Mandatum Aktie

Good morning, everyone, and thank you for joining Mandatum's Q2 2026 audiocast. My name is Lotta Borgström from Investor Relations, and I am pleased to be joined today by our CEO, Petri Niemisvirta; our CFO, Matti Ahokas; and as a special guest, the Head of Asset and Wealth Management, Janne Sarvikivi.

During this audiocast, we will begin by presenting the highlights and key developments from Mandatum's second quarter of 2026. We will also comment on the announced acquisition of the Swedish asset manager, Cliens, which was communicated earlier this morning. Following the presentation, we will proceed to the Q&A session where you will have the opportunity to dial in with any questions you may have. Participants can also submit questions through the chat, which we will review the available time after the dial-in Q&A. As stated, Janne Sarvikivi is joining us for today's call and will be available to comment in particular on the transaction and answer related questions later in this audiocast.

And with these remarks, I will hand over to Petri. Please go ahead.

Thank you, Lotta, and thank you all for joining us today. The second quarter was a strong one for Mandatum with good results across the board. Our capital-light profit before taxes increased by 32% year-on-year to EUR 27.1 million. This demonstrates the strength of our strategy and the continued growth of our core businesses. The market environment was supportive during the quarter. As a result, our client assets under management increased by 16% year-on-year to a record EUR 16.7 billion. Net flow remained solid at EUR 164 million and stayed at the same level as a year ago. The strong growth in assets supported our fee result, which increased by 21% to EUR 22.4 million.

The group's profit before taxes more than doubled from the comparison period and reached EUR 79.1 million. The result was supported by a strong net finance result and good investment returns from our own with-profit balance sheet investments, particularly fixed income assets, benefiting from tightening credit spreads. Alternative investments and especially private equity investments also performed well.

Let me then move on to the -- to client assets under management and net flow. Client assets under management reached a new record of EUR 16.7 billion at the end of June. Client assets increased not only in asset and wealth management, but also in our corporate and retail businesses, in which the equity weight of investment is typically higher. This broad-based growth highlights the importance of all our business areas for Mandatum's profitability and demonstrates the strength of our diversified business model.

Net flow remained positive in all our key business areas during the first half of the year. Asset and wealth management generated the majority of net flows, while corporate also continued to contribute positively. In corporate business, sales of pension insurance products and personal funds remained at a good level. In retail, our cooperation with Pohjantähti continued to support risk insurance sales and investment product sales return to growth. Retail assets under management increased to more than EUR 4 billion.

We are also encouraged by early signs of improving economic activity in Finland. A gradual recovery in the economy, including increasing M&A activity, is expected to support both our asset and wealth management business and our corporate customer business going forward. This creates new opportunities for client growth and advisory services.

Asset and wealth management continued to deliver strong growth during the quarter. A particularly positive development was the continued success of our international institutional business. International institutional assets increased by 19% year-on-year, driven mainly by growth in Sweden. During the quarter, we also won our first clients in Italy, further strengthening our position in Europe. Private wealth management assets increased by 18% year-on-year and exceeded EUR 5 billion for the first time. Growth was supported by strong sales of discretionary mandates and continued client confidence. We are pleased with the strong momentum in this business. One of our strategy ambitions is to double our market share in Finnish private wealth management during the [ strategy ] period, and the current development shows that we are moving in the right direction.

We have continued to invest in future growth through new hires, among others. While these investments temporarily increase costs, we believe they will accelerate growth and strengthen our position in the coming years. We also made excellent [ process ] in fundraising. During the quarter, Mandatum Credit Opportunities II raised more than EUR 300 million in its first closing, and Private Debt VIII secured over EUR 100 million of commitments. This demonstrates investors' trust in our expertise and long-term track record.

Finally, a few words on profitability and efficiency. Our cost/income ratio remained at a healthy level of 49%. On a rolling 12-month basis, the ratio improved by 4 percentage points year-on-year. We have continued to invest in selected growth areas, especially within asset and wealth management. Despite these investments, we have maintained a very strong level of efficiency. Our fee margin remained stable at 1.12%. While business mix effects continue as asset and wealth management grows faster than other businesses, underlying product margins remain stable. This reflects good pricing discipline across our operation.

Overall, we continue to see clear evidence that our business model is scalable. We are growing assets, increasing earnings, maintaining efficiency and investing for future growth at the same time.

With that, I will now hand over to Matti, who will go through the financials in more detail.

Thank you, Petri. Let's now take a closer look at the second quarter result components. As pointed out, our fee result was up by 21% year-on-year with assets under management up by 16%, and both of these are at all-time high levels. Compared to Q1, our AUM was up by 8% or EUR 1.3 billion to EUR 16.7 billion. The main driver for this quarter was the strong market performance of our corporate and retail assets, which have a higher equity weight than our asset and wealth management segment.

As Petri mentioned, the cost/income ratio of our client AUM was 49%, actually slightly down quarter-on-quarter. Our income was up in Q2, but increased growth initiatives in the capital-light business meant that costs in this area increased as well. This is in line with our business plan, as you know. It's worth noting that the overall cost control remains good. Our group total cost/income ratio continued to improve, and we're well in line with our overall annual cost growth target of around 1% until 2028.

The net finance result was strong across the board in Q2, and I'll talk a bit more about this later on. And the result related to risk policies at EUR 5.1 million in Q1 was a significant improvement compared to last year. As you know, one of our key financial targets is to grow the capital-light profit before taxes by more than 10% annually by 2028 compared to 2024. Looking at the second quarter, the reported profit before tax was EUR 27.1 million or 32% growth versus Q2 '25. Although the comparison number in Q2 '25 was maybe a bit low, we are at the run rate above our long-term target growth.

Looking at the segments, asset and wealth management profit grew by 19% year-on-year, driven by a 20% growth in the fee result. The corporate segment saw a significant profitability jump as the result related to risk policies increased due to higher CSM release. In addition, the AUM increased by 18%. The retail segment saw the largest increase in fee result or 32%. The fee result was positively impacted by the very strong AUM development in the quarter. Actually, the AUM was up by some EUR 400 million compared to Q1.

And then, let's take a closer look at the group net finance result, which came in at EUR 55 million. As you all know, Q2 was a positive quarter in the financial markets, and this is also reflected in our client AUM. The with-profit investment return in the quarter at 2.5% was above the expected level. Fixed income credit makes up now as much as 79% of our own investment portfolio. In Q2, the return was positively impacted by mark-to-market adjustments from lower rates and tighter spreads. The portfolio mark-to-market yield was down by 20 basis points in the quarter to 4.7% but is significantly still above the cost of liabilities.

Our equity portfolio return was 5.5% in the quarter, broadly in line with the market. We continued the portfolio derisking in line with our strategy, and now, listed equities amount to only 2% of the portfolio. One specific thing in the quarter was that private equity returns were very strong in the quarter, actually at 7%, and we are seeing clearly higher capital distributions from the portfolio. In Q2, the PE capital distributions were over EUR 40 million, much higher than the level in previous quarters. This supports the capital release in line with our plan. Our private credit portfolio has also continued a positive trend like we've seen in previous quarter. The real estate portfolio return was negative, and this was mainly due to a write-down of a single lease contract.

Turning then to the other part of the net finance result or discounting and cost of liabilities. As you saw, market interest rates decreased slightly in Q2, and this had a EUR 21 million negative discounting impact. Remember also that this item also includes the profit sharing impact from the segregated portfolio. And the impact was unusually high in Q2 as the investment return from the segregated portfolio was unusually high here as well.

As in previous quarters, it's nice to say that we continue to consistently generate capital. Organic capital generation was EUR 90 million or EUR 0.18 per share in Q2. This was the highest quarterly figure in the history of the group. Q2 was the third quarter in the history of Mandatum when the SCR from the with-profit business is smaller than the capital-light SCR. And this confirms and shows our clear transformation journey towards a high-ROE capital-light group.

The group fully-loaded solvency ratio stood at 195%. This was down from 207% in Q1, but clearly still above our target range. The decline was mainly driven by the increased SCR from significant increase in client equity AUM and then the increase in the symmetrical adjustment factor, which was at the maximum level in Q2.

And now back to you, Petri.

Thank you, Matti. Before we conclude today's presentation, I would like to briefly comment on our announced acquisition of the Swedish asset manager, Cliens. Cliens is a well-established Swedish asset manager with a strong investment performance track record and a highly respected brand among a broad client base. The company managed approximately SEK 36 billion of client assets and serves around 100 institutional clients and 30 distribution partners through a team of experienced investment professionals.

The transaction increased Mandatum's footprint in the Swedish asset management market and supports our Nordic expansion ambitions. Sweden is the largest asset management market in the Nordics, and the acquisition strengthens our local presence and client reach there. The acquisition also enhances our product offering through complementary actively-managed equity products.

One of Cliens' particular strength is its strong expertise and long track record in small and mid-cap equities. This complements Mandatum's existing strengths and broadens the range of investment solutions we can offer our clients. Also, we will look for opportunities over time to further broaden the distribution of Mandatum's own products. In addition, we believe that Cliens is an excellent strategy and cultural fit for Mandatum's. Cliens' active investment manage approach, quality of operations and strong client focus were important factors behind this transaction.

The transaction is expected to complete by the end of year 2026, provided that we get the necessary approvals from the regulators. The announced acquisition does not change our financial outlook for 2026 or our shareholder payout target. This transaction is a very good example of how we are executing our strategy in practice. At our Capital Markets Day last year, we highlighted the international growth in asset management and the enhancement of our product offering as 2 key strategic priorities. The acquisition of Cliens supports both of these objectives and is a natural next step in this journey.

Overall, second quarter confirms that our business is developing well and that we continue to execute successfully on our strategy. We entered the second half of the year from a very good position and continue to work towards our vision of becoming the fastest-growing asset and wealth manager in the Nordics.

With that, I will hand back to Lotta.

Thank you, Petri. We will now move on to the Q&A session. Joining Petri and Matti, we also have Janne Sarvikivi available to answer questions, particularly regarding the announced acquisition of Cliens and our asset management business in general as well. Please dial-in or submit your questions via the chat.

[Operator Instructions] The next question comes from Vash Gosalia from Goldman Sachs.

I have 2 questions, please. The first one on Cliens and the acquisition there. So could you give us a little bit more color on how much it would add to your EPS? So I roughly calculate it's like EUR 9 million of bottom line. But then, do you see any upfront synergies from this acquisition? And also, the other point I was quite curious on getting your inputs on is, the fee margin at Cliens appears to be around 60 basis points as opposed to your around 1.12 percentage points. So could you just give us some sense of how does your fee margin then develop? Or do you basically see upside to the 60 basis points? So, that was the first part.

The second just on Europe. Could you give us a sense of what's your near-term ambition over there? And any other countries outside of Italy that you're looking into?

Vash, it's Matti here. I'll take some of the questions on the financials of Cliens. Altogether, I think your numbers sound quite realistic on the financial impact. You should, however, remember that there's probably going to be some amount of purchase price adjustments regarding that. So, that might be a couple of millions. But I think the ballpark is correct. And in terms of the margins, the margins are actually pretty close to what we are reporting at the moment. Of course, it's a kind of definition question, how do you look at the kind of distribution costs? Are they a reduction of the margin? Or are they actually a cost? So I think that's probably the explanation. But the way we look at it, the margin should be fairly similar to what we're seeing at the moment on that side.

I think, Vash, you asked about the synergies. This is not an acquisition that we've made targeting cost synergies in the first instance. So that's not going to be a main concern for us. We're looking for sales synergies, top line synergies and ways to cooperate, but cost synergies are not a central part of the calculation here.

And then, I think you had a question about Europe as well and our ambitions there. We intend to grow our business there in the similar fashion that we've done so far, taking it one step at a time and looking at the opportunities as we go along. Petri already mentioned in his opening pitch about the first clients we've now had from Italy and so forth. So it's a slow progression and -- but it will lead to the end result that we are after, which means growing our business there in a fashion that's favorable for the shareholders.

On Europe, could I just actually get a little bit more color on -- so what is your right to win or your USP when you're competing in the European market? Because presumably, there, you do not have the same sort of heritage or history that you have in Finland. So how do you then sort of create that proposal or proposition [ for it ] and compete with like larger international asset managers?

Petri here. So you are right with that. So basically, our brand recognition is extremely high in Finland and somewhat also increasing after this acquisition, of course, also in Sweden. But when it comes to Central Europe, it's not the brand recognition which is leading our business and supporting our business. I would say that it's a great expertise, long-term track, long-term team, which has been on place. So once we are competing with the large -- really big players and local players in Central Europe, it's just the performance and the track and the return what we can offer and stability in our businesses and teams. And that's what have already turned the business in those countries. So it's a clear thing that we have to be better than others in many ways in order to open the doors in the first place.

Our USP is really product excellence there. I mean, it's all about having a product that stands out, that has the track record Petri just described, and also, of course, then the fact that we have the right people opening up the right doors there. So our sales force needs to be very competent, which, of course, they are. So it's a combination of product excellence and then having the right connections, but it's not brand recognition, as you correctly pointed out.

The next question comes from Michele Ballatore from KBW.

So the first question is about the impact on the solvency from the acquisition of Cliens in Sweden. I mean, of course, my second question is, how should we look about the dividend expectation? Because I believe, I mean, current expectation sees dividend, let's say, be also part of your excess capital. So I mean, the EUR 64 million will go out, fund. So if you help us understand how to frame all these moving parts ahead of this -- the completion of this acquisition?

And then, my second question is about the distribution abilities. I think we have discussed this that any M&A opportunity will primarily target distribution even outside Finland. So what kind of distribution -- attractive distribution capabilities we can -- you saw in this acquisition in this asset manager?

And then, the third question, which is more curiosity as I'm Italian, and I'm very surprised you acquired clients in Italy. I mean, how did this happen in terms of the acquisition and what kind of client -- I don't know if you can mention the name, but what kind of client you were able to acquire in Italy?

Michele, it's Matti here. The solvency impact from the deal, obviously, as we've said, it's EUR 64 million. And typically, asset manager, the balance sheet is very small. The company has no debt, and that means that the real impact comes from the intangible assets and the deduction from own funds. And I think it's probably in the magnitude of roughly EUR 50 million impact altogether. And if you put it in the model would mean somewhere between 5 and maybe 7 percentage points on the solvency ratio. So quite manageable altogether for that side.

In terms of the dividend payout, as I said, this will have no impact. We have sufficient liquidity in our parent company to finance this when the deal is closed. So this is not an issue at all. We are -- we have a lot of liquidity, and we have very little debt as well. So, that is not an issue for us at all. So, no impact for that, and we have the sufficient funds ready in cash and marketable securities already.

And then, it's Janne here. You had a question about the distribution and what this brings to the distribution of Mandatum's products and otherwise. I think it goes in both directions. First of all, of course, Cliens gains a very good distribution channel. They have a Swedish business. They are very strong in Sweden, but they have limited or no client exposure outside of Sweden. So we are able then to give them a path to Finland, to the rest of the Nordics and to Europe at some stage when we deepen our relationship and start distributing our products through our channels.

And then, in the other direction, of course, we have a very good client base and very good client relationships in Sweden as it is. But of course, Cliens has been in the market for even a longer time. They have a bit of a different angle, different product palette. So they can now, of course, also then help us through opening doors, making sure that our products get the shelf life that they need to their customers, and that will help us to distribute our products. So, that I think...

How is distribution made, sorry?

How is distribution made?

Yes.

Well, both directly and through distribution platforms, if you talk about Cliens, how they distribute their products.

And then, you had a question about Italy and the clients there. Of course, I can't comment on the name of the -- or the type of the client or clients that we have gained there. But the way we do it is basically the same way we do it in all the countries, through our own excellent salespeople who have the right types of contacts. And then, of course, we also use partners in some of the markets to help us distribute these products. And this is the way we work, and that's also the way we've succeeded in Italy now in the last quarter.

Yes. And if I may comment, so not customer name or client name, but it's clearly what we are doing outside of Finland, it's only institutional business. So it's an institution, of course, the customer in Italy. And like Janne said, it's -- we do have something special to offer to customers all over the Europe with certain asset classes, which are not that commonly known and offered in certain markets and extremely good track record on those products. So there's a combination of uniqueness and an extreme good track record. And of course, like Janne said, the right people to open the doors.

The next question comes from Antti Saari from OP Markets.

Well, most of my questions regarding Cliens have been asked, but I have one more to go. So looking at the figures that you gave in this release, they have been weakening in last year, even though asset management industry in general has performed quite nicely and going upwards. And on the other hand, assets under management for Cliens were lower at the end of June than they were at the end of last year. So what's behind this? And has these clients seen weakening performance for several years? Or is this just a short-term issue?

Thanks, Antti, for the question, Janne here. Yes, you're correct in pointing out that the AUM has declined slightly from year-end and that figures have been slightly weakening. The main factor behind this is, of course, the phenomenon we've seen in the entire Nordic market regarding small and mid-cap companies and the performance of those companies relative then to the rest of the markets. It's been a tough market to be in for the past couple of years, and it's been maybe particularly tough in Sweden. And despite this, I think Cliens has done a very good job in retaining clients and making sure that their performance is as good as possible. And of course, we think that, that entire market segment of small and mid-cap companies is something where we can add value to customers because it requires research capabilities. It requires analytical knowledge. It requires a very high level of professionalism from the PMs and the analysts. And we think that Cliens has all of these. And it's a market segment and sector that we think will come back. And we strongly think that when it does and even in the face of some headwinds, Cliens can benefit from this.

Okay. That's clear. Then one a bit technical question for Matti. I thought that your solvency requirement rose fairly clearly in Q2 compared to Q1. And in the report, there was mentioned this symmetric assumption of equity holdings. But was there also something else that impacted your solvency requirement?

Yes. Antti, that's absolutely correct that it actually came down quite a lot. But then think about it that our assets under management and mainly on the equity side, obviously, in the client AUM, increased by EUR 1.3 billion during 1 quarter. So this meant that the solvency capital requirement came up and the corresponding increase, which you normally see in the own funds, was lower than that. So this will even out in the coming quarters altogether. But of course, the main impact was that the -- now the symmetrical adjustment factor is at the maximum at 10 percentage points because the markets have been so strong. So, that, of course, hit it instantly. But over time, this -- of course, we hope to see as good AUM growth because that's probably the most -- single most important driver for our profitability, but it's also kind of -- it will even out the impact altogether because then the own funds increase will compensate for that as well. But once you see a very high increase in the assets under management, it will kind of temporarily burden the solvency margin as well, even though it's in the capital-light business.

The next question comes from Jaakko Tyrvainen from SEB.

Jaakko from SEB. The Cliens questions have -- most have been discussed. But if I may, I would like to ask about the incentives for the key employees there. Is the 22% stake enough strong in your view for the key employees? And could you talk a bit more how you are planning to retain the key people in the business?

Yes. Thanks, Jaakko. We think that it's a very strong vote of confidence that the key employees and actually most of the employees at Cliens wanted to stay along for the ride that we have in front of us. And the incentive from their part is actually quite strong with the shareholding they have. So we absolutely believe that the kind of ownership they have is enough to align their interest with us and retain the key employees. That was one of our main concerns and main points during the discussions that we absolutely want to retain the key employees, and we think that we've found a structure that very much does so.

And then, on the Q1 report and performance, I know that you are talking about the net numbers in terms of flows. But could you elaborate, did you see material outflow during the quarter? Just trying to understand the underlying new business trends there.

Yes. Petri here. About the net flow and outflows and inflows, I would say that no one should be worried about our sales capability. Our sales is going extremely well, and our products are in order and there is no softening on that side. The fact, of course, is that we have now invested quite a lot of new salespeople lately, and we haven't seen or got yet, let's say, normal level of sales from them. At the same time, our assets under management has increased a lot, which means that even our customers are extremely happy with us. We have a very high NPS. Still, we have a normal industry average outflow yearly basis. Our customers need money back, a reason or another, even though they are happy with us. And that means that the bigger assets under management also creates bigger net outflow, no matter what in certain ways. So you have to sell even more than previously. So that's one.

There is one a little bit bigger outflow number in customer side, which has nothing to do with the customers' happiness with that. It was customers' other reasoning and structuring. So I would say that it was a little bit more outflow side than sales inflow side, which affected that the number wasn't that high when it comes to net flow during the Q2.

Very good. Continuing on that one, you have reported quite nice amount of new product commitments during the first half. Should we think that the sales -- good sales and commitments is somehow away from the kind of sort of ordinary net flows? You will get that money later on, but is it kind of -- should we kind of think that the commitment sales has been done -- is kind of similar to the net flow sales?

Yes. Of course, those commitments -- Janne will tell a little bit more details. But as a high level, those commitments, of course, are not seen immediately in our net flow. But at the same time, they require resources from our sales organization. That's also the one explanation for our net flow maybe not be the level that somebody wanted it to have because our resources and salespeople, they concentrated a lot for commitment-based sales and not having that much time to other products because that was very important to get those commitments as much as possible before closing. And that money will come once we call those commitments in. Typically, it's 2 to 3 years when everything we are planning to call in. But of course, it will show up in our net flow going forward once we call that money.

So Janne, if you want to add something to that?

Yes, sure. Just adding to what Petri just said is that commitment-based sales is very important for us. It's money that typically flows into products that are very specific to our expertise. And of course, like Petri said, it takes some resources away from selling other products. That being said, I wouldn't say that our sales personnel are capacity constrained. They have capacity to sell other stuff as well. But it just so happens that during the first half of the year, we had 2 particularly excellent products that were in high demand among customers, and that took some of our resources, of course, then as well.

The next question comes from Emil Immonen from DNB Carnegie.

Just a couple more. I want to push a little bit on the hiring of personnel because when I look at the number of employees you have, it doesn't really look like it's increasing. So is there then simultaneously some cost cutting in other places if you're hiring sales personnel? Or how should we think of it?

Yes, you are right. It's the top -- number of all employees is not increasing. It's more or less the same than it has been in -- or in many quarters, but it's inside of the company that there has been a shift from, let's say, support functions to customer service and sales. So we are here following the ratio of the number -- percentage, what is the number of salespeople in customer service compared to whole number of employees, and that number is increasing. So there is less people in support functions than it used to be and more people in sales side than it was like a year ago or half a year ago. That is what has happened.

Okay. Sounds good. And that's then -- I assume it's mostly focused on increasing the institutional sales because that has -- if we look year-on-year, well, it was flat in -- the net flow was flat in Q2, and it's not really accelerating right now at least. So you're looking to accelerate that in at least the coming years, but hopefully coming quarters as well.

Yes. The areas we have added people is international institutional sales. We have also changes in our institutional sales in Finland. And also, private wealth management in Finland, we have new hires, as well as in our corporate business area. So quite a wide increase in our sales forces.

Okay. Understood. And then, maybe one more question on the acquisition of Cliens. As you described, it's not any cost synergies you're going for, it's more revenue synergies. So I want to ask any overlap in your customers? Or is it completely synergistic?

So there is -- let's say, they are also -- Sweden is not that big country. Of course, there are some common customers, but it's -- what is good news for all of us is that there are also -- we are a little bit in different customer segments in certain way, even though both are in institutional customers. So, that creates opportunities for both parties. So we have a little bit different type of institutional customers portfolio.

So Janne, if you want to add something, please?

Yes. Following up on that is, of course, that our product portfolios are exactly complementary. So we -- even though, of course, in Sweden, like Petri said, it's -- the key institutional customers are typically people we also talk to, but the products we sell to them are completely different than what Cliens has been selling. So, that is the overlap, but it's not a positive -- it's not a negative. It's a positive for us.

The next question comes from Vash Gosalia from Goldman Sachs.

I actually wanted to clarify on one of your answers from before. So you mentioned that your own funds -- in your capital-light business, your own funds is higher than the SCR. But can you give us a sense of how much own funds does your capital-light business generate on day 1 for per euro of SCR? So just trying to get a sense of the solvency ratio impact from new business.

And the other question was, again, just on Solvency II and the symmetrical adjustment. So you mentioned that it's at the maximum level, which is 10%. Does that mean if the markets continue to rally from here as they perform well, the benefit to your Solvency II ratio will be much higher than we've seen in the past?

Vash, it's Matti here. So basically, how it works is that the own funds is calculated by the kind of normalized equity market return or fund return, which is clearly lower what we've seen here now. So, that, of course, is kind of explaining part of the stuff. And I said 10 percentage points, it's actually 9 percentage points, the maximum, but that's where the level is now because of the strong market performance. And as you know, that is the buffering in the system so that when markets come down, then the solvency impact is smaller. And when markets are very positive, it is consuming more solvency margin altogether.

And sorry, I forgot your other question.

So the other one was just how much of own funds does the capital-light business generate on day 1 versus the SCR? So you had mentioned that your own funds on day 1 of writing business is higher than the SCR. But I'm just curious as to how much higher than the SCR is it?

The difference is not significant on day 1. And it depends, of course, on the products that we -- so as you know, in our system, we have -- our products and funds are part of our insurance wrapper. So, that is the main driver behind it. And then, of course, there is a solvency requirement because of that. But it's roughly the same or just ever so slightly above. But remember then, if you have a very big increase like we've had now in this quarter, it kind of consumes a bit more, but it evens out in the coming quarters.

The next question comes from Michele Ballatore from KBW.

Yes. It's still about Sweden. And just regarding -- I mean, if we look at your offering, of course, you have -- part of your offering is more, let's say, less plain vanilla like credit and things like that, I mean, where you have a strong know-how and probably quite unique know-how. So what kind of appetite you think there will be for this kind of products that are presumably higher margin in Sweden?

So you're asking about how our products sell in Sweden, the products we are currently offering, credit and other types of debt products? Or...

Also in light of acquisition of Cliens.

Right. So basically, I mean, it's a niche strategy, and we have been able to generate a lot of interest and sales in Sweden already at the moment. And if we think about how we can broaden that now through the acquisition, it's, of course, a question of getting our foot in the door for more clients and showing our product to them. And as we have been executing on a very successful niche strategy, which is based on our competence in these products, I think we're going to be very successful if we have an opportunity to gain access to clients who already have a good experience with -- working with.

Then let's move over to the chat questions. We have several questions from Sauli Vilen at Inderes, and some of these we have already answered. But the first one would be, can you confirm that 2025 figures are purely continuous fees and do not include any notable performance fees or other onetime fees? I think Sauli is referring to Cliens here.

Yes, we can confirm that.

Then following, is there a put-call structure for the 21.6% stake held by the management? If there is, can you open up the details regarding this?

Yes. We won't go into the details of the shareholder agreement. But what I can say, of course, is that the Cliens' employee shareholders have made a long-term commitment here to us, and we look forward to that partnership.

And then, the following theme, we have already touched upon, but just to make clear, are the key fund managers owners in Cliens?

They are owners in Cliens. Cliens' share ownership is very widely distributed in the company as well, but the key employees are all owners.

How much of the AUM comes from distribution partners and how much from institutions? And what is the share of the largest distribution partner?

We're not going to disclose the shares of different partners from AUM, but distribution partners are important because they are -- a lot of the AUM is distributed through them.

And the last question, how worried are you that both flagship funds are underperforming their corresponding indexes or indices on 1-year and 3-year periods?

Well, we briefly touched upon it earlier when we got a question about the performance. But the short answer is, we are not worried because we think that, in particular, this market segment, in particular, in the small mid-cap market, you should look at for a longer period of time than just 1 or 3 years. And we all know how the market has been during the past 1, 2, 3 years in that particular segment. On a 10-year horizon, for example, the figures look very different.

And if I may add, so once we have done our DD and look at the company and its people and knowledge, we believe the way of working and how they look at the market, and it's the same people who have done this long-term track, and we believe that it will come in good results going forward as well.

Okay. That concludes today's audiocast. If you have any further questions, please feel free to reach us at Investor Relations. Thank you for joining us, and have a great day.

A very good morning from sunny Helsinki, and welcome to Mandatum's Q1 Audiocast. I am Lotta Borgstrom from Investor Relations. And I am pleased to be joined by our CEO, Petri Niemisvirta; and CFO, Matti Ahokas, who will guide you through today's results. During this audiocast, we will begin by presenting the highlights and key developments of Mandatum's first quarter of 2026.

Following this, we will proceed to the Q&A session, where you will have the opportunity to dial-in with any questions you may have. Participants can also submit questions through the chat, which we will review within the given time frame after the dial-in Q&A.

With these remarks, I will hand over to Petri. Please go ahead.

Thank you, Lotta. And now let me walk you through our first quarter of 2026. The start of the year was good in our core businesses, even though the reported result was clearly impacted by changes in interest rates and our discount rate curve. Market sentiment was mixed in the first quarter. Geopolitical tensions, especially in the Middle East, affected the markets. Uncertainty increased towards the end of the quarter, resulting in a decline in our assets under management in March. However, market confidence has mostly recovered since then.

Our capital-light business continued to develop very well. Capital light profit before taxes increased by 35% year-on-year to EUR 26.8 million. This shows that our strategy is working and that we have -- that we continue to grow in the right areas.

The fee result increased by 10% year-on-year to EUR 20.6 million. The growth was supported by higher client assets under management and good client activity. Client assets under management increased by 10% year-on-year to EUR 15.4 billion. Net flow remained strong at EUR 248 million, which shows that our clients continue to trust us and invest with us also in more uncertain market environment. It also shows that our sales performed well in different market conditions.

At the same time, our operational efficiency continued to improve. The cost-income ratio decreased to 49% year-on-year, which is a clear indication that our business model is scalable and that we can grow income faster than costs.

The reported profit before taxes in the quarter was negative at minus EUR 25.9 million. This was mainly due to a more technical change in discount rate curve, which has a negative one-off impact of EUR 36 million on the net finance result and the group profit. Excluding the impact, our underlying profit before taxes was positive at EUR 10.3 million, which was weighed down by net finance result, mainly due to the low investment returns during the quarter. As we have said before, these items can cause volatility in our reported earnings from quarter-to-quarter.

Our solvency position saw a strong increase to 203% during the quarter as a result of the sale of Saxo Bank shares. This gives us a solid foundation for our business and for future shareholder distributions. Overall, the first quarter shows once again that our underlying business is developing well. Our operations are processing as planned and that the quality of the result is moving in the right direction.

Let me then move on to the client assets under management and net flow. Client assets under management reached EUR 15.4 billion at the end of the quarter. The year-on-year growth of 10% was supported by strong net flow as well as the market. A strong net flow of EUR 248 million increased assets under management also from the beginning of the year, despite negative market movement.

When we look at the different business areas, asset and wealth management continued to grow steadily, supported by both private wealth clients and institutions. Corporate net flow also remained strong with good sales, especially in personnel funds. Retail net flow was stable, and we continue to see good customer activity, especially in our Pohjantähti distribution partnership. Overall, the development shows that we are able to generate positive net flows across all market conditions and across all our key customer segments.

In asset and wealth management, we continue to see solid growth. Assets under management in this business area increased by 12% year-on-year. Growth was supported by positive net flow and good demand across our product offering. Private wealth management continued to develop well. Assets grew by 17% year-on-year, supported by strong sales of discretionary mandates. International institutional assets also increased by 12% year-on-year. This shows that our international growth strategy continues to work and that we are able to attract new clients outside Finland. It is good to note that international investment money moves quickly. When markets are uncertain, this usually led to more outflows and delayed investment decisions.

On the other hand, when situation improves, money often comes back quickly. When looking at products, most of the net flow was directed to allocation products. We also continue to see good demand for credit products, which remain an important part of our offering. Overall, the development in assets and wealth management supports our long-term vision of being the fastest-growing asset and wealth manager in the Nordics.

Finally, a few words on profitability and efficiency. Our cost-income ratio improved further year-on-year and is now 49% on a rolling 12-month basis. This shows that our focus on cost efficiency is delivering results. At the same time, we have made growth investments in asset management and corporate sales, such as new customer interface software and new recruitments. And yet, our cost-to-income ratio has remained stable as we have improved efficiency in other areas.

At the same time, the fee margin decreased slightly to 1.12%. This was mainly due to the changes in the business mix as the share of lower-margin asset and wealth management business continues to grow. It is important to note that our underlying product margins remain stable. This means that we continue to have good pricing discipline. Overall, we are seeing clear evidence that our business is scalable. We are able to grow income, improve efficiency and maintain profitability in our core businesses.

I will now hand over to Matti, who will go through the financials in more detail.

Thank you, Petri. Let's now take a closer look at the first quarter result components. The fee result was up 10% year-on-year with assets under management up by a similar amount. The fee result is down slightly compared to Q4, as in Q1 fee expenses have increased due to growth investment within the capital-light area. Also, there's some seasonality due to the timing of sales commissions, mainly in the Corporate and Retail segments.

And of course, as you know, the day count is lower in Q4 -- sorry, in Q1. Compared to Q4, our AUM was up by 1% or EUR 100 million to EUR 15.4 billion. As we all know, March was a turbulent month in the financial markets with negative returns, but we're still able to grow the AUM sequentially. And note that the market development has been clearly positive in April, May. So AUM has recovered nicely.

As Petri mentioned, the cost-to-income ratio of our client AUM was 49%, unchanged quarter-on-quarter. And although our income was up, the increased FTE and IT investments in the capital-light business meant that costs in this area increased as well, and this is very much in line with our business plan.

It's worth noting that the overall cost control remains good. Our group total cost-income ratio continued to improve, and we're very much in line with our overall annual cost growth target of around 1% until 2028, that we published at the CMD last June.

The net finance result was negative in Q1, and the main driver behind this was the discount rate assumption change that we announced earlier. The mark-to-market return of our own investment portfolio was negative as well, and I'll talk a bit more about this later on.

Our result related to risk policies at EUR 6 million in Q1 was a significant improvement compared to last year. As you know, one of our key financial targets is to grow the capital-light profit before taxes by more than 10% annually by '28 compared to 2024.

Looking at the first quarter, the reported profit before tax was EUR 26.8 million or 35% growth versus Q1 '25. Although we were a bit behind the target in 2025, we are now at an overall run rate well in line with our long-term growth target.

If we then look at the different segments. Asset and wealth management profit grew by 20% year-on-year, driven by a 16% jump in the fee result. Corporate saw a significant profitability increase as the result related to risk policies increased due to a higher CSM release and a favorable claims development.

The Retail segment grew as well, although the fee result was negatively impacted by the AUM development as well as a lower insurance service result. This was impacted by changes in assumption in the tax deductibility of voluntary individual pension contracts that will be -- the tax will be discontinued in -- tax benefit will be discontinued in 2027.

Then taking a closer look at the net finance result. It was minus EUR 47 million, and the earlier disclosed IFRS-related change in the discount rate assumptions had a negative one-off impact of EUR 36 million. Despite the positive start of the year, March was a negative month in the financial markets. The with-profit investment return in the quarter at minus 0.6% was clearly below the expected level. Worth noting is that the development in Q2 has so far been more positive.

Fixed income credit makes up 77% of our own investment portfolio. In Q1, the net return was negatively impacted by mark-to-market adjustments from higher rates and wider spreads. At the same time, the portfolio mark-to-market yield was up by 40 basis points in the quarter to 4.9% or significantly above the cost of liabilities. This means that the investment returns should also improve going forward.

Our equity portfolio had a weak quarter in Q1. The legacy portfolio consisting mainly of Finnish illiquid small-cap names was down by 9%. However, our private credit portfolio has continued a positive trend and private equity returns were positive in the quarter as well, and both are seeing continued capital distributions.

The other part of the finance -- net finance result or discounting and cost of liability. As you all saw, we saw market rates increase significantly in Q1. This had a EUR 14 million positive discounting impact, but the impact was maybe a bit muted as the increase in the market rates was mainly in the shorter end of the yield curve, where most of our fixed income assets also are.

As you all know, we announced a couple of weeks ago that we'll start using a new discount rate curve for our insurance liabilities. As you can see from the graph, the new rate is clearly lower in the long end and closer to externally observable swap rates and also more in line with industry standards. Although the change resulted in a fairly large accounting impact in the quarter, it's important to note what Petri also said that this impact will be offset over time. It has no impact on our cash flow solvency in our dividend capacity. We believe there's other benefits, as you can see from the slide as well compared to the very volatile old IFRS curve that we used.

We consistently continue to generate capital. Organic capital generation was EUR 50 million positive in Q1 despite the negative IFRS result. The strategic asset derisking of the with-profit portfolio continues and is expected to further support the capital release going forward.

Q1 was the second quarter in the history of Mandatum when the SCR from the with-profit business was smaller than the capital-light SCR. This also supports our transformation journey towards a high ROE capital-light group.

The fully loaded group solvency ratio stood at 203%, up from 169% in Q4 and is clearly above our target range. Main drivers behind this increase were the completion of the sale of the Saxo Bank shares and the lower symmetrical adjustment factor.

And finally, we paid back, in March, the EUR 200 million loan that we used to finance the Saxo Bank shares. So the financial leverage decreased to 17.5% from 23.8%.

And now back to you, Lotta.

Thank you, Matti. And now let's move on to the Q&A. Please dial-in or submit your questions via the chat.

[Operator Instructions] The next question comes from Vash Gosalia from Goldman Sachs.

I have potentially 3 questions. The first one, just on your investment results. And apologies if I missed this, but you have certain losses or the miss was driven by movement in listed equities. Can you just help us understand what is the composition of the portfolio there? And is it essentially something that you expect to recover relatively soon? Or is there something else going on there?

The second one, just on Saxo Bank and dividends. So just trying to understand the dividends for the year. So last year, you upstreamed somewhere between EUR 300 million and EUR 350 million combined from your life and asset management entities. But with the net EUR 100 million from Saxo, how should we think about dividends for this year? Is it a special that we can expect? Or would you prefer to then just upstream lesser this time?

And then the third one was just on your fee margins. Could you help us understand how your fee margins compare to your competitors? So what do you charge versus what competitors in the market are charging?

Great. I'll take the first 2 ones, and Petri, if you take the last one. Obviously, the equity portfolio that we still have of around EUR 100 million is very much a legacy portfolio consisting of very liquid small-cap names. I think it's important to take also a bit of a longer-term view on this when we started our journey as a listed company, we had around EUR 1.2 billion in equity. So most of the liquid names have been sold. And as you know, back in our Capital Markets Day, we've shown that we also have a clear path to have the kind of strategic asset allocation with around over 90% in fixed income instruments and the alternative part should be gone. There's nothing funny going on. The small-cap names have been hit quite badly and they're quite illiquid. So their positions that are quite difficult to get around.

That said, remember, we're talking about EUR 100 million portfolio roughly where the illiquid part is may be half of it. And in the big scheme of things, in our total, even our own investment portfolio, this is a small thing. But negative development in Q1 for sure. And the long-term solution is to get rid of this. And -- but we, of course, are not selling it at any prices.

Then regarding the dividend upstreaming, if we look at it, I think we've been very, very clear on what we expect on things. And the Saxo Bank net EUR 100 million is something that we did not pay out, obviously in -- or is not part of the dividend proposal for 2025. We have our AGM next week, obviously. And then, of course, that means that, that is additional for potential for the Board to decide on the due regarding the 2026 dividend. But that is not included in the proposal as we mentioned in conjunction with the Q4 report.

Yes. And about the fee margins compared to other players in the market, of course, in an effective market, it's hard to charge much more than any other player in the market. Having said that, once you have really good products like we have in high yield side, especially our Nordic high yields, you might get some extra fee for that. You have to continuously -- you have been the #1 in that segment, but of course, not that much. Investors are not willing to pay that much.

Having said that, why our margins are quite high compared to industry is that we are in those asset classes where you traditionally can charge higher margins than in like plain vanilla equity investments. So it's more or less the areas of asset classes where we act and we work those are traditionally with higher margin levels than, for example, investment grade or government bonds and so on.

And maybe one could also add that if we look at the net flow that we also were able to produce in Q1. If the margins were significantly different to our competitors, I don't think that would really work. So the market is what it is, and that I think is important to note.

The next question comes from Hans Rettedal Christiansen from Danske Bank.

I have 2, if I may. So the first question is on the P&L this quarter and the fee result relating to investment services where you have the step-down from Q4 to Q1. And I appreciate the comments that you have, Matti. I'm just kind of trying to dig into the growth investments into the asset-light business that you mentioned. Could you elaborate a little bit on that? And is it relating to -- I see on your employee side that you have, sort of, 4 new employees in Mandatum asset management. Is that what you're speaking about?

And then the second question is on net flows this quarter. Just looking at the personnel funds where you've established 1 new personnel fund this quarter versus you had, I think, 44 in total last year. So how should we think about the kind of growth trajectory there for the rest of the year? And is there any kind of seasonality here? And would you characterize 1 new personnel fund as sort of normal? Or could it in theory have been higher and therefore, also higher net flows? Those are my 2 questions.

Hans, if I'll take the first, kind of the fee result development, Petri can talk about what the investments in practice have been. But looking at the numbers, obviously, there is volatility between quarters in terms of especially sales commissions, which is affecting the Retail and the Corporate part, both internally paid and externally paid. Q4 was probably a bit low in the terms of sales commission and now Q1 is more on the normal side.

And then as I mentioned, we did make a change in what we believe that the individual pension insurance policies, customers will pay since the tax benefits will end now starting next year. They will continue to pay, but we expect it's going to be a bit less than what we have estimated in our actuarial assumptions. So that also had a negative impact. And this altogether was maybe around EUR 0.5 million in the Retail segment altogether. But the growth in the -- or the investments we've made in the capital-light area.

Yes. So investments we have done in the capital-light area, it's, let's say, 2 areas, people. So last 6 to 8 months, we have started like a little bit more than 10 people, both in Corporate segment and Wealth Management segment. So especially in Wealth Management segment, really high -- really high level people to support our growth in wealth and asset management side and of course, quite pricey in that sense. And it's like in any other investments. First, you do investment, and it takes a while to get the benefits of that. So we are living in some kind of transition time with those investments that we have invested, but not yet get that much back of that. Of course, new people coming to new house, new products, and so it takes for a while to really get the business going.

And another area is investments to software supporting to our sales in both Corporate and Wealth Management side. That's something we have also invested, not very heavy investment, more like support tools and not very expensive, but the investments anyway. Those are the investments we have done.

And in order to cover that because we have -- we are more or less during this strategy period, we have a plan, and we have introduced that in last June that we are keeping our cost base more or less the same, only small growth in our cost base. So what we have done in order to cover these investments, we have streamlined our operations in support functions. So all-in-all, it's not that heavy investments in a group level.

About the net flow and personnel funds, yes, there's only one personnel fund, but it's seasonality. It's the business goes so that during the Q1, Q2, especially, but also Q3, you build up the momentum for that, you have negotiation. It's building up the new personnel fund, it takes quite a while, because it's all employees in the company. There's a certain regulatory framework how you can do that. So it takes some time.

And the Q4 is where you close those deals really. So it's always -- so the Q4 is main part of the new deals during the year. And you try to close those before year-end in order to pay the bonuses in next Spring to those personnel funds. So it goes like that.

So one closed personnel fund doesn't tell anything about the activity really. There's a huge activity behind it, and there's a lot of prospects going on. And there will be a good year as well on that side. But it is -- normally, you close those in the latter part of the year.

And how would you characterize the activity on the personnel funds compared to last year? Is it sort of fair to assume that it's the same or?

It's more or less the same like it has been like last 3, 4 years. It has been more or less the same amount of personnel funds. We have a little bit changed our way of working. So we are concentrating a little bit bigger ones and not taking every personnel fund because the legislation goes so that it has been the requirement for how many employee company can be -- can established personnel fund has come down every second year. And now it's very small. I think it's 10 people only companies. And that means also that the size of the personnel fund will stay very small in a very long time. So we are a little bit concentrating more the bigger ones and to be very competitive on those cases. So it might be so that in number-wise, it might be -- will be the same or a little bit less. But money-wise, no changes compared to other years. That's our plan at least.

Got it. That's clear. And just finally, is it then fair to assume that the majority of the net flows is coming from the private wealth side? I take, sort of, your comments on the last question there.

Yes. Like it has been mainly -- it's even though corporate, especially personnel fund net flow has been really good in -- especially in H1 during the years. Of course, the fastest-growing area of our net flow and business and assets under management is coming from Asset and Wealth management side. That will be the case this year as well.

The next question comes from Ulrik Zürcher from Nordea.

I was just wondering about the unwinding rate for the year. That's unchanged at EUR 10 million per quarter. That's the first question. And then, I was just wondering about the 60 bps mark-to-market yield increase in the original portfolio. So just thinking about the unwinding rate next year, like how much of that 60% -- sorry, 60 bps increase is spreads versus base rates?

Ulrik, yes, you're correct that the unwinding rate for '26 is set and then next year, we will have a different rate. And of course, it depends on how the market rates move altogether. So it's too early to say exactly where we're going to end up. But it's true that now last year, we've seen a decrease in the mark-to-market yield as well as the discount rate.

Now with the kind of change we made it, of course, it's -- that's one structural change. But then, of course, it depends also where the rates are going to be at the end of the year. But I think it's fair to say that what we look at it is, of course, the spread between the mark-to-market yield and the discount rate and that has improved a bit, and which is, of course, cost positive, and that's what is really driving the results. But the rate is not set for next year.

I'm just wondering because like, yes, you'll get -- definitely you have a higher expectation for the result this year, but I was just wondering about like sort of the long-term spread because -- I just noticed you took a bit surprisingly big loss on the fixed income portfolio. So I'm thinking that was a lot of spreads. So I was just trying to figure out the underlying spread between your liabilities and your assets?

I think there will be a small positive, but nothing dramatic. As we've said, it's around 200 basis points of spread, but of course, that can move 10, 20 basis points to either direction from that side. If you look at the kind of portfolio, of course, one of the main things what -- if you look at in absolute terms, the -- on the original portfolio, the fixed income portfolio had a negative EUR 10 million mark-to-market impact. So there, you can see obviously what the kind of rest of the portfolio did. So actually, the discounting -- positive discounting effect was, as I mentioned, probably a bit more muted given the fact that rates in the really long end didn't change that much even though they change, they increased a lot in the short end. But there are kind of hedge ratio because most of the assets are also there. So they kind of offset each other.

And just last one, I was just wondering if you have an update on the derisking of the portfolio. Do you think it will happen this year? Or is it more likely next year?

Well, of course, the biggest thing of that, where we -- in the portfolio, as you can see, is that the alternative weight is very, very high. And there, we have kind of 3 different asset classes. We have the real estate portfolio, which has come down already. It's around -- at the moment, around EUR 70 million -- EUR 80 million. And then, of course, you have the private equity and private credit. And the private credit, as I mentioned, has been distributing capital all the time, and it's performing very well.

Private equity is a big question mark, and I think there's kind of positive signs regarding that as well if you look at the portfolio. So I think we're quite constructive, but it's out of our hands. And I think hopefully, we will start seeing things during the remainder of the year. And then, of course, continue there as well. But it's for sure, not -- no changes there, and I think we're pretty constructive on the remainder of the year.

The next question comes from Antti Saari from OP Markets.

A few questions from my side. Regarding our international sales, in this quarter, was it more from Central Europe or still from the Nordics?

Yes. Antti, it's Petri here. So it was more from the Nordics.

Okay. Okay. And then what about private credit market in U.S., it's pretty volatile, but not that much in Europe. But have you seen the U.S. development to affect your clients' appetite for private credit products in Europe?

No, not really. So let's say, so that they have a more deep conversation about this issue and the market as a whole. But once we have had those discussions and open up really how we are doing our private credit strategies. It's -- I would say that we haven't seen any loss of appetite to that asset class.

Okay. And then I would like to continue about discounting. The EUR 36 million loss that you know now booked, you will get it back. I understand that. But what about the pace? Let's say that everything else, interest rate and everything else remains the same. How much would be the positive impact of that in the coming years? Can you give any kind of hint for that?

Yes, it's a very good question, Antti. Well, first of all, if you look at it, the portfolio is very -- the maturity of the portfolio is very, very long. And that means that -- so if it's EUR 36 million, it will come back in. It won't be 10 years, it might be 20 years or something like that. So you can calculate what the impact. So it's not huge. But that, of course, is -- remember, this is a discounted figure as well. So it depends also on the interest rates. But probably a couple of million a year, if you do the math that way. But that depends also -- remember, it's not an absolute -- the EUR 36 million is a discounted figure. So it depends also on the rate development, et cetera. So it will take a long time to come back, but it means, but it will definitely come back.

The next question comes from Kasper Mellas from Inderes.

First question is, what was the new MAMCO fund included in the AUM at the end of Q1 at all? And when will this fully show in your AUM?

Yes. It was not so 0. So -- but as we have stated that we have or use some dry powder because of the market changes and that it has been a really good timing for us to collect that commitments and deploy the money. But in Q1, there is no net flow related to that. And how it will come to our net flow, it's really difficult to say, but it's -- it comes at the speed that we invest the money and we call the money from investors, but it will take a while.

All right. Yes, that's clear. I just want to know if it's based on deployment. All right.

Of course, it's clearly supporting our net flow in coming quarters.

Yes, of course. A you stated net fee profit from -- or fee profit from private clients was impacted negatively by the tax changes. So could you clarify a bit what this means in practice?

So what it means, obviously, is that in Finland, now the tax benefits for individual pension savings, and this was announced already 1.5 years ago, 2 years ago, will end starting '27. And we believe that this will impact that people will pay less premiums to their policies. And of course, that means that the CSM will be lower, and that's what we did this change now in Q1.

And that actually also meant that the insurance service result coming from the CSM release was lower as well. So nothing too dramatic, but yes, you know why? It did have an impact on our numbers. But especially on the Retail side, the sales commissions make a much bigger role. And especially in the beginning of the year, we make an assumption on how it was. And last year, it was lower than maybe normal, especially in Q4. So that kind of evened it out. But this is something which was already -- the tax change was announced a long time ago, and we believe that we still will -- people will continue to pay in these policies. But probably a bit less than or somewhat less than with the tax benefit.

All right. So the effect on your P&L is structural, not onetime expense?

Yes, that's correct. It is -- if the CSM is lower, so the CSM release will be lower in the Retail area as well. But especially, as I said, this maybe is like EUR 500,000 in the quarter. So all-in-all, and so you can kind of -- that change is fine. But now we had the kind of more normal sales commissions, and that may vary during the quarters, which is kind of impacting the fee profit there.

All right. But the fee result from investment and asset management services also decreased compared to Q4, which to me, at least, was a bit surprising given that your average AUM was higher. So could you describe the relevant drivers behind this a bit more? For example, how significant was the cost effects related to international expansion?

Well, I think in international expansion, less so. But in general, the expansion did have an obviously impact, as Petri very well described, both in terms of IT and FTEs. Remember, however, that Q4 or Q1 is a short-term month in terms of day count that has an impact quite significant actually, if you then do the math that there's 2 days less. So that had an impact as well and other items. So those are probably the kind of items I would single out on that line.

Okay. So in the income side, no, meaningful onetime items other than the day count, which, of course, is recurring year-on-year?

Correct.

The next question comes from Jaakko Tyrvainen from SEB.

It's Jaakko from SEB. Still a couple of questions left. First one on the international business. Petri, you mentioned that the money there is much more rapid in its moves. Does this imply that you probably see a bit abnormal outflows during the quarter, i.e., how strong was the kind of gross inflows overall during the quarter? And should we expect based on what you said, that the money could be returning during the second quarter already?

Yes, that's something, of course, we have noticed already during the previous quarter. Once you're -- part of the money we are getting outside of -- internationally outside of Finland is based on platforms and that kind of distribution channels, we don't have the, let's say, deep connections or any connections to end clients. So once there's a turbulence in the market, the money is not that sticky like it is like if some like pension fund has invested EUR 10 million, EUR 20 million after long decision-making process and meeting our portfolio managers and so on. So that kind of money, it's more in and out in crisis situations, and that's what we are referring to. So -- but like you mentioned, it's also when the market normalizes, it comes back quite soon as well.

Then on the strong risk result during the quarter, that you already touched on the factors behind. But could you wrap up the kind of the key drivers for this strong Q1 level? And should we continue to assume kind of a so-called normalized level a bit below what we saw now in Q1?

Yes, absolutely. If you look at it last year, and we discussed this a year ago and also in Q2 that we believe that the risk result was lower than what you should expect for a couple of reasons. And -- now I think the CSM release is kind of on a normal level. The claims development, however, was a bit more favorable. So from the EUR 6 million, you probably like EUR 1 million, EUR 1.5 million was kind of potentially recurring. We obviously don't know, it depends on the development.

I think we've kind of outlined on a run rate somewhere between EUR 15 million, EUR 17 million, could, of course, hopefully be better. But I think that's the best guess we still have at the moment. So kind of EUR 4 million, EUR 4.5 million, EUR 5 million per quarter is probably a good estimate here. But I think it's important to note that now it's -- there's no funnies here. So it's -- this is a much more stable development. And we've been still able to grow the CSM. So it's not that we are releasing much more. I think, now it's kind of more normal development than what you should expect going forward.

Excellent. And then final one, a bit technical. On the net proceeds from the Saxo exit, where is this capital sitting? Should we assume that it's in the -- I assume that it's in the parent company and invested in short papers and where should small interest on that short papers be visible in your P&L? Is it on the -- on the other row?

Yes. Well, a very technical question indeed, Jaakko. It's other, it's where it stands. And you are correct that we got the EUR 300 million, a bit more, and then we repaid the EUR 200 million loans. So that money is invested in fixed income short-term instruments.

The next question comes from Emil Immonen from DNB Carnegie.

Just one more maybe on the net flows. If we look at your net flows during the last 12 months, would you say that you're happy with the current level as it has been decelerating a little bit over the last few quarters?

Yes. I would say, of course, as a CEO, I always want to have more. But it's having in mind the circumstances, especially now in Q1 and especially in March, I'm happy with our net flow also during the last 12 months. But of course, once we have already discussed today, we have invested to our distribution in order to get more. So of course, that's our target and that we will like to see bigger net flows in coming months and coming years. Of course, it's also true that we have a bigger assets under management portfolio now, and there is a natural outflow also from your portfolio. So we have to run faster and we have to sell more in order to create the same amount of net flow. And then of course, we are targeting to -- our targets are higher than what we have seen in the past.

So if I understand correctly, you're increasing investments and recruiting more people to, in the long term, accelerate further net flow -- net flow driven growth?

Yes, exactly.

The next question comes from Michele Ballatore from KBW.

I have two questions. The first, sorry if I missed it, but can you maybe give a little bit more color on the dynamic of the capital generation, the organic capital generation in the quarter. And if you can maybe -- is there a normal run rate, quarterly run rate of capital generation maybe that you can talk about? This is the first question.

The second question is about capital management. You mentioned considering the level of solvency now, you may do more in terms of distribution. Does it mean like a higher dividend or you're also contemplating share buybacks or special dividends? How should we look at that?

Yes. Michele, regarding capital generation, of course, there's 2 parts to it. One, of course, is the capital-light profitability. So that -- and that was maybe a bit higher than what you should expect going forward. The capital-light profits were EUR 27 million, and it was EUR 50 million positive altogether. And if you look at our kind of investor presentation, there was a EUR 2 million negative impact from the with-profit portfolio. So obviously, we didn't -- the kind of capital release from the portfolio derisking was 0 to negative. And of course, the IFRS results were negative as well.

Important to note, however, that the discount rate change had -- has no impact on the OCG. So -- so that also is important to kind of, I think, single out there. But overall, the OCG is driven by 2 factors: own funds generation and SCR. And now the SCR, especially in the Retail segment went down because of the -- first of all, the symmetrical adjustment, but also the lower -- slightly lower AUM. So that helped the situation altogether. But the building blocks are capital-light profits or -- and then with-profit profits and then the own fund generation and the SCR, which typically would not be positive, but it was positive now in Q1. So a bit more positive altogether than one should expect. At the same time, as you can see, the with-profit contribution was negative, so that should be actually positive there as well.

So higher than the IFRS result typically, and then there's other moving factors altogether. But I think the EUR 50 million is probably as a run rate slightly higher than maybe one should expect. But as I mentioned also, the with-profit contribution was negative, and that's lower than what you should expect.

Yes. And then you were asking about the about the capital distributions, I think our Board has been quite explicit that the current structure of dividends is the preferred way forward. And at least I haven't heard of any changes on that point. We don't look at the dividends as extra or recurring. It's more on the fact that -- and what is driving it is the liquidity in the holding company.

Solvency is more than enough. And now, of course, as I mentioned in the previous question, we do have a lot of cash in the holding company as well. And then the rest of the dividend capacity is coming from upstream dividends from the life company and the asset management company, and those are the building blocks here altogether.

So I think the dividends, the Board will decide then for '26 sometime in the beginning of '27. And remember, our AGM is next week. So we haven't even paid the dividend for '25 out yet. And that's going to happen next week.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So that concludes today's audiocast. If you have any further questions, please feel free to reach out to us at Investor Relations. Thank you for joining us today, and goodbye.

Good morning, and welcome to Mandatum's Q4 2025 Results Audiocast. My name is Lotta Borgström from Investor Relations, and I am pleased to open today's call. I am joined today by our CEO, Petri Niemisvirta; and our CFO, Matti Ahokas, who will take you through the highlights and key developments of the quarter.

We will begin with the management presentation, after which we will move on to the Q&A session. And as always, you can participate either by dialing in or by submitting your questions through the chat. We will review the questions once the dial-in Q&A has concluded. Before we get started, a brief reminder that the materials for today's call are available on our website.

With these remarks, I will hand things over to Petri. Please go ahead.

Thank you, Lotta. Let me now walk you through Mandatum's fourth quarter and full year performance. In the fourth quarter, Mandatum delivered another period of continued process across our core businesses and operational efficiency. The results demonstrate the strength of our capital-light model, our operational discipline and the trust our clients place in us.

For the October-December period, profit before taxes decreased by 14% to EUR 13.3 million due to the lower net finance result and other results. However, our capital-light profit before taxes increased by 28% to EUR 27 million, and its most significant income item, the fee result rose by 18% year-on-year.

This shows that our strategic focus is in the right areas with profitable growth driven particularly by Asset and Private Wealth Management as well as our corporate business. The strong growth also highlights the continued improvement in the quality of the Group's earnings. Client assets under management reached a new EUR 1 billion milestone at year-end, increasing 10% from the previous year to EUR 15.3 billion.

Quarterly net flows was lower than the strong comparison period as a few larger client distribution in alternative investment weighed on the total despite strong underlying sales. The net finance result decreased from the last year to EUR 19 million, but it is important to keep in mind that the comparison period included a EUR 16 million dividend from Saxo Bank. Matti will later walk you through the composition of the net finance result in more detail.

For the full year 2025, profit before taxes decreased to EUR 182 million, while capital-light profit before taxes for the year increased by 5% to EUR 92 million. It is good to note that the result for the comparison period included more than EUR 10 million related to the insurance portfolio sold to If in 2024. Once again, the fee business performance remains resilient and the underlying client activity remains strong throughout the year, which for us is a top priority.

Mandatum's Board of Directors proposed to the Annual General Meeting a dividend of EUR 0.85 per share, reflecting our strong capital position. At our Capital Markets Day in June, we introduced our long-term financial targets, including a cumulative shareholder payout exceeding EUR 1 billion over the 2025 to 2028 strategy period. We are well on our way towards this goal, and we place strong emphasis on having the capacity to pay out attractive dividends both now and the years ahead.

The solvency ratio at 169% was once again very strong. It is good to bear in mind that the figure includes the foreseen dividend based on the Board of Directors' proposal and that it will bounce back to higher levels after the closing of the sale of Saxo. Client activity remained solid throughout the year. Assets under management reached a new EUR 1 billion milestone and increased to EUR 15.3 billion, supported by both positive net flow and a favorable market environment.

Net flow for the quarter was EUR 141 million and for the full year of EUR 723 million, which is more than 5% of the clients' assets under management. The Institutional Wealth Management flow decreased from last year. The main reason was a few large client distribution related to alternative investments, which offset the impact of otherwise very strong new sales.

It is also worth noting that the comparison period was very strong. Corporate net flow, on the other hand, increased significantly from last year. In our Corporate business, we maintained our market-leading position, supplementary pensions and personal funds. Sales of risk life insurance stayed strong, although they fell short of ambitious targets we have set for ourselves.

In the Retail business area, sales of risk life insurance is developed particularly well supported by the strong start of our cooperation with Pohjantähti Mutual Insurance Company. The role of key distribution partnership is significant in the retail customer business. One of last year's highlights was the great performance of our Wealth Management business.

Sales of discretionary mandates were notably strong and overall assets under management in private wealth management grew by 19% from the previous year. The strong growth also expanded Mandatum's market share. It is great to see our investments in private wealth management paying off as it is a central part of our growth strategy. During the year, we have -- we made strong process in advancing our Asset and Wealth Management business.

The expansion of our international operations was one of the highlights of 2025, and I'm very pleased with what we have achieved. Growth remains strong, especially in Sweden, and we also gained new clients across Central Europe. Our quality investment products reserved multiple awards last year, highlighting strong investment performance across several asset classes and fund categories.

This shows both the international appeal of our competitive products and Mandatum's ability to build a credible presence outside the Finnish market. Operational efficiency continued to improve, driven by rising income and lower costs. The cost-to-income ratio dropped by 9 percentage points to 49% over the trailing 12 months. As we have said before, our business is scalable, and we have made the main IT investments already, so costs should grow less than income going forward.

At the same time, we have continued to invest in our future. Last year, we hired new salespeople to accelerate growth in both the Institutional Wealth Management and the corporate business areas. Fee margin stood at 1.13%, slightly lower year-on-year due to mix effects as institutional wealth management volumes increased, while standalone product margin remained stable.

Mandatum was once again awarded the Great Place to Work Certification, highlighting the strength of our culture and the commitment of our employees. Retaining good people is especially important in our industry. The certification is a clear sign that we have succeeded in creating work environment built on trust and well-being. In November, Mandatum was ranked Finland's Best Private Banking Provider in Kantar's Prospera Private Banking 2025 Finland Customer Study.

Our very high customer satisfaction scores tell the same story. The Net Promoter Score for our Wealth Management business was very high last year at 80. Our corporate clients were even more satisfied with the Net Promoter Score reaching 85. Both figures are exceptionally high by any standard of comparison. The exceptional commitment of our people and our strong customer satisfaction are evident in everything we do.

Finally, a quick look at our financial targets, which were presented at last summer's Capital Markets Day. Although we are only 8 months into the new strategy period, we are already well on track towards all of our targets. As we look ahead, our strategic direction remains clear. We continue to focus on growing in our target segments and improving operational efficiency for long-term value creation.

Thank you. I will now hand over to Matti, who will go through the financials in more detail.

Thank you, Petri. Let's now take a closer look at the fourth quarter result component. As mentioned, our fee result was up 18% year-on-year with assets under management up by 10%. And if we compare it to Q3, our AUM was up by some 3% or EUR 410 million to EUR 15.3 billion. The client fee margins were unchanged in the quarter when looking on a 12-month rolling basis.

And more importantly, I think the product-specific margins were largely flat during the quarter. As Petri mentioned, the cost-to-income ratio of our client AUM continued to decrease according to plan and was below 50% for the first time in our history. Overall, we saw a decline in our cost during 2025, mainly due to lower IT costs. At the same time, income was up, as you know.

The Q4 net finance result came in at EUR 19 million. And as all of you know, our investment portfolio is mainly in credit instruments and returns were lower than normal during the quarter as rates increased. In addition, the movements of the IFRS discounting rate components impacted our net finance result during the quarter. I'll talk a bit more about this later on.

The result related to risk policies at EUR 4 million in Q4 was back to more normalized levels and up significantly compared to the previous year. On the other result line, there was a negative impact by some EUR 5 million due to updated actuarial assumptions, mainly in the With-profit portfolios. Capital generation is a key success factor to any financial company, and we still continue to consistently generate capital.

Organic capital generation was EUR 60 million in Q4 or EUR 0.12 per share. And the main positive driver here again was the increase in own funds. Return on equity was 8.6% in the quarter. As you know, and as Petri mentioned, one of our key financial targets is to grow the capital-light profit before taxes by more than 10% annually by 2028 compared to 2024. And if we look at 2025, the reported profit before taxes was EUR 92 million, up 5% compared to '24.

I think it's important to note that in the first 6 months of '25, the result was impacted by the turbulent financial markets, the U.S. dollar FX headwinds and lower sales, but the second half was definitely a step change in profitability in the capital-light business. All segments within capital-light increased their profit sequentially in Q4. The quarter level of EUR 27 million is up by 28% compared to a year ago and suggests the overall run rate in line with our long-term growth target.

Also worth noting again is that the '24 comparison figure included the EUR 11 million one-off gain from the transfer of the If portfolios. So then let's take a closer look at the Group net finance result. As mentioned, it was EUR 19 million in Q4 and somewhat lower than the historical average. The With-profit investment return in the quarter at 0.7% was above last year, but slightly below the expected return of our portfolio.

Fixed income credit makes up 76% of our own investment portfolio. And in Q4, the return was negatively impacted by mark-to-market adjustments from higher rates and spreads. At the same time, the portfolio mark-to-market yield was up by 30 basis points in the quarter, up to 4.5%, and this is naturally significantly above the cost of liabilities. Our private credit portfolio has continued a positive trend and had a very good quarterly return in Q4.

Also, private equity returns were good at 3% in the quarter. The real estate returns were impacted by the Morgan Stanley joint venture transaction write-down. If we then turn to the other part of the net finance result, our discounting and the cost of liabilities. As you all who follow the market saw that swap rates increased significantly in Q4.

However, the IFRS rates that we use for discounting increased clearly less in the quarter, and this was the result of a 15 basis points to 25 basis points lower illiquidity premium in the long IFRS rates that we use. The lower illiquidity premium had a EUR 15 million negative P&L impact in the quarter, and this largely offset the positive discounting gains from higher swap rates.

The With-profit portfolio interest rate hedging ratio remained at the high level in Q4. However, you shouldn't read too much into this figure as it varies depending on the tactical view of the fixed income market. Also, remember that the hedging ratio is a relative figure and the interest rate risk is low in absolute euros, only a few millions, as you can see from our material.

And of course, the main target is naturally to generate financial profit on this line as well. Finally, it's worth noting again that the IFRS discount rate mark-to-market changes have no impact on the actual contract cash flows nor our dividend paying capacity. We continue to consistently generate capital. Organic capital generation was EUR 60 million, as I mentioned, and again, significantly higher than the reported IFRS net result.

In 2025, we generated capital organically by EUR 301 million net of taxes or EUR 0.60 per share. This figure was EUR 0.44 in '24 and also supports the higher dividend proposal from the Board. Our own funds generation increased the solvency margin by 5 percentage points in the quarter and 31 percentage points during the full year.

Actually Q4 was the first quarter in the history of Mandatum when the SCR from the With-profit business was smaller than the capital-light SCR. And I think this is also yet another indication of our transformation journey towards a high ROE capital-light group. The fully loaded solvency ratio stood at 169% for the Group.

And although this number is down, remember that now we take away the impact of the transitional measures of around 15 percentage points. The decrease from Q3 is also due to the larger dividend deduction based on the actual dividend proposal, and this reduced the solvency ratio by 18 percentage points.

Worth noting is that the comparable like-for-like solvency ratio was unchanged in the quarter. However, also worth noting here is that the announced sale of the Saxo Bank shares is expected to increase the solvency margin by around 28 percentage points once the transaction is finalized, as you can see from our material.

In addition, the strategic asset derisking we announced in the June Capital Market Day of the With-profit portfolio is expected to further support the capital release going forward in the coming years. And then briefly on the outlook for '26, not too much to mention here.

Our fee result is expected to grow and the With-profit portfolio is expected to decrease compared to '25. There is one extra thing worth noting that the unwinding rate for '26 is 2.0%, down from 2.4% in 2025, which means around EUR 40 million annual unwinding costs compared to over EUR 50 million in 2025. All for me. Back to you, Lotta.

Thank you, Matti. And now let's move on to the Q&A.

The next question comes from Vash Gosalia from Goldman Sachs.

I have 2 questions, please. So one is on the net finance result. And here, I appreciate in 2025, we've had a lot of moving pieces because obviously, you no longer have Saxo, you have sold some of the real estate portfolio. And then again, you have some changes in your unwinding.

So just trying to sort of get a sense of when we look forward, what should be a normalized run rate for the net finance results that we should be basing our sort of estimates of? Any color on that would be quite helpful. And then the second question is actually on your cost/income ratio.

So I fully appreciate it has been improving. But as I believe Matti pointed out, it was related a little bit to the IT costs. But I would assume those cost benefits no longer come through in '26. So as a result, should we expect the cost/income ratio to remain thereabouts or is there further improvement that we can see over there?

Thanks. Regarding your first question on the run rate for the net finance result, it's a task impossible. But if we kind of break down the different components, obviously, we've given you very clear indication of what the structure of our investment portfolio is plus also the ambition, how it would look towards 2028.

So I think that is something that you can measure the mark-to-market yield of the credit portfolio, the fixed income portfolio is now 4.5%. And then, of course, you should assume something on the alternative part, the private equity, the private credit and the small real estate and equity portfolios.

So with that, I think you can get to a kind of reasonable expectation on how the investment return develops. Then on the other part, the discounting, we've given you the unwinding rate. And if rates don't change, that is basically the cost of the liabilities. But as we all know, the rates are very likely to change going forward.

And this, of course, means that there will be some quarterly volatility over time. But regardless of this, if we look at the overall development in the net finance result on a yearly basis and year-to-date basis, I think the moves kind of tend to smoothen out. And as I said, if rates go up, it's usually bad for the investment return, but good for the discounting. So -- but then you do have these kind of special items like the illiquidity premium.

And we fully understand that it's creating a bit of confusion, and it's not what we like either. As we've said, it comes from Moody's and -- but we're looking into it if we can kind of potentially do something about it in the future. But I think that's all I can kind of point out to. And if rates stay at constant level, it should be pretty constant. But unfortunately, they never do, but they tend to even out over time.

It's Petri here. Thank you for your question. About the cost/income ratio and IT costs related to that and overall. Yes, it's true that we have gained a lot of cost savings from IT side, but it's still room to go lower. For example, we are one of the first players who will get rid of the mainframe in May. And that's a really big thing for us.

And after that, there's no mainframe cost anymore to us. And -- but of course, we still also the license costs going up every year and so on. But we still see that there is room to be more effective in our processes, streamline our operations. And what we -- how we have forecasted is if we can keep and we are forecasting to keep our cost base in this -- during this trial period more or less the same than they were in 2025, which is really a big thing to do.

So in order to improve our cost/income ratio, I think the biggest thing will be going forward will be growing the earnings and that will improve the rate. Having said that, 49% is already quite good having in mind that we are also investing to growth, especially outside of Finland. So there might be some room to improve, but it's -- we are quite a low level, sorry now, having in mind that we are growing quite fast outside of our normal territories as well.

The next question comes from Hans Rettedal Christiansen from Danske Bank Markets.

Just quickly, first, I had a follow-up question that came up on your answer there, Petri, on the mainframe that you're getting rid of in May. Can you just quantify what sort of cost savings that will give you in 2026? That's the first one. And then I have 2 other questions. One is on the net flow development this quarter.

Could you just explain a little bit sort of financial effect or the nominal effect of the few larger client distributions, what exactly that is? And maybe a little bit also how we should think about the underlying development then in Q4? And then my second question is on the dividend proposal this -- today. Previously, you've sort of split it out into an ordinary and an extraordinary part, whereas this year, it's sort of all coupled into one.

So is there kind of an ordinary or an extraordinary portion to this one? And also relating to that, maybe, Matti, if you could just explain a little bit around sort of liquidity versus capital and how we should think about that in terms of funding the dividend into 2026? That's my three questions.

Hi Hans. If I start with the dividend and Petri will continue with the first 2 ones. Well, first of all, the extra and ordinary discussion was basically kind of concluded at the Capital Market Day where we said that we have the over EUR 1 billion target, and that is kind of including everything. So we don't look at it from an ordinary -- extraordinary perspective anymore.

The over EUR 1 billion is the number you should be kind of focusing on. And what we also said is that it's most likely going to be a bit front-loaded and now EUR 427 million is the proposal. If we look at the liquidity, it's a very relevant question and something that is definitely having an impact. Around EUR 300 million was the dividend from Mandatum Life and around EUR 35 million from the asset management company.

And then we had some gains also from the Enento sale. So this basically the proposal is almost -- or actually more than the internal dividends and pretty much the liquidity that we have available, also leaving something for working capital. And of course, since the Saxo deal hasn't closed, this represents pretty much the liquidity we have at the moment to pay out.

Okay. Thank you for your questions. About the IT cost, we don't have exact number to give you what is the benefit of that, but it's part of our budgeting and it's substantial. Of course, at the same time, we have other license costs and so on. But all-in-all, our IT costs are decreasing as we have already seen in the past 2 years.

And this getting rid of the mainframe will help us. So we will get the full benefit of getting rid of the mainframe. And when it comes to net flow, so yes, it's net flow in Q4. First, the sales was really good. It was a strong sales quarter, especially the December. But at the same time, I guess I would not say, unfortunately, there are certain -- in this business, it's good is that our customers get distribution from the private equity and private debt investments and big ones.

So they are happy customers because of that. And that happened in quarter 4. And the profit, I would say that there's no big changes. The sales at the same time, we got maybe even a little bit more higher margin products that we distributed out. So let's say so that it wasn't a big thing really for us.

Got it. And just on the new fund that you announced in January of around EUR 200 million, I guess you said it was. Is that included in sort of December figures or is that that -- would that be included in Q1 figures?

Yes. I think you are referring to Mandatum opportunistic Credit Fund II. That's not in the Q4 numbers, and it's not even -- you can't calculate as a whole to quarter 1 numbers because it's called based. So the customers pay fees once we call it, and it will come month-by-month once we call the customers' money in.

The next question comes from Antti Saari from OP Markets.

It's Antti here. Part of my question has already been answered, but I would like to ask you that do you believe that you're able to achieve your net inflow target of 5% of assets under management in 2026?

Thank you, Antti, for your question. We don't -- as in our financial targets, we don't have net flow target anymore, neither is 5% or something else. But of course, we are doing our best. And of course, as you know, the bigger you get, of course, your assets under management are growing as well. And natural outflow in every player in the market is certain percent of your assets under management.

So you have to run faster. And that's why we are hiring more salespeople. And of course, we are increasing the existing salespeople's targets for this year in order to keep the momentum what we have seen in the past 2 years. So I'm confident that we -- our sales is really going well in both in Finland and outside of Finland, especially in Sweden. And let's see.

But regarding Q4 sales, you said that it was strong, excluding these few large outflows. Was the sales -- if we talk about new sales, not net sales, was the new sales in line with the strong level of Q3?

Yes, yes.

Okay. And then one more technical question. Your tax expense was pretty close to 0 on Q4. I wonder what's behind that?

Yes, you're absolutely correct. And for the full year, the tax rate was kind of unusually low. We got some tax benefits, and we were able to utilize some previous year cash -- tax loss carryforwards. You shouldn't read too much into this item altogether.

So we're still kind of, over time, it should be around 20% or the corporate tax rate in Finland. As you all know, there's a proposal that it would be lowered in '27. But let's see. So -- but of course, we try to kind of use all ways to kind of make sure that we pay the right taxes, but this was unusually low in the fourth quarter.

The next question comes from Ulrik Zürcher from Nordea.

Just start with a clarification on the remittance or upstreaming. You said EUR 300 million from Mandatum Life. Has that been remitted already or will it be?

I'm not actually sure. Hi Ulrik, I don't know what you mean by remitted, but that money has been paid to the -- from the subsidiary to the holding company. So it's on the bank account as cash. So if that answers your question.

Yes, it does because I'm just wondering about the you reported assets in the With-profit segment. So I was just wondering if there will be a drop once you paid it or if it's already paid?

It's already taken, and we usually do it towards the end of the year.

Yes. And I also think you said that the dividend was funded that you haven't -- you don't need to use the Saxo proceeds for this. Was that correct?

That is correct. We have not got the money. And of course, it was also -- I'm pretty sure, impacted the Board's decision. This is what we have and the proposal for '25.

But could it go higher then once you get the proceeds because that will likely be before the annual meeting or?

Well, I think since we haven't -- the deal hasn't closed, I think it's -- the Board has been quite clear that this is the proposal for '25. And it's not a huge issue altogether. We still believe the deal will close during the first half, but the proposal is based on the current situation.

That's clear. And then just thinking on the general dividend level here because you have an ROE target for '28 and you measure ROE on average equity. So just like a simple calculation like roughly flattish earnings. It seems like this is actually a level you should maintain the 2 next years to reach the ROE target or is something I'm forgetting?

Well, I think you just should keep in mind that we have the over EUR 1 billion target and the 20% ROE target, and there's multiple ways to kind of achieve the 20% target, but it's -- over EUR 1 billion is the number you should be looking at. We don't -- and we cannot guide for anything more specific, but those 2 targets will be met by '28.

And just since you have ROE target, it just seems like you can also go the way to just look at what your equity base would need to be, but I get where you're.

Yes. That's one component there, definitely.

And then also -- sorry, again, just a small -- because you had actually a very, very strong development in fee versus capital-light AUM, not only this year, but last year as well. It was like the growth rate to fee to AUM was -- the ratio was quite stable, but should we expect a somewhat of a downtick the next year or can you sort of maintain this at, let's say, normal returns in the market?

Well, our target is the capital-light profit growth, and that should be over 10% and we had 5% in last year, of course, accelerating clearly above that on the second half of the year. So I think that's what we're aiming at and what we're targeting. And there's, of course, the income and the cost and fee and AUM play a role in both of those items.

And last one, just a technical one. Just on the other results. I was just wondering what the run rate would be roughly on the other results once you do the Saxo Bank deleveraging or pay back that loan.

Yes, that cost is just below EUR 10 million per annum. And then, of course, as mentioned, we had the change in actuarial assumptions, mainly due to kind of higher cost assumptions and for the next 50 years. So for a EUR 2 billion portfolio, that EUR 5 million is not a lot.

But of course, over time, that should be kind of closer to 0 if we're adequate in reserving, which we believe we are. So I think those are the items there. And then you have some of the LTI costs there as well, difficult to say how those will develop depending on our share price development, plus then the general Group overhead. So I think those are the items you should be looking, but clearly, obviously lower than what was in '25.

Maybe EUR 20 million to EUR 25 million or?

Probably closer to EUR 25 million, I think, is a good estimate.

The next question comes from Jaakko Tyrvainen from SEB.

Jaakko here from SEB. Most of my questions have already been asked. But if I may, I would like to continue on the cost-to-income topic and the scale of the capital-light business. And is it fair to assume fairly stable cost base, underlying cost base from the levels we saw in the second half of '25 going forward? Just trying to understand the upcoming leverage.

Yes. Thanks, Jaakko, it's Petri here. So yes, that's something you can assume. So our budgeting and forecast is based on that, that our cost base will increase just a little bit going forward. And why -- how we can do that is that we are streamlining our operations and processes. And at the same time, we get some room for and quite a lot of room also growth in sales side and product side. And overall, we will keep our cost base quite much the same.

Good. And then more detailed question on the AUM development during the quarter. The international AUM was rather muted during the quarter. Was the slowness there because of the outflows or was there particularly lower inflows during the quarter? And any further commentary on the current activity level in the international business would be nice.

Yes. Thank you. So the first one, it was the distribution of our profits in -- it was especially in our international side. So -- and things we have sold in the past, and they are distributing the profits now. And -- but at the same time, the sales was really strong. So that explains that assets under management remains stable, so at the same level.

And other things, I would say that Sweden is growing really strong as it has already done 2 years and still improving. And all other places like Central Europe, we are a little bit like just investing to -- in order to grow the business. We have seen the same inflows what we have seen in the past, doing that from the, let's say, from Helsinki only.

Now we have put a lot of activity to our Luxembourg sales office and my weightings are that we will -- we should see some new tickets and new, let's say, new -- some kind of jump in our business in Central Europe during this year because we have a lot of activity now. But also, we have to remember that we really started in September last year.

Maybe also worth commenting, Jaakko, is the fact that, as you know, that our international AUM is largely tilted towards the credit market and the increase in rates during the quarter, obviously meant that the market growth was lower than what could normally be assumed. So that also had an impact on the AUM.

[Operator Instructions] The next question comes from Emil Immonen from DNB Carnegie.

I just have 2 more. Maybe starting with the net flows still. How do you think about the kind of money you're paying out? Would you normally consider that, that returns to Mandatum as well or how should we think about these flows in general?

Okay. Yes. Thank you for your question, Petri here. So yes, with the large institutions, what we are here talking about is it's -- once you distribute some profits back from like PE or PD investments, they don't immediately give it back to you. But of course, the relationship is strong, and we have worked with those customers a long period of time.

So of course, we are having negotiation that at least some part of that money will come back. But that's very normal with institutions that it's not like, okay, money is coming to your account, let's put it somewhere. So it's a little bit different type of investment process in those large institutions.

Okay. That's good to hear. And then on the maybe corporate side, you mentioned that personal funds was liquidated. How is that market in general developing in your view?

It's a really strong market. There's a lot of customers demand and it's growing, and we are establishing a lot of new personal funds in the last year as well, a little bit less than 2024, but they were bigger ones last year than the year before. And there's, let's say, really, really big customer demand on that side. So I'm very confident that, that market will continue to grow.

Sounds good. And then a final question on the mainframe discussion. Maybe following up on that, is that purely an exercise in cutting IT costs or does it allow you to do something else to improve the efficiency of operations in general or do new products or is this visible outside the company somehow?

Yes, you're right. That's really [indiscernible] question. But yes, it's -- once you get rid of, let's say, more legacy type of things and you don't consume so much spending to those, it gives you room for developing new things and new software and new products and streamline your processes. So you can increase your -- in your IT budget, you can increase your development side, and that's basically what is happening with us.

There are no more questions at this time. So I hand the conference back to the speakers.

So there seems to be one question about the mainframe in the chat, but I think we have covered the topic already. And this concludes today's audiocast. Thank you for your good questions and for taking the time to join us today.

If you have any additional questions after the call, please feel free to reach out to Investor Relations at any time. We appreciate your continued interest in Mandatum. Have a great day, and goodbye.

Good morning, and welcome to Mandatum's Q3 audiocast. I am Lotta Borgström from Investor Relations. And it is my pleasure to introduce you our CEO, Petri Niemisvirta, and our CFO, Matti Ahokas, who will guide you through today's presentation.

During this audiocast, we will begin by presenting the highlights and key developments of Mandatum's third quarter of 2025. Following this, we will proceed to the Q&A session, where you will have the opportunity to dial in with any questions you may have. As a new feature, participants can also submit questions through the chat which we will review after the dial-in Q&A.

With these remarks, I will hand over to Petri. Please go ahead.

Thank you, Lotta. And now let me give you an overview of Mandatum's third quarter of 2025. In Q3, we saw another period of solid growth, which reflects our strong momentum. Our profit before taxes increased by 23% compared to the same time last year. The good earnings growth was supported by the fee result, which increased by 20% from the last year, in line with our guidance. On top of that, our net finance result increased significantly from last year due to the favorable interest rate movements.

The capital-light result before taxes, including institutional wealth management, corporate and retail businesses was roughly at last year's level. However, the comparison period included a profit of EUR 3.3 million related to portfolio transferred to If in 2024.

Since becoming a listed company, we have made operational efficiency a top priority. One clear sign of this is our cost income ratio, which has improved to 50%, a 13 percentage point improvement from a year ago. This shows that our scalable business model is working. We are able to grow our income without a large increase in costs which puts us in a good position for continued growth.

Our financial strength remains solid. In the third quarter, our solvency stayed at a high level and we have generated EUR 0.48 per share in organic capital since the start of the year. It's worth noting that this organic capital generation is a more reliable indicator of our capability to pay dividends than just looking at earnings per share.

Looking at the client activity. We achieved a net flow of EUR 163 million, which is especially good given the usual slowdown during the summer holidays. Client assets under management reached a new record of EUR 14.9 billion. This was driven by both strong net inflows and a favorable investment market where the overall market development was much steadier than early in the year. Optimism about earnings growth helps support global stock markets and the bond market was stable.

We also saw good sales activity across all our business areas. Our retail business developed as expected, helped by the successful launch of our partnership with Pohjantähti insurance company, selling our personal risk insurances. Loan insurance sales to the Danske Bank channel were active and average coverage amount of granted loan insurances continue to increase.

Turning to our corporate client business. Sales of pension insurance and personal funds remain strong. Even though the Finnish economy has faced challenges, our clients have generally performed well in their businesses.

Net flow from the corporate clients increased significantly year-to-date. The growth coming mainly from personal funds. The strong corporate net flow shows also the diversification of our capital-light business highlighting the importance of corporate business to our growth story.

Net flow from the institutional wealth management business year-to-date was lower than last year, the growth still being clearly above the historical average of 5% of assets under management. Also, institutional wealth management net flow in the quarter was 51% higher than last year.

In our institutional wealth management segment, we focus on growing our international presence and private wealth management in line with our strategy. Our efforts are paying off. Sales in Sweden were particularly strong, supporting international institutional sales and assets from international clients grew by 45% year-on-year. We also made process in Central Europe with our first team members starting in the new Luxembourg sales office, bringing us closer to the European customer base.

Private wealth management asset increased by 17%, mainly thanks to the clients using full mandate solutions. The largest increase in assets under management was once again in credit and allocation products. Product development continues to be a cornerstone in our business. In May, we introduced the European high-yield total retail fund which focus on Europe and high-yield bonds and has been well received. It has been now already attracted over EUR 100 million in investments. Our mandate to Managed Futures Fund, which uses systematic investment strategies, also attracted significant new investments this quarter.

Operational efficiency continued to improve significantly with the cost-to-income ratio dropping by 13 percentage points to 50% over the trailing 12 months. The improved operational leverage demonstrates that the determined focus on cost efficiency is paying off supporting sustainable profitability.

Having said that, we have not sacrificed our investments to the future. During the quarter, we recruited new salespeople in order to speed up our growth in the institution and wealth management and corporate segments. While the fee margin decreased slightly to 1.13% due to the growth in lower-margin Institutional Wealth Management business, stand-alone product margins remain stable.

And now let's move over to Matti and the figures.

Thank you, Petri. Let's now take a closer look at the third quarter result components. As mentioned, our fee result was up 20% year-on-year with assets under management up by 12%, and if we compare to Q2, our AUM was up by some 3% or around EUR 500 million to EUR 14.9 billion, just shy of the EUR 15 billion mark. The client fee margins were largely unchanged in the quarter when looking on a 12-month rolling basis.

We saw similar trends as before, a gradual mix change from the growing international institutional business and a lower share of alternative assets compared to 2024. And as Petri mentioned, the product-specific margins were largely unchanged during the quarter. The cost income ratio of our client AUM continued to decrease according to plan and was 50%. The main driver for this was a 4% higher average AUM versus Q2, which supported income and then a smaller impact from seasonally lower costs.

Our net finance result came in at EUR 39 million. Financial market returns were pretty close to normal during the quarter. In addition, we had some tailwind from the long IFRS discounting rates during the quarter. And I'll talk a bit more about this later on.

Our results related risk policies in Q3 was down compared to 2024, and you all know that the comparison figure included around EUR 3 million of one-off income from the portfolio transferred to If. Also, the cost CSM release was a bit lower in the quarter due to timing effects, but the new business CSM continued to grow.

Capital generation is a key success factor for any financial company, and we still continue to consistently generate capital. Organic capital generation was EUR 70 million in the third quarter. This translates to EUR 0.14 per share. The main positive driver here was the increase in own funds. And one of our financial targets, return on equity stood at 13.6% in the quarter.

One of our financial targets is to grow the capital-light profit before taxes by more than 10% annually by 2028 compared to 2024. And if we look at the first 9 months of 2025, the reported profit before taxes was EUR 65 million or 3% below the level of 2024. And as you remember, in the first 6 months of the year, the result was impacted by the turbulent financial markets, FX headwinds from the weaker U.S. dollar and lower sales altogether.

But it's encouraging to see that Q3 saw a step change in quarterly profitability. All segments increased their profit sequentially. The quarterly level of EUR 25 million suggests a run rate in line with our financial targets.

Also worth noting here again is that the comparison figure in '24 included a EUR 11 one-off gain from the portfolio transferred to If. Adjusted for this, the profit before tax growth in capital-light was 16% year-on-year.

Then the group net finance result, up to EUR 39 million in Q3. With-profit investment return in the quarter at 0.9% was below last year and slightly below the expected run rate. Our fixed income portfolio had a negative impact -- negative mark-to-market impact from higher rates, but this was also partly offset by positive spread movements in the quarter. The mark-to-market yield was down slightly, ever so slightly, you could say, to 4.2% due to tightening spreads, and we also did some portfolio adjustments here. But it's important to stress that this is still well above the cost of liabilities.

Equities contributed positively this quarter, but as you know, our exposure here is very low. The listed equity exposure was unchanged at 4% of total during the quarter. On the alternative side, private credit had a fairly normal quarter again, but we had a small negative value change in our own real estate portfolio during the quarter. Private equity returns were positive, but slightly below the normal rate in the quarter.

If we then look at the long swap rates, they were up by 5 to 10 basis points in the quarter. And the IFRS rates that we use for discounting in the long end of the yield curve increased in the quarter by around 15 basis points, lowering the cost of liabilities by EUR 12 million. The illiquidity premium contributed positively to the IFRS discount rates by around 8 basis points. And as you probably remember, in Q2, the impact was negative in the second quarter.

With profit portfolio, interest rate hedging ratio increased further and was unusually high, one could say, at 109 at the end of Q3, this was mainly due to technical factors as the fixed income exposure increased and mainly in the 20-plus year bucket. And as we show in our presentation and although the average hedging ratio is high, there are big differences in the different maturities. And in the third quarter, the hedging ratio was also impacted by tactical bond investments.

And finally, worth noting again that the IFRS discount rate mark-to-market changes have no impact on the actual contract cash flows nor our dividend paying capacity. We continue to consistently generate capital. Organic capital generation, as Petri mentioned, was EUR 70 million in Q3 and again significantly higher than the reported IFRS result. In the first 9 months of '25, we generated capital organically by EUR 242 million net of taxes or EUR 0.48 per share. And looking at 2024, for the first 9 months, the figure was EUR 0.34.

As pointed out before, we think the OCG is a more relevant measure than the reported IFRS result when assessing our performance and capital generation in particular. Own Funds generation increased the solvency margin by 9 percentage points in the quarter. Group solvency margin increased by 4 percentage points in the quarter compared to the -- compared to Q2, but decreased by 16 percentage points to 206 when taking into account the larger dividend deduction compared to last year.

And maybe worth noting still is that the announced sale of the Saxo Bank shares is expected to increase the solvency margin quite significantly around 35 percentage points once the transaction is finalized.

And now back to you, Lotta.

Thank you, Matti. And now let's move on to the Q&A. Please dial in or submit your questions through the chat.

[Operator Instructions] The next question comes from (35)8415-289122.

It's Antti from OP. Two questions from my side. Firstly, regarding risk policies. You have guided us that 10% of CSM is a pretty good estimate for results from risk policies. But now it has been 4 quarters in a row quite significantly below that level. So should we do any conclusion about this? And do you still believe that you're going to reach the 10% level this year, meaning about EUR 13.5 million?

Yes. Antti, it's Matti here. A valid question, and your observation is exactly correct. The CSM release has been lower than one should expect. However, I think it's very important to note here that we've actually been generating the CSM. So it's not a question that we won't be kind of -- having the kind of potential release, it just has been slower due to the modeling we use.

We are looking into this so that it would not kind of be pushing the CSM too much forward, and it would be a more stable release, and you should still expect the EUR 13 million to EUR 14 million as the annual run rate, of course, in '25, it's lower.

But from the following quarters, I think it should be roughly the same. But a valid point, and we're definitely looking into that. But of course, the main thing is that the CSM is still there. The release has just been slower.

Okay. And then other question regarding your very strong fee result. It stated in the report that, yes, costs are seasonally lower in Q3, but were there anything exceptional? Or do you think that the cost base was normal for Q3, so to say?

Yes. I think the cost base was pretty normal for Q3. So -- but the main reason for the improvement in the cost-to-income ratio now in the third quarter was actually the fact that we've been able to grow our AUM. And by AUM, we've talked about the average AUM because in the beginning of the year, there was a lot of volatility in the market. So even though the end of period AUM grew, the average AUM growth was significantly lower.

So I would actually say that the bigger impact in Q3 was both in the income side. Costs were maybe EUR 1 million lower than normal. So that was probably the impact in the quarter. So a combination of both, but definitely more impact from the income side because of higher average AUM.

The next question comes from Emil Immonen from DNB Carnegie.

Maybe to continue on the cost/income ratio. So if I understood correctly, it's a lot now scale benefits that you're seeing. But has there been any cost cutting that you're doing that also is showing an effect because I think the jump Q-on-Q in the cost/income ratio was quite big.

Yes. Emil, as I mentioned previously, in this quarter, the impact from higher income was more significant. But as we pointed out several times that operational efficiency is one of our key strategic priorities. And this means then obviously, that it has had an impact. But now in the third quarter, isolated, it was more driven by income, which we are very happy about altogether.

That is good to hear. Maybe then touching on the net flow. So it was negative in both corporate and retail. Could you maybe elaborate on how that should be analyzed?

Yes. Thank you, Emil, Petri here. So yes, it's -- let's say, if I first answer to retail segment. Retail segment has been quite much flat or a little bit negative over the years or quite a long period of time. So we have very old cooperation with Danske Bank and a large portfolio, which was mainly sold in before 2010 when the Sampo Bank was still part of the Sampo Group.

And since then, the sale has been let's say, more modest than especially the savings side, not especially in loan, loan insurance side. So there's nothing special on that compared to other years before and other quarters. So of course, we try to enhance and put some speed to Danske Bank sales, but it's quite difficult to really increase a lot that sales on that side. So nothing special on that.

About the corporate side, there was some seasonal withdraws from personal funds. So it varies a little bit from quarter-to-quarter. So when the companies are paying the variable compensation payments in spring, so then we will see a lot of inflow in personal funds, which is the largest part of the inflow nowadays.

And during the summertime, that's the time when the personal fund numbers are ready, and that's the time when the people has a chance to withdraw their money, so some employees wanted to have their money and use those. So that's a little bit seasonal issues and nothing special in our business wise -- in business and business-wise.

The next question comes from Jaakko Tyrvainen from SEB.

I mean my questions regarding the profit asset allocation and continuing derisking products there. Could you remind us how far you are -- you should be able to rotate the capital from the illiquid asset classes to credit and perhaps liquid equities?

Yes, it's a good question. And unfortunately, we don't really have a good answer to that. What we've seen, obviously, in the market, as you know, private credit has been returning capital quite nicely. So that is functioning normally. The private equity side has been clearly slower, some signs of positive developments there and also some capital payouts already. But of course, the big -- it's the most important factor is how that side will develop altogether, and we still feel comfortable about the guidance that during the strategy period, we will be able to release the capital from those investments and take the derisking, as we pointed out.

Important to note out that during Q3, we didn't really have a lot of derisking going on altogether. So this was more of a kind of pause in that direction. But the trajectory is quite clear. We aim to continue there and we see no real changes to that side. And hopefully, the private equity market recovers faster than expected.

Then on the solvency and without transition rules, it was 191%. When thinking your capital guidance and planning and the capital payouts throughout the strategy period. Could you remind us which solvency we should be looking at with or without the transition rules?

It's the one without transition rules. So the 191% and there with the target is 160% to 180%. There is a bit of confusion obviously there because we report several solvency margin figures altogether. And remember that the transition rules, they expire in 2031. So that's still quite a long time ago until then. But our strategy, that is the figure you should be looking at.

Excellent. Then on the net flows, did you see -- during the strong Q3, did you see some pent-up demand coming from the perhaps moderate Q2? And looking a bit towards the ongoing quarter, last year, you had exceptionally very strong quarter in Q4. Was it very exceptional last year? And then how should we think about the net flows towards the year-end?

Thank you, Jaakko. It's Petri here. So I wouldn't say that there was some -- any pending cases from Q2. It was like Q2 was really difficult because of the -- especially April. And we all know that it is a very volatile market, especially in April and beginning of the Q2. But no pending cases. Let's say it was like -- there's a few things why the Q3, we managed to increase our net flow compared to other Q3s in previous years.

I think the one is in wealth management here in Finland, we were more active. We had a full calendars when we came back from the holidays in the beginning of August. So really, really high activity towards customers and a lot of meetings that -- that's something we can now see in the figures.

And I guess when we are growing our business outside of Finland, it's -- you have to remember that July is not a holiday season yet in Central Europe, and it looks like it's not that much in Scandinavia than it's in Finland. So it also helped us. July was really strong because normally, it has been quite weak on those time, we had only business in Finland. So international business growth is helping us in Q3, especially.

And another question, the Q4 last year, yes, you are right, it was especially really, really high level. I can't comment on Q4, which is already going on, but it's -- last Q4, we were very, very successful in getting some very large tickets and institutional tickets from Sweden and international side. So let's see.

Okay. It's helpful. And finally, perhaps few words, if you may, an update on the international expansion. You just launched the new sales office, what are your own expectations when that effort should start to bear some kind of materiality?

Yes. Yes. Of course, we are -- we are not very patient people here. So of course, we are waiting every day and week, things happen and realistic is many times once you have tenders with the large institutions, it takes some time. But of course, we have a very good pipeline already in Central Europe, where we have been before establishing the sales office there. So this is just like a boosting, boosting the business what we have already done there before like 2024 and 2023.

So I would say, to be realistic and a little bit optimistic. I guess we will start to see some improvement and a clear change in coming years. So we just established that in September. So I guess it's a little bit too early to wait, big change in our business during this year, but next year is something we hopefully see growth -- faster growth in that area.

[Operator Instructions] The next question comes from Kasper Mellas from Inderes.

My first question is about your profit distribution outlook. So if the sale of Saxo shares would happen in 2026 instead of Q4, would this have any effect on your profit and distribution potential for -- or plans for 2025?

Kasper, as we write in the report that there is a slight chance that the transaction will not be finalized by the end of the year. We still think it's possible, but it's also possible that it might be delayed slightly. There is one regulator still investigating the thing. I think there's a total of 40 different regulatory approvals already achieved. So we don't believe this is a big thing altogether. And of course, for us, the main thing is that in May '26, when we have our AGM, then we have to have the money on our bank account. So we don't expect that this would have any impact on a potential distribution.

That said, obviously, it's all up to the Board and then ultimately, to the AGM to decide what to do with the money. But we don't believe that this delay will be significant. We just wanted to flag a bit that there is a possibility since we said originally that should happen by the end of the year. It's still can happen, but it might be delayed but not materially.

Okay. That's just a matter of liquidity?

Yes.

Okay. Then my last question is more technical related to group costs. Group costs, I calculated this as the difference between other results from items not allocated to the segments and your finance expenses. And this, according to my calculations were higher in Q3 than in Q2. So have you done some cost allocations from unit-linked to other results? Or were there some onetime expenses or what was behind this development since I assume that your finance expenses were quite stable quarter-on-quarter?

Yes. The finance expenses are pretty stable quarter-on-quarter, but there is, of course, some variation from side to side. And so we haven't done any major factors. I don't think you can draw that kind of straight conclusion from our cost base by just allocating the finance costs. There was nothing clearly different or funny from that side altogether.

Remember that in the with-profit now, of course, we do include the with-profit, the Tier 2 loan interest expenses, we started that in Q2 now. So that, of course, has an impact on -- if we look at the previous quarters. But apart from that, there was nothing out of the ordinary in that item.

The next question comes from Michele Ballatore from KBW.

Yes. So my first question is about the capital generation, specifically the own fund generation. Can you help us understand to what extent, let's say, a friendly market environment help that metric in the third quarter?

Yes, it definitely did help. Of course, if you look at the generation overall, that's typically the biggest driver, apart from the -- obviously, the net profit and that generated in IFRS results. But it did have an impact in the own funds generation.

So do you have like kind of run rate for the own fund generation, like a quarterly run rate or there is a seasonality also there?

No, that, of course, depends on the market development as well. So I don't think you can put a kind of stable run rate for that. I think the one way of looking at it, what's the difference between the reported IFRS profit and then the -- then the own funds generation. So that would give you some kind of indication where it could be.

So -- but of course, if the market situation is favorable, then we continue to generate future profits or present value of future profits from higher fund growth than we have in our estimation, and that contributes positively to the own funds. But it's impossible to give a run rate. I think you should look at the difference in the previous quarter that gives you some kind of indication.

Yes, fantastic. And then the second question is about -- I mean, of course, the growth is driven by institutional and wealth management kind of segment. My question, I guess, is more related to what kind of retention. I mean based on the products that they are -- this segment, the products sold in this segment, what kind of retention you expect? I mean, are these money that can easily move to other funds? Or I mean can you help us understand what kind of behavior you expect for this kind of specific segments in terms of -- from the client?

Yes. Petri here. Thank you for your question. Let's say that if I start with our Corporate segment. In Corporate segment, we are currently have assets under management and the product we are selling are more sticky because the nature of the business like pension business, there is no transfer market in Finland. And of course, the taxation, everything is like that. So corporate segment money is really sticky money and stay longer by nature.

When it comes to Institutional Wealth Management segment, it's more or less like any other wealth management and asset management company. So customers can withdraw their money if they are not happy with us and we are not good in investments and so on.

Having said that, especially in our wealth management side, where we are selling mainly through capital redemption policies, our services and products, there's one thing which is clearly hindering that is taxation because once you have created, for example, taxable income, capital gain taxable income, inside your portfolio. If you withdraw your money, you have to pay taxes, you can't transfer to that somebody else without paying taxes. So in certain way, it's a little bit more sticky than just to sell let's say, like-for-like direct equities.

And with the funds, it is the same. And -- but -- and another thing, which I would say this is not very coming and going money is also that more or less everything we do in our sales and in our distribution is in our own hands. So we own the customer relation. So we have a very tight relations to our customers. No matter are they private individuals, high net worth, ultra high net worth or institutions, we always try to create deep connection to our customers.

So -- let's say, in times that it's -- the times are difficult, we do have still relation to our customers. It's not in someone else hands. So that helps us to keep the money, let's say better than otherwise. But of course, ultimately, it's a question of how much wealth you generate to your customers, how good your investments? And what is your NPS, which is very high with our customers currently.

And when you mentioned the tax, it's the taxes on capital gains, right?

Yes.

Okay. Because I was also thinking the -- correctly -- correct me if I'm wrong, but if the allocation is to, let's say, not plain vanilla products, normal equities and liquid bonds, but it's in like, let's say, private credit or -- I mean this kind of funds are probably stickier because there is a more longer-term view from the investor in terms of approach, right?

Yes. Yes, you are right. And we -- yes, we have a quite big part of our business is also alternative and commitment based. So -- so once you have committed to something to fund to invest to us, you have to stay with that. So no matter what you think afterwards, you have to stick with the commitment, and especially in private equity, private debt, it's a long-tail business. So it's more sticky as well.

The next question comes from Emil Immonen from DNB Carnegie.

One more question related to the Institutional and Wealth Management business. I was just wondering, seeing the net flow is pretty good. How is the fee margin developing? Is there any pressure on that? Or are you getting good net flow without having to touch fees at all?

Yes. Thank you for your question. It's -- yes, as we have stated, we haven't seen any softening and huge price pressure in stand-alone products. Why our average fee margin is going just a little bit down is because we are selling more institutional wealth management products and services. So -- and as we have said, and you all know there's a lower fee margin on that segment and has always been.

So more we grow in that segment, of course, it will come a little bit down, but it's slowly going down, but stand-alone divisions, customer segments, products, we haven't seen any big margin pressure. And we are not sacrificing our profitability and discipline in pricing in order to get growth. So this money and net flow and inflow we are getting in is right price.

Sorry, if I understand correctly, it's pretty much developing exactly as you said.

Yes, exactly. No changes in pricing and margins.

There are no more questions at this time. So I hand the conference back to the speakers.

And then I take 2 questions from the chat as well. Could you please elaborate on the lack of AUM growth for Finnish institutions in Institutional and Wealth Management business?

Yes. Thank you for the question. So I think the Finnish institution as a subsegment, which is moderate growth and our flat growth in assets under management, there are a few reasons for that. I guess one is the bigger thing, I guess, it's some kind of mirror of the Finnish economy.

So institutions underneath assets, they are not getting that much new money from -- and there are no new institutions established. And many of the Tier 2, Tier 3 institutions in Finland, they have committed a lot to illiquid assets like private equity and private debt also with us. And also the real estate market is quite a freeze in Finland. So that means that investable assets are not that high at the moment.

And at the same time, the picture is not that flat. It looks like for us -- we have also a lot of commitment based sales towards institutions in Finland, which is not shown immediately in assets under management and net flow. It will come once we call and once the funds call those commitments in. So the sale has been quite good on that segment, but it's not shown yet in those figures.

And then there was a question regarding the transfer for the internal profit transfer of EUR 1.2 million from institutional wealth management to corporate, and that was a more technical nature.

That concludes today's audiocast. Please do not hesitate to contact Investor Relations should you have any further questions. Thank you for joining us. Have a good day.