Sparebanken Vest

Welcome to the presentation of Sparbank Invest's first quarter of 2025. As usual, you can send in questions on the way to this email address. We will try to answer as many questions as possible in the Q&A sequence after the presentation. We are very pleased with the first quarter. We delivered a one-capital transfer rate of 21.3%. It is on the same level as we had in the first quarter last year. We are very well capitalized. We are at 17.9%. And we have a cost percentage, including fusion costs, of 27.7%. If we look at the inflation costs, it is at 25.2, and we also have the consolidation of Borea in this quarter, which we did not have in the same quarter last year. The cost of income for Borea is around 70, so that is also a lot to increase. If we had not had this change, we would have been even lower than 25.2. Low costs are important for competitiveness, important also for good profitability in the savings market. We have a good track record now. We have shown this over many quarter presentations. This is the development and the return on investment on average from 2012 to 2024, where we have talked to all banks. Now you can see that we are at the top with 13.7% on average in the return on investment during this period. This is best in class if you look at Norwegian banks. And we also have a long track record from 2013 and up to now, where we have delivered on the one capital reduction target. It has changed a little in the period, it has increased from 11 to 13. But in all these years, we have been on or above the one capital reduction target, and we also see that it implicitly means that we have relatively low volatility in our results. We are a bank with low risk and small swings compared to other comparable banks. And you can also see in this picture that we have had a very good period now. 2023, 2024 and the first quarter of 2025 are very good quarters in a historical perspective as well when it comes to equity and investment banks, and for Sparbank Invest in particular. So this is a very special quarter for us. This is the last quarter with Sparbanket Vest. Sparbanket Vest was established in 1982, when Sparbanket Vest was established as a trademark. And so we are in the last quarter. And we are looking forward to becoming Sparbanket Norge together with a great group in Sparbanket Sør. So in many ways, this is a very special quarter for us. The main points in the presentation are a little about the banking industry, a little about the risk profile. We are also in perhaps a little more uncertain times with what is happening in the world economy. And then I'm going to talk a little about Sparbank Norway. Where are we? Where are we going? With the new bank, the significant investment in becoming a national savings bank, Norway's largest and hopefully best savings bank in time. If I talk a little more about the key figures, then I was aware that we had a one-capital discount of 23.3. In comparison with the first quarter last year, we had a one-capital discount of 21.6, so we are on the same level. We have a result per one-capital proof of 4.78 kroner in this quarter. And then we have a book value per one-capital proof of 84.90 kroner. The net income is a bit down from Q4 to Q1 last year. This is due to two less days of income, 35 million kroner. But there is also no doubt that we see a slightly increased competition, which creates a pressure on the net income. from other banks that have come to the table today, that there is a certain pressure on the net, and we expect that in the future. And the more important it is to have good control over costs and losses to ensure that we have good competitiveness and a good foundation to deliver also good capital allocation to our investors in the future. We have a nice foreign growth, both on the personal market and the business market. We take market shares. We have a very competitive value proposition on the bank side. We have a foreign growth of 9.3% in the last 12 months on the personal market. Very well satisfied with the personal market division as well in Sparbank Invest. Ex Bulder, which has a growth of 5.6% in the last 12 months, is quite confident that we will be able to deliver on target this year. when it comes to the personal market in X bulls, and then we have a head to goal in bulls, which I also think we will be able to deliver on this year, which is 73 billion in foreign markets at the beginning of this year. And then we have a nice growth in the stock market, where we have strengthened our position in the running. The foreign growth in the last 12 months is at 9.1%. I see that we are increasingly getting a strong position along the coast in the important industries, and have a good position among our business customers, which means that we are constantly strengthening our position. In Norway, on the stairs, we have come to strengthen ourselves further as an important business bank, but especially along the coast. We have a good impact on the stock market, 13.8 in the last 12 months. I will come to Bulda later tonight, especially good impact growth in this quarter. There is also as much money growing abroad and on impact on the team. Nice impact growth collected, and then we have especially one large single impact, which is marginally priced, which goes out in this quarter. There is a weaker development of income on the business market, but it is not the underlying income mass that is changing. It is marginal income that does not really mean much from a profitability perspective. If we look at the cost growth, it is up from NOK 443 million to NOK 547 million. But it is important to have in mind what the change is. The consolidation of Borea, or foreign capital management, as it says here, results in NOK 24 million. Then we have fusion costs, which we will have for a good number of quarters now, at NOK 50 million. Then we have increased costs, which is also linked to significantly higher revenues. In this chart, we have an underlying cost growth of 18 million kroner. If we correct the first two, we have a cost growth of 4.8%. This shows that the nominal cost growth is much higher. We are also very pleased to have established a long-term partnership agreement with Tieto Evri in this quarter. We have negotiated with Tieto Evri for the last six months, together with the other exchange banks. We are very pleased with both Ender Rangnäs and Tieto Evri in this dialogue. We have reached a very close and good relationship with Tieto Evri. Should we be an important and long-term partner for Tieto Evri in terms of developing Tieto Evri's banking services together with them, and ensure that Tieto Evri is the best and strongest alternative in the Norwegian banking sector when it comes to core banking services? We also see that the agreement we have made is a very good starting point for securing low-cost income and competitiveness in terms of costs. costs that can be supported by a further good one-capital investment in Sparbank Invest. A very important milestone in this quarter for Sparbank Norway. If you look at the development in total results before tax from Q1 last year to Q1 this year, you can see that the interest rate net is up 70 million, the provision revenue is up 80 million kroner, the associated business is up 40 million, the finance is up 38 million. Then we have this cost development that I showed, which is among other things about consolidation of joint capital management and Borea. And then we have a loss picture, which is also 33 million better than last year. We have only 10 million in losses in the first quarter of the year. This indicates a robust base portfolio. Something to come back to. But a very strong result development, actually broad, in this quarter, which means that we are on the upside of 20% when it comes to one-capital spending, also in this first quarter of the year. Bulder, a good development. We could probably afford to price ourselves even more sharply in relation to what we have guided on in the capital market when it comes to equity and casting. But we have a good exit growth. We are satisfied with this. We are building rock on rock in Bulder, up to 380 billion by the beginning of 2026. But we have a 12-month growth of 10.3 billion kroner, and we are now at 64 billion per year. And we have a deductible loan rate of 42%. This means that there is low risk in this concept. We have built 100,000 customers of LCD with 117,400 customers now. And we also have a very good income growth in this quarter. Income growth of 27.5%. very good and solid for a concept like Bulda, which first and foremost goes towards foreign customers, who are increasingly now using the bank concept also for daily banking services. In each quarter, we guide on where we are in relation to growth and marginal profitability for the bank. We are on the growth curve, approximately where we should be, and we are now above when it comes to marginal equity. It is between 13 and 14 percent in the quarter, and what we have guided on is between 9 and 10 percent on a marginal basis in this growth period. So we are well on the road with Bulda. They do a great job, and an incredibly strong team is involved in revolutionizing the experience of applying for housing loans and having a mobile-only banking experience on mobile in the Norwegian banking market. From the very beginning, I think, in the world, that's what the Bulda gang does. I am also very pleased with this quarter with Einholdsmegler Vest. We have not always had the same good results, not exactly the same good development as we have now, but in the last year we have really lifted our Einholdsmegler investment. We sell 40% more homes in this quarter than we did in the first quarter of 2024. This is a formidable development. Our market share in our own market area, Sparbanket Vest, increased from 13.1% to 11.9%, which was the market share in the first quarter of 2024. We have also made significant adjustments to our organization, so we have managed to increase the market share We sell several homes, and at the same time, we have managed to work well with our costs. This means that the operating margin per quarter is 14.2%. This is far above what we have seen for quite some time at Einar Smegler Vest. We are very pleased with the team and the group at Einar Smegler Vest, who have managed to really speed up the pace when it comes to salary growth. This is important for us within Sparbanken Norge. Then there is a little focus on liquidity today, so we have taken a slide on that this time. We, Sparbank Invest Boligkredit, just issued an obligation with the right to property at 250 million euros. Very good timing for that. And we have a very well-diversified transfer structure, as you can see to the right of this picture, with a continuous running time of three years. So we are very comfortable with the liquidity situation. We have a diversification, we have a length on the financing of the bank, and a risk profile on the liquidity portfolio, which we are very comfortable with, also if it were to become a larger market euro. In addition to good liquidity control, we also have good capital control. We have a capital situation that is robust. We have a capital situation that indicates pure core capital at 17.9%. We become system important once in the course of 2027, and we have a good time to adapt to this. But anyway, we are very robust in relation to the goals we have today and the goals we see coming in 2027 for Sparbank Norway. That was a little about the underlying key figures on the banking industry. I will go a little into our risk profile in the next part of the presentation. As many of you who follow us closely know, we have a conservative loan book dominated by 76% of our loans to the personal credit market. Of the loans we have to the personal credit market, 99.7% is actually a little up. of that person's portfolio. It consists of housing loans, as I said, a very conservative risk profile. So the geographical decline will of course change with Sparbank Norway, but so far we have had a conservative We have changed our strategy on geography in relation to investing in new market areas. We will continue to have a conservative foreign profile, but the geographical distribution will of course change over time, among other things by investing in physical distribution, also in Oslo. We have a good market share in Oslo through the Bulldog concept, but we will also invest significantly in the Oslo region. But we have a clear plan that we should not do this at the expense of the good risk profile that has been on the credit side of Svarbanken Mest over time. We have low maintenance costs for pension customers. You can see that here. Maintenance costs over 90 days, it is a little up, but at a historically very low level. We come from a very low level. We may have to take advantage of the fact that this is going up a little again. This is a historical perspective. But if we look at the freedom of expression for housing loans over 60% LTV, you can see that we are at a very low level when it comes to freedom of expression. Freedom of expression does not necessarily mean that the customer has a payment problem. It means that they want to use some of the values in the house in a slightly different way for a period. With such a low volume, it also indicates a very robust starting point to continue to have a low loss level. As mentioned, in the first quarter, we had a loss level of 10 million, which is very low from a historical perspective. We are also very comfortable with our business market portfolio. We think it stands well in macroeconomic uncertainty. We have a well-diversified portfolio. We are not particularly concerned with single sectors, but we are concerned with good customers, as there are in all sectors, and of course follow single sectors closely, which can be exposed to The challenges are related to tolls, but the progress so far indicates that we have a very good starting point when it comes to some major unrest, and what we see is the development when it comes to the toll regime in the world. If we take a look at our share when it comes to maintenance and debt repayment, step 3, we have worked very well with this over time. You can also see that we have had a very nice trend from 2012-2013, which was the peak, all the way down to the first quarter of 2025, where we had maintenance and debt repayment, or step 3, at 0.37%. And if we compare this with the largest Norwegian savings banks and D&B, which are indicated to the right here, then you see that this is in the lowest level and decidedly in the lowest level, and that also indicates that what I said before is a case where we have a very robust and a very reasonable risk profile in the West savings bank, regardless of what key figures you would look at. And here, when it comes to the share of collected and misplaced loans in the collected form of the bank. That was a little about our loan book in a little more uncertain times. Then a little about Sparbanken Norge. We will be a robust and strong savings bank. We will be Norway's largest savings bank. We have, at the beginning of this quarter, collected in foreign currency 453 billion kroner. We will be an important player in the Norwegian banking market. We will be Norway's third largest bank. And we have a very good starting point, I think, to take the market share and grow and develop further through the power we represent together in the West and the South. Our ambition is quite simple. We want to build Norway's largest and best savings bank in a time when the savings bank map is rewritten. And we have a clear ambition that we, through strong performance, will ensure that we stand strong as an alliance-free bank, where decisions and competence are built in our own bank. We are very surprised by the ambition we are burning for and what we want to realize with Sparbank Norway. We are absolutely sure that the alliance-free direction that both Sparbank Sør and Sparbank Vest have taken in recent years is correct, is a very good starting point for doing well, running a good bank and having a very good profitability. We also see that the complexity which we consider to be lower for us, which stands outside of the alliance cooperation in the banking sector, contributes to lower costs, lower complexity and also an ability to develop good digital solutions from a simple and less complicated cooperation. Where are we going? We will of course work on this together with the new management group, which has started to discuss the direction and the new board. But I don't think the direction of the bank will be much different than what I'm going to show here. We will continue to be among the best banks when it comes to banking and equity. We will have customer experiences and customer satisfaction in the Norwegian market, as we had, for example, for Sparbank Invest at Epsi on the operating market last year, where we were at the top, or Bull, who was at the top at Epsi on the personal market last year. And this is about good people, and we will strive to be among the most attractive competencies in the environment. In the Norwegian finance industry, we will do that by having a very exciting and fun culture to be a part of. A culture that we will be proud to be a part of, and through, among other things, to continue to set goals for leadership development and culture building, as a basis for strengthening performance and subjugation of the strategy that we have laid for Sparbank Norway, which is about alliance freedom and good casting and good operation. The strategic positions we are going to build in the next two or three years will probably be team-like. We are going to build a land-spreading strong brand and be present in the largest Norwegian cities during this period. We are going to have a strong and profitable product company platform as the basis for long-term alliance independence. We will be an attractive consultant in the Norwegian banking sector and continue to build on strong banking values. That is why we have engaged ourselves so strongly in the selection of banking institutions. We will be keen on banking values, we will be keen on one-capitalism. We will work very hard for that in the next two to three years. We will be leading in digital sales and effective work processes. Now we get even more power in the development environments we have when it comes to developing good front solutions for customers when it comes to digital development. And not least, we will be at the forefront, also when it comes to employees' work tools, work processes and loan processes. Both of these areas will get more resources and more power in Sparbank Norway. Through low complexity, we will be one of the most cost-effective banks in Norway, and indirectly in Europe, because Norway is far ahead in terms of cost-effectiveness. And we will succeed with Bulldar, the Bulldar journey we have started, which is about being at 380 billion in foreign currency by the beginning of 2026, and being the leading digital bank concept in Norwegian banking. That means that we have some strategic priorities in a slightly shorter picture, 2025-2026, which is about realizing the cost synergies at a level of 350-400 million kroner, which we have guided on earlier. We will realize capital synergies at about 3.4 billion kroner. We will build a joint culture, a joint performance culture in Sparbank Norway. It will get a lot of attention in the next one to two years. We are going to implement what I mentioned earlier, Norway's most effective loan process for the personal and operating market. We have worked for a long time and are working on the task of launching internally on the personal market. We are also working on the same process on the operating market, which will take a little longer time for our advisors to see the effect of the project. Two important projects that have top priority in Sparbanket Vest today and will get it in Sparbanket Norway. Then we will be able to choose a technical integration within Q4-2026. If we want to realize the costs in Q4-2027, we have to be in place with technical integration in Q4-2026 in order to reduce costs. We have a good plan for that. It is quite safe to say that we will be able to do that. We have a very good dialogue with Tietoebri in relation to that process. At the same time we do these things, we will be able to keep pressure on the market. One of the things I am most proud of the employees on when it comes to the last 12 months is that we have managed to take market share and maintain a very good profitability in a time where we have had a very large project that is about drawing up legal fusion for Sbarbanken Vest and Sbarbanken Sør and the establishment of Sbarbanken Norge. We will continue to do that, while we are working on technical integration, we will be able to keep track of the market, and not least take market shares, while we make the largest bank fusion in many, many years in Norwegian Bank. Then we will succeed in establishing in Oslo, Romsdal and Tromsø. This is the priority when it comes to a geographical expansion. We are already in the process of evaluating in Tromsø. We have already hired some people in Oslo. And we are in the process of funding the establishment in Romsdal. So these are the three most important geographical expansions in the short picture of Svarbank in Norway. And then there is Bulle, which I have mentioned several times, in 380 billion in the week of 2026. This is a small picture, this can change, but this is how it looks for us in the future. Tentative discussions with the leadership group in Sparbank Norway and tentative considerations around where we should go. And then there may be adjustments, but we always find it right to indicate where we should go with Sparbank Norway when we are now on the threshold to become Sparbank Norway after this presentation. From a relative perspective, this is the exchange rate per year shift, we see that there will be two major and important savings banks in Norway. It will be Sparbank Norge and Sparbank 1 Sør-Norge. We compete in the same market. I think this will be good for the customers. Tough competitors, two strong banks that will lead to the structural development that we see in the map, which will be drawn again. We had two bank functions last week. New functions are coming in the running. It is not unthinkable to imagine that we can get ten bank functions this year in the next four years, and that means a halving of the number of Norwegian savings banks. This does not mean that the savings bank sector will become weaker, because if we become a little smaller, I am quite sure that the savings bank sector, through the structure negotiations that are taking place now, will be able to settle in position and perhaps in sum take market share through a little smaller and even stronger savings banks in the future. We are at the end of a very long process that has been up to legal fusion. I would like us to be completely in line with the fusion with May 2nd. We are not. Technical fusion will take a good deal of attention. There will be a lot of costs related to the technical fusion, but we have set a timetable that is as tight as possible. We have set a timetable that I was in on, will give the cost synergies we are very concerned about to take place in 2027. And then we must be in place with technical fusion in 2026. We are quite confident that we will make it. We have an incredibly talented IT team in both banks who are very dedicated to making it happen. Then we are in place with a new corporate management. Incredibly proud to be the team that was gathered last week, two days ago, and started to guide the direction of Sparbanken Norge. Good people in Sparbanken Sør and Sparbanken Vest who will be part of building 200 years of history in both of these two banks. And we are well on the move. This management team is well on the move and will take part on the 2nd of May. And now I'm going to talk a little bit about why the organization has become the way it has become, and a little bit about what I want to achieve with both the personal cabal, but not least the organizational design that is laid out for phase 1 for Sparbank Norway. The most important thing in the organization is to keep the line and the customer divisions as they are today. We will go through a large technical conversion, which means risk for a lot of internal focus. We will try to avoid that at all costs. We will frame the line, as we have done in the work up to the legal version, also in the work with the technical version. So the most important step in the organization is to ensure that the competent leaders who lead the customer units in the South and West today will continue to do so in Sparbank Norway to ensure pressure on the market in a period where there is a risk of losing some pressure on the market because we have other processes that we will succeed in at the same time. Margun, Gunnar, Olav, Simen, Pål and Simen Eilertsen at Bulde will handle this in an excellent way this year. I am sure that this is a set-up that allows us to take market shares. It is also a set-up with a very flat organizational structure. What we have been good at in Sparbank Vest, among other things, in recent years, is to have short distances, little bureaucracy, and no fewer leadership teams than we need. That gives motivation, that gives people autonomy, and that also gives lower costs and faster time to market. We will also stand up for that in Sparbank Norway. It will be a bit difficult to handle for the undersigned, but I'm sure it will go in a nice way. Then we collect the technology environment on the side of Sundland, which has made a fantastic journey with Sparbank Invest, connected to technology. It is the technology grid of Sparbank Invest that we will continue to build on, mainly when it comes to customer solutions, employee solutions, in the new bank. She has built a performance-strong environment, incredibly strong culture building, which means that we, among other things, almost do not have consultants inside, but people want to work with us on a fixed basis. We will continue to strengthen that in Sparbank Norway. We will realize significant capital synergies. We will continue to build on Sparbank Invest's IAB models. That is why it is natural that Jan Ståle is the one who takes this area further. We will achieve great results, and we will continue to build on the good loss history, the good risk profile that we have had over time in both banks. I am quite confident that Jan Ståle will be the right person to move this forward. Good relations with the financial services, good relations with the customer units. We have achieved a very good dynamic between the central credit environment and, among other things, the customer division in the business market in recent years, and we will continue to build on that. Bente Svendsen has great competence in process efficiency. We collect directly to the banks, support devices. We re-encouraged the customer division to be able to have such a flat structure. Stable support will be collected in support environments. And not least, customer service in both banks and customer division support devices will be collected in this large unit, which will last for many years. Which will be led by Bente Svendsen from Sør, who I am very sure will be a very talented and exciting leader for this role. On CFO, we have a CFO who has been on almost the entire journey to Sparbanken Vest. Frank Johannesson came on stage afterwards. He gives himself after no less than 40 years in Sparbanken Vest. We have been Sparbanken Vest for 43 years. He has had 40 of these. I've been wondering a lot about who can take over as CFO and fill his role. It won't be easy, but Hans-Olof Ingdal is quite safe. Is he the right person to do that? He has been economy director at Sparmanken Vest before. He has been in charge of the banking services, A and V area, which will also be located here in Ny Bank. He has led the development of the Friendly Group, which means that he has a good insight into our shareholder companies, our owner management. In addition, he has been, among other things, a consultant in the Boston Consulting Group before he started at Sparbank Invest. All in all, he has a very broad and strategic background, which makes it quite safe to say that he is the best candidate to follow in the footsteps of Frank Johansen when it comes to establishing Sparbank Norway. Stanne Breen, a talented person who has worked in consulting for a long time before he started at Sparbankens Sør, very strategically strong, long experience from the bank, knows both strategy, but not least has had the responsibility of leading the IRB project at Sparbankens Sør. heavy banking skills, heavy strategy skills, heavy consulting skills. We will have many big projects this year, whether it is technical conversion, our new building in Kristiansand, structural projects, other projects. We need to lift that area, manage it in a different way in a larger bank. Stenner Bren will do it in a very good way. Therese has led HR, communication, purchasing, and marketing well over time in the West. She will get the same mandate in the future. She is a very good leader. She has extensive experience from the line, which I am very interested in, on all of these. Line experience that shines as much as possible. Customers in the store. She has worked both in PM and BM, worked in customer service, worked in direct bank BM, and has worked in STAB in recent years. Very good insight in banking, very good insight in the store, and will continue to do a good job on this post in Sparbank Norway. It is time to lift compliance into the board of directors in Sparbank Norway. We have had compliance personnel reporting to risk management, but of course we have had reporting to the CEO in relation to laws and requirements. Now it will be CIFI Bank. We lift this role into the learning group. Bjørg Beate has a strong risk experience from Sparbank Sør. He cooperates very well with Jan Ståle on risk management in the integration project and is very confident that this will be a good setup. in a new bank, which will make sure that we have good control over the future, especially in a phase where we are going to demolish and rebuild a new bank, it will be quite important to have very good control over such an important area. That is why we are lifting this into the board of directors now. Then I would like to underline two other areas that I will report to, but which I will not mention in the leadership group, but which are also important. We are in the recruitment process with the leaders of Eindhoven Magna Norge, where we are at the end of the phase. The process started a little later than the recruitment connected to the leadership team. And I am incredibly happy to have Ari Landersen with me, former land manager at Handelsbanken, to build up new geographical market areas. So what we do outside of the established geography, Ariel will be responsible for. He has already focused on the drum setting, as I mentioned earlier. He has already employed people in Oslo. We are going to build stone by stone. We are not proud of moving in with 40 people or having a very large cost structure, because the income structure will come. But we are going to build rock on rock in new geographies, and I am very sure that we have had a very good leader to lead that in Arel. He will get a lot of autonomy and will be working closely with me in this venture and so on, as he has done since I was employed at Ischesal a long time ago. Finally, we are going to build Norway's largest savings bank. It is a fair goal, it is a fair statement, but you can't put a lower list when you establish a savings bank in Norway, as we do with Sparebanken Sør. We have a clear ambition to be leading in customer satisfaction in the new bank. We will be a bank with low complexity. We will strengthen our strengths by not having the complexity that those who are involved in larger alliances have, where you like to have a three-part collaboration in IT. We have a two-part collaboration between Sparbank Norge and Gjetto Evri, which I am quite sure will contribute to both cost efficiency and good customer solutions. We will continue to take a low risk on the foreign exchange portfolio, even if we grow geographically. We have done that when we grew up in Rogaland. We have done that when Vesta grew up in Møre Romsdal. This will also impact Sparbank Norge. We will build a proud performance culture with two strong headquarters in Kristiansand and Bergen. It will bring a lot of attention to the leadership group agenda in the future, the leadership meetings. We have already started, as I said, with the top leadership meeting last week. Now we are starting to try to get the leadership level under the board of directors also before the summer, and if we can do that, we will also have a A kick-off with leader level 2 before the summer, if we manage to get it done. We have a pretty tight agenda to try to get it done. We believe it has a great value to put in the raffle also before the summer. We are going to build a national trademark, a national office structure with the big Norwegian cities in Norway. We want to be a bank that is a significant community. It means a significant force on gifts and customer exchange. We are also in Ny Bank, we are quite similar, we have the same ownership, so it gives a very good basis for continuing to be a bank, focusing on the value of the savings bank. One of the things that separates the savings banks from the other banks is the shareholder part, which is underlying for both Gavar and Kundutbytte, for example in Sør and Vest today. So we get greater power on digital development. We have shown that we in the West are able to develop digital services right at the top in the North. We are still at the top in Google Play and App Store when it comes to the mobile bank, at Personvaker, for example. We will be able to do that in a new bank. It is a tough journey. Many other banks have invested heavily on, of course, good user experience in the digital field. We have shown that we can get that done, and with the ecosystem that is now being strengthened, I am sure that we will be on the front line and so on. In addition, we have Bulde who is with us develop the bank in addition to developing our own good digital solutions. The sum of that makes us have the right ecosystem to be at the forefront of this as well. And then we will be among the best in one-capitalization. It is a clear ambition. We will not be there in 2025, we will not be there in 2026, but we have a clear ambition that when we have done the job we should do on Synergia, when we have put this together, we have worked on the culture side for a good period, then we will be back at the top in 2027. when it comes to one-capital transfer in the Norwegian bank. With that, I would like to show you a short video related to what I have just been talking about when it comes to Sparbanken Norge, while we get ready for questions and answers.

We have received some questions. The first question is for you, Henrik. The interest rate is down 3% from last quarter. Can you elaborate on the competition situation and the margin expectations for housing loans and person-customer interest?

We have come from a period with very good profitability. It is not natural that there is a little pressure on that profitability through tougher competition. That is perhaps what we see the contours of. We have not had any changes in the last few years. Then you do not get the opportunity to pick up a little of the revenue flow that is present for all banks. We also have two less profitable days, which means that there is no drama in this. We have long expected that we will see a little tougher competition. A little tougher competition is part of the picture. I think we have a good starting point to fight for Magin. We have worked well with KULTUR. We talk a lot about paying as much as we can to give what we have to, so I think we should be good on the net income, but I think the net income has been especially good for a period and we will experience even tougher competition and an income slide as long as there are no income changes. The banks can adjust a little and bring in some of that slide, so you always bring in what happens between income changes.

That's good. Frank, you get the next question. The underlying cost growth is up 104 million from Q1 in 2024. Can you tell us a little more about what is in the cost of this quarter, and should we expect 50 million in the cost of each quarter next year?

Yes, I think so. In 2025 and 2026, we have to wait and see if we get big integration costs in the future. That's what Erik was talking about in the presentation. And then we will be back on track in 2027, given that we have carried out the technical expansion in the beginning of 2026. If you look at the numbers in the first quarter, then probably 50 million of our costs have been allocated to integration. And as Erik also showed in the presentation, we adjust for them and adjust for a number of new costs, as a result of increased operations in Jernås Megler Vest, and as a result of the fact that they have also included Borea, then the cost growth is actually at an adequate and acceptable level. But that we will get integration costs in the quarter in the future, that we have to consider.

But not as high as we have had in this quarter. It is important to add that there is one special thing that has struck in, which is paid out as part of the fact that the vision is approved by the financial services to formulate it that way, which we do not want to have in the other quarters. So it will not be that high. guide tight on this. We have a strong cost structure, so we will of course not use more than we need on integration, but there may be some integration costs, then we will keep the market updated on what is underlying cost growth, as we have done today, and what are special costs related to this fusion process.

Jan-Erik, the investment growth from business customers is weak in the quarter, as you mentioned. Can you tell us a little more about how the bank thinks about investment from business customers?

This is an investment of several billion kroner from a single actor, which means that we get a special output now. What we have thought about in the past, we are a little lower financially than other banks. And we are quite commercial, so we think that these refugee money market investments, which are quite large, especially in the billions, are more uncertain funding than getting money in the money market. So we are not that blind in terms of financing. It is much more stable, as shown by our liquidity control, than a 3 billion investment from a single large national actor. So for us it is both more stable and more profitable, and we are committed. We are interested in running a good bank. So our perspective, and has been our perspective, is not to chase those marginal contributions, and that means that we will swing a little, and rather think profitability and think long-term. So we will continue to do that, we will not be blind to financial damage, we will be concerned about having stable contributions and not those fleeting contributions, and of course then think profitability. So that will continue, and that means that you can get this type of income.

Just as a supplement to that, as you mentioned during the presentation, Henrik, we have a good position in the capital market. This is of course a result of the fact that the bank is doing very well, and we have also been quite good with the timing in relation to the value transactions we have made. And last year, I spent more than SEK 750 billion. millions here in March.

Then we got the rating confirmed by Sparmokken Vest and also by Sparmokken Norge a few days ago. So we have a very good starting point for Fundos Billi, and we are going to exploit that in a very good way, looking forward to income, as we say, and our customers in relation to Billi Funding.

That's good. And while we're on revenue, another thing that has come in. Bulder's revenue tax has increased to 27.5%. Have you done anything special to increase this?

Have you raised the revenue tax? We haven't done that, but we see that Bulder, this is a natural journey for Bulder, right? From being a concept that maybe only got loaned, we now get the daily bank. And we see that Bulder has become a full-fledged bank offer on mobile. And that means that they have had an impressive development on the investment side. And investment, I think I've said it before, if you look at our oil investments, the financial level is significantly lower than it used to be. So everyone who builds a new land, geographically, we experience, I think, a slightly lower level of financing, then Bulda would be able to build. And that is important, because it looks a little lower than the bank, but when you enter a new market area or a new segment, you go after loans, and then gradually total customer relations come in, so you manage to build it up. to what is the average for the bank over time. So Bull has impressed me in many ways, and that investment growth is far ahead of what we had hoped for when it comes to the level of financing, and that actually makes the profitability in the concept also above what we have guided on. So it's more about raising the profitability in the concept, and that the marginality is above what we have guided on.

Absolutely. Frank, on the capital side, we have received questions about how to explain how we get to the 3.4 billion in capital synergies, whether it is net synergies, and how much comes from Basel IV, CR3 and risk values.

For those who remember well, when we announced the merger with Sparbakken Sør in August last year, we indicated capital synergies at a rate of 4 billion kroner. And that was in combination with the fact that we were going to add risk factors to the Sør portfolio, and that we were also going to get a new standard method on the Sør portfolio at the first step. So what is happening now is that from the second quarter of this year, the Sør portfolio will go on a new standard method, which will have a very positive capital effect on the Norwegian stock market in the second quarter. There is also a new risk factor for housing loans, an increase of 20-25% from the first of July this year. This means that this is taking something down again. The fact that we have gone from about 4 billion to 3.4 billion is in line with the fact that the level of housing loans has increased by 20-25%. As we have talked about before, we have good faith that This curve will probably be changed again. It is certain that in the present time it can take out more capital effects in the future. Now it is so that the investment that is there now applies to 2026.

That is correct. Jan-Erik, Einar Smøgler Vest, what are you up to? You contribute positively to the bank. We have received a question on how much is the market that is with the company, and how much is it that the company has taken on its own?

When we go up in the market share, it is not the market, it is the company itself, so we strengthen the market share quite significantly. Of course, and that is because it has worked very well, just with Fredrik, who has done a great job of lifting our results and our market share together with his team. And then the degree of results is significantly increased. I'm not sure we will see such a big rise from all other companies, so I experience that A good part of the promise in terms of results is also due to a very good cost-effectiveness in A&M Vest, and I am very happy that we have a major company. We have a clear ambition that when it comes to results, i.e. how much is left on the bottom line or the top line in A&M Vest, we will be among the best companies in Norway. And I think we have taken a significant step in the last 12 months.

That's good. Last question. It looks like the credit quality in the bank is improving in the quarter. Can you tell us a little more about what is behind this development?

I think we have been very successful in Sparbank Vest in recent years. We have a very stable, we have very little penetration. People want to be on our team. After we announced the Sparbank Norway fusion, we have almost not lost people. We have almost no penetration. The stability in the business market, the stability in the area of Jens Ståle, the stability in the area of credit, means that we have worked in an untrusted manner to reduce the risk profile. We have worked in an untrusted manner with a misplaced portfolio with us. And we have had a very strict goal that we will come down quite low. And they worked hard on that area, and that means that we are now at 0.37, I heard the rating office say that it wasn't just Norway's best, it was the world's best. That's what we're proud of, but I think it's about people, as it does with everything in banking. It's about stability over time, and accountability, and also to come up with good ideas for negotiations. There, we have recognized both the business market and the risk environment, and especially the credit environment, for a very new way of working, which means that we are now in a completely different place. And if you look at what I took over in 2013, and then see how we work our way down there, then the art now becomes, also in Ny Bank, that we don't forget what we did wrong before 2013, so that we don't make that mistake again, and that we manage to keep it at a low level. And of course, it could increase a little if the macro picture is against us, but in the relative picture, it is very important that the new bank is able to compensate for losses. The bank is not very complicated, the interest net plus other income minus losses and costs, and then you have to get it to the capital bond. That's really what it's about, and that's why losses and costs are extremely important, among other things, to deliver good peace, which means that you have a deal, and that you have the trust of the capital market, have the confidence to build new land while doing good work. And that's what we're going to do. We have managed to build a dam, we have managed to build a dam while we have West Inklas and Rohe. Now it will be a new journey for us. Now we will be able to build a new geographical distribution while we do not erode our Rohe too much. And that will be an art for the new management groups to find out what is How much can we allow ourselves to build a new country without eroding our peace too much? So these things are connected.

Exciting times. And it's not just the last quarter presentation for Sparbank Invest today. Not at all.

This gentleman here has been an incredibly important partner for me and for the bank during my entire career. Now I have been CEO since 2013. That is almost 12 years. During that time you have been a bait for me. You have been an incredibly important partner. We had an incredible number of phone calls. I don't know who to call. I call Raffaell and Anna every night. We discuss different things. We tune and tweak things. We actually started working together in 1999, so I don't know if that was wrong or wrong. We have been partners since 2013 and until today. So this is not just a VMO today for us in relation to the brand of Sparbank Invest. It is also a VMO today for me and for the bank. I know that the board of the bank has paid a lot of attention to the work we have done. In Bergen we have a term around brand that is called bleu for drakta. I do not know anyone who has bleu so much for drakta and bleu so much for Sparbank Invest, like you Frank, for 40 years. We have been at 40 out of 43 years with the name Sparbank Invest. So all we can do is give a high five and wish you the best of luck. Fortunately, we will bring him to the Sparvåker Mest Foundation. And then we have a few projects to carry out. And then we will sit down and give you some advice. So you will still get some phone calls, but it will not be as many as before. Thank you very much for a fantastic effort.

Thank you for the kind words, Jan-Erik. It has been a fantastic journey. I have to say that the last 12 years have been an adventure in many areas, and we have always had some challenges. Thank you for your cooperation. Thank you for taking part in the journey. I would also like to thank everyone who is listening, whether it is investors, analysts, colleagues, or whoever you may be, for your cooperation and for those I have met along the way over the years. Thank you very much. Thank you.