Q2 2026 NOBA Bank Group AB Earnings Call

August 18, 2026

Speaker #2: Good day, and thank you for standing by. Welcome to the NOBA Q2 2026 report conference call and webcast. At this time, all participants are in listen-only mode.

Operator: Good day and thank you for standing by. Welcome to the NOBA Q2 Report 2026 conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I would now like to the conference over to your speaker, Jacob Lundblad, CEO. Please go ahead, sir.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker #2: To withdraw your question, please press star one one again. Please note that today’s conference is being recorded. I would now like to turn the conference over to your speaker, Jakob Lundblad, CEO.

Speaker #2: Please go ahead, sir.

Speaker #3: Thank you so much. Welcome to the presentation of our Q2 report. My name is Jakob Lundblad, I'm the CEO, and with me today I have, as per usual, Patrick MacArthur, our CFO.

Jacob Lundblad: Thank you so much. Welcome to the presentation of our Q2 report. My name is Jacob Lundblad, I am the CEO, and with me today I have, as per usual, Patrick MacArthur, our CFO. Q2 showed stable financial development with good progress towards our targets. Adjusted core operating profit came in at 1.5 billion Swedish krona, up 21% year on year. Core ROTE of 27% and actually 29% on core capital employed. On totality, we saw an 11% year on year organic growth in local currencies. Reported numbers are slightly higher. All segments are contributing particularly strong growth from credit cards in Germany and mortgages in Sweden, Norway, and especially glad to see that the secured space continues to deliver following the recovery last year. Speaking about growth, I think it is also worth highlighting that we have a number of product launches in the pipeline.

Speaker #3: Q2 showed stable financial development with good progress towards our targets. Adjusted core operating profit came in at 1.5 billion kroner, up 21% year on year.

Speaker #3: Core RoTE of 27% and actually 29% on core capital employed. In total, we saw 11% year-on-year organic growth in local currencies. Reported numbers are slightly higher.

Speaker #3: All segments are contributing, with particularly strong growth from credit cards in Germany and mortgages in Sweden and Norway. I'm especially glad to see that the secured space continues to deliver, following the recovery last year.

Speaker #3: Speaking about growth, I think it's also worth highlighting that we have a number of product launches in the pipeline: equity release in Norway, mortgages in Finland, corporate deposits, micro-SME lending—adjacent to the scale-up of DBT, obviously.

Jacob Lundblad: Equity release Norway, mortgages Finland, corporate deposits, micro SME lending adjacent to the scale-up of DBT obviously all scheduled for 2027. So quite a lot of activity in the business right now. In terms of NIM, we saw stable development quarter on quarter with underlying NIM coming in at 8.2%. Cost income ratio came in at 23%, flat quarter on quarter. We expect to have impact on our cost takeouts initiatives towards the end of the year, and that will reduce cost growth, but we remain confident that we will achieve our medium-term cost income target of below 20% during 2027. In terms of cost of risk, we see a strong underlying trend came in at 2.5% in Q2, despite 42 million kronas of macro provisions. This is the ninth consecutive quarter with year on year improvement.

Speaker #3: All scheduled for 2027, so quite a lot of activity in the business right now. In terms of NIM, we saw stable development quarter on quarter, with underlying NIM coming in at 8.2.

Speaker #3: The cost-income ratio came in at 23%, flat quarter-on-quarter. We expect to see the impact of our cost takeout initiatives towards the end of the year, and that will reduce cost growth.

Speaker #3: But we remain confident that we will achieve our medium-term cost/income target of below 20% during 2027. In terms of cost of risk, we see a strong underlying trend: it came in at 2.5% in Q2, despite 42 million krona of macro provisions.

Speaker #3: This is the ninth consecutive quarter with year-on-year improvement. We're now at the lower end of the normalized range of 2.5% to 3%, and at this point in time, we see that the positive development is predominantly driven by our continuous improvements in underwriting, particularly within the banking region operations.

Jacob Lundblad: We are now at the lower end of the normalist range of 2.5% to 3%, and at this point in time, we see that the positive development predominantly is driven by our continuous improvements in underwriting, particularly within the Bank Norwegian ratios. Funding we issued 81 senior preferred bonds during the quarter yet again at lower spreads compared to earlier transactions. Strong capital position and capital generation CET1 of 13.4%, which is a 3.2 percentage point above regulatory requirements after deduction of anticipated dividends. Capital generation is strong, and we also communicate that the board are evaluating a potential share buyback program as an option to ensure optimum capital level and manage surplus capital generation going forward. So that was the summary. We will jump into the segments. So flip page, please.

Speaker #3: Funding, we issued SEK 81 million, and CINDI preferred bonds during the quarter, yet again at lower spreads compared to earlier transactions. Strong capital position and capital generation, CET1 of 13.4%, which is 3.2 percentage points above regulatory requirements after reduction of anticipated dividend.

Speaker #3: Capital generation is strong, and we also communicate that the board is evaluating a potential share buyback program as an option to ensure optimal capital levels and manage surplus capital generation going forward.

Speaker #3: So that was a summary. We'll jump into the segments. So, flip the page, please. Private loans are now a rounding error from SEK 100 billion. The segment grew by 11% in local currencies year-on-year, and quarter-on-quarter. There was some tailwind from FX in the reported numbers.

Jacob Lundblad: Private loans now a rounding error from 100 billion SEK segment through with 11% in local currencies year-on-year and quarter-on-quarter. Some tailwind from FX in the reported numbers. Very happy with the development. Sweden and Denmark continues to deliver. Finland carries its weight. With increased commercial focus on Norway, we are starting to see a pickup there as well. NIM performance is stable. At this point in time, some slight headwind from delayed pass-through of high rates. Cost of risk continues to improve. Came in at 2.9, which is an improvement both quarter-on-quarter and year-on-year. We are flipping page to credit cards. Year-on-year growth of 11% in local currencies, tailwind from FX in reported numbers. Portfolio now at 21.1 billion SEK. Solid growth in the Nordics, and Germany continues with a high growth trajectory.

Speaker #3: Very happy with the development. Sweden and Denmark continue to deliver. Finland carries its weight, and with increased commercial focus on Norway, we're starting to see a pickup there as well.

Speaker #3: NIM performance is stable. At this point in time, there is some slight headwind from the delayed pass-through of higher rates. Cost of risk continues to improve, coming in at 2.9, which is an improvement both quarter-on-quarter and year-on-year.

Speaker #3: We're flipping page to credit cards. Year-on-year growth of 11% in local currencies, tailwind from FX in reported numbers. Portfolio now at 21.1 billion Swedish kroner.

Speaker #3: Solid growth in the Nordics, and Germany continues with a high growth trajectory. NIM stable, cost of risk stable. Let's flip to secured. Very glad to see that secured has picked up over the last year, following a slower period.

Jacob Lundblad: NIM stable, cost of risk stable. Let's flip to secured. Very glad to see that secured picked up over the last year following a slower period. Year-on-year growth at 12% in local currencies, 11% quarter-on-quarter, again, slightly higher in reported due to FX. Growth is driven by high demand for our mortgage products both in Sweden and Norway, which in turn is driven by high demand for near-prime mortgages. At the same time, we see somewhat slower activity in the equity release products. NIM is stable quarter-on-quarter, but slightly negative year-on-year, driven by the near-prime mortgages. It should be noted that although NIM is slightly lower in that segment, risk-adjusted margins are attractive. Cost of risk at 0.2% down year-on-year, up quarter-on-quarter, very much normal fluctuations.

Speaker #3: Year-on-year growth is at 12% in local currencies, and 11% quarter-on-quarter. Again, this is slightly higher in reported terms due to FX. Growth is driven by high demand for our mortgage products, both in Sweden and Norway, which in turn is driven by high demand for near-prime mortgages.

Speaker #3: At the same time, we see somewhat slower activity in the equity release product. NIM is stable quarter-on-quarter, but slightly negative year-on-year, driven by the near-prime mortgages.

Speaker #3: It should be noted that although NIM is slightly lower in that segment, risk-adjusted margins are attractive. Cost of risk is at 0.2%, down year-on-year and up quarter-on-quarter, which reflects very much normal fluctuations.

Speaker #3: And finally, it's worth highlighting that we're working on the expansion of equity release to Norway and mortgages to Finland, with the expected launch in 2027. So that was a wrap-up of the totality in the segment.

Jacob Lundblad: Finally, worth highlighting that we are working on expansion of equity release to Norway and mortgages to Finland expected to launch in 2027. So that was a wrap-up of the totality of the segment. Then I will hand over to Patrick for more financials.

Speaker #3: Then I'll hand over to Patrick for more financials.

Speaker #4: So great, thank you, Jakob. I will now go to the financials, and starting off, I think we overall have a very good trend among the key drivers this quarter.

Patrick MacArthur: Great. Thank you, Jacob. I will now go through the financials. Starting off, I think we have overall very good trend among the key drivers this quarter. We have an organic loan growth of 11%. We then have a good conversion of that growth into P&L with stable margins and solid income growth and continued very positive P&L pass-through as credit losses are continuing down. These trends also come through very clearly on the page. We have 12% reported loan growth, which we converted to 13% revenue growth and 21% operating profit growth. With that introduction, I will move into going through the page in more detail. Starting off at the top with loan development. We had a loan growth of 12% in the quarter, including the effect of the DBT acquisition.

Speaker #4: We have an organic loan growth of 11%. We then have a good conversion of that growth into P&L with stable margins and solid income growth, and continued very positive P&L pass-through as credit losses continue to decline.

Speaker #4: These trends also come through very clearly on this page. We are at 12% reported loan growth, which we convert into 13% revenue growth and 21% operating profit growth.

Speaker #4: And with that introduction, I will move into going through the page in more detail. Starting off at the top with loan development, we had loan growth of 12% in the quarter, including the effect of the DBT acquisition.

Speaker #4: If we look at organic content currency growth, the growth rate is 11%, whereas our target is 10%. And similarly, as last quarter, we see all three segments at about 10% growth.

Patrick MacArthur: If we look at organic constant currency growth, the growth rate is 11% with our target of 10%. Similarly, as last quarter, we see all three segments at above 10% growth, so good business momentum across all areas. Moving on to the P&L. NIM came in at 8.1% reported and adjusted for day counted FX, we are at 8.2%. Overall, we continue to see very stable underlying NIM with the headline numbers in Q2 also having some negative effect of delayed pass-through as we have seen rate increases in NOK and DKK in Q2. Moving on to fee and commission income. We came in at 219 million SEK here, which was a 10% growth year over year. We continue to see a positive trend here with growth largely in line with loan growth. In total, we have operating income growth of 13% for the quarter.

Speaker #4: So, good business momentum across all areas. Moving on to the P&L, NIM came in at 8.1% reported, and adjusted for day count and FX.

Speaker #4: We had to 8.2%. Overall, we continue to see very stable underlying NIM, with the headline numbers in Q2 also having some negative effect from delayed pass-through, as we have seen rate increases in NOK and USD/DKK in Q2.

Speaker #4: Moving on to fee and commission income, we came in at 219 million SEK, which was a 10% growth year over year. So we continue to see a positive trend here, with growth largely in line with loan growth.

Speaker #4: In total, we have operating income growth of 13% for the quarter. So, as I mentioned, converting the loan growth well into the P&L. Then, moving on to cost.

Patrick MacArthur: As I mentioned, converting the loan growth well into the P&L. Moving on to costs. We have a cost-to-income ratio of 23% for the quarter, which was in line with Q1. It is slightly up compared to the 22% we had in Q2 2025, and we have reported growth of 20% including DBT year over year and 17% excluding DBT. This growth is driven by a combination of transitionally higher cost growth, as we have outlined before, as well as temporary factors as Q2 2025 had an unusually low cost base, and there is also a negative FX effect of circa 2% here year over year. As mentioned, we expect to see cost takeouts having effect towards the end of the year and remain confident with reaching our target of 10% during 2027. Moving on to credit losses. We have 2.5% cost of risk in the quarter.

Speaker #4: Costs. We have a cost-income ratio of 23% in the quarter, which was in line with Q1. It is slightly up compared to the 22% we had in Q2 '25, and we have reported growth of 20% including DBT year-over-year, and 17% excluding DBT.

Speaker #4: This growth is driven by a combination of transitionally higher cost growth, as we've outlined before, as well as temporary factors, as Q2 '25 had an unusually low cost base, and there's also a negative FX effect of circa 2% year over year.

Speaker #4: But as mentioned, we expect to see cost takeouts having effect towards the end of the year, and remain confident in reaching our target of 20% in June 2027.

Speaker #4: Moving on to credit losses, we have a 2.5% cost of risk in the quarter. This was negatively impacted by SEK 42 million in macro, due to a changed forecast from our external data suppliers.

Patrick MacArthur: This was negatively impacted by 42 million SEK in macro due to changed forecast from our external data suppliers. So would have been 2.4% excluding that impact. This is our ninth straight quarter with year over year foreign cost of risk, and we continue to see a very strong underlying trend here, primarily driven by continuous underwriting improvements and also some continued positive effects from macro normalization. This all takes us a core operating profit of 1.5 billion SEK for the quarter, which is up 21% year over year. From a return perspective, we are very solid return in the quarter with core ROA 27% and core return on capital employed excluding accrued dividends of 29%. Lastly, continue well capitalized with a CET1 ratio of 13.4%. Next page, please. So double clicking on loan book development by segment.

Speaker #4: So it would have been 2.4% excluding that impact. This is our ninth straight quarter with year-over-year foreign cost of risk, and we continue to see a very strong underlying trend here, primarily driven by continuous underwriting improvements and also some continued positive effect from macro normalization.

Speaker #4: This all takes us to our core operating profit of 1.5 billion SEK for the quarter, which is up 21% year over year. And from a return perspective, we are very solid, returning for the quarter with a core loss ratio of 27% and core return on capital employed, excluding accrued dividends, of 29%.

Speaker #4: And lastly, we're continuing to be well-capitalized, with a C21 ratio of 13.4%. Next page, please. So, double-clicking on loan book development by segment, private loans, we have an FX-adjusted growth of 11%, both on a year-over-year and quarter-over-quarter basis.

Patrick MacArthur: Private loans, we have an FX-adjusted growth of 11% both on a year over year and quarter over quarter basis. In the quarter, we see all countries contributing positively here. Strongest growth in Sweden and Denmark, but after a few quarters of weak growth in Norway, we also see Norway doing better following the increased commercial focus there. On credit cards, we see good growth across both Nordics and Germany. We have total FX-adjusted year over year growth of 10.6%. Quarter-over-quarter growth slightly lower at 9.8%, which is as expected as the seasonality in growth for credit cards, with Q3 being the strongest growth quarter. On secured, we continue to see strong growth here, mainly from the non-standard mortgage segment across both Norway and Sweden. Move to the next page, please. So looking at NIM and NII, we have a reported NIM of 8.12% in the quarter.

Speaker #4: In the quarter, we see all countries contributing positively here, with the strongest growth in Sweden and Denmark. After a few quarters of weak growth in Norway, we also see Norway doing better, following an increased commercial focus there.

Speaker #4: On credit cards, we see good growth across both Nordics and Germany, with total FX-adjusted year-over-year growth of 10.6%. Quarter-over-quarter growth was slightly lower at 9.8%, which is as expected due to seasonality in growth for credit cards, with Q3 being the strongest growth quarter.

Speaker #4: And on secured, we continue to see strong growth here, mainly from the non-standard mortgage segment across both Norway and Sweden. Moving to the next page, please.

Speaker #4: So looking at NIM and NII, we have a reported NIM of 8.12% in the quarter. Adjusted for FX and day count, we had 8.16%.

Patrick MacArthur: Adjusted for FX and day count, we are at 8.16%. That is slightly down versus the 8.22% in Q1 on a like-to-like basis, and this reduction is due to some temporary negative effects of delayed pass-through following rate increases in Q2 in NOK and in DKK. Underlying, we continue to see a very stable NIM around the LTM level of 8.2%, with front and back book margins at same levels. Next page, please. Moving on to costs. In Q2, we had a cost income ratio of 23% and cost growth of 17%, excluding the effect of DBT. This development is largely in line with our expectation with transitionally high growth in 2026 given by business investment and our cost takeouts are only expected to come towards the end of the year.

Speaker #4: That is slightly down versus the 8.22% in Q1 on a like-for-like basis, and this reduction is due to some temporary negative effects of delayed pass-through following rate increases in Q2 in NOK and in USDKK.

Speaker #4: Underlying, we continue to see a very stable NIM, around the last twelve months level of 8.2%, with France and back book margins at the same levels. Next page, please.

Speaker #4: Moving on to costs. In Q2, we had a cost-income ratio of 23% and cost growth of 17%, excluding the effect of DBT. This development is largely in line with our expectations, with transitionally higher growth in 2026 driven by business investments, and cost takeouts are only expected to come towards the end of the year.

Speaker #4: In addition, the year-over-year growth in Q2 is impacted by temporary effects, as the cost base in Q2 ’25 was unusually low, and we also had some negative impact from FX, with approximately 2% of the growth coming from FX.

Patrick MacArthur: In addition, the year-over-year growth in Q2 is impacted by temporary effects as the cost base in Q2 2025 was unusually low, and we also have some negative impacts from FX, with 2% of the growth coming from FX. As mentioned, we have ongoing initiatives for cost takeout and have a clear plan for getting down to 20% cost income ratio during 2027. Moving on to cost of risk. Next page, please. Reported cost of risk in the quarter is 2.5%, including 42 million SEK negative macro and was 2.4% excluding macro. However, Q2 is seasonally strong and the LTM, we had 2.7% cost of risk. We continue to see very strong developments within credit losses as we see the positive effect of both normalizing macro and our continuous underwriting improvements in particular on the Bank Norwegian platform having effect.

Speaker #4: And as mentioned, we have ongoing initiatives for cost takeout and have a clear plan for getting down to a 20% cost-income ratio by June 2027.

Speaker #4: Moving on to cost of risk. Next page, please. Reported cost of risk in the quarter is 2.5%, including SEK 42 million negative macro, and was 2.4% excluding macro.

Speaker #4: However, Q2 is seasonally strong and the LTM, we had 2.7% cost of risk. We continue to see very strong developments within credit losses as we see the positive effect of both normalizing macro and our continuous underwriting improvements, in particular on the bank division platform having effect.

Speaker #4: And overall, we see a positive trend on credit losses continuing, and we see that there is potential for the cost of risk to continue down from the current LTM level.

Patrick MacArthur: Overall, we see positive trend of credit losses continuing and we see that there is potential for cost of risk to continue down from the current LTM level. However, as we mentioned before, the forward-looking nature of ECL may give us a bit more volatility in the coming quarters given macro volatility. Next page, please. We continue to have a strong capital position with a CET1 ratio of 13.4%, which is a 3.2% margin to requirements and well within our range of 13% to 15%. The AT1 level is relatively high as we have included two new issues of in total 1.5 billion SEK this quarter, one done in Q2 this year and one done in Q4 last year. We also have two quite sizable calls coming up in Q4 with a call of 1.4 billion SEK AT1 and 650 million SEK Tier 2.

Speaker #4: However, as we mentioned before, the forward-looking nature of ECL may give us a bit more volatility in the coming quarters, given macro volatility. Next page, please.

Speaker #4: We continue to have a strong capital position, with a CET1 ratio of 13.4%, which is a 3.2% margin to requirements and well within our range of 13 to 15%.

Speaker #4: The 81 level is relatively high, as we have included two new ECLs, in total SEK 1.5 billion, this quarter—one done in Q2 this year and one done in Q4 last year.

Speaker #4: We also have two quite sizable calls coming up in Q4: a call of €1.4 billion at 81, and €650 million in Tier 2. As Jakob mentioned, the board is actively evaluating buybacks as a tool for optimizing capital and managing excess capital going forward, and we will provide further updates on that as and when relevant.

Patrick MacArthur: As Jacob mentioned, the board is actively evaluating buybacks as a tool for optimizing capital and managing excess capital going forward. We will provide further updates on that as and when relevant. On the liquidity side, LCR and NSFR remain strong at 193% and 110% respectively. Next page, please. Lastly, a page on return perspective. We have a core ROTE of 26.3% LTM, and we have a quite clear path for taking the last steps from the current level to our target of 30%. As we outline on the page, we have three key levers to work with here. Two related to financial performance and then also a third potentially from capital efficiency. Starting off with the two financial performance levers we have. First, risk-adjusted margins. We currently have a risk-adjusted margin of 5.5%, and we see potential for this to improve further.

Speaker #4: On the liquidity side, LTR and NSR remain strong at 1.93 and 1.10%, respectively. So, next page, please. Lastly, a page on the return perspective.

Speaker #4: We have a core loss of 26.3% LTM, and we have a quite clear path for taking the last steps from the current level through our target of 30%.

Speaker #4: And as we outline on the page, we have three key levers to work with here: two related to financial performance, and then also a third potential lever on capital efficiency.

Speaker #4: Starting off with the two financial performance levers we have. First, risk-adjusted margins. We currently have a risk-adjusted margin of 5.5%, and we see potential for this to improve further.

Patrick MacArthur: While the NIM is stable, we have a clear positive trend on cost of risk as we could potentially reduce it further from the current LTM level 2.7%. The other financial lever we have is really operational efficiency. This is really about taking down our cost income ratio from the current level of 23% to our target of 20%. As we outline on the page, every 0.1% RAM improves core ROTE by 0.7% and every 1% improvement in cost income ratio gives us 0.6% on return on equity. Lastly, in addition to the financial performance, we also see further potential to improve capital efficiency through our capital stack. With that, I hand over to Jacob.

Speaker #4: While the NIM is stable, we see a clear positive trend in the cost of risk, with good potential to reduce it further from the current LTM level of 2.7%.

Speaker #4: The other lever, the other financial lever we have, is really operational efficiency. And this is really about taking down our cost-income ratio from the current level of 23% to our target of 20%.

Speaker #4: And as we also note on the page, every 0.1% improvement in RAM improves core loss by 0.7%, and every 1% improvement in the cost-income ratio gives us 0.6% on return-on-equity.

Speaker #4: Lastly, in addition to the financial performance, we also see further potential for improved capital efficiency through our capital stack. So with that, I hand over to Jakob.

Speaker #1: So I'll try to wrap this up on this slide, but we've seen before looking at the goals. So, we have a goal of 10% organic growth and an additional target of reaching SEK 215 billion by 2030.

Jacob Lundblad: I'll try to wrap this up on this slide that we've seen before looking at the goals. We have a goal of 10% organic growth and the addition target of reaching 250bn SEK with CEG by 2030. Happy about where we stand, 11% growth in constant currency, 12% reported, all segments contributing and additionally, as outlined, we have a number of new product initiatives underway. Cost income ratio, we did have a target of 20%, quarter came in at 23%, expect to see effective cost takeout programs during the end of the year, and we remain committed to reach our target during 2027. Core ROTE, we're at 27%, we're actually 29% if looking at capital employed, clear runway to reach our medium-term target of 30%. CET1 and dividends, we're at 13.4% within our range 13% to 15%. We have a 3.2 percentage point headroom to requirement.

Speaker #1: Happy about where we stand—11% growth in constant currency, 12% reported, all segments contributing. Additionally, as outlined, we have a number of new product initiatives underway.

Speaker #1: The cost-income ratio target is 20%. For the quarter, it came in at 23%. We expect to see the effect of cost takeout programs toward the end of the year.

Speaker #1: And we remain committed to reaching our target during 2027. Core loss: we're at 27%. We're actually at 29% if looking at capital employed. There is a clear runway to reach our medium-term target of 30%.

Speaker #1: CET1 and dividends: we're at 13.4, within our range of 13 to 15. We have a 3.2 percentage point headroom to requirements. Focus now is on efficient capital deployment and distribution of excess capital.

Jacob Lundblad: Focus now on efficient capital deployment and distribution of excess capital. Ordinary interim dividend equal to 40% of Q1 to Q3 profits will be paid in connection with the Q4 EGM. Lastly, we're putting in place a share buyback as a tool, something that the board of directors will evaluate in due course. I think that wraps it up, and we will open up for questions.

Speaker #1: An ordinary interim dividend, equal to 40% of Q1 to Q3 profits, will be paid in connection with the Q4 EGM. And lastly, we're putting in place share buyback as a tool—something that the board of directors will evaluate in due course.

Speaker #1: I think that wraps it up, and we will open it up for questions.

Speaker #2: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Operator: Thank you. As a reminder to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Once again, please press star 1 1 and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you.

Speaker #2: Once again, please press star one-one and wait for your name to be announced. To withdraw your question, please press star one-one again. Please stand by while we compile the Q&A roster.

Speaker #2: This will take a few moments. Thank you. We are now going to proceed with our first question. The questions come from the line of Bjorn Olsson from SEB.

Operator: We are now going to proceed with our first question. The question comes from the line of Björn Olsen from SEB. Please ask your question.

Speaker #2: Please ask your question.

Björn Olsen: Good morning, guys. The first question from my side is on the cost side. You are mentioning that you are planning cost takeouts by the later part of this year. Could you give any ballpark guidance on the size of these takeouts? Second, you are also guiding to reach a sub 20% cost income by 2027. Should we expect this to come by the later part of 2027, or do you have any indication of when during the coming year we can expect this target to be reached?

Björn Olsson: Good morning, guys. The first question from my side is on the cost side. You are mentioning that you are planning cost takeouts by the later part of this year. Could you give any ballpark guidance on the size of these takeouts? Second, you are also guiding to reach a sub 20% cost income by 2027. Should we expect this to come by the later part of 2027, or do you have any indication of when during the coming year we can expect this target to be reached?

Speaker #3: Good morning, guys. The first question from my side is on the cost side. You're mentioning that you're planning cost take-outs by the later part of this year.

Speaker #3: Could you give any sort of ballpark guidance on the size of these takeouts? And then second, you're also guiding to reach a sub-20% cost-income by 2027.

Speaker #3: Should we expect this to come by the later part of 2027, or do you have any indication of, sort of, when during the coming year we can expect this target to be reached?

Speaker #1: Yeah. As I left off with the second part of the question, which is when in 2027 we should reach the cost-income ratio of 20%.

Jacob Lundblad: Yeah. I will start off with the second part of the question, which is when in 2027 we should reach the cost income ratio of 20%. It should be during 2027, and I think it will probably be towards the second half of that year or in the second half of that year. With regards to the specific amount of cost takeouts, I think it is how our cost base has developed over the next 18 months for us to reach the target of below 20% by June next year. So we are not going to communicate a specific number of cost takeout, but clearly we need to have a very disciplined cost growth in 2027 to reach our target of 20%.

Patrick MacArthur: Yeah. I will start off with the second part of the question, which is when in 2027 we should reach the cost income ratio of 20%. It should be during 2027, and I think it will probably be towards the second half of that year or in the second half of that year. With regards to the specific amount of cost takeouts, I think it is how our cost base has developed over the next 18 months for us to reach the target of below 20% by June next year. So we are not going to communicate a specific number of cost takeout, but clearly we need to have a very disciplined cost growth in 2027 to reach our target of 20%.

Speaker #1: And it should be during 2027, and I think we'll probably be towards the second half of that year, or in the second half of that year.

Speaker #1: And with regards to the specific amount of cost takeouts, I mean, I think it's pretty clear how our cost base has developed over the next 18 months for us to reach the target of below 20% by June next year.

Speaker #1: So we're not going to communicate a specific number of cost take-outs, but clearly, we need to have very disciplined cost growth in 2027 to reach our target of 20%.

Speaker #3: Okay. So we should view it as though the trend of growth will stop, and then it will sort of flatten out. That's the plan, basically.

Björn Olsen: Okay. We should rather view it as that the trend of growth will stop and then it will flatten out. That is the plan, basically.

Björn Olsson: Okay. We should rather view it as that the trend of growth will stop and then it will flatten out. That is the plan, basically.

Speaker #1: That is basically the plan, yes.

Jacob Lundblad: That is basically the plan, yes.

Patrick MacArthur: That is basically the plan, yes.

Speaker #3: Okay, great. Second, on buybacks—could you give any sort of, I understand that it's a BOD question and not for you, but still, could you give any explanation on the timing of announcing this now versus previously?

Björn Olsen: Okay, great. Second on buybacks. I understand that it is a BOD question and not for you, but still, could you give any explanation on the timing of announcing this now versus previously? Second, in terms of your buffer level, you are at the lower end of your CET1 buffer range. While talking about capital efficiency, should we view it as that you might review your CET1 target range as well in conjunction to this?

Björn Olsson: Okay, great. Second on buybacks. I understand that it is a BOD question and not for you, but still, could you give any explanation on the timing of announcing this now versus previously? Second, in terms of your buffer level, you are at the lower end of your CET1 buffer range. While talking about capital efficiency, should we view it as that you might review your CET1 target range as well in conjunction to this?

Speaker #3: And second, in terms of your buffer level, I mean, you're at the lower end of your CET1 buffer range. While talking about capital efficiency, should we view this as you might review your CET1 target range as well, in conjunction with this?

Speaker #1: In terms of I can start with timing. In terms of that, I think it's important for us to ensure equal information to all stakeholders and obviously getting a share buyback program in place entails a number of applications and I mean, we need to submit applications to SFSA, et cetera, et cetera.

Jacob Lundblad: I can start with timing. In terms of that, I think it is important for us to ensure equal information to all stakeholders. Obviously, getting a share buyback program in place takes a number of applications. We need to submit the applications to the Swedish Financial Supervisory Authority, et cetera. We just want to ensure that no one picks that up and makes a flash of it. It is better to be open about that this is a tool we want to have in the box. I think on where we are in our CET1 target level, so we communicated target level 13% to 15%. I think we have stated historically and consistently that we are very happy to be at the lower end of that range, given the operating profitability that we have and that we have a CF% PTG.

Speaker #1: So we just want to ensure that no one picks that up and makes a flash of it. It's better to be open about the fact that this is a tool we want to have in the box.

Speaker #1: And I think on where we are in our CT1 target level—so we're communicating a target level of 13 to 15%. I think we've stated historically and consistently that we are very happy to be at the lower end of that range, given the operating profitability that we have, and that we have a 7% PKG.

Speaker #1: So we are very happy to be towards the lower end of that range. And then I think the other part of that story is clearly that, given that with a 40% payout ratio, we generate quite a lot of additional CET1 every quarter.

Jacob Lundblad: We are very happy towards the lower end of that range. I think the other part of that story is clearly that with a 4% payout ratio, we generate quite a lot of additional CET1 every quarter. The 13.4%, that is the static position we have right now, but it clearly grows every quarter from organic capital generation at a 4% payout ratio.

Speaker #1: So, the kind of 13.4%—that's a static position we have right now, but it's clearly growing every quarter from organic capital generation at the 40% payout ratio.

Speaker #3: Okay, clear. Thanks a lot.

Björn Olsen: Okay, clear. Thanks a lot.

Björn Olsson: Okay, clear. Thanks a lot.

Speaker #2: We are now going to proceed with our next question. The questions come from the line of Patrick Bratelius from ABG. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Patrik Brattelius from ABG. Please ask your question.

Speaker #3: Thank you. Two questions from my side. The first one is on net commission income. So, it grew by 10%, I think I saw in the presentation there.

Patrik Brattelius: Thank you. Two questions from my side. The first one is on net commission income. It grew by 10%, I think I saw in the presentation there, and last quarter it was quite low growth rate year-over-year. We have previously talked about it can be lumpy, but over time it should grow above the growth rate of the loan book. Can you talk about expectations here if we should see a trend shift in H2 or how we should think about this income line looking into the coming quarters?

Speaker #3: And last quarter, it was quite a low growth rate year over year. And we have previously talked about how it can be lumpy, but over time, it should grow above the growth rate of the loan book.

Speaker #3: So, can you talk about expectations here—if we should see a trend shift in the second half, or how we should think about this income line looking into the coming quarters?

Jacob Lundblad: I think over time, I think it is fair to have the slightly above loan book growth perspective on it. That is the over time perspective. Then I think 2025 was a very strong year for fee and commission income. 2026, we have a good development on it, but you should look at the longer term trend. The longer term trend, there we are above loan book growth in the drivers, but each individual quarter, we are not going to be specifically at that level and look at it at the trend level.

Patrick MacArthur: I think over time, I think it is fair to have the slightly above loan book growth perspective on it. That is the over time perspective. Then I think 2025 was a very strong year for fee and commission income. 2026, we have a good development on it, but you should look at the longer term trend. The longer term trend, there we are above loan book growth in the drivers, but each individual quarter, we are not going to be specifically at that level and look at it at the trend level.

Speaker #1: I think, over time, it's fair to have the kind of cyclical, above-loan-book growth perspective on it. That's kind of the over-time perspective.

Speaker #1: Then, I think 2025 was a very strong year for fee and commission income. And 2026, we have a good—we have kind of a good development on it.

Speaker #1: But we should really kind of—you should look at it on a longer-term trend. And the longer-term trend, there we are above loan book growth, given the drivers.

Speaker #1: But it is each individual quarter—we're not going to be at that, kind of specifically at that level—but look at it at the trend level.

Speaker #3: Okay, fair enough. Thank you. And I note that credit cards and secured both delivered double-digit loan growth in the quarter. However, year over year, it looks like adjusted operating profit is lower.

Patrik Brattelius: Okay, fair enough. Thank you. I note that the credit cards and secured both delivered double-digit loan growth in the quarter. However, year-over-year, it looks like adjusted operating profit is lower. What needs to change for these segments to generate stronger operating leverage?

Speaker #3: So, what needs to change for these segments to generate stronger operating leverage?

Speaker #1: I mean, I think it's slightly just different stories in those two segments. I think credit cards, it's very much driven by a very, very strong comparative if you look at it at a trend on kind of any form of trend basis, you're not going to see the same case there, that it's kind of you have a stable name stable cost of risk in credit cards and 11% growth.

Jacob Lundblad: I think there are different stories in those two segments. I think credit cards is very much driven by a very, very strong comparative. If you look at it on an annual trend basis, you are not going to see the same case there. You have a stable cost of risk in credit cards and 11% growth. Clearly the drivers are there. The reason it is down year-over-year on a quarterly basis is that Q2 2025 was an extremely strong quarter, both on a fee income and the cost side. The comparative quarter was extremely strong.

Patrick MacArthur: I think there are different stories in those two segments. I think credit cards is very much driven by a very, very strong comparative. If you look at it on an annual trend basis, you are not going to see the same case there. You have a stable cost of risk in credit cards and 11% growth. Clearly the drivers are there. The reason it is down year-over-year on a quarterly basis is that Q2 2025 was an extremely strong quarter, both on a fee income and the cost side. The comparative quarter was extremely strong.

Speaker #1: So clearly the drivers are there. The reason it’s down year over year on a quarterly basis is that Q2 2025 was an extremely strong quarter, both on the fee income and on the cost side.

Speaker #1: So the comparative quarter was extremely strong. And then secured, I think there we have we haven't had a bit of a shift in the business there, where we've had names clearly down year over year, which is the reason that operating profit does not have the growth rate there.

Patrick MacArthur: Secured, I think there we had a bit of a shift in the business there, where we have had NIM scale it down year-over-year, which is the reason that operating profit does not have the growth rate there. It now, what we said on secured is that given positive change in NIM that we saw in the last few quarters, we expect a stable NIM level there. We also expect growth to result in operating profit growth there, but at a low, kind of at a stable NIM level from where we are now. Credit cards very much did have a very strong cost and fee quarter last year. Secured, we are seeing strong growth there at a stable NIM level from the current level.

Speaker #1: But now, what we said on secured is that given post this change in NIM that we saw over the last few quarters, we expect a stable NIM level there.

Speaker #1: So, we also expect that growth will result in operating profit growth there, but at a stable NIM level from where we are now.

Speaker #1: So, credit cards were very much driven off a very strong cost and fee quarter last year. And in secured, we are seeing strong growth there, at a stable NIM level from the current level.

Speaker #3: Thank you. If I might squeeze in a third question, I note that the lending growth is progressing according to plan, while deposits have only grown by one and a half percent year over year. So, is this an ongoing shift in the funding mix that we see, or should we expect to see a reversal and that you should ramp up deposits further looking ahead?

Patrik Brattelius: Thank you. If I might squeeze in a third question. I note that the lending growth is progressing according to plan, while deposits only have grown by 1.5% year-over-year. Is this an ongoing shift in the funding mix that we see, or should we expect to see a reversal and that you should ramp up deposits further looking ahead? Should this impact the NIM going forward? How should we think about that?

Speaker #3: And should this impact the NIM going forward? How should we think about that?

Speaker #1: Yeah. I mean, I’ll start off with the last question, which is that we don’t expect or foresee any changes in the funding mix that will impact our NIM. But we will always optimize across our funding sources, which is kind of secure.

Patrick MacArthur: Yeah. I will start off with the last question, is that we do not foresee any changes in the funding mix that would impact our NIM. But we will always optimize across our funding sources, which is kind of secure. It is doing well funding, it is doing senior secured, it is doing deposits. We are always going to optimize across those three on what gives us the most kind of effective funding cost on a total basis. And we have guided for no significant shifts in our funding mix. So that is what we continue to see. We do not foresee any big shifts there, but it is always going to be a little bit different quarter to quarter based on where we think the optimal funding is.

Speaker #1: It's doing warehouse funding, it's doing senior and secured, and it is doing deposits. And we're always going to optimize across those three on what gives us the most effective funding cost on a total basis.

Speaker #1: And I mean, we're guided for no significant shifts in our funding mix, so that's what we continue to see. We don't foresee any big shifts there, but it's always going to be a little bit different quarter to quarter.

Speaker #1: Based on where we think the optimal funding is, we find where we think the optimal funding is.

Speaker #3: I see. Thank you so much.

Patrik Brattelius: I see. Thank you so much.

Operator: We are now going to proceed with our next question. The question comes from the line of Johan Ekblom from UBS. Please ask your question.

Speaker #2: We are now going to proceed with our next question. The questions come from the line of Johan Ekblom from UBS. Please ask your question.

Speaker #3: Thank you. I just want to come back to the costs, because when I look at consensus into the year, people are forecasting double-digit volume growth.

Johan Ekblom: Thank you. I just want to come back to the costs because when I look at consensus into next year, people are forecasting double-digit volume growth. They are forecasting revenues growing slightly faster than volumes. And to get to 20% cost income, you need to have a quarterly cost run rate that is lower than Q2. So it is essentially zero cost growth, 27 on 26. Is that the right way to think about it? That, with 20% growth, a slowdown in cost growth leaves a very broad range, but are we actually needing to see negative cost growth versus the Q2 level for you to hit your targets? Or are we much too bearish on revenue growth?

Speaker #3: They're forecasting revenues growing slightly faster than volumes. And to get to a 20% cost-to-income, you need to have a quarterly cost run rate that's lower than Q2.

Speaker #3: So it's essentially zero-cost growth—27 on 26. Is that the right way to think about it? That with 20% growth, a slowdown in cost growth leaves a very, very broad range?

Speaker #3: But do we actually need to see negative cost growth versus the Q2 level for you to hit your targets, or are we being too bearish on revenue growth?

Speaker #1: No, I think we should—I think—I mean, we can't comment exactly on consensus, but I think the case is really that we're going to have underlying cost growth at the same time as we have very clear cost take-up, in cost take-up plans, to come through during H2.

Patrick MacArthur: No, I think we cannot comment exactly on consensus, but I think the case is really that we are going to have underlying cost growth at the same time as we have very clear cost take-up plans to come through during H2. So in order to hit the target of 20% next year, which we expect to hit, we are going to see very low cost growth in 2027.

Speaker #1: So, in order to hit the target of 20% next year, which we expect to achieve, we are going to see very low cost growth in 2027.

Speaker #3: Okay. So we shouldn't be surprised if the run rate is, let's call it, similar to this quarter at least next year, which will get you broadly to the 20.

Johan Ekblom: Okay. So we shouldn't be surprised if the run rate is, let's call it similar to this quarter, at least next year, which will get you broadly to the 20.

Speaker #1: Yes. Yes.

Patrick MacArthur: Yes.

Speaker #3: Okay. And then you talked about a delayed pass-through of rates in the private loan business. Could you talk a bit about how big that impact is, and is this something that will come through in the second half, or do we need to wait for the whole book to roll, so it's more of a multi-year, very slow process?

Johan Ekblom: Okay. And then you talked about a delayed pass-through of rates in the private loan business. Could you talk a bit about how big is that impact? And is this will come through in the second half or we need to kind of wait for the whole book to roll, so it's a multi-year kind of very slow?

Speaker #1: Right, that’s right. It’s a very short-term impact. Sorry, sorry. We have— I mean, we have base rate increases in Norway and in Europe DKK in Q2.

Patrick MacArthur: No, it's a very short-term impact. Sorry. We have base rate increases in Norway and in the EUR DKK in Q2. Then the way it works is kind of multi-line. I think we have the same dynamic when rates were going down 1.5, 2 years ago, but then obviously it was positive. Which is that when rates go up or down, the funding side reprices quite quickly and the asset side, i.e. the loans, they are variable rates, but they have different repricing times depending which country we are in. So we have to notify the customer and then the repricing comes through. And in Finland, it updates every month, so the pass-through is kind of around 4 weeks. Denmark, the pass-through is 4 to 6 weeks, and in Norway it is 8 to 10 weeks to pass through on the asset side.

Speaker #1: And then the way it works is kind of multi-line. I think we had exactly the same, we had the same dynamic when rates were going down one and a half, two years ago, but then obviously it was positive.

Speaker #1: Which is that when rates go up or down, the funding side reprices quite quickly. On the asset side, i.e., the loans, they are variable rate, but they have different repricing times depending on which country we are in.

Speaker #1: So that we have to notify the customer and then the repricing comes through. And in Finland, it updates every month. So it's quite a the capacity is kind of around four weeks.

Speaker #1: Denmark, the capacity is four to six weeks. And in Norway, it is eight to ten weeks to pass through on the asset side, which means that when we saw when we see these rate changes, we have a little bit of a we have basically a month where we have where it's hit us on the liability side but not the asset side.

Patrick MacArthur: Which means that when we see these rate changes, we have basically a month where it is hit us on the liability side but not the asset side. I guess one can do the maths around it. Around 55% of our book is in the countries that had increased rates, and was probably around a month for that effect in Q2. Then that kind of comes to the number it hits on the NIM in Q2.

Speaker #1: And then I guess one can do the math around it. Around 55% of our book is in the countries that had increased rates.

Speaker #1: And yeah, it was probably around a month of that effect in Q2. And then that's kind of how we come to the number it hits on the NIM in Q2.

Johan Ekblom: A single-digit basis point impact.

Speaker #3: So a single-digit basis point impact.

Johan Ekblom: A single-digit basis point impact.

Speaker #1: Sorry?

Patrick MacArthur: Sorry?

Johan Ekblom: It will be a single-digit basis impact on the NIM.

Speaker #3: So, it will be a single-digit basis point impact on the NIM, five or whatever.

Johan Ekblom: It will be a single-digit basis impact on the NIM.

Patrick MacArthur: Yeah

Johan Ekblom: Five or whatever.

Patrick MacArthur: Yeah, we see the main difference between the, I would say the 8.22% FX and day count adjusted NIM in Q1 with 8.16% here. I would say if it wouldn't have been for the pass-through effect, they would have been very similar.

Speaker #1: Yeah. We see the main difference between the, I would say, the difference—we had 8.22% SX and day-count adjusted NIM in Q1.

Speaker #1: We had 8.16% here. I would say if it hadn't been for the pass-through effect, they would have been very similar.

Speaker #3: Yeah. And finally, just on the—you mentioned that you signed an NPL sale during the quarter of €400 million. Should we expect a positive impact in Q3?

Johan Ekblom: Yep. Finally, you mentioned that you signed an NPL sale during the quarter of SEK 400 million, where you expect a positive impact in Q3. Any guide for how meaningful that impact is? I am guessing that would be booked on the credit loss line. Is that correct?

Speaker #3: Any guide for how meaningful that impact is? And I'm guessing that will be booked on the credit loss line—is that correct?

Speaker #1: Yeah, it will be booked. I mean, we typically—I mean, the last NPL sales we've done over the last, I guess, 12 to 18 months—we've typically seen meaningful profits on those sales.

Jacob Lundblad: Yeah. The last NPL sales we've done over the last, I guess, 12 to 18 months, we've typically seen meaningful profits on those sales compared to book value. We will have a profit here. We'll communicate that at Q3, but it will be in the mid-double digit type range.

Patrick MacArthur: Yeah. The last NPL sales we've done over the last, I guess, 12 to 18 months, we've typically seen meaningful profits on those sales compared to book value. We will have a profit here. We'll communicate that at Q3, but it will be in the mid-double digit type range.

Speaker #1: And compared to kind of compared to book value. And it will be a we will have a profit here. We'll communicate that around at Q3, but it will be kind of in the mid double-digit type range.

Speaker #3: And it's on the credit loss line, right?

Johan Ekblom: It's on the credit loss line, right?

Speaker #1: Yes. Credit loss line.

Jacob Lundblad: Yes. Credit loss line.

Patrick MacArthur: Yes. Credit loss line.

Speaker #3: Yeah. And then when we look at DBT or the corporate loan book, it looks like there was sub-1% growth quarter-on-quarter. How should we think about the growth potential?

Johan Ekblom: Yeah. When we looked at DBT or the corporate loan book, it looks like there was sub 1% growth quarter on quarter. How should we think about the growth potential? I'm guessing you acquire something, there is a startup period, and there might be parts of the portfolio you might choose to exit, et cetera. But what should we expect in terms of growth? I am guessing sub 1% Q on Q is not the ambition.

Speaker #3: I'm guessing you acquire something, that there might be a startup period, and that there might be parts of the portfolio you might choose to exit, etc.

Speaker #3: But what should we expect in terms of growth? I’m guessing sub-1% quarter-on-quarter is not the ambition.

Speaker #1: No, obviously, the ambition is that it should fit our overall financial profile. So we expect more. So there's a growth during the quarter—you are right.

Jacob Lundblad: Obviously, our ambition is that it should fit our overall financial profile, so we expect more. The growth during the quarter was, you are right, it was quite slow, and that relates back to the fact that DBT earlier optimized for liquidity and not long-term profitable book growth. That is obviously something we are changing as we have entered this marriage. A lot of focus in DBT right now on conversion initiatives, forward lending, catching new ground, playing in segments that were not available before due to high cost of funds, clearly opens up the market. But also working on book protection, working with the existing portfolio of clients.

Speaker #1: It was quite slow. And that relates back to the fact that earlier, we optimized for liquidity and not for profitable book growth, long-term profitable book growth. That is obviously something we're changing as we've entered this marriage.

Speaker #1: So, a lot of focus in DBT right now is on commercial initiatives—forward-leaning, catching new ground, playing in segments that weren't available before. Due to high cost of funds, it clearly opts up the market, but we're also working on book protection, i.e., working with the existing portfolio of clients.

Speaker #3: Thank you. And just finally on the buyback discussion, do you have any preference between how you think about buybacks versus dividends? I think you said the dividend, the 40%, is there no matter what.

Johan Ekblom: Thank you. Just finally, on the buyback discussion, do you have any preference between how you think about buybacks versus dividend? I think you said the dividend, the 40% is there no matter what. But should we think of it anything above that, more likely buybacks than special dividends, or is there any thought around that?

Speaker #3: But should we think of anything above that as more likely buybacks than special dividends, or is there any thought around that?

Speaker #1: I mean, it's ultimately a question for the board. So I think the we talked we've talked about those components before that we have kind of two strict components here, which is the capital for growth and it's the dividend.

Jacob Lundblad: It is ultimately a question for the board.

Patrick MacArthur: Yeah. I think we have talked about those components before, that we have two strict components here, which is the capital to growth and it is the dividend. But those together do not absorb the full capital generation that we have at our target rate. The rest there, we will deploy. We will either deploy it through M&A or we will distribute it out either through buybacks or dividends. I think as Jakob said, it is really a board question of the dividends versus buybacks. But we are making sure that we have the tool for buybacks as well, and then it is for the board to evaluate that during the autumn.

Speaker #1: But those together don't absorb the full capital generation that we have at our target rate. And then, kind of the rest there, we will deploy.

Johan Ekblom: Yep.

Patrick MacArthur: The rest there, we will deploy. We will either deploy it through M&A or we will distribute it out either through buybacks or dividends. I think as Jakob said, it is really a board question of the dividends versus buybacks. But we are making sure that we have the tool for buybacks as well, and then it is for the board to evaluate that during the autumn.

Speaker #1: We will either deploy it through M&A or we will deploy it through or we will distribute it out either through buybacks or dividends. I think, as Jakob said, it's really a board question of the dividend versus buybacks.

Speaker #1: But we are making sure that we have the tool for buybacks as well, and then it's for the Board to evaluate that during the autumn.

Speaker #3: Perfect. Thank you very much.

Johan Ekblom: Perfect. Thank you very much.

Speaker #2: We are now going to proceed with our next question. The questions come from the line of Emil Johnson from DNB Carnegie. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Emil Jonsson from DNB Carnegie. Please ask your question.

Speaker #3: Good morning. Thank you very much for taking my questions. I would like to start by asking about the net interest margin in Secured. Could you help us think about how much more of a mix shift to near-prime we should expect in the next, say, 12 months?

Emil Jonsson: Good morning. Thank you very much for taking my questions. I would like to start by asking on the net interest margin in Secured. Could you just help us think about how much more mixed shift to near-prime mortgages we should expect in the next, say, 12 months? Also, whether there is any sort of structural floor in the segment on how low the net interest margin could go in theory.

Speaker #3: And also, whether there's any sort of structural floor in the segment on how low the net interest margin could go, in theory.

Speaker #1: And I think we given the NIM movement there in Q1, we I think we gave quite a clear guidance on how we think that's going to develop.

Jacob Lundblad: Given the NIM movement there in Q1, I think we gave quite a clear guidance on how we think that is going to develop, and we think NIM will be stable from the current level in Secured. Based on what we can see in the business, that is what we foresee stable NIM from the current level.

Patrick MacArthur: Given the NIM movement there in Q1, I think we gave quite a clear guidance on how we think that is going to develop, and we think NIM will be stable from the current level in Secured. Based on what we can see in the business, that is what we foresee stable NIM from the current level.

Speaker #1: And we think NIM will be stable from the current level in secured. So, what we can see in the business, that's what we foresee—stable NIM from the current level.

Speaker #3: All right, that's clear. And could you also say anything about what you're seeing in terms of competitive pressure from the other smaller banks? Is there anything different from, say, at the start of the year?

Emil Jonsson: All right. That is clear. Could you also say anything about what you are seeing in terms of competitive pressure from the other smaller banks? Is there anything different from, say, at the start of the year, particularly on private loans?

Speaker #3: Particularly on private loans.

Jacob Lundblad: No, I think we're in a pretty stable environment overall. I think we communicated that we saw a little bit of increase in competition through 2025. Since then, we've had a very stable environment, and I think everything is going as we expect. We're growing our products above 10%. We have stable margins, and we have clearly fallen cost of risk.

Patrick MacArthur: No, I think we're in a pretty stable environment overall. I think we communicated that we saw a little bit of increase in competition through 2025. Since then, we've had a very stable environment, and I think everything is going as we expect. We're growing our products above 10%. We have stable margins, and we have clearly fallen cost of risk.

Speaker #1: On private, no. On the NO, I think we're in a pretty stable environment. Overall, I think we communicated that we saw a little bit of increasing competition through 2025.

Speaker #1: Since then, we've had a very stable environment. And yeah, I think everything is going as we expect. We're growing all products above 10%.

Speaker #1: We have stable margins, and we have clearly falling cost of risk.

Speaker #3: Okay, that's clear. And the cost takeout measures that you mentioned, those should have an effect in the latter half of this year. Could you elaborate on what kinds of takeout measures you're referring to?

Emil Jonsson: Okay. That's clear. The cost takeout measures that you mentioned that should have an effect on the latter half of this year, could you elaborate on what kinds of takeout measures you're referring to?

Speaker #1: I mean, we have quite clear—we have, obviously—we wouldn't be so kind of communicative around it if we didn't have quite clear costs that we are going to take out.

Jacob Lundblad: We wouldn't be so communicative around it if we didn't have quite clear costs that we are going to take out. This, to a large extent, is external costs that we are buying today. I don't want to communicate who they are because they are going to impact contractual relationships that we have. We have a clear plan on where we're taking out costs. Basically, this will impact towards the very end of this year, and then will have a bigger impact in 2027. We have clearly identified costs that we are taking out through H2.

Patrick MacArthur: We wouldn't be so communicative around it if we didn't have quite clear costs that we are going to take out. This, to a large extent, is external costs that we are buying today. I don't want to communicate who they are because they are going to impact contractual relationships that we have. We have a clear plan on where we're taking out costs. Basically, this will impact towards the very end of this year, and then will have a bigger impact in 2027. We have clearly identified costs that we are taking out through H2.

Speaker #1: But this, to a large extent, is external cost that we are buying today. So I don't want to communicate where they are, because they are going to impact contractual relationships that we have.

Speaker #1: But we have a clear plan on where we're taking out costs, and basically, this will impact towards the very end of this year.

Speaker #1: And then we'll have a bigger impact in 2027. But we have clearly identified costs that we are taking out through H2.

Speaker #3: Okay, fair enough. And just one final question: Seeing as you've now seen the full effect of the removal of the tax deductibility on interest on Swedish private loans, have you seen anything different this time around regarding the positive Q2 seasonality on loan losses?

Emil Jonsson: Okay. Fair enough. Just one final question. Seeing as you've now seen the full effect of the removal of the tax deductibility on interest on Swedish private loans, have you seen anything different this time around on the positive Q2 seasonality on loan losses? Could you maybe say anything about what investors should expect in the future on this?

Speaker #3: And could you maybe say anything about what investors should expect in the future on this?

Speaker #1: I think we got a lot of questions about it back when it happened, and it was 2025 when it was announced, or 2024 when it was announced.

Patrick MacArthur: I think we got a lot of questions about it back when it happened in, it was 2025 when it was announced, or 2024 when it was announced. I think we said then we think this will essentially be a rounding error in other things that happen. I think that's the way it's played out. If we go look very specifically, we can possibly see some effect of it, but it's very minor and it's kind of lost in the overall development as expected. What do you happen to have?

Speaker #1: And I think we said then, we think this will essentially be a rounding error in other things that happen. And I think that's the way it's played out.

Speaker #1: I mean, if you look at—if we go look very, very specifically, we can see some—we can possibly see some effect of it, but it's very, very minor, and it's kind of lost in the overall developments.

Speaker #1: We, as expected, have to have.

Jacob Lundblad: No, totally. I think it was implemented in a period where everyone expected base rates to come down, which was also the case. So that met up and also, again, worth pointing out that the deductibility is still there for the mortgage product and a high proportion of our customers obviously have mortgages as well.

Speaker #3: No, no, totally agree. I think it was implemented in a period when everyone expected base rates to come down, which was also the case.

Speaker #3: So, that met up. And also, I mean, again, it's worth pointing out that the deductibility is still there for the mortgage product, and a high proportion of our customers obviously have mortgages as well.

Speaker #1: I mean, we got to the number, right? The impact is like a few hundred SEK per month for a customer. It's nothing.

Patrick MacArthur: We got the number, right. The impact is like a few hundred SEK per month per customer. It's nothing.

Jacob Lundblad: It's lost in the noise.

Speaker #3: It's lost in the noise. Okay, that's very clear. Thank you very much.

Emil Jonsson: Okay. That's very clear. Thank you very much.

Speaker #2: We are now going to proceed with our next question. The questions come from the line of Shirshah from JP Morgan. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Shane Shah from JP Morgan. Please ask your question.

Speaker #3: Great, thanks. Good morning. I've just got a few questions on these. Firstly, on the cost again, just thinking about the shape of the cost growth.

Shane Shah: Great. Thanks. Good morning. I've just got a few questions, please. Firstly, on the costs again, just thinking about the shape of the cost growth. You mentioned very low cost growth in 2027, which looks to me that you have underlying cost growth, but you have cost saves coming through in 2027. Does that mean in 2028, these cost saves on an incremental basis fall away, and we sort of go back to a higher level of growth, in terms of cost growth in 2028? That's the first. The second, on credit cards, are you seeing any shift in customer behavior, whether it comes to revolvers versus transactors with the higher rate environment? I'm just thinking about the long-term NIM trajectory for the credit cards business here and-

Sheel Shah: Great. Thanks. Good morning. I've just got a few questions, please. Firstly, on the costs again, just thinking about the shape of the cost growth. You mentioned very low cost growth in 2027, which looks to me that you have underlying cost growth, but you have cost saves coming through in 2027. Does that mean in 2028, these cost saves on an incremental basis fall away, and we sort of go back to a higher level of growth, in terms of cost growth in 2028? That's the first. The second, on credit cards, are you seeing any shift in customer behavior, whether it comes to revolvers versus transactors with the higher rate environment? I'm just thinking about the long-term NIM trajectory for the credit cards business here and-

Speaker #3: So you mentioned very low cost growth in '27, which looks to me like you'll have underlying cost growth, but you have cost saves coming through in '27.

Speaker #3: Does that mean in '28, these cost saves on an incremental basis fall away, and we sort of go back to a higher level of growth in terms of cost growth in 2028?

Speaker #3: That's the first. The second, on credit cards—are you seeing any shift in customer behavior, whether it comes to revolvers versus transactors with the higher rate environment?

Speaker #3: I'm just thinking about the NIM—the long-term NIM trajectory for the credit cards business here. And...

Patrick MacArthur: Sorry, you're breaking up a little bit. Can you just repeat the question on the credit cards? I got the question on cost. Okay, take the credit card question again.

Speaker #1: So, can you repeat the—so yeah, you were breaking up a little. Can you just repeat the question on the credit cards? I got the question on cost, but can you take the credit card question again?

Speaker #3: Sure. Just on the credit cards—in terms of customer behavior on transactors versus revolvers—are you seeing any shift in customer behavior here? And more in the context of the long-term NIM trajectory of the credit cards business?

Shane Shah: Sure. Just on the credit cards, in terms of customer behavior on transactors versus revolvers, are you seeing any shift in customer behavior here and more in the context of the long-term NIM trajectory of the credit cards business?

Sheel Shah: Sure. Just on the credit cards, in terms of customer behavior on transactors versus revolvers, are you seeing any shift in customer behavior here and more in the context of the long-term NIM trajectory of the credit cards business?

Speaker #1: Yeah. Okay, clear. Now I got the question. I think on the cost side, looking at 2028 costs, I mean, I think we're having a bit of an unusual year this year compared to both history.

Patrick MacArthur: Yeah. Okay, clear now I got the question. I think on the cost side, looking at 2028 costs, I think we are having a bit of unusual year this year compared to both history, also compared to history where we kind of the cost takeout that end up being very lumpy this year, due to commercial priorities and other factors. We have a very kind of lumpy cost takeout, in 2026, impacting our cost growth this and the trajectory 2026 versus 2027. Our aim here, and what I think we will achieve is a more even cost takeout going forward. I do not foresee that we will have this kind of 20% growth one year, zero next year, that it will kind of go this up, down, up, down, but it should be more smooth.

Speaker #1: Also, compared to history, the cost takeout has ended up being very lumpy this year due to commercial priorities and other factors.

Speaker #1: So, we have a very kind of lumpy cost takeout in 2026. In fact, our cost growth this year and the trajectory in 2026 versus 2027...

Speaker #1: I mean, our aim here, and what I think we will achieve, is a more even cost take-out going forward. So I don't foresee that we will have this kind of 12% growth one year, here or next year.

Speaker #1: That it will kind of go this up, down, up, down, but it will be a bit more it should be more smooth. But then I think we'll always be in the situation where we'll not be exactly at 30% every quarter.

Patrick MacArthur: I think we will always be in the situation where we will not be exactly at 30% every quarter. There is volatility in the cost base in the quarters and a certain volatility in the cost takeout. I think we are seeing possibly a bit of an extreme effect 2026, 2027. That is on the cost side. On the transactor revolver question, which is a very interesting question, I think we got this question a little bit around Q1 in the sense of if we get into a kind of worsening back to higher rates, how will that impact us? We said, probably we start seeing increased revolver rates in the credit cards as a result. Clearly, we cannot really see any negative macro effect in real behavior.

Speaker #1: There is volatility in the cost space in the quarters, and there's certain volatility in the cost takeout. But I think we're possibly seeing a bit of an extreme effect in '26, '27.

Speaker #1: So that's on the cost side. On the transactor revolver question, which is a very interesting question, I think we got this question a little bit around Q1 in the sense of if we get into a kind of worsening macro, higher rates, as to how would that impact us.

Speaker #1: And then we said, probably we'll start seeing increased revolver rates on the credit cards as a result. Clearly, there's been no – I mean, we can't really see any negative macro effect in real behavior.

Speaker #1: So as a starting point, we also don't see any kind of shifts in transactor or revolver behavior in the credit card book. But clearly, part of our strategy in credit cards is to increase the revolver base over time.

Patrick MacArthur: That is the starting point, and we also do not see any kind of shifts in transactor revolver behavior in the credit card book. Clearly part of our strategy in credit cards is to increase the revolver base over time. That still holds. Over time, our strategy is to increase the revolver proportion in that segment. There is no kind of macro effect here, but we are gradually, consistently working with transactor revolver split.

Speaker #1: And that's kind of that's still holds. So over time, our strategy is to increase the revolver proportion in that segment. But there's no kind of macro effect here.

Speaker #1: But we are gradually and consistently working with the transactor and revolver split.

Speaker #3: Great, thank you. And just one more on—sorry, go on.

Shane Shah: Great. Thank you. Just one more on the. Sorry, go on.

Sheel Shah: Great. Thank you. Just one more on the. Sorry, go on.

Speaker #1: I was going to say there's been no kind of shift in any—there's no, there's been no shift here, but generally, we work with transactor/revolver proportions and attempt to build the revolver proportions up.

Patrick MacArthur: I was going to say there's been no kind of shift in any. There's been no shift here, but we generally work with transactor revolver proportions and attempt to build the revolver proportions up.

Speaker #3: Great. Great. Thank you. Just one more question on the new business initiatives that you're expecting in 2027. Are these costed out as well? So have you already invested in these initiatives, or will they be happening soon, in the course of this year?

Shane Shah: Great. Thank you. Just one more question on the new business initiatives that you're expecting in 2027. Are these costed out as well? So you've already invested in these initiatives, or they'll be happening soon in the course of this year, or they're already in the cost plans, or are these incremental things that we should be thinking about?

Sheel Shah: Great. Thank you. Just one more question on the new business initiatives that you're expecting in 2027. Are these costed out as well? So you've already invested in these initiatives, or they'll be happening soon in the course of this year, or they're already in the cost plans, or are these incremental things that we should be thinking about?

Speaker #3: Or they're already in the cost plans? Or are these incremental things that we should be thinking about?

Patrick MacArthur: No, we think we essentially take those into account in our cost outlook. But clearly, again, they can default to volatility around it, but it is not that this will suddenly drive costs in a different way than we are kind of outlining our expectations now.

Speaker #1: No, I mean, we essentially take those into account in our cost outlook. But clearly, again, there can be default and volatility around this.

Speaker #1: But it's not that this will suddenly drive costs in a different way than we are kind of outlining our expectations now.

Speaker #3: Great. Thank you.

Shane Shah: Great. Thank you.

Sheel Shah: Great. Thank you.

Speaker #2: We are now going to take our next question. The questions come from the line of Yurik Zercher from Nordea. Please ask your question.

Operator: We are now going to take our next question. The question comes from the line of Ulrich Vertch from Nordea. Please ask your question.

Speaker #3: Yeah, thank you. Just one remaining from here. Just wondering, if you see again some commercial momentum in Norway launching new products, are risk-adjusted NIMs different in Norway versus the other countries at the moment due to the higher rates?

Ulrich Vertch: Thank you. Just one remaining from me. I was just wondering if you regain some commercial momentum in Norway launching new products, are risk-adjusted NIMs different in Norway versus the other countries at the moment due to the higher rates?

Ulrik Zürcher: Thank you. Just one remaining from me. I was just wondering if you regain some commercial momentum in Norway launching new products, are risk-adjusted NIMs different in Norway versus the other countries at the moment due to the higher rates?

Patrick MacArthur: The risk-adjusted margins are not different in Norway compared to other markets on the private loan side.

Speaker #1: The risk-adjusted margins are not different in Norway compared to other markets on the private loan side.

Speaker #3: So if you're successful there—yeah, I'm just thinking because of the market growth in Norway.

Ulrich Vertch: So if you are successful there, I am just thinking because the market growth in Norway.

Ulrik Zürcher: So if you are successful there, I am just thinking because the market growth in Norway.

Patrick MacArthur: There is no big shift there.

Speaker #1: On the private loan side, it's quite similar across the markets. Credit cards vary more, given that we have different transactor-revolver splits across the different markets.

Ulrich Vertch: Okay.

Ulrik Zürcher: Okay.

Patrick MacArthur: On the private loan side, it is quite similar across the markets. Credit card is varied more given that we have different transaction revolver splits across the different markets. Private loans, it is not that there are big shifts between the markets on a risk-adjusted margin basis.

Speaker #1: But with private loans, it's not that there are big shifts between the markets on a risk-adjusted margin basis.

Speaker #3: Yeah. And then in general, just so it's 100% clear, your NIM in the private loan segment on a group level—do you project that to be relatively stable going forward?

Ulrich Vertch: Yeah. In general, just so it is 100% clear, the NIM in the private loan segment on a group level, you project that to be relatively stable going forward?

Ulrik Zürcher: Yeah. In general, just so it is 100% clear, the NIM in the private loan segment on a group level, you project that to be relatively stable going forward?

Speaker #1: We predict relatively stable margins in totality. And that kind of implies that, given private loans are 70% of the business, it implies relative stability there as well.

Patrick MacArthur: We predict relatively stable margins in totality, and that implies that given private loans is 70% of the business, it implies relative stability there as well.

Speaker #3: Okay. Yeah. Thank you.

Ulrich Vertch: Okay. Yeah. Thank you.

Ulrik Zürcher: Okay. Yeah. Thank you.

Speaker #2: We are now going to proceed with our next question. The questions come from the line of Sophie Petersen from Goldman Sachs. Please ask your question.

Operator: We are now going to proceed with our next question. The question has come from the line of Sophie Petersen from Goldman Sachs. Please ask your question.

Speaker #4: Yeah, hi. This is Sophie from Goldman Sachs. Thanks a lot for taking my question. So, my first question would be on trading income. It was negative this quarter.

Sophie Petersen: Yeah. Hi, this is Sophie from Goldman Sachs. Thanks a lot for taking my question. My first question would be on trading income. It was negative this quarter. How should we think about trading income going forward? What is kind of a normalized run rate trading income for you? My second question would be just going back to the share buyback and the M&A. I realize that you are evaluating a share buyback, but why not do M&A instead of share buyback? What is the kind of thought process of thinking about the share buyback and not maybe putting more emphasis on M&A? Thank you.

Sofie Peterzéns: Yeah. Hi, this is Sophie from Goldman Sachs. Thanks a lot for taking my question. My first question would be on trading income. It was negative this quarter. How should we think about trading income going forward? What is kind of a normalized run rate trading income for you? My second question would be just going back to the share buyback and the M&A. I realize that you are evaluating a share buyback, but why not do M&A instead of share buyback? What is the kind of thought process of thinking about the share buyback and not maybe putting more emphasis on M&A? Thank you.

Speaker #4: How should we think about trading income going forward? What kind of a normalized run-rate for trading income should we expect from you? And then my second question would be just going back to the share buyback and the M&A.

Speaker #4: I realize that you're evaluating a share buyback, but why not do M&A instead of a share buyback? And what's the kind of thought process of, yeah, thinking about the share buyback and not maybe putting more emphasis on M&A?

Speaker #4: Thank you.

Jacob Lundblad: Well, I can start with the latter one there. Well, again, we think it is our job to look at M&A, and if we find something attractive, we might pursue it. The extra room in terms of capital can be used for M&A, extra dividend, or share buybacks. Time will tell.

Speaker #1: I mean, I can start with the latter one there. Well, again, we think it's our job to look at M&A, and if we find something attractive, we might pursue it.

Speaker #1: So the extra room, in terms of capital, can be used for M&A, extra dividend, or share buybacks. Time will tell.

Speaker #3: And I think on trading income, I think we guided before that we probably, on a run rate basis, would expect that to be negative SEK 15 to 25 million per quarter.

Patrick MacArthur: I think on trading income, I think we have guided before that on a run rate basis, we would probably expect that to be -15 to -25 million SEK per quarter, but there is going to be volatility there. I think in Q1 it was positive. This quarter was slightly higher. But if we look at it on a rolling basis, we expect it to be slightly negative every quarter, kind of in the range over time of 15 to 25. But then there is volatility in this line, which means that some quarters it is positive, some quarters slightly more negative.

Speaker #3: But it's going to be volatile. I think Q1 was positive. This quarter was slightly higher, but if we look at it on a rolling basis, we expect to be slightly negative every quarter, kind of in the range over time of 15 to 25.

Speaker #3: But then, there is volatility in this line, which means that some quarters are positive, and some quarters are slightly more negative.

Speaker #4: Okay. What's driving the negative trading income? Is it hedging?

Sophie Petersen: Okay. What is driving the negative trading income? Is it hedging costs or?

Sofie Peterzéns: Okay. What is driving the negative trading income? Is it hedging costs or?

Patrick MacArthur: It is the cost of holding swaps.

Speaker #1: It's cost of holding swaps.

Sophie Petersen: Okay. Thank you.

Sofie Peterzéns: Okay. Thank you.

Speaker #4: Okay. Okay. Thank you. Thank you.

Operator: This concludes the question and answer session. I will now hand back to Jacob Lundblad for closing remarks.

Speaker #2: This concludes the question and answer session. I will now hand back to Jacob Lundbland for closing remarks.

Speaker #1: Thank you very much for listening in. I look forward to interacting again in due course.

Jacob Lundblad: Thank you very much for listening in. Looking forward to interact again in due course.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

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Q2 2026 NOBA Bank Group AB Earnings Call

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