in the IPO was one of 3 lead banks and the other 2 were U.S. global investment banks. And this will be a good event for our business. And it's Q4, as you say.

We currently have no further questions. [Operator Instructions]

If there are no further questions, we will thank you for your valuable questions and wish you a nice day. Thank you very much.

Thanks. Bye.

Thank you.

Thank you.

Good morning, everyone, and welcome. Welcome to everyone also watching us on the stream, this will be the presentation of our third quarter results in DNB Group, and we are looking forward to present the results for you. Kjerstin and Ida will go into the details shortly.

The emergency exits are in the front you left and in the back. But there are no planned drilled today. So if there is a fire alarm, it's for real.

So there will be questions later, both here in the audience and possible to ask questions for those watching on the stream.

And I'll just leave the floor to you, Kjerstin, to get on with it.

Thank you very much, Even, and a very good morning to all of you, and a warm welcome to this presentation of our third quarter results. We are presenting a strong set of numbers, reflecting the summer season where a couple of months are slower for parts of the activity of our business. But overall, steep and increasing activity towards the end of the quarter. The Norwegian economy continues to do well, and this is well reflected both in the customer activity across our business, but also in the robustness of our portfolio.

I wanted to start by sharing a few highlights from the quarter. The first 1 actually after the quarter because only a few days into the fourth quarter, the transaction related to listing Verisure on the Stockholm Stock Exchange closed. We had the honor of being a global joint leader of this transaction. And it was the largest listing in Stockholm in more than 25 years, the largest listing in Europe since 2022, and it marks the strengthened brand and platform we have with DNB Carnegie.

Our assets under management continues to grow to a record level, NOK 1,579 billion, driven by market valuation and net inflow, and we continue to grow despite having sold Holberg in the quarter.

One of the key drivers is successfully launching new products. We have launched 4 new products so far this year, and this has driven NOK 5 million of -- NOK 5 billion of net inflow.

Making life easier and simpler for our customers is something that we always strive for. And this quarter, we have launched several new initiatives, 1 of them a fully digital process not only to register your company but also onboard your company in the bank. And each of these processes, saving our customers 18 days in the process.

By using amongst other, artificial intelligence, we are also simplifying the customer journey across services and across our platforms. And this has within the last year, led to an 18% reduction in number of service inquiries by our customers. And as usual, I do think it's appropriate for me to give a big shout out to the organization that works so hard every day to deliver on our mission to make life easier and the economy better for our customers at large.

Now maybe over more to the numbers. Return on equity for the quarter at 15.8%, which is well above our targeted return of minimum 14%.

The net interest income in the quarter is down by 1% compared to the previous quarter. This number is positively impacted by growth both on the lending side and the deposit side and offset by repricings that have been done and taken effect during the quarter as well as product mix effects.

Net commission and fees, a strong 28.9% increase from the corresponding quarter last year. Key engines or drivers, if you will, are investment banking and asset management. In Investment Banking, we see high activity across ECM, DCM and a somewhat lower contribution from M&A this quarter. Asset Management already referred to record numbers and attractive both market valuations and net inflow into the business.

And other area that stands out very positively this quarter are our activities on the insurance side, both in the life insurance and the non-life insurance.

Costs are down, reflecting our continuous efforts to increase efficiency and scale. We have a robust and well-diversified portfolio across industries and geographies. We do take impairments of NOK 862 million this quarter, but it is important to highlight that impairment on the underlying activity is for NOK 131 million, which corresponds to a cost of risk of 8 basis points.

Core Equity Tier 1, 17.9%, 135 basis points headroom to the FSA expected level. And this number also reflects a reduction of 40 basis points related to the additional 1% share buyback that was announced earlier today.

Earnings per share up 2.8% from previous quarter. Year-to-date, a total of NOK 6.98, year-to-date NOK 20.81, a solid platform to continue to deliver on our dividend policy.

A few comments on the Norwegian economy. New data and economic update has shown that growth was higher than thought actually in the first half of the year. So the growth estimates for the year has been updated and is now believed to come in at around 1.8%, a very healthy level of growth, and it's expected to stay roughly at this level for the coming years.

Unemployment remains low and the regional business survey that is published by the Central Bank supports both the growth outlook and the unemployment with a very positive results.

Inflation continues to move down. With lower inflation, high wage growth, we see drivers for increased consumer spending, which is an important driver for further economic growth.

The Central Bank decided to cut rates for a second time in September this year. Ahead in the forecasting period, the expectations of DNB Carnegie is for 1 more rate cut to take place and that to take place in June next year taking the key policy rate level to 3.75% and thereafter, stay at that level for the remainder of the forecasting period.

Needless to remind you, the world is an uncertain place these days with geopolitical tension around us, more importantly, the robustness and the resilience in the Norwegian economy continues to be very visible, and this is what matters the most for our business.

A few highlights from the main business areas. An additional strong quarter from Personal Customers, 2.7% growth in lending year-over-year and a quarter where there's been a high interest from customers in not only financing new homes, but also looking for a new bank and many of them selecting DNB and our Sbanken brand who have had the strongest growth in a quarter in a month that they have seen for more than 15 years.

Attractive revenue and Other income, strong cost discipline and very low losses leads to attractive return on capital of 19.6% for Personal Customers.

In Corporate Customers Norway, volumes at the end of the quarter are relatively flat. They do increase if we look at the average volumes throughout the quarter. And the underlying activity and growth across regions are positive with growing demand and growing volumes, driven primarily by seafood and somewhat energy. There is a solid contribution from Other income, in particular on the life insurance and defined contribution pension this quarter. Also here, cost discipline, certain customer-specific impairments have been taken, but even so a return on allocated capital of above 20% for this part of our business.

In Large Corporates, pretax profit is down compared to the previous quarter. And second quarter is usually a slower quarter, in particular, in Other income, where we are comparing to a record high quarter third quarter 2024, which was also impacted by positive market-to-market effects. Volumes are up by 0.5 percentage points. Underlying activity is, however, stronger in the business. There's also been a high activity in refinancing, typical transactions related to bridge to bond, which indicates a strong activity related to new business to get to the 0.5 percentage points growth. Year-over-year growth on lending here is 10.2%. A solid contribution from Other income certainly on ECM again and DCM, but also here, we see the lower contribution from M&A.

Wealth Management revenue in this area continues to grow.

In the Nordics, we are building on our strengthened growth platform. If we take DNB Carnegie and look at the rolling 12-month revenue, it's up by 12.3% compared to last year. This is driven, of course, by the Carnegie acquisition, but also high activity on the ECM and DCM side.

Equity capital markets are open. We do see an increasing number of RFPs and mandates coming in. And we are expecting to see more of the business materializing after having been pushed out in time after the trade turmoil earlier this year.

Wealth Management, again, we see a revenue compared to last year, that is up by 26.8%, a key driver, obviously, market valuation, but also very attractive flows into the business. And of course, the acquisition of Carnegie with Carnegie Fonder and Private Banking in Sweden that broadens our platform.

Because I would like to highlight that even more importantly than this quarter is the strengthened growth platform that we have across these 2 business areas.

The position stands out very strongly with a clear leading position as the Nordic Investment Bank. We have done 3 of the -- we have been a leader in 3 of the 4 largest IPOs in Europe so far this year. And in equity research, we hold the #1 position in 16 out of 21 sectors and are among top 3 in the remaining sectors.

For assets under management, it's a broader platform, well positioned for further growth.

And then it's time for me for the last time to welcome my copilot for several years on to stage for the last time. And it is also more than appropriate for me on behalf of DNB to thank Ida for her service and commitment to our activity, our business and our shareholders for many, many years across different roles where she has added substantial value in so many characters.

So Ida, the stage is yours.

Thank you, Kjerstin. And thank you to the entire team for allowing me to be here for 18 years. It has definitely been the best 18 years of my life so far. So thank you all.

Now moving over to the third quarter. We note good activity across the group with currency adjusted profitable loan growth of 0.3%. We continue to see a good momentum in the Personal Customer segment, where the lending volumes were up 0.4%. And as Kjerstin pointed to, with an uptick of growth towards the end of the quarter.

Corporate Customer Norway was stable in terms of lending volumes. But this segment is, of course, also impacted by the fact that there's continues to be a low activity in the construction of new houses, which is usually a strong engine for growth in the corporate customer area.

Large Corporate and International are up 0.5%. This does, however, not fully reflect the underlying development in the portfolio, where we're seeing several larger bridge to bond transactions being taken out in the quarter and good momentum in terms of new businesses.

Currency-adjusted deposits were up 0.6%. The decrease of 1.8% in the Personal Customer segment are driven by seasonality. The reduction is, however, lower than what is usual for a third quarter and should also be seen in connection with this good increase we're seeing in asset under management from the retail customers.

Corporate Customers are down 3.9%. This is driven by a seasonal effect related to the public sector where there is a monthly -- where there is no monthly contribution from the state to the municipalities in August, but it is so for the remaining months of the year. The underlying deposit growth in Corporate Customer Norway is actually up 2%, which is, of course, a positive testament to the momentum in the overall society.

Large Corporate and International saw an increase by 8.5%, predominantly driven by the fact that there was only 1 petroleum tax payment in the quarter. We continue to maintain a strong deposit-to-loan ratio within the Customer segments of 73.6% in the quarter.

Net interest margins were affected by interest on equity and other NII and is down by 5 basis points. Combined spreads are stable. The underlying development in combined spreads are somewhat weaker than what can be seen here related to product mix effects and continued strong but rational competition in the market. For instance, Large Corporates, we noted a high margin bridge bonds, as mentioned before, being replaced by lower-margin loans. In the Corporate Customer area, we also saw a decrease in low-margin deposits stemming from the public sector being replaced by larger, higher-margin deposits from the SMB segment.

Net interest income decreased by NOK 162 million in the quarter. Volume growth and FX effects increased NII by NOK 142 million, and 1 additional interest day contributed positively by NOK 129 million. Spreads are affected by the rate cut, product mix effects, as mentioned before, and continued strong but rational competition in the market.

Interest on equity is down by NOK 202 million, affected by changes in the money market rates and lower average equity following the dividend payment made in May as well as the concluded share buyback program.

In the fourth quarter, we will see full effect from the first repricing being implemented 25th of August as well as partial effects of the second repricing being implemented mid-November.

We continue to benefit from a robust and well-diversified fee platform. Customer activity picked up throughout the quarter and in addition to what you can see on this slide, we are also noting positive momentum from the DNB Life Insurance business as well as the non-life insurance company, Fremtind, as you can see on Other income.

Net commission and fees on this slide is up NOK 878 million or 28.9% from an all-time high third quarter last year.

Real estate broking was up 9%, reflecting the higher activity in the real estate market.

Investment Banking Services was up by 73%, driven by the inclusion of Carnegie and a strong deliveries within equity capital markets and growing so also from debt capital markets.

In M&A, as Kjerstin mentioned, activity was lower than what was noted in the similar quarter last year, but particularly related to the maritime industries as well as energy.

In Investment Banking, we note a solid pipeline within equity capital markets as well as debt capital market, where several transactions already have been completed in the fourth quarter, and more mandates are expected to come.

Asset Management and Custodial Services was up 67%. There was a continued growth in asset under management in the quarter, net up NOK 15 billion when adjusted for the sale of the Holberg divestment.

Underlying asset under management was NOK 54 million in the quarter. And we noted positive net inflow from both Personal Customers, the retail segment as well as institutional customers. And we continue to see a positive development in terms of number of long-term savings schemes.

Guarantee commissions were down by 6%, driven by lower demand for trade finance.

Money Transfer and Banking Services were down by 19%. The positive contribution that we're seeing from the seasonally higher transaction and international travel activity was offset by costs and reduced contribution from banking services.

Banking Services was, among other things, impacted by fewer cars being sold from DB Finance and also insurance premium costs related to exposures in Large Corporate and International. The latter is a tool used for capital efficiency increased originate and distribute and also generates overall profitability to the group.

Sale of insurance products was up by 21%, supported by continued good income from defined contribution in our non-life -- in our life insurance business, and positive development also in the non-life insurance business.

Moving on to costs, where operating expenses are down by NOK 242 million, reflecting seasonally lower activity. Fixed salaries are down by NOK 126 million quarter-on-quarter, NOK 45 million of these are related to seasonal effects in our Swedish operation where the vacation days are deducted from previously accrued costs. The rest relates to fewer full-time employees in the group.

This quarter also includes one-off costs amounting to NOK 55 million, of which NOK 25 million relates to the announced decrease in number of full-time employees in our operations area and NOK 30 million to the integration of Carnegie.

Over to portfolio quality, which remains robust and is well diversified with 99.4% being in Stage 1 and 2. We note impairment provisions totaling NOK 862 million in the quarter, NOK 150 million of these relates to an update of our expected credit loss model. This impacts impairment provision in Stage 1 and 2 in the Personal Customer segment as well as in the Corporate Customer segment.

In addition to that, we have taken NOK 281 million of further impairments related to our legacy portfolio in our Polish -- in Poland.

Impairment provision as Kjerstin mentioned, in the underlying portfolio amounts to NOK 431 million, equivalent to cost of risk of 8 basis points.

The overall portfolio in the Personal Customer segment as well as in the Corporate Customer segments are strong with no signs of deteriorated quality.

In the Personal Customer segments, there are fewer customers with installment holidays and defaulted loans today than what we saw a year ago.

In the Corporate Customer segment, we have fewer customers on watch list, and we continue to see a good momentum.

The impairment provisions in Stage 3 for Corporate Customer Norway related to customer-specific situations in the same sectors as we pointed to before, namely real estate related.

The overall portfolio quality here continues to be sound and robust with a limited portion of the exposure in high risk. We remain comfortable with our credit quality in the overall portfolio.

And now moving on to capital. The Core Equity Tier 1 capital is strong at 17.9%, 135 basis points above the regulatory expectation. The Core Equity Tier 1 was positively impacted by profitability, 30 basis points, which was offset by the increased risk weight floors in the residential mortgage portfolio, leading to a reduction as announced previously of 60 basis points.

We finalized the previous share buyback program during the quarter and are today announcing a new 1% share buyback program impacting the Core Equity Tier 1 by 40 basis points this quarter.

Leverage ratio remained strong at 6.3%, well above the regulatory requirement of 3%.

With a Core Equity Tier 1 of 17.9% and a leverage ratio of 6.3%, our capital position remains strong and enables us to continue to deliver on our dividend policy.

So summing up, we delivered a strong set of results in the third quarter reflected in these key numbers. Return on equity came in at 15.8%, earnings per share at NOK 6.98, 2.8% increase from the last quarter, cost income at 37.4%.

And with that, I thank you for your attention, and we now open up for Q&A.

Thank you so much, Ida. Thank you, Kjerstin. So this is the last chance you have to ask Ida difficult questions. Any questions from the audience?

To Ida.

Yes, Roy from Arctic.

So Roy Tilley from Arctic Securities. So a couple of questions. Just on the customer revenues in DNB Markets, they were a bit down year-on-year and also the year before. Is that expected? Or are you surprised? That's the first question. I think there was NOK 700 million this quarter. So it's 20% down versus Q3 '24.

And on the activity levels after the September rate cut. I remember after the June rate cut, you had record high activity on mortgages. How was this in September? Was it the same or less this time around? I can start there.

1 more, actually. On Poland, just the legacy portfolio, can you just remind us how big is that portfolio? How big is the provisions now? And should we see more?

Thank you, Roy. I'll do the 2 1st ones, and Ida can do the latter. Third quarter DNB Carnegie is a good quarter, but it's a lower quarter than same quarter last year. And this -- we see strong areas such as DCM, equity capital markets in DCM, particularly on the investment-grade side. If you look at customer revenues, it's also on the fixed side that there is lower activity, lower activity related to interest hedging and somewhat lower on FX. And these are natural volatility for that part of the business, I would say.

As for M&A, it's typically the part of the business that varies from quarter-to-quarter. Third quarter last year, particularly active driven by, as Ida was saying, the maritime sector and transactions in the energy sector, an exceptionally high quarter for us. And this piece was lower in the third quarter.

So there's nothing that stands out that we would like to comment, rather emphasize the strong growth platform and that this business needs to be seen over a longer time than a quarter, and we're very happy with the development and what we see going into the fourth quarter.

Activity level after September was also very strong. Hard to say if it's exactly at the same level, but we continue to see that customers are focused on what their terms are, where they do their banking. And we think that's a very positive thing. It's healthy competition, and it does remain rational. And of course, we were delighted to see that so many customers wanted to come in and join Sbanken. But even in the DNB brand, we have seen a 10% increase in financing certificates. So this is a strong September and end to the quarter for all of our business in the Customer segment related both to pricing but also to the offering at large.

And in terms of the loan book in Poland, we have a total loan book of NOK 3.7 billion, of which we've taken accumulated impairments of NOK 1.6 billion as of today.

What's important to say, and I'll give you a bit more details in terms of the portfolio, 88% of the portfolio is euro loans and only 2.3% is Swiss franc loans, which is exposed in terms of the recent developments we've seen in terms of rulings from the court.

The reason why we're taking larger impairment this quarter as well as last quarter before that is not due to the fact that the customer are changing in terms of behavior or anything like that, it's related to our proactivity towards the customers where we've tried different solutions really to find a long-term solution here, which is impacting the impairment provisions, but not underlying development in the portfolio.

We are continuously monitoring the development and are comfortable with the impairment provisions that we've taken overall related to this portfolio as of today.

Thank you. You can toss the mic to Thomas Svendsen from SEB.

So on the capital, this big difference between your posted CET1 ratio and the FSA expectation. Should we expect that to come down over time, let's say, the next 2 couple of years? That's the first question.

And second, as you pointed out, there are sliding corporate -- large corporate lending margins. Is this a trend that we should expect to continue throughout the next few quarters?

In terms of the Core Equity Tier 1, you're right, we have a good buffer, 135 basis points per the regulatory expectation. What needs to be also taken into account when looking at this number, is that we have a Pillar 2 guidance of 125 basis points within that expectations, which is significantly higher than our Swedish peers, which I believe is around 50 basis points.

So we have a buffer on top of the buffer so to say, and therefore, we are also very well capitalized where we are today, and that's also why we are launching a new share buyback program.

We haven't changed our dividend policy. That stays firm. We're going to continue to focus on an increased nominal cash dividend year-on-year and utilize share buybacks as a flexibility tool to optimize the capital position. But where we are today, I would say that we are very well capitalized.

And in terms of LCI and the lending margins. As I pointed to, and Kjerstin also mentioned, we're seeing some movements within the portfolio in terms of larger bridge to bonds, which have higher margins being taken out in the quarter and being replaced by lower margin and also low risk in large corporates.

In addition to that, there is a fierce competition out there. There is a lot of very solid, well-capitalized banks out there, which, of course, also has an impact in terms of the overall market developments. But this quarter, it's predominantly the impact of the fact that we're shifting large portions of transactions which are different in terms of lending margins.

And we do not see a basis to be able to call it a trend.

Any more questions? Herman Zahl from Pareto.

Just on the competition within PC, Personal Customers currently. Since lending spreads are up by 16 basis points. So it seems like you have given some more repricing downwards than would be suggested by the conventional 25 bps and that your communicated repricing effective date. So -- and you're not growing that much in the quarter either. So I know you're stating and saying that competition remains rational. But would you say it's less rational than it has been historically?

The key theme is that it is rational, but it is slightly intensifying. I think we've been very clear on that. And I think it's well known that the magnitude of liquidity in the market at the moment surpasses demand. However, I believe it's important to be cautious while reading spread movements and directly transferring them to repricing movements as the margins in the statistics are based on the money market rates. And they move and bear in mind that we've had 2 rate cuts within relatively short period of time, and you will see lag effects just as we did on the way upwards, you will see lag effects as money market rates tend to move prior to the adjustment from the Central Bank. And again, there's a lag before the price adjustments become effective into our numbers. So there is competition.

I would qualify the growth in the quarter as attractive given what we've seen statistically. And given what we see in September. And given what we see also in the wider market. This is a quarter where I at least I'm very happy with the performance of the team and reiterate that year-on-year is a growth of 2.7%, and it's at profitable conditions.

And just given that some of the -- sort of more challenger banks in -- within Personal Customers have grown quite strongly since the rate cuts. Could you give some color on how you how the Sbanken volumes have developed since the June rate cuts?

We do not give sort of details across our brands. We believe the key importance and our priority is to deliver a profitable growth in the area, and that is what we do this quarter. When looking at percentages, it is important to keep in mind that we have doubled the volumes of the second largest player in the market, and there is a strong culture for amortizing in the Norwegian market. So just keeping volumes means having a very high level of activity and growing volumes even beyond that. And we are grateful and appreciative of the fact that so many new customers choose to bring their business to us.

Any questions from the online audience? No. There's 1 more from Roy, please. [ Simon Rune ], ABG.

Just a question on your costs for the quarter. Ida, I think you mentioned that was mainly driven by the drop quarter-on-quarter is mainly due to seasonal effects. But I think Kjerstin, you said there's also some structural aspects of it in your introduction. So which 1 is it?

And in relation to that, you have NOK 3 billion cost savings program ongoing until '27. Can you say something about how you're tracking towards that with -- yes, close to 1 year already done?

I would say in terms of your first question, both are right. When I talk about it was more quarter-on-quarter where we're seeing the seasonality effect and that's more to also talk about what we're seeing in the fourth quarter, which is expected to have a higher seasonal element into it.

What Kjerstin talks about is, of course, that we continuously work on cost efficiency. We use digitalization and increased automation. That's also 1 of the reasons why you're seeing a decrease in full-time employees in the operations area is driven by increased automation and efficiency.

In addition to that, we are now kind of benefiting from the full impact of the reduction of 500 full-time employees that we launched last year or announced last year, which is, of course, also impacting long term in terms of the overall -- the underlying cost development.

So when you're talking about the NOK 3 billion, this is something that we embed in how we do business on an everyday basis, and cost efficiency is really embedded in our culture and continues to be a very important tool also when looking at competitiveness, not at least in the mass market and then both on the Personal Customer side but also on the Corporate Customer side.

Yes. So trying to quantify how you track...

I would say we're tracking in line with what we expected. Actually, a bit kind of better than that being said that we then decreased the number of full-time employees already this year of 500.

And Roy, you had 1 more question?

Just a question on insurance. So as the Fremtind, the results in the quarter, they were 76.4% combined ratio. They're tracking well below the target they had for 2025. So I know it's kind of a benign summer quarter for insurance, but it's starting to get very profitable again.

So 2 questions. Firstly, are -- is this the level you expected? Are you happy? And secondly, if it's good enough, are you prepared to start taking some volumes again? You think kind of -- is the premium hikes behind us now? Will competition increase? Or is there still more to do?

In terms of the non-life insurance business, I think what we have seen in Fremtind is also showing their results today. I would say that the team under Hege's influence has done a tremendous job in terms of focusing on increased profitability, cost efficiency and also focusing even more so on the distribution the banks.

And this is also what we're seeing this quarter a closer collaboration between the Personal Customer segment with Maria as well as the Corporate Customer segment with Marianne in terms of how we can collaborate even better in terms of selling more towards our customer and making it even more digital and more seamless for the customer.

So we are seeing a positive uptick on the non-life insurance company business for DNB as well this quarter. And I hope that, that will continue also with a strong sentiment and the driver we're seeing from Hege and the team in Fremtind.

All right. Thank you. I haven't seen any more questions in the audience. So then we will close this session. And for the journalists in the room, there will be time to meet management after this session. Today, we are rigging for the DNB next conference tomorrow outside. So the journalist interviews will be in the area just behind us.

Thank you so much for joining us online and physically, and have a nice Wednesday.

Thank you.

Everyone welcome to the DNB Q2 conference call. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Mr. Rune Helland, to begin today's conference. Thank you.

Thank you very much, and hello, everyone, and welcome to the DNB's analyst call for the second quarter. Around the table here in Oslo, we are in addition to the CEO, Kjerstin Braathen; and CFO, Ida Lerner. We have Maria Loevold, Head of Personal Banking; Head of Large Corporate, Alf Otterstad, Head of DNB Carnegie; and also Eline Skramstad, Head of Risk Management. Ida will now start giving you the highlights for the quarter before we open up to our questions. Ida?

Thank you, Rune, and thanks, everyone, for taking the time to participate in this call. The Norwegian economy continues to be robust with a strong and healthy GDP growth this year expected to be at 1.3% and 1.5% next year. Unemployment remains low at around 2% and is expected to remain at this level in the coming years.

As you know, the Central Bank cut a key positive rate by 25 basis points in June to now being 4.25. Our economist expects 2 further rate cuts this year and then to see a key policy rate to stabilize at 3.75. For DNB, this quarter is characterized by continued high activity level with profitable loan growth in all customer segments and strong contribution from capital-light income.

Higher margin deposit volumes were up in personal customers, while we noted a decrease in low-margin short-term deposits in large corporates. NII was down in the quarter affected by the profitable loan growth, which accelerated towards the end of the quarter as well as the product mix effect within deposits earlier mentioned, as well as other elements, noncustomer-related elements in NII.

We continue to have a robust and well diversified portfolio across industries and geographies and take impairment provisions of NOK 677 million in the quarter, predominantly in the large corporate and corporate banking -- corporate customer Norway area with still very specific -- customer-specific situations. We maintain a strong capital position with a core equity Tier 1 capital ratio of 18.3%, 180 basis points above the regulatory expectation and also marked this quarter a return on equity of 15.4%, well above the long-term ambition of being above 14%.

With that, we open up for questions.

[Operator Instructions] The first question comes from the line of Johan Ekblom calling from UBS.

I just wanted to come back a little bit on the interest rate outlook. And if you can say anything on the impact of the price changes that you've announced. So first, on the rate outlook. I mean, I think you stuck with your call of a 3.75 kind of trough rate, even though the cut we had came a bit sooner. But when I look at Norges Bank forecast, they have 3 more cuts beyond that in their baseline, and I know that the numbers you quoted is the DNB Carnegie's, but can you help us understand what makes them so different? Do you have a dramatically different view on inflationary pressures? Do you have a very different view on the growth dynamics in Norway? Or why does Norges Bank see rate so much lower than what you think?

And then maybe slightly related to the cut that we've had when rates were going up, you would give us some guidance as to the impact of already announced price changes. Would you be willing to do that for the price changes you've announced so far, please?

Thank you, John. First, on the rate outlook and the rate cut, which I would rather say it came a bit later than expected more than it came sooner than expected because the market expected this to be in March, and the Central Bank decided not to postpone it then until June where when most people actually expected the postponement to be until September, but that's just a detail. But our view was it was to be expected already in March.

As for the future outlook, it's been a while where the view of our economist has differed somewhat from Norges Bank. But I believe our view to be more in line with the consensus in the market and the primary differentiator is on the inflationary outlook, not so much the growth perspective, the unemployment or activity, but rather more on the stickiness of the inflation.

And I believe also the uncertainty and the turmoils and the discussions around tariffs alongside the debt levels across various states in the western part of the world, in addition to the investment outlook on defense and other areas are all expected to be believed to be drivers of inflation, and this is the primary reason, I believe, for DNB Carnegie maintaining their view of further 2 rate cuts rather than several more as outlined by Norges Bank.

We have decided not to give a nominal guidance on the impact of the repricing. This time, we did so as you're correctly stating on many occasions when rates went up. And I guess the best sort of reference we can give you is to refer back to the nominal impact. We talked about at the time between NOK 1 billion and NOK 1.5 billion what we commented on for the 25 bps rate hikes that we saw at the time.

And then maybe just secondly, I think you commented this morning that you're happy with the progress of the Carnegie integration and things like that. I mean now that we can't see the contribution of that alone. Can you give us a bit more color on what are you seeing in terms of, I guess, pipeline? And did Q2 conversions come in as expected? I mean we've seen various press stories of activity being delayed maybe until after summer at least? And maybe give us an update if there is any on staff retention. I think we spoke about it last quarter. I know you were very happy that you kind of kept the people that you want us be any change on that front, please?

Good. I'll have Alex answer.

Yes. Thanks, Johan, for starting on sort of business momentum throughout the quarter. Of course, very little happened in April. And I think commenting on various products M&A processes were pushed out in time or delayed somewhat. We haven't really had any M&A processes being canceled as such, but they were slow moving as clients sort of took a wait-and-see approach throughout April and early May. We've seen some ECM mandates both being postponed and some altogether called likely to return at some point, but they were due to be executed in the second quarter.

And then, of course, very strong business momentum sort of May or mid-May onwards. And in the middle of all of this, we have launched sort of the common DNB Carnegie brand and organization. And the sort of 6 weeks that we have experienced from, we feel that the competitiveness of the platform is as or even better as expected. And with other very busy sort of capital markets period from sort of mid-May, but some of the transactions that have been delayed and really moved into the second half of the year.

With regards to staff retention, there has been very limited turnover, quite frankly, somewhat less turnover than we would have expected, and no sort of really unwanted turnover at all so far.

The next question comes from the line of Namita Samtani calling from Barclays.

I've got 3 please. Firstly, are there any timing impacts on when you reprice your mortgages downwards and when that flows into the P&L. So i.e., our mortgages reprice sometime after the 25 bps rate cut is announced or -- are there any factors which would make the rate sensitivity of 25 bps to your NII a bit lower than one might expect.

Secondly, I just wondered how much were the Polish provisions this quarter? And can you remind us what this has taken for? And is this the end of taking these provisions? And my last question is just in relation to the output floor of 72.5% when it's fully loaded. Should we expect your RWA inflation to be lower than the average bank given you've already have risk weight flows? I think the EBA has disclosed the average RWA inflation is around 6%. So would you be expected to be around that or lower?

So if we start with the timing, we have said that -- as I said in the presentation, we have the full effect from the repricing being implemented on the 25th of August. That means that we have the same delay or lag effect that we had on the way up in terms of 8 weeks lag effect both on deposits as well as on mortgage lending.

When it comes to the Polish portfolio, as you know, we've talked about this before. We have a currently outstanding exposure of NOK 4.1 billion. We've taken accumulated provisions of NOK 1.4 billion. As you know, 88% of that portfolio is in euros and only 2.3% is in Swiss francs. That means that we've written out the entirety of the Swiss franc portfolio and are also then following very closely the development we're seeing in the rest of the portfolio and the provisions that we've taken today is our best estimate in terms of provisions also looking ahead. But this is something that we follow very closely.

This quarter, we take impairment provisions around NOK 152 million, which is lower than what we did last quarter. When looking at the fully loaded, we are providing the information in our Pillar 3 report being published in August. So we haven't got the numbers kind of ready for you today. But overall, you are right in your assumptions given the calibration in our portfolio and our risk-weighted assets today. But I wouldn't -- I would more point in terms of the -- where the Nordic banks have also commented on their effects, and we would be in the midrange of that. It's my best estimate today.

The next question comes from the line of Jan Gjerland from ABG.

Jan, can you hear us? We can't hear you. Just we move to the next.

Yes. We will move to the next. The next question now comes from the line of Patrik Nilsson. Seems like we currently have a technical issue and then...

We're just waiting. So you just let us know if we're able to sort that or if we should redial.

Yes, please bear with me while we are sorting out.

[Technical Difficulty] [Operator Instructions] And our next question is from Riccardo Rovere from Mediobanca.

I was just looking at your fact book, specifically table 1.2.5. And I was looking at the very, very -- toward the end of the table, which shows a line other interest expenses, which has always been positive with different numbers, but always been positive over the past 24 months, couple of years. And then all of a sudden in the second quarter of '25, it gets negative by NOK 500 million. So there is a swing in that line of almost more than NOK 700 million only in that line, and there is impotent that says that interest rate swaps are included there. Can you explain why that line, that small little in the P&L had a swing of more than NOK 700 million a quarter because the NII decline Q-on-Q seems to be completely driven by that. So what's in there? And what are the swaps, if you can clarify that, please?

Yes, Riccardo, thanks for the question. So I mean, apart from what you're seeing in terms of the footnote on number two, this interest expenses needs to be seen in connection with the total interest income because there is a counteracting mechanism in terms of that you would see that in the numbers above. But we're not specifying them specifically. So -- so that's kind of -- you will see a matching number on the interest income, which is spread out between the different elements there.

So Ida, just to be clear here, there is nothing particularly odd in minus 517, nothing. Okay. All right. Okay. And the other question I wanted to ask is, if I'm not mistaken, I understand that your Polish provisions amounted to NOK 150 million in the quarter. So basically, the underlying provisions, I don't know, are those Polish provisions to be considered a sort of one-off or not?

Well, I think when looking at the Polish provisions as all provisions, we always make an estimate in terms of best assessment of the provisions at any given point of time. And that's depending on the development in the portfolio. It's also depending on how we actively handle the development in that portfolio. The Polish provision is the consequence is that we've started initiated a bit of a different approach to part of that portfolio. So it's no change in the underlying portfolio. There is no change in the outlook per se in the portfolio, but it's more a reflection of our best estimate given how we have approached that portfolio today.

Okay. Look, this is -- this is something that happens also in other banks in Europe. Other banks in Europe say that we should be more or less close to the end or the amount of new provision should come down significantly over the next quarters or maybe a year or whatever. Would you share this thought or not?

I think that's very difficult for me to say in terms of outlook. The provisions that we're taking are always a reflection of what we believe are the right amount of provisions and therefore, to have any thoughts around what we think will happen in the future would mean that we would have to take those provisions today so -- or reversals of those provisions today. So this is the best estimate that we have in terms of also looking at the accumulated provisions as I mentioned of NOK 1.4 billion, looking at the overall portfolio. And you also need to think about when assessing what other banks are doing, and again, I'm not an expert in terms of their portfolios, of course, you need to also look at the portion of Swiss franc lines and euro loan. And in our portfolio, 88% is euro loans, which are set to be less exposed in the period or in the Polish [indiscernible]

Okay. [indiscernible]

No. And that's why I'm saying it's distributed in between the different lines where I see that I'm not helping you here, Ricardo. But -- this is kind of -- if you look at interest on amounts due from credit institutions, for instance, you see an uptick there. And you also see a movement in between the different lines. So you need to look at the total interest income and look at also the total interest expenses as a whole.

Sorry to bother you and everyone was how can interest rate swap all of a sudden, it can become negative. Everyone was expecting rates to go down at some point in Norway. So your balance sheet should have been somehow prepared if I may say. So to this kind...

I'm sorry for interrupting you here. But as it says on the footnote, it includes interest rate adjustments resulting from interest rate cost. So it doesn't mean that the entirety of this is related to interest rate swaps. So it includes that element in addition to other elements as well.

And the other elements are?

I'm sorry, Ricardo, I don't have that information. .

Okay. All right. Okay. No worries. No problem. I'll take -- try to take it offline. No worries. Okay.

And we will now take our next question from Gulnara Saitkulova from Morgan Stanley.

So my question is on fee income with other investment banking activity has remained resilient. And you mentioned in your previous answer, that mid-May, you've seen the relatively strong business momentum. How sustainable do you think this can be in the context of elevated uncertainty and tariff risk? And can you comment more broadly what you see in terms of the key moving parts for the coming quarters on the fee income more broadly. Where do you see most potential to grow your fees in the near term? And separately, related to that, on commission margins in asset management. So we saw in the previous quarters, they have been under pressure. Can you comment what you're seeing this quarter? And what is your outlook for commissioning margins going forward?

Alex can comment on the investment banking part, and I can take the rest of the fee base more broadly.

Thank you. If I should start, so momentum, very strong from mid-May onwards, as mentioned, and it's, of course, tightly linked to the fact that risk sentiment has gradually improved throughout the quarter in capital markets in general. We sort of feel that optimism has carried into the summer in the Nordic region business is slower now during July. But as long as capital markets stay constructive, we expect that the business went to continue once we sort of get into the later part of August and early September.

Thank you, Alex. And largely, I would just reiterate that we maintain our guidance on growth in fee and commission income by 9% annually, and we maintain our commitment to delivering on the synergies is outlined on DNB Carnegie. And as we've said before, our 2 main engines, so to speak, in the fee growth are indeed investment banking as well as asset management. We did provide you with some additional information on the asset management position in the fact book this time around. We also had a substantial inflow this quarter, more than NOK 10 billion, but have not seen margin pressure to speak of.

Approximately 50% of the inflows were retail funds and 50% institutional funds. And in general, as you know, retail funds comes at a higher margin. There is a more global trend of a move towards index-related products in our region. So over time, that may put some pressure. But on the other hand, we have systematically been building the repaid share in our assets under management and benefited from that. But we do expect that to be a key driver for fee growth also as we move ahead.

The assets under management in the defined contribution bucket now has surpassed NOK 200 billion. So that is growing recurringly every month. We continue to see customers staying in their savings agreements, putting savings down in their mutual fund products every month, and we continue to expect savings growth to be 2x to 3x as high as GDP growth for Norway in the years ahead of us.

Real estate brokerage, more seasonal impact, but this is a high quarter, seasonally high quarter second quarter, and we are taking market share in that area. Money transfer and banking services, money transfer very steady. Third quarter should be an active quarter. People, even with a relatively weak Norwegian kroner, they book their vacations and they travel and they spend money. And there is also a good sentiment on the insurance side, not the least non-life insurance where combined ratios have come back considerably. This is a positive contributor this quarter on the fee side, but also on the associated companies line for this quarter, and we expect that business to be in a better place also in the coming quarters and years than we have seen in the previous few quarters.

We will now take our next question from Patrik Nilsson from Goldman Sachs.

It was also on fee income, and I appreciate you gave a very comprehensive answer now to the last question. But I just wanted to follow up on that. Is there anything in terms of the seasonality that you expect to be different this year given that there were quite some challenges in the second quarter following the beginning of April. Or do you expect -- or do you think that the second quarter is a good sort of proxy of how the second quarter and then how we can think about the seasonality for the remainder of the year? Or was there -- or is there some kind of catch-up effect we should expect?

I think Alex's run-through gave a pretty good picture of a slower start and much better finish to the second quarter. I think we have seen the same also on the mortgages that pace have picked up activity. That's not so much on the fee side, but still we have seen increasing activity throughout the quarter. A lot of the lending activity also on the large corporate side came towards the end of the quarter. So I would say we have unusually high activity going into July. How long that will last and whether it will lead to a very different picture for the third quarter or not. I mean we're at a level of detail that I think it's hard to comment upon beyond saying what I just said. But there could be a sentiment that, that part of the activity is pushed into July and the third quarter compared to what we would see in a more normal year.

[indiscernible] passive impact to yourselves from the consolidation of the smaller players, both in the SME and personal customer market. How do you view the sort of margin versus volume debate in these markets? That is to say, could we see further pressure on lending margins in personal customers or SMEs going forward, independent of the level of rates? That's my first one.

I think we comment on the competitive situation in general that it is indeed very fierce. Banks have a lot of capital. There is ample supply in the market. It's nothing new in the Norwegian market that the competition is fierce, but we always remind you that it's also a rational market saying that all the banks with a material size have return on equity as their most important financial targets. There is a shifting dynamic in the market, as you are pointing to with several of the middle-sized players merging and growing in size.

On the one hand, you can argue this will intensify competition. On the other hand, we always know that these are -- these mergers open up windows of opportunities where banks are busy with the integrations and mergers. So the way we see it, we do prioritize profitability over growth, which is why we're also specifying this quarter that we are growing profitably and that overall customer margins are roughly stable. We see that we have a product offering and a way to deliver services that where it is more than a single pricing point. So that is a value to customers.

And one of the proof points is that we saw a sharp uptick in number of customers considering to move their mortgage to us after the Central Bank reduced the key policy rate. So we would always target profitable growth. This quarter, we do deliver this in all customer segments in a very competitive environment. So we like to say that competition is good and healthy. It makes us on our toes. And the only way to win and earn customers' trust is by being competitive, and we expect to continue to be that in the future.

That's understood. And one more from me, please. Can you speak a little bit more about the big quarter-on-quarter decline in large corporate deposits? I know it's not a big NII driver. But can you speak about the dynamic there in terms of not corporate willingness to do business with yourselves? And is this based on a change in pricing or change in competitive pricing? And how do you see this evolving going forward, both on the deposit and loan side?

Yes. Well, your question more specifically on the process, I'd be happy to comment on that, and it is due to pricing and how attractively we choose to price these deposits. I think we've commented on several occasions in the years after the pandemic that we have been seen increasingly attractive as a counterpart for larger corporates for their deposits being one of the very few banks with a AA rating. So this has been one of the reasons for large deposit growth and why we have a close to 100% deposit coverage in the large corporate area. We have also repeatedly said that we price these in close cooperation with treasury and we never pay more than what makes sense for us. So these have never been presented as very sticky deposits.

Now we did some changes to our pricing on these deposits in the second quarter that resulted in some of these customers choosing to place some of their deposits with other institutions. These are, as you're saying, low-margin deposits. So they are primarily reflected in our volumes, not so much in the revenue line.

We will now take our next question from Jacob Kruse from Autonomous Research.

So I had one question really. So just on the net interest income. If I look at the divisional disclosure, firstly, a lot of the negative is in the other division this quarter. Most of the kind of business lines are relatively stable. Is that just the funds pricing that we see there? Or are there other factors driving it?

And then on the related question, I guess, if I look at the corporate customers Norway business in the quarter, is there some kind of restatement or something going on here? I'm just looking at the SME business having NII growing from NOK 2.7 billion to NOK 3.4 billion within that division, whilst the overall is slightly down, which seems to say that the kind of balancing item is moving very drastically. So I just wanted to kind of understand what's going on that slide.

Thank you, Jacob. NII, I think your overall assessment is correct. The customer activity is benign and growing, which is why we're also commenting very clearly that customer spreads are roughly stable and the elements that are reducing NII is a lower contribution from other net interest income elements such as the interest on equity, such as a somewhat higher funding cost and a smaller bucket of other interest -- net interest related elements. As for the Corporate Banking in Norway. .

Yes. That is very well spotted. It's actually more a reshuffling in terms of how we have identified the different exposures related to CRR3. So it's more the fact that we've now registered these corporates in a more similar way. So you will see the same movement in -- for instance, in large corporates or in other areas that is more of a matching element here. So more companies are...

Okay. So that number is really we should start in Q2 as to base and...

Yes. Exactly.

And we will now move to our next question from Martin Ekstedt from Handelsbanken.

Okay. Great. So could I just ask, could you let us know a little bit more about what industries you saw loan losses this quarter in particular. Are there any concentrations to any portfolios, for example, given what's happening geopolitically and with global trading tariffs and so on, I had a specific look myself at your shipping portfolio. And I wanted to check if you could add some color to the stage migrations you see this quarter, were for example, Stage 3 impairments dropped sharply and exposures in Stage 2 increased a lot over the last 2 quarters. If you could give us some more color on that situation?

Yes. I need to start out to say that I truly believe that we have a very overall robust and solid portfolio and that 99.3% of our exposures are within Stage 1 and 2 and without any [indiscernible]. And in a historic perspective, I think we are on very low levels when it comes to Stage 3 provision. And when we look at what is within the provision this quarter, these are really customer-specific situations and that's not something that we think are a trend of any [indiscernible] more customer-specific situations or incidents, that said, of course, it's somewhat turmoil geopolitical situation. And of course, we need to foresee that impairments might increase going forward if the turmoil continues or if we need to foresee that there will be more volatility probably.

Furthermore, given this higher geopolitical unrest and uncertainty, it would be natural to see more company-specific impairments as well in the longer-term perspective. But we believe that the cost of risk will generally come in below the [ 20x ] historical average.

And we can just maybe add some -- I mean there are really -- it's spread across maybe not a large number, but a moderate number of companies and there are some names related to residential construction activity and property, but we still do not comment this as an industrial trend because we've looked at all of them and see that this is not systematic across the portfolio. There is no negative migration in this portfolio. These are particular companies who have taken specific risks that have led to these situations. So again, I reiterate that the portfolio is robust and well diversified, no systematic weakening, no migration and no deterioration in any area compared to what we've been reporting in the previous couple of quarters.

Should I make a comment on shipping?

Yes, in particular. .

So as you can see, the shipping portfolio is very strong. And I think that's also due to the fact that Harald and the team has worked diligently on choosing customers within shipping that have strong ownership and also have a strong cash flow ability and don't have any oversupply. So I think move, if you look on historical average shipping used to be more of a volatile and cyclical industry for us and has also then imposed more impairments. Historically, what we see today. This is actually now a low-risk portfolio, but of course, shipping is exposed to geopolitical uncertainty and macroeconomic developments. And therefore, we followed this industry closer. But as you can see, very low risk in this portfolio. And also, as again, pointing to the fact that I believe that Harold and the team has worked very diligently on choosing the right customers here.

Yes. I can just add -- it's Harald. I can just add that the area of shipping most exposed to the changes in trade and tariffs will be container shipping, and we have very limited exposure on the containers. .

We'll now move to our next question from Jan Erik Gjerland from ABG.

Hope you can hear now?

We can hear and read you well and again, apologies for not seeing your questions earlier today.

No, no, no problem at all. I just have a couple of questions. The first one is to this insurance coverage you use -- you cover your exposure at default. Is this a new thing you have entered into? Or is this something you have been going on for a number of years. And -- is this roughly NOK 100 million you pay for this insurance coverage lowering your basis? How much is it lowering your CET1 -- increasing CET1 this time around versus what you pay for it. And you have a high CET1 ratio. So why are you actually paying to getting it higher than actually using -- utilizing your growth liability to low rate when you have strong growth. That's my first question.

Just in general, I mean, we have been using insurance as one of the items in the toolbox in originate to distribute and increased the turnover of capital. And of course, we would look at every individual transaction and the price of such coverage and from a profitability point of view to make sure that it's accretive to the bank. I don't think it makes sense to think about that in terms of how much it's costing to the core equity Tier 1 ratio, but it's one of the instruments that can be considered in the originate to distribute toolbox.

Yes, we have a very strong capital ratio. Identical headroom to what we presented in the previous quarter. And -- as you know, we do reinvest this into growth partly and into distribution of dividend or capital back to shareholders to the extent we do not use it for growth. We have grown 1.7% year-to-date, which puts us in the bucket of 3% to 4% as we are guiding for the annual growth. And I'd say, we rather believe in growing sustainably and building valuable positions over time rather than just trying to grow very short term on the more easier than usually lower return opportunities if we were more erratic. I mean, we focus on profitable growth within the strategic areas that we are targeting. And again, see ample opportunities. I mean we're growing 3.3% also in the large corporate this quarter. But our business model is more longer term systematically building value rather than growing in accordance with what our capital ratio is at online.

Okay. Clear.

A few comments from Harold too maybe.

Yes, Erik, just if you look at the growth over time in the LCI segment, you will see that growth in volumes and income is much higher than the growth in risk-weighted assets. So that's how we try to manage the the growth by -- and the insurance is a very flexible tool because you can actually cancel the insurance after a period of time. It's a way to manage concentration risk as well on single transactions, single clients and even industries. It's a good way of maintaining the full share of wallet on the cross-selling side without inviting competitors into the syndicate. And it's a good way for certain types of transactions to boost the yield on that transaction. So it's actually a good combination, something we're very pleased to use as a part of the original and distributed model.

Very good. That leads into the next question about the lending growth in your area. You had a sort of slow start to the quarter probably, and that's why the average lending growth in the LCI is down Q-on-Q, but it looks like it's up, as you pointed to on the end-to-end levels. Could you shed some more light into which countries and regions and type of clients you have been gaining this time around in probably June. And if this is going to be kept going forward and point net interest income contribution? Or is it so that you want to make it into us to syndicate and sell it into the bond market as you said, Harald?

Yes. I can't really give a concise answer to the second part of your question because we -- that's an ongoing process in terms of originate and distribute model. So that's why volumes will vary over time. And of course, the flattish volumes we had in the first quarter [indiscernible] because of the regionals and distribute model, you can't really look at the changes in exposure at default to conclude which sectors will be most active. But I would say that 50% comes in Norway and 50% comes outside Norway. So that's roughly in line with our overall portfolio distribution.

If you look at it in terms of activity, I would say the most active sectors have been power and renewables, fish farming. And we've also been active on -- increasingly active on manufacturing as a part of our Nordic ambitions following the acquisition of Carnegie. We've also had very high activity level on oil and gas, but the exposure at default is actually down, partly because there's been CRR3 effects on revolvers, which means that the capital rates have come down and run the ones.

Okay. Then just one kind of clarification on the other income. You have a very strong revision of the CRR3 and the insurance part, but also in the other income, it seems like that line is growing from roughly NOK 700 million run rate from, let's say, NOK 500 million, NOK 600 million over the last couple of quarters. I see some gain hidden there, something we have missed out on either of a transaction done of late? Or is it just the new run rate?

Now under other income -- and other income, there is an effect of an increased contribution from the corporate portfolio in DNB Life. So there, you have an extraordinary high contribution, I would say, this quarter, but it's generally a run rate that I would say would be more normalized levels, NOK 50 million below the level to date. But apart from that, there is no -- nothing that is sticking out in terms of extraordinary. So there is a positive development in the corporate portfolio in DNB Life.

Okay. So your equity in the life boutique is booked there as a contribution from the -- for whatever you have at a gain there. .

That is.

[Operator Instructions] And we'll now take our follow-up question from Riccardo Rovere from Mediobanca.

Thanks for taking my 2 follow-ups, if I may. The first one is to get back on second to what Gjerland was asked before on loan growth in general growth in the is running below the 3% to 4%. If it's just about 1% in personal customers. This is kind of 1.5% corporate and it is kind of 1% or value large corporate. So this is for the semester. So June and December replying it by 2, basically, we did not land in the 3% to 4% region. I was wondering if rate cuts maybe the one that is really happened and the ones that may occur in the next quarters to eventually be bump. And in general terms, if you are still confident on the 3% to 4%. This is the first question.

And the second question I have is on the solvency of DNB Liv, which continues to remain at 200, actually above 260%. Shouldn't this going down at some point. I remember this should be brought to 140%. That's what I have in the back of my mind, 2 years that keeps traveling around 260% and the equity base of the believe actually never goes down, it never go down. So -- but it should go down theoretically with the dividend upstream to the parent companies? No, at some point.

Thank you, Ricardo. I'd say we're confident in our ability to deliver the 3% to 4% growth this year. As it stands, we have grown 1.7% so far this year. And just by doubling that pace, we would be at 3.2%. That being said, we do start to see signs of an uptick in activity and house construction that could lead to a further increase in credit demand in the SME corporate customer Norway sector. And there is a very active housing market and with additional -- a couple of rate hikes, the expectation is for the credit demand in the personal customer area to continue to grow, and we should take our fair share of that.

It's always more difficult on the large corporate side because it will vary more from a quarter to quarter. What we can say is that we are positioned in industries and sectors that are driven by long-term trends and that we are able to find opportunities where we can add value and that are profitable to us. So we will continue to work on them. But 3 to 4 should be well within which this year.

As for the solvency, the solvency ratio is high. We are not targeting to go down to 140%. 140% is the minimum level we say at which point we will consider to dividend up to 100% of the results from the life insurance company. But we have additionally talked about the expectations to allocate NOK 10 billion back to shareholders towards 2030. And we are at the beginning of this period, having done this for the second time this year. And over time, everything else being equal, this should lead to a reduction in the solvency ratio.

That being said, Ida just commented to Jan Erik about the improved results in the Life Insurance business. We have seen also this quarter an improvement in the risk results in the Life Insurance business that we expect to continue. So of course, it is also impacted positively by an improved result in the Life Insurance business. And if that proves to be sustainable, well, that would add even more capital and add to the capability of distributing capital back to shareholders.

Okay. Did you -- so the idea of upstreaming dividends from the DNB Liv to the parent company, that remains. The fact that the solvency ratio remain the solvency stays in 260%, does it mean that you will not have upstream capital from insurance in the parent?

Absolutely. I mean as you're pointing to the solvency ratio is way ahead of the level where we're saying we would consider holding back regular results. So there is an ample room to deliver on the outlined intention to distribute capital back. And as you know, our obligations onto the guaranteed portfolio has topped out and gradually also comes down further adding to the capital buildup in the company.

And we have a question from Johan Ekblom from UBS.

Just two quick follow-ups. I saw you made a decision to demerge your leasing business. I was wondering if there is any -- or what the rationale is behind that, if anything, I mean, I think the trend is towards simplifying legal structure rather than adding legal structure. So what drove that decision?

And then I just wanted to come back to Ida's comments on the output floor, because I think you've always been very clear that you don't expect meaningful impact from Basel III finalization, but then Ida say somewhere in the average of Nordic banks, the average of your 5 large cap peers that have disclosed this 11%, there will be NOK 120 billion higher risk-weighted assets pre-mitigation, and I'm not sure how I could square that with minimal impact. If you can maybe give some more color there would be helpful.

Absolutely. If I start with the demerger, this is driven by the fact that we see that a lot of other leasing companies, the main competitors to DNB Finance is on a stand-alone basis and are not the aggregated or part of other kind of ordinary banks, which with this new setup that we're now establishing makes them far more competitive and also far more similar to their main competitors. So this is in one way, a simplification as well in terms of streamlining and simplifying the structure for DNB Finance, and that's really the driver for this.

When it comes to the output for us, as I said, we will disclose this in August in the Pillar 3 report. So again, you can only see my comment as being an indication of my best estimate today it could be lower, but it could be in that region. And I think we will just have to come back with a further clarification and description when we have the full information in August.

And thank you all for your questions today. It appears there are currently no further questions in the queue. With this, I would like to hand the call back over to our host for any additional closing remarks. Thank you.

Thank you very much, and thank you all for your participation. And then we all hear from Oslo we'd like to wish you asset and a very good summer. Thank you so much.

Thank you. .

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Good morning, everyone, and welcome to the presentation of the second quarter results for DNB. And also welcome to everyone following us on the stream. It's 30 degrees outside, and I don't see very many with a tie inside. I think that's a good sign that we are approaching summer.

But first, let's dive into the numbers for DNB. Our CEO, Kjerstin Braathen; and CFO, Ida Lerner, will present the results. There will be time for questions after the presentation. And I do see a new -- some new faces from the press here today. Very welcome. And for your information, you will be able to ask questions to management outside in the lunch area after the presentation.

Kjerstin, please go ahead.

Thank you so much, Even, and a very warm welcome to all of you to this second quarter earnings release for DNB. In this quarter, where increased uncertainty is becoming the new normal, we still present yet another strong set of results, reflecting a high activity and high growth across the group overall.

It has indeed been an eventful quarter. This is the first quarter we are fully integrating the Carnegie numbers into our numbers. And we had, from the Central Bank, the first rate cut in more than 5 years, further boosting an already high activity level.

I wanted to start this quarter with a few examples of initiatives and events that are key driver for our results. The DNB Carnegie position combined further strengthens our position as a leading Norwegian -- not Norwegian, but Nordic investment bank that we have been targeting.

We have seen a high activity year-to-date, and we hold several #1 positions, more specifically in equity capital markets in terms of volume of capital raised, in M&A in terms of number of transactions completed and maybe for many of the most prestigious one being ranked the #1 Nordic broker by Extel, who surveys institutional investors.

For personal customers, we continue to scale and grow our activity across the country. With several initiatives being fulfilled, we have strengthened the pace and activity in our digital offering, with now 75% of mortgage applications coming in digitally. And we, in some locations, opened up local satellites to further boost local activity and growth.

We have launched the digital adviser in our savings app Spare, and we have been ranked -- our chatbot has been ranked the best chatbot in Norway.

In addition to this, we are further motivated by seeing that our customers across Private Banking and Large Corporate customers have rated the satisfaction at the highest level we've ever seen.

I wanted to show an appreciation to the organization who has worked relentlessly throughout this quarter as well in order to deliver to our customers and these results. But this quarter, I also would like to send one appreciation in particular to one of our employees who walked in the doors of DNB 43 years ago and who has her last day of working today. [ Sylvia ] has been material in developing the profitability measurement systems. She's one of the people who works very closely producing the numbers, analyzing the numbers. And [ Sylvia ] is the DNA of DNB and part of what DNB is all about. I would hope that you all would join me in showing an appreciation to [ Sylvia ] today.

Over to the key highlights of the numbers, indeed reflecting a high activity across all customer segments and product areas. Return equity for the quarter comes in at 15.4%, well above the minimum 14% that we have targeted.

NII is down compared to previous quarter by 1.6% and up compared to the same quarter prior year by 2.1%. The most important message to convey is that customer margins are roughly stable. We have seen growth in lending across all customer segments, accelerating throughout the quarter. And this is offset by some low-margin outflows in deposits and a lower contribution from noncustomer-related interest income elements such as funding and interest on equity.

In net commission and fees, we are seeing a sharp uptick naturally, with 7.1% with a full integration of Carnegie in the numbers. Many areas delivering particularly strong this quarter, and I would highlight equities, bond and asset management.

Our portfolio overall remains robust and well diversified. We see no material movements or negative migration in any area. We do book NOK 677 million of provisions this quarter, predominantly related to customer-specific situation.

Our capital position remains rock solid, 18.3%, still with a 180 basis points headroom to the required unexpected level by the FSA. As you know, we have a share buyback program ongoing, buying back 1% of the share and expect to complete this in September or early October. Earnings per share came in at NOK 6.79 for the quarter and are up by 3.9% year-to-date.

The Norwegian economy remains robust and the outlook is healthy. We continue to expect a GDP growth this year of 1.3% and 1.5% next year. Unemployment remains low, around 2%, and we continue to say that the fact that people have a job is the most important factor for both financial and social wealth.

We have seen the Central Bank over years acting decisively to bring down inflation, and while not being fully down to the desired level around 2%, we continue to see inflation decreasing and healthy wage growth contributing to the spending of consumers.

We did expect the first rate hike to happen this year, and we saw that materialize in the month of June. Ahead, DNB Carnegie expects another 2 rate decreases this year and rates to stabilize around 3.75%. While the level of uncertainty globally is higher than normal, we continue to see a robust and strong fundamentals in the Norwegian economy with a positive outlook.

A few highlights from the customer segments. First of all, personal customers delivers a very strong quarter. We see a very healthy growth of 0.8% in lending, 3.2% in the past 12-month period and a seasonally strong growth in deposits of 5.8%, even stronger than we usually see, and it might be boosted by the healthy levels of the wage settlement.

Rate cuts came and further boosted what was already a high activity, and we saw a sharp increase in number of customers showing an interest of moving their mortgages to DNB. As well as a significant number of requests for financial certificates, people continue to buy apartments and houses in the month of July, this summer, which provides a healthy pipeline going into the third quarter.

Net other income up by 29.9%, boosted by the Carnegie integration, but also a solid performance on what was the basis prior to Carnegie, amongst other, in real estate brokerage activity.

For both our corporate segment, pretax profit is slightly down compared to the previous quarter, but up compared to the same quarter prior year. The highlight for corporate customers in Norway, I would point to the growth of 1.8%, and this is before having seen a real uptick in the construction activity related to housing, which we do expect to pick up in the second half. And we see results of the systematically work to improve customer satisfaction amongst the smaller customers as well as an uptick in the market share of a number of start-ups who was choosing to start their working relationship with DNB. This is a tremendously valuable position for us across corporate customers in Norway overall, and return on allocated capital is 21.9% in the quarter.

Large corporates, growth of 3.3% in the quarter, accelerating towards the end of the quarter, showing healthy activity, growth driven by industrials and energy at our core markets, is a strong momentum in net other income and an increase by 17.6%, and the portfolio continues to remain very robust.

I'd like to end this quarter with a few comments related to our activities across investment banking and asset management. And we'll remember that we have talked about systematically working to strengthen these areas strategically many years. And here, we can clearly see how these 2 areas have become an increasingly important part of our business, now further strengthened also with the Carnegie acquisition.

The integration of DNB Carnegie and the merger is going in accordance with plan. And I would add also slightly better than expected. We see that the offering is very well received by our customers. We continue to see a confirmation of the strategic rationale and our ability to offer services and products that wins mandates we would not have been able to do separately on our own.

We remain committed to deliver on the synergies that we highlighted on the outset of announcing the acquisition. And there are several particularly strong areas this quarter, already mentioned, equities, bonds and asset management that shows an inflow of more than NOK 10 billion in the quarter.

And with those remarks, I will hand over to our CFO, Ida.

Thank you, Kjerstin, and thank you, everyone, for listening in to this and also participating here today.

I would now like to turn to the second quarter in a bit more detail. We continue to see the good momentum that we saw already in first quarter in all customer segments, with profitable loan growth picking up with 1.7% in the quarter. We note the continued good growth, profitable growth in the personal customer segment, up 0.8%. Large corporate customers in Norway was up 1.8%, and large corporates, we noted a solid quarter with increasing lending volumes of 3.3%.

For large corporates, it's important to note that the lending growth came towards the end of the quarter and, therefore, does not fully impact NII in this quarter. We noted a large shift in our deposit portfolio this quarter, where low-margin deposits in large corporates were partially replaced by high-margin deposit personal customer segments. This meant that the deposit volumes were down by 1.8% in the quarter.

Personal customers up 5.9%, positively impacted by the annual holiday payment, which is made in June. Corporate customers in Norway was up 2%, with a continued positive contribution from the public sector. Volumes in LCI were down by 13.9%, reflecting outflow due to repricing of short-term low-margin deposits as well as one additional payment of the oil and petroleum tax this quarter. We continue to maintain a strong deposit to loan ratio in our customer segments of 73.4%.

The customer spreads are, as Kjerstin pointed to, stable, while the net interest margin is down by 5 basis points, now amounting to 185 basis points. The net interest margin is predominantly affected by the noncustomer-related other NII such as amortization effects, treasury as well as interest on equity, which is reducing this quarter, lending and deposit spreads, among others, impacted by the increase in average money market rates, where you see a positive effect of deposits as well as a negative effect on overall lending spreads.

In addition, we continue to see a fierce but rational competition in the Norwegian market also impacting our margins. The repricing announced following the Norwegian Central Bank's cut of key policy rate will have a full effect from the 25th of August.

NII was down by NOK 258 million in the quarter. This, we had a positive impact of an additional interest day by NOK 130 million. The lending margins are affected by the increased NOK money market rates and continued strong condition, as I mentioned earlier. This was partly offset by the increased spreads on deposit, but due to the fact that there was a shift in portfolio mix during the quarter, you will also see an impact of that. Since loan growth came in, in the later part of the quarter, average loan growth were lower, therefore, impacting NII volumes in NII.

The combined effect from spreads and volumes were NOK 108 million in the quarter. Additional elements impacting NII this quarter was front-loading of funding activity, interest on equity as well as amortization and fees that were coming down from a high level in the first quarter.

We delivered a strong quarter results within net commission and fees, with a solid performance across the board and from a very diversified platform. Income from Carnegie is, as Kjerstin pointed to, now fully integrated in our quarterly numbers and represent a step change in terms of the fee platform from now.

Real estate broking was up 4% from the corresponding quarter last year, reflecting a higher activity overall in the market. Investment banking was up by 51% from the corresponding quarter last year, driven by a strong quarter within equities and bonds, and this was accelerating during the quarter, also following the 2nd of April.

Asset management and custodial services was up by 69% from the same quarter last year. Assets under management had an uptick in -- asset under management had an uptick of NOK 95 billion during the quarter with a positive net inflow of NOK 10.3 billion. We're happy to see that the majority of our retail customers stick to their savings agreements. This is also reflected by the strong positive net inflow of NOK 4.5 billion in the quarter from retail customers and net inflow from institutional customers of NOK 5.8 billion.

We note continued strong demand for trade finance products, and that's where you can see the increase in guarantee commissions up by 13%. Money transfer and banking services was down by 20%. There was a stable contribution from money transfers but reduced income from banking services. Sale of insurance product was up by 10%, with a continued positive development in the defined contribution pensions as well as nonlife insurance products.

Now moving on to costs, which this quarter was impacted by the full integration of Carnegie, some one-off effects as well as overall higher activity. Costs increased by NOK 818 million from a seasonally low quarter in the first quarter.

Q1 numbers only included 1 month of Carnegie. With Carnegie now being fully integrated in our numbers, we note increased costs related to fixed salaries, variable salaries and depreciation in addition to one-off costs linked to the integration process. As mentioned last quarter, we estimate a one-off cost this year of around NOK 250 million. That means that there should be approximately NOK 100 million more to be taken in the 2 next quarter in relation to one-off costs.

Pension expenses are up by NOK 212 million, related to higher return on the closed defined benefit scheme. The scheme is, as you know, partly hedged, and you can, therefore, find a corresponding gain under net gains on financial instruments.

Portfolio quality remains robust and well diversified with 99.3% of the portfolio in stage 1 and 2. The personal customer portfolio, which accounts for approximately 50% of our exposure default, remains strong, and we do not see any negative development in that portfolio.

For corporate customers Norway and large corporates, impairment provision totaled NOK 203 million and NOK 462 million, respectively. Stage 3 impairment provision relates to customer-specific situations, but we're not seeing any systematic change or negative migration in any segment or geography in those portfolios.

We remain comfortable with our credit quality in the portfolio, but please bear in mind that losses will vary from quarter-to-quarter.

Now over to capital. Our core equity Tier 1 ratio remained strong at 18.3%, 180 basis points above the regulatory expectation. The core equity Tier 1 was positively impacted by profit generation of 35 basis points in the quarter, which was somewhat offset by the share buyback program, which we announced in June, accounting for approximately 40 basis points on the core equity Tier 1.

The combined effects of CRR3 as well as the Sbanken moving over to our IRB models was, as mentioned last quarter, almost neutral. As indicated earlier, we estimate a negative effect of approximately 60 basis points related to the increased risk weight floors on residential mortgages coming into play in the third quarter.

The leverage ratio remains strong at 6.2%, well above the regulatory requirement of 3%. With a core Tier 1 equity ratio of 18.3%, a leverage ratio of 6.2%, our capital position remains strong. We are well positioned to meet announced regulatory changes while, at the same time, continue to deliver on our dividend policy as well as supporting our customers in the years ahead.

Thank you for your attention. And with that, we open up for questions.

Thank you so much, Ida and Kjerstin, and we will open up for questions from the audience and also from the online viewers.

Any questions from the audience? Thomas from SEB. Just wait for a microphone.

I have 2 questions. First, on the NII, this amortization effects on fees was within NII was strong in Q4 and even higher in Q1, and now they are coming down. So do you think they have come down to a more normal level? Or should we expect a further decline next quarter?

And the second question on commission and fees, this banking services that you pointed to us due to the decline year-on-year decline, could you give some more flavor on that? And also, will that -- this decline impact your commission and fee growth targets?

I'll do the first, and Ida can answer the second one. On amortization and fee income element in NII, it's typically an element that will vary from quarter-to-quarter. Over time, usually the quarter with the higher activity are the fourth quarter and the second quarter, and it's been a bit atypical this quarter with the first quarter being so strong and a slightly lower level in the second quarter.

Keeping also that activity grew towards the end of the quarter in large corporates, these fees are typically generated once we do and complete syndications as well as refinancing. So it's a bit hard to guide you specifically in coming quarters, but we can repeat that the activity level across large corporates is high and that we continue to focus on originate to distribute that typically provides a good contribution over time also in the amortization and fee part.

And on the banking services, the reason why we're seeing a decrease in net income from banking services is because we have an increased cost associated with insurance, which is highly linked to originate and distribute as well, where it's more kind of capital optimization in the large corporate area, where we're also using insurance as being an important part of that. So that comes in on banking services, which means that there's a net reduction, but underlying income hasn't really changed to the same degree as you're seeing on the net numbers.

So I wouldn't change anything in terms of the overall picture and the contribution overall from commission and fees based on that.

Yes. Next question is on the guy with the tie in the audience, Herman Zahl from Pareto.

You mentioned high activity following the rate cut in June. So I was wondering how you see the competitive environment in PC lending currently? And if you have seen any changes in behavior from the smaller banks in Norway following CRR3 being implemented in the quarter?

The competitive environment is fierce. And we are seeing signs that the smaller banks have input their competitiveness after the implementation of CRR3, but it's always high in Norway but intensifying slightly this first half where there is a lot of liquidity in the market. Even so, we already had a high activity in particular for financing certificates also prior to the rate cut, and the rate in particular, stimulated activity related to bank switching, and we saw a sharp uptick in a number of customers who showed an interest in taking their mortgage over to DNB.

So a very active market, a very fierce competition, but still a rational market overall. I think that's the most important message that the rationality in general in the Norwegian market persists and continues.

And then just since it's a bit more than a year since technical merger with Sbanken. And just thinking that -- are you -- and you mentioned, I think, some -- what you referred to as child diseases last year. How has the development there been since integration? And are you able to sort of leverage that brand when there's increased customer in the markets such as now?

A lot of the so-called child diseases have certainly been fixed and the liking has improved. And we are benefiting from a broader sector of offering, where we typically see Sbanken more attractive as a bank swapping offering and the DNB brand more competitive on buying new housing even. So we also now see the DNB brand being seen very attractive for people who are looking to move their mortgage. But definitely, there continues to be broader optionality and a broader competitive position across the 2 brands, and we will continue to work to differentiate among the 2 and improve the offering across both brands as we move ahead.

And one more, if I...

Yes, please.

And then on your ROE target, above 14% until '27. Just given the interest rate expectations you showed here and sort of you are still very well capitalized, do you think the earnings part of that or the capital base, what levers are the most important to reach 14%, do you think? Or do you think it's -- are you able to reach 14% at your current capitalization, so to speak?

We maintain a clear ambition to deliver higher than 14% return on equity. Currently, we are delivering well above that. And even with an outlook that indicates 2 more rate cuts, we are comfortable maintaining our ambition to deliver above 14% return.

The second question from Thomas.

Final question from my side on lending growth and capitalization. So have you considered speeding up the lending growth, for instance, outside Norway as a supplement to buying back shares as you're buying back these shares at a higher, higher price or currency these days?

I think our ambitions and guiding on lending remains intact. We still say 3% to 4% annually across the customer segments. But we have also shown that in selective years, we may grow a little bit faster. But it is a key element in our large corporate operations that we focus on a rapid turnover of capital and combine this with an increasingly attractive offering across our investment bank. That is the key provide a return on a very, very robust capital base, and we will continue to push for that.

So we are not being limited in terms of how much growth we can take. And indeed, we have specializations and competence in sectors also outside of Norway and the Nordics that are growing on the back of global trends at the moment, but we focus equally much on distributing that capital and raising capital in the market for these customers in addition to using our own balance sheet.

So on share buybacks, have you considered other...

We maintain our previously communicated strategy on share buyback and are not at a level where we have where we have considered to make any changes to that at the moment.

Thank you so much. Thank you for your questions. I don't see any more questions. So I think we will wrap it up, and have a good summer, everyone. Thank you so much.

Thank you.

All right, everyone. Welcome to DNB's pre-close call for the second quarter. This call will not contain any new information. This is just a reminder to you of what we have communicated that might affect this quarter's result. Just a general reminder before we start with the NII, and that is that the Carnegie figures will be fully included and integrated in the financials from Q2.

As you remember, in Q1, only the first month of Carnegie figures were included. I'll start with NII and continue with capital, and then Ida will go through the rest of the P&L. On the NII, there will be one more day of interest compared to first quarter, which will have an effect of approximately NOK 130 million.

On the volume side, just to remind you that in the first quarter, the group had a total loan growth of 0.5% FX adjusted. Statistics Norway reported last 12 months credit growth per April at 4.1%, of which household was 4.2% and corporate was 2.7%.

The NOK has strengthened versus the U.S. dollar during the quarter, and this will have a negative effect on the NII. The FX split in the loan portfolio per first quarter was 8% U.S. dollars, 6% euro and 6% SEK. On the margin side, Central Bank rate has been unchanged at 4.5% during the quarter. And DNB Carnegie expects the key policy rate to remain stable at 4.5% until September and expect 25 basis point cuts in September and December and one more additional cut in March 2026. After which it's expected to stabilize at 3.75%. We have mentioned the other NII during the pre-calls over the last few quarters and particularly on the amortization effect and fees.

Amortization effects and fees typically is driven by activity level in the large corporates, both in terms of refinancing and consequently amortization of fees and new financing, which is fees. After a high growth in the fourth quarter in LCI, there was a high level of refinancing in the first quarter, which positively affected the amortization fees.

On the capital side, in the first quarter, we reported a CET1 ratio of 18.5% versus the Norwegian FSA's expectations of 16.7%. The implementation of the CRR III or Basel IV and migration of the Sbanken portfolio to IRB models is expected to have a neutral effect this quarter. Positive FX effects on CET1 due to strengthening of NOK or weakening of the U.S. dollar.

Here, the FX sensitivity is approximately when there is a 10% change in FX Norwegian kroner, that will have approximately 20 basis points effect on the CET1. As stated earlier, we have sent an application to the Norwegian FSA to buyback up to 1% of outstanding shares. And we will inform you when we initiate a share buyback program.

Just a reminder of future headwinds. Ministry of Finance decisions regarding higher risk weights floors for mortgages from 20% to 25% will have a negative effect on the CET1 ratio of 60 bps from the third quarter.

And over to you, Ida.

Yes. Starting with a general comment to commission and fees. Generally, activity levels tend to be higher in the second quarter compared to the first, which impacts fees positively.

Moving on to net gains on financial instruments at fair value and starting with customer revenues in DNB Markets or FICC, similarly, typically sees a seasonally higher activity level in the second quarter compared to the first. The mark-to-market effects on the AT1s and the basis swaps will be announced shortly after quarter end. But a reminder on the outstanding FX AT1s, we have USD 700 million AT1s outstanding and SEK 4.95 billion AT1s outstanding. And keep in mind, of course, that the U.S. dollar has weakened compared to the NOK quarter-to-date.

Moving on to costs. A seasonally higher activity level in the second quarter compared to the first, all else equal, typically leads to somewhat higher costs. Market expectations for salary inflation in Norway for 2025 is now at 4.5% according to the Central Bank's latest estimates. The annual centralized wage negotiation process was concluded in April with a frame agreement of 4.4%. And the wage adjustment for DNB will take full effect from May 1.

As communicated with our first quarter release, we expect to incur one-off costs related to the Carnegie integration in 2025, so the full year 2025 of approximately NOK 250 million, of which NOK 77 million were booked in the first quarter. And a reminder on pension expenses that normalized pension expenses are expected to be slightly higher than NOK 400 million in the quarter, and the closed defined benefit compensation scheme is primarily linked to the development in global equities.

Impairments and asset quality, there's really no change in our message on asset quality. The portfolio is carefully monitored, and we are still comfortable with the risk in the portfolio. As you know, impairments will vary from quarter-to-quarter depending or driven by potential changes to macro input factors in the ECL model and/or company-specific events. And given the elevated level of uncertainty driven by the global macro picture, it would be natural to see more company-specific events as we also stated last quarter. But again, we do not see any systemic areas of concern in our portfolio.

And finally, a kind reminder or request to please submit your consensus estimates to Rune by end of business on Friday, June 20, so this coming Friday. With that, we thank you for your attention and wish you a good rest of the day. Thank you.

Thank you.