Sparebanken Vest

Welcome to the forecast presentation for the first quarter for Sparvanken Vest. And as before, we note that those who follow us can send us questions along the way in the presentation, which we will answer after the session and my presentation. And with me there I will have CFO Frank Johannesen and new economic director and responsible for IR Brede Borgen Kristiansen. He has taken over in this quarter after Hans Olav Ingdal, who has now become a board director for Banking Service and as part of the board management. We go straight to the numbers. We have a stable and high one-capita cost over time. We only have two of the years after 2012. We have not reached our one-capita cost target of 12%. We also deliver a very good one-capita cost result in the first quarter of the year with 16.5%. I will come back to the details of course, behind the numbers in today's review. If we also look at our one-capital spending over time from 2012 to 2021, compared to our toughest competitors in the Norwegian banking market, we are also at the forefront when it comes to one-capital spending. We have a two-part one-capital spending goal in Sparbank MS. One is that we will be over 12% and the other is that we will be among the two best Norwegian banks over time with moderate risk. In the first quarter, it is exciting for us to see that a bank chooses to become a part of SpareBankenVest. Etne SpareBank and us announced that we are joining in the first quarter. This shows a little of what we were talking about in our previous presentation, namely that we are an attractive bank. Also an attractive bank for actors who think that it will be demanding to stand alone in the Norwegian banking market with the framework conditions we see for us in the coming years. A little about why we think we are attractive and why Etnes Sparebank chose us. If we look at the stakeholder universe in Etnes Sparebank, a bank that is not listed, they have three stakeholders in their general assembly. Employees, customers and Etnes Samfundet. We believe, for those who think that it is useful and reasonable to become part of a larger savings bank, that we have a good value proposition for all these three interest groups. If we look at the employees first, we are a bank that has a clear long-term agenda as a savings bank. We see that sound good with savings banks that evaluate the same. We are an exciting group with all the functions in our region. We do not have a competence environment that is located in Østland, Oslo or other places. We have built up a strong ecosystem around the bank, a large internal labor market. We have good conditions for employees. We also have an employee commitment around our financial goals through ownership, where 65% of our employees have also chosen to become owners in the bank. We are a proud bank with proud employees and a bank with high employee satisfaction, which has continuously increased in the last five years, so we are also a very attractive employer in our region. Therefore, we experienced that the employees in this bank were very positively adjusted to Spar Bank Invest. If we look at the customer perspective and the customer choices in a bank, we believe that because it is important that the savings bank tradition is carried out regionally, we are a guarantor for that. In this case, the bank was very concerned that we would also invest in a larger geographical area, including Vindafjord and Ølen, which is a very exciting market area. We have said that we are of course involved. We see that customer exchange is important for banks that value this. This was important for Etna. We see that they are interested in becoming part of a bank that has a very good digital space. As many of you who follow us know, we have had Norway's best mobile bank for many years. Especially if you look at the rating in Google Play and App Store. In this case, it was important that the customers could continue their good customer relations in Fremde Forsikring and Brage Finans. They were also concerned about becoming part of a bank that had a much greater leverage for the business market in their region, and not least to get access to a direct bank and customer service center with a much wider opening time than this bank had before. And then social perspectives, which is also important. What we experienced in this fusion, and as is certainly the case in many other discussions, is that it is concerned with the fact that the savings bank tradition should be carried on locally when it becomes part of something larger. Sparebank Invest is actually the sum of many different savings banks that over time have become part of something larger. They see that they get a powerful foundation. If they do well, they will be able to be a unique player in the development of the international community. They were interested in becoming part of a bank that does well, and has done well over time. It is important to maintain a good development of the savings bank capital that they place in this foundation. They also emphasized that we were a bank with 60% community ownership. Through this, they both wanted access to the gift capacity of Sparbank Invest, which has not been less than 1.6 billion in the last 10 years, in addition to the gift capacity of the local foundation. We have experienced both in relation to Etne, but also from other banks that consider the same, that we have a very attractive value proposition in relation to all stakeholders in the general assembly or the representatives in this type of bank. And for us it is important to be a natural consolidator for those who value the same in our region. We are not concerned with building up distribution far beyond the market we know well. We believe that the risk profile in Sparbank Invest is low because we have laid the foundation for the church tower principle over time. We will continue to do that, but we will build a strong regional bank for these three counties. We will also do that further, both through organic growth, but hopefully also through structural changes. All that we have done, or will do, and are in process with, in relation to the first savings bank. In the next presentation, I will talk about our key figures, our banking business, our basic business, a little more in depth on our credit risk, and why we think we have a very good starting point to deliver low losses further. We have a loss level of 6 million in the first quarter, which is low, and we also believe in a low and moderate loss picture. Finally, I will share some of the reasons why we think we are very well positioned for very good growth. You will see that we have two figures of foreign growth in the last 12 months, both on the personal and private market. We also think we are very well positioned for strong growth in the coming quarter. We have a very good development in our one-capital transfer. You can see that in the upper left corner. We delivered 16.5 in the first quarter. The customer exchange means a little. We have a sale of some shares to the local bank, which is part of their entry into foreign cooperation. But the underlying operations are also very good, which we will get to later. We have a result per unit capital certificate of 2,77 kroner. We are well capitalized, 17,5. And we have now recorded value per unit capital certificate of 67,40 kroner. If we look at the development from Q1 last year to Q1 this year, we have a good development in the interest rate net. Even if we only have two out of three months of effect on the last interest rate change in December, we have managed to deliver on what we have said to the capital market when it comes to strengthening the interest rate net through these interest rates that have been and the interest rates that we see coming. However, we get an effect here, of course, like all other banks, by the fact that the money market financing tends to be a bit ahead of the Norwegian Bank's interest rate change, so that you get a lag. in relation to the fluctuation of the interest rate change, but also in relation to the fluctuation of the interest rates that we have, in order to get full effect and in turn increase the financing cost directly to the customer. Therefore, we are very pleased that we are able to strengthen the interest rate net with 180 million, despite a slightly demanding picture when it comes to implementing increased interest rates to the customer. Our provision revenues are up, saving, placement and payment management are particularly good. The associated business is down, it is primarily foreign and it is about financial discharge. The damage percentage is very good, it will come back again. Finance is in positive development, 51 million of this is due to the fact that we have sold some shares to the local bank, which has become part of the foreign cooperation. And then there are some basis swap effects here that also draw up. Our costs are a little higher in this quarter. The first quarter last year was only low due to the pandemic, but it will come back to the cost development and decompose it a little further in the later light picture. The loss picture is a little more previous than last year, but small changes. We have low losses and we also see the contour of a year, at least where we think we will deliver a year with quite low losses. And then we have a tax effect that is a little lower. This means that we have a result for the first quarter of 256 million. If we look at the cost-effectiveness first, we can see that last year was influenced by the pandemic, quite low activity. We have at least estimated that we are 15 million lower in the first quarter last year than we are this year in relation to COVID-19 effects. Then we have some strategic investments that have increased some in cost. Bulder, Ålesund are trying to pull it up a bit. Einhedsmægler Vest is raising the cost by 7 million. We have said over time and guided that we want to increase the activity. We want them to take a stronger position. This also means employing skilled workers when we have access to new skilled workers. And then we have a underlying cost growth of 14 million, which gives a corporate cost of X bonus of 3.93 in this quarter. In 2012, we had costs of 1,305,000,000 kroner. What we see ahead of us this year is, I believe, what we have guided on earlier, a little higher costs. We are heading towards a cost level for Morbanken, ex-housing costs of 1,340,000,000 kroner, which was a little higher than the cost level we had in 2012. We also have a good cost-income ratio this quarter, right at the edge of 32%. We have good foreign growth. We have previously put a significant weight in our presentation on that we are well positioned. We have good customer satisfaction, which we will come back to. We have a strong market position. We also see that in our growth figures. We have a 12-month growth of 13.6, including bulls. If we take out bulls, we also have good underlying growth. in the last 12 months at 5.1% in the personal market in the bank XPUL and the business market. Over time, we have built a very strong position that makes us on the bidder list. on many of the best customers in our region, and we have a 12-month growth in the business market at 10.1%, which I am very pleased with. I would like to thank both the employees of the Person and Business Market Division, who manage to achieve a very good growth with good margin, compared to what I said on the internet earlier. It is not an art to achieve good growth with low margin, but the art is to achieve a good growth with usable margin and reasonable risk selection, and I experience that our customer division has delivered very well in the last 12 months. I am also impressed by what we managed to achieve on the investment side. We have an investment growth in the last 12 months on the personal market at 10.5%. I think it also indicates that the personal market segment is getting ready for interest rates at a slightly different time. We also see that with the help of the strategic measures we have made towards the funding cost, we have also strengthened significant revenue on the operating market. Impressed by the division the operating market has achieved here, with a 12-month growth of 22.8% when it comes to revenue growth on the personal market. Important in relation to the bank's future profitability in the coming quarter. There are two smaller interest rates in this quarter than there were in the previous quarter. Nevertheless, we have a lag in relation to repricing of increased market interest out to our customers. Nevertheless, we managed to get a net interest of 887 million in the first quarter. And we also strengthen the relative net interest rate, as I said, the last interest rate change we only have an effect of two or three months per quarter, but at the same time we have a relative net interest rate of 1.48%, which we are very pleased with. And we also believe that this ongoing picture, linked to time between increased Money market interest rates and repricing for customers will be preserved in light of the rapid interest rate changes we see from Norges Bank. But we are very much concerned about the fact that we will use the opportunity to strengthen the interest rate net in the interest rate changes we see coming. We have strengthened savings and placement significantly over time. The picture we have seen in the first quarter, of course, affects further growth there. We see that the stock and customer retention value is a little lower, but the long picture is that we have strengthened significantly in terms of savings and placement. And then we also see that we are in a quarter where a good number of our customers have taken a profit, and we also see that net revenue is a little lower in the first quarter. We believe this is the past, and we still believe that we should strengthen our position within this segment, and strengthen other revenues through increased volume. If we look at our connected businesses, we are very concerned about not doing other things than what we think we can do very well, and what we see gives significant results for the bank. We try to cut out other things. We try to be disciplined in what we prioritize and what we prioritize away. But if we look at our most important investments, Frende, Braga and Nordne, then Frende is affected by finance, of course, like the other damage companies and life companies in the first quarter, but the underlying operations are significantly better than they were in the first quarter last year. We have no major challenges with major damages, fewer major damages, and you can see that the damage percentage in the first quarter on the damage side is 69.5 versus 80.6 last year, to illustrate good underlying operations. Brage Finans now delivers well over 11% in the last quarter, and we think it will continue to do so. Brage has risen significantly, has a fantastic low cost percentage, and we see the contours of our one-capital release target, which is 12% there as well, and good delivery in the first quarter, very good growth, and a calmness of 11.1 days in the first quarter. Nordne is also very exciting to see. It has a very nice development. The best result since the start in 2008 in the first quarter. Our share is 7 million. Not very big, but very important for us. It is a very important company in terms of competence towards our business division and also other projects we have together with Nordne. So it is an important company for us and also very exciting to see. that they succeed in the market, build a position, have a lot of talented people, so I am sure that we will also be well on the plus side in the coming quarters. We have capitalized well. We have good room for further growth. You have seen our growth. It is good. We are well above the minimum requirement, which was 14.2 before we got SREP on the 28th of April, where we got a review of some of the answers we had at the original starting point. A PILART 2 estimate of 1.7% has been reduced to 1.5%. This means that the relevant requirements for pure core capital coverage are reduced from 14.2% to 14.0% with the feedback we have received. We are not satisfied with 1.5% either. So there is a high probability that the board will complain about the Pillar 2 requirement we have received. We think that we have adapted the risk picture quite well in relation to a low Pillar 2 requirement and that we have a very moderate risk profile in the bank, which may also include a lower Pillar 2 requirement in line with our calculations. So we will actually consider a complaint on this and then we will come back to that later. The demand will continue to increase until March 31, 2023. However, the cycle capital buffer will be filled with 2.5. We also take this into account in our capital planning. Summarized key figures, net income, positive development driven by good growth and reasonable repricing in relation to rent changes. Our costs have risen a little, some strategic investments in line with what we have been working on. On the one hand, Vestbulder and Ålesund are doing that, plus last year's first quarter was a little artificially low because the activity was low as part of the pandemic. Our declines are at 6 million against 17 million last year. Still very low loss level. Our result is 849, but a capital loss of 16.5 in the first quarter, which we are very pleased with, and which indicates that we are well on track to reach our capital loss target for 2022, which is as before 12%. A little about our credit risk. We have a conservative loan book dominated by housing loans. 99% of our loans to the personal market are for housing loans. We also have a good and diversified business market portfolio, which now consists of 24% of our loans. We will come back to how it is affected after our assessment of the terrible war we now have in Europe. If we look at our core bank, we are primarily focused on these three provinces, and then the upper elite increases, and that has to do with Bulder's foreign growth. Apart from these three provinces, we have a very limited foreign business, and we think that is reassuring for our investors, because it makes it possible for our portfolio, in a very good way, by knowing the region and knowing these customers, better than if we had expanded to other geographical areas that we know less about. We have had low losses over time, and a lot of what we have done through the pandemic has been model deductions. If you look at what we have done in this period, then 73% of what we have taken from loss costs has been model deductions. In contrast to some others, we have chosen not to reverse these model deductions to a significant extent. We see that the macro picture is uncertain, and therefore we have also now thought that we should be on the cautious side. and to a small extent has taken back previous model assessments, because we also believe that the future has a lot of uncertainties in it, with what we see taking place, among other things, in Ukraine. So we have moderate feedback on model assessments in the last few quarters, and we think that's smart and healthy banking. We have a low level of lost and kept loans. We think it is a relatively low level compared to other comparable banks. We also have a good loss history. Here you can see that there is little change compared to last quarter when it comes to lost and kept loans. We are very pleased with that. We have been conservative in our deductions, and if you look at our deductions, the lowest in this picture, in relation to losses and losses to loans in the business market, it means that our deductions are 74% of losses and losses to loans, which we mean is high, but healthy and good banking operations. We mean a caution in this area. We do not think there is any reason for us to be especially high on revenues compared to other banks, because we have shown over time that we have had a robust exchange portfolio that has given relatively low losses compared to our toughest competitors. Over time, we have told the capital market that we will have a moderate risk picture, and through that A slightly lower loss than in the natural comparison over time. This also shows that the geographical approach we have has worked and given reasonable risk in our foreign portfolio. We also think that the region we are in has a lower fall rate than the Oslo region, which has had a significantly higher price development when it comes to the housing market than the home market we operate in. If you look at the housing price development since 2014, you will see that the price development in Oslo has been plus 70%. while Bergen has had a plus 33% and the Stavanger region has had a much more moderate price development with a plus 8% throughout this period. We think that if there is a correction in the housing market as part of the higher interest rate, then the fall height in our portfolio is moderate and in the region we operate in. And we have a housing portfolio where 96.1% is within 70% of LTV, which we think is a good indication of a moderate risk in our housing portfolio, which is the decidedly largest portfolio abroad. We also see a long-term positive development in the cost of living. It has continued for many quarters. It also indicates a healthy and good housing portfolio. If you look at the interest rate with loans with over 60% LTV, it is unchanged, over 85%. And then we have a small increase in segments of 60 to 85%, but there is also LTV level is safe. So no indication, at least in the short picture, that this picture with a moderate risk in our housing portfolio would change. We are very concerned about being early and close to our business customers when external things happen that can affect our risk of loss and their operations. We have had a significant transition from our business market portfolio in relation to how this is affected by the terrible war we see in Ukraine. As you can see to the left here, the largest volume has often been completely unimpacted by this war, at least in the short term. We also have very few customers who have a significant part of their customer portfolio in Russia or Ukraine. We are very confident in the exposure we have in relation to customers who are directly affected by this war. We do not believe that this will significantly change the picture of loss in the short term. with the transitions we have had from the business market, of course. We are close to, we are concerned about getting good information early, and we are concerned about being a good advisor for the companies that are affected by this, so that they will get through this challenge as well. But as I said, very limited direct exposure and very little change in the risk picture in the bank, at least in the short picture, linked to this terrible war. Finally, we believe that we are well positioned to deliver strong single capital deductions in the coming quarters. We are in a region with a strong pressure on the labor market side. We see that we have very low unemployment. It is a very large activity. The growth we have seen in oil and gas prices of course also affects the region in the short term. We see that the expectations for our companies, both in terms of results The expectation index is generally at a very good level, and we do not think that this is a big moment of concern The regional macro picture is the short picture. We experience that we are a region in very strong development, which also shows a very strong ability to change in relation to taking positions in the green shift, both in the Bergen region, Stavanger region and further north in Ålesund, we see that we are a region that has an enormously strong will and ability to change, and that will also be reflected in our operations, we think, in the coming years. Vest is important to us. We believe that a strong property market will also strengthen our opportunity to take market share and a good and profitable growth on the personal market. The property market has been strengthening continuously in the last few quarters. It had a very strong 2021. continues to grow in market share also in the first quarter, despite a slightly lower activity in the housing market now than it has been before. We especially see that we are very successful in the new building department in Bergen, Stavanger and Sandnes, and strengthen the position as a strong and leading broker in our region. What I especially look forward to is that the customer satisfaction also increases here, We are up 5 points on customer satisfaction from the fourth quarter of 2021. That is not very long ago, it is only a quarter of development. We are very strong in that. We see that we get what we call 5 stars, 8 or more, in many of the areas we ask the customer about. We also see that the number of solar-ready recommendations, after we have sold housing to customers, is also significantly up from the last quarter, which indicates that we are very well positioned to strengthen Einar Smegler Vest further. Both with the effect on our direct results, but also in relation to strengthening our ecosystem as a basis for a strong growth in the personal market further. We also see that Frende is a very good development. Growth of 7.5% in the last 12 months. The local bank delivers very well. Very happy that we have had them with us on the team. And we see that the profitability is good, and as I mentioned earlier, the underlying damage situation is also good, and the financial discharge For us, as for other companies, the results are affected in the short picture, but we are confident that Frende will deliver strong numbers. Here you can see the damage percentage in the first quarter, down from the first quarter last year, both in life and damage, as you can see, down to the right in this light picture. Brage Finans is still in development. Good growth. Here you can see the growth on the gross and foreign portfolio from 2018 to 2022. We are close to 18 billion in foreign currency at the beginning of the first quarter. An incredibly strong development. We have built this in very few years. We see very moderate losses. Very comfortable with the risk profile. in this company, where I myself am also the head of the board and feel the company close and confident that this is a company that we will have great joy from in the coming years and that is constantly taking new positions within its own segment. So be sure that the development here will be positive and so on. We also had a strong 2021 with a one-capital discount of 11.4%. and believe that we will continue to strengthen this. We are also looking forward to the effects of the SMB discount on capital binding in this company, which means that we get a little extra growth capacity in the year we are in. Nordne continues the good development, a group of very good people, a very strong team, a performance-oriented team we have had, which is now also in the ownership side, which shows that they have faith in the company. We have a very good collaboration with many EIKA banks and most foreign banks in this company. We offer digital fund solutions for 25 banks now, with a total management of 19 billion. We have online stock market that grows through distribution to 72 banks in the Nordic countries. A company in good development and we look forward to delivering a very strong first quarter in the light of the history we have since its establishment in 2008. We started to target customer satisfaction back in 1997. We have never seen higher customer satisfaction than we do in the first quarter. We also know that the interest rate explains about 25-30% of the variation in customer satisfaction for Norwegian banks. Then we also know that when we are in a rising interest rate, it will be even more demanding to deliver good customer satisfaction, to get satisfaction with the opportunity to go down, especially for our foreign customers. Therefore, I am especially proud that we manage to strengthen customer satisfaction in the first quarter. We see, among other things, that there is no doubt that our customer exchange, among other things, is to drive customer satisfaction upwards. It is a good indication that the value proposition we have, with good digital platforms, personal signature, social engagement and customer exchange, is a value proposition that stands firmly in the market. In three years, we have in the first quarter paid out customer exchange, this time 390 million. We are concerned with maximizing this both in marketing, but also in our own digital space, as you can see an example here, and show that we are one of very few banks in our region that provides customer exchange and uses this actively in marketing. This is incredibly good for our competitiveness, and there is no doubt that the ownership gap that we want to have in connection with the sale we had a moment ago, where we put up to 60% community ownership and 40% one-capital ownership, We can have a strong footprint, both for the customers when it comes to customer exchange, but not least in relation to the society when it comes to gifts. So I am quite confident that we have a very good set-up in Sparbank MS in relation to strong competitiveness and so on, both for the joy of the interest groups in our general assembly and for the joy of single-capital business owners. It is a privilege to have two owner classes, where the one owner class uses parts of its surplus to build customer loyalty to the customer mass, which the other owner class of course also has great joy about. We have run a significant campaign to anchor this. Now we have three years of history. Now we see that this is starting to sit. And we also see that we are gradually getting more and more effect from it, the more predictable it becomes. This is not something we can guarantee the customers, but this is something that customers get in the years when the bank is doing well, and we have also intended to drive the bank further within the framework of the framework requirements that we meet, of course, but if we manage to deliver on our capital reduction goals, then it is obvious that we are well positioned also to manage, can evaluate further customer exchange every single year. And we have now, as I said, three years with customer exchange, 339 we have divided into 2019, 354 for 2020 and now we have divided 390 in the first quarter for the fiscal year 2021. And here is a picture that illustrates both the advertising campaigns we have run and not least the response we get in social media from our customers on customer exchange. They are of course very happy with the customer exchange they get and we have done this in a very fun way where customers can also share with us what they use customer exchange for and get a lot of energy in communication around customer exchange this year, which we will also take with us in the future. Work with and anchor customer exchange in a good way. So we are very concerned about sustainability, as you know from earlier. We have a very good rating in various areas when it comes to sustainability. We have also set ourselves a very ambitious goal that we will be climate neutral in 2040. That is not long until. We have a lot of financing today, which is long financing, so it is a very demanding goal. We work on the product side, we work with competence. to strengthen us in relation to both being a good savings partner and advisor for our customers, but not least also to work with our competence to ensure that we onboard the right customers in relation to the long goals we have to drive with net and zero, including scope 3 emissions in 2040. We are also very interested in digital development. One of the things that I am especially pleased with is that we have managed to get the new business market app in place in the last few quarters. We have been very good at personal markets over time at Mobilbank, not so good at the business market. We have in a very short time, with a very good team, developed a very good business app that we are going to develop further, which has received a very good rating in the App Store with 4.9, and which we see increasingly being used, and which we have good interaction with customers on how we are going to develop further. Bull is now around 20 billion, which we are very pleased with. We know that this will be a demanding journey. 20 billion was a crazy hard target when we think that S-Banken spent 20 years building an international portfolio of 80 billion. We have planned to build 60 billion in six years. As you know, our goal is 60 billion by the beginning of 2024. It is an ambitious goal. If we were to reach a slightly lower level, it would be a blessing and a good performance. But we are in very good development and we also have a lot of new development in functionality and The housing loan side in Vente, which I think will help to make the gap even larger in terms of which customers we can bring into Bulder, and through that also fuel our growth further towards 2024. As I have said before, the turnover in LTV is very moderate here, 39%. Moderate risk when we first go out over our three villages, so we are concerned about doing it with moderate risk. The average loan growth is 2.25 million, and we have also increased the knowledge through the last quarter significantly, from one in four in Norway who are familiar with Bulldar to one in three. So we see that we are continually building a good foundation to achieve the ambitious goal we have at the beginning of 2024. What we are working on now is to help Buldar create a seamless and fully digital loan flow for new housing loans. This will significantly increase our market. We also see that we are well in the process of activating several customers to not only use us on housing loans, but as a full-service bank. And we also see that the interest rate has had a significant jump in the quarter. We have an interest rate of 10% now, which is quite good in relation to the fact that there are many of the customers here are housing loan customers. We have an exhibition of BankID for Bulder directly in pilot. It is important for us to get it in place. We have a fund trading and credit card that is right around the corner in relation to the launch. And then we have succeeded in the last and will succeed further with very little manual work in Bulder. Most of it should be fully digital and we have done quantum sprint. on the scaling capacity of Bulder in the last few quarters in relation to removing unnecessary manual labor and making the loan flow 100% digital. I am very pleased with the contours of delivery in all these three areas, which becomes important for us in relation to 60 billion. The development towards 60 billion will probably be a bit of a hockey stick. We will probably not be able to divide it into 2022, 2023 and 2024, because if we get these things in place, we also believe that the growth in the exchange rate will increase in 2023 and 2024. This is an illustration of this picture. We know that we must have an average growth of 14 billion per year in the future. We see that the knowledge is increasing and the service offers are increasing. We hope to have a higher number when we reach the goal in the last years than in the first years compared to where we are right now. Until now, we have had a very good growth. In 2021, we had an annual net growth in the bull at 11 billion, but with a lower knowledge. We believe that we have many drivers to be able to drive this up on average in the years ahead of 2024. We are also concerned about being a bank that sets an agenda in our region, a safe bank, a regional bank. One of the most important measures to set ourselves on the map in relation to that part of our value proposal was the Vestlandskonferencen, which we had on the 5th of April. It may have been the most important conference in our region, with 1,500 people in Grieghallen. Many government officials were present, where we discussed the breaking point and the transition this region will go through in relation to the renewable and green transition. Great success, again, with building a position, with setting ourselves on the map, and with providing content in our value proposals, where social engagement is one of the four parameters where we have said that we should be especially good in our region. We have also said to Kapitalmarked over time that we are very concerned about building a strong performance culture, a strong team, an organization with strong leaders and employees who are concerned about doing it a little better next week than we did last week. We have also been very concerned that we will quickly get the energy back after the pandemic. There is no doubt that one of the things that has lost the most through the pandemic is team play, team spirit, curiosity, learning, feedback culture, all that we have worked very hard to achieve in recent years. Therefore, we have now decided in 2022 that we will have three leadership meetings in two and a half days at Finse, together with our leadership corps, where we will set a new direction and new energy for the bank. We have already had the first one with great success. There we had, among other things, the head of defense, who talked a lot about how he thinks of the defense in relation to building strong teams. Now we will have collection number two at the end of May, and then we will also have a large collection for all employees after the summer, where we will work with the implementation of a target image of our folk culture, which we will show on one of the next light images. So we ramped up our commitment to leadership. The feeling of being on a winning team and the performance journey and the performance culture journey we have had in recent years. I experienced that what we achieved in the first collection was a real vitamin injection, and we will also do that in the next two leadership collections we will have at Fintse, where we will include this as Camp Fintse 22 for our leaders. Then we will have a meeting for all employees in the fall, where we will work with a lot of the same things, where the theme is to work with ownership and anchoring of the target image we have now written out on our culture. We have made a culture document that we will also be transparent on after the summer, after we have worked more with all employees, where we describe what it looks like when we at Sparbanket Vest are at our very best. What it looks like when we stretch ourselves between the culture and the behavior that we believe should be, to also be among the very best. when it comes to delivering one-capital deposits in the Norwegian banking market and being the best team in the Norwegian savings banking sector. So we work very targeted, as this is an example of, with building a clear picture of what we expect from our people and how it looks when it's fun and energy-saving to work in Sparbanket Vest. Therefore, this is a slightly different cultural document than many others are used to from other organizations, and it should be. We have been very inspired by Netflix's cultural target image, the slide deck, which many have probably seen. Netflix has shared this extensively over time. That was a little bit about our banking business, a little bit about our foreign book and a little bit about why we think we are well positioned to deliver good growth and good capital transfer in the coming quarter. As you know, we are concerned that we will be a bank with low complexity. We will have the conditions to be really good at what we are doing. We will not spread our management focus and our focus too broadly. We will continue to be at the forefront of the digital shift, where we work with a very exciting culture journey also when it comes to our digital development environment, which delivers very good delivery from area to area, which, among other things, the new BM app is a good proof of. We will be a bank with a conservative loan book, where the church tower principle stands strong. As you can see, we have managed to deliver moderate losses over time. We will continue to do so, even if the framework conditions may change. We also work very systematically with our performance culture. We have a very strong employee commitment in relation to the goals we have set ourselves. As I have also shown today, 65% of the employees have chosen to invest in the bank because they believe in what we are doing. Over time, we believe that this will lead to a high absolute one-capital deposit, and we also believe that it will give a very good risk-adjusted deposit for those who invest in Sparbank Nest. Historically, this has been the case, and we have a very clear ambition that we will also achieve our absolute goal and our relative goal of one-capital deposit for 2022. And the foundation for that is low risk, low complexity, that we are still far ahead in the digital, the digital development that hits the sector, that we have a customer exchange that is also part of building position and customer satisfaction. We are going to be far ahead in terms of collections. And involvement when it comes to setting a new direction for the bank on how we will continue to perform in the Norwegian savings sector. So with that, I would like to invite Frank, CFO up here, and Bredeborgen Kristiansen, who I am very happy to introduce today, who is our new director of economics here. And again, a very good example of that we are a bank, where we are also interested in showing that if you are willing, if you are interested in performing, then you get new opportunities, as Brede has gotten, and as Hans Olav, who was here last quarter. Welcome.

Thank you, Jan-Erik. Thank you for the nice introduction. We have received many questions in this quarter, so we will answer some of them now, and then we will come back to some in the future, directly on e-mail and telephone. But we can start with the following. Jan-Erik, what are you most pleased with in this quarter?

We are very pleased. We have put the quarter behind us. We are on the next quarter. What drives us for the next quarter is a good customer satisfaction, that we do a good job in the digitalization of the bank, that we manage to build a strong position for the bank, so that we manage to achieve this difficult combination with good growth, reasonable margin and moderate risk. And I am very pleased with the customer satisfaction. I am very pleased with the energy the organization shows. I am very pleased with the meetings we have had with the organization, where I see that people are really coming back. I think it's fun to come back to the office. We don't suffer because people don't want to go back to their offices. People want to be part of the team. They want to be exposed to good people. Our response in the market is on customer satisfaction, and not least the response in the organization is something that makes us confident that we are on the right track.

Good to hear, good to hear. Some of the questions we have received are about the export growth. Among other things, the bull growth. 1.1 in the quarter and just under 2 billion in 2022. How strong are the goals for 60 billion in 2024?

In this journey, we have set our heads to a goal. You don't always get the hang of it. We managed almost 20 billion in the beginning of the year, a month too late. If we managed 40 or 50 billion, it would be a strong performance. But we like to stay high. And we genuinely believe that it is within the scope. We have a lot of incentives now. We increase the burden to 2040 years from 2020. We have a lot of development processes that make it possible This includes new housing loans, fund trading, and we see the investment coverage on the way up. We believe that we will build a strong position. 60 billion is something that is within the budget, but it was very demanding. It is also important to note that we are building a significant system value. We believe that the concept we have built has significant value, which is not visible today. If we had been a fintech, we would have accepted a much greater negative result to build the top line than what we do as a bank. We are very concerned that we will be able to build Bulda with a reduced downside risk to the bank and with a limited expansion of the bank's own capital deposit. So this quarter we will deliver 16.5 in one capital deposit. For those who want to look at the notes, I would say that this negative result we drew on Bulda at 8 million, in addition to the capital costs. So it's that we manage to build such a concept. and at the same time be at the forefront of one-capital-throwing, which I think is an incredibly strong performance. And then we are going to build system value further on the way to 60 billion, but we are not willing, I mean it would have been If we were willing to lose more money, we would have easily reached 60 billion. We are not willing to do that, so we try to tune this by not winning the one-capital transfer to the bank too much at the same time as we set ourselves this goal. So it will be a hard-fueled balancing act. But in the first quarter, there is a negative result for Bull. before capital costs, and we think that's a good balance. Then the prices are quite sharp. We have a good capital injection in the bank, we don't want it to go too far, but we are on the right track. So this will be the art of the future. Then we will tune up and down a bit. In this quarter, we will tune up our investment pricing a bit, to build slowly but surely a little investment hole. So this will be a difficult balance, and we are thinking in a slightly different way. We are thinking a little more stone by stone than you would have done if you were a private equity investor in one of the other fintechs in Norway.

It is also important to say that our growth in the bank is very good. If you go into the personal market and adjust the figures, you can see that we have our 5% annual growth in the personal market in the last year, which is also very good in terms of competition. At the same time, the position we have developed in the business market also means that we also have a fairly good development and strong growth in that segment, but growth, two-digit growth in the last 12 months.

So we have good growth and good development in net interest, as I mentioned. We have been very concerned about that. It's a long answer to a question, but it's an important question. We have been concerned about not prioritizing growth in costs and income. So what we can do now with good growth and development in net interest, we are at a strong position.

If the growth were to be lower, could it be important to pay more than 50% exchange rate?

We might not be able to guide you on anything new here, but you can see that our capital coverage is good. We are well equipped to grow further. It will not be like that. Our capital coverage, neither ours nor other banks, is mainly above the requirement that is when it is counter-cyclical, fully closed at the beginning of March 2023. I would say that March 2023 is not very long until then, so there is not much headroom there for us or other banks, if you look at the others as well. We will see when it comes. We have a good growth capacity and are also interested in having a good growth while we have an attractive exchange rate.

While we are on capital, there has been a question related to the Pillar 2 requirements that came from Financesund for a week ago. How would you relate to the new recommendation from Finansøysynet around P2G in the future? Would you follow the recommendation over the Havre requirement, or would you use some kind of management approach?

We have to relate to the requirements and expectations that Jutrik provides, of course. As Erik was saying during the presentation, we are at the same level as the P2 requirement we have received. Our calculations show that it will be lower. Just out of curiosity, we have complained about the previous decision we got three years ago, but we still haven't got an answer to that. We have to renew the complaint. We have to renew the complaint. I think we have to do that. But we think, I mean, that in terms of the risk level of our business, the P2 requirement should actually have been lower. And then, in addition to the expectation of this capital requirement magic, there is of course also a relationship with the banking business, of course.

In the short term, this does not have a practical consequence, because we are in the short term, up to a full-fledged supply chain in a short period of time, and also if it has been used.

Yes, we are in the short term. Of course, if you look at the capital margin at 1.25, for all the requirements you are at 16.75, and we have 17.5 in the first quarter of pure capital. Correct.

The next question is about the rental net. Can you comment on the expectations for the rental net in the next quarter, Q2, in all respects?

In all respects, yes. Jan-Erik was right about the work that has been done in the bank. on the customer side. It has been a great job to ensure a balanced development between growth and margin, and we have strengthened our margin in the quarter. We are very happy about that, and as he said, it is due to the efforts within the customer border, and it is also due to what I would like to say, to supply generation. That is the job we do on the funding side of the bank, to get cheap and good funding for the bank. So it is a great job to ensure that the interest rate network for the bank develops so positively. I think we, together with many other banks, are trying to take out some of the effects of the proposed interest rates that have been and will come. But we want to put Nibor, which is higher than normal, in a negative effect. At the same time, the credit spreads that are on the way out and have been on the way out in the last quarter, will have a certain importance for the bank's funding costs in the future. Up in this picture, there is something that is pulling in both directions, but we think that in the end it will pull in a certain positive direction.

You write in the report that the board has taken the lead for higher losses in the future. What specifically are you thinking about and at what level do you see the advantage?

This is perhaps something we have communicated over time. We are concerned about being cautious. That's what I agree with when it comes to the level of investment in the bank. We don't think that having 6 million in losses in the quarter or 17 that we had in the same quarter last year is a sustainable level. So to run a bank means that we are going to take the risk, but we are going to lie well in relation to the relative picture in the Norwegian banking market. And we are concerned with our prognoses to the extent that the unusually low loss levels that we have had for quite some time now will not be preserved in eternity. And then we'll see how long it lasts. We have no indication, as I mentioned in the presentation, that our losses are going to increase significantly. Payment mismanagement in operations and the operating market is at a very moderate level. I think we have been very good at risk selection over time. As I said, in the operating market we are in a completely different place today than we have been earlier when it comes to to get access to the best customers in our region. We have been disciplined in relation to the increase in engagement. I had a meeting with the management group yesterday, where they discussed whether we were at the right level. But I think we have performed well over time at TAP, and then it will be incredibly important to be able to maintain discipline. both on credit quality and on the risk of construction and other things, because it is very easy to think that now we can all go to the water, because now we have had low water for a very long time. What we are concerned about is not to take height and not to believe, so that's why we are concerned about painting a very intense and extreme on right there, and then it is not because we see especially dark skies just now for Sparvarkenast. Right, that's good.

We have also received a question related to the investment growth in PM, and it has been commented on a little earlier here as well. Are you surprised by a lower available income and perhaps some lower savings rates? And what is really the reason for this strong growth?

I think a little of the reason is that we see, as Jan-Erik also showed, that the savings rate for their shares and funds is somewhat down. So it is clear that people are positioning themselves a little now for a somewhat tougher everyday life than they might have seen before. And in that sense, I wish to have And that is a consequence of a stronger investment value. It is also important to say that we are very concerned about ensuring that we have a good investment value. We are sure that those who work in the customer base have a strong focus on this, because it is clear that any investment we can get at a cost with lower marginal costs for market financing would be positive for the bank's interest rate. So I don't think there is a combination of several factors in this context.

It's a bit of a surprise, but also a possible explanation. We were talking about the fact that net revenue in the stock market is down, for example. Such things contribute in a single quarter, of course, to a change in the way of thinking. I also think that most people are ready to draw a line in a slightly different way. Maybe have a different use of it when the interest rates go up. So it's a combination of working goals, maybe a little encouragement from our customers, and a different approach to alternative savings in the short term.

Yes, the last question we'll take today. You have already taken a refund of the capital on the IRB loan. What is the status of the loan? Is it possible to reverse this refund?

Yes, we haven't taken that into account yet. We are the only IAB bank that took into account the IAB document that came in May last year. The effect was 70-80 points on capital. At the end of the day, the risk weight has gone down, so the effect of converting it today would have been less than the 70 points we had at that time. It would have been 25-30 points if we had reversed. So we have not taken any action yet. The progress is as it is. Right.

Thank you for your good answer. As I mentioned initially, we come back to the questions we have not been able to answer now. And with that, we say thank you to everyone who followed us today. And then it's good to take contact information here if there is anything else.