Sparebanken Vest

A warm welcome to the first quarter presentation from Sparbanket Vest. If you have any questions that you would like us to address at the end of this presentation, please send them to this email address that you see in this light image that is first in the presentation. Initially, I thought I would draw some reasoning on what strategic foundation we work with at Sparbanket Venst to deliver a stable and good return over time on the equity we manage. We are concerned about being a bank with low complexity. We only do what we think we can do best. We are concerned about being at the forefront of the break-in time we are in when it comes to digital digital services there, and over time we are concerned about being a bank that has a conservative loan book, and is relatively well positioned when it comes to loss performance. This will give a high capital return over time, and we also have a very large investment in leadership development and culture building, which makes it possible for us to attract the best people to our bank who want to be part of our project, which is to create one of Norway's best savings banks. To underline this a little bit, I would like to point out that our history is good when it comes to losses. We are careful, we are very selective on what we load on board when it comes to new engagements, and are concerned about having a very profitable loss process and a conservative loan book over time, something this slide indicates that we have also delivered on in recent years. Our losses are in this quarter low, 17 million, but if we look at our loss history over time, through this pandemic, we have been careful, and a good part of what we have taken from loss costs throughout the previous quarter have also been model-based investments to build a robust starting point for a more uncertain future. Now we are concerned that we should not spread too widely. We should focus on what we can do best, and that is to drive out loans to companies and personal marketers. It is to sell insurance, drive insurance, because insurance has been a great success for us. It is to drive property management and also to get synergies between property management and our personal market division, especially. And then there is Brage Finans, which is a leasing company and a financing company that we have built over time, which also promises very good when it comes to contributing to the bank's own capital transfer over time. Over time, this has meant that we have been on the front line in terms of net capital spending, and it is our clear ambition that we will continue to be at this level when it comes to relative performance, when it comes to spending on net capital in Sparbanken Vest. And then we see that this is perhaps the most important character book when it comes to how it succeeds in digital exchanges. The mobile bank is instrumental in the behavior of the personal market segment, and Google Pay and App Store ratings are the most important character book when it comes to what customers think about our digital platform. We are still at the top when it comes to digital user experience. This quarter, we intend to invest further north. We will establish an office for the first time with 10 years of work in Ålesund, as the starting point for further investment in this region. We will come back to that later in the presentation, but we experience that it is an attractive market. We experience that there are customers who are similar to the customers we have in the other two regions. We are quite sure that we will be able to implement that market area. It is very exciting through the investment that we are now moving towards. A little bit about the first quarter, a little bit about banking, a little bit about our credit risk and a little bit about our market position as the starting point for creating good and attractive capital gains. This will be the main focus of my presentation. In the first quarter, we are at 13.1. We had some one-time effects in Q4 last year, so we are at 18.2. But as you know, our one-capital-discount goal over time is to achieve a one-capital-discount of 12%. We have a result per capita in the first quarter of 2.5 kroner. We have a very good capital coverage. We have a good starting point for further growth. We have a pure core capital coverage of 18.5. And we have a recorded value per capita in the first quarter of 63.20 kroner. If we look at the development from Q1 last year to Q1 this year, it is a development characterized by low losses and particularly good cost discipline. We have a cost level in Q1 compared to last year, which is 30 million lower, and that includes, for example, our investment in Bulda Bank, which is implicit in these figures. There is no doubt that there is pressure on the interest rate netto. We have a lower interest rate netto than we had in the first quarter last year. So the provision revenues are rising. The business is doing better. Finance is up. Costs are up. And then we have a more profitable period compared to what was the first quarter last year, where the uncertainty with the start of the quarter was significant due to the pandemic. The interest rate net has been under pressure. We are pleased that we have received the effect that we did not see in the previous quarter, linked to repricing. Despite our pressure on the interest rate net, we have managed to maintain a stable interest rate net from the fourth quarter to the first quarter this year. The relative interest rate net has increased from 1.35 to 1.42, as you can see on the right in this picture. Økt Nibor contributes to the positive income margin and the negative loan margin, as you can see here. We have also implemented the margin-improving measures that we indicated last quarter, which would have an annual effect of about 100 million kroner. We have a good underlying growth. The 12-month growth on the personal market is 7.2. The 12-month growth on the operating market is a little lower. We have a goal this year of a foreign growth on the personal and operating markets, X bull there, at about 5%. And we believe that we will be able to lie close to or a little above those growth goals when we are finished this year. We have a very good pipeline on the operating market, which makes us quite confident that we will be able to achieve growth goals there at 5% with good quality. And we also have a very good drive in the personal market division in the last, including bulls, but also exclusive bulls, which makes us believe that we will be able to meet our goal set growth goal. And then there is what we have always said, we will not sacrifice profitability for growth. For us, the most important goal every time is to have a robust and good drive and a good one-capital cast. You can see the revenue growth here. The 12-month growth on the personal market is 5.7, and the 12-month growth is 2.8 on the business market, and we see that we have a relatively good growth also on the revenue side. One of the things we have seen a clear development in the last few quarters is that the growth in savings and placement is significant, and we have also grown significantly when it comes to savings and placement. Now we have a maintenance value for our customers of 15.8 billion. which is significantly up and also up in relation to the value development that we have seen in the last. We have a profitable net and new drawing, especially in the last four quarters, we have seen a very good inflow when it comes to alternative savings with our customers through Sparbanken Mest. We are very concerned about cost development. The foundation for being competitive in price is to have control over costs and work in line with cost development over time. We are a bank that has managed to move away from these large projects that will have very big effects on the results of bettering the measures. We have continuously worked with our costs. That means we have achieved results. As you can see, we have lower costs in 2020 than we had in 2012. In the first quarter of this year, we are 30 million lower than in the first quarter of last year. For example, Bulda Bank. In the first quarter of this year, we have about 15 million in costs. That is absorbed into the flat cost development, so we can make new investments without increasing our costs and our thoughts as well. to manage the investments in Ålesund without us getting a nominal cost increase in 2021. We have a significant margin for regulatory requirements, as you can see, and as I mentioned earlier, 18.5. Now we will probably see that the motorcycle buffer will gradually rise and so on, so our headroom is not as large as it can be indicated here, but we have a very comfortable position when it comes to capital coverage and have a very good starting point also to grow further within the framework of the regulatory regime when it comes to capital requirements for Sbarbanken Vest. Frende is doing very well. We have a very good year ahead of us, and we are also in a very good development. If you look at the damage rate in this quarter compared to last year, we have a significantly lower damage percentage and a very good underlying drift. We also have a good stock development, and we are also very happy that the Local Bank Alliance also chose a new Distributors for insurance, and we see that it is with adding new distribution power and new givers in our collaboration with a number of other independent savings banks in Norway. Brage Finance has lived a little shorter than before and was established a little later, but we also see that we have a significant growth here. We have a growth of 20.5 percent in the last 12 months. We have been very successful in taking market share into this market. And Brage, for example, participates in our investment in Ålesund, and also sees a little further north of our own part. And we have some self-tapping in 2020 at 9.8, and we are very concerned about lifting this company through good top-line growth up to what is our self-tapping requirement, which is 12%. To sum up the key words, there is net net pressure, but stable from last quarter. We also see increased customer mobility and working hard to get growth with good magic. It's the art today. Getting growth alone is not very difficult, but growth with good magic We see that we have a strong cost development and will continue to work very well on keeping the cost development in check. It will not be through large projects, but we have, in terms of management and culture, come many steps in recent years when it comes to working with continuous improvement. The losses are low. 17 million is significantly lower than it was in the first quarter last year, where the uncertainty was significantly greater. It is worth noting that a lot of our revenues are model-based deductions. We have actually reduced individual deductions in the quarter and very low confirmed losses. Our result is 613 million in advance tax, which gives a one-capital discount of 13.1. I should add that if we remove the tax effect on customer exchange, we have a one-capital discount in the first quarter of around 11%. A little about the credit risk and our loan book. As I said, we are a bank that is engaged in delivering good, but stable, one-capital spending over time. Predictability is important for us. Therefore, we have a conservative loan book. 99% of the loans to the personal market are housing loans, and 75% of the collected loans are for the personal market, and we have 25% on a well-diversified loan book on the operating market. When it comes to geography, we have been very concerned about lending money to the region we know, and we have made one exception, and that is Bulda Bank, which is national, and therefore the rest of Norway will increase a little over time for Sparbank Invest, but there it is so that we only lend within 75% of LTV, so we are very concerned that we should have a very low risk of what we do outside our two counties earlier, and now the three counties that we define as our primary market. We also think that we have a very good development and a very conservative profile when it comes to our personal market payments. 95.4% is within 70% LTV. We also think that the value that lies at the bottom of this LTV is moderate in our region. If you look at housing price development in the last five years, there is no doubt that in relation to, for example, Oslo, we think that our region has had a healthy and good price development that has not led to unnatural imbalances in the housing market or a high fall. And then I can just mention that the freedom of expression has increased a little, but for us it is reassuring to see that the freedom of expression that has increased a little in the last few quarters is primarily due to low LTV. If we look at over 60% of LTV here, you can see that it has been a relatively stable development from the third quarter last year. The most important thing is the flexibility in the business market portfolio. You can see that we have a very moderate volume in flexibility, and the volume is actually a little lower than it was before the pandemic, which is also an indicator that we have a safe and good business market portfolio in the macro picture we see. Offshore exposure has been demanding in recent years for all banks. Most banks have taken deductions to reach a level of deductions that reflects what one thinks is the risk in that portfolio. We have had a very moderate exposure to offshore, and we are reducing this exposure in the running according to what is happening in the market. We have three and nine engagements that have been introduced in recent quarters, and now we are under one billion in exposure to this segment. We have six customers, and as you can see here, a good part of these customers also pay full fees where we are now. In addition, we have a robust rate of return of 23.8% on this portfolio, which means that there is nothing that indicates that we would get big surprises here or big loss costs as we see it in the coming time. Moderate portfolio, good rate of return, and many customers who still pay full fees in this portfolio, and as I said, came under 1 billion. i siste kvartal, gjennom salgaskip, for example. Yes, so there is a little bit of lost and lost engagement. This is primarily due to the fact that we have implemented new definition of loss. So a marginal increase here, but nothing that worries us. And it is also worth noting that when it comes to this portfolio, we have a rate of return in Sparbank Invest at 69.5% in relation to lost returns, and that is a high percentage and a conservative approach to lost and lost engagement. We have had a decline in individual occupations. Over time, we have increased in model-based occupations. We have a conservative approach when it comes to occupations within the framework. As you can see, we have increased model occupations. through these quarters to have a robust starting point for possibly a more uncertain macro picture. We are very pleased that the individual declines are significantly lower and actually at a level with the first quarter of 2020, and not much more than we were before the pandemic. The top cost was 17 million in the quarter. It is down from the quarter we have had earlier in the pandemic. We have not had a very high loss level in Sparmonke Vest at some point in the pandemic. We are very pleased with that. Finally, the basis for strengthening the bank further is to manage a good customer growth with good margin. I will share some views at the end. We have a good value proposal that we will come up with. We will share a little view of Burla Bank. We will share a little about our strategic agendas linked to the Møstnum Battle Sprints that we now have. A little about sustainability, which is incredibly important for us. And of course, It's a topic that everyone is concerned about. It's more about our investment in Sunnmøre, about our customer base, which we have paid out in this quarter for the second year in a row, and a little about our social commitment and the unique opportunity we have to build a position through the ownership that Sparbank Invest has, which we think is very profitable, with 40% of equity and 60% of basic fund capital. This means that we have good liquidity in our evidence, while we can maintain customer exchange and gifts with a fairly large turnover. Our value proposal that will separate us from the competitors is simple. We have been working on this in the organization and in the market for a long time, and we see how it works. We are going to separate ourselves especially on four things that should be as good as the competitors on the other. We are going to have a personal signature through our signature principles, which I will show you a picture of later, that will separate us from the competitors. We are going to be right in front of the digital space. That's why we have an ecosystem at Sparbank Invest on 140 years of work that only works with innovation and the development of the digital space. We should have a social commitment that differs from the other banks in our region. We should care a little more about how it goes with this region. We are inseparably linked to this region when it comes to result development. Customer exchange should also distinguish us from our competitors. We are the largest bank in Norway that has customer exchange and perhaps also the largest that has reason to pay customer exchange. We have worked very precisely to clarify what increased customer orientation means. For us, increased customer orientation is these six things. Show that you care, make it easy for the customer, give the customer clear advice, tell them what they can expect, update them along the way in the loan process and other things, and then we will keep what we promise. This we work very well with operationalize in our customer areas, and that also makes us have had a very beneficial development in customer satisfaction over time. On the personal market, we are very well on, and that is the highest level with 76-75, which we have had since we started to measure this at the end of the 90s. And on the last EPSI measurement, which measured customer satisfaction on the business market, it was only the EICA group that was ahead of us when it came to customer satisfaction on the business market. Buller Bank is an investment that we are very interested in. It runs out of the ecosystem that we have had most in IT, where we have had a very good mobile bank over time, where we have discussed how we can to exploit the mobile bank at a national level. That was the starting point for Bulda Bank. And we see that Bulda Bank, especially in April, although it is not necessarily included in the growth figures that we have just been talking about, we see that we have had a lot of pressure around the transactions that have been announced and are working with in the banking market lately. So now we have a crazy move on Buller Bank, and we have prioritized quite a lot in the bank to be able to take the growth that we see lying there for Buller Bank, and for the time being, we are conservatively considering that we are at about 10 billion abroad, and we believe that this will also grow significantly in the coming months. We have 15,000 customers. The knowledge will come back to have increased significantly in the course of April for Bulda Bank. And we have a very moderate LTV. The average LTV in Bulda is 40%, which indicates a very low risk profile. Something, as I said, we were concerned about on one of the previous slides. We have had a significant rise in April, very visible in the media, and we see that Buller, the brand now, has a national knowledge of 28%, has had a significant rise over the past month. We were worried about cannibalization when we launched this concept. What we see is that we have managed to correct the concept towards Osloviken and urban areas in Norway. And we see that the cannibalization of our own customers is only 3.6%, which is significantly lower than what we had in the business case when we shipped Bull. And we work very targeted, not only to remove the traffic we have now, but also to ensure that we have in place in the Mobile Bank, Norway's simplest user experience within a broad financial spectrum. What remains now, and which we are open to, out to the customers. We share the roadmap for development and we involve our customers. in what we are going to prioritize as the next development stretch, but what is obvious is that we are now working to establish a good fund structure, alternative savings in the Bulda Bank app, credit cards right around the corner, and then available information from other banks is also not far away. And then we get to involve our customers in what will be the steps after that, and then we also work Inspired by Tibber with an advertising function in the app. We see that Tibber, which we admire in many ways in relation to the fantastic development they have had with their Stream app, has succeeded very well with advertising. They use very little marketing, gets an enormous effect of advertising function in Tibber. We have had an extensive dialogue with Tibber and will use much of the same idea in relation to testing out whether this can also be something. to ensure good and stable growth in wool in the future. So we have a lot of exciting things going on, and it is not so long before we have a bank in Norway, which is Mobile Only, which has a very broad financial service spectrum and is absolutely a full-fledged banking connection for those who want an innovative and sustainable user experience at the bank. I have been aware that we have had a lot of interest for Bulder in the media. There has been a lot of traffic lately, which means that we have had to re-prioritize quite a bit in the last few days to be able to take it away. We have also been very focused in marketing, where we see that Bulder has been talked about. We have also run digital marketing to take down the threshold to respond to what customers and potential customers read in the media. A little further about Must Win Battles. As I said, we are constantly working on improving the results, not just shipping. We have used the Must Win Battles methodology in quite a few strategy periods. Now we are in the fifth strategy period with Must Win Battles. This time we have chosen to divide the Must Win Battles period into three sprints. Now we are in the second sprint, which we will work with for about a month. We work with the following four things. We work with even stronger negotiations between bank and brokerage. We are working to ensure results-improving measures on revenue and cost side with 100 million kroner. That looks very promising. I'm pretty sure that we will get to this period. We are working to simplify the customer's bank every day. We see that the customer uses us too manually. Part of the things that we have functionality on, we have to ask the customer to act on themselves. And then we also see that we can get even better at self-employment. So there is a fairly concrete agenda of things we are going to solve in this camp period, sprint period. We work very focused on increasing and strengthening the customer relationship to stand even stronger in the increased margin gap and the fight for growth that we see especially in personal marketing. These four fights, we have fight owners on, we have a fight team, the organization is very engaged in this and we have succeeded very well in putting strategic pressure on some areas. We want a strategic participation through this method and these are the four things that are very high on the strategic agenda of the management of the group that we have a set up for. That is where we are now. Sustainability. We will also be at the forefront. We have recently decided that we will have a drift that is net zero before 2040, ten years before this 2050 goal. We have intended to use all our energy to contribute to that our customers and we take the sustainability responsibility that we have to take if this pandemic is not going to be 100% sustainable where we are now after the pandemic. We will of course do everything we can and so on to reduce travel activity, use Teams and work in a more sustainable way in relation to everything we have learned through this pandemic. So we are very much concerned, but we are also very concerned about that we will also celebrate our own door when we start to put demands on customers and our suppliers, as we have done. And we will second this climate clean-up when it comes to our own operations. So one of the requirements we have set for suppliers, there is so much talk when it comes to sustainability, we are extremely concerned about doing things that we see have an effect. And one of the things we see has an incredible effect is what Fjordkraft has shown the way to, namely the requirement that their suppliers should be climate neutral. We have 103 suppliers who have a significant supply to us. We have set requirements for them and have worked with them for a long time to ensure that they can meet our requirements to be climate neutral. 99 suppliers of our 103 have now committed themselves to being climate neutral. And we still work with three suppliers in the last round when it comes to follow-up. Only one supplier, a major national actor, has met the requirement. The other is that if they want to be our suppliers, they have to be climate-neutral. If several companies had done this, the transition in the business world would have been much, much faster. This is a domino effect. 84 of the suppliers of these 103 say that they started this work as a consequence of us setting requirements for them to become climate-neutral. We are also working hard to be competent when it comes to data capture and so on, to be able to be at the forefront when it comes to the taxonomy that we see coming and that has recently been decided. We are also very focused on having a good database to be able to report our green break when it comes to our operations and our footprint, whether it's our own operations or our books over time. This is an important competence race that will take place, not only with us, but we will also do our best to guide and coach our customers in these areas, so that customers contribute to our business becoming as green as possible in the coming years. So, back to our Ålesund establishment. We are very good at it, very happy to have a leader who has both experience from the bank, but also a lot of business experience. And we are in full swing of recruiting advisors up there, and we are in the final phase when it comes to finding locations. Why are we established in Ålesund? Because the customer structure in the personal and business market is quite similar to the rest of the country. One of the things we are particularly good at in the business market is the competence that we will also be able to use in this region. It is an attractive market, it is a very exciting region, and we have also had good success with earlier expansions in the west, among other things what we have achieved in Rogaland south of Buknafjorden. We build on this experience we have from earlier in relation to earlier expansion and will use a lot of the same tools and tools when we now go north. And we will provide good advice, strong customer relations in combination with good digital user experiences in this region, as we have done in the rest of the West. Customer exchange is important for us. When we did this sale not so long ago, we were very concerned about ensuring that we had an ownership that allowed us to share customer exchange, to contribute with gifts to the public in our region, but at the same time to raise liquidity and attractiveness in our own capital. And in dialogue with a lot of investors, they said, don't raise the bar any more than you can still launch customer exchange, and our investors were also interested in this customer exchange tool. And we understand that well, because we see the effects of this now, and we are also trying to highlight this selling point. in digital space, as we have illustrated here. And it is clear that when you have had customer exchange, for example, over four years, and it says that you have received 30,000 kroner in customer exchange in the last few years, for example, if we manage to have customer exchange also in the next two years, then this has a significant impact, and it is clear that it builds customer reality. And we have also brought Some comments from customers, very happy customers, who have recently been paid customer exchange in this quarter. So we paid out in the first quarter of the year, 354 million in customer exchange based on the results of the Sparbank Vest last year and the annual exposure that the General Assembly recently received. And I've been in on it several times, the unique combination we have through our own business, to both be able to pay out customer exchange, contribute to public funds in a region, in a time that has been very special. In 2020 and 2021, we will be able to distribute almost 600 million in gifts or money to associations and associations of volunteers and related to the transformation the region is going through. And it is clear that this is a significant increase in our two counties. And this will be valued, this will be marked, and this is with building a position. And the last step on the agenda is the Ilkjell Fund, where the Sparbank Foundation, which we have established in connection with this sale, contributes 100 million kroner, where associations of our region, which have good goals, can apply for funds. And we opened for applications here on March 15th. And here we are also quite quick. We are not slow when it comes to application treatment. I wonder if we only have a few weeks to treat these applications before the money is paid out. And it is noted that there is no centrality in this. In a situation where many teams and associations are in a demanding situation for many arrangements, cups and so on, is eliminated. And they will end up in a demanding financial and liquidity-based situation due to the pandemic. So that was mainly our first quarter draw. Good banking, low losses and a very good starting point for further growth, we think we have as a Green Party to deliver good one-capital issuance and so on. We are concerned with delivering a stable and good one-capital issuance over time. Here we have taken our one-capital issuance from 2012 to the first quarter of the year. And as you can see, we have managed to maintain a high one-capital return. We have largely, in most years, delivered on our one-capital return target, which is 12 percent. We also do that in 2019, 2020 and in the first quarter of 2021. And this despite the fact that we have a much larger one-capital we will be renting now than we had in 2012. In 2012 we had a one-capital of 7.4 billion. Now we have a one-capital of around 17 billion. Much more one-capital to be rented, but we have managed that during this period. Finally, why invest in Sparbank Vest? We are a low-risk and low-complexity bank. We are at the forefront of digital development. We mean customer exchange, not only attractive for our customers, but also for investors. We are at the forefront when it comes to ESG and sustainability, which are extremely important in banking and finance now. Over time, we have built a very strong performance structure as a basis for avoiding shipwrecks and to perform to the fullest. We have invested a lot in learning development, the development of our people, and we also see that we are a very attractive employer. Over time, we have also managed to give good people who want to in Sparbank Invest opportunities. Last year, we had an internal recruitment rate in leadership positions at 86%. Last year, we had an internal recruitment rate in internal leadership positions at 83%. So we are also concerned about being an ecosystem where it pays to be on, and where those who want to actually get the opportunity to test themselves out with bigger shoes. We still have 12% of our GDP, and we believe and are optimistic that we will also be able to deliver on that this year, as we have done in recent years. As a starting point for this, I think I will leave the floor to Hans Olav Ingdal, who is our Economy Director, who will lead the question and answer sequence at the end of this presentation.

Thank you for that. We have received many good questions from you out there. We will answer some of them later in the mail. Some of them are of a technical nature, and we are busy answering precisely, so we will come back to that later. But let's start with the net income. The bank has a flat net income from last quarter. Despite two lower interest rates and some backlash at Nibor, can you tell us a little about the margin-improving measures that have been carried out, and how the interest rate net is expected to develop in the future?

Yes, we implemented the interest rate changes from Q1 this year. In the fall, we guided them to give us an effect of about 100 million kroner. We see that materialize in the first quarter with about 25-30 million kroner. This is mainly due to two things. Lower interest rates in the personal market, and it has worked hard within the business market to ensure a better margin in the portfolio. The sum of that gives the effects that we have previously guided.

Thank you. Let's move on to growth. Bulder has won a lot in the past few weeks. Are the growth ambitions for Bulder 2021 maintained?

Yes, we think there is no reason to adjust it now, but we have to agree that 20 billion at the beginning of 2021 is very ambitious. If you look at the S-Bank, it built 83 billion in 20 years. So we are going to build 20 billion in a year and a half. But we stick to that goal. We have an incredibly good traffic now. We are re-disposing the resources we were talking about. We have many advisors in the bank who believe that we have a reasonable I hope and believe that it will be within the range. It is a very ambitious goal, but we will keep that goal for the future. When it comes to growth in the bank, we have a growth ambition of 5% that was mentioned in the presentation. In the business market, I am quite confident that we will achieve 5+. In the personal market, it is a tough fight, and we are not willing to sacrifice profitability for a few percentage points more growth. But the latest development indicates that we should not be so far below that goal, we think, when it comes to the personal market division ex-Builder.

There is of course a lot of interest around the margin picture in Bulder, where the product interest was lowered by 15 points for a few weeks. Can you say something about the profitability in Bulder cases as it stands right now?

What we have said, in addition to the volume goal that Jan-Erik was talking about, with the increase of 2021 to 20 billion, is that Bulda will then be in a one-capital deposit in an isolated set of 12% based on the portfolio with the increase of 2021. We have also said that the concept is cash positive when we pass 10 billion kroner, and there we are now, so in the future this will be an add-on to the income in the future.

We are in a situation where we have a very good capitalization, as others have commented in other meetings. The growth we have, at least in the short term, will not attract much capital, because we are where we are in terms of capital. So it may be that we tune in a little to this calm goal and see how we can use the window that is now to build a top line. And the top line we are building, I am quite sure, will be profitable over time. So Frank is in on it. We are cash positive around where we are now, and we have a very good capital situation.

The cost development in the bank is very good. The level of costs that we are on now in the first quarter, is it a level we expect to see in the future?

What we have guided on is that we will have flat cost development in 2021. And as you can see from the figures, we have had lower nominal costs in nine years in a row. And as we think forward, the ambition is that we will be able to do that in ten years.

We work very much on the goal of taking out the effects of breaking new technology. Of course, we see that there is a significant potential still when it comes to work processes. Specifically, we have a bottle neck discount in relation to the amount of important traffic we have on the roads. So to put robots on and make our process end-of-my-line, I think we will still have potential without increasing our development environment in the west. But we see that we can use new technology in a new area with the ecosystem we have, which we are working on with continuous improvement. This also asks us if we can keep the flat cost development going. But the ambition is that we will not have an increase in costs this year, and that we will also be able to absorb the investment in Ålesund within the framework of flat cost development in 2022. The only thing I'm sure of is that there will not be a significant increase in costs, like a 5% growth. We will work hard to keep it low, but at least flat out in 2021.

Other banks are implementing cost programs.

Sparbank Invest doesn't believe in that. No, we have been very interested in working away from this. We haven't had large subcontracting rounds in recent years. We haven't had large subcontracting projects since 2016, where we had a very large project that was very demanding for the bank. The lesson from that is that we want to avoid it. And you, Hans Olav, are the leader of the one in the fight that we were talking about, which is about finding result-enhancing measures of 100 million, both in terms of income and costs. And we are working very well with that in mind, and we will deliver on that. It is this type of work that we believe in to deliver good and stable spending over time, and also an advantageous It is important to note that we came from a position many years ago where we were among the worst in the KIA, and now we are in front of the KIA, and that has given more taste, I think we can say, Frank.

Yes, let's put it that way. A significantly lower loss this quarter than before. What can we say about the loss outlook for 2021?

It is very positive that we see a development that goes in the direction we see now, and it is a direction that is significantly better than we actually feared when we sat here a year ago. And I think it is important to bear in mind that the outcome of the pandemic is still uncertain. Of course, when the public starts to focus on taxes and taxes, and when the support orders are issued, then you should not forget that you also get some companies that can have greater challenges, and that can materialize in losses with us. But as the picture shows now, we see that the losses will be significantly lower than what we actually had in 2020.

Model-based is up in the quarter. What do we have to look for before we believe in a reversal of model-based occupations?

Model-based occupations are supposed to be so-called expectations, built on macro images, and thus not the structure in your own portfolio. We think we have to look at something even better. and the central industries that are strongly affected by the pandemic. And of course, the uncertainty in the oil sector, even though there has been a positive development in oil prices lately.

On the capital side, how big would the effect be for SMB to be part of the core capital?

Between 75 and 80 basis points.

And finally, some follow-up questions about Bulder. What does Sparbanken Vest think about Bulder's low-capacity revenue? What is the plan for the future?

Now we are trying to increase the pace of the fund in relation to the possibilities we have now. So there will be a bet, and then there will be a credit card right around the next round. And then it is possible to take insurance as the next option. We are quite open to the roadmap for development. We involve our customers. If our customers say that insurance is important, we will take it as the next step. If the customer means something else, we will do something else. We are very concerned that this will be a customer-driven case, a customer-driven company, in close dialogue with our customers. We see it work. We are quite sure that we will be able to build a good fund volume further. The art for us now in Bulda, And make sure that the customers not only become real estate customers, but become total customers, so that we also get a higher rate of income. First and foremost, it is more important than other income for builders right now, it is the income tax and then it is the next other income. So if we are to take the priority range for us, it is to ensure that most will become builder customers in the future, become total customers and that we get the income tax and then other income comes.

One last question about core capital coverage. The bank is well capitalized now with 18.5. Is there a reason to believe that in 2022, with exchange rates or growth, we will be able to reach a closer capital coverage target?

As Jan-Erik said during the presentation,- it is expected that the counter-cycle buffer- will be rewritten at some point. The sum of minimums and buffer requirements for Sparbank Invest- will be 15.7, with a pilar 2 requirement of 1.7. So we still have a lot of room for that requirement with 18.5. And then there will be the work that was mentioned earlier. The challenge, as Jan-Erik said, is to put capital into work. We have clear ambitions for that, which will contribute to the bank's future development and results.

We have to take with us that there is a discussion between the finance department, the finance department and the business, which makes us a little unsure of what can happen in the coming time. So we are concerned about being a little careful on the capital side. But there is no doubt that we are in a very robust position and can grow quite significantly. But we will not think that we will scrape the bottom on the capital side with the first, in relation to the goals that lie there now, because we see the opposite and other things can affect the capital coverage. We shouldn't put ourselves in a situation where we are suddenly too poorly capitalized.

Then I say thank you to Frank and Jan-Erik. We have some more questions of a detailed nature that we will answer in the course of the day. But other than that, I say thank you to all of you who have followed along.