Sparebanken Vest

Welcome to our presentation related to the first quarter of 2024. As usual, you can send in questions during the presentation. They will send you to this email address. We will try to answer as many of them as possible when we are done with this presentation. We have a cost income of 26%. We have a result after tax of 1,224,000,000 og en egen kapitalavkastning på 21,6% i dette kvartalet. One of the things that we also want to highlight this time is that after we started a process five years ago, applied three years ago, we have finally been able to approve our new IRB models and take them into use in this quarter, which I believe is one of the first IRB banks, and I am very pleased with that. It takes down the uncertainty linked to the capitalization of the bank in the future. As you can see here, we have a core capital debt of 17.5, which is quite good in relation to the minimum requirements we have when it comes to pure core capital right now. Despite good capitalization, we have been able to deliver a very good direct return in Sveggen in the past. It is a combination of good operations, good results and good capitalization that makes us in this quarter have divided out 7.50. This gives a division degree for 2023 of 59%. And for 2022, you can see that we had a dividend rate of 83%. So we have a good capitalization, a good growth and a good dividend rate in the last few years, we would say. We have a fairly long history now of delivering on or over our one-capital-expenditure target. Now it is not the case that we have 13% throughout this period. In most of this period we have had an expenditure rate of 12%, but in the end 13%. We have largely been target-filled all these 11 years. plus the first quarter, which is illustrated on this slide. We have a good quarter with a one-capital drop of 21.6% in Q1 2024. Our foundation for doing well, our foundation for performing well and having a good return on a fairly moderate risk is this value proposition that we repeat every time to the capital market. We are a bank with low complexity. There is a lot we don't do. There is a lot we have chosen away. Own trading on interest rates and currencies. accounting services and so on, fintech funds, fintech investments. We have chosen a lot to do with what we think we can do best. So low complexity is an important leading star for us at Sparbanket Vest. Digital leadership is another. We are focused on being on the front of digital development. It will come eventually. We have a conservative loan book. We have a 76% PMA share. And we have had a very low loss over time. I think we are positioned to continue to have that, at least relatively, in our sector. And then we have built and continue to build a strong performance culture, which is concerned with performing among the best, and which sees that our long-term independence and being able to make your own choices is inevitably linked to strong performance, as we have done in the past, and as we lay the foundation for what we will do in the coming years. The main part of my presentation will be these three. A little about our core banking business, a little about our loan book, and not least the last point. Why do we believe that we are well positioned to also deliver a strong journey on one-capital transfer in the coming years? A little more about the key figures. We have a one-capital deposit of 21.6. Apart from a slightly extraordinary low tax rate, our one-capital deposit is 16.9. We have a result per one-capital deposit of 4.40 kroner. We are well capitalized, which I have already covered, and we have a recorded value per one-capital deposit per exit of this quarter of 77.10 kroner. If we look at our growth, we have a good growth. We have a 12-month growth on the personal market at 15.4. Very well driven by bulls. If we look at our foreign growth, ex-bulls, we also see that there is tough competition. There is low foreign growth in the personal market in general. If we look at bulls, we are at a 12-month growth of 1.4. It is one of the things we are not entirely satisfied with in the last 12 months. It is our foreign growth, ex-bulls. It's positive, but we want to reach a goal this year of between 3 and 4% growth, so we're working hard on that right now. We also have a very nice journey on the operating market, with an output growth of 11.2% in the last 12 months, which is A little over what we have set goals for, and we are very pleased with the foreign growth. We also see that our value proposition and our position on the business market is strengthened, and that we are on the business list with many of the businesses in our region and along the coast, and we are very proud of that. And all the honor to the people on the business market in the bank, who have worked up this position over time, which makes us a very attractive partner on the business market for businesses along the coast. Income growth is also good, 13.3% in the personal account. Very nice growth also on the income side in Bulde. Looking at the growth so far this year, over 50% of the growth is financed with income. We are very pleased with that. It is above the income level in the bank. Our investment growth is at 3.1%, and we also have a good investment growth over time in the business market, but that will vary a little. All this, how we handle particularly large investments, and what are the financing costs for the banks in the market. We are concerned about not paying a lot of money for large investments if we can finance ourselves cheaper in the market. So we are concerned about liquidity and good profitability, and also how to finance the bank on it. Higher growth, the interest rate net increase, we see, even though it is not a very large growth from Q4 to Q1, the interest rate net is in good growth. The relative interest rate net is a little lower. As you can see, it has been flat in Q3 and Q4, and then we are a little lower in Q1 at 1.83, but still at a slightly higher level than what we have seen in recent years, if we had taken a slightly longer time series on the quarter than what we have taken here. We believe that to be competitive, we need to go into it now, with some higher losses over time, it is very much about driving an efficient and good bank. And we have a clear goal of being among the most cost-effective banks in the country. And I am especially pleased that we go down from 450 to 443 million kroner in costs in Q1, compared to Q1 last year. It gives us a very attractive position when it comes to cost of income, and it is decisive in terms of being competitive, a situation where we believe that there will be a tougher pressure on the margins and a tougher pressure on growth when growth is as low as it is now on the personal market. On the business market, a slightly different story, but on the personal market, which is important for us, we believe that the margin pressure will increase a little, and we see that some has adjusted the interest rate a little to the individual segments, beyond what has been triggered by interest rates changes from Norway's banks. If we look at our associated companies, Frende is characterized by a slightly higher number of injuries in the first quarter, in line with all injury companies. What is very pleasant is that we have a stock growth of about 10% in the last 12 months, so Frende continues to grow, even though we have had some changes on the distribution side. Brage Finance is doing well. Just in the quarter change, there was a loss for many of the Norwegian financing companies. There also had Brage an exposure, which means that had we considered the loss we made in the last round in Brage Finance, then the results for Brage would be worth half the share, or our result share worth half the share, not 42, but 21 million. So there is a small adjustment in Brage's forecast, contrary to what we managed to catch up on in our forecast. But I think most of those who have been exposed to this company will take their losses in the second quarter. That's what it looks like for those who have put the numbers that far, but we have in Brage's control made a slightly higher loss ratio than what has been reflected in i denne presentasjonen, og det utgjør altså 21 millioner for vår del. Så 21 i stedet for 42 på Brage, hvis vi hensyn tar det tappet, og den tapsavsetningen. Norden, litt mer krevende kapitalmarkedet gjør at vi har et resultatbidrag der på, som er flatt, altså null, og har tro på at dette vil ta seg opp igjen, og er trygg på at vi har et bra setup i Norden, som skal gi en fornuftig og god avkastning over tid, men altså et flatt resultat i første kvartal. We have a very fine development in saving, placement and drawing of funds over time in Sparbank Invest. Even though it has gone down a bit with the market, we see that we have a good net and new drawing of 752 million in the quarter. It is high, as you can see, compared to the last quarter. And that illustrates that we have a good value proposal. The offices with the advisors, the set-up we have, it stands well and is a good starting point also to increase the income on saving and placement in the coming time. If we look at this slide, which illustrates the result development from Q1 last year to Q1 this year, we see that the net income is significantly higher. This is because our margin of income is higher than what we have seen in a low-income regime. Our provision revenues are up a little bit. The associated companies are down a little bit. This is primarily due to the damage insurance situation and the damage figures that many have had in the first quarter. And then finance a little further. Our costs are down 7 million, i.e. a result improvement of 7 million compared to the same quarter last year. And then we have a loss level of around 40 million in this quarter, which is a little higher than what we had in the first quarter last year, but still a low loss level at Sparbanket Vest. This results in 1,256,000,000. If we look at our loan book, which is the next part of the presentation, we have a conservative loan book, at least according to our understanding. We have 76% PM, 20% of our loan book is bulls, 56% is personal customers without bulls, and we have a business market portfolio that accounts for 24% of the foreign book. Well diversified within individual businesses on the business market, it will be, but also well diversified geographically. But first and foremost, exposure along the coast, Vestland, Rogaland and Møre Romsdal are the most important market areas for the bank. And then there is a lot of our exposure in the Oslo region, Akershus. It is through Bulder with low LTV, which I will also come to later. The average LTV on Bulder is 42%, so there is very low borrowing on We believe that our foreign book has a moderate fall height. If we look at the housing price development from 2014, we see that Rogaland and Vestland, or Bergen and Stavanger as the largest regional centers in these two provinces, has had a different development in housing prices than what we have seen in the Oslo region. And we also think that if it were to be a little tougher times, if you were to see a housing price fall, then the fall height would be a little lower in our portfolio than what would happen if it had a national exposure, especially towards the Oslo region. We have a large amount of our loans in front of a moderate LTV, as you can see there, 90.3%. And we also see on the right side that we also have a housing price level in our region, which means that all professional groups have a fair chance of getting into the housing market. When it comes to the amount of money that could be marked, it is still at a very low level. This could change. We are at a historically low level. There is no sign at all that the amount of money over 90 days will significantly increase. This can change, but still at a very low level. We see no sign that it, at least in our foreign book, is up in the short term. And then we also look at interest-free loans. For housing loans over 60% of LTV, i.e. over 60% of the value, you also see that the interest-free loan in that portfolio, which is slightly higher than 60%, is still at a very, very moderate level, and actually perhaps at a slightly abnormal low level, if you look at this from a slightly longer historical perspective. It is important to note that we have a well diversified and robust portfolio. We are well diversified in different sectors and have ruled out the most cyclical segments. We believe that is a strength in the time we are entering. You can see that on the left side of this picture. We have a very moderate exposure to value, as you can see on the right side of this picture. And the ones on the upper right of the diagram are usually industrial buildings that are supplied with side security in the form of guarantees, operating permits, customer requirements, warehouses and other things that ensure that we have security outside of the property itself. If we take a look at the unpaid and unpaid loans in the bank, it is still at a low and moderate level. And we have a very robust sales level in Sparbank Vest. Within the subjective knowledge we have, we have been concerned about being conservative. As you can see here, we have a sales level for unpaid and unpaid loans on the personal market at 65%. It is slightly up from 52% in the same period last year. And if you look at the operating market, we still have a moderate level when it comes to lost and lost loans, and we have a decline there of 76%, which is up from 72% at the same time last year. So a good decline at a relatively moderate level when it comes to lost and lost loans. And that is due to the fact that we, since the first quarter of 2020, have built some model revenues. 65% of the loss costs we have taken throughout this period from the first quarter of 2020 have been model-based, and we have had very low individual deductions in this period, on average 13 million per quarter, which is very, very low, I would say, in relation to the loan book and the sum of loans we have in Sparbanket Vest på person- og bedriftsmarked. And this gives a good loss history. Here we have just taken a loss history linked to Pears, and who we have compared with here is at the bottom. But as you can see, we have had a moderate loss level, and a loss level that on average has put under the banks we naturally compare with. That was a little bit about the loan book. That was a little bit about the banking business. Then I will conclude the last part of the presentation with a little bit about why we think we have a good starting point for delivering a strong and good performance also in the coming quarters. We have just laid out a strategy, used good time with the board and the management and all the leaders in the bank to set a right for 2024 to 2026, where we have two overarching goals. We will raise significantly on customer satisfaction in those areas where we are a little lower than we want, and then we will lay a good foundation for being among the two best banks in Norway in equity and casting, in addition to reaching our absolute goal, which is 13%, as you know. We have four strategic moves we will succeed with in this strategy period. It is to strengthen our distribution power in Møre, Romsdal and Rogaland, where we have already started. There we will invest, in addition to investing in Bulder, in the future, to succeed with a wide and good distribution along the entire coast. We have a dedicated investment on Bulder, where we want to be at 380 billion in excise loans at the beginning of this strategy period, i.e. the beginning of 2026, where Bulder also at that time will be a prisoner of the bank's peace on a marginal basis with 0.5 to 1 percent point. We see that we have to scale our advisers for cost-effective operation in a better way. We have to have better tools for our advisers, especially in the personal market, but also in the business market. That is a move we have to make in this strategic period. We are starting a project we have called Hands on the Wheel, which is also about ensuring that the parameter setting in digital loan flow is much greater than putting it out on a relatively stiff model. So there we have a very exciting project that will make us able to both scale our advisors better, but not least get to a more effective digital distribution, which we see we are about to succeed with in Bulder, but which still has a potential. And what we learn to do in Bulder, we will of course use in Sparbank Invest to also achieve a good digital loan flow for those who can serve themselves and who do not want to have a conversation with advisors, but want to fix this themselves. There we will be right in front, also when it comes to traditional banks. And the fourth initiative, or what is listed as number three here, is to succeed in building foreign cooperation as the most exciting and cost-effective cooperation in the Norwegian savings sector at a time when the savings sector is in significant change. We are very concerned about building a strong and attractive value proposition for the banks that want their own identity and that want to have a cooperation that does not go any further than to ensure a strong cost-effectiveness. A bit in line with what Sparmanken Vest har som mål, nemlig å drive godt og ha en lav kost-inkom som grundlag for å kunne være her i eget hus og velge egen fremtid. In the regime we are in now, with a slightly higher interest rate, a slightly higher uncertainty, a slightly lower foreign growth, a slightly more uncertain forecast when it comes to housing price development, we see that our value proposition stands better than ever. Personal signature, offices, it is easy to get in touch with, good advisors you can have a conversation with if you are through a collective spread, if the interest rate is a little extra, we think that is perhaps more important than we have seen for a very long time. We experience that that part of our value proposition stands very strongly. So we think, and are fully aware of, that you have to combine that with digital solutions in the world class. I will show you a slide afterwards, which shows that we have the best mobile banks, both in the personal and business markets. We will continue to work with that. We think it is an important part of our value proposition. We will have a social engagement, both through the way we vote to develop the region, but not least through the grants that make us a bank that this region would have been poorer without, through a clear footprint in our region. And then we will further develop the savings bank idea, the savings bank model, and among other things use customer exchange to show that we are partly a society-owned bank, and give parts of our results back to the customers in a different way, than the commercial banks and a good part of the other small banks. So these four things, the four things we believe we can be best at, differentiate ourselves on, and if we are good at differentiating ourselves on these four, then we believe we are also a very attractive bank. We work with continuous measures to subjugate this value proposition. This is just one of many measures we have now. Now we have appointed three head of state. We will have four in these regions. Sognefjordland, Sønderland, Rogaland and Mølleromsdal. Leaders who have an ordinary line of responsibility, but who also have a special responsibility to sit us on the agenda, coordinate our various business areas in this area, build pride, be a clear voice, have a hand on the wheel on gift submissions in the region and so on. We believe that this is a small but important part of building an even stronger regional anchorage and even better content in our value proposition. Very happy and very satisfied with these three good leaders who are already ready to take place. And then we will have them in place afterwards when we have spent a little longer time on our future strategy in Møre Romsdal. Also a head of space in Møre Romsdal who will ensure that we have a strong footprint in these regions in the same way as we have in the region of Bergen, where we have a large head office with many key profiles in Sparbank Invest. In addition to the development of our value proposition, we have a wonderful gift business. We have distributed over 2 billion in gifts in the last six years. This gives a significant footprint in itself. Hjertebank is one of the initiatives where we really operationalize that part of our value proposition. We have wide divisions in many areas. We see that the municipal economy in many of the municipalities now is weaker. It is difficult to raise important investments towards children and young people. Therefore, we are in many half-projects now. The last is a new half in Os, or Bjørnafjorden municipality, where we gave 10 million for a few weeks ago. We are involved in... We spent money on the sustainability initiative, which is linked to the Microplast Center, 11 million kroner. And we have just released a division linked to the work around the media circle in our region, which we work with. secure much stronger information around real news and false news, and the fight against false news, which has become a major democratic problem. So this is just a small, few examples of much of what we do on the public side. In addition to gifts with significant size, we have an ownership of about 40-60, which means that we also have the opportunity to give significantly back to our customers. In the fifth year in a row, we gave customer exchange, and that was a record height for 2023. An average of a customer is a couple. With 4 million in loans without interest, they received 17,720 kroner in their account in the first quarter, because they were customers of Sparbank Invest. We see this as a unique way to highlight the Sparbank model, and of course this also builds loyalty to the Sparbank model in a very good way. Femte året på dag, vi håper vi skal drive så godt i årene som kommer også, at vi kan dele ut kundutbytte de neste fem årene også. Det avhenger selvsagt av bankens resultatsituasjon, men formidabelt 2,7 milliarder har vi delt ut i kundutbytte de siste fem årene parallelt med veldig stor gaveverksamhet. The feedback has been overwhelming in the first quarter. More than 255,000 Westerners have received customer orders on the account, and the feedback to the bank has been amazing. This also makes the bank's employees a little more proud of their work at Spar Banken Vest. When it comes to that part of our value proposal that goes on a good digital platform, we think the customer rating is the best proof. We have a very good rating on our BM app, 4.8, and we also have a very good rating on our PM app in Google Play and App Store, as you can see at the top here, together with Bulder, and we have taken some of our big competitors down. But I think this is a good illustration that it's about people and not budgets when it comes to developing good digital solutions. It was a small example. We work continuously to improve digital flats. Now we are one of the first banks in Norway to offer virtual cards. We believe that no one wants to bring a plastic card if they can avoid it in the future. With VIPS, which is on its way into a digital pocketbook, we believe that digital cards can quickly become the main rule in not so long. This is one of many initiatives to be at the forefront of the digital flat and also to subjugate the position we just showed in the previous picture. So little about Bulder, which actually runs out of the last slide, namely very good digital flats in Sparbank Invest, where we discussed how we can use our digital flats in a national average without establishing offices around the country. And we have succeeded in that to a large extent. We have a status for Bulder per 29 April, which is an exit volume of 54.5 billion kroner. A low LTV, as I mentioned earlier in the presentation. An LTV on an average of 42, a low risk. We have received a formidable knowledge on the Bulldog concept, which I will come back to, of 59%, in a very short time, with very limited market budgets. We now have more than 80,000 customers, and we have lifted the insurance coverage significantly. It was only at the beginning of the first quarter at 21%, and by 9-20 April it is at 22%. So a large part of the growth in the first quarter is actually financed through insurance, and it is incredibly important to succeed with the guidance we have had when it comes to profitability in the Bulda concept. Bulls are ready for significant growth further. If we look at drawbacks related to questions to customers, if you were to choose a new bank today, which banks would you rate? Then we see that bulls come all the way to the top. And that is despite a fairly small market share in the Norwegian market today, we are the most preferred market. the bank concept if you were to choose a new bank today. This is an incredibly strong driver, which makes us quite optimistic in terms of success with the growth journey that we have guided, and that we are still holding on to, which is about 380 billion in spending at the beginning of 2026. Bulder has the most successful customers on the Epsi-measure last year. Borge also gets good growth further, and we see that they have a high customer satisfaction, which is at the top in the Norwegian banking sector. We are coming up with new services. Last time I said that foreign payments were important. Now it is in production. We see that in relation to a few banks that have had a lot of problems lately, it is important for us to get the offer of children and young people in place. There is ongoing internal testing. Our customers have said that this is important to get in place and we prioritize IT development, based on what our customers want to see in the Bulder app, so we offer it to children and young people right around the next turn. We hope that it is in place and in operation in the second quarter of the year. And then we also have testing going on when it comes to virtual cards in Bulder, and that will also happen in this quarter. Some get examples of new things that make us able to complement Bulder as a total bank offer that has the best Norwegian bank services in the mobile app. This is the journey we started to guide from last fall, when we had the capital market day. We will go from an out-of-water situation to an in-water situation from 1.1.2026. And we are confident with this journey. From this year onwards, we see that we will be able to achieve a marginal capital transfer on the bulldozer concept of between 7 and 9%. This means that the bulldozer will still win the bank's capital transfer, but less than what we have seen before. We have a growth in the first four months of the year of 7.7 billion. It should be good for us to reach 60 billion, at least at the beginning of this year. We have two tertials again. The first tertial we grew with 7.7 billion, so it should be good for growth. And the profitability is in line with the guidance and in line with the growth journey we have made for Bulder. So we are quite confident that we will succeed both with margin goals and growth goals this year. And then it will be extremely exciting to follow this concept further. But we are quite confident that this will go from winning out to winning in the bank's one-capital withdrawal on a marginal basis. And we are quite proud that we have managed to build this concept with negative one-capital withdrawal. In a period where we also for the bank have still delivered a fairly good one-capital withdrawal. And held in front and in line with our relative goal. to be among the two best, and the absolute goal is to be above 13. So we have built new business, invested, at the same time as we have learned at the target level. The trading group is important to us. It is a collaboration where we believe, even if we have different sizes, we have the same ambition, namely to drive a good bank, drive a cost-effective bank, and not least, drive so well that a single bank can sustain itself in the future. That is what we are laying the foundation for. We are well in the process of recruiting key people to the change group. It will not be a large group. We are investing for the first time in a 10-year project that will control the technology research that we are going to do and conclude with in 2025. Stronger purchasing cooperation, a number of single projects that we want to launch to use the scale in some areas where we see that it gives meaning. And we are also working on a full-fledged investment in infocapital management. I hope we can come up with more information in the second quarter. These are the three most important priorities at the start of the change group. Finally, it is a good performance culture that makes us perform well, that we drive effectively, that we have low losses. It is a culture that has been built over time. We have low turnover in the bank, record low turnover in 2023. We see that cultural work makes us able to keep up with people. We see that we are an incredibly attractive employer, and we see that The candidates say that we see that they are the best place to be if they are to realize their potential as leaders and employees. This makes us very proud, and it also means that we are not going to stop investing in these collections, these leader reflections. It is to start all board meetings with an important leader reflection theme before we move on to the other issues. We work very systematically in many areas, and the sum of these measures is not a single leader collection A single leader reflection, or a single breakfast, or a single leader spiral program that makes us move. It is the sum of these things that makes us able to perform well over time, and that we are well equipped in meetings with Mertef time. And our top initiative in leadership development is our leadership meetings, and over time we have established Camp Finse, which is a leadership development arena for us, where we at least once a year set off a whole week, where we have two parties, some come on Monday and leave on Wednesday, and some come on Wednesday and leave on Friday, where we invest in good leadership, discussion around good leadership, and let ourselves be inspired of important leadership stars in Norway when it comes to leadership culture and to succeed in realizing ambitions. Just a small example of this is our leadership program. There we see some of our leaders to the left, who have, through a good period, a professional background, based on their leadership knowledge. And we also see that many of the leaders we have had in the previous leadership programs, they become leaders in the bank. I am greatly proud of the fact that in recent years we have had 80% of internal recruitment, for free leadership in Sparbank Invest, and that means that we are good at investing in young people who want to take a step up as leaders, and we give them the opportunity, we dare to give them the opportunity, when the opportunity is there. And especially proud, I think, in recent years, I am of Simen Eilertsen, who has entered without having led people before, and now leads Bulda in a completely extraordinary way, in terms of goals and in terms of the growth journey we have made for Bulda. One of many good examples of just that. and do pre-compte practice when it comes to giving young leaders the opportunity and also educating young leaders to be in a position to take the opportunity, and the opportunity opens up in Sparbanket the most. Our first test was to take the Kemp Finse concept out and use it outside the bank. We did that in the second quarter, where we gathered a group of young leaders, promising leaders from Sognefjordane, and gathered them for a few days at Finse, and shared a lot of what we work with in the bank, used a lot of the thematic we use in the bank, on a leadership development program that we will run for a long time, for this fantastic group of young leaders in Sognefjordane. This is so exciting that we will be scaling other regions, I think, in the future, and these regional leaders will be permissive on when and when we will take such initiatives, for example in Sønderland and Rogaland. That was a little about our banking business, a little about our foreign book. This was some key points on why we think we are well positioned to deliver strong performance in the coming quarter, why we think that an investment in Svegg can still be a good investment. And our history is good. If you look at this slide, this is the single-capital transfer to the bank up against our toughest Norwegian competitors from 2012 to 2023. And there you see that we have been in touch with both our absolute goal, and not least our relative goal of being among the two best over time. We believe this is what makes us have the space to develop the bank for the benefit of employees, owners and customers in a good way. A strong ecosystem in the bank of exciting jobs, an attractive instrument in the swing, and not least to operate in such a good way that we can share shares of our revenue back to customers and the region. Our pillars to do this further is this. We believe that customer exchange and gift exchange also has a value for our investors. We believe that the ecosystem we have built up in the last ten years when it comes to digital development is among the leading countries. Now we also see that we have very low penetration in our IT environment. We see that the best IT developers are those who can both the industry and IT in a good way. You can't do the industry with just IT. then it will not be an effective IT development. This means that stability in this ecosystem is very important. We have achieved this in a good way with Siren Sundland at the top of this division. Low risk, low complexity. As I said, individual investments of around 13 million a quarter is very low compared to having an expense of over 250 billion kroner. We have high ambitions in sustainability, which we did not cover in this presentation, but we will most likely get back to that on our capital market day. We have a strong performance culture, which we continually invest in. Many of the bank's employees are now also owners of the bank. This gives an extra interest in how we perform, which we think is healthy and good. And then we are a little unrecognized, right in front of one-capital-discounts, and we will continue to be so, with a starting point in, among other things, these things we have been through. So with that, the time is up for questions, and hopefully some good answers. I invite Franco Brede here, and he can still send questions to the e-mail address, if he has questions he would like answered in the session we will have after the presentation.

Thank you, Henrik. In your presentation, you mentioned that the foreign exchange rate on the personal market has exploded, which is an area we are not entirely satisfied with. In connection with that, we have received a few questions. What measures are being taken on the private market to raise the exchange rate? Will price be an effective tool? And is it actually realistic to reach 3-4% when you are between 0 and 0.5% per first quarter?

First of all, we think it is possible. It is demanding, but it is possible. I can't say anything about pricing. We have undergone quite strict financial guidance on what we can talk about, so I can't say anything about that. But what we do say is that we follow the price and competitive image. We have a cost-effectiveness that makes us competitive in price, and we will continue to be. We have this high agenda for business reviews, we make decisions, we see that part of our new distribution is starting to give effect. We see quite positive development, if I may say so, in April. So I am quite confident that we will be in that interval at the beginning of the year. And then we have a number of decisions. We have scaled up the Rogaland region with some new year projects, so we have made some concrete measures to support that level. But we have said many times that we will not sacrifice profitability for growth to a very large extent, but we will be competitive and we will have a good underlying growth, as we have both in Bulder and on the business market in the bank.

Thank you for that. You were talking about the price, and Frank, what does the magic look like, and the pressure on housing loans, other people's loans, business loans, and insurance?

The answer is general. We have said this all along, when these rent changes... will come to an end. And the last interest rate has had an effect in the first quarter, so we will perhaps have a more dull situation on the interest side than we have had in the last few years. So with a relatively flat interest rate level, and it looks like the interest rate decline is waiting for us, we think it creates extra pressure on the magic. Combined with low market growth and capitalization of several banks, we think it will continue to tighten the competition.

We will add that we have one or two changes that we do not have 100% effect on in the first quarter, as we get in the second quarter, but apart from that we see that we are well positioned for a slightly tougher competitive climate.

Yes. Jan-Erik, pure core capital coverage makes a small leap in the quarter. Can you tell us more about the reason for that?

It's a combination. It's about a good migration in the portfolio. It's about a few new models. It's about a number of things that in sum make us have a good development in the quarter. I don't know if you want to supplement that.

Yes, I can say that you have... We have also been waiting for a housing price choice. That has not materialized in the quarter, quite the opposite, and that also gives a slightly positive effect in the capital accounting of the quarter.

That is correct. It is a nice bridge over to bulldoze, because there has also been a question this quarter. The average risk value in the bulldoze portfolio is now at 20%, so that the IAB gold is binding. Will that affect the growth profile of bulldoze in the future, for example by aiming for a slightly higher LTV and a slightly higher margin, Jan-Erik?

That was a very good question. We are concerned about making commercially good and smart choices. And I think we should be aware that I don't think we've really seen the volatility that is implicit in the IRB model yet. To be on the safe side, to be a little safe, to have a little headroom if there is a fall in housing prices, I think that's pretty smart. So to fine-tune this in the short term, because we are a little below or above the floor, I think is a little difficult, because suddenly there will be a period of housing prices falling, and then this will hit hard into the risk objects. So we'll have to wait and see. But of course, it's part of the picture. It's to see if we can take a little higher risk, for example in Bulde, which has a very low LTV, and is definitely more likely to pull down LTV than in Sparbanket Vest, well below the floor.

We continue with Bulldog. Do you notice any changes in the growth rate in Bulldog after the price increase in the middle of March, i.e. that we effectuated the 15 points, and after S-Banken put down the interest last week?

I think we have to be careful to talk about the interest rate situation, but what is a coincidence is that I am very happy that what we have managed to build with Bull there are not the top ones who are moving banks all the time. Of course, the decline is an issue when you build 50 billion abroad, but the decline is very small. So what we have managed to build with Bull there is not ... Overestimate the price part as a part of the bubble. We have built a trust-raising concept where we automatically adjust your interest with lower LTV. We have said that they should be competitive and among the best in price, but not necessarily price leading. And we're not doing that now either. So what I've experienced with Bulda is that it's not a concept that is much more robust than it was in the beginning, linked to whether you're number one, two or three on the financial portal. And that makes me quite confident in the journey we're going to have, that it's not like we have to be at the top of the price all the time. We can have periods where we are within the value proposition, which is that we should be competitive in price and among the best over time. And that doesn't mean among the best all the time. And we see that we have a fantastic growth, right? 2.7 billion in the first four months. and 54.5 billion in loans, so we only need 5.5 billion for the rest of the year to reach our goal of 60, and we have two goals to achieve at the same time. This is the journey to the inner peace, and then we are going to reach our growth goal, and we are very close to the growth goal. This indicates that we do not have to do anything at a price to secure our target image.

Over time, we will be able to expand the products in Buller. What is important to say in this quarter, that 50% of the growth we had in the first quarter in bulls is actually financed with income in bulls. And we are extremely satisfied with that. And that will of course both contribute to strengthening the income from the concept of isolated sales, but also to reduce the bank's saving of financing costs.

And that is significantly more than what a geographical new investment would have had from the investment coverage. And that is quite important. I think it's because this bull has been isolated, and we report that it is isolated, so there will be a very large focus on investment coverage. But if you take our Ålesund investment, or any other bank's Oslo investment, then you will see that the financing rate is down by 10%. So we are very satisfied with the financing rate in the bull now. Our journey forward is that we will get more and more people to use Bulle as a total bank. Now the concept is in place with the most important services, and we see that it boosts the use account revenue, and there is a fantastic potential for us in relation to getting all those who have taken loans to use Bulle as a main bank and not just as a loan bank. We see this happening to a much greater extent, and it is a great satisfaction to see the development there so far this year.

Yes, that is also a question here in relation to Inscud and Bulder. Have you made any special measures to get the Inscud's up?

Not done anything special. The most important measures are that Bulder should be seen as a full-fledged bank offer, the first in the world on mobile only, and that is where we are at the moment. With the fact that families who move over housing loans and total credit accounts can also have their children's accounts in the Bulda concept, and a number of such things, the foreign payment system is in place, digital cards are coming now. This is the most important thing in terms of increasing income, and especially those who have a good margin, which is operating and using account income.

Last question on the bill before we move on. If you are ahead of the plan to reach 83 billion, that is in time, will you keep the pace up or start thinking about the price earlier than what you will see?

I think we should keep the pace up.

Frank, I've got a question here on costs. Cost development has been impressive for a long time, and again in this quarter. Given how high foreign growth you have, is there a risk that there are areas that are underinvested in?

That's a good question. We have had an extreme focus on costs and cost development all the way back to 2012. We had a nominal development in costs from 2012 to 2021, which was relatively flat. And then we have had a certain growth in recent years. We don't see anything that means that we have underinvested, but we still have an extreme focus on following the cost side. Even though we have picked up the lowest hanging fruit, there is still a lot to pick up on the cost side in the future. Therefore, one of our top strategic measures, also in 2024, is to ensure that the cost growth is maintained. at a low and acceptable level. And we have, we are guiding on to say that we are a cost increase in every year, so we are expected to be around 5%. And then we get some effects of some strategic measures, so we might have to go up to around 7% in every year. We have a clear ambition to achieve that.

If we are going to invest more, there is a little more distribution power, a little more advisors maybe, in the selected places, in the two flanks, where we have said that we are going to strengthen strategically Møller, Romsdal and Rogaland. So that's what we want to see. And then I just have to say that we are the, now I repeat what we said last, but it is clear that we are the first bank One of the first banks is at a new cost level in Tieto and Evry. It's going up, and it frustrates us greatly that there are so many price differences. But what is satisfying is to see that we manage to bring in our LCD to what we are doing at the top. So at some point, everyone will be on the same level there, and then we have an advantage. And that's what we're working with, and we're working with API calls and things like that that we can do in the short term in relation to taking IT costs. But it's not just the cost to the core supplier that goes up. If you look at Microsoft licenses and other areas, it grows at least as much. which happens in the market on the core side, necessarily deviating from what we see in the rest of the IT costs. So having control over IT costs now, we think is extremely important, and we believe complexity draws costs. If I were to highlight why I have a strong belief in the Friendly Alliance, or in cooperation as such, we are not an alliance but we are in cooperation, that we think we can do a smart move here, which is on reasonable complexity and which makes you build a good foundation in the future, which is cost-effective and does not attract enormous complexity costs. So I think we have a smart strategy, and we think that we will succeed with that strategy. And if it was so that there were so many advantages that they had to cooperate a lot, then it would not have been the case that the foreign banks were the lowest in terms of cost of income. benchmark now, so almost no matter what exchange rate you look at banks, the foreign banks have the lowest cost income. So complexity is an incredibly important and important foundation towards the piece of costs as is and to be.

We have also received a question related to customer exchange, one who has calculated 44 basis points in loan exchange for 2023, if you have 4 million in housing loans. Has it become as good a matter of fact as mutual customer exchange, is the question.

I have been the head of the security department since the beginning, and we have never used a lot of energy to replace the spare parts. We have competed well with the spare parts. It is clear that it has been one of the unique things the spare parts have had, which has made their history and their business model in a good way. We have competed well with that. And I think this is one of many ways to highlight the savings bank model. For us, we are sure that this has been a success. We are a bank with 60% community ownership. That means that when I say that we have divided over 2 billion kroner in gifts in the last 5-6 years, then this would have been an enormous gift budget if we could not have divided this into both gifts and exchange. Sparbank Invest's big advantage is that it's a 40-60 share. I think it's underrated. I see Sør and Lasse on the same. It's a significant strength for us, and it has many facets. One of the facets is that we share the supply part, and we do it well, with both society through gifts and customer exchange. It is appreciated on both sides. I experience that we get very good response on the gift part. gives 10 million kroner to the new hall in Bjørnafjorden, as we did just now, then it creates a norm of goodwill. And it hasn't been more important, I think, in my time in the bank, to be able to supply a tight municipal budget with that type of allocation. That's what the region sees, and that's what people appreciate. And that's a unique part that actually comes out of the fact that Sparbanket Vest was one of the few of the big banks that managed to get out of state aid in the mid-90s, and that's why it has a different use today than maybe some of the others.

Good. The last question we raise today goes to someone who is listening to pick up capital management, as you mentioned. Should this be a community or today's foreign companies? Should it run its own management or sell funds on behalf of others in a slightly more colorful way?

We believe that there is a great potential for savings and placement further. We believe that a part of the value creation will also be in fund production, if I should use that term. So to take a larger part of the value chain is definitely a part of this. I think it gives a pretty good color. And we at Frendesamarbeid have the opinion that we should not have a holding company that owns everything and that becomes very rigid. We have a clear ambition that these investments should be bank-controlled, it should be direct ownership and it should be able to be choice-free in relation to whether you want to be part of it. And then there will be rebalancing of new incentives from day one. So that's what we're working with.

I don't know if you want to supplement that, Franke? Yes, that's right. And then there's this in the pipeline and in the evaluation. And what you say, Jan-Erik, and that's a pretty important underline, is that this company, the owner structure becomes the same as we structurally have it on both Brage and Frende and other companies, that Frende Bank owns directly into this fund management company. So we have to come back to... Any more questions at a later time? Enough questions for today.

That was good. That was what we got from Bergen. Thank you, Jan-Erik. Thank you, Frank. If you have any questions, please contact us directly at the end. We thank you for following and wish you all a good day.