Sparebanken Vest

A warm welcome everyone to the forecast presentation for the fourth quarter of 2024 for Sparbank Invest. This is the last year. We want to announce the annual figures for Sparbank Invest. We are looking forward to what will be our next chapter, which is to build Sparbank Norway together with good people in Sparbank Sør. If you have any questions, send them to this email address and we will try to answer as many of them as possible after this first round of our annual talks for 2024. If we start by looking at the overall financial goals for the bank for 2024. One-capital spending of over 13%, dividend rate of around 50%, a net net capital of 16.05% and a cost percentage of under 30%, we deliver in 2024 on all these goals and partly on some of the goals with good margin. We have a one-capital spending of 20.1% in 2024. We have a division rate of a little over 50%. We have a solid capital position of 17.7% and we delivered a very good cost of income in 2024 at 24.8%. This means that over time we are at the forefront of Norwegian banks when it comes to one-capital transfer. Here we have taken the figures from 2012 to the third quarter of 2024, since we do not have all the figures for all banks yet for the fourth quarter. But as you can see, we are at the forefront when it comes to one-capital transfer in the Norwegian market throughout this period, if you see this period as one. We have a statement from the board. When it comes to the allocation of the fiscal year 2024, as you can see in this picture, the exchange rate is at just under 4.5 billion kroner. We have an equity break of 40.7 and 59.3. It was 40.6 before the merger with Etne. A little up on the equity capital to 40.7 with that merger. You can see that the equity capital has 1.8 billion, slightly above that, of this exchange base. With the investment of 8.50 kroner, it means 933 million to the one-capital property owners, and the social capital has 2.6 billion of this exchange base. We divide this by 927 million in customer exchange and 434 million in gifts. And as we have also expressed in this debate around the Sparebank election, there are a total of 400 million plus in gifts this year, a formidable amount, which means that we do not, as we see it, need to have an incredibly much higher amount of gifts than that. We manage to find good gift projects for this amount, but if we had to divide the entire customer exchanges and gifts to gifts to the public in the form, a large part of that will probably be sold to a foundation and not be distributed, because it is a formidable amount. And that illustrates well and in a good way why we are one of the banks that needs the flexibility that the Bank Law Commission introduced in 2007, namely the reason to share both customer service and gift, because we have both good income and we have a high and strong community ownership. Because Sparbank Invest was one of the largest banks during the banking crisis, it managed without state help, and therefore has a significant community ownership today, and a community ownership that is significantly greater than perhaps comparable banks. If we look at the nominal exchange rate over time, it is the highest exchange rate we have divided in relation to the annual supply for a long time, 8.50 kroner, one kroner higher than what we had for 2020. The third result, as you can see, was 2050. In 2022, we also had a significant exchange rate. We had a surplus available as part of the annual results, and we also had an extra-ordinary allocation of 3 kroner that autumn. If we look at the gift part, we are very proud. I know that all my colleagues are very proud of this. There is no one in our region, and perhaps not nationally either, who has the same gift capacity that Sparbanket Vest has. Precisely by having a significant community ownership, and a community ownership that is less than 60%. We have divided 3.1 billion kroner in donations since 2015, and a significant growth since 2015, when we divided 50 million. In the last two years, we have put an average of well over 0.5 billion kroner a year. A formidable difference we make in our region. This makes the employees incredibly proud of the community mission we carry out. We are also incredibly concerned about being a bank with strong savings bank values in the coming years. Therefore, we also fight so clearly to maintain the one-capital model and the savings bank model and the special features that the savings bank sector has today. in connection with this Sparbank challenge, which I will also solve a little later in the presentation. If we look at some of the projects that we have supported through our oversight, then it is an incredibly wide range of gift allocations. One of the things that I think has made both me and the rest of my team most proud in 2024, is the commitment we have had to lift girls football in Norway, and especially in the West, in relation to recognition and setting standards. There we have done an incredible amount when it comes to the allocation and support of the girls team. But we have also done a lot when it comes to the attitude towards the girls football. And produced commercials, advertising campaigns to raise the recognition of the girls football. And we have received a lot of attention around that. Among other things, we have been nominated for the European Sponsorship Association Awards, which is one of the The proof we get is that we have really made a difference. One of the projects that is in all the gift submissions we have had last year, which makes us really proud. As far as customer exchange is concerned, I have shown that the government is setting 927 million kroner for customer exchange. Here we have shown the customer exchange rate since we introduced it in 2019. It is quite natural that customer exchange increases when we are well capitalized and have good income, and it is quite natural that it is a little lower this year. we have a need for building capital, or that the results are a little weaker. For us, it has been important to have a stable and good gift business, over time, at the level of what we think we can share in a reasonable way. It is important to note that many foundations receive money from the bank and share out 50% of the money they get from the bank, we share out 100% of what we give away, with significantly lower costs than is the case for many others who have a different model. We believe in the one-capital model, we believe in a strong basic fund in the bank, and we believe in direct gift distribution from the bank, and that this gives the most effect to the society around us. So, the one-capital proof is strong. Sparbank Invest's one-capital proof is strong. We have delivered good results. We see that it is not at all disadvantageous to be a one-capital proof bank. We see on the overviews that the pricing of both stock and one-capital proof banks The main thing is that the price is based on future investment expectations, and there are no disadvantages or advantages related to the various instruments as they are today. Therefore, we are also extremely concerned about the balance that is in today's capital market, which will continue after the politicians have taken a stand on this position from the Sparbank-election. That was a little introduction. I will go on and look at our numbers, our key numbers on banking, a little bit on our loan book and loss risk in the future. I'm going to talk a little bit about Bull there, I'm going to talk a little bit about the Sbarbank election, which I touched on a little bit initially, and then I'm going to talk a little bit about the next chapter for our part, which is Sbarbanken Norge, something we look forward to very much, both in Sbarbanken Sør and Sbarbanken Vest, and look forward to the legal version on May 2nd. If we look at our one-capital statement, it has been good in 2024, 20.1% on average. Varied a little from the different quarters, as you can see here, 17.6% in the fourth quarter. We will come back to the result change in relation to the fourth quarter in the previous year. The result per one-capital statement is 16.66 kroner for 2024 collected, 3.87 kroner for the fourth quarter. We are well positioned in terms of capital, with 17.7% as you can see here, and we have a recorded value per equity certificate at the start of the fourth quarter at 89.10 kroner. We have a good foreign growth in 2024. We have a foreign growth to the personal market of 11.2%. It is also good ex-Bulder. We have a foreign growth, if you look away from Bulder, of 5.1% in 2024, which we are very pleased with. We have made a formidable effort in our PM division in Bulder to ensure a good foreign growth in 2024. We have said before, and we can repeat it again, for us growth alone is not the most important thing. Profit as growth is what we are concerned with. This means that there is a trade-off between income and growth, and we think we hit it pretty well in 2024 with 5.1x bull there. We also have good growth in the business customer market. We thought we would come in the fourth quarter, but came now in January. So it will swing a little when it comes to quarter growth on the business market. But over time we have taken a very clear position along the coast when it comes to being a good business bank and had a very good growth over time. We do not think this will be much higher than we have had in the past. Then we know that there is a significant risk for negative risk selection, especially in the business market. So we are concerned about having a healthy and good growth. Take the market share, but not such a big growth that we risk getting increased losses. Very pleased with the loss picture in 2024, 97 million kroner in losses versus 95 million in 2023. It is a stable and good low loss level, and we will continue with that. Therefore, it is also a balancing act in relation to growth, especially in the business sector. But very well satisfied with the work that has been done in the business market division, where we have managed to achieve good growth with good risk and reasonable margin over time within the framework of the growth goals that we have set ourselves. On the investment side, we have a good growth on the stock market, 15.2% in 2014. Bulder has a tremendous growth on the investment side. It is important for us to raise the financing rate in Bulder. But also a good underlying investment growth in the stock market division in the bank. 5.3% ex-Bulder investment growth in 2024. And then we know that the growth in revenue on the business market has shifted a little with our appetite for large money market revenue, and there you can see that the 12-month growth is at 2.1%, so it has gone down a little, in line with the fact that we experience that financing has been a little more attractive than large revenue from the public sector and from large business customers. We have a good growth in our interest rates. It is up quite a bit from Q3 last year, and then we see a small decline in relative interest rates to 1.84, as you can see on the right part of this picture. We are very concerned about the costs. We have also worked well with the costs in 2024. If we look at our operating costs in 2023 versus 2024, we have an increase in the cost picture due to the consolidation of foreign capital management, or indirectly Borea, which we have bought. We have an increased formula tax, which is significant. We have 48 million in formula tax on the basic fund capital, something we wouldn't have had if we were an equity bank. So that's one of the disadvantageous things about our own capital. We see that we have fusion costs of 16 million. in the year of 2024. And then we have an overall cost development on underlying operations, which is not related to one-time transactions, at 38 million kroner. And that means that the underlying cost growth, adjusted for fusion costs, form of tax and consolidation of Borea or foreign capital management, is the underlying cost growth of 2.1 percent, and we are very, very pleased with that for 2024. We will continue to work hard in Ny Bank to ensure that we are One of the countries that is not the country's best-run bank when it comes to cost-effective operations. Incredibly proud of the culture we have managed to put in the organization. I experience that we are a team and we are a group of employees who really ask questions continuously. Do we need this? Can we negotiate this? Can we do it in a different way than we did earlier to reduce our costs? This is what makes the underlying cost growth below what is ultimately the price and wage growth in the market. If we look at the result development before tax from 2023-2024, we have a good increase in net interest, 917 million. The provision revenue is up 152 million. Connected business is up 73 million. Finance is up 200 million. Our costs, as I have just mentioned, are not much up if you look away from the one-time ratio, but up 118 million combined. And then we have a loss picture that is stable from 2023 to 2024. We had 95 million in losses in 2023. We have 97 million in losses in 2024. That is a very low level in relation to the bank's size, and perhaps also from a historical perspective, an abnormally low loss level. This applies to both the savings bank most, but also what we see around us. So I believe at some point, we have to take a step forward and get some higher losses. As for the risk picture, especially on credit, in the next part of the presentation, as many of you who follow us know, you know that we have a heavy personal market portfolio, which now accounts for 76% of our expenses. The operating market accounts for 24% of our expenses. And of the 76% on the personal market, 99.6% of that portfolio consists of housing loans. So we think that we are a conservative and low-risk bank. And with good one-capital spending and low risk, we think that the risk-adjusted spending on Sparbanket Venst last year is very good and perhaps best in class. Over time, we have also been careful to expose ourselves outside of what we have defined as our main market area, and this will change as we build distribution across the South and the West. But as you can see on the right, our main exposure is in the West, Rogaland and Mølleromsdal, which is our private market area. We also have a part in Oslo Akershus, and a lot of that is Buller-customers with low LTV, which again supports a low risk profile on the credit side of Sparvonker Vest. If we look at the unemployment rate for pensioners, you can see the unemployment rate for over 90 days to the left of this picture. It is at a low level, slightly higher than the lowest level we have had for a while, which was in September of 2023, but still at a very low level, both in the short picture that we have taken here from January 2021, but also from a longer perspective, this is a fairly low level. And if you look at the freedom of address on the housing market, over 60% LTV. What is below 60% is perhaps not such a big reason to be worried about. There is good security. But on the freedom of address on the housing market, over 60%, it is also at a record low level. Here we have brought a time series from the first quarter of 2021. And as you can see, it is at the lowest level we have seen in this time series. And again, if we had brought a longer time series, it would have shown that this is low from a historical perspective. If we look at the operating market and the collection of deposits, you can see that we have a low level of deposits when it comes to miscellaneous and lost loans, both on the personal and operating markets. This has been relatively flat. Here we have taken a time series from the fourth quarter of 2022. And then we would like to add that when it comes to the amount of collected unpaid loans on the personal and business market, if they compare us with other actors, which is natural to compare with in our sector, then we are at the forefront when it comes to the amount of unpaid loans on the personal and business market. This again supports a bank with low risk and a bank with moderate losses over time. That was a little bit about our loan book. Then I will tell you a little bit about Bulder and the development in Bulder. There we are on target when it comes to the development in foreign volume. We had a growth of 3.3 billion in the fourth quarter. When it comes to foreign volume, we had collected foreign volume per 6th of February. and you can see that we are slowly growing. We have a clear ambition to achieve our growth target in 2025, which I will come back to. We have a low risk with an average loan rate of 42%. We have a significant knowledge that I will also come to tonight. We have built 100,000 customers, and we are very pleased that we have managed to raise the income tax to 25.6. If we look at the new establishments at the office level in Sparbanket Mest, the income tax is significantly lower. For example, on our investment in Ålesund, the income tax on a new investment that starts at 25.6 is quite good. We are very pleased with this, and we are actively working with Alhonor and the BULDER team to achieve both our growth goals abroad, but not least strengthen us significantly when it comes to the investment coverage in the BULDER concept, which is important in relation to our profitability goals in BULDER. We have shown this many times before. We are interested in showing it again and being credible when it comes to our guiding and guiding on how we perform in relation to very ambitious goals. We achieved 60 billion by the beginning of 2024, with a good growth in the fourth quarter of 3.3 billion kroner. Our goal for the start of 2025 is 73 billion kroner abroad and a one-capital transfer on a marginal basis of between 9 and 11 percent. We also believe that we will be able to do that in 2025, so we are very determined to stick to this plan and will guide on this every quarter and so on. But we are out of the picture in relation to the long picture, so we have seconded the last quarter. Bulder has a fantastic starting point to grow further. In a survey from Kantar, which we do regularly, we ask which banks in Norway would you consider if you were to change your housing loan today? And it is absolutely fantastic that the vast majority of the Norwegian population who have a housing loan actually answer that they would move to Bulder. This is a very good indication that we have a good condition to be able to grow further. If we add that we had Norway's most satisfied customers in 2024 on the Epsi-measurement, it strengthens the position of Bulda in Italy. And we are in an incredibly good development when it comes to Bulda, in the group that works with the development of attractive digital services and a seamless banking experience, both on a daily basis, but not least on the home launch trip. And there we will also come up with new launches in 2025. Among other things, we will probably launch a moving machine that will makes it the easiest bank to move total customers to. And not least, we have worked a very good period in Sparbanket Vest with a project called Hand på rattet, where we developed our own travel when it comes to home loan travel and the use of home loans digitally. And not least significant simplification of the everyday life of the providers, both in Bulder and Sparbanken Vest, which is part of the process we have been working on for a very long time, and which we are looking forward to seeing the effects of in 2025. I see several refer to the mobile banking research developed by Konsulenthus, which also sells consulting services to Norwegian banks. We are more concerned with the customers, when it comes to who has good mobile banks in the Norwegian market, both in the personal and business markets. If you look at the average rating in App Store on Google Play and App Store on the stock market, Bulder's app and Sparbank Invest's app are at the forefront. This is a good indication and a good guarantee that the alliance-free strategy that we have chosen is good for us, both when it comes to cost efficiency, but not least, there is a short distance between idea and action in a set-up that has low complexity, and that has incredibly talented people who work every day so that we can be at the forefront when it comes to digital services. So the alliance-free strategy gives us both an effect on costs, low complexity, but not least, a healthy front customer experience when it comes to the mobile banking experience, both in the personal market and in the business market, in relation to the customer's judgment, as we see here. That was a little about Bulder and our digital capability. Then I will go to the Sbarbank election, where we are engaged and strong. We were very surprised when we saw the introduction of the Sbarbank election, which we think in practice will be the beginning at the end of the Sbarbank sector in Norway, as we see it today. I will get to that later, but many of the approaches that are suggested from the Sbarbank election are approaches that have been in Europe, in other countries, where it has been the beginning at the end of the banking sector. If you fundamentally change the purchasing value and the capital model in the banking sector, you will see a completely different sector over time, and I will come to that later. What we are quite excited about is that the Sparbanksutvalget's statements are completely in opposition to the intention of the government and the Minister of Finance, and what he expressed in March 2024, namely that the Sparbanksutvalget would come with statements that would support the private sector and important social functions of the Sparbanks. We experience that we have received a statement that is in opposition to the intention of the Sparbanksutvalget and the mandate that the Sparbanksutvalget received. We are very happy that a combined savings sector through the Sparebank Association is so clear that the changes that are proposed when it comes to equity proof and the capital structure of the savings banks far from what we think is the right medicine for the banking sector. We experience that a medicine is prescribed to a patient who is not ill. We live very well with the one-capital model we have today. We have no drawbacks with the one-capital model we have today. And we are also strongly disagree, as banking associations and FinansNorge, that the owner's share of capital today would not correspond to the EU's capital requirements. For my part, We have, together with a number of other banks, given a statement that supports FinansNorge 100% and the Sparbank Association, where they have taken a position. We have also taken a position in our statement on customer exchange, where FinansNorge and the Sparbank Association have not taken a position. We are a bank that needs the flexibility, as I said initially, that today's regulation gives when it comes to disposing of the share of surplus that belongs to the social capital. We have gone over 400 million in revenues to Gavi last year, and we have close to a billion in revenues to customer exchange. We need the flexibility to be able to play both on customer exchange and on the gift business, as INCD does today, for example, and a number of other savings banks. And we have seen that it has become different... Customer exchange means significantly lower gift services, and we are very dissatisfied with that. If we look at the development when it comes to all-purpose gifts for the collective savings sector from 2009 to 2023, which we have talked about here, you can see that it has doubled. It was 0.5 billion in gifts to all-purpose items from the savings sector in 2009. and 4 billion in 2023. And Sparbank Vest, in this time series, with the numbers we have, is one of the banks that has supplied the most gifts in this period. Significantly, if it is 3.1 billion kroner in the last 10 years, in an earlier slide it showed. It is significant, and it also shows that for our bank, customer exchange has not meant lower gift business, but on the contrary, we have increased the gift business throughout this period. When it comes to customer exchange, it is difficult to find an overview of the interest rate picture, because it gets customer exchange at the top of the interest rates that are paid on loan and the interest rates that are received on interest. There is nothing that indicates that customer exchange does not reach the top of already competitive conditions. The exit margin for the banks that are on the Oslo Stock Exchange today, and that give exit margin in their quarterly reports, and then you see that the exit margin is significantly lower for banks with customer exchange than for banks without customer exchange. that the banks that today share in customer exchange are more competitive than banks that do not have customer exchange, so there is nothing that indicates that this makes the competitive image unclear, or means that the banks with customer exchange have a higher margin abroad than other banks without customer exchange. This comes to the top of already competitive conditions. The difference between customer exchange banks and non-customer exchange banks, here are eight basic points. On interest, the picture is even clearer. The banks with customer exchange have a 31 basis point lower interest margin than banks that do not have customer exchange. The picture is also very clear. This is not at the expense of good conditions for the customers. This comes in addition. The experience from Europe, as I mentioned earlier, is that there are many places where this is what the Spare Bank Challenge now imposes. There is a large part of the Spare Bank sector away. You can look at Spain and Italy. We have had an Italian professor, Andrea Resti, from Bocconi University, to make a comment on both what happens when you introduce this type of change and this EBA problem-setting related to the owner's share of capital. His conclusion is that when this type of change has been implemented, it has exactly meant the beginning and the end of the savings sector. I also have experience as the next leader in the EBA Stakeholder Group, and we have been recommended by the European Saving Bank Association, and they are also very clear that there is no reason why Norwegian authorities would not conclude that real estate capital is to be considered as real capital. So for those who are interested, it is a significant consideration that lies within our hearing statement, which supports the conclusion of FinansNorge and the Sparbank Association on this EBA problem that has been discussed a lot. Our opinion is that the proposal for the Sparbank election must be put in a drawer and not taken up again. It is an institution that does not correspond to the mandate the government had for this election work. It will remove the unique role that Norwegian Sparbank has in the Norwegian the Norwegian banking market today. A savings bank model that has served the Norwegian model well. And we experience that the election comes with a number of proposals that no party has asked for, and which I think have weak support from the political parties that are now going to take over these institutions. So that was a little about the savings bank election, which is an important event in the fourth quarter of last year. Then a little foreshortening. We are looking forward to building Norway's largest and strongest savings bank. It will be a significant size on this bank. It will be Norway's third largest bank. We have a fantastic starting point. We are thinking of building a large powerful bank with still local anchorage and not least a bank that can be tough on strong savings bank values through two banks with a very strong co-op as we have. We have identified identical owners in Sør and Vest today. Vi blir en betydelig aktør i norske sparebankmarkedet. Vi skal bygge distribusjon over tid i hele landet. Vi har hatt, som jeg skal komme til, en ansettelse, Aril Andersen, som kom fra Handelsbanken, som i første omgang skal se på Oslo-Viken-markedet, men som allerede er i gang med å se på blant annet Tromsø. Jeg har vært et par dager i Tromsø nettopp og møtt store kunder som man har relation til fra tidligere. Ganske sikker på at vi skal klare å bygge A good distribution for Sparbanken Norge in the largest cities in Norway over a reasonable period of time. I am very happy to have brought Ariel with me on the team, and I think it is a perfect match. Handelsbanken has a lot in common with the behavior concept that we want to build for Sparbanken Norge. Personal advice, local location management, local engagement and significant gift business in the regions we are located in. Vi skal være både og. Vi skal ikke være enten eller. Det er mange som sier at om du er national, så betyr det at du ikke lenger kan være lokal. Det er jeg veldig, veldig uenig i. Vi skal bygge en national bank med veldig sterk lokal engagement and local anchoring. We are not going to change when it comes to our location. We are going to have exactly the same offices as the new ones we are going to build. And we are going to have a very strong community engagement, either through our gift institutes or through other things that we do in relation to being able to build a strong local community and strong regions. We are sure that we will be able to do both parts and not one of these things, because if we become a bigger bank with a stronger distribution. We have guided significant cost synergies that are part of this combination. We are also ambitious in this area. We have estimated cost synergies between 350 and 400 million a year, with an effect from 2027-2028. We are already working on that. We are already looking at renegotiations and agreements in the integration project. and quite confident that we will manage this, even if it is ambitious and above the level we have seen others have guided on in corresponding fusions. The capital synergies are significant, where we have guided on 2 billion and 2.1 billion in relation to the Basel IV effect. You also know that the risk value of housing loans has increased, and we will reduce this estimate that we previously guided on with 700 million, as illustrated and described on this slide. We will also get some of the entry costs as part of this transaction. Our best estimate is between 250 and 300 million kroner. We will of course do everything we can to get it as low as possible. But it will be a significant entry cost, of course, as part of such a large collection. Our timeline is ambitious. We have a clear ambition to have a legal fusion on the 2nd of May. We are working hard to achieve that. We want to get rid of those who work in this integration project. We are trying to solve this with a lot of internal forces. We do not think that this type of project should be, to a large extent, externally consultant driven. This means that the competence will also remain in the bank after we are done with, among other things, legal fusion. It works incredibly well. I am incredibly proud of the interaction I see between South and West, and the commitment that I see. For example, when we recently had a large project leadership meeting in Kristiansand, with all those involved in the integration project, I became very proud and very confident that we will manage these milestones. And I see a lot of very good people who are burning for the Sparbank idea, and who are burning for this vision, and who think that this is going to be incredibly good. We have a very clear mandate from the General Assembly in the two banks into this meeting, since we have unanimity in both General Assembly when it comes to fusion and meeting with Sparbanken Sør. And then we work with verified data for technical fusion. We have a clear ambition that we will fusion and merge both banks, technically as well, before 2027, so that we get the synergies that we have guided when it comes to cost synergies from 2027 and beyond. Then we must have achieved a technical fusion in the course of 2026, and as it looks now, we will manage it in a good way. That was a little about Sparbank Norway. Finally, I would like to show this. This is the last 12 years in Sparbank Vest. We are very proud that when we put from us the last year's results from Sparbank Vest, which we now do. Sparbank Vest has existed since 1982. The merger in 1982 is a fairly long period of time. But in the last 12 years, we have delivered more than one capital release target to the bank. We are very proud of that. We will continue to be a bank when we enter the Norwegian stock market, which will be predictable for the capital market. We will also be a bank that delivers supportive and good results at the top of the Norwegian banking sector, and so on, even though this will be the last year's agreement we make for Sparbanket Vest. Even though this is the last year for Sparbank Invest alone, it is a bank that is at the forefront in terms of customer satisfaction. We topped Epsi on the operating market in 2024. We topped Epsi with Bulder on the stock market. We have a bank with low complexity and low risk on our foreign portfolio. We will continue to build an alliance-free bank with very good technological solutions, with low complexity and low costs. We will continue to have a good risk profile. I also experience on credit risk and risk profile that Sparbank Vest and Sparbank Sør are a good match. I also see on foreign losses Dairys that it is a good trading bank with good credit risk culture. We are going to build a bank that has a strong performance culture, where people in the bank are concerned that we are going to do well, because that's what gives us room for action, that's what makes us able to choose untraditional paths. If we have the confidence of the capital market, we also have confidence in the choices we have made, as we have done in the most historical way in Sparbank, by being alliance-free, building bonds, making untraditional choices, choosing our own path. The foundation for that is good driving in the beginning. Then we will build two strong office buildings that will attract the best people, both in Kristiansand and the Sørlands region, and not least in the West. We are well on the way with the brand project. We are going to build a new brand based on savings bank values, strong community ownership. We are looking forward to launching the new brand. It is not so far away now. We are going to be a bank with significant gifts to be able to exchange, because we have a significant community ownership. We are going to be on the front line of digital development, as shown by Google Play and App Store ratings on our mobile bank on the business and personal market. We are also going to be on the front line of the new bank in these areas. We will also be among the two best Norwegian banks in one-capital spending when we get through this period in 2025 and 2026, where we will have some extraordinary costs linked to the crash with the long-term picture, where the ambition is fixed. So that was a little about the numbers, a little about the things that are happening in and around the bank in the fourth quarter and the beginning of 2025. As it is, I would like Franco and Brede to come forward, and then we will take some questions from those who have come in during the presentation.

With foreign capital management, or Borea Asset Management, which comes into the company in the quarter and affects the different accounting lines. What goals do you have for the investment with Borea?

What makes us very proud of the fact that Borea is a part of us, we experience that it is a very neutral cross-border culture, incredibly good people who have driven effectively and who have performed very well. in terms of funds over time, which are visible and have taken a position. We experience that this is a perfect match, and in the last 14 days we have launched Borea's retail fund in our digital fields, and I am sure that we will build a very exciting fund management environment together with Borea, and that we will be a significant player in terms of volume. We have a clear ambition to continue the culture that I live in, cost-oriented, performance-oriented, both for the customer and for the owners, and we are confident that we will build system value through this platform, together with other good foreigners who will participate in this investment.

That's good, that's good. And a little in the same direction. One question we have received. Do you see more purchases in the foreign group? I wonder especially whether capital management environments or portfolios are something you are looking at at the moment?

Now we have more than enough to hold our hands in, to be honest. I am more concerned about the fact that we stand out as the winning team, because the bank is in the Norwegian savings sector, which sees that it is difficult to stand alone. We are of the opinion that it is very good that a single bank can choose its own path and its own future. That is why we work so hard. that everyone should not become a stock bank and move their purchases from banks to foundations, which over time may want to search for papers with good liquidity and good return. We believe that the individual must be able to make his own choice, but we are very concerned about making a bank that people want to be a part of. Maybe we make it so that we see some structural changes and collaborations in other areas than necessarily what is on other incomes. On other incomes, I think we have a very good rig now. We have Borea and Brage, who deliver very well. We are very happy that Roggeland Sparbank is now on the owner's side. Frende is very well positioned. We are going to fight well when it comes to performance towards the future, which is the alternative. So I feel that we have a good product and company platform, and it is something about not increasing complexity and buying up or start with new product areas that give marginally room for integration, but that increases the complexity and pressure on integration in IT and other areas. I feel that we have a very good rig now, and you can also see that in other revenues. They have grown significantly in 2024. And we are very proud of that. So we have a platform we need. It's about tuning and tweaking it, instead of increasing the complexity and making it too broad, I think.

I see. Frank, the cost has increased significantly in the quarter. Can you give a little more color to the development that was there?

Yes, I can. We have worked with the cost side for many years, and as you know from earlier, we had flat cost development in the MoBak in 10 years, up to 2021 and 2022. The development in 2020-2024 has also been quite good. As Jan-Erik has mentioned, we have introduced the Borea foreign capital fund in the fourth quarter of 2024. We have 89 million in one-time costs due to this transaction. At the same time, we also adjust the FOMU tax, which we mentioned earlier, in relation to the Svarbank selection and the owner model, which we would like to be without. Then we have an underlying cost growth of 2.1% in 2024. If we include the budget, which is a little higher in 2024 than in 2023, we are well within what we have guided on in collecting the cost growth at 5% in 2024, which is 4.6%. This cost side is also an area that we will work hard with in the future to ensure that we will also have good development. into 2025 and forward.

And then we will guide on the underlying cost growth and the one-time costs as a result of the comparison. We will get between 250 and 300 million in one-time costs here, and that must be kept out of the way, because these are costs we do not want to have in 2027 and 2028. So we will use 2025 and 2026 in a very good way in relation to rigging us for a very good cost income and so on, but that will of course change a bit when we become a combined bank in the first years.

A good bridge over to the next question that has come in, just about these integration costs of 250 to 300 million. Is it primarily after technical fusion, legal fusion, or will there be something more now, for example in Q1, is the question. So there are some timings on these 250 to 300. What can we say there?

What can we say about that? The big headlines in the estimate of 250-300 million are on the IT side. We see a lot of synergy effects on the IT side, and that will take time. Jan-Erik was talking about the technical fusion in the 26th week. The biggest effects will be present. But we will also have big effects on other IT applications along the way. So this will be a journey forward in the next few years into this area.

Yes, and the transaction cost is one thing, and the synergies we have talked about are something else. We have received a question related to how much of these cost synergies do you expect to be realized in 2026?

We think there will be a gradual increase in both the integration costs and the synergies. There are a number of agreements, even though we are not on a joint IT platform, that we will have lower costs on. But the big change will be to get one agreement instead of two agreements on a large part of the IT area, which will first happen in the fourth quarter or first quarter of 2027. The biggest synergies on IT will be in the future, and we also have a significant synergistic cost. Even if everyone wants to continue, we will try to solve it with a natural outcome. There is a significant synergistic goal, and it will also come gradually, so it is difficult to say exactly how long it will take, but especially what will happen on IT will be the biggest effect from Q1 2027, as we see it now.

That's good. Jan-Erik, we have two questions for Bulder. First, if you could give a little more detail on the growth of Bulder in the quarter. After a calm Q3, it looks like Q4 was faster.

How do you see that? The Bulder gang is a fantastic gang. It's an incredibly exciting ecosystem with a lot of hungry and good people. And it's exciting to see what happens when we get this new floor on housing values, which the Bulda gang of course thinks is problematic. We have invested on low LTV levels, where the standard banks are very competitive now, as it seems. We turn around, they think new. We have increased the LTV level in Bulda in the past. We have improved and tuned on a lot of This hand-in-hand project is going to make sure that we get the world's best housing travel. It makes it more efficient. It is an incredibly good team that works with development in areas related to moving customer relations and other things. We have a very strong market position. I never thought that we would be able to build such a strong market position with 15-20 million in market budget this year. That is basically what we have had in Bulda. So I am incredibly optimistic about Bulda growth. And Bulda growth is a little triggered by triggers in the market. So when something happens in the market, we get a boost on Bulda growth. So right now there is little trigger in the market. For example, in the fourth quarter we achieved 3.3 billion, which is a pretty good performance. We know that new triggers will come into the market, and then the loan questions will increase. A part of what we do on the IT side is things that we would have liked to have two years ago, when we had many triggers, for example, for a large purchase from a large bank in Norway. We didn't scale that well then, but now we are still scaling better, and that means that we will be able to use these triggers even better in the future. Very optimistic when it comes to the further development of Bulda.

Now we are in an incredibly good place. That is perhaps an important basis. We have a guide on the level of ambitions for Bulda in the future. We have said that we will have an ambition of 73 billion in loans by the end of 2025. We do not change that goal, which is a consequence of the risk of a loan increase from 1 July.

This means that we need an additional growth than what we had in the previous quarter in the different quarters in 2025. This illustrates that it is fully within the range, even if it is ambitious.

The next question on Bull and Ike is about the risk and weight curve from 2020 to 2025. Are there any changes in the strategy with a low loan rate and changes to a higher loan rate? Is Bulder Unge an example of this?

Bulder Unge is an example. The financing rate is a good example of this. We have adjusted it. We are also working on the financing evidence for new housing buyers, so don't be surprised if that comes in. So this kind of shift is exactly what we are discussing. How do we adjust the strategy in relation to being profitable? I have heard that we have not had a single loss in bulls so far. Now I think we got a loss of a few hundred thousand kroner, which is the first in bulls. I heard that this week. was in the middle of little in a perspective where we have over 60 billion abroad. So we have built stone by stone, had a very careful approach. We can increase the risk a little, that's my point to mention that, apart from what we have had historically. But I still think it was right to be so conservative when we launched the bulldog concept and gain experience and trim our credit models and the credit process. And then when we see that this is working in a good way, we can move up a little on LTV levels, as we have done now, and as we might do further.

Frank, do you think the top net income for Vest Isolert has been reached on a quarterly basis and in the future?

Now the net income has flattened out in the course of 2024, and we have had a relatively stable net level in 2024 as well. And then there will be exciting developments in the future. There will be one, two or three interest rates in 2025. There is still a lot of struggle, I think. The probability is that interest rates will be reduced by more, to put it that way. And of course, if there will only be one or two interest rates in 2025, it will be a good idea to keep the interest rates at a higher level. Because you get a higher return, for example on interest-free capital. But I think that the development we have had in recent years, and with the competitive image that we have now, we may not be able to get any more pressure on the net than we have seen in 2024.

And about that, there is another question from an analyst here. It looks like the competition is pretty tough on the investment side. On the PN, can you explain a little what you experience there and what you see in the short term?

The competitive image on both the PM and the BN is quite tight. It is no different from what we have said before. There are several actors out there. There is a lot of competition about the investment. We also want to focus on that in the future. As Jan-Erik showed, we had a dip on the business market and the investment growth in the fall of 2024. This is in conjunction with two things. One is that we had a lot of big BMI investments that went out on our shoulders, while it has also been relatively more advantageous in terms of capital market financing in periods. So I think it is very difficult to give a concrete answer to that. The intensity of competition at INSKUD is very high. But we have a clear vision of how things are going to be.

I agree with the premise of the question, because it sounds like we have a very low and very good entry margin. So I don't agree with the premise of the question, because I feel that the situation is that Bein has a competition on the foreign margin, and that is actually a bit too low. And the entry margin is quite good. So there will be a bit more competition on the entry margin, and maybe the foreign margin hopefully. Adjusting is what should be worth the situation.

We hope so. Two questions. Jan-Erik, is there a short-term effect of change in the expiry date in 2025?

I am one of those who have said that I think the expiry date has a function. There are many perspectives in our industry. I think that the municipality has had a strong surprise when it comes to what this little adjustment has contributed to. There is an enormous pressure at the beginning of our year on the housing market. A lot of young people are afraid of losing the opportunity to enter the housing market. We see a lot of price growth. And the whole idea here was that more people would get a reason to enter the housing market, but if the housing prices, it is more for the housing prices to rise significantly, then it is a very short-term effect in that case, because then it will just be even more difficult for young people to get into the housing market. So I'm not sure that this was a smart adjustment from a social perspective, and based on what was the intention. So what we see now is a significant price increase in housing. It is related to the change in the housing policy. That's how it is. And that makes it very difficult to enter the housing market when prices go up or down.

True. Last question. The capital position is at an exchange rate of 8.50 kroner. Despite the increase in risk and weight, you have significant margins on the capital requirements. And with CRR 3 on the way, could you allow a higher exchange rate?

We are concerned with being a bank that does not have to deal with yo-yo management, whether it is about losses, costs, income or exchange of goods. We think this is the right assessment based on what we see. We are very concerned about not getting into an emission situation, which we could have avoided. We have made a very accurate assessment of what we see coming in 2025 on the capital side. There is a lot of uncertainty related to several of the things that will happen in 2025. And I am concerned about being a little on the cautious side. At the same time, I would like to say that we are a bank that is very concerned about being in front of a one-capital approach. And then it's both about our business, but it's also about how much capital we hold. So we should be capital efficient. So we think that this is a responsible assessment within the framework of being capital efficient. And then we will get a clearer picture of what it looks like for the new bank when we are done with 2025.

It's not just a supplier, it's a very important point. And we have put a lot in the hat in relation to the assessment of the share price for 2024 and so on. And that is of course the change in the risk management policy that comes from July 1st. And then there is of course uncertainty regarding the new standard method, how long it will be implemented. We expect that this will happen in the first half of the year. And then we have, as a natural part of the fusion with Sparmarket Sør, the co-operation of the educational level, which then also changes the relationship in in our fusion plan. So all these things have been included in the evaluation of the exchange rate for 2024. But still, as Jan-Erik also showed, there has been a nice nominal development in the exchange rate for investors. At the same time, we have significantly improved both in terms of gifts and customer exchange rates.

But there has been a lot in the hat, that's important.

Don't look forward to an exchange if it turns out that some of the things that we have evaluated and put in the hat, so that people can use that picture, will turn out differently, then we won't be able to sit and grumble about it. That's good. Last word.

Thank you, Jan-Erik and Frank. That was the last question, and with that we thank you from Mediasit in Bergen, and wish you all a good day.