Q3 2026 Nordea Bank Abp Pre-Close Call

September 29, 2026

Speaker #3: Hello everyone, and good afternoon. Welcome to Nordea's Q3 2026 pre-close call. Please note that this call is being recorded for compliance reasons. This will be an audio-only Teams call. We will keep you muted during the remarks and enable your microphones when we move over to the Q&A.

Ilkka Ottoila: Hello, everyone, and good afternoon, and welcome to Nordea's Q3 2026 pre-close call. Please note that this call is being recorded for compliance reasons. This will be an audio-only Teams call, and we will keep you muted during the remarks and enable your microphones when we move over to Q&A. If you wish to ask a question, please use the raise your hand function. We will enter into a silent period on 5 October, so please contact us before that if you have further questions. Our Q3 2026 report will be published on 15 October. This call will focus on what happened back in Q2, the relevant public data, and macro trends in our market. We will go through the macro indicators, the P&L statement line by line, and comment on capital at the end. The script will be published on Nordea's financial calendar webpage.

Ilkka Ottoila: Hello, everyone, and good afternoon, and welcome to Nordea's Q3 2026 pre-close call. Please note that this call is being recorded for compliance reasons. This will be an audio-only Teams call, and we will keep you muted during the remarks and enable your microphones when we move over to Q&A. If you wish to ask a question, please use the raise your hand function. We will enter into a silent period on 5 October 2026, so please contact us before that if you have further questions. Our Q3 2026 report will be published on 15 October. This call will focus on what happened back in Q2, the relevant public data, and macro trends in our market. We will go through the macro indicators, the P&L statement line by line, and comment on capital at the end. The script will be published on Nordea's financial calendar webpage.

Speaker #3: If you wish to ask a question, please use the raise-your-hand function. We'll enter into a silent period on the 5th of October, so please contact us before then if you have further questions.

Speaker #3: Our Q3 2026 report will be published on the 15th of October. This call will focus on what happened back in Q2, as well as the relevant public data and macro trends in our market.

Speaker #3: We will go through the macro indicators, the P&L statement line by line, and comment on capital at the end. The script will be published on Nordea’s financial calendar webpage.

Speaker #3: We would like to highlight that we will only answer questions related to already disclosed information, as well as publicly available data as of 28 September, unless otherwise noted.

Ilkka Ottoila: We would like to highlight that we will only answer questions related to already disclosed information as well as publicly available data as of 28 September, unless otherwise noted. With that, let's turn to macro. Starting with the interest rates and policy rates. During Q3, the ECB hiked by 25 basis points with effect from 16 September, and the Danish Central Bank hiked by 25 basis points with the effect from 11 September. Additionally, the Norwegian Central Bank hiked by 25 basis points effective from 25 September. The three-month interbank offered rates increased during the quarter. The most notable changes were in three-month euro and Danish rates, where the average level in Q3 increased by around 25 basis points versus Q2. Three-month NIBOR also continued to increase, and the average level in Q3 was up by 10 basis points versus Q2.

Speaker #3: With that, let's turn to macro, starting with the interest rates and policy rates. During Q3, the ECB hiked by 25 basis points, with effect from the 16th of September, and the Danish Central Bank hiked by 25 basis points, with effect from the 11th of September.

Speaker #3: Additionally, the Norwegian Central Bank hiked by 25 basis points, effective from 25 September. The three-month interbank offered rates increased during the quarter. The most notable changes were in three-month euro and Danish rates, where the average level in Q3 increased by around 25 basis points versus Q2.

Speaker #3: Three-month NIBOR also continued to increase, and the average level in Q3 was up by 10 basis points versus Q2. In equity markets, the USD-denominated MSCI World Index was 4.7% higher on average quarter-on-quarter, while the OMX40 Nordic Index was 2.7% higher.

Ilkka Ottoila: In equity markets, the USD-denominated MSCI World Index was 4.7% higher on average quarter on quarter, while the OMX Nordic 40 index was 2.7% higher. On the fixed income side, the USD-denominated Bloomberg Global Aggregate Bond Index was 0.6% lower. Remember also to adjust for FX, as our reporting currency is euro. USD versus euro was 1% higher on average quarter on quarter. Further on FX movements, SEK and NOK versus euro are always the key currencies to track. What's relevant for the P&L is the average quarter on quarter development. There, SEK was 2% lower and NOK was broadly stable. So importantly, FX turned into a headwind for income for the first time in a while with a minor tailwind on costs. Moving to net interest income. In Q2, we reported NII of EUR 1.779 billion.

Speaker #3: On the fixed income side, the USD-denominated Bloomberg Global Aggregate Bond Index was 0.6% lower. Remember also to adjust for effects, as our reporting currency is euro.

Speaker #3: USD versus euro was 1% higher on average, quarter-on-quarter. Further on, effects movements and Second NOK versus euro are always the key currencies to track, and what's relevant for the P&L is the average quarter-on-quarter development.

Speaker #3: And there, SEC was 2% lower and NOC was broadly stable. Importantly, effects turned into a headwind for income for the first time in a while, with a minor tailwind on costs.

Speaker #3: Moving to net interest income: In Q2, we reported NII of €1.779 billion, while higher policy rates are expected to support NII over time.

Ilkka Ottoila: While higher policy rates are expected to support NII over time, in the near term, rate increases also create headwinds through higher funding costs and repricing lags due to customer notification periods. The longer-term net effect will also depend on how rate changes affect credit demand, lending margins, and deposit pass-through. Turning to Q3 and the moving parts. For volumes, we recommend looking at system-level data across each market where there are no meaningful changes in recent trends. In Q2, lending and deposit volume growth contributed EUR 78 million to NII, but this was more than offset by lending margin pressure, which had a negative impact of EUR 39 million. Given the ongoing environment and as flagged at our Q2 results, it is reasonable to expect that lending margin pressure seen in previous quarters will continue into Q3. On top of that, there are two items that broadly offset each other.

Speaker #3: In the near term, rate increases also create headwinds through higher funding costs and repricing lags due to customer notification periods. The longer-term net effect will also depend on how rate changes affect credit demand, lending margins, and deposit pass-through.

Speaker #3: Turning to Q3 and the moving parts: For volumes, we recommend looking at system-level data across each market, where there are no meaningful changes in recent trends.

Speaker #3: In Q2, lending and deposit volume growth contributed €28 million to NII, but this was more than offset by lending margin pressure, which had a negative impact of €39 million.

Speaker #3: Given the ongoing environment, and as flagged at our Q2 results, it's reasonable to expect that lending margin pressure, seen in previous quarters, will continue into Q3.

Speaker #3: On top of that, there are two items that broadly offset each other. The 15 basis point mortgage price reduction we announced in Denmark will have a full effect in Q3, amounting to a roughly €15 million headwind quarter-on-quarter.

Ilkka Ottoila: The 15 basis point mortgage price reduction we announced in Denmark will have a full effect in Q3, amounting to a roughly EUR 50 million headwind quarter on quarter. In Norway, the timing of the rate hikes and repricing provides a quarter on quarter uptick of 10 to EUR 50 million. The previous notification period ended mid-July, but the NIBOR movement and September hike partly offset the uptick in Q3. Lending margins continue to be a clear headwind in Q3. Deposit margins benefit from the policy rates. Given the rate hikes in June, Q3 should see some benefit in Denmark and Finland, while our Norway business has a lower deposit to loan ratio than in the other markets and with a relatively low share of transaction accounts in the deposit mix. The September hikes will have only a very limited effect in Q3, but should support Q4.

Speaker #3: In Norway, the timing of the rate hikes and repricing provides a quarter-on-quarter uptick of €10 to €15 million. The previous notification period ended mid-July, but the NIBOR movement and the September hike partly offset the uptick in Q3.

Speaker #3: Lending margins continue to be a clear headwind in Q3. Deposit margins benefit from the policy rates. Given the rate hikes in June, Q3 should see some benefit in Denmark and Finland, while our Norway business has a lower deposit-to-loan ratio than in the other markets, and with a relatively low share of transaction accounts in the deposit mix.

Speaker #3: The September hikes will have only a very limited effect in Q3 but should support Q4. In line with our NII sensitivity disclosures, the deposit hedge is expected to be a modest quarter-on-quarter headwind in Q3 of around €10 million.

Ilkka Ottoila: In line with our NII sensitivity disclosures, the deposit hedge is expected to be a modest quarter-on-quarter headwind in Q3 of around EUR 10 million, reflecting higher shorter short-term rates. Remember that the way the hedge is constructed, we pay the floating short-term rate and receive the fixed long-term rate. Lastly, a few technical items. Day count is expected to contribute around EUR 19 million quarter on quarter, and FX movements provide a headwind for the first time in a while, particularly via the 2% weaker SEK, affecting roughly 30% of our NII. This translates to approximately EUR 10 million headwind. With that, let us continue with net fee and commission income. On net fee and commission income, we reported EUR 880 million in Q2, inclusive of EUR 10 million in semi-annual fees, which will not repeat in Q3.

Speaker #3: Reflecting higher short-term rates. Remember that, the way the hedge is constructed, we pay the floating short-term rate and receive the fixed long-term rate. Lastly, a few technical items.

Speaker #3: Day count is expected to contribute around €19 million quarter-on-quarter, and FX movements provide a headwind for the first time in a while, particularly via the 2% weaker SEK, affecting roughly 30% of our NII.

Speaker #3: This translates to approximately €10 million headwind. With that, let's continue with net fee and commission income. On net fee and commission income, we reported €880 million in Q2, inclusive of €10 million in semi-annual fees, which will not repeat in Q3.

Speaker #3: For savings fees, as previously highlighted, recent market movements, adjusted for effects and asset mix, point to a slightly positive, low single-digit percent effect on average AUM.

Ilkka Ottoila: For savings fees, as previously highlighted, recent market movements adjusted for FX and asset mix point at a slightly positive low single-digit percent effect on average AUM. On brokerage and advisory, we reported EUR 58 million in Q2. Q3 is seasonally slower given the summer months, and the average quarter-on-quarter decrease over the past five years has been 33%. Last year, the seasonal dynamic was different given the tariff turmoil but would expect this year to be in line with normal seasonality. Moving on to net insurance results, which amounted to EUR 78 million in Q2, elevated by lower claims and higher investment results similarly to the quarter before that. The four-quarter average is now EUR 69 million. On net fair value, this year has seen more than the usual volatility.

Speaker #3: On brokerage and advisory, we reported €58 million in Q2. Q3 is seasonally slower, given the summer months, and the average quarter-on-quarter decrease over the past five years has been 33%.

Speaker #3: Last year, the seasonal dynamic was different, given the tariff turmoil, but we would expect this year to be in line with normal seasonality. Moving on to net insurance result, which amounted to €78 million in Q2, elevated by lower claims and higher investment result, similarly to the quarter before that.

Speaker #3: The four-quarter average is now 69 million euro. Then on net fair value, where this year has been more than this year has seen more than the usual volatility.

Speaker #3: In Q1, net fair value amounted to €226 million, driven by extremely volatile market conditions given the developments in the Middle East. The resulting rapid change in interest rate expectations held back our market-making operations in March.

Ilkka Ottoila: In Q1, net fair value amounted to EUR 226 million, driven by extremely volatile market conditions given the developments in the Middle East. The resulting rapid change in interest rate expectations held back our market-making operations in March. Q2 was stronger than normal. In Q3, the hawkish remarks that accompanied the ECB's September hike drove another upward shift in rate expectations, and that is expected to again weigh on Q3 market-making result in rates. That, combined with the usual seasonal slowness in the summer months, means you should expect a lower-than-usual net fair value result in the quarter, likely towards the lower end of the normal EUR 200 to EUR 250 million range. On costs, first, as a reminder, Q2 included EUR 8 million expense for the fee related to the interest-free deposits in Sweden, which is booked annually.

Speaker #3: Q2 was stronger than normal. In Q3, the hawkish remarks that accompanied the ECB's September hike drove another upward shift in rate expectations, and that is expected to again weigh on Q3 market-making results in rates.

Speaker #3: That, combined with the usual seasonal slowness in the summer months, means you should expect a lower-than-usual net fair value result in the quarter, likely towards the lower end of the normal €200 to €250 million range.

Speaker #3: Then, on costs, first as a reminder, Q2 included an €8 million expense for the fee related to the interest-free deposits in Sweden, which is booked annually.

Speaker #3: In Q2, we saw the partial effect of salary increases in most countries, which increased staff costs. In Q3, we will observe some of the tail effects of those increases, as many of them took place in May, with further impact from Danish salary increases starting in July.

Ilkka Ottoila: In Q2, we got the partial effect of salary increases in most of the countries, which increased staff costs. In Q3, we will see some of the tail effects of those increases, as many of them took place in May, with further effect from Danish salary increases from July. You should also note the increase in depreciation and amortization seen in the past couple of quarters and factor that into your estimates. On a more technical topic, as previously flagged, from Q3, we will see an impact from the Norwegian VAT change that will add roughly EUR 10 million of costs per quarter. This will be a headwind on costs quarter on quarter in Q3. To sum up costs, expect to be slightly up quarter on quarter. In terms of loan losses, our credit quality remains very strong.

Speaker #3: You should also note the increase in depreciation and amortization seen in the past couple of quarters and factor that into your estimates. On a more technical topic, as previously flagged, from Q3 we will see an impact from the Norwegian VAT change that will add roughly €10 million of costs per quarter.

Speaker #3: So this will be a headwind on costs quarter-on-quarter in Q3. To sum up, costs are expected to be slightly up quarter-on-quarter. In terms of loan losses, our credit quality remains very strong.

Speaker #3: As we have said before, given that the management judgment buffer has been fully deployed earlier this year, it is reasonable to expect a generally higher loan loss level than in previous quarters, somewhat closer to our long-term expected level of 10 basis points.

Ilkka Ottoila: As we have said before, given that the management judgment buffer has been fully deployed earlier this year, it is reasonable to expect a generally higher loan loss level than in previous quarters, somewhat closer to our long-term expected level of 10 basis points. One area worth mentioning, a topic that has been quite heavily in the press in Denmark, is the pressure on Danish pig farmers. We have some exposures here as part of our agricultural portfolio. That may add to the provisioning need, but loan losses should stay well within the 10 basis points. On taxes, in Q2, our tax rate was 23.4%, slightly down from 23.9% in Q1, and expect similar levels going forward. Then finally on capital, our CET1 requirement stood at 30.8% at the end of Q2, and the Q2 CET1 ratio was 15.7%.

Speaker #3: One area worth mentioning—a topic that has been quite heavily in the press in Denmark—is the pressure on Danish pig farmers. We have some exposures here as part of our agricultural portfolio.

Speaker #3: That may add to the provisioning need, but loan losses should stay well within the 10 basis points. And on taxes, in our Q2, our tax rate was 23.4%, slightly down from 23.9% in Q1, and we expect similar levels going forward.

Speaker #3: Then finally, on capital, our CET1 requirements stood at 13.8% at the end of Q2, and the Q2 CET1 ratio was 15.7%. In the first half of the year, we have deployed generated capital into profitable growth.

Ilkka Ottoila: In the H1 of the year, we have deployed generated capital into profitable growth. We commented that we saw a strong pipeline into the H2 and would prioritize deployment of capital for growth and expect similar dynamics to continue as in the H1. In addition, the market volatility, seen particularly in rapid change in interest rates, may push up a market risk RWA. Finally, a reminder that in mid-August, Nordea distributed a mid-year dividend of EUR 0.34 per share. Corresponding to approximately 50% of the net profit for the six-month period ending 30 June 2026. This reduces the average equity during Q3, which is used in the ROE calculation. To close off, as said, our Q3 reports will-

Speaker #3: We commented that we saw a strong pipeline into the second half and would prioritize deployment of capital for growth and expect similar dynamics to continue as in the first half.

Speaker #3: In addition, the market volatility, particularly in rapid changes in interest rates, may push up market risk. And finally, a reminder that in mid-August, Nordea distributed a mid-year dividend of €0.34 per share, corresponding to approximately 50% of the net profit for the six-month period ending 30th of June 2026.

Speaker #3: This reduces the average equity during Q3, which is used in the ROE calculation. And to close off, as said, our third-quarter report will...

Speaker #1: You are allowed to unmute. To unmute yourself, press star.

Operator: You are allowed to unmute. To unmute yourself, press star 6.

Speaker #2: 6.

Speaker #3: The 5th of October. So if you have further questions, feel free to contact us before then. And now let's move over to Q&A. Magnus, I think you are number one.

Ilkka Ottoila: The 5 October. If you have further questions, feel free to contact us before that. Now let's move over to Q&A. Magnus, I think you are number 1.

Speaker #4: Yes, hi, good afternoon. Just first of all, on the net fair value—as you guided now in Q3 towards the lower end of the 200 to 250 range—do you still guide for roughly $1 billion for the full year of '26?

[Analyst] (ABG Sundal Collier): Yes. Hi, good afternoon. Just first of all, on the net fair value as you guide it now in Q3 towards the lower end of the EUR 200 to 250 million range, do you still guide for roughly EUR 1 billion for the full year of 2026? Secondly, on capital, I was just wondering whether there will be any regulatory impact on risk-weighted assets quarter on quarter. For example, you mentioned in the Q2 report you talked about the Danish systemic risk buffer for exposure to commercial real estate. Secondly, we have this EUR 4 to 6 billion, of which 50% should come in 2026 and the rest in 2027. I think we got EUR 1.6 billion in Q1. If there's anything impacting Q3.

Magnus Andersson: Yes. Hi, good afternoon. Just first of all, on the net fair value as you guide it now in Q3 towards the lower end of the EUR 200 to 250 million range, do you still guide for roughly EUR 1 billion for the full year of 2026? Secondly, on capital, I was just wondering whether there will be any regulatory impact on risk-weighted assets quarter on quarter. For example, you mentioned in the Q2 report you talked about the Danish systemic risk buffer for exposure to commercial real estate. Secondly, we have this EUR 4 to 6 billion, of which 50% should come in 2026 and the rest in 2027. I think we got EUR 1.6 billion in Q1. If there's anything impacting Q3.

Speaker #4: And secondly, on capital, I was just wondering whether there will be any regulatory impact on risk-weighted assets quarter-on-quarter. For example, you mentioned in the Q2 report, you talked about the Danish systemic risk buffer for exposure to commercial real estate.

Speaker #4: And secondly, we have this €4–6 billion, of which 50% should come in '26 and the rest in '27. And I think we got €1.6 billion in Q1. If there's anything impacting Q3,

Speaker #3: Yeah, the 50% this year and the rest next year—I don't actually recognize that, but to put that aside, we got some benefit in the first half of the year from the retail model remediation.

Ilkka Ottoila: Yeah. The 50% this year and the rest next year, I don't actually recognize. To put that aside, we got some benefit in the first half of the year from the retail model remediation. We haven't really commented on the other ones apart from probably 2027 more than 2026. No other things to flag on the capital front as of now. On the fair value side, we talk about fair value being a EUR 1 billion a year line for us annually, and that's under normal years. I think what is worth highlighting there is that Q1 was quite extraordinary. Q1 and Q2 usually are the highest net fair value quarters as well, when the customer activity tends to be higher.

Speaker #3: We haven't really commented on the other ones apart from, you know, probably '27 more than '26. But no other things to flag on the capital front as of now.

Speaker #3: Then, on the fair value side—yeah, we talk about fair value being a €1 billion a year line for us annually. And that's under normal years.

Speaker #3: I think what is worth highlighting here is that Q1 was quite extraordinary. Q1 and Q2 are usually the quarters with the highest net fair value as well, when customer activity tends to be higher.

Speaker #3: So, with Q1 being hit with the market turmoil, and as said, Q3 also has similar dynamics, then probably that makes this a slightly unusual year from a net fair value perspective.

Ilkka Ottoila: With Q1 being hit with the market turmoil, as said, Q3 also has similar dynamics, then probably that makes this a slightly unusual year from a net fair value perspective. That probably is the take, and we can touch on that of course later as we see how Q4 develops. That would probably be the high level take on that.

Speaker #3: That probably is to take, and we can touch on that, of course, later as we see how Q4 develops. But that would probably be the high-level take on that.

Speaker #4: Okay, thank you. And then just finally, will you come with the new hedge guidance in conjunction with the Q3 report, given that short-term rate expectations have changed during the quarter?

[Analyst] (ABG Sundal Collier): Okay. Thank you. Then just finally, will you come with the new hedge guidance in conjunction with the Q3 report, given that short-term rate expectations have changed during the quarter?

Magnus Andersson: Okay. Thank you. Then just finally, will you come with the new hedge guidance in conjunction with the Q3 report, given that short-term rate expectations have changed during the quarter?

Speaker #3: We will probably provide the usual update to the sensitivity, where also the hedge is a part of it. But you're right, when the short-term rates move up, like we have seen now—and given we pay the short-term leg on the hedge—then that creates some headwind. Of course, this is probably a bit more than offset by the deposit margin benefit that does come in.

Ilkka Ottoila: We will probably provide the usual update to the sensitivity where also the hedge is a part of. But you are right that when the short-term rates move up like we have seen now, and given we pay the short-term leg on the hedge, then that creates some headwind, which of course, is probably a bit more than offset by the deposit margin benefit that does come in. But of course, that is also dependent on pricing actions and competition as such.

Speaker #3: But of course, that's also dependent on pricing actions and competition, as such.

Speaker #4: Yeah, but that will be the case in Q3, right? That the deposit margin impact exceeds the negative hedge impact.

[Analyst] (ABG Sundal Collier): Yeah. But that will be the case in Q3, right? That the deposit margin impact exceeds the negative hedge impact.

Magnus Andersson: Yeah. But that will be the case in Q3, right? That the deposit margin impact exceeds the negative hedge impact.

Speaker #3: I think that would be a fair assumption—that it should be a little bit better than the hedge impact—but that's correct.

Ilkka Ottoila: I think that would be a fair assumption, that it should be a little bit better than the hedge impact. That is correct.

Speaker #4: Yeah, okay, thank you.

[Analyst] (ABG Sundal Collier): Okay. Thank you.

Magnus Andersson: Okay. Thank you.

Speaker #3: Thanks, Magnus. Sophie, go ahead.

Ilkka Ottoila: Thanks, Magnus. Sophie, go ahead.

Ilkka Ottoila: Thanks, Magnus. Sofie, go ahead.

Speaker #2: Yeah, hi. Thanks a lot for taking my question. So my first question would be, on the deposit hedge that you have, some other European banks have guided for mark-to-market impacts in the OCI.

[Analyst]: Yeah. Hi. Thanks a lot for taking my questions. My first question would be on the deposit hedge that you have. Some other European banks have guided for mark-to-market impacts in the OCI from some of the hedges or swaps that they have in place. Is this something we should be mindful of for Nordea?

Sofie Peterzens: Yeah. Hi. Thanks a lot for taking my questions. My first question would be on the deposit hedge that you have. Some other European banks have guided for mark-to-market impacts in the OCI from some of the hedges or swaps that they have in place. Is this something we should be mindful of for Nordea?

Speaker #2: From some of the hedges or swaps that they have in place, is this something we should be mindful of for Nordea?

Speaker #3: On the deposit hedge itself, that is within net interest income.

Ilkka Ottoila: On the deposit hedge itself, that is within net interest income.

Speaker #2: I know, I mean, like, how is it—is it available for stay? Will there be any negative mark-to-market impacts on your capital from higher rates?

[Analyst]: I know. I meant like how is it available for, say, will there be any negative mark-to-market impacts on your capital from higher rates, from the deposit hedge that you have or any bonds that you hold on your balance sheet?

Sofie Peterzens: I know. I meant like how is it available for, say, will there be any negative mark-to-market impacts on your capital from higher rates, from the deposit hedge that you have or any bonds that you hold on your balance sheet?

Speaker #2: From the deposit hedge that you have, or any bonds that you hold on your balance sheet?

Speaker #3: So, from the deposit hedge, no. Those are purely kind of swaps, or interest rate swaps. So then, as said, the impact there comes through in the NII line, as such.

Ilkka Ottoila: From the deposit hedge, no. Those are purely swap or interest rate swaps. As I said, the impact there comes through in the NII line as such. On other instruments held, I am not 100% sure, so I probably will not go into that lane. But there shouldn't be a tremendous amount of volatility that necessarily comes from that side as such. But I am not able to provide you a good steer on that one, unfortunately.

Speaker #3: Then, on other instruments held, I'm not 100% sure, so I probably will not go into that lane. But there shouldn't be a tremendous amount of volatility that necessarily comes from that side as such.

Speaker #3: But I'm not able to provide you with a good steer on that one, unfortunately.

Speaker #2: Okay. And then my second question would be, on the AML case that has been going on for some time in Denmark, could you just remind us if the case has closed, how much provisions you have against the case, and what the next steps are?

[Analyst]: Okay. My second question would be on the AML case that has been going on for some time in Denmark. Could you just remind us if the case has closed and how much provisions you have against the case and what the next steps are?

Sofie Peterzens: Okay. My second question would be on the AML case that has been going on for some time in Denmark. Could you just remind us if the case has closed and how much provisions you have against the case and what the next steps are?

Speaker #3: So, in terms of provisioning, we've only provided the commentary back in 2019 when we quantified that. And since then, we've provided commentary that we believe is adequate for AML matters.

Ilkka Ottoila: Provisioning, we have only provided the commentary back in 2019 when we have quantified that. Since then, we have provided commentary that we believe that it is adequate for AML matters. That I will leave at that. On the case itself, the proceedings are coming to an end, I think, during the fall at some point. There should be a kind of verdict that comes out. Timing I do not have yet, but it should be during the fall. What happens post that, I think remains to be seen. It could well be that, as you know, there are multiple levels of courts in Denmark as well, so depending on the outcome, I think there is a possibility of appeals as well. It could go on for quite some time, but we will see that when we have the verdict and more information following that.

Speaker #3: So, I'll leave it at that. On the case itself: the proceedings are coming to an end. I think during the fall, at some point, there should be a verdict that comes out. The timing I don't have yet.

Speaker #3: But it should be during the fall. Then, on what happens after that, I think remains to be seen. So it could well be that, you know, as you know, there are multiple levels of courts in Denmark as well.

Speaker #3: So, depending on the outcome, I think there's a possibility of appeals as well, so it could go on for quite some time. But we will see that when we have the verdict and more information following that.

Speaker #3: But during the fall, at some point, is there any expectation on that?

Ilkka Ottoila: But during the fall at some point is the expectation on that.

Speaker #2: Okay, okay. And then, just a final question on deposits. You haven't done any repricing? You're not paying for any current account deposits in any of your markets, right?

[Analyst]: Okay. Then just final question. On deposits, you have not done any repricing, you are not paying for any current account deposits in any of your markets, right?

Sofie Peterzens: Okay. Then just final question. On deposits, you have not done any repricing, you are not paying for any current account deposits in any of your markets, right?

Speaker #3: I think we still remunerate transaction accounts in Finland, but with a lower rate. But we haven't made changes to the transaction account pricing as such.

Ilkka Ottoila: I think we still remunerate transaction accounts in Finland, but with a lower rate, but have not made changes to the transaction account pricing as such. There are, as usual, some changes, of course, in the term deposits and some other changes, minor changes in the savings deposits. I think probably we are fair to say that probably Norway, the pricing activity has been most active. But the full list of pricing changes I do not have here right now, but you can find those on the web pages.

Speaker #3: There are, as usual, some changes, of course, in the term deposits, and some other minor changes in the savings deposits. I think it's probably fair to say that Norway's pricing activity has been the most active. The full list of pricing changes—I don't have it here right now—but you can find those on the web pages as well.

[Analyst]: And in Norway, have you seen any easing of the price competition, or is it equally fierce as during Q2?

Sofie Peterzens: And in Norway, have you seen any easing of the price competition, or is it equally fierce as during Q2?

Speaker #2: And in Norway, have you seen any easing of the price competition, or is it equally fierce as during the second quarter?

Ilkka Ottoila: Continues to be fierce. I think that is the overall take on Norway.

Speaker #3: Continues to be fierce. I think that is the overall take on Norway.

[Analyst]: Great. Thank you so much.

Sofie Peterzens: Great. Thank you so much.

Speaker #2: Great. Thank you so much.

Speaker #3: Thanks, Sophie. Namita, go ahead.

Ilkka Ottoila: Thanks, Sophie. Namita, go ahead.

Ilkka Ottoila: Thanks, Sofie. Namita, go ahead.

[Analyst] (Barclays): Hi, Ilkka. Thanks for taking my questions. Just the first one. On the net interest income, you guys have this line equity margin. I just assume for Q3, that will be a positive impact, right? That's just the interest on equity.

Namita Samtani: Hi, Ilkka. Thanks for taking my questions. Just the first one. On the net interest income, you guys have this line equity margin. I just assume for Q3, that will be a positive impact, right? That's just the interest on equity.

Speaker #1: Hi, Ilkka. Thanks for taking my questions. Just the first one on net interest income: you guys have this line, 'equity margin.' I just assumed for Q3 that will be a positive impact, right?

Speaker #1: Like, that's just the interest on equity.

Ilkka Ottoila: Correct. It should be a positive impact in terms of the effect. Sorry, not the effects, but the rate changes themselves. What partly probably offsets that is the fact that we have the dividend payment in mid-August, which reduces equity, of course. So that is an offset to that.

Speaker #3: Correct, it should be a positive impact in terms of the effect. Sorry, not the effects, but the rate changes themselves. What partly probably offsets that is the fact that we have the dividend payments out in mid-August, which reduces equity, of course.

Speaker #3: So, that is an offset to that.

[Analyst] (Barclays): Okay, cool. That is helpful. And just my other question. I'm just a bit confused what's going on with the share buyback. Are you allowed to say anything there?

Namita Samtani: Okay, cool. That is helpful. And just my other question. I'm just a bit confused what's going on with the share buyback. Are you allowed to say anything there?

Speaker #1: Okay, cool. That is helpful. And just my other question, I'm just a bit confused about what's going on with the share buyback. Are you allowed to say anything there?

Speaker #3: No, I'm not sure how much confusion there is, but we've seen a lot of growth opportunities in the market, like we've commented in the last couple of quarters.

Ilkka Ottoila: I'm not sure how much confusion there is, but we've seen a lot of growth opportunities in the market, like we've commented in the last couple of quarters, and repeating what we said last quarter. The growth we're seeing is profitable. We think it makes sense. When we look at our capital deployment approach, it's always been the case that we prioritize growth. Organic growth is top of the list. Inorganic opportunities are of interest, and buybacks is a tool for us to trim excess capital when we have excess capital. So no changes to the way that we think about the priorities in terms of capital deployment or overall. So that continues to be the case.

Speaker #3: And, repeating what we said last quarter, you know, the growth we're seeing is profitable. We think it makes sense. And when we look at our capital deployment approach, it's always been the case that we prioritize growth.

Speaker #3: Organic growth is top of the list. Inorganic opportunities are of interest, and buybacks are a tool for us to trim excess capital when we have excess capital.

Speaker #3: So, no changes to the way that we think about the priorities in terms of capital deployment overall. So, that continues to be the case.

[Analyst] (Barclays): Okay, thank you.

Namita Samtani: Okay, thank you.

Speaker #1: Okay, thank you.

Speaker #3: Thanks, Namita. Ricardo, go ahead.

Ilkka Ottoila: Thanks, Namita. Riccardo, go ahead.

Speaker #4: Thanks, Ilkka, for taking my question. Just a quick one. The interest rate scenario that you used when you presented your 2030 targets looks extremely different than the one today. The one today seems to be more— I mean, rates are definitely higher than what's plugged in one of your slides.

[Analyst] (Mediobanca): Thanks, Ilkka, for taking my question. Just a quick one. The interest rate scenario that you used when you presented your 2030 targets looks extremely different than the one today. The one today seems to be more Rates are definitely higher than what was plugged in one of your slides. Life never goes according to plans. You've never really given any indication about midterm targets 2027 or 2028. But given the situation seems to be so different from what you have depicted in your macro assumption slide, are you thinking about giving an indication of what might be something in between without waiting for 2030? Is that something that you're thinking about?

Riccardo Rovere: Thanks, Ilkka, for taking my question. Just a quick one. The interest rate scenario that you used when you presented your 2030 targets looks extremely different than the one today. The one today seems to be more Rates are definitely higher than what was plugged in one of your slides. Life never goes according to plans. You've never really given any indication about midterm targets 2027 or 2028. But given the situation seems to be so different from what you have depicted in your macro assumption slide, are you thinking about giving an indication of what might be something in between without waiting for 2030? Is that something that you're thinking about?

Speaker #4: I mean, I've never closed according to plans. You have never really given any indication about mid-term targets—'27 or '28. But given the situation seems to be so different from what you have depicted in your macro assumption slide, are you thinking about giving an indication of what might be something in between, without waiting for 2030?

Speaker #4: Is there something that you're thinking about?

Ilkka Ottoila: I think we've committed. First of all, I think, Riccardo, you're right to note that we used the forward curves back at that time, and they did point upwards a little bit. I think it has moved a little bit higher than what those indicated. Agree on that. In terms of the guidance as such, what we committed to do is that we'll provide the usual kind of full year guidance, next full year guidance as we go through the strategy period. In terms of something midterm, I haven't really thought about it as such. We clearly put our stake on the ground in terms of 2030. That's the long-term target that we're going after, and then annually, we'll provide a view to the shorter term. Like you say, things change around quite quickly, especially those things that you cannot control.

Speaker #3: I think we've committed. First of all, Ricardo, I think you're right to note that we used a forward curve back at that time, and they did point upwards a little bit.

Speaker #3: I think it has moved a little bit higher than what those indicated, so I agree on that. In terms of the guidance as such, what we committed to do is that we'll provide the usual kind of full-year guidance—next full-year guidance—as we go through the strategy period.

Speaker #3: In terms of something mid-term, I haven't really thought about it as such. So, we clearly put our stake in the ground in terms of 2030.

Speaker #3: That's the long-term target that we're going after. And then, annually, we'll provide a view of the shorter term. And like you say, things can change quite quickly.

Speaker #3: Especially those things that you cannot control. So it's always a little bit difficult to assess how those have an effect. But we will see as we go along.

Ilkka Ottoila: It is obviously a bit difficult to assess how those have an effect, but we will see as we go along.

Speaker #4: Okay. But from your answer, Ilkka, my understanding is that, I mean, you have your 2030 targets outstanding, and that the 2030 will stay. I mean, what rules is 2030?

[Analyst] (Mediobanca): Okay. But from your answer, Ilkka, my understanding is that you have your 2030 targets outstanding, and the 2030 will stay. What rules this 2030?

Riccardo Rovere: Okay. But from your answer, Ilkka, my understanding is that you have your 2030 targets outstanding, and the 2030 will stay. What rules this 2030?

Ilkka Ottoila: In the past, if we look at how we have set the targets, we have had a longer-term target, and then, of course, guidance or outlook for the future year. That probably is a decent way of thinking about it going forward as well.

Speaker #3: In the past, if we look at how we've set the targets, we've had a longer-term target, and then, of course, guidance or outlook for the future year.

Speaker #3: And that probably is a decent way of thinking about it going forward as well.

[Analyst] (Mediobanca): Fair enough. Thank you.

Riccardo Rovere: Fair enough. Thank you.

Speaker #4: Fair enough. Thank you.

Ilkka Ottoila: All right. Super. Thank you for the questions, and thank you, everyone, and we will speak in a bit more than two weeks' time. Until then.

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