Q3 2026 Swedbank AB Pre-Close Call
Maria Caneman: Hear me all right. Welcome to Swedbank's Q3 2026 pre-close call. I am Maria Caneman, Head of Investor Relations here at Swedbank, and this will be an audio-only Teams call, which is being recorded. The script used for this call will, per usual, be published in the Investor Relations website after the call. We will be focusing on the events during the third quarter, relevant public data, macro trends in our markets, go through macro indicators, P&L, and also a few other comments where relevant. We would like to highlight that we only refer to already disclosed information or publicly available data. To start off, there is, as you know, 1 more day in this quarter compared to the previous one, so this is resulting in a positive impact on NII and NCI.
Speaker #1: Give me, all right. Welcome to Swedbank's Q3 2026 pre-close call. so I'm Maria Caneman, I'm head of investor relations here at Swedbank, and this will be an audio-only Teams call, which is being recorded and the script used for this call will, per usual, be published in the investor relations website after the call.
Maria Caneman: Welcome to Swedbank's Q3 2026 pre-close call. I am Maria Caneman, Head of Investor Relations here at Swedbank, and this will be an audio-only Teams call, which is being recorded. The script used for this call will, per usual, be published in the Investor Relations website after the call. We will be focusing on the events during the third quarter, relevant public data, macro trends in our markets, go through macro indicators, P&L, and also a few other comments where relevant. We would like to highlight that we only refer to already disclosed information or publicly available data. To start off, there is, as you know, 1 more day in this quarter compared to the previous one, so this is resulting in a positive impact on NII and NCI.
Speaker #1: So we will be focusing on the events during the third quarter, relevant public data, macro trends in our markets, go through macro indicators, P&L, and also, a few other comments where relevant.
Speaker #1: We would like to highlight that we only refer to already disclosed information or publicly available data. To start off, there is, as you know, one more day in this quarter compared to the previous one, so this is resulting in a positive impact on NII and NCI.
Speaker #1: So if you look at average day count effects, it's around 70 million a day on NII, and around 20 million a day on AUM.
Maria Caneman: If you look at average day count effects, it is around SEK 70 million a day on NII and around SEK 20 million a day on AUM. Starting with the macro trends. On FX, as of 30 September, the Swedish krona had depreciated from end of June versus the USD and the EUR. On average, compared to last quarter, the krona depreciated versus both the dollar and the euro. For P&L, the average Q on Q development is the relevant number to track. The Riksbank policy rate was left unchanged at 1.75% during the quarter. The ECB raised its policy rate to 2.5% on 10 September. As of 29 September, the 3-month STIBOR rate had increased by 11 basis points, while the 6-month EURIBOR rate was up by 53 basis points.
Maria Caneman: If you look at average day count effects, it is around SEK 70 million a day on NII and around SEK 20 million a day on AUM. Starting with the macro trends. On FX, as of 30 September, the Swedish krona had depreciated from end of June versus the USD and the EUR. On average, compared to last quarter, the krona depreciated versus both the dollar and the euro. For P&L, the average Q on Q development is the relevant number to track. The Riksbank policy rate was left unchanged at 1.75% during the quarter. The ECB raised its policy rate to 2.5% on 10 September. As of 29 September, the 3-month STIBOR rate had increased by 11 basis points, while the 6-month EURIBOR rate was up by 53 basis points.
Speaker #1: Starting with the macro trends: on FX, as of 30 September, the Swedish krona had depreciated from end of June, versus the US dollar and the euro, and on average, compared to last quarter, the krona depreciated versus both the dollar and the euro.
Speaker #1: So for P&L, the average quarter-on-quarter development is the relevant number to track. The Riksbank policy rate was left unchanged at 1.75 during the quarter, and ECB raised its policy rate to 2.5% on September 10.
Speaker #1: As of 29 September, the 3-month cyber rate had increased by 11 basis points, while the 6-month Euribor rate was up by 53 basis points.
Speaker #1: Looking at average quarter-to-date compared to last quarter, the 3-month cyber was 1 basis point lower, while 6-month Euribor had increased by 23 basis points.
Maria Caneman: Looking at average quarter to date compared to last quarter, the 3-month STIBOR was 1 basis point lower, while 6-month EURIBOR had increased by 23 basis points. Moving on to NII for Sweden. Mortgage list prices in Sweden were raised on 18 September by 30 to 25 basis points on fixings longer than 3 months, while the 3-month fixing was left unchanged. This follows decreases in the second quarter by 5 to 15 basis points, of which interest rates on 3-month fixings were lowered by 5 basis points. All this information can be found on our website, and I would encourage you to visit continuously because we do show most of our offering there, and that is where you can find the most up-to-date information.
Maria Caneman: Looking at average quarter to date compared to last quarter, the 3-month STIBOR was 1 basis point lower, while 6-month EURIBOR had increased by 23 basis points. Moving on to NII for Sweden. Mortgage list prices in Sweden were raised on 18 September by 30 to 25 basis points on fixings longer than 3 months, while the 3-month fixing was left unchanged. This follows decreases in the second quarter by 5 to 15 basis points, of which interest rates on 3-month fixings were lowered by 5 basis points. All this information can be found on our website, and I would encourage you to visit continuously because we do show most of our offering there, and that is where you can find the most up-to-date information.
Speaker #1: Moving on to NII: for the Sweden, mortgage list prices in Sweden were raised on 18 September by 13% to 25 basis points on fixing longer than 3 months, while the 3-month fixing was left unchanged.
Speaker #1: This follows decreases in the second quarter by 5% to 15 basis points, of which interest rates on 3-month fixings were lowered by 5 basis points.
Speaker #1: All this information can be found on our website, and I would encourage you to visit continuously because we do show most of our offering there, and that's where you can find the most up-to-date information.
Speaker #1: Actual mortgage prices decreased by 6 basis points on the 3-month fixings in the first 2 months of the quarter, followed an increase of 7 basis points in the previous quarter.
Maria Caneman: Actual mortgage prices decreased by 6 basis points on the 3-month fixings in the first 2 months of the quarter, following an increase of 7 basis points in the previous quarter. On deposits in Sweden, rates were unchanged in the quarter, and we pay 0% on transaction accounts as well as eSavings accounts. Turning to mortgage volumes and public statistics, Swedbank's volumes in own channels in the first 2 months of the quarter, excluding savings banks on our balance sheet, but including Stabelo, increased by SEK 5.3 billion, corresponding to an average front book market share of 19%. Swedbank's corporate lending grew in the first 2 months of the quarter by SEK 2.8 billion, corresponding to an average front book market share of around 22%. Retail deposits in Sweden decreased in the first 2 months of the quarter by SEK 10.6 billion, and Swedbank accounted for SEK 3.6 billion of this.
Maria Caneman: Actual mortgage prices decreased by 6 basis points on the 3-month fixings in the first 2 months of the quarter, following an increase of 7 basis points in the previous quarter. On deposits in Sweden, rates were unchanged in the quarter, and we pay 0% on transaction accounts as well as eSavings accounts. Turning to mortgage volumes and public statistics, Swedbank's volumes in own channels in the first 2 months of the quarter, excluding savings banks on our balance sheet, but including Stabelo, increased by SEK 5.3 billion, corresponding to an average front book market share of 19%. Swedbank's corporate lending grew in the first 2 months of the quarter by SEK 2.8 billion, corresponding to an average front book market share of around 22%. Retail deposits in Sweden decreased in the first 2 months of the quarter by SEK 10.6 billion, and Swedbank accounted for SEK 3.6 billion of this.
Speaker #1: On the positives in Sweden: rates were unchanged in the quarter, and we paid 0% on transaction accounts as well as e-savings accounts. So turning to mortgage volumes and public statistics: Swedbank's volumes in own channels in the first 2 months of the quarter, excluding savings banks on our balance sheet, but including stabilo increased by 5.3 billion corresponding to an average front-book market share of 19%.
Speaker #1: Swedbank's corporate lending grew in the first 2 months of the quarter by 2.8 billion, corresponding to an average front-book market share of around 22%.
Speaker #1: Retail deposits in Sweden decreased in the first 2 months of the quarter, by 10.6 billion, and Swedbank accounted for 3.6 billion of this. Corporate deposits in Sweden decreased in the first 2 months of the quarter by 4.7 billion of which 1.2 billion in Swedbank.
Maria Caneman: Corporate deposits in Sweden decreased in the first two months of the quarter by SEK 4.7 billion, of which SEK 1.2 billion in Swedbank. Turning to the Baltics. According to data provided by ECB, total lending in the Baltics in July increased by 13.5% year on year, private lending by 12.6%, and corporate lending by 14.4%. Total deposits in the Baltics in July increased by 10.6% year on year, private deposits grew by 12%, and corporate deposits by 8.7%. Regarding retail deposit rates, we paid 0% in interest on transaction accounts, while eSavings accounts paid 1.5% in Lithuania, 1.75% in Estonia, and 2% in Latvia. During the quarter, rates on longer fixings were raised in Latvia by 10 to 100 basis points and in Estonia by 25 to 35 basis points, while they remained unchanged in Lithuania.
Maria Caneman: Corporate deposits in Sweden decreased in the first two months of the quarter by SEK 4.7 billion, of which SEK 1.2 billion in Swedbank. Turning to the Baltics. According to data provided by ECB, total lending in the Baltics in July increased by 13.5% year on year, private lending by 12.6%, and corporate lending by 14.4%. Total deposits in the Baltics in July increased by 10.6% year on year, private deposits grew by 12%, and corporate deposits by 8.7%. Regarding retail deposit rates, we paid 0% in interest on transaction accounts, while eSavings accounts paid 1.5% in Lithuania, 1.75% in Estonia, and 2% in Latvia. During the quarter, rates on longer fixings were raised in Latvia by 10 to 100 basis points and in Estonia by 25 to 35 basis points, while they remained unchanged in Lithuania.
Speaker #1: So turning to the Baltics: according to data provided by the ECB, total lending in the Baltics in July increased by 13.5% year-on-year, private lending by 12.6%, and corporate lending by 14.4%.
Speaker #1: Total deposits in the Baltics in July increased by 10.6% year-on-year, private deposits grew by 12%, and corporate deposits by 8.7%. Regarding retail deposit rates, we paid 0% in interest on transaction accounts, while e-savings accounts paid 1.5% in Lithuania, 1.75% in Estonia, and 2% in Latvia.
Speaker #1: During the quarter, rates on longer fixings were raised in Latvia by 10% to 100 basis points, and in Estonia by 25% to 35 basis points while they remained unchanged in Lithuania.
Speaker #1: So please let me remind me, of remind you of the timing effects of interest rate changes in that the negative effects from interest rate increases materials ahead of the positive effects, as has been repeatedly pointed out by our CFO.
Maria Caneman: Please let me remind you of the timing effects of interest rate changes in that the negative effects from interest rate increases materials ahead of the positive effects, as has been repeatedly pointed out by our CFO. Moving on to net commission income. First of all, a kind reminder that asset management commissions are generated by daily fees. Looking at average values of the stock market development, which impact our asset management fees. On average in the quarter compared to the average of Q2, the Swedish stock market increased by 4.8%, while the US and European stock markets increased by 4.8% and 4.5%, respectively. On FX, just a reminder here on that component, where the Swedish krona had depreciated by 3% versus the USD on average compared to Q2. This should be considered when assessing the US stock market changes.
Maria Caneman: Please let me remind you of the timing effects of interest rate changes in that the negative effects from interest rate increases materials ahead of the positive effects, as has been repeatedly pointed out by our CFO. Moving on to net commission income. First of all, a kind reminder that asset management commissions are generated by daily fees. Looking at average values of the stock market development, which impact our asset management fees. On average in the quarter compared to the average of Q2, the Swedish stock market increased by 4.8%, while the US and European stock markets increased by 4.8% and 4.5%, respectively. On FX, just a reminder here on that component, where the Swedish krona had depreciated by 3% versus the USD on average compared to Q2. This should be considered when assessing the US stock market changes.
Speaker #1: Moving on to net commission income: first of all, kind reminder that asset management commissions are generated by daily fees, looking at average values of the stock market development, which impact our asset management fees, on average in the quarter compared to the average of the second quarter.
Speaker #1: The Swedish stock market increased by 4.8%, while the US and European stock markets increased by 4.8% and 4.5% respectively. So on FX, just a reminder here on that component: where the Swedish krona had depreciated by 3% versus the US dollar on average compared to the second quarter, this should be considered when assessing the US stock market changes.
Speaker #1: According to the statistics from the Swedish Investment Fund Association, the Swedish mutual fund market had net inflows during July and August of approximately 42.5 billion Swedish kronor, compared to an inflow of approximately 63.3 billion in the second quarter.
Maria Caneman: According to statistics from the Swedish Investment Fund Association, the Swedish mutual fund market had net inflows during July and August of approximately SEK 42.5 billion compared to an inflow of approximately SEK 63.3 billion in Q2. The trend with inflows to index fund and fixed income, both long and short term continued while outflows in actively managed equity funds remain. Swedbank Robur had continued net inflows in July and August with the market share between 11% to 16% of the total market net inflow and Robur's back book market share of AUM at the end of August was at 21.7%. On to cost, our full year 2026 cost guidance is around SEK 27.5 billion, excluding extraordinary items. At Q2 we said at current levels, the full year FX effect estimate is estimated to add around SEK 200 million versus guidance.
Maria Caneman: According to statistics from the Swedish Investment Fund Association, the Swedish mutual fund market had net inflows during July and August of approximately SEK 42.5 billion compared to an inflow of approximately SEK 63.3 billion in Q2. The trend with inflows to index fund and fixed income, both long and short term continued while outflows in actively managed equity funds remain. Swedbank Robur had continued net inflows in July and August with the market share between 11% to 16% of the total market net inflow and Robur's back book market share of AUM at the end of August was at 21.7%. On to cost, our full year 2026 cost guidance is around SEK 27.5 billion, excluding extraordinary items. At Q2 we said at current levels, the full year FX effect estimate is estimated to add around SEK 200 million versus guidance.
Speaker #1: The trend with inflows to index fund and fixed income, both long and short term, continued, while outflows in actively managed equity funds remained. Swedbank Rubber had continued net inflows in July and August, with the market share between 11% to 16% of the total market net inflow, and Rubber's backbook market share of AUM at the end of August was 21.7%.
Speaker #1: Onto costs: our full year 2026 cost guidance is around 27.5 billion, excluding extraordinary items. So at Q2, we said at current levels the full year FX effect estimates estimated to add around 200 million kronor versus guidance.
Speaker #1: So please keep this in mind, and the krona has depreciated even further since. The cost guidance excludes the settlement to pay 50 million USD to the Department of Financial Services in New York, which was booked here during the third quarter.
Maria Caneman: Please keep this in mind and the krona has depreciated even further since. The cost guidance excludes the settlement to pay $50 million to the New York State Department of Financial Services, which was booked here during Q3. Also the cost guidance excludes the SEK 1.3 billion extraordinary cost for the restructuring program that was announced in Q1. We booked a little over SEK 800 million of those in Q2, and the remaining is mostly direct cost that will be spread over the rest of 2026. Bank taxes, we continue to accrue 100% of the bank tax in Latvia, so around SEK 17 million per quarter. If any thresholds for discounts will be reached, this will be booked as reversals in Q4 so similar to last year.
Maria Caneman: Please keep this in mind and the krona has depreciated even further since. The cost guidance excludes the settlement to pay $50 million to the New York State Department of Financial Services, which was booked here during Q3. Also the cost guidance excludes the SEK 1.3 billion extraordinary cost for the restructuring program that was announced in Q1. We booked a little over SEK 800 million of those in Q2, and the remaining is mostly direct cost that will be spread over the rest of 2026. Bank taxes, we continue to accrue 100% of the bank tax in Latvia, so around SEK 17 million per quarter. If any thresholds for discounts will be reached, this will be booked as reversals in Q4 so similar to last year.
Speaker #1: And also, the cost guidance excludes the 1.3 billion Swedish kronor extraordinary costs for the restructuring program that was announced in the first quarter. We booked a little over 800 million of those in Q2, and the remaining is mostly direct cost that will be spread over the rest of 2026.
Speaker #1: Bank taxes: we continue to accrue 100% of the bank tax in Latvia, so around 17 million per quarter. If any thresholds for discounts will be reached, this will be booked as reversals in Q4, so similar to last year.
Speaker #1: On asset quality in Q2, the post-model adjustment decreased, and stood at 161 million by the end of the quarter. And let me also remind you of the positive revaluation of expected credit losses of approximately 0.5 billion Swedish kronor to be recognized here in the third quarter, as announced already in the press release, because this is due to the sale of Entecard's backbook of non-performing loans.
Maria Caneman: On asset quality in Q2, the post-model adjustment decreased and stood at SEK 161 million by the end of the quarter. Let me also remind you of the positive revaluation of expected credit losses of approximately SEK 0.5 billion to be recognized here in Q3, as announced already in the press release because this is due to the sale of Entercard's back book of non-performing loans. You have all the details in the press release about the credit loss revaluation will be recognized already in Q3. On capital, I would like to just mention that the balance sheet is affected by end of period FX rates mainly via RWAs from the Baltics that are denominated in EUR. As mentioned earlier, the Swedish krona has weakened versus the EUR in the quarter.
Maria Caneman: On asset quality in Q2, the post-model adjustment decreased and stood at SEK 161 million by the end of the quarter. Let me also remind you of the positive revaluation of expected credit losses of approximately SEK 0.5 billion to be recognized here in Q3, as announced already in the press release because this is due to the sale of Entercard's back book of non-performing loans. You have all the details in the press release about the credit loss revaluation will be recognized already in Q3. On capital, I would like to just mention that the balance sheet is affected by end of period FX rates mainly via RWAs from the Baltics that are denominated in EUR. As mentioned earlier, the Swedish krona has weakened versus the EUR in the quarter.
Speaker #1: But you have all the details in the press release, but the credit loss revaluation will be recognized already in Q3. On capital: I'd like to just mention that the balance sheet is affected by end-of-period FX rates, mainly via RWAs from the Baltics that are denominated in EUR.
Speaker #1: And as mentioned earlier, the Swedish krona has weakened versus the EUR in the quarter. Let me also flag to you, this is what we said in the Q2 report, that a reorganization of the business area Swedish banking and wealth management has been done.
Maria Caneman: Let me also flag to you what we said in the Q2 report that a reorganization of the business area, Swedish Banking and Wealth Management, has been done. The restatement file for this is being published during today on our investor relations page, something called Investor News. This is neutral on group level, but for those of you who want to look into the business areas, that restatement file will be available today. That was all for the pre-close call. Please note that we go into silent period on 9 October. If any questions, feel free to reach out before that. I see that we have a question here from Magnus. Please go ahead. See if I need to allow you to unmute or if you can unmute. Let us see. Are you able to unmute, Magnus? Sounds like you are not.
Maria Caneman: Let me also flag to you what we said in the Q2 report that a reorganization of the business area, Swedish Banking and Wealth Management, has been done. The restatement file for this is being published during today on our investor relations page, something called Investor News. This is neutral on group level, but for those of you who want to look into the business areas, that restatement file will be available today. That was all for the pre-close call. Please note that we go into silent period on 9 October. If any questions, feel free to reach out before that. I see that we have a question here from Magnus. Please go ahead. See if I need to allow you to unmute or if you can unmute. Let us see. Are you able to unmute, Magnus? Sounds like you are not.
Speaker #1: And the restatement filed for this is being published during today on our investor relations page, something called Investor News. So this is neutral on group level, but for those of you who want to look into the business areas, that restatement file will be available today.
Speaker #1: And that was all for the pre-close call. We please note that we go into silent period on the 9th of October, so if any questions, feel free to reach out before that.
Speaker #1: And I see that we have a question here from Magnus. Please go ahead. Let's see if I need to allow you to unmute, or if you can unmute.
Speaker #1: Let's see. Are you able to unmute, Magnus? Sounds like you are not. Let's see if I can do it this way then. There we go.
Maria Caneman: See if I can do it this way then. There we go. Now you should be okay, Magnus. Trying again, Magnus. Yes, now it is working.
Maria Caneman: See if I can do it this way then. There we go. Now you should be okay, Magnus. Trying again, Magnus. Yes, now it is working.
Speaker #1: Now you should be okay, Magnus.
Speaker #2: Now do you hear me?
Speaker #1: Trying again, Magnus. Yes, now it's working.
Speaker #2: Yeah. Yeah, okay, you have to unmute us. I think.
Magnus Andersson: Yeah, okay. You have to unmute us, I think.
Magnus Andersson: Yeah, okay. You have to unmute us, I think.
Speaker #1: Yes, I don't, but it didn't seem to work. But please go ahead.
Maria Caneman: Yes, I did, but it didn't seem to work. Please go ahead.
Maria Caneman: Yes, I did, but it didn't seem to work. Please go ahead.
Speaker #2: Yeah. Okay. Just two questions. First of all, on capital: whether you will publish your SREP, like SEB did yesterday evening. I think you used to do that.
Magnus Andersson: Okay. Just two questions. First of all, on capital, whether you will publish your SREP like SEB did yesterday evening. I think you used to do that. Secondly, if there are any regulatory issues or anything impacting risk-weighted assets Q on Q we should be aware of. Secondly, I don't know if you mentioned it, the remaining SEK 440 million in restructuring charges for the H2. Have you said anything about how that will be distributed between Q3 and Q4?
Magnus Andersson: Okay. Just two questions. First of all, on capital, whether you will publish your SREP like SEB did yesterday evening. I think you used to do that. Secondly, if there are any regulatory issues or anything impacting risk-weighted assets Q on Q we should be aware of. Secondly, I don't know if you mentioned it, the remaining SEK 440 million in restructuring charges for the H2. Have you said anything about how that will be distributed between Q3 and Q4?
Speaker #2: And secondly, if there are any regulatory issues or anything impacting risk-rated assets quarter on quarter, we should be aware of. Secondly, just, I don't know if you mentioned it, the remaining 440 million in restructuring charges for the second half, have you said anything about how that will be distributed between Q3 and Q4?
Speaker #1: Thank you. I'll start with the SREP. No, we will not be publishing that separately. We will going forward be publishing that in our quarterly reports, so no update on that until Q3.
Maria Caneman: Thank you. I'll start with the SREP. No, we will not be publishing that separately. We will going forward be publishing that in our quarterly reports, so no update on that until Q3. No further items to point out on risk-weighted assets, I believe, apart from the restatements and these things, but those are neutral on group level. The last question, what was that one again? Could you repeat the last question?
Maria Caneman: Thank you. I'll start with the SREP. No, we will not be publishing that separately. We will going forward be publishing that in our quarterly reports, so no update on that until Q3. No further items to point out on risk-weighted assets, I believe, apart from the restatements and these things, but those are neutral on group level. The last question, what was that one again? Could you repeat the last question?
Speaker #1: No further items to point out on risk-weighted assets, I believe. And apart from the restatements and these things, but those are net on, you know, neutral on group level.
Speaker #1: And the last question: what was that done again? Sorry. Could you repeat the last question?
Speaker #2: I was just on the restructuring charges, the.
Magnus Andersson: I was just on the restructuring charges, the-
Magnus Andersson: I was just on the restructuring charges, the-
Speaker #1: Restructuring charges, yes. No, indicated anything. We have not said anything else. They are more than that. They are direct costs, so all the provisioning that was the big part was already booked in Q2, as you know.
Maria Caneman: Restructuring charges. Yes.
Maria Caneman: Restructuring charges. Yes.
Magnus Andersson: If you had indicated anything.
Magnus Andersson: If you had indicated anything.
Maria Caneman: We have not said anything else, more than that they are direct costs. All the provisioning and the big part was already booked in Q2, as you know. We have not guided on specifically how it falls between the quarter. It will be distributed over Q3 and Q4.
Maria Caneman: We have not said anything else, more than that they are direct costs. All the provisioning and the big part was already booked in Q2, as you know. We have not guided on specifically how it falls between the quarter. It will be distributed over Q3 and Q4.
Speaker #1: And we have not guided on specifically how it falls between the quarter. It will be distributed over the Q3 and Q4.
Speaker #2: Okay. Thank you.
Magnus Andersson: Okay. Thank you.
Magnus Andersson: Okay. Thank you.
Speaker #1: Thank you. And next in line is Andreas.
Maria Caneman: Thank you. Next in line is Andreas.
Maria Caneman: Thank you. Next in line is Andreas.
Speaker #3: Yeah, morning. Just, you talked about this timing effect that you said you CFO has been flagging, but isn't that related to the covered bond funding and the pricing of it?
[Analyst] (SEB): Morning. You talked about these timing effects that you said your CFO has been flagging, but isn't that related to the covered bond funding and the pricing of it? Shouldn't we expect that the covered bond funding turn cheaper during Q3 compared to Q2? I think you priced at 207 basis points in Q2, and you should be at 201 basis points now in Q3, while you said that your mortgage prices were down, but net without a month of previous quarter, you're actually up 1 basis point. So wouldn't we see a positive timing effect in this quarter? That's my first question.
Andreas Håkansson: Morning. You talked about these timing effects that you said your CFO has been flagging, but isn't that related to the covered bond funding and the pricing of it? Shouldn't we expect that the covered bond funding turn cheaper during Q3 compared to Q2? I think you priced at 207 basis points in Q2, and you should be at 201 basis points now in Q3, while you said that your mortgage prices were down, but net without a month of previous quarter, you're actually up 1 basis point. So wouldn't we see a positive timing effect in this quarter? That's my first question.
Speaker #3: And shouldn't we expect that the covered bond funding turn cheaper during Q3 compared to Q2? I mean, I think you priced at 207 pips in Q2, and you should be at 201 pips now in Q3, while you said that your mortgage prices were down but net with other months of previous quarter, they actually up one beat.
Speaker #3: So wouldn't we see a positive timing effect in this quarter? That's my first question.
Speaker #1: So the timing effect that our CFO is mainly pointing to is that when market rates move, now ahead but policy rates are staying, that you see in Sweden.
Maria Caneman: The timing effect that our CFO is mainly pointing to is that when market rates move now ahead, but policy rates are staying that you see in Sweden, or you saw the negative effect in Q2. Now Q on Q, that should not be a big effect versus STIBOR, which has been on average flat. But you see that effect on EURIBOR, where EURIBOR has moved ahead of the ECB rate change. That type of timing effect, because we're not repricing until the policy rate change typically. That is the kind of dynamic. Then if you're looking at wholesale funding the way we usually, that is affected also, of course, by the increasing EURIBOR. Then you need to add, of course, increasing volumes on that as well Q on Q.
Maria Caneman: The timing effect that our CFO is mainly pointing to is that when market rates move now ahead, but policy rates are staying that you see in Sweden, or you saw the negative effect in Q2. Now Q on Q, that should not be a big effect versus STIBOR, which has been on average flat. But you see that effect on EURIBOR, where EURIBOR has moved ahead of the ECB rate change. That type of timing effect, because we're not repricing until the policy rate change typically. That is the kind of dynamic. Then if you're looking at wholesale funding the way we usually, that is affected also, of course, by the increasing EURIBOR. Then you need to add, of course, increasing volumes on that as well Q on Q.
Speaker #1: Or you saw the negative effect in Q2. Now Q1Q, that should not be a big effect versus STIBOR, which has been on average flat.
Speaker #1: But you see that effect on your IBOR, where your IBOR has moved ahead of the ECB rate change. So that type of timing effect because we're not repricing until the policy rate change, typically.
Speaker #1: So that is the kind of dynamic. And then you have if you're looking at wholesale funding, the way we usually, that is affected also, of course, by the increasing your IBOR.
Speaker #1: And then you need to add, of course, the increasing volumes on that as well, Q1Q.
Speaker #3: Yeah, so I follow you in Sweden. So my first question was on Sweden, so we shouldn't have negative timing effects in Q3, which we had in Q2.
[Analyst] (SEB): Yeah. I follow in Sweden. My first question was on Sweden. So we shouldn't have negative timing effects in Q3, which we had in Q2. But then in the Baltics, have I misunderstood, or aren't you repricing your loans according to EURIBOR? So given it's six months, it's one sixth every month automatically. So shouldn't that be repricing as we speak?
Andreas Håkansson: Yeah. I follow in Sweden. My first question was on Sweden. So we shouldn't have negative timing effects in Q3, which we had in Q2. But then in the Baltics, have I misunderstood, or aren't you repricing your loans according to EURIBOR? So given it's six months, it's one sixth every month automatically. So shouldn't that be repricing as we speak?
Speaker #3: But then in the Baltics, have I misunderstood or aren't you repricing your loans according to your IBOR? So given it's 6 months, it's 1/6 every month, automatically.
Speaker #3: So shouldn't that be repricing assets?
Speaker #1: Yeah, so that side, yes, but I was referring to the wholesale funding aspect of it, as you see higher funding costs. But yes, you're right on the repricement mechanism versus your IBOR.
Maria Caneman: Yes, but I was still referring to the wholesale funding aspect of it as you see higher funding costs. You are right on the repricing mechanism versus EURIBOR.
Maria Caneman: Yes, but I was still referring to the wholesale funding aspect of it as you see higher funding costs. You are right on the repricing mechanism versus EURIBOR.
Speaker #3: So you said that your IBOR were up 23 pips in the quarter. But that's irrelevant, right? Because we should see the people in Q3 repricing from what they came from Q1.
[Analyst] (SEB): You said that EURIBOR were up 23 basis points in the quarter, but that is irrelevant, right? We should see the people in Q3 repricing from what they came from Q1. Is not the repricing that is going to happen in EURIBOR some 70 basis points, really?
Andreas Håkansson: You said that EURIBOR were up 23 basis points in the quarter, but that is irrelevant, right? We should see the people in Q3 repricing from what they came from Q1. Is not the repricing that is going to happen in EURIBOR some 70 basis points, really?
Speaker #3: So isn't the repricing that's going to happen in your IBOR some 70 basis points, really?
Speaker #1: So versus your IBOR, we are repricing. But so, I mean, that dynamic is correct if you're looking on the deposit side. That's versus 6 months your IBOR.
Maria Caneman: Versus EURIBOR, we are repricing. That dynamic is correct if you are looking on the deposit side. That is versus 6 months EURIBOR.
Maria Caneman: Versus EURIBOR, we are repricing. That dynamic is correct if you are looking on the deposit side. That is versus 6 months EURIBOR.
Speaker #3: Yeah.
Speaker #1: But my comment was also on the overall funding, because you have wholesale funding costs, which is also dependent on.
[Analyst] (SEB): Yeah.
Andreas Håkansson: Yeah.
Maria Caneman: My comment was also on the overall funding because you have wholesale funding costs, which is also dependent on where the EURIBOR.
Maria Caneman: My comment was also on the overall funding because you have wholesale funding costs, which is also dependent on where the EURIBOR.
Speaker #3: Yeah, but not in the Baltics. Because there you only deposit funded, right?
[Analyst] (SEB): Yeah, not in the Baltics because they are only deposit funded, right?
Andreas Håkansson: Yeah, not in the Baltics because they are only deposit funded, right?
Speaker #1: Exactly. So depending on where you are in the Baltics.
Maria Caneman: Exactly. Depending on where you are in the Baltics.
Maria Caneman: Exactly. Depending on where you are in the Baltics.
Speaker #3: Okay. No, then I think we have the same view. Thanks. That's it.
[Analyst] (SEB): Okay. Then I think we have the same view. Thanks.
Andreas Håkansson: Okay. Then I think we have the same view. Thanks.
Speaker #1: Yeah. So next in line, Sophie.
Maria Caneman: Yes.
Maria Caneman: Yes.
[Analyst] (SEB): That's it.
Andreas Håkansson: That's it.
Maria Caneman: Next in line, Sofie.
Maria Caneman: Next in line, Sofie.
Speaker #4: Yeah, hi. Thanks a lot for taking my question. So my first question will be also on kind of your funding side. Like, could you just walk us through how your wholesale funding is hedged?
[Analyst] (Goldman Sachs): Yeah. Hi. Thanks a lot for taking my question. My first question would be also on your funding side. Can you just walk us through how your wholesale funding is hedged? When we see higher EURIBOR rates, weaker SEK, is that risk fully hedged with cross-currency swaps, or how should we think about the impact?
Sofie Peterzens: Yeah. Hi. Thanks a lot for taking my question. My first question would be also on your funding side. Can you just walk us through how your wholesale funding is hedged? When we see higher EURIBOR rates, weaker SEK, is that risk fully hedged with cross-currency swaps, or how should we think about the impact?
Speaker #4: So when we see kind of higher your IBOR rates, a weaker SEK, is that risk kind of fully hedged with cross-currency swaps? Or how should we kind of think about the impact?
Speaker #1: Good question. I think I might have to come back to you a little bit on the hedging side of things. On the technical aspects of it.
Maria Caneman: Good question. I think I might have to come back to you a little bit on the hedging side of things, on the technical aspects of it. Maybe I can come back to you on that question.
Maria Caneman: Good question. I think I might have to come back to you a little bit on the hedging side of things, on the technical aspects of it. Maybe I can come back to you on that question.
Speaker #1: So maybe I can come back to you on that question.
Speaker #4: Yeah, that would be great. And then my second question would be on funding. Did you do any material like funding in the quarter? And if so, how should we think about the kind of funding that was done in Q3?
[Analyst] (Goldman Sachs): Yeah, that would be great. My second question would be on funding. Did you do any material funding in the quarter? If so, how should we think about the kind of funding that was done in Q3?
Sofie Peterzens: Yeah, that would be great. My second question would be on funding. Did you do any material funding in the quarter? If so, how should we think about the kind of funding that was done in Q3?
Speaker #1: Yes, we have done a few. Let's see, we did a Tier 2 transaction that we did here in September, and Adam has top of mind all of us.
Maria Caneman: Yes, we have done a few. Let's see, we did a Tier 2 transaction that we did here in September. I do not have top of mind all of us, but we have on our website, I believe we have all those. We have been acting in the funding market, but nothing out of the ordinary apart from maybe the Tier 2 transaction, which is a little bit more rare ahead of a call coming up next year.
Maria Caneman: Yes, we have done a few. Let's see, we did a Tier 2 transaction that we did here in September. I do not have top of mind all of us, but we have on our website, I believe we have all those. We have been acting in the funding market, but nothing out of the ordinary apart from maybe the Tier 2 transaction, which is a little bit more rare ahead of a call coming up next year.
Speaker #1: But we have on our website, I believe we have all those. So but we have been acting in the funding market, but nothing sort of out of the ordinary apart from maybe the Tier 2 transaction, which is a little bit more rare ahead of a call coming up next year.
Speaker #4: Okay. And then my final question: I know you said there was nothing in terms of capital, but is there any update on the Baltic models?
[Analyst] (Goldman Sachs): Okay. My final question. I know you said there was nothing in terms of capital, but is there any update on the Baltic models?
Sofie Peterzens: Okay. My final question. I know you said there was nothing in terms of capital, but is there any update on the Baltic models?
Speaker #1: No, we have no update on that. So nothing there, sorry.
Maria Caneman: No, we have no update on that. Nothing there, sorry.
Maria Caneman: No, we have no update on that. Nothing there, sorry.
Speaker #4: Okay, great. Thank you.
[Analyst] (Goldman Sachs): Okay, great. Thank you.
Sofie Peterzens: Okay, great. Thank you.
Speaker #1: Thank you. And Ricardo?
Maria Caneman: Thank you. Riccardo?
Maria Caneman: Thank you. Riccardo?
Speaker #2: Yes, Maria, thanks. Thanks for taking my question. Just a very quick one. Among the values one-offs, so the especially on the department financial services, the 50 million dollar, the restructuring cost, the provisions from the release of provisions from Entercard, is there any fiscal effect on all of these?
[Analyst] (Mediobanca): Yes, Maria, thanks. Thanks for taking my question. Just a very quick one. Among the values one-offs, especially on the New York State Department of Financial Services, the $50 million, the restructuring cost, the provisions from the release of provision from Entercard. Is there any fiscal effect on all of these? Are they tax deductible, especially with the special reference to the $50 million?
Riccardo Rovere: Yes, Maria, thanks. Thanks for taking my question. Just a very quick one. Among the values one-offs, especially on the New York State Department of Financial Services, the $50 million, the restructuring cost, the provisions from the release of provision from Entercard. Is there any fiscal effect on all of these? Are they tax deductible, especially with the special reference to the $50 million?
Speaker #2: Are they tax deductible? And especially with the special reference to the 50 million dollar?
Speaker #1: No. They are not tax deductible.
Maria Caneman: No, they are not tax deductible.
Maria Caneman: No, they are not tax deductible.
Speaker #2: Okay, okay.
[Analyst] (Mediobanca): Okay.
Riccardo Rovere: Okay.
Speaker #1: Thank you very much. So I believe that was the last question. And so as I mentioned, silent period started 9th of October, and we will release our third quarter report on Thursday, 22nd of October, at 7:00 AM CET in the morning, and the analyst call will be hosted at 9:30 CET.
Maria Caneman: Thank you very much. I believe that was the last question. As I mentioned, silent period starts on 9 October, and we will release our Q3 report on Thursday 22 October at 7:00 AM CET in the morning, and the analyst call will be hosted at 9:30 CET. Thank you so much for attending, and wish you all a nice day.
Maria Caneman: Thank you very much. I believe that was the last question. As I mentioned, silent period starts on 9 October, and we will release our Q3 report on Thursday 22 October at 7:00 AM CET in the morning, and the analyst call will be hosted at 9:30 CET. Thank you so much for attending, and wish you all a nice day.
