Sparebanken Vest

Welcome to the budget presentation for the fourth quarter of 2023. This is the tenth time I'm looking forward to the results of the year for Sparbanket Vest. I never think we've worked harder for a year's result, and I never think we've been more proud of the results of that effort. We have a very good year ahead of us, where we have a good number of things that we have succeeded in throughout the year, which makes us have a good result for 2023. If you have any questions, please send them to this e-mail. After the presentation, we will try to answer them as well as possible. I will go straight to the results for the fourth quarter. We have a cost percentage for the fourth quarter of 25.7. It is without financial help, and it is without extraordinary posts. We are very proud of that. We have a result after tax on the right edge of 1 billion kroner. And we have a one-capital tax on the fourth quarter on 17.8%, which we experience as very good. If we look at the financial goals that we have guided over time, we are well over our one capital release goal of 13%. We propose a division rate of 58.8% over our division policy of around 50%. If we look at pure core capital coverage, we have a demand, including buffer, of 16.05%. We have a pure core capital coverage at the beginning of the year, with this proposal for surplus disposal of 16.8%. Vi er veldig glad for at det har vært et godt år å være investor i Sveggen på. Vi ser at Sveggen har gjort det bra. Totalavkastningen i 2023 måler seg med de aller fleste og ligger godt over vår nest tøffeste konkurrent i dette hittet i 2023. Det er vi veldig glad for, og veldig glad for å kunne konstatere at det har vært et godt år for våre investorer. If we look at the board's position on the allocation of the fiscal year 2023, we have an exchange rate of 3.4 billion omelage. We have an ownership gap of 40.7, so that means that 40.7% of the result goes to single-capital owner, which is 1.4 billion. The board proposes an exchange rate of 7.50 kroner, which gives an exchange rate of 823 million kroner. And then we have a formidable surplus that will also supply the social capital in excess of 2 billion. It is suggested that the government disposes of 1 billion in customer exchange, a little in excess of that, a gift of 150 million and retained capital of 842 million. If we look at the additional part we had at the beginning of 2023, you can see that we had an exchange rate of 3 kroner for single-capital property owners, and we had a gift budget of 482 kroner, where we took the extra-ordinary part and put it on gifts. So we have a formidable gift capacity in 2024, and we have a significant customer exchange rate with the results the bank has delivered in 2023. If we look at the last 11 years of the one-capital transfer, you can see that in 7 out of 11 years we have exceeded our new one-capital transfer target, which is 13%. And throughout this period, we have never delivered better than we have done for 2023, but collected one-capital transfer at 16.5%. That means that if we look from 2022 and up to the third quarter, which we have numbers for on all comparable banks, we are at the top when it comes to one-capital spending over time. And we will continue to be there. As you know, we have a two-part one-capital spending goal. We will be over 13%, but we will also be among the two best of the Norwegian banks when it comes to one-capital spending, and we have delivered that during this period. Finally, before I go into more detail about our numbers for the fourth quarter and for 2023, I would like to say why we deliver good numbers. I think the most important explanation variables are on this slide. We have a bank with low complexity. We are not part of an alliance. We are big enough to be able to do things ourselves. We are small enough to be able to be fast. We devalue complexity. We are very aware of what we should do and what we should not do, and I think that is a bit of the success report for both low-cost income, but not least a strong one-capital return over time. We have invested in significant digital areas, and that means that we are at the forefront when it comes to Google Play and App Store, when it comes to the rating of Mobilbank, for example, and Bulda's Mobilbank in terms of user experience. Vi har en konservativ lånebok. Vi har hatt en veldig god tapshistorikk. Ser vi fra første kvartal 2020 og frem til i dag, så har vi omlag 10 millioner i kvartal i individuelle nedskrivninger. Det har vært veldig lave tapsnivå. Vi tror det vil endre seg, men vi tror fortsatt at vi relativt sett skal prestere godt på tap. And then we have built an organizational culture that is performance-strong, that we have invested in over time, and that wants to build a bank that is completely on the front when it comes to delivering on the four stakeholders we have, their primary goals. This means that over time, we believe, we have delivered a very good one-capital-output relatively and absolutely. In the next presentation, I will share a little bit of the key figures on the banking industry, a little bit about our loan book, and not least a little bit about why we think we are well positioned to deliver good performance in the coming years. We are in a very exciting time in the sector. I will also, at the last point, share some reflections around what we think will be important for us, to position ourselves for strong performance in a slightly different time, where we see that the card in the banking sector is ready to be written again, once again. Our one-capital return in the quarter is 17.8. A strong one-capital return gives a result per one-capital proof of 3.60 kroner. We have a pure core capital coverage that is solid, 16.8. And we have a bookkeeping value per one-capital proof now of 80.70 kroner. Our foreign exchange growth, both to the personal and business markets, is good. Here you see the top line, which is a 12-month sliding average. And we have a personal market exchange growth of 15.1% in 2023. And we have a business market exchange growth of 10.1%. Collected foreign exchange, just under 200 billion on the personal market. And a little over 60 billion on the business market at the beginning of 2023. Also a good investment growth throughout the year. Foreign growth at 9.6% on the personal market and a foreign growth at 10.7%. There it is a little different from quarter to quarter. We see it swing a little, but gathered foreign growth the last 12 months at 10.7% on the business market. Strengthening the net income is undoubtedly an important driver behind the results. We are back to a time where there is also a good margin for interest. We have not had that in a time with a very low interest rate, but it strengthens the net income. This means that we have a net income in the quarter at an overhead of 1.4 billion, and we have a net income in percentage of administrative capital, which is flat from the third quarter to the fourth quarter, but it is at 1.85%. We are very satisfied with selling this slide. We have a cost-income if we eliminate finance at 28% in 2023, 29% if we include finance. We have no drawback from finance in 2023. And if we look at comparisons with other banks per third quarter, which is the figure to the right here, then you see that we perform right in front when it comes to cost-income. And we have had a very good development from 2017 to 2023 in cost-income. And I'm very proud that we, for the first year, are below 30 on cost income, without any additional effects, and without any help, for example, from finance. Now it's to the left, regardless, without finance. So very strong performance on costs. We think this is incredibly important to be competitive in a market where we see especially the personal market growth becoming very demanding, and the K2 growth significantly lower than what we have experienced for a very long time. We have a demanding insurance year ahead of us, as most other insurance companies. Frende still delivers a one-capital discount of 7% in 2023, despite the demanding damage. Brage Finans delivers very strongly, despite a slightly demanding funding situation. Solid results from Brage. And Nordne, a little influenced by the volatile capital market, but also drives in plus in 2023. And we are reasonably satisfied with the consideration of the framework conditions. With three companies we are very proud of, three companies that have incredibly many talented people, and three companies we are quite confident in, will be a joy for all the foreign banks in the future, and will deliver good performance, absolutely, but also relatively compared to comparable companies. Positive development in net and new design is also in terms of savings and placement. This is an area we are going to take a closer look at in foreign cooperation in the first phase of that cooperation. We have a maintenance value through our customers of over 20 billion now and a very nice net and new design in Q4. This is an area we see we can develop further, also together with the foreigners in foreign cooperation. Capital coverage, I think it has covered. We are at 16.8, well above minimum requirements at 14.8, and including buffers it is at 16.05. Good headroom and a good starting point to grow further and develop both bulls and BM and PM in the bank into an exciting year, an exciting 2024. If we look at the results from Q4 2022 to Q4 2023, it looks like this. We have a significantly increased interest rate of just over 306 million. The provision revenue is a little lower. The connected business is a little lower. It's about what we were talking about just now. Finance is a little better in Q4 than it was in Q4 2022. Costs are generally flat. Losses are slightly higher, but from a very low loss level. We have 13 million in losses in the fourth quarter. We have 95 million in losses collected in 2023. So still a very low loss level in Sparbank Vest. And that gives a result after tax, as you can see here, right at the edge of a billion in Q4 2023. If we look at the same set-up for 2023-2022, the net interest rate is significantly higher. The provision revenue is flat. Connected business is mainly due to the demanding insurance market with interest, down 48 million. Finance is a little weaker. In 2022, we had positive finance. In 2023, we have minus 87 million in finance. That is the difference between 2022 and 2023, which focuses on 161 million. The cost is a little higher. We are very pleased that we are able to have a cost increase of 5% in 2023. It has been very demanding. IT is 18% higher, which means that the 5% cost increase in 2023 is actually quite impressive. Let's go back a little to the cost picture. We are on the New Tieto-Evry agreement, which means that we have an increased cost picture. We don't like what we see when it comes to price differentiation between Tieto and Evri. We are in a process where we are looking at whether we can be a part of that or whether we can find another core supplier. We will use that in the future, but it is clear that the fact that we are at a new Tieto and Evri cost level in 2023, while others are with the old contract, also affects the cost picture. In light of that, we are very proud of a collected cost growth of 5% last year. This means that we have a cost increase of 580 million, as you can see in this diagram. Our losses are slightly higher than they were in 2022, but still at a very moderate level, with 95 million in total losses in 2023. The tax is a little lower, so that means that we have a result as you can see to the right in this diagram. It was a bit about the banking industry, a bit about our key figures, and a bit about our loan book and the outlook on losses and declines in the coming time. There is no doubt that Bulder is ready to contribute to the fact that we are a very heavy personal market bank. We have 76% of our external loans to the personal market. We think that contributes to a very moderate risk profile on Sveggen, on Sparbank Invest. We also have 99% of our loans to housing loans, and a very large proportion of them are within a very low LTV level. We have also been conservative when it comes to geography. What we do primarily outside our primary region is through buildings with a low LTV. The average LTV there is 44%, so a very moderate loan level. That makes us think that we still have a very conservative loan book. To loan out to a geography you know, to businesses you are well known with, it is ABC in good credit work. And we have done that over time, and that is a bit of a background for us to have very low losses in Sparbank Vest. If you look at sustainability work up to credit on the business market, we are very pleased with the promises we have made on sustainability in relation to integrating it into our special business market credit advisory. We have a share of sustainability-related loans of 56% in new loans and refinancing in 2023. It is a high level. I think it is quite high in relation to comparable banks. This illustrates that we have taken a step forward in terms of connecting sustainability and credit development in a completely different way than what we have done historically. We also see that we slowly but surely will have a delay in the work to be done when it comes to the energy marking of our PM portfolio. And this will, in the coming years, also tick further up. As I said, we have a large PM portfolio of 76%. 99% of that is housing loans, and 96% of those housing loans are within 70% LTV. That gives a moderate fall height, even in a meeting with a slightly more challenging housing market. The figures in the middle show that we are in a market with a lower fall height, we think, than the Oslo region, where price development, exemplified here from 2014, has had a completely different progress than what we have had in our primary market, which is Rogaland, Vestland and Møre-Romsdal. And then we also see to the right, that buying a house in this region is easier than, for example, in Oslo, in terms of the price level and the price level of the housing. In short, we believe that this means that we are well equipped in the face of a market that may become a little more fragile when it comes to housing prices and housing prices and housing turnover. When it comes to business, we have a well-diversified portfolio. We have little exposure to real estate and office buildings. And we have an exposure to the LTV level there as well, which is very moderate. Most of it is within 50% LTV. We only have 3.5 billion. of our loans here, which is over 50% LTV. So also here a fairly moderate loan, which makes us believe that we should also do well if it becomes even more demanding on the business side. The unemployment rate on the pension market is at a very low level. Here you see the development of the unemployment rate over 90 days and between 30 and 90 days in the figure to the left here. And then you see that this is actually at a historically very low level. We expect this to go up. But we are looking forward to the fact that even in the fourth quarter of last year, this is at a historically very low level. That means that we have done a good job over time with credit, and that means that the sales are robust and have taken the height for the interest rate to go up from an otherwise record low level. When it comes to debt-free housing, over 60% LTV, you also see in the second figure on this slide that the levels are at a very low level in relation to the history here, which is from the first quarter of 2021, but also from a longer perspective, this is a very low level yet. If we look at unpaid and unpaid loans, it is on a low level, both on the personal market and the business market. We also have a very robust rate of return. We have a rate of return for unpaid and unpaid loans on the personal market at 56%. We have a rate of return for unpaid and unpaid loans on the business market at 74%. It is conservative, and we have a low level of mismanaged and lost loans. We are pleased with this development, and we think that this will also benefit moderate loss levels in 2024. If we look at our losses from Q1 2020, 70% of our losses have been model-based. We have had an average of 10 million individual losses per quarter. This is a very moderate level in relation to the balance of loans for Sparbank Invest. and illustrate that we have a very good quality in our foreign books. We have built a culture over time, I think, which makes us good at risk selection, we are good at credit work, and we have had stability in the people, the key people who have worked with credit, both in the business market and in the support apparatus, which means that we have been able to learn well over time. We learn from the losses we have, and we continuously improve the credit work in the bank, and I am quite confident that this will also give good results when it comes to moderate individual deductions. That was a little about our foreign book, a little about the loss picture historically, but also a little indication of what we think in the future. Finally, a little about the future, a little about why we think we are well positioned to deliver good and strong performance in the coming time, in the coming years, in a time when a lot of exciting things are happening in our sector. I genuinely believe that size is not decisive. It will be about the best people. It will be about the best culture. It will be about having low costs, regardless of how big you are. It depends on whether a single bank can decide for itself what they want in the long run. Do you want to be independent or do you want to be part of a larger savings bank? This is how we think, and this is how we feel that the other banks in foreign cooperation think. We have used the second half of 2023 to work with the bank's strategy from 2024 to 2026, where we have a head-to-head to build Norway's best savings bank. Two important components are that we must be completely upfront on customer satisfaction, on both advice and user experience in the digital field. We will also continue to perform among the two best banks in Norway in one capital transfer. This is important in terms of trust in the investor market, but it is also important in terms of creating the space for action, in terms of structure and alternatives. Being here in Egethus is tough on good operations, and that is why this is so important to us outside Båre. and deliver good numbers in the capital market. Very simply explained, I will not go into depth on our new strategy, but I would like to share with you that we see three strategic moves, three strategic victories that we will succeed in the next strategy period and before the start of 2026. It is about strengthening our distribution, not in Oslo, but in Møre, Romsdal and Rogaland, where we believe that we still have a very large potential to strengthen the market position and get to a profitable growth. The second point above this is that we will succeed with the trip we have said for Bull there, which is to build a foreign balance before the start of 2026 at 83 billion. And this foreign balance should be calm in the water at that time, with a size of 0.5 to 1 percent point. The third, down to the left, is to scale the bank better. Build even better tools to scale both our advisors in the existing office canal, but also the bulldog case in a good way. This means more effective tools, more effective loan registration processes. The fourth point, which is labelled as number three here, is foreign cooperation. We are quite sure that there is room for a third alternative in the Norwegian private sector, which primarily will ensure and support independent banks with a low cost of income. We believe that cost of income and good performance also here must be decisive for a single bank to be able to choose which way it wants to go in a time with even greater movement in the sector. These four things are the most important in our next strategy period. The most important moves we are going to make. The most important things we are going to succeed with in this strategy period. And why should we succeed in the market today? That's where the game is. It's not about size, it's about delivering good customer experiences from a value proposition that stands well. We believe that we, especially in these four areas, should differentiate ourselves well in relation to the competitors. And if we succeed in differentiating ourselves well on these four things, we believe that we will have a very attractive market position over time. It is about personal signature. We have seen lately that we have gone from subsidiary deposits to many banks establishing new subsidiaries. This tells us something about the importance of personal signature. Even if you are digitally mature, it does not mean that you are very safe in meeting with divorce, buying a first home and so on. We believe that the office network will also become super important in the next strategic period. We will continue to deliver digital solutions of the world class, with Bulder, with Mobilbanken in Sparbank Invest, with Mobilbanken on the operating market. We have an ecosystem in Sparbank Invest that is incredibly good, that delivers very good digital user experiences. And I am very proud that in 2023, had less turnover on IT employees than we have had maybe once. And we have managed to draw out consultants and in permanent employees. That means that we build system value. That means that we combine IT skills with good industry skills. And that's where we think the success lies over time. So especially with low throughput and very stable workforce through 2023, citizens get very good user experiences in the digital field and so on. We have a unique social commitment. We have a power in our gift muscle, because we have a share price of about 40-60, which is unique. We are involved in setting a footprint in our region, which I think no other bank can match. And because we also have the share price we have, we have the opportunity to share parts of our turnover in customer exchange. And we have done that with this policy for the fifth year in a row. That also builds customer loyalty. It illustrates the savings bank model in a completely unique way, which we will continue with. If we look at the gift muscle of Sparbank Invest, we have divided 2.5 billion in gifts in the last 10 years. The sum of 2022 and 2023 is amazing. Customer exchange. With this surplus, we want to have over 1 billion kroner in customer exchange. This means that a customer with a loan of 4 million kroner will get 17,700 kroner in customer exchange without interest. for 2023. That means something for most people in the long run. That makes a difference for many of our customers in a time when they struggle with higher rents. Very proud that we can contribute to this. In a time when people have worse conditions, in a time when people struggle a little more due to higher rents, then 17,000 on a housing loan of 4 million, that makes a difference. We also believe that we should take care of the core, the best in the savings bank model, the best in the savings bank investment, but we should also be very good at trade changes, very good at changing ourselves when the time is right for that. There are significant ambitions about what we should change in a new strategy. They also lead to how we organize ourselves optimally into a new strategy period. And with the effect of January 23, the bank's organized organization has changed. We have gathered the technology environment along the way, on the side of Sunland, which has done a brilliant job over time by building a strong tech environment, an attractive tech environment with little penetration, which makes us stand out without having the largest budgets when it comes to digital user experiences. I think we have strengthened that with this organization. We also label business processes, because we see that we still have a way to go when it comes to making our tools more efficient, as a basis for our customer advisors to be able to spend more time on prospecting, more time in meetings with customers, less time on systems. Frank Johansen, who has been with us for a long time, is an incredibly important player for me and has been over time. He is responsible for finance and ownership. Ownership becomes more important in a time when we are going to invest more and use more time to strengthen foreign cooperation. Risk management with Jan Ståle. He has done a formidable job over time, which means that we have low losses. Continuity in this position is very valuable. and has shown that we have been able to show results in loss and risk over time. And Therese, who has done a great job at HR, she has a much larger responsibility by taking responsibility for the staff areas that are now not linked to technology, finance and risk in the staff environment. What we do with this organization, we take down the staff leaders with one, because Hans-Olof Ingdal goes out and leads the foreign group in 24, and then we strengthen the customer side with two, by lifting Simmel Einarsen, who has done a great job of strengthening Buldar over time, he goes into the board of directors. Simen and Olav Hovland have a very good job going on in the PM division. They have done a good job over time, especially Simen, who has been with us for a longer period than Olav. So now they have been constituted for a period, but become permanent leaders for Personmarket Nord. I am very pleased with Margun Aas Minne, who is the head of the business market division. He had fantastic results last year, both in sales and growth. And then we lifted Einar Smegla Vest, Fredrik Gisle Neslin. He is a third quarter constituent, and in that period he was also in the company management. We see that we have not succeeded as well as we wanted, by creating a better top line and a better profitability in Einar Smegla Vest. Over time, we will be on the same level as the other regional banks when it comes to single-payer businesses. Fredrik's promise is a clear indication that we are serious about this, and he raised his hand in the board meeting to lay the groundwork for us to succeed even better than what we have done with single-payer businesses. This is a new organisation, quite confident that this is a very strong team. We look forward to the next phase with this team behind us. A little bit about Bulder, which we believe will be an important thing for us in the long term in relation to the influx of one-capital deposits. But I would like to say that we are quite pleased that we will deliver a good one-capital deposit in 2023, at the same time as Bulder is in a growth phase, where Bulder won out the bank's one-capital deposit. It would have been very easy in 2023 and 2022 to increase the market budget, increase the annual growth frame for bulls, which is 2040, and put us even lower in price to use the unrest that has been in the market to grow much faster. What we have thought here is that we are going to build stone by stone, while we do not risk too much with the bank's performance in total. And we feel that we have succeeded in that. We have doubled the volume in bull from the entry in 2023 to today. We had 24 billion in foreign currency at the entry to 2023. Now we have 48 billion. We are very pleased with that. We will follow this journey that we have guided over time when it comes to the way to 380 billion. We are exactly where we should be in terms of succeeding in that. Low loan, we have not lost money in the bubble, we should not do that either. We should not take a big risk in a geography we do not know. Therefore, we are conservative. We could have opened up more, but then we would most likely have taken another risk. It is important for us to have low risk in this investment. We have received a fantastic knowledge, which I will come back to, through very low market budgets, but through a lot of unpaid attention. We are close to 70,000 customers, and we have increased our turnover recently as well. When we had a presentation for the capital market last time, we were at 17, and now we are at 19, and that is significantly higher than, for example, our geographical exploration in Ålesund, at the offices there. So this is actually, in light of new investments and where we are in the brash with housing loans to create business volume, this is actually a good turnover where we are today. Buldar has an incredibly strong position in relation to further growth. Number one on Epsi, customer satisfaction. A very strong trust among their own customers, as illustrated in the middle here. And then we have to say that we are actually quite surprised that on the last draws and measurements from Kantar, on questions about who you would have chosen if you were free to choose a housing loan bank today, Buldar is at the top of all concepts and banks in Norway. a percentage of 21.8%. So 21.8% mention bulls when they mention from one to three banks they could consider becoming a customer if they were to change today. So it's an incredibly good starting point for further growth in bulls. Incredibly well delivered with moderate market budget and a fairly short history. We are constantly making new moves on the IT side in Bulder. We are not going to be a network bank, but we have done a great job of making sure that the app works optimally for everyone who uses Apple products. If you have a Mac now, you get a fantastic user experience, illustrated to the left, by using the app on the Mac, and you have a network bank for app users. 7,000 have taken advantage of this new app in the course of a week. This illustrates that we have done something right and something extremely exciting in terms of expanding the area of use of the app that we have had primarily on mobile so far. We are offering children and young people. We see in the light of the storm that has been around other banks today that it is important. So we have 2,000 on the waiting list for two days after we said we were going to develop this. We will be able to have a fairly low time to market on this, because the bank has a very good solution there that we can implement in the Builder app quite quickly. We will be back soon with foreign payments. We have 1,800 on the waiting list, only for two days, when we have said that we will have that functionality. So we are working early with new functionality, which will contribute to the fact that there is no reason not to use Bullder as a total bank connection, not just on housing loans in the coming years. Where are we then in relation to the roadmap we showed on profitability and growth on the day of the capital market? Yes, we are where we are going to be. We are quite confident that we will be able to deliver a one-capital transfer on a marginal basis on the concept of the stock market at between 7 and 9 percent in 2024. Our goal is to have 60 billion in loans by the beginning of 2024. That's how it looks, at least at the beginning of the year. If we achieve this, we are confident that from 2025 we will have a strong and convincing concept of the bank's one-capital transfer. Furthermore, we will continue to deliver good one-capital transfer numbers, even if we have a concept where we build significant value, which in the short term will win out the bank's one-capital transfer. So the friend group becomes important for us in terms of performing well and so on. We see that the time is in to establish a strong and cost-effective cooperation alternative to relatively established alliances that have worked on establishing an alliance structure for a very long time. We are not going to be an alliance, but we are going to be a cooperation alternative that cooperates in a little more areas than we have done historically. It hurts a bit to give up Hans-Olaf Vingdal in 2024 to lead the foreign group, but based on our strategic investment, which I have shown earlier, and our new strategy, we have found that this is right to get traction on the foreign group in 2024. Hans-Olaf has done a great job in working towards the launch of the foreign group and has very good relations and very good trust in the entire cooperation group in the foreign group. So he has already joined, as part of the organization Vistidag, so he has joined. and has been released from Sparbanket Vest and will work with to establish the group 924. What we are going to do, we have a new product company under lease, which we have worked quite well with in recent months. We will launch that soon. And then in 24 we will work with and give content to the foreign group on which areas of cooperation we want to cooperate on, on which areas of cooperation we should cooperate, where local banks and DSS cannot do things themselves, where they experience that they are too small, that we have to do something in a larger context. Then we will cooperate. in the foreign group. But it is a goal for us that what the local bank and the DSS want to do, they should do it themselves. But what they think we should do in a larger context, we should do in a larger context. And we are working on these things now and sorting them out. We are quite sure that the first of the benefits we will take on purchase cooperation in selected areas already in 2024. There is a lot of talk about scales these days, and everyone takes these sales pitches that scales are important in the future for good fishing. But for us, this is about proving it in numbers and facts. What I want to show here is that foreign cooperation will continue to be a cost-effective cooperation, and foreign cooperation has been a very cost-effective cooperation. If we look at cost income in different bank sizes, illustrated here with foreign volume, then we see that regardless of whether you look at banks with foreign volume between 3 and 5 billion, 5 and 10 billion, 10 and 15 billion, 15 and 100 billion, or over 100 billion, then foreign banks get the best out of cost income. That tells me something quite important, namely that complexity drives costs. Alliance structures drive costs. Therefore, we will not build the same as other alliances have built. We will build something that is more cost-effective and that also supports that these numbers should be true when we get further and further along the way. Then we will still have the lowest cost income of the cooperation group in Norway. That is the primary goal with the establishment of the change group. Not to become as big as possible. Not to build an empire, but simply to build a foundation on areas where we see that there are obvious scale advantages, especially in purchasing, so that we support that we are still the banks with the best cost of income in the coming time. Another example on the scale can be insurance in the bank. Is it so that the largest insurance companies deliver the best results? We do not think so, as illustrated here. It is actually the smallest insurance companies that have delivered the best one-capital deposit in this period. We also believe that in the future we will have what it takes to deliver a competitive one-capital deposit in the coming years. Three priorities in the change group at the start. Technology, collaboration, purchase. Especially a new product company. And not least, to succeed with areas that are important in terms of cost efficiency. This is going to be a broad collaboration. Even though Sør og Vest are the biggest banks, we are extremely concerned about not doing more than what all banks think is right. We are very concerned that we are going to pull this together. That is why I am very happy that Heidi, who has done a great job in the last half year in the foreign cooperation, has taken a yes to become head of the board. I am very happy that Geir Berskøy, who is also a driving factor in this collaboration, will be the next head of this board. We will also be with and contribute. But a broad board of directors is a good indication that we are going to bring this together. The big banks are not going to do this. We are going to do this together, and we are going to share responsibility, and we are going to do it in a cost-effective way. Finally, why do I think we are well positioned? We are also well positioned because we are a region that has very good economic development, illustrated to the left here. The unemployment rate is low, as you can see in the middle there, in Rogaland, Møre, Romsdal and Vestland. Good and in the lower level. In the open competition, Vestland, Rogaland, Møre and Romsdal is a very good place to be. This is our primary market, this is our home market. This also means that we are quite confident that we are well positioned in relation to further good operation and good sales. And then we will be able to put the agenda in a region in a rising development that will change over time, both from oil and gas. In just a few days, we will put the agenda again for our region. 1,600 participants are involved in the Vestland Conference, 1,000 on the waiting list. A fantastic, exciting program in Grieghallen, where we again will be an important contribution to set the direction for a region that is in very good development. That was the main points, good banking, a little about our outlook and a little about why we think we are well positioned to deliver good performance and so on. In summary, we are a bank that has a good ownership, which we think is attractive also for investors, which means that we can have a clear footprint in our region, which means that we can give parts of the surplus back to the customer exchange. We are in the face of digital development. We are early aware of low complexity. We are not members of large systems that attract bureaucracy and complexity. We are cost-effective. We have a strong performance culture. I think it is worth it that three or four employees in Sparbanket Vest, through the SWEG programs we have had for many years now, own the bank, are curious about our performance, follow our quarterly presentations, are proud of our performance. And then we will be the leader in one-capital spending, among the two best, and we have an absolute goal for 2013. We are confident that we will also deliver in the coming years. With that, I would like Brede and Frank to come up here, and then we will take questions and answers at the end of this session.

Thank you, Jan-Erik. We have received a few questions that we will take now. And then there is probably another e-mail address if there is anything else you are wondering about, which you can send in in the future. Jan-Erik, if we look away from Bulder, the growth in the personal market portfolio in the last few quarters has been low. How does the bank see this development?

If you look at our growth over time, you will see that we have been around the K2 growth. In periods, if you go a little further back than the last quarter, we have put a lot over the K2 growth on the office channel, and we have put a little under in the fourth quarter. We have a clear ambition that we will overcome short-term growth in 2024. But for us, we have said on Capital Market Day time and time again, that for us growth is not the most important thing. Good profit, good profit as a business. We will not sacrifice growth for the margin. And then we believe that it will be a tough margin pressure in the future, and that we will have to adjust a little when the growth is so low. But this we will swing a little, but over time we have put a little over the short-term growth, and we will also do that further.

That's good. Frank, the net interest rate in percentage of administrative capital is flat from Q3 to Q4. Can you tell us a little bit about the drivers to this? The interest rate has increased in Q4, so one could perhaps think of an increase is a question you have received.

Yes, nominally it has increased by about 15 million from Q3. The reason for this is relatively flat in the quarter. This is in connection with that we have had good growth. Especially in the operating market and bulls in the fourth quarter. This is growth that we bring with us in 2024 and in the future, which also means that we will strengthen both net interest and income in the future. The main reason for the relative bull is constant from 3Q to 4Q. It is actually very strong and good growth for bulls and BM in the operating market in the fourth quarter.

That's good. Another question for Jan-Erik. For us who read notes, we can read minus 37 million on bulls in 2023. How should we believe in 7-9% of one-capital spending in 2024?

You will have to listen to these notes. Respect for that. It is clear that when we are at a low level of financing in the bulldog concept, and the interest rate is running ahead of us, and we have eight weeks of hustle and bustle with impact on our stocks, then the bulldog concept blurs more than what we do in a stable interest rate market. As our prognosis looks now, with the costs we have, with the scale we are able to get on the picture, and with the rent we have, we are quite confident that we will deliver between 20 and 24. It looks like that on our numbers so far this year. We are very confident about that. There may be changes, but what we have done so far, has been pretty clear on what we have been guiding on, both in terms of profitability and growth over time, and I think we will be able to do that as well. There are also quite important bulls. What I am perhaps most proud of about bulls is that surveys now show that customers do not choose bulls because of the price. They choose bulls because they want to be a customer, a challenger, a predictable interest rate. At the lowest, we were in the 37th place on the financial portal with Bulder. So many believe that Bulder only sells at a price and compares with the other direct bank concepts that are out there. This is something else. I'm sure we're building a completely different customer loyalty than the other concepts. Our customers expect us to be the best at price all the time, but they expect us to be competitive all the time. And that's what we should be proud of. And I can say, I don't think anyone will run a concept like that more cost-effectively than Sparbank. I deny that. We have 47 years of weakness today. We've had that for a long time. We have said that we will continue to have 47 years of weakness. It can happen that we have to increase one or two years on something else. But in the main, we will scale this. And the one fight in the strategy meeting that we agree on, it's just about scaling everything that is on the backside of a fully digital loan process for Bulder, so that Bulder scales with a lot of people. Customer service in Bulder is very similar, and it will be. And we have to put it in front of this so that it becomes true and so on. So I think that if we don't manage to make money on this concept, then no one will manage to make money on it either. That might have been a bit bold, but that's what I believe.

We agree. Yes, yes. The next question we have received, you will get it, Frank. The cost in the quarter looks very low. Are there one-time effects here?

No, we have no one-time effects in our results, neither in the fourth quarter nor in 2023. As Jan-Erik also pointed out, we haven't had any particular feedback on the model investments. The cost growth for the company in 2023 is 5%. We have a couple of pension and retirement estimates. If we adjust to that, the cost-benefit ratio is 6.4%. This is completely in line with the price and interest rate ratio in 2023. If we compare it to the cost-benefit ratio we have had on the IT side, we think it is very well delivered.

You mentioned IT, and Jan-Erik talked about a cost growth of 18%, and you are targeting new contracts with Tieto and Evri. Can you tell us more about the assessments the bank makes here?

It is obvious that we are on a new... First of all, the IT costs are generally rising, whether it's Microsoft licenses or other things, so it has been a formidable price increase. So it's not unnatural that the costs against Tieto and Evri are going up. What makes it very painful for us is to see how low Sparbank 1 is compared to what we are at in 2023. We are on a new deal in 2023. It is impressive that we deliver five or six, four, depending on how you calculate the cost growth last year. We are on a new level. We know the others will be on a new level in the future. But the difference is so big right now that we just have to figure out what to do. And we have also said that to Tieto and Evri. We will not be at Tieto and Evri and cross-subsidize other banks over time. So then we have to do something else. And that's what we're going to use this year and next year very well to figure out what we're going to do. Also invite the other foreign banks on. And if Tietoe Avery continues on this journey with such a big price gap between the banks, they will be underpriced by the banks that have the best price. But then there will also be poor profitability in the end, I think, for Tietoe Avery. So this is quite critical, quite important, but as we agree on, Impressive that we manage to absorb the new contract and still deliver the cost on the five. We are very pleased with that. But this is a critically important point for us. And it is clear that if the competitors are on the cost per customer, compared to the other 200, while we are much higher, then it does not work very well.

You were also in the foreign group, Jan-Erik. What are the ambitions here in 2024?

The ambition is to build an alternative that is not comprehensive, but that solves the things that the bank is unsure about and that the bank wants us to do in a larger context. Sparmanken Vest would of course stand alone without close cooperation, but we are concerned about working closely to strengthen the community. We are concerned about building an exciting alternative for those who want to be independent, have their own identity. Be a bank manager. Have freedom of choice on the product side. And that's what we're going to build in Frende. And then we're going to build a slim organization that's going to take over the projects that the management in Frende Group says are important. And the first is a new product company that we're working on right around the corner. And then there's purchase. And then we're going to look at the IT side, obviously in light of the previous answer. And that's a little reason why I think we have the best leader to lead this. Hans Olav ran our process, where we entered a short agreement with Tieto and Evry, precisely because we were going to have the trading room from 2028 onwards, to find out what we were going to do. But Hans Olav was the one who ran that project, Over the course of a year, together with a number of foreign banks, we evaluated the issues with STC and Tietoevri against each other. We decided to make a short agreement with Tietoevri to make sure we were safe in the short term, but then we'll see what we do in the long term. That's why I think we have a very good leadership in Hans Olav in terms of running the processes for foreign banks, for those who have to wish, in 2024.

That's right. Back to the numbers. Frank, the capital coverage is falling significantly this quarter, after it also fell last quarter. What is the cause of this?

We were very clear when we were out with our talks in the fall and when we came with the additional department. We have a clear ambition that we will be capital efficient and earn capital in relation to the regulatory requirements. That is why we came with the additional department last fall. If you look at the development from 3Q to 4Q, there are some factors that affect this. One has already been mentioned. Strong growth in the operating market in the fourth quarter. It also hits the capital coverage at 31.12. And then we have a slightly higher rate of issuance for the year as a whole than what we have previously guided on, which is above the bank's exchange rate. That is the main reason, and we are far above the regulatory minimums and buffer requirements. The minimums are 14.8, so we are far above that by 2023. I just want to say one more thing. We have what we call the so-called Pillar 2 Guidance at 1.25. This is something we are not entirely satisfied with, because we think it is a bit too high. If we compare it with a few other banks that also have a large isolated personal market, they have a P2G of 1%, and we also think we should have that.

We are quite dissatisfied with that.

Yes, actually.

We have 76 percent of the share market share. The other two who have got 1 percent, they are below us in the PM share, and we may not understand that we got 1.25. So we will follow suit. Very good.

We will do that. Yes. Structure is talked a lot about in the industry today, Jan-Erik. What are your evaluations of the increasing structural changes we see in the sector?

I have been in the sector all my life, so I think there has been a lot of talk and a lot of action. Now there is a lot happening. I think it is very exciting. I think the strength of the savings sector is not about the number of banks, it is about the sector's size. What I am very excited about is that, as I saw in the D&B presentation yesterday, the head of the BNB said that they noticed the savings banks in the Far East and Norway in a different way on the stock market. And that is my experience as well, especially in our market area, the savings banks have been one of the first competitors. And that tells you about a savings bank sector that is incredibly strongly positioned. And this time, I think I'm one step ahead in finding out how to create a savings bank sector that is also competitively stronger, with fewer banks, but which might be stronger in sum. It's really exciting. We're going to make smart decisions there. There are many things we could have been involved in, but we will not compromise on what we believe in. It is a strong ecosystem, strong competence in our own bank, decisions in our own bank, and to build on a bank that is attractive in the investor market and has trust in the investor market. So for us, it is not the size that is primary. It goes a little back in my presentation. There's so much talk about scale. No one asks the numbers if it's like this. Do you have a scale here? Do you get the effects? Is it like this that the big risk events don't eat up the big risk benefits in these areas? When I look at the key numbers for Frende against the other cooperation alternatives, I look at our key numbers, I see a reason why we shouldn't be able to... as it is today, but I like to talk to banks that want to do something with us, either on the structure or in the exchange group primarily. We are very humble because we cooperate with their strategy. They actually have the same strategy as we have. They want to lay the foundation, the best possible foundation, so that they themselves can choose how long they want to exist as a bank. And that's actually what we think too, so we're pretty much the same. Whether it's Lustre or Skudnesåker or Vest, we have the same strategy, we have the same wishes, and we're doing so well that we can choose for ourselves how long we're going to be independent. That's what a collaborative effort is about. That's the strategy we have. And then we're going to do smart things, but we don't need to do anything.

That's good. I think we'll end there. Thank you, Jan-Erik and Frank. The questions we didn't get to ask now, with a little more technical character, we'll get back to them. And with that, we'll end here. Thank you from Mediasit in Bergen, and I wish you all a nice day.